MRP-Material Requirement Planning

PP Process Material Requirement Planning

Planned Orders
Production Order
Purchase Requisition

Confirmation

Capacity
Planning
Material Master
Bill of Material
Work Center
Routing
Sales Reqmt
Make to Order
DM/PIR
Order
MRP
PIR/SL/Quota
Goods Receipts
Purchase Order
PO Print
Release
Goods
Movement
R
Sales order /
Planned Ind Requirement
Planned order
Purchase requisition
Dependent requirement
Planned order
Dependent requirement
Finished Finished
product product
Assembly 2 Assembly 1
Raw
material 3
Raw
material 1
Raw
material 2
R/3s MRP is for unconstraint-based planning,
APO is for the constraint-based planning
PP Process Demand Management
DEMAND MANAGEMENT
PURPOSE :

Demand management is to determine requirement quantities and delivery dates for
finished product assemblies. DM uses planned independent requirements and customer
requirements as input.

Source of Demand

Annual Sales Plan
Sales Order


PP Process Demand Management
Splitting
PP Process Demand Management
Splitting
PP Process Material Requirement Planning
Objective of MRP
Guarantee Material Availability
Generate In-house/External Production and
Procurement Plan

MRP tries to strike the best balance possible
between

-optimizing the service level and
-minimizing costs and capital lockup

MATERIAL REQUIREMENT PLANNING
How the Planning Run Works
Net Requirements Calculation
1. Determine Available Warehouse Stock
2. Determine Planned Receipts (after considering existing issues and receipts)
3. Calculate the Shortage Quantity
Lot Size Calculation
Determine the lot size of each plan order. R3 Lot Sizing falls into 3
categories : Static Lot Size, Optimum Lot Size or Period Lot Size
Procurement Type & Scheduling
In-house Production or External Procurement & Backward Scheduling or
Forward Scheduling
BOM Explosion
Determine the valid BOM for explosion
Quota Arrangement
A lot can further be split by quota arrangements
Net Requirements Calculation ---> Lot Size Calculation ---->
-------> Scheduling --------> BOM Explosion ----->
-------> Quota Arrangement
Basic Parameters for MRP
MRP Type
Lot Size
Safety Stock / Safety Time
Reorder Point
Rounding Value
Procurement Type (In-house/Ext/Both)
Quota Arrangement
In-house Production days / Planned Delivery
Time
GR Processing Time
Planning Parameter - MRP Type
Key that determines whether and how the
material is planned
No Planning
Manual reorder point planning
Automatic reorder point planning
Material requirements planning
Master production scheduling (MPS)
Parameters for MRP-MRP Type

No Planning ND
EX:- If we keep no planning for Material then
the results are as follows for BENT ROD

Parameters for MRP-MRP Type
MRP type - PD (Planning Required)
MRP type PD means the material will be
considered by MRP run for planning and trigger
the Procurement Proposals after Net reqt
calculation
MRP Type - M0 (MPS)
This is set for critical material which are excluded
from MRP Run. However planning for these
materials are done thru separate routine
MRP type - VB (Manual Re-order Point)
Plans as per the Re-order level set for the
material


BOM Explosion
Scheduling
Procurement type
Lot- size calculation
Net Reqmts Calculation Net Reqmts Calculation
Overview : Net Requirements Calculation
MRP: Net Requirements Calculation
Shortage Shortage
Sales Sales Orders Orders
Planned Ind Reqmts Planned Ind Reqmts
Dependent Reqmts Dependent Reqmts
Reservations Reservations
Planned Orders
Production Orders
Purchase Requisitions
Purchase orders
Warehouse Stock
Lot Size
Safety Safety Stock Stock
Compare Compare
Demand Supply
MRP will compare the requirement and supply to get a shortage gap.
A comparison is made between warehouse stock and the appropriate
receipts and issue.
BOM Explosion
Scheduling
Procurement type
Lot-
Lot-
size calculation
size calculation
Net Requirements
Calculation
Overview : Lot- Size Calculation
Parameters for MRP-LOT SIZE
Lot Size Used to consolidate
demand/dependent reqmt as per the set
business rules.
Lot Size Procedures
Static lot-sizing procedures
Period lot-sizing procedures





Parameters for MRP-LOT SIZE
Static lot-sizing procedures
In static lot-sizing procedures, the lot size is
calculated by means of the quantity
specifications recorded in the material master
record.
There are three different criteria according to
which the lot size can be calculated:
Lot-for-Lot Order Quantity
Fixed Lot Size
Replenishment up to Maximum Stock Level






Parameters for MRP-LOT SIZE
Static lot-sizing procedures
Lot-for-Lot Order Quantity


after MRP run the order proposals as follows
Date Order proposals
14.11 Purchase order 20
15.11 Purchase order 30
16.11 Purchase order 50 .






Parameters for MRP-LOT SIZE
Static lot-sizing procedures
Fixed Lot Size


Fixed Lot Size set in Material Master as Ex-10 the results
as follows
Date Order proposals
14.11 Purchase order 10
14.11 Purchase order 10
15.11 Purchase order 10
15.11 Purchase order 10
15.11 Purchase order 10
16.11 Purchase order 10
16.11 Purchase order 10..






Parameters for MRP-LOT SIZE
Static lot-sizing procedures
Replenishment up to Maximum Stock Level
if you want to fill the stock up to the highest possible level or if
you can only store a certain quantity of a material due to the
container size. This applies to a tank, for example. The capacity of
the tank determines the maximum stock level.


Maximum Stock Level:-100 EA








Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
In period lot-sizing procedures, the
requirement quantities from one or from
several periods are grouped together to form a
lot. The SAP System supports various periods.
You can determine the number of periods
which are to be grouped together into an order
proposal. You have the choice between
Daily lot size
Weekly lot size
Monthly lot size





Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
Daily lot size
EX:-Argo-2000


Date Order Proposals
14.11 20
15.11 30
16.11 50
17.11 60.









Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
Weekly lot size
EX:-Argo-2000


Date Order Proposals
14.11 290
21.11 240
28.11 250









Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
EX:- Monthly lot size
Argo-2000


Date Order Proposals
30.11 780







BOM Explosion
Scheduling
Scheduling
Procurement type
Procurement type
Lot- size calculation
Net Requirements Calculation
Overview : Scheduling
External procurement Stock Stock transfer transfer
Procurement Types Procurement Types
In- In- house house
production production
Subcontracting Subcontracting Vendor
Production Production in in
own own plant plant
Production Production in in
another another plant plant
Reservation in Reservation in
another another plant plant
Components
Components Components
Procurement types
Special procurement types
Procurement Types
Scheduling
The following times are taken into account :
processing time required by purchasing
department (workdays)
planned delivery time of the material (calendar
days)
goods receipt processing time (workdays)

These times will be used to determine the
release date of the planned order or
purchase requisition.
Planned Orders for manufactured material
Purchase Requisition for external procurement
Action Messages & Planning related MIS