Optimum Lot-Sizing Procedures System Functions in a Planning Run

In the two procedures described above, the costs resulting from stockkeeping, from the set up procedures or from purchasing have not been taken into consideration. The aim of optimum lot sizing procedures, on the other hand, is to group shortages together in such a way that costs are optimized. These costs include lot size independent costs (setup or order costs) and storage costs.

In so doing, the following problem arises:

If you order often, you will have low storage costs but high order costs due to the high number of orders. If you only seldom place orders then you will find that your order costs remain very low, but your storage costs will be very high since warehouse stock must be large enough to cover requirements for a much longer period.

All optimum lot-sizing procedures adhere to the following pattern:

The starting point for lot sizing is the first material shortage date which is determined during the net requirements calculation. The order quantity must be larger or equal to the shortage quantity. The system then adds successive shortage quantities to this lot size until optimum costs have been established. This then determines the lot size.

The only differences between the various optimum lot-sizing procedures are the cost criteria. The following different procedures are available:

• 
  
Part Period Procedure

• 
  
Least Unit Cost Procedure

• 
  
Dynamic Lot Size Creation

Part Period Procedure Optimum Lot-Sizing Procedures

The part period procedure adheres to the "classic" lot size formula for the minimum costs whereby variable costs (storage costs) are equal to the lot size independent costs.

Starting from the shortage date, successive requirements are grouped together to form lots until the sum of the storage costs equals lot size independent costs. (In other words, this procedure involves an adjustment of quantity-dependent and non-quantity dependent costs.)

The following figures are used in the example:

Price: $20

Lot size independent rcosts: $100

Storage costs percentage: 10%

In the example of the part period procedure above, the best lot size is 2000 pieces because, if more requirements were added to this lot, total storage costs would be larger than the lot size independent costs.

Least Unit Cost Procedure Optimum Lot-Sizing Procedures

Starting from the shortage date, successive requirements are grouped together to form lots until total costs per unit reach a minimum level. The total costs are equal to the sum of the lot size independent costs plus the total storage costs.

The following figures are used in the example:

Price:$20

Lot size independent rcosts: $100

Storage costs percentage: 10%

In the example of the least unit cost procedure above, the minimum cost per unit is achieved with a lot size of 2000 pieces.

Dynamic Lot Size Creation Optimum Lot-Sizing Procedures

Starting from the shortage date, successive requirements are grouped together to form lots until additional storage costs are greater than lot size independent costs.

The following figures are used in the example:

Price: $20

Lot size independent rcosts: $100

Storage costs percentage: 10%

In the example of dynamic lot size creation above, the optimum lot size is 3000 pieces, because an additional requirement of 1000 pieces for the 7/27 would mean that the lot size independent costs would be exceeded.

Groff Reorder Procedure Optimum Lot-Sizing Procedures

1. The Groff reorder procedure is based on the fact that additional storage costs are equal to the saving in lot size independent costs according to the "classical" lot sizing formula for the minimum costs. Additional storage costs resulting from an increase in the lot size are, therefore, compared with the resulting savings in lot size independent costs.

   Starting from a certain period, the system keeps grouping requirements into a lot until the increase in the average storage costs per period is larger than the decrease in the lot size independent costs per period.

   

   The following figures are used in the example:

   Price: $20

   Lot size independent rcosts: $100

   Storage costs percentage: 10%

   In the example of the Groff reorder procedure above, the optimum lot size is 1000 pieces because, for a further requirement of 1000 pieces, additional storage costs would then exceed the savings in lot size independent costs.

Additional Restrictions Optimum Lot-Sizing Procedures

You can influence the various lot-size calculations described in the previous pages by using additional restrictions.

If certain packaging units are to be used for an order quantity, enter a rounding value in the material master record which the system then takes into account during the lot-size calculation.

It may be necessary, due to technical or organizational factors that the lot size to be calculated may not exceed or fall below a certain quantity. In this case, you enter either a minimum lot size or a maximum lot size in the material master record. The system will then take these values into account during the lot-size calculation.

Scheduling System Functions in a Planning Run

During the net requirements calculation, the system determined the shortage quantities and material shortage dates. During lot sizing, the lot sizes and order proposals necessary for covering requirements were determined. These order proposals must now be scheduled. There are two procedures available for scheduling:

• backward scheduling

• forward scheduling

The following times are taken into account for scheduling externally procured materials:

• planned delivery time of the material based on calendar days

• processing time required for purchasing based on workdays

• goods receipt processing time based on workdays

When creating planned orders, the system also takes the following time into consideration:

• opening period based on workdays

Backward Scheduling for External Procurement

Forward Scheduling for External Procurement

Backward Scheduling for External Procurement

With materials that are planned using the forecast-based planning procedure and the MRP procedure, the requirement dates in the future are already known. The materials must be ready on these dates. The release date for purchasing is determined by scheduling, that is, the date that the materials must be ordered, so that they are available for the requirement date. Thus, the system starts with the requirements date and then schedules backwards to determine the release date of the purchase requisition. This procedure is referred to as backward scheduling.

Forward Scheduling for External Procurement

In the reorder point planning procedure, when the planning run determines that a material shortage exists, the date of the shortage is not in the future. This is not possible because once the reorder level is exceeded, material procurement must be organized immediately. During scheduling, the system determines the date when the material must be available starting from the material shortage date. This procedure is referred to as forward scheduling .

Creating Order Proposals System Functions in a Planning Run

During lot sizing, the system determined the quantities needed to cover requirements. It then determined the dates for the order proposals. Now, it must decide whether the receipt should be carried out via in-house production or external procurement. This decision depends on the following factors:

• procurement type

You determine the procurement type by maintaining the material type in the material master record. The system uses this entry to determine which of the following is valid for this material:

• in-house production
• external procurement
• both in-house production and external procurement

If the procurement type is not clearly specified, the system automatically selects in-house production.

• quota arrangements

If the material participates in the quota arrangement, the specification of the procurement type and the special procurement type are additionally determined via the source of supply.

For materials procured via in-house production, the system automatically creates planned orders (when creating the order proposal.)

For materials acquired via external procurement, the system either creates a planned order, which you can then convert into a purchase requisition, or it can create a purchase requisition immediately. This is specified by the creation indicator for purchase requisitions.

If the system is to create a planned order for materials that are acquired via external procurement, this means that the MRP controller has more control of the order proposals. Only once he has checked and converted the planned order into a purchase requisition can the purchasing department order the material. Otherwise, the purchase requisition is available for the purchasing department immediately, and it then takes over the responsibility for material availabiliy and warehouse stocks.

If a delivery schedule exists for a material and if an entry has been maintained in the source list, which is relevant for requirements planning, then the system can automatically create delivery schedules during the planning run. You control this by means of the creation indicator for delivery schedules in the initial screen of the planning run.

For the order proposals determined by the system for externally procured materials, you can use the source list or the quota arrangement to determine sources of supply. A source of supply is, for example, a vendor or an outline agreement (for example, a delivery schedule).

Determining the Source of Supply for Purchase Requisitions

Determining the Source of Supply for Delivery Schedules

Determining the Source of Supply for Purchase Requisitions Creating Order Proposals

For purchase requisitions which are created during the planning run, the source of supply can be determined directly from the planning procedure. Two procedures exist here:

• Determining the source of supply by means of the source list

The system first checks whether a quota arrangement has been maintained for the material whose validity period covers the requirements date of the purchase requisition. The system then checks to see whether only one entry exists in the source list that is relevant to MRP. This means that the indicator for source list usage must be set so that the creation of purchase requisitions is only allowed for one vendor. If this is the case, then a purchase requisition is created with the source of supply which is recorded in the source list.

• Determining the source of supply by means of quota arrangements and the source list

The system first checks to see whether a quota arrangement has been maintained for the material which is valid for the requirements date of the purchase requisition. It also checks to see whether the indicator for quota arrangement usage has been correctly maintained in the material master record. If a quota arrangement exists, the system calculates from which vendor the material should be procured, using the quotas specified for the vendors.

In the second step, the system then checks to see whether an entry, relevant to MRP, has been made for the selected vendor in the source list. This means that the indicator for source list usage must be set appropriately. If this is the case, then all further data required for the purchase requisition is copied from the source list.

Determining the Source of Supply for Delivery Schedules Creating Order Proposals

If delivery schedules are to be created during the planning run, the system must determine a valid vendor and a valid delivery schedule. There are two ways of determining the source of supply for delivery schedules.

• Determining the source of supply by means of the source list

The system first checks whether a quota arrangement has been maintained for the material whose validity period covers the requirements date of the order proposal. The system then checks to see whether only one entry exists in the source list that is relevant to MRP. This means that the indicator for source list usage must be set so that the creation of delivery schedules is only allowed for one vendor. If this is the case, then a delivery schedule is created with the source of supply which is recorded in the source list.

• Determining the source of supply by means of quota arrangements and the source list

The system first checks to see whether a quota arrangement has been maintained for the material which is valid for the requirements date of the delivery schedule. It also checks to see whether the indicator for quota arrangement usage has been correctly maintained in the material master record. If a quota arrangement exists, the system calculates from which vendor the material should be procured, using the quotas specified for the vendors.

In the second step, the system then checks to see whether an entry, relevant to MRP, has been made for the selected vendor in the source list. This means that the indicator for source list usage must be set appropriately. If this is the case, then all further data required for the delivery schedule is copied from the source list.

The specification of the source of supply is completed with the maintenance of the source list, that is, the complete data (vendor, purchasing organization, contract) is maintained for the purchase order.

Supply Source Determination for Retail Order Proposals Creating Order Proposals

Use

This function only applies to work done using Retail.

Purchase requisitions or delivery schedules can be created during the planning run. The system attempts to find a unique source of supply for every requirement. For delivery schedules to be created, the system must find one unique source of supply for the scheduling agreement. Purchase requisitions, on the other hand, can be generated with or without a source of supply. A source of supply in a purchase requisition can either be a vendor or a vendor and an outline agreement.

There are two types of outline agreement: contracts and scheduling agreements. Purchase requisitions are generated in Replenishment Planning for contracts. These are then converted into release orders issued against the contracts. Delivery schedules are generated in Replenishment Planning for scheduling agreements and are issued to a vendor in the same way as a purchase order.

In determining the source of supply, the system proceeds as follows:

1. First it checks if quota arrangements exist;
2. Secondly it checks the source list;
3. Thirdly it checks the supply source indicator in the article master for

1. external supply sources
2. internal supply sources.

If relevant quota arrangement exist, the system checks in Customizing if the quantity required has to be split among different sources of supply (quota arrangement split).

In Replenishment Planning the system only processes unique sources of supply, except if a quota arrangement split has been defined. If the source of supply is not unique, no supply source is assigned to the requirement.

Creation of Exception Messages MM

During the planning run, the system recognizes exceptional situations where you usually have to manually reprocess the planning result and it records these situations as exception messages. These messages depend on the transaction being carried out and are meant to inform you of an event/events that you may need to follow-up (for example, start date lies in the past, safety stock has been exceeded). Exception messages refer to an individual MRP element. If several exceptions occur for one MRP element, the most important one is stored.

By means of the exception messages, you can easily sort out any materials which require manual reprocessing from the rest of the planning result (see MRP List).

Rescheduling Check System Functions in a Planning Run

Rescheduling proposals form an important group which belongs to the above-mentioned exception messages. These refer to receipt elements which are not automatically changed by the system. These include, for example, purchase orders or firm planned orders. During rescheduling, the appropriate elements are automatically provided with an exception message which is linked with a course of action. This helps you with reprocessing, firstly, as the elements to be reprocessed are easy to find and, secondly, because the system has already offered you a suggestion of how to go about reprocessing. Proposals offered by the system can be, for example:

• cancel event

• bring forward event with specification of the proposal date

• postpone event with specification of the proposal date

Rescheduling proposals are only created for receipts that can no longer be changed by the system. Other receipts are automatically adapted to the availability situation during the planning run.

In Customizing, you can select whether the following are taken into consideration for the rescheduling check:

• firmed planned orders

• firmed purchase requisitions

• order item schedule lines

In order to improve system performance, you can set a rescheduling horizon in Customizing so that rescheduling is only carried out for part of the planning period instead of for all of it. The system checks whether the receipts participating in the rescheduling check are necessary to cover requirements. If not, the system creates a cancel proposal in order to avoid excessive warehouse stocks.

If the receipts do not fit the particular situation in question, the system checks whether they can either be brought forward or postponed. The new date is then saved when the receipt takes place.

By using comparison values (which you can set in Customizing), you can control how much of a variance from the original goods receipt date is accepted by the system before it creates deadline shift proposals. The receipt is then used in the following net requirements calculation with the rescheduling date.

The rescheduling check is further explained in the following example:

You have entered two firm planned orders for a material and you have carried out an individual planning run. The planned order for 8/5 covers the reservation's requirements, but it would be too late. As the corresponding exception messages states, the date for the planned order would have to be brought forward to the 8/3.

The planned order of the 8/10 is too early and would have to be postponed to the 8/24.

The planned order of the 8/31 can be cancelled as it would result in an excess in warehouse stock of 1000 pieces.

After processing the planned orders, that is, after changing the dates correspondingly and cancelling the planned order for 8/28, the quantities and dates of the planned orders will then match the requirements situation.

Storage Location MRP

The planning run for materials is carried out at plant level. This means, the system includes the stocks of the individual storage locations in the total plant stock.

However, when maintaining the material master record, you can either exclude certain storage locations of a material from the planning run or you can also instruct the system to plan certain storage locations separately. In so doing, the stocks of the flagged storage locations are treated as a special case in the planning run. The following options are available:

• You can set an MRP indicator at storage location level that excludes this storage location’s stock from the planning run. Thus, the storage location’s stock is not contained in the available stock at plant level, nor is it included in the planning run. The exclusion of storage location stock is only relevant to the planning run - for example, this stock is still completely available for withdrawals.

• You can set an MRP indicator at storage location level that instructs the system to plan this location separately. You also define a reorder level and a replenishment level. In so doing, it is possible to monitor this storage location’s stock automatically, and if the stock level should fall below the reorder level the storage location is also replenished automatically.

The system creates an order proposal for the amount of the replenishment quantity or for a multiple of the replenishment quantity so that the stock level exceeds the reorder level again. Existing firmed receipts for the storage location are also taken into account (similar to the reorder point procedure at plant level). In the planning run, stocks that lie in storage locations which are planned separately are not contained in the available stock at plant level.

Several options are available for procuring stock for storage locations that are planned separately: either via a stock transfer from the plant or via a special procurement. If a receipt element (planned order, purchase requisition, purchase order, production order, and so on) or an issue element (reservation, sales order) refers to a special storage location (one that is either excluded from the planning run or one that is planned separately), then these elements are not taken into account at plant level.

For more information, please refer to sections:

Storage Location MRP with Stock Transfer

Storage Location MRP with Special Procurement

Storage Location MRP with Stock Transfer

If you have set an MRP indicator for storage location MRP, but you have not defined a special procurement type, then the storage location stock is procured by stock transfers from the plant to which it belongs, this means that the storage locations in a plant that are planned as normal provide stock to replenish the special storage locations. The following is carried out in the planning run:

For every storage location whose stock is planned separately, the system compares the reorder level with the stock level of this storage location. If available storage location stock is less than the reorder level, the system creates a stock transfer reservation for the amount of the replenishment quantity or for a multiple of the replenishment quantity. The stock transfer reservation is treated as a receipt at storage location level. At plant level, it is treated as an issue reservation (material reservation).

For storage location "X", you define a reorder level of 30 pieces and a replenishment quantity of 50 pieces. In the planning run the stock level is equal to zero. Since stock (0) has fallen below the reorder level, a stock transfer reservation amounting to the replenishment quantity (50) is created. At the same time, this stock transfer reservation produced an issue at plant level for the same amount.

Storage Location MRP with Special Procurement

If you have set an MRP indicator for storage location MRP, you can control how the system is to procure the material by entering a special procurement type at storage location level. The following special procurement types are available at storage location level:

Special procurement types at storage location level

Special procurement type	Standard key in Customizing
In-house production	-
External procurement	-
Procurement via consignment	10
Subcontracting	30
Stock transfer	40
Production in an alternative plant	80

If you enter no special procurement type at storage location level, the material is procured by a stock transfer reservation from the plant to which the storage location is allocated.

The following is carried out in the planning run:

For every storage location whose stock is planned separately, the system compares the reorder level with the stock level of this storage location. If the available storage location stock is less than the reorder level, the system creates a receipt at storage location level for the amount of the replenishment quantity or for a multiple of the replenishment quantity. The order proposal is either a purchase requisition, a planned order, or a delivery schedule and it refers to this storage location. This means that you can trigger either internal or external procurement for the special storage location.

When creating an order proposal, the system takes the quota arrangements and the source list into account.

The source list can refer to either a contract or a scheduling agreement.

• If the source list refers to a scheduling agreement, the system only takes the scheduling agreement if the storage location recorded in the scheduling agreement corresponds to the special storage location in the material master record.

• If the source list refers to a contract, the system only takes the contract if the storage location that is recorded in the contract is either blank or if it corresponds to the special storage location in the material master record.

Quota Arrangements System Functions in a Planning Run

If a material is obtained from various sources of supply, the individual sources of supply can be provided with a quota arrangement. The quota arrangement applies to a certain period and specifies how the receipts should be distributed amongst each source of supply. Sources of supply include, for example, in-house production or external procurement, other plants as well as individual vendors and outline agreements.

You can determine in the material master record whether a material is to participate in the quota arrangement during material requirements planning. You will find a more detailed description of displaying and maintaining the quota file in MM Purchasing Guide.

For every order proposal (purchase requisition or planned order), the system determines the sources of supply according to the quota file and allocates the order proposal to the source of supply. Furthermore, the system updates the quota file during the planning run.

Thus, for the quota arrangement, the following steps are carried out during the planning run for every order proposal to be created:

• determining the source of supply

• allocating the source of supply to the order proposal

• updating the quota file

The criterion for the selection of the source of supply is the quota rating. It is calculated using the following formula:

The system allocates the order proposal to the source of supply with the lowest quota rating. In this example, the first order proposal is allocated to item 1 and the second order proposal to item 2.

Allocating the source of supply to the quota item determines the procurement type that the order proposal receives. Therefore, you can determine via the quota arrangement that, for example, 40% of a material is to be externally procured and the other 60% is to be produced in-house.

You can allocate a vendor to the order proposal for external procurement by maintaining the quota file. This vendor is either copied directly into the purchase requisition or it is copied into the resulting purchase requisition when the planned order is converted.

For every order proposal which takes part in a quota arrangement, the quota file is updated so that the quota arrangement is always kept up-to-date.

MM Multi-Plant Planning with Stock Transfer

Within the stock transfer procedure, goods are produced and delivered within a company. The plant which is to receive the goods (receiving plant) orders the goods internally from another plant which is in a position to deliver the goods (delivering plant). The dependent requirements for the components to be to be transferred are determined in the receiving plant.

Over and above the normal procedures for transferring stock using transport requisitions, orders and delivery schedules (see MM Managing Special Stocks and Forms of Special Procurement Types), you can also instruct the system to transfer stock from one plant to another automatically during planning via the special procurement type, stock transfer.

Special procurement types are defined in Customizing according to plant, procurement type, and special procurement type and are allocated to the material in the material master record. For materials that are included in multi-plant planning with stock transfer, a material master record with the appropriate special procurement type must be maintained in all plants involved. The following standard settings are pre-set for the special procurement types in Customizing:

Customizing	Procurement type	External procurement
"Stock transfer"	Special procurement	Stock transfer
	Special procurement type	40 - stock transfer

The following example demonstrates the stock transfer procedure.

In plant 0001, a material receives the special procurement key, stock transfer. This specifies that the material is to be procured from another plant (for example, from plant 0002). A requirement which arises in plant 0001 is then covered by stock from plant 0002.

The following happens during the planning run: on detecting a shortage in plant 0001, the system automatically creates a purchase requisition for a stock transfer in plant 0001 and a release order for the purchase requisition in plant 0002. The date of the release order is determined during scheduling. When the stock transport requisition is converted into a stock transport order, the release order in plant 0002 is automatically converted into a reservation.

Procurement is carried out in the delivering plant. The removal from storage of the ordered quantity is carried out by a transfer posting with reference to the release order. The movement type here is, Transfer posting ® Plant to plant ® To stock in transit Stock in transit is the quantity of a material which was withdrawn from the warehouse of the delivering plant but which has not yet been received by the receiving plant. In the receiving plant, a goods receipt is posted for the stock transfer order on receipt of the goods and the stock in transit is entered into the warehouse of plant 0001.

Please note the planning sequence of the various plants during the planning run. Delivering plants are planned after the receiving plants so that all requirements quantities are taken into account.

If for a particular material, special procurement types for stock transfer have been saved in two plants that refer to each other, then once the system has planned both plants, it goes back and plans the first one again.

Planned Orders Overview

A planned order shows a planned receipt for a particular material in a plant. Basically, it specifies when the receipt is to take place and the quantity of goods that is to be received.

Planned orders are generally created automatically during the planning run. Here, the system detemines the materials to be procured automatically and it also calculates the requirement quantities and dates.

Planned orders can also be created manually by the MRP controller. In this case, the MRP controller determines which material is to be procured, how much is to be procured when it is to be procured and whether externally or internally.

Planned orders are converted into production orders in the case of in-house production and they are converted into purchase requisitions in the case of external procurement.

A planned order has the following features:

• It is an internal document which is not used outside the company and it is not binding in any way. It is purely a purchase order proposal from MRP which is used for covering demand and which can be changed at any time.

• It serves the purpose of an order proposal for external as well as for internal procurement. The procurement source is determined either during the creation of the planned order or when processing the planned order.

• It can generate dependent requirements and can be used in the capacity calculation.

A planned order consists of a header and one or more items.

Numbering Planned Orders

Creating Planned Orders

Changing Planned Orders

Deleting Planned Orders

Displaying Planned Orders

Converting Planned Orders into Purchase Requisitions

Creating Planned Orders

There are two possibilities for creating planned orders:

Manually

The MRP controller enters a planned order manually. He determines which material is to be procured, the required quantity, the date required, and whether the material is to be procured externally or internally.

Automatically

During the planning run, the system automatically determines the materials to be procured as well as the required quantity and the required date.

Numbering Planned Orders

The SAP System distinguishes between two different types of number assignment during the manual creation of planned orders:

• external number assignment

• internal number assignment

For external number assignment , enter a planned order number in the details screen for creating a planned order. The entered number must lie within the number range defined for this order type.

For internal number assignment , do not enter a planned order number when creating a planned order and instead leave this field empty. When saving, the system then automatically assigns the next available number from the number range which has been defined for this order type. The counter reading for the number range then automatically increases.

Creating Planned Orders

Planned orders are generally automatically generated during a planning run. However, in certain circumstances, it may be necessary to create planned orders in the system manually. This is the case, for example, if the MRP controller wants to procure materials without taking requirements into account.

If you want to create a planned order in the system manually, proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Create.

The initial screen for creating a planned order appears.

2. Enter an Order profile. The order profiledetermines both the order type and the procurement type of the planned order.
3. Press
ENTER.

The details screen for maintaining material and order data now appears.

4. Enter the following information:

– If you want to enter the planned order number externally, fill in the Planned order field. You leave this field blank if you want the system to assign a planned order number internally.

– Enter the Planning plant, a Material number and the Order quantity.

– You must enter either the Planned end date or the Planned start date. The date not entered is automatically calculated by the system which uses the scheduling data for this purpose.

– If the planned order is not to be produced in a lot but in several partial lots, specify an appropriate Partial lot quantity and the Number of partial lots. If you specify the partial lot quantity, the system recalculates the order quantity using the partial lot quantity and the number of the partial lots.

– If you know that there will always be the same amount of production scrap for the total planned order quantity then fill in the Scrap quantity field.

– If a goods receipt processing time has already been defined for this material in the material master record, the system will then suggest it here as a default value in the GR proc. time field.

You can, however, overwrite the default value or, if the field is empty, you can enter a value. This entry has no effect on the value entered in the material master record.

– The Order profile, the Procurement type, the Special procurement type and the Account assignment type are all set automatically in this screen due to the order profile which you entered in the initial screen. Except for the account assignment type, these fields can no longer be changed.

– In the Conversion field, the planned order is automatically marked as being convertible. As a result, it can later be converted into a production order for in-house production or into a purchase requisition for external procurement.

– Since the planned order is created manually, it is automatically marked as being firmed in the Firming field. Firm planned orders will not be changed automatically by a planning run.

5. Press
ENTER.

The entered data is completed by additional texts and if you have not entered any dates, they will be calculated by the system.

The planning plant is automatically taken over as the production plant.

6. Save the planned order by selecting Planned order
® Save.

Creating Planned Orders with Reference

If you want to use an existing planned order as a reference for the creation of a new planned order, then, in the initial screen for creating planned orders you must specify the number of the planned order which you want to use as a reference in the reference section in the Planned order field. In so doing, all the data from the reference planned order will be automatically suggested in the details screen. If necessary, you can overwrite the data.

Changing Planned Orders

It may be necessary to make changes to an existing planned order. This can occur, for example, if the planned order in question has been firmed but if it then received a rescheduling proposal during the planning run.

If you want to change a planned order, proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Change.

The initial screen for changing a planned order now appears.

2. Enter the number of the planned order to be changed and press
ENTER.

The details screen now appears.

3. Make the necessary changes.
4. Save the changes with Planned order
® Save.

If you have made changes to a planned order, it is then treated as firm for material requirements planning - exactly as was the case for a manually created planned order. Therefore, it will not be changed during the following planning runs.

Deleting Planned Orders

It may be necessary to delete a planned order. This can occur, for example, if the planned order in question has been firmed but it no longer matches the requirements situation.

If you want to delete a planned order, proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Change.

The initial screen for changing a planned order now appears.

2. Enter the planned order number and press
ENTER.

You now reach the details screen for the planned order.

3. Select Planned order
® Delete.
4. A pop-up window appears to confirm that you really want to delete the planned order.

Verify the deletion by a double click of the mouse on Yes.

The system returns to the initial screen and reports that the Planned order was deleted.

Displaying Planned Orders

There are two different ways to display planned orders:

• 
  
Individual Display

In the individual display, you display one specific planned order.

• 
  
Collective Display

In the collective display, several planned orders are displayed that correspond to your selection criteria, for example, all planned orders of a specific MRP controller.

Individual Display Displaying Planned Orders

If you use the individual display, the system will only display one planned order. To do this, proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Display ® Individual display.

The initial screen for the planned order display now appears.

2. Enter the number of the planned order you are interested in and press
ENTER.

The planned order details screen is now displayed.

Collective Display Displaying Planned Orders

With the collective display, all planned orders which correspond to the specified selection criteria are displayed; for example, all planned orders of a certain MRP controller. To do this, proceed as follows:

1. Starting from the menu screen of mateiral requirements planning, select Planned order
® Display ® Collective display.

The initial screen for the collective display now appears.

You have the option to search for planned orders by MRP controller, material, run schedule header, version or production line.

The following procedure uses Search for planned orders via MRP controller.

2. Select an MRP controller number and choose
Search.

A dialog box appears.

3. Enter the plant and MRP contoller number.

If you want to narrow down the selection further, enter an end date, that is a date up until which the planned orders are to be displayed.

4. Press ENTER.

The system displays an overview of the all planned orders which correspond to your selection criteria.

From this overview, you have various options for processing the planned orders:

• To display additional data for a particular planned order, select the appropriate planned order and choose
Display planned ord.

A dialog box with additional data now appears.

• If you want to change a particular planned order, select the appropriate planned order and choose
Change planned order.

The details screen now appears in the change mode.

• If you want to delete a particular planned order or planned orders, select the appropriate planned order or planned orders and choose
Delete.

A dialog box appears in which you confirm that the system is to delete the planned orders.

• If you want to display a pegged requirement for a particular planned order, select the appropriate planned order and choose
Pegged requirements.

The pegged requirement screen now appears.

• If you want to display an order report for a particular planned order, select the appropriate planned order and choose
Order report.

The order report screen appears.

• If you want to sort the planned orders differently, position the cursor in the column with the criteria by which you want to sort, such as the order start date, and choose
Sort.

The system sorts the planned orders according to the sorting criteria chosen, according to the order start date, for example.

• If you want to convert a certain planned order into a purchase requisition, select the appropriate planned order and choose
Convert -> planned ordpur. req.

If you changed or converted a planned order in this overview, it will then be recorded as being firmed (X in the Firmed column).

Converting Planned Orders into Purchase Requisitions

If the start date of a planned order lies in the opening period, this is an indicator for the MRP controller that procurement must be arranged. For external procurement, the planned order should, therefore, be converted into a purchase requisition.

There are various possibilities available to you for converting planned orders into purchase requisitions:

• 
  
Individual Conversion

• 
  
Partial Conversion

Collective Conversion

Individual Conversion Converting Planned Orders into Purchase Requisitions

If you select individual conversion, you can only convert one planned order into a purchase requisition. Proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Convert ® pur.req. ® Individ. conversion.

The initial screen for the individual conversion of planned orders now appears.

2. Enter the number of the planned order you want to convert into a purchase requisition and press
ENTER.

The details screen for individual conversion of planned orders now appears.

The top part of the screen shows the planned order data and the lower part of the screen shows the purchase requisition data. The data partly comes from the planned order and partly from the material master record. The information is displayed here but, if necessary, you can overwrite the entries.

– You can enter a purchase requisition number in the Purchase requisition field (external number assignment). Otherwise, the system automatically assigns a number when the information is being saved (internal number assignment).

– Enter the Supplying plant in the case of a transport order.

– In addition, you can specify the Storage location here where goods receipt is to take place.

– Specify whether a Goods receipt and an Invoice receipt are required for the material by selecting corresponding fields.

From the details screen, you can also specify vendor data for the purchase requisition. To do this, proceed as follows:

a. Select Environment ® Vendor data.

A pop-up window for entering the vendor data now appears.

b. Enter the vendor data.

c. Press ENTER .

You return to the details screen.

3. To convert the planned order into a purchase requisition, select Planned order
® Save.

You return to the initial screen and receive the message Planned order was converted into a purchase requisition.

Partial Conversion Converting Planned Orders into Purchase Requisitions

If you do not want to convert the total planned order quantity into a purchase requisition either because the requirements situation has changed or you want to produce a part of the quantity in-house, you have the option of partially converting the planned order.

If you opt for a partial conversion, only a part of the amount quoted in the planned order is recorded in the purchase requisiti

Collective Conversion Converting Planned Orders into Purchase Requisitions

If you use the collective conversion function, you can convert several planned orders into purchase requisitions in one step. To to this, proceed as follows:

1. Starting from the menu screen of material requirements planning, select Planned order
® Convert ® pur.req. ® Collective conversion.

The initial screen for collective conversion now appears.

2. Enter the MRP controller number and the plant.

If you want to narrow down the selection further, you can also enter the planned opening date in the Planned opening field and/or the procurement type in the Procurement field.

3. Press
ENTER.

A list of all the planned orders which correspond to your selection criteria now appears.

4. Mark the planned orders you want to convert.

The planned orders are marked for conversion and marked with a check mark in the selection column.

5. Then to convert the selected planned orders into purchase requisitions, select Planned orders
® Save.

If necessary information is missing for the creation of a purchase requisition, the system interrupts the conversion and branches off into the details screen for individual conversion. Here, you can then add the missing data. After pressing ENTER again, the system will then continue with the conversion of the remaining planned orders.

To avoid the conversion being interrupted, you can predefine proposed dates for the purchase requisition. To do this, proceed as follows:

a. Select Edit ® Pur.req.default data in the screen with the list of the marked planned orders.

A pop-up window now appears where you must enter the default data.

b. Enter the data to be taken over into the purchase requisitions. This data applies to all purchase requisitions created during conversion.

c. Press ENTER .

The entered data is taken over and you then return to the list of planned orders.

d. To convert the planned orders, select Planned orders ® Save.

From the list of all selected planned orders you can also call up individual planned orders in sequence and then convert them individually.

All purchase requisitions created as described above are regarded as being fixed for material requirements planning and they are not affected by the following planning runs.

On the subject of displaying, changing and converting planned orders, please also read "Displaying, Changing and Converting MRP Elements" in Displaying, Changing, or Converting MRP Elements.

Collective Conversion in the Background Converting Planned Orders into Purchase Requisitions

As of release 4.0 you can also convert planned orders into purchase requisitions in the background. This is particularly useful if you use the creation indicator (2) Purchase requisitions in opening period in the planning run. The system creates purchase requisitions in the opening period but outside the opening period, the system creates planned orders. The planned orders must be converted into purchase requisitions in time so that purchasing receives the purchase requisitions in time. To ensure that this occurs you can use conversion in background.

To do this proceed as follows:

1. To access the screen, Convert Planned Orders into Pur. Reqs in Background, choose Planned order
® Convert -> pur. req. ® In background from the MRP screen.

The screen, Convert Planned Orders into Pur. Reqs in Background: Variations, appears.

2. Choose
Create variant and create a variant.

In the variant, you define the plant, MRP controller and until which opening date conversion is to occur.

3. Complete the necessary attributes for the variant.
4. Choose
Schedule job. Set whether scheduling is to occur once or periodically and enter the dates. Scheduling once means the scheduling occurs once on a certain date.Periodic scheduling means the scheduling occurs regularly on set dates.
5. The system automatically converts planned orders into purchase requisitions on the set dates.

MRP Parameters Topics

Overview

Maintaining MRP Parameters

General Parameters

Parameters Dependent on the MRP Procedures

Parameters for Scheduling

Parameters for Calculating the Lot Size

Parameters for Storage Location MRP

PPC Planning Calendar

Creating Planning Calendars: with Calculation Rule

Creating Planning Calendar: without Calculation Rule

Changing Planning Calendars

Protecting Periods Against Automatic Changes

Displaying Planning Calendars

Maintaining Calendars that are no Longer Valid

Deleting Planning Calendars

Rounding Profile: How does the System Calculate the Order Quantity?

MRP Parameters Overview

If you want to carry out material requirements planning for a material, then you first have to specify certain parameters for this material in the material master record. These MRP parameters can be divided into five areas:

• 
  
General Parameters

• 
  
Parameters Dependent on the MRP Procedures

• 
  
Parameters for Scheduling

• 
  
Parameters for Calculating the Lot Size

Parameters for Storage Location MRP

Maintaining MRP Parameters

Before you can carry out material requirements planning for a material, you must first of all maintain the parameters in the material master record which the system requires in order to carry out this task. This is done as described below:

1. Starting from the menu screen of the material master, select Material
® Create general.
2. Enter the material type, allocate it to an industry sector and press
ENTER.

The pop-up window for Select View(s) appears on your screen.

3. Select views MRP 1 and MRP 2 and MRP 3 and then press
ENTER.

The pop-up window for the Organizational Levels/Profiles now appears.

4. Because material requirements are planned at plant level, you must enter the appropriate plant. You only have to enter the storage location, however, if you want to carry out storage location MRP. In so doing, the entered storage location is treated as an independent unit during planning (see
Storage Location MRP).
5. Press
ENTER.

The MRP 1 data screen now appears.

6. Once you have filled in the required entries and pressed
ENTER again, the MRP 2 data screen appears.
7. Fill in the required entries in this screen as well, and then press
ENTER.

The MRP 3 data screen now appears.

8. Fill in the required entries in this screen and then save your entries by selecting Material
® Save

In the following section, a detailed description is given of all the MRP parameters that are available. For a more detailed description of the maintenance options in the material master record, please refer to the document MM Managing Material Master Data.

General MRP Parameters

There are parameters in the material master record that you can determine for every material, independent of MRP and lot-sizing procedures:

Procurement type

The procurement type is automatically suggested by the system depending on the material type. However, you can overwrite the default value. A material can be produced in-house, it can be externally procured or it can be partly produced in-house and partly procured externally. If both procurement types are possible for a material but you only want to specify one, then you must enter the appropriate indicator here.

MRP group

The MRP group, groups together materials from the planning point of view for allocating special control parameters for the planning run. The MRP group is defined in Customizing where it is also provided with the control parameters.

Special procurement type

Entering a special procurement type makes it possible for you to specify the procurement type "in-house production" or "external procurement" more exactly. For example, setting this indicator would make it possible for you to determine that an externally procured material should be procured via consignment orders.

MRP controller

In this field, you must enter a key for a single MRP controller or for a group of MRP controllers who/which is responsible for the planning of a material. In the future, you can process the MRP results according to the MRP controller.

Purchasing group

In this field, you must enter a key for a buyer or for a group of buyers who/which is responsible for purchasing the material. As a result, during a planning run, order proposals for externally procured materials can immediately be allocated to the appropriate purchasing group.

ABC indicator

With the ABC indicator, you can classify the material according to its consumption value. This indicator is used within logistics controlling for analysis purposes. It can also be automatically specified by the system.

PPC Planning calendar

With the planning calendar, you can define flexible period lengths for grouping requirements together and for determining procurement dates. To make this possible, you must select the lot-sizing procedure, Period lot size according to planning calendar and you must also specify a planning calendar. The requirements quantities are then grouped together into a lot according to the period that you determined in the planning calendar. The procurement date is copied from the planning calendar.

If you use the time-phased planning procedure, you can record the delivery cycle in this field (see Delivery Cycle).

For more detailed information on the use and maintenance of the planning calendar, please refer to the section entitled PPC Planning Calendar.

Quota arrangement

With this indicator, you can determine whether a material should participate in the quota arrangement and which transactions/events result in a quota arrangement. This means that you can determine, for example, that only purchase orders take part in quota arrangements or that order proposals, created by requirements planning take part in quota arrangements.

Availability check

With this indicator, you determine whether sales orders result in individual or collective requirements for requirements planning and also how the availability check for a material is carried out by the system. This indicator also controls:

• whether the system creates individual or collective requirements when you create sales orders for this material

• which MRP elements (for example, purchase orders, or reservations) the system should take into account for the availability check

• whether the availability check should not be carried out until the end of the replenishment lead time or whether it should be carried out for the entire period in which MRP elements exist

Total replenishment lead time

Time that is needed for the complete production and procurement of a finished product or an assembly. This value is an estimate value and is used for the availability check.

MM/PP status

By allocating a material status from the view of materials management and production planning, you determine for which business transactions a material is used. If a material is not provided for a certain transaction, you specify whether a warning or an error message appears with this status.

Mixed MRP

You use this indicator to provide the material for special planning types:

To carry out assembly planning for a material, the respective indicator must be set here.

To carry out gross requirements planning or dual planning for a material, the respective indicator must be set here.

Individual/Collective

This indicator controls whether individual customer requirements planning is allowed for dependent requirements.

• In individual planning, this indicator is used to display the dependent
  requirements of a component separately.

• In collective requirements, this indicator is used to display the dependent
  requirements of a component grouped together.

Range of coverage profile

The range of coverage profile determines the parameters used in the calculation of the dynamic safety stock. You can use the dynamic safety stock to plan an additional safety stock which is based on the average daily requirements and which is available for planning purposes.

The dynamic safety stock is calculated using the following formula:

- average daily requirements * range of coverage

You define the range of coverage profile in Customizing for materials planning by determining the parameters for the ranges of coverage and the calculation of the average daily requirements.

Please refer to the SAP document Master planning / MRP for more information on this subject.

If you use the time-phased planning procedure, you should also refer to the section entitled Range of Coverage Profile in Time-Phased Planning.

Repetitive manufacturing

You use this indicator to mark that a material is available for repetitive manufacturing.