Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

Horizons relevant for production planning Planning horizon: Part of the planning area, where a planning file entry is made for the net change planning in the planning horizon. The planning horizon is calculated in workdays. When a material has an entry in the planning file, it becomes relevant for MRP Scheduling horizon: Once a planned order (for in-house production) is in the scheduling horizon, the exact production dates are calculated and the capacity requirements are created. Rescheduling horizon: Once a planned order is in the rescheduling horizon, exception messages can be created Dispatch horizon: If a planned order or process order is in the dispatch horizon, it becomes visible in the planning board for sequencing on a production line.

Horizons relevant for production planning

Planning horizon => 182 days Scheduling horizon => 120 days Rescheduling horizon => 100 days Dispatch horizon => 30 days Time fence => 14 days

Creation of exception messages

Exception messages depend on the transaction being carried out and are meant to inform you of an important or critical event. By means of the exception messages, you can easily sort out any materials that you need to reprocess manually. Special search and selection functions are available for this in the evaluations for MRP. During the planning run, the system recognizes exceptional situations where you usually have to manually reprocess the planning result and it records these situations as exception messages. The system displays the exception messages in the evaluations for MRP. Exception messages refer to an individual MRP element. If several exception messages occur for one MRP element, the most important ones are stored.

Creation of exception messages

Rescheduling proposals

If a material shortage exists, the system usually creates a new procurement proposal. The rescheduling check is used to change the dates of already existing firmed receipts not planned on the same day as the requirement to suit the requirement date. For this purpose, the system displays the appropriate exception messages with rescheduling proposals for these firmed receipts to be processed by the MRP controller. The rescheduling horizon (defined on MRP group) defines the time periods in which exception message are to be created. There are also tolerance values which allow rescheduling of a firm procurement proposal by MRP (defined on MRP group)

Rescheduling messages: Bring process forward Postpone/cancel process

Lists for evaluation

method of evaluation that gives an overview of the stock, requirements and receipt elements. This list is continuously updated (except when you keep the transaction open)

Stock/requirements list: The stock/requirements list is a

list, with the difference that the MRP list is not continuously updated. It gives an overview of the situation as it was at the moment of the last MRP run.

MRP list: The MRP list is the same list as the stock/requirements

Internal and external procurement

Material can be purchased externally and internally (Procurement type X) Quota arrangements can be used to divide the procured quantity over time in different sources of supply (internal and external) If there are no quota arrangements, the system automatically switches to in-house production. MRP therefore firstly creates planned orders, which you can then convert into production orders or purchase requisitions.

Procurement proposals
Procurement proposals by MRP => planned orders & purchase requisitions Proposal determination Procurement type: E In house production => always planned orders F External procurement => planned orders and purchase requisitions X Both types => planned orders and purchase requisitions MRP groups: Z001 Finished materials => always planned orders Z002 Raw materials => purchase requisitions in the opening period, planned orders outside opening period Z003 Semi-finished materials => purchase requisitions in the opening period, planned orders outside opening period Z004 Precious metal materials => purchase requisitions in the opening period, planned orders outside opening period

Planning file The point of start for MRP is the planning file. The planning run and scope of the planning run (which materials are planned in which planning run) are controlled by the planning file. Next to the material number the planning file includes a number of important entries: Low level code Net change planning indicator => if this indicator is set, this material has to be planned in the NETCH planning mode Net change in the planning horizon indicator => if this indicator is set, this material has to be planned in the NETPL planning mode Reset procurement proposals => indicates that existing procurement proposals will be deleted and recreated Re-explode BOM => Controls the re-explosion of BOMs for existing procurement proposals that came from the last planning run. This indicator can be set by changes in the BOM, changes in the sales BOM, changes in the material classification, etc.

Low level code

In an MRP run every material is planned separately. In order to organize the planning in the most efficient way every material in a BOM is assigned with a low level code. The lowest code materials are planned first, then the next level until the last level is reached. The finished product is given a low level code 000. The next level in the BOM is given a higher number. A raw material is always the highest code possible (999), because they are planned in the end of the planning run. If a material is used in several BOMs so that it has more than one low level code, the lowest number is chosen. In the examples BBB has low level codes 001 and 002. MRP will only start planning BBB when it starts planning the materials with low level code 002.
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A 000

AAA

999

BBB

001

999

999

000

AA

999

BB

001

AAA

999

BBB

002

999

999

Days supply determination

The days supply of a material indicates how long a material will cover requirements if you only take current plant stock into account. The first/second receipt days' supply indicates how many workdays a material will cover the requirements when taking current plant stock and specific, predefined receipts into account.
Days' supply Process orders + Production orders 1st rcpt X X X 2nd rcpt X X X X X X X X

Purchase orders + shipping notifications + schedule lines + schedule line deliveries QM inspection lots Firmed purchase requisitions Firmed planned orders Assigned planned orders Receipt reservations Shipping notifications

X X

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

12

Material master data MRP 1 MRP group: number of settings are defined on MRP group level => linked to material type Plant specific material status: Status that can be set to restrict the usability of a material on plant-level. MRP type: key that determines whether and how the material is planned. Current keys that are used Reorder point: stock level that triggers a procurement element (purchase requisition or planned order) => only used for reorder point planning (V1). MRP controller: key to group materials in a number of listings Lot size: key that determines how and when the quantity is to be procured or produced is calculated Min./max. lot size: to avoid procurement/production of too big/small quantities Rounding value: value to a multiple of which the system rounds up the production/procurement quantity

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Material master data MRP 2 In-house production time: time needed to produce the material independent of the lot size expressed in workdays. Planned delivery time: number of calendar days needed to procure a material externally. Goods receipt processing time: number of work days needed after receiving the material for inspection and placement into storage. Safety stock: specifies the quantity that has always to be available to satisfy unexpectedly high demand

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Material master data MRP 3 Total replenishment lead time: total time needed to replenish the stock of a material => relevant for reorder point planning MRP 4 Production versions: list of all the production versions maintained for the material => see next slide => Enter storage location at entry screen Storage location MRP indicator: Indicator to exclude storage locations from MRP at plant level => storage locations excluded CA04, CA05 and CA06 excluded for planning

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

16

Other master data (1/2) Resource: After calculating the basic dates MRP will start a scheduling process and calculate the capacity requirements, in which MRP will start calculating backwards from the basic finish date using a scheduling formula which is taken from the resource. Bill of material: A bill of material is a formally structured list of the components that make up a product or assembly. The list contains the object number of each component, together with the quantity and unit of measure. Production version: It is possible that a material can be produced on different production lines or production operations. A production version determines the various production techniques that can be used to produce a material.

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Other master data (2/2) Master recipe: The master recipe in PP-PI describes the production of a material in the production run. Next to the header information, it lists the number of operations and the component materials (BOM). Quota arrangements: If a material can be obtained from various sources of supply, each individual source of supply can be allocated a quota arrangement. The quota arrangement is valid for a certain period of time and specifies exactly how the receipts are to be distributed amongst each source of supply. Source list: List that links a material to a vendor to make automatic vendor determination possible.

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

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MRP Flow - Overview

MRP run

MRP evaluation
In-house production External procurement

Capacity evaluation

Capacity leveling

Conversion of MRP proposals

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MRP Flow - Parameters

Fixed receipts: Purchase orders Shipping notifications Process orders Firmed planned orders Firmed purchase requisitions

External requirements:
Sales orders, scheduling agreements, deliveries Order reservations

Stock level

Planning file

Dependent requirements Safety stock

MRP
Procurement proposals Planned orders Assigned purchase requisitions Dependent requirements Exception messages
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MRP Flow - In-house production vs. External Procurement

MRP Planned order Dispatch in planning board Firm planned order Collective conversion Process order

MRP Planned order Purchase requisition Firming proposals * Firm purchase req. Collective conversion Purchase order

* Exceptional

In-house
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External Procurement

Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

23

MRP Run Steps

Creation of proposal consists of 4 stages / steps

MRP
Calculate net requirements Calculate quantity needed Calculate dates:

Determination of basic dates For in-house produced goods => calculation of exact production dates and capacity requirements

Explode BOM

Vendor assignment

Result: Procurement proposals

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Result: Procurement proposals

request for the procurement of a particular material at a determined time. It specifies when the inward material movement should be made and the quantity of material that is expected. Planned orders can be created for in-house produced materials as well as for externally purchased materials.

Planned orders: A planned order is sent to a plant and is an MRP

notification of requirements of materials and/or external services and keep track of such requirements. Determination of which procurement proposal to create = defined in procurement type on MRP 1 view E: always produced in house => planned order F: always externally purchased => purchase requisition in opening period and planned order outside opening period

Purchase requisitions: Purchase requisitions are used to give

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

26

Step 1: Calculate net requirements MRP types: PD: standard MRP run P3: standard MRP run with the use of a planning time fence

V1: ( Reorder point planning): a new procurement proposal will be created by MRP as soon as plant stock falls below a specified stock level (reorder point).
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Plant stock + Open order quantity (purchase orders, firmed planned orders, firmed purchase requisitions) - External sales quantities in replenishment lead time

= Available stock

Step 1: Calculate net requirements

MRP type PD

MRP calculates untill it finds a first net requirement => completes all the next steps

First net requirement

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Step 1: Calculate net requirements

MRP type PD

MRP applies the next steps to calculate the dates and quantity of the first procurement element

First net requirement is no longer requirement

New first net requirement

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MRP moves to next net requirement and applies the same steps

Step 1: Calculate net requirements

MRP type PD

MRP applies the next steps to calculate the dates and quantity of the first procurement element

Second net requirement is no longer requirement

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MRP keeps iterating until are net requirements are handled

Step 1: Calculate net requirements

MRP type P3

P3 uses the same logic as PD Use of planning time fence: MRP will not schedule planned orders inside the planning time fence A requirement in the planning time fence will trigger the creation of a planned order MRP will schedule a planned order at the end of the planning time fence Planned orders which are not firm, will keep getting pushed outside of the planning time fence => fix planned orders to avoid this

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Step 1: Calculate net requirements

MRP type P3

Planned order is pushed out by MRP to end of planning time fence

MRP RUN

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Step 1: Calculate net requirements

MRP type V1

V1 only takes into account only external requirements that lie in the replenishment lead time of the material

The other requirements are not taken into account by MRP

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

34

Step 2: Determine quantities Lot size procedures: EX Lot for lot order quantity: Planned orders or purchase requisitions are planned with the same quantities as the requirements. The procurement elements are planned to be available on the day that they are required. This procedure can be used in combination with rounding values, maximum and minimum lot sizes. FX: Procurement elements are only created with one fixed lot size. If the requirement is larger than lot size, a second order/requisition is created. The procurement elements are planned to be available on the day of the first requirement. MB: All requirements for 1 month are bundled into one procurement element. The elements are planned to be ready at the 1st day of the month. This procedure can be used in combination with rounding values, maximum and minimum lot sizes. WB: All requirements for 1 week are bundled into one procurement element. The elements are planned to be ready at the 1st day of the month. This procedure can be used in combination with rounding values, maximum and minimum lot sizes.
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Step 2: Determine quantities Lot size procedures: Z3 Two months lot size: All requirements for two months are bundled into one procurement element. The elements are planned to be ready at the 1st day of the month. This procedure can be used in combination with rounding values, maximum and minimum lot sizes. Z4 Three months lot size: All requirements for three months are bundled into one procurement element. The elements are planned to be ready at the 1st day of the month. This procedure can be used in combination with rounding values, maximum and minimum lot sizes. ZM All requirements for 1 month are bundled into one procurement element. The procurement elements are planned to be available on the day of the first requirement. This procedure can be used in combination with rounding values, maximum and minimum lot sizes. ZW All requirements for 1 week are bundled into one procurement element. The procurement elements are planned to be available on the day of the first requirement. This procedure can be used in combination with rounding values, maximum and minimum lot sizes.

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Step 2: Determine quantities

Other elements: Rounding value Maximum lot size Minimum lot size Assembly Assembly scrap: No examples at AC

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

38

Step 3: Determine dates In-house Production Calculation of basic dates

If backwards scheduling is not possible (Start date in the past)=> switch to today scheduling

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Step 3: Determine dates In-house Production

Release date (only for process orders):

Release date

Scheduled start

Release period

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Step 3: Determine dates In-house Production Calculation of scheduled dates using resource calendar. The production version of a material can be assigned automatically to a planned order The production version determines which master recipe, which BOM and which resource will be used Production time is calculated based on data maintained in the master recipe and resource

If the basic start date is different from the scheduled start date, the basic start date will be adjusted.
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Step 3: Determine In-house Production

In-house produced goods

Select production version

Material master => quota arrang. usage indicator 3/4 (QA relevant for MRP) Quota arrangements (MEQ1)

1/2 (no QA for MRP)

Production versions (C223)

No quota arrangements found

Check quantities & validity dates Check quantities & validity dates Production version X

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Step 3: Determine External Procurement

External procurement
Calculation of basic dates

requisitions. The opening horizon is calculated from the planned start date of the purchase requisition into the past, determining the opening date. (defined in the scheduling margin key) a purchase requisition into a purchase order (2 days for AC)

Opening period: time buffer for converting planned orders into purchase

Processing time for purchasing: average time needed by purchasing to convert

Planned delivery time: If source list exists, the entry in the material master is Release date: Latest date to convert purchase requisition to purchase orders

overruled by the purchasing info record 43

Step 3: Determine External Procurement

External procurement

Selection of source of supply

Material master => quota arrang. usage indicator

3/4 (QA relevant for MRP)

Quota arrangements (MEQ1)

1/2 (no QA for MRP)

Source list

No quota arrangements found

Check MRP indicator in source list Check MRP indicator in source list Vendor X

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Step 3: Determine Factory Calendar

Factory calendar

Times defined on the material master can be defined in two ways: Calendar days => 365/366 days per year Work days => depending on factory calendar Factory calendar AC Burlington: Work days => 7 days per week, except public holidays Planning calendar => not used Resource calendar => calendar with available days of a certain
resource

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

46

Step 4: BOM explosion

Select production version:
The production version of a material can be assigned automatically to a planned order The system will search in the quota arrangements which is the preferred production version. This can be based on: Lot sizes Quotas or percentages Priorities If none of these are maintained, the system will take the first production version using the alphanumeric name

Explode BOM
If a material is produced in-house, the system also calculates the dependent requirements, that is, the required quantity of components required to produce the finished product or the assembly and required date. This is done by exploding the BOM which is defined in the preferred production version. If a material shortage exists, planned orders are created at every BOM level to cover requirements. Component scrap is applied to calculate the required quantity

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Agenda SAP MRP Overview

MRP Terminology

Material Master MRP Views

Other Master Data MRP Flow

MRP Run Steps

Step 1: Calculate net requirements Step 2: Determine quantities Step 3: Determine dates Step 4: BOM explosion

Useful Transactions

48

Useful Transactions (1/2) MD01: Plant MRP run MD02: Single item, multi-level MRP run MD03: Single item, single-level MRP run MDBT: MRP run in background* MD20: Create planning file entries MD21: Display planning file entries MDAB: Setup planning file in background MDRE: Consistency check planning file MD04: Individual stock/requirements list MD07: Collective stock/requirements list MD05: Individual MRP list MD06: Collective MRP list MD44: Planning situation material

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Useful Transactions (2/2) MD14: Individual conversion of planned orders to purchase requisitions MD15: Collective conversion of planned orders to purchase requisitions MD04/MD07: Firming of procurement proposals (exceptional case) ME57: Collective conversion of purchase requisitions to purchase orders CM01 Capacity load per resource CM25 Capacity planning table (graphical) CM29 Capacity planning table (graphical) => profile defined in parameters COR7: Individual conversion of planned order to process order COR8: Collective conversion of planned orders to process orders MD06/MD07: Firming of procurement proposals

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