MRP Planning #2
Dear SAP Friends,
This is in Continuation of my Previous Blog MRP Planning
So in this Blog will see about
Planning with MRP areas
Requirements grouping for individual project planning
The MRP area represents an organizational unit for which material requirements planning is carried out independently.
Basically, there are three types of MRP area:
- Plant MRP Area
The plant MRP area initially contains the plant together with all its storage locations and stock with subcontractors.
When we have defined MRP areas for storage locations and for subcontractors and we have assigned the materials, the plant MRP area is reduced by exactly this number of subcontractors and storage locations. This is because they are now to be planned separately.
- MRP Areas for Storage Locations
We can define an MRP area that consists of a storage location, by creating an MRP area and assigning the storage location to it. Material requirements for this storage location are then planned separately from the rest of the plant.
We can also group several storage locations into one MRP area, by creating an MRP area and assigning the storage locations to it. These storage locations are then planned together.
A storage location of a plant may be assigned to only one MRP area.
- MRP Areas for Subcontractors
We can also define an MRP area for each subcontractor.
A subcontractor may be assigned to only one MRP area. An MRP area of the subcontractor type may also only contain one subcontractor.
The following graphic shows an example of how a plant can be divided after the implementation of MRP areas:
- We can carry out MRP specifically for the determined MRP areas. This enables us to carry out differentiated material requirements planning. The requester can be, for example, the production on an assembly line or a subcontract order.
- The MRP area allows us to have specific control over the staging and procurement of important parts produced in-house and purchased parts for each shop floor area. We can, however, also plan the provision of components for the individual subcontractors.
- MRP areas of the storage location or subcontractor type are only suitable for:
- components that are planned and produced for stock
- finished products that are planned and produced for stock. By assigning a storage location in a sales order or by entering an MRP area when creating the planned independent requirements, we can define whether material is planned in the plant MRP area or in the MRP area of the storage location.
- Finished products and important assemblies intended for make-to-order or engineer-to-order production are always planned in the plant MRP area.
- The planning run considers the planning with MRP areas as follows:
- If we do not enter a separate scope of planning, the system plans the whole plant, that is, all MRP areas in the plant, during the total planning run. If we want to carry out a total planning run for an MRP area only, we must specify the required MRP area in the scope of planning.
- During single-item, multi-level planning, the system plans the selected material in the MRP area entered. In addition, the system considers planning file entries from other MRP areas, for example, if the material is to be procured using stock transfer.
- During single-item, single-level planning, the system plans the selected material in the MRP area entered only.
- We define the MRP areas in Customizing for MRP. We can thereby assign the following to an MRP area:
- one or more storage locations(example: we want to carry out planning for an assembly line and therefore assign a production storage location to the MRP area)
- a subcontractor.
- We assign the various MRP areas to the materials in the material master. For this, we create an MRP area segment for material for every MRP area, in which it is used. In this MRP area segment, we can define MRP parameters such as, for example, the lot size or MRP type. This allows us to plan the material difference in the MRP area from how we plan it in the plant MRP area.
MRP with MRP areas for the material is not activated until the material has been assigned to an MRP area. If we have not assigned material to an MRP area, that is, we have not created an MRP area segment in the material master, the material will continue to be planned in the plant MRP area only. If we have assigned an MRP area to it, the system can plan it in the plant MRP area and in the assigned MRP area.
- We can carry out material requirements planning for MRP areas using all MRP procedures and all lot-sizing procedures.
- We can also carry out an independent material forecast for MRP areas using our own parameters.
- The material consumption values are updated separately for each MRP area.
- A separate ATP check is carried out for each MRP area.
If several storage locations belong to an MRP area, the system can also carry out a check at two levels, that is, at the storage location level and at MRP area level.
We can use cross-plant planning to carry out material requirements planning for various plants centrally. This facilitates the production of a product in another plant and it also guarantees a smooth flow of materials between different plants.
- In MRP, cross-plant planning is carried out using special procurement keys. We assign the special procurement key to the material in the material master.
- In Customizing for MRP, we define the special procurement key in the IMG activity Define Special Procurement Type. We define the special procurement key at the material level according to plant, procurement type, and special procurement.
If required, we can also use the indicators Phantom item, Direct Production, Direct Procurement, and Withdrawal from Alternative Plant to control the treatment of the material as a component during the BOM explosion.
A material appears in several BOMs as a component because it is installed in finished products in in-house production. As such, it is procured from an alternative plant.
The same material, on the other hand, is also sold from stock to customers who need the material as a replacement part, for example. In this case, the material cannot be procured by withdrawing it from an alternative plant but must be procured using a stock transfer. If a material shortage occurs after we have entered a customer requirement, a stock transfer requisition is created in the planning run.
We can do this in the SAP system by creating a special procurement key for a withdrawal from an alternative plant and by entering a U for stock transfer in the Special Procurement field, and by entering the plant from which the material is to be transferred
- Materials that are included in cross-plant planning must have a material master in all plants concerned.
When carrying out planning, we must pay attention to the chronological planning sequence of the various plants:
Plan the receiving plants first and then the supplying or production plants.
For various materials in a production chain, the special procurement types can reference each other. For example, a material for production in plant 0001 can be withdrawn from plant 0002 (withdrawal from an alternative plant). In this case, plant 0001 is the receiving plant and plant 0002 is the supplying plant. The end product that is produced using the material in plant 0001 is transferred to plant 0002 (stock transfer). Now plant 0002 is the receiving plant and plant 0001 is the production plant.
On no account should special procurement types for stock transfer that reference one another be stored for one material in two plants. In other words, a material cannot be transferred from plant 0002 to plant 0001 and at the same time be transferred from plant 0001 to plant 0002.
A cycle across multiple plants should also be avoided.
The following cross-plant planning processes are available:
- Stock transfer from plant to plant or from plant to MRP area
- Production in alternative plant
- Withdrawal from alternative plant
Requirements Grouping for Individual Project Planning
Requirements grouping is a planning procedure for projects within material requirements planning.
Requirements grouping for individual project planning enables we to group material requirements that are caused by WBS elements within a project or also cross-project, and plan and procure them together. This enables us to save costs.
Requirements grouping is possible only for operative WBS elements.
We are using the component Project system for the processing of projects.
Basically, there are three procedures for planning material requirements in projects in the SAP System:
- Individual project planning
The system only plans individual requirements. Materials that are required for a project (WBS element) are specifically planned for the project and are procured with reference to the WBS element. The materials in the individual project stock of the WBS element are managed and settled separately from the normal stock. Goods issue only takes place with reference to the WBS element.
This procedure is used to plan finished products and important assemblies.
- Requirements grouping for individual project planning using grouping WBS elements
The material requirements for different WBS elements are combined and jointly planned and procured. If we combine the WBS elements within a project to one grouping WBS element, we will have real individual project stock.
If we use cross-project requirements grouping, the ordering parties must give their consent that the assemblies and components are planned and procured using this procedure.
- Planning collective requirements(Make-to-stock production)
We can plan and procure materials at subordinate BOM levels that are required in all projects, independently of WBS elements, using make-to-stock production. During the planning run, the system calculates the total requirements of material in a plant. The material is procured without reference to a WBS element.
These materials are managed in the plant stock and are available for all projects.
The requirements grouping for the materials of different WBS elements is carried out by using one or more grouping WBS elements.
- If we would like to group requirements of WBS elements within a project, the Automatic Requirements Grouping function is available. With this procedure, all requirements are combined into one grouping WBS element of the project. This has the advantage that we have “real” individual project stock, or project definition stock, for the whole project.
- In cross-project requirements grouping, we assign the WBS element to one or more grouping WBS elements. The grouping WBS elements thereby have a grouping function.
We group all WBS elements of projects from the private sector into one grouping WBS element and combine all WBS elements from the public sector into another grouping WBS element and plan each together.
Requirements grouping in individual project planning has the following features:
- It combines several WBS elements into one grouping WBS element for the planning.
- It plans material requirements that have been caused by WBS elements, together on the basis of the grouping WBS element.
- Material requirements planning creates procurement elements (planned orders, purchase requisitions) that are assigned to the account of the grouping WBS element.
- In MRP evaluations, an individual MRP segment is managed for each grouping WBS element.
- We manage individual project stock for each grouping WBS element. All materials that are required by the WBS elements belonging to the grouping WBS element are included in this stock.
- The materials in the project stock of the grouping WBS element are available for every WBS element that is assigned to the grouping WBS element.
- The complete procurement costs are incurred by the grouping WBS element. The costs are posted to the network activity with the withdrawal of the procured material for production. During the procurement phase, no costs are visible for the WBS elements, which have caused the requirements. It is not until the withdrawal, that the procurement costs are assigned to the appropriate WBS element.
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Thanks & Regards
SME – S/4 HANA Manufacturing & Procurement
SAP Ariba P2P
Nice Blog.. Thank you for sharing, Ruthvik Chowdary
Thank you Anita Arifin