Optimizing Manufacturing Performance

SAP MRP Strategy Parameter Configuration ✔️ The configuration of MRP (Material Requirements Planning) strategy parameters in SAP is crucial for defining how materials are planned, produced, and managed in relation to customer demands and stock levels. The main focus is on strategies such as Make-to-Stock (MTS), Make-to-Order (MTO), Assemble-to-Order (ATO), and Engineer-to-Order (ETO), each with their own set of parameters and configuration nuances. SAP MRP strategy parameters define how materials are planned, produced, and managed based on business requirements such as Make-to-Stock (MTS), Make-to-Order (MTO), and Assemble-to-Order (ATO). Key parameter: Strategy Group – Found in Material Master (MRP3 Tab), it determines the primary planning method (e.g., MTS with Strategy 10, MTO with Strategy 20, ATO with Strategy 40). Requirements Class and Type – Control how planning and order consumption occurs; managed via customizing and assigned through the requirements type. Consumption Mode and Periods – Specifies how sales orders consume planned independent requirements (PIRs), set as backward, forward, or both, with defined days in Material Master. MRP Type – Chooses the basic planning logic (e.g., manual reorder point, forecast-based, automatic); set in Material Master (MRP1 Tab). Lot Size and Safety Stock – Establish how much to order and keep in inventory, configured in Material Master (MRP2 Tab). Individual/Collective Indicator – Determines whether planning is for individual sales orders or grouped collectively; set in Material Master (MRP2 Tab). MRP strategy parameters can also be managed at the MRP Group level to apply consistent settings across multiple materials. Common transaction codes: OMDU (MRP activation), OPPQ (plant parameters), OMI8 (consumption-based planning maintenance). Proper configuration ensures that SAP plans production and procurement aligned with demand, stock, and strategic business goals. → Defines material planning strategy (MTS, MTO, ATO, ETO) → Set Strategy Group in Material Master (MRP3 Tab) → Assign Requirements Class & Type via customizing → Configure Consumption Mode & Periods (forward/backward days) → Select MRP Type (manual, forecast-based, etc.) → Set Lot Size & Safety Stock in Material Master → Choose Individual/Collective Indicator (MRP2 Tab) → Can be managed at MRP Group level for consistency → Use key transaction codes: OMDU, OPPQ, OMI8

Migrating from SAP ECC (ERP Central Component) to SAP S/4HANA is a significant project that requires careful planning, assessment, and execution. Below are the key steps involved in this migration: 🔁 ECC to S/4HANA Migration – Step-by-Step Process 1. Preparation Phase (SAP Readiness Check) Assess system compatibility using SAP Readiness Check. Check for custom code, data volume, add-ons, business functions, and integration scenarios. Analyze simplification items and functional changes in S/4HANA. Choose a deployment option: On-Premise, Private Cloud, or Public Cloud. 2. Planning Phase Decide on a conversion strategy: System Conversion (Brownfield) – migrating an existing ECC system. New Implementation (Greenfield) – fresh install of S/4HANA. Selective Data Transition – hybrid of both approaches. Define project scope, timelines, and resources. Create a detailed project plan including cutover activities. 3. Custom Code Analysis Use SAP Custom Code Analyzer to identify: Unused code. Code incompatible with S/4HANA. Adjust or retire code based on simplification changes. 4. System and Landscape Preparation Upgrade to minimum NetWeaver version if required. Clean up obsolete or inconsistent data. Install Maintenance Planner and prepare Software Update Manager (SUM). Update system kernel and database if necessary. 5. Pre-Conversion Activities Run Simplification Item Check. Activate required business functions. Install S/4HANA conversion add-ons. Archive or delete unwanted data to reduce the data volume. 6. Technical Conversion (Using SUM Tool) Use SAP Software Update Manager (SUM) with Database Migration Option (DMO) for combined: System conversion. Database migration (if moving from non-HANA DB). Perform: Data migration. Code adjustments. Configuration updates. Monitor the SUM process closely. 7. Post-Conversion Activities Conduct SPDD and SAPU adjustments (ABAP Dictionary and Repository). Test end-to-end business processes. Validate interfaces, customizations, and authorizations. Optimize Fiori apps and activate relevant tiles. 8. Testing & Validation Perform: Unit testing. Integration testing. User Acceptance Testing (UAT). Regression testing. Involve key business users to ensure continuity. 9. Training & Change Management Train users on new Fiori UX and updated processes. Manage organizational change and communication. 10. Go-Live & Support Finalize cutover activities. Switch to production environment. Monitor performance and resolve post-go-live issues. Set up ongoing support and optimization. 🛠 Tools You Will Use SAP Readiness Check SAP Maintenance Planner Simplification Item Check Software Update Manager (SUM) with DMO Custom Code Migration App SAP Fiori Launchpad Design #SAPMigration #S4HANA #ECCtoS4HANA #SAPTransformation #DigitalTransformation #SAPConsulting #SAPProject #SAPUpgrade #SAPTech #SAPS4HANA

MRP errors are devastating. This document contains a 21-point checklist for Material Requirements Planning (MRP): ↳ # 1 - Ensure Bills of Materials (BOMs) are complete and contain all part numbers and alternates ↳ # 2 - Set up preferred and approved suppliers with accurate details ↳ # 3 Maintain up-to-date supplier lead times for each item ↳ # 4 - Define accurate Minimum Order Quantities (MOQs) for every supplier and part ↳ # 5 - Input and validate accurate freight and incoterms in supplier records ↳ # 6 - Review and confirm open purchase orders (POs) with suppliers ↳ # 7 - Keep ready dates and ETAs (Estimated Times of Arrival) updated regularly ↳ # 8 - Maintain accurate on-hand inventory by location and batch ↳ # 9 - Track and consider inventory in transit and inter-plant transfer lead times ↳ # 10 - Always run MRP with the most updated Master Production Schedule (MPS) ↳ # 11 - Review safety stock levels to reflect true demand and supply variability ↳ # 12 - Set accurate planning horizons (short, medium, and long-term) to match business needs ↳ # 13 - Ensure item planning policies are accurate ↳ # 14 - Validate production lead times for each work center ↳ # 15 - Include alternate sourcing and dual suppliers in the system where applicable ↳ # 16 - Verify substitution rules for interchangeable parts ↳ # 17 - Incorporate shelf-life, expiration dates, and aging rules for sensitive items. ↳ # 18 - Verify exception messages (reschedule in, reschedule out, cancel, expedite) ↳ # 19 - Track planner buy reports and reconcile against supplier acknowledgments ↳ # 20 - Validate supplier confirmations (acknowledgment of PO dates and quantities) ↳ # 21 - Establish feedback loops; when MRP recommendations fail, document root causes and adjust parameters Any others to add?

From my recent S/4HANA Experience, a key topic discussed was SAP ECC to S/4HANA Migration – Choosing the Right Path. Moving from ECC to S/4HANA is more than an upgrade. It is a strategic transformation. The migration should be guided by business priorities first, with technology as the enabler. Efficiency, agility and cost control must shape the path before system configurations come into play. Greenfield (New Implementation): A complete rebuild on S/4HANA, migrating only essential master data while leaving behind old transactions and customizations. Best suited for organizations seeking simplification and modernization. Example: Re-designing material planning processes with fresh MRP logic and analytics, free from years of complexity. Brownfield (System Conversion) Direct conversion of ECC to S/4HANA, retaining history, custom developments and configurations. Ideal for continuity with minimal disruption. Example: Preserving long-term plant maintenance history while enabling faster analytics. Hybrid (Selective Data Transition) A mix of both, where some modules are re-implemented and others converted as is. Practical for phased modernization in large-scale environments. Example: Finance and procurement rebuilt with automation, while warehouse operations transition gradually.

Mastering MRP in SAP PP – A Breakdown for Learners and Practitioners Planning materials in manufacturing doesn’t have to feel overwhelming. SAP’s Material Requirements Planning (MRP) helps businesses answer three core questions: ✔️ What materials do I need? ✔️ How much do I need? ✔️ When do I need them? Let’s simplify MRP for anyone diving into SAP PP or brushing up on the essentials—with config TCodes, real-life cues, and planning logic! 1. What Is MRP? MRP = Smart planner for materials. It ensures you have the right materials, in the right quantity, at the right time, using stock data, lead times, and demand. Think of it like planning a dinner: Check what’s in the pantry (stock) Count the guests (demand) Create a shopping list (planned orders) 2. Key MRP Elements in SAP Materials Required (Demand): Sales Orders Production Orders BOM Components (dependent requirements) Reservations Materials Received (Supply): Purchase Orders Planned Orders Schedule Lines Production Orders Formula: Requirement – Stock – Incoming = Shortage → MRP Proposal 3. Lead Time & Lot Sizing Lead Times include: Planned delivery time In-house production time Goods receipt processing time Lot Sizes include: Fixed (e.g., always produce 100 pcs) Minimum/Maximum Rounding values (multiples of 10, etc.) 4. Safety Stock Your insurance buffer. Helps prevent stockouts due to unexpected demand or delays. 5. Types of MRP Runs in SAP Net Change (NETCH / NETPL): Only materials with changes (inventory update, master data change) get planned. Run with: MD01 and choose the appropriate processing key. Full Regeneration (NEUPL): Plans everything from scratch, regardless of changes. Usually run weekly (e.g., Fridays). Single Item Planning: Plan individual material on-demand with MD02 or MD03. Background Scheduling: Use SM36 or MDBT to schedule nightly batch runs. 6. MRP vs MPS MPS (Master Production Scheduling): Top-level planning (e.g., finished goods) MRP: Plans components to meet MPS demand MPS run first (MD41), then MRP kicks in. 7. MRP Areas (Decentralized Planning) Use MRP Areas to plan at department/storage-location level: Defined in OMIZ Assigned in material master (MM02 → MRP 1 View) Supports focused, mini-plant-style planning 8. Configuration Must-Knows Create/Change Material: MM01, MM02 Create BOM: CS01 Create Routing: CA01 Create Work Center: CR01 Define MRP Types: OMD0 Define Lot Size Procedures: OMI4 Define Planning Horizon: OMI1 Assign MRP Controller: OMCY Manage Planning File: MD20, MD21, MD22 9. Real-Life Scenario: You're assembling laptops. BOM contains RAM Stock low on RAM MRP run (MD01) generates planned order Planner reviews in MD04 and converts to PO That’s MRP in action—automated, real-time, data-driven. If you find it useful, please For more insightful content follow ARUN KUMAR KASINATHAN #SAPPP #SAPLearning #MaterialPlanning #ManufacturingExcellence #MRP #SAPERP #DigitalTransformation #ProductionPlanning #SAPConfiguration #SAPBOM

🌟 Mastering Material Requirements Planning (MRP) in SAP PM 🌟 Efficient maintenance depends on having the right materials at the right time. Enter Material Requirements Planning (MRP)—a game-changer in SAP Plant Maintenance (SAP PM). It ensures operations run smoothly by aligning material needs with maintenance tasks. 🚀 Let’s dive into MRP with technical details, practical insights, and examples. 🛠️ 🔑 What is MRP in SAP PM? MRP in SAP PM determines materials needed for maintenance tasks. It automates planning and procurement, reducing delays caused by unavailable materials. 🛠️ How Does MRP Work in SAP PM? 💡 Integration with Maintenance Orders: 👉 Specify Materials: Planners list the required materials in the order’s Bill of Materials (BOM) or manually add them. 📝 Seamless Flow: Materials are processed during MRP runs to ensure timely availability. 💡 MRP Process Overview: ⚙️ Run MRP: Execute through T-Code MD02 (specific materials) or MD01 (plant-wide planning). 📊 Analyze Requirements: MRP checks stock and open reservations to identify shortages. 🛒 Generate Proposals: Automatically creates purchase requisitions (PRs), planned orders, or stock transfer requests for shortages. 🌟 Example in Action: Scenario: A pump requires seal replacements during preventive maintenance. 🛠️ Planner Action: The planner creates a maintenance order in T-Code IW31, listing seals as components. 🔍 MRP Check: ✅ If available: Materials are reserved. ❌ If unavailable: MRP generates a PR. 🛒 Procurement Process: The PR is converted into a purchase order (PO) for procurement. 🎯 Result: Seals are procured in time, ensuring maintenance proceeds smoothly. ⏩ Technical Details of MRP in SAP PM: 🔧 Key Fields in Maintenance Orders 🧾 Component Tab: For listing required materials. 📦 Reservation Field: Automatically reserves stock items. 🛠️ Procurement Type: Indicates whether materials are in-house or externally procured. 🔧 Configuration Steps: 🔧 MRP Groups: Defined in T-Code OPPR for planning parameters. 🛠️ Material Master Setup: Configure Reorder Point and Lot Sizing in T-Code MM01/MM02. 🌟 Benefits of MRP in SAP PM: ✅ Prevents Material Shortages: Ensures availability before tasks start. 🤖 Streamlines Procurement: Automates PR and planned order creation. 📦 Optimizes Inventory Levels: Minimizes surplus stock while maintaining critical materials. 🚀 Boosts Maintenance Efficiency: Eliminates delays for timely task execution. 🚀 Real-World Applications: 🔄 Preventive Maintenance: Prepares materials for scheduled tasks. 🔧 Emergency Repairs: Triggers swift procurement for unexpected needs. 🏭 Shutdown Planning: Coordinates large-scale material requirements. 📈 Stock Replenishment: Identifies low-stock items for restocking. How do you utilize MRP in your SAP PM processes? Share your insights or challenges in the comments below! 💬👇 🐈 #SAPPM #MRP #PM #EAM #SAP

Material Requirement Planning (MRP) - Backbone for the #InventoryManagement #MRP is a system accelerates the #manufacturing production process by determining what raw materials, components and subassemblies are needed, and when to assemble the finished goods, based on demand and #billofmaterials Why Is MRP important? Therefore, the necessary raw materials must come first in order to manufacture anything. Obviously, we are unable to produce FG without RM! the RM's quality and quantity requirements must be checked before moving on to #procurement. The #QualityDepartment (#IQC) is in charge of maintaining quality; the Material Controller is in charge of quantity. Inadequate #management could lead to #shortages, excesses, #production #hiccups, issues with #warehousehandling, etc. MRP is completed ahead of time for the following period. The #PurchaseRequisition (#PR) is only placed in accordance with the MRP. MRP Steps and Processes 1.Identifying requirements to meet demand. Inputting #customerorders and #salesforecasts is the first step in the MRP process, which identifies customer demand and the requirements needed to meet it. 2.Checking #inventory and allocating #resources. It's crucial to know which items you have in #stock and where they are when using the MRP to compare #demand and inventory and allocate resources appropriately. This is particularly true if your inventory is spread out across multiple locations. 3.#Schedulingproduction. The system uses the #masterproductionschedule to calculate the amount of time and labor needed to finish each build step and when they must be completed in order for production to proceed on time. The #productionschedule also creates the necessary #purchaseorders, #transferorders, and #workorders and specifies the equipment and workstations required for each step. 4.Identifying issues and making recommendations. Finally, because the MRP associates raw materials with #workorders and customer orders. For Example:- We need to produce 100 cars next month. We've 13 tyres as balance from last month. As its festive season, consider up to 7% increase in demand. Also for next month, need to maintain balance of 106 tyres at month end. Now calculate stock-to-procure for tyres if historic rejection trend is 0.2%. Solution: #BOM per unit consumption = 4 wheels + 1 stepony = 5 tyres FG forecast demand = 100 Cars Wheels required = 100×5 = 500 tyres Prior balance = 13 tyres Buffer stock = (7% of 100)×5=7×5=35 tyres Safety Stock to maintain = 106 tyres Line rejection rate = 0.2% of stock purchased Now, Stock to procure = (500-13+35+106)×1.002= 629.256 tyres ~ 630 tyres So we need to procure 630 qty of tyres for next month period. Now it'll be distributed among those 30 days as per the lead time, #MOQ, batch size for RM, frequency/rate of Forecast

🔥 MRP views (MRP1 to MRP4) ➡️ MRP1 View: 💡 This view focuses on the basic planning parameters. One of the most important fields is the MRP Type, which determines whether and how the material is planned (e.g., PD for MRP, VB for manual reorder point). 💡 The MRP Controller is also crucial, as it assigns responsibility for planning the material. The Lot Size field defines how procurement proposals (planned orders, purchase requisitions) are created (e.g., lot-for-lot, fixed lot size). 💡 You also specify whether planning is done at the plant or MRP area level. 💡 Another important entry is the planning time fence, which helps stabilize the planning process by preventing automatic changes within a defined period. ➡️ MRP2 View: 💡 MRP2 focuses on procurement and in-house production details. Key fields include Procurement Type (E for in-house production, F for external procurement), which dictates whether the material is produced internally or purchased. 💡 The In-house Production Time and Planned Delivery Time help the system calculate lead times for procurement and production. 💡 Also, you can define scheduling margin keys, which add buffer times to production orders. 💡 The Batch Entry field is relevant if the material is handled in batches. 💡 There are also settings for backflushing, which determine whether component consumption is posted automatically during production. ➡️ MRP3 View: 💡 This view deals with strategy and consumption parameters. The Strategy Group is the key field that links the material to a specific planning strategy, such as make-to-stock (10) or make-to-order (20). 💡 The Availability Check Group defines how the system checks for available stock during order processing. 💡 The Consumption Mode and Consumption Period fields define how planned independent requirements and customer requirements are consumed. ➡️ MRP4 View: 💡 MRP4 focuses on BOM and work scheduling integration. 💡 The most important field here is the Selection Method, which determines how the BOM and routing are selected for production. 💡 The Production Version is also key, especially in S/4HANA where it is often mandatory, as it links the BOM and routing for a specific manufacturing scenario. 💡 The Individual/Collective Indicator helps define whether requirements are planned individually or collectively. This view also includes settings for repetitive manufacturing and alternative BOM usage. Together, these MRP views provide all necessary inputs to ensure the material can be effectively planned and produced in the SAP PP module. Accurate and consistent data entry in these views is critical for successful material requirements planning and production execution. #sap #sapcommunity #saptraining #usa #canada #uk #ireland #germany #france #southafrica #bangladesh #pakistan #malaysia #indonesia

#Knowledgeable articles in Manufacturing excellence. Material requirements planning (MRP) systems became a prominent approach to managing the flow of raw material and components on the factory floor. The three main inputs into the MRP system are product structure files, master production schedules, and inventory master files. MRP uses information from the bill of materials (BOM), inventory data and the master production schedule to calculate the required materials and when they will be needed in the manufacturing process. The BOM is a hierarchical list of all the materials, subassemblies and other components needed to make a product, along with their quantities, each usually shown in a parent-child relationship. The finished good is the parent at the top of the hierarchy The inventory items in the BOM are classified as either independent demand or dependent demand. An independent demand item is the finished good at the top of the hierarchy. Dependent demand items, in contrast, are the raw materials and components needed to make the finished product. For each of these items, demand depends on how many are needed to make the next-highest component in the BOM hierarchy. It does this by asking three main questions: 1. What is needed? 2. How much is needed? 3. When is it needed by? The answers to these questions provide clarity into what materials are needed, how many and when to fulfil the required demand and help facilitate an efficient and effective production schedule. Core Functions of MRP: 1. Demand Planning: MRP uses forecasts and actual customer orders to determine the required quantity of finished goods.  2. Master Production Schedule (MPS): This schedule outlines the specific products to be manufactured, the quantities, and the timelines.  3. Bill of Materials (BOM): The BOM lists all the components, raw materials, and sub-assemblies needed to produce a finished product, along with their quantities.  4. Inventory Management: MRP tracks current inventory levels, identifies shortages, and manages the procurement or production of necessary materials.  5. Lead Time Management: MRP considers lead times for both material procurement and production to ensure timely availability of materials. Why Is MRP important? MRP gives businesses visibility into the inventory requirements needed to meet demand, helping your business optimize inventory levels and production schedules. Without this insight, companies have limited visibility and responsiveness, which can lead to: 1. Ordering too much inventory, which increases carrying costs and ties up more cash in inventory overhead that could be used elsewhere. 2. Inability to meet demand because of insufficient raw materials, resulting in lost sales, canceled contracts and out-of-stocks. 3. Disruptions in the production cycle, delaying sub-assembly builds that result in increased production costs and decreased output.