MRP 1 View

The MRP 1 View is a place holder for defining the Planning Contents methods and lot sizing procedures of a give material at a plant/storage location level. If you are going to have a particular material planned in SAP, then you can go ahead and create a MRP views (MRP 1, 2, 3, and 4)

1.0 MRP type

The MRP Type Key determines whether and how the material is planned. You have the following options

1. PD - Relevant for Material Requirement Planning 2. ND - No Planning in SAP 3. VB - Manual reorder point planning (Consumption based planning) 4. VM- Automatic reorder point planning (Consumption based planning) 5. VV - Forecast based Planning 6. X0 - External Planning i.e., APO or BAAN or I2 or MES or any other external planning system.

MRP types can also be configured to the requirements, but most of the times, standard MRP types are used.

Lateral Thinking:

Step 1: As a consultant you have to decide whether a particular material needs to be planned in SAP.

Step 2: Then decide the type of planning.

MRP Types can be classified into 2 Major Types or Leagues:

a) Materials for Consumption based planning:

For materials whose planning is based on consumption or for materials which are really not expensive or which are really not monitored by finance and the costing teams.

This is mostly used for Raw Materials.

This type of planning is for Materials which are procured based on their consumption. Methods like Reorder Point Planning, where procurement is triggered after the stock falls below certain levels is the most widely recognized consumption based planning.

The Following are consumption based MRP types:

VB - Manual reorder point planning VM- Automatic reorder point planning

b) Planning not based on Consumption: Planning Based on Demand:

For materials whose planning is not based on the consumption levels or materials who are to be procured on demand only. These materials are those whose consumption is monitored by the finance team and they are really important for the company. These materials are expensive materials.

This type of planning is mostly used for expensive and monitored Raw Materials and for planning of the manufactured products.

Demands coming from Sales order or planned independent demand for semi-finished materials, finished materials or even the most expensive raw materials are planned using Material Requriement Planning.

Illustrative explanation of MRP Types:

See the table below:

Material category Criteria 1 Criteria 2 Criteria 3 MRP type preferred Raw material without

consumable based planning

Expensive/purchase is

monitored Consumed lot

by lot Purchase/ issue

is planned

Then use normal MRP/MPS type

planning

Raw material with consumable based

planning Not really expensive

Consumed lavishly

Purchase/ issue is not really

planned

Use consumption based planning such as

reorder/Forecast based planning

Manufactured material with lot by lot consumption

Expensive & production is

monitored Consumed lot

by lot

Produced by MTS/MTO

scenario

Then use normal MRP/MPS type

planning

The Material requirement planning is mostly carried out for high value materials like the assemblies, subassemblies or the high value procurement materials whose procurement quantities are planned based on the incoming demands. For high value materials, the planning is monitored and production/procurement is ordered once the higher levels demands arrive.

On the other hand, consumption based planning is carried out for low value materials whose planning methods can be restricted to consumption based methods like the reorder point planning (with putting in a lot of efforts in to planning strategies).

The below screen shot shows the various MRP types which are offered by SAP:

1.1 Material Requirement Planning - MRP Type "PD"

The planning is carried out for the quantities planned through planned independent requirement or quantities planned through incoming sales orders (made-to-order or made-to-stock). The planning is done with respect to the master plan.

The planning process does not consider any forecast information or historical consumption patterns. Material planning is done only for absolute requirements/demands on hand. The available stock is determined by the planning run (that is required to meet the demands) by including the following in an equation as shown below

Plant stock (considered as receipt) + scheduled receipts from production and purchase - all the demands from sales order, material reservations and planned independent requirements.

If the available stock does not satisfy the demand then procurement proposals are raised to cover the demands. Alternatively we can interpret it as - fulfillment of the incoming demands by all the receipts.

1.2 Manual Reorder Point Planning - MRP Type VB

Consumption based planning is a type of planning which is triggered based on consumption of stock. It can based on the past consumption history based on a forecasted value or it can be based on the current consumption levels. The best example of consumption based planning can be Reorder Point Planning, where the planning for a given material is triggered when the stocks fall below a reorder point. On the other hand you can also have a forecast based planning where planning is carried out based on forecasted figures for the material (forecast based on historical data)

In the case of Manual Reorder Point Planning (MRP)

When the Plant stock & firmed receipts for a given material fall below reorder point, the planning for the material is triggered (a planning file entry is created). For this to happen, you would have to enter the Reorder level manually in MRP 1 view of the material master (as in the case of manual Reorder Point Planning) or the reorder point can be automatically calculated by the system (as in automatic Reorder point planning)

In the Reorder Point Planning, we usually maintains a safety stock" (entered manually in MRP 1 View of the material master - though not mandatory) to use it as handy stock in the period when the order is placed with the vendor and the material is being transported to the plant - material is on its way to the plant or warehouse (this is called replenishment lead time). The Safety stock can also be calculated automatically by the system using the "Dynamic Safety Stock" concept. You should also maintain the replenishment lead time, as accurately as possible in the material master.

In Re-order point planning, the incoming demands are not considered as issues, in other words the incoming demand plays no role in planning or creation of procurement proposals. MRP waits for the cumulative of the "Stock + Firmed receipts" to fall below the re-order point so as to trigger creation of a procurement proposal. The procurement proposal is created for a quantity equal to the Reorder point or equal to a fixed lot size maintained in the material master. If a procurement proposal already exists for the material with quantities greater than the proposed quantity (a manually created one), the system would not create a new

one. It is always recommended to use fixed lot sizing procedure so that every time the stock falls below the reorder point, the system can procure the fixed lot size, instead of using its own planning brains and ordering the quantity mentioned in the reorder point.

For example, if for a given material which is set for reorder point planning, with a reorder point of 80 Units, the system would try to create a planned order once the stocks falls below 80 Units. Assuming that the current stock at any given point in time is 50 Units and the firmed receipts are 20 Units, making it 70 Units, which is still well below the 80 unit's level, in which case the system would create a planned order of 10 more units to reach back to the level of 80 units.Now if you have a "Fixed Lot Sizing" procedure" set in the material master, for a 100 Units, the system would always create a planned order of 100 units.

1.3 Automatic Reorder Point Planning - MRP Type VM

In the case of Automatic Reorder Point Planning (MRP Type VM) - a type of consumption based planning, the system calculates the recorder point and the safety stock using the past historical consumption data to derive the future consumption patterns. In this case you would need to extend the material master for the forecast view with a valid forecasting method selected.

In the net requirement calculations, the available stock is determined as equal to the plant stock and the firmed receipts from purchase and production. Net requirement calculations do not consider the demand from sales order or from planned independent requirements or from material reservations. If the available stocks fall below the reorder point, procurement proposals are raised.

1.4 Manual/Automatic Reorder Point Planning with External Requirements - MRP Type V1/V2

The only difference between the reorder point planning method and the reorder point planning methods with external requirements is that, the Sales order requirements and the requirements from manual reservations are also included in the formula that is used to calculate the available stock. These external requirements can be considered for the period within the replenishment lead time or within the total horizon, this option can be configured in the configuration for MRP procedures. .

1.5 Forecast Based Planning - MRP Type VV

Another form of Consumption based planning is "Forecast Based Planning", in which the historical consumption data is used to extrapolate the future consumption patterns, which are directly used as requirement figures in the next planning run. The forecast is suggested by the system periodically, i.e., on a weekly, daily, monthly basis or as per accounting periods.

You can specify the number of historical periods and the future forecast horizon (periods) for each material. In the planning run, the forecasted requirements are made to be available at the start of the period specified (week, month or day etc) and then you have an option to further divide/split these requirements to a finer detailed period pattern through the use of Splitting Indicator in MRP 3 view. The splitting Indicator can be configured in the following path - Logistics > Production > MRP > Forecast > Define Splitting of forecast requirements for MRP.

The forecasted requirements should be covered by the plant stock + scheduled firmed goods receipts (from purchase or production). Net requirement calculations do not consider the demand from sales order or from planned independent requirements or from material reservations. Only demands from the forecasted figures are considered. If the available stocks fall below the forecasted requirements/demand, for the period, procurement proposals are raised.

Safety stock can be considered in the net requirement calculations Available stock that is left over after the planning run calculations = plant stock - safety stock + firmed receipts from purchase or production - Forecasted requirements/demand.

Another way of interpreting the same is that, the receipts should cover the demands from forecasts. If the receipts cannot cover the demands from forecast, then the system raises procurement proposals.

2.0 MRP Group

Using the MRP groups you can group materials which would have the same planning parameters.Use of planning parameters available at the plant level would have all the materials in the plant adopt to the same planning parameters. MRP Groups allows you to have different set of planning parameters, which once assigned to the materials helps these materials to get planned in varied specified ways as described below:

These control parameters include, the planning strategy group, the consumption mode, the planning horizon, Rescheduling Horizon, Planning Time fence, determination strategies for issue storage location, Order type to be used for conversion of planned orders, availability checking rule, Safety Stock, whether start is allowed to be in the past etc. Lateral Thinking As a consultant you have to think whether the materials needs to be grouped in groups which define varied the planning parameters or you are happy with using the plant level planning parameters for all the materials. If you don't have MRP groups specifying grouping of materials with similar planning concepts, then the system assigns these materials with plant specific planning parameters.

3.0 Reorder Point

Re-order point planning is a special procedure in materials planning under the heading of consumption based planning. If the reorder point is greater than warehouse stock, an order proposal is created by materials planning. Manual reorder point planning, the logic here is more attentive towards maintaining the stock levels rather than the (Net) requirements for the material.

For example you have a stock of 100 KG and the Reorder point value is say 150, then the system creates a proposal for the balance 50 kg even though there may / may not be requirements for this ordered qty. At the time of procurement the system would procure according to the lot sizing procures defined for the material, i.e., if the lot sizing procures suggests min lot quantity as 60 kg; the system would procure 60 kg, instead of 50 kg.

Illustration of the Reorder Point Planning:

4.0 MRP Controller

It is a Configurable Field. It has to be configured in IMG. MRP Controller specifies the absolute three digit code of the MRP controller responsible for material planning for the material. MRP controller is the person responsible for a group of materials in a plant or company. A material that takes part in material requirements planning must be allocated to an MRP controller. This allocation helps you to evaluate or run MRP for a controller. . Lateral Thinking

You can run or evaluate MRP for a plant or material at a plant using the standard SAP Transaction codes MD01 or MD02 (running MRP at Plant or Material-Plant level or MD04 (Evaluation at material plant level). But it would be interesting to know that you can also run a MRP run for a MRP controller activating a standard User-Exists in the system.

7.0 Lot size (materials planning)

It is a Configurable Field. It has to be configured in IMG in the MRP section of the Logistics Production area. Normally consultants avoid configuring this field and they use it as it is. Lot Sizing Key determines which lot-sizing procedure the system uses within materials planning to calculate the quantity to be procured or produced for the material. Lot Sizing procedure in material requirements planning is used to calculate the order and production quantities (lot sizes).

Types of Lot sizes:

7.1 Static Lot Sizing Procedure: Static Lot Sizing procedure means that the lot size is static and it is not be clubbed periodically or for optimum lot size calculations. EX is the most commonly used, which means lot for lot quantity. Which means the lot size is equal to the requirement quantity and it is not be clubbed periodically or for optimum lot size calculations. FX is used for Fixed Lot Size and HB is used as a lot size to replenish stock to the maximum level.

7.2 Period Lot Size Procedure - The clubbing of requirements on a daily basis or a weekly basis or on a decided periodic basis. TB is used if you want to carry out Daily Lot Sizing; WB is used for Weekly,

As per standard SAP, the material is always planned in the start of the period. For example if the material is planned with a weekly- lot-size, then the required planned start date will be in the start of the week. Nevertheless through configuration, you can have it starting in the end of the week if required. There are many other options of starting and ending of the dates for the lot size planning.

8.0 Minimum lot size It is the Minimum Procurement quantity for the material at the given plant and storage location defined.

For example, if the Minimum Lot size is 100 kg and the required Quantity is 80 kg, then the system will create one planned order of minimum 100 kg in number {if the Plant/Storage location stock for that material is Zero}.

9.0 Maximum lot size It is the maximum Lot size for a Procurement quantity. If the Maximum Lot size is 80 units, then the

maximum planned order qty cannot be more than 80 units in any case.

For example, if the required quantity through a demand is 120 kg, then the system will create two planned orders of 80 kg & 40 kg {if the Plant/Storage location stock for that material is Zero}

Fixed lot size The Fixed Lot size defines a fixed procurement lot size quantity for the material. Which means that you

will always procure or produce a material in a fixed quantity.

For example, if the required Quantity through demand/demands is 120 and the fixed lot size is 80, then the system will create 2 planned orders with one planned order of quantity 80 an the other planned order of Qty 80 {if the Plant/Storage location stock for that material is Zero}.

10.0 Rounding Value

For example, if the Rounding Value is 20, and the procurement quantity is 70, then the system will always round up the planned order to a multiple of 20.

11.0 Rounding Profile

The static rounding value method may not satisfy all the business cases, where a given rounding value is used and the procurement proposals are rounding to that value. There may be situations where the rounding value may change according to the size of the procurement proposal; this is where the concept of rounding profile may help you.

Rounding Profile allows you to enter a procurement quantity and the corresponding rounded value that is applicable if the procurement quantities. You may configure the system to have a rounded value of 10 units, if the procurement quantity is at least 1 unit and a rounded value of 100 units, if the procurement quantity reaches 70 units. The transaction code to configure is OWD1. The Rounding profile configuration screen would look something as below. The Rounding Profile configured is named as Z001".

Explanation for the Rounding Profile - Z001 -

Further discussing the above example, the rounding profile Z001, once created can be simulated by pressing the "Simulation" button in the configuration screen. The simulation carries a rounding 10 Units for a requirement quantity ranging from 1 unit to 69 Units (Rounding of 10 for requirement quantity of 1 to 10, 11 to 20, and 21 to 30 till 61 to 69) and starting from 70 Units to 100 Units we will round to 100 (i.e., if the requirement quantity from 70 onwards will be rounded to 100 units every time). This continues in the same pattern as shown by a rounding of 10 units from 101 to 110 till 161 to 169 and at 170 units it will round to 200 for the range of 170 to 200; so on and forth.

12.0 Assembly scrap

It defines the scrap % that is allowed for the material. It is used to define the scrap % of the header material.

For example, if the scrap % is 10% and the requirement quantity is 100, the planned order will be created for 100 units and the system will add a column in the MRP screen to Mention that 10 is the scrap Quantity to be produced for that material. The components of the production order or process order are planned proportionately for manufacturing 110 units.

13.0 Maximum stock level

Maximum Stock level is a Quantity of the material in this plant that may not be exceeded. In materials planning, the maximum stock level is used only if you have chosen Replenish to maximum stock level as the lot-sizing procedure; that is, you have entered HB (Replenish to maximum stock level) as the lot size key. If you have chosen to work on Maximum stock level then the system procures for the maximum stock level quantity and then adds the Procurement quantity to that.

For example, if the Maximum Stock level is 500 and the demanded quantity is 45, then the system creates a planned order of 545, thereby first ensuring the 500 stock is filled up and then the demand quantity is added to that.

MRP 2 View:

1.0 Procurement Type (Plant Specific):

Procurement type indicator defines how the material is procured. The following procurements types are possible

1. E = material is produced in-house, 2. F = material is procured externally, 3. X = material can be both produced in-house and procured externally X (to be used as an exception)

E.g. A material in Plant A will have this field as "E" (being produced in-house), whereas the same material in Plant B will have "F" if it is being externally procured.

You cannot change the configuration for this field. . Note: Every Material needs to have a Procurement type.

2.0 Special Procurement Type (at Plant level):

Special procurement type is used for allocating a material for special procurements functions such as:

2.1 Withdrawal from another plant: For manufacturing a product in Plant 0001, you can withdraw a component directly from Plant 0002

(called a planning plant or the issuing plant). Dependent requirements for these components are directly created in the issuing plant.

You can use withdrawal from alternative plant for both components produced in-house and procured externally. A special procurement key is defined for both procedures and the issuing plant is entered there. This special procurement key is assigned to that component which is to be withdrawn from the plant 0002.

Dependent requirements for the component is created in plant 0001 as well as plant 0002 and when the planned order for manufacturing is converted to a production order these dependent requirements are converted to dependent reservations in both the plants. MRP will show the dependent requirements with an MRP element called as "Withdrawal from alternate Plant"

2.2 Production in alternate plant: The planning of the product is carried out in the planning plant but it is actually produced in the production plant. The product's BOM is created in the production plant. The special procurement key has to be created in configuration. The special procurement key has to be assigned to the assembly's material master of the planning plant (MRP 2 view).

Planning Plant Producing Plant

Step a) The Material requirement planning is carried out for the assembly in the planning plant.

Step b) Planned order created in planning plant

Step c) Routing of the production plant can be used for scheduling this planned order.

Step c) BOM explosion can be carried out in production plant for material requirement planning.

Step d) Planned order ? Production order in Planning Plant

Step e) Dependent Requirements are created in production Plant

Step f) Dependent Requirements are converted ? Dependent Reservations in Production Plant

Step g) Production is started in Producing Plant

Step h) Goods Receipt is created for the production order of the producing plant in Planning Plant

2.3 Planned Stock transfer

Values predefined are used to identify the unique route from the requesting to the supplying plant in the same company code (which will be used for the Stock transport orders between two plants). It should be noted that the Special procurement type of this category has to be entered for the material in the requesting or demanding plant.

In Customizing, when you would create a special procurement type for the requesting plant, you would have to enter "U" for the fields - Special Procurement and enter the supplying plant in the plant field. Planned stock transfers are MRP driven. A Shortage in receiving plant creates a Stock Transport requisition or planned order in the receiving plant with a Purchase requisition raised on the Supplying plant for release of these materials to the demanding plant for the requirement date.

For example, Z1 is the Special Procurement type predefined for materials requested by plant X from plant Y This value Z1 is maintained for the material in the requesting or demanding plant and not in the supplying Plant.

The below table explains the step by step methodology of stock transfers:

Plant X Plant Y Step a) Requirement for -200 Units raised in Plant X through MRP.

Step b) Stock Transport requisition or planned order of type "NB" is raised in Plant X to cover these 200 Units.

Step c) Purchase requisition or planned order is raised in plant Y for -200.

Step d) Goods are procured or manufactured in Plant Y to meet the 200 Units as per the Procurement type indicator for the material there.

Step e) The Stock Transport Requisition is converted to Stock Transport order in Plant X or the planned order is converted to Purchase requisition (PR) and then the PR is converted to Purchase order in plant X.

Step f) Transfer of goods through a transfer posting with reference to the Stock Transfer Purchase order is created once the goods are available in Plant Y for transfer to plant X. To do this, you can create a direct transfer plant to plant and put the stock in transit or you can create an outbound delivery and post goods issue to the outbound delivery in Plant Y

Step g) At the Receiving Plant X, you have to create a Goods receipt for the STO through MIGO against the Stock transport Purchase order.

2.4 Phantom Item: If a material is to be identified as the Phantom material, you have to enter a standard special

procurement type - "50" in the material master of the plant where the material is defined a Phantom.

2.5 Direct production (for Collective order processing) `In direct production scenario, the whole assembly is collectively produced and the cost of production

is collectively calculated and booked on the highest level order. Along with cost of production the scheduling is also carried out jointly for all the products in the hierarchy. All the levels are connected to each other in a multi level collective order.

Restrictions:

a) Use is restricted to Made to Order Production. b) Special Procurement key configuration:

In Customizing, the system creates a special procurement key for direct production as standard. The special procurement key contains the procurement type E for in-house production and the direct production field is selected. You can create a further special procurement key by setting the special procurement type P for Production in alternative plant as well as entering the production plant in addition to making the direct production settings. The settings work in addition to each other and do not block each other. This is how you create a multi-plant collective order.

c) Assigning of SPK to the Materials: Assign the special procurement key - 52, for direct production in the MRP 2 of the component. You can

restrict the use of the Collective design of direct production to a certain BOM. To achieve this enter this key for the BOM items in the MRP data area.

d) Order type Configuration: In order type configuration (Customizing for Shop Floor Control, by choosing Master data ?

Order ? Define Order Types) you can use the indicator "Coll. ord. process" to determine howcosts are to be settled in the collective order. Also, if the indicator "Collective order with goods movements" is set, then the goods receipts and goods issues between assemblies happen automatically. On Production of the Lower level subassemblies, the goods receipt is created and the same is automatically goods issued to the higher level order.

e) Planned order in direct production: Planned orders for each level is created in the system and names them as "Planned orders for

direct production". When you convert the planned order in to production order for higher level all the dependent planned orders are also converted in to production. Every planned order for direct production contains the number of the superior planned order as well as the number of the leading planned order.

Illustration:

Materials Order number

Start Date

Finish Date

Auto issue Auto Cost

Cost added up to the

higher Level

Level 1 01 30th Dec 31st Dec GI GR 200 900 Level 2 02 28th Dec 30th Dec GI GR 400 700 Level 3 03 27th Dec 28th Dec GI GR 200 300 Level 4 04 25th Dec 27th Dec GR 100 .

Behavior of costs:

The confirmation of yield in the subordinate order has the result that costs are credited to the subordinate order and costs are debited from the superior order. Goods receipt with reference to the subordinate order would therefore lead to costs being debited twice from the superior order.

Batch Entry - Determination of batch entry in the process order:

Defines when batches have to be determined when using the PP/WM interface. This indicator refers to the Raw Materials of an order, not to the FG of the order. You have the following options:

The batches can be determined when the goods issue is posted. The batches must be entered in the order before it is released. The batches are determined automatically when the order is released

3.0 Back Flush Indicator:

Definition: As a consultant or a user, you have to classify the components required in production as, components whose: Consumption is as per the standard Bill of Material or consumption of the component is totally unknown. Consumption is not exactly as per the Bill of Material or where the user would personally like to create the goods issues.In the second case, the components have to be issued to the order manually through the goods issue transactions. And in the first case, the components can be Backflushed (issue automatically in the background) to the production order or process order. A component identified as Back Flush component is automatically issued to the order when you carry out a production order Confirmation or process order confirmations.

When you Carry out Production order or Process order Confirmation, and confirm a Partial or Final Qty out of the Total Qty for the order, the system automatically issues the proportionate Back Flush Component qty to the Order.

Illustration:

If you are producing 20 Pc of M1 and the Bill of Material for M1 has a component RM2 as below:

RM2 = 2 Pc for every 1 quantity of M1 that is produced (To be Backflushed), then -

Step 1: Initial Order confirmations for 5 Pc for the order (of 20 pc)

Step 2: Auto Issue of Backflush items (RM2) in the background, that quantity required for production of 5 Pc = 5 Pc X 2 Pc = 10 Pc.

Step 3: Optional - Editing the Backflush records before saving:

This automatic consumption of the backflush components happens in the background during the production order or process order confirmations. Nevertheless you can manually go and edit the quantities in the confirmation screen itself before saving the production order or process order confirmations. To edit the entries you have to press the "Goods Movement Button" in the confirmation main screen.

Lateral thinking Thus we can conclude here that the goods movement screen in the confirmation transaction behaves as a normal goods issue screen from where we can issue any component to the order and not just backflush components.

Possible errors:

Since the backflush of components is executed in the background automatically by the system, it is certainly possible that some errors may pop up. These errors can be due to:

The storage location is missing - The storage location from where this backflush component is to be consumed from is not defaulted for the material in the "issue storage location of the MRP views of the material".

The Batch Number is missing or it does not exist - If the Component that is to be backflushed is a batch managed component and the batch which is to be consumed is not allocated to the component then the error may occur. It is advisable to create auto batch determination for these components so that the system automatically allocates batches for consumption on the selection or sort rule that is given in the batch determination procedure.Stock is in deficit - If the component that is to be backflushed is not available in the plant's storage location defined for the material, then the error is inevitable.

COGI:

These goods issue items which are in error after the production order or process order confirmation, can be configured to go in to a Packet in system called "COGI" where all the backflush errors will accumulate. This configuration exists in the order confirmation parameters section.

This COGI entries can be cleared periodically once the personnel corrects the errors or brings in stock for the material. If you select the entry in this screen and press the "Bell" Button you can see the errors that have caused the entry to fall in to COGI. You can also see the error in the record itself at the extreme far end of the screen. After correcting the record you can press the save button so that the good issue is triggered in the background and the item is consumed.

4.0 Issue Storage Location:

Definition:

In the case of a material produced in-house, this is the key of the storage location that is copied to the planned order, production order.

If the material is a material that is to be consumed, then it is the issuing storage location to which it is posted.

If the material is a material that is to be produced, then it is the receiving storage location to which the receipt of the material is posted.

Lateral thinking

The issue storage locations for components can also be defined in the BOM Item data. The issue storage location for a component in the BOM Item data takes the precedence over the material master value. This means that you can change the issue storage location of a certain component depending upon the material you are manufacturing. Moreover you can also maintain Issue storage location for a material in the production version of a material. You can use your common sense and generalize that when you maintain the issue storage location in the production version, it is the Goods receipt storage location for a material that is being manufactured.

5.0 Storage location for External Procurement (EP): It is a Default storage location for external procurement. It is a key of the storage location that is

proposed in the purchase requisition in materials planning for subsequent storage of the material and receipt.

6.0 In-house production time (FG & SFG):

It specifies the time in workdays needed to produce the material in-house. In-house production time is independent of the order quantity. The system requires the in-house production time to determine the planned dates for planned orders in materials planning if the MRP is run at Basic dates. On the other hand if MRP is run through lead time scheduling (parameters set in the MRP Run screen) these dates are not considered at all. In that case the scheduling is done through the use of Routing or Recipes.

7.0 Planned delivery time in days (RM & STO Procured):

Number of calendar days needed to obtain the material or service if it is procured externally right from the requisition time to the goods receipt time.

If you have multiple vendors for the material, you must specify an average value. The same applies if you order the material from a fixed vendor that has varying delivery times.

8.0 Goods receipt processing time in days (for all Materials):

This is a time required for goods receipt of a material at a given Plant and it does not include the transportation time used bring the material till the plant.

For Finished Goods & Semi Finished Goods: Number of workdays required after receiving the material from Production for inspection and placement into storage. It may vary for each product.

For Raw Material & Semi Finished Goods: Number of workdays required after receiving from the source for inspection and/or labeling before its further shipment or internal usage.

9.0 Schedule Margin Key:

Key that the system uses to determine the floats required for scheduling an order. You define the following floats with the scheduling margin key. The definition of the floats or the schedule margin keys are through IMG.

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.

10.0 Safety Stock:

Safety Stock specifies the quantity whose purpose is to satisfy unexpectedly high demand in the coverage period. The risk of shortfalls is reduced by having a safety stock.The safety stock defined here for a material in terms of quantity is an additional static requirement and the system adds to this quantity as an additional requirement quantity. You can use this along with manual reorder point planning as well.

10.1 Dynamic Safety Stock (Coverage Profile):

In place of defining a static or constant safety stock for a material, there is also a provision to define a dynamic safety stock through the "Coverage profile field". The concept identifies the demand for a required period (as mentioned in customizing) and calculates the average daily requirement. Then it uses this average daily requirement to calculate the target stock for a target safety coverage period defined in customizing.

For example, if the Demand over 10 weeks in future is 7000 Units and the safety stock coverage is required for 2 days, then the system calculates the average daily requirement as 7000/ (10*7 factory calendar working days) = 100 Units per day, which in turn means that for covering 2 days of safety stock the required quantity will be 2*100 = 200 Units.

Therefore as soon as the stock falls below the Minimum safety stock calculated for minimum safety coverage period, the system creates requirements for the dynamic safety stock.

Customizing required:

First we have to define in the Configuration section of MRP, a "Coverage profile" whichcontains the following primary items:

The Demand for the number of periods which is to be used to calculate average daily requirement = XX period

Period in terms of = Weeks/days/Months

The Target safety stock coverage = XX period

Minimum safety Stock coverage = XX period

Maximum safety Stock coverage = XX period

11.1 Minimum Safety Stock/Service Level:

Minimum Safety Stock is the quantity that defines the lower limit for safety stock. This value cannot be exceeded. The lower limit is checked if you use an availability indicator which shows, according to customizing settings, if the safety stock is to be calculated again in a forecast. If the safety stock is lower than this level in forecasting, the safety stock is automatically increased to the value of the lower level. The safety stock must always be greater or equal to this lower level.

Service level is the system uses the service level to calculate the safety stock. The higher the service level, the higher will be the safety stock calculated by the system to compensate for additional consumption or delays in delivery.

MRP 3 View:

The following are the fields in MRP 3 View:

1.0 Strategy Group:

A Strategy Group represents the procedure used for planning a material. Primarily for Made to Stock the strategy is "10" in SAP and For Made to Order the Strategy is "20" in SAP.

There are many other strategies in the system other than Made-to-order and Made-to-Stock like

1.1 Planning without final assembly - Strategy Group or Strategy = 40

This is a made to stock scenario where production is not only driven merely by planned independent requirements set in MD61 for a material, but any shortage is stock recognized by incoming sales orders or demand is fulfilled through a procurement proposal added in MRP.

In a mere Made-to-stock scenario (Strategy = 10) , the production is only driven by planned independent requirements set in MD61 for a material and on any shortage identified by incoming demand does not result in additional procurement proposals in MRP.

You can use Strategy - 10, when you know that the forecasted demand is correct and you cannot afford to produce more than that.

You can use Strategy - 40 when you want to accommodate for ever growing changes in demand and satisfy the shoratages not identified by the forecast.

Note - Using Strategy 40 is wise.

1.2 Make-to-Order - Strategy Group or Strategy = 20

In a make-to-order scenario, the production is initiated upon receipt of an incoming customer requirement, i.e., production is made specifically for the customer requirements. In this case the production order and the stock is assigned to the customer order avioding any divertions to another customer demand for a similar or same product.

2.0 Consumption Modes:

The consumption mode controls the direction on the time axis in which the system consumes requirements.

2.1 Backward Consumption period

Determines how far in the past on the time axis, the system should look for consuming the PIRS (planned independent requirement). The Sales Orders, Dependent Requirements, etc are assigned to & consume the PIR quantities that within this consumption period (before the requirements date

2.2 Forward Consumption period

Determines how far in the future on the time axis, the system should look for consuming planned independent requirement. The Sales orders, Dependent Requirements, etc are assigned to & consume the PIR quantities that within this consumption period (after the requirements date).

3.0 Availability Check

Using this field the system specifies whether and how the system checks availability and generates requirements for materials planning. It specifies which MRP elements the System takes into account (Purchase Orders, Production/Process Orders, etc) during availability check.

MRP 4 View:

MRP 4 View contains the following fields:

1.0 Selection Method:

This field determines which Alternative Bill of Material the system selects during the MRP run. It is a Standard SAP Pre-configured selection.

With Selection by order quantity, the system chooses the alternative BOM into whose lot size range the order quantity falls. The lot size range and area of validity of the BOM apply.

With Selection by explosion date, the system chooses the alternative BOM into whose area of validity the date falls according to the setting BOM via dates.

With Selection by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area of validity of the production version apply

With Selection only by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area of validity of the production version apply. If no production version is found, no production orders or process orders can be created.

2.0 Individual/Collective Requirements:

This field controls how the Dependent Requirement are displayed in the Stock/Requirements list as individual records or collectively (grouped together)

Indicator determining whether the following requirements are allowed for the dependent Requirements of the material. You can also define this in the explosion type of the BOM item (in Customizing for Basic Data in Define Explosion Types)

Individual requirements: Requirement quantities of the dependent material are stated individually. This is predominantly done for a Made to order material, where the requirements are stated individually against a sales order and are not collectively planned.

Collective requirements: Requirement quantities of the dependent material are grouped together.

3.0 Requirements Group:

It defines whether the system groups together Dependent requirement for the material on a daily Basis. When analyzing requirements planning. If several requirements exist on a day, the system Groups them together & displays one line item.

It is standard SAP pre-configured selection.

4.0 Version Indicator:

This field indicates whether a Production Version exists for this material.

Production Version:

This tab gives the details about the Production Version/s maintained for the material. Production Version determines the Alternate Bill of Material & the Task List type/group used for Production of this material. Production Version defines for a material, the Bill of Material & Routing {Recipe}combination, for the production of a material, for a given Validity date & a lot size range. It is a key which determines the various production techniques according to which a material can be manufactured.

Use of Production Versions:

We can have multiple Bill of Material's and Recipes for a Material, but at a given date or for a given lot size it is mandatory for the system to keep one Bill of Material and one Routing/Recipe. This helps the system, in picking the predefined BOM and Routing/Recipe rather than going mad on which to pick in the automatic MRP run.

If the lot size of the product does not govern the selection of a bill of material and routing {recipe}, we can keep it as 0 - 99999999999 units. And if the dates of production do not govern the selection of bill of material and routing, we can keep the validity dates as "today - 12/31/9999 {MM/DD/YYYY}".

Question: Can we have many predefined production versions?

For a given material we can have many Production Versions for different Bill of material and Routing/Recipe combinations for different Lot sizes and different validity periods, but at a given time, the system considers only one production version according to dates or lot sizes and if dates and lot sizes are not the criteria, the system picks up the first production version maintained for the material.

Transaction codes to maintain them is through MM01/MM02/CC23

5.0 MRP Dependent Requirements:

This field controls the relevance of the Dependent requirements to MRP. It is used to avoid duplication in planning at this material level. It may happen that the material is planned through PIR and its requirement also comes in as a dependant requirement through the planning of its higher level material, therefore to avoid this, we set this indicator as "Materials for dependent requirements are not planned".

Work Scheduling View

To produce an assembly or subassembly, you need to maintain a work scheduling view for the material.

1. Production Scheduler:

They have to be configured in SAP IMG as required.

Production Scheduler is the scheduler responsible for a material in production activity control. The production scheduler determines how capacity requirements are calculated for a material during a scheduling run. You can use the Production Scheduler for the purpose of reporting, there are standard reports in SAP, that can be executed for a given production scheduler/s.

Configuration Path - Production ? Shop Floor Control ? Master Data ? Define Production Scheduler

2. Production scheduling Profile:

Profile that you can use to specify that certain business transactions are carried out in parallel in a production order / process order (you can, for example, create and release an order at the same time, or release an order and print the shop papers) trigger an automatic goods receipt. The production scheduling profile is copied into the order during order creation.

Configuration Path - Production ? Shop Floor Control ? Master Data ? Define Production Scheduling profile

3. Production Version:

Production Version defines for a material, the Bill of Material & Routing {Recipe} combination, for the production of a material, for a given Validity date & a lot size range.

It is a key which determines the various production techniques according to which a material can be manufactured.

4. Batch management requirement indicator:

This indicator specifies whether the material is managed in batches at the plant for the material.

Setting this indicator: Very Easy

Undoing the setting: Very Hard

The indicator cannot be changed if stocks exist for the given material in either the current period or in the previous period. The reason for checking the previous period is because stocks can be posted to this period when goods movements are entered. Thus in turn if stocks or requirements are open for the given material, this indicator cannot be changed.

Process - To find out the activities that stop the batch management indicator from being reset you would have to go to the material master change mode (MM02) and check/uncheck the batch management indicator; on check/uncheck of this indicator the system would give an error message, if it is not able to reset the indicator. This Error message statement helps you to lead in uncheck/check the batch management indicator.

Note - a) You would have to make the entire Stock equal to Zero.

b) You would have to reverse all the open documents that are existing for the material.

c) You may also need to archive the Batch master data before you reset the batch management indicator.

5. Under Delivery/Over delivery Tolerance:

These are the tolerances of Goods receipt quantities against the order quantities.

Unlimited over delivery tolerance is the permission to receive unlimited quantity from the order over and above the order quantity.

Under Delivery tolerance is the permission to receive materials, in a % mentioned here, below the order quantity.

For example, if your production order quantity is 100 Units and the under delivery tolerance is 10%, then on the GR of 90 Units, the system sets the DLV Status to the order.

Over Delivery tolerance is the permission to receive materials, in a % mentioned here, above the order quantity.

For example, if your production order quantity is 100 Units and the over delivery tolerance is 10%, then on the GR of 110 Units, the system sets the DLV Status to the order.

6. Lot size dependant/Lot Size Independent In House times in Days:

The setup time a Processing times in number of days for a base quantity defines the total production time for a quantity used for MRP.

The In house Production time for a lot size independent number of days is the flat time required to produce a product irrespective of base quantity. These are the timings used in MRP