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MRP-Material Requirement Planning
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PP ProcessMaterial Requirement Planning
Planned Orders
Production Order
Purchase Requisition
Confirmation
Capacity
Planning
Material Master
Bill of Material
Work Center
Routing
Sales Reqmt
Make to Order
DM/PIR
Order
MRP
PIR/SL/Quota
Goods Receipts
Purchase Order
PO Print
Release
Goods
Movement
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R
Sales order /
PlannedIndRequirementPlanned order
Purchase requisition
Dependent requirement
Planned order
Dependent requirement
FinishedFinishedproductproduct
Assembly 2Assembly 1
Raw
material 3
Raw
material 1
Raw
material 2
R/3s MRP is for unconstraint-based planning,
APO is for the constraint-based planning
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PP ProcessDemand Management
DEMAND MANAGEMENT
PURPOSE :
Demand management is to determine requirement quantities and delivery dates for
finished product assemblies. DM uses planned independent requirements and customer
requirements as input.
Source of Demand
Annual Sales Plan
Sales Order
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PP ProcessDemand Management
Splitting
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PP ProcessDemand Management
Splitting
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PP ProcessMaterial Requirement Planning
Objective of MRP
Guarantee Material Availability
Generate In-house/External Production and
Procurement Plan
MRP tries to strike the best balance possible
between
-optimizing the service leveland
-minimizing costsand capital lockup
MATERIAL REQUIREMENT PLANNING
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How the Planning Run Works
Net Requirements Calculation
1. Determine Available Warehouse Stock
2. Determine Planned Receipts (after considering existing issues and receipts)
3. Calculate the Shortage Quantity Lot Size Calculation
Determine the lot size of each plan order. R3 Lot Sizing falls into 3
categories : Static Lot Size, Optimum Lot Size or Period Lot Size
Procurement Type & Scheduling
In-house Production or External Procurement & Backward Scheduling or
Forward Scheduling
BOM Explosion
Determine the valid BOM for explosion
Quota Arrangement
A lot can further be split by quota arrangements
Net Requirements Calculation ---> Lot Size Calculation ---->-------> Scheduling --------> BOM Explosion ----->
-------> Quota Arrangement
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Basic Parameters for MRP MRP Type
Lot Size Safety Stock / Safety Time
Reorder Point
Rounding Value Procurement Type (In-house/Ext/Both)
Quota Arrangement
In-house Production days / Planned DeliveryTime
GR Processing Time
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Planning Parameter - MRP Type
Key that determines whether and how the
material is planned
No Planning
Manual reorder point planning
Automatic reorder point planning
Material requirements planning
Master production scheduling (MPS)
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Parameters for MRP-MRPType
No Planning ND
EX:- If we keep no planning for Material then
the results are as follows for BENT ROD
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Parameters for MRP-MRP Type
MRP type - PD (Planning Required) MRP type PD means the material will be
considered by MRP run for planning and triggerthe Procurement Proposals after Net reqt
calculation MRP Type - M0 (MPS)
This is set for critical material which are excludedfrom MRP Run. However planning for these
materials are done thru separate routine MRP type - VB (Manual Re-order Point)
Plans as per the Re-order level set for thematerial
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BOM Explosion
Scheduling
Procurement type
Lot-size calculation
Net Reqmts CalculationNet Reqmts Calculation
Overview:Net Requirements Calculation
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MRP:Net Requirements Calculation
ShortageShortage
SalesSalesOrdersOrders
Planned Ind ReqmtsPlanned Ind Reqmts
Dependent ReqmtsDependent Reqmts
ReservationsReservations
PlannedOrders
ProductionOrders
Purchase Requisitions
Purchase orders
WarehouseStock
LotSize
SafetySafetyStockStock
CompareCompare
DemandSupply
MRP will compare the requirement and supply to get a shortage gap.A comparison is made between warehouse stock and the appropriatereceipts and issue.
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BOM Explosion
Scheduling
Procurement type
Lot-Lot-size calculationsize calculation
Net Requirements
Calculation
Overview:Lot-Size Calculation
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Parameters for MRP-LOT SIZE
Lot SizeUsed to consolidate
demand/dependent reqmt as per the setbusiness rules.
Lot Size Procedures
Static lot-sizing procedures
Period lot-sizing procedures
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Parameters for MRP-LOT SIZE
Static lot-sizing procedures
In static lot-sizing procedures, the lot size is
calculated by means of the quantity
specifications recorded in the material master
record.
There are three different criteria according to
which the lot size can be calculated:
Lot-for-Lot Order Quantity
Fixed Lot Size
Replenishment up to Maximum Stock Level
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Parameters for MRP-LOT SIZE
Static lot-sizing procedures
Lot-for-Lot Order Quantity
after MRP run the order proposals as follows
Date Order proposals
14.11 Purchase order 20 15.11 Purchase order 30
16.11 Purchase order 50 .
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Parameters for MRP-LOT SIZE Static lot-sizing procedures
Fixed Lot Size
Fixed Lot Size set in Material Master as Ex-10 the results
as follows Date Order proposals 14.11 Purchase order 10 14.11 Purchase order 10 15.11 Purchase order 10
15.11 Purchase order 10 15.11 Purchase order 10 16.11 Purchase order 10 16.11 Purchase order 10..
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Parameters for MRP-LOT SIZE
Static lot-sizing procedures
Replenishment up to Maximum Stock Levelif you want to fill the stock up to the highest possible level or if
you can only store a certain quantity of a material due to the
container size. This applies to a tank, for example. The capacity of
the tank determines the maximum stock level.
Maximum Stock Level:-100 EA
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Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
In period lot-sizing procedures, therequirement quantities from one or fromseveral periods are grouped together to form alot. The SAP System supports various periods.You can determine the number of periodswhich are to be grouped together into an orderproposal. You have the choice between
Daily lot sizeWeekly lot size
Monthly lot size
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Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
Daily lot size EX:-Argo-2000
Date Order Proposals
14.11 20
15.11 30 16.11 50
17.11 60.
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Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
Weekly lot size
EX:-Argo-2000
Date Order Proposals
14.11 290 21.11 240
28.11 250
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Parameters for MRP-LOT SIZE
Period Lot-Sizing Procedures
EX:- Monthly lot size
Argo-2000
Date Order Proposals
30.11 780
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BOM Explosion
SchedulingScheduling
Procurement typeProcurement type
Lot-size calculation
Net Requirements Calculation
Overview:Scheduling
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External procurementStockStocktransfertransfer
Procurement TypesProcurement Types
In-In-househouse
productionproduction
SubcontractingSubcontracting VendorProductionProduction inin
ownownplantplant
ProductionProduction inin
anotheranotherplantplant
Reservation inReservation in
anotheranotherplantplantComponentsComponentsComponents
Procurement typesSpecial procurement types
ProcurementTypes
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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 orpurchase requisition.
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Planned Orders for manufactured material
Purchase Requisition for external procurement
Action Messages & Planning related MIS