Introduction to MRP in the Apparel Industry
Material Requirement Planning (MRP) plays a crucial role in the apparel industry, ensuring that raw materials and components are available for production when needed. As an ERP Consultant, understanding how MRP functions is essential for optimizing supply chain processes, improving production planning, and ensuring cost efficiency in both domestic and international markets.
For instance, a domestic fashion brand in India like Raymond needs to ensure that all required raw materials (fabrics, buttons, labels, interlinings) are available when production begins. Similarly, an international apparel company like Zara must manage raw materials across multiple countries and suppliers to meet its fast-fashion production schedules.
Master Production Schedule (MPS) vs. Material Requirement Planning (MRP)
- MPS (Master Production Schedule): Determines the number of garments to be produced at a macro level.
- MRP (Material Requirement Planning): Works at a micro level, planning the raw materials, trims, and accessories needed.
Example: Consider an international apparel manufacturer like Nike producing sportswear. The MPS will define that Nike's Vietnam factory needs to produce 100,000 t-shirts in March 2025. The MRP will determine that for this, they need:
- 250,000 meters of polyester fabric
- 100,000 printed labels
- 200,000 meters of stitching thread
- 100,000 zippers (for zippered versions)
Without MRP, Nike may face raw material shortages or overstocked fabric, increasing costs.
Understanding Demand in the Apparel Industry
1. Independent Demand: This demand is not linked to another product.
- Example (Domestic): Pantaloons (India) plans to launch a new collection of women's ethnic wear. The demand for these garments is independent because it comes from customer preferences, seasonal trends, and market forecasts.
- Example (International): H&M (Sweden) launches a new summer collection based on fashion trends in Europe and the US. This demand is independent because it is directly driven by consumer purchases.
2. Dependent Demand: This depends on the demand for another product. In apparel manufacturing, fabric rolls, zippers, and buttons are dependent demands based on garment production requirements. Dependency can be categorized as:
- Vertical Dependency – A fabric's demand is dependent on the requirement of finished garments.
- Horizontal Dependency – If a delay occurs in a component like a zipper, it can delay the parent product (jeans) as well.
Example (Domestic): A shirt manufacturer in Ludhiana needs buttons, labels, interlinings, and packaging materials based on the number of shirts produced.
Example (International): Levi’s (USA) plans to produce 500,000 pairs of jeans. The demand for:
- Zippers (YKK Japan)
- Denim fabric (Turkey)
- Rivets and buttons (China) is dependent on the jeans production schedule.
Objectives of MRP
- Determine Requirements – Identify what to order, when, how much, and where to deliver.
- Keep Priorities Current – Adjust orders dynamically by adding, deleting, expediting, delaying, or modifying as needed.
Key Inputs for MRP in the Apparel Industry
MRP relies on three critical inputs:
- MPS (Master Production Schedule): How many garments will be produced and when?
- BOM (Bill of Materials): A detailed list of raw materials, trims, and components.
- Inventory Data: Includes available stock, planned quantity, and safety stock levels.
Example: Adidas (Germany) manufactures running shoes. The production team needs:
- 500,000 pairs of rubber soles
- 1,000,000 meters of mesh fabric
- 2,500,000 shoelaces
Their MRP system checks inventory to see what’s already in stock and what needs to be ordered.
Bill of Materials (BOM) in Apparel Manufacturing
Types of BOM in the Apparel Industry:
1. Single-Level BOM – Lists all components required to assemble a product but does not break them down into subassemblies.
Example: A t-shirt factory in Bangladesh lists fabric, stitching thread, care labels, and packaging materials.
2. Multi-Level BOM (Indented BOM) – A hierarchical breakdown showing relationships between components and subassemblies.
Example: A winter jacket produced in Vietnam includes:
- Outer shell fabric
- Inner padding
- Zippers
- Lining fabric
- Stitching materials
Summarized Parts List – Lacks detailed assembly instructions, used mainly for inventory tracking.
BOM Elements in Apparel Manufacturing
- Line – Identification number.
- Level – BOM hierarchy.
- Part Number – Unique identifier for components.
- Description – Details of the component.
- Quantity & Unit of Measure – Specifies how much of each component is needed.
- Manufacturer & Part Number – Supplier information.
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| Figure: Bill of Material |
Where-Used and Pegging Reports
Where-Used Report: Identifies all garments that use a specific component.
Example: A factory in Tirupur, India, uses cotton fabric in t-shirts, shirts, and dresses. The where-used report shows all products requiring cotton fabric.
Pegging Report: Shows only garments with current demand for a component.
Example: If Zara Spain has an urgent denim jacket order, the pegging report will show only the jackets requiring the specific denim fabric, not other garments.
Techniques of MRP in the Apparel Industry
1. Exploding and Offsetting:
- Exploding: Determines component needs based on the product structure.
- Offsetting: Adjusts material order timing based on lead times.
Example (International): Uniqlo (Japan) needs 50,000 winter coats ready for winter sales. The MRP system calculates that:
- Wool fabric (60-day lead time) must be ordered 6 months in advance.
- Zippers (30-day lead time) must be ordered 4 months in advance.
2. Gross vs. Net Requirements:
- Gross Requirement: Total demand before checking inventory.
- Net Requirement: Adjusted demand after subtracting existing stock and scheduled deliveries.
Example (Domestic): Shahi Exports (India) needs 100,000 meters of cotton fabric for an export order.
- Available stock: 30,000 meters
- Scheduled delivery: 20,000 meters
- Net Requirement: 50,000 meters (100,000 - 30,000 - 20,000)
3. Releasing Orders:
- Planned Orders: Created for future needs.
- Scheduled Receipts: Orders already placed.
- Open Orders: Released but not yet completed.
Example (International): Hugo Boss (Germany) places an order for 200,000 meters of wool fabric from Italy. The MRP system tracks whether the supplier has shipped it.
Managing MRP in Apparel Manufacturing
1. Priority Control: Adjusts schedules based on due dates.
Example: If an order for winter jackets is urgent, the MRP system expedites fabric procurement.
2. Reducing System Nervousness: Avoids frequent, unnecessary changes in schedules.
3. Role of Planners in MRP: Planners work with:
- Planned Orders: System-generated orders.
- Released Orders: Sent to suppliers or production.
- Firm Orders: Manually adjusted for priority orders.
Conclusion
MRP is essential for the apparel industry, ensuring that materials are available when needed while minimizing waste and excess inventory. For domestic manufacturers like Arvind Mills (India), MRP helps in efficiently managing local raw material procurement. For global brands like Zara and H&M, MRP ensures that international suppliers deliver materials on time, maintaining fast-fashion production cycles.
Integrating MRP ensures reduced lead times, improved supplier coordination, and enhanced agility in responding to market demands, making it a critical tool for modern apparel manufacturing.
Books
- Vollmann, T. E., Berry, W. L., Whybark, D. C., & Jacobs, F. R. (2005).
- Manufacturing Planning and Control for Supply Chain Management (6th ed.). McGraw-Hill.
- Kumar, R., & Anand, V. (2018).
- Production Planning and Control in Apparel Manufacturing. Woodhead Publishing.
- Chuter, A. J. (2004).
- Introduction to Clothing Production Management (2nd ed.). Wiley-Blackwell.
- Glock, R. E., & Kunz, G. I. (2004).
- Apparel Manufacturing: Sewn Product Analysis (4th ed.). Pearson Education.
- Industry Reports & White Papers
- McKinsey & Company (2021).
- The State of Fashion 2021: Supply Chain and Sourcing Strategies.
- Fashion for Good (2020).
- Innovations in Fashion Supply Chain Management.
Research Articles & Journals
- Gunasekaran, A., & Ngai, E. W. (2005).
- Build-to-Order Supply Chain Management: A Literature Review and Framework for Apparel Manufacturing.
- Journal of Operations Management, 23(5), 423-451.
- Christopher, M., & Peck, H. (2004).
- Supply Chain Risk Management: Apparel Industry Case Studies.
- International Journal of Logistics Management, 15(2), 25-42.
Case Studies & Online Sources
- Zara's Supply Chain Strategy (2022).
- Nike’s Smart MRP System (2023).
Note: All the images are generated by Google Gemini and Microsoft Copilot
About the Author:
Prafull Sundriyal is a seasoned professional in Supply chain management with a solid academic background, holding an MFTech degree from NIFT Bengaluru and a BTech in Mechanical Engineering. With over five years of extensive experience in the Apparel and Fashion Industry, he has effectively collaborated with both domestic and international clients to deliver optimized solutions and enhance operational efficiency. Currently serving as an M3 Consultant at Infor, Prafull specializes in streamlining workflows, executing timely project implementations, and reducing operational costs. His expertise encompasses Project management, Product development, Operations, Strategy, and Customer success, making him a trusted advisor for seamless system transitions and impactful business outcomes.