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R/3 System
MRP Areas

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......................................6 The MRP Process......................13 Multi-Level Subcontracting.................3 Basics......Contents Introduction ..........................................................11 Subcontractor Third-Party Order Processing .......................................................................................................................................................................................................13 Integration Sales and Distribution (SD)...............................................................................................................................................................................................................................................................................................................................16 Summary..........................................................................................................................................................................................................................................................11 Stock Transfer Plant to MRP Area ...........................................................10 Multi-Plant Total Planning....................................................................................10 Scenarios...............................................................................8 Plant MRP Area ..............14 ATP Availability Check ........15 Forecast and Long-Term Planning....................................................................................................................................................................................................................................................................................................................................................................8 Subcontractor MRP Area ...........................................................4 MRP Areas..................................................................7 MRP Areas for Storage Locations..............................................................................................................................................................5 Settings ...............9 Planning Strategies at MRP Area Level ......4 MRP Up To Now ................................................................................................................................................................................................................................................................................................................................................................................17 MRP Areas · July 1999 ...................................................................................................................

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This results in special demands on modern MRP (Material Requirements Planning). This requirement is fulfilled by the implementation of MRP areas. The main function of MRP is to guarantee the availability of materials by monitoring stocks and to automatically create order proposals for purchasing and production. independent planning areas. to increase the variety of products. MRP tries to optimize service levels but also minimize costs and capital lock-up. and to react flexibly to changes in the market.Introduction The globalization of markets means that companies are forced to develop their products quicker (time to market). MRP areas are freely-configurable organizational units within SAP R/3 with independent MRP. One of the demands on modern MRP is decentralized MRP for individual. 3 .

Deterministic or forecastbased planning was not supported at this level. All requirements were combined in the planning run to create procurement elements. If you wanted to plan a certain area separately. this type of planning was only based on reorder points. 4 .Basics MRP Up To Now Up to R/3 Release 4.5 MRP took the following organizational units into consideration: q Plant q Storage location MRP Organizational Units 0080 0070 0100 Plant 1000 0060 0090 0050 0040 0110 0120 0030 0020 V 5013 V 5012 0010 Storage locations Subcontractors The lowest organizational unit was the storage location. The plant was the central organizational unit for MRP and inventory management. However. you had to plan each plant individually.

Planning at Plant Level Without MRP Areas Requirements for assembly line 1 Requirements for assembly line 2 Storage locations 0110-0120 Storage locations 0010-0040 MRP In-house production Other requirements Subcontractor requirements Storage locations 0050-0100 V5012 V5013 Planned orders Purchase requisitions Schedule lines External procurement The parameters in the material master record that control MRP for a material were valid for the whole plant. or subcontractors. MRP Areas 0080 0070 0110 0100 Plant 1000 1000 0060 0090 0120 A200 0050 A100 0040 0030 0020 V 5013 A400 V 5012 A300 0010 Storage locations MRP areas Subcontractors 5 . MRP Areas MRP areas were introduced with R/3 Release 4. shop floor areas. The materials involved are needed at the various different production lines. They represent organizational units. An MRP area can include one or more storage locations of a plant or include just one subcontractor.5. It was not possible to differentiate between different types of requirements nor physically separate consumption locations. for which MRP is carried out separately. storage locations.

especially when planning several plants. If you do not assign a material to an MRP area. and to determine the respective consumer. you can define different MRP controllers for each MRP area that is assigned to a material. You can differentiate planning for one particular material according to the MRP areas. planning for a storage location MRP area can differ from that for a subcontractor MRP area. All MRP procedures are supported for MRP areas and you can display the results of the planning run for each MRP area. Once you activate MRP with MRP areas. for example) in MRP. Settings The existing planning file entries at plant level need to be converted to planning file entries at MRP area level. This conversion can also be useful even if you do not implement MRP areas. the material remains in the plant MRP area. If you assign a material to a new MRP area. These can differ from those defined in the material master at plant level. You can also plan the provision of components for individual subcontractors. a new record for this assignment is written in the planning file. As an example. this type of MRP is active for all plants and cannot be reversed. thus providing more clarity. one after the other. MRP does not actually change until you assign the materials that are to be planned separately to MRP areas. The conversion creates a plant MRP area for each plant and the existing planning file entries are copied into the new planning file. This enables you to differentiate between different types of requirements (spare parts or series.You can define MRP areas within a plant and then carry out MRP specifically for each area. It allows you to provide the right quantity of materials at the right time for each individual MRP area. You no longer need to segment plants to accommodate the decentralization of logistical operations. You can define individual MRP and forecast parameters for each MRP area that you assign to a material. In Customizing for MRP. For each MRP area. 6 . You can delete the assignment of a material to an MRP area as long as no postings for the material exist in that MRP area. The new planning file improves system performance during the planning run. a new record for this assignment is written in the planning file. Each material can be assigned to one or more MRP areas by creating an MRP area segment in the material master for each MRP area. If you assign a material to a new MRP area. you can control the staging and procurement of parts that are produced in-house or purchased. The only difference before you assign materials to MRP areas is an additional field (MRP area exists) in the material master. for example. you must activate MRP for MRP areas and create the MRP areas for each plant.

This is only possible if a valid vendor and a valid scheduling agreement exist. You can select material for one or all MRP areas of a plant in the collective display of these lists but the individual lists are calculated for each MRP area. The system can create delivery schedules for MRP areas during the planning run. During the total planning run (please see unit 5). the system creates an order proposal for the MRP area. A delivery schedule is then assigned to an MRP area via the receiving storage location that is entered in the scheduling agreement. q Use forecast requirements for each individual MRP area of a material. The customer requirement is assigned to an MRP area via the storage location. The system calculates the net requirements for the material in the MRP area and whether they are covered by the: q stock that is available in that MRP area q planned receipts for that MRP area. For exceptional cases.The system automatically sets planning file entries resulting from changes in MRP-relevant data at MRP area level in the same way that they were set at plant level. You display and process the results of the planning run for each individual material and MRP area in the MRP list and the stock/requirements list. You can also start a total planning run for just one or several particular MRP areas (if you have defined the scope of planning in Customizing). the system plans each MRP area for every material and then plans the rest of the plant. If there is a shortage. There are three types of MRP area: 7 . specifying the MRP area. you can: q Create a sales order with reference to a storage location. The system reads the source list for each material during the planning run. q Enter planned independent requirements in Demand Management. The MRP Process To plan independent requirements of a material. This is only possible if you use the make-tostock production planning strategy. you also have the option of creating the entries manually.

for example) are assigned via the receiving and issuing storage locations. The process is shown in the graphic: Planning at MRP Area Level Requirements for production line1 Requirements for shop floor 2 Storage locations 0010-0040 Storage locations 0110-0120 MRP area 1 MRP In-house production MRP area 2 MRP External procurement Receipt (planned orders. If the system is unable to determine a storage location. 8 . A storage location can only be assigned to one MRP area. Each subcontractor corresponds to one MRP area. However. for example. for example) and issue elements (planned independent requirements. You do this when you want to plan these storage locations together but separately from the other storage locations in the plant. you can group several storage locations into one MRP area. Subcontractor MRP Area You use the MRP area for subcontractors to plan components that you provide for a particular subcontractor from a specific plant separately from all other requirements. sales orders. The system checks whether the receiving or issuing storage location is assigned to an MRP area and then assigns the receipt of issue element to this MRP area. it assigns the element to the plant MRP area. This procedure can be used to plan the procurement and staging of components on a particular production line.MRP Areas for Storage Locations This type of MRP area represents a storage location that is planned separately from the rest of the plant. as shown in the following graphic.

MRP for each Subcontractor Components to be provided Subcontractor 1 Components to be provided Subcontractor 2 MRP area 1 MRP area 2 MRP MRP Stock Stocktransfer transferfrom from plant planttotoMRP MRParea area11 Third-party Third-partyorder orderprocessing processing During the planning run. Once you have defined separate MRP areas. 9 . Plant MRP Area The plant MRP includes the entire plant with all its storage locations and subcontractor stocks that are not planned separately. the system explodes the assembly BOM and determines the requirements of the components to be provided to the subcontractor. for example. You can set special procurement keys according to the requirements situation. the plant MRP area is reduced by exactly that number of storage locations and subcontractor stocks. The system uses these keys to determine whether to q create stock transfer reservations from the plant to the stock of material provided to the subcontractor or q create planned orders or purchase requisitions within subcontracting third-party order processing. where make-toorder production is planned. This type of MRP area is always used for finished products and assemblies that are intended for make-to-order or engineer-to-order production. The requirements can only be entered at plant MRP area level. Independent requirements for finished products or assemblies are planned using the planning strategy Planning without final assembly. The dependent requirements of the components to be provided are only assigned to the subcontractor MRP area if the system determines the subcontractor as the source of supply for the assembly.

MRP areas for storage locations or subcontractors can be used for finished products. That is to say. you can plan as many plants as you want in one total planning run. The following types of make-to-stock strategies can be used: q Make-to-stock (anonymous) q Gross requirement planning q Planning with final assembly q Planning at assembly level Multi-Plant Total Planning To avoid having to plan each plant individually. You use the scope of planning to define whether total planning is to be carried out for: q One or more plants q One or more MRP areas q A combination of plants and MRP areas 10 .Planning at MRP Area Level Requirements for assembly line 1 Requirements for shop floor area 2 Plant Subcontractor requirements requirements Storage locations 0010-0040 Storage locations 0110-0120 Storage locations 0050-0100 MRP MRP MRP In-house production V5012 V5013 MRP MRP External procurement Planning Strategies at MRP Area Level Make-to-stock production is supported at MRP area level. and assemblies that are planned as maketo-stock production. semi-finished products.

The following graphic shows the dependencies involved: Multi-Plant (Site) Total Planning Plant 1000 stock transfer Plant 2000 scope of planning stock transfer Plant 3000 A simplified example: Plant 1000 produces mountain bikes. You can procure components that you provide to a subcontractor (for the production of an assembly) by transferring stock from a plant to the subcontractor MRP area. Plant 1000 would carry out an MRP run to determine the requirements for wheels. The dependencies between plants or MRP areas are then automatically included and planned in the total planning run. Scenarios Stock Transfer Plant to MRP Area You can procure materials for MRP areas. The wheels are produced in plant 2000 and the spokes for the wheels in plant 1000. From Release 4. by transferring stock from the plant to the MRP area. Plant 1000 would then have to re-run MRP to determine dependent requirements for components of the spokes. so that all requirements were planned correctly in the various plants. Plant 2000 would then carry out an MRP run to determine the dependent requirements for spokes.5 it is sufficient to define the scope of planning. whether they are for separate storage locations or subcontracting MRP areas. as shown in the graphic below: 11 . Previously. the planning sequence of the plants had to be defined exactly.

The system creates a stock transfer reservation as a receipt element in the MRP area concerned and a material reservation as an issue element in the plant MRP area. The assembly BOM is exploded and the dependent requirements of the components to be provided are assigned to the subcontractor’s MRP area. Using MRP areas Storage Location MRP can use all MRP procedures (instead of just the reorder point planning procedure). Special Procurement Type: Stock Transfer from Plant to MRP Area Plant MRP area Stock transfer of components to be provided 12 MRP area storage locations .MRP Area at Subcontractor Level : Stock Transfer Plant MRP Area Delivery of assembly MRP Area subcontractor Stock transfer of components to be provided The system determines the subcontractor as the vendor for the assembly (using the source list) and creates a purchase requisition. a stock transfer reservation is created. the system determines that the components are to be procured by means of stock transfer from the plant to the subcontractor MRP area. In this situation. Based on the special procurement key in the MRP area segment of the components to be provided. The actual procurement is processed by the plant and the stock transfer posting to the MRP area refers to the reservation.

Special Procurement Type: Subcontractor Third-Party Order Processing Plant MRP area ord ers Delivery of assembly c MRP area Subcontractor 2 s er s l iv nt de on e p om Vendor Z The system determines Subcontractor 2 as the vendor for an assembly and creates a subcontract purchase requisition. The advantage is that the components are delivered directly from the vendor to the subcontractor. that is. which he/she obtains from subcontractor “Z”. Multi-Level Subcontracting You can also use MRP areas to plan multi-level subcontracting. For example. the subcontractor’s address is the delivery address. which were provided from Plant MRP area “1000”. as shown in the following graphic. subcontractor third-party orders. Subcontractor “X” needs “Assembly 2” for his/her production. When you display a subcontracting third-party order. The components to be provided are delivered directly to the subcontractor and goods receipt is posted to the subcontracting stock. The BOM is exploded and the dependent requirements of the components to be provided are assigned to the MRP area for Subcontractor 2. Subcontractor “Z” needs the “components to be provided 3”.Subcontractor Third-Party Order Processing You use this process for components that you provide to a subcontractor by procuring them externally. 13 . You can then convert the purchase requisitions to purchase orders. you order “Assembly 1” at subcontractor “X”.

As the special procurement key is set in the MRP area segment of the “components to be provided 3”. The BOM for “Assembly 2” is exploded and the system generates dependent requirements for the “components to be provided 3”. The system generates a subcontractor planned order (or purchase requisition or delivery schedule) to cover the dependent requirements of “Assembly 2”. Independent requirements are reduced each time goods issue is posted for a delivery for a sales order. 14 . These dependent requirements are assigned to the MRP area for Subcontractor “Z”. Integration Sales and Distribution (SD) Sales order There are two possibilities to integrate MRP areas in sales orders: q You can use a user-exit to update MRP areas in the sales orders with your own MRP area determination. or q The system can determine MRP areas by the storage locations in sales orders.Multi-Level Subcontracting MRP area Assembly 1 Co mp on en ts to be pr ov ide d Subcontractor X Assembly 2 Plant MRP area 1000 MRP area 3 Subcontractor Z The system determines Subcontractor “X” as the vendor for Assembly 1 and creates a subcontract purchase requisition. The BOM for “Assembly 1” is exploded and the dependent requirements of “Assembly 2” are assigned to the MRP area of Subcontractor “X”. the system determines that the components are procured by transferring stock from the plant to the MRP area for Subcontractor “Z”.

it is only carried out within the MRP area. The receipt and issue elements are assigned to the correct MRP area based on the receiving and issuing storage locations. No check takes place against the storage location entered in a sales order. and issues are taken into consideration. for example. q ATP check with storage location check If you have assigned several storage locations to an MRP area. receipt and issue elements of separate MRP areas are not taken into account in the plant MRP area. If more than one storage location has been assigned to the same MRP area. The result of the ATP check is the smaller of the two quantities. the ATP check is also activated at MRP area level. receipts. A separate ATP check is carried out for each MRP area.Delivery You can create an SD delivery and post goods issue when you are in the list of stocks for a subcontractor. Storage location and subcontractor stock is not included in the ATP stock of the plant MRP area. you can define an ATP check at storage location level. SD Delivery for Components to be Provided to a Subcontractor Vendor Post goods issue x Comp X1 x Comp X2 x Comp X3 Subco A Create delivery Comp X4 ATP Availability Check Once MRP with MRP areas has been activated. all stocks. There are two types of ATP check: q ATP check without storage location check This ATP check is single-level. In addition. The delivery is used for delivering input material to be provided to that subcontractor. The system determines the quantity available in the storage location and then the corresponding MRP area. 15 .

Consumption values are updated separately for each MRP area. You can carry out consumption-based planning at MRP area level if you have created a material master record with valid MRP data and forecast parameters. you can only carry out forecasting for MRP areas in master planning and not online in the maintenance of the material master (as for the plant area). Selection Interactive Automatic Constant model Trend model Seasonal model Seasonal trend model Automatic model selection Models Parameters Basic value Basic value Trend value Basic value Seasonal indices All different forecast models and the automatic model selection are available for the MRP area. However. All long-term planning functions are also available at MRP area level. 16 .Forecast and Long-Term Planning All the forecast models and automatic model selection are available for the MRP area.

multi-level planning. avail. In Sales and distribution you can create a sales order with determination to an MRP area. Therefore. Every delivery of a sales order reduces the independent requirement for an MRP area. check. lists. For each MRP area you can control the staging and procurement of parts that are procured in-house or purchased. stock reqm. Now storage locations can be grouped and planned separately. MRP areas are fully integrated in the logistic chain.5 there are MRP areas. MRP lists. Integration of MRP Areas in the Logistic Business Process Master planning Material forecast Demand management Long-term planning Procurement Total. Using long-term / simulative planning you can verify different what-if scenarios. With the MRP areas you can also carry out subcontracting/third-party order processing You can use different forecast models and demand management on MRP area level. pegged requirements MRP Sales and distribution Sales Shipping All standard MRP procedures are supported at MRP area level.Summary From R/3 Release 4. These enable the decentralization of logistical operations (fractal factory) and also differentiate between different types of requirements. single. order progress. 17 .