MRP & Production Planning

Course Objectives

Understand the principles of Demand Management (DM)

Define the Materials Requirements Planning (MRP) process
Describe how to valuate MRP planning runs
Perform DM and MRP transactions

Table of contents

Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

PP flow & Integration

FI /CO

MM

Long Term
Capacity
Planning

Sales & Ops

Planning

Capacity Req.
Planning

CO
(Cost
Control)

Demand
Management

MRP

MM LE
(Stock
Control)

Production
Execution

QM
(Quality
Control)

Master Data Related Transactions

Practice the following transactions

MM03 Display Material Master

CS03 Display BOM
CR03 Display Work Center
CA23 Display Rate routing
MM03 Display Production Version

Table of contents

Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

What is Demand Management?

Demand Management is used to determine requirement

quantities and delivery dates for finished products
Demand Management provides a demand program which
is used by MRP to generate production plans
Depending on the planning strategy chosen in the material
master, the demand program can use forecasts of demand,
actual demand, or combinations of both
Actual demand is created in sales order management
(customer orders) and materials management (warehouse
replenishment)
Forecasts of demand are represented by planned
independent requirements which are copied from the Sales
and Operations Plan

What is the DM Process (1)?

SOP plans are transferred to Demand Management as

Independent Requirements for end products

The actual sales orders are for information purpose only

and are not considered in planning.

In case the sales orders significantly vary from the

forecasted demand; Planners revise the demand before
running MRP to generate manufacturing orders and
purchase requisitions

Who is Responsible for DM?

Planner (DEM)
Responsible for managing the demand by comparing the actual
demand with the forecast and manipulate the plan based on the
actual demand before executing MRP

DM Related Transactions

Practice the following Transactions

MM03 Display Strategy

MD63 - Display Independent Requirements
MD04 - Display Stock Requirements List
MD74 Reorganise Independent Requirements

Table of contents

Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

Materials Requirements Planning

MRP compares the requirements for end products, from

Demand Management, with the current stocks and creates
planned manufacturing orders
Manual
entry

SOP
SOP
Production
Sales Plan
Plan

Material
Forecast

Copy
another
plan

Demand
Program
Planning levels:
Material
Product group
Versions

MRP

Planning options:
Horizon
Period splits
History

What is MRP?

MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that

is, it is used to procure or produce the requirement
quantities on time. This process involves the monitoring of
stocks and demand, leading to the automatic creation of
procurement proposals for purchasing or production.

The main objective of MRP is to determine which material

is required, the quantity required and by when it is
required.

What is the MRP Process (1) ?

MRP compares the requirements for end products, from

Demand Management, with the current stocks and planned
manufacturing orders

MRP chooses a Production Version which indicates the Bill

of Material and Routing to be used

MRP then explodes the product BOMs to determine the

dependent requirements for intermediate products and
purchased raw materials

What is the MRP Process (2) ?

MRP will normally be run weekly.

The MRP process assumes infinite capacity

The Rough-Cut Capacity Planning check in SOP ensures that the
loading is broadly correct before MRP runs.

MRP Type

For the MRP procedure, use MRP type PD in the material

master
MRP creates planned orders or requisition receipts to
balance the demand plan
Safety stock can be used to cover unplanned requirements

Receipts

Time
Requirements

Who is Responsible for MRP?

MRP Controller
Responsible for running and operating the material requirement
planning to check and track the planned requirement for both
finished products and raw material in order to generate Production
Orders and Purchasing Requisitions

Table of contents

Course Map

Module 1: Demand Management

Module 2: Material requirements Planning

Module 3: Master Data
Module 4: MRP Planning Runs
Module 5: Summary

Evaluations
There are several options for analyzing the Planning run
MRP list
By material
Collectively

Stock requirements list

By material
Collectively

Printed MRP list

MRP list

Planning Result

MRP list

Use the MRP list to analyze the planning result

The MRP list displays the future stock/requirements
situation at the time of the last planning run
By using the collective display, you can select a specific
MRP list based on plant and MRP controller
Analyze the exception messages in the MRP list, judge and
or solve problems
Use the processing indicator to indicate that you checked
the material

Planned order

Is the output of an MRP run

Are automatically created
Planned orders may be converted to production / process
orders or purchase requisitions

Planned
Order
10

Requirements

20
30

MRP

MRP Related Transactions

Practice the following exercise

MD01 Total Planning Run Online

MD02 Single-Item, Multi-Level
MDBT Total Planning in Background
MD07 Stock Requirements List Collective
MD05 Evaluate MRP List
MD44 Planning Situation Material