How MRP Works in SAP: Old vs. MRP Live / Depth look / Guide

Material Requirements Planning (MRP) is the backbone of production and procurement planning in SAP. Whether you’re dealing with the classic MRP or the new MRP Live on HANA, understanding the differences is key to leveraging the right tool for your business needs.

What Does MRP Do?

At its core, MRP answers these questions:

1. What materials are needed?
2. How many are needed?
3. When are they needed?

It ensures that the right materials are available at the right time to avoid production delays or excess inventory.

Understanding the MRP Planning Process

1. Net Requirements Calculation

This is the first step in the planning run, where the system determines whether there’s a need for procurement or production.

How It Works:

• The system checks available stock and receipts (e.g., planned orders, purchase orders).
• It compares these against requirements (e.g., sales orders, forecasts, dependent demands).
• If requirements > available stock, the system identifies a shortage and triggers a procurement proposal.

Key Formula:

2. Calculating Procurement Quantity

Once a shortage is identified, the system calculates the quantity needed to cover the requirements. It considers:

• Lot Sizing Rules: Determines the order quantity based on predefined settings:
• Safety Stock: Ensures a buffer is maintained by adding it to the procurement quantity.

Example: If the net requirement is 50 units, and safety stock is 10 units, the system calculates the procurement proposal as 60 units.

3. Scheduling

Once the quantity is calculated, the system determines when the materials are required. Scheduling involves two key steps:

a. Basic Scheduling

• Calculates the planned order dates based on:Requirement date.Lead times (procurement, production, in-house transport).

b. Lead Time Offset

• For procurement: Considers planned delivery time and goods receipt processing time from the material master.
• For production: Considers setup time, processing time, and queue time from the work center.

Output:

• Start Date: When production or procurement should begin.
• Finish Date: When the material will be available.

4. Determining the Procurement Proposal

After scheduling, the system determines the appropriate procurement type based on the material master settings:

• E (In-House Production): The system generates a planned order for internal manufacturing.
• F (External Procurement): The system generates a purchase requisition or schedule line for external suppliers.
• X (Both Production and Procurement): The system decides based on strategy or planning rules.

5. BOM Explosion and Determining Dependent Requirements

If the material is produced in-house, the system explodes the Bill of Materials (BOM) to calculate the components required to produce the finished product.

How It Works:

1. The system identifies the BOM components and their quantities.
2. It calculates dependent requirements for each component based on the planned order quantity.
3. These dependent requirements become input for further MRP runs, ensuring raw materials and subcomponents are planned appropriately.

Example: For a bike requiring:

• 1 frame.
• 2 wheels.
• 1 chain.

If the planned order is for 10 bikes, the dependent requirements would be:

• 10 frames.
• 20 wheels.
• 10 chains.

MRP Output

At the end of the planning process, the system generates the following:

1. Planned Orders: For in-house production.
2. Purchase Requisitions: For external procurement.
3. Exception Messages: Alerts for rescheduling, quantity adjustments, or potential issues.

How Classic MRP (Old) Works

Classic MRP uses a sequential, batch-based process to generate procurement proposals and production plans. Here’s how it works:

Scope: MRP runs for a specific plant or material and considers:

Key Features

MRP Programs:

• MD01: Run MRP for all materials in a plant.
• MD02: Single-material, multi-level planning.
• MD03: Single-material, single-level planning.

Performance: Slower as it processes materials one at a time.

Planning File: Tracks which materials need planning based on changes in stock, sales, or BOM.

Output:

• Planned orders for production.
• Purchase requisitions for procurement.
• Exception messages (e.g., rescheduling, delays).

Limitations:

1. Performance Bottlenecks: Sequential processing slows down with large datasets.
2. Static Planning: Limited to periodic batch runs.
3. Limited Parallelism: Cannot fully utilize modern multi-core CPUs.

Key Differences: Classic MRP vs. MRP Live

When to Stick to Classic MRP

1. Coverage Profiles: If you rely heavily on dynamic safety stock with MRP areas, classic MRP may still be needed.
2. Complex Customizations: Some enhancements or Z-programs designed for classic MRP may not work with MRP Live.

Will Rescheduling Check Automatically Move Unfixed Schedule Lines?

What Should You Do?

Monitor Exception Messages:

• 10: Reschedule in.
• 15: Reschedule out.
• 26: Cancel process.

Manually Adjust Schedule Lines: Use ME38 to modify or delete the schedule lines based on MRP proposals.

Avoid Past Due Schedule Lines:

Consider Automation (if applicable).

No, the rescheduling check in SAP does not automatically move schedule lines, even if they are unfixed. Instead, it creates exception messages to notify the MRP controller about the changes that should be made. The MRP controller must manually adjust the schedule lines based on these proposals.