- SAP Managed Tags
Introduction
Planning at Material Requirements Planning (MRP) level allows for more granular and precise control of materials planning within a plant. Instead of executing MRP at the entire plant level, planning is carried out for specific MRP areas such as storage locations, subcontractors, or production lines. This helps tailor planning strategies to localized needs, enhancing overall supply chain efficiency.
An MRP Area represents a distinct unit within a plant where MRP is carried out independently. There are three types:
a) Plant-level MRP area – Entire plant treated as one area (default).
b) Storage location MRP area – Separate planning for specific storage locations.
c) Vendor MRP area – Used for subcontracting (i.e., planning for components sent to a subcontractor).
Key Benefits
- Enables decentralized material planning within a single plant (Enables planning at storage locations, production lines, or subcontractors)
- Accommodates different planning strategies for separate storage locations or subcontracting processes - Including different MRP types and Lot-sizing procedures per MRP areas.
- Offers improved Supply Chain Visibility – Isolates demand/supply data for better analysis, Identifies bottlenecks or shortages at specific areas.
- Provides greater flexibility in managing inventory levels and replenishment lead times - Reduces excess inventory and stock transfer requirements, Minimizes holding costs by planning closer to consumption points.
- Enhances supply chain efficiency by aligning material availability with operational needs.
- Reduced Planning Errors - Prevents cross-area requirement mix-ups, Increases accuracy and reliability of MRP outputs.
Industry applications
a) Automotive Industry
Planning for External Assembly: An automotive manufacturer might send raw materials (e.g., steel, plastic resins) to a subcontractor who produces specific parts (e.g., car seats, dashboards). By defining each key subcontractor as an MRP area, the manufacturer can plan the delivery of raw materials and track the stock levels at the subcontractor's location. This ensures timely availability of components for the final assembly line and better management of consignment stocks.
Planning for Different Production Lines: A large automotive plant might have separate production lines for different car models or vehicle types. Each production line could have its own dedicated storage areas for specific components. Defining these storage locations as separate MRP areas allows for independent planning of components required for each line, preventing shortages or overstocking in specific areas.
Sequencing Components: Some components in automotive manufacturing need to be delivered in a specific sequence to the assembly line (e.g., seats in the order they are installed in the car). MRP areas linked to specific staging areas near the production line can help in planning the sequenced delivery of these parts, ensuring smooth and efficient assembly.
b) Pharmaceutical Industry
Planning for Quality Control Areas: Certain raw materials or intermediate products might be held in quarantine or quality control areas before being released for production. Defining these areas as separate MRP areas allows for planning the release of these materials based on quality checks and expiry dates, ensuring that only approved materials are used in the manufacturing process.
Planning for Different Dosage Forms: A pharmaceutical company might produce tablets, capsules, and liquid formulations in different areas of the plant or even at different sites. Each production area or site could be defined as an MRP area to plan the specific raw materials and packaging materials required for each dosage form, considering different BOMs and production processes.
Planning for Clinical Trial Materials: Materials used for clinical trials often have different planning and tracking requirements compared to commercial production. A separate MRP area can be created for the storage and planning of these materials, ensuring they are managed according to the specific protocols of the trial.
c) Electronics Industry
Planning for Different Assembly Lines: An electronics manufacturer might have separate assembly lines for different product types (e.g., smartphones, laptops, circuit boards). Defining the component staging areas for each line as MRP areas allows for focused planning of the specific electronic components needed for each product, considering their unique BOMs and production volumes.
Planning for Testing and Rework Areas: Components or sub-assemblies that require testing or rework might be stored in specific locations. Defining these as MRP areas allows for tracking the inventory in these areas and planning for any additional components needed for rework, without affecting the planning for the main production lines.
Planning for Phased-Out Components: As new technologies emerge, certain electronic components become obsolete. A separate MRP area can be used to manage the remaining stock of these phased-out components for service or repair purposes, with different planning parameters to ensure minimal procurement of these items.
By using MRP area planning in these and other industries, companies can achieve more precise material planning, reduce inventory costs, improve production efficiency, and respond more effectively to specific supply chain and operational requirements within different parts of their organization.
Features & Capabilities
- With IBP release 2502, SAP has enabled planning at MRP area level within IBP Order-Based Planning (Response & Supply Planning).
- Tight Integration: RTI structures have been enhanced to support “Out-of-the-box” integration between ERP (ECC/S4) and IBP. For edge scenarios, BADIs are available to accommodate any custom logic.
- All Planning Processes including Supply Planning, Response Management, Deployment Planning, Transportation Load Building and Supply Usage and Gating Factors are available for MRP Area Locations.
- There are no limitations or specifics regarding:
a) OBP Planning Algorithms
b) OBP Planning Runs such as OBP Optimizer such as Deployment Runs
c) Planning Functions such as Forecast Consumption, Shelf Life, or Subcontracting
- There are no limitations or specifics regarding OBP features for Reviewing and Refining Plans: The “
a) Analyze Supply Usage
b) Interactive Planning
c) Adjusted Quantities
Prerequisites for Master Data Integration
ECC/S4
1) Define MRP Area of type Storage Location (Transaction Code: OMIZ) – Storage Location 1 is assigned to the MRP area 1310_A as shown below.
Storage Location 2 and Storage Location 3 are assigned to the MRP area 1310_B as shown below.
2) Assign material to the MRP Area (Transaction Code MM02): The material FG126 is assigned to MRP area 1310_A and relevant fields were filled in as shown below.
Once the fields at MRP area level are maintained, the same can be cross-checked in the standard table MDMA (Material + Plant + MRP Area).
3) Extend materials to the storage location (Transaction Code MMSC): Storage locations from 1 to 5 are assigned to the material FG126 at plant 1310.
4) Maintain issuing storage location for components in order to determine the withdrawal location (Optional Step).
5) Maintain receiving storage location for production versions in order to define PDS for dedicated MRP Areas only (Optional Step).
IBP
If the planning area is created based on the version 2411 or earlier, we need to perform the below settings to make sure the integration of “Reference Location” happen correctly. Note, this field is quite vital and useful while filtering data during the planning results assessment in full scope.
1) The attribute “REFERENCELOCATION” needs to be added to the Location MDT and then to the Operational OBP planning area. Check and activate the planning area.
2) “Application Mappings” app needs to be updated to include this attribute as highlighted:
3) Lastly, RTI Integration profile needs to be updated to include “Reference Location” attribute as shown below:
Master Data Integration
a) Location
Plants (with & without MRP areas) are integrated into IBP as Locations (either as a Production Plant or Distribution Center). Plants with MRP areas are integrated as Locations in IBP with Plant type as “MR (MRP Area)”.
The field “Reference Location” reflects the Plant/Location under which the MRP area is created. As highlighted below, 1310_A is the Storage Location MRP Area created in IBP of type “MR”, with reference location populated as 1310.
ECC/S4 (Transaction code OMIZ)
While setting-up the integration model in the transaction code CFM1, we need to select both “Plants” and “MRP Areas”:
IBP (View Locations app)
b) Product
Materials (with & without MRP areas) are integrated into IBP as Products. Materials extended to MRP area have specific value-settings maintained in various tabs of the material master – MRP1, MRP2 and so on.
ECC/S4 (Transaction code MM03)
In addition, we can maintain specific Storage Location settings in the material master like MRSL, Total Shelf Life etc.
While setting-up the integration model in the transaction code CFM1, we need to select both “MRP Area Matl” and “MRP Areas”. This selection enables business configuration decisions to adopt the standard RTI based on MRP Area feature of SAP IBP.
IBP (View Location Products app)
c) Transportation Lanes
Lanes are generated in IBP via SPK assignment, Purchase Info Records, Master Data Maintenance, and BADI enhancement. In the context of MRP areas, the below conditions apply:
d) Production Data Structures (PDS)
PDS can be created on both Plant and MRP Area location in IBP depending on the “Receiving Storage Location” maintained in the production version as shown below. If the “Receiving Storage Location” is not maintained, RTI would generate the PDS at both the plant and MRP area as part of the standard integration. Thus, we need to be cautious of where the PDS needs to be generated before setting (generation and activation) up the integration models.
ECC/S4 (Transaction code C223)
IBP (View Production Data Structures app)
Transaction Data Integration
a) Stock Situation
SLOC 0004 and 0005 are not assigned to any MRP area and thus appear under plant with title “Without MRP Area”, while others appear under specific MRP areas based on the SLOC assignment.
ECC/S4 (Transaction code MMBE)
IBP (View Stock Details app)
In this fiori app, we can see the inventory situation at Material, Plant/MRP area and Storage Location level. With the help of the reference location field, we can filter to include all the MRP areas linked to a plant:
b) Demand Situation
ECC/S4 (Transaction code MD04)
Sales Order demand has been created at the MRP area – US22_A as shown below:
IBP (Projected Stock app)
Sales Order demand appears at the MRP area US22_A with standard RTI integration:
Supply Planning Run, Results Assessment and RTI Outbound Integration
Performed the Supply Planning Run based on Finite Heuristic as mentioned below:
Once the planning run is completed – To meet the demand of 200 PC, we can see the system has generated the STR at US22_A with sourcing from 1310_A.
At the 1310_A (“MRP area at the Production Plant”), we see the planned order of 100 PC got generated and the remaining demand quantity was pegged to the inventory already available.
Pegging relationship: For the components demand (generated after the BOM explosion), we can see the system has generated the PRs to 1310_A as shown below (highlighted in green):
Performed the RTI Outbound integration with below parameters to publish the orders back to the connected ECC/S4 system:
STR at US22_A (MRP area of the DC# US22)
Planned Order at 1310_A (MRP area of the Plant# 1310)
Dependent demand for the components at 1310_A (MRP area of the Plant# 1310)
With the key completion done, the order numbers are synced between ECC/S4 and IBP:
Notes to enable RTI integration around MRP area
3533624 - SAP IBP Real-Time Integration - Enable MRP area in CFM1
3518277 - SAP IBP Real-Time Integration - MRP area
3527608 - SAP IBP Real-Time Integration - PDS MRP Area Integration
3517245 - SAP IBP Real-time Integration: MRP Area Order In/Out
3533762 - SAP IBP Real-time Integration: Integrating Stocks to MRP Area
3527842 - SAP IBP Real-Time Integration: Reconciliation of Stocks on MRP Area Location
3534384 - MRP Area: Sales and Distribution
3534385 - MRP Area: Purchasing
3474855 - Support for MRP areas in FCC reconciliation
3527354 - SAP IBP Real-time Integration: Reconciliation MRP Area (PP-Orders)
3516569 - SAP IBP Real-Time Integration: Reconciliation of CBP PO
3516794 - SAP IBP Real-Time Integration: SD Reconciliation
References
a) SAP help documentation:
- Support of MRP Areas in Order-Based Planning
- Setting Up Planning with MRP Area Locations
- Storage Location MRP Areas in SAP IBP Order-based Planning
b) Consulting Notes:
3547103 - Storage Location MRP Areas in Order-based Planning: Frequently Asked Questions
3106619 - SAP IBP Real-time integration - Notes for installation
3110007 - IBP Real-time Integration: Information/Restrictions
c) What’s new series:
- Release 2502
- Release 2505
Conclusion
Planning at the MRP Area level provides a scalable and flexible approach to material planning. It is particularly valuable in complex manufacturing environments where different parts of the plant require unique planning strategies. Proper configuration and management of MRP Areas ensure optimal resource utilization and streamlined supply chain operations.
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