Reorder Point Planning Procedure (SAP Library - Material Requirements Planning (PP-MRP))

Reorder Point Planning Procedure

Prerequisites

You have set an MRP type for reorder point planning in the material master (MRP 1 view).

You define MRP types in Customizing for MRP in the IMG activity Check MRP types.

In the material master, you have entered or let the system automatically calculate and enter the values for the reorder point (MRP 1 view) and for the safety stock (MRP 2 view).

Process Flow

The continuous monitoring of available warehouse stock within reorder point planning is carried out in Inventory Management.

Every time a material is withdrawn from the warehouse, the system checks whether this withdrawal has caused stock levels to fall below the reorder level. If this is the case, the system makes an entry in the planning file for the next planning run (see also Checking the Planning File).

If a material is returned to the warehouse, the system checks in exactly the same way whether the available warehouse stock exceeds the reorder level again. If this is the case, an entry is made in the planning file, which acts as an indicator for the planning run to delete any unnecessary procurement proposals.

If planned receipts are no longer required due to material returns, for example, then the system will suggest that these receipts should be cancelled. In this case, the MRP controller in cooperation with Purchasing or Production must check whether the purchase order or the production order can be cancelled.

The system then calculates the net requirements. The system compares the available stock at plant level (including safety stock) plus the firmed receipts that have already been planned (purchase orders, production orders, firmed purchase requisitions and so on) with the reorder point. If the sum of the stock plus receipts is less than the reorder point, a material shortage exists.

The system then calculates the procurement quantity according to the lot-sizing procedure defined in the material master.

For reorder point planning, the system supports the Fixed lot size and Replenish up to maximum stock level lot-sizing procedures.

You can also use period or optimum lot-sizing procedures for reorder point materials. In this case, you must calculate future requirements using the forecasting functions. The forecast values are then interpreted as requirements.

The system then schedules the procurement proposal, that is, the system calculates the dates on which the purchase order has to be sent, or when production has to begin and the date on which the vendor has to deliver the goods or by which production has to have the goods ready.