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Material Requirements Planning Process Flow - SAP PP Implementation

Material Requirements Planning Process Definition The DEMAND PLAN generated by the demand management in the form of planned indepe... thumbnail 1 summary

Material Requirements Planning

Process Definition

The DEMAND PLAN generated by the demand management in the form of planned independent requirement becomes the input for MRP.

MRP Functions

MRP run performs the following functions:
·         Material Requirement planning i.e. calculating the quantities and dates of all the components to be procured.
·         Lead time scheduling i.e. calculating the start and finish dates of all the operations and phases for the assemblies to be produced in-house and pegging the component arrival dates with the start date of the phases or operations.
At MYCOMPANY, lead time calculation would incorporate Set-up time (time required to change the filters and other parts when a grade or thickness of the film changes) and Operation time (duration of the production run). On this basis, the system would calculate the planned lead time.
·         MRP also calculates the capacity loads for all the resources engaged in different phases and operations and thus calculates the capacity requirements according to the operation hours defined earlier in the Master Recipe.


Out-put of MRP

The output of MRP is planned orders. A planned order is a request created in the planning run for a plant to trigger the procurement of a plant material for a certain quantity for a specific date. To generate a planned order, the system would calculate the requirement for material components, and generate a procurement proposal for them with the quantities adopted from the BOM and Master Recipe. In addition of procurement proposals generated in the system, capacity requirements would be generated as well according to the operation hours defined earlier in the routing/master recipe.
For components, however, the result of an MRP run could also be a Purchase requisition depending upon the settings of parameters of the MRP run.
A purchase requisition would be converted into a purchase order. However, planned orders for raw and packing materials (if generated using MRP) would be converted into a Purchase requisition first and then into a purchase order. Planned orders for semi-finished and finished materials would be converted into Process order for further execution.

MRP Process Flow (To-Be)


Process
Description
Process owner
Triggering event
Run MRP at plant level
This function would be carried out by the MRP Controller/ Planning Manager twice every week. In the MRP run, system would perform the netting i.e. would calculate the net requirement of all the materials existing at the plant that are relevant to the Materials Requirement Planning by subtracting the stock at hand and scheduled receipts from the total requirements of the materials. The MRP run uses the BOM explosion to calculate the requirements of the materials. The MRP run applies the lead time on top of the net requirements to calculate the planned order release date.
MRP Controller/ Planning Manager Port Qasim plant
Routine business practice

Based upon the production plan; version 300 and the splitting of planned independent requirements, the planning Manager would run MRP at the plant level.

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