Material Requirement Planning (MRP)

What is SAP MRP - Material Requirement Planning

What is SAP MRP SAP MRP What is SAP MRP - Material Requirement Planning Overview Material Requirement Planning (SAP MRP) is a tool which helps in planning the requirement quantities and schedules of a given material. It not only ensures availability of the material for which MRP is carried out, but also ensures availability of the components (of all the BOM levels) below in the BOM structure.   Apart from assuring material availability, MRP also carries out scheduling of the procurement proposals using the lead times for the materials/components. When the material is an internally manufactured material, it will use the lead times or operation lead times from the routings/recipes and when the material is an external procured material, it will fetch the lead times or delivery times for the material defined at an appropriate place in the tool/system. Scheduling of the procurement proposals not only derives the capacity loading of the orders on the workcenter but it also calculates the delivery dates of the components that would be requried for manufacturing (delivery date = start date of processing). The output of MRP proposes procurement proposals (planned order or purchase requests) so as to gaurantee material availability and at the same time schedule the procurement proposals using delivery lead times for the materials/components. Material requirement Planning can be run for purchased materials or finished saleable materials or subassemblies (semi-finished) used in production. While the Material Requirement Planning in SAP ECC (SAP MRP), derives a plan for the materials and helps the planners and supervisors to purchase, produce or sell. It offers all the possible planning methods available in the market like the reorder point planning for the consumption based planned materials, lot for lot MRP planning for the demand based planning materials, forecast based planning methods which uses the past historical figures to extrapolate the future requirements (again a consumption based planning material). SAP material requirement planning or SAP MRP, uses the following factors in its planing run: a) planning strategies  - made to order or made to stock or its variations b) planning types - type of the MRP run, i.e., consumption based planning methods or demand based planning methods and net requirement planing or gross requirement planning c) lot sizing procedures set for the material d) master data such as BOM or Routings/Recipes, quota arrangements, souce list, vendors, purchase info records. customer masters etc, and transaction data such as sales orders, forecast, planned independent demands (forecasted demand