SAP Mental Notes » PP

Distribution of Planned Independent Requirements in MRP

Kowboy — Thu, 23 Jul 2009 07:33:42 +0000

Distribution of planned independent requirements can be key in getting your MRP results exactly right. This post is about how to break down your Sales and Operations Plan and schedule it for MRP. E.g. Assume your SOP is planned in monthly buckets, but you plan your production in weekly buckets and you use forward scheduling for your production orders. In this case you want independent requirement quantities show on the first day of the week. Another example: since you plan production on a daily basis you want your monthly forecast spread out on a daily basis throughout the month. Distribution of planned independent requirements can help you achieve this.

First you define the distribution function itself.

Production > Production Planning > Demand Management > Planned Independent Requirements > Automatic Split > Distribution Function for Automatic Split > Define Distribution Function

Distribution function

Here you specify the percentage of the quantity that needs to be available or released after a certain percentage of time. You can e.g. determine that total quantity should be available at the beginning, at the end or spread over 5 time points (like work days). To reach the goal of the first example you determine that after 0% of time has passed, 100% of quantity should be available (see below function S10).

Next step is to define the distribution strategy.

Production > Production Planning > Demand Management > Planned Idnependent Requirements > Automatic Split > Distribution Function for Automatic Split > Define Distribution Strategy

Distribution strategy

This let’s you determine either of two things:

1. spread the quantities exactly over the points in time defined in the previous step, or;

2. smooth the quantities along the time axis according to your function.

Imagine 2 time points in a month (20 working days) where 80% is available after 20% of production time and 100% after 100%. Using the second strategy you can spread the 80% over the first 4 days of production. Using the first strategy the total 80% will become available only after four days. To achieve this you also need to determine the period split for the strategy.

Production > Production Planning > Demand Management > Planned Independent Requirements > Automatic Split > Define period split for automatic split

Automatic split

Here you define how many of the first few weeks need to be split into daily quantities and/or how many of the first few months need to be split into weekly quantities. You then decide how you are going to spread your quantities. You decide whether your distribution strategy applies to the weeks and/or to the months by assigning the strategy two the last two columns.

The only thing that is required as a last step is to assign the period split to an MRP group or independent requirement version. When you opt for the last the periods will be split at the time of copying the demand plan from SOP or Flexible Planning to the Demand Management tables (MD61).

IMG paths for assigning split

You may need to try different settings in order to achieve what you need, especially if your require more complex distributions.

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Forecasting – Copy history

Kowboy — Mon, 06 Apr 2009 12:50:26 +0000

In forecasting it is fair to say that most forecast models only sensibly apply to high volume materials and that for low volume materials (although specific models exist)more manual intensive forecasting practices apply. A lot of customers prefer to use historical data one on one for the future predictions: May 2008 – 120 boxes sold hence May 2009 -120 boxes sold, June 2008 – nothing sold hence June 2009 also nothing sold, and so on. In a lot of situations it is desirable to manually adjust some of the forecast values. So if you wish to use last year’s actuals as your forecast for the upcoming year you can do the following:

This method can be applied in SOP/Flexible Planning and Material Forecasting. Take the following steps:

1. Choose (Winter’s) Seasonal Model.

2. Use one season as your history (e.g. season = 12 months, historical periods = 12 months)

3. No further initialization periods

Using these settings the last year’s pattern will be copied to the next year.

In SOP/Flexible Planning there is also the option ‘Copy history’. This will copy the consumption values (goods issues that are consumption relevant) to the future. However, when you are using a custom forecast field in Flexible Planning like e.g. ‘Invoiced quantities’ you are not interested in goods issues. You want to copy the ‘Invoiced quantities’ actuals. The method above then fits your requirement.

Find below how you can set the parameters in Flexible Planning in your forecast profile (MC35):

Forecast profile settings in MC35

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MD04 – Export planning to Excel

Kowboy — Mon, 16 Feb 2009 20:55:54 +0000

Sometimes a planner wishes to share the planning status of a particular material with colleagues or partners that are not SAP users. In this case it is useful to export the planning overview to Excel and perhaps pimp the lay-out with some colorful headers.

To do this -from within MD04 or MD07- go to Menu > List > Variable Print.

MD04 - Variable Print

Immediately a new overview opens up that may look less attractive than the overview you are used to. On the screen ‘Print list – variable’ you can change the lay-out and save it as a variant like you are used to in standard SAP reporting.

MD04 printlist lay-out

To get the best Excel results export the report directly to an Excel table, as opposed to first store it as a local file and then open it in Excel. This way the lay-out is optimized for direct filtering and sorting.

This is all there is to it. Sometimes SAP life is that easy.

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Batch determination for IM

Kowboy — Fri, 06 Feb 2009 08:31:53 +0000

This blog offers a quick guide on how to use standard SAP Batch Determination for a material transfer. For an internal goods movement we need SAP to pick the batch from stock with the earliest Shelf Life Expiration Date (SLED). We don’t want our fresh products terminate themselves from stock…

1. For this we will be using standard IM search strategy ME001 – Standard Search Procedure.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Batch Search Procedure Definition > Define Inventory Management Search Procedure

IM Search Procedure

The search procedure consists of three condition types that is plenty to us. We want the determination rule to be activated when we use Movement type 311 (Mvt from SLoc to SLoc) in Plant X for only a specific material. ME01 condition seems to fit this purpose.

2. Now we need to activate the search procedure for the movement type, otherwise it will not even begin to look for a determination procedure in the first place.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Batch Search Procedure Activation and Check Activation > Allocate IM Search Procedure/Activate Check

Activate procedure

We add the Search procedure to movement type 311 and check the check box so that manually entered batch codes are validated as well.

3. Next we need a sort rule to be able to sort batches on SLED.

IMG > Logistics > Batch Management > Batch Determination and Batch Check > Define Sort Rule

Sort rule

For the rule we use standard Batch Characteristic LOBM_VFDAT. This is the SLED. We need earliest batches first so we choose ‘Ascending’.

Now we did all necessary customizing. It may be necessary to create batch classes with classifications if you are not already using this. If your products are batch managed already, your materials should already be assigned a batch class in the material master. This class we will also be using in the batch determination.

4. The last step is to create a search strategy, much like message determination for document output (if you never did this, then never mind this comparison).

SAP Menu > Logistics > Central Functions > Batch Management > Batch Determination > Batch Search Strategy > For Inventory Management > MBC1 – Create

We will use strategy type ME01 and key combination Movement Type/ Plant and Material. Remember that we want the search procedure only to work for one material at time of goods transfer in one plant. If you want you can extend the procedure to all materials for movement type 311. In this case choose key combination: Movement Type/Plant. It’s that easy.

MBC1 - Create Search Strategy

Here we actually enter the criteria when the batch determination should be activated: movement 311, material MRP and plant 3000. You can choose settings with regards to batch splits and whether determination should occur in dialogue mode or background. For details F1 your way through these options.

Last but not least: enter Selection criteria and Sort rule by pressing the buttons in the task bar. For selection criteria you can e.g. say SLED > 01.01.2009. It is a minimum requirement that the procedure needs. Be selecting a SLED date in the past I’m assuming that all batches are in scope (at the same I assume that expired products are taken off the shelf in time so I will not use it in my delivery process).

I will use the sort rule I created in the previous step: sort by SLED.

That should do it.

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What is a planned independent requirement?

Kowboy — Sun, 07 Dec 2008 19:31:44 +0000

Independent requirements and dependent requirements are the two main types of requirements you encounter when configuring SAP planning. This is what they are:

Planned Independent Requirements (PIR)

Planned Independent Requirements are planned production or sales quantities that are based on some sort of forecast procedure (e.g. Material Forecast or S&OP procedure). These numbers are used in MRP to calculate procurement and/or production quantities for a material.

(Planned) dependent requirements

Dependent requirements is demand that is dependent on another material. E.g. components of a bill of material are often planned on the basis of the demand for the material of which it is a part.

Example

You plan to sell 200 bikes in the month of January 2009 based on sales in the same month of 2008. These 200 bikes is a Planned Independent Requirement for 01/2009.

Since every bike is produced using two pedals the 200 bikes you plan to sell in January 2009 results in 400 pedals you need to procure. These 400 pedals is a planned dependent requirement for 01/2009.

On the basis of these numbers MRP can calculate including current stock levels how much bikes and pedals you actually need to produce/procure.

More

Sometimes “old” planned independent requirements can negatively affect your MRP planning leading to an overstatement of procurement quantities. How you can get rid of these requirements is posted here.

Read about PIRs and Consumption-based Planning here.

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Lot-size for continuous production and process industry

Kowboy — Tue, 25 Nov 2008 17:34:39 +0000

A suitable lot-size for continuous production can be hard to come up with. Picture the situation of a mineral oils manufacturer that refines crude oil to 3 co-products. The planner wishes to control the process flow to align the production with demand (i.e. the refinery is not continuously refining at the same speed as it would in make-to-stock). Another requirement for ATP is that the production quantities are issued on a daily basis. Hence we want MRP to come up with weekly planned orders that are distributed on a daily basis. In abundance: 1 planned/process order per week, with equal quantities released per day.

Lot-size

IMG > Production > Material Requirements Planning > Planning > Lot-Size Calculation

The lot-size that can be set up for this could be (a variant of):

Custom lot size for continuous production

Lot-size procedure is P for period lot-sizing. Lot-size indicator is K for sizing according to a custom planning calendar (pick factory calendar if this suits you). This enables you to create planned orders e.g. from Wednesday to Tuesday.

For scheduling you choose 3 for Period Start = Start and period end = delivery date.

Distribution key

IMG > Production Planning for Process-Industries > Master Data > Master Recipe > Material List > Item Data > Item Data from Related Application Areas > Define Distribution Keys

You set up a distribution key for the production version that enables a equal distribution through time.

Equal distribution key

The distribution key consists of standard SAP distribution function S20 for Equal Distribution and standard SAP Distribution Type 01 for continuous distribution through time.

Production version

Last thing to do is assign the distribution key to the production version in the material master (tab MRP4). If you’re not working with production versions and you’re going to create a new one: make sure the BOM Selection method is set to Selection by production version (also in the MRP4 tab).

Distribution key in production version

MRP

Now you run MRP and you will find that a planned order is spread over seven days with equal quantities. Take note that the order number is the same for every day (indicating that it is indeed just one planned order and not seven).

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MRP processing keys

Kowboy — Wed, 19 Nov 2008 18:26:45 +0000

NETCH, NETPL and NEUPL are three fundamentally different ways to schedule your MRP run:

NETCH – Net Change Planning
NETPL – Net Change Planning within Planning Horizon
NEUPL – Regenerative Planning

MRP Processing Keys

I will elaborate on these three options and their workings:

SAP is keeping track of changes that are relevant for planning a material (like sales order entry, purchase order entry, stock release, etc.). A planning relevant change signals to MRP that the material should run in the next NETCH or NETPL MRP run. MRP will thus only process those materials that underwent some type of planning relevant change. This can decrease processing time of the MRP background run when compared to processing ALL materials.

The difference between NETCH and NETPL is the planning horizon. In NETPL, if a change occurs outside the planning horizon (e.g. a sales order is entered 2 months away and your planning horizon is 6 weeks), then the material is not included in MRP even though there is a change. Be careful with this, because that same sales order is not recognized as a new requirement when it will shift within the planning horizon as we move towards the future.

Regenerative planning (NEUPL) disregards the fact whether or not planning relevant changes were made to the material. It will process ALL materials (with an MRP relevant planning type in the material master’s MRP1 tab).

Another element worth mentioning is the processing indicator. You can use the processing indicator in the stock/requirement list or MRP list to indicate that you checked the material. You can use a filter in the collective access transaction MD06 so you only have to review unprocessed materials (the materials that you didn’t check yet).

MD06 - Processing Indicator

MD06 Filter Processing Key

Planning background MRP jobs

Background scheduling of MRP jobs is done through program RMMRP000 (SE38). This screen is similar to transaction MD01 that is used for foreground (on-line) processing. Alternatively to RMMRP000 you can schedule variants through transaction MDBT. I usually plan two MRP jobs for my customers:

Weekly MRP: MRP NEUPL on Monday morning: we start with a new week and all materials are processed. All processing indicators are reset.
Daily MRP: MRP NETCH runs from Tuesday to Friday, early in the morning, only materials that have undergone some type of planning relevant change are picked up for MRP, safely assuming that all other materials are still OK. The processing indicator of the materials in these runs are reset, the ones not included in MRP are untouched.

Note that in this MRP run setup there are two jobs: daily and weekly. This results in an MRP run on every day except Saturday and Sunday. Obviously if weekends are working days for your company’s planning department weekends needs to be included as well.

Also MRP runs in the morning and not before midnight. You want the stock date to be today’s date. Even though there is only five minutes difference between before and after midnight: yesterday’s stock date just looks as if you are using data that is not current.

I recommend staying away from NETPL. There is really no advantage using this procedure; only risk.

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Different planning views

Kowboy — Sun, 16 Nov 2008 15:47:31 +0000

End-users can get confused about the difference between MD04 – Stock/requirement List and MD05 – MRP List. This post will give you the answer on when to use what report and why:

MD05 will show only the situation as it was since the last MRP run. This transaction is suitable for reviewing the MRP run. Without taking into account new stock issues or receipts MD05 is ideal for evaluating your MRP parameters. Look at the stock date, this is the date of the last MRP run.

MD04 will show you the current stock situation taking into account all requirements and planned receipts. The stock date is always current (=today). This view is appropriate if you make procurement decisions in dynamic environments, i.e. requirement situation changed a lot since the last MRP run.

Example: MRP has run for a material on Monday early morning. The planner will not evaluate the procurement proposals until Monday afternoon. Customer service entered a large number of sales orders in the system, and the warehouse already shipped quantities. In this case I suggest the planner uses MD04 to get the most up-to-date planning situation. On top of that I would actually recommend the planner gets out of bed early and does the planning evaluation first thing in the morning. If a planner allows a lot of changes to happen, the procurement proposal out of MRP may not make sense anymore.

I will post an article on the workings of SAP MRP and the theory of MRP in the future.

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Replenishment to Maximum Stock Level

Kowboy — Tue, 11 Nov 2008 20:42:16 +0000

Replenishment to maximum stock level

It is not uncommon that the use of the field Maximum Stock Level in the MRP1 tab in the Material Master leads to misinterpretations. This field can only be properly used together with lot-sizing procedure HB: Replenishment up to maximum stock level. This is commonly used for tanker planning where storage is limited to the tank capacity. This lot sizing can be used in conjunction with re-order point planning or MRP. It cannot be properly used independent of lot sizing HB as a procurement ceiling (see my suggestion at the end of this post for a way to address this).

Planning Type PD: MRP

The system will create a requisition for the size of the remaining capacity of the tank OR if the requirement in a period exceeds the remaining tank capacity it will take the real requirement. MRP gives priority to giving the planner a balanced planning overview. It is up to the planner how to handle the storage shortage.

Planning Type VB/VM: Re-order point excl external requirements

Lot size = max stock level – current stock – existing fixed receipts

Planning Type V1/V2: Re-order point incl external requirements

Slightly more complex, this is a two step approach:

1) Lot size = max stock level – current stock – existing fixed receipts

2) Lot size = Re-order point – Total requirements in lead time – current stock – existing fixed receipts

Whichever of the two is the highest will be the quantity proposed.

Order ceiling

Some customers prefer to stick to exact lot sizing and want to use the maximum stock level as a ceiling. SAP does not support this. There is a work-around for this by using the coverage profile. Whenever a requisition exceeds the max stock level in the coverage profile MRP will issue a warning (25). This can be used to avoid exceeding the tank capacity if you align this indicator with the tank capacity. Since the coverage profile is based on historical average demand, this method can only be used if your average demand is stable.

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Firming types in MRP

Kowboy — Thu, 06 Nov 2008 19:42:07 +0000

In a production environment it may not be preferable that new requirements on the short term can influence production quantities. The length of the term can be determined by the planning time fence. How MRP treats new requirements in this period can be determined using the firming type in customizing for MRP type:

The firming type determines how the MRP run treats requirements in relation to the planning time fence. The time fence is counted by number of workdays from today. This number can be set in the material master (MRP1 tab) or in customizing per MRP group.

Firming types

There are five firming types:

0 – Time fence has no effect on planning: new requirements are always accepted and increase/decrease any non-firmed orders (planned orders, requisitions).

1 – All non-firmed planning proposals moving into the time fence will automatically be firmed by the system. This way no automatic changes will be made to these order in future planning runs. When new requirements within the time fence are identified by MRP, these will result in new non-firmed orders lying just outside the time fence.

2 – All non-firmed planning proposals moving into the time fence will automatically be firmed by the system. Again, as in 1, no automatic changes in the time fence are made. Contrary to 1 NO new proposals are created at all. It is up to the planner to identify the shortage and deal with it.

3 – No automatic firming of any non-firmed planned orders, either within or outside the time fence. All orders are moved outside the time fence and remain non-firmed.

4 – No automatic creation and/or firming of planned orders to cover shortage

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