April 11, 2023 Page 1
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
April 11, 2023 Page 2
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
April 11, 2023 Page 3
MRP – Calculates net requirements
MPS MRP
SR
1. Requirement from sales order passed on to demand management
SO
SO
PlnOrd
R S
2. MPS planning run result as ‘Planned order’ to supply requirement.
SO
SO
PlnOrd
ProOrd
R S
3. Production planner convert planned order to be production order
PlnOrd
SO
SO
A.1 Requirements of components are passed on to MRP
SR
DepReq
DepReq
Safety
Stock
A.5 GR from vendor
R S
DepReq
DepReq
PlnOrd
Stock
Safety Stock
R S
Depreq
A.7 Reservation is eliminated when material is withdrawn for production order
PlnOrdSafety Stock
R S
DepReq
DepReq
PlnOrd
PR
A.3 PR is created (See detail)
Safety Stock
A.6 Reservation is created from production order
R S
Depreq
Reservation Stock
PlnOrdSafety Stock
R S
DepReq
DepReq
PlnOrd
PO
A.4 Buyer convert PR to PO
Safety Stock
R S
PlnOrd
A.2 Procurement Proposal is created from MRP planning run
DepReq
DepReq
Safety Stock
April 11, 2023 Page 4
MPS MRP
SO
R SSO PlnOrd
DO Stock5. CS open delivery order for arrange shipment
R SSOSO
PlnOrdStock
6. Post goods issue ref. DO after goods has been shipped
R SPlnOrd
Stock4. Make goods receipt to warehouse when finish produce
SO
SO
ProOrd
R S
From previous page
PlnOrd
SO
SO
MRP – Calculates net requirements
April 11, 2023 Page 5
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)
April 11, 2023 Page 6
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 FlowThe 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).
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MRP - Scheduling
Backward Scheduling for External Procurement
MRP date3.03.08
MRP date10.03.08
time
Releasedate 23.2.08
Openingdate 20.2.08
GR processingtime 1 day
Planned delivery time7 days
Processing timefor purchasing 1 day
Openingperiod 3 days
Releasedate 16.2.08
Openingdate 13.2.08
GR processingtime 1 day
Planned delivery time7 days
Processing timefor purchasing 1 day
Openingperiod 3 daysToday
20.2.08
Example Material: 14003290GR processing time 1 day Planned delivery time 7 daysProcessing time for purchasing 1 day Opening period 3 days
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MRP – Creates order proposals
Order ProposalsThe type of order proposal that is automatically created by the planning rundepends on the material’s 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.
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Reorder LevelThe 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 StockSafety 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.
MRP - Reorder Point Planning
April 11, 2023 Page 10
MRP - Reorder Point Planning
PO
PR
Stock
Qty
Reorder Point
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
Reorder Point
Stock
PO
Calculates net requirements
Qty
Reorder Point
Stock
Reservation
April 11, 2023 Page 11
MRP - Reorder Point Planning
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
Reorder Point
Stock
Qty
Reorder Point
Stock
Calculates net requirements
PR
Stock
Qty
Reorder Point
PO
PO
April 11, 2023 Page 12
MRP - Reorder Point Planning
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
Calculates lot sizeLot size: Lot-for-lot order qty
Replenish to maximum stock level
PR 3EA
Stock27 EA
Qty
Reorder PointPR 5EA
PR 23EA
Qty
Reorder Point
Maximum stock level
Stock27 EA
PR 25EA
April 11, 2023 Page 13
MRP - Reorder Point Planning
Reorder point
Safetystock
Stock Lot size
TimeDeliverydate
Replenishmentlead time
Reorder point
Replenishment of stock
April 11, 2023 Page 14
Exceptional messagesException 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.
MRP - Creates exception messages
April 11, 2023 Page 15
Planning ResultsThe MRP controller has two options for calling up the planning results: MRP list (MD05) Stock/requirements overview (MD04)
MRP – Planning Result