Outlining Material Requirements Planning with MRP-Live

Material requirements planning takes current and future sales as its reference point. The planned requirement quantities trigger the MRP calculation. In MRP, the requirements elements include sales orders, planned independent requirements, material reservations, the dependent requirements created by exploding the BOM, and so on.

With SAP S/4HANA, the MRP-Live eliminates the danger of planning with obsolete data.

MRP is a supply chain planning process used with other planning processes, such as Demand Planning, Supply Planning, Sales and Operations Planning, Production Planning, and Transportation Planning, all of which are used to manage the supply chain activity of the enterprise.

MRP is the process of matching enterprise-wide supply with actual and forecasted customer demand to identify potential material shortage situations and to recommend potential solutions.

Examples of supply include material in inventory, planned stock transfers, purchase orders, and good receipts from manufacturing.

Examples of demand include customer sales orders and forecasts of future customer demand.

Supply and demand requirements are location specific and MRP matching is performed to ensure that the materials are in the right location at the right time to fulfill customer demand.

Material planners are challenged with potentially dozens of material shortage issues each day, and must identify, prioritize, and focus on the most important issues first.

They must know which sales orders are affected, for which customers, and how much time is needed to solve the issue before the shortage affects fulfillment.

With traditional MRP, material planners could be making material decisions based on outdated information, because there was no real-time, single view of material issues, and no view of supply and demand across multiple sites based on current information. Material planners only saw material shortages from a site-specific and material point of view.

Identification of critical material shortages based on outdated information makes real issues harder to detect and increases the opportunity for poor decision-making.

Today, the MRP Planning Run is a resource-intensive batch process, which involves thousands of materials in hundreds of physical locations. It performs hundreds of thousands of database reads from across multiple database tables in ERP. The process typically takes hours to execute, so it's typically run once a week, once every couple of days, or overnight.

On completion, it creates a snapshot of the existing material situation across all the locations in an enterprise. The snapshot is immediately outdated after new supply and demand activity occurs.

MRP-Live refers to the migration of the traditional MRP Planning capability to run on SAP HANA.

With MRP on SAP HANA, the MRP runs faster and more frequently. This means more real-time visibility to a broader set of supply and demand data from across the enterprise, including the combination of sales order, inventory, and procurement information into a single view.

The solution immediately calculates and highlights the material issues that must be addressed across thousands of material stock situations.

The new process is faster, streamlined, and less manually intensive, which allows the material planner to identify issues more quickly and find better solutions to material shortage issues.

The migration of MRP to SAP HANA is a work in progress that started in 2013 and has continued through 2014.

Traditionally, to identify solutions to materials shortages, a material planner had to investigate options across multiple ERP transactions, which was time-consuming.

With Smart Business for MRP, the ability to identify and make decisions to solve material shortage issues is greatly improved.

• More frequent MRP runs provide more timely and accurate material stock information.

• It provides a single, real-time view of material shortage information across sites without having to navigate across multiple ERP transactions.

• There are new views of material shortages from a sales order, inventory, and procurement point of view, instead of just a material view.

• There's a new ability to simulate recommended solution viability and effectiveness in real-time across sites and thousands of material situations.

These improvements make the material planner much more effective.

The material requirements planning cockpit of SAP Smart Business is a new capability being developed to replace existing MRP UI and transactions in ERP.

For each material, it provides real-time visibility to the stock situation and indicates when a stock level becomes insufficient or critical.

It provides a personalization capability to allow the Material Planner to filter on certain types of materials and have different and customized views of shortages.

It performs the recalculation of thousands of material situations in real-time.

It not only suggests potential solutions but, using SAP HANA, also provides the ability to evaluate the potential viability and results of a solution, before it's applied.

In SAP Business Suite powered by SAP HANA, there's also improved UI and processes for traditional Production Planning, Quality Management, and Enterprise Asset Maintenance.

In Production Planning, planned orders and purchase requisitions inside the replenishment lead time have to be released to the shop floor and the purchasing department respectively. On completion of production, the amount of product produced and raw materials and resources consumed need to be confirmed.

In SAP Business Suite powered by SAP HANA, there's a new user interface to convert planned orders into production orders, to convert purchase requisitions into purchase orders, to release production orders, and to confirm production on completion.

Technically, there are two database deployment options: an integrated one with full deployment as part of Suite on SAP HANA (which is a prerequisite for MRP on SAP HANA) and a side-by side scenario of the SAP HANA database with a traditional database. The latter can't be used for MRP on SAP HANA.

The planning scope preselects the materials that have to be planned in a certain MRP-Live run. You can indicate the BOM components and stock transfer materials (according to a special procurement type) so that they are also planned during the planning run.

Using the MRP-Live control parameters, you define how the preselected materials should be planned. For example, by selecting the Regenerative Planning parameter, you force the system to plan all preselected materials, even if there were no changes since the last planning run.