MRP Planning Strategy for SAP

MRP Planning Strategy for SAP 

and 

Difference between Make to Order and Make to Stock

10 - MTS (net requirement calculation)

11 - MTS (Gross requirement calculation)

20 - MTO (Make to Order)

30 - Production by lot size

40 - Planning with final assembly

50 - Planning without final assembly

 Strategy 10 - MTS (net requirement calculation)

Ø  Net requirements planning. That is even the warehouse/storage location stock is also taken into account besides planned receipts / issues during planning for calculating the order quantity. Planned Independence Requirement quantity is reduced at the time of Goods Issue for delivery.

Strategy 11 - MTS (Gross requirement calculation)

Ø  Gross requirement planning. Warehouse / storage location stock is not considered, and only planned receipts / issues are considered. Also Planned Independent Required quantity is reduced during Goods Receipts for production / planned order (Repetitive).  It is generally recommended for mass production industries and process oriented industries where the production has to be carried on, regardless of the stock available. The constraint in such industries is that it is not economically viable / possible to stop production.

Strategy 20 - Make to Order (MTO):

Ø  In the scenario where the material is subjected to MTO, every time when MRP runs and plan for you, the produced quantity is tied to the Sales Order.

Ø  In the MTO scenario, we can see the SO number in the production order.

Strategy 30 - Production only with sales order

                    (Demand Management entry are ignored during MRP run)

Ø   Maintain the following master data for the finished product:

o    Strategy group 30 on the MRP screen

o    Availability check field (on the MRP screen and the Sales: General/Plant screen) so that you can perform an availability check with replenishment lead times (01 in the standard system)

o    Item category group (for example, NORM) on the Sales Organization screen

 Strategy 40 - Make to Order Production

                    (Production triggered by sales order)

Ø  Planned Independent Requirements will be reduced by sales order delivery to reflect the current  stock requirement. (depending on your configuration, sales order will consume the VSF (planned independent requirement) quantity on the same date or two to three days away from it)

Ø  You can set up the consumption parameters in the material master on the MRP screen.

Ø  Check whether the fields Consumption mode, Bwd consumption, Fwd consumption contain entries. If empty, default values are taken from the MRP group parameters in Customizing. If these fields are filled in the material master, they override the MRP group parameters.

Ø  In MD04, VSF will disappear once it is consume by the sales order.

Strategy 50 - Planning without final assembly

Ø  Use this planning strategy when the main value-added process is final assembly.

Ø  This strategy and Planning with a Planning Material (60) are probably the most widely-used strategies in a make-to-order environment. Like all make-to-order strategies, you should use strategy 50 if production is unique for each and every customer; in other words, it is not possible to change the stock for different sales orders. 

Difference between Make to Order and Make to Stock

1. Make to Order (MTO):

In the scenario where the material is subjected to MTO, every time when MRP runs and plan for you, the produced quantity is tied to the Sales Order.

In the MTO scenario, you can see the SO number in the production order.

2. Make to Stock (MTS):

In the scenario where the material is subjected to MTS, there is no assignment/tying of produced quantity to any SO.

The produced quantity will not be tied to any Sales Order and free to be used by any sales order.

If the material strategy group is Make to Order (20) , The stock must be issued from sales order stock

If the material strategy group is Make to Stock (10) , The stock can be issued from unrestricted stock

Example:

SalesOrder  LineItemNo           Material           Strategy Group

01                     10                     ABC000001                    20

02                     20                     ABC000002                    20

03                     30                     ABC000003                    10

04                     40                     ABC000004                    10

Note:

If the material Strategy group is Make to Order (20), but the production order created the stock without sales order reference.

During delivery we have to assign stock to sales order.