The Main Five Steps Of MRP Process (2024)

SAP MRPis carried out in five steps:

1) Net Requirement Calculation
2) Lot-Size Procedures / Calculation
3) Procurement Types / Proposal
4) Scheduling
5) BOM Explosion

1) Net requirement calculation

- A comparison of firmed receipts & requirements takesplace along time axis.
- If a material shortage occurs then the system calculatesa net requirement.
- Available Qty is Stock-Safety Stock.
- Net requirement = Total requirement - Avail Qty.
- You can define the available part of the safety stockin a MRP group.
- New order proposals are not created until stock levelshave fallen below the available portion of safety stock

2) Lot size Procedures

There are 3 Lot sizing procedures in SAP R/3 Static, Periodic& Optimum lot sizing.

a) Static lot sizing
–Lot-to-lot order quantity
–Fixed lot size
–Replenish up to maximum stock level

b) Periodic lot sizing
–Daily lot size
–Weekly / Monthly lot sizing
–Flexible periods according to planning calendar

c) Optimum lot sizing
–Part period procedure
–Least unit cost procedure
–Gross reorder procedure
–Dynamic lot size creation
-Net requirements are used in lot size calculations todetermine the quantities of the individual order proposals
-For period or optimum lot-sizing procedures, severalnet requirements are clubbed together in one order proposal.

-Lot sizes can be restricted by using options
-–Define maximum or minimum lot size
-–Rounding value functions

3) Procurement types

- Procurement types define whether a material is producedin-house or procured externally.
- If the procurement type is “E” then the system alwaysuses in-house production time.
- If the procurement type is “F” then the system alwaysuses Planned delivery time
- All other types of procurement like stock transfer,sub-contracting, production in other plant are carried out using specialprocurement key.
- Procurement key & special procurement key are availablein MRP-2 screen of material master.

4) Scheduling

Backward Scheduling

- The goods receipt processing time specifies the numberof workdays required by the stores person to check the material received& to place it in stock.
- In-house production time is calculated by adding leadtime & the floats before & after production.
- The opening period represents the processing time requiredby the MRP controller for converting the planned orders.

Forward Scheduling

- The system schedules forward starting from the basicstart date.
- "today" scheduling: The system carries out forwardscheduling using the current date as a basic start date.

5) BOM explosion

- In BOM explosion, the system calculates the componentsor assemblies required for the appropriate BOM
- The key date for evaluation of the BOM (Explosion date)is the order finish date of the planned order
- Using the lead time offset in the BOM you can displacethe dependent requirements date of a specific component.

The Main Five Steps Of MRP Process (2024)
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