Materials Requirement Planning (MRP)

The objective of MRP is to ensure material availability for the requirements.

Requirements could be of two types – internal requirements and external requirements.
External requirements originate from customer requirements which are entered into
SAP as a sales order (for example). Internal requirements are to manufacture
components on the same plant which could be supplied as components to finished
goods or to satisfy the customer requirements.

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SAP MRP checks the stock level of the respective material and generates procurement
proposals or planned orders which could be either converted to purchase requisitions or
production orders based on the MRP settings in material master records.

Master Data for MRP

The following master data is required to carry out SAP MRP process:

 Material master
 Bills of material
 Work center (in-house production)
 Routings (in-house production)
 Demand management
 Sales and distribution (if required)

For SAP MRP process to be carried out, material master would need to be maintained
accordingly. Material master has several views related to MRP viz. MRP1 to MRP4.

MRP 1 view has fields like purchasing group, plant special material status, MRP
procedure, and lot size data.
SAP Material Master – MRP 1 View

SAP Material Master – MRP 2 View

In material master MRP 2 view, fields like procurement type, special procurement,
scheduling margin key, and planned delivery time are located. There is a separate tab
available for net requirements calculation which includes safety stock, minimum safety
stock which helps to calculate the required quantity at the right time.
SAP Material Master – MRP 3 View

Material master MRP 3 view includes fields like strategy group which is used to decide
between Make-To-Order (MTO) or Make-To-Stock (MTS) scenarios.

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Also, Availability check filed is available which is used to maintain the checking rule for
checking the material availability and update it for available to promise dates and
quantities.

SAP Material Master – MRP 4 View

In material master MRP 4 view, fields for BOM explosion and dependent requirements
are available. There is a separate tab available for Repetitive Manufacturing which
helps to maintain REM profile that is used to enter and record transactions for repetitive
manufacturing.

If a material is subject is to in-house production, then work scheduling view would need
to be maintained. If a material is subject to MRP planning, then all the four views of
MRP would need to be maintained in material master.

SAP MRP Process Flow

SAP MRP process flow starts with customer requirement, which originates from the
sales department or marketing department. The customer requirements are entered in
SAP via sales orders. The customer requirements are entered as demand in demand
management system.

The output of demand management is Planned Independent Requirements which would

be used in long-term planning.

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Now, materials requirement planning comes into picture. The input to MRP is from sales
order and planned independent requirement, if applicable. When the MRP run is carried
out, planned order or purchase requisition would be generated based on the planning
run settings. Planned order could be converted into purchase requisition (PR) or
Production order. Purchase requisition is for external procurement and production order
is for in-house production. SAP will then convert all the dependent requirements of
planned order into reservations in the production order. When planned order is created
for external procurement, it would need to be reviewed by planners, and if required
planners would convert the planned order to purchase requisition. Otherwise, the
purchase requisition would be generated automatically and available for purchasing.

In SAP MRP process, the system calculates the net requirements while considering
available warehouse stock and scheduled receipts from purchasing and production.
During MRP process all levels of the bill of material are planned.
SAP MRP Process Overview
SAP MRP Planning run can be executed at plant level or MRP area level. This planning
run can be executed for a single material or a material group. Planning run can be total
planning for a plant, single-item single level planning, or multi-level single item planning.
The SAP system creates procurement proposals which could be planned orders,
purchase requisitions, schedule lines based on the planning run settings. Planning file
entry contains details of the materials that are to be included for the MRP run.

SAP MRP Planning run type depends on the processing key in the MRP run screen.
There are three types of processing key:

 NETCH – Net change planning in total horizon.

 NETPL – Net change planning in the planning horizon.
 NEUPL – Regenerative planning.

SAP MRP Planning Run

SAP MRP Planning Run Initial Screen
The figure above shows planning run at material level. The material and a respective
plant are entered.

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There are several fields which come under MRP control parameters control data.

 Processing key field – net change in the planning horizon.

 Create Purchase Requisition – This field has an option for creating purchase
requisitions or planned orders.
 Scheduling Agreement (SA) delivery schedule lines – This field has an option for
creating schedule lines / no schedule lines. To create a scheduling agreement there
should be settings maintained in a source list.
 Create MRP list – MRP list would be created and displayed when the planning run is
executed and saved.
 Planning mode – In this field, the planning mode would be maintained whether to run
normally or delete and create all planning data or re-explode BOM and routing, if
there are any changes made to those master data.

Transactions for SAP MRP Planning Run

Transaction code: MD01

SAP Menu -> Logistics-> Production-> MRP -> Planning -> Total Planning -> Online

With this transaction code, we would be able to carry out planning run at a plant level.
As this would consume a lot of time for the output to be displayed, it could be executed
as a background job.
Transaction MD01 – Planning Run at Plant Level

Transaction Codes for Planning Run

MD02 – This transaction code is used to execute a planning run for a material and used
to explode multi-level materials.
SAP MRP Planning Run for Single-Item, Multi-Level

SAP MRP Planning Run for Single-Item, Single-Level

In this planning run, MRP would be carried for a material and for the first level of BOM,
the other components will not be included for planning.
Stock/Requirement List – Transaction MD04

In the transaction code MD04, we could get the latest stock / requirement list for a
particular material and plant wise. Enter the material and plant; this would give you the
current stock with requirements or receipts.

Stock / Requirement List for a Material

SAP Consumption-based Planning (CBP)

As the name indicates, this planning would be carried out based on the consumption
values. The consumption values are the past historical consumption data. This data
would then be used to calculate future requirements with the help of a forecasting
program. For example, the requirements could be triggered when the material stock
level falls below a reorder point. The reorder point would be calculated based on the
past historical consumption data. There is another stock known as safety stock level.
The safety stock should be maintained for the respective material to plan for the
requirements and also for any unplanned delivery or any unexpected delay in supply
from vendors.

SAP Materials Requirement Planning (MRP) Vs

Consumption-based Planning (CBP)
MRP and CBP both are MRP procedures in SAP. They determine how the materials are
planned and made available to meet the requirements.

MRP calculates the net requirement by considering the warehouse stock and scheduled
receipts. CBP calculates the requirements based on events like when the stock level
falls below the reorder point. CBP contains procedures like reorder point planning,
forecast-based planning, time-phased planning. Reorder point planning could further be
classified into manual and automatic reorder point planning.

SAP Material Master Record – MRP Procedure

The figure above shows the material master MRP 1 view. The MRP procedure could be
set up in this view with the required MRP type. MRP type is a field which is used to
define and determine the MRP procedures.

There are several standard MRP types defined by SAP as listed below:

 ND – No Planning
 PD – MRP
 R1 – Time-phased planning
 VB – Manual reorder point planning
 VM – Automatic reorder point planning
 VV – Forecast-based planning

If the MRP type is set to ND, then it means no planning, i.e. no planning run is carried
out for those materials. Then, there is no MRP procedure required for materials that
require no planning.

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When the MRP type is set to PD, it means that those materials require planning. When
PD is set up in the MRP type field, it means MRP procedure. The other MRP
parameters would need to be set up in the material master, to make the planning run to
be carried as per our requirements.

If the MRP type is set to R1, then the procedure is time-phased planning procedure.
This procedure would be suitable for materials that are supplied by vendors in a regular
interval like two days in a week or only on some particular days.

When the MRP type is set to VB, then manual reorder point planning procedure could
be activated. In this procedure, the safety stock and reorder point would be calculated
manually and entered in the SAP system.

If the MRP type is set to VM, then the MRP procedure could be determined as
automatic reorder point planning procedure. The safety stock and the reorder point
would be calculated automatically by the system based on the past historic consumption
data.

When the MRP type is set to VV, it means we are determining a forecast-based
planning. The requirements could be calculated based on the forecast data that was
maintained in the material master.

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The main difference between MRP and consumption-based planning is in the
requirements calculation. MRP uses warehouse stocks, scheduled receipts and the
requirements would be from sales order, dependent requirements, order reservations,
BOM explosions, etc. Consumption-based planning calculates requirements when the
stock level goes below the predetermined reorder point. The requirements would be
triggered by the past historical consumption data and forecast data.

Though the above mentioned MRP types are available in the standard SAP, customized
MRP types could be configured based on the business requirements. It could be
configured with the help of copy option from the already available MRP types, and
changing the required fields to suit the business requirements.

SAP consumption-based planning (CBP) could be used for planning B and C materials.
As this procedure could trigger requirements with less effort and setup, it could be used
for planning operating supplies also.
On the other hand, materials requirements planning (MRP) could be used for planning A
materials. As the stock level of A materials is very important and required to determine
crucial decisions on materials, MRP would be used for planning of A materials. MRP
calculates the material requirements based on the requirements triggered by the
warehouse stock, scheduled receipts and issues.

When we describe warehouse stock, Material Requirements Planning would consider

stock in both quality and unrestricted for available stock. MRP does not include blocked
stock, during planning run it excludes the blocked stock.

SAP MRP Procedures

The main function of Material Requirement Planning (MRP) is to ensure the availability
of the required quantity of material(s) at the right time. The material should be made
available for requirements like sales orders, planned independent requirements,
dependent requirements which arise out of BOM explosion during planning run, or
reservations. MRP is executed to calculate the net requirement calculation which arrives
after calculating the warehouse stock and the receipts. For this purpose we could use
MRP or consumption-based planning (CBP) procedures. The main difference MRP and
CBP is on the net requirements calculation. MRP performs net requirements calculation
based on the current and future requirements like sales orders, dependent
requirements, etc. On the other hand, CBP calculates net requirement based only on
the past consumption data or forecasted data.

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SAP MRP procedures can be classified into two major types:

1. Consumption-Based Planning (CBP)

2. Material Requirements Planning (MRP)

CBP includes the following procedures:

 Reorder point planning

 Forecast-based planning
 Time-phased planning

Reorder Point Planning

In reorder point planning, there comes a concept called reorder point. This is the point
where the requirement is triggered either for the procurement proposals or in-house
production. The reorder point triggers the procurement proposals when the material
stock and receipts fall below the reorder point.

The time taken by material to be available for requirement, either for in-house
production or external procurement is called replenishment lead time. When calculating
the reorder point SAP system would include the material requirements during replenish
lead time.

Net requirements calculation also takes into account safety stock. Safety stock is the
stock which includes material requirements and any unexpected deviations from
planned or unexpected delays in delivery. Safety stock would be maintained in MRP 2
view of a material master record under net requirements calculation tab.

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Reorder point planning could be further classified into manual and automatic reorder
point planning.

Manual reorder point planning requires the reorder point and safety stock to be
determined and entered in the material master record manually. MRP controller
calculates these values and enters in the material master record manually. These
values are then used during planning run calculation of the net requirements and trigger
procurement proposals.

Automatic reorder point planning ensures that the reorder level and safety stock are
calculated automatically by the historical consumption data. The historical consumption
data would be used to calculate the future requirements through a forecast program.
The future requirements, i.e. forecast values, are used to calculate the reorder level and
safety stock.

Material Master Record – SAP MRP Procedure

Material Master Record – Net Requirements Calculation

Forecast-Based Planning

Forecast-based planning procedure is based on the historical material consumption

data. The future requirements are calculated with the forecast program that calculates
future requirements with the forecast value and consumption values. The calculated
value would be considered during a planning run. This procedure which is used to
calculate the requirements is executed in a specified interval. If there is any material
consumed during this interval, then that particular material should be reduced from the
forecast requirement so that those quantities or the requirement is not considered
during planning run.

Material master – Additional data – Consumption Value

The consumption values are maintained in additional data under “Consumption” view. It
consists of a period indicator field, which has options for settings period intervals. The
period intervals that are commonly maintained are daily, weekly and monthly. The
period indicator in the above figure has the value as “T” which is the key for daily. So, if
you look at the table for consumption values in the figure, the period is maintained on a
daily basis. The consumption values are entered in the material master on a daily basis.
If there is any deviation in the planned delivery or production schedule, then it could be
entered in the corrected value. While calculating net requirements all periods are
included to generate the procurement proposal. The quantity for the proposal is
calculated based on the lot-sizing procedure that is maintained in the lot size data of the
material master record MRP1 view. The proposals would then be converted to either a
purchase order or a planned order. The date for the conversion of the proposals to
order would be calculated by the system. So, this planning procedure would be used to
ensure the availability of stock against the requirements at the right time with the right
quantity.

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Time-Phased Planning

Let’s discuss the next one of SAP MRP procedures. As the name suggests, this
planning procedure performs planning for a particular day. For instance, if the material
is supplied by a vendor only a specified day or days in a week, this material could be
planned based on the days in which it would be delivered by the vendor.

This time-phased planning procedure requires the material to be maintained with an

MRP date in the planning file. The date could be entered during material master
creation and the same would be changed or reset after every planning run has been
executed. The date which is reset or changed is calculated with the help of a planning
cycle that is maintained under MRP procedure tab in MRP1 view of the material master.
Time-Phased Planning – Planning Run
The above figure shows the planning run for a single item, single level planning. There
is a processing key available for the planning run. The keys N and P marked above,
which could be described as net change planning indicator and net change planning
horizon indicator respectively, are not applicable for time-phased planning. Therefore,
only G – regenerative planning is applicable for time-phased planning procedure.

There is another field marked above – planning date. This field indicates the date on
which the planning run would be carried out.

Planning date field is very significant for the time-phased planning. As this planning
procedure runs on a planning cycle and plans requirements based on the day the
material would be delivered, this planning date field helps the planning run to be
executed on an earlier date if required by business in case of any deviation in the
delivery schedule.

SAP MRP Types

SAP MRP type is a field that is maintained in the material master MRP 1 view under
MRP procedure data. This is a key which is used to regulate the material requirements
planning. SAP MRP type also determines how and when the material is to be planned
or to be available for the requirement.

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MRP procedure used for planning a material is determined with the help of SAP MRP
type and this also determines the value or settings to be maintained in the other MRP
views.
Material Master – MRP Type
There are several SAP MRP types that have been defined in the standard SAP. Please
find below the list of standard SAP MRP types:

 ND – No Planning
 PD – MRP
 R1 – Time-phased planning
 VB – Manual reorder point planning
 VM – Automatic reorder point planning
 VV – Forecast-based planning

There are also other SAP MRP types available. SAP MRP types can be configured
based on the business requirements. SAP MRP types can be customized in the IMG
activity and then the same MRP type can be assigned to the required material.

Customizing for SAP MRP Types

Here is the path in SPRO transaction:

IMG -> Materials Management -> Consumption-Based Planning -> Master Data ->
Check MRP Types -> Execute
Customizing Screen – SAP MRP Types
MRP Type – This field should contain the name for the MRP type and the description
for it should be typed in the next field. When a customizing takes place, the name or
parameter would begin with Z. But still this would be based on the business requirement
and it could be configured to suit as per the business.

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MRP Procedure – The MRP procedure used for planning the material is maintained in
this field. Some of the procedures are:

 B – Reorder point planning

 D – Material requirements planning
 N – No MRP
 S – Forecast-based planning
 R – Time-phased materials planning
 X – Without MRP, with BOM explosion

Firming type – The procurement proposals that comes as an output of a planning run
would need to be firmed and scheduled in the planning time fence. This firming type
determines the firming of procurement proposals within the stipulated planning time
fence. The below are the firming types:

 0 – Planning results not firmed

 1 – Automatic firming and order proposals rescheduled out
 2 – Automatic firming without order proposal
 3 – Manual firming and order proposals rescheduled out
 4 – Manual firming without order proposal

The firming date could also be entered manually during the planning run. As a result of
this the planning time fence would be extended to the manually entered firming date.
Roll forward – Two settings pertaining to planned orders could be maintained in this
field. One is to delete firm planned orders and the other is not to delete firm planned
orders. This indicator helps to delete or not delete the planned order during planning
run. New planned order could also be generated based on the materials requirements
at the time of planning run.

Forecast indicator – This indicator is used to determine whether forecast results would
need to be included in materials requirement planning or not. The options that are
available for this field are:

 No forecast
 Obligatory forecast
 Optional forecast

Consumption indicator of forecast – This indicator is used to determine which

consumption values are to be considered for forecast. The consumption values are total
consumption and unplanned consumption. Either of these two consumption values are
maintained in the consumption indicator forecast.

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MRP indicator of forecast – During planning run or net requirements calculation it
should be predetermined to include forecast value for net requirements calculation. If
forecast values are to be included for net requirements calculation, then it should be
determined unplanned requirement or total requirement.

Reduce forecast – With this indicator the forecast requirement could be controlled for
reduction. Reduction of forecast requirement by consumption, reduction of forecast
requirement in current month, average reduction of the forecast requirements. So, any
of these three values could be selected and maintained in reduce forecast field.

Automatic calculation – Automatic calculation of safety stock and reorder point could
also be maintained in the MRP types customization. The indicator must be set if the
safety stock and reorder point are to be calculated automatically. For net requirements
calculation, safety stock and reorder point value would be needed.

The above described are the major fields that would need to be maintained in SAP MRP
type customizing. Standard SAP MRP types are available, which could be copied,
customized and configured to suit our business needs. SAP MRP type could be created
by copying from the existing one and changing the required fields. The newly created
SAP MRP type would be made available in the drop down of SAP MRP type field in a
material master and the required type could be set against the material in the MRP
view.

MRP Scenario 1
If a material is to be removed from MRP or not to be planned automatically,
procurement proposals are not required to be created automatically. Then, MRP type
could be set to ND – No planning. When ND is set up in the MRP type of MRP1 view,
the material would not be considered for planning run either at a plant level or MRP
area level. The other parameters like forecast, consumption would be considered from
the MRP type customization.

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MRP Scenario 2
If a material is to be planned for MRP, procurement proposals would need to trigger
automatically, which could then be converted to either a planned order or a purchase
requisition. The MRP type to be set in material master is PD, the other MRP parameters
like forecast, consumption values, MRP procedures would be considered for planning
run from SAP MRP type configuration.

MRP Scenario 3
If a material is to be planned based on the past historical consumption data, then
consumption-based planning would need to be set up for that material. If the reorder
point based planning is to be setup, then MRP type should be either VB or VM. If
forecast-based planning is to be carried out, then MRP type VV should be maintained. If
time-phased planning is to be carried out, then R1 would need to be setup. Apart from
the MRP type field, for the planning run to be executed successfully and the exact net
requirements to be calculated, the other MRP parameters like reorder point, safety
stock, forecast values, consumption data, BOM explosion, lot size calculation and the
other fields required for planning run would need to be maintained in the material
master. Material master data maintenance in all the four MRP views is important for
successful execution of planning run and net requirements calculation.

SAP MRP Profile

For a material to be enabled for MRP (Materials Requirement Planning) run, it would
need to be maintained with MRP views with required settings during material master
creation or the material would need to be changed and the MRP views have to be
extended. SAP material master has four MRP views in it, viz., MRP 1, MRP 2, MRP 3
and MRP 4 views.

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MRP 1 view: This view contains fields that are relevant to general data, MRP
procedure, and lot size data.

MRP 2 view: In this view, fields pertaining to procurement data, scheduling, and net
requirements calculation are maintained.

MRP 3 view: Fields pertaining to forecast requirements, planning, availability check,

and plant specific configuration are maintained in this MRP 3 view.
MRP 4 view: This view has fields that are required for BOM explosion/dependent
requirements and repetitive manufacturing.

So, if one would like to create a material master and maintain the MRP parameters,
then all the MRP views would need to be maintained as per the requirement. It is a
time-consuming operation to go through every view and enter the required fields. This
could also lead to manual entry errors.

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This is where SAP MRP profile comes into picture. It is used to populate the MRP fields
with required values. SAP MRP profile is defined as a key that contains a set of MRP
view field values to be maintained during material master creation. It helps to minimize
the repetitive task of maintaining the MRP fields. This profile has two types of values –
fixed values and default values. Fixed values are those fields which would be greyed
out and they cannot be changed in a material master. Default values are those values
which could be changed or overwritten during material master creation while it gets
saved.

SAP MRP Profile Transactions

Menu Path: Logistics -> Materials Management -> Material Master-> Profile -> MRP
Profile

SAP MRP Profile Transactions

MMD1 – SAP MRP profile creation

MMD2 – To make changes to already created or existing SAP MRP profile

MMD6 – To delete an existing SAP MRP profile

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MMD3 – To display SAP MRP profile and its values

MMD7 – To check the usage of SAP MRP profile – where it used (which plant, material
number)

SAP MRP Profile Creation

The transaction code for SAP MRP profile creation is MMD1. Please see below for the
initial screen of SAP MRP profile creation.

SAP MRP Profile Creation

On the initial screen, there are two fields named as MRP profile. MRP Profile field with
NEW1 value maintained is the new MRP profile that is to be created (see picture
above). The other MRP profile under template tab is the reference MRP profile. The
existing SAP MRP profile could be entered in template, so that it could be used as a
reference to create a new MRP profile. In our example, let us create a new SAP MRP
profile named as NEW1 rather than creating a new MRP profile from the template. Enter
the new MRP profile, then click on “Selection screen” icon or hit Enter.
SAP MRP Profile Creation – Selection Screen

In the selection screen, the name for the MRP profile would need to be maintained. The
fields for selection are available and the selected fields will be copied to the profile.
There are two columns fixed values and default values, where the fixed value is write-
protected which means it cannot be overwritten during material master creation. The
default values are not write-protected and the MRP fields checked against default
values could be overwritten during material master creation.

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For our ease of understanding let us select one field per MRP view. For example

MRP 1 view – MRP type

MRP 2 view – Procurement type

MRP 3 view – Period indicator

MRP 4 view – Repetitive manufacturing indicator

After selecting the fields and marking them as fixed values or default values, click on
“Data screen 1” or “Data screen 2” icons.
SAP MRP Profile Creation – Data Screen 1
In this screen, there are three fields and these fields are populated here as we have
selected them in the selection screen. Now, the data screen 1 consists of all basic data.
If there is any additional data that is to be maintained and those fields had been
selected in the selection screen, it would appear on data screen 2.

Now, take a look at the fields on data screen 1. MRP type field is in blue color. The
other fields like procurement type and period indicator are in black color. This indicates
that the fields in blue color are fixed values which cannot be overwritten during material
master creation. The fields in black color are marked as default values on the selection
screen which means that they could be overwritten during material master creation. The
fields in data screen 1 are populated with the required values. Now, click on “Data
screen 2” icon.
SAP MRP Profile Creation – Data Screen 2
The repetitive manufacturing indicator has been selected on the selection screen and
marked as a default value. Hence, it appears in black color. Select the repetitive
manufacturing indicator, and then click on the save icon to create SAP MRP profile.

Now let us create a material master with reference to SAP MRP profile NEW1 that we
have just created. Go to the transaction code MM01.

SAP Material Master Creation – Initial Screen

Enter the new material to be created, its industry sector and material type, and then
click on “Select Views” to select the views of the material master that will be created.
SAP Material Master – Select Views

The views selected for our material master creation are Basic data1 and MRP 1-4. Then
press Enter.

SAP Material Master Creation – Organization Levels

Enter the value for plant, storage location and for SAP MRP profile – the newly created
MRP profile NEW1, and then press enter.
SAP Material Master – MRP 1 View

The figure with MRP 1 view shows that the value maintained in MRP profile – NEW 1 is
automatically populated and, as it was maintained as a fixed value, it is greyed out in
MM01, i.e. it cannot be overwritten.

SAP Material Master Creation – MRP 2 View

The procurement type maintained as E in NEW1 is populated in MRP2 view and it can
be overwritten in MM01 because it is a default value field.
SAP Material Master – MRP 3 View

The period indicator field maintained as T is populated in MRP 3 view as a default value
which can be overwritten.

SAP Material Master – MRP 4 View

The repetitive manufacturing indicator which was checked is replicated in MRP 4 view.
Now, click on save to create the material master MATERIAL1 with a reference to SAP
MRP profile – NEW1.

SAP Material status Field in Material Master Record

SAP material status field is available in “Basic data 1” view, “Purchasing” view, “MRP 1”
view, “Quality Management” view, and “Costing 1” view.

SAP enables us to configure various settings for material statuses. Here is IMG menu
path to perform the configuration:

SPRO -> Logistics -> General -> Material Master -> Settings for Key Fields ->
Define Material Statuses

The transaction code for this menu path is OMS4.

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If we start this configuration activity, it would bring the below screen showing a view to
define material Statuses.

Change View – Define Material Status Screen

Now, let’s check details of the material status “01 – Blocked for Procmnt/Whse”.

SAP Material Status 01

Both plant-specific and cross-plant settings could be maintained on this screen.

The plant-specific settings include “Purchasing”, “BOM”, “Routing/master recipe”,

“Material requirements”, “Production”, “Production resources/tools”, “Plant
maintenance”, “Inventory management”, “Warehouse management”, and “Cost estimate
with quantity structure”.

For all these fields there are three different message settings are available, viz.,

 Blank – No message
 A – Warning message
 B – Error message

We can specify any of these three messages based on our requirements.

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For example, if you look at the screenshot above, you will see that SAP material status
“01” has several fields with “B” as an input, which means it is an error message. When a
material is maintained with SAP material status 01, the material is blocked for
purchasing, inventory management, forecasting and MRP. SAP transactions related to
these areas would throw an error message indicating that a material is blocked for
Procmnt/Whse.

Next, let’s have a look at the SAP material status “99 – Obsolete”.
SAP Material Status 99 – Obsolete
Obsolete is a state where the material would no longer be used. Hence all fields should
be maintained with an error message. If the material has to be blocked client-wise, then
status 99 should be maintained in “Basic data 1” view of a material master record.

The same configuration activity can also be used for maintaining and creating other
SAP material statuses. There are many SAP material statuses available in the standard
SAP. We could use the available material status if it meets our requirements.
Otherwise, a new SAP material status could be created by copying the already existing
SAP material status. The newly created status should start with Z, to differentiate
between standard SAP and the customized ones.

For instance, let’s imagine that we would like to create a new SAP material status
similar to the standard status “01”, but with few modifications. In this case, “01” status
should be copied and a new one with name “Z1” should be created.

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To do this, select “01” line which should serve as a source, then click on “Copy as…”
icon.
Creation of a New SAP Material Status

New SAP Material Status “Z1”

This way, we created a new material status “Z1” by copying the standard status “01”.
The modification that we require is in BOM area and the fields over there are now
marked with B – error message.

Hence, when a material with status “Z1” is used for any purpose that involves BOM, the
system would throw an error message showing “Blocked for Pur/Whse/BOM”.

There are many standard material statuses supplied with the system. For example,
when you create a material, it could be set to the status “10 – Created but not usable”.
Then, when the material is required for business processes, it could be changed to “15
– Uncosted material”. When the material costing has been carried out, the status could
be changed to “16 – Initial Status Go Live”. Once the project is in Go-Live stage, the
material status could be changed to “30 – Released and saleable”.

SAP Reorder Point Planning

As the name indicates, SAP Consumption Based Planning (or CBP) has procedures
that are based on information about previous material consumption or the historical
data. The MRP procedures that come under consumption based planning are:

 Reorder point planning

 Forecast-based planning
 Time-phased planning

The material requirements planning takes place at plant level. The entire stock on the
plant is considered for planning irrespective of storage locations. In this tutorial, we will
discuss SAP reorder point planning. The reorder point planning consists of two
procedures:

1. Manual reorder point

2. Automatic reorder point planning

In SAP reorder point planning, a reorder point is obtained by calculating a sum of plant
stock and firmed receipts. When the stock level falls below the reorder point, a
procurement proposal is triggered. The following parameters are important when
considering the reorder point:

 safety stock
 average consumption
 replenishment lead time

In manual reorder point planning, both the reorder point and safety stock are maintained
manually in the MRP 1 view of a material master record. In automatic reorder point
planning, the reorder level and safety stock are calculated automatically by the
forecasting program.

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How to Use SAP Reorder Point Planning

To setup SAP reorder point planning, there have to be settings made at the material
master level in MRP views. MRP 1 and MRP 2 views contain fields that are considered
for SAP reorder point planning.

 MRP 1 View: MRP type, Reorder Point, Lot Size

 MRP 2 View: Safety Stock

Here is what these fields mean:

MRP type: VB – Manual reorder point planning; VM – Automatic reorder point planning

Reorder point: A stock value has to be entered in this reorder point field

Lot size: For our illustration, let us maintain “HB – Replenish to maximum stock level”. If
we maintain HB, then the maximum stock level field has also to be maintained.

SAP Material Master – MRP 1 View

For manual reorder point planning, the MRP type has to be maintained as “VB”. When
we enter VB as MRP type, then SAP system would display a message telling us to
maintain the reorder point. The reorder point has to be maintained in the specified field.

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Then, the lot size plays an important role in procurement proposal. Lot size defines the
quantity of the order that has to be placed. In our example, the lot size is maintained as
HB – replenish to maximum stock level, so the maximum stock level field has also to be
populated with the required stock value. The system will then create orders to replenish
stock up to this maximum level.
SAP Material Master – MRP 2 View
In MRP 2 view, the safety stock field has to be populated. Safety stock is the minimum
stock level that is acceptable for a material. It is defined by business requirements.
Now, let us view this material in stock/requirements list transaction (MD03).

Stock/Requirements List – Safety Stock

In the above figure, the stock/requirements list is shown. The available stock level is
0.000 at plant level. The safety stock for this material is 100.000 which is also shown.
Let us now run MRP at plant level for this material.
Transaction MD03 – MRP Run at Plant Level

Transaction MD04 – Stock/Requirement List – Safety Stock and Purchase Requsition

The stock/requirement list shown above now contains two lines with the safety stock
and a purchase requisition. As the stock level has fallen below the reorder point, when
the MRP run was carried out, the system triggers procurement proposal as a purchase
requisition. When you look at the image, the purchase requisition quantity is 300, which
is the maximum stock level maintained at MRP 1 view of the material master record.
This purchase requisition would then be converted to a purchase order by the
procurement department When we place a purchase requisition, the expected quantity
would first be kept as safety stock, and then the stock would be kept as available stock.