R3 MRP Logic

The purpose of MRP is to guarantee material availability by planning for procurement or production of required quantities.
Sales Orders Planned Ind Requirements

Material Reqmts Planning
Dependent Reqmts

Reservations Planned Order

Convert Purchase Requisition Purchase Order Schedule Line

Production Order

Warehouse

 SAP AG 2001, A Business View of mySAP Financials, GBU FIN - 2

R/3’s MRP is for unconstraint-based planning, APO is for the constraint-based planning

Finished product

Sales order / Planned Ind Requirement Planned order

Assembly 1

Assembly 2

Dependent requirement Planned order

Raw material 1

Raw material 2

Raw material 3

Dependent requirement Purchase requisition
R

 SAP AG 2001, A Business View of mySAP Financials, GBU FIN - 3

Optimum Lot Size or Period Lot Size Procurement Type & Scheduling In-house Production or External Procurement & Backward Scheduling or Forward Scheduling BOM Explosion Determine the valid BOM for explosion Quota Arrangement A lot can further be split by quota arrangements (MM will cover this)  SAP AG 2001. A Business View of mySAP Financials.4 . R3 Lot Sizing falls into 3 categories : Static Lot Size. Calculate the Shortage Quantity Lot Size Calculation Determine the lot size of each plan order. GBU FIN .How the Planning Run Works Net Requirements Calculation ---> Lot Size Calculation ----> -------> Scheduling --------> BOM Explosion -----> -------> Quota Arrangement Net Requirements Calculation 1. Determine Planned Receipts (after considering existing issues and receipts) 3. Determine Available Warehouse Stock 2.

A Business View of mySAP Financials. purchase order. firmed planned order The planning run will not automatically displace firmed receipts.Rescheduling Check for Firmed Receipts Exception message Receipts Reschedule in Exception message Reschedule out Time * * Tolerance Reqmts Tolerance Tolerance In-house production time + Goods receipt processing time + Rescheduling horizon Firmed receipts: production order.  SAP AG 2001.5 . GBU FIN .

A Business View of mySAP Financials. GBU FIN .6 .Overview: Net Requirements Calculation Net Reqmts Calculation Lot-size calculation Procurement type Scheduling BOM Explosion  SAP AG 2001.

forecast-based planning. A comparison is made between warehouse stock and the appropriate receipts and issue. the system calculates available stock differently. In each procedure.7 Compare Dependent Reqmts Reservations Safety Stock Demand . In the net requirements calculation. and MRP.MRP: Net Requirements Calculation MRP will compare the requirement and supply to get a shortage gap. GBU FIN . Lot Size Shortage Sales Orders Planned Orders Planned Ind Reqmts Production Orders Purchase Requisitions Purchase orders Warehouse Stock Supply  SAP AG 2001. A Business View of mySAP Financials. a difference is made between reorder point planning.

GBU FIN .8 . A Business View of mySAP Financials.MRP Procedures controlled by MRP type in material master (MRP 1 view) MRP Procedures Consumptionbased MRP Deterministic Planning Reorder point planning W/ or W/O Requirements Forecast-based planning Time-phased planning based on consumption in the past  SAP AG 2001.

Master Data Material Master (Important Ones)  MRP Group (MRP1) .9 .  Reorder Point (MRP1) . GBU FIN .Lot Size determination  Storage Cost Indicators (MRP1) .  Quota Arrangement (MRP2) .  Special Procurement (MRP2) .Restrict Planning Activities within the TimeFence  Planning Cycle (MRP1) .For Reorder Point Planning Methods  Planning Time Fence (MRP1) .For Optimum Lot sizing Only  Ordering Costs (MRP1). A Business View of mySAP Financials.Make or Buy Indicator.Planning Method.Group common MRP materials together  MRP Type (MRP1) .Splitting of Quota for internal and/or external procurement (MM will handle this)  SAP AG 2001.For Assembly Scrap Only  Procurement Type (MRP2) .Planner for the material  Lot Sizing (MRP1) .For Optimum Lot Sizing Only  Assembly Scrap (MRP1) .For stock transfers.Only for Time Phased Planning  MRP Controller (MRP1) . phantoms etc.

Safety Stock  Forecast (MRP3 and Forecasting) . GBU FIN .How external or internal procurement is scheduled  Safety Stock (MRP2) .Group requirements for planning or display  Storage Location MRP (MRP4) .Only if storage MRP is required  SAP AG 2001.Mainly for Finished Goods .ATP logic for components .Component Scrap  Requirements Grouping (MRP4) . A Business View of mySAP Financials. For Finished Goods .to be decided by APO  Availability Check (MRP3) .Receiving and Purchasing Lead Times  Scheduling Margin Key (MRP2) .10 .to be decided by ZL.to be decided by APO.Discontinuation by material across all BOMs  Component Scrap (MRP4) .Master Data (Cont’d) Material Master (Important Ones)  Lead Times (GR and Planned Delivery Time) (MRP2) . ReOrder Point Planning and Time Phased Planning  Planning Strategy (MRP3) .Mainly for Forecast Based Planning.  Discontinuation (MRP4) .

The difference here is that sales orders and reservations are also taken into account. Safety Stock requirement is just for information Available Stock = Plant Stock + Receipts Reorder Point Planning + Requirements (REORDERREQS) (MRP Type V1.(Sales Orders + Reservations)  SAP AG 2001.How the Planning Run Works Per MRP Type Reorder Point Planning (REORDER) (MRP Type VB. planned orders are generated in the planning run to order up to reorder level. Available Stock = Plant Stock + Receipts . Reorder Level) When Available Stock falls below reorder level.11 . planned orders are generated in the planning run to order up to reorder level. Safety stock requirement is just for information. A Business View of mySAP Financials. Reorder Level) When Available stock falls below reorder level. GBU FIN .

MRP Planned (PDFORECAST) (MRP Type PD. Planned orders are proposed when available stock is less than forecast requirements. The material have to be planned using a separate MRP run. Available Stock = Plant stock .How the Planning Run Works Per MRP Type Forecast Based Planning (FORECAST) (MRP Type VV.Forecast Requirements Time Phased Planning (TIMEPLAN) (MRP Type R1.Forecast Requirements) within the planning cycle. Create Forecast) Material is planned according to same cycle in which it is delivered ie the material is not planned during the normal MRP run. Planning Cycle.Safety Stock + Receipts .12 .Safety Stock + Receipts . GBU FIN . Available Stock = (Plant stock .All Requirements  SAP AG 2001. A Business View of mySAP Financials. Optional Create Forecast) System checks every requirement to determine whether they are covered by available warehouse stock and/or receipts. Create Forecast) System only considers forecast requirements (any other requirements are not considered).Safety Stock + Receipts . Available Stock = Plant stock .

Quantity and Time Floats Safety stock Safety stock partially available Dynamic safety stock Safety time  SAP AG 2001. GBU FIN .13 . A Business View of mySAP Financials.

Safety Stock Safety stock: To be set in material master (MRP 2) or in the MRP area segment Stock Available quantity for planning Safety stock (not available for planning) Time Reqmt  SAP AG 2001. GBU FIN .14 Receipt . A Business View of mySAP Financials.

Safety Stock Partially Available Safety stock partially available : set in MRP group Available quantity for planning Stock Portion of safety stock available Safety Portion of safety stock not available for planning Statistical safety stock from material master Time Reqmt Receipt  SAP AG 2001. GBU FIN .15 . A Business View of mySAP Financials.

otherwise adjustment  SAP AG 2001. GBU FIN . A Business View of mySAP Financials.Dynamic Safety Stock (1) Stock Maximum stock Target stock "dynamic safety stock“ Minimum stock Replenish to target stock if falls below minimum stock Exception message for firmed order proposals .16 .

GBU FIN .Dynamic Safety Stock (2) Dynamic Safety Stock and Range of Coverage Profile Period 1 Period 2 Period 3 Period 4 Reqmts Average daily requirements Average daily requirements Average daily requirements Time Days Maximum stock Target stock Minimum stock Time  SAP AG 2001. A Business View of mySAP Financials.17 .

Range of Coverage Profile: Intervals (1) Definition of range of coverage profile in Customizing. assignment in material master Interval 1 Interval 2 Interval 3 Time Reqmts Maximum stock Target stock Minimum stock Time  SAP AG 2001. GBU FIN .18 . A Business View of mySAP Financials.

GBU FIN .2000 10.12. A Business View of mySAP Financials.Range of Coverage Profile: Intervals (2) Periods with deviating range of coverage Interval 1 Reqmts Interval 2 Interval 3 Time 20.2000 Maximum stock Target stock Minimum stock Time  SAP AG 2001.19 .12.

2 workdays Time Reqmts Safety time  SAP AG 2001.03.Safety Time Safety time: To be set in material master (MRP 2) or in the MRP area segment 28.03.20 . GBU FIN . Receipts 30. A Business View of mySAP Financials.

A Business View of mySAP Financials. GBU FIN . reqmts  SAP AG 2001.Safety Time in Multi-Level Production Defined using the safety time indicator in the material master (MRP 2) or in the MRP area segment + Finished product Safety time Ind reqmt Ind reqmt Time + Components Time Dep.21 .

Period Profile for the Safety Time Definition of period profile in Customizing.22 20. assignment in material master Receipts Safety time Reqmts Safety time Safety time Time 2 workdays 4 workdays 2 workdays 12.2000 .2000  SAP AG 2001. A Business View of mySAP Financials. GBU FIN .12.12.

A Business View of mySAP Financials.23 .Overview: Lot-Size Calculation Net Requirements Calculation Lot-size calculation Procurement type Scheduling BOM Explosion  SAP AG 2001. GBU FIN .

GBU FIN .Overview of Lot-Sizing Procedures Definition in Customizing Entered in Material master Lot-sizing procedures Static procedures Period procedures Optimum procedures Lot-for-lot order quantity Daily lot size Part period procedure Fixed lot size Replenishment up to maximum stock level Weekly lot size Least unit cost procedure Groff reorder procedure Dynamic lot size creation Monthly lot size Flexible periods according to planning calendar  SAP AG 2001.24 . A Business View of mySAP Financials.

Static Lot-Sizing Procedures EX Lot-for-lot order quantity (exact to the day) Quantity Receipts Reqmts Time FX Fixed lot size HB Replenish up to maximum stock level  SAP AG 2001. GBU FIN .25 . A Business View of mySAP Financials.

GBU FIN . A Business View of mySAP Financials.26 .Period Lot-Sizing Procedures TB Daily lot size WB Weekly lot size MB Monthly lot size Period length Period length Period length Receipts Time Reqmts Period 1 Period 2 Period 3  SAP AG 2001.

27 . to Planning Calendar July 2000 Mon Tue Wed Thu Fri 1 8 15 22 2 9 16 23 3 10 17 24 4 11 18 25 5 12 19 26 Sat Sun 6 13 20 27 7 14 21 28 Time Period 1 Period 2 Period 3  SAP AG 2001. GBU FIN . A Business View of mySAP Financials.Lot Size According to Planning Calendar PC Period Lot Size Acc .

28 . GBU FIN . A Business View of mySAP Financials.Optimum Lot-Sizing Procedures Many deliveries / High order costs Minimal stockkeeping/ Minimal storage costs Few deliveries / Low order costs More extensive stockkeeping/ Higher storage costs  SAP AG 2001.

GBU FIN .Long-Term Lot Size Exact analysis Short-term Reqmts preview Long-term Lot-for-lot order quantity Monthly lot size Reqmt Receipt  SAP AG 2001.29 . A Business View of mySAP Financials.

GBU FIN . no events required a change in planning. so not planned during NETCH + NETPL! Problem 2 2 Today Possible Solution: Maximum MRP period (MRP group)  SAP AG 2001.30 . A Business View of mySAP Financials.Planning Run Executed Regularly 1 1 2 months ago For 2 months.

GBU FIN .31 .Additional Restrictions You can use these additional restrictions to further define lot sizes :  Short Term and Long Term Lot Size (SHORTLONGTERMLOT) (Lot Size Key LL)     Minimum Lot Size Maximum Lot Size Rounding Value Rounding Profile  SAP AG 2001. A Business View of mySAP Financials.

A Business View of mySAP Financials.32 . GBU FIN .Overview: Scheduling Net Requirements Calculation Lot-size calculation Procurement type Scheduling BOM Explosion  SAP AG 2001.

33 Components Components . A Business View of mySAP Financials. GBU FIN .Procurement Types Procurement Types In-house production Stock transfer External procurement Production in own plant Production in another plant Subcontracting Vendor Reservation in another plant Procurement types Special procurement types  SAP AG 2001.

GBU FIN .34 . A Business View of mySAP Financials.Scheduling The following times are taken into account :  processing time required by purchasing department (workdays)  planned delivery time of the material (calendar days)  goods receipt processing time (workdays) These times will be used to determine the release date of the planned order or purchase requisition.  SAP AG 2001.

A Business View of mySAP Financials.Backward Scheduling for In-House Production Planned order Opening period In-house production time Goods receipt processing time MRP 2 Lot-size dependent: MRP 2 Scheduling margin Lot-size independent : work scheduling key (MRP 2) Time Opening date Order start date Order finish date Availability date  SAP AG 2001. GBU FIN .35 .

A Business View of mySAP Financials. if order start date is in the past during backward scheduling Today Planned order In-house production time Goods receipt processing time Time Order start date Order finish date Availability date  SAP AG 2001.36 . GBU FIN .Forward Scheduling for In-House Production Automatic.

Time Release date  SAP AG 2001.37 Delivery date .Scheduling for External Procurement Order start date Order finish date In-house production time ... GBU FIN . A Business View of mySAP Financials.. Processing time for Purchasing Customizing Plant parameters Plnd delivery time Non-vendor-specific: Material master Vendor-specific: Outline agreement or info record ..

Scheduling in Production Planning Basic Scheduling  Separate scheduling for planned orders  Exact to the day  Basic dates calculated Order finish date Periods t Order start date Opening date  Basis for in-house production or replenishment lead time  Improved performance  No calculation of capacity requirements Lead Time Scheduling  Used for production orders and routings  Based on basic dates: MRP  Order header Arbeitsvorg änge Materialkomponenten    manual Target dates calculated (scheduled dates) Target start date Target finish date Basis for in-house production or operations Capacity requirements calculated Exact to the second Fertigungshilfsmittel Kosten Plan Soll Ist 100 20 50  SAP AG 2001. A Business View of mySAP Financials. GBU FIN .38 .

GBU FIN . no capacity requirements Backward scheduling OS Reqmts date Reqmts date Product Product Product OD OS OF Assembly OD OS OF Available Raw material OD OS OF Available Available Opening period Goods receipt processing time Time OF Order start date Order finish date OD Opening date  SAP AG 2001. A Business View of mySAP Financials. =1.39 .Order Dates for Basic Scheduling Scheduling ind.

GBU FIN . = 2. capacity requirements are calculated 1 1 OS Float before production Scheduling margin key Planned order OF Operations Operations (from routing) (from routing) Float after production Scheduling margin key 2 2 OS Order start date Production Production start date start date 10 20 30 OF Production Production finish date finish date Order finish date  SAP AG 2001.Lead Time Scheduling Scheduling ind.40 . A Business View of mySAP Financials.

41 . GBU FIN . A Business View of mySAP Financials.Scheduling : Significance of In-house Production Time Calculation of planned dates Requirements date OS OF In-house production time from material master Wrong in-house production time in material master? 10 20 30 40 50 Float before production Lead time scheduling using routing Float after production Calculation of order dates In-house prod. time greater than scheduling in routing In-house production time shorter  SAP AG 2001.

GBU FIN . A Business View of mySAP Financials.Order Dates for Lead Time Scheduling Backward scheduling OD OS PS PF OF Product 10 20 30 Assembly 2 in routing assigned operation 30 Assembly 1 10 20 30 Assembly 2 10 20 30 Time OS Order start date Order finish date OD PS PF Opening date Production start date Production finish date Opening period Goods receipt processing time OF  SAP AG 2001.42 .

reqmts Dep reqmts Lead time Lead time Lead time + Lead-time offset BOM maintenance Time Dep. reqmts Dep reqmts Lead-time offset Lead-time offset Note: the lead time and lead-time offset are not taken into account in the lead time scheduling!  SAP AG 2001.43 ..Changing Dependent Requirement Dates Order start date Planned order Determining components Finished product Component 1 Dependent reqmts w/o lead time/lead-time offset Component 2 Dep.. A Business View of mySAP Financials. GBU FIN .

Overview: BOM Explosion Net Requirements Calculation Lot-size calculation Procurement type Scheduling BOM Explosion  SAP AG 2001. A Business View of mySAP Financials. GBU FIN .44 .

GBU FIN .45 . A Business View of mySAP Financials.BOM Explosion Target Usage quantity /dates Dependent reqmts quantities and dates Items relevant to production Component selection Change status of alternative BOM Selection of Alternative BOM Selection of BOM usage Explosion date Lot size Usage  SAP AG 2001.

3’ Production version Customizing for BOM explosion Order start Order finish BOM explosion number Alternative BOM selected Customizing for BOM explosion Order start Order finish BOM explosion number Change status of alternative BOM determined  SAP AG 2001. A Business View of mySAP Financials.46 . GBU FIN .Summary: BOM Selection BOM usage by selection ID Selection method indicator ‘1’ Explosion date Lot size ‘2.

A Business View of mySAP Financials.47 .Selection of BOM usage BOM Selection ID Planned order Priority 1 2 Usage Production Engineering Used if no valid production BOM exists Production BOM Engineering BOM Costing BOM  SAP AG 2001. GBU FIN .

Selection of Alternative BOM

for multiple BOMs

Order quantity Order quantity (Lot size) (Lot size)
Alternative selection indicator in material master

1
2, 3

Explosion date Explosion date

Production version Production version

 SAP AG 2001, A Business View of mySAP Financials, GBU FIN - 48

Selection by Order Quantity (Lot Size)

(Selection method indicator = blank)

Multiple BOM
Alternative 1 Lot-size range 0 -10 pieces

Small lot
A B

Planned order
Large lot

Alternative 2 Lot-size range 11 - 10,000 pieces

A
 SAP AG 2001, A Business View of mySAP Financials, GBU FIN - 49

C

Selection by Explosion Date

Customizing

Planned order
BOM explosion using

Order start date
of a planned order

Order finish date of a planned order

BOM explosion number (gross date)

 SAP AG 2001, A Business View of mySAP Financials, GBU FIN - 50

51 . GBU FIN .Selection by Order Start (Selection method indicator = 1) Order start Order 1 Order start Order 2 Alternative BOM 1 Alternative BOM 2 Alternative BOM 3 Time Valid from (relevant to planning from) Valid from (relevant to planning from) Valid from (relevant to planning from)  SAP AG 2001. A Business View of mySAP Financials.

GBU FIN .52 .Explosion Date Using the Order Finish Date Order finish Order finish Order 1 Order 2 Alternative BOM 1 Alternative BOM 2 Alternative BOM 3 Time Valid from (relevant to planning from) Valid from (relevant to planning from) Valid from (relevant to planning from)  SAP AG 2001. A Business View of mySAP Financials.

Explosion Using the BOM Explosion Number 1. xxx Order for assembly 2 BOM explosion no.53 . A Business View of mySAP Financials. xxx Order for assembly 1 BOM explosion no.2000 BOM explosion no. xxx Order for product BOM explosion no. GBU FIN .2. xxx Alternative finished products Alternatives for assembly 1 Alternatives for assembly 2 Gross date  SAP AG 2001.

A Business View of mySAP Financials.Selection by Production Version (Selection method indicator = 2 or 3) Production version 1 Production version 2 Material master Routing BOM Describes production procedure Work center (Line production)  SAP AG 2001.54 . GBU FIN .

GBU FIN . A Business View of mySAP Financials.Defining the Change Status Using the Order Start Date Order start Order start Order 1 Order 2 Time Explosion date Explosion date Time Change status 1 Technical change Change status 2 Change status 3 Technical change Same alternative BOM  SAP AG 2001.55 .

GBU FIN .Defining Change Status Using the Order Finish Date Order finish Order 1 Order 2 Order finish Time Explosion date Time Explosion date Change status 1 Technical change Change status 2 Change status 3 Technical change Same alternative BOM  SAP AG 2001.56 . A Business View of mySAP Financials.

2. xxx Order for assembly 2 BOM explosion no. GBU FIN . xxx Order for product 1. A Business View of mySAP Financials.57 .Defining Change Status Using BOM Explosion Numbers BOM explosion no. xxx Order for assembly 1 BOM explosion no. xxx Change status for product Change status for assembly 1 Change status for assembly 2 Gross date  SAP AG 2001.2000 BOM explosion no.

58 .Other MRP Functions • Planning Time Fence • Discontinued Parts • Alternative Parts • Single and Multi Level Pegging • Multi-Plant Planning • Storage Location/MRP Area • Blocked Storage Location • Other Special Procurement  SAP AG 2001. GBU FIN . A Business View of mySAP Financials.

Outside the time fence.Planning Time Fence Plan is protected from changes within the planning time fence. When new orders move into the time fence. system creates order proposal as usual. they may be firmed automatically depending on how the system is configured. GBU FIN . You can configure system as to how you want the orders to react within the time fence.59 . End date of time fence determined from planning date. Firming Types for MRP Planned Materials : Orders Moving Into Firming Types TimeFence Type 1 Firmed Type 2 Firmed Type 3 Not Firmed Type 4 Not Firmed New Order Proposals Creation Outside Time Fence No Orders Created Outside Time Fence No Orders Created New Order Status Not Firmed NA Not Firmed NA  SAP AG 2001. A Business View of mySAP Financials.

GBU FIN .Carrying Out the Planning Run Planning File Types of Planning Run    Regenerative (NEUPL) Net Change Planning (NETCH) Net Change Planning in planning horizon (NETPL) Planning Mode Creation Indicator MRP Group vs Plant Parameters  SAP AG 2001.60 . A Business View of mySAP Financials.

Review Pegging  SAP AG 2001.Review planning situation (ie stock requirement list) for material for all plants • Order Report .(the last MRP run for the material) . A Business View of mySAP Financials. • Situation (all plants) .Evaluating the Planning Run • MRP List By Material • MRP List Collective Display • Stock Requirements List By Material • Stock Requirements List Collective Display • Compare MRP List against Stock Requirement List • Planning situation for Material . GBU FIN .you can compare your current plan against long term planning scenarios or stock requirements list here.(same as stock requirement list ie latest situation for a material) • Planning result for material .Review your orders in the order report • Pegged Requirements .61 .

A Business View of mySAP Financials.Important Configurations Most Important : Production-->MRP-->Planning File Entries -->Activate MRP and set up planning file This Configuration should be done before materials are mass created in a new plant • • • • • • • • • • • Plant Parameters MRP Groups MRP Types Special Procurement Types Stock Availability Lot Size Calculation Define Floats Define External Procurement BOM Explosion / Determine Routing Define Storage Location/MRP area per Plant Procurement Proposals  SAP AG 2001.62 . GBU FIN .

Implementation Decisions • • • • • • • • Group materials with common planning profile together.63 . Decide an MRP Type for each group of materials. whether you require safety stock and if safety stock is required. Decide for each material. A Business View of mySAP Financials. Decide what the lot sizing should be for each material/group of materials. GBU FIN . what method of planning the safety stock ? Which material require quota arrangements ? What are the materials that have to be procured from another plant ? Are there any storage locations to be blocked from planning ? Are there storage locations/MRP area needed to be planned separately ?  SAP AG 2001.

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