SAP MRP

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).

SAP material requirement planning or SAP MRP, uses the following factors in its planing run:

a) planning strategies - made to order or made to stock or its variations

b) planning types - type of the MRP run, i.e., consumption based planning methods or demand
based planning methods and net requirement planing or gross requirement planning

c) lot sizing procedures set for the material

d) master data such as BOM or Routings/Recipes, quota arrangements, souce list, vendors,
purchase info records. customer masters etc, and transaction data such as sales orders, forecast,
planned independent demands (forecasted demand)