What is SAP MRP - Material Requirement Planning Overview

Material Requirement Planning (SAP MRP) is a tool which helps in planning the
requirement quantities and schedules of a given material. It not only
ensures availability of the material for which MRP is carried out, but also
ensures availability of the components (of all the BOM levels) below in the BOM
structure.

Apart from assuring material availability, MRP also carries out scheduling of the
procurement proposals using the lead times for the materials/components. When
the material is an internally manufactured material, it will use the lead times or
operation lead times from the routings/recipes and when the material is an
external procured material, it will fetch the lead times or delivery times for the
material defined at an appropriate place in the tool/system. Scheduling of the
procurement proposals not only derives the capacity loading of the orders on the
workcenter but it also calculates the delivery dates of the components that
would be requried for manufacturing (delivery date = start date of processing).

The output of MRP proposes procurement proposals (planned order or purchase

requests) so as to gaurantee material availability and at the same time schedule
the
procurement
proposals
using
delivery
lead
times
for
the
materials/components. Material requirement Planning can be run for purchased
materials or finished saleable materials or subassemblies (semi-finished) used in
production.

While the Material Requirement Planning in SAP ECC (SAP MRP), derives a plan
for the materials and helps the planners and supervisors to purchase, produce or
sell. It offers all the possible planning methods available in the market like the
reorder point planning for the consumption based planned materials, lot for lot
MRP planning for the demand based planning materials, forecast based planning
methods which uses the past historical figures to extrapolate the future
requirements (again a consumption based planning material).

Bill of Material (BOM)

Definition
List of all materials required in a process together with the quantities required.

Use
The BOM is part of the master data of production planning and is also used in
discrete manufacturing. However, note that the following features are specific to
process industries:
In general, the BOM is created and edited directly from within the master recipe
for which it is required.
By creating a production version, you can uniquely combine a master recipe with
an alternative BOM. The material components of the alternative BOM can then be
assigned to the operations or phases of the master recipe and be taken into
account in material quantity calculation.