beas group AG Material Requirements Planning MRP Daniela

Agenda Material Requirement Planning 1: Business Process Overview 2: Procedure: MRP Scenario Creation 3: MRP Calculation Logic 4: MRP Order Recommendation View © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 2

Business Process Overview © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved.

Agenda Material Requirement Planning 1: Business Process Overview 2: Procedure: MRP Scenario Creation 3: MRP Calculation Logic 4: MRP Order Recommendation View © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 4

MRP Scenario Creation In order to execute the Material Requirements planning (MRP), the business must define the input to be considered in the process. For this, the system divided into three tabs: Scheduling. This tab is used for most relevant parameters for the scenario ü Forecast: after creating a forecast for upcoming days, the user can assign it to the process run ü Order recommendation by: the system allows to choose how the orders will be created: by day, week, month ü Deliver by: planning days, this could be in a range of days or a quantity of days ü Work order: the system allows to select which work order will be taking into account. If the user does not select any, the system will use by default all the work order in the range of days the MRP is running ü Containment for display: in this part, the user can filter by item, group of items, or property, the MRP process © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 5

MRP Scenario Creation In order to execute the Material Requirements planning (MRP), the business must define the input to be considered in the process. For this, the system divided into three tabs: Detail. In this tab, the user customizes the input parameters, the calculation method, view and authorizations ü Pegging and replenishment: the user sets in the scenario which activities from production, sales, purchases and inventory are going to be considered ü Breakdown replenishment: the user sets in the scenario which transactional data will be considered in sub-assembly and bill of material ü Inventory: the user can specify which documents at the warehouse are considered available to plan ü Calculation: the system allows to select in the scenario if the MRP besides from quantities, also calculates material price ü Authorization: in this part, the user can specify who is able to set up, view or calculate in the system © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 6

MRP Scenario Creation In order to execute the Material Requirements planning (MRP), the business must define the input to be considered in the process. For this, the system divided into three tabs: Warehouse. In this tab, the user selects which inventory the system take into account as available for calculation ü Warehouse list: the user sets in the scenario which warehouse are going to be considered (*) Consider warehouse location filters in transactions: when activated, WO receipts and issues are not taking into the inventory calculation © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. (*) This only occurs when the warehouse is not selected. The system only take the minimum inventory (when apply) 7

Agenda Material Requirement Planning 1: Business Process Overview 2: Procedure: MRP Scenario Creation 3: MRP Calculation Logic 4: MRP Order Recommendation View © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 8

MRP Calculation Logic MRP has several parameters to configure before calculating to give the best result according to the business cases Ø Calculation customization: configure parameters in the configuration wizard about MRP logic: Administration > System Initialization > Configuration Wizard > Material Management > MRP Wizard > Calculation Ø Calculation customization: configure parameters in the configuration wizard about Forecast input: Administration > System Initialization > Configuration Wizard > Material Management > MRP Wizard > Forecast © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 9

MRP Calculation Logic The MRP works just as a calculator. The objective is to plan the inventory flow throughout the period of time according to incomes and outcomes period Direct Flow Inventory At the end of the previous day Example: Work Orders Finished Good Purchase Orders Raw Material Good Receipts Master Data: Forecast Finished Good: Work Orders Delivery Date: 0 days Minimum Inventory: 20 Uof. M: 1 piece Raw Material Sales Orders Raw Material: Minimum Inventory MRP Calculation Lead Time: 7 days Uof. M: 5 pieces Total to Produce or buy © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 10

MRP Calculation Logic The MRP logic starts from the delivery date and calculates backwards. The finished good breakdowns a demand for the item in the bill of material and the system calculates the quantities and delivery dates ILLUSTRATIVE Finished Good 1 pc 5 pcs Week 1 Week 2 Week 3 Inventory 10 20 20 Work Orders 60 0 0 Purchase Orders 0 0 0 Good Receipts 15 0 0 Forecast 150 50 100 Sales Orders 55 10 25 Minimum Inventory 20 20 20 MRP Calculation 140 60 125 © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 11

MRP Calculation Logic The MRP logic starts from the delivery date and calculates backwards. The finished good breakdowns a demand for the item in the bill of material and the system calculates the quantities and delivery dates ILLUSTRATIVE Raw Material Week 1 Week 2 Week 3 500 350 275 0 0 0 150 0 0 Forecast 250 500 0 Sales Orders 50 125 0 Lead Time 7 7 7 MRP Calculation 0 275 0 Inventory Work Orders 1 pc 5 pcs Purchase Orders Good Receipts © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 12

Agenda Material Requirement Planning 1: Business Process Overview 2: Procedure: MRP Scenario Creation 3: MRP Calculation Logic 4: MRP Order Recommendation View © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 13

MRP Order Recommendation View The results of the MRP run are congregated in one

MRP Order Recommendation View The results of the MRP run are recommendations that fulfill gross requirements by taking into consideration the existing inventory levels and existing Purchase and Work Orders. This upper side of the screen has three tabs: all items, purchase items and in-house production Ø The system gives, by default, a general vision of the results for the next 7 weeks, also an accumulative of weeks in the past and in the future after the 7º week. The user can configure the time line in periods by scenario (months, weeks, days) Ø This upper side of the screen has three tabs: all items, purchase items and in-house production © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 15

MRP Order Recommendation View Down, on the left side of the main screen, there are two tabs: Ø The first tab shows outflows (forecasts, sales orders) or inflows (work orders, purchase orders) that were used to calculate the quantity needed to deliver the finished good Ø The second tab is called either order or produce depending on the item the user is looking. When the item is produced by the company, the tab that appears is “produce”, and when is bought, the tab is “Order” © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 16

MRP Order Recommendation View Down, on the right side of the main screen, there are three tabs: Ø The first tab shows all current active documents from the product selected Ø The second tab shows the price lists including scale prices and special price list Ø The third tab shows the detailed information of the alternative product according to the main product planned © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 17

MRP Order Recommendation View As an additional functionality from beas, there are internal documents for purchase and production order. These documents are designed preview to the final document in order to validate the amounts and details Mode of Procurement Buy Produce Intermediary Document Final Document Purchase request Purchase Order Purchase Quotation Production demand Work Order (*) It is not necessary to create an intermediate document to go through the process. A final document can created directly Document used for validating purposes © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 18

MRP Order Recommendation View The pre-assignment functionality works for collective receipts or issues ILLUSTRATIVE Ø The pre-assignment functionality assign quantities according to the document (Sales order, purchase order, work order). Ø This functionality helps the user to assigns the exact number according to the plan or negotiation © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 19

MRP Order Recommendation View In more detail, the second tab is very useful to create an order (Purchase or work, depending on the item) Ø These results can be accumulated depending on the quantities recommended. The system allows to create a purchase order individually, summing the orders from a week, or month. If it is a work order, this can be only made if the product is make to stock when the user consider the pre-assignment function. Ø There are several documents that can be created: only in Beas or SAP documents © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 20

MRP Order Recommendation View Work Order The system allows to create the work order directly according to the quantities calculated or adjusted manually Ø After creating the work order the user can view the detailed information in the work order and adjust if needed © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 21

MRP Order Recommendation View Production Demand As an additional functionality from beas, there is an internal document creation for production requests Ø After creating the production request, the user can view the detailed information in “Production Request” screen © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 22

MRP Order Recommendation View Production Demand The system allows to create a production demand according to the quantities calculated manually in order to go through a validation or adjustments before creating a work order Ø The system allows to create individual work order, summarized or merge production demand in order to create a new work order © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 23

MRP Order Recommendation View Purchase Order The system allows to create the purchase order directly according to the quantities calculated or adjusted manually Ø After creating the purchase order the user can view the detailed information in the work order and adjust if needed © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 24

MRP Order Recommendation View Purchase Request As an additional functionality from beas, there is an internal document creation for purchase requests Ø After creating the purchase request, the user can view the detailed information in “Purchase Request” screen © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 25

MRP Order Recommendation View Purchase Request screen is a view of all purchase requests filtered by supplier and user Ø © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. Detailed information can be viewed by double clicking the material. The information presented could be purchase requests (Upper screen) and purchase orders (bottom screen) with document number 26

MRP Order Recommendation View Purchase Request screen allows the user to modify according to preview negotiation the supplier, quantities and dates Ø After creating the purchase request, the user can view the detailed information in “Purchase Request” screen © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 27

MRP Order Recommendation View Purchase Request screen is a view of all purchase requests filtered by supplier and user Ø After changing the purchase request, the user can create the purchase order from the same screen © 2015 SAP; beas Group, be. as Manufacturing, All rights reserved. 28