Feature / MRP Engine

How MRP works
in Dream MRP

A plain-English walkthrough of every step Dream MRP takes — from reading your sales demand to creating planned purchase orders and work orders — and the settings that change its behaviour.

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Overview

One calculation.
Three outputs.

Every time you run Dream MRP it works through a single calculation that combines your demand, your stock, and your Bills of Materials. The result is three things: a set of planned purchase orders for items you need to buy, a set of planned work orders for items you need to make, and an MRP results table showing the numbers behind every recommendation.

Nothing is permanent. Planned orders carry the status Dream MRP Planned and can be reviewed, edited, or discarded. Each time you run MRP the previous planned orders are cleared and replaced with a fresh set.

step 1
Collect demand

Open sales order lines and (optionally) sales forecast lines are combined to form total demand for each finished item.

step 2
Explode the BOM

Each finished item is expanded through its Bill of Materials — up to five levels deep — to calculate how much of every sub-component and raw material is needed.

step 3
Net off stock

Quantity on hand and open purchase order quantities are subtracted from gross demand. Only genuine shortfalls proceed to the next step.

step 4
Create planned orders

Purchased items become planned purchase orders grouped by supplier. Manufactured items become planned work orders ready for your production team to action.

Step 1 — Demand

Where demand
comes from

Dream MRP combines two demand sources. You control whether both are active or just one.

Sales orders (always on)

Every open sales order line is read from your accounts system. The item code on each line is matched to your item list and the ordered quantity is added to demand. There is no date filter — all open orders are included regardless of their due date. If the same item appears on multiple order lines the quantities are totalled.

Sales forecasts (optional)

If you have created sales forecasts inside Dream MRP and marked them as Include in MRP, their lines are also added to demand — but only for lines whose required date is today or in the future. Past-dated forecast lines are automatically excluded. You can further limit how far ahead forecasts count using the Sales Forecast Horizon setting (see below).

Step 2 — BOM explosion

Turning finished goods
into raw material needs

Once Dream MRP knows how many of each finished item are demanded, it expands that demand through your Bills of Materials. If product A requires 2 units of sub-assembly B, and sub-assembly B requires 3 units of raw material C, then an order for 10 of A creates demand for 20 of B and 60 of C.

This expansion happens automatically up to five BOM levels deep, which covers virtually all real-world product structures. Any item that appears at multiple levels has its demand contributions summed into a single total.

Items flagged as Ignore in Planning are silently skipped at every level. They do not generate demand themselves, and demand does not flow through them to their components either.

Example — three-level BOM
  • L0
    Widget Pro — 10 on order → 10 units of demand at the top level
  • L1
    Frame assembly — BOM qty 2 → 20 units of demand
  • L2
    Steel tube 500mm — BOM qty 3 → 60 units of demand
  • net
    Stock on hand: 15 tubes → 45 tubes to order
Item types

Purchased, Make to Stock,
or Make to Order

Each item in Dream MRP has an item type. This single setting determines what MRP creates when a shortfall is detected.

item type
Purchased

You buy this item from a supplier. When demand exceeds stock on hand (minus open PO quantities), Dream MRP creates a planned purchase order line. Lines for the same supplier are grouped onto a single purchase order. If sales-order demand is below the item's minimum stock level, the minimum is used as the floor instead — ensuring stock is replenished even when outstanding orders alone do not trigger a shortfall.

item type
Make to Stock

You manufacture this item to hold in stock. When demand exceeds quantity on hand — or when sales-order demand falls below the item's minimum stock level — Dream MRP creates or increments a planned work order. Multiple demand sources for the same item are merged into a single work order. Forecasts can raise total demand above the minimum, but only sales-order quantities are compared against the minimum floor; forecasts alone do not trigger it.

item type
Make to Order

You manufacture this item only when a customer orders it. Dream MRP creates one work order per sales order line for the exact quantity ordered. Stock on hand is deliberately ignored — every order gets its own dedicated work order. Forecast lines do not create Make to Order work orders.

Settings

Parameters that
change the plan

Several settings in Dream MRP directly influence what the calculation produces. All of them are per-item or per-tenant and can be changed at any time — re-running MRP immediately reflects the updated values.

  • Minimum Stock Level

    Set on individual items. Applies to Purchased and Make to Stock items — not Make to Order. Dream MRP compares this floor against sales-order demand only; forecast quantities are deliberately excluded from this check. If sales-order demand is below the minimum (or there is no demand at all), a planned order is created for enough stock to reach the minimum level. If total demand including forecasts is higher than the minimum, total demand wins — the minimum never reduces the planned quantity below what is actually needed.

  • Default Supplier

    Set on individual items. Used to group purchase order lines by supplier. If no default supplier is set, Dream MRP looks at the most recent purchase order for that item to find the last-used supplier. If neither is available the line is placed on an Unassigned order.

  • Ignore in Planning

    Set on individual items. When ticked, the item is completely excluded from the MRP calculation. It will not appear as a product to be made, a component to be purchased, or a sub-assembly to be exploded through. Useful for packaging, consumables, or items managed outside Dream MRP.

  • Sales Forecast Horizon (days)

    Set in MRP Planning Settings. Controls how far into the future forecast lines are included in demand. Setting this to 30 means only forecast lines due within the next 30 days count. Setting it to 0 means all future forecast lines are included (no limit). Past-dated forecast lines are always excluded regardless of this setting.

  • Include in MRP (on a forecast)

    Set on individual sales forecasts. Only forecasts with this flag enabled contribute to MRP demand. You can maintain multiple forecasts and choose which ones are active in the calculation without deleting any data.

Fresh every run

Each run starts
from scratch

Before calculating anything, Dream MRP deletes all existing Dream MRP Planned purchase orders and work orders for your organisation. This means the results always reflect your current data — there is no accumulation of stale recommendations from previous runs.

Orders you have already actioned — those with a status other than Dream MRP Planned — are never touched. Dream MRP only manages its own planned output.

When MRP finishes it records the run date and time against your organisation. You can see this on the Settings page under Last MRP run.

What MRP will and won't touch
  • clears Purchase orders with status Dream MRP Planned
  • clears Work orders with status Dream MRP Planned
  • creates New planned purchase orders grouped by supplier
  • creates New planned work orders for manufactured items
  • never Your authorised/submitted orders, live stock quantities, or any data in your accounts system
Running MRP

On demand or
on a schedule

You can trigger MRP manually at any time using the Run Now button. Dream MRP will first sync your latest data from your accounts system — items, sales orders, purchase orders — then run the calculation on that fresh data.

You can also schedule MRP to run automatically overnight so that your planned orders are ready each morning. Scheduled runs use the same sync-then-calculate sequence as a manual run.

The MRP results table on the dashboard always shows the output of the most recent run, labelled with the run date and time.

Sync and calculate sequence
sync
Fetch latest data

Items, sales orders, purchase orders, contacts, and purchase history are refreshed from your accounts system before the calculation begins.

clean
Remove previous planned orders

All Dream MRP Planned purchase orders and work orders from the previous run are deleted so the new results start clean.

calculate
Run the MRP engine

Demand is collected, the BOM is exploded, net requirements are calculated, and new planned orders are created — all in a single pass.

See the calculation
on your own data.

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