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MRP & Production Planning

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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

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Table of contents
Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

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PP flow & Integration

FI /CO

MM

Long Term
Capacity
Planning

Sales & Ops

Planning

Capacity Req.
Planning

CO
(Cost
Control)

Demand
Management

MRP

MM LE
(Stock
Control)

Production
Execution

QM
(Quality
Control)

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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

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Table of contents
Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

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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 management
(customer orders) and materials management
(warehouse replenishment)
Forecasts of demand are represented by planned
independent requirements which are copied from the
Sales and Operations Plan

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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 generate manufacturing
orders and purchase requisitions

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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

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DM Related Transactions
Practice the following
Transactions
MM03 Display Strategy
MD63 - Display Independent
Requirements
MD04 - Display Stock Requirements List
MD74 Reorganise Independent
Requirements

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Table of contents
Course Map

Module 1: Master Data

Module 2: Demand Management

Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary

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Materials Requirements
Planning
MRP compares the requirements for end products, from
Demand Management, with the current stocks and
creates planned manufacturing orders
Manual
entry

SOP
SOP
Production
Sales Plan
Plan

Material
Forecast

Copy
another
plan

Demand
Program

Planning levels:
z Material
z Product group
z Versions

MRP

Planning options:
z Horizon
z Period splits
z History

What is MRP?

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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.

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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 BOMs to
determine the dependent requirements for
intermediate products and purchased raw
materials

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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.

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MRP
Type
For the MRP procedure, use MRP type PD in the

material master
MRP creates planned orders or requisition receipts
to balance the demand plan
Safety stock can be used to cover unplanned
requirements
Receipts
Time

Requirements

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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

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Table of contents
Course Map

Module 1: Demand Management

Module 2: Material requirements Planning

Module 3: Master Data
Module 4: MRP Planning Runs
Module 5: Summary

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Evaluations
There are several options for analyzing the Planning run
; MRP list
By material
Collectively
; Stock requirements list
By material
Planning Result
Collectively
; Printed MRP list

MRP list

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MRP list
Use the MRP list to analyze the planning result
The 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
controller
Analyze the exception messages in the MRP
list, judge and or solve problems
Use the processing indicator to indicate that you
checked the material

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Planned order
Is the output of an MRP run
Are automatically created
Planned orders may be converted to production /
process orders or purchase requisitions

Planned
Order
10

Requirements

20
30

MRP

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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