Fdocuments - in - Sap PP Process

General
• CBP is a branch of MRP dealing with all those materials whose

planning is a function of their consumption, as opposed to how
much is currently needed for production or to fulfill customer
demand
• In accordance with the above, we will use CBP for less expensive,
less critical components. That is, those less expensive
components that we usually purchase from external vendors (e.g.,
nuts and bolts).
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MRP Process
1
MRP Procedures
Here you can

see the main
areas of CBP
2
A Word About SAP Supply Chain Management (SCM-APO)
When should you use CBP and
when should we use SCM-APO?
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What We’ll Cover …
• Main differences between MRP and CBP
• Materials categorization — the ABC approach
• Reorder point planning; planning based on past consumption
• Time-phased planning
• Forecasting
• Plant MRP and MRP areas
• Illustration: Customizing plant parameters
• Illustration: Customizing MRP types and lot sizes
• Illustration: Customizing MRP areas
• Wrap-up
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Categorization
• Categorization of products is about defining the delivery time and
the delivery service for each of the products in the product
program. Categorization of the products is made from a
categorization of the customers and the products they buy.
• Subsequently the categories for the finished products are then
linked to the semi-finished and the raw materials respectively, and
later also to suppliers
• With categories at each level it is possible to create a very
efficient supply chain
• Product Categorization gives a superb basis for implementing
Lean Manufacturing, by clearly showing the product priority when
it comes to flow, inventory, planning, etc.
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ABC Approach
• One of the common practices for categorizing materials is the
ABC approach
• In principal, the ABC approach says: Categorize your materials
according to the following simple rule:
 A – “A” materials are the most expensive and critical materials
in your organization
 B – “B” materials are the less expensive, less critical materials
 C – “C” materials are the non-expensive, non-critical materials
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When to Use CBP
• CBP deals primarily with the “C” materials that we purchase
• One of the purposes of CBP is to create Purchase Orders as
automatically as possible in order to reduce manual intervention
in the purchase process
• It is possible to use transaction MIBC (ABC Analysis for Cycle
Counting) as a basis for ABC categorization. However, it does not
take into account the criticality of the material, and therefore
manual work must still be performed.
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• Forecasting
• Wrap-up
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General
• Reorder point planning should be used with relatively constant
consumption materials
• If the material’s consumption is not constant over time, this
method might result in excess stock (the need to keep high safety
stock) or stock shortage (fluctuations)
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Methodology
Reorder point quantity

includes safety stock. The PO
quantity depends on the lot
size (e.g., fixed).
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Calculation
MRP
compares the
quantity in
stock + PRs
+ POs to the
reorder point.
There is a
shortage if
the total
quantity is
lower than
the reorder
point.
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Chart
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Forward Scheduling
CBP calculates the availability date depending on lead

times from today’s date
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Add External Requirements to MRP calculation
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Planning Based on Past Consumption
• Planning based on past consumption should be used for
materials whose future behavior can be predicted by their past
consumption
• Materials with short life cycle would therefore probably not be a
good choice for planning using this method
• Good candidates for planning using this method might be
materials with relatively many consumption periods
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• Forecasting
• Wrap-up
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General
• Time-phased planning should be used for materials that are
delivered on specific dates
• This method works similarly to reorder point planning — the
difference is that specific delivery dates are taken as parameter
• To run this method, a specific calendar must be created and
maintained
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How Time-Phased Planning Works
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Methodology
Time-phased planning works almost the same way as reorder
point planning, only with specific GR dates
• Forecasting
• Wrap-up
20
General
• Forecasting can be used to:
 Predict future consumption values from old ones
 Calculate safety stock
 Calculate reorder points
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Forecasting Methods
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Selection of Forecasting Methods
Selection is done
in the Material
Master
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Uses of Forecasting
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How Forecasting Works
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How Forecasting Works (cont.)
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Backward Scheduling
Forecasting calculates the date when we should
start purchasing according to the requirement date
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Using Forecasting for Reorder Point Planning Calculation
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• Forecasting
• Wrap-up
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Plant MRP and MRP Areas
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Example 1
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Example 2
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Example 3
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Types of MRP Areas
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• Forecasting
• Wrap-up
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Configure CBP Forecast Views:
Start by Activating the Material Master MRP
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Configure CBP Forecast Views:
Start by Activating the Material Master MRP (cont.)
• There are other

IMG activities for
all that is on the
screen, but all can
be configured in a
one-stop shop
37
• Forecasting
• Wrap-up
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Effect of MRP Types
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Effect of MRP Types (cont.)
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Effect of MRP Types (cont.)
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Effect of Lot-Sizing Procedures
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Effect of Lot-Sizing Procedures (cont.)
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Effect of Lot-Sizing Procedures (cont.)
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• Forecasting
• Wrap-up
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Tasks to Perform When Activating MRP Areas
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Tasks to Perform When Activating MRP Areas (cont.)
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• Forecasting
• Wrap-up
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Resources
• SAP courses – www.sap.com/usa/services/education/index.epx
 SAPSCM - Supply Chain Management Solution Overview
 SCM525 - Consumption-Based Planning and Forecasting
• http://help.sap.com
 Consumption-Based Planning (MM-CBP)
 http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c282
1c454011d182b40000e829fbfe/frameset.htm
• Product Categorization (ABC categorization)
 www.flexinfonet.com/setprice.asp?page=34
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7 Key Points to Take Home
• Categorize your materials
• Use CBP for your “C” components
• Materials with relatively constant consumption should be planned
with reorder point planning
• Materials with numerous consumption histories may make use of
forecasting to predict their future consumption
• Materials with specified delivery dates may use time-phased
planning
• Forecasting may be used also to calculate safety stock and
reorder points according to past consumption figures
• Creating a new MRP type can be useful to control customized
planning methodology as combination of “standard” methods
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General

• CBP is a branch of MRP dealing with all those materials whose

Here you can

Reorder point quantity

CBP calculates the availability date depending on lead

 Calculate safety stock

 Calculate reorder points

• There are other

 SCM525 - Consumption-Based Planning and Forecasting

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