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Author's profile photo Jakob Merlin Frederik Schneller

The Power of SAP S/4HANA #3 – Predictive Material and Resource Planning

With SAP S/4HANA 1909, the new SAP Fiori apps “Schedule pMRP Simulation Creation” and “Process pMRP Simulations” are shipped in order to support production planners in identifying and solving capacity issues early in the requirements planning process.

To get a better understanding of Predictive Material and Resource Planning (predictive MRP/pMRP) and its value, it is useful to have a closer look at the term and its single components.

Predictive:
In the context of pMRP, the term “predictive” exceptionally does not indicate machine learning capabilities. Rather, it is related to the comprehensive mid-term simulation capabilities of the solution: Besides simulating the impact of capacity on the planned requirements for selected materials, it also simulates in real-time, how potential requirements, production and capacity adjustments would impact the overall delivery performance.

Material:
The term “material” aims to describe one of the central perspectives covered by pMRP, the material perspective. Having entered the initial high-level material requirements for a defined planning horizon, the simulation is capable of end-to-end pegging across all levels. Thus, the interdependencies between the high-level requirements and the resulting lower-level component requirements are mapped and the total impact of a change can always be traced exactly.

Resource:
The second central perspective of pMRP is the resource perspective. In contrast to the “R” in MRP (Material Requirements Planning), the “R” in pMRP stands for “resource”. This exactly indicates the difference between a pMRP simulation run and an actual MRP run. Although the set-up of both looks quite similar, they have one main difference: The MRP run is infinite, meaning that it breaks down all requirements according to the BOM structure, without considering capacity constraints.
In this context, experts will argue that the SAP solution “Production Planning and Detailed Scheduling” (PP/DS) exactly fulfills the purpose of adjusting requirements and production planning to available capacities. This is absolutely true, if the nature of your production or your branch requires the high degree of sophistication that is offered by the planning capabilities of PP/DS. In this case you can create complex formula-based heuristics to optimize your capacity in situations of any complexity. However, this requires heavy customization efforts which need to be compared with the benefits, a company derives from PP/DS.
As a result, for some companies PP/DS will not be suitable, although they need to plan their capacity and solve potential capacity issues. For such companies, pMRP will be a light-weight alternative offering a quick set-up without dedicated customizing or master data.

Planning:
Finally, the last “P” in pMRP stands for “planning”. Thus, it once again emphasizes the main purpose and the strengths of the solution. Predictive MRP offers a planning horizon, which is ideally suited for mid-term planning. At the same time, it allows high planning flexibility through the interactive simulation capabilities, which provide the planner direct feedback, in case a variable (may it be requirements, the production or the capacity) is changed.

Having a clear understanding of the term “pMRP”, the following screens will emphasize the explained functionalities:

The “Demand Plan Simulation” view shows, which weeks of the planning horizon (2) will be affected by the identified capacity issues (1).

 

The inspector provides details about the extent of the capacity issue as well as its impacts and offers links to the most likely next navigation steps.

 

The Multi-Level Material Simulation allows to drill down into the BOM of a selected material in order to identify the origin of a bottleneck (1). Based on the findings it offers strategies like “Change Source of Supply” or “Preproduce” (2) to resolve the bottleneck.

 

By selecting the “Preproduce” button, the system identifies underutilization in earlier weeks and allocates the production of missing units to such weeks. As a result, the overall utilization increases and the overall impact of capacity issues is reduced. The system automatically proposes values for the identified weeks, which may be directly adopted and applied.

 

The alternative to preproduction is to change the source of supply. In this case the system looks for other active production versions and proposes, how production should be distributed across them in order to minimize the impact of capacity issues. Once again, the system proposes values, which can be adopted and applied. However, the option to define values manually always exists.

 

As counterpart to the “Demand Plan Simulation” view, the “Capacity Simulation View” shows the available capacity per work center and per week. It also indicates the capacity utilization and the resulting underutilization or overloads (1). The latter can also be visualized for a selected work center (2). Having identified a capacity issue, the system once again offers different strategies to handle it. Thus, you can either “Disregard Capacity Issues” or “Change Available Capacity” (3).

 

The option “Change Available Capacity” results in a proposal of the capacity increase that would be required to avoid a particular issue. If you are confident that your work center can provide this additional capacity, you can adopt the proposal and apply it to resolve the capacity issue.

The simple set up without customization resulting in a mid-term planning tool with flexible end-to-end simulation capabilities makes pMRP highly valuable for production planners and related stakeholders. Watch the video to get a first impression.
The introduced solution is only one of the manifold innovations enabled by SAP S/4HANA. To find out more, stay tuned for our upcoming videos and blogs and feel free to have a look here:

SAP S/4HANA Feature Scope Description: http://spr.ly/6009Ds0UT

SAP Fiori Application Library: http://spr.ly/6006Ds0Uw

SAP S/4HANA Trials: http://spr.ly/6005Ds0Uc

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      9 Comments
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      Author's profile photo Caetano Almeida
      Caetano Almeida

      Nice blog! I was also thinking about a blog about pMRP, but now the job is done!

      I strongly suggest you to add the following tags to your blog, to ensure that it reaches the correct audience:

      Regards,

      Caetano

      Author's profile photo Jakob Merlin Frederik Schneller
      Jakob Merlin Frederik Schneller
      Blog Post Author

      Hi Caetano,

      thank you very much! I am happy to hear that you like the blog.

      Thank you also for the additional tags, which I have directly added.

      Jakob

      Author's profile photo Pravin Mandgaonkar
      Pravin Mandgaonkar

      Thanks for sharing.This is really innovative solution for mid term planning!

      Author's profile photo Prasath Elumalai
      Prasath Elumalai

      Hi  Frederik,

      Its  very informative for beginner to get know the features available in pMRP.

       

      Prasath E

      Author's profile photo Nikos Giannopoulos
      Nikos Giannopoulos

      Hello  Frederik

      Can i please kindly ask you to inform me if this functionality is available on premise or only available in the cloud version of S/4 HANA? Is it an embedded S/4 HANA application, that i can run through a transaction for example, or does it require a FIORI app in order to run? Is this FIORI app (or apps) free of charge or should i obtain a seperate licence?

      Thank you very much,

      Nikos Giannopoulos

       

       

      Author's profile photo Jocelyn Dart
      Jocelyn Dart

      HI Nikos,

      These apps are available for both SAP S/4HANA on premise and SAP S/4HANA Cloud.

      You can see this & more in the SAP Fiori apps library by searching for the apps details by name or app id e.g. https://fioriappslibrary.hana.ondemand.com/sap/fix/externalViewer/#/detail/Apps('F3934')/S15OP

      As always, SAP Fiori is the way business users consume SAP S/4HANA innovations. So these innovations are SAP Fiori apps - not GUI transactions. You need to run these in SAP S/4HANA from your SAP Fiori launchpad.

      SAP Fiori for SAP S/4HANA is included and core part of your SAP S/4HANA solution. No separate licence or install is required to run SAP Fiori.

      In some cases some optional parts of SAP S/4HANA business functions are licensed separately.  For that check with your SAP account team.

       

      Author's profile photo Aymeric DE L'HERMUZIERE
      Aymeric DE L'HERMUZIERE

      Hello Nikos and Jocelyn,

       

      Sorry to disturb but I would like to make a comment.

      pMRP requires an additional licence on top of S/4HANA Digital Core.

      The licence name is SAP S/4HANA for extended planning. It brings two major functionalities which are DDMRP and pMRP.

      Best regards

      Author's profile photo Jocelyn Dart
      Jocelyn Dart

      Hi Jakob

      Excellent news. Please also add the links to the exact Fiori apps in the SAP Fiori apps reference library - this will enable people such as Nikos to check further installation and configuration details.  That is: ,

      SAP Fiori app F3968 Schedule pMRP Simulation Creation

      https://fioriappslibrary.hana.ondemand.com/sap/fix/externalViewer/#/detail/Apps('F3968')/S15OP

      SAP Fiori app F3934 Process pMRP Simulations

      https://fioriappslibrary.hana.ondemand.com/sap/fix/externalViewer/#/detail/Apps('F3934')/S15OP

      Author's profile photo Nils Kemmer
      Nils Kemmer

      Hello Jakob,

      I am currently testing the pMRP functionalities in connection with strategy groups.
      When using strategy group 50 (planning without final assembly in the individual customer) I noticed that although sales orders are offset against the PIR, the sales orders reduce the demand in the pMRP. Here is a short example:
      PIR for July 2020 ————————–200 EA
      Customer order on 14.07.2020 ——–50 EA

      Results in a demand in the demand plan simulation in pMRP of 150 EA, but in my opinion the actual demand is still 200 EA, a reduction to 150 EA is not correct.

      Thank you in advance for your help!

       

      Best regards,

      Nils