You are on page 1of 30

SAP MRP Configuration

Activating MRP and Planning File Entry


a) Activating SAP's Material Requirements Planning (MRP)
This configuration allows you to choose the plant for which you would want to activate
SAP Material Requirement Planning (SAP MRP). Activating MRP for the plant allows
one to use the SAP MRP tool for the plant. SAP Transaction code OMDU and the SAP
path is Logistics > Production > MRP > Planning File Entry > Activate MRP and Set up
Planning File

b) Activating Planning File Entries for a Plant


Activating Planning file entry for the plant (through a variant that can be rescheduled)
allows you to collect all the material in a planning file list, which has an MRP Type in the
material master MRP 1 View (other than MRP Type XO)
The process of recording a planning file entry for a material, can be run periodically
using a batch job scheduling method. The transaction code to set up the variant and
period scheduling is OMDO and the Path for activating the planning file set up is
Logistics > Production > MRP > Planning File Entry > Activate MRP and Set up
Planning File
All the entries in the planning file will have a change indicator specifying that a material
has undergone a change (change in receipts elements or issues elements). This
indicator will help you to choose only those materials that have undergone a change,
through the use of planning key called Net Change Planning when running MRP.
The planning file record for a material also has a net change planning in the current
horizon field which will be set if the change in the materials receipt or issue element is
valid in the planning horizon. This indicator will help you choose only those materials
which have undergone a change in the planning horizon; through the use of a planning
key, in an MRP run, called Net change planning in the planning horizon.

Plant Level configuration for MRP

Plant Level configuration for MRP


SAP MRP is run at plant level or at a group of plant level (called as scope of planning),
thus the MRP configuration is done at Plant level.

The configuration done for SAP MRP at Plant level would also be true for SAP
Consumption Based Planning (SAP CBP) settings.
Transaction code OPPQ takes you in to the SAP MRP configuration called as Plant
Parameters for Material Requirement Planning. The Path which can be used is Logistics
> Production > Material Requirement Planning > Plant Parameters > Carry out Overall
Maintenance of Plant Parameters.
The Transaction code for Consumption Based planning is OMI8 and the Path is
Logistics > Materials Management > Consumption Based Planning > Plant Parameters
> Carry out Overall Maintenance of Plant Parameters.

Fig MRP - Config 1

In the transaction code for Plant level parameters for SAP MRP, you should first input
the plant and press the maintain button.
If you have already maintained the configuration for the parameters, then it states so, if
you havent then it simply says To Maintain next to the parameter

Fig MRP - Config 2

Following are the parameters that need to maintain as a part of SAP MRP/CBP
Configuration:

a) Number ranges
The number range IDs are maintained for the following objects:
the Planned orders
the reservations,
the dependent requirements,
the simulative dependent requirements,
the purchase requisitions,
the MRP Lists,
In this section only the number range IDs are maintained. While the actual number
range is configured, for the number range ID, using a transaction code OMI2 (for the
above mentioned objects created in the planning run). One can also use the transaction
code OMI3 for the objects created manually in the front end.

Every number range interval, created using OMI2 and OM13, has an ID, which can be
allocated to the objects at plant level, i.e., every plant can have a different number
range for the objects mentioned above.

b) Availability Check rule for Backorder Processing


As per standard SAP, the Availability checking rule for the backorder processing is PP,
though you can have your own availability check rules created or configured.
Every Availability checks rule (availability checking scope defined) has a set of receipts
(Purchase orders, Production orders) and issues (Sales orders, dependent
requirements, reservations, planned independent requirements etc) which are to be
considered or not to be considered during the SAP availability checks.
To have the checking rule work along with the configuration, you should have the
Availability checking groups maintained in the material master. The Checking groups
are configured to be associated with the checking rules (checking scopes).
The availability checking rule (checking rule scope) has to be maintained, for a given
SAP functionality and it has to be assigned to the availability checking group maintained
in the material master. The SAP functionalities that use availability checks to check the
availability of the header materials as well as components at the plant at the time of
sales order creation, the availability checks of the header material at the time of sales
order delivery, the availability checks for components in production thus reporting the
missing parts list, the backorder processing etc.

c) Reporting
This configuration is used for the following purposes.
To configure the objects, which are to be considered in the calculation of the
receipts days supply like the production orders/process orders, firmed planned
orders, purchase orders, assigned planned orders, firmed purchase requisitions, QM
Inspection lots, reservations, safety stocks
To configure the reporting of periods totals in terms of a defined period (day,
week, month, periods as per planning calendar) of in Stock requirement list, MRP
list, simulative MPR or interactive MRP

d) MRP Controllers
This is a mandatory configuration. Here you can configure the list of MRP controllers for
the plant. A MRP Controller is a person or a group of people, which is responsible for
planning a material or a given list of materials.
You have to assign the MRP controller to the Material Master MRP 1 View, so as to
delegate the responsibility of the planning and evaluation of planning for that material.

e) Floats
Floats are buffers in the total lead time, that are provided in production/process order or
in the planned orders created manually or during an MRP run. The schedule margin key
is used in the Material Master MRP 2 View. It is used in MRP as well as in production
order.
The floats are defined using the scheduling margin key.
Opening period: Number of working days between the date that the order is created and
the planned start date. This time is available for the MRP controller to convert a planned
order into a purchase requisition or a production order.
Float after production: Number of working days between the scheduled finish date and
the order finish date; used as a float in production scheduling.
Float before production: Number of working days between the order start date and the
scheduled start date; used as a float in production.
Scheduling release period: Number of workdays between the planned start date and the
date for releasing the order. If the order release indicator is set, the production order is
released by a background program that takes all dates into account.

Plan
t

Plant
Name

Margin
Key

0001
0001
0001

0001
0001
0001

001
002
002

Opening
Period
Days)
5
5
5

(In

Fl.
Before
Production
(In
Days)
2
3
4

Fl.
After
Production
(In
Days)
2
3
4

Release
Period
Days)
5
5
5

(In

f) Special Procurement
The special procurement function helps you to configure and assign special
procurement to the materials which can be used during an MRP run while creating the
procurement proposal.
The special procurement functions are withdrawal from alternate plant, production in
alternate plant, subcontracting, direct production, phantom item planning,
https://sites.google.com/site/sapswords/home/learn-sap-pp/sap-material-master/sapmrp2-view
Example: For Stock Transfer from Plant C001 to Plant C002
Create the Special procurement key (Key number = 12 as an example) in the plant
C002 with the procurement type as F and special procurement as U (Stock transfer)
and the special procurement plant as C001. Normally when creating the special
procurement key use Z, Y or X to the Key number, so instead of having Key number as
12, we could have something like Z2 or YA etc.

Fig MRP - Config 3

Similarly for Withdrawal from Alternate plant, you could have a Configuration as below:

Fig MRP - Config 4

Similarly for Subcontracting, you could have a Configuration as below:

Fig MRP - Config 5

Similarly for Production in alternate plant, you could have a Configuration as below:

Fig MRP - Config 6

g) Conversion for Planned orders


In this configuration parameter, you can maintain the production order type or the
process order type, which the system should use as default during the planned order
conversion. Setting defaults in the plant parameters configuration allows the system to
fix and select the order type for a plant during the conversion process.
Note: This can be a useful tool when you are using one production order type and one
process order type, but if you are using multiple production/process order types, then
you should not be maintaining defaults here.
Also for the purchase requisition conversion, you are given an option in the
configuration to define the maximum number of planned orders that can be converted in
to Purchase requisition.

Fig MRP - Config 7

g) Dependent Requirements availability check


When carrying out the availability check for each of the components in a MRP BOM
explosion, the system needs to know the availability checking scope rule. Again we
would maintain the standard Checking rule as PP or you could alternatively configure
one for yourselves.

h) BOM/Routing Selection ID
This configuration parameter is really important and it is mandatory to maintain one,
since it helps selection of BOM and task lists in the planned orders. Though there is one
more place in the planned order Scheduling parameters MRP configuration, where you
can maintain the selection ID for selection of the Task lists (Routing/Recipe/Rate
Routing).
A selection procedure is set to select BOM or Routing/Recipe on priorities set for the
BOM usage or for the task list types and the task list status. Knowing the selection
procedures allows the MRP run to select the right BOM and task list for the planned
orders.
In other words, you could have the BOM Selection being set for selection of the
Production BOM Usage first and if a BOM for the material with the Usage production
(Usage = 1), is not found, you could have the system search for a BOM of universal
Usage (Usage = 3).
Similarly, you could have a task list of type Routing or Recipe or reference operation
sets selected and set in priorities of selection (1 st Routing, 2nd Reference operation
sets, 3rd, which has a Status Released for all purposes or released for costing) etc.

h) Scheduling of Planned orders


This configuration parameter is really important and it is mandatory to maintain one. It
allows you to set the control parameters for scheduling of planned orders of type LA at a
given plant and for a given MRP Controller. You can leave the MRP controller as * to
have the scheduling parameters true for all the planned orders across all the MRP
controllers.

The following control parameters can be configured here:


The Routing/Recipe Selection ID, specifying the routing/recipe that would be
selected for detailed scheduling, as per the priorities set for task list type and task list
status.
The Detailed scheduling, using the task list is only carried for the scheduling
Horizon mentioned, i.e., if the planned orders dates lie beyond the scheduling
horizon, then the basic date scheduling is used where the in house production times
from the material master is used.
Allow Scheduling Indicator allows the planned orders to be scheduled using
the detailed scheduling or basic date scheduling, either of the two, depending upon
the availability of the task list and scheduling type selected for the MRP run.
Generate Capacity requirements indicator allows generation of the capacity
requirements for the work centers and loads them accordingly. The loading of the
work centers is as per the use of the work center determined through the scheduling
carried out.
The Task list selection, scheduling horizon, scheduling indicator and the capacity
indicator can also be set for rough cut planning used for Long term planning
purposes.
The next configuration parameter talks about the configuration of the selection of
the type of scheduling level that should be used for adjusting the basic dates of
planned orders. The various options available are rate based scheduling, lead time
scheduling, scheduling using takt times.
The Adjust planned order dates configuration option allows you to readjust the
scheduling results or the basic dates every time you carry out Scheduling. Though
there is one more scheduling configuration option provided by the system for
overwriting/adjusting the existing basic dates by the new dates arrived at, through
rescheduling (using the scheduling level as mentioned).
The system not only offers an option to adjust the basic dates for the planned order
arrived at by using the scheduling level set, but it also setting the dates of the
dependent requirements to the operation start date or the order start date.
This configuration not only adjusts or sets the dates of the header planned order and
the dependent planned orders, but it also generates capacity requirements for the
same.

See below for the details of adjusting dates in scheduling and adjusting dates for
capacity requirement generation:
You can adjust the Basic Dates of the header planned order using the
scheduling level and adjust (or set) the dependent requirements to the start of
the header planned order
You can adjust the Basic Dates of the header planned order using the
scheduling level and adjust (or set) the dependent requirements to the start of
the respective operation to which the dependent requirements are assigned
to
You can decide not to adjust the Basic Dates of the header planned order
arrived at by using the scheduling level and at the same time not-adjust (or
not set) the dependent requirements to the start of the header planned order
You can decide not to adjust the Basic Dates of the header planned order
arrived at by using the scheduling level and at the same time not-adjust (not
set) the dependent requirements to the start of the respective operations to
which the dependent requirements are assigned to
You are also provided an option to configure the scheduling type whether
forward or backward scheduling. It is a normal behavior for the standard system to
have this configured as backward scheduling so that SAP MRP (material
requirement planning) never misses the customer delivery date or order availability
date. An option is also provided to not-to-schedule, any orders during the breaks set
in the factory calendar.
Start date in the in the past options allows you to push the start date of the
planned orders to a certain number of days in past. If the order start date goes
beyond the number of days allowed, then the system uses the concept of todays
scheduling and sets the start date of the planned order to todays date and carrying
out forward scheduling there-after.
One of the scheduling parameters is reduction measures, used to reduce the
total order lead time in circumstances designed. You can avoid configuration of
reduction measures, if you are not using it.

Fig MRP - Config 8

i) Default Values for External Processing


For external purchasing, one can maintain the default lead time required for conversion
of Purchase requisition into purchase order, using the planned delivery lead times from
the purchase info record or purchasing agreement. So as to use the planned delivery
times from the purchase info record, one should also maintain the source list for the
material, with the same vendor in the source list and the purchase info record.
Using the planned delivery times from the material master or from purchase info record,
is totally a decision of the consultant. It is indeed a nice additional option provided by
SAP for using the lead time from info records.

j) Planning Horizon

Maintaining a planning horizon helps the system to plan only those demands, which fall
in the planning horizon starting from today. When an MRP Run is taken, the planning
horizon is number of work days as mentioned (lets say 180 days) from todays date; the
system would not plan any orders whose start date lies beyond this horizon.

k) Available stock for net requirement calculations


SAP MRP offers you a choice to select the most controversial stock types, in its net
requirement calculations. The stock types are stock in transfer (stock in transfer is
considered as stock at the receiving plant as it is already issued from the sending plant),
blocked stock, restricted batch stock (stock of batches marked with restricted batch)

Fig MRP - Config 9

l) Option to trigger direct Production in MRP or in production planning

j) Allowing start date in the past

MRP Group Level configuration for MRP

MRP Group Level configuration for MRP


The entire configuration that is created as a part of SAP MRP Plant level parameter in
the above steps can be also set for an MRP Group. You can group materials using MRP

Groups. Each of the MRP Group can have its own MRP Parameter set. You can set the
MRP group in the material master MRP 1 View.
MRP Group can be maintained using transaction code OPPR or the transaction path
Logistics > Production > MRP > MRP Groups >
Advantage of working with MRP Groups:
Working with MRP groups can be convenient for a plant or an organization, since by
assigning the MRP groups to a set of materials, would allow planner to configure these
materials (through MRP Groups) to behave in a certain manner for planning purposes.
In other words, all the materials in the group would then have a unique planning method
or unique planning features. Thus the organization can device multiple MRP groups with
their own planning features and characteristics rather than having one set of planning
features set at the plant level. The group could have its own unique:
Strategy group,
Conversion order types,
Planning horizon,
Planning time fence and roll forward periods,
BOM and task list selection IDs,
Direct procurement parameters,
Planned order scheduling parameters,
Start number of days allowed in the past
Availability checking groups,

Strategy Groups
The strategy groups can be set for a given MRP group at a given plant. The strategy
group consists of a number of planning strategies assigned in a sequence of priorities.
In other words, the strategy groups, groups together the relevant planning strategies of
a material. If you dont see the default strategy groups, then we would have to manually
maintain the strategy groups on the materials MRP 3 view. Defaulting the strategy
groups is a nice idea when the strategy groups would remain the same across all the
materials which would be assigned with a given strategy group.
For example:
A material can have the priority 1 strategy as Made-to-Stock (planning strategy 40) and
then priority 2 planning strategy as Made-to-Order (planning strategy 20). Assigning this

strategy group for a MRP group in the MRP Group Parameters configuration and then
subsequently assigning the MRP Group to the material master would make the material
work on a planning strategy 40 and planning strategy 20 in a sequence of priority.
The primary strategy for the material is 40 Made-to-stock while the secondary strategy
is 20 Made-to-order, which means that every time you plan or produce a material or
create a sales order for the material it will always primarily work as a made-to-stock
material. Nevertheless, you can also make to material work as a made-to-order
material, by changing the requirement type KE of the material in the sales order
procurement tab, to suit for made-to-order, which the system would allow since the
materials secondary planning strategy is made-to-order.

Configuring SAP MRP Types

Configuration of SAP MRP Types


In all probabilities, MRP Types is not something which one should configure in SAP; it is
used as a standard configuration. Nevertheless, a consultant should know the
importance of MRP types and the involved pre-configured parameters.

Fig MRP - Config 10

a) MRP Procedures
MRP Procedures defines the type of MRP to be used Reorder point planning
methods, Material requirement planning or demand based planning methods, Forecast
based planning methods, Time phased planning methods, MPS and the no planning
procedures to mark a material with a MRP types that does not plan a material at all.

b) Firming Type
In the category of MRP procedure called MRP or demand based planning method and
MPS, SAP offers 8 different MRP types with Firming namely P1, P2, P3, P4 and M0,
M1, M2, M3, M4.
When working with the planning time fence, one needs to set the firming methods & the
scheduling methods of the procurement proposals within the planning time fence.
0

M0

P1
M1

P2
M2

P3
M3

P4
M4

Firming type

MRP Types

Firming Methods for Procurement Proposals in the Planning time fence


No Firming of Procurement Proposals within
the planning time fence
Automatic Firming of Procurement Proposals
within the planning time fence

Manual Firming of Procurement within the


planning time fence (No Automatic Firming of
the procurement proposals )

Treatment with New Order Proposals in the Planning time Fence


Automatic Creation of New Procurement
Proposals to cover the shortages within the
planning time fence. But the dates of these new

Procurement Proposals are pushed outside the


planning time fence
No New Procurement Proposals created to
Cover the material shortages within the planning
time fence

c) Include External Requirements


The inclusion of external requirements in net requirement calculations is available to be
set, when you are working with reorder point planning based MRP types. Actually there
are 2 options in this field, i.e., include external requirements in the total planning horizon
or restrict the inclusion of the external requirements only within the replenishment lead
time.
For example:
If the external requirements are set to be considered in the total horizon (of 7 weeks)
then in the todays MRP run, the Customer demand will be considered as it falls in the
planning horizon and it will reduce the warehouse stock proportionately which would
trigger the reorder point planning procurement once the stock falls below the reorder
point.
If the external requirements are set to be considered in the Replenishment lead time,
lets say the Replenishment lead time is 1 week, then in that case, only in a MRP run
triggered one week before the start date of the external demand, this customer demand
will be considered, thus triggering reduction in warehouse stocks.

Fig MRP - Config 11

SAP also offers an option to select the additional external requirements that should also
be included in the net requirement planning calculations like the - components supplied
to the vendor in a subcontracting case, reservations set for the components in a
production order, reservations of components in plant maintenance orders,
requirements to satisfy the Stock transfer order to another plant, stock transfer
requisitions created for Stock transfer orders, requirements raised because of stock
transfer delivery schedules.

c) Forecasting for MRP


Forecasting MRP Types have a forecasting indicator as obligatory, unlike other MRP
types which normally have the forecasting indicator set to optional.
Also the historical data is updated in the material master as total consumption (planned
consumption plus unplanned consumption) or unplanned consumption. When the
consumption is planned as per the MRP reservations, planned consumption is updated
and when the consumption is not planned as per the reservation or is greater than the
reservation quantities, then unplanned consumption is updated.
In MRP type configuration, you have an option of choosing the type of historical
consumption of a material to be used for planning whether total consumption (planned +
unplanned consumption) or unplanned consumption.
After choosing the historical date type, you should configure, the type of forecast
requirements to be considered in MRP planning run, whether total consumption
(planned + unplanned consumption) or unplanned consumption.
The reduction method for forecast requirements is also configurable. The default is
reduction by consumption.

d) Planning method
The MRP type offers you to plan the materials in an external system, like the MRP Type
X0. The indicator called the planning method allows you to choose external planning so
as to plan materials in the external system.

e) Automatic Calculations

You can have the safety stock and the reorder point calculated automatically by the
system, when you are using the automatic reorder point planning methods. In the
automatic calculations the system uses the forecast data.
Configuring SAP MRP Scope of Planning for the Total Planning Run

Configuring SAP MRP Scope of Planning for the Total Planning Run
SAP provides an option to plan multiple plants together or multiple MRP areas in one
planning run in a sequence. Transaction code OM0E can be used for configuration or
the logical SAP path SAP Customizing Implementation Guide > Production > MRP >
Planning > Define Scope of Planning for Total Planning, can be used to configure.
Step 1 Define the Name of the Scope of planning run
Step 2 Define the plants or MRP areas to be included in the planning run arranged in
a sequence. The sequence is defined by the first field called
Configuring SAP MRP Planning time fence and Roll Forward Period

Configuring SAP MRP Planning time fence and Roll Forward Period
The transaction path to configure the planning time fence and roll forward period is:
SAP Customizing Implementation Guide > Production > Material Requirements
Planning > Planning > MRP Areas > MRP Calculation > Define Planning Time Fence
and Roll Forward Period

Planning Time Fence:


The planning time fence is the number of work days, within which you can protect the
master plan (or in other words the procurement proposals of a master plan) from being
disturbed or changed from any automatic changes (of an MRP Run). The procurement
proposals are firmed so as to protect them from any changes. The firming of the
procurement proposals (planned orders, purchase requisitions, delivery schedules) in
the planning time fence prevents the proposals in the time fence from being adopted in
the next planning run.

In other words, in the planning time fence, the system does not create or delete any
procurement proposals nor does it changes the existing proposals.
The system calculates the time fence from todays date plus the number of days
mentioned as planning time fence in the material master or in the MRP configuration
(where you can define the planning time fence for plant or for a given MRP group). It is
needless to say that any new requirements are not included in this time period nor the
existing requirements are changed. MRP carries its usual planning outside this fence
without interrupting this fenced period.

Configure Planning Time fence and Roll Forward Period


Plant
0001
0001

MRP Group
0001
0002

Planning Time fence


14
14

Roll forward Period


32-

It is logical that any procurement proposal lying outside this fence would start moving in
to the fence one by one; when the fence moves ahead on the time scale. When they
move in to this fence, they are automatically firmed for protection.
Firming for automatically created procurement proposals:
The automatically created procurement proposals in the MRP Run are not firmed by the
system, so that they are available for adjusting dates and quantities in the next planning
run, in cases where there is change in BOM or task list.
You can though manually firm the planned orders individually or collectively using
transaction code MD19
Note - Automatically created planned orders in the planning time fence are only remain
firm till they are in the planning run.

Firming for manually created procurement proposals:


For manually created or changed procurement proposals or even when you reschedule
the planned order in the graphical planning table, the system always marks them with a
firming indicator. Though you can remove or delete this firming indicator.

Firming for components planned orders:


In case of a planned order, you can manually firm it by selecting the firming planned
order Indicator in the planned order header. And in order to make sure that the BOM
levels below are not exploded or changed in a planning run, you have to set the firming
components indicator
See the below Example Planning time fence is 3 days.

Plannin
g Start
Date
Today Day 2
Day 1
Planning time fence
Planned
Planned
Order 1
Order 2
Auto
Auto
Firmed
Firmed

Day 3

Day 4

Day 5

Day 6

Day 7

Day 8

Planned
Order 3
Auto
Firmed

Planned
Order 4
Not-firmed

Planned
Order 5
Firmed

Planned
Order 5
Not-firmed

Planned
Order 6
Not-firmed

Planned
Order 7
Notfirmed

Next
Planning
Start Date
Planning time fence
Planned
Planned
Order 4
Order 5
Auto
Auto
Firmed
Firmed

Planned
Order 5
Auto
Firmed

Roll Forward Period


The Roll Forward Period adds the functionality of automatic deletion of firmed planned
orders, from the master plan. It also creates new proposals to cover any requirements
pending during the MRP run. This period can be defined for number of days in past or
future. The system deletes all the firmed planned orders that lie before the roll forward
period.
Using the roll forward period, you can have the system delete all useless old firmed
planned orders, which otherwise the system would never had deleted, since they were
firmed. This allows for reorganizing the planned orders.

Configuring SAP MRP Areas

Configuring SAP MRP Areas


Long ago, SAP MRP was only at the plant level or at MRP controller level (activated
through a user exit). Then SAP came up with the concept of running MRP at MRP
areas. You can define your own area for which you want to run MRP without disturbing
other areas.
Running MRP for MRP Areas: For running MRP at a MRP area, you would have to
create a scope of planning in MRP configuration, which contain the MRP area or a set
of MRP areas arranged in sequence of planning.
Assigning MRP areas: To have the MRP Areas work, you have to activate the MRP
areas and then create them and then assign them to the material master MRP 1 view. If
a MRP area is not assigned to the material, then it will work as per the plant level MRP
area.
Configuring MRP areas
Step 1: Activate MRP Area: Use the transaction path: SAP Customizing Implementation
Guide > Production > Material Requirements Planning > Master Data > MRP Areas >
Activate MRP for MRP Areas
Step 2: Define MRP Areas: Use transaction path: SAP Customizing Implementation
Guide > Production > Material Requirements Planning > Master Data > MRP Areas >
Define MRP Areas

Types of MRP Areas:


Plant MRP Areas: You can create one MRP area for several plants, so that when you
run the MRP for this MRP area, the run is for all the plants configured in the MRP area.
Storage Location MRP Areas: You can create MRP areas for several storage locations
at a plant. You cannot use one storage location in multiple MRP areas.

Subcontractors MRP Areas: You can create MRP areas for several subcontractors for a
plant. You cannot use one subcontractor in multiple MRP areas.

Configuring SAP MRP Dynamic Safety Stock (Range of coverage Profile)

Configuring SAP MRP Dynamic Safety Stock (Range of coverage Profile)


The Range of coverage profile is configured for the use of Dynamic safety stock for a
given material. The range of coverage configuration contains the parameters for the
calculation of the dynamic safety stock. The dynamic safety stock is a stock calculated
based on the average daily requirements for a period rather than the actual
requirements over the period, therefore it is more statistical value rather than an
absolute value.
Safety stock as we know is used to cover the fluctuations in the requirements, so is the
dynamic safety stock, the only difference being, the safety stock is an absolute value
provided directly for a material whereas the dynamic safety stock is calculated by the
system on the basis of the coverage period and average daily stock calculated internally
by the system.
The Dynamic safety stock is calculated in every planning run.
The transaction path is: SAP Customizing Implementation Guide > Production >
Material Requirements Planning > Planning > MRP Calculations > Define Range of
Coverage Profile (Dynamic Safety Stock)
Range of coverage Configuration:

Fig MRP - Config 12

Configuration for calculation of average daily requirement for a period


Period indicator - Indicate the type of period, whether week or month or according to PP
planning calendar. (Lets say it is W Week)
Number of Periods Number of periods used to calculate the average daily
requirements (Lets say it is 13 Weeks)
Type of Period length It defines the number of days in the period, if the period length
is in terms of workdays, then the factory calendar work days are considered, if the
period length is in terms of calendar days then it is considered in terms of Gregorian
calendar, and if it is terms of standard days, then you would have to enter the number of
days in a period in the configuration (Lets say that the configuration was done with
workdays and the factory calendar has 7 days per week)
Therefore Average daily requirement =
= Requirements in the period (Requirements in 13 Weeks Lets say 910
Units) / (Number of Periods Lets say 13 Weeks) * (Number of days in the period
Lets say 7 days)
= 910 / (13*7)
= 10 Units

Configuration parameters for calculation of Dynamic Safety Stock for the Range
of Coverage
You can define 3 different range of coverage minimum, maximum, and target range of
coverage, which is used to calculate 3 different stocks using the average daily
requirements (range of coverage multiplied by the period length). The Target range of
coverage defined here would be used to calculate the Dynamic Safety Stock for the
period of the coverage.
The Period of the coverage is specified in the configuration. The coverages and the
periods for which they should work for, are defined for 2 separate period lengths and the
3rd period length is for the rest of horizon.
In the example, we have defined the safety stock to cover a period of 7 days (minimum,
target and the maximum range of coverage). The minimum, target and the maximum
stock is calculated for the average daily requirement over the respective coverage
periods.
You can check the minimum, maximum, target stock levels, minimum range of
coverage, maximum range of coverage, target range of coverage in the MRP List or
Stock requirements lists Period Total Display Section.
As per our example, for the first period of 13 weeks, all the 3 stocks levels minimum,
maximum, and target stock levels would be 70 Units and for the next period of 26 weeks
it will be 70 units as well and for the rest of the horizon it will be 70 units again.
Normally when the available stock falls below the minimum stock level, SAP planning
run, would immediately create planned orders to suffice at least the target stock level.
For example if the minimum stock level is 30 and the maximum is 80 and the target
stock is 50 units, then if the available stocks fall below the 30 units mark, SAP creates a
procurement proposal for 50 units to reach back to the target stock level. Whereas in
the example below, all the 3 stocks types are 70 units, therefore when the stocks fall
below the 70 units, the system will try to raise a procurement proposal to reach back to
70 units.
As per our example in the configuration screen shot
Dynamic
safety
Dynamic safety stock stocks for the 1st
formula summarized as period of 13 weeks
= Average Daily Stock *

Dynamic safety stocks


for the 2ndperiod of 26
weeks

Dynamic safety stocks


for the rest of the
Horizon

Range of coverage
70 Units

70 Units

70 Units

70 Units

70 Units

70 Units

70 Units

70 Units

70 Units

Minimum safety stock

Target safety stock

Maximum safety stock

Another Example of Dynamic Safety Stock

Fig MRP - Config 14

Step a) Demand for 8 Weeks = 800


Step b) Average Daily Requirements
= 896 Units of Demand for 8 Weeks / (8Weeks * 7 Days Per Week)
= 896/(8*7)
= 896/56
= 16 Units
Step c) Calculation of Safety Stock for the coverage period

As per our example in the configuration screen shot


For the first period, when the stock falls below 32 units (minimum Stock Level), the SAP
MRP run would create the procurement proposals (Lets Say planned order) for a
quantity to suffice at least the target safety stock level or the dynamic safety stock level
= 8 Units.

Dynamic safety stock Dynamic


safety
formula summarized as stocks for the 1st
= Average Daily Stock period of 8 weeks
* Range of coverage

Dynamic safety stocks


for
the 2ndperiod of
8 weeks

Dynamic safety stocks


for the rest of the
Horizon

= 2 * 16 = 32

= 2 * 16 = 32

= 2 * 16 = 32

= 5 * 16 = 80

= 5 * 16 = 80

= 5 * 16 = 80

= 7 * 16 = 112

= 7 * 16 = 112

= 7 * 16 = 112

Minimum safety stock

Target safety stock

Maximum safety stock

Configuring SAP MRP Day's Supply and Receipt Day's Supply

Configuring SAP MRP Day's Supply and Receipt Day's Supply


The days of supply is not a mandatory configuration, you can only configure the days
supply if you feel the SAP pre-configured ones are not what you want.
SAP offers 2 types of evaluations in SAP, the days supply and the receipt days supply.
In the SAP MRP Evaluation transactions such as stock requirement list or MRP list, the
days supply would calculate the number of days on the time axis, till the material
requirements can be satisfied purely by the current available stock.
While the Receipt Days supply would indicate how long would the current stock and the
expected receipts would cover the requirements. There are 2 receipt days supply
evaluations offered by SAP called as the receipt days supply 1 and receipt days supply
2. SAP offers a configuration to select the receipts elements for receipt day supply 1
and 2 evaluations. There is also an option to have the receipt days supplies to be
calculated when the stocks fall below the safety stock or below the current available
stocks.

The days supply values or the receipt days supply values can be correlated with the
range of coverage concept. These tools comes with traffic lights red, yellow and green
which offer warnings to the MRP Controllers/users and lets him/her strategically know
when the material stock would be totally consumed out, which would help the planner to
foresight and take necessary actions in advance.
The transaction path for the same is SAP Customizing Implementation Guide >
Production > Material Requirements Planning > Evaluations > Define Receipt Elements
for Receipt Days' Supply

Fig MRP - Config 13

Number of Days Stocks will Cover the Requirements

Days
Supply

Receipt
Days
Supply 1

Receipt
Days Supply
2

Consider Current Stocks only in calculation of Days Supply


X
Only Consider Current available Stocks to cover
Requirements

Consider Receipts also along with Current Stock in Calculation of Days Supply
Firmed Planned orders, Planned orders assigned with Production versions, Purchase orders,
Schedule lines, Firmed Purchase Requisitions, Receipt Reservations, Shipping Notifications

X
Consider all the possible receipt elements along with
the plant stock
Example Firmed Planned orders, Planned orders
assigned with Production versions, Purchase orders,
Schedule lines, Firmed Purchase Requisitions, Receipt
Reservations,
X
Consider all the Most Certain receipt elements along
with the plant stock
Example - Production order, Shipping Notifications,
QM Inspection Lots

Example for Days Supply and Receipt Days Supply:

Days Supply for Material M1 on Today = 3 days


(Receipts are not considered)
Day

Requirements

Available Qty
Stock Balance Left after covering
Requirements

Today
2nd Day
3rd Day
4th Day
5th Day
6th Day

20
30
50
52
40
20

Current Stock = 100


Stock Available = 80
Stock Available = 50

100 20 = 80
80 30 = 50
50 50 = 0 (Stock = 0)

Days Supply on Today = Coverages Considering without the receipts = 3 Days Exactly

Receipts Days Supply for Material M1 on Today = A little more than 4 days
(Receipts are also considered This example can be for Receipt Days supply 1 or 2)
Day

Reqmts

Expected Receipts

Available Stock

Stock Balance Left


after covering
Requirements
Today

2
0

2nd Da
y

3rd Day

3
0

5th Day

(95 + 0 ) 30 = 65
Available = 95

Production order = 25
Total Receipts on day = 25

Available = 65

Planned order = 8
Production order = 5
Total Receipts on day = 13

Available = 40

(40 + 13) 47 = 6

Available = 6

(1 + 5) 40 = - 34
Shortage

(65 + 25) 50 = 40

4
7

4
0

6th Day

(100 + 15) -20 = 95

Total Receipts on day = 0

5
0

4th Da
y

Available = 100
Firmed Planned order = 10
Production order = 5
Total Receipts on day = 15

Planned order = 5
Total Receipts on day = 0
2

0
Receipt Days Supply on Today = Coverages Considering the receipts
= 5 1 + (6/40) = 4 + 0.15 = 4.15 Days