Material Requirements Planning

Material Requirements Planning 2019 Presented by: Jay Uhlenhoff

Agenda Introductions and Expectations The Why and the How Forecasts (Ch. 3) MRP Wizard (Ch. 4) MRP Results (Ch. 5) Questions & Troubleshooting

Introduction Game – I’ll Go First Jay Uhlenhoff Consultant/Trainer/Tester since 2015 Help customers get started using MRP Only one of me – Help each other! Your future resources are in this room. Two scenario takeaways – Production of one brand, Raw materials

Introduction Game – Your Turn Name, company and role Years using Orchestrated? Experience with MRP? How solid is your data?

Agenda Introductions and Expectations The What and the How Forecasts (Ch. 3) MRP Wizard (Ch. 4) MRP Results (Ch. 5) Questions & Troubleshooting

What Can MRP Do? Calculate the amount of raw materials or liquid needed Calculate when you need to order or produce those goods to meet demand Recommend transfers between warehouses Create POs and Inventory Transfer Req’s from recommendations

Key Concepts A planning tool applying a simple equation to a very large data set. Review regularly then take action Get smarter about what to order and when Example: PdOs Item being produced is Supply Item(s) being consumed is Demand

There’s a Utility for that! Item Master Utility Units of Measure Make vs Buy Planning Management Utility Most MRP fields Item Properties Tip: Lots of items to load/change?

MRP Process Flow Visual

Pop Quiz!

MRP Item Preparation Refresher Raw Materials/Production Inputs? Min Order Qty, Order Multiple, Lead Days, Min/Max Stock Labels, Bottles/Cans, Packaging Materials? Min Order Qty, Order Multiple, Order Interval, Lead Days WIP Items? Brewhouse size – Min Order Qty and Order Multiple Fermentation – Lead Days

Use the Utilities! Planning Management Utility Most MRP fields Item Properties Tip: Lots of items to load/change? Item Master Data Utility UoMs Make vs Buy

Just Getting Started? First, focus attention on: Lead Days, Order Multiple, Min Order Qty, Min Stock Then work on: Production Yield by Brand/BOM, Purchase UoMs, Max Stock, Order Interval And later get to: Tolerance Days, Preferred Vendor

Quick Q&A Why is it important to devote resources to this feature? Any specific goals taking this class? High-level MRP questions? Prior difficulty getting started with MRP?

Forecasting can be frustrating…

Forecasts Extends planning beyond existing documents Creates ability to plan further out Works in tandem with current short-term sales Can assist with both production and sales Forecasts of barrelage or sales by SKU Design a scenario with a specific forecast

Forecasts

Forecasts Consider short and/or long-term forecast Only one forecast per scenario Data in Days, Weeks or Months Quarters? Divide by three and use Months Can be updated frequently or not at all

Creating a Forecast Import an existing forecast Planning Management Utility Copy/paste into SAP Forecast feature Manual creation in Orchestrated Use SAP-generated historical sales forecast Only use as a starting point

So Let’s Get To It MRP > Forecasts Utilities > Planning Management Utility > Demand Planning

MRP Wizard 5 steps, then Results & Recommendations Questions encouraged Compare/contrast with your new best friend

Step 1: Scenario Selection Create New scenario Scenario Name is shorthand Description has more detail

Step 2: Scenario Details

Step 2: Scenario Details Match details to screenshot recommended Days – 4 to 12 weeks; Weeks – 4 to 12 months Items to note: Date range applies to Due Date specifically Range can be adjusted after-the-fact Can later have separate Days and Weeks scenario Simulation good option during early training (or Test DB)

Step 3: Item Selection

Step 3: Item Selection Missing items aren’t flagged for MRP Can ‘stack’ filters Items not obviously grouped > Item Properties Number of items makes a difference

Item Properties Great tool for creating subsets of items Go beyond Item Groups, Process Types, etc. Larger/more complex? More likely to utilize Item Properties Setup, then Planning Mgmt Utility Examples: Subset beyond Item Group (labels, bottles) Order Interval (same time of the month) Vendor

Step 4: Inventory Data Source

Step 4: Inventory Data Source Company vs Warehouse Company is most common, simpler to start Recommendations for Default Warehouses Heavy use of Inv. Transfers could make difference Exclude OAK01, QC, other non-available inv. Consider removing entire locations if multiple Expand/Collapse is helpful

Step 5: Documents Data Source

Step 5: Time Range

Step 5: Time Range Within Planning Horizon Issues with old, unclosed documents Excludes documents with due date outside range ‘Past Due Data’ column only back to Start Date Switch to down the road Include Historical Data Includes data with due dates outside range Helps identify invalid, old documents to close

Step 5: Sources of Demand and Supply

Step 5: Sources of Demand and Supply PdOs: Both Planned and Released included Blanket agreements must be Specific type and Approved Straightforward other than the Restrict column… Check box for a document type Then click ellipsis button to the right Select all documents to include in the scenario Likely want to ignore

Step 5: Inventory Level

Step 5: Inventory Level Set whether you want an inventory source of demand Minimum or Maximum Recommend ordering to meet this level of inventory Required Similar to Minimum but suggests in Purchase UoM Min-Max When falling below the minimum, order to the maximum Blank Only use other sources of demand

Step 5: Forecast & Recommendations

And Now… The Moment You (Probably Didn’t) Wait For Click Save Scenario Click Run!!

Step 6: Results

Step 6: Results – Features Report tab vs. Recommendations tab Expand/Collapse button Preview MRP Run Results

Step 6: Results – Colors Black Text/Light Gray Background Sufficient time to fulfill order recommendations Black Text/Off-White Background Fulfilling recommendations will create more supply than demand Red Text/Dark Gray Background

Step 6: Results – Pegging Info

Material Requirements Planning