Tally is one of the renowned software used by approximately 20 lakh businesses across 100 countries. It effortlessly allows businesses to record and track their day-to-day business activities and facilitate prompt decisions based on analysis. Material requirement planning (MRP) is an add-on module of tally software that helps businesses streamline their inventory management and boost profitability. 

In this comprehensive blog, we will discuss the benefits of using tally for material requirement planning with its features and how to set up the MRP module in your tally software

What Is Material Requirement Planning (MRP) In Tally? 

Tally’s material requirement planning (MRP) is an add-on module that helps organize any business’s inventory process. MRP is a liable inventory management system that projects the indents based on ongoing sales and available stocks. It aids in providing overall inventory data on a single window, saving time and boosting efficiency. 

The aim is to plan and maintain the production schedule by leveraging inventory data provided by Tally’s MRP module. It streamlines the inventory process at its optimum by facilitating accurate material resource planning. It mitigates the material shortage by forecasting the material demands and ensuring the right material is available during product manufacturing. 

Benefits Of Material Requirement Planning Module

1. Inventory Management

MRP leverages the bill of material (BOM), master production schedule (MPS), and inventory data information to forecast the required materials for upcoming productions. It can also raise the purpose order to maintain the optimal inventory level for production. It saves businesses from over-stocking and understocking, saving costs and inventory wastage. These benefits make the MPR software an excellent inventory management tool for businesses. 

2. Effective Resource Management

The data-driven decisions are key elements of effective manufacturing resource planning. MRP streamlines all aspects of the supply chain and offers data-driven resources to plan and manage the resources. Since over-stocking poses storage costs and understocking causes lost sales, MRP effectively levels the inventory by preventing over and under-stocking of resources.

3. Production Planning

The streamlined material requirements planning aids in fulfilling the customer’s demands and ensures business growth. MRP reduces the complexity of inventory planning to achieve greater operational efficiency and productivity. It evaluates various data to provide insightful production forecasts and resource requirements for effective production planning.

4. Cost Reduction

Overstocking and unoptimized inventory demand continuous cash flow. MRP improves the efficiency and profitability of any organization by utilizing its data to offer optimal inventory balance. It effectively evaluates the lead times and purchasing demands to optimize the inventory and avoid overstocking to eliminate the storage cost. It ensures that the right amount of materials is delivered at the right time, mitigating the product’s obsolescence and restricted cash flow. 

Features of Tally’s MRP Module 

1. Product Wise Consumption Estimates

Tally’s material requirement planning software estimates and analyses material consumption for each product. It forecasts raw materials demands for the future inventory cycle by assessing the past production data and current inventory level. These features help the inventory managers to plan their procurement activities more accurately and precisely. It ensures that necessary materials are in the right place to meet the production demands without overstocking or understocking. 

2. Product Wise Consumption Analysis

Product-wise consumption analysis features in the Tally MRP module provide data for per-product material consumption. It tracks actual usage and estimated requirements to highlight variances and inefficiencies. These data provide manufacturer insights to recognize trends, optimize material usage, and reduce waste. The analysis also pinpoints the specific products that may be causing higher production costs. 

3. Production Requirement Report

The production requirement report in Tally’s MRP module outlines materials needed for the upcoming productions. It collects information from multiple sources including sales orders, inventory levels, and production schedules to provide a detailed overview of material requirements. The report aids in streamlining the production process and minimizes delays. 

4. Purchase Requirement Report

The purchase requirement report suggests which and how many materials are to be purchased to fulfill upcoming production requirements. The MRP software analyses current inventory levels, lead times, and reorder points to generate a precise list of purchase orders. The MRP module’s purchase requirement report contributes to more efficient and cost-effective procurement practices.

Setting Up Material Requirement Planning In Tally

1. Activate MRP Module

  • Open Tally and navigate to the Gateway of Tally.
  • Select “F11: Features” and then choose “Inventory Features.”
  • Enable the “Use Material Requirement Planning” option by setting it to “Yes.”

2. Configure Inventory Masters

  • Create stock items and categorize them into stock groups.
  • Define units of measurement for accurate tracking.
  • Set reorder levels and lead times for each stock item.

 3. Define Bill of Materials (BoM)

  • Navigate to Inventory Info and select “Stock Items.”
  • For each finished product, define the Bill of Materials by specifying the raw materials and their quantities required for production. 

4. Generate MRP Reports

Access “MRP Reports” from the Gateway of Tally to view production requirement reports and Purchase Requirement Reports.


Tally’s MRP module is an excellent add-on software that helps streamline inventory management. It is an effective solution for maintaining optimal inventory balance for scheduled and timely production. These features aid in saving time, minimizing inventory costs, improve business efficiency and profitability. However, the right integration of Tally’s MRP module is crucial to leverage the excellent features of this software. 

Mark IT is a leading tally partner & dealer in Mumbai that offers cost-effective solutions for all your Tally needs. Contact us today and let us help you integrate the MRP module with Tally safely and easily. 


Q) What is MRP in Tally?

Ans: MPRP is a production planning tool that is used to manage the manufacturing process. 

Q) What are the steps in material requirement planning?

Ans: It involves three major steps: hands-on Material inventory, assessing additional requirements, and scheduling the production. 

Q) How to activate the MRP feature in Tally Prime?

Ans: There are certain options that users need to follow to activate the MRP feature in Tally Prime. To activate the Material Requirement Planning (MRP) feature in Tally Prime, follow these steps:

  1. Open Tally Prime
  2. Access Company Features
  3. Enable MRP Feature
  4. Save the Settings

Q) What is the shortcut key to activate the MRP feature from the gateway of Tally?

 Ans: Users can press the F12 key to activate the MRP feature from the gateway of the tally.

Q) What is the connection between MRP, MRP II, and ERP?

Ans: ERP is an enhanced version of MRP and MRP II. It has all the core features that both MRP versions lack.