Conguration of the SAP MRP Procedure Parameter

Conduction of disposition (MRP procedure, MRP policy) Material not critical and no demand (during last x months) OR: Minimal planning effort requested (planning with BOM-successor through BOM explosion): C-item NO Demand-driven (MRP, plan-based, deterministic) vs consumption-based disposition LT + LT of BOM-successors < acc. LT Production smoothing and strategic stocking are not primary goals of material planning YES Demand-driven (MRP) NO Consumptionbased No disposition YES

Supplier manages stock more efciently? NO MRP with Master Schedule items (critical items) Material has signicant inuence on production performance OR production technology highly inuences the production process OR high share on overall turnover (A-item) AND top level BOM item YES SMI demand-driven

VS Saisonal planning

Saisonal product?

Planning according to BOM explosion

Replenishment policy Material planning conducted for customer

BOM explosion

No disposition

SM NO YES

Replenishment policy

Consumption-based (normal)

X0, X1

ND

Internal or external customer

Demand-driven (MRP) NO YES

MRP with Master Schedule items

Internal customer

External customer

Plan-driven + periodic review

Continuous review applicable technical and organizational Delivery at any date possible, no xed intervals? A or B items only, if high control costs

Plan-driven and continuous review

Continuous review applicable technical and organizational Delivery at any date possible, no xed intervals? A or B items only, if high control costs Planning with xing horizon: high planning nervousness over BOM YES NO M0: No automatic xing of order proposals NO Set and x order proposal autmatically without manual control NO YES P3 (continuous) NO P4 (continuous) YES M1 M3 YES Set and x order proposal autmatically without manual control NO YES M2 M4 YES Generate order proposals automatically? (good forecast quality) NO Set and x order proposal autmatically without manual control NO Dynamic target stock level (A or Y,Z item) YES RR NO RS Dynamic target stock level (A- or Y,Z item) YES RF YES NO RP YES Continuous review NO Periodic review

Use of VMI-module YES VI YES Continuous review (reorder point policy) NO RE

Continuous review applicable technical and organizational Delivery at any date possible, no xed intervals? A or B items only, if high control costs

Planning with xing horizon: high planning nervousness over BOM NO R1 with PD YES Set and x order proposal Set and x order proposal manual control YES P1 (periodic) NO P3 (periodic) YES Generate order proposals automatically? (good forecast quality) NO Set and x order proposal Set and x order proposal manual control YES P2 (periodic) NO P4 (periodic) YES NO

Planning with xing horizon: high planning nervousness over BOM

NO Periodic review

PD YES

Generate order proposals automatically? (good forecast quality)

Set and x order proposal autmatically without manual control

P1 (continuous)

P2 (continuous)

Consider external requirements (Reservations etc. not adequately considered in forecast and safety stock) NO No consideration of ext. requirem.

constant demand (X-item) B-/C-items Order cost relatively high

var. demand (Y, Z item) A-items ordering costs relative low

delivery schedule in place relatively stable average daily demand (X-item) use dynamic ss (R1)

P1 (M1 with MPS items): Order proposals within the xing horizon get xed (but no new proposals)

P2 (M2 with MPS items) Order proposals are xed withing xing horizon No automatic setting of new order proposals A shortage situation in xing horizon is not balanced automatically

Consider external requirements

periodic reorder point policy (T,s,S), R2

periodic stochastic policy (s, S), VV NO

Delivery rhythm depends on day of order YES Periodic with delivery rhythm

P3: (M3 with MPS items) not automatic xing of order proposals necessary proposals are shifted to the end of the xing horizon

Set reorder point automatically good forecast quality YES V1 NO V2

Set reorder point automatically good forecast quality YES VB NO VM

Periodic policy width range of coverage prole

P4 (M4 with MPS items) Order proposals are not generated automaticaly A shortage situation is not balanced

Taken from 'Automatic Parameter Conguration for Inventory Management in SAP ERP/APO' by David Bucher and Joern Meissner, available at: http://www.meiss.com