Create Material Master MRP Views and Assign MRP types (MRP Procedures)

Maintaining Material Master MRP Views:

To have a material managed through SAP MRP, it is mandatory that you would create
the MRP views for the materials. The MRP views for the material are explained in the
Material Master section of this website - http://www.sapsword.com/home/learn-sap-
pp/sap-material-master

When you create the MRP views for the material, a MRP Type has to be assigned in the
MRP 1 view. A MRP type designated to the material explains whether the material is
allowed to go through material requirement planning and if the MRP type allows
material requirement planning, it explains the type of material planning that is required
for the given material at a given plant. The MRP Type configuration can be checked in
the following linkhttps://sites.google.com/site/sapswords/home/learn-sap-pp/sap-
mrp/sap-mrp-configuration

It should also be noted that the MRP type ND would not trigger any Material
requirement planning for the material, while MRP type XO carries out MRP in an
external system like APO. (It should be noted that you should extend the material for all
the 4 MRP views)

MRP Types can be categorized in to 2 major categories, namely Material Requirement

planning and consumption based planning. In material requirement planning, the
planning is based on the master plan designed for a material through planned
independent requirements or through incoming sales order demands. In the case
of Consumption based planning, the materials are planned on the basis of their
consumption patterns, for example the 'reorder point planning' where procurement
proposals are created once the stock is consumed below a certain reorder point level or
the forecast based planning where the future consumption is based on the forecasted
consumption, arrived at through the past historical consumption for the given materials.

The Material requirement planning is mostly carried out for high value materials like the
assemblies, subassemblies or the high value procurement materials whose
procurement quantities are planned based on the incoming demands. For high value
materials, the planning is monitored and production/procurement is ordered once the
higher levels demands arrive.
On the other hand, consumption based planning is carried out for low value materials
whose planning methods can be restricted to consumption based methods like the
reorder point planning (with putting in a lot of efforts in to planning strategies).

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

Material Master MRP Types:

Some of the above MRP types which are profusely used, are explained below

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.
 The available stock is determined by the planning run (that is required to meet
the demands) by including the following in an equation as shown below

= Plant stock (considered as receipt) + scheduled receipts from production and

purchase all the demands from sales order, material reservations and planned
independent requirements.

If the available stock does not satisfy the demand then procurement proposals are
raised to cover the demands. Alternatively we can interpret it as fulfillment of the
incoming demands by all the receipts.

Material Requirement Planning MRP Types with the Planning type fence and
Firming logics

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.

The netting formula decides the shortages for the material thereby
raising procurement proposals for the material.

The only difference in such types of planning is that the master plan is protected for
any changes through the use of planning time fence in the material master or in the
MRP configuration. To protect any changes to the planning situation in the fence, the
MRP run firms the procurement proposals. The MRP type configuration in such cases
would decide whether any new procurement proposals could be created outside the
planning time fence, automatically or manually by the planner, for the new requirements
placed in the time fence period. It would also decide whether the procurement proposals
that already exists in the fence require automatic firming or manual firming.

0 1 2 3 4
Firming type

M0 P1 P2 P3 P4
MRP Types M1 M2 M3 M4

Firming Methods for Procurement Proposals in the Planning time fence

No Firming of Procurement Proposals within the X
planning time fence

Automatic Firming of Procurement Proposals X X

within the planning time fence

Manual Firming of Procurement within the X X

planning time fence (No Automatic Firming of
the procurement proposals )

Treatment with New Order Proposals in the Planning time Fence

Automatic Creation of New Procurement X X

Proposals to cover the shortages within the
planning time fence. But the dates of these new
Procurement Proposals are pushed outside the
planning time fence

No New Procurement Proposals created to Cover X X

the material shortages within the planning time
fence

Manual Reorder Point Planning MRP Type VB - Consumption Based Planning

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. On the other hand you can also have a forecast based
planning where planning is carried out based on forecasted figures for the material
(forecast based on historical data)

In the case of Manual Reorder Point Planning (MRP Type VB), when the Plant
stock & firmed receipts for a 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). The Safety stock can also be calculated
automatically by the system using the Dynamic Safety Stock concept. You should
also maintain the replenishment lead time, as accurately as possible in the material
master.

In Re-order point planning, the incoming demands are not considered as issues,
in other words the incoming demand plays no role in planning or creation of
procurement proposals. MRP waits for the cumulative of the Stock + Firmed
receipts to fall below the re-order point so as to trigger creation of a procurement
proposal. The procurement proposal is created for a quantity equal to the Reorder
point or equal to a fixed lot size maintained in the material master. If a procurement
proposal already exists for the material with quantities greater than the proposed
quantity (a manually created one), the system would not create a new one.

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.

For example, if for a given material which is set for reorder point planning, with a
reorder point of 80 Units, the system would try to create a planned order once the
stocks falls below 80 Units. Assuming that the current stock at any given point in
time is 50 Units and the firmed receipts are 20 Units, making it 70 Units, which is still
well below the 80 units level, in which case the system would create a planned
order of 10 more units to reach back to the level of 80 units.

Now if you have a Fixed Lot Sizing procedure set in the material master, for a 100
Units, the system would always create a planned order of 100 units.

Automatic Reorder Point Planning MRP Type VM - Consumption Based

Planning

In the case of Automatic Reorder Point Planning (MRP Type VM), 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 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 - Consumption Based Planning

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 - Consumption Based Planning

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.

You can specify the number of historical periods and the future forecast horizon
(periods) for each material. In the planning run, the forecasted requirements are
made to be available at the start of the period specified (week, month or day etc)
and then you have an option to further divide/split these requirements to a finer
detailed period pattern through the use of splitting indicator in MRP 3 view. The
splitting Indicator can be configured in the following path Logistics > Production >
MRP > Forecast > Define Splitting of forecast requirements for MRP.

The forecasted requirements should be covered by the plant stock + scheduled

firmed goods receipts (from purchase or production). Net requirement calculations
do not consider the demand from sales order or from planned independent
requirements or from material reservations. Only demands from the forecasted
 figures are considered. If the available stocks fall below the forecasted
requirements/demand, for the period, procurement proposals are raised.

Safety stock can be considered in the net requirement calculations

Available stock that is left over after the planning run calculations = plant stock
safety stock + firmed receipts from purchase or production Forecasted
requirements/demand. Another way of interpreting the same is that, the receipts
should cover the demands from forecasts. If the receipts cannot cover the demands
from forecast, then the system raises procurement proposals.

SAP MRP Configuration

The following are the Major Configuration items explained in detail:

a) Activating MRP and Planning File Entry

b) SAP MRP Plant Level MRP Parameters Configuration
c) SAP MRP, MRP Group Level Parameters Configuration
d) Configuring SAP MRP Types
e) Configuring SAP MRP Scope of Planning for the Total Planning Run
f) Configuring SAP MRP Planning time fence and Roll Forward Period
g) Configuring SAP MRP Areas
h) SAP MRP Dynamic Safety Stock (Range of coverage Profile)
i) Configuring SAP MRP Days Supply and Receipt Days Supply

SAP MRP Configuration

Activating MRP and Planning File Entry

a) Activating SAP's Material Requirements Planning (MRP)

This configuration allows you to choose the plant for which you would want to activate SAP
Material Requirement Planning (SAP MRP). Activating MRP for the plant allows one to use the
SAP MRP tool for the plant. SAP Transaction code OMDU and the SAP path is Logistics >
Production > MRP > Planning File Entry > Activate MRP and Set up Planning File

b) Activating Planning File Entries for a Plant

Activating Planning file entry for the plant (through a variant that can be rescheduled) allows
you to collect all the material in a planning file list, which has an MRP Type in the material
master MRP 1 View (other than MRP Type XO)
The process of recording a planning file entry for a material, can be run periodically using a
batch job scheduling method. The transaction code to set up the variant and period scheduling is
OMDO and the Path for activating the planning file set up is Logistics > Production > MRP >
Planning File Entry > Activate MRP and Set up Planning File

All the entries in the planning file will have a change indicator specifying that a material has
undergone a change (change in receipts elements or issues elements). This indicator will help
you to choose only those materials that have undergone a change, through the use of planning
key called Net Change Planning when running MRP.

The planning file record for a material also has a net change planning in the current horizon
field which will be set if the change in the materials receipt or issue element is valid in the
planning horizon. This indicator will help you choose only those materials which have
undergone a change in the planning horizon; through the use of a planning key, in an MRP run,
called Net change planning in the planning horizon.

Plant Level configuration for MRP

Plant Level configuration for MRP

SAP MRP is run at plant level or at a group of plant level (called as scope of planning),
thus the MRP configuration is done at Plant level.

The configuration done for SAP MRP at Plant level would also be true for SAP
Consumption Based Planning (SAP CBP) settings.

Transaction code OPPQ takes you in to the SAP MRP configuration called as Plant
Parameters for Material Requirement Planning. The Path which can be used is Logistics
> Production > Material Requirement Planning > Plant Parameters > Carry out Overall
Maintenance of Plant Parameters.

The Transaction code for Consumption Based planning is OMI8 and the Path is
Logistics > Materials Management > Consumption Based Planning > Plant Parameters
> Carry out Overall Maintenance of Plant Parameters.
 Fig MRP - Config 1

In the transaction code for Plant level parameters for SAP MRP, you should first input
the plant and press the maintain button.

If you have already maintained the configuration for the parameters, then it states so, if
you havent then it simply says To Maintain next to the parameter
 Fig MRP - Config 2

Following are the parameters that need to maintain as a part of SAP MRP/CBP
Configuration:

a) Number ranges

The number range IDs are maintained for the following objects:

the Planned orders

the reservations,
the dependent requirements,
the simulative dependent requirements,
the purchase requisitions,
the MRP Lists,

In this section only the number range IDs are maintained. While the actual number
range is configured, for the number range ID, using a transaction code OMI2 (for the
above mentioned objects created in the planning run). One can also use the transaction
code OMI3 for the objects created manually in the front end.
Every number range interval, created using OMI2 and OM13, has an ID, which can be
allocated to the objects at plant level, i.e., every plant can have a different number
range for the objects mentioned above.

b) Availability Check rule for Backorder Processing

As per standard SAP, the Availability checking rule for the backorder processing is PP,
though you can have your own availability check rules created or configured.

Every Availability checks rule (availability checking scope defined) has a set of receipts
(Purchase orders, Production orders) and issues (Sales orders, dependent
requirements, reservations, planned independent requirements etc) which are to be
considered or not to be considered during the SAP availability checks.

To have the checking rule work along with the configuration, you should have the
Availability checking groups maintained in the material master. The Checking groups
are configured to be associated with the checking rules (checking scopes).

The availability checking rule (checking rule scope) has to be maintained, for a given
SAP functionality and it has to be assigned to the availability checking group maintained
in the material master. The SAP functionalities that use availability checks to check the
availability of the header materials as well as components at the plant at the time of
sales order creation, the availability checks of the header material at the time of sales
order delivery, the availability checks for components in production thus reporting the
missing parts list, the backorder processing etc.

c) Reporting

This configuration is used for the following purposes.

To configure the objects, which are to be considered in the calculation of the

receipts days supply like the production orders/process orders, firmed planned
orders, purchase orders, assigned planned orders, firmed purchase requisitions, QM
Inspection lots, reservations, safety stocks

To configure the reporting of periods totals in terms of a defined period (day,

week, month, periods as per planning calendar) of in Stock requirement list, MRP
list, simulative MPR or interactive MRP
d) MRP Controllers

This is a mandatory configuration. Here you can configure the list of MRP controllers for
the plant. A MRP Controller is a person or a group of people, which is responsible for
planning a material or a given list of materials.

You have to assign the MRP controller to the Material Master MRP 1 View, so as to
delegate the responsibility of the planning and evaluation of planning for that material.

e) Floats

Floats are buffers in the total lead time, that are provided in production/process order or
in the planned orders created manually or during an MRP run. The schedule margin key
is used in the Material Master MRP 2 View. It is used in MRP as well as in production
order.

The floats are defined using the scheduling margin key.

Opening period: Number of working days between the date that the order is created and
the planned start date. This time is available for the MRP controller to convert a planned
order into a purchase requisition or a production order.

Float after production: Number of working days between the scheduled finish date and
the order finish date; used as a float in production scheduling.

Float before production: Number of working days between the order start date and the
scheduled start date; used as a float in production.

Scheduling release period: Number of workdays between the planned start date and the
date for releasing the order. If the order release indicator is set, the production order is
released by a background program that takes all dates into account.