Last Step  <<< BOM Explosion to calculate the quantities of header material and its dependent requirements.

First Step >>> Configuring SAP MRP

SAP MRP Analysis – Stock Requirement List 

At the end of Step 10, SAP MRP run would be complete and ready for evaluation.   

This section would illustrate a few examples and help you understand how MRP works. The examples are detailed and can be of great help for a starter as well as an experienced consultant. 

A stock requirement list is the most updated report of a given material/materials. Whenever there is a receipt or issue added to the material, the same is updated in stock requirement list at real time. Also whenever the material is planned and the procurement proposals are added for the material, the same is updated in the stock requirement list immediately on a real time basis.

This list is an evaluation list for a material or for a set of material. 

Individual material stock requirement at a plant, can be accessed through the transaction code is MD04, while the collective stock requirement list for all the materials of a given MRP controller or for a given vendor or a given production line or a material class, or for all the materials in a product group, can be accessed through the transaction code MD07. 

SAP also offers an MRP list, which is displayed right after the planning is carried out for the material. MRP list is generated, only if, the creation indicators on the planning selection screens opt for a MRP list. MRP list contains the results of the planning run and it is not a real time situation list of a given material or materials. 

If you access the MRP list after the planning run is carried out, using the transaction codes MD05 (individual material at a plant) or MD06 (collective display for multiples of a given MRP controller, product groups, or vendors), it will display the planning situation as per the last MRP Run (it will mention the time and date of the last planning run on the top of the screen). 

It should be noted that all the functions/tools/buttons that are explained in the below given examples are for Stock requirement list, but they hold true for MRP list evaluation also.   

1st Example: Manual Re-order Point Planning 

Details of the example: 

Material – TEST_MATERIAL @ Plant – C002

Fixed Lot Size = 105

Rounding Value = 10

Safety Stock = 30

Re-order Point = 80 

Reorder point Planning considers the following items during the planning run to evaluate the Available Quantity for calculating the shortages = 

Plant Stock

+

Open PO or Firmed Planned order or Purchase Requisition or Open Purchase order 

Note that – Safety stock is not considered as a demand which is to be satisfied. 

Stage 1 – No Transactions Made on the Material: 

a)  Stock Requirement List before MRP Run: 

Current Stock = 0, Safety Stock = 30 

b) Stock Requirement List after MRP Run: 

In our example, the plant stock = 0, and there are no receipts as yet, MRP will try to create a planned order for the Fixed quantity of 105 (without entertaining any rounding as the lot size is marked to be a fixed lot size) 

Stage 2 – Adding Receipts to the Material 

a) Stock Requirement List before MRP Run: 

Now, we would add some stock, and a firmed planned order for the material. 

Add Stock = 15 Units 

Add Firmed Planned order or order type NB = 45 Units 

Total Receipts = 60 Units 

b) Stock Requirement List after MRP Run: 

MRP, in its run added the firmed receipt of: 

Stock = 15 +

Firmed planned order receipt through planned order 0000082031 = 45

_________________________________________________________________ 

= 60 Units

Therefore to cover these 60 units, it created a planned order along with consideration of the fixed lot size = 105 units, though there is already a planned order 0000082030 of 105 units to cover the shortages, so MRP does not create any more. The screen shot below shows the same.

Though if you add a Demand (Planned independent requirement), say for a quantity of 200 units, the material status after the MRP run will look something as below – You can notice that the MRP run does not consider any incoming demand, thus, it does not plan from the shortages arising from such demands. See the screen shot below:

Therefore it is clear that the system considers the receipts for the material and at the same time does not consider the safety stock as a demand. Thus Re-order point theory is justified.

The planned 

2nd Example: Simple Made to Stock example with MRP Type PD 

Details of the example: 

Material – TEST_MATERIAL @ Plant – C002

Lot sizing procedure = MB = Monthly Lot size

Min Lot Size = 30

Max Lot Size = 95

Rounding Value = 10

Safety Stock = 30

Planning Strategy = 40 = Made to Stock 

Stage 1 – Adding Receipts to the Material 

a) Stock Requirement List before the MRP Run: 

If you check the screen shot below for the example created, there is a: 

Current Material Plant Stock = 15

Safety Stock = 30 (It’s a Demand of 30 units, so 30- )

Expected Receipt through a Firmed Planned order (type NB) = 100

Issues on a monthly basis are = 200 from Sept 2010 & Oct 2010 

c) Justification – Post MRP run – 

Point 1: The Safety stock (demand) is satisfied partially by the plant stock leaving a demand of 15 units. 

Point 2: The Firmed Receipt (shown by a star against the planned order number in the MRP element) satisfies the left over demand of 15 units and brings down the plant stock to 85 Units. 

Point 3: The MRP Run should now try to satisfy monthly demands of 200 units, with 85 units already in hand; therefore it creates one planned orders of 95 units (maximum lot size is 95 units), which leaves an in-hand stock of 180 units, with 20 units still left to satisfy, therefore it creates one more planned order of 30 Units since the minimum Lot size is 30 units and it cannot create anything lesser than that. 

Both the planned orders are placed at the start of the month, since standard configuration in the case of monthly lot size, allows the planned orders to be placed at the start of the month. 

With the last planned order of 30 units, the available stock increases to 210 units, which would be consumed in the month of September, leaving an available stock of 10 units. 

Point 4: With an available stock of 10 units and with an in-hand demand of 200 units still to be satisfied for the month of October, the system creates one planned order of 95 units (leaving an available stock of 105 units) and one more planned order of 95 units, thus satisfy the total demand of September (leaving the available stock at the end of September as zero). 

3rd Example: Simple Made to Order example with MRP Type PD: 

Details of the example:

Material – TEST_MATERIAL @ Plant – C002

Lot sizing procedure = EX = Lot of Lot 

Min Lot Size = 30

Max Lot Size = 95 

Rounding Value = 10 

Planning Strategy = 20 = Made to Order 

Stage 1 – Stock Requirement list before adding any Customer requirements

a) Stock Requirement List before the MRP Run:

Stage 2 – Adding Customer Requirements 

a) Stock Requirement list before SAP MRP Run: 

Now, we will add customer requirements through a sales order. The Stock requirement list will show the customer requirements. At this point of time, the MRP run has not been carried out. 

A Sales order has been added with one line item - 0010005315/000010. The MRP Element “CustSt” shows that for the given sales order line item, there is no stock in inventory. Also note that the free stock is 15 for the product, which is not assigned to any Sales order or customer. The MRP Element “CusOrd” specifies the demand along with the sales order number, the line item number. 

It is also important to note that in the case of a made to order, the MRP run never considers the stocks in storage location which are not assigned to this particular sales order line item. 

b) Stock Requirement list after SAP MRP Run:

c) The MRP Run can be explained as below:  

Point 1: The MRP Run does not consider the inventory stock; it only considers the sales order/line item stock if any (any stock belonging to the sales order line item which is already produced against the sales order line item) 

Point 2: The Minimum Lot size and the Maximum lot size conditions are also not adhered to, since the lot sizing procedure is EX and the scenario is made-to-order. 

Point 3: The Planned order which is created is also linked to the sales order, shown by the planned order assignments below. 

Point 4: If you thinking about dates of the sales order availability or delivery date, the next example in this section would explain the same in detail.

4th Example: Simple Made to Order example with MRP Type PD: 

Details of the example: 

Saleable Material – TEST_MATERIAL @ Plant – C002

Lot sizing procedure = EX = Lot of Lot 

Min Lot Size = 30

Max Lot Size = 95

Rounding Value = 10 

Planning Strategy = 20 = Made to Order 

In-house Production time = 2 days (lot size independent) – Used for Basic Date scheduling 

 Dependent Material – TEST_COMPONENT @ Plant – C002

Lot sizing procedure = MB = Monthly Lot size  

In-house Production time = 2 days (lot size independent) – Used for Basic Date scheduling 

Case: Assume a case that the sales order was ordered on 17th October 2010, and after an MRP Run, planned orders are created as shown below: 

a) Stock Requirement list after the MRP Run: 

b) Explanation o f MRP Run: 

Point 1: The Customer requirement is created for a delivery date of 17th October 2010 – 17:10:2010; therefore with a in-house production time of 2 days, the MRP Run creates a planned order starting on 15th October 2010 (15.10.2010) for a quantity of 70 Units. Standard SAP MRP Run schedules the sales order requirements using the backward scheduling methods (though you have an option to change that). 

Point 2: If you add the Route timings and other delivery related lead times, it will increase the material availability dates in the sales order, pushing the start time of the order much before 15th October. 

Point 3: Again it is needless to mention that the made-to-order scenario does not consider the stored inventory. 

Viewing the planning situation for dependent levels:

In the stock requirement list it is also possible to view the dependent levels, thus allowing you to evaluate all the levels for a product and their planning situation.

Keeping your cursor on the planned order (keeping your cursor on the procurement proposal) you should press the “order report” button the screen to view the entire hierarchical planning report. 

Pressing the Order report Button   would open up the planning situation for all the dependent requirements, as shown below:

Explanation for the dependent material – TEST_COMPONENT 

Point 1: The lead time in the material master for this product is 2 days and the lot size is daily lot size, because of which the SAP MRP Run has created one planned order for the date of 13th October 2010, with the planned order finishing on 15th October 2010, so that it can be used to start the manufacturing of the higher level material on 15th October as planned.

Point 2: Since the dependent component is an externally procured material, the system has created a planned order of type NB, showing the description of the planned order in the MRP Element data as “0000082064/STPO” 

Viewing the MRP Elements detail: 

Pressing the magnifying glass next to the MRP element allows you to see the MRP element in detail, for example, if you wish to see the planned order 0000082064/STOP, then you should either “double click on the planned order” or press the “magnifying glass” for the record in stock requirement list. Pressing the glass, will open up the object overview for you, where you can choose whether you want to check the pegging details or whether you want to change the object or display the object.

 Viewing the Pegged requirements: 

Pegging of requirements, gives you an overview of the higher level elements or requirements which have given birth to the specific level and the specific requirement on this level, which is in question. In short it shows you the parent material levels which have flown in the requirements to the dependent level in question. 

If you try to evaluate the pegging requirement for the highest level itself, the system shows the highest level. Logically there would be no parent level for the highest parent level, thus absurd. 

The pegging requirement is the button with the hierarchical structure shown on it, with an arrow directing upwards specifying a pegging report. 

In the pegging report, if you press the “Order Route”, you would get the details of the higher levels and the entire report with dates and quantities that explain the need for the planned order right from the level you have chosen to the highest level. 

In our example, if we demand for the pegging report on the component TEST_COMPONENT, we would get the following pegging details, and further pressing the “Order Route” button would give access to the planning details of all the higher levels which have given birth to the planned for the material – TEST_COMPONENT. 

Order Route report as shown below –

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