SAP PP Training Material

CONFIDENTIAL
Version 2009

Production Planning

Production Planning Processes

Document Name
CONFIDENTIAL

Introduction

Contents
MRP Overview
Planning Procedures
Planning Process
Capacity Planning overview

Document Name
CONFIDENTIAL

What Is Material Requirement Planning (MRP)

The main function of material requirements planning is to guarantee material
availability, that is, it is used to procure or produce the requirement quantities on
time both for internal purposes and for sales and distribution. This process involves
the monitoring of stocks and, in particular, the automatic creation of procurement
proposals for purchasing and production

Document Name
CONFIDENTIAL

Material Requirement Planning (MRP) Overview

Document Name
CONFIDENTIAL

Material Requirement Planning (MRP) Overview

MRP analyzes the demand from sales orders and forecasts. If stock is needed then a
planned order is created. A planned order consists of a suggested order quantity, a start
date and a finish date.

The bill of material of the planned order is exploded, creating dependent requirements.
These are processed later by MRP, to determine if planned orders are needed for the
components.

In order to replenish stock, we must convert the planned order to a production order (if it
is for a manufactured item), or to a purchase requisition (if it is for a purchased item).

MRP can create purchase requisitions directly, for purchased materials, depending on
runtime settings. If the purchased material is part of a scheduling agreement with a
vendor, MRP can create schedule lines.

When the planned order is converted to a production order, the dependent requirements
for its components become reservations.

Document Name
CONFIDENTIAL

Planning Procedures

Planning procedures automatically generate order proposals to purchasing

and to production.

Planning procedures can be divided into Material Requirements Planning

and Consumption-based planning.

Document Name
CONFIDENTIAL

Planning Procedures
In MRP, the system compares available stock plus planned receipts with demand. If
the available quantity is less than the required quantity at a point in time, then an
order proposal is created.
Consumption-based planning procedures use past consumption data (history) to
calculate future requirements. These procedures are sometimes used for externally
procured materials or for low value / low demand items.
Consumption-based planning can be divided into
Forecast-based and
Reorder point planning

Document Name
CONFIDENTIAL

Steps In MRP Run

Document Name
CONFIDENTIAL

Step-1 In MRP Run

The net requirements calculation is the first process to be carried out in the
material requirements planning run at plant level. During this process, the
system checks whether the requirements can be covered by the available
warehouse stock + anticipated receipts. If shortages exist, the system
creates an order proposal (Planned order or Purchase requisition).

Document Name
CONFIDENTIAL

Step-2 In MRP Run

Once the shortage is determined, the system uses lot size to calculate required
quantities
You can define how lot sizes are to be calculated (Fixed lot or Lot for Lot).
The result of the lot-size calculation is the quantity to be produced or procured

Document Name
CONFIDENTIAL

Step-3 In MRP Run

When determining the order proposal, the system checks whether the
receipt is to produced in-house or procured
Scheduling determines the start and finish dates of the procurement
elements for materials produced in-house and procured externally

Document Name
CONFIDENTIAL

Scheduling - Backward

The system calculates the goods receipt processing time backwards using the
requirements date and thus determines the order finish date.
The system calculates the in-house production time backwards using the order finish
date and thus determines the order start date.
The system calculates the opening period backwards using the order finish date and
thus determines the order opening date.

Document Name
CONFIDENTIAL

Scheduling - Forward

The current date is entered as the order start date. The system adds the
in-house production time to the current date and thereby calculates the
order finish date.

The system adds the goods receipt processing time to the order finish date
and thereby calculates the availability date. On this date, the material is
available.

Document Name
CONFIDENTIAL

Step-4 In MRP Run

After the planning run has carried out the net requirements calculation, the lot
size calculation and the scheduling for a material, it determines the required
quantities for assemblies produced in-house
The system determines and explodes the valid BOM for every new order
proposal of an assembly.
Document Name
CONFIDENTIAL

Consumption Based Planning

In reorder point planning, procurement is triggered when the sum of plant

stock and firmed receipts falls below the reorder point.
The safety stock exists to cover both excess material consumption within
the replenishment lead time

Document Name
CONFIDENTIAL

Planning process

You can execute the planning run on two levels: for an individual material or as a
total planning run for a plant. In addition, it is possible to execute a total planning run
for several plants and/or MRP areas.
You can execute a single-item planning run either for a specific material only (single
level) or for all BOM levels (multi level).
A total planning run can be executed online or as a background job.
Total planning for a plant encompasses all materials relevant to MRP for this plant
and includes the BOM explosion for materials with BOMs.
Document Name
CONFIDENTIAL

Control Parameters For MRP

Document Name
CONFIDENTIAL

Control Parameters For MRP

The following control parameters for MRP are required for the planning run:

Processing key: NETCH, NETPL and NEUPL are three fundamentally different ways to
schedule your MRP run:
NETCH (Net Change Planning) : is any material that has undergone some changes
since last MRP run. (e.g. you have created a new planned order for the material, so al
other planning data has to be re planned according to this change)
NETPL (Net Change Planning within Planning Horizon) : is any material that has
undergone some changes since last MRP run, and those changes are in the planning
horizon. (e.g. you have created a planned order which is inside the planning horizon. If
your planning horizon is 3 months, and you created planned order for a date 5 months
from now, that material is not included in planning with NETPL)
NEUPL (Regenerative Planning) : The system plans all the materials that are
contained in the planning file.

Document Name
CONFIDENTIAL

Control Parameters For MRP

The indicators "Create purchase requisition" and "Schedule lines" are only
relevant for materals that are procured externally. You can determine
whether or in which period purchase requisitions and schedule lines are
required as the result of the planning run.
You can determine further whether the planning run is to generate MRP lists.
The planning mode defines whether the existing planning data should simply
be adjusted, whether BOMs and routings should also be re-exploded or
whether the planning should be started from the very beginning again.

Document Name
CONFIDENTIAL

SAP Steps for MRP Run (Multilevel Single Item Planning)

Path : Logistics ->Production -> MRP ->

Planning -> Multilevel Single Item Planning
T-code MD02

Document Name
CONFIDENTIAL

SAP Steps for MRP Run (Multilevel Single Item Planning)

Document Name
CONFIDENTIAL

SAP Steps for MRP Run (Multilevel Single Item Planning)

Material : Enter the material number for which you want to take MRP run
Plant : Enter the Plant number for which you want to take MRP run
Processing Key : Specifies the type of the MRP run. The following types are possible:
net change planning
net change planning in the planning horizon
online regenerative planning
Create MRP List : Indicator controls whether the system;
should always create an MRP list for all planned materials
should create an MRP list for certain materials depending on the exception message
should never create an MRP list for planned materials
Planning Mod : Defines how procurement proposals from the last planning run are to be
dealt with
Scheduling : Determines whether only the basic dates are determined for planned
orders, or whether lead time scheduling is carried out as well. The indicator refers to all
planned orders that are new or have been changed or have been re-exploded for the
BOM.
Document Name
CONFIDENTIAL

SAP Steps for MRP Run (Multilevel Single Item Planning)

After executing MD02 BOM get exploded for material and Planned orders /
Purches requistion get genrated.
Save the planning results.

Document Name
CONFIDENTIAL

SAP Steps for MRP Run (Multilevel Single Item Planning)

Document Name
CONFIDENTIAL

Stock/Requirement & MRP List

The stock/requirements list is a dynamic list: it contains up-to-date information on the

current status of stocks, requirements and receipts. You are able to view any changes
immediately. This can be done as soon as the current stock / requirements list is called
up or, upon displaying the current
stock / requirements list, the elements are re-read from the database using the
"Refresh" function

The MRP list represents the result of the last planning run and is therefore static:
changes that were made after the planning run are not visible. You can define whether
or not the planning run is to generate an MRP list, or as a result of which exception
conditions the MRP list is generated for a given material.

The basic structure of both lists is the same:

Links are in the form of a tree for the worklist of the MRP controller.
Above the list is the header with the material number. You can display additional
data in the header details.
The list itself contains the individual MRP elements and the corresponding available
quantities.

Document Name
CONFIDENTIAL

SAP Steps To See Stock / Requirement List

To see the Stock/

Requirement List
materila wise go to :
Path : Logistics
->Production -> MRP ->
Evaluation ->
Stock/Requirement List
T-code MD04

Document Name
CONFIDENTIAL

SAP Steps SAP Steps To See Stock / Requirement List

Document Name
CONFIDENTIAL

Capacity Requirement Planning

Section Contains :
Capacity Category
Available Capacity
Capacity Requirement
Capacity Evaluation
Capacity Leveling

Document Name
CONFIDENTIAL

Capacity Category
Capacity can be measured for various key parameter in production
activities like
Machine
Labor
Production Line

Document Name
CONFIDENTIAL

Available Capacity
You can store the operating time and the daily available capacity at a work center in a
capacity in the work center. You identify a capacity at the work center using the
capacity category. Various capacity categories can be assigned to the work center,
for example, a machine capacity or a labor capacity, but each capacity category can
only be assigned once.
The available capacity is determined by:
Work start and work finish
Length of breaks
Rate of capacity utilization
Number of individual capacities which the capacity consists of

Document Name
CONFIDENTIAL

Capacity Requirement
Orders generate capacity requirements and thus a load on the resources that are to
process them. The following types of orders are relevant:
Production orders in Shop Floor Control
Process orders in the Process Industries
Planned orders in
Material Requirements Planning (MRP)
Repetitive Manufacturing (PP-REM)

Maintenance orders in Plant Maintenance (PM)

Calculating the capacity requirements of an operation for manufacturing a material
takes place in scheduling using formulas from the work center. For this, you must enter
a formula to calculate the capacity requirements of the operations for each of the three
operation segments setup, processing and teardown on the screen Capacity overview
in work center maintenance.

Document Name
CONFIDENTIAL

Capacity Requirement

Document Name
CONFIDENTIAL

Capacity Evaluation

You can use capacity evaluations to analyze capacity loads in your company.
The capacity evaluation is a part of the component Capacity Planning.
A lists predefined by SAP showing data on the capacity situation at work centers. For every
capacity for the selected work centers the following information is displayed in columns:
Period
Capacity requirements in the period
Available capacity in the period
Capacity load (capacity requirements/available capacity in percentage terms) in the
period
Document Name
CONFIDENTIAL

Capacity Leveling

The objectives of capacity leveling include:

Leveling overloads and under loads at work centers
Achieving optimum commitment of machines and production lines
Selection of appropriate resources
Functions in capacity leveling - Dispatching operations is the main function of
capacity leveling. Operations are dispatched to the time when there is sufficient
capacity for them to be executed. You can also dispatch sub-operations and work
elements.

Document Name
CONFIDENTIAL