Configuration 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

YES

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

NO
Consumptionbased

No disposition

Saisonal product?

Planning according
to BOM explosion

Demand-driven
(MRP)

VS
Saisonal planning

Supplier manages
stock more efciently?
YES

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

Replenishment policy
Material planning conducted for customer

SMI demand-driven

SM
NO

Replenishment
policy

BOM explosion

No disposition

X0, X1

ND

Consumption-based
(normal)

YES
Internal or external
customer

NO

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

YES

Plan-driven and
continuous review

Planning with fixing horizon:

high planning nervousness over BOM

Planning with fixing horizon:

high planning nervousness over BOM
YES

NO
R1 with PD

YES
P1
(periodic)

YES
PD

NO

YES

NO
P3
(periodic)

P2
(periodic)

Continuous review applicable

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

Use of VMI-module

NO
P4
(periodic)

YES
P1
(continuous)

YES

NO

Set and fix order proposal

autmatically without manual control
NO
P2
(continuous)

YES
P3
(continuous)

NO

Set and fix order proposal

autmatically without manual control
NO

YES
M1

P3: (M3 with MPS items)

not automatic xing of order proposals
necessary proposals are shifted to the end of
the fixing horizon

RE
NO

YES

Continuous review

Periodic review

Continuous review
(reorder point policy)

Dynamic target stock

level (A or Y,Z item)

Dynamic target stock

level (A- or Y,Z item)

Consider external
requirements
(Reservations etc.
not adequately
considered in forecast and safety stock)

M3

NO

YES
M2

M4

YES
RR

NO
RS

NO

YES
RF

RP

Periodic review

Consider external
requirements

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

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

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

No consideration
of ext. requirem.

periodic reorder point

policy (T,s,S), R2

periodic stochastic
policy (s, S), VV
NO

Set reorder point

automatically
good forecast quality

P4 (M4 with MPS items)

Order proposals are not generated automaticaly
A shortage situation is not balanced

YES
V1

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

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

NO

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

Continuous review applicable

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

NO

Set and fix order proposal

autmatically without manual control

P4
(continuous)

NO

YES

Generate order proposals automatically? (good

forecast quality)

YES

Set and fix order proposal

autmatically without manual control

NO

YES
VI

NO
M0: No automatic fixing of order proposals

Generate order proposals automatically? (good

forecast quality)
YES

Set and fix order proposal Set and fix order

proposal manual control
YES

External customer

Planning with fixing horizon:

high planning nervousness over BOM

NO

Generate order proposals automatically? (good

forecast quality)

Set and fix order proposal Set and fix order

proposal manual control

Internal customer

MRP with Master

Schedule items

Demand-driven
(MRP)

NO
V2

Set reorder point

automatically
good forecast quality
YES
VB

NO
VM

Periodic policy
width range of
coverage profile

Delivery rhythm depends on day of order

YES
Periodic with
delivery rhythm