MRP
MRP (Material Requirements Planning) calculates what materials are needed, how much and when, to meet demand, and proposes procurement (purchase requisitions) and production (planned orders). It is the planning engine of PP.
MRP ties PP to MM (purchase requisitions for components) and sales/forecasts (demand).
- MRP nets demand (sales orders, forecasts, dependent demand from BOMs) against supply (stock, open orders) and, where there is a…
- Demand & supply elements that MRP nets.
- Lot-sizing and safety stock.
- Watch out: Bad master data (BOMs, lead times), wrong plans.
What MRP does
MRP nets demand (sales orders, forecasts, dependent demand from BOMs) against supply (stock, open orders) and, where there is a shortfall, proposes replenishment: purchase requisitions for bought materials and planned orders for manufactured ones. It plans the whole multi-level supply chain to ensure materials are available when needed, without excess.
Key concepts
- Demand & supply elements that MRP nets.
- Lot-sizing and safety stock.
- Planned orders → production orders / purchase requisitions.
- MRP run (classic MRP or S/4HANA MRP Live on HANA).
Integration
MRP ties PP to MM (purchase requisitions for components) and sales/forecasts (demand). It reads BOMs (dependent requirements) and stock, and its output drives procurement and production. In S/4HANA, MRP Live runs on HANA for far faster planning. Accurate master data (BOMs, lead times, stock) is essential for good MRP results.
Common pitfalls
- Bad master data (BOMs, lead times), wrong plans.
- Ignoring safety stock/lot-sizing settings.
- Not converting planned orders, plans not executed.