Md. Shalehur Rahman SamyAssociate Consultant, SAP MMIPE, Shahjalal University of Science & Technology.

Mobile: +8801725444492Email: shalehur@gmail.com

MRP views in Material Master

MRP views required for Production Planning related data update. MRP View 1Q1: MRP view material master ?

Ans: Production purpose MRP view maintained

MRP views are maintained mostly for production purposes. This information is supplied by the appropriate MRP controller or someone else from production planning team. The only mandatory field in MRP 1 View is Planning type. We will cover the most important fields used in a productive environment in more detail.

1.Base Unit of Measure:The base unit of measure is the unit satisfying the highest necessary requirement for precision. Unit of measure in which stocks of the material are managed. The system converts all the quantities you enter in other units of measure (alternative units of measure) to the base unit of measure.

( base unit of measure unit quantity material alternative unite of measure system alternative unite of measure base unit of measure convert ) Alternative Units of Measure:Alternative units of measure can also be defined to identify packages or lager containers for smaller units of measure such as cartons, boxes, bottles, barrels, pallets (storage unit types) and so on.

Procedure:You define the base unit of measure and also alternative units of measure and their conversion factors in the material master record.

Example:When you create a new material in the system, for example, if you designate "piece" as the base unit of measure and "box" as an alternative unit of measure, the system will display a conversion window which asks you to define how many pieces are contained in a box.

1.Purchasing group: this field is used to indicate which purchasing group is the default for purchasing this material. We haven't maintained it yet as this is a finished product of our company, we don't need it to be purchased at any time. We will set up this field for another material that needs to be purchased.Q2: What is Purchasing group?

Ans: The purchasing group can be defined as a person or group of people dealing with a certain material or group materials purchased by through the purchasing organization.( purchasing organization person group of people material group materials purchase , purchasing group plant under purchasing organization purchasing organization under purchasing group )

3.ABC indicator: This is an indicator showing the importance of the material in terms of stock availability.( ABC indicator indicator material stock available matrial importance numbering indicate/show ) Most of the companies use several ABC values, but most common are: A the most important materials, they need to be available for sales in every moment customer requests it,B less important materials that are often supposed to be available but the lack of this material can happen and is allowed,C Least important materials.There can also be few more categories, N new, material not yet tested on the market, so we don't actually know if it's going to be A, B or C yet. S material that is produced only on customer request, and D same as S with the difference that it has a certain quantity on stock just in case someone needs it ASAP, in production planning it is called a material safety stock.

4.MRP type: Key that determines whether and how the material is planned. You have the following options:

A. Manual reorder point planningB. Automatic reorder point planningC. Forecast-based planningD. Material requirements planning with forecasts for unplanned consumptionE. Master production scheduling (MPS) there are various types of MRP that can be utilized. In this case, our MRP controller signalled that it should be PD default MRP for most of the SAP installations.( MRP slide ).(A+B) Reorder point planning:A reorder point is the inventory unit quantity which determines when a new order is placed. ( reorder point inventory unit quantity, purchase order )Graphically inventory future consumption base safety stock replenishment lead time reorder point Equation:Reorder point = Replenishment lead time + Safety stockMaterial order material receive It is the minimum level of inventory that is held as a protection against storage due to fluctuation in demand., system past consumption data (historical data) use future requirement forecast

Or, Reorder point = Demand rate per period Lead time + Safety stockOr, R = dL + SSafety stock is a part of Reorder point.

Example:ABC company 10 units sugar , ABC company sugar order supplier/vendor 5 days stock blank ( sugar delivery supplier/vendor 5 days ) ABC company safety stock 20 units. ABC company reorder point =510+20=70 units.

Calculating Dynamic Safety Stock:The system determines an average daily requirement of 15 pieces. You have defined a minimum range of coverage of 3 days, a maximum range of coverage of 7 days and a target range of coverage of 5 days.The system calculates the following:Minimum stock level = 3 x 15 pieces = 45 piecesMaximum stock level = 7 x 15 pieces = 105 piecesTarget stock level = 5 x 15 pieces = 75 piecesThe available quantity is 40 pieces and is therefore less than the minimum stock level.Therefore, the system creates a procurement proposal for 35 pieces (= target stock level 75 pieces actual quantity of 40 pieces) during the planning run.

C. Forecast-Based planning: A procedure in consumption-based planning that is based on future requirements predictions calculated using the forecast. ( consumption-based planning procedure past consumption forecasting calculate future requirement predict )

It operates based on historical values and forecast values and future requirements are determined via the integrated forecasting program. Forecasted values form basis for planning run and have direct effect in MRP as forecast requirements. In the case of a shortage for forecast requirement, the system creates a procurement proposal.

Forecasting 4types formula follow :1. Model: Moving Average2. Model: Weighted Moving Average3. Model: First-Order Exponential Smoothing4. Model: Constant( http://help.sap.com/saphelp_46c/helpdata/en/a5/6320e843a211d189410000e829fbbd/content.htm)

You can specify the period pattern for the forecast (daily, weekly, monthly or per accounting period) and the number of periods to be included in the forecast individually for each material. It is possible, however, that the forecast period pattern is not specific enough for planning purposes. In this case, you can define per material that the forecast requirements should be divided according to a finer period pattern for planning. You can also define how many forecast periods are to be taken into account during requirements planning. The splitting indicator is defined in Customizing for MRP per plant and per period unit and is assigned to the material in the material master.

Example:, past one year consumption base forcast based planning system 12 months forecasted value automatically generate lot size plays crucial role in consolidating the entire requirement.I. Lot size Ex select , system month forecasted values individual purchase requisition ( ) II. Lot size Yr select , 12 months forecasted values only one purchase requisition

Problem:I am having the requirement from client, that MRP should be triggered based on the ( Plant available stock, safety stock, Planned delivery time and past 3 months sales). I know VV-Forecast planning, but i want to know how system is calculating this forecast. so pls clarify the MRP Forecast based planning(VV) for trading material with a complete example.1) I have created a Trading Material with MRP views and Forecast View2) MRP 1 view: MRP type-VV, MRP controller-001, Lot size-EX, 3) MRP 2 view: Proc type:F , Planned delivery time: 45 days, GR Processing time: 2 days, safety stock: 10, service level :1%4) MRP 3 view: Period indicator: M5) Forecasting view: Forecast model: D, History period: 3 months, Forecast period: 3 months, Consumption values for 3 months: 03.2012 - 40 EA02.2012 - 50 EA01.2012 - 60 EANow with this data 1) i just want to know how the system will calculate the forecast values for the first time ?2) From second time onwards system will take History of sales from system itself?

Solution:For VV MRP type, in standard SAP, the forecast (based on total consumption) is obligatory meaning you will have execute forecast using MP30/MP38 on a defined frequency say Monthly in your case.Once you are done with this, you will see the MRP element 'ForReq' in your MD04 list for the next 3 months in your case as 04/05/06 2012.

After this when you run MRP (MD01/MD02) it follows the formula(for Forecast based planning),Available stock = Plant stock - safety stock + Receipts (Purchase orders and Firmed purchase reqs) - Requirements(Forecast requirements).When Available stock is negative it creates the procurement proposals.Based on your consumption of your VV material against a production order for instance the consumption values can be seen getting updated in the forecast view of the material master. The 261/201 movement types get in there as total consumption against your monthly buckets as relevant to the date of consumption and which form the basis of your future forecasting and the subsequent MRP runs based on the rolling planning horizon.You will also observe that when ever there is a consumption your Forecast requirements are also consumed accordingly in MD04

Q3.What is the difference between MRP and MPS in SAP MRP type?

Ans: MPS use critical resources/ materials MRP use all material SAP MPS MRP Example: , car BOM BOM---1) engine ( critical resource MPS ) 2)gear box 3)body ( general material MRP ) Master Production Schedule (MPS) :MPS operates within only one level of the BOM, While MRP can be utilized throughout all levels of a materials BOM. If a MPS is run on a material, the necessary orders are planned at that level. Dependent requirements (if any) are placed on the next BOM level down, and then the process stops.Main Idea : Master production scheduling (MPS) is a form of MRP that concentrates planning on the parts or products that have the great influence on company profits or which dominate the entire production process by taking critical resources. These items are marked as A parts (MPS items) and are planned with extra attention. These items are selected for a separate MPS run that takes place before the MRP run. The MPS run is conducted without a BOM explosion so that the MRP controller can ensure that the Master schedule items (MSI) are correctly planned before the detailed MRP run takes place.Material Requirements Planning (MRP) :A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase. Time-phased MRP begins with the items listed on the MPS and determines(1) the quantity of all components and materials required to fabricate those items and(2) the date that the components and material are required. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.Master Production Schedule is the set of techniques uses for only one level of productionMaterial Requirements Planning is the set of tools that use for inventry data and master data for the requirment of mareial

8.MRP controller: The person responsible for a group of materials in MRP in a plant or company. Material that takes part in material requirements planning must be assigned to an MRP controller. MRP controller responsible for production of this material, he manages all the data in these MRP views, along with the MRP results itself, production planning for this material etc. Specifies the nusmber of the MRP controller or group of MRP controllers responsible for material planning for the material.

9.Lot size: In a production lot size model, we are a manufacturer, trying to determine how much to produce (the production lot size) during each production run.Lot size defines the procedure used by the system in order to calculate the procurement or production quantity of the material.

A procedure in material requirements planning used to calculate order and production quantities (lot sizes).

Lot-sizing procedures are divided into the following groups:1. Static2. Period3. Optimum

Production Planning and Detailed Scheduling (SCM-APO-PPS)

Procedure in production planning that is used to calculate the purchase order quantities of receipts.

In the SAP APO (Advanced Planner and Optimizer), the following standard lot-sizing procedures are available, which can be configured in the location product master. Exact lot size Fixed lot size Period lot size Reorder point procedure

10. Ordering cost: Ordering costs are the expenses of ordering a new batch of raw materials. These include cost of placing a purchase order, costs of inspection of received batches, documentation costs, etc.Ordering costs vary inversely with carrying costs. It means that the more orders a business places with its suppliers, the higher will be the ordering costs. However, more orders mean smaller average inventory levels and hence lower carrying costs.It is important for a business to minimize the sum of these costs which it does by applying the economic order quantity model.Use: The ordering costs are used only for calculating the lot size in optimum lot-sizing procedures. You must specify the ordering costs in the currency of the company code belonging to the plant.Example: AzerGas is a company engaged in gas distribution to households and businesses through its network of pipelines in Azerbaijan. The company expands its pipelines every now and then. Installation of pipelines involves use of specialized high quality pipes, customized valves and other spares and loose tools. AzerGas has only a few suppliers who produce these customized tools. Azerbaijani government regulations require the company to advertise in three national and two international newspapers before placing a purchase order. This will cost $200,000 per order. The suppliers have to modify their own production plans and they charge an amount of $2 million regardless of the size of order. The opportunity cost of staff time spent on drafting the tender documents is estimated at $250,000. Related legal costs are $50,000. In each procurement AzerGas hires a firm for inspection at a flat fee of $100,000. Bank charges an amount of $3,000 as documentation charges.In this situation, AzerGas ordering costs are $2,603,000 per order (advertisement costs of $200,000 + customization cost of $2,000,000 + opportunity cost of staff time of $250,000 + legal costs of $50,000 + inspection costs of $100,000 + bank charges of $3,000).Since there are constant improvements in the related technology, the most significant related carrying cost is obsolescence. Other carrying costs which AzerGas would have to trade-off against the ordering costs include the opportunity cost of capital tied up in the expensive tools, the cost of wear and tear of the tools, etc.

11. Rounding profile: Key that the system uses to adjust the order proposal quantity to deliverable units. In Customizing, enter a threshold value from which the system should round up to the next value per deliverable unit: 1. If the requirements value exceeds the first threshold value, the system always rounds up to the next multiple of the level found. 2. If the requirements value falls below the first threshold value, the system copies the original requirements value.

Examples : A material's base unit of measure is 1 unit; the purchase order is to be delivered in layers (1 layer corresponds to 5 units) or in pallets (1 pallet corresponds to 8 layers which contains 40 units). You maintain the profile as follows: From a requirements of 2 units, the system is to round up to 5; from a requirement of 32 units, the system is to round up to 40. This results in the following order proposal quantities: Requirement from 1 -> 1 requirement from 31 -> 30 Requirement from 2 -> 5 requirement from 32 -> 40 Requirement from 6 -> 10 requirement from 74 -> 80 Requirement from 7 -> 10 If no rounding profile has been entered, the system uses the rounding value entered in the material master record for the planning run.

12. Unit of Measure Group: Key that you can use for grouping several units of measure.Use:You can use the unit of measure group, for example, to define allowed units of measure for a particular material for a vendor or a receiver. This is of significance for when rounding with the dynamic roundingprofile if 'check vendor' or 'check customer' is selected in the rounding profiles. In this case, only those units of measure are included in rounding that are defined in the unit of measure group.

13. Takt time: Takt time is the desired time that it takes to make one unit of production output.The usual takt time calculation is as follows: Available production time per day TimeTakt time = ----- = --------------- Customer demand per day Volume(Takt time differs from cycle time, which is the actual time it takes to make one unit of production output.Cycle time= Actual time required for a worker to complete one cycle of his process.)The system uses the takt time if a requirement is covered by several receipt elements due to restrictions on lot size such as maximum lot size (with all lot-sizing procedures) or rounding value (with fixed lot size with splitting). You enter the takt time in workdays.

14. Rounding value: Value to a multiple of which the system rounds up the procurement quantity.(General: Rounding a numerical value means replacing it by another value that is approximately equal but has a shorter, simpler, or more explicit representation; for example, replacing 23.4476 with 23.45, or the fraction 312/937 with 1/3, or the expression 2 with 1.414.).The rounding value is used in the planning run if no rounding profile has been specified in the material master record.Example:Minimum lot size : This is Minimum lot size for which requirement will be generated through system (MRP) . If your minimum lot size is 50 & although requirement is of 30 nos, System will generated schedule lines for 50 nos.Rounding Value : When define rounding value in Material Master system will automatically generate schedule lines as per rounding value for ex we have set 0 to 25 = 25 nos & 26-50 =50 nos then even the requirement is for 20 & 35 schedule lines will be generated for 25 nos & 50 nos respectively.

MRP View 2MRP view 2 contains data about Procurement, Scheduling, and Net requirements calculation.

1.Procurement TypeIndicator that defines how the material is procured. The following procurements types are possible:1) The material is produced in-house.2) The material is procured externally.3) The material can be both produced in-house and procured externally.

Use:The procurement type is defined by the material type you have chosen.

Q4. What is Scheduling?

Scheduling is the process of arranging, controlling and optimizing work and workloads in a production process or manufacturing process. Scheduling is used to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials.

Q5. Scheduling ?

Traditionally, scheduling algorithms were used in capital intensive production processes where there was a need to optimize the production because the plant capacity was constrained and there were different lines of products varying for the same manufacturing plant resources. With warehouse operations getting more complex and automated over the years, a similar need is felt to schedule some of the warehouse jobs using these algorithms to optimize the use of resources such as cranes, conveyors, labelers and pickers deployed in the warehouse to maximize the throughput.

Types of scheduling algorithm:Most commonly used algorithms for scheduling order dispatch or releases are: Forward Scheduling Backward Scheduling Bottleneck Scheduling Shortest Processing Time Scheduling

Forward scheduling:Suppose, material available but delivery date delivery date forward scheduling

Backward Scheduling:Suppose, delivery date but date , backward Scheduling purchasing & sales Backward scheduling is the calculation of deadline dates: the arrival time at the customer site is calculated as the earliest possible goods receipt time at the customers unloading point on the requested delivery date. All four of the delivery and transportation scheduling lead times are subtracted from the customer's requested delivery date to determine if this date can be met. The transit time, loading time, and pick/pack time are subtracted from the requested delivery date to calculate the required material availability date.The system calculates backward scheduling as follows: Requested delivery date minus transit time = Goods issue date Goods issue date minus loading time = Loading date Loading date minus transportation lead time = Transportation scheduling date Loading date minus pick/pack time = Material availability date

By default, the system will calculate delivery dates the closest day, taking into consideration the working days of the shipping point and a rounding profile. In this case the system assumes a 24 hour work day and lead times can be entered in days up to 2 decimal points. This is referred to as daily scheduling. Precise scheduling calculated down to the day, hour and minute is supported. This allows the scheduling of a delivery within a single day. It is activated by maintaining the working hours for a particular shipping point. Backward scheduling is always carried out first. If the material availability date or transportation scheduling date is calculated to be in the past, the system must then use forward scheduling. Forward scheduling is also done if no product is available on the material availability date calculated by backward scheduling. The system does an availability check to determine the first possible date when product will be available. This new material availability date forms the starting point for scheduling the remaining activities. The loading time, pick/pack time, transit time, and transportation lead time are added to the new material availability date to calculate the confirmed delivery date.

2.Production storage location: In the case of a material produced in-house, this is the key of the storage location that is copied to the planned order, production order, or run schedule quantity.

If the material is a component, it is the issuing storage location to which a back-flush is posted. ( BOM material finish material component use , material storage location BOM back-flush ) If the material is produced, it is the receiving storage location to which the receipt of the material is posted. ( material produced , material post material storage location receive

3.Back flash: Backflushing is automatic accounting (Goods issues - 261 mvt) of material consumed for production, at the time of confirmation. Back flushing is nothing but automatic goods issue. System will automatically posts the goods issue when you confirm the operations. You have no need to make manual issue. It will reduce the effort. production raw material, semi-finish material and packing material , STORAGE LOCATION material Back flush click system automatically STORAGE LOCATION material automatic good issue

4.Inhouse production date:

5.Goods Receipt Processing Time in Days: Number of workdays required after receiving the material for inspection and placement into storage.

6.Schedule margin key: This represents a key used for determination of the floats required for scheduling an order. It is defined in customizing and is supplied by your MRP controller or PP administrator.Key that the system uses to determine the floats( / ) required for scheduling an order. You define the following floats with the scheduling margin key:1) opening period2) float after production (only in the case of in-house production)3) float before production (only in the case of in-house production)4) release period (only in the case of production order management) Floats are maintained in workdays.

7.Planned delivery time in days: Number of calendar days needed to obtain the material or service if it is procured externally.If you have different vendors for a material, you must specify an average value. The same applies if you order the material from a fixed vendor that has varying delivery times.

MRP View 3MRP view 3 contains several valuable fields mostly used by planning functions.

1.Period indicator: Indicates if material is to be planned/forecast monthly, weekly, yearly, daily etc. This is in most cases set to monthly.

2.Strategy group: The strategy group used for grouping the planning strategies, for example, this can be set to Make to Order, Make to Stock etc. There are a number of options, and this must be defined by the production planning management. You define planning strategies and strategy groups in Customizing for demand management.

3.Consumption mode: this controls how system will consume requirements. In backward mode sales, orders, dependent requirements or material reservations consume planned independent requirements that lie before the requirements date while in forward mode they consume planned independent requirements that lie after the requirements date.

4.Forward consumption period: Determines number of day used as a consumption threshold ( ) in forward consumption mode. Can be set from 1 to 999 days but usually not longer than several days. We are using 0 since we are utilizing backward consumption mode for this material.

5. Backward consumption period: Same as previous except it is used for backward consumption mode.

6.Mixed MRP: Defines whether the material is available for: Subassembly planning with final assembly Gross requirements planning Subassembly planning without final assemblyA deterministic procedure in material requirements planning.In gross requirements planning, no comparison is made between the warehouse stock and gross requirements. These requirements are covered by order proposals.

7.Availability check: Specifies whether and how the system checks availability and generates requirements for materials planning.( essential attribute stock availability check method These methods are defined by customizing team, and can include stock on storage locations, can be also set up to include quantities on process and production orders, planned orders, quantities in the transfer towards the plant from which sales is being processed, etc.)The value you enter is a default value which defines: Which MRP elements (for example, purchase orders, reservations) the system includes in the availability check. Whether the system checks availability only until the end of the replenishment lead time or whether it checks availability over the entire period for which MRP elements exist. Whether the system generates individual requirements or summarized requirements if you enter sales orders or deliveries for the material.

MRP 4 ViewThis is the only MRP view that is maintained on Plant / Storage location organizational level. It doesn't contain as much valuable fields as previous, but there are three handy indicators that can be used to optimize processes in some modules.

Q6.Alternative BOM ? , finish material BOM raw material, packing material semi- finish material finish material BOM

semi finish material stock semi finish material semi finish material BOM

alternative BOM stock semi finish material alternative BOM

1.Selection method: If you need alternative BOM for your production, you could select the alternative BOMs with this field.

Use:

1. With Selection by order quantity, the system chooses the alternative BOM into whose lot size range the order quantity falls. The lot size range and area of validity of the BOM apply.2. With Selection by explosion date, the system chooses the alternative BOM into whose area of validity the date falls according to the setting BOM via dates.3. With Selection by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area of validity of the production version apply.4. With Selection only by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area of validity of the production version apply.If no production version is found, no production orders or process orders can be created.

3.Discontinuation indicator: Identifies the material as a part to be discontinued and includes it in the discontinued parts procedure in materials planning. Use:If this indicator is set, the system transfers the dependent requirements in materials planning to the follow-up material if they are no longer covered by warehouse stocks. However, this requires:

The part to be discontinued and the follow-up material to be planned using material requirements planning (MRP). The base unit of measure of the follow-up material to be the same as that of the part to be discontinued.

3.Storage location MRP indicator: This is the most powerful indicator on this view. It tells us if our storage location (that we used in organizational levels screen in this example 0001 Lager 0001) is relevant for MRP. That is highly significant as it can reflect not only MRP but also ATP (available to promise) quantities. For example, if we use the default value (empty field), it means that our storage location is taken into account in our MRP runs. It is also taken into account in ATP so sales department can see the stock on this location available for sales activities. On the other hand,1. If you choose indicator 1 Storage location stock excluded from MRP, this stock will not be taken into account for the MRP run, as well as it won't be available to promise (ATP) to the customer, so it couldn't be sold.2. If you choose indicator 2 - Manage storage location separately, it means that you want to manage this locations stock separately from plant stock (useful in some rare cases). The most obvious example for usage of this function is rejects storage location. When our LCD TV 40" comes out of the production line it can be fully functional, or it might have a flaw. If it is ready for sales we will transfer it to our 0001 location and sales department will see that quantity available to be sold. Let's say we produced 3000 TV sets. Out of that quantity there is 10 TV sets with some problems and our quality control department chooses that those cannot be sold, so these are sent to our location 0003 for rejects. In MRP 4 view, we have to maintain the indicator 1 for our rejects location 0003 as we don't want sales department to see the stock as available. We only want the other 2900 pieces available that are on the 0001 location, for which we maintain empty field for this indicator (include in MRP/ATP).