Concept on Consumption and Reduction

Consumption and reduction happens in different level of a proposal. Below example will show the concept of consumption and reduction.

Example:1

Material : R-F115

Strategy : 10

PIR=100

Sales Order (VA01)=50

Two requirements from IndReq & Order for 100 & 50 pcs will appear on the stock requirement list.

Now we ran MRP.

MRP RUN : MD02

After MRP Run Planned Order was created only for the PIR meaning NO CONSUMPTION. This is the setting of strategy 10 that Sales Order will not be

considered. As well Sales order (Customer requirement) will not consume the planned independent requirement.

The Planned order should be converted to Production Order -> Release Material -> Confirm all Operation, Finished Goods receipt (MIGO).. i.e Replenish the the

stock level to 100.

Thereafter Issue of Material or Goods Issue to Sales Order which will REDUCE the PIR or STOCK LEVEL

Example:2

Material : R-F116

Strategy : 40

PIR=100

Lets consider Sales Order (VA01)=50

Sales Order Immediately CONSUME 50 PCS from the PIR

MRP RUN : MD02

After MRP Run 2 Planned Orders were created separately. Again the reduction will happen once the goods will be issued to Sales order.

Another important thing to notice…

For almost same material (both are FIN product)

PIR with Strategy 10 = MRP Element Data is LSF

PIR with Strategy 40= MRP Element Data is VSF

5 Comments

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Kalyana Chakravarthy January 2, 2014 at 7:05 am

Hi Krishnendu,

Very useful document. Thanks for sharing.

Regards

Kalyan

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Aditya S January 2, 2014 at 7:43 am

Hello Krishnendu,

Thanks for sharing this. Looks like there is some correction to be done. In the Example 2, you have specified there is PIR for 100 Pcs, i can see only Independent Requirement of 50 Pc and Sales Order is for 100 Pcs, but in MD04 we are seeing only 50 Pcs for the Sales Order. Can you please go through this document and do corrections if any is there.

Please correct me if i am wrong. Thanks.

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1. Krishnendu Das Post authorJanuary 2, 2014 at 7:51 am
  
  Hi Aditya,
  
  You are correct. SO will be of 50 nos.
  
  Regards,
  
  Krishnendu.
  
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  1. Aditya S January 2, 2014 at 8:27 am
    
    Hi Krishnendu,
    
    Thanks for acknowedging and making the correction in the document. Thanks again. 🙂
    
    like (0)
Nikos Giannopoulos July 15, 2015 at 4:43 pm

Hi Krishnendu,

Thank you for such a good document. However, i need a clarification on something. I have created an example as your example number 2 (Planning strategy 40, Independent requirements type = VSF). However, when i run MRP system created 1 planned order for the complete quantity, and not one for the sales order and one for the PIR. Any idea why is that?

Best regards,

Dr. Nikos Giannopoulos

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