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Materials Requirement

Planning

MRP - Overview
The main function of material requirements planning is to guarantee material
Availability

It is used to procure or produce the requirement quantities on time both for internal
purposes and for sales and distribution.

MRP tries to strike the best balance possible between optimizing the service level and
minimizing costs

Integration between master data, demand management, sales and distribution,
inventory management

MRP Features
Net requirements
calculation

Lot sizing

MRP Internal production
and external purchasing
Forecasting

Order scheduling Bill of Material
and generation Explosion

MRP Overview - MRP at
Plant or MRP Area Level
 You can plan material requirements at plant level or for different MRP areas.
System adds together stocks from all of the individual storage locations, with
the exception of individual customer stock, to determine total plant stock.
Individual storage locations can be planned separately or be excluded from
planning.
 In the case of material requirements planning on an MRP area level, only the
stocks from the storage locations or subcontractor assigned to the respective
MRP area are taken into account. Only the requirements in this MRP area are
combined and procurement elements are created for them. This enables you to
plan material requirements specifically for certain areas.

tradable assemblies.  independent requirement. that is.  In order to cover these requirements. The procurement element in the planning run is the planned order or.  In Demand Management . MRP Overview . . the requirement for the finished product.sales forecast.concrete customer requirements from the market. MRP calculates procurement quantities and dates as well as plans the corresponding procurement elements. rescheduled or deleted at any time.  Dependent requirements. trading goods and replacement parts. for external procurement. Both procurement elements are internal planning elements that can be changed.  Production orders for in-house production and purchase orders for external procurement.Material Requirements Planning in the Logistics Chain  Sales and Distribution . the purchase requisition.

In this case.Material Requirements Planning in the Logistics Chain  The progress of the order for materials produced in-house is controlled by using the production order. Cost accounting is also carried out via the individual production order. you must have chosen suitable vendors or you must have drawn up outline agreements.  The quantities made available by production or by external procurement are placed in stock and are managed by Inventory Management . capacity planning and status management. MRP Overview . The production order contains its own scheduling procedures.  Materials that are procured externally trigger the purchasing procedure.

MRP Overview .

. The Planning Concept in SAP SOP MASTER PLANNING MRP Planned Customer Independent Independent Requirements Requirements Demand ie Sales Requirements Plan Requirements (Orders) from Offset SD Module Keep Balanced Planned Orders Production Plan Production Orders Order Proposals Purchase Requisitions Order proposals. planned orders etc are created and adjusted by running the MRP programs.

MRP Overview .MRP Proceedures  MRP  Consumption Based Planning .

MRP PREREQUISITES  Activate MRP  create the master data -  material master (LO-MD-MM)  bills of material (LO-MD-BOM)  When you use MRP for in-house production..  sales and distribution. if necessary .  work center (PP-BD-WKC)  routings (PP-BD-RTG)  demand management (PP-MD-DEM) to define requirement quantities and requirements dates for finished products and important assemblies.

 Reorder Point – The stock level below which fresh stocks are to be planned  Planning Time Fence: defines a period during which MRP will not automatically add or reschedule orders  MRP Controller – The personresponsible for material planning for the material. Material Master – MRP 1Key Fields  MRP Type .Key that determines whether and how the material is planned. .

Material Master – MRP 1Key Fields  Lot Size: Key that determines which lot-sizing procedure the system uses within materials planning to calculate the quantity to be procured or produced.  Minimum Lot Size  Maximum Lot Size  Fixed Lot Size  Maximum Stock Level  Planned Delivery: lead-time for purchased material  GR Processing Time: goods receipt processing time .

 Planned Delivery: lead-time for purchased material  GR Processing Time: goods receipt processing time  Safety Stock  Availability Check indicates whether the system generates individual or summarized requirements for sales orders for this material and for planning. . Material Master – MRP 2 Key Fields  Procurement Type – Inhouse / External / Both  In-house Production: Lead time for the inhouse manufactured item. which all MRP elements the system takes into account for the availability check.

. Material Master MRP 3 Key Fields  Availability Check indicates whether the system generates individual or summarized requirements for sales orders for this material and for planning. which all MRP elements the system takes into account for the availability check.

are planned separately from the overall plan  Reorder Level: used for storage location MRP  Replenishment Quantity: used for storage location MRP . Material Master MRP 3 Key Fields Storage Location MRP  MRP Indicator: determines whether or not requirements. for a specific storage location.

The reorder point and safety stock levels are entered manually VM Automatic Reorder Point Planning: The reorder point and safety stock level are calculated based on the forecast results VV Forecast Planning The latest forecast is copied as requirements which are used to create order proposals .MRP Types ND No Planning PD MRP VB Manual Reorder Point Planning: MRP produces order proposals when stock falls below a “reorder point”.

but they can also be entered manually – MRP LEVEL PARTS Dependent Requirements – Are directly related to or derived from the BOM structure for other items or end products. demand forecast) – Customer Independent Requirements: Are sales orders on the system. Sales Orders are generally copied directly into the PP system from the SD system. They are automatically generated during MRP . Requirement Types  MPS LEVEL PARTS Independent Requirements – Planned Independent Requirements: Are used for the anonymous (Non-order-specific) planning of production or procurement (eg.

Lot Sizing Static Periodic Optimum (Cost ) Lot for Lot Daily Lot size Part period balancing Fixed Lot size Weekly Lot size Least unit cost procedure Replenish up to Monthly Lot size Dynamic Lot size creation maximum stock level Flexible period Groff reorder procedure Lot size according to planning calen. .

MRP: Static Lot Sizing Lot for Lot Order Quantity: Shortage Quantity = Ordered Quantity Fixed Lot Size: Order Material Order = Shortage Quantity Order Shortage If Fixed Order = Quantity Fixed Order If > Quantity Quantity Fixed Order Quantity Order Replenishment up to Maximum Stock Level: Stock required to achieve Order Quantity = maximum stock level set in the material master .

Consumption Based Planning  Use past consumption data (historical data) to calculate future requirements  With the help of the material  no reference to the master plan .

 You have an efficient and current inventory management. Prerequisites  The material consumption is consistent with only a few fluctuations. .

MRP procedures in consumption-based planning  Reorder Point Planning  Forecast-Based Planning  Time-phased planning .

 Important for defining the reorder point: Safety stock. Average consumption. Reorder Point Planning  The reorder point should cover the average material requirements expected during the replenishment lead time. Replenishment lead time .

Reorder Point Planning  important for defining the safety stock: Past consumption values (historical data) or future requirements  Vendor/production delivery timelines .

Reorder Point Planning  Manual Reorder Point Planning .both the reorder level and the safety stock level are determined by the integrated forecasting program. .define both the reorder level and the safety stock level manually  Automatic Reorder Point Planning .

-calculates the net requirements -calculates the procurement quantity according to the lot- sizing procedure -schedules the procurement proposal . Reorder Point Planning -continuous monitoring of available warehouse stock within reorder point planning in Inventory Management.

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Forecast Based Planning  Forecast-based planning is also based on material consumption  Forecast values and future requirements are determined via the integrated forecasting program-MP30/MP38  Period Pattern and Forecast Periods .

MRP Prerequisites PLANT LEVEL  Activated for MRP MATERIAL LEVEL  Valid MRP Type  Valid Material Status  Material MRP Views Maintained  MRP Controller  Planned Lead Time  MRP Group  Lot Size Data .

MRP: Reorder Point Planning Stock Reorder Point Safety Stock Time Order Date Delivery Date .

Carrying Out the Planning Run Total Planning – All materials in a given plant  MD01  All materials are reviewed by MRP regardless of activity  Only the materials in a plant that have undergone a change relevant to planning since the last planning run (net change planning) Planning Interval – Limiting the MRP Planning Interval example: 100 days Planned requirements and supply order receipts Time MRP Planning Horizon .

Only create planned order – Automatically create within the opening period – Automatically create for the entire planning horizon  Opening Period Parameter: allows the user to take advantage of MRP automatic creation features while retaining control over the number of open purchasing documents . Planning Run Options for Automatic Creation of Requisitions and Delivery Schedules  MRP Control Parameter: determine whether or not MRP will automatically create requisitions or delivery schedules  Options are: – Do not automatically create.

Total MRP Run – Online-MD01 .

Total MRP Run – Scheduling-MDBT .

. such as warehouse receipts and issues.  Net Change Planning in the Planning Horizon – shortens the period over which MPS plans to the planning horizon. It is common to run net change MRP daily.  Net Change Planning – only master schedule items which have undergone a change to the supply/demand balance. are re-planned. It is typically set to the length of time of the longest lead time item. This means that only those master schedule items which have undergone a relevant change within the planning horizon are planned. Planning Run Types  Regenerative Planning – all master schedule items are planned for a plant. which is set in Customizing. It is generally used during initial start-up to insure all items are planned or when heavy maintenance causes most items to be re- planned.

Dependent requirements are only created for materials on the next lower level Multi-level. Single Item Planning-MD02/MD03  Single-level. Single-Item Planning – Planning carried out for a single item on a BOM. Single-Item Planning – Planning carried out for the complete BOM structure of a material .

Multi-Level Planning Structure Independent Requirements Customer Requirements = Demand E1 = Supply Planned Orders Level 0 Dependent Requirements B1 B2 Planned Orders Planned Orders Level 1 Dependent Dependent Requirements Requirements R1 R2 R3 Planned Orders Planned Orders Planned Orders Level 2 .

Process Process Result Issues Last planning Stock Requirements run results List uses current data  The MRP List displays the result of the last planning run  The Stock Requirements List displays the most up-to-date stock and requirements situation . MRP List vs Stock Requirements List MRP Current Stock. Planning Planning Planning planned Receipts. MRP MRP Rqmts. Balances.

Stock Requirements List- MD04 .

independent and dependent demands and stock balances for the material. Stock Requirements List-MD04 Date MRP Element Supply/Demand Ref EM Quantity Available 01/01 STOCK 100 01/08 ORDER Sales Order 25 75 01/15 PL ORD 1000 120 05 100 175 Stock Requirements List brings together all the supply orders. MRP makes order proposals to balance the supply/demand position for the material .