MRP implementation for operations directors

SAP MRP Strategy Parameter Configuration ✔️ The configuration of MRP (Material Requirements Planning) strategy parameters in SAP is crucial for defining how materials are planned, produced, and managed in relation to customer demands and stock levels. The main focus is on strategies such as Make-to-Stock (MTS), Make-to-Order (MTO), Assemble-to-Order (ATO), and Engineer-to-Order (ETO), each with their own set of parameters and configuration nuances. SAP MRP strategy parameters define how materials are planned, produced, and managed based on business requirements such as Make-to-Stock (MTS), Make-to-Order (MTO), and Assemble-to-Order (ATO). Key parameter: Strategy Group – Found in Material Master (MRP3 Tab), it determines the primary planning method (e.g., MTS with Strategy 10, MTO with Strategy 20, ATO with Strategy 40). Requirements Class and Type – Control how planning and order consumption occurs; managed via customizing and assigned through the requirements type. Consumption Mode and Periods – Specifies how sales orders consume planned independent requirements (PIRs), set as backward, forward, or both, with defined days in Material Master. MRP Type – Chooses the basic planning logic (e.g., manual reorder point, forecast-based, automatic); set in Material Master (MRP1 Tab). Lot Size and Safety Stock – Establish how much to order and keep in inventory, configured in Material Master (MRP2 Tab). Individual/Collective Indicator – Determines whether planning is for individual sales orders or grouped collectively; set in Material Master (MRP2 Tab). MRP strategy parameters can also be managed at the MRP Group level to apply consistent settings across multiple materials. Common transaction codes: OMDU (MRP activation), OPPQ (plant parameters), OMI8 (consumption-based planning maintenance). Proper configuration ensures that SAP plans production and procurement aligned with demand, stock, and strategic business goals. → Defines material planning strategy (MTS, MTO, ATO, ETO) → Set Strategy Group in Material Master (MRP3 Tab) → Assign Requirements Class & Type via customizing → Configure Consumption Mode & Periods (forward/backward days) → Select MRP Type (manual, forecast-based, etc.) → Set Lot Size & Safety Stock in Material Master → Choose Individual/Collective Indicator (MRP2 Tab) → Can be managed at MRP Group level for consistency → Use key transaction codes: OMDU, OPPQ, OMI8

SAP MRP The Material Requirements Planning (MRP) process in SAP is a critical component for managing production planning and inventory control. It ensures that materials and products are available for production and delivery to customers, while maintaining the lowest possible inventory levels. Here’s an overview of how the SAP MRP process works: Key Objectives • Ensure material availability: Meet customer demands and production schedules by having the right materials in the right quantity. • Optimize inventory levels: Avoid excess inventory while preventing stockouts. • Plan production schedules: Align production activities with material availability and demand forecasts. Core Elements of SAP MRP 1. Master Data: • Material Master: Contains information on all materials within the company, including procurement type, MRP type, lot sizing, and lead times. • Bill of Materials (BOM): Defines the components and quantities required to produce a finished product. • Work Centers: Locations where production operations are carried out. • Routing: Sequence of operations needed to produce a product. 2. MRP Types: • Consumption-Based Planning: Based on historical consumption data. • Reorder Point Planning: Triggers procurement when stock falls below a certain level. • Forecast-Based Planning: Utilizes demand forecasts to anticipate material needs. 3. MRP Process Steps: • Net Requirements Calculation: Determines the quantities needed by comparing available stock and scheduled receipts against the required quantities. • Lot-Sizing: Determines the order quantity based on the lot-sizing procedure (e.g., fixed lot size, lot-for-lot, economic order quantity). • Procurement Proposal Generation: Creates purchase requisitions or planned orders based on net requirements and lot-sizing results. • Scheduling: Plans the start and end dates for production orders and purchase orders. 4. MRP Execution: • MRP Run: Executed using transaction code MD01, MD02, or MD03, depending on the scope (total planning, single-item planning, etc.). It can be run in regenerative or net change mode. 5. MRP Evaluation: • Stock/Requirements List (MD04): Provides an overview of current stock levels, planned orders, purchase requisitions, and sales orders. • MRP List: Shows the results of the last MRP run, allowing users to analyze planning results. Benefits • Improved Efficiency: Streamlines production planning and procurement processes. • Cost Savings: Reduces excess inventory and associated carrying costs. • Enhanced Customer Service: Ensures timely product availability to meet customer demands. Challenges • Data Accuracy: Relies on accurate master data and demand forecasts. • Complexity: Requires careful configuration and management to meet specific business needs. SAP MRP is a powerful tool that helps organizations balance demand and supply effectively, ensuring smooth production operations and optimal inventory management.

💡The MRP procedure in SAP is a systematic approach used to plan material requirements, trigger procurement or production, and ensure stock availability for timely sales and manufacturing operations. ✅Types of MRP Procedures There are several key MRP procedures in SAP controlled by the MRP Type field in the material master: 💡Manual Reorder Point Planning (MRP Type VB): Stock is replenished when it falls below a manually set level. 💡Automatic Reorder Point Planning (MRP Type VM/V2): The system calculates reorder points using historical data. ✅Forecast-Based Planning (MRP Type VV): Requirements are calculated based on consumption forecasts. ✅Material Requirements Planning (MRP Type PD): Net requirements are calculated from actual demand and planned receipts; includes BOM explosion and multi-level planning. ✅No Planning (MRP Type ND): No planning is performed for the material. ✔️Main Steps in the MRP Process Requirements Calculation: MRP compares total demand (sales orders, planned independent requirements, dependent requirements) with stock and planned receipts. ✔️Procurement Proposals: If there is shortage, MRP generates planned orders and purchase requisitions to cover material needs. ✅Lot Sizing: Determines how much quantity is to be procured/produced per replenishment run (e.g., exact, weekly, monthly). ✔️Safety Stock & Reorder Points: Additional planning parameters to ensure buffer inventory and automatic trigger of procurement when stock drops. ✔️Important Configuration Aspects The MRP procedure is set in the material master record under MRP 1 view. ✔️Associated fields include the MRP controller, lot size, minimum/maximum lot size, and safety stock. ✔️Transaction codes for executing MRP include MD01 (total planning), MD02 (single item, multi-level), MD03 (single item, single level). 💡Summary Table: Main SAP MRP Procedures MRP Type Description Planning Method Typical Use PD Material Requirements Planning Net req., multi-level Important A parts VB Manual Reorder Point Planning Stock level trigger Non-critical B/C parts ✔️VM/V2 Auto Reorder Point Planning System calc. trigger Consumable materials VV Forecast-Based Planning Forecasted demand Seasonal/variable demand ND No Planning None No replenishment needed ✔️SAP MRP procedures help planners align material supply with demand by automating procurement and production efficiency for business needs.

🚧 “We never have the right spare part when we need it.” Every Plant Head has said this at least once. ⸻ The Problem: In one of my projects, the client was struggling with spare parts planning: • Maintenance orders were delayed because parts weren’t available. • Stores kept excess stock of wrong materials, blocking working capital. • Users raised PRs manually at the last moment → firefighting mode. • No visibility of which part belonged to which equipment. The result? High downtime. High cost. Frustrated users. ⸻ My Approach as SAP Consultant: 🔧 1. Configuration Settings • Defined MRP Areas for plant and storage locations. • Maintained correct lot-sizing procedures (don’t always order in bulk). • Set reorder point & safety stock for critical spare parts. 🗂 2. Master Data Clean-Up • Created proper material masters with correct MRP views. • Linked equipment BOMs with spare parts (no more guesswork). • Classified spare parts by criticality (A/B/C categorization). 🔄 3. Business Process Changes • Automated reservation creation when maintenance orders are released. • Implemented auto PR generation from MRP run → no last-minute PRs. • Introduced cycle counting for fast-moving spare parts. 👨🏭 4. User Training & Reminders • Planners: Always maintain lead times, safety stock, reorder points. • Maintenance: Don’t raise orders without checking reservations. • Stores: Use stock determination → pick from right storage location first. ⸻ The Outcome: ✅ Spare parts availability improved → downtime reduced. ✅ Inventory cost went down by 20%. ✅ Maintenance planners had visibility of requirements weeks in advance. ✅ Storekeepers stopped overstocking non-critical items. ⸻ Spare parts planning is not just a stores issue. It’s a system + process + people alignment issue. And when SAP PM + MM + MRP are integrated correctly → magic happens. ✨ ⸻ Have you faced spare parts unavailability in your projects? Drop your experience below – let’s compare notes and discuss as a community - Drop your comments queries 🔰