1. R3 MRP Logic

2. The purpose of MRP is to guarantee material availability by planning for procurement or production of required quantities.
Sales
Material
Reqmts
Orders
Planning
Planned Ind
Dependent Reqmts
Requirements
Reservations
Planned
Order
Convert
Purchase
Schedule
Production
Requisition
Line
Order
Purchase
Order
Warehouse

3. R/3’s MRP is for unconstraint-based planning,
APO is for the constraint-based planning
Sales order /
Planned
Ind
Requirement
Finished
Finished
product
product
Planned order
Dependent requirement
Assembly 1
Assembly 2
Planned order
Dependent requirement
Raw
Raw
Raw
material 1
material 2
material 3
Purchase requisition R

4. How the Planning Run Works
Net Requirements Calculation ---> Lot Size Calculation ---->
> Scheduling > BOM Explosion ----->
> Quota Arrangement
Net Requirements Calculation
1. Determine Available Warehouse Stock
2. Determine Planned Receipts (after considering existing issues and receipts)
3. Calculate the Shortage Quantity
Lot Size Calculation
Determine the lot size of each plan order. R3 Lot Sizing falls into 3
categories : Static Lot Size, Optimum Lot Size or Period Lot Size
Procurement Type & Scheduling
In-house Production or External Procurement & Backward Scheduling or
Forward Scheduling
BOM Explosion
Determine the valid BOM for explosion
Quota Arrangement
A lot can further be split by quota arrangements (MM will cover this)

5. * * Firmed receipts : production order , purchase order ,
Rescheduling
Check
for Firmed Receipts
Exception
Exception
message
message
Receipts
Reschedule in * *
Reschedule out
Tolerance
Tolerance
Time
Tolerance
Reqmts
In-
house production time +
Goods receipt
processing time +
Rescheduling horizon
Firmed receipts :
production order ,
purchase order ,
firmed planned order
The planning run will not automatically displace firmed receipts.

6. Net Reqmts Calculation Net Reqmts Calculation
Overview :
Net Requirements Calculation
Net Reqmts Calculation
Net Reqmts Calculation
Lot-
size calculation
Procurement type
Scheduling
BOM Explosion

7. Net Requirements Calculation
MRP:
Net Requirements Calculation
MRP will compare the requirement and supply to get a shortage gap.
A comparison is made between warehouse stock and the appropriate receipts and issue.
In the net requirements calculation, a difference is made between reorder point planning, forecast-based planning, and MRP. In each procedure, the system calculates available stock differently.
Lot
Size
Shortage
Shortage
Sales
Sales
Orders
Orders
Planned
Orders
Planned Ind Reqmts
Planned Ind Reqmts
Production
Orders
Dependent Reqmts
Dependent Reqmts
Compare
Compare
Purchase Requisitions
Reservations
Reservations
Purchase orders
Warehouse
Stock
Safety
Safety
Stock
Stock
Supply
Demand

8. MRP MRP MRP Procedures Procedures based on consumption in the past MRP
controlled by
MRP
type in
material master
(MRP 1 view)
MRP
MRP
Procedures
Procedures
Consumption -
MRP
based
Deterministic Planning
Reorder point
Forecast -
based
Time -
phased
planning
planning
planning
W/ or W/O Requirements
based on consumption in
the past

9. Master Data Material Master (Important Ones)
MRP Group (MRP1) - Group common MRP materials together
MRP Type (MRP1) - Planning Method.
Reorder Point (MRP1) - For Reorder Point Planning Methods
Planning Time Fence (MRP1) - Restrict Planning Activities within the TimeFence
Planning Cycle (MRP1) - Only for Time Phased Planning
MRP Controller (MRP1) - Planner for the material
Lot Sizing (MRP1) - Lot Size determination
Storage Cost Indicators (MRP1) - For Optimum Lot sizing Only
Ordering Costs (MRP1)- For Optimum Lot Sizing Only
Assembly Scrap (MRP1) - For Assembly Scrap Only
Procurement Type (MRP2) - Make or Buy Indicator.
Special Procurement (MRP2) - For stock transfers, phantoms etc.
Quota Arrangement (MRP2) - Splitting of Quota for internal and/or external procurement (MM will handle this)

10. Master Data (Cont’d) Material Master (Important Ones)
Lead Times (GR and Planned Delivery Time) (MRP2) - Receiving and Purchasing Lead Times
Scheduling Margin Key (MRP2) - How external or internal procurement is scheduled
Safety Stock (MRP2) - Safety Stock
Forecast (MRP3 and Forecasting) - Mainly for Forecast Based Planning, ReOrder Point Planning and Time Phased Planning
Planning Strategy (MRP3) - Mainly for Finished Goods - to be decided by APO
Availability Check (MRP3) - ATP logic for components - to be decided by ZL. For Finished Goods - to be decided by APO.
Discontinuation (MRP4) - Discontinuation by material across all BOMs
Component Scrap (MRP4) - Component Scrap
Requirements Grouping (MRP4) - Group requirements for planning or display
Storage Location MRP (MRP4) - Only if storage MRP is required

11. How the Planning Run Works Per MRP Type
Reorder Point Planning (REORDER) (MRP Type VB, Reorder Level)
When Available Stock falls below reorder level, planned orders are
generated in the planning run to order up to reorder level. Safety Stock
requirement is just for information
Available Stock = Plant Stock + Receipts
Reorder Point Planning + Requirements (REORDERREQS) (MRP Type V1,
Reorder Level)
When Available stock falls below reorder level, planned orders are generated in the planning run to order up to reorder level. Safety stock requirement is just for information. The difference here is that sales orders and reservations are also taken into account.
Available Stock = Plant Stock + Receipts - (Sales Orders + Reservations)

12. How the Planning Run Works Per MRP Type
Forecast Based Planning (FORECAST) (MRP Type VV, Create Forecast)
System only considers forecast requirements (any other requirements are not considered). Planned orders are proposed when available stock is less than forecast requirements.
Available Stock = Plant stock - Safety Stock + Receipts - Forecast Requirements
Time Phased Planning (TIMEPLAN) (MRP Type R1, Planning Cycle, Create
Forecast)
Material is planned according to same cycle in which it is delivered ie the material is not planned during the normal MRP run. The material have to be planned using a separate MRP run.
Available Stock = (Plant stock - Safety Stock + Receipts - Forecast Requirements) within the planning cycle.
MRP Planned (PDFORECAST) (MRP Type PD, Optional Create Forecast)
System checks every requirement to determine whether they are covered by available warehouse stock and/or receipts.
Available Stock = Plant stock - Safety Stock + Receipts - All Requirements

13. stock partially available
Quantity
and
Time Floats
Safety
stock
Safety
stock partially available
Dynamic safety stock
Safety
time

14. Safety Stock Safety stock: To be set in material
master (MRP 2) or in the MRP area
Stock
segment
Available
quantity
for planning
Safety stock
Time
(not available
for planning)
Reqmt
Receipt

15. Safety Stock Partially Available Safety stock partially available :
set in
MRP
group
Available
Stock
quantity
for planning
Statistical
safety stock
from
material
Portion of
master
safety stock
available
Safety
Time
Portion of
safety stock
not
available for planning
Reqmt
Receipt

16. Dynamic Safety Stock (1) Stock " dynamic safety stock “ Maximum stock
Target stock
"
dynamic
Minimum
stock
safety
stock “
Replenish to
target stock
Exception message
if falls
below minimum
for firmed order proposals ,
stock
otherwise adjustment

17. Dynamic Safety Stock and Range of Coverage Profile
Period 1
Period 2
Period 3
Period 4
Time
Reqmts
Average daily requirements
Average daily requirements
Average daily requirements
Days
Maximum stock
Target stock
Minimum stock
Time

18. Range of Coverage Profile: Intervals (1) Definition of range of
Customizing,
assignment in
material master
Interval 1
Interval 2
Interval 3
Time
Reqmts
Maximum
stock
Target stock
Minimum
stock
Time

19. Periods with deviating range of coverage
Range of Coverage Profile:
Intervals (2)
Periods with deviating range of coverage
Interval 1
Interval 2
Interval 3
Time
Reqmts
Maximum stock
Target stock
Minimum stock
Time

20. 2 workdays Safety time Safety Time 30.03. 28.03. Safety time : To
be set in
material master
(MRP 2) or in
the MRP
area segment
30.03.
28.03.
Receipts 2
workdays
Time
Reqmts
Safety
time

21. Safety Time in Multi-Level Production Defined using the
safety time indicator
in the
material master
(MRP 2) or in
the MRP
area segment +
Ind reqmt
Finished product
Time -
Safety
time
Ind reqmt +
Components
Time -
Reqmts
time
Dep .
reqmts

22. 20.12.2000 12.12.2000 Period Profile for the Safety Time 4 workdays 2
Definition of
period profile
in Customizing,
assignment in
material master
Receipts
Time
Safety
time
Safety
time
Safety
time
Reqmts 4
workdays 2
workdays 2
workdays

23. Lot- Lot- size calculation size calculation Overview : Lot-
Net Requirements
Calculation
Lot-
Lot-
size calculation
size calculation
Procurement type
Scheduling
BOM Explosion

24. Lot- Lot- sizing procedures sizing procedures Overview of Lot-
Definition in
Entered in
Customizing
Material
master
Lot-
Lot-
sizing procedures
sizing procedures
Static
Static
Period
Period
Optimum
Optimum
procedures
procedures
procedures
procedures
procedures
procedures
Part
period procedure
Lot-
for -
lot order quantity
Daily lot size
Least
unit cost
Fixed lot size
Weekly lot size
procedure
Replenishment
up to
Monthly lot size
Groff reorder procedure
maximum stock
level
Flexible
periods
Dynamic lot size
according to
creation
planning calendar

25. EX FX HB Static Lot-Sizing Procedures
Lot-for-lot order quantity (exact to the day)
Quantity
Receipts
Reqmts
Time FX
Fixed lot size HB
Replenish up to maximum
stock level

26. TB Daily lot size WB Weekly lot size MB Monthly lot size Period Lot-
Sizing Procedures TB
Daily lot size WB
Weekly lot size MB
Monthly lot size
Period length
Period length
Period length
Receipts
Time
Reqmts
Period 1
Period 2
Period 3

27. Period Lot Size Acc . to PC Planning Calendar Lot Size According to
July
2000
Planning Calendar
Mon
Tue
Wed
Thu
Fri
Sat
Sun 1 2 3 4 5 6 7 8 9 10 11 12 13 14 , 15 16 17 18 19 20 21
Wed , 22 23 24 25 26 27 28 ,
Wed
Wed
Wed ,
Time
Period 1
Period 2
Period 3

28. Optimum Lot- Sizing Procedures Many deliveries / Minimal stockkeeping/
High
order costs
Minimal
storage costs
More extensive
stockkeeping/
Few deliveries /
Higher storage costs
Low order costs

29. Long-Term Lot Size Lot-for-lot Monthly lot size order quantity Reqmt
Reqmts
preview
Long-term
Exact analysis
Short-term
Lot-for-lot
order quantity
Monthly lot size
Reqmt
Receipt

30. 1 1 2 2 Possible Solution : Maximum MRP period (MRP group ) Planning
Run
Executed Regularly 1 1 2
months ago
For 2
months ,
no events
required
a change in
planning
, so not
planned
during
NETCH + NETPL!
Problem 2 2
Today
Possible Solution :
Maximum MRP
period
(MRP
group )

31. Additional Restrictions
You can use these additional restrictions to further define lot sizes :
Short Term and Long Term Lot Size (SHORTLONGTERMLOT) (Lot Size Key LL)
Minimum Lot Size
Maximum Lot Size
Rounding Value
Rounding Profile

32. Procurement type Procurement type Scheduling Scheduling Overview :
Net Requirements Calculation
Lot-
size calculation
Procurement type
Procurement type
Scheduling
Scheduling
BOM Explosion

33. Procurement Types Procurement Types Procurement Types In- In- house
Stock
Stock
transfer
transfer
External procurement
production
production
Production
Production in in
Production
Production in in
Subcontracting
Subcontracting
Vendor
own
own
plant
plant
another
another
plant
plant
Reservation in
Reservation in
Components
Components
Components
another
another
plant
plant
Procurement types
Special procurement types

34. The following times are taken into account :
Scheduling
The following times are taken into account :
processing time required by purchasing department (workdays)
planned delivery time of the material (calendar days)
goods receipt processing time (workdays)
These times will be used to determine the
release date of the planned order or purchase
requisition.

35. Planned order Planned order Backward Scheduling for In-
House Production
Planned order
Planned order
Opening period
Goods receipt
In-
house production time
processing time
Lot-
size dependent :
MRP 2
Scheduling margin
MRP 2
Lot-
size independent :
work scheduling
key
(MRP 2)
Time
Opening
Order
start
Order
finish
Availability
date
date
date
date

36. Today Planned order Planned order
Forward Scheduling for In-House Production
Automatic, if order start date is in the
past during backward scheduling
Today
Planned order
Planned order
Goods receipt
In-house production time
processing time
Time
Order start
Order finish
Availability
date
date
date

37. ... ... In-house production time Scheduling for External Procurement
Order start
Order finish
date
date
In-house production time
...
...
Processing time
Plnd
delivery time
for Purchasing
Non-vendor-specific:
Customizing
Material master
Plant parameters
Vendor-specific:
Outline
Time
agreement or info record
Release
Delivery
date
date

38. Scheduling in Production Planning
Basic Scheduling
Basic Scheduling l
Separate scheduling for planned orders l
Exact to the day l
Basic dates calculated
Order finish date
Periods t
Order start date
Opening date l
Basis for in-house production or replenishment lead time l
Improved performance l
No calculation of capacity requirements
Lead Time Scheduling
Lead Time Scheduling
Order header
Order header l
Used for production orders and routings
Arbeitsvorg
änge l
Based on basic dates:
MRP
manual
Materialkomponenten l
Target dates calculated (scheduled dates)
Fertigungshilfsmittel
Target start date
Kosten
Soll
Plan
100 20
Ist 50
Target finish date l
Basis for in-house production or operations l
Capacity requirements calculated l
Exact to the second

39. Order Dates for Basic Scheduling
ind .
=1, no capacity requirements
Reqmts
date
Reqmts
date
Product
Backward scheduling
Product OS
Product OD OF OS
Assembly
Available OD OF OS
Raw material
Available
Available OD OF
Time OS
Order start date
Opening date
Opening period OD
Order finish date
Goods receipt OF
processing time

40. 1 1 Planned order 2 2 Lead Time Scheduling Scheduling ind .
= 2, capacity requirements are calculated 1 1
Planned order OS OF
Float before production
Float after production
Operations
Scheduling margin key
Operations
Scheduling margin key
(from routing)
(from routing) 2 2 10 20 30 OS OF
Order
Production
Production
Production
Production
Order
start date
start date
start date
finish date
finish date
finish date

41. Scheduling : Significance of In- house Production Time Wrong in- house
Calculation
Calculation of of
planned dates
planned dates
Requirements
date OS OF
Wrong
in-
house
In-
house production time from material master
production time in
material
master ? 10 20 30 40 50
Float before
Lead time scheduling
Float after
production
using routing
production
Calculation
Calculation of of
order dates
order dates
In-
house prod .
time greater than scheduling in
routing
In-
house production time shorter

42. Dates for Lead Time Scheduling
Order
Dates for Lead Time Scheduling
Backward scheduling OD OS PS PF OF
Product 10 20 30
Assembly 2 in
routing
assigned
Assembly 1 10 20 30
operation 30
Assembly 2 10 20 30
Time OS
Order
start
date
Opening
date OD
Opening period
Order
finish
date PS
Production start
date
Goods receipt OF
processing time
Production finish
date PF

43. - + Planned order Changing Dependent Requirement Dates
start
Planned order
date
Finished product
Determining components
Component 1
Dependent reqmts
w/o
lead time /
lead -
time offset
Component 2 -
Time +
Dep
Dep . .
reqmts
reqmts - -
Dep
Dep . .
reqmts
reqmts - -
Lead
Lead -
Lead time -
time offset
time offset
Lead time
Lead -
time offset
Lead time
BOM
maintenance
Note:
the
lead time
and
lead -
time offset are
not
taken into
account
in the
lead time scheduling !

44. BOM Explosion BOM Explosion Overview : BOM Explosion
Net Requirements Calculation
Lot-
size calculation
Procurement type
Scheduling
BOM Explosion
BOM Explosion

45. Target BOM Explosion Dependent reqmts quantities and dates
Usage quantity /
dates
Dependent reqmts
quantities
and
dates
Items
relevant to
production
Component selection
Explosion date
Change
status of
alternative BOM
Lot
size
Selection
of Alternative BOM
Usage
Selection
of BOM
usage

46. Summary : BOM Selection BOM usage by selection ID
Selection method indicator
‘1’
Explosion date
Lot
size
‘2,3’
Production version
Customizing
for
BOM
explosion
Order
start
Order
finish
BOM
explosion number
Alternative BOM
selected
Customizing
for
BOM
explosion
Order
start
Order
finish
BOM
explosion number
Change
status
of alternative
BOM
determined

47. BOM Selection ID Selection of BOM usage Planned order Production
Priority
Usage
Planned order 1
Production 2
Engineering
Used if
no valid production
BOM
exists
Production
Engineering
Costing
BOM
BOM
BOM

48. 1 2, 3 Order quantity (Lot size) Explosion date Production version
Selection of Alternative BOM
for multiple
BOMs
Order quantity
(Lot size)
Explosion date
Production version
Alternative
selection
indicator 1 in
material
master
2, 3

49. Multiple BOM ( Selection method indicator = blank) Selection by Order
Quantity
(Lot
Size ) (
Selection method indicator
= blank)
Multiple BOM
Alternative 1
Lot-
size range
0 -10
pieces
<= 10
pieces
Small
lot A B
Planned
Alternative 2
order
Large lot
Lot-
size range
,000
pieces
> 10
pieces A C

50. Planned order Customizing BOM explosion using Selection by
Explosion Date
Customizing
Planned order
BOM
explosion using
Order
start
date
Order
finish
date
BOM
explosion
of a
of a
number
planned order
planned order (
gross
date)

51. Selection method indicator = 1)
Selection by
Order Start (
Selection method indicator
= 1)
Order
start
Order
start
Order 1
Order 2
Alternative
Alternative
Alternative
BOM 1
BOM 3
BOM 2
Time
Valid from
Valid from
Valid from
(relevant to
(relevant to
(relevant to
planning from )
planning from )
planning from )

52. Explosion Date Using the Order Finish Date Order finish Order finish
Alternative
Alternative
Alternative
BOM 1
BOM 3
BOM 2
Time
Valid from
Valid from
Valid from
(relevant to
(relevant to
(relevant to
planning from )
planning from )
planning from )

53. 1.2.2000 Explosion Using the BOM Explosion Number BOM BOM explosion no
xxx
Order
for product
BOM
explosion no .
xxx
Order
for assembly 1
BOM
explosion no .
xxx
Order
for assembly 2
BOM
BOM
explosion no
explosion no . .
xxx
xxx
Alternative
finished products
Alternatives
for assembly 1
Alternatives
for assembly 2
Gross
date

54. Selection method indicator = 2 or 3)
Selection by Production
Version (
Selection method indicator
= 2 or 3)
Production version 1
Production version 2
Material
Material
Routing
master
master
Work center
BOM (
Line
production )
Describes production procedure

55. Defining the Change Status Using the Order Start Date Order start
Time
Explosion
Explosion
date
date
Time
Change
status 1
Change
status 2
Change
status 3
Technical
Technical
change
change
Same alternative BOM

56. Defining Change Status Using the Order Finish Date Order finish Order
Time
Explosion
Explosion
date
date
Time
Change status 1
Change status 2
Change status 3
Technical
Technical
change
change
Same
alternative BOM

57. 1.2.2000 Defining Change Status Using BOM Explosion Numbers BOM BOM
explosion no .
xxx
Order
for product
BOM
explosion no .
xxx
Order
for assembly 1
BOM
explosion no .
xxx
Order
for assembly 2
BOM
BOM
explosion no
explosion no . .
xxx
xxx
Change
status for product
Change
status for assembly 1
Change
status for assembly 2
Gross
date

58. Single and Multi Level Pegging Multi-Plant Planning
Other MRP Functions
Planning Time Fence
Discontinued Parts
Alternative Parts
Single and Multi Level Pegging
Multi-Plant Planning
Storage Location/MRP Area
Blocked Storage Location
Other Special Procurement

59. Planning Time Fence
Plan is protected from changes within the planning time fence.
End date of time fence determined from planning date.
You can configure system as to how you want the orders to react within the time fence.
Outside the time fence, system creates order proposal as usual.
When new orders move into the time fence, they may be firmed automatically depending on how the system is configured.
Firming Types for MRP Planned Materials :

60. Carrying Out the Planning Run
Planning File
Types of Planning Run
Regenerative (NEUPL)
Net Change Planning (NETCH)
Net Change Planning in planning horizon (NETPL)
Planning Mode
Creation Indicator
MRP Group vs Plant Parameters

61. Evaluating the Planning Run
MRP List By Material
MRP List Collective Display
Stock Requirements List By Material
Stock Requirements List Collective Display
Compare MRP List against Stock Requirement List
Planning situation for Material - (same as stock requirement list ie latest situation for a material)
Planning result for material - (the last MRP run for the material) - you can compare your current plan against long term planning scenarios or stock requirements list here.
Situation (all plants) - Review planning situation (ie stock requirement list) for material for all plants
Order Report - Review your orders in the order report
Pegged Requirements - Review Pegging

62. Important Configurations
Most Important : Production-->MRP-->Planning File Entries
-->Activate MRP and set up planning file
This Configuration should be done before materials are mass created in a new plant
Plant Parameters
MRP Groups
MRP Types
Special Procurement Types
Stock Availability
Lot Size Calculation
Define Floats
Define External Procurement
BOM Explosion / Determine Routing
Define Storage Location/MRP area per Plant
Procurement Proposals

63. Implementation Decisions
Group materials with common planning profile together.
Decide an MRP Type for each group of materials.
Decide what the lot sizing should be for each material/group of materials.
Decide for each material, whether you require safety stock and if safety stock is required, what method of planning the safety stock ?
Which material require quota arrangements ?
What are the materials that have to be procured from another plant ?
Are there any storage locations to be blocked from planning ?
Are there storage locations/MRP area needed to be planned separately ?