MRP & Production Planning

Course Objectives

• Understand the principles of Demand Management (DM)

• Define the Materials Requirements Planning (MRP) process

• Describe how to valuate MRP planning runs

• Perform DM and MRP transactions

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning

Module 4: MRP Planning Runs

Course Map

Module 5: Summary

Table of contents

PP flow & Integration

Sales & Ops Planning MRP

Capacity Req.Planning

Long TermCapacity Planning

Demand Management

Production Execution

CO(Cost

Control)

MM – LE(Stock

Control)

QM(QualityControl)

FI /CO MM

Master Data Related Transactions • Practice the following

transactions

– MM03 – Display Material Master– CS03 – Display BOM– CR03 – Display Work Center– CA23 – Display Rate routing– MM03 – Display Production

Version

Module 1: Master Data

Module 2: Demand Management

Module 3: Material requirements Planning

Module 4: MRP Planning Runs

Course Map

Module 5: Summary

Table of contents

What is Demand Management?

• Demand Management is used to determine requirement quantities and delivery dates for finished products

• Demand Management provides a demand program which is used by MRP to generate production plans

• Depending on the planning strategy chosen in the material master, the demand program can use forecasts of demand, actual demand, or combinations of both

• Actual demand is created in sales order t ( t d ) d

What is the DM Process (1)?

• SOP plans are transferred to Demand Management as ‘Independent Requirements’ for end products

• The actual sales orders are for information purpose only and are not considered in planning.

• In case the sales orders significantly vary from the forecasted demand; Planners revise the demand before running MRP to

t f t i d d

Who is Responsible for DM?• Planner (DEM)

– Responsible for managing the demand by comparing the actual demand with the forecast and manipulate the plan based on the actual demand before executing MRP

DM Related Transactions• Practice the following

Transactions– MM03 – Display Strategy– MD63 - Display Independent

Requirements– MD04 - Display Stock Requirements

List– MD74 – Reorganise Independent

Requirements

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning

Module 4: MRP Planning Runs

Course Map

Module 5: Summary

Table of contents

Materials Requirements Planning

• MRP compares the requirements for end products, from Demand Management, with the current stocks and creates planned manufacturing orders

ManualManualentryentry

SOPSOPSalesSales PlanPlan

SOPSOPProductionProduction

PlanPlanMaterialMaterialForecastForecast

CopyCopyanotheranother

planplan

DemandProgram

MRPPlanning levels:

MaterialProduct groupVersions

Planning options:HorizonPeriod splitsHistory

MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that is, it is used to procure or produce the requirement quantities on time. This process involves the monitoring of stocks and demand, leading to the automatic creation of procurement proposals for purchasing or production.

The main objective of MRP is to determine which material is required, the quantity required and by when it is required.

What is MRP?

What is the MRP Process (1) ?• MRP compares the requirements for end

products, from Demand Management, with the current stocks and planned manufacturing orders

• MRP chooses a Production Version which indicates the Bill of Material and Routing to be used

• MRP then explodes the product BOM’s to determine the ‘dependent requirements’ for intermediate products and purchased raw

What is the MRP Process (2) ?• MRP will normally be run weekly.

• The MRP process assumes infinite capacity– The Rough-Cut Capacity Planning check in SOP

ensures that the loading is broadly correct before MRP runs.

MRP Type • For the MRP procedure, use MRP type PDPDin the material master

• MRP creates planned orders or requisition receipts to balance the demand plan

• Safety stock can be used to cover unplanned requirements

Time

Receipts

Requirements

Who is Responsible for MRP?• MRP Controller

– Responsible for running and operating the material requirement planning to check and track the planned requirement for both finished products and raw material in order to generate Production Orders and Purchasing Requisitions

Module 1: Demand Management

Module 2: Material requirements Planning

Module 3: Master Data

Module 4: MRP Planning Runs

Course Map

Module 5: Summary

Table of contents

Evaluations

There are several options for analyzing the Planning run

MRP list• By material• CollectivelyStock requirements list• By material• CollectivelyPrinted MRP list

Planning Result

MRP list

MRP list

Use the MRP list to analyze the planning resultThe MRP list displays the future stock/requirements situation at the time of the last planning run By using the collective display, you can select a specific MRP list based on plant and MRP controllerAnalyze the exception messages in the MRP list, judge and or solve problemsUse the processing indicator to indicate

Planned order

• Is the output of an MRP run• Are automatically created• Planned orders may be converted to

production / process orders or purchase requisitions

MRP

Planned Order102030

Requirements

MRP Related Transactions• Practice the following exercise

– MD01 Total Planning Run Online– MD02 Single-Item, Multi-Level– MDBT Total Planning in Background– MD07 Stock Requirements List

Collective– MD05 Evaluate MRP List– MD44 Planning Situation Material