SAP MRP

Supply Chain Management: SAP MRP

In today’s digitally disrupted environment, planners are requested to check the feasibility of an uplifted product forecast based on time horizons. This feasibility check is carried out to determine the availability of capacity and supply to avoid out-of-stock situations and optimize sales. Therefore, putting customer service as the top focus and priority.

What Is SAP MRP?

SAP MRP (Material Requirements Planning) is a module in SAP ERP software. It is where production and procurement planners create feasible and realistic plans to initiate the procurement or production processes. Within SAP MRP, the system calculates the net requirements while considering available stock and scheduled receipts from purchasing and production. The planning run can be executed at a plant level or MRP-area level. The results of an MRP run are recommendations for creating documents to produce, purchase, or transfer the materials. The final step is to create the needed supply documents to meet that demand.

Supply Chain Management: SAP MRP

In today’s digitally disrupted environment, planners are requested to check the feasibility of an uplifted product forecast based on time horizons. This feasibility check is carried out to determine the availability of capacity and supply to avoid out-of-stock situations and optimize sales. Therefore, putting customer service as the top focus and priority.

What Is SAP MRP?

SAP MRP (Material Requirements Planning) is a module in SAP ERP software. It is where production and procurement planners create feasible and realistic plans to initiate the procurement or production processes. Within SAP MRP, the system calculates the net requirements while considering available stock and scheduled receipts from purchasing and production. The planning run can be executed at a plant level or MRP-area level. The results of an MRP run are recommendations for creating documents to produce, purchase, or transfer the materials. The final step is to create the needed supply documents to meet that demand.

What Is the Key to SAP MRP?

For complex products and higher production volumes, complex calculations are needed. Inventory is a major cost of doing business and one of the biggest factors in profitability and customer service. It is important early on to identify key personnel roles whose power base is affected by a new MRP system. The key to making an SAP MRP implementation successful is to provide extensive training and education for all affected employees.

Key business use cases for SAP MRP are:

• Product Promotion: The module can examine if it is feasible to produce the products per an increased demand forecast.
• Capacity Planning: Plan for extra staff, shifts, or additional capacity to prepare for an expected increase in production.
• Purchasing Decisions: Proactively identifies if you should renegotiate purchase contracts due to an increase in scale and identify new vendors to reduce costs. This can also help in creating visibility with supplier collaboration.

SAP MRP benefits come from improved production planning and scheduling processes. This brings faster response time per market changes, allowing a reduction in inventory without compromising customer service.

Technical resource partners for consideration might be – SAP, Opsveda or Tibco.

Further Insights for SAPinsiders

• Manage Material Requirements Planning Exception Messages in SAP. Venkata Ramana Nethi from Schlumberger offers insights to categorize and manage SAP MRP exceptions, because this can impact your operational performance relative to using KPI’s. Learn how to standardize your process and translate the messages into actions.
• Real-Time Supply Chain Planning with Demand-Driven MRP in SAP S/4HANA. Caetano Almeida, talks about DDMRP (Demand Driven MRP) SAP Fiori apps. The bullwhip effect is where inventory can move from being backordered to having excess. The DDMRP establishes buffers to absorb the demand variability and help stabilize the nervousness effect.