MRP Overview

1 August 2011

Page 1

MRP Overview

1 August 2011

Page 2

MRP Overview
MRP Types

Master Production Scheduling is carried out for finished product that manufacturing in-house Material Requirement Planning is carried out using current and future sales figures Consumption-Based Planning uses past consumption data to calculate future requirements
Reorder Point Planning Forecast-Based Planning Time-Phased Planning

1 August 2011

Page 3

MRP Overview
Processing Steps
During a planning run, the system performs the following steps

Calculates net requirements Calculates lot size Scheduling Creates order proposals Creates exception messages

1 August 2011

Page 4

MRP Overview MRP Net Requirement Calculation

1 August 2011

Page 5

MRP Calculates net requirements

MPS
1. Requirement from sales order passed on to demand management
SO SO

A.1 Requirements of components are passed on to MRP

DepReq DepReq Safety Stock

MRP
A.2 Procurement Proposal is created from MRP planning run
DepReq DepReq Safety PlnOrd Stock

A.3 PR is created (See detail) 2. MPS planning run result as Planned order to supply requirement.
SO SO PlnOrd PlnOrd DepReq DepReq Safety PR PlnOrd Stock

A.4 Buyer convert PR to PO

DepReq DepReq Safety PO PlnOrd Stock

A.5 GR from vendor

DepReq DepReq Safety Stock PlnOrd Stock

A.6 Reservation is created from production order 3. Production planner convert planned order to be production order
SO SO ProOrd PlnOrd Reservation Depreq Safety Stock PlnOrd Stock

A.7 Reservation is eliminated when material is withdrawn for production order

Depreq Safety PlnOrd Stock

1 August 2011

Page 6

MRP Calculates net requirements

MPS
From previous page
SO SO

MRP
R
ProOrd PlnOrd

4. Make goods receipt to warehouse when finish produce

SO SO

Stock PlnOrd

5. CS open delivery order for arrange shipment

DO SO SO

Stock PlnOrd

6. Post goods issue ref. DO after goods has been shipped

SO SO

Stock PlnOrd

1 August 2011

Page 7

MRP Calculates lot size

Lot-sizing Procedures
The system calculates the receipt quantity in the lot-size calculation, which is carried out during the procurement quantity calculation.

Lot-for-lot order quantity Replenishment to maximum stock level Weekly lot size Monthly lot size Additional restrictions
Minimum lot size (minimum procurement quantity per lot) Rounding value (The procurement quantity must be a multiple of this value)

1 August 2011

Page 8

MRP Scheduling
Backward Scheduling for External Procurement
For materials that are planned, the requirement dates in the future are known. The materials must be available by these dates. The release date for the purchasing department is calculated during scheduling, that is, the date by which the materials must be ordered so that they are available for the requirements date.

Process Flow
The system starts with the requirements date and then schedules backwards to determine the release date of the purchase requisition (order start date of planned order, which is to be procured externally).

1 August 2011

Page 9

MRP - Scheduling
Backward Scheduling for External Procurement
Example Material: 14003290 GR processing time 1 day Processing time for purchasing 1 day Planned delivery time 7 days Opening period 3 days

Today 20.2.08

Opening Processing time period 3 days for purchasing 1 day Opening

date 13.2.08

Planned delivery time GR processing 7 days time 1 day MRP date 10.03.08

Release
date 16.2.08

time
Opening
date 20.2.08

Release
date 23.2.08

MRP date 3.03.08 Planned delivery time GR processing 7 days time 1 day

Opening Processing time period 3 days for purchasing 1 day

1 August 2011

Page 10

MRP Creates order proposals

Order Proposals
The type of order proposal that is automatically created by the planning run depends on the materials procurement type. For materials produced in-house, a planned order is automatically created. For materials that are externally procured, the MRP controller can decide between a planned order or a purchase requisition.

1 August 2011

Page 11

MRP - Reorder Point Planning

Reorder Level The reorder level (sometimes known as the reorder point) is calculated by adding the safety stock plus the expected average material consumption within the replenishment lead time. When determining the reorder level, you must consider safety stock, previous consumption values or future requirements, and the replenishment lead time. Safety Stock Safety stock must be set at a level that covers both excess material consumption within the replenishment lead time and any additional requirements that may occur because of delivery delays. Therefore, you must consider previous consumption or future requirements, and vendor delivery/production timeliness when determining the safety stock level.

1 August 2011

Page 12

MRP - Reorder Point Planning

Calculates net requirements
Example: Material 14002001 Lead time 7 days Average consumption 20 EA (per lead time) Safety Stock 50% = 10 EA (consumption deviation) Reorder Point = 20 + 10 = 30 EA
Qty Qty Qty

Reorder Point

Stock

Reorder Point
Stock

Reorder Point

PO PR PO

Stock Reservation

1 August 2011

Page 13

MRP - Reorder Point Planning

Calculates net requirements
Example: Material 14002001 Lead time 7 days Average consumption 20 EA (per lead time) Safety Stock 50% = 10 EA (potential deviation) Reorder Point = 20 + 10 = 30 EA
Qty Qty Qty

Reorder Point
Stock PO PR

Reorder Point

Reorder Point

Stock Stock PO

1 August 2011

Page 14

MRP - Reorder Point Planning

Calculates lot size
Lot size: Lot-for-lot order qty Replenish to maximum stock level
Example: Material 14002001 Lead time 7 days Average consumption 20 EA (per lead time) Safety Stock 50% = 10 EA (potential deviation) Reorder Point = 20 + 10 = 30 EA
Qty Maximum stock level
PR 25EA PR 23EA

Qty

Reorder Point

PR 5EA PR 3EA

Reorder Point

Stock 27 EA

Stock 27 EA

1 August 2011

Page 15

MRP - Reorder Point Planning

Replenishment of stock

Stock

Lot size

Reorder point

Safety stock

Reorder point Replenishment lead time

Delivery date

Time

1 August 2011

Page 16

MRP - Creates exception messages

Exceptional messages
Exception messages depend on the transaction being carried out and are meant to inform you of an important or critical event (for example, start date lies in the past, safety stock has been exceeded). By means of the exception messages, you can easily sort out any materials that you need to reprocess manually. Special search and selection functions are available for this in the evaluations for MRP.

1 August 2011

Page 17

MRP Planning Result

Planning Results
The MRP controller has two options for calling up the planning results: MRP list (MD05) Stock/requirements overview (MD04)

1 August 2011

Page 18