MRP Refresh Training

Production Planning
Introduction
Material Requirements Planning
• It is a production planning process that starts from the demand for finished products and plans the production step by step of
subassemblies and parts.

The Benefits of MRP

• Improve Plant Efficiency.
• Reduce component shortage.
• Reduce Purchasing cost.(Reduce inventory levels)
• Reduce Manufacturing cost.
• Improve Machine, labor and equipment utilization.
• Improve Calculation of Material Requirements.
• Simplified and Accurate Scheduling.
• Improve customer service.
MRP Flow Chart For FG & SFG MATERIALS
MRP Flow Chart For PD ( RAW & PACK MATERIALS)
MRP RUN

Single Plant

MD01 MDBT

ON LINE BACK JOB

Multiple Plant
RESULTS

DEPENDS ON CONTROL
PARAMETERS

PURCHASE
PLANNED ORDERS
REQUISITION

QUOTA ARAANGEMENT

PURCHASE
PUCHASE ORDERS
REQUISITION

QUOTA ARAANGEMENT

PUCHASE ORDERS
Course structure

In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Planning Strategies
o Planning Types
o Lot Sizing Procedures
o Net Requirement calculation(Calculation of Short quantities)
o Scheduling
o Execution
o Processing the MRP Results
o Exception Messages
Key Information
Production Planning Overview
Production Planning Overview will cover 3 major sections. They are PP Master Data,
Production Planning and Production Execution.

Material Resource Rate Routing Production

PP Master Data Master
BOM
Master recipe Version

Production Planning Purchase

Requisition

MRP

Production Execution

Planned and Production

Process Orders Confirmation
Key Information

Material Views
Every business function can maintain one or more views of the material master. each business unit has its
own view of the material master record and is responsible for its data Integrity.

Purchasing Material Master Sales

Record

Basic Data Costing

Definition
Definition

MRP The material master record is the Work Scheduling

central data object in the SAP R/3
Plant/Storage System.
Forecasting
Location Stocks It is used to store information on raw
materials, operating supplies, semi-
Accounting finished products, finished products, Classification
production resources & tools, and so
on. Warehouse
Storage
Management
Key Information
MRP Data View

• Material requirements planning (MRP) ensures material replenishment so that the right materials are available at the
right place at the right time.

• The MRP views are maintained at plant level.

• MRP Data 1
• MRP Data 2
• MRP Data 3
• MRP Data 4

T codes for the Material

Mater
• Creation is MM01
• Change is MM02
• Display is MM03
MRP1 View
 MRP TYPE MRP1 View The Below Lot sizing procedures are use in for AU Plants
The Below MRP Types are use in for AU Plants

The Below Planning cycles are Available in AU Plants

 MRP1 View
Base Unit of Measure
Unit of measure in which Stocks of the material are managed. The system converts all the quantities you enter in other
units of measure (alternative units of measure) to the base unit of measure.

Purchasing Group
Key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities.

Plant-Specific Material Status

The plant-specific material status restricts the usability of the material for the plant concerned, that is, it defines
whether a warning or error message is displayed if you include the material in a particular function.
MRP Group
The MRP group contains all the materials from the point of view of MRP for assigning special control parameters for
the total planning run.
For each MRP group, control parameters can be created for total planning in Customizing for MRP which deviate from
the plant parameters.
 MRP1 View
MRP Type
Key that determines whether and how the material is planned. You have the following options:
 Manual reorder point planning
 Automatic reorder point planning
 Forecast-based planning
 Material requirements planning with forecasts for unplanned consumption
 Master production scheduling (MPS)
Reorder Point
If the stock falls below this quantity, the system flags the material for requirement planning by creating
planning file entry.
The reorder point is important only for reorder point planning.

Planning cycle
Key that determines the day on which the material is planned and ordered. The planning cycle is a planning calendar
that is defined in Customizing for MRP.
Procedure
In addition to the planning cycle, you can enter a delivery cycle which is defined in the planning calendar field.
 MRP1 View
Planning time fence
The planning time fence specifies a period within which no automatic changes are to be made to the master plan.
The planning time fence is maintained in workdays.

MRP Controller (Materials Planner)

Specifies the number of the MRP controller or group of MRP controllers responsible for material planning for the
material.

Lot size (materials planning)

Key that determines which Lot sizing procedures the system uses within materials planning to calculate the quantity to
be procured or produced.
Minimum Lot Size
Minimum procurement quantity

Maximum Lot Size

Quantity that is not allowed to be exceeded during procurement.
The system takes this value into account during the automatic lot size calculation for planned orders and production orders.
The lot size of the individual orders cannot exceed this value.
 MRP1 View
Assembly scrap in percent
Percentage scrap that occurs during production of the material if the material is an assembly.
Use
The assembly scrap is used in materials planning to calculate the lot size of the assembly. The system increases the quantity to
be produced by the scrap quantity calculated.

Takt time
The system uses the takt time if a requirement is covered by several receipt elements due to restrictions on lot size such as
maximum lot size (with all lot-sizing procedures) or rounding value (with fixed lot size with splitting).

Rounding value for purchase order quantity

Value to a multiple of which the system rounds up the procurement quantity.
Course
structure
In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Net Requirement calculation(Calculation of Short quantities)
o Scheduling
o Execution
o Processing the MRP Results
o Exception Messages
Lot Size calculation for the Make to stock Net Requirement calculation(10)
Demand Created Demand Display in MD04

 It will check the Strategy

 MRP Running
whether it is make to stock /
make to order

Make to Stock with Net Requirement

Stock  Consideration of Hand on Stock

Receipts >Demand

checking the Receipts & Issued No Procurement Propo sals

Receipts < Demand

Checki ng the Lot Sizi ng Two Lot sizing Procedure are using
Procedures In Make to stock with Net Req Planning

W1 (1 Weekly lot size ) W4 (4 Weekly lot size )

Lot Size calculation for the Make to stock Gross Requirement calculation(11)
Demand Created Demand Display in MD04

 It will check the Strategy

 MRP Running
whether it is make to stock /
make to order

Make to Stock with Gro ss Requirement

Stock  NO Consideration of Hand on Stock

checking the Receipts & Issued

Checking the Lot Sizing  Two Lot sizing Procedure are using
Procedures In Make to stock with Net Req Planning

EX(Lot-for-lot Order W1&W2Weekly lot size (start

Quantity) Mon, delivery Fri)
Lot Size calculation for Planning with final Assem SO Consum (40)

Demand Created Demand Display in MD04

Sales  It will check the Strategy whether it

Order  MRP Running is make to stock / make to order

Planning with final Assem SO Consum

ATP Check
Stock
 Considered the Hand on Stock

Receipts > Demand

Checking the receipts and Issued
No Procurement proposals
(Netted Off)

Receipts < Demand

Checking the Lot Sizing

Procedures
 Two Lot sizing Procedure are using
 In Make to stock with Net Req Planning

EX(Lot-for-lot Order W1,W2&W4Weekly lot size

Quantity) (start Mon, delivery Fri)
MRP2 View
 MRP2 View
Special Procurement Type
Procurement Type

Coverage Profile
 MRP2 View
Procurement Type

• Procurement type indicator defines how the material is procured. The following procurements types are possible
E = material is produced in-house,
F = material is procured externally,
X = material can be both produced in-house and procured externally X (to be used as an exception)
10 Consignment
Special Procurement Type 20 External procurement
Special procurement type is used for allocating a material for special procurements functions such as: 30 Subcontracting

Quota arrangement usage

Key that specifies which business functions use a quota arrangement
Use
The entry you make here controls how the total order quantity is calculated in the quota arrangement, and thus which source of
supply is determined for the material at a particular point in time. You can enter a quota arrangement for the following field
combinations:

Back Flush Indicator

• Non Manual posting of the components at the time of Order Confirmations

• A component identified as Back Flush component is automatically issued to the order when you carry out a process order confirmations.
 MRP2 View
Prod.stor.location
This is the key of the storage location that is copied to the planned order, production order.
E = material is produced in-house, this is Receiving storage location
F = material is procured externally, this is issue storage location

Default supply area

The supply area is used as an interim storage area on the shop floor which is used to provide materials directly at the production line.

Storage loc EP

• It is a Default storage location for external procurement.

Stock determination group

Specifies the stock determination group.
The stock determination group combined with the Stock determination rule at plant level
create a key for the stock determination strategy.

In-house production time (FG & SFG)

• Time needed to produce the material in-house.

Planned delivery time in days (RM & STO Procured)

• Number of calendar days needed to obtain the material or service if it is procured externally.
 MRP2 View
GR Processing Time
• For FG & SFGs: days required after receiving the material from Production for inspection.
• For Raw Material days required after receiving from the source for inspection.

Schedule Margin Key

• Key that the system uses to determine the floats required for scheduling an order..

Safety stock:

• To satisfy unexpectedly high demand in the coverage period. The risk of shortfalls is reduced by having a safety stock.

PPC planning calendar

This specifies the days on which the vendor delivers the material. You can enter the planning cycle in addition to the
delivery cycle.
Minimum Safety Stock
The quantity that defines the lower limit for safety stock. This value cannot be exceeded.

Safety time (in workdays) If you define a safety time, the requirements in MRP are brought forward on the time axis by the
number of workdays you define here.
This does not change the actual requirements dates. However, as the requirements have technically been brought forward,
receipts are created for the earlier dates in MRP.
Course structure

In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Scheduling
o Net Requirement calculation(Calculation of Short quantities)
o Execution
o Processing the MRP Results
o Exception Messages
SCHEDULING
• During scheduling the system calculates the start and finish dates of the procurement elements for materials produced
in-house or externally
• There are two methods for scheduling in production planning that are applied differently
SCHEDULING

Basic date Scheduling backwards for in house

production • If future requirements dates are known. Backward
scheduling is used.

• The system calculates the order finish date by

subtracting the goods receipt processing time from
the requirements date

• The system calculates the order start date by

subtracting the in-house production time from the
order finish date.

• The in-house production time comprises the lead

time and floats ( Safety time, float before production)

• The opening period reflects the processing time that

the MRP controller requires to convert planned
orders.
SCHEDULING
Basic date Scheduling For External Procurement

• Scheduling for externally-procured materials is similar to

scheduling for materials that are produced in-house.

• System will consider the planned delivery time & Gr

processing time

• You maintain the non-vendor-specific planned delivery

time in the material master (view MRP 2).

• You enter a vendor-specific planned delivery time in the

purchasing info record or in the outline agreement.
MRP3 View
 MRP3 View
Strategy Group :
• The planning strategy represents the procedure used for planning a material.

Consumption Modes :

• The consumption mode controls the direction on the time axis in which the system consumes requirements.
• Backward Consumption period:
• Determines how far in the past on the time axis, the system should look for consuming the PIRS (planned independent requirement). The
Sales Orders, Dependent Requirements, etc. are assigned to & consume the PIR quantities that within this consumption period (before
the requirements date
• Forward Consumption period:
• Determines how far in the future on the time axis, the system should look for consuming planned independent requirement. The Sales
orders, Dependent Requirements, etc are assigned to & consume the PIR quantities that within this consumption period (after the
requirements date).

Availability Check :

• It specifies which MRP elements the System takes into account (Purchase Orders, Production/Process Orders, etc.) during availability
check.
MRP3 View
Mixed MRP indicator
Defines whether the material is available for:
 Subassembly planning with final assembly
 Gross requirement planning
 Subassembly planning without final assembly

Planning material
You maintain planned independent requirements for the planning material entered here. If a sales order/customer requirement is
posted for the material in question, the sales order quantity consumes the planned independent requirements of the planning
material. The planning material is not actually produced itself. If is only used for planning non-variant parts and for consuming the
planned independent requirements.

Total replenishment lead time (in workdays)

The total replenishment lead time is the time needed before the product is completely available again, that is, after
all BOM levels have been procured or produced. It is not calculated by the system, but defined in this field as the
total of the in-house production time(s) and/or the planned delivery time(s)of the longest production path.
This time is necessary if, for materials produced in-house, the replenishment lead time is to be taken into
consideration in the availability check.
Planning Strategies
MAKE TO STOCK PRODUCTION WITH NET REQUIREMENT PLANNING

Demand Sales Order

1500 CSE 1300 CSE

Hand on Stock
• Sales order are not part of the Planning
100 CSE • Considered the safety stock & On hand
MPS/MR P
stock

Reduction of PIR Results

• Net requirements planning
1 Planned orders
. Ind Req(-1400CSE)
Adjust
Demand
Maually 2800
CSE • NO consumption of planned
Prod. independent requirements with
GR 1400 CSE Ye s Plan No
OK? Re-schedule /
customer requirements
change
planned
Order s 2800
MD04 List CSE
Stock 200
PGI 1300 CSE
.Ind R eq 200-(LSF)

Prod.
2 Planned orders
GR 2700 CSE Ye s Plan
2. Ind Req(2700CSE)
OK

Stock 2800
.Ind R eq 2800-(LSF)
Planning Strategies
MAKE TO STOCK PRODUCTION WITH GROSS REQUIREMENT PLANNING

Demand Sales Order

1500 CSE 1300 CSE

• Sales orders & on hand stock are not part of the

Hand on Stock
planning
100 CSE

MPS/MRP
• Gross requirements planning
Reduction of PIR Results

Planned orders • Customer requirements are always from the stock

1. Ind Req(-1500CSE)
Adjust without independent requirement
Demand
Maually 2800 (No sales order consideration)
CSE

Prod.
GR 1500 CSE Yes Plan No
OK? Re-schedule /
change
planned
Orders 2800
MD04 List CSE
PGI 1500 CSE Stock 100

Prod. Reduction of PIR

Planned order
GR 2800 CSE Yes Plan
1. Ind Req(2800CSE)
OK

Stock 2900 CSE

Planning Strategies

Make To Order (20)

MAKE TO ORDER
• In made-to-order scenario the safety stock is not considered

Demand Stock Sales Order Sales Order

1500 CSE 1300 CSE
2000 CSE 1000 CSE
• will not consider the planned independent requirements

• will not consider the material reservations

MPS/MRP
Reduction of Sales Orders line
Item
Results

2 Planned orders
1. order 1300 CSE
2.Order 1000 CSE
Creation of
Sales Order

Prod.
GR 1300 CSE Yes Plan No
GR 1000 CSE OK?
Re-schedule /
change
Customer
Orders
MD04 List
PGI 1300 CSE Stock 1500
PGI 1000 CSE
Planning Strategies

PLANNING WITH FINAL ASSEMBLY

• consumption of planned independent requirements with customer
Demand Sales Order
requirements .
Consumption of
1300 CSE PIR 1500 CSE
• Net requirements planning.

• Sales order with consumption

MPS/MRP
Hand on Stock
100 CSE
Results

Planned orders
1.Planned order(-1400CSE)

Prod.
Plan
OK

MD04 List

GR 1400 CSE Stock 1500

MRP4 View
 MRP4 View
Selection Method :
• This field determines which Alternative Bill of Material the system selects during the MRP run.

Individual/Collective Requirements :

• This field controls how the Dependent Requirement are displayed in the Stock/Requirements list – as individual records or collectively
(grouped together)

Requirements group :

• Defines whether the system groups together Dependent requirement for the material on a daily Basis When analyzing requirements planning

Follow-Up Material
Number of the material that the system uses in materials planning to replace the material to be discontinued once its warehouse
stock is depleted.
Use
In the material master record and also in the bill of material (BOM), you can define a follow-up material for a material to be
discontinued. The follow-up material defined in the BOM has a higher priority than that in the material master record.
 MRP4 View
Component scrap in percent
Percentage of scrap that occurs during production of the material if the material is a component

Component scrap is used in material requirements planning (MRP) to determine the quantities of components required. When
exploding the bill of material (BOM), the system increases the required quantities of the components by the calculated scrap
quantity.

MRP relevancy for dependent requirements

This indicator controls whether dependent requirements are relevant to MRP or not. Dependent requirements include
dependent reservations and stock transfer requirements.

Production Version:

We can have multiple Bill of Material’s and Recipes for a Material(The unique combination of BOM & Recipe)

Version Indicator

This field indicates whether a Production Version exists for this material.
DAY 2
 BOM – Bill of Materials

• BOM determines the basic purchase requirement in MRP

• Each change in the master recipe or BOM will have an effective start date for the change to take place
• Scrap factor (%) can be maintained for each component within the BOM in order to cater for production allowance
 Resource

• Factory calendar is maintained within the resource to indicate

the non working days in a year (see right)
• Resource also indicate the standard available capacity (see right)
 Master Recipe

• Master Recipe combines the Resource to a manufactured product with BOM

• Referring to the resource’s capacity & the machine hours in the recipe, MRP will be able to calculate the start date of a process order
referring to the demand
• I.e. In order to produce 4800kg of 400G VEGEMITE AUSTRALIA DAY, production needs 0.4hr.
Course structure

In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Net Requirement calculation(Calculation of Short quantities)
o Scheduling
o Execution
o Processing the MRP Results
o Traffic lights
T codes for Running the Planning

T codes Description Use

MD61 Demand Creation Common
MD62 Change of Demand Common
MD63 Display Common
MD40 Planning Online MPS
MDBS As Background Job MPS
MD41 - Single-Item, Multi-Level MPS
MD42 Single-Item, Single-Level MPS
MDBT As Background Job MRP
MD01 Planning Online MRP
MD02 Single-Item, Multi-Level MRP
MD03 Single-Item, Single-Level MRP
MD04 Stock/Requirements List Common
MD05 MRP List Common
MD06 MRP List - Collective Display Common
MD07 Stock/Requirements List: Collective Display Common
MD45 Planning Result Common
MD46 Planning Result: Collective Display Common
MRP Execution
MRP Control Parameters
NETCH Net Change in the Total Horizon
Processing Key NETPL Net Change in the Planning Horizon Before executing the MRP, we must know about the Planning control
NEUPLRegenerative planning
parameters.

Create purchase
1 Purchase requisitions • Control parameters available in MRP
req. 2 Purchase requisitions in opening period
3 Planned orders MD01, MD02&MD03 T codes,
• For the MPS (MD41,MD42&MD43)
1 No schedule lines
Schedule lines 2 Schedule lines in the opening period
3 Schedule lines

1 MRP list
Create MRP li st 2 Depending on the exception messages
3 No MRP list

1 Adapt planning data (normal mode)

Planning mode 2 Re-explode BOM and routing
3 Delete and recreate planning data

Process Control Parameters

Parallel Processing

Display Material List

 MRP Execution
Total Planning online or scope of planning (MD01)

• Raw, Packing & Spare parts are planned under MRP , by using
online Planning(MD01) & Back ground jobs.

Set parallel Process

indicator
MRP Execution
Total Planning Background(SM37)
• Raw, Packing & Spare parts are planned under MRP , by using
online Planning(MD01) & Back ground jobs.
MRP Execution
Total Planning Background(SM37)
 MRP Execution
Single item Multilevel(MD02)

Demand Creation
MRP Execution Single item Multilevel(MD02)

• Running the MRP BY using single item Multi level planning

(MD02)
 Inputs: Material, Plant,
 MRP Control Parameters,
 Process Control Parameters.
Click on MRP Results
selected
results
Select any one of the
Material
 Single item Multilevel(MD02)
MRP Execution

• The Below functions are possible before saving the results

For In-house & ROH Materials the possibility of changing the

procurement proposals like Qty & Scheduling.
Course structure

In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Planning Strategies
o Planning Types
o Lot Sizing Procedures
o Net Requirement calculation(Calculation of Short quantities)
o Scheduling
o Execution
o Exception Messages & Traffic lights
o Processing the MRP Results
Exception Messages T Code is MD06
 The system displays a maximum of two
Select the line item exception Messages for each MRP element
& click on the
selected
stock/requirements
lists

If require
scheduling can
change as per the
requirement
Exception Messages

• We use Exception Messages to help monitor the MRP Results

• Exception messages can be review and processes with the all the T codes like MD04, MD05, MD06,
MD07

• They alert you items that require your attention.(such as finish date in the past, plan processes according
to the schedule)

• The MRP controller can then select those planning results in order to process them manually and
process

• Maximum 2 exception Messages for each MRP element.

Traffic Lights
Traffic lights T Codes : MD06/MD07

Inputs plant & MRP

controller & click
on continue

Clicked on Define
Traffic Light
 Traffic Lights
The below New screen will displayed

• Once you have decided which groups should have the highest
priority on the planners list, you can change your traffic lights
accordingly & Clicked on the save.

• The best practice in our business is to define these "high priority"

items with the RED traffic light. The least importance would be
defined as a GREEN.

• Once changes done on Traffic lights, clicked on save

Specific to plant

• In the next Execution, you can see the changes made on the Traffic
lights.
On clicking Exception
groups, you can see the list
(Specific to User)
Course structure

In this course we will be reviewing the following sub-processes and related SAP
transactions :

o Master data – Material Master & BOM

o Master data – Resource & Master Recipe
o Planning Strategies
o Planning Types
o Lot Sizing Procedures
o Net Requirement calculation(Calculation of Short quantities)
o Scheduling
o Execution
o Exception Messages
o Processing the MRP Results
Processing MRP Results
MRP list : Collective access (MD06)
MD06 is a report for accessing the MRP list collectively.
• MRP controller
• A product group
• vendor

• MD06 will display the last MRP results

• But in MD07 you can get dynamic up-to-date information.
Processing MRP Results
Stock /Requirement list: Collective Display (MD07)
• MD07 - Collective access stock/Req
Lists

• Dynamic list

• It is useful for the large number of Selection criteria.

• MRP Controller
• Production line & Class are additional feature compare MD06
Processing MRP Results
Stock /Requirement list: Collective Display ( MD07)

• Firstly a material overview will display with all of the selected materials.

• If we have set the “Set up list in Back ground” indicator below functions are available

 Traffic lights
 Individual lists
 Individual customer segments by date or number
 Select materials by certain exception messages
 User specific sort criteria also possible

• MRP or Processing date and /or the processing indicator for the selection are available.
• Possible to search processing indicator or new exceptions
Processing MRP Results Stock /Requirement List (MD04)
S
S

Expanded Header details

Header

Period
Aggregated time bucket
Processing MRP Results
Functions of Stock /Requirement list (MD04)

• Possible period total display(Planning results into Periodic Buckets like weekly ,Monthly..)

• You can process the individual MRP elements from the list.

• The show over tree displays all materials in the current session.

• When accessing the list through the collective process, all materials that were selected are displayed.

• Otherwise as you type over the material number, the new product will be added to the work list.

• You can display the stock/requirements list or MRP list for a material by double-clicking on the material in the
tree.
 Processing MRP Results
Functions of MRP list (MD05)
Processing
indicator

• The Functions of MRP list is largely identical to the functions of stock / requirement list like
 Processing MRP elements or display options is concerned.
 Selection rules are only used in the stock / requirement list

• We can set Processing indicator in the MRP list. (its highlights the list that have already been processed by the MRP controller)
Processing MRP Results T Code is MD45

Evaluation of the Planning Results

(MD45)

User specific
layout

In the below screen shot you can check overall demand ,

Production & Coverage
Processing MRP Results
Evaluation of Planning results ( MD46)
• Like MD45 layout option is the same , with extra functionality like
• Exception Groups
• Processing indicator
• Procurement
• Restriction selection like(Mrp dates, Processing date from, stock coverage less than)
DAY 3
REPORTS
Call-off / Quick Replenishment Forecast ( YMM_DELFCAST)
External Delivery schedule report (ZMMPUR_EXTDEL_R)
Contract coverage report (ZMMPUR_CCOV)
REPORT : MC40(Usage-Based ABC analysis)
The ABC analysis allows you to classify materials according to their importance. It is also known as
Selective Inventory Control. The main criterion is the usage value.

The usage value is calculated by using the usage value that is valuated with the current price taken in the
period to analyze.

The results of the ABC analysis are divided into three categories:
A materials: important, high usage/requirements value
B materials: less important, medium usage/requirements value
C materials: relatively unimportant, low usage/requirements value

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the analysis
for all plants, select the field “Analysis on All Plants". If you want to carry out the analysis for one or more
certain plants, specify the desired selection criterion in the field “Plant”
-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to analyze, the
calculation starting from the current date.
-Analysis Area
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field “Material with a
deletion Indicator”.
-Restrictions for the Ranking List
• Percentage of usage/requirements value.
You allocate a percentage of the total usage value to the A, B, and C items.
• Absolute usage/requirements value
The proportions allocated to A, B, and C items should together account for the total usage value.
• Number of materials in percent
You define the number of A, B, and C items as a percentage of the total number of items.
• Absolute number of materials
You specify the number of A items and the number of B items. All the remaining items are
classified as C items.

If you select the “Update ABC Indicator” field, the system overwrites the ABC in Material master
REPORT : MC40(Usage-Based ABC analysis)
A,B,C indicator not
Maintained in the
Material Master
• After executing MC40, Based on consumption, the system will give the A,B,C indicators.

• For High A, Medium B, Low c.

• For the Material 249658 Systems has given Indicator “A” , this is based on the highest
consumption in the 90 days.
REPORT : MC41 (Range of Coverage Based on Usage Values)
The ABC analysis allows you to classify materials according to their importance. It is also known as
Selective Inventory Control. The main criterion is the requirement value.

The requirements value (issues in the future) is derived from the requirements of the MRP (customer
orders, dependent requirements) valuated with the price that was saved in the material master.

The results of the ABC analysis are divided into three categories:
A materials: important, high requirements value
B materials: less important, medium requirements value
C materials: relatively unimportant, low requirements value

-Objects to Analyze
If you select “All Plants Cumulated” checkbox, the requirement value of a material refers to the
cumulated total requirement value of all plants .If you want to carry out the analysis for one or more
certain plants, specify the desired selection criterion in the field “Plant”
-Period to Analyze
When using the analysis according to requirements values, the system will suggest 90 days in the future,
the calculation beginning with the current date.
-Analysis Area
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field “Material
with a deletion Indicator”.
-Analysis Strategies
• Percentage of requirements value.
You allocate a percentage of the total usage value to the A, B, and C items.
• Absolute requirements value
The proportions allocated to A, B, and C items should together account for the total usage value.
• Number of materials in percent
You define the number of A, B, and C items as a percentage of the total number of items.
• Absolute number of materials
You specify the number of A items and the number of B items. All the remaining items are
classified as C items.

If you select the “Update ABC Indicator” field, the system overwrites the ABC in Material master.
REPORT : MC41 (Requirement-Based ABC Analysis)

• This report taken for the requirement of Next one Month.

• For the Material SI300000 the requirement Qty for the Date up to 10.08.2015 is
5,067,728.992 KGs
• The ABC indicator, however, is plant-dependent and is set for each plant, which means a
material can have a different ABC indicator in plant ID01 than it does in plant ID02
•
REPORT : MC42 (Range of Coverage-Based On Usage Values)

Range of Coverage - The key figure "range of coverage" provides information on the stock level
in relation to demand. A range of coverage analysis allows you to identify materials with excess
coverage. The range of coverage for usage is calculated as follows:
Current Stock / Average Usage per Day

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out
the analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every
designated plant. You can restrict the analysis to the characteristics ‘sales organization’,
‘purchasing organization’ and ‘plant’.
-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to
analyze, the calculation starting from the current date.
Daily Usage - If you select this checkbox, the usage quantities and values are calculated directly
from material document. This enables you to display usage in terms of daily values and
quantities
-Analysis Area
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field
“Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP
-Restrictions for the Ranking List
By specifying threshold values, you can limit the scope of your ranking list. There are three
different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a
maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC42 (Range of Coverage-Based On Usage Values)

• A range of coverage analysis allows you to identify materials with excess

coverage. You are then able to adjust the stock level to comply with the new
usage rate.
• The analysis according to range of coverage can be executed
for usage and requirements .
• The range of coverage for usage is calculated as follows:
= Current stock
Average Usage/Day

• The range of coverage for requirements value is calculated as follows:

= Current stock
Average requirement/Day

For the Material 603437 daily usage is 1971.178, current stock is 25,583.
So Total coverage is =25583/1971.178 = 13 days
REPORT : MC43 (Range of Coverage-Based On Requirement Values)
Range of Coverage –
The report can be executed material wise, commodity type wise, material planner wise
etc.
MC43 shows coverage based on future dependent requirements (planned consumption).
The range of coverage for requirements value is calculated as follows:
current stock / average requirement/day

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry
out the analysis for all plants, select the field “All Plants Cumulated". Analysis is created
for every designated plant. You can restrict the analysis to the characteristics ‘sales
organization’, ‘purchasing organization’ and ‘plant’.

-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to
analyze, the calculation starting from the current date.

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field
“Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the
following characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three
different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can
specify a maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC43 (Range of Coverage-Based On Requirement Values)

For the Material 10000016 daily usage is 0.020 KG,

current stock is 13.016 KG
So Total coverage is =13.016/0.020 = 651 days
REPORT : MC44 (Inventory Turnover)
The key figure “Inventory turnover" specifies how often average stock has been consumed.
Inventory turnover is calculated as the ratio of cumulative usage to average stock level. An
inventory turnover analysis allows you to identify whether there are any "slow-moving items".

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the
analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every
designated plant. You can restrict the analysis to the characteristics ‘sales organization’,
‘purchasing organization’ and ‘plant’.
-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to analyze,
the calculation starting from the current date.
Daily Usage - If you select this checkbox, the usage quantities and values are calculated directly
from material document. This enables you to display usage in terms of daily values and quantities
-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field
“Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP
-Restrictions for the Ranking List
By specifying threshold values, you can limit the scope of your ranking list. There are three
different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a
maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC44 (Inventory Turnover)

Formula
Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory at value
Average Inventory is measured in value and not in volume.
If you divide both elements you know how often you sold you’re average
inventory.
REPORT : MC45 (Usage Value) By using the analysis on usage value you can select the materials that have a high level of
usage value and a high capital lockup.
The usage value is derived from the average usage of a material within a period of time (past).

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out
the analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every
designated plant. You can restrict the analysis to the characteristics ‘sales organization’,
‘purchasing organization’ and ‘plant’.

-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to
analyze, the calculation starting from the current date.
Daily Usage - If you select this checkbox, the usage quantities and values are calculated
directly from material document. This enables you to display usage in terms of daily values
and quantities.

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field
“Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three
different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a
maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC45 (Usage Value)
REPORT : MC46 (Slow-Moving Items)
Materials that have been consumed little or not at all over a long period of time are referred to as slow-
moving items. The main criterion for this analysis is the date of the last usage. This analysis enables you
to identify materials that are not currently in use.

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the
analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every designated
plant. You can restrict the analysis to the characteristics ‘sales organization’, ‘purchasing organization’
and ‘plant’.

-Period to Analyze
Any period can be selected for the analysis. The system suggests 400 days as the period to analyze, the
calculation starting from the current date.
Daily Usage - If you select this checkbox, the usage quantities and values are calculated directly from
material document. This enables you to display usage in terms of daily values and quantities

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field “Material
with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three different
ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a maximum
value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value
REPORT : MC46 (Slow-Moving Items)

• These are the non consumption Items from

last 400 days
REPORT : MC47 (Requirements Values) By using the analysis on requirements value you can select the materials that have a
high level of requirements value and a high capital lockup in the future.
The requirements value of a material is derived from the current price of valuated
requirements within a period of time (future).

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to
carry out the analysis for all plants, select the field “All Plants Cumulated". Analysis is
created for every designated plant. You can restrict the analysis to the characteristics
‘sales organization’, ‘purchasing organization’ and ‘plant’.

-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period
to analyze, the calculation starting from the current date.

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the
field “Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the
following characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are
three different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you
specified.
• Limit the ranking list to materials with a certain stock value. For example, you can
specify a maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC47 (Requirements Values)
REPORT : MC48 (Stock Value)
This analysis is based on the stock value of a material and allows you to select materials with a high
capital lockup. The analysis can be carried out for the current or the average stock value .
The current stock value is calculated by multiplying the stock level with the current price. The average
stock value is calculated by multiplying the average stock level with the current price.

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the
analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every designated
plant. You can restrict the analysis to the characteristics ‘sales organization’, ‘purchasing organization’
and ‘plant’.

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field “Material
with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three different
ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a maximum
value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC48 (Stock Value)

• For the Material 10000836 in the

report, system is showing the current
stock of the Material and & Stock
Value.

• In MD04 is also showing the same Qty

REPORT : MC49 (Average Stock Value)
This analysis is based on the stock value of a material and allows you to select materials with a high
capital lockup. The analysis can be carried out for the current or the average stock value .
The current stock value is calculated by multiplying the stock level with the current price. The
average stock value is calculated by multiplying the average stock level with the current price.

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the
analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every
designated plant. You can restrict the analysis to the characteristics ‘sales organization’,
‘purchasing organization’ and ‘plant’.

-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field
“Material with a deletion Indicator”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three
different ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a
maximum value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC49 (Average Stock Value)
REPORT : MC50 (Dead Stock)
Dead stock is the part of your warehouse stock that has not been used for a certain period of time. The
dead stock value is calculated by multiplying the dead stock with the current price. A dead stock analysis
allows you to identify materials with inefficient amounts of stock. This report will not work for the
Future dates.

-Objects to Analyze
You can carry out the analysis for all plants or only for certain plants. If you want to carry out the
analysis for all plants, select the field “All Plants Cumulated". Analysis is created for every designated
plant. You can restrict the analysis to the characteristics ‘sales organization’, ‘purchasing organization’
and ‘plant’.
-Period to Analyze
Any period can be selected for the analysis. The system suggests 90 days as the period to analyze, the
calculation starting from the current date.
-Area to Analyze
You can restrict the area of the analysis to certain materials.
If you also want to include materials with a delete indicator in the analysis, select the field “Material
with a deletion Indicator”. If only materials kept in stock are to be included in the analysis, select the
field “Material Kept in Stock”.
The analysis area can be restricted even further by using the following characteristics:
– Material group
– Material type
Only for the analysis object ‘plant’ can the area to be analyzed be restricted for the following
characteristics:
– ABC indictor
– MRP type
– MRP

-Restrictions for the Ranking List

By specifying threshold values, you can limit the scope of your ranking list. There are three different
ways to do this:
• Limit the ranking list to materials whose stock value lies within the range you specified.
• Limit the ranking list to materials with a certain stock value. For example, you can specify a maximum
value, minimum value, or a range of values.
• Limit the ranking list to a certain number of materials with the lowest stock value.
REPORT : MC50 (Dead Stock)
• An example would be that if you met all demand over a 3
month period and the stock level in that time never dropped
below 500 then that would be the dead stock level throughout
the period you supposedly could have had 500 less stock and
still met all requirements.

79 Cases is the Dead

stock for the Material
845024
THANK YOU