MRP Innovations with SAP S/4HANA

Introduction

This blog highlight the differences between Classic MRP v/s MRP Live. It also attempts to explain the parameters which help in making the decision to use Classic MRP v/s MRP Live or both in one SAP S/4HANA system. The information of most useful SAP Notes/Links for MRP topics are also listed below.

Documentation Links

MRP Innovations with SAP S/4HANA

In today’s digital world execution speed, flexibility, interconnectivity, and interdependency are few critical factors for the success of manufacturing businesses. Fundamentally there are multiple KPI’s governed in the manufacturing organization for different business units and roles. Optimized information flow (Internal and external) for a material planner is critical to achieving the below KPI’s.

Example of few critical KPI’s of material planner are mentioned below

• Inventory Turnover
• Days on hand
• Cycle time
• Material Stock-out situation

In ERP world, performance was a bottleneck stated by customers, who extensively used SAP (Classic MRP) to run MRP in their landscape. The customers with a huge volume of data could never use MRP frequent intervals as desired by businesses which led to high inventory holding, missing parts and resulting in high costs. Now with SAP in-memory capabilities of SAP HANA, the customer is able to run MRP in quick time with a performance improvement of up to 10x faster as compared to traditional/classical MRP run on a traditional database.

Illustration – Classic MRP and MRP Live Technical changes

From a business user standpoint, the MRP controller executes MRP run in SAP S/4HANA system which considers different stock types of inventory, pending material receipts (Planned orders, production orders, purchase requisitions, purchase orders, stock transfer reservations and delivery schedule lines) and material requirements such as Sales orders, forecast requirements, planned independent requirements, dependent requirements, stock transfer requirements and subcontracting requirements.

Erstwhile in classic MRP implementations, the application server had to call the database server multiple times to read all the relevant data stored in 52 tables. The data was transferred from the database server to the application server. The relevant tables were read sequentially which had impact on performance

With MRP Live using SAP HANA, relevant tables are read in parallel using the parallelization capabilities of SAP HANA. Data from relevant tables is transformed into a common structure ignoring all columns that are not needed by MRP. MRP Live reads material receipts and requirements for multiple materials at once.

The relevant data is used to calculate material shortages directly in the database server. As a result of MRP run, the system creates planned orders and purchase requisitions to cover the material shortages. These objects are again created and inserted into the database in parallel threads where every thread inserts large numbers of planned orders or purchase requisitions into the database at once. This capability makes it possible to get rid of some earlier performance bottlenecks.

MRP Live has some additional advantages like:

• The definition of the planning scope is more flexible. MRP Live allows you to plan a set of materials with all components, materials for which a certain production planner is responsible, or single material across all plants.
• If a material is transferred from one plant to another then the stock-transfer requirement is not known in the supplying plant until after the material has been planned in the receiving plant. MRP Live determines the sequence in which materials should be planned across several plants
• MRP Live is a prerequisite for the future production planning and detailed scheduling PP/DS solution in SAP S/4HANA.

Most important key differences between MRP live and classic MRP are mentioned below:

• MRP Live on HANA cannot plan materials that are included in supersession chains. In this case, the system also does not automatically plan the material using classic MRP. Use transaction MD_MRP_FORCE_CLASSIC to make sure that the material is planned using classic MRP.
• Customer can use classic MRP for Direct production since it is not yet supported by MRP Live on HANA
• Characteristics-based forecasting is not supported in MRP Live on HANA.
• Currently, MRP live does not write MRP lists
• Multi-level, make-to-order planning (transaction MD50) is not optimized for HANA.
• Individual project planning (transaction MD51) is not optimized for HANA.
• The creation indicator for purchase requisitions is not available in MRP Live. MRP Live always creates purchase requisitions if the material is procured externally.
• The creation indicator for delivery schedule lines is not available in MRP Live. MRP Live always creates delivery schedule lines if a valid delivery schedule exists.
• MD01N (MRP Live) is a standard SAP transaction code optimized for SAP HANA available to use with SAP S/4HANA system.
• Long Term Planning (LTP) is not supported by any HANA optimizations. That means it is neither possible to plan LTP scenarios in the context of MRP live nor SAP provide optimized database accesses when reading LTP data for the classic LTP transactions as we do it for appropriate MRP transactions. So there are no special LTP features at all in a HANA environment.

Use Cases

Material Planners using SAP S/4HANA are experiencing a transformed user experience which has completely changed the way work is done. As material planners can now optimize daily work tasks by focusing on exceptions and situations on the most urgent problems with the highest financial implications.

With SAP’s Launchpad (Fiori) and real-time embedded analytical capabilities due to the merge of OLTP and OLAP layers users can directly focus on the transactional processes, leverage the simulation results provided by SAP S/4HANA system for making informed decisions.

Decision Support

Identifying solutions to material shortages traditionally, several ERP transactions have to be executed. In the MRP within SAP S/4HANA, data is pulled in real time from all areas including procurement lead times, inventory stock availability, lot sizes, manufacturing scheduling and sales orders across multiple sites. The system goes one step further and suggests potential solutions for the shortage through Solution Cards. In fact, Solution Cards has all information needed to resolve the material shortage (e.g. Reschedule Purchase Order, Increase Purchase Order, stock transfers). As this system is on one common base, financial data can be mixed directly into the process to rank proposed solutions. Each proposed solution is evaluated in real-time and the Material Planer can preview viability and impact before accepting a solution 

User Experience

The material resources planner will completely change the way work is done, because it can now optimize daily work tasks by focusing on exceptions and on the most urgent problems with the highest financial implication. Due to the merge of OLTP and OLAP, we can use the real-time analytical capabilities directly on the transactional processes and propose simulations possibilities for the user. 

Simulation

Starting from the current state of the supply chain and including the existing MRP algorithms, the simulation computes the future inventory situation in detail. The optimization algorithms make use of the simulation to find the ideal replenishment strategies and parameters. Example: With this ability to simulate and compare the ways of resolutions, the Material Recourses Planner can compare, the effectiveness of an external replenishing compared to a replenishing via a production on an industrial site. Additionally, all financial implication of the proposed solutions is visible.

• Real-time data from all areas of material management including procurement lead times, inventory stock availability, lot sizes, manufacturing scheduling and sales orders across multiple sites
• The suggestion of potential solutions for the shortage through “Solution Cards” with all information needed to resolve the material shortage (e.g. Reschedule Purchase Order, Increase Purchase Order, stock transfers).
• Real Time Simulation computes the future inventory situation in detail. The optimization algorithms make use of the simulation to find the ideal replenishment strategies
• Daily work tasks focused on exceptions and on the most urgent problems with the highest financial implication

Some of the SAP Fiori Apps for MRP are available in this Link

There can be many factors which decide if the customer should use MRP Live, Classic MRP or both. Some of the factors are listed as below. SAP recommends customer to use MRP Live because of the innovations which are done for MRP Live and considering future developments around MRP Live. With the combination of MRP Live and “Fiori” apps which are available for MRP will bring in a lot of business value and great user experience to the business users.

If the customer decides to use both (Classic MRP/MRP Live), then the transaction MD01N will by default use MRP Live for planning the materials. The planning will automatically switch to Classic MRP for materials that require planning features that are not yet supported in MRP Live.

During the planning run, the system plans the materials according to the sequence determined by the low-level codes that are defined in the bill of materials. That is, for the first low-level code (0), the system determines which materials can be included in MRP Live on HANA and plans these first. In a second step, the system determines the materials with the same low-level code that could not be planned in MRP Live on HANA and then automatically plans these materials using classic MRP. Included in this second step are also the materials that were planned in MRP Live on HANA but for which an error occurred. Both the planning in MRP Live on HANA and classic MRP should be completed for one low-level code before the system commences the planning of the next low-level code (1).

Since these planning features will be supported in later releases, the recommendation is that customer should not change the business processes to avoid these planning features and SAP recommendation is to use MRP Live

“Plan in Classic MRP indicator” can be set in the transaction “md_mrp_force_classic” for the materials. In this report, the system displays all materials with active MRP views in the material master and you can define that the planning run is to be executed using classic MRP for individual materials. You should check which materials require the processing of a BAdI during the MRP run and always set this indicator for these materials.

Materials that cannot be planned in either MRP Live on HANA or in classic MRP because of inconsistent master data, for example. The system creates exception MRP lists for such materials that cannot be planned.

Value Achieved by SAP S/4HANA

• Reduce customer service & support cost by making proactive decisions in response to changing demand
• Increase annual procurement savings by providing clear visibility across the supply chain
• Improve on-time delivery performance by tailoring available capacities and receipts to meet required quantities
• Reduce revenue loss due to stock-outs by monitoring inventory and automating the creation of procurement proposals
• Improve inventory accuracy by considering all inventory data, lead times, and procurement timing in calculations

SAP Notes on MRP Live

Consulting SAP notes on MRP Live

SAP Notes for correcting errors/performance improvement and their validity