Sap r3 Mrp Logic

R3 MRP LogicR3 MRP Logic

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

The purpose of MRP is to guarantee material availability by planning for procurement or production of required quantities.

Convert

Planned Order

Dependent Reqmts

Reservations

Purchase Requisition

Warehouse

ProductionOrder

Planned IndRequirements

Purchase Order

ScheduleLine

Material ReqmtsPlanning

SalesOrders


R

Sales order /Planned Ind Requirement

Planned order

Purchase requisition

Dependent requirement

Planned order

Dependent requirement

FinishedFinishedproductproduct

Assembly 2Assembly 1

Raw material 3

Raw material 1

Raw material 2

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


How the Planning Run Works

Net Requirements Calculation1. Determine Available Warehouse Stock 2. Determine Planned Receipts (after considering existing issues and receipts)3. Calculate the Shortage Quantity

Lot Size CalculationDetermine the lot size of each plan order. R3 Lot Sizing falls into 3categories : Static Lot Size, Optimum Lot Size or Period Lot Size

Procurement Type & SchedulingIn-house Production or External Procurement & Backward Scheduling orForward Scheduling

BOM ExplosionDetermine the valid BOM for explosion

Quota ArrangementA lot can further be split by quota arrangements (MM will cover this)

Net Requirements Calculation ---> Lot Size Calculation ---->-------> Scheduling --------> BOM Explosion ----->-------> Quota Arrangement

Net Requirements Calculation ---> Lot Size Calculation ---->-------> Scheduling --------> BOM Explosion ----->-------> Quota Arrangement


Firmed receipts: production order, purchase order, firmed planned order

Reschedule in Reschedule out

Tolerance

In-house production time+

Goods receiptprocessing time

+Rescheduling horizon

Receipts

Reqmts

Time

Rescheduling Check for Firmed Receipts

* *Tolerance Tolerance

Exceptionmessage

Exceptionmessage

The planning run will not automatically displace firmed receipts.


BOM Explosion

Scheduling

Procurement type

Lot-size calculation

Net Reqmts CalculationNet Reqmts Calculation

Overview: Net Requirements Calculation


MRP: Net Requirements Calculation

ShortageShortage

SalesSales Orders Orders

Planned Ind ReqmtsPlanned Ind Reqmts

Dependent ReqmtsDependent Reqmts

ReservationsReservations

Planned Orders

Production Orders

Purchase Requisitions

Purchase orders

Warehouse Stock

Lot Size

SafetySafety Stock Stock

CompareCompare

DemandSupply

MRP will compare the requirement and supply to get a shortage gap. A comparison is made between warehouse stock and the appropriate receipts and issue. In the net requirements calculation, a difference is made between reorder point planning, forecast-based planning, and MRP. In each procedure, the system calculates available stock differently.


MRP Procedures

based on consumption in the past

MRPMRP Procedures Procedures

controlled byMRP type in

material master(MRP 1 view)

MRPConsumption-based

Reorder pointplanning

Forecast-basedplanning

Time-phasedplanning

W/ or W/O Requirements

Deterministic Planning


Master Data

Material Master (Important Ones) MRP Group (MRP1) - Group common MRP materials together MRP Type (MRP1) - Planning Method. Reorder Point (MRP1) - For Reorder Point Planning Methods Planning Time Fence (MRP1) - Restrict Planning Activities within the TimeFence Planning Cycle (MRP1) - Only for Time Phased Planning MRP Controller (MRP1) - Planner for the material Lot Sizing (MRP1) - Lot Size determination Storage Cost Indicators (MRP1) - For Optimum Lot sizing Only Ordering Costs (MRP1)- For Optimum Lot Sizing Only Assembly Scrap (MRP1) - For Assembly Scrap Only Procurement Type (MRP2) - Make or Buy Indicator. Special Procurement (MRP2) - For stock transfers, phantoms etc. Quota Arrangement (MRP2) - Splitting of Quota for internal and/or external

procurement (MM will handle this)


Master Data (Cont’d)

Material Master (Important Ones) Lead Times (GR and Planned Delivery Time) (MRP2) - Receiving and Purchasing

Lead Times Scheduling Margin Key (MRP2) - How external or internal procurement is

scheduled Safety Stock (MRP2) - Safety Stock Forecast (MRP3 and Forecasting) - Mainly for Forecast Based Planning, ReOrder

Point Planning and Time Phased Planning Planning Strategy (MRP3) - Mainly for Finished Goods - to be decided by APO Availability Check (MRP3) - ATP logic for components - to be decided by ZL. For

Finished Goods - to be decided by APO. Discontinuation (MRP4) - Discontinuation by material across all BOMs Component Scrap (MRP4) - Component Scrap Requirements Grouping (MRP4) - Group requirements for planning or display Storage Location MRP (MRP4) - Only if storage MRP is required


How the Planning Run Works Per MRP Type

Reorder Point Planning (REORDER) (MRP Type VB, Reorder Level)

When Available Stock falls below reorder level, planned orders are

generated in the planning run to order up to reorder level. Safety Stock

requirement is just for information

Available Stock = Plant Stock + ReceiptsAvailable Stock = Plant Stock + Receipts

Reorder Point Planning + Requirements (REORDERREQS) (MRP Type V1,

Reorder Level)

When Available stock falls below reorder level, planned orders are generated in the planning run to order up to reorder level. Safety stock requirement is just for information. The difference here is that sales orders and reservations are also taken into account.

Available Stock = Plant Stock + Receipts - (Sales Orders + ReservationsAvailable Stock = Plant Stock + Receipts - (Sales Orders + Reservations))


How the Planning Run Works Per MRP Type

Forecast Based Planning (FORECAST) (MRP Type VV, Create Forecast)System only considers forecast requirements (any other requirements are not considered). Planned orders are proposed when available stock is less than forecast requirements.Available Stock = Plant stock - Safety Stock + Receipts - Forecast RequirementsAvailable Stock = Plant stock - Safety Stock + Receipts - Forecast Requirements

Time Phased Planning (TIMEPLAN) (MRP Type R1, Planning Cycle, CreateForecast)

Material is planned according to same cycle in which it is delivered ie the material is not planned during the normal MRP run. The material have to be planned using a separate MRP run. Available Stock = (Plant stock - Safety Stock + Receipts - Forecast Requirements) Available Stock = (Plant stock - Safety Stock + Receipts - Forecast Requirements) within the planning cyclewithin the planning cycle.

MRP Planned (PDFORECAST) (MRP Type PD, Optional Create Forecast)System checks every requirement to determine whether they are covered by available warehouse stock and/or receipts.Available Stock = Plant stock - Safety Stock + Receipts - All RequirementsAvailable Stock = Plant stock - Safety Stock + Receipts - All Requirements


Safety stock

Safety stock partially available

Dynamic safety stock

Safety time

Quantity and Time Floats


Reqmt Receipt

Stock

TimeSafety stock(not availablefor planning)

Availablequantity

for planning

Safety stock: To be set in materialmaster (MRP 2) or in the MRP areasegment

Safety Stock


Reqmt Receipt

Time

StockAvailablequantity

for planning

Portion of safety stocknot available for planning

Safety stock partially available: set inMRP group

Statisticalsafety stockfrommaterialmasterPortion of

safety stockavailable

Safety

Safety Stock Partially Available


Minimum stock

Target stock

Maximum stock

Replenish to target stock Exception message

if falls below minimumstock

for firmed order proposals,otherwise adjustment

"dynamicsafety stock“

Dynamic Safety Stock (1)

Stock


Reqmts

Period 1 Period 2 Period 3 Period 4

Minimum stock

Target stock

Maximum stock

Time

Time

Average daily requirements



Days

Dynamic Safety Stock and Range of CoverageProfile

Dynamic Safety Stock (2)


Interval 1 Interval 2 Interval 3

Minimum stock

Target stock

Maximum stock

Reqmts

Time

Time

Definition of range of coverage profile inCustomizing, assignment in material master

Range of Coverage Profile: Intervals (1)


Interval 1 Interval 2 Interval 3

ReqmtsTime

Time

10.12.200020.12.2000

Periods with deviating range of coverage

Maximum stock

Target stock

Minimum stock

Range of Coverage Profile: Intervals (2)


Time

Safety time

30.03.28.03.

2 workdaysReceipts

Reqmts

Safety time: To be set inmaterial master (MRP 2) or in

the MRP area segment

Safety Time


Dep . reqmts

ComponentsTime

Ind reqmt

Finished productTime

+

-

+

-

Safetytime

Reqmtstime

Ind reqmt

Defined using the safety time indicator in the material master (MRP 2) or inthe MRP area segment

Safety Time in Multi-Level Production


Time

Rec

eip

tsR

eqm

ts

2 workdays

Safety time

4 workdays

2 workdays

12.12.2000 20.12.2000

Safety timeSafety time

Definition of period profile in Customizing,assignment in material master

Period Profile for the Safety Time


BOM Explosion

Scheduling

Procurement type

Lot-Lot-size calculationsize calculation

Net RequirementsCalculation

Overview: Lot-Size Calculation


Staticprocedures

Staticprocedures

Lot-for-lot order quantity

Replenishment up tomaximum stock level

Fixed lot size

Periodprocedures

Periodprocedures

Daily lot size

Monthly lot size

Weekly lot size

Flexible periods according to

planning calendar

OptimumproceduresOptimum

procedures

Dynamic lot sizecreation

Least unit costprocedure

Part period procedure

Groff reorder procedure

Lot-Lot- sizing proceduressizing procedures

Overview of Lot-Sizing Procedures

Entered inMaterial master

Definition inCustomizing


Quantity

Time

Lot-for-lot order quantity (exact to the day)

Replenish up to maximumstock level

Fixed lot size

Receipts

Reqmts

EX

FX

HB

Static Lot-Sizing Procedures


Time

Period 1 Period 2 Period 3

Period length Period length Period length

Receipts

Reqmts

TB Daily lot size WB Weekly lot size

MB Monthly lot size

Period Lot-Sizing Procedures


Time

Period 1 Period 2 Period 3

Mon Tue Wed Thu Fri Sat Sun

18

1522

29

1623

3101724

4111825

5121926

6132027

7142128

July 2000

Wed, 3.7.2000

Wed, 1

0.7.2000

Wed

, 17.

7.20

00

Wed

, 24.7.2000PC Period Lot Size Acc. to

Planning Calendar

Lot Size According to Planning Calendar


Many deliveries/High order costs

Minimal stockkeeping/Minimal storage costs

Few deliveries /Low order costs

More extensive stockkeeping/Higher storage costs

Optimum Lot-Sizing Procedures


Lot-for-lotorder quantity Monthly lot size

Reqmts previewLong-term

Exact analysisShort-term

Reqmt Receipt

Long-Term Lot Size


2 months ago

11

Today

22

For 2 months, no eventsrequired a change in

planning, so not plannedduring NETCH + NETPL!

Problem

Maximum MRP period (MRP group)Possible Solution:

Planning Run Executed Regularly


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


BOM Explosion

SchedulingScheduling

Procurement typeProcurement type


Net Requirements Calculation

Overview: Scheduling


External procurementStockStock transfer transfer

Procurement TypesProcurement Types

In-In-house house productionproduction

SubcontractingSubcontracting VendorProductionProduction in in

ownown plant plantProductionProduction in in anotheranother plant plant

Reservation inReservation in anotheranother plant plant ComponentsComponentsComponents

Procurement typesSpecial procurement types

Procurement Types


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.


Planned orderPlanned order

Availabilitydate

Openingdate

Order startdate

Order finishdate

Time

Goods receiptprocessing timeIn-house production timeOpening period

Scheduling marginkey (MRP 2)

Lot-size dependent: MRP 2Lot-size independent: work scheduling

MRP 2

Backward Scheduling for In-House Production


Availabilitydate

Order startdate

Order finishdate

Time


In-house production time

TodayPlanned orderPlanned order

Automatic, if order start date is in thepast during backward scheduling

Forward Scheduling for In-House Production


In-house production time

Plnd delivery timeProcessing timefor Purchasing

Order startdate

Order finishdate

CustomizingPlant parameters

Non-vendor-specific:Material masterVendor-specific: Outlineagreement or info record

Deliverydate

Releasedate

Time

... ...

Scheduling for External Procurement


Lead Time SchedulingLead Time Scheduling Order headerOrder header

Arbeitsvorgänge

Materialkomponenten

Fertigungshilfsmittel

Kosten Plan

Soll

Ist

2050

100

Used for production orders and routings Based on basic dates: MRP manual Target dates calculated (scheduled dates)

Basis for in-house production or operations Capacity requirements calculated Exact to the second

Target start dateTarget finish date

Separate scheduling for planned orders

Order finish dateOrder start dateOpening date

Basic SchedulingBasic Scheduling

tPeriods

Exact to the day Basic dates calculated

Basis for in-house production or replenishment lead time Improved performance No calculation of capacity requirements

Scheduling in Production Planning


OS Order start date

OF Order finish date

OD Opening date

Time

OD

Product

OS

OF

OD

OS

OF

Raw material

OD

Assembly

OS

OF


Opening period

Reqmts dateProduct

Reqmts dateProductBackward scheduling

Scheduling ind . =1, no capacity requirements

Order Dates for Basic Scheduling

Available

Available

Available


OS OF

Orderfinish date

Production finish date

Production finish date

Productionstart date

Productionstart date

Order start date

Operations(from routing)Operations

(from routing)

Float before productionScheduling margin key

Float after productionScheduling margin key

10 3020

Planned order

OS OF

11

22

Scheduling ind . = 2, capacity requirements are calculated

Lead Time Scheduling


OS OF

10 20 30 40 50

Float beforeproduction

Lead time schedulingusing routing

In-house production time shorter

In-house prod. time greater than scheduling in routing

In-house production time from material master

Float afterproduction

Requirements date

CalculationCalculation of of order dates order dates

CalculationCalculation of of planned dates planned dates

Scheduling: Significance of In-house ProductionTime

Wrong in-house production time inmaterial master?


Time

OS OFOD

10 3020

PS PF

10 3020

10 3020

OS Order start date

OF Order finish date

OD Opening date Opening period


PS Production start date

PF Production finish date

Assembly 1

Product

Assembly 2

Backward scheduling

Order Dates for Lead Time Scheduling

Assembly 2in routingassignedoperation 30


Finished product

Component 1

Component 2

Determining components

Lead-time offsetLead time

+-Time

Order startdate

Planned order

Dep . reqmts -Lead-time offsetDep . reqmts -

Lead-time offsetDep . reqmts -Lead time

Dep . reqmts -Lead time

BOM maintenance

Changing Dependent Requirement Dates

Note: the lead time and lead-time offset are not taken intoaccount in the lead time scheduling!

Dependent reqmts w/o lead time/lead-time offset


Scheduling

Procurement type


Net Requirements Calculation

BOM ExplosionBOM Explosion

Overview: BOM Explosion


Usage quantity/dates

Target

Selection of BOM usage

Selection of Alternative BOM

Change status ofalternative BOM

Component selection

Dependent reqmtsquantities and dates

Usage

Lot size

Explosion date

Items relevant to production

BOM Explosion


Production versionExplosion date

Lot size

BOM explosion numberOrder finishOrder start

‘1’‘2,3’

Customizing for BOMexplosion

BOM explosion numberOrder finishOrder start

Customizing for BOMexplosion

BOM usage by selection ID

Selection method indicator

Alternative BOM selected

Change status of alternativeBOM determined

Summary: BOM Selection


Planned orderPriority

1

2

Usage

Production

Engineering

BOM Selection ID

Production BOM

CostingBOM

Engineering BOM

Used if no valid productionBOM exists

Selection of BOM usage


Order quantity(Lot size)

Order quantity(Lot size)

Explosion dateExplosion date

Production versionProduction version

Alternativeselectionindicator

in

materialmaster

2, 3

1

for multiple BOMs

Selection of Alternative BOM


Alternative 1

Alternative 2

Lot-size range 0 -10 pieces

Lot-size range 11 - 10,000 pieces

A B

A C

Multiple BOM

Small lot

Large lot

<= 10

pieces

> 10 pieces

( Selection method indicator = blank)

Selection by Order Quantity (Lot Size)

Plannedorder


Order start dateof a

planned order

BOM explosion number

(gross date)

Order finish dateof a

planned order

BOM explosion using

Planned order

Customizing

Selection by Explosion Date


Time

AlternativeBOM 1

AlternativeBOM 2

AlternativeBOM 3

Valid from(relevant to

planning from)


planning from)


planning from)

Order 1 Order 2

Order startOrder start

( Selection method indicator = 1)

Selection by Order Start


Time

AlternativeBOM 1

AlternativeBOM 2

AlternativeBOM 3


planning from)


planning from)


planning from)

Order 1 Order 2

Order finishOrder finish

Explosion Date Using the Order Finish Date


BOM explosion no. xxx


Order for assembly 1



BOMBOM explosion no explosion no.. xxx xxx

Alternative finished products

1.2.2000

Alternatives for assembly 2

Alternatives for assembly 1

Order for product

Explosion Using the BOM Explosion Number

Gross date


MaterialMaterialmastermaster

Production version 1

Production version 2

Describes production procedure

Routing

BOM Work center(Line

production)

( Selection method indicator = 2 or 3)

Selection by Production Version


Change status 1 Change status 2 Change status 3

Technical change

Order startOrder start

Order 2Time

Time

Technical change

Same alternative BOM

Order 1

Defining the Change Status Using the Order StartDate

Explosiondate

Explosiondate


Explosiondate

Change status 1 Change status 2 Change status 3

Order 1

Explosiondate

Order finishOrder finish

Order 2

Technical change

Technical change

Time

Time

Same alternative BOM

Defining Change Status Using the Order FinishDate




Order for assembly 1BOM explosion no. xxx


BOMBOM explosion no explosion no.. xxx xxxChange status for product

Change status for assembly 2

Change status for assembly 1

Order for product

1.2.2000

Defining Change Status Using BOM ExplosionNumbers

Gross date


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


Planning Time Fence

Plan is protected from changes within the planning time fence.

End date of time fence determined from planning date.

You can configure system as to how you want the orders to react within the time fence.

Outside the time fence, system creates order proposal as usual.

When new orders move into the time fence, they may be firmed automatically depending on how the system is configured.

Firming Types for MRP Planned Materials :

Firming TypesOrders Moving Into TimeFence

New Order Proposals Creation

New Order Status

Type 1 Firmed Outside Time Fence Not FirmedType 2 Firmed No Orders Created NAType 3 Not Firmed Outside Time Fence Not FirmedType 4 Not Firmed No Orders Created NA

Firming TypesOrders Moving Into TimeFence

New Order Proposals Creation

New Order Status

Type 1 Firmed Outside Time Fence Not FirmedType 2 Firmed No Orders Created NAType 3 Not Firmed Outside Time Fence Not FirmedType 4 Not Firmed No Orders Created NA


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


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 - (same as stock requirement list ie latest situation for a material)

• Planning result for material - (the last MRP run for the material) - you can compare your current plan against long term planning scenarios or stock requirements list here.

• Situation (all plants) - Review planning situation (ie stock requirement list) for material for all plants

• Order Report - Review your orders in the order report

• Pegged Requirements - Review Pegging


Important Configurations

• 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

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

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


Implementation Decisions

• Group materials with common planning profile together.• Decide an MRP Type for each group of materials.• Decide what the lot sizing should be for each material/group of

materials.• Decide for each material, whether you require safety stock and if

safety stock is required, 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 ?

Documents

Sap r3 Mrp Logic