MRP Net Requirement Calculation Logic for Shortage Qty and Creation of Procurement Proposal

 

 

How SAP calculate shortage qty at the time of MRP run

 

After using a particular planning run type and executing the MRP Run,

�the SAP MRP run program executes through complex algorithm.

 

This algorithm logic and working will be explained in next steps.

 

It is not a manual step, which one has to carry out manually.

 

When SAP starts the MRP Run for a given material, it first goes through something called �net

Requirement planning" or "gross requirement planning", in which the receipts and issues are compared and

find position the available stock, thus calculating the shortage quantities, which will be ordered through

creation of procurement proposals.

 

SAP planning can also be carried out using gross requirement planning which disregards the plant stock in

the planning formulas.

 

Before carrying out the netting, MRP checks the strategies used for the material in the MRP 3 view which

helps in identifying whether it is dealing with a made-to-order (MTO) or a made-to-stock (MTS) situation.

MRP also checks the individual collective indicator which again helps it to ascertain whether it

is a MTO or a MTS situation.

Along with checking the strategies, the netting is carried out for each requirement date, to ascertain whether

the requirement is satisfied by the receipts. In case of shortages the system issues procurement proposals.

The netting is carried out using the formula.

 

The MRP Run programs analyses all the demand and all the receipts available for a given material as

shown below

Add all the Receipts

+ Stock in Inventory (Plant Stocks)

In made-to-order scenario, only the storage location stocks are considered which belong

to the individual sales order line item in question

Also note that �Stock in inventory� is not considered in Gross requirement planning

method

Unrestricted stock, Quality Inspection stock, and consignment stock is used as plant

stock. If you want to use blocked stock, stock in transfer or restricted stock you can configure

the same

+ Firmed Procurement Proposals � Firmed Planned order or Firmed Purchase requisition

� In made-to-order, the firmed receipts should necessarily be for the sales order line item

requirements, if the receipts are not for the individual requirements then they are not

considered as firmed receipts

+ Scheduled Firmed Receipts from Production

In made-to-order, the receipts should necessarily be for the sales order line item

requirements; if the receipts are not for the individual requirements then they are not

considered as firmed receipts

+ Scheduled Firmed Receipts from Purchase

In made-to-order, the receipts should necessarily be for the sales order line item

requirements; if the receipts are not for the individual requirements then they are not

considered as firmed receipts

 

Add all the Demands

NOTE Demands are not considered in Manual/Automatic Reorder point planning.

+ Safety Stock included in the material master or as dynamically calculated

In made-to-order scenario the safety stock is not considered

In Re-order point Planning Safety stock is not considered in calculating shortage quantities

Demand from Sales order

 

Sales order Demand is not considered in reorder point planning

Sales order Demand is not considered in Forecast Based planning

+ Demand from Planned Independent Requirements

Made-to-order scenario will not consider the planned independent requirements

Planned Independent Demand is not considered in reorder point planning

Planned Independent Demand is not considered in Forecast Based planning

+ Demand from Material Reservation

Made-to-order scenario will not consider the material reservations

Material Reservations are not considered in reorder point planning

Material Reservations are not considered in Forecast Based planning

+ Demand from forecasted figures

Used only in any Forecast based planning

-> If this Receipts > Demand = Then a requirement proposal is not raised and the existing receipts

are enough to cover the incoming demands.

-> If this Receipts < Demand = Then a requirement proposal or a procurement proposal is raised for

the quantity in shortfall (shortage quantity) to cover the incoming demands.

 

Stocks types considered in Plant Stock

 

 

 

SAP is configured to use the unrestricted stock, quality inspection stock and consignment stock in

unrestricted and quality, for MRP. The system does not consider blocked stock or restricted inventory or stock in transfer

in an MRP run unless you want it to be considered through configuration � Logistics > Production > Material Requirement Planning >

MRP Calculations > Stocks >Define Availability of stocks in transfer/blocked stock/restricted stock.

Here you have an option to choose the stock types for MRP run as required for your organization.

 

 

Outcome of this step After calculating the quantities required for satisfying the demand, SAP MRP

evaluates the lot sizes of these arrived at quantities.