MRP & Production Planning
Course Objectives
• Understand the principles of Demand
Management (DM)
• Define the Materials Requirements
Planning (MRP) process
• Describe how to valuate MRP planning
runs
• Perform DM and MRP transactions
Table of contents
Course Map
Module 1: Master Data
Module 2: Demand Management
Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary
PP flow & Integration
FI /CO
MM
Long Term
Capacity
Planning
Sales & Ops
Planning
Capacity Req.
Planning
CO
(Cost
Control)
Demand
Management
MRP
MM – LE
(Stock
Control)
Production
Execution
QM
(Quality
Control)
Master Data Related
Transactions
• Practice
the following
transactions
– MM03 – Display Material Master
– CS03 – Display BOM
– CR03 – Display Work Center
– CA23 – Display Rate routing
– MM03 – Display Production
Version
Table of contents
Course Map
Module 1: Master Data
Module 2: Demand Management
Module 3: Material requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary
What is Demand Management?
• Demand Management is used to
determine requirement quantities and
delivery dates for finished products
• Demand Management provides a demand
program which is used by MRP to
generate production plans
• Depending on the planning strategy
chosen in the material master, the demand
program can use forecasts of demand,
actual demand, or combinations of both
• Actual demand is created in sales order
What is the DM Process (1)?
• SOP plans are transferred to Demand
Management as ‘Independent Requirements’
for end products
• The actual sales orders are for information
purpose only and are not considered in
planning.
• In case the sales orders significantly vary
from the forecasted demand; Planners
revise the demand before running MRP to
Who is Responsible for DM?
• Planner (DEM)
– Responsible for managing the demand by
comparing the actual demand with the forecast
and manipulate the plan based on the actual
demand before executing MRP
DM Related Transactions
• Practice the following
Transactions
– MM03 – Display Strategy
– MD63 - Display Independent
Requirements
– MD04 - Display Stock Requirements
List
– MD74 – Reorganise Independent
Requirements
Table of contents
Course Map
Module 1: Master Data
Module 2: Demand Management
Module 3: Material Requirements Planning
Module 4: MRP Planning Runs
Module 5: Summary
Materials Requirements
Planning
• MRP compares the requirements for end
products, from Demand Management, with
SOP
Copy
the current
stocks
and
creates
planned
Manual
SOP
Material
Production
another
entry
Sales Plan
Forecast
Plan
plan
manufacturing orders
Demand
Program
Planning levels:
l Material
l Product group
l Versions
MRP
Planning options:
l Horizon
l Period splits
l History
What is MRP?

MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that
is, it is used to procure or produce the requirement
quantities on time. This process involves the monitoring of
stocks and demand, leading to the automatic creation of
procurement proposals for purchasing or production.

The main objective of MRP is to determine which material
is required, the quantity required and by when it is
required.
What is the MRP Process (1) ?
• MRP compares the requirements for end
products, from Demand Management, with
the current stocks and planned
manufacturing orders
• MRP chooses a Production Version which
indicates the Bill of Material and Routing to
be used
• MRP then explodes the product BOM’s to
determine the ‘dependent requirements’ for
What is the MRP Process (2) ?
• MRP will normally be run weekly.
• The MRP process assumes infinite capacity
– The Rough-Cut Capacity Planning check in SOP
ensures that the loading is broadly correct
before MRP runs.
•
MRP
Type
For the MRP procedure, use MRP type PD
in the material master
• MRP creates planned orders or requisition
receipts to balance the demand plan
• Safety stock can be used to cover
unplanned requirements
Receipts
Time
Requirements
Who is Responsible for MRP?
• MRP Controller
– Responsible for running and operating the
material requirement planning to check and
track the planned requirement for both finished
products and raw material in order to generate
Production Orders and Purchasing Requisitions
Table of contents
Course Map
Module 1: Demand Management
Module 2: Material requirements Planning
Module 3: Master Data
Module 4: MRP Planning Runs
Module 5: Summary
Evaluations
There are several options for analyzing the
Planning run
MRP list
• By material
• Collectively
Stock requirements list
• By material
MRP list
• Collectively
Printed MRP list
Planning Result
MRP list
Use the MRP list to analyze the planning
result
The MRP list displays the future
stock/requirements situation at the time of
the last planning run
By using the collective display, you can
select a specific MRP list based on plant
and MRP controller
Analyze the exception messages in the
MRP list, judge and or solve problems
Planned order
• Is the output of an MRP run
• Are automatically created
• Planned orders may be converted to
production / process orders or purchase
requisitions
Planned
Order
10
Requirements
20
30
MRP
MRP Related Transactions
• Practice the following exercise
– MD01 Total Planning Run Online
– MD02 Single-Item, Multi-Level
– MDBT Total Planning in Background
– MD07 Stock Requirements List
Collective
– MD05 Evaluate MRP List
– MD44 Planning Situation Material