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MRP in SAP MM

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247 views14 pages

MRP in SAP MM

Sap mm

Uploaded by

gauravsalgar3733
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© © All Rights Reserved
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MRP (Material Requirement Planning)

MRP is a system designed to plan manufacturing production. It identifies necessary materials,


estimates quantities, determines when materials will be required to meet the production schedule,
and manages delivery timing – with the goal of meeting demands and improving overall
productivity.

MRP is system in SAP is Integration of MM-PP

MRP Types can be classified into 2 Major Types or Leagues:

a) Materials for Consumption based planning:

For materials whose planning is based on consumption or for materials which are really not
expensive or which are really not monitored by finance and the costing teams. This is mostly used
for Raw Materials.
This type of planning is for Materials which are procured based on their consumption. Methods like
Reorder Point Planning, where procurement is triggered after the stock falls below certain levels is
the most widely recognized consumption based planning.

The Following are consumption based MRP types:


VB - Manual reorder point planning
VM- Automatic reorder point planning

b) Planning not based on Consumption: Planning Based on Demand:

For materials whose planning is not based on the consumption levels or materials who are to be
procured on demand only. These materials are those whose consumption is monitored by the
finance team and they are really important for the company. These materials are expensive
materials.

This type of planning is mostly used for expensive and monitored Raw Materials and for planning of
the manufactured products. Demands coming from Sales order or planned independent
demand for semi-finished materials, finished materials or even the most expensive raw materials
are planned using Material Requirement Planning.

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The below screen shot shows the various MRP types which are offered by SAP:

Material Requirement Planning – MRP Type PD


The planning is carried out for the quantities planned through planned independent requirement or
quantities planned through incoming sales orders (made-to-order or made-to-stock). The planning
is done with respect to the master plan.
The planning process does not consider any forecast information or historical consumption
patterns. Material planning is done only for absolute requirements/demands on hand.

Manual Reorder Point Planning – MRP Type VB


Consumption based planning is a type of planning which is triggered based on consumption of
stock. It can based on the past consumption history based on a forecasted value or it can be based
on the current consumption levels.
The best example of consumption based planning can be Reorder Point Planning, where the
planning for a given material is triggered when the stocks fall below a reorder point. In the case
of Manual Reorder Point Planning (MRP Type VB), when the Plant stock & firmed receipts for a

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(SAP MM Associate)
given material fall below reorder point, the planning for the material is triggered (a planning file
entry is created).
For this to happen, you would have to enter the Reorder level manually in MRP 1 view of the
material master (as in the case of manual Reorder Point Planning) or the reorder point can be
automatically calculated by the system (as in automatic Reorder point planning).
In the Reorder Point Planning, we usually maintains a “safety stock” (entered manually in MRP 1
View of the material master – though not mandatory) to use it as handy stock in the period when
the order is placed with the vendor and the material is being transported to the plant – material is
on its way to the plant or warehouse (this is called replenishment lead time).
It is always recommended to use fixed lot sizing procedure so that every time the stock falls below
the reorder point, the system can procure the fixed lot size, instead of using its own planning brains
and ordering the quantity mentioned in the reorder point.

Automatic Reorder Point Planning – MRP Type VM


In the case of Automatic Reorder Point Planning (MRP Type VM) - a type of consumption based
planning, the system calculates the recorder point and the safety stock using the past historical
consumption data to derive the future consumption patterns. In this case you would need to
extend the material master for the forecast view with a valid forecasting method selected.
In the net requirement calculations, the available stock is determined as equal to the plant stock
and the firmed receipts from purchase and production. Net requirement calculations do not

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consider the demand from sales order or from planned independent requirements or from material
reservations. If the available stocks fall below the reorder point, procurement proposals are raised.

Manual/Automatic Reorder Point Planning with External Requirements – MRP Type V1/V2
The only difference between the reorder point planning method and the reorder point planning
methods with external requirements is that, the Sales order requirements and the requirements
from manual reservations are also included in the formula that is used to calculate the available
stock.
These external requirements can be considered for the period within the replenishment lead time
or within the total horizon; this option can be configured in the configuration for MRP procedures.

Forecast Based Planning – MRP Type VV


Another form of Consumption based planning is “Forecast Based Planning”, in which the historical
consumption data is used to extrapolate the future consumption patterns, which are directly used
as requirement figures in the next planning run. The forecast is suggested by the system
periodically, i.e., on a weekly, daily, monthly basis or as per accounting periods.

Prerequisites for MRP consumption based planning


1. Activate MRP for plant
2. Maintain plant parameters

1. Activate MRP for plant

6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
2. Maintain plant parameters

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Linked In | Ameersuhil Dafedar

(SAP MM Associate)
6360959192 www.tagskills.com [email protected]

Linked In | Ameersuhil Dafedar

(SAP MM Associate)
Let’s Run a MRP using MRP Type as VB
Steps involved
1) Create Material (MM01)
2) Maintain Info Record (ME11)
3) Maintain Source List (ME01)
4) Stock/Requirement list (MD04)
5) MRP Run (MD02)
6) Goods Receipt (MIGO)

1. Create Material

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Material 20000174 created

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2) Maintain Info Record

Purchasing info record 5800010007 AB01 AB01 created

3) Maintain Source List

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4) Stock/Requirement list

We can observe there is no stock requirement is there for this material

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5) Run MRP

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In MD04 we can see our PR created through MRP

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Automatic converted PO

Standard PO created under the number 4500025689

6) Goods Receipt

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Material document 9200001111

Stock overview in MMBE

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(SAP MM Associate)

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