20th of April, 2000

The World without MRP is not Enough !

Olivier Flament

World without MRP is not Enough. Trainings map

Introduction Master Data Planning Strategies MTS vs MTO Planning Levels - Overview

MTS MTO

MTS (10,11) Planning w. Final Assembly (40) MTO (20) Planning w/o Final Assembly (50)

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Planning Levels - Overview

CO/PA

Profitability analysis Sales & operations planning

Region 1

Region 2

SIS

Forecast

SOP

Product group

Demand management

Product 1

Product 2

MPS

Master planning
MRP

Master production scheduling

Long -term planning

Material requirements planning

Assembly Part

Assembly

. . .

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Feedback / Corrections

Production Planning cycle

Long-Term Planning

Master Production Scheduling

Material reqmts planning

Demand Management

Capacity Capacity

Stock Stock

Production control

Sales and operations planning

Settlement

Controlling Controlling
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Master Data for Production Planning

Organizational Elements Material Master Bill of Material (BOM) Work Center Routing Costing Data (Cost Center)

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Organizational elements for PP

Client

Company Code

1000

1100

Plant

1000

1100

Storage location

0001

0002

0002

0088

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Material Master for PP: Material type

Raw material Trading goods

ROH - Raw material HAWA - Trading goods

Semi-finished

Operating supplies

HALB - Semi-finished product HIBE - Operating supplies FERT - Finished product

Finished product

Non-stock material

Other

Other

NLAG - Non-stock material

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Material Master for PP: PP views

Material Master: Data Structure
Basic data Material Description Unit of Measure

MRP MRP type Procurement type MRP controller Lot size key
Plant 2000 Plant 3000

Work scheduling
Lot size times Tolerance data
Plant 1000 Plant 2000 Plant 3000

Accounting Price control Prices

Plant 1000 Plant 2000 Plant 3000

Plant 1000

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Material Master for PP: MRP view

Example fields: Procurement type Planning Strategy (Strategy group) MRP controller In-house production time MRP type Lot size key

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Raw Mat

Planning Strategy: Make-to-Stock versus Make-to-Order

Sub Assembly Semi Finish Final Assembly Finish Product

Supplier
Raw Mat

Customer

De-coupling Point

MTS

Plan : Make to Stock

Sales Order Sales Order Info Assemble to Order

MTS Plan w/o Final Assembly ATO

Sales Order Info

MTO

Produce Make to Order

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Planning Strategy: MTS strategies

Planning with Final Assembly

Make-to-Stock Planning

Make-to-Stock Production

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Planning with Final Assembly (planning strategy 40)

Planning with final assembly Sales and Operations planning (SOP) Demand Management (DM) Materials Requirements Planning (MRP) Consumption by sales orders

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Planning with Final Assembly (Planning Strategy 40)

General features
Planning is done at the finished product level Procurement and production are initiated after planning Sales orders consume the forecast quantities Forecast quantities that are not used increase the warehouse stock Additional requirements automatically adjust demand program

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Planning with Final Assembly: Consumption Process

Independent Reqts. Sales Orders Demand Program

Time Time Forecast Comparison

Time Time

Time

Total Requirements Master Plan

Planning quantities vs. Sales Orders Sales orders

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Production Planning cycle: Sales and Operation Planning

Sales and Operations Planning
Master Production Scheduling

Long-Term Planning

Material reqmts planning

Demand Management

Capacity Capacity

Stock Stock

Production control

Sales and operations planning

Settlement

Controlling Controlling
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Sales & Operations Planning

Create Sales Plan

Create Production Plan

Disaggregate Values

Planning

Transfer Planning Values to Demand Management

R

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Sales and Operation Planning: Creation of a sales plan

Creating a Sales Plan
Sales Information System
Information Information Version Version From From To To

CO / PA module
CO/PA field name CO/PA field name Version Version From From To To Measure Measure - -Sales quantity Sales quantity

Forecast

Measure Measure - -Sales quantity Sales quantity - -Returns Returns

SOP Planning Table Un Sales

PC

05/1999
1000

06/1999

07/1999

900

1200

Value OP Sales Production Target stock Target supply 10 = 5 %+

From 01/1999

To 12/1999

01/1999 12/1999

Distribution
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Direct - manual

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Production Planning Cycle: Demand Management

Demand Management
Master Production Scheduling Long-Term Planning Material reqmts planning

Demand Management

Capacity Capacity

Stock Stock

Production control

Sales and operations planning

Settlement

Controlling Controlling
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Demand Management: Input/Output

Demand Management

Manual entry

SOP Sales Plan

SOP Production Plan

Material Forecast

Copy another plan

Demand Program

Planning levels:  Material  Product group  Versions

MPS / MRP

Planning options:  Horizon  Period splits  History

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Demand Management: Stock/Requirement List

Material Plant MRP Elements
Date 01/31/97 02/15/97 02/21/97 02/26/97 MRP Element R-Date Stock PrdOrd IndReq PlOrd 100000783 VSF 100000790 EM Recpt/Rqud qty Available qty 100 200 2000

Material 1 CSPL MRP Type PD

Material Type FERT

07

100 400 200

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Production Planning Cycle: MRP

Material Requirements Planning
Master Production Scheduling Long-Term Planning Material reqmts planning

Demand Management

Capacity Capacity

Stock Stock

Production control

Sales and operations planning

Settlement

Controlling Controlling
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Planning procedures: consumption based vs. MRP

Planning procedures

MRP

Reorder point planning

Automatic reorder point

Material reorder point

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Re-Order Point Planning

Reorder Point Planning ( ROP) + In reorder point planning, procurement is triggered when the sum of warehouse stock and firmed receipts falls below the reorder point + ROP, Safety stock
700 Lot Arrives 600 Lot Arrives

Reactive approach
Inventory

500 Reorder Point 400 Lead Time

Lead times are fixed (focus on start dates) Order quantities are generally fixed No time phasing of demand

300 Order 200 Order

100

Safety Stock
0 2 4 6 8 10 12 14 16 18 20 22

Weeks

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MRP Overview (1): The cycle

Sales Orders Planned Ind Requirements

MRP
Dependent requirements Reservations

Planned order Convert

Production order

Purchase requisition Purchase order Warehouse

Schedule line

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MRP Overview (2): The Bill of Material

Finished product

Sales order / Planned Ind Requirement Planned order

Assembly 1

Assembly 2

Dependent requirement Planned order

Raw material 1

Raw material 2

Raw material 3

Dependent requirement Purchase requisition

R

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MRP Net Requirements Calculation

Net Requirement= Supply +Stock-Demand
Lot size
Shortage

Sales Orders Planned orders Production orders Purchase requisitions Purchase orders Warehouse stock
Compare

Planned Independent Requirements Dependent requirements Reservations Safety stock

Supply
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Demand

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Lot-sizing Procedures
Static lot-sizing procedures
- Lot-for-lot order quantity - Fixed lot size - Replenish up to maximum stock quantity

Period lot-sizing procedures

- Daily lot size - Weekly lot size - Monthly lot size - Lot size according to accounting period - Lot size according to MRP planning calendar

Lot size limitation

- Minimum lot size - Maximum lot size - Rounding quantity/partial lot size

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MRP Date Calculation

MRP Date Calculation
Order start date Finished Product Assembly 1 Assembly 2 Planned Order Planned Order Order finish date Planned Order

Raw Mat 1 Raw Mat 2

Purchase Req Purchase Req

Raw Mat 3

Purchase Req

Time
R

Required Date

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Basic Dates: Backward Scheduling

Opening Period

In-house production time

Goods receipt processing time

Planned opening date Today

Order start date

Order finish date Backward Schedule

Availability date

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Basic Dates: Forward Scheduling

Opening Period

In-house production time

Goods receipt processing time

In-house production time

Goods receipt processing time

Order start date Forward Schedule Today

Order finish date

Availability date

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Time elements summary

Order lead time Float bef . OP Prod. 0010
OS SS

SD processing time Float after GR Prod. Proc Time

SF OF AD

OP 0020

OP 0030

OP 0040

........

OP 0099

Pick / Pack
LD

Load
GI

Transit
DD

In house Production lead time

Order dates
OS SS SF OF AD LD GI DD Order start date Scheduled start date Scheduled finish date Order finish date Availability date Load date Goods issue date Desired delivery date

Time elements
Lead time for order or operation Float times In house Production lead time Execution time -operation Interoperation times Processing times in Sales and Distribution
R

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Planning Time Fence (1)

Planning time fence (example: 15 days)

Firm Planned Order

The planned order is here only if it is manually rescheduled by the MRP controller

In the automatic planning run, the new planned order is scheduled at the end of the planning time fence. Time End of planning time fence

Today Existing Requirement New Requirement

Firming period Firming period

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MRP Total Planning

Planning types
 Plan all materials in a plant

 Plan only materials that have undergone a change relevant to planning

Receipts

Planning horizon
Time Planning horizon

 Unlimited, or  Defined time length

R

Issues

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MRP List and Stock/Requirements List

Stocks

MRP List

Material requirements planning

Reqmts

Stock / Requirements List

Receipts

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Sales and Distribution in Production planning cycle

Long-Term Planning

Master Production Scheduling

Material reqmts planning

Demand Management

Capacity Capacity

Stock Stock

Production control

Sales and operations planning

Sales and Distribution
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Settlement

Controlling Controlling

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Sales and Distribution

Sales Order Sold-to: Purchase order: Delivery date: Customer A XYZ 10 May 1999

Item 10 Customer

Material T-F101 Pump

Quantity 100

Availability check

Consumption
R

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Availability Check
Planned orders

A A 01 May

B B 01 June Sales orders

A B

= 120 PC = 90 PC

1 1 10 May

2 2 20 May Allocation

1 2

= 100 PC = 100 PC

A A

Sales order 1: 10 May 100 PC Sales order 2: 20 May 20 PC 01 June 80 PC

R

1 1 Completely confirmed

2 2 Partially confirmed

B B

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Consumption logic (1)

Planned independent requirements

Time

Sales orders

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Consumption logic (2)

Planned independent requirements

Backward consumption only

Time Customer requirements

Backward consumption period PB Forward consumption only

PB

Time
Forward consumption period PF Backward / forward consumption
1 2

PF

Time
PB PF

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Make-to-Order

Make-to-Order Make-to-Order Planning Planning

Make-to-Order Make-to-Order Production Production

Assembly Assembly Processing Processing

Planning without Planning without Final Assembly Final Assembly

Repetitive Repetitive Manufacturing Manufacturing

Production Production Order Order

Project Project

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Make-to-Order Production

Material X

Material X

Sales Order A
D e l i v e r y

Sales Order B
D e l i v e r y

Material Requirements Planning

Production

Production

Customer Stock

Customer Stock

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Planning without Final Assembly (Strategy 50)

Planning Planning

S&D S&D

PC PC

Production planning using planning without final assembly Hard disk Hard disk Motherboard Motherboard

Assembly Assembly production production

BIOS BIOS
Component Component replenishment replenishment

Make-to-stock repetitive manufacturing

KANBAN

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Planning without Final Assembly: Sales Order

2. .5. Final assembly 4. Sales order MRP PC PC 1. Planned ind . reqmt MRP Production 3.
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6.

Warehouse stock: Hard disk

Warehouse stock: Motherboard

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Stocking Level

High value added

Sales order

PC PC

Planned ind . reqmt

Warehouse stock: Warehouse stock: Hard disk Hard disk

Warehouse stock: Warehouse stock: Motherboard Motherboard

Stocking level

Low value added

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Flexible Determination of Stocking Level

Strategy group 50 Strategy group 50 PC PC Individual/collective Individual/collective = 1 or blank = 1 or blank Stocking level

Warehouse stock: Warehouse stock: Hard disk Hard disk

Warehouse stock: Warehouse stock: Motherboard Motherboard

Stocking level

Individual/collective = 2

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bj . t c e

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Reference
 SAP

training LO 050 course material (available in training LO 210 course material (available in

MCS InfoKiosk SAP database)

 SAP

MCS InfoKiosk SAP database)



SAP MRP Strategies Made Easy Book (available on sapnet)

The World without MRP is not Enough !

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The End...

If you still have any question...

The World without MRP is not Enough !