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Demand. BOM. Material Data. M aterial R equirements P lanning. Inputs. Output. Planned Orders. Inputs. Demand. Output. Planned Orders. BOM. Material Data. M aterial R equirements P lanning. With MRP, production is planned to meet: Future demand forecasts (make-to-stock)

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m aterial r equirements p lanning

Demand

BOM

MaterialData

Material Requirements Planning

Inputs

Output

Planned Orders

m aterial r equirements p lanning1

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning
  • With MRP, production is planned to meet:
    • Future demand forecasts (make-to-stock)
    • Orders to be completed in the future (make-to-order or assemble-to-order)
  • A key input is, therefore, actual demand or a demand forecast

MRP is a Push production system

m aterial r equirements p lanning2

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning
  • Planning
    • Sales and Operations Planning (SOP)
      • Forecasting, marketing plans, capacity
    • Profitability Analysis
      • Controlling (CO) Module (CO-PA)
    • Direct Input (Demand Management)

Demand Sources

demand management
Demand Management
  • Simplest way to create demand it to input it directly:
m aterial r equirements p lanning3

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning
  • MRP uses the assembly structure, or Bill of Material (BOM) to determine how many components or subassemblies are needed to make the required number of finished products
    • Considers available inventory of components and subassemblies in calculations—net requirements

MRP is designed for assembled products

m aterial r equirements p lanning4

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning
  • For end-items, demand is “independent”—from customers
  • For other components, demand can be determined using the BOM
    • Dependent demand

MRP is designed for assembled products

m aterial r equirements p lanning5

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning

## NRG–A

(7 cases)

## Dough NRG–A

(500 lb)

## Oats

(300 lb)

## Wheat Germ

(50 lb)

## Raisins

(50 lb)

## Carob Chips

(50 lb)

m aterial r equirements p lanning6

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning

Key MRP concept:

Time-phased BOM

## NRG–A

(7 cases)

## Dough NRG–A

(500 lb)

## Oats

(300 lb)

## Wheat Germ

(50 lb)

## Raisins

(50 lb)

## Carob Chips

(50 lb)

Time

bill of material bom1

## NRG–A

(7 cases)

## Dough NRG–A

(500 lb)

Bill of Material (BOM)
bill of material bom2

## NRG–A

(7 cases)

## Dough NRG–A

(500 lb)

Bill of Material (BOM)
bill of material bom3

## Dough NRG–A

(500 lb)

## Oats

(300 lb)

## Wheat Germ

(50 lb)

## Cinnamon

(5 lb)

## Nutmeg

(2 lb)

Bill of Material (BOM)
bill of material bom4

## Dough NRG–A

(500 lb)

## Oats

(300 lb)

## Wheat Germ

(50 lb)

## Cinnamon

(5 lb)

## Nutmeg

(2 lb)

Bill of Material (BOM)
m aterial r equirements p lanning7

Inputs

Demand

Output

Planned

Orders

BOM

MaterialData

Material Requirements Planning

Material Data determines production lot size and timing

  • Primary material data includes:
    • Current Inventory
    • Lot sizing procedure
    • Production lead times
  • All of this data is available in SAP via the Stock/Requirements List
material data s r list
Material Data—S/R List

Inventory Level

0

Inventory Detail

textbook mrp

Part:

A

LS:

50

LT: 2

1

2

3

4

5

6

7

8

9

10

Gross Requirements

10

10

15

15

15

20

20

15

10

10

Scheduled Receipts

50

Planned Order Receipts

50

50

Available Balance

15

5

45

30

15

0

30

10

45

35

25

Planne

d Order Releases

50

50

Textbook MRP

Textbook MRP uses a bucketed system

textbook mrp1
Textbook MRP

LS - lot size - size of production batch or lot sizing method

Gross Requirements - quantity needed in each period - from MPS or from other components and assemblies

Scheduled Receipts - Planned receipt dates for orders that have already been placed

Planned Order Receipts - expected receipt date for planned orders (orders that haven't been placed yet)

Available Balance - Projected inventory balance at the end of each period

Planned Order Releases - Orders that need to be placed (as determined by MRP process) to meet gross requirements (source of planned order receipts)

textbook mrp example problem

Inventory Data

Initial

Scheduled

Component

LS

LT

Inventory

Receipts

A

LFL

1

-

10 in pd. 1

B

50

2

30

50 in pd. 2

C

50

3

40

50 in pd. 3

30 in pd. 3

D

30

4

30

Textbook MRP—Example Problem