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SAP MRP PROCEDUREES
TABLE OF CONTENTS
Contents
SAP MRP PROCEDURES ............................................................................................................ 1
1.1. How it works ..................................................................................................................... 3
1.2. MRP Procedure ................................................................................................................ 4
3.1. MRP Type PD (MRP Procedure D) ................................................................................ 10
3.2. MRP Type PP (MRP Procedure D) ................................................................................ 13
3.3. MRP Type PV (MRP Procedure D) ................................................................................ 17
3.4. MRP Type PW (MRP Procedure D) ............................................................................... 18
3.5. MRP Type P6 (MRP Procedure D) ................................................................................. 18
3.9. MRP Type ZP (MRP Procedure D) ................................................................................ 28
3.10. MRP Type Z8 (MRP Procedure D) ................................................................................. 28
4.1. CBP Type VB Manual Reorder Point (MRP Procedure B) ............................................. 29
4.2. CBP Type V2 Automatic Reorder Point (MRP Procedure B) .......................................... 32
6.1. CBP Type R1 or VS Time phased Planning (MRP Procedure R) ................................... 40
6.2. MRP Type RS Replenishment retail (MRP Procedure W) .............................................. 40
7.1. Calculation of lot-sizes for the procurement proposal ..................................................... 42
7.2. Static lot-sizing procedure .............................................................................................. 43
7.3. Periodic lot-sizing procedure .......................................................................................... 43
7.4. Optimum lot-sizing procedure ......................................................................................... 44
7.5. Other tools in lot-sizing procedure .................................................................................. 44
8.1. Consumption values ....................................................................................................... 47
8.2. Forecast values .............................................................................................................. 48
8.3. Forecast execution ......................................................................................................... 48
8.4. Forecast models ............................................................................................................. 50
9.1. Creation indicator ........................................................................................................... 54
9.2. Planning mode ............................................................................................................... 55
10.1. MRP Storage location with special procurement ............................................................ 57
10.2. MRP availability check per stock type ............................................................................ 57
11.1. Planning strategy 40 and VE .......................................................................................... 60
11.2. Key property of strategy VE and procedure .................................................................... 61
11.3. Strategy VE example ...................................................................................................... 62
12.1. Scheduling for externally procured materials .................................................................. 65
12.2. Scheduling for in-house manufactured materials ........................................................... 65
14.1. SMT Kanban Procedure (KTEC) .................................................................................... 70
14.2. STT and SRK Kanban Procedure................................................................................... 71
14.3. SST - GI Year-forecast Procedure.................................................................................. 74
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SAP MRP PROCEDUREES
1. Material Planning Overview
Materials’ planning is one of the key of good inventory control systems.

The objective of materials planning is to monitor the stocks to ensure material availability;
with materials planning in SAP we can determine automatically which material is required,
the quantity required and when it is required. We can therefore prevent lacking of materials
if needed.
Materials planning in SAP can automatically create procurement proposals for purchasing
and production (planned orders, purchase requisitions or delivery schedules). This target
is achieved by using various materials planning methods which each cover different
procedures.
1.1. How it works
Sales and Distribution module of SAP receives demand from customer. Sales department
will create a sales order or a sales forecast which contain the information of what, how
many, and when Finished Goods are needed by the customer.
The Sales Order or the Sales Forecast will be considered as an independent requirement
and this requirement will trigger materials planning process for finished goods.
SAP will compare the requirements with finished goods current stock and if the
requirement fulfilment will result in shortage of stocks (according to determined calculation
rule for the finished goods), materials planning will automatically create procurement
proposal, like a planned order.
Planned order can be converted into production order (if finished goods are produced
internally) or purchase requisition (if finished goods are procured externally). In addition,
materials planning can also create purchase requisition directly as a procurement proposal
(no planned order).
If the finished goods are produced internally, the production or planned order created will
be considered as dependent requirement. SAP will determine these dependent
requirements by using the information from Bill of Materials (BOM) of finished goods.
These dependent requirements will also trigger materials planning for the components or
raw materials.
If the finished goods/components/raw materials are procured externally, the procurement
department will process the purchase requisition into Purchase Order.
The prerequisites for implementing all materials planning procedures is the Inventory
Management must always be up-to-date; if this prerequisite will be not maintained, then
materials planning will fail to achieve its goal to monitor stocks in order to ensure material
availability.
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SAP MRP PROCEDUREES
1.2. MRP Procedure
We will use the MRP type in order to assign the procedure to be used to plan a material
and to control which MRP parameters will be maintained in the material master record.
It follows a picture about the section MRP1 in material master we will use in order to set
our relevant parameter:
The key MRP Type determines how the material will be planned, according to following
options:
o Deterministic Planning MRP

o Reorder Point + Time-phased + Forecast-based = Consumption-based Planning
o Master Production Schedule MPS
As we will see in the next Chapter of this Document, starting from the same MRP
Procedure, we will have the possibility to maintain in customizing a group of parameter in
order to define better the expected results.
So basically, to resume, we can distinguish 3 types of materials planning procedures in
SAP, which are:
A Traditional Material Requirements Planning (MRP)
In traditional MRP system, sales order, independent requirements, reservations,
dependent requirements that comes from BOM explosion are planned directly as
requirements.
The materials planning procedure will create procurement proposal only if these
requirements will result from shortage of material stocks at a certain time. There are no
other requirements that can trigger a procurement proposal. This procedure is used for
example, in PD MRP Type (customizing procedure code D).
The traditional MRP Procedure is especially useful for the planning of finished products
and important assemblies or components.
B Consumption Based Planning (CBP)

Consumption-based planning is a materials planning procedure based on past
consumption values that determine future requirements by using forecast or other
statistical procedures.
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SAP MRP PROCEDUREES
Originally, in CBP, planned independent requirements or dependent requirement will not

be considered in the net requirements calculation. Instead, it is triggered when stock levels
fall below a predefined reorder point or by forecast requirements calculated using past
consumption values. So, all the planned independent or dependent requirements in a
certain period of time should have been considered before.
Consumption-based planning procedure is substantially a simple materials planning

procedure which we can use with little effort: therefore is used typically in areas without in-
house production.
We are able to define 3 different procedures in Consumption Based Planning:
1 Reorder point planning

In reorder point planning, SAP checks whether the available stocks are below the reorder
point that has been set for the material. If they are, will be create procurement proposal.
We can determine the reorder point manually (VB) or, it can also be calculated
automatically using the material forecast (VM).
The reorder point should cover the average material requirement expected during the
replenishment lead time. Besides the average consumption, we also should consider
safety stock. The safety stock exists to cover both excess material consumption within the
replenishment lead time and any additional requirements that may occur due to delivery
delays. Therefore, the safety stock is included in the reorder level.
In order to define the correct level of safety stock it will be necessary to consider the
following elements:
- past consumption values (historical data)
- vendor and production delivery timelines
- service level to be achieved
- forecast error
Besides the MRP type VB (manual reorder point) and VM (automatic reorder point) there
are also other types that use reorder point as basis to calculate requirement with additional
procedure which take into consideration external requirement (like sales order and manual
reservation): these types are: V1 (manual reorder point with external requirements) and V2
(automatic reorder point with external requirements). In any case the customizing
procedure code is B
2 Forecast-based planning
In forecast-based planning, historical data are used in the material forecast to estimate
future requirements. These requirements are known as forecast requirements and are
immediately available in planning.
The forecast is carried out at regular time intervals: this offers the advantage that
requirements, which are automatically determined, are continually readapted to suit
current consumption needs.
Actually we don’t have any examples or use in our customizing setting.
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SAP MRP PROCEDUREES
3 Time-phased materials planning

In time-phased planning, historical data is also used to estimate future requirements but
the planning run is only carried out according to predefined time intervals. If a vendor
always delivers a material on a particular day of the week, it makes sense to plan this
material according to the same cycle in which it is delivered.
This procedure is used in R1, R2 and VS MRP Type in standard SAP (customizing
procedure code R).
Besides all procedures that have been explained above, we can create other procedures
according to our own needs.
C Master Production Schedule (MPS)

Master Production Schedule is simply a form of MRP based on the same procedures, that
concentrates planning on parts or materials that strongly influence the company profits or
required critical resources. Materials marked as master schedule items can be finished
goods or even raw materials.
These items are selected for separate MPS run that takes place before the MRP planning
run. MPS run is executed without any BOM explosion: this make able the MRP controller
to ensure that the master schedule items are correctly planned before any detailed MRP
run take place.
If we compare MRP and MPS, there are no differences in the logical process; what is
really relevant to say is that MPS only acts on materials with an MRP type MPS (M0, M1,
etc...), and MRP acts on materials with an MRP type MRP (PD). How the materials are
processed is exactly the same, the algorithm are the same, both work with the Plan Time
Fences and Fixation types and the use of rescheduling is comparable.
So, in order to summarize the aim of MPS, we can say that the idea is to "separate" the
requirements planning of different kind of materials: for example, for some strategically
finished goods we will run MPS once per week, and for other components we will plan a
daily MRP run.
The procedure is used in M0 MRP Type in standard SAP (customizing procedure code M).
2. Customizing setting
We will select a particular MRP Type to assign the procedure we intend to use in order to
plan a material and to control which MRP parameters we will have to maintain in the
material master data.
It follows a short description about the meaning of all the relevant fields we can combine in
customizing starting from a given Planning procedure; performing the transaction OMDQ
we will find this picture:
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SAP MRP PROCEDUREES
Some important parameters deserve to be considered with attention because they are
relevant if linked with specific MRP procedures:
a Firming type
It determines how procurement proposals are firmed and scheduled within the planning
time fence. We have at disposal the following options:
0 No firming takes place with this firming type.
1 Procurement proposals within the planning time fence are firmed automatically as
soon as their date is at least one day before the end date of the planning time fence
2 No new procurement proposals are created automatically within the planning time
fence; that is, the shortage situation is not adjusted within the planning time fence.
3 Procurement proposals within the planning time fence are not firmed automatically.
All procurement proposals required to cover the requirements are moved to the end
of the planning time fence.
4 No procurement proposals are created automatically within the planning time fence.
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SAP MRP PROCEDUREES
b Roll forward code (MPS)

In order to adjust the production planning to a new modified requirements situation, it will
be possible use this code to delete obsolete planned orders. This makes it possible to
define that the Master Production Schedule will be updated into a specific period.
c Include external requirements (CBP-RPP)
This group of selections instructs the system to include component requirements that have
been provided to the subcontractor, stock transfer order, order reservations, stock transfer
requisition and other type of reservations, for production as external requirements in the
calculation for Reorder Point Planning.
d Forecast indicator (CBP)

The indicator specifies whether the forecast results have to be used in material planning
and therefore taken into consideration during the MRP run. Obligatory forecast is typically
mandatory, for example, in Time phased planning R1, R2, RR, Reorder point V2, VV and
Forecast-based S0 procedures.
About the rest of the Planning procedures the indicator can be optional or simply not
activated.
e Automatic calculation of safety stock and reorder point
We will use this indicator to define whether the system will calculate safety stock and
reorder point automatically. The safety stock can be calculated automatically for materials
planned using traditional MRP or using Reorder point procedures if historical data exists
and if the forecast has been carried out.
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3. Planning run and examples for traditional MRP materials
We will start now a planning execution in order to plan material requirements for materials
belonging to the group “traditional MRP” whose stock situation or requirements in general
has changed.
We have the choice to execute an MRP planning run for a single material, for a products
group, for a plant, for several plants and even for a specific MRP area if managed.
3.1. MRP Type PD (MRP Procedure D)

We take as example the material 10276103 whose setting in master data are follows (the
Forecast view is not foreseen)
Related to MRP Type PD, we find In customizing as follows:
NO Firming Type
NO Roll Forward
OPTIONAL Forecast Indicator
NO Automatic calculation of Safety

stock and Reorder point
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Using Transaction MD04 we will check the actual stock situation:
Now we will suppose to receive a sell Order for a finished product that we produce
internally and whose Bill of materials is compounds from diverse materials as follows:
Starting from this Production order we want check as well the requirement generated on
our material 10276103 used in the bill of material; we will run an MRP planning simply
using transaction MD02 at single item level.
Various control parameters are available in order to determine how the planning run is to
be executed and which results are to be produced. The parameters include in particular
the indicators:
Processing key: following 3 types are possible
 During regenerative planning (NEUPL), all materials are planned for a plant; this
makes sense when we are carrying out the planning run for the first time as well as
later during production if data consistency cannot be guaranteed due to technical
error.
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The disadvantage of regenerative planning is the fact that the system has to deal
with high capacity loads because all materials are planned, including materials,
which may not be affected by the planning run.
 To overcome this disadvantage, it makes sense during production to carry out the
planning run using the net change planning procedure (NETCH); the only materials
that are included in the planning run are those, which have undergone a change
relevant to MRP since the last planning run. The net change planning procedure
makes it possible to execute the planning run in short intervals, for example, in daily
intervals.
 We will use net change planning in the planning horizon (NETPL) to shorten the
MRP planning run even further. The system then only plans materials that have
undergone a change relevant to MRP within the planning horizon.
We can define the planning horizon per plant or per MRP group. The planning
horizon should be at least long enough to cover the period when sales orders are
received and it must also accommodate delivery periods and the total lead times of
the materials.
Also plan unchanged components: if we do not set this indicator, the system will only plan
the components that have undergone a change that is relevant to the planning run.
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After the MRP run we will find as result the following situation about our component:
We can observe that since the stock is 0 and we need to produce (Production Order Res.
10002106), in order to fulfil the requirement (86 pc) we have to supply our component
(Purchase requisition 13992093)
So now we proceed to deepen every kind of MRP Type that uses the MRP Procedure D,
in order to underline which constellation are possible.
3.2. MRP Type PP (MRP Procedure D)
Let’s take as example the finished product 10025126 whose setting in master data are as
follows (the Forecast view is not foreseen)
Procurement type E define that our material is internally produced. Reorder point is being
automatic calculated (in our case is temporary 0)
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Related to MRP Type PP, we will find in customizing as follows:
Using Transaction MD04 we will check the stock situation:
Now we suppose to be at the beginning of the week (time at which the reorder point is
being automatically calculated from the System using a planned Job and basing on the
past consumption) and to verify how the data will be transfer in the material master, thus
how the new value overwrite the old one:
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a this screenshot shows us as the “period indicator” field has been set on W (weekly)
b this one shows the Job Plan
c this one shows the new re-calculated “reorder point”
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We want now to run the MRP Procedure with transaction MD02 single level and verify how
the system behaves:
No data has been changed because the MRP Type PP calculates the reorder point but it is
not taken into consideration as requirement. Thus in this case “reorder point” make sense
merely as information.
Only in the case in which we would have a new “safety stock” settlement would the
System generate a new requirement according to the safety stock level and to the
“minimum lot size”.
The picture below shows as the changed situation would influence the stock requirements
list (new internal planned order):
In the same way, if we would generate a sales order for our finished product, the situation
would change like this:
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3.3. MRP Type PV (MRP Procedure D)
We shift now to the finished product 10025156 whose setting in master data are as follows
(the Forecast view still to be not foreseen)
Reorder point is temporary set to 0 but it have no influence related to MRP Pr. PV (thus
represent just an information)
MRP Type PP has been customized as follows:
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Compared with the previous type PP, no difference are existing and therefore no different
behaviour produced from the MRP run can to be expected
3.4. MRP Type PW (MRP Procedure D)
No one difference takes place if compared with the previous types PP and PV
3.5. MRP Type P6 (MRP Procedure D)
We take now into consideration the material 10003709 as example that belongs to the
group “operating supplies”; master data setting are following (Forecast view is managed)
VIEW MRP1
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VIEW FORECAST
MRP Type P6 has been customized as follows:
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Just to remind, reorder point is being automatic calculated merely for statically or
information reasons (as every MRP procedures type D).
Let’s check now the stock situation about our material using transaction MD04:
Then we suppose to run the monthly forecast procedure and to verify how the data will be
taken into consideration both in the material master and in the requirements list. We want
as first to run the procedure and then verify the values contained in the forecast view:
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Now let’s check how the requirements situation has change:
As we can see, the forecast run has produced 3 lines of requirements corresponding to the
next 3 months (according to the field “forecast period”); in addiction we have also a “safety
stock req” generate independently from our forecast setting but according to the field
“safety stock”.
We want now consider what an MRP single item run will produce (transaction MD02 as
usual):
As expected, the system generate a purchase requisition of 96 in order to cover the totality
of our requests and according to the “minimum lot size” maintained in the MRP1 view
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MRP type P7 presents the characteristics of a normal MRP procedure, without any
particularity. The constellation we will find in customizing will be as follows:
It appears whole evident that no particular behaviour will characterize any materials
belonging to this group; if we take for example the raw material 10001752 (procurement
type F30 external subcontracting) the master data will be
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The behaviour of that material will be totally comparable with materials belonging to the
group PD or PP: if a requirement emerges after an MRP run, it will consist in a purchase
requisition type L (subcontracting). No other differences will take place.
No differences if compared with MRP type P6.
Anyway let’s analyze an example: we take the semi finished product 10002396 and verify
as usual in the material master the MRP1 view:
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For this material we opened also the Forecast view:
The field “forecast model” defines which model we intend to use in order to calculate the
future requirements of the material; the available strategies to performing the calculation
we have at disposal, are following:
- constant model (D)

- constant with factor adjustment (K)
- trend model (T)
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- seasonal model (S)
- seasonal trend model (X)
- moving average (G)
- weighted moving average (W)
- 2nd order trend with adjustment (0)
- 2nd order trend (B)
- automatic model selection (J)
The automatic model selection forecast strategy allow us to let the system select the
forecast model that best fits the trend of the historic data.
Now we start to verify the stock situation (in evidence safety stock level):
After the forecasting run we will have following situation:
Safety stock has changed according to the new calculation and 3 new lines of
requirements has been generated; starting from that, the fulfilment of the requests will
follows the usual procedures.
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Let’s check the customizing setting:
The only difference we can note in comparison with other D-based models is about the
field “MRP indicator forecast”: this means that in this case the forecast values will be not
considered in the net requirements calculation.
We take as example the material 10288146 and execute the forecast run as usual:
START SITUATION
FORECAST EXECUTION
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M ATERIAL MASTER CHECK (Safety stock has changed)
S TOCK REQUIREMENT LIST (Stock situation has changed)
Thus we want to verify after an MRP run (transaction MD02) if the new produced forecast
values will be taken into consideration or not (as expected)
A new planned order has been created in order to cover the quantity required but no one
line of “forecast requirements” as below reported (MRP element ForReq) generated
through the forecast running, took place, as we want to demonstrate.
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3.9. MRP Type ZP (MRP Procedure D)
No one difference takes place if compared with the previous types PP (and PV).
3.10. MRP Type Z8 (MRP Procedure D)
No one difference takes place if compared with the previous types P9.
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4. Planning run and examples for CBP materials
We have already understood that the central role of every MRP procedure is to monitor the
stocks and then to automatically create procurement proposals for purchasing or
production (purchase requisitions, planned orders or delivery schedules).
Consumption-based planning is based on past consumption values and uses the forecast
or other statistical procedures to determine future requirements.
The procedures in consumption-based planning don’t refer to the master production
schedule; that means that the net requirements calculation is not triggered by a planned
independent requirements or a dependent requirement. Instead, it is triggered when stock
levels fall below a predefined reorder point or by forecast requirements calculated using
past consumption values.
Typically this planning procedure is used in areas without internal production or,
eventually, in production plant ,in order to plan secondary parts, semi finished products or
operating supplies.
4.1. CBP Type VB Manual Reorder Point (MRP Procedure B)
In reorder point procedures, procurements are been generated when the sum of plant
stock and firmed receipts falls below a given “reorder point”. In manual reorder point
planning we will define both the reorder level and the safety stock level manually without
the support of any forecast procedure.
Let’s start taking into consideration the semi finished product 10288697 and analyzing his
relevant characteristics in material master (no forecast view is being managed):
M RP1 VIEW
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M RP2 VIEW
“Reorder point” field is per definition manually maintained.

“Lot size” FX determines the system used procedure to calculate the quantity to be
procured or produced: in our case is handled a fixed order quantity related to a fixed lot
size.
“Procurement type” X defines that our material can be both produced in-house or
externally buy.
“Period indicator” T indicates that the period in which the material’s consumption values
and forecast values are managed is daily.
Now we want to check the customizing setting:
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If we compare the under reported customizing constellation with other already examined,
we immediately note a new part of configurable parameters related to some additional
requirement components that could be taken into consideration in the calculation for the
reorder point planning: in our specific case no possible field has been activated because
the field “include external req” has been not signed.
Other parameters present no particularity.
Now we want to consider the stock situation at the time zero:
And let’s run the MRP single item transaction (MD02) in order to check the results and
evaluate the effects of our parameterization:
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As expected, starting from a situation of 0 stock, reorder point fixed at 44.000 piece and lot
size equal to 19.200, our gap has been fulfilled through 3 different planned orders that can
be converted either in production orders or purchase requisitions or a mix of both,
according to the situation.
4.2. CBP Type V2 Automatic Reorder Point (MRP Procedure B)
In automatic RPP both the reorder level and the safety stock are determined by the
integrated forecasting procedure. The system will use past consumption data to forecast
future requirements and then taking into account the service level (specified by the MRP
controller) and the material’s replenishment lead time.
Since the forecast is carried out at regular time intervals, the reorder level and the safety
stock are constantly adapted to the current consumption and delivery situation.
This means that a great contribution take place in keeping the stock level as low as
possible.
Let’s consider now the row material 10283028 and analyzing his relevant characteristics in
material master (no forecast view is being managed):
M RP1 VIEW
Some new field must to be considered relevant in order to better describe our procedure:
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“GR processing time”: goods receipt processing time. It means number of workdays
required to process the material after inspection and placement into storage location.
“Planned delivery time”: number of workdays needed to receive the material if externally
procured. In case of different vendors we must specify an average value.
“Service level”: the system uses this parameter to calculate the safety stock; it is the
percentage describing what proportion of the requirement is to be covered by the
warehouse stock. The higher we desire the service level, the higher will be the calculated
safety stock to compensate possible additional consumption or delays in delivery.
FORECAST VIEW
“Historical periods”: number of historical values the system uses for the forecast. If fewer
historical values exist in the system than what here specified, the system includes all the
existing values in the forecast. In case of manual initialization, this field could remains
empty and as consequences, no values will be used to carry out the forecast.
“Forecast periods”: number of period for which a forecast should be created in the future.
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Let’s check now which customizing setting we have:
If we compare this customizing constellation with the previous VB CBP procedure, we can
note that the forecast indicator is settled as obligator and this means the forecast view in
master data play an important role to calculate our parameters.
Second, we find as managed the field “include external requirements”: every external
requirement is included in the net calculation for reorder point planning. Our indicator is
setting up on 2 and indicates that the system must not include the customer requirements
with a date outside the replenishment lead time.
Now we want to verify the current stock situation:
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As first step we run the forecast procedure in material master data:
and check as the data are changed:
And now let’s run the MRP single item transaction (MD02) in order to check the results:
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The new safety stock has triggered a requirement and thus a purchase requisition
(procurement type F external) in order to cover the shortage; the proposal quantity of the
purchase requisition is equal to the reorder point level because it correspond to the
minimum requirement (safety stock play here no role).
The forecasted quantity (0,448 x 6) is not taken into consideration because, as basis,
every B procedure don’t use these values in order to influence or to determine the future
requirements.
5. Planning run and examples for MPS materials
We will use MPS procedure in order to plan materials which greatly influence the company
management or which take up critical resources; thus we will check and plan them
separately through a series of special tools.
MPS operates within only one level of the BOM, while MRP can be utilized throughout all
levels of a material’s BOM. If a MPS is run on a material, the necessary orders are
planned at that level and dependent requirements, if existing, are placed on the next BOM
level down.
These special items are marked as ‘A’ parts (MPS items) and are planned with extra
attention; then they are selected for a separate MPS run that takes place before the MRP
run. The MPS run is conducted without a BOM explosion so that the MRP controller can
ensure that the Master schedule items (MSI) are correctly planned before the detailed
MRP run takes place.
MPS is executed using the same principles as a traditional MRP run; his aim is to reduce
storages costs and to increase the planning stability. This could be useful, for example, in
the case of these materials strongly influences the entire production process where the
planning of the dependent parts depends on the planning results of the finished products,
even if the finished products represent a small share of all the material to be planned.
We consider now the row material 10061836 and analyzing his relevant characteristics in
material master (no forecast view is being managed):
No particularities emerge from the master data (no reorder point, no safety stock)
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“Firming type”: this field determines how procurement proposal are firmed and scheduled
within the planning time fence. The type 0 indicates those procurement proposals are not
automatically firmed. If we enter a manual firming date (in the initial screen of the planning
run or in the stock/requirements list), the planning time fence is automatically extended to
this date.
Now we want verify as it work; let’s check the initial stock situation:
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Now we suppose to generate a production order which contain a finished product using in
his BOM our MPS material:
We start now the total planning run for master schedule items using transaction MD40; in
contrast to the MRP run, this planning run only plans the master schedule item level. The
system will create dependent requirements for the BOM level directly below the planning
level. However, this level and lower levels are not planned:
After the run we became following result 2 MPS materials has been taken into
consideration):
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And in MD04 we will go to check how the situation has been changed
M D04 FINISHED PRODUCT M0
M D04 ROW MATERIAL M0
We can now do, if necessary manual changes in our MPS material planned order,
remembering that the planning run is just an advice and never can replace our personal
decision.
Then, once we have confirmed the dependent requirements according to MPS materials
planned orders, we will run, as usual, MRP procedure through transaction MD02: this run
will not change the MPS run results.
The basic idea results at once and can be resuming saying that we will have the chance to
separate different kind of materials in order to fix and make definitive the plan situation for
some important code and, in a second time, to run massive plan process without change
or influence on an already consolidated situation.
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This will ensure that this kind of materials will have the opportunity to be planned
independently from other planning.
6. Further examples for non-traditional MRP materials
In Consumption-based Planning it is available the procedure Time-phased planning that

uses the MRP procedure R.
6.1. CBP Type R1 or VS Time phased Planning (MRP Procedure R)
Materials that are planned using this method are provided with an MRP date in the
planning file; this date is being settled during the creation of a material master and is re-set
after each planning run.
It represents the date on which the material is to be planned again and is calculated on the
basis of the planning cycle entered in the material master.
The net change planning indicator and the net change planning horizon indicator are
irrelevant for materials planned using the time-phased planning procedure. The system
does not therefore set these if changes are made in the planning run.
Time-phased planning can be executed using consumption-based planning or MRP:
 if we want to use typical CBP procedures, the requirements have to be created
using the material forecast
 if we want to use MRP procedures, all the requirements that are relevant to MRP
are included in the net requirement calculation; the forecast requirements can also
be taken into account in this process
6.2. MRP Type RS Replenishment retail (MRP Procedure W)
The Replenishment function is typically used by one organizational unit to coordinate the
supply of merchandise to another organizational unit. This can be from a distribution
centre to a store or from a wholesaler to a retailer.
Replenishment will be coordinated and controlled solely by the supplying organizational
unit, taking the requirements of the recipient only into account. Replenishment can
therefore be considered as a service provided by a vendor for a customer.
Requirements can be determined in one of two ways:
 Standard method can only be used in connection with material-based inventory
management; the stock on-hand as reflected in MM Inventory Management is the
stock figure used for Replenishment. This method requires a defined target stock
for each material and can be controlled via reorder point
 Simplified method is designed for a less sophisticated system environment; it is
based solely on the quantities sold at the electronic cash registers and does not
require any further goods movements. The target stock is the starting stock of the
customer. Since the system is not aware of the actual stock on-hand at the
customer, it uses zero for both the target stock and the starting stock. With the
simplified method, less master data has to be maintained, as there is no target
stock necessary.
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In both the case we can use a forecast to determine the target stock level. All the forecast
models in the R/3 system are available. A special model with seasonal weighting factors
has also been developed for use in Replenishment.
We want now briefly take a look on the customizing setting:
7. MRP Lot-sizing procedure

The key lot-size in material master defines which kind of “lot sizing” procedures uses SAP
in order to calculate the quantity to be procured (in case of materials externally purchased)
or produced (if internally manufactured).
This procedure can be defined in customizing or directly through the transaction OMI4; we
will assign the appropriate lot size procedure to the material in MRP1 material master field
as follows:
The picture below shows the table in customizing containing all the possible lot-size
procedures (in yellow the keys that in the Group are used):
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7.1. Calculation of lot-sizes for the procurement proposal
After analyzing the shortage quantities, the MRP of SAP starts the process of creation of
the requirements/procurement proposal related to situations where the available quantity is
not sufficient to cover the requirements.
This procurement proposal has to be congruent to the lot-sizing procedure settled in
material master; together with this key, the MRP run will take also into consideration other
appropriate parameters involved in the lo-size procedure, like “minimum or maximum lot-
size”, “rounding values”, “fixed lot-size”, “safety stock”, “scrap percentage” and so on
In order to simplify we can say that 3 groups of lot-sizing procedures are available, that
are:
1 Static lot-sizing procedures
2 Period lot-sizing procedures
3 Optimum lot-sizing procedures
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7.2. Static lot-sizing procedure
The static lot sizing possible procedures are:
E lot for lot (exact)

F fixed lot size
H replenishment up to maximum stock level
When the lot size is “EX” or exact lot size, the system creates planned orders or
procurement proposals to cover the exact shortage requirement. The lot size is the whole
shortage quantity required to satisfy the demand. That is, if the requirement is for a
quantity of 200 pieces, the proposal will be created for an exact 200 piece.
On the other hand if the lot sizing procedure is FX “fixed lot size”, then the total
requirement quantity as proposed by the system to cover the shortages, will be divided
into the number of fixed quantities as included in the material master (MRP 1); for
example, if the lot size is fixed as 100 pieces and the shortage quantity is 500, the system
will create 5 planned orders to cover the gap.
Similarly if the lot size of the material is HB “replenish to maximum stock level” then on
shortages of the requirement quantities the system creates planned orders to fill it to the
maximum stock level.
7.3. Periodic lot-sizing procedure
The most common periodic lot sizing possible procedures are (we can decide the period in
customizing):
M monthly lot sizing

W weekly lot sizing
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According to this procedure the system will aggregate a group of requirements within a
given lapse/period of time, in order to create a lot.
That means, the requirements that generated in a given time interval are grouped together
and the availability date for the procurement proposals would be the start date of the first
requirement in the referred period. The standard configuration of lot sizes puts the
requirements for periodic lot sizing at the start of the first requirement, but we can also
choice to set it to the end of the period.
If the lot sizing procedure will be W2, ZE or ZW “weekly”, the MRP will consider all the
demands for the week and all the receipts for the week and will place a weekly proposal
(planned order or purchase requisition). The weekly proposal can be put at the start of the
week or at the end of the week as the configuration in the lot sizing procedure.
In a similar way but of course referred to a “monthly” period of time, will work the
procedure MB.
7.4. Optimum lot-sizing procedure
Within the Group this procedure is not taken into consideration; anyway, according to this
parameterisation, the intention is to group together the shortages in such a way that costs
are minimized.
For examples, if the lot sizing procedure is daily, the system will consider all the demands
and all the receipts for that day and, if necessary, will generate a daily shortage proposal.
7.5. Other tools in lot-sizing procedure
Along the lot sizing procedure we can use other tools, whose function is to complete and
to better define our above mentioned lot dimension:
- minimum lot size corresponds to the minimum procurement quantity and can
be used with almost all the defined procedure. When the min l.s. is 200 pc
and the required quantity is 150 pc, then the system will creates a proposal
for 200 pc to cover the shortage.
- maximum lot size corresponds to the quantity that is not allowed to be
exceeded by the procurement process (production or planned order) per
single order. When the max l.s. is 100 pc and the required quantity is 150 pc,
then the system will creates two proposal of 100 and 50 pc to cover the
shortage
- fixed lot size means that the procurement proposal are created according to
a given fixed quantity. When the fix l.s. is 100 pc and the required quantity is
250 pc , then the system will creates three proposal of 100 pc (total 300 pc)
to cover the shortage.
- rounding value is the key the system uses to adjust the order proposal
quantity to deliverable units. If the rounding value is 20 units then the system
will always rounds every procurement proposal to a multiple of 20 units.
When the required quantity is 150 pc and the rounding profile correspond to
20 pc, then the system will generate a number of lot according to the rules of
min or max lot size, but rounding off the quantity to 20 pc, therefore 160 pc.
- rounding profile is being used when a static single rounding value is not able
to satisfy all the business case: there may be situation where the rounding
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value may change according to the size of the procurement proposal and this
could be a typical scenario where the rounding profile can be useful.
This key allows us to configure the system to have a rounded value of 10
units in the case of the procurement quantity is at least 1 unit, and a rounded
value of 100 units when the procurement quantity reaches, for example 90
units .
The transaction code we will use to configure every possible static or
dynamic rounding profile is OWD1:
Created by M.Volpi Page 45 of 74

Printed at 27/09/2019
- takt time can be defined as the maximum time allowed to produce a product
in order to meet demand; if a requirement quantity can not be produced in a
single lot, we have to schedule several receipt and we will use the takt time
to specify that these receipts are delayed by n workdays. The system will use
this parameter for example, in case of restriction due to max lot size or
rounding value.
8. Forecast view
In order to carry out anyone forecast for our materials, we must first of all maintain the
necessary forecast parameter in the material master; we will start our analysis taking into
consideration the material 10003709 (MRP Type P6) which “Forecast view” configuration
is as follows:
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First, it will be useful specify that not for all materials indiscriminately we need to open and
manage the forecast view: main candidates are the consumption-based managed
materials (MRP type reorder point)
Second, once we decided to manage the forecast view, we will have following 2 options:
 we can direct insert our consumption and forecast values as a “starting point”
necessary for the initial calculation
 we can directly execute an individual forecast for the material (it is possible,
depending on the maintained parameters, to simulate the forecast following several
dialog windows)
8.1. Consumption values
Consumption values are used as a basis for forecasting; they are being inserted per single
period using a simple dialog window as shown in the picture below:
There are 2 type of consumption we can use:
 Total consumption corresponds to the sum of planned and unplanned consumption.

If materials are planned using consumption-based planning then the system will
updates the total consumption; but in case of materials are planned using MRP and
withdrawn on the basis of a reservation, then the system will update only the total
consumption provided, the quantity withdrawn does not exceed the reservation.
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 Unplanned consumption will be updated only for materials planned using MRP
The system will normally update the consumption values in the material master
automatically whenever stock is withdrawn from the warehouse. In any case we can insert
our values manually for the following purposes:
- as basis for the first forecast

- to correct automatically updated consumption values if the values result
atypical and would have a negative effect on the next forecast
8.2. Forecast values
Forecast values indicate the future consumption for a material within a given period.
Forecast values are usually determined by the system in forecasting and updated in the
material master; however, we can enter forecast values manually for the following
purposes:
- as a basis for material requirements planning
- to correct the forecast values calculated by the system: this could be
necessary, for example, if an higher consumption is expected due to an
unexpected demand growth
8.3. Forecast execution
In order to carry out an individual forecast for a single material, we will have 2 way:
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- using transaction MM02 and simply executing the forecast inside the specific
view
- using transaction MP30 that is allocated in the context of MRP menu
In both the case the result will be the same and will follows the same basic step.
Before the run of the forecast procedure, some prerequisite must be fulfilled:
Forecast parameters maintenance in the material master

Period determination for which the system will carry out the forecast calculation: for
each material the procedure can be run on daily, weekly or monthly basis, or
alternatively according to specific periods
Forecast model determination: this cam be made manually or automatically by the
system. In the case of automatic model selection , the required number of historical
values have to be available and this number depends on the selected forecast
model.
Historical value must be entered contextually to the creation of the material master;
otherwise we must initialize the model manually
We will have the opportunity to adjust the uploaded values which are normally
calculated by the system trough the normal activity of posting: this can be done
direct in the window dialog or correcting the “weight factor” in customizing
Let´s start now a step by step forecasting execution procedure: once specified material
and plant, an overview about the given parameter will be provide:
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It will be sufficient to push the button “execute” to lunch the forecast procedure; we only
have to specify the desired period, as the picture shows
and the forecast results will appear:
bearing in mind that any value can also be adjust according to our specific requirement.
8.4. Forecast models
Within the basic data in the forecast view we have the possibility to choice the forecast
model that is a parameter that defines according to which model the system bases its
calculation in order to give and to foreseen the future requirements of a material.
This indicator can be manually entered but, alternatively, can be automatically determined
by the system using a forecast selection procedure.
How an SAP model is being defined depends on analysis referred to a series of
consumption values: normally specific pattern or trend can be recognized. Starting from
these patterns it will be possible to distinguish diverse models:
D Constant
T Trend
S Seasonal
X Seasonal trend
J Automatic selection
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We will apply a constant consumption flow if consumption values moves away from a
stable value in a very little form.
With a trend model, consumption values fall or rise constantly over a long time-period with
only occasional deviation.
If periodically recurring peak or low values, which differ significantly from a stable value,
are observed then we will be in presence of a seasonal consumption flow.
A seasonal trend consumption model will be characterized by a constant increase or
decrease of the values.
If we don’t want or if we are not able do define a forecast pre-selected model, we must
give instructions to the system to make an automatic selection. In this case the system will
analyze the historical data and will selects the appropriate model using either statistical
tests or basing on the lowest absolute deviation. In case of no regular pattern detection will
be automatically selected the constant model.
If none of the above described situations can be identified in a series of past consumption
values, then we will have an irregular consumption flow.
Just to complete the picture of the parameters we have to set, it is necessary to briefly
specify what the field “period indicator” is used for;
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It represent the period in which the material’s consumption and forecast values are
managed. We will use this key to specify the period for the evaluation of the stock and
receipt statistics: the system will determine the receipt and the requirement quantity in the
current period, next period and the period after the next, as well as the quantities that are
already subject to delay.
The given options are the following:
M monthly
W weekly
T daily
P period according to fiscal year variant
All those materials which have the same period indicator in the material master as the
indicator we will enter in a possible mass forecast run (transaction MP38), will be included
in the forecast.
9. MRP planning run type
The entire purpose of MRP is to plan material requirements for all those materials whose
requirements or stock situation has changed.
The planning run type determines which materials in which plant (or MRP area if
managed) are to be planned; in this way we will have the chance to execute a planning run
- for a plant or for an MRP area if necessary (or combinations of this 2

elements) carrying out a total planning and using transactions MD01 in case
of online run or MDBT as background job
- for a single material or product group through a single-item planning and
using transactions MD02 or MD03
First of all we want to analyze the meaning of the field “processing key” used in all above
mentioned transactions
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The possible inputs will be:
NETCH net change planning: the system will plan all the material contained in the
planning file
NETPL regenerative planning and NEUPL net change in the planning horizon: the
system will only plan materials that have undergone a change relevant to MRP
since the last planning run
In the net change planning (NETCH) will be planned only those materials for which the
“net change indicator” has been set as a planning file entry: the system usually sets this
indicator automatically as soon as a change to the MRP relevant material is made.
The following changes determine an entry in the planning file:
- changes of stock if these modify the stock or the requirement situation for the
material
- creation of purchase requisitions, purchase orders, planned orders, sales
requirements, forecast requirements, dependent requirements or
reservations
- modifications to fields that are relevant for the planning run or in the material
master
- deleting receipts or issue quantities
If we change any parameter for a material that is MRP relevant, the material affected by
these modifications will have no planning file entry and therefore will be not included
automatically in the next planning run; in order to fix this situation we can either chose to
run a regenerative plan (NETPL) or to make manually the entry in the planning file, using
the transaction MD20 (in background with MDAB):
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We can also use a planning horizon in order to further restrict the scope of the planning
run. In the net change in the plan horizon (NEUPL) the system will only plan materials that
have undergone a modification relevant to the planning run within the period we have
defined as “horizon”. For these materials the system will set the related indicator
automatically.
9.1. Creation indicator
The creation indicator defines whether planned orders, purchase requisition or schedule
lines should be created for material externally procured.
The following options are available:
- planned orders only

- purchase requisitions only
- purchase requisitions within the opening period and planned orders outside
The opening period represent the number of workdays to be subtracted from the order
start date in order to determine the order opening date. This period is used thus as a “time
float” which is available for the MRP controller to convert a planned order into a purchase
requisition.
The same could be extended to the other indicator “delivery schedules”; the following
options are available:
- no schedule lines
- only schedule lines
- schedule lines within the opening period and purchase requisitions outside
Of course, if we want that schedule lines can be automatically generated by the planning
run, some prerequisites must be fulfilled: we have already created a scheduling agreement
for the material as well as a valid entry, relevant to MRP, in the source list.
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9.2. Planning mode
The planning mode controls how the system is to deal with procurement proposals from
the last planning run, which are not yet firmed, in the next planning run. Firmed
procurement proposal still remain unchanged.
The following options are available:
- adapt planning data

- re-explode BOM and routing
- delete and recreate planning data
Generally the planning mode is set automatically in the planning file, but, if necessary, we
can overwrite it in every initial screen of each run.
In planning mode 1 the system reactivates the existing planning data: this means that, not
firmed procurement proposals remain on the database and are only then adapted in the
case of dates and quantities don’t suit the new planning situation. Thus the system will
only re-explode the BOM for adjusted procurement proposals.
Planning mode 2 is used if a material has planning file entries and the “re-explode
indicator” is also settled in the planning file; this means the system will re-explode the
BOMs for all existing not firmed procurement proposals, and also for those which dates
and quantities don’t have to be adjusted.
In the planning mode 3 existing not firmed procurement proposals are completely deleted
and recreated: the system will proceed to re-explode the BOMs.
10. Storage location
The planning run for materials is carried out at plant level; this means, the system includes
the stocks of the individual storage locations in the total plant stock.
In any case when we maintain the material master, we have the opportunity either to
exclude a storage location of a specific material from the planning run or we can instruct
the system to plan certain storage location separately or even to exclude it.
The following options will be available:
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we can set an MRP indicator at storage location level that excludes his related stock
from the planning run. Thus, the storage location’s stock is not contained in the
available stock at plant level, nor is it included in the planning run. The exclusion of
storage location stock is only relevant to the planning run but still remain, for
example, completely available for withdrawals;
we can set an MRP indicator at storage location level that give the information to
the system to plan it separately. We also define a reorder level and a replenishment
level and, in so doing, it will be possible to monitor this storage location’s stock
automatically: in case of the stock level should fall below the reorder point, the
storage location will be automatically replenished.
The system creates an order proposal for the amount of the replenishment quantity or for a
multiple of the replenishment quantity so that the stock level exceeds the reorder level
again. Existing firmed receipts for the storage location are also taken into account (similar
to the reorder point procedure at plant level). In the planning run, stocks that lie in storage
locations which are planned separately are not contained in the available stock at plant
level.
Several options are available for procuring stock for storage locations that are planned
separately: either via a stock transfer from the plant or via a special procurement. If a
receipt element (planned order, purchase requisition, purchase order and so on) or an
issue element (reservation, sales order) refers to a special storage location (one that is
either excluded from the planning run or one that is planned separately), then these
elements are not taken into account at plant level.
In order to give a better explanation of the chance we have, it will be opportune to take a
look at transaction OMIR:
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With this transaction we act directly in order to make or not a storage location relevant to
MRP run or, eventually, to plan our st.loc. separately.
And now we look at transaction MM02:
10.1. MRP Storage location with special procurement
If we have settled an MRP indicator for MRP storage location, we can control how the
system will procure the material by entering a special procurement type at storage location
level. The following special procurement types are available at storage location level:
Special procurement type Standard key in Customizing

In-house production -
External procurement -
Procurement via consignment 10
Subcontracting 30
Stock transfer 40
Production in an alternative plant 80
If we enter no special procurement type at storage location level, then the material will be
procured by a stock transfer reservation from the plant to which the storage location is
allocated.
Following actions are carried out in the planning run: for every storage location whose
stock is planned separately, the system will compare the reorder level with the stock level
of the considered storage location. If the available stock is less than the reorder level then
the system will create a receipt at storage location level for the amount of the
replenishment quantity or for a multiple of it. The order proposal will be either a purchase
requisition, a planned order or a delivery schedule and will refer to the specific related
storage location.
Once create an order proposal, the system will take, if existing, the quota arrangement or
the source list into account.
10.2. MRP availability check per stock type
It may be necessary define which kind of stock must be taken into consideration in relation
to the checking rules; a checking rule is an MRP characteristic that identifies a group of
elements able to configure according to which rules a specific stock must be considered as
“available to promise” .
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Every checking rule is allocated to a checking group: together these two elements
determine the final inspection requirements. In addition, the checking rule includes a
specification whether or not an availability check should take into account the
replenishment lead time.
Let’s take a look at the customizing configuration attainable through transaction OPJJ or
OVZ9: once we have selected the rule, we will face with the follow screen shot
Thus, once specifying the inspection scope for a certain check rule, we will have the
opportunity to select the following stock elements:
Safety stock (MRP data)
Stock in transfer in the receiving plant
Quality inspection stock
Blocked stock
Restricted-use stock
Subcontracting stock
Another important parameter to take into account is the “replenishment lead time” flag; it
specifies the time that is needed to order or to produce a specific material. The system will
determine the RLT as follows:
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 for internally procured materials it is determined from the in-house production time
and the goods receipt processing time or alternatively from the total replenishment
lead time, if it is specified
 For externally procured materials it is determined from the goods receipt processing
time and the processing time for purchasing.
Thus, If we carry out the availability check using the replenishment lead time, we should
plan ahead in regular intervals (on a daily basis for individual and daily requirements, on a
weekly basis for weekly requirements) to prevent a shortage and therefore a possible
delivery block.
11. Planning process strategy

We want now to analyse which kind of influence have the field “strategy group” managed
in material master, view MRP2:
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First of all we have to define what a planning strategy is: it represent a procedure for
planning a material and is technically controlled via requirements types. With the help of
the planning strategy, the material is automatically assigned to the correct requirements
type in demand management and sales order management.
Every planning strategy is defined by
- a requirements type from demand management

- a requirements type from sales order management
- a combination of both that make sense
Thus, in order to summarize the main concepts, we will say that the planning strategy
represent the procedure used for planning a material, technically controlled by the MRP
types; the strategy group, on the other side, groups together all the planning strategy that
can be used for a specific material. In the system the planning strategies are recorded by a
combination of requirements types from demand and sales order management: this
combination determines either the consumption of planned independent requirements by
customer requirements or how the availability check is carried out.
If we have entered a strategy group or a MRP group containing the appropriate strategies
in the material master, we don’t have to enter a requirements type in demand
management because the system will determine the valid type with the strategy group
from the material record and will purpose it automatically during the creation of
independent or customer requirements.
In case of the strategy group will contain more than one pl. strategy, then the system will
purpose the type one of the main strategy.
We actually use following strategy group:
11.1. Planning strategy 40 and VE
This strategy is for sure the widely used make-to-stock strategy but not in our context,
where the most used type corresponds to strategy VE; otherwise, it is simply a copy of
strategy 40.
It will be anyway useful to analyze it in order to produce a good example about which
parameter play an important role in every planning strategy.
Generally speaking, if we can forecast the production quantity for the finished products,
then it will make sense to use this planning strategy.
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Let’s take a look on the customizing configuration:
There are 2 parameters that drive and define the behaviour our strategy:
- requirement type for independent requirements (VSF) settled on “planning

with final assembly”
- requirement type of customer requirements (KSV) settled on “sales order
with consumption”
11.2. Key property of strategy VE and procedure
As first we start the process entering the planned independent requirements at finished
product level and this will trigger the procurement or the production of the necessary
components before receiving the sales order.
As soon as the sales order will be received, it will consume the planned independent
requirements: this means that we will be able to compare the pl.ind.req. situation with the
actual customer requirements situation.
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After that an accurate availability check will be performed according to ATP logic, during
the sales order processing procedure: the system will check whether sufficient planned
independent requirements have been planned to cover the sales order.
Last step foresee that requirements from the sales order will be confronted with the
production and eventually will bring an adjustment being made to the procurement in the
case of the requirements coming from the sales orders would exceed the planned
independent requirements quantity.
Thus, in presence of insufficient coverage of components, the sales orders can not be
confirmed: the system will automatically adjust the master plan. Planned independent
requirement quantities that still remain unconsumed, will increase the finished products
stock but the system will not create additional production orders if sufficient stock will exist.
11.3. Strategy VE example
Let’s give now an example about how this planning strategy works, proceeding through 3
specific step:
1 Planned independent requirement are created (for the production plan):
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The system will find requirements type VSF because related to this material, the strategy
group has been set to VE:
2 Procurement before sales: a procurement requisition is created through the MRP

run MD02
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This procurement requisition is the starting point for production or external procurement;
according to our settings, we will have various possibilities for handling the procurement
process but one of they, would be to convert the planned order into a purchase order
After the receipt of the purchase order and a second MRP run, the stock/requirements list
appears as follows:
3 Sales order: once we created a sales order the checking availability will prove
that the stock is available (the system will find the requirements type KSV because
the strategy group has been set to VE)
12. Scheduling strategy

As already examined, during the net requirements calculation, task of the system is to
determine the shortage quantities and the material shortage dates; in doing so the system
will thus calculate the procurement quantities necessary to cover the requirements.
During the scheduling process, the system will also determines start and finish dates for
the procurement elements of materials that are “in house” produced and “externally”
produced.
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In order to expect that the MRP run will schedule the procurement proposals correctly, we
have following material master fields properly to maintain:
 In-house production times: specifies the time in workdays needed to produce the
material in-house and is independent from the order quantity. The system will use
this parameter to determine the planned dates for planned orders in materials
planning.
 Planned delivery time: it represent the number of calendar days needed to obtain
the material in case of external procurement; for example, if we have different
vendors for the same material, we must specify an average value
 GR processing time: number of workdays required, after receiving the material, for
inspection and placement into storage location.
 Scheduling margin key: this parameter has been from the system used to determine
the floats required for scheduling an order in workdays; we can define the following
floats with the scheduling margin key:
- opening period
- float after production
- float before production
- release period
12.1. Scheduling for externally procured materials
For the externally procured materials, the system will use the planned delivery time (lead
times) and goods receipt times in Material master to schedule the delivery and release
dates for the procurement proposals. We can either use forward scheduling or backward
scheduling for these kinds of materials.
12.2. Scheduling for in-house manufactured materials
For materials which are to be manufactured in house, as assemblies for example (in-
house produced materials), the scheduling is done according to the scheduling method
selected in the selection screen of the MRP run.
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If 1 “basic date scheduling” is selected then the system will consider the “in-house
production time” of the material in the MRP 1 view along with its goods receipt time. The
times in terms of days as included in the material master are not quantity dependant and
MRP will use them directly, independently from the fact of whether it is planning for 1 unit
or for a million units.
The Planning does not generate any capacity loading and operation dates are not derived.
The system generates the basic start date of the order and the basic finish date of the
planned order. This type of scheduling is best used when the lot sizes of the production
and their timings are usually fixed.
Alternately if the scheduling method selected will be 2 “lead time scheduling”, the
scheduling for the planned orders will be done through the use of standard timings in the
routings/recipes of the material. The Standard values or the standard timings in the
routings or recipes are for a base quantity, which means that the scheduling carried out
using the lead time method is an accurate method of scheduling and gives the greatest
results every time. It calculates not only the operation lead time (operations start and finish
times) but also cumulates them to arrive at a total lead time with an order start date and
order finish date.
When we use the “lead time scheduling” method, the system uses the scheduling methods
configured; we can use either forward scheduling or backward scheduling method for the
MRP run. As a default scheduling type, the system will use backward scheduling but it also
switches automatically to forward scheduling if the determined start date lies in the past.
Let’s try now to produce a concrete example starting from following material and following
MD04 situation:
Page 66 of 74
Now we create a customer sales order of 200 pc in order to overdue the actual “at
disposal” stock and therefore to generate a requirement of 100 pc:
The actual setting for the material 10529906 in material master is as follows:
And now let run the MRP according to the parameter-combination “planning mode” 3
(delete e recreate planning data) and “scheduling” 1 (determination of basic data for
planned orders) in order to evaluate the results:
Page 67 of 74
As expected, MRP run generated a planned order for 100 pc, corresponding to the missing
quantity; the start date determined from the system in order to begin on time to produce,
will be the 2th of June, opportunely calculated deducing 30 work days to date of 1the 5th of
July and having no other work days to consider according to the scheduling margin key
PP0.
It follows the created production order:
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13. Source list role
A source list is normally defined at plant level and is strictly linked to a specific material; for
purchase requisition or delivery schedules which are created during the planning run, the
system can determine the source of supply directly from the planning procedure.
The system first will check whether a quota arrangement has been maintained for the
material, which has a valid period able to cover the requirements date of the purchase
requisition.
It then checks whether only one entry exists in the source list that is relevant to MRP. The
indicator for source list usage must therefore be set for a particular vendor so that
purchase requisitions and delivery schedules, which are created during the planning run,
are automatically assigned to this vendor. In the case of a delivery schedule, we must also
have maintained a scheduling agreement for this entry.
If we have maintained all the entries correctly, the system will create a purchase
requisition with the source of supply that is recorded in the source list.
In order to better explain which fields we have to maintain to assure the automatic
assignment of a specific vendor during an MRP run, it will be useful to take a look directly
at the source list:
The keys we have the possibility to manage are 3 (transaction ME01):
1 Purchase requisitions generated within the framework of material

requirements planning are automatically assigned to this source
2 If the source of supply is a scheduling agreement, MRP will create a delivery
schedule line with respect to a requirement.
3 The source of supply is not taken into account by MRP
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Of course another important field to consider will be the flag “fix” that specifies if the source
of supply will be the preferred procurement option within the given period: in this way,
during the process of source determination, the preferred source will be suggest as first.
14. Special procedure
Some special procedures are used in STT and SPK and they have been analyzed in the
next paragraph. Generally speaking the Kanban method is based on the actual stock
quantity in production: material that is required on a regular basis is continually provided in
small quantities in production. Replenishment or the production of a material is only
triggered when a higher production level actually requires the material. This replenishment
is triggered directly in production using previously maintained master data. The entries we
have to make in the system have been reduced to a minimum, for example, the scanning
of a bar code. All other actions in the system are carried out automatically in the
background.
Basically we will find 2 ways to use the Kanban method in the Group:
- via extern impulse using Kanban card

- via SAP impulse using automatic generated production order
The first procedure is being analyzed in the next paragraph
14.1. SMT Kanban Procedure (KTEC)
Let’s say one of the components needed to produce our finished product is a particular
dimensioned brush and it arrives/ been produced on pallet; when the pallet is empty, the
person assembling the FP takes the kanban card that was attached to the pallet and
sends it to the component manufacturing area. Another pallet of components is then
manufactured and sent to the FP assembler. A new pallet of FP is not made until a new
kanban card is received
This first way to perform the Kanban procedure, run according some specific rules that can
be described as follows:
 the row materials requirements-plan is based on “reorder point”: the reorder stocks
are being calculated from SAP using a specific Job and according to any specific
parameterizations that we will consider later. Reorder point is also used for finished
and semi-finished products
 referring to finished products we will use no MRP run in order to define the quantity
to produce; the finished products will be otherwise managed using typical card and
kanban table. If a minimum card quantity have been totalized then the production
phase can take place
 production orders is manually generated referred to diverse kanban cards and
confirmed eventually using a specific transaction (ZPCO01); then for every PO we
will have a single operation producing an automatic goods entry with correlated
components consumption
 finished product requirement plan take place just according a simulation run via
MD61 and allow us to calculate a forecasted requirement
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This procedure is at the moment not used because the company SMT has been acquired
from another company.
14.2. STT and SRK Kanban Procedure
Another kind to intend kanban is based not on single card containing the description about
material to produce, but referred to a production order: in this case in fact, the productions
order same is the kanban card.
Just to summarize the main characteristics and the differences with the previous
procedure, it will be sufficient to say
 all the kanban materials will be managed and procured according to a “reorder
point” method: the calculation of the reorder quantity is manually performed and
manually entered in SAP system
 once MRP has run, a production order will be automatic generated and as a single
kanban card managed: in this case our kanban table will contain a certain number
of production orders that will suggest to produce or to still wait
 the production order will be adjust inserting the components lot number and
adapting the components lot quantity to the production order head quantity; then we
will have the first operation confirmation with related retroactive consumption
 final confirmation via milestone and automatic FP good receipt
Some important material master settings that play a central role in order to perform this
procedure, have to be underlined:
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MRP type must be VB therefore settled to manual reorder point, and reorder point quantity
must contain a quantity; together they define the requirement strategy and give the
impulse to generate a new production order.
The lot size has to be set to FX (fixed order quantity): the quantity given in the field “fixed
lot size” determine the precise quantity to produce, according to the rule
1 lot size quantity PO = 1 kanban
The MRP controller must be always like 191
Some other important parameter are being managed in the work scheduling view:
Production storage location must be set to 1013 or 1014 (kanban G3 or kanban RK)
otherwise the automatic goods receipt cannot be executed.
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Production scheduling profile has to be set to 000003 in the way to link every kanban
production order to the right PO type during the order creation.
Batch management still remain activated; anyway the batch entry field must be empty
maintained, otherwise automatic PO release and print cannot take place.
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14.3. SST - GI Year-forecast Procedure
Materials that have to be continually and constantly produced are being managed through
planned independent requirements (transaction MD61) and year forecast quantities
distribute and divided per day.
These materials will be maintained using a special field in material master classification
(forecasted quantity).
As usual, a production order will be automatic generated and automatic released; after that
every components will be consumed according to the option “kanban consumption” via
ZRMG transaction.
Page 74 of 74

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SAP MRP PROCEDUREES

1. Material Planning Overview

Materials’ planning is one of the key of good inventory control systems.

1.1. How it works

1.2. MRP Procedure

o Deterministic Planning MRP

B Consumption Based Planning (CBP)

Originally, in CBP, planned independent requirements or dependent requirement will not

Consumption-based planning procedure is substantially a simple materials planning

1 Reorder point planning

3 Time-phased materials planning

C Master Production Schedule (MPS)

b Roll forward code (MPS)

d Forecast indicator (CBP)

3.1. MRP Type PD (MRP Procedure D)

Related to MRP Type PD, we find In customizing as follows:

OPTIONAL Forecast Indicator

NO Automatic calculation of Safety

3.2. MRP Type PP (MRP Procedure D)

Using Transaction MD04 we will check the stock situation:

b this one shows the Job Plan

c this one shows the new re-calculated “reorder point”

3.4. MRP Type PW (MRP Procedure D)

3.5. MRP Type P6 (MRP Procedure D)

MRP Type P6 has been customized as follows:

3.7. MRP Type P8 (MRP Procedure D)

No differences if compared with MRP type P6.

- constant model (D)

After the forecasting run we will have following situation:

Let’s check the customizing setting:

S TOCK REQUIREMENT LIST (Stock situation has changed)

3.10. MRP Type Z8 (MRP Procedure D)

4.1. CBP Type VB Manual Reorder Point (MRP Procedure B)

“Reorder point” field is per definition manually maintained.

Now we want to check the customizing setting:

Now we want to consider the stock situation at the time zero:

4.2. CBP Type V2 Automatic Reorder Point (MRP Procedure B)

and check as the data are changed:

5. Planning run and examples for MPS materials

Let’s check now which customizing setting we have:

M D04 FINISHED PRODUCT M0

M D04 ROW MATERIAL M0

6. Further examples for non-traditional MRP materials

In Consumption-based Planning it is available the procedure Time-phased planning that

6.1. CBP Type R1 or VS Time phased Planning (MRP Procedure R)

6.2. MRP Type RS Replenishment retail (MRP Procedure W)

7. MRP Lot-sizing procedure

7.2. Static lot-sizing procedure

The static lot sizing possible procedures are:

E lot for lot (exact)

7.3. Periodic lot-sizing procedure

M monthly lot sizing

7.4. Optimum lot-sizing procedure

7.5. Other tools in lot-sizing procedure

Created by M.Volpi Page 45 of 74

8.1. Consumption values

There are 2 type of consumption we can use:

 Total consumption corresponds to the sum of planned and unplanned consumption.

- as basis for the first forecast

8.2. Forecast values

8.3. Forecast execution

Forecast parameters maintenance in the material master

and the forecast results will appear:

8.4. Forecast models