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Primary Function
System monitors stocks and automatically creates proposals for purchasing and/or production MRP initially proposes but human must convert proposal to concrete action
MRP
Locations for MRP Plant Determines requirements for entire plant on planning run Can exclude specified storage locations
MRP Area Can set up a specific area for which planning will be carried out Example: inventory maintained in Assembly operations area Only this area is planned by MRP run
Incorporates
Goods receipts planned orders and purchase requisitions Goods issues customer requirements, planned independent requirements, and reservations
MRP ATP- Available to promise quantity ATPATP = warehouse stock + planned receipts planned issues Inventory Management: when creating/changing reservations to ensure goods movement will not jeopardize availability status of other issue elements already created and checked by system
SD: whether material is available on desired delivery date for sales orders MRP: planned order processing and production order processing, processing, to make sure material components are available for production of finished product
Quota arrangements For multiple source materials Internal production or external procurement
MRP
System determines the sources of supply according to a quota file and assigns procurement proposals to sources Allocation quota arrangement: every lot assigned to rotating sources of supply Splitting quota arrangement: a lot is split among various sources of supply
MRP - Process
current inventory on order status forecasts recommended production actions
Inputs
master schedule bills of material planning rules
2008 by SAP AG. All rights reserved. SAP University Alliance
MRP process
Outputs
Organizational Structure
Plant specific organizational units MRP controller Production controller / production scheduler / planner group Person responsible (financially) Non-plantNon-plant-specific organizational units Capacity planner
A complete list of the components (inputs) that are required to assemble a completed unit of goods (e.g., finished good) Could be for an intermediate production good (e.g., engines for car manufacturer)
Where is the BOM used? MRP uses the BOM to determine dependent requirements (exploding the BOM to identify raw material and subcomponent quantities required to complete production of a planned order) Controlling uses the BOM to calculate product costs Production (PP) uses the BOM to issue the proper quantities of components and raw materials to the shop floor
Work Center
Location where value-added work is valuepreformed Contains one or more of the following resources Equipment Operations People
Master Data - Work Center Capacities are defined by the user Labor / machine / emissions / energy consumption
Used for capacity requirements planning, detailed scheduling and costing Capacity is assigned to a cost center HR assignments could include ... Qualifications, Positions, People
Routing Sheet
Recipe (plan) for activities Ordered sequence of procedures required
to assemble a completed unit of goods Contains the resources required to complete each step in the manufacturing process for a particular product or item. Elements of a routing are ... Operations Material components used by each operation Production resources and tools Inspection characteristics
2008 by SAP AG. All rights reserved. SAP University Alliance
Routing
Routings will be used in Scheduling Costing Capacity planning Production orders Components to be used in the individual operations are assigned to the individual operations
Planned Order - replenishment elements created by MRP Dependent demand based on BOM can be ... Firmed: changes only recommended Changed by the planner Converted into a production order System assumes recommendations have been acted upon
Production Orders
Planned orders are converted into production orders Used to specify What is to be produced When production is to take place Which capacity is to process the order How much production cost will be
Production Orders
routing is selected, operations and selected, sequences are transferred to the order BOM exploded and the items are transferred to the order Reservations are created to hold items in stock Planned costs of order are generated Capacity requirements are generated in work centers Purchase requisitions generated for non-stock nonitems and externally-processed operations externally 2008 by SAP AG. All rights reserved. SAP University Alliance
Costs - $$ Planned cost of order ... Uses bill of material Uses routing Based on material master price for each component Allocated to cost elements
Costs - $$
Actual costs of order Uses bill of material Uses routing Gets updated when goods are issued to order or when purchased materials are received May include activity costs Updated at completion confirmation
Flya Kite PP Transactions EXERCISE PP01: CREATE MRP VIEWS FOR RAW MATERIALS
Before raw materials can be used in manufacturing, the MRP views must be added to the material master record
If material master already created, MRP views are added to extend the record Determine the lot size of the order Set the production time required Set the safety stock Set the availability check Set the replenishment lead time for the material
In some cases, trading goods are not only sold outright but they are used in the manufacturing process to create finished goods
For example: string is sold as a trading good but is also used in making a kite
Before a trading good can be used in manufacturing, the MRP views must be added to the material master record
If material master already created, MRP views are added to extend the record
EXERCISE PP03: CREATE MRP & WORK SCHEDULING VIEWS FOR FINISHED GOODS
The MRP views are necessary to set the production data in the finished good master record Because finished goods are produced, there must be a work scheduling view included in the record to permit the system to schedule the production of this material
The BOM specifies what components are needed in order to produce the particular finished product
For example: to make a kite, one needs paper, wood, and string
The BOM also includes the quantities of each material needed to create the finished product
For example: to make a kite one needs 1 unit of paper, 1 unit of wood, and 150 units of string
Flya Kite PP Transactions EXERCISE PP05: CREATE A ROUTING FOR FINISHED PRODUCTS
The routing indicates which operations must be performed to build the product and their order The routing specifies how much time will be required in each of the operations both for set up in order to get ready for production of one unit of product as well as the labor time required (it can also include machine time if machines are part of the operation) The materials to be used at each operation are also assigned to the routing so that the materials will be present for use when required
The routing created and the components assigned to each step are displayed in order to ensure they are correct
Flya Kite PP Transactions EXERCISE PP07: RUN MRP SINGLE ITEM, MULTI LEVEL
The MRP system is executed (run) so that it will plan the production of the finished good