SAP ERP 6.

Rajesh Sharma
SAP Certified Consultant
ERP Sourcing & Procurement6.0,
SAP S/4 HANA Sourcing & Procurement,
SAP EWM 9.5 , SAP Activate 05
SAP ERP 6.0

Material
Requirement
Planning
✓ Basics of Material Requirement Planning

✓ Overall MRP Procedure

✓ Consumptions Based Planning

✓ Consumption base planning v/s Materials Requirement Planning

✓ MRP Types in SAP System

✓ MRP Data in Material Master

✓ MRP Profile

✓ Material Status and its customizing

✓ Reorder Point

✓ Safety Stock

✓ Scheduling

✓ MRP Run

✓ Planning File Entry

✓ Process of consumption based planning.

✓ Execution of MRP

✓Control Parameters of MRP run

✓ Plant MRP group Parameter’s customizing

MRP Areas :

MRP areas are optional. All Material Requirements planning can plan without referring MRP Areas.

There are three types of MRP areas

1. Plant MRP areas (obligatory) that are automatically created by activating planning with MRP
areas. Their number match with number of plant, if MRP area is defined the MRP area covers
entire plant,
2. Storage location MRP areas that are defined by the storage location assigned to them.
3. Subcontractors MRP areas that provide requirements planning of the materials provided for
a subcontractor and are defined by the assignment of this subcontractors.

There are many settings need to made separately for each plant or for each MRP area. The actual
Planning procedure is exactly the same.

Material Requirement Planning at plant level which is termed as consumption-based planning

If Material requirement planning is carried out at
plant level, the system adds together available stocks
for all individual storage locations to determine the
shortage.

Following prerequisite is mandatory for consumption

Based planning.

• Requirement planning for the corresponding plant

must be activated.
T-code: SPRO➔ IMG Screen➔ Materials Management
➔ Consumption based planning➔ Planning➔
Activate➔ Material Requirement Planning
• The plant parameters for the corresponding plant
must be activated in customizing.
T-code➔ SPRO➔ IMG screen➔ Materials
Management➔ Consumption based planning➔
Plant parameters➔ Carry out over all
Maintenance of plant parameters.
• In the material master record must have maintain
the MRP data of the material subject to automatic
planning.
CBP and MRP both are Materials
Requirements Planning procedure in SAP
, They determine how the
Materials are planned and made available to
meet the requirements.

MRP calculates the net requirement by

considering the warehouse stocks and
schedule receipts.
CBP calculates the requirements based on
events like when the stock level falls below
the reorder
point. CBP contains procedure like reorder
point planning, forecasts based planning,
time based
planning, Reorder point planning could further
be classified into manually or automatic
reorder point
planning.
You can see material master MRP1 View .
MRP procedure setup required MRP type it is
A field which determine and define the MRP
Procedure.
The MRP procedure is defined in the material
master record for each material and plant
(or MRP area). Therefore, the same material
can be planned in different plants using
different MRP procedures.

Material requirement planning based on

current and future requirements. The planned
requirements quantities triggers requirements
calculations. In MRP, the requirement elements
Include sales orders, planned independent
requirements reservations as well as the
dependent requirements that BOM explosions
create.

Consumption base planning, generally based on

Historical values, uses material forecasts or
statistical procedure to determine future
requirements. Consumption based planning do
not refer to the production plan.

Net requirements calculations is triggered by

available stock level falling below the reorder
point or by forecast requirements calculated
from historical data.
Prerequisites for the introduction of consumption
based planning.

• You need an efficient, up-to-date inventory

management.
• If you are working with forecast requirements,
the consumption history is to run according to
certain legality and only show low random
fluctuations.

In Reorder point planning

As a rule only shortfall of the reorder point causes

a planning file entry during reorder point planning,
and this then triggers net requirements calculations.
To avoid over planning, sales orders, dependent
requirements, reservations are not included in the
net calculation. In customizing,
Materials Management➔ Consumption Based
planning-➔ Master Data➔ Check MRP type use the
Indicator include external requirements for the MRP
Type in reorder planning to determine whether
external requirements (sales orders, and manual
reservations) are considered. Other requirements
like order reservations, purchase requisition
release also can be consider.

It can be decide whether these external requirements

Are to be included in the planning or only the lead time
of replenishment time is consider.
There are several MRP types are as follows:
• ND – No Planning
• PD – MRP
• R1 – Time phased planning
• VB – Manual reorder point planning
• VM – Automatic reorder point planning
• WM – Forecast-based planning

If the MRP type is to ND, then it is means no. Planning run is carried out for those materials.
Then their is no MRP procedure required.

MRP uses warehouse stocks, schedule receipts and requirements would be from sales order,
dependent requirements, order reservations, BOM explosions etc. CBP calculates requirements
When the stocks level goes below the permitted reorder point. The requirements would be
Triggered by the past historical data of consumption and forecasts data.

Above mentioned MRP type are available in standard SAP, customize MRP types could be
Configured based on business requirements. It could be configured with the help of copy option
From the existing MRP types, and changing the required fields to suit the business requirements

SAP CBP could be used for planning B and C materials. As this procedure could triggers
Requirements with less efforts and setup. It could be used for planning operation supplies also.

MRP could be use for A materials. As the stock level of A materials is very important and
Required to determine crucial decisions on materials, MRP would be used for planning of A
Materials. MRP calculates materials requirements based on the requirements triggered by the
Warehouse stock, schedule receipts and issues.
As opposed to MRP, consumption based planning
procedures are based on previous material
consumption. External requirements such as sales
Orders, planned independent requirements , and
reservations, are generally not relevant to planning.
MRP controllers with information about current issue
at same time. Is sales orders dependent manual
reservations, display in the current stock/requirements
list. The planning procedures in consumption-based
planning are easy to use methods of requirements
planning. That assist in achieving the goals with little
effort. The use of these MRP procedures is prefer in
areas without in-house production or in manufacturing
plant for plan B and C materials and operating supplies.
The following are planned directly as requirements in
MRP sales orders, planned independent requirements,
reservations. MRP is useful for planning finished goods,
and import assembly groups and components
(A materials)

The following MRP Procedure are available.

• Reorder Point Planning

• Forecasts based planning
• Time-phase planning
• Reorder Point Planning

In reorder point planning, checks are run to determine the planned available stocks (total from
plant stock and fixed receipts) fall short of reorder point determined for material in material
master record. If it fall down from reorder point the procurement must be triggered. The
reorder point should cover the expected average material requirement during replenishment.
Reorder Point are of two types
- Reorder point manually
-MRP controller determine Reorder point automatically where the system calculate the
reorder point using the forecast.

• Forecast Based Planning

It uses historical values in the material forecast to estimate future requirements. These
requirements are future requirements are immediately available in planning. The system
executes the forecast calculation at regular intervals.

• Time Phased Planning

Time phase planning also uses historical values in material forecast to estimate the future
requirements. In this procedure the planning is only executed according to predefined
intervals. It can shifted to delivery time if a vendor always deliver a material on a particular
week day.
MRP Type are defined in customizing
for material management under
Consumption-based planning➔
Master Data➔ Check MRP types. The
MRP types is a key which use to
determine the procedure use for
Planning a material, and to determine
The MRP parameters that must be or
Can be entered during maintenance
of the Material Master Record.

You can adjust the parameters for the

MRP types delivered in SAP standard
system to meet the requirements.
New MRP types also can be added.

For requirement planning different The MRP indicator for forecast determines whether the
MRP type parameters are relevant. Forecast values in the net requirements calculation are
MRP controller whether it is MRP or To be consider, if so whether as total requirements or as
Consumption based planning. Planned requirements. You can specify whether reorder
Forecast indicator can be use to Point and safety stock are to be automatically calculated.
determine the forecast results, are
To be used in planning. The
Consumption indicator for forecast
determine which historical values
used in planning.
The following Master data is required to
carry out MRP process:

• Material Master record

• Bills of Material
• Work Center (In house Production)
• Routings (in house production
• Demand Management
• Sales & Distribution (if required)

Material Master Record

The Material Master contains

information about all materials that a
company produce, procures,
stores, or sales. The material master is
the central source of a company for
getting information for
a material specific data which is save d
in individual material master record.

MRP Relevant data is stored at plant level in

the material master record. Need to make
relevant settings for storage location level
in material mater record (MRP 4). The
Function for separate storage location MRP
Planning allows for a flexible display with
MRP areas.
Maintain settings for MRP areas in the material master record MRP1 view.

MRP Data in the material master record can be sub divided into the following categories.

• General data that you must/can always define for a planning material
• Data dependent on MRP procedure
• Data required for scheduling
• Data required for lot-sizing calculation

To create the MRP views in the material master record

T-code: SAP Easy access➔ SAP menu➔ Logistics➔ Material Management➔ Material Master➔
Material➔ Create (General) ➔ Immediately
You can maintain MRP parameters with MRP profiles. The MRP profile is a key in which you can
store MRP parameters that do not depend upon on the material master record. A profile is
collection of fields for the configuration of material master records. The information determined
in the profile is standard that needed again and again in a similar combination when maintaining
different materials. A profile simplifies maintenance and administration of MRP data.
Specify the following in a MRP profile

• Which fields are to be completed when entering MRP data in

the material master record.
• Which values are to be entered in these fields
• Which of these values in material master record can be over
written (default values) and which can not (fixed values)

To create MRP profile,

SAP Easy access➔ SAP menu➔ Logistics➔ Material

Management➔ Material master➔ Profile➔
MRP profile➔ Create

Working with Profiles

When creating material master records, enter a profile to

make an assignment between the material master record
and the profile. This assignment means that the fixed values,
copied from the profile in the data screen, can not be
changed in the material master records. You can over right
the copied proposal values. When you save the material
master records, the
values are written to the material master record.

When changing a profile, the system creates a background jo

(PROFILE) that updates all material
records. A change document is automatically created for all
materials with changes. The time at
which the PRIFILE batch job is started is defined by the system
administration in customizing.

T-Code : SPRO➔ IMG Screen➔ Logistics General➔ Material

Master➔ Tools➔ Define Start time
Of Background Job➔
You can start the RMMM00001 program manually from menu by choosing
T-Code : S38 System→ Services→ Reporting
T-Code: MMD7
SAP Easy Access→ Logistics→ Material Management→ Material Master→ Profile→ Material
Profile
In addition to using MRP profiles, you can also use forecast profiles to manage forecasts data.
The processing of forecasts profiles follows the same principle as that of MRP profile.
The Material Status limits the use
of a material, it determines the
functions in materials
management and production
planning and control, for which
warning or error message should
generated.

This assignment is frequently

done for a limited period of time.
For example in the construction
or change phase of material.
T-code: SPRO→ IMG screen→
Logistics General→ Settings for
Key fields→ Define Material
Statuses

This can be assign a material

status to a material in material
master record either at plant
level (MRP1), or Cross Plant
(Basic Data 1) view. It is also
possible to assign material
status values in advance across
the plant in material type.
T-Code : MM01 Create Material T-M525-01 Select view→ Purchasing→ MRP1→ MRP2→
Accounting View→ Organizational View→ Plant→ Storage Location→ MRP Profile→
ZVB01
MRP1→ MRP Type automatically come because of MRP profile→ Reorder Point can be
change → MRP2→ Safety stock also can be change
Go to additional data→ Enter Consumption f0r last Months, Enter valuation class and
Moving average price ,click on save Material is created.
T-Code : MM02-Change→ Sect view MRP1→ enter
Plant and storage location→ continue→ Go to Edit→
MRP profile select The MRP Profile you can change it
and save. The Material MRP profile is changed
T-Code : MMD7- The material that have MRP Profile
will display

T-Code : MMD1- Create MRP Profile→

Principle of Re-order Point Planning :
The bases of re-order planning is the comparison of
available MRP stock (total from plant stock and the
fixed receipts) with the re-order point. If the available
stock is less than the re-order point, then procurement
is triggered.

The Re-order point should cover the expected average

material requirements during replenishment lead time
(RLT).

The safety stock should cover both excess material

consumption caused by delay deliveries. The safety
stock therefore part of the re-order point.

Following points should consider when defining the re-

order point.
▪ Safety stock
▪ Previous consumption or future requirements
▪ Replenishment Lead Time

During automatic re-order planning you determine the

re-order point and safety stock in the material master.
During automatic re-order planning, the integrated
forecast program determines the re-order point and
safety stock. To calculate the formula is
Re-order point = Safety Stock + Daily Requirement *
Lead Time
Inventory Management
continuously monitor the
Plant stock level during re-
order point planning. At
each material withdrawal
the system check whether
the withdrawal falls short
of the re-order point.

The system calculates net

requirements during the
planning run.

Available MRP warehouse

stock = Warehouse Stock +
On Order Stock

The on-order stock is

The Shortage quantity is the difference between and re-order
composed of fixed receipt
point and the available warehouse stock.
elements and firm receipt
elements. Such as
The Purchase Order quantity is created from the lot-sizing
Purchase Orders, Firm
procedure in the material master record.
Planned Order, and firm
Purchase Requisition.
After the net requirement calculation and lot sizing calculation
the system schedules the procurement proposal during
If the available stock is
planning run. It calculates the date on which the Purchase
lower than the re-order
Order has been sent and the date on which the vendor must
point there will be material
deliver the corresponding quantity.
shortage
Forward scheduling starts on the MRP date.

This date specifies the order start date for planned orders and the release date for purchase
requisitions (Release in this context means the release of the purchase requisition for conversion
into a purchase order as a result of Purchasing).

The purchasing department processing time is calculated in workdays, and the planned delivery
time in calendar days.

The delivery date therefore stands firm (for planned orders, this means the order
finish date).

Finally, the goods receipt processing time is calculated in workdays

with the delivery date and thus the availability date is known.

Time Frames Fields in Forwarding Scheduling :

The purchasing department processing time is the time available for the buyer
to convert a purchase requisition into a purchase order. You determine this in
Customizing for Materials Management under Consumption-Based Planning →
Plant Parameters → Carry Out Overall Maintenance of Plant Parameters.

The planned delivery time is the number of days required to procure the material
from external procurement.

The goods receipt processing time is the timeframe between receiving the
material and the receipt in the warehouse. It is required for unpacking, checking,
storing material and so on.
The planned delivery time and the goods receipt processing time are determined
for each material. (You can also determine the planned delivery time in the outline
agreement or purchasing info record according to vendor).
T-code: SPRO→ Logistics General→ Materials Management→ Consumption based planning→
Master Data→ Check MRP type
Material Master Record for T-M525A-01 T-Code- MM02
SAP Easy Access→ SAP Menu→ Logistics→ Materials Management→ Material→ Display→ Display
Current
MRP 2 View GR Processing Time-1 day, Planned delivery time 02 day safety stock 10
T-Code : SPRO→ Material Management→ Consumption based planning→ Plant parameters→
Carry out over all maintenance of plant parameters Enter plant number
Planned Order :

A planned order is an internal document used by the

MRP controller, specifying how much of a material is
needed and when.

A planned order is only used within the company and

it is not binding.

Example Requirement from Safety stock: Create a

new material by copy from existing material
MRP list :
T-Code : MD05
SAP Easy access→ SAP Menu→ Materials
Management→ MRP→ Evaluation→ MRP list
T-Code: MD04- Stock requirement list
T-Code : MD03- Run MRP enter the Material MRP Area
and Plant press enter, MRP carried out message
display, go to T-Code MD05
Describe the overall process of MRP

. Name the planning levels in consumption-based planning

. Describe the prerequisites for executing consumption-based planning.

. Differentiate between consumption-based planning and material

requirements planning (MRP)

. Name the MRP procedures of consumption-based planning

. Define MRP types in the system

. Create material master records and explain the MRP data

. Describe the functions of a MRP profile and create own MRP profiles

. Explain the meaning of the material status

. Explain the principle of reorder point planning and its process

. Describe the meaning of the reorder point and safety stock

. Comprehend net requirements calculation for materials planned with reorder

point planning

. Explain how materials planned with reorder point planning are scheduled.
Thank You…………………..