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

Demand-driven Consumption- No disposition

(MRP) based

Supplier manages VS Saisonal product? Planning according

stock more efficiently? Saisonal planning to BOM explosion
NO YES

MRP with Master Schedule items (critical items) SMI - Replenishment policy BOM explosion No disposition
• Material has significant influence on production performance demand-driven Material planning conducted for customer
• OR production technology highly influences the production process
• OR high share on overall turnover (A-item) AND top level BOM item
SM Replenishment Consumption-based X0, X1 ND
policy (normal)
NO YES

Internal or external
customer

Demand-driven MRP with Master Internal customer External customer

(MRP) Schedule items

Plan-driven + periodic review
Planning with fixing horizon:
high planning nervousness over BOM
NO Continuous review applicable
• technical and organizational
• Delivery at any date possible, no fixed intervals?
• A or B items only, if high control costs
YES Plan-driven and Continuous review applicable Use of VMI-module Continuous review applicable
continuous review • technical and organizational • technical and organizational
• Delivery at any date possible, no fixed intervals? • Delivery at any date possible, no fixed intervals?
• A or B items only, if high control costs YES NO • A or B items only, if high control costs
Planning with fixing horizon: Planning with fixing horizon: VI RE
high planning nervousness over BOM high planning nervousness over BOM

NO YES NO YES NO YES YES NO YES NO

R1 with PD Generate order proposals automatically? (good PD Generate order proposals automatically? (good M0: No automatic fix- Generate order proposals automatically? (good Continuous review Periodic review Continuous review Periodic review
forecast quality) forecast quality) ing of order proposals forecast quality) (reorder point policy)

YES NO YES NO YES NO

Set and fix order proposal Set and fix order Set and fix order proposal Set and fix order Set and fix order proposal Set and fix order proposal Set and fix order proposal Set and fix order proposal Dynamic target stock Dynamic target stock Consider external • constant demand • var. demand • delivery schedule in
proposal manual control proposal manual control autmatically without manual control autmatically without manual control autmatically without manual control autmatically without manual control level (A or Y,Z item) level (A- or Y,Z item) requirements (X-item) (Y, Z item) place
(Reservations etc. • B-/C-items • A-items • relatively stable av-
YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO not adequately • Order cost relatively • ordering costs erage daily demand
P1 P3 P2 P4 P1 P2 P3 P4 M1 M3 M2 M4 RR RS RF RP considered in fore- high relative low (X-item)
(periodic) (periodic) (periodic) (periodic) (continuous) (continuous) (continuous) (continuous) cast and safety stock) • use dynamic ss (R1)

YES NO

P1 (M1 with MPS items): P2 (M2 with MPS items) Consider external No consideration periodic reorder point periodic stochastic Delivery rhythm de-
• Order proposals within the fixing horizon get fixed • Order proposals are fixed withing fixing horizon requirements of ext. requirem. policy (T,s,S), R2 policy (s, S), VV pends on day of order
(but no new proposals) • No automatic setting of new order proposals
• A shortage situation in fixing horizon is not NO YES
balanced automatically Set reorder point Set reorder point Periodic policy Periodic with
P3: (M3 with MPS items) automatically automatically width range of delivery rhythm
• not automatic fixing of order proposals good forecast quality good forecast quality coverage profile
• necessary proposals are shifted to the end of P4 (M4 with MPS items)
the fixing horizon YES NO YES NO
• Order proposals are not generated automaticaly
• A shortage situation is not balanced V1 V2 VB VM

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