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Reorder Based Planning

Planning procedures :-
 To maintain optimum stock levels
 To guarantee material availability in most of the scenarios
 To minimize capital lockup due to excess inventory.

Two major types of planning procedure:-

1. MRP - Material Requirement Planning.
2. CBP - Consumption Based Planning.

MRP Vs CBP:-

Material Requirement Consumption Based Planning

Planning

Process It’s carried out using current and It’s carried out using Historical consumption
Flow future sales figures. data to calculate future requirements with
the help of the material forecast.
 Open sales orders and
Deliveries.
 Open Purchase Orders and
Purchase Requisitions.
 Open Planned Orders and
Production Orders.

Safety stock Net requirement calculation is Net requirement calculation is triggered

triggered based on the exact based on forecast requirements.
requirement.
High level of safety stock is maintained.
Low level of safety stock is
maintained.

prerequisite MRP 1 view MRP 1 view

 MRP type  MRP type
 Reorder Point  Reorder Point
 Lot Size  Lot Size

MRP 2 view MRP 2 view

 Safety stock  Safety stock
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Consumption Based Planning:-

 Reorder point planning
 Forecast-based planning
 Time-phased planning

Reorder point planning: - Procurement is triggered when the sum of plant stock and firmed
receipts falls below the reorder point.
Manual Reorder Point Planning (VB)
 In manual reorder point planning, you define both the reorder level and the safety stock level
manually in the appropriate material master.

Automatic Reorder Point Planning (VM)

 In automatic reorder point planning, both the reorder level and the safety stock level are
determined by the integrated forecasting program.

Assigning the MRP type -VB (Reorder- point planning) to material.

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Assigning Safety stock to material.

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Assigning Planning strategy to material.

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Creating Manual Demand (PIR) for material.

T-Code :- MD61

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Created Demand in the June month of 10 Qty.

Running MRP for the material.

T-code - MD01N

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After Running MRP

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Checking the requirements for the material.

T-code :- MD04

1. Available stock in New York plant - 0 Qty

2. Safety Stock to be maintained in New York plant - 10 Qty
3. Manual Demand created in June month - 10 Qty
4. Purchase order (4500001092) was created for - 100 Qty
5. Current available Qty as per above snap short = 80 Qty (after subtracting 10
qty of Safety stock and 10 qty of manual demand).

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