The function of Material Requirements Planning (MRP) is to guarantee material availability at right time and in the required quantity to fulfill the internal requirement and external requirements of the material.
In SAP Material Requirement Planning (MRP) is used to procure or produce materials for in-house production purposes or for fulfilling customer demands.
MRP creates a plan based on requirements and considering the current stock in hand to meet the shortages.
MRP Process Flow
- Sales and distribution give customer requirements from the market in the form of Sales order or Sales and Operations planning provide sales forecast.
- In Demand Management, the sales forecast is entered in the form of Planned Independent Requirement (PIR), i.e., the requirement for the finished product.
- In order to cover these requirements, MRP does net requirement calculation and creates procurement proposals with dates and quantities for procurement and production of materials.
- BOM explosion is carried out during the MRP run. If the material is produced in-house, the system explodes the BOM and calculates the dependent requirements, that is, the number of components required to produce the finished product.
- If a material shortage exists, Planned orders are created at every BOM level to fulfill the requirements, and purchase requisitions are generated for externally procured raw materials, packing materials.
- Production orders / Process orders or Purchase orders are created after conversion of planned orders and purchase requisition, respectively.
Comments
Post a Comment