Production planning without Excel: material requirements planning in one system

At many manufacturing companies, production planning lives in one Excel workbook. One tab holds customer orders, another the weekly production plan, a third the bills of materials, stock sits somewhere else, and purchasing works from its own sheet. With few products and a stable order book, this works. Then a rush order arrives, a raw material delivery is late or a machine goes down, and rewriting the plan takes half a day. This article covers the signs that production planning and material requirements planning have outgrown Excel, the risks of running them on spreadsheets, and what a custom production planning tool does instead.

It is written mainly for managing directors, production managers and planners at manufacturers with 20 to 200 staff, where on-time delivery and the cash tied up in inventory directly affect profit.

Why production planning is where Excel hurts most

Production planning is a chain. A customer order becomes a production requirement, the bill of materials tells you which parts and materials it needs, and that gives you gross material requirements. Subtract what is in stock and what is already on order and you get net requirements, which have to be ordered in time given each supplier's lead time. All of this runs against limited machine and shift capacity. This logic is what material requirements planning, or MRP, describes.

Excel can handle every single step. The problem is that the steps depend on each other, and a change should flow through the whole chain. When an order quantity changes, material requirements, the purchasing list and machine load all change with it. In a spreadsheet someone has to carry that through by hand, and the more products, variants and orders you have, the more likely something gets missed.

7 signs your production planning has outgrown Excel

• The plan depends on one person. If only one person really understands the production plan and its sheets, their holiday or sick leave stalls production.
• Material shortages show up mid-production. If jobs regularly stop because something is not on the shelf, your material requirements calculation is not keeping up with reality.
• Stock data is out of date. If the warehouse keeps its own sheet and the planner sees real stock days later, the plan is built on old numbers.
• Bills of materials exist in several versions. If you are not sure production, purchasing and costing use the same BOM, you end up with wrong orders and wrong unit costs.
• One rush order rewrites the whole week. If it takes hours after a new or changed order to see what slips and what material is needed, you cannot give the customer a quick answer on delivery dates.
• You cannot see machine and shift load. If you only find out after planning that one machine is overloaded while others sit idle, capacity use is left to chance.
• Safety stock is based on gut feeling. If you always have too much of some materials and too little of others, cash sits idle in the warehouse while shortages still stop production.

If two or more of these apply to you, moving production planning out of Excel and into a shared system deserves serious thought.

The risks of staying on spreadsheets

• Stopped production: one missed material order leaves machines, people and deadlines waiting at once.
• Tied-up cash: inaccurate material requirements push you to hold extra stock just in case.
• Slipping delivery dates: if the plan does not follow changes, customers find out about problems from late deliveries.
• Lost knowledge: planning rules, usual lead times and supplier experience live in one person's head and one spreadsheet, not in the company.
• Blind spots in decisions: without aggregated data on capacity, delays and scrap, it is hard to decide where you need a new machine, shift or hire.

What a custom production planning tool does instead

A custom production planning and MRP tool moves your existing planning logic into a shared system that runs in the browser. You do not adapt to the way an off-the-shelf product thinks. The system follows the way you manufacture.

• Shared master data: items, versioned bills of materials, routings, machines, shifts and supplier lead times in one place. When something changes, you update it once.
• Automatic material requirements: from orders and the production plan, it explodes the bills of materials into gross requirements, nets off stock and open purchase orders, and shows what is missing and when it has to be ordered.
• Purchase suggestions: the shortage list becomes order suggestions grouped by supplier, which purchasing approves or adjusts.
• Capacity and scheduling: one view shows machine and shift load. Move a job to another day and you immediately see what it affects.
• Shop floor feedback: operators report finished quantities and scrap on a tablet or phone, so the plan starts from the real state.
• Alerts: the system warns you when a material will not arrive in time or an order's due date is at risk.
• Integration: if you use inventory, invoicing or ERP software, the tool can exchange data with it. If quoting and cost calculation are also in spreadsheets, they can move into the same system, as we describe in replacing Excel for quotes and costing.

For the bigger picture, our ERP system guide compares off-the-shelf and custom options.

ERP or a custom tool for production planning?

Many ERP systems have a manufacturing or MRP module, and if you run series production with a few stable products, such a module can work well. We will tell you so. For contract manufacturing, make-to-order or small-batch production, many product variants, or scheduling rules you have refined over years, the standard module is often hard and expensive to bend to reality. In those cases a focused custom tool is built faster and fits better.

You do not have to replace everything at once. A common setup keeps accounting and invoicing in your current system while the custom tool handles planning and material requirements alongside it. Pricing is covered in detail in ERP system cost.

How moving production planning out of Excel works, step by step

We start with a free initial consultation. Based on it, we design the system at a fixed price, step by step, so from the very beginning you see on a live prototype how it will work. After that, in a separate offer, we give a fixed price for development that covers everything we recorded during design. You can also find the full process on our homepage.

1. Free initial consultation

A free, one-hour online conversation. You show us how the weekly plan and material orders are made today, where the bills of materials and stock data live, and what causes the most delays.

2. Fixed-price system design with a live prototype

For a small or medium project this takes 1 to 4 weeks, depending on the size of the system and how much we need to discuss. We go through your spreadsheets and planning rules, then build a clickable prototype in the browser. Live prototype: before development starts, you already see your whole system working, and you can change it quickly, step by step, during this phase. If you continue with us after design, the system design fee is credited against the development price.

3. Separate fixed-price development offer

Based on the approved prototype, we give an itemised, fixed-price proposal. From then on you know exactly what you get and what it costs.

4. Development: typically 6-10 weeks for a small or medium project

Based on industry experience, a small or medium internal system used to need a development team of typically 3-4 people, and comprehensive automated testing, which keeps the system stable and easy to extend for years, pushed that cost even higher. Today, with the right methods, every project is led end to end by one lead developer, supported by a complete AI team, for a fraction of the traditional cost, including a large suite of automated tests. We can give you the exact scope and price after the one-hour call and the discovery phase. For a small or medium project this typically means 6-10 weeks of development, after 1-4 weeks of discovery. For larger projects we set the timeline after discovery. You get weekly status updates throughout. Along the way we load your existing item master, bills of materials, stock and open orders.

5. Switchover and training

It is worth running the spreadsheet and the new tool side by side for a few weeks and comparing the calculated material requirements and the plan. Once they match, the team switches over. The source code and documentation belong to you.

The full process is described in our guide to custom software development for companies.

Which companies benefit?

Mostly manufacturers with 20 to 200 staff that have many products or variants, a frequently changing order book, and shortages or excess stock that already cost real money: metalworking, machine building, contract manufacturing, plastics and wood processing, food production and printing. If you run a manufacturing company, see our custom software for manufacturers page too.

If you have a few stable products, the plan rarely changes and the spreadsheet works well, you do not need a system. Replacing Excel for production planning pays off when the spreadsheet costs more in time, stoppages and tied-up stock than it saves.