Material Requirements Planning (PP-MRP)

Implementation Options

The main function of material requirements planning is to guarantee material availability , that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.

In doing so, MRP tries to strike the best balance possible between

  • optimizing the service level and

  • minimizing costs and capital lockup.

The MRP component (PP-MRP) assists and relieves MRP controllers in their area of responsibility. The MRP controller is responsible for all activities related to specifying the type, quantity, and time of the requirements, in addition to calculating when and for what quantity an order proposal has to be created to cover these requirements. The MRP controller needs all the information on stocks, stock reservations, and stocks on order to calculate quantities, and also needs information on lead times and procurement times to calculate dates. The MRP controller defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals.

Integration

You must first create the master data to be able to work with the MRP component. To do this, you require the following components:

  • material master (LO-MD-MM)

  • bills of material (LO-MD-BOM)

When you use MRP for in-house production, you also need the following components if you want to determine production dates:

  • work center (PP-BD-WKC)

  • routings (PP-BD-RTG)

You also need the following components:

  • demand management (PP-MD-DEM)

You need the Demand Management component to define requirement quantities and requirements dates for finished products and important assemblies. Demand Management also determines the strategy you are to use for planning, procuring, or producing a certain finished product.

  • sales and distribution , if necessary

Features

MRP at Plant or MRP Area Level

You can plan material requirements at plant level or for different MRP areas. With MRP at plant level, the system adds together stocks from all of the individual storage locations, with the exception of individual customer stock, to determine total plant stock. The requirements are combined in the planning run and procurement elements are created for these pegged requirements with unknown sources. Individual storage locations can be planned separately or be excluded from planning.

In the case of material requirements planning on an MRP area level, only the stocks from the storage locations or subcontractor assigned to the respective MRP area are taken into account. Only the requirements in this MRP area are combined and procurement elements are created for them. This enables you to plan material requirements specifically for certain areas.

Lot-Sizing and MRP Procedures

The most common lot-sizing procedures are available in the system and you can easily integrate user-defined formulas.

You can use MRP or consumption-based planning as the materials planning procedure.

Automatic Planning Run

The automatic planning run in MRP determines any shortages and creates the appropriate procurement elements. The system generates messages for critical parts and unusual situations so that you can rework the planning results in the specific area with problems.