Over view MRP

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MATERIAL REQUIREMENT PLANNING

Apr 2015

By : Syed Mateenuddin

3Copyright © Capgemini 2013. All Rights Reserved

January 2013and

What is MRP

MRP is Materials Requirement Planning

MRP helps in answering the following questions :

What items are required?How many are required?When are they required?...


January 2013and

History of MRP

MRP in its very basic form dates back to as early as 12 th – 16th century.We see MRP everyday in our Kitchens.Wars were one of the main reasons for development of MRPThe huge uncertanity and rapidly fluctuating situations in Wars required

proper and quick response in terms of planning, which primarily was soldiers.

By late 16th century, European armies started numbering more than 100,000 soldiers. Improper planning for food and water many a times let to self defeat of armies.

WW II was the turning point in history of planning. Multiple sub wars at different locations gave rise to the need to plan and deploy the right number of soldiers, ammunition, food, horses etc at the right place and time. It also gave the necessity to calcuate the quantity required to be on battle field for X days as well as to be prepared if the war prolonged.


January 2013and

History of MRP

In 1964, Toyota came up its Just in time production system.This necessiated its suppliers to come up with accurate strategies to meet

demand.Joseph Orlicky was the first person to come up with the modern MRP

system. It was first implemented at Black and Decker in 1964.


January 2013and

Organisational Level in SAP


January 2013and

Output of MRP

The output of MRP is either a purchase requisition or a planned order.

For inhouse manufactured materials, MRP run results in a planned orer.Planned order will then be converted to a production order ( traveller)

For externally procured items, MRP run results in a Purcase requisition, which is then converted to a purchase order.


January 2013and

Order to Cash Cycle & MRP


January 2013and

MRP , Procurement and Sales


January 2013and

Types of MRP

Materials planning

MRPConsumption

based

Reorder point Planning

Does not consider Demand. Just stock and ROP

Driven by Demand from sales order or PIR


January 2013and

Output of MRP

The output of MRP is either a purchase requisition or a planned order.

For inhouse manufactured materials, MRP run results in a planned orer.Planned order will then be converted to a production order ( traveller)

For externally procured items, MRP run results in a Purcase requisition, which is then converted to a purchase order.


January 2013and

Types of MRP

Re-order Point Planning:MRP Type is “VB”Used for B and C class materials / consumables.PR is generated if stock falls below re order point.

STOCK REORDER POINT RESULT OF MRP

200 200 No action

250 200 No action

199 200 PR created

100 200 PR created

0 200 PR created


January 2013and

Types of MRP

Demand Based planningMRP Type is “PD”Used for A class materials / BoM itemsPR is generated based on demand

STOCK (A) DEMAND (B) SAFETY STOCK ('C) (B+C) - D RESULT OF MRP

0 0 10 10 PR created


10 0 5 -5 No Action

10 5 5 0 No Action

10 0 10 0 No Action



January 2013and

Steps in MRP


January 2013and

How Much to Order ( Lot Size)

The PR or planned order quantity is decided by the lot size maintained in material master.Primarily we use lot sizes FX( Fixed lot) , EX (lot for lot) and MB (Monthly Lot)


January 2013and

Lot Size

Fixed Lot : FXHere the lot size is fixed in Material master. Example 1 : Demand is 23 and Fixed Lot =50 PR created for 50Example 2 : demand is 60 and Fixed Lot =50 Two PRs created for 50 ea

Lot for Lot : EXHere system clubs the requirements and creates a single PR or planned order.Example : If total demand is 73pcs, then MRP creates a singel PR or planned order

for 73pcs.

Monthly Lot


January 2013and

Stock /Requirement List

MD05 gives results of last MRP run.MD04 gives the current stocks Vs Requirement data, taking into account the latest Stock and demand situation.Other transactions can be accessed from MD04


January 2013and

BoM and Its Explosion


January 2013and

MRP relevant Scrap


January 2013and

Demo On SAP System


January 2013and

Over view MRP

Documents

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