4.00 [BPD Title]
Document number
Version 1.0
Business process design document
[Workstream] (Master Data)
4.00 [BPD Title]
Document number
Version 1.0
Business process design document
[Workstream] (Master Data)
Document revision history:
Version no.
1
Date
Author
Change description
20/12/2023
Izhak assaf
Initial Draft
Approvals
Prepared by:
Signature indicates that this document is accurate and complete, and it complies with current standards and regulatory requirements
and adequately addresses the intended purpose and scope.
Author name
Role
Signature
Izhak Assaf
MRP & Manufacturing Team
Lead (EY)
Izhak Assaf
Date
20/12/2023
Approved by:
The undersigned acknowledge that they have reviewed this document and agree with the information presented within.
Approved by
Role
Sergio Negroe
MRP & Manufacturing Team
Lead (EY) Lead
Procure to Pay Lead
Carrie Willicome
EMEA Lead
Signature
Date
Table of contents
1.
2.
3.
4.
5.
Introduction ........................................................................................................................................................................................ 5
Main Function of MRP ....................................................................................................................................................................... 6
2.1 MRP Planning Modes ............................................................................................................................................................... 7
2.2 Scope of Planning Run ............................................................................................................................................................. 7
2.3 Stock Requirements List & MRP List. ....................................................................................................................................... 8
2.4 MRP Areas ............................................................................................................................................................................... 9
Detailed MRP Process run at plant level ......................................................................................................................................... 12
MRP in Cengage ............................................................................................................................................................................. 13
MRP Essential Master data ............................................................................................................................................................. 14
Requirements Traceability Matrix (RTM): ........................................................................................................................................ 14
5.1 Process performance measures and management information ............................................................................................. 15
5.2 Process reporting requirements. ............................................................................................................................................. 15
5.3 Data requirements .................................................................................................................................................................. 15
5.4 Process risks and controls ...................................................................................................................................................... 15
5.5 Business roles and access requirements ............................................................................................................................... 15
5.6 RICEFW requirements............................................................................................................................................................ 15
5.7 Design risks and issues .......................................................................................................................................................... 16
5.8 Identified process improvements. ........................................................................................................................................... 17
5.9 Change impact summary. ....................................................................................................................................................... 17
5.10 Non-functional requirements (Include Security Requirements) ............................................................................................... 17
1. Introduction
Document purpose and structure
1.1
The purpose of this document is to describe the business requirements and the necessary configurations required for
setting up Materials Requirement Planning (MRP) process for the Future ERP phase 2 program at Cengage, to meet the
requirements collected by the SAP team.
1.2
The Materials Requirements Planning Process has following important segments:

Required Master Data at material Master with MRP Profiles

Required Master Data other than Material Master such as BOM's, Routings, Production versions

Usage of MRP Areas that are the building blocks of the MRP Processing

Execution of MRP Jobs

Analysis of MRP results
In workshop conducted with Cengage Business team, following points are discussed in terms of Material Requirements
Planning types.
Deterministic MRP (Demand Based): MRP is carried out using current and future sales figures. The planned and the
exact requirement quantities trigger the net requirements calculation.
The requirement elements of this calculation include sales orders, planned independent requirements, material
reservations, dependent requirements received from BOM explosion, and so on. The net requirements calculation can
give the exact requirements for each day. As you require exact requirement quantities for MRP, this means that you can
work with particularly low safety stocks.
Consumption Based MRP: Consumption-based planning is based on past consumption (Stock) values and uses the
forecast or other statistical procedures to determine future requirements. The procedures in consumption-based planning
do not refer to the master production schedule. That is, the net requirements calculation is not triggered either by planned
independent requirements or dependent requirement. Instead, it is triggered when stock levels fall below a predefined
reorder point or by forecast requirements calculated using past consumption values.
Following scenarios are to be considered:
Production Process in USA (As-Is treated as Vendor for Manufacturing facility)
On the Fly Kits (Bundling / kitting): Decision required for production relevance.
KITs/Bundles created in advance and kept in Stock Document scope and context.
2. Main Function of MRP
The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or
produce the requirement quantities on time both for internal purposes and for sales and distribution. This process
involves the monitoring of stocks and the automatic creation of procurement proposals for purchasing and production.
Procurement or production dates for the finished product, the assemblies, and components are determined based on the
requirements dates for the finished product (a sales order, for example). If possible, backward scheduling is used to
derive the requirements dates for the dependent requirements of lower-level materials.
If MRP discovers shortage quantities, procurement proposals are generated in planning. For execution, they are
converted. Planned orders can be converted into production orders or process orders. Purchase requisitions, planned
orders, and scheduling agreement scheduling lines are internal planning elements that can be changed, rescheduled, or
deleted at any time. After conversion of planned orders or purchase requisitions, production orders, process orders, and
purchase orders are fixed for planning.
Material requirements planning takes current and future sales as its reference point. The planned requirement quantities
trigger the MRP calculation. In MRP, the requirements elements include sales orders, planned independent requirements,
material reservations, the dependent requirements created by exploding the BOM, and so on.
if the MRP run determines shortage quantities, the system creates procurement proposals: Purchase requisitions and
planned orders are internal planning elements that can be changed, rescheduled, or deleted at almost any time. With inhouse production, the system creates planned orders for planning the production quantities.
When planning is complete, planned orders can be converted into production orders.
With external procurement, the system either uses a planned order or uses a purchase requisition directly to plan the
external procurement quantity. When planning is complete, the planned order is converted into a purchase requisition,
which is subsequently converted to a purchase order. Using the creation indicator for purchase requisitions on the initial
screen of the planning run, you control whether the system immediately creates purchase requisitions directly, or first
creates planned orders. In Cengage we prefer to create directly Purchase requisition for purchase materials.
If a scheduling agreement exists for a material and is relevant for MRP in the source list, you can also create schedule
lines directly using MRP. You control this using the creation indicator for scheduling agreement delivery schedule lines on
the initial screen of the planning run.
2.1
MRP Planning Modes
2.1.1
MRP Live: Using a S/4HANA Enterprise Management system, you use the new function MRP Live to run MRP. The
system performance enables you to plan one or several plants online interactively.
2.1.2 Total planning for a plant: You can execute a total planning run for several plants and MRP areas. Total planning for a
plant encompasses all MRP-relevant materials for this plant and includes the BOM explosion for materials with BOMs.
2.1.3 Planning for an individual material: You can execute a single-item planning run for a specific material (single-level) or for
all BOM levels (multilevel). Interactive planning of a material is also possible. From the MRP menu, you can execute total
planning online or as a background job. To execute the total planning run as a background job, select a report variant to
restrict it to the relevant plant and schedule the job.
2.2
Scope of Planning Run
2.2.1 With regenerative planning, the system plans all materials in a plant. This is useful for the first planning run and during
day-to-day plant operations when data consistency cannot be guaranteed due to technical errors.
2.2.2 Due to certain circumstances, such as goods issues, new sales orders, and changes to the BOM structure, it is
recommended (particularly with a large number of materials) to execute MRP for only those materials to which MRPrelevant changes have been made. Because of its short runtime, net change planning, which is used to plan only these
materials, allows you to execute the planning run at short intervals, yielding the most current planning result.
2.2.3 With net change planning in the planning horizon, the system only considers changes that are within the planning
horizon, and only plans materials to which MRP-relevant changes have been made within the planning horizon. In
addition, the materials are only planned within this horizon.
2.2.4 You can set the planning horizon as a plant or MRP group parameter in MRP Customizing. The planning horizon must at
least include the time period in which sales orders are received, the delivery times, and total lead times for the material.
We would setup the planning horizon parameter for Cengage during the Realization Phase.
2.2.5 You specify the type of planning to be used in the Processing Key field on the initial screen. With single-item planning,
you can decide between net change planning (NETCH) and net change planning in the planning horizon (NETPL). With
total planning, in addition to NETCH and NETPL, you can select the NEUPL key to determine that all materials in the
planning file are to be planned.
Stock Requirements List & MRP List.
2.3
Additional similarities between the current stock/requirements and MRP list are as follows:

The worklist of the MRP controller is in the form of a tree, on the left (optional).

The header with the material number is above the list. More information displays above the header details.

The list contains the individual MRP elements and the corresponding available quantities.

MRP list is a static list that shows the status of requirements and sources just after the MRP run, while the Stock
Requirements List is a dynamic list that shows the current status of requirements and sources for that material.

Changes that have occurred between planning runs are ignored in the MRP list, while the system displays all changes in
stock, receipts, and issues that have currently occurred in the Stock Requirements List.

Each time the Stock Requirements List is called up, the system selects the various MRP elements and displays the most
up-to-date situation, while the MRP list updates only after each MRP run so that between runs you have a static picture of
the MRP scenario.

Comparison: The screen layout of both lists is basically the same.

The system automatically runs the rescheduling check directly when both lists are created and puts forward rescheduling
proposals.

The number of exception messages displayed in each list is roughly the same. The only difference lies in the fact that, due
to the nature of the list, no exception messages can occur for newly planned MRP elements in the stock/requirements list.

Directly after the planning run, both lists contain the same information. As soon as a change relevant to MRP is made, the
system updates the information in the stock/requirements list.

As stock/requirements lists are subject to change, they cannot be set with a processing indicator. Hence the MRP
controller in Cengage will follow the MRP List for the last regenerative or net change Last Run. At real time he will
compare MRP list with stock requirement list. A single item/single item multi-level run will take place, planned orders
and/or Purchase requisitions should be created in case there is no available stock. Some purchase requisition may be
converted to orders (based on the planned delivery time) and planned orders can be converted to Manufacturing orders.
When the situation is fulfilled, the material will be set for processing with the processing indicator, and he will move to plan
the next material in his MRP List. In Cengage Every MRP controller will be responsible to his own set of materials.
During realizations we will allocate MRP controllers / Planners to the related materials preferably according to the
MRP Profiles.
2.4
MRP Areas
As we know, SAP MRP runs at plant level (centralized), but as per business need, we may have to plan MRP for
individual & independent planning areas (decentralized). This can be achieved by activating MRP areas. These MRP
areas are fully configurable organizational units where MRP can be run individually. So, we can broadly classify running
MRP in 2 major ways.
2.4.1 MRP at plant level: The system adds together stocks from all the individual storage locations to determine total plant
stock. The requirements are combined in the planning run and procurement elements are created for these pegged
requirements with unknown sources. Individual storage locations can be planned separately or be excluded from
planning.
2.4.2 MRP area level: MRP Area represents an organizational unit for which material requirements planning is carried out
independently. Only the stocks from the storage locations or subcontractor assigned to the respective MRP area are
considered. The requirements in this MRP area are combined and procurement elements are created for them. This
enables us to plan material requirements specifically for certain areas (MRP areas).
You can define MRP areas within a plant and carry out MRP specifically for that particular area, for example in above
illustration, for MRP area M0001 can be planned independently without running MRP for plant FP01. In each MRP area
you can control staging and procurement of parts that are produced in house or externally. All MRP procedures are
supported by MRP areas and one can display the result of MRP run for each MRP area.
MRP Area is functionality for special planning process that enables you to carry out planning not only at plant level but
also at different planning levels (eg, storage location & sub-contractors). There are 3 types of MRP areas in SAP



Plant MRP Area
MRP Areas for storage location
MRP Areas for Subcontractors
2.4.2.1. Plant MRP area: MRP area can be created at plant level. On doing so, system combines all its storage locations
and stock with subcontractors under that MRP area. When you define MRP areas for storage locations and for
subcontractors and assign material to newly created MRP areas with in plant then the plant MRP area gets
reduced by exactly the numbers of subcontractors and storage locations. This is because they will now be
planned separately in new MRP areas.
2.4.2.2. MRP area for storage location: MRP area can also be defined for storage location or multiple storage locations.
Material requirements for this storage location are then planned separately from the rest of the plant. Important
point to note here is that you can assign 1 storage location to only 1 MRP area but you can have multiple storage
locations under single MRP area. It’s a N to 1 relationship.
2.4.2.3. MRP Areas for Subcontractors:
You can also define an MRP area for each subcontractor. Important point to note here is that a subcontractor can
be assigned to only one MRP area in a plant. An MRP area of the subcontractor type can only contain one
subcontractor. It’s a 1 to 1 relationship.
Cengage would activate MRP Area at plant level and in Subcontractor level. That means that MRP area will be
defined for every plant and for every subcontractor.
As recommended, MRP procedures with SAP best practice J44 comes with different MRP types, like Demand
Driven & Consumption based planning. Both these items are denoted with different codes in SAP system.

PD (Demand Driven):
It is expected most of the materials will be a part of this MRP procedure with Cengage business processes, still it
is important to decide high level categorization for what type of materials should be marked for this process. The
whole basis for planning of such materials is forecasting based OR Sales Orders based requirements as an input.

VB (Consumption Based, Reorder-Point Planning):
It is expected few of the materials will be a part of this MRP procedure with Cengage business processes, still it is
important to decide high level categorization for what type of materials should be marked for this process. The
whole basis for planning of such materials is Consumption based OR reorder point as an input for triggering MRP
process.
3. Detailed MRP Process run at plant level
Please follow demo to review MRP run.
Performing Material Requirements Planning at Plant Level (ondemand.com)
https://education.hana.ondemand.com/education/pub/s4/index.html#&show=slide!SL_F03FF91BDED3E7AA
4. MRP in Cengage
The business process starts with a defining PIR (Planned Independent Requirements) which is Planning data (in CENGAGE
context these figures can be derived from Forecasting which is carried out from other methods than J44) PIR in demand driven
planning with other items like Sales Order become an input as a demand for carrying out MRP execution, Materials requirement
planning can be executed as a front-end transaction or scheduled Job.
Here CENGAGE must define a strategy for deriving / forecasting required demand inputs, same can be used for MRP input.
Again, PIR’s are maintained at Plant Level with period indicator, like Monthly, Daily etc.
Once MRP is executed the following proposals are generated for desired output master data are required to be set up
accordingly.
Process Step
Business Role
Transaction / App
Maintain Planned Independent
Requirements (PIR)
Material Planner - External Procurement
Maintain PIRs (F3445).
Run Materials Requirement Planning
(MRP)
Material Planner - External Procurement
Monitor Material Coverage (F2101A
Evaluate MRP Results with Purchase
Requisition)
Material Planner - External Procurement
Monitor Material Coverage (F2101A).
Evaluate MRP Results with Schedule Lines Material Planner - External Procurement
Monitor Material Coverage (F2101A).
Display MRP Master Data Issues
Material Planner - External Procurement
Display MRP Master Data Issues
(F1425A)
Display MRP run key figures
Material Planner - External Procurement
Display MRP Key Figures (F1426
Planned Order Creation
TO BE ADDED
TO BE ADDED
5. MRP Essential Master data
Requirements Traceability Matrix (RTM):
L3 Process
Requirement
Description
Standard
(Y/N)
Config
Gap
(Y/N)
WRICEF
(Y/N)
Comments
Alternative Solution
1
Maintain
Material MRP
views
E1 Item Code MRP
Profile
Y
Y
N
Creating materials
under MM-P2P Team
PDD Maintain master
data.
None
2
Maintain
Material Work
scheduling view
E1 Item Code MRP
Profile
Y
Y
N
Creating materials
under MM-P2P Team
PDD Maintain master
data.
None
3
Maintain BOM
headers
BOM define the
header info & Base
Qty. list of
materials for
manufacturing and
subcontracting.
Y
Y
N
Routings are copied
as templates to
Manufacturing orders
and subcontracting
purchase orders
None
4
Maintain BOM
Items
BOM Items define
list of materials for
manufacturing and
subcontracting
Processes
Y
Y
N
Routings are copied
as templates to
Manufacturing orders
and subcontracting
purchase orders
None
5
Maintain Work
centers
Work centers to
define the
Machine/People
required for
manufacturing
operations
Y
Y
N
Work centers are
required to maintain
routing operations
None
6
Maintain
Routing
Headers
Routing header for
manufacturing
specifications
Y
Y
N
Routings are copied
as templates to
Manufacturing orders
None
7
Maintain routing
operations
Routing operations
for manufacturing
specifications
Y
Y
N
Routings operations
are copied as
templates to
Manufacturing orders
None
8
Maintain
Routing material
Assignment
Material
assignment to
assign
Manufacturing
general
specification to
Materials
Y
Y
N
Materials should be
assigned to Routing
headers
None
9
Maintain
Production
versions
Production versions
are required to
MRP to distinguish
Routing and BOM
selected for every
material
Y
Y
N
Required for SAP S4H
Version MRP
None
In an MRP profile, assigned to a material in the material master we define.
1. which fields are filled with values when MRP data is entered in the material master record,
2. which values these fields have,
3. which of these values can be overwritten and which not.
5.1
Process performance measures and management information
Measure name
Measure description
Target to-be value
L3 step(s) ref.
NA
NA
NA
NA
5.2
Process reporting requirements.
Report type
(Statutory/business/other)
Report description
L3 step(s) ref.
MM60
Business
Material list
Maintain MRP, Work
scheduling views Material
master
CS11
Business
Display BOM Level by Level
Maintain BOM
CS12
Business
Multilevel BOM
Maintain BOM
CS13
Business
Summarized BOM
Maintain BOM
CS14
Business
BOM Comparison
Maintain BOM
CS15
Business
Single-Level Where-Used List
Maintain BOM
CC04
Business
Product structure
Maintain BOM & Routing
CR60
Business
Work centre information system
Maintain work centre
CR05
Business
Work centre list
Maintain work centre
CR06
Business
Work centre assignment
Maintain work centre
Report name
5.3
Data requirements
Data group
5.4
Data description
Data type
Source
system
Owner/contact
Target
system
Archiving
requirement
Process risks and controls
Risk ID
Risk description
Control Objective
Control ID
Control description
NA
NA
NA
NA
NA
5.5
Business roles and access requirements
Step name/ref.
5.6
Step Ref.
Application
Business role
Access requirement
(Including SAP T-Code if
applicable)
SAP S4
TBD
TBD
Authorization required
(e.g., create, change,
delete etc.)
TBD
RICEFW requirements
Solution requirement description
RICEFW
Application/module
NONE
5.7
Issue ref
NONE
Design risks and issues
Issue description
Status/actions
L3 process step(s) ref.
5.8
Identified process improvements.
Improvement area
Improvement description
Estimated improvement value
NA
NA
NA
5.9
Change impact summary.
Change impact description
Business implications
Change impacts are living therefore they are captured People – Low
in this spreadsheet.
Process – High
Technology – High
5.10 Non-functional requirements (Include Security Requirements)
NFR name
NFR type (security/SLA/volumes etc.)
NFR description
NA
NA
NA