MRP & Production Planning

1. MRP & Production Planning

2. 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

3. 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

4. MM FI /CO MM – LE(StockControl) CO(Cost Control) QM(QualityControl) PP flow & Integration Long TermCapacity Planning Sales & Ops Planning Demand Management MRP Capacity Req.Planning Production Execution

5. 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

6. 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

7. 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

8. 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

9. 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

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

11. 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

12. SOP Copy SOP Copy Manual SOP Material Manual SOP Material Production another Production another entry Sales Plan Forecast entry Sales Plan Forecast Plan plan Plan plan Planning options : Planning levels : Horizon l Material MRP l Period splits l Product group l History l Versions l Materials Requirements Planning • MRP compares the requirements for end products, from Demand Management, with the current stocks and creates planned manufacturing orders Demand Program

13. What is MRP? • 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.

14. 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 materials

15. 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.

16. 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

17. 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

18. 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

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

20. 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

21. 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 20 30 Requirements MRP

22. 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