A pegging report is a standard output generated by Material Requirements Planning (MRP) systems in

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer ...

and

supply chain management In commerce, supply chain management (SCM) deals with a system of procurement (purchasing raw materials/components), operations management, logistics and marketing channels, through which raw materials can be developed into finished produc ...

. It identifies the specific sources of demand—such as customer orders,

work order A work order is usually a task (project management), task or a job for a customer, that can be scheduled or assigned to someone. Such an order may be from a customer request or created internally within the organization. Work orders may also be crea ...

s, or

forecasts Forecasting is the process of making predictions based on past and present data. Later these can be compared with what actually happens. For example, a company might estimate their revenue in the next year, then compare it against the actual resu ...

-that necessitate the procurement or production of lower-level components or

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials/Intermediate goods that are feedstock for future finished ...

s. Pegging is used to trace dependent demand through the Bill of Materials (BOM), establishing a parent–child relationship between assemblies and their required components. By showing which higher-level items (''parents'') are responsible for the demand of lower-level items (''children''), pegging reports provide detailed visibility into the quantity, schedule, and origin of demand for each component. This allows planners to link material requirements directly to end-use items, improving the accuracy of planning and scheduling activities. Pegging reports are essential tools in multi-level MRP environments and are commonly used in

discrete manufacturing Discrete manufacturing is the production of items that are distinct from one another. Examples of discrete manufacturing products are automobiles, furniture, smartphones, and airplanes. The resulting products are easily identifiable and differ gre ...

aerospace Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial, and military applications. Aerospace engineering consists of aeronautics and astron ...

, automotive, and

electronics Electronics is a scientific and engineering discipline that studies and applies the principles of physics to design, create, and operate devices that manipulate electrons and other Electric charge, electrically charged particles. It is a subfield ...

industries. The information in these reports supports decision-making related to

procurement Procurement is the process of locating and agreeing to terms and purchasing goods, services, or other works from an external source, often with the use of a tendering or competitive bidding process. The term may also refer to a contractual ...

, production scheduling, and Sales and Operations Planning (S&OP), particularly when managing long lead times, fluctuating demand, or constrained supply. Typical data fields include item numbers, demand source type (e.g., work order, sales order), quantities required, due dates, and priority levels. Pegging is a key function in many Enterprise Resource Planning (ERP) systems, including those developed by SAP, Oracle, and Microsoft Dynamics. Its primary value lies in the ability to perform ''backward tracing'' of demand—tracking how each material requirement rolls up into finished goods or customer commitments—allowing organizations to manage material shortages proactively.

See also