The following are the Major Configuration items explained in detail:

a) Activating MRP and Planning File Entry

b) SAP MRP Plant Level MRP Parameters Configuration

c) SAP MRP, MRP Group Level Parameters Configuration

d) Configuring SAP MRP Types

e) Configuring SAP MRP Scope of Planning for the Total Planning Run

f) Configuring SAP MRP Planning time fence and Roll Forward Period

g) Configuring SAP MRP Areas

h) SAP MRP Dynamic Safety Stock (Range of coverage Profile)

i) Configuring SAP MRP Days Supply and Receipt Days Supply 

a) Activating SAP's Material Requirements Planning (MRP)

This configuration allows you to choose the plant for which you would want to activate SAP Material Requirement Planning (SAP MRP). Activating MRP for the plant allows one to use the SAP MRP tool for the plant. SAP Transaction code OMDU and the SAP path is Logistics > Production > MRP > Planning File Entry > Activate MRP and Set up Planning File

b) Activating Planning File Entries for a Plant

Activating Planning file entry for the plant (through a variant that can be rescheduled) allows you to collect all the material in a planning file list, which has an MRP Type in the material master MRP 1 View (other than MRP Type XO)

The process of recording a planning file entry for a material, can be run periodically using a batch job scheduling method. The transaction code to set up the variant and period scheduling is OMDO and the Path for activating the planning file set up is Logistics > Production > MRP > Planning File Entry > Activate MRP and Set up Planning File.

All the entries in the planning file will have a “change indicator” specifying that a material has undergone a change (change in receipts elements or issues elements). This indicator will help you to choose only those materials that have undergone a change, through the use of planning key called “Net Change Planning” when running MRP. 

The planning file record for a material also has a “net change planning in the current horizon” field which will be set if the change in the materials receipt or issue element is valid in the planning horizon. This indicator will help you choose only those materials which have undergone a change in the planning horizon; through the use of a planning key, in an MRP run, called “Net change planning in the planning horizon”. 

SAP MRP is run at plant level or at a group of plant level (called as scope of planning), thus the MRP configuration is done at Plant level. 

The configuration done for SAP MRP at Plant level would also be true for SAP Consumption Based Planning (SAP CBP) settings. 

Transaction code OPPQ takes you in to the SAP MRP configuration called as – Plant Parameters for Material Requirement Planning. The Path which can be used is Logistics > Production > Material Requirement Planning > Plant Parameters > Carry out Overall Maintenance of Plant Parameters. 

The Transaction code for Consumption Based planning is OMI8 and the Path is Logistics > Materials Management > Consumption Based Planning > Plant Parameters > Carry out Overall Maintenance of Plant Parameters.

In the transaction code for Plant level parameters for SAP MRP, you should first input the plant and press the maintain button. 

If you have already maintained the configuration for the parameters, then it states so, if you haven’t then it simply says – “To Maintain” next to the parameter. 

Following are the parameters that need to maintain as a part of SAP MRP/CBP Configuration: 

a) Number ranges 

The number range ID’s are maintained for the following objects:

the Planned orders

the reservations,

the dependent requirements,

the simulative dependent requirements,

the purchase requisitions,

the MRP Lists,

In this section only the number range ID’s are maintained. While the actual number range is configured, for the number range ID, using a transaction code OMI2 (for the above mentioned objects created in the planning run). One can also use the transaction code OMI3 for the objects created manually in the front end.

Every number range interval, created using OMI2 and OM13, has an ID, which can be allocated to the objects at plant level, i.e., every plant can have a different number range for the objects mentioned above. 

b) Availability Check rule for Backorder Processing

As per standard SAP, the Availability checking rule for the backorder processing is “PP”, though you can have your own availability check rules created or configured. 

Every Availability checks rule (availability checking scope defined) has a set of receipts (Purchase orders, Production orders) and issues (Sales orders, dependent requirements, reservations, planned independent requirements etc) which are to be considered or not to be considered during the SAP availability checks. 

To have the checking rule work along with the configuration, you should have the Availability checking groups maintained in the material master. The Checking groups are configured to be associated with the checking rules (checking scopes). 

The availability checking rule (checking rule scope) has to be maintained, for a given SAP functionality and it has to be assigned to the availability checking group maintained in the material master. The SAP functionalities that use availability checks to check the availability of the header materials as well as components at  the plant at the time of sales order creation, the availability checks of the header material at the time of sales order delivery, the availability checks for components in production – thus reporting the missing parts list, the backorder processing etc.

c) Reporting

This configuration is used for the following purposes. 

•         To configure the objects, which are to be considered in the calculation of the “receipts days supply” like the production orders/process orders, firmed planned orders, purchase orders, assigned planned orders, firmed purchase requisitions, QM Inspection lots, reservations, safety stocks 

•         To configure the reporting of “periods totals” in terms of a defined period (day, week, month, periods as per planning calendar) of in Stock requirement list, MRP list, simulative MPR or interactive MRP

d) MRP Controllers 

This is a mandatory configuration. Here you can configure the list of MRP controllers for the plant. A MRP Controller is a person or a group of people, which is responsible for planning a material or a given list of materials. 

You have to assign the MRP controller to the Material Master MRP 1 View, so as to delegate the responsibility of the planning and evaluation of planning for that material.

e) Floats 

Floats are buffers in the total lead time, that are provided in production/process order or in the planned orders created manually or during an MRP run. The schedule margin key is used in the Material Master MRP 2 View. It is used in MRP as well as in production order. 

The floats are defined using the scheduling margin key. 

Opening period: Number of working days between the date that the order is created and the planned start date. This time is available for the MRP controller to convert a planned order into a purchase requisition or a production order. 

Float after production: Number of working days between the scheduled finish date and the order finish date; used as a float in production scheduling. 

Float before production: Number of working days between the order start date and the scheduled start date; used as a float in production. 

Scheduling release period: Number of workdays between the planned start date and the date for releasing the order. If the order release indicator is set, the production order is released by a background program that takes all dates into account.  

f) Special Procurement 

The special procurement function helps you to configure and assign special procurement to the materials which can be used during an MRP run while creating the procurement proposal.

The special procurement functions are withdrawal from alternate plant, production in alternate plant, subcontracting, direct production, phantom item planning. 

https://sites.google.com/site/sapswords/home/learn-sap-pp/sap-material-master/sap-mrp2-view 

Example: For Stock Transfer from Plant C001 to Plant C002 

Create the Special procurement key (Key number = 12 as an example) in the plant C002 with the procurement type as “F” and special procurement as “U” (Stock transfer) and the special procurement plant as “C001”. Normally when creating the special procurement key use Z, Y or X to the Key number, so instead of having Key number as 12, we could have something like Z2 or YA etc. 

Similarly for Withdrawal from Alternate plant, you could have a Configuration as below: 

g) Conversion for Planned orders 

In this configuration parameter, you can maintain the production order type or the process order type, which the system should use as default during the planned order conversion. Setting defaults in the plant parameters configuration allows the system to fix and select the order type for a plant during the conversion process. 

Note: This can be a useful tool when you are using one production order type and one process order type, but if you are using multiple production/process order types, then you should not be maintaining defaults here. 

Also for the purchase requisition conversion, you are given an option in the configuration to define the maximum number of planned orders that can be converted in to Purchase requisition. 

g) Dependent Requirements availability check

When carrying out the availability check for each of the components in a MRP BOM explosion, the system needs to know the availability checking scope rule. Again we would maintain the standard Checking rule as PP or you could alternatively configure one for yourselves. 

h) BOM/Routing Selection ID 

This configuration parameter is really important and it is mandatory to maintain one, since it helps selection of BOM and task lists in the planned orders. Though there is one more place in the planned order Scheduling parameters MRP configuration, where you can maintain the selection ID for selection of the Task lists (Routing/Recipe/Rate Routing).

A selection procedure is set to select BOM or Routing/Recipe on priorities set for the BOM usage or for the task list types and the task list status. Knowing the selection procedures allows the MRP run to select the right BOM and task list for the planned orders. 

In other words, you could have the BOM Selection being set for selection of the Production BOM Usage first and if a BOM for the material with the Usage – production (Usage = 1), is not found, you could have the system search for a BOM of universal Usage (Usage = 3).  

Similarly, you could have a task list of type Routing or Recipe or reference operation sets selected and set in priorities of selection (1st – Routing, 2nd – Reference operation sets, 3rd, which has a Status Released for all purposes or released for costing) etc.

h) Scheduling of Planned orders 

This configuration parameter is really important and it is mandatory to maintain one. It allows you to set the control parameters for scheduling of planned orders of type LA at a given plant and for a given MRP Controller. You can leave the MRP controller as “*” to have the scheduling parameters true for all the planned orders across all the MRP controllers. 

The following control parameters can be configured here:

• The Routing/Recipe Selection ID, specifying the routing/recipe that would be selected for detailed scheduling, as per the priorities set for task list type and task list status.

• The Detailed scheduling, using the task list is only carried for the scheduling Horizon mentioned, i.e., if the planned orders dates lie beyond the scheduling horizon, then the basic date scheduling is used where the in house production times from the material master is used.

• Allow Scheduling Indicator allows the planned orders to be scheduled using the detailed scheduling or basic date scheduling, either of the two, depending upon the availability of the task list and scheduling type selected for the MRP run.

•  Generate Capacity requirements indicator allows generation of the capacity requirements for the work centers and loads them accordingly. The loading of the work centers is as per the use of the work center determined through the scheduling carried out.

• The Task list selection, scheduling horizon, scheduling indicator and the capacity indicator can also be set for rough cut planning used for Long term planning purposes.

• The next configuration parameter talks about the configuration of the selection of the type of scheduling level that should be used for adjusting the basic dates of planned orders. The various options available are rate based scheduling, lead time scheduling, scheduling using takt times.

• The Adjust planned order dates configuration option allows you to readjust the scheduling results or the basic dates every time you carry out Scheduling. Though there is one more scheduling configuration option provided by the system for overwriting/adjusting the existing basic dates by the new dates arrived at, through rescheduling (using the scheduling level as mentioned).

The system not only offers an option to adjust the basic dates for the planned order arrived at by using the scheduling level set, but it also setting the dates of the dependent requirements to the operation start date or the order start date.

This configuration not only adjusts or sets the dates of the header planned order and the dependent planned orders, but it also generates capacity requirements for the same.

See below for the details of adjusting dates in scheduling and adjusting dates for capacity requirement generation: 

• You can adjust the Basic Dates of the header planned order using the scheduling level and adjust (or set) the dependent requirements to the start of the header planned order

• You can adjust the Basic Dates of the header planned order using the scheduling level and adjust (or set) the dependent requirements to the start of the respective operation to which the dependent requirements are assigned to

• You can decide not to adjust the Basic Dates of the header planned order arrived at by using the scheduling level and at the same time not-adjust (or not set) the dependent requirements to the start of the header planned order

• You can decide not to adjust the Basic Dates of the header planned order arrived at by using the scheduling level and at the same time not-adjust (not set) the dependent requirements to the start of the respective operations to which the dependent requirements are assigned to 

• You are also provided an option to configure the scheduling type – whether forward or backward scheduling. It is a normal behavior for the standard system to have this configured as “backward scheduling” so that SAP MRP (material requirement planning) never misses the customer delivery date or order availability date. An option is also provided to not-to-schedule, any orders during the breaks set in the factory calendar.

• Start date in the in the past options allows you to push the start date of the planned orders to a certain number of days in past. If the order start date goes beyond the number of days allowed, then the system uses the concept of ‘today’s scheduling” and sets the start date of the planned order to today’s date and carrying out forward scheduling there-after.

• One of the scheduling parameters is “reduction measures”, used to reduce the total order lead time in circumstances designed. You can avoid configuration of reduction measures, if you are not using it. 

i) Default Values for External Processing  

For external purchasing, one can maintain the default lead time required for conversion of Purchase requisition into purchase order, using the planned delivery lead times from the purchase info record or purchasing agreement. So as to use the planned delivery times from the purchase info record, one should also maintain the source list for the material, with the same vendor in the source list and the purchase info record. 

Using the planned delivery times from the material master or from purchase info record, is totally a decision of the consultant. It is indeed a nice additional option provided by SAP for using the lead time from info records. 

j) Planning Horizon 

Maintaining a planning horizon helps the system to plan only those demands, which fall in the planning horizon starting from today. When an MRP Run is taken, the planning horizon is number of work days as mentioned (let’s say 180 days) from today’s date; the system would not plan any orders whose start date lies beyond this horizon. 

k) Available stock for net requirement calculations 

SAP MRP offers you a choice to select the most controversial stock types, in its net requirement calculations. The stock types are – stock in transfer (stock in transfer is considered as stock at the receiving plant as it is already issued from the sending plant), blocked stock, restricted batch stock (stock of batches marked with restricted batch)   

l) Option to trigger direct Production in MRP or in production planning 

j) Allowing start date in the past 

The entire configuration that is created as a part of SAP MRP Plant level parameter in the above steps can be also set for an MRP Group. You can group materials using MRP Groups. Each of the MRP Group can have its own MRP Parameter set. You can set the MRP group in the material master MRP 1 View. 

MRP Group can be maintained using transaction code OPPR or the transaction path – Logistics > Production > MRP > MRP Groups > 

Advantage of working with MRP Groups: 

Working with MRP groups can be convenient for a plant or an organization, since by assigning the MRP groups to a set of materials, would allow planner to configure these materials (through MRP Groups) to behave in a certain manner for planning purposes. In other words, all the materials in the group would then have a unique planning method or unique planning features. Thus the organization can device multiple MRP groups with their own planning features and characteristics rather than having one set of planning features set at the plant level. The group could have its own unique:

Strategy group,

Conversion order types,

Planning horizon,

Planning time fence and roll forward periods,

BOM and task list selection ID’s,

Direct procurement parameters,

Planned order scheduling parameters,

Start number of days allowed in the past 

Availability checking groups, 

Strategy Groups 

The strategy groups can be set for a given MRP group at a given plant. The strategy group consists of a number of planning strategies assigned in a sequence of priorities. In other words, the strategy groups, groups together the relevant planning strategies of a material. If you don’t see the default strategy groups, then we would have to manually maintain the strategy groups on the materials MRP 3 view. Defaulting the strategy groups is a nice idea when the strategy groups would remain the same across all the materials which would be assigned with a given strategy group.  

For example:

A material can have the priority 1 strategy as Made-to-Stock (planning strategy 40) and then priority 2 planning strategy as Made-to-Order (planning strategy 20). Assigning this “strategy group” for a MRP group in the MRP Group Parameters configuration and then subsequently assigning the MRP Group to the material master would make the material work on a planning strategy 40 and planning strategy 20 in a sequence of priority.

The primary strategy for the material is 40 – Made-to-stock while the secondary strategy is 20 – Made-to-order, which means that every time you plan or produce a material or create a sales order for the material it will always primarily work as a made-to-stock material. Nevertheless, you can also make to material work as a made-to-order material, by changing the requirement type – “KE” of the material in the sales order procurement tab, to suit for made-to-order, which the system would allow since the material’s secondary planning strategy is made-to-order.

Configuration of SAP MRP Types 

In all probabilities, MRP Types is not something which one should configure in SAP; it is used as a standard configuration. Nevertheless, a consultant should know the importance of MRP types and the involved pre-configured parameters.

a) MRP Procedures 

MRP Procedures defines the type of MRP to be used – Reorder point planning methods, Material requirement planning or demand based planning methods, Forecast based planning methods, Time phased planning methods, MPS and the no planning procedures to mark a material with a MRP types that does not plan a material at all. 

b) Firming Type 

In the category of MRP procedure called – MRP or demand based planning method and MPS, SAP offers 8 different MRP types with Firming namely P1, P2, P3, P4 and M0, M1, M2, M3, M4. 

When working with the planning time fence, one needs to set the firming methods & the scheduling methods of the procurement proposals within the planning time fence.

c) Include External Requirements

The inclusion of external requirements in net requirement calculations is available to be set, when you are working with reorder point planning based MRP types. Actually there are 2 options in this field, i.e., include external requirements in the total planning horizon or restrict the inclusion of the external requirements only within the replenishment lead time. 

For example: 

If the external requirements are set to be considered in the total horizon (of 7 weeks) then in the today’s MRP run, the Customer demand will be considered as it falls in the planning horizon and it will reduce the warehouse stock proportionately which would trigger the reorder point planning procurement once the stock falls below the reorder point. 

If the external requirements are set to be considered in the Replenishment lead time, let’s say the Replenishment lead time is 1 week, then in that case, only in a MRP run triggered one week before the start date of the external demand, this customer demand will be considered, thus triggering reduction in warehouse stocks.   

SAP also offers an option to select the additional external requirements that should also be included in the net requirement planning calculations like the - components supplied to the vendor in a subcontracting case, reservations set for the components in a production order, reservations of components in plant maintenance orders, requirements to satisfy the Stock transfer order to another plant, stock transfer requisitions created for Stock transfer orders, requirements raised because of stock transfer delivery schedules. 

c) Forecasting for MRP 

Forecasting MRP Types have a “forecasting indicator” as obligatory, unlike other MRP types which normally have the forecasting indicator set to optional. 

Also the historical data is updated in the material master as total consumption (planned consumption plus unplanned consumption) or unplanned consumption. When the consumption is planned as per the MRP reservations, planned consumption is updated and when the consumption is not planned as per the reservation or is greater than the reservation quantities, then unplanned consumption is updated. 

In MRP type configuration, you have an option of choosing the type of historical consumption of a material to be used for planning whether total consumption (planned + unplanned consumption) or unplanned consumption. 

After choosing the historical date type, you should configure, the type of forecast requirements to be considered in MRP planning run, whether total consumption (planned + unplanned consumption) or unplanned consumption. 

The reduction method for forecast requirements is also configurable. The default is reduction by consumption.

d) Planning method 

The MRP type offers you to plan the materials in an external system, like the MRP Type X0. The indicator called the planning method allows you to choose external planning so as to plan materials in the external system. 

e) Automatic Calculations 

You can have the safety stock and the reorder point calculated automatically by the system, when you are using the automatic reorder point planning methods. In the automatic calculations the system uses the forecast data.  

SAP provides an option to plan multiple plants together or multiple MRP areas in one planning run in a sequence. Transaction code OM0E can be used for configuration or the logical SAP path – SAP Customizing Implementation Guide > Production > MRP > Planning > Define Scope of Planning for Total Planning, can be used to configure.

Step 1 – Define the Name of the Scope of planning run

Step 2 – Define the plants or MRP areas to be included in the planning run arranged in a sequence. The sequence is defined by the first field called 

Configuring SAP MRP Planning time fence and Roll Forward Period: 

The transaction path to configure the planning time fence and roll forward period is: SAP Customizing Implementation Guide > Production > Material Requirements Planning > Planning > MRP Areas > MRP Calculation > Define Planning Time Fence and Roll Forward Period  

Planning Time Fence:  

The planning time fence is the number of work days, within which you can protect the master plan (or in other words the procurement proposals of a master plan) from being disturbed or changed from any automatic changes (of an MRP Run). The procurement proposals are firmed so as to protect them from any changes. The firming of the procurement proposals (planned orders, purchase requisitions, delivery schedules) in the planning time fence prevents the proposals in the time fence from being adopted in the next planning run.

In other words, in the planning time fence, the system does not create or delete any procurement proposals nor does it changes the existing proposals.

The system calculates the time fence from today’s date plus the “number of days mentioned as planning time fence” in the material master or in the MRP configuration (where you can define the planning time fence for plant or for a given MRP group). It is needless to say that any new requirements are not included in this time period nor the existing requirements are changed. MRP carries its usual planning outside this fence without interrupting this fenced period.

The transaction path to configure the planning time fence and roll forward period is: SAP Customizing Implementation Guide > Production > Material Requirements Planning > Planning > MRP Areas > MRP Calculation > Define Planning Time Fence and Roll Forward Period

Planning Time Fence: 

The planning time fence is the number of work days, within which you can protect the master plan (or in other words the procurement proposals of a master plan) from being disturbed or changed from any automatic changes (of an MRP Run). The procurement proposals are firmed so as to protect them from any changes. The firming of the procurement proposals (planned orders, purchase requisitions, delivery schedules) in the planning time fence prevents the proposals in the time fence from being adopted in the next planning run. 

In other words, in the planning time fence, the system does not create or delete any procurement proposals nor does it changes the existing proposals. 

The system calculates the time fence from today’s date plus the “number of days mentioned as planning time fence” in the material master or in the MRP configuration (where you can define the planning time fence for plant or for a given MRP group). It is needless to say that any new requirements are not included in this time period nor the existing requirements are changed. MRP carries its usual planning outside this fence without interrupting this fenced period. 

The planning time fence is the number of work days, within which you can protect the master plan (or in other words the procurement proposals of a master plan) from being disturbed or changed from any automatic changes (of an MRP Run). The procurement proposals are firmed so as to protect them from any changes. The firming of the procurement proposals (planned orders, purchase requisitions, delivery schedules) in the planning time fence prevents the proposals in the time fence from being adopted in the next planning run. 

In other words, in the planning time fence, the system does not create or delete any procurement proposals nor does it changes the existing proposals. 

The system calculates the time fence from today’s date plus the “number of days mentioned as planning time fence” in the material master or in the MRP configuration (where you can define the planning time fence for plant or for a given MRP group). It is needless to say that any new requirements are not included in this time period nor the existing requirements are changed. MRP carries its usual planning outside this fence without interrupting this fenced period. 

It is logical that any procurement proposal lying outside this fence would start moving in to the fence one by one; when the fence moves ahead on the time scale. When they move in to this fence, they are automatically firmed for protection. 

Firming for automatically created procurement proposals: 

The automatically created procurement proposals in the MRP Run are not firmed by the system, so that they are available for adjusting dates and quantities in the next planning run, in cases where there is change in BOM or task list. 

You can though manually firm the planned orders individually or collectively using transaction code MD19 

Note - Automatically created planned orders in the planning time fence are only remain firm till they are in the planning run. 

Firming for manually created procurement proposals:

For manually created or changed procurement proposals or even when you reschedule the planned order in the graphical planning table, the system always marks them with a firming indicator. Though you can remove or delete this firming indicator. 

Firming for component’s planned orders: 

In case of a planned order, you can manually firm it by selecting the “firming planned order Indicator” in the planned order header. And in order to make sure that the BOM levels below are not exploded or changed in a planning run, you have to set the “firming components indicator”. 

See the below Example – Planning time fence is 3 days.    

The Roll Forward Period adds the functionality of automatic deletion of firmed planned orders, from the master plan. It also creates new proposals to cover any requirements pending during the MRP run. This period can be defined for number of days in past or future. The system deletes all the firmed planned orders that lie before the roll forward period. 

Using the roll forward period, you can have the system delete all useless old firmed planned orders, which otherwise the system would never had deleted, since they were firmed. This allows for reorganizing the planned orders. 

Long ago, SAP MRP was only at the plant level or at MRP controller level (activated through a user exit). Then SAP came up with the concept of running MRP at MRP areas. You can define your own area for which you want to run MRP without disturbing other areas. 

Running MRP for MRP Areas: For running MRP at a MRP area, you would have to create a scope of planning in MRP configuration, which contain the MRP area or a set of MRP areas arranged in sequence of planning. 

Assigning MRP areas: To have the “MRP Areas” work, you have to activate the MRP areas and then create them and then assign them to the material master MRP 1 view. If a MRP area is not assigned to the material, then it will work as per the plant level MRP area. 

Configuring MRP areas: 

Step 1: Activate MRP Area: Use the transaction path: SAP Customizing Implementation Guide > Production > Material Requirements Planning > Master Data > MRP Areas > Activate MRP for MRP Areas 

Step 2: Define MRP Areas: Use transaction path: SAP Customizing Implementation Guide > Production > Material Requirements Planning > Master Data > MRP Areas > Define MRP Areas   

Plant MRP Areas: You can create one MRP area for several plants, so that when you run the MRP for this MRP area, the run is for all the plants configured in the MRP area.

Storage Location MRP Areas: You can create MRP areas for several storage locations at a plant. You cannot use one storage location in multiple MRP areas.

Subcontractors MRP Areas: You can create MRP areas for several subcontractors for a plant. You cannot use one subcontractor in multiple MRP areas. 

The Range of coverage profile is configured for the use of Dynamic safety stock for a given material. The range of coverage configuration contains the parameters for the calculation of the dynamic safety stock. The dynamic safety stock is a stock calculated based on the average daily requirements for a period rather than the actual requirements over the period, therefore it is more statistical value rather than an absolute value. 

Safety stock as we know is used to cover the fluctuations in the requirements, so is the dynamic safety stock, the only difference being, the safety stock is an absolute value provided directly for a material whereas the dynamic safety stock is calculated by the system on the basis of the coverage period and average daily stock calculated internally by the system. 

The Dynamic safety stock is calculated in every planning run.

The transaction path is: SAP Customizing Implementation Guide > Production > Material Requirements Planning > Planning > MRP Calculations > Define Range of Coverage Profile (Dynamic Safety Stock)

Range of coverage Configuration: 

Configuration for calculation of average daily requirement for a period 

Period indicator - Indicate the type of period, whether week or month or according to PP planning calendar. (Let’s say it is W – Week)

Number of Periods – Number of periods used to calculate the average daily requirements (Let’s say it is 13 Weeks) 

Type of Period length – It defines the number of days in the period, if the period length is in terms of workdays, then the factory calendar work days are considered, if the period length is in terms of calendar days then it is considered in terms of Gregorian calendar, and if it is terms of standard days, then you would have to enter the number of days in a period in the configuration (Let’s say that the configuration was done with workdays and the factory calendar has 7 days per week) 

Therefore Average daily requirement =

= Requirements in the period (Requirements in 13 Weeks – Lets say 910 Units) / (Number of Periods – Lets say 13 Weeks) * (Number of days in the period – Lets say 7 days)

= 910 / (13*7)

= 10 Units

Configuration parameters for calculation of Dynamic Safety Stock for the Range of Coverage 

You can define 3 different range of coverage – minimum, maximum, and target range of coverage, which is used to calculate 3 different stocks using the average daily requirements (range of coverage multiplied by the period length). The Target range of coverage defined here would be used to calculate the Dynamic Safety Stock for the period of the coverage.

 The Period of the coverage is specified in the configuration. The coverage’s and the periods for which they should work for, are defined for 2 separate period lengths and the 3rd period length is for the rest of horizon.

In the example, we have defined the safety stock to cover a period of 7 days (minimum, target and the maximum range of coverage). The minimum, target and the maximum stock is calculated for the average daily requirement over the respective coverage periods.

You can check the minimum, maximum, target stock levels, minimum range of coverage, maximum range of coverage, target range of coverage in the MRP List or Stock requirements list’s “Period Total Display” Section.

As per our example, for the first period of 13 weeks, all the 3 stocks levels – minimum, maximum, and target stock levels would be 70 Units and for the next period of 26 weeks it will be 70 units as well and for the rest of the horizon it will be 70 units again.

Normally when the available stock falls below the minimum stock level, SAP planning run, would immediately create planned orders to suffice at least the target stock level. For example if the minimum stock level is 30 and the maximum is 80 and the target stock is 50 units, then if the available stocks fall below the 30 units mark, SAP creates a procurement proposal for 50 units to reach back to the target stock level. Whereas in the example below, all the 3 stocks types are 70 units, therefore when the stocks fall below the 70 units, the system will try to raise a procurement proposal to reach back to 70 units. 

As per our example in the configuration screen shot – 

Step a) Demand for 8 Weeks = 800 

Step b) Average Daily Requirements

= 896 Units of Demand for 8 Weeks / (8Weeks * 7 Days Per Week)

= 896/(8*7)

= 896/56

= 16 Units

Step c) Calculation of Safety Stock for the coverage period

As per our example in the configuration screen shot –

For the first period, when the stock falls below 32 units (minimum Stock Level), the SAP MRP run would create the procurement proposals (Let’s Say planned order) for a quantity to suffice at least the target safety stock level or the dynamic safety stock level = 8 Units. 

The days of supply is not a mandatory configuration, you can only configure the days supply if you feel the SAP pre-configured ones are not what you want.

SAP offers 2 types of evaluations in SAP, the days supply and the receipt day’s supply. 

In the SAP MRP Evaluation transactions such as stock requirement list or MRP list, the days supply would calculate the number of days on the time axis, till the material requirements can be satisfied purely by the current available stock.

While the Receipt Day’s supply would indicate how long would the current stock and the expected receipts would cover the requirements. There are 2 receipt day’s supply evaluations offered by SAP called as the receipt day’s supply 1 and receipt days supply 2. SAP offers a configuration to select the receipts elements for receipt day supply 1 and 2 evaluations. There is also an option to have the receipt day’s supplies to be calculated when the stocks fall below the safety stock or below the current available stocks.

The days supply values or the receipt days supply values can be correlated with the range of coverage concept. These tools comes with traffic lights – red, yellow and green which offer warnings to the MRP Controllers/users and lets him/her strategically know when the material stock would be totally consumed out, which would help the planner to foresight and take necessary actions in advance.  

The transaction path for the same is SAP Customizing Implementation Guide > Production > Material Requirements Planning > Evaluations > Define Receipt Elements for Receipt Days' Supply

All the site contents are Copyright © www.sapsword.com and the content authors. All rights reserved.

All product names are trademarks of their respective companies.  The site www.sapsword.com is in no way affiliated with SAP AG. Every effort is made to ensure the content integrity. 

Information used on this site is at your own risk.

 The content on this site may not be reproduced or redistributed without the express written permission of

www.sapsword.com or the content authors. 

Sitemap                                                                                                                                                                                                                                                                                                                                                       Sitemap