mrp presentation draft 8-27-04

8/8/2019 MRP Presentation Draft 8-27-04

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Production & MaterialRequirements Planning with

SAP R/3 System

Vincent A. Mabert

Kelley School of Business

Indiana UniversityAugust 18, 2004



2

Objective

• Identify Key Elements of Mfg. Planning &Control Systems

• Review End Item Material & Components

• Navigate and Display Basic Production

Planning & MRP Data in R/3• Describe MRP Processing Logic in R/3

• Demonstrate Production Planning and MRPProcess Logic in R/3

• Illustrate Some Useful R/3 Features



3

Manufacturing Planning & Control System

• The MPC system provides information to efficiently manage the flowof materials, effectively utilize people and equipment, coordinate

internal activities with those of suppliers, and communicate withtrading partners about requirements. The MPC system does notmake decisions or manage the operations, managers perform thoseactivities using information from MPC system.

• Typical support by the MPC system include:

– Plan capacity requirements and availability to meet marketplace needs. – Plan for materials to arrive on time and in the right quantities needed for

product production.

– Maintain appropriate inventories of raw materials, work in process, andfinished goods-in the correct locations.

– Schedule production activities so people and equipment are working onthe correct things.

– Track material, people, customers' orders, equipment and other resources in the factory.



4

Approach

• Part 1: Present Product Overview – Review sample product and structure components

– Understand the MPC elements and steps in the SAP R/3• Part 2: Review key data elements:

– Bill of material

– Routing Data

– Work Center Information – MRP Processing Parameters

• Part 3: Outline Basic Process Logic

• Part 4: Use Pre-Populated Item (Precision Pump, T-F100) in R/3 System to illustrate data & process logic

• Part 5: Highlight some useful R/3 features



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Precision Pump (1)

T-B100

Casing (1) Flywheel (1) Hollow Shaft (1) Turbo Drive (1) Hex Screw (8)

Blank (1) Flywheel Blank (1) Shaft Blank (1) Drive Casing (1)

Gasket (1)

Hex Screw (8)

T-T300

T-T100

T-T200

T-T300

T-T000 T-T400 T-T500

T-B200 T-B300 T-B400

T-F100

Precision Pump (T-F100)Product Structure Tree (# required)



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Shop FloorSystems

Capacity

Requirement

Planning

Material

Requirement

Planning

Material and

Capacity Plans

Vendorsystems

Forecasting Sales and

OperationsResourcePlanning

Rough-Cut

capacityPlanning

Master

ProductionScheduling

RoutingBOM

MaterialMaster

Inventory

Status


Key Components

= processing logic= data input



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Part 2: Basic Data

Requirements

• Bill of Material

• Job Routing

• Work Center

• MRP Processing

Parameters

Shop Floor

Systems

Capacity

Requirement

Planning

Material

Requirement

Planning

Material and

Capacity Plans

Vendor

systems



Rough-Cut

capacityPlanning

Master


Routing BOM

MaterialMaster

Inventory

Status



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Bill of Material for T-F100Drawing Data

Click on ‘Document’ tab

to see more informationconcerning part drawing

Subassemblies and

components that

comprise pump.

There are 5 differentmaterial items for the

pump

Quantity requirements



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Part Drawing Data

1. Double click on drawing row

2. Double click on

‘BMP’ files

3. Click and then ‘Material’ to return to Overview



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Bill of Material for T-F100Product Structure

To see subassembly information,

double click ‘ √’ for T-B100 under

‘Asm’ column.

Or back up by clicking and then

see BOM for component T-B100

Subassemblies

and

components

that comprise

pump. There

are 5 different

material itemsfor the pump

Quantity

requirements

T-F100

T-B400T-B100 T-B200 T-B300 T-T100

Product Tree Structure

Column ‘ICT’ indicates

material type, like stock or

non-stock item



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Look at Component Part T-B100 (Casing)

At Initial Screen type in material

number T-B100, plant number 1000

and BOM usage indicator value of 1,

then hit enter key or click

For material T-F100 there are 3 different

material items for the casing subassembly

T-B100

T-T300T-T100 T-T200



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View Routing Data for T-F100

Click ‘Operations’ button

for display

Logistics Production Master Data Routings Routines Standard Routines Display(click)

Enter part number

and plant data



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T-F100 Routing Data

Routing sequence

and work center

numbers and

descriptions

Set up timedata per lot

Process time data (machineand labor) per piece

Description Translation:

Bereitstellung gemäß Kommissionierliste = provision / allocation according to picking list

Einpressen Laufrad in Gehäuse = force fitting of the blade wheel in the casing

Lackieren Gehäuse = painting of the casing

Einbau Welle in Gehäuse = installation of axle / shaft in the casing

Endmontage Pumpe = final assembly of the pump

Abliefern an Lager = deliver to warehouse



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Work Center DataTo move to work center data, position cursor on row for

work center (e.g., T-M00) and click ‘Work Center’ buttonWork center screen shows basic data.

For w/c T-M00, labor is the primary

resource (Work Center Cat.).

Click on ‘Capacities’ tab to

see work load estimate



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Work Center Loading

For Set Up put cursor on

SAP005 entry and click ‘Form.

To view Process formula, put

cursor on SAP007 and click

‘Form.’

The work center load estimate is based upon the number of orders and order quantity. Formulas are used to

determine the load estimate using data shown on the Work Center Capacity Overview screen.

Set Up formula –

expected set up for each

job order Process formula – when Base

Qty is 1, then load equals

LaborTime*OrderQty



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MRP Processing Parameters

Enter part number

(e.g., T-F100 &

Click check (or

enter key)

Enter plant number & Click check mark (or enter key)

Click MRP1 and check

mark (or enter key)

Logistics Production MasterData Material Master Material Display Display Current (click)



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MRP Parameters (MRP1)

Numerous parameter options that user

can utilize to customize processing. For

example, many different lot sizing choices

available. Currently set for Lot-for-Lot.

Click on cell to see drop down menu.

Drop down menu here shows choices.

Click on MRP2 tab



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MRP Parameters (MRP2)More alternatives to customize MRP processing

Parameters for:

Lead timeSafety stock

Safety lead time

Service target

Etc.

While lead time normally reflects process andset up time, the ‘Scheduling Margin Key’ allows

the user to add more time for before and after

operation delay.



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Part 3: Processing Logic

• Since the R/3 system is not a live system with routinetransactions, the following approach uses anindependent planning logic – Start with sales estimate by period for end item

– Determine rough cut production schedule to support sales(similar to master production schedule)

– Transfer production schedule to material planning

– Explode material plan based upon BOM and MRP parameters toget Planned Orders

– Convert Planned Orders to appropriate Production Orders for shop execution

– Review Work Center load profile base upon Production Orders• The colored boxes in the MPC flow diagram (next slide)

indicate key system logic elements that are employed



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Shop Floor

Systems

Capacity

Requirement

Planning

Material

Requirement

Planning

Material andCapacity Plans

Vendor

systems



Rough-Cut

capacityPlanning

Master


RoutingBOM

MaterialMaster

Inventory

Status


Key Logic Components

= processing logic= data input



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Part 4: Production & Material

Planning Example –Precise Pump (T-F100)

Precision Pump (1)

T-B100

Casing (1) Flywheel (1) Hollow Shaft (1) Turbo Drive (1) Hex Screw (8)

Blank (1) Flywheel Blank (1) Shaft Blank (1) Drive Casing (1)

Gasket (1)

Hex Screw (8)

T-T300

T-T100

T-T200

T-T300

T-T000 T-T400 T-T500

T-B200 T-B300 T-B400

T-F100



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Start with R/3 Rough Cut Capacity

Planning for Part T-F100

Enter appropriate part

number and plant number

Click ‘Active Version’

Logistics Production SOP PlanningFor Material Material Create (double

click)



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Use ‘Change Rough-Cut Plan’

Screen to develop an initial

time-phased schedule for an

item’s production. Two optionsfor sales estimation are: time

series forecasting or user

provided. This slide demos user

provided from Excel sheet.

Highlight starting cell and type <Ctrl> & ‘V’ to paste data vector.

Copy desired sales data from Excel

Provide Sales Estimates to Initiate Planning



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Develop Rough Cut Production Schedule

Under ‘Edit’ drop down there are a

number of planning options for

coordination production with sales,

here the Synchronize to Sales is

demonstrated to crate a Rough-CutProduction Schedule for T-F100

Click save icon

Under ‘Extras’ want to transfer

Production Schedule by Clicking

to Transfer to Demand

ManagementShop calendar uses weeks and the beginning

of August is Week 32



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Transfer Production Schedule for T-F100

Click on ‘Transfer now’ and save data

when requested

Summary report on transfer.

Next step is to conduct MRP explosion.

Click return icon to go to SAP Easy Access screen



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Conduct MRP Explosion

Enter appropriate part number, MRP area and

plant number (e.g., T-F100 , 1000 & 1000)

Click to display info

Click Check mark or enter key twice to

complete explosion

Logistics

Production

MRP

Planning

Single Item – Multi- level (double click)



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End Item Material Summary

Explosion summary for end item

showing Planned Order quantity,

timing, available material, etc.

Click Save icon

Click ‘Continue’ to finalize process



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View MRP Results(Stock Requirements List)

Fill in P/N T-F100 and plant 1000 number ,

then click check mark or hit enter

Logistics ProductionMRP EvaluationsStock Requirements List (double click)



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Click ‘Show Overview Tree’

Click Tree Icon

Click Cancel

Stock Requirements List & Tree View

List Shows:

Planned Orders

Exception Messages

Quantities



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View Indented Product Structure

See tree structure on left



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Move Down Product StructureDouble click on T-B100 on left side to get lower level view of product requirements.

Return back to T-F100 (Double click T-F100 on left side in tree)



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Convert Planned Orders to Production Orders

Click on ‘Eye Glass’ for PlOrd row to create Production Order



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Create Production Order

Click Prod. Ord

If all is okay, then

click ‘FLAG’ in

upper left corner.

Otherwise,

change quantity,

dates, etc.

See Production Order now

release, light FLAG and

RLAL indicator.

Now click save icon and

click return icon to

Stock Req. list



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Released Production Orders

See PrdOrd replaced PlOrd entriesClick Refresh Icon to see updates



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Release More Production Orders

Repeat steps in prior three slides for PlOrd until Jan 3rd, after

updating you see the following PrdOr listed.

With Production Orders released, one can now go

see the expected loads on work centers



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Capacity Work Load Analysis

Fill inappropriate WC number (e.g., T-M00) andplant number 1000, click check mark or enterkey. (Note - T-F100 requires the following W/Cs:

T-M00, T-V00, T-L00, T-E00 & T-F00

Click ‘Standard Overview’

to see detail

Logistics Production Capacity PlanningEvaluationWork Center View Load (double

click)



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click graphic for plot

Double click left row box and see detail

production orders for load

close to return

Click return arrow to go back to Overview.

Work Center T-M00

Standard Overview Load Summary at

period 35 for work center for weeks 35

- 44, measured in hours .



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Part 5: Other Useful Points

•Change MRP Parameters, e.g., Lot Size Logic•Cancel Production Orders

•Help System

•Part Numbers Available



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Change MRP Lot Size Logic for T-F100Go to Material Master and MRP1 screen: Logistics Production Master DataMaterial Master Material Display Display Current (click) and then

completing steps to get to MRP1 screen

Want to adjust lot sizing logic.

Will use Lot-for-Lot but will have

a Min (300) and Max (400) order size requirement. Change

appropriate cell values and save.

Complete MRP explosion process

by going to: LogisticsProduction MRP PlanningSingle Item – Multi- level (doubleclick) and then complete required

steps .



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New MRP Lot Size Logic Results

New PlOrd results for Min and Max

logicOld PlOrd results for Lot-for-Lot logic

Note: The new lot size logic results in fewer Planned Orders being placed

Cancel Prod ction Orders



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Cancel Production OrdersThere are times that a Production Orders should be canceled because of demandchanges or other conditions, which reduces the shop work load. Here are the steps.

First go to Stock Requirements List for appropriate part.

1. Go to Stock Requirements List

for appropriate part. [ LogisticsProduction

MRP

Evaluations Stock Requirements List

(double click)] and select

appropriate part number

2. Click on order line for change, e.g., 11/02/2004

3. Click PEN icon at bottom



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Production Order Change: Cancel Order

At Header screen go to Functions > RestrictProcessing >Technically Complete and

select

Screen entry color changes to inactive,

indicating the order is cancelled.

Click save icon, which returns

you back to Stock Requirements

List.

Cancel Order: Revised Stock



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Cancel Order: Revised Stock

Requirements List

Click Refresh icon

Note removed

order. This also

reduces load on

WCs

Cl E i



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Classroom Exercise• The Precision Pump end item is

preconfigured in the SAP R/3 system,

supported by the SAP Competency Centers

and available for use by University Allianceinstructors.

• There are 31 part numbers available for

assignment in R/3 that have been configuredin the same manner. They run from T-F100

to T-F130.

• Remember, only one user can be active witha part number or data element at any

moment.

mrp presentation draft 8-27-04

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