With this comprehensive reference, you’ll learn how to implement, optimize, and use SAP ERP and SAP APO for effective materials planning. Expert insights help you understand cross-component materials planning with SAP ERP and SAP SCM as well as modern materials planning procedures. Readers discover how to configure and use the different SAP ERP applications and how best to integrate them with an existing SAP system. In addition, the authors show you how to optimize the tools and determine which settings are useful, and how they affect other settings.

Basic Principles and Processes of Materials Planning: Learn the tasks and goals of materials planning, along with the impact of various materials planning parameters on stock.

Impact of Materials Planning Parameters in the SAP System: Benefit from a highly-detailed overview of the materials planning parameters in SAP ERP and SAP APO, and learn how to optimize your materials planning processes using these tools.

Materials Planning Optimization: Get an in-depth look at the powerful tools and functions in SAP ERP and SAP APO to optimize your inventory controlling.

Add-On Tools for SAP ERP Materials Planning: Find out about special add-on tools for materials planning that provide targeted support for effective inventory management, including the materials planning monitor, backlog monitor, and many more.

Diagrams and Real-World Examples: Discover how SAP ERP and SAP APO are applied to materials planning with real-life business scenarios and examples throughout.

Highlights

• Basic Principles and Processes: Strategic versus Operational Materials Planning, Item Classification, Processes in SAP
• MRP Parameters and Their Effects: Planning and Forecast Methods, Planning Strategies and Requirements Consumption, MRP Procedures, Procurement Quantity Calculation, Safety Stock Planning, Determination of the Sources of Supply, Scheduling, Interactions
• MRP Optimization: Processing of the MRP Results, Global ATP, VMI and SMI, Kanban, Inventory Controlling
• Add-Ons: Forecast Monitor, MRP Monitor, RLT Monitor, and many more

About the Author(s)

Ferenc Gulyássy, Marc Hoppe, Martin Isermann, and Oliver Köhler work at SAP Deutschland AG & Co. KG and have many years of in-depth experience as consultants for logistic issues.

Table of Contents

1 ... Basic Principles of Materials Planning ... 25
... 1.1 ... Goals and Tasks of Materials Planning ... 25
... 1.2 ... Core Functions of Materials Planning ... 26
... 1.3 ... Requirements Calculation ... 27
... ... 1.3.1 ... MRP (Deterministic) Determination of Requirements ... 28
... ... 1.3.2 ... Consumption-Oriented (Forecast-Based) Determination of Requirements ... 29
... ... 1.3.3 ... Order-Based Determination of Requirements ... 30
... 1.4 ... Accumulate Balances ... 30
... 1.5 ... Purchase Order Calculation ... 32
... ... 1.5.1 ... Reorder Cycle Method ... 33
... ... 1.5.2 ... Reorder Point Method ... 36
... ... 1.5.3 ... Mixed Procedure ... 38
... ... 1.5.4 ... Overview of Reorder Policies ... 39
... 1.6 ... Impact of Materials Planning on Inventory ... 40
... ... 1.6.1 ... Selecting the Production Type ... 41
... ... 1.6.2 ... Selecting the MRP Strategy/Determining the Stocking Level ... 42
... ... 1.6.3 ... Selecting Consumption Parameters ... 45
... ... 1.6.4 ... Selecting Lot-Sizing Parameters ... 45
... ... 1.6.5 ... Selecting the Safety Stock Procedure ... 46
... ... 1.6.6 ... Selecting the Forecast Strategies ... 47
... ... 1.6.7 ... Item Classification and Product Analysis ... 47
... 1.7 ... Conclusion ... 48

2 ... Strategic versus Operational Materials Planning ... 49
... 2.1 ... Tasks in Materials Planning ... 49
... 2.2 ... Organizational Integration of Materials Planning ... 51
... 2.3 ... Conclusion ... 54

3 ... Item Classification as the Basis for Materials Planning Decisions ... 55
... 3.1 ... Options Provided by Item Classification ... 56
... ... 3.1.1 ... ABC Analysis ... 56
... ... 3.1.2 ... XYZ Analysis ... 61
... 3.2 ... ABC Analysis with SAP ... 63
... ... 3.2.1 ... Outlining the Analysis Process ... 63
... ... 3.2.2 ... Determining the Analysis Goal ... 64
... ... 3.2.3 ... Defining the Area to Analyze ... 64
... ... 3.2.4 ... Calculating the Data Basis ... 67
... ... 3.2.5 ... Defining the ABC Strategy ... 69
... ... 3.2.6 ... Defining Class Limits ... 71
... ... 3.2.7 ... Assigning Classes ... 72
... ... 3.2.8 ... Evaluating ABC Analysis ... 74
... ... 3.2.9 ... Performing an ABC Segmentation ... 75
... ... 3.2.10 ... Case Scenario: ABC Analysis for Warehouse Optimization ... 77
... ... 3.2.11 ... Case Scenario: ABC Quantity Flow Analysis ... 79
... 3.3 ... XYZ Analysis in the SAP System ... 81
... ... 3.3.1 ... Running Analyses in SAP ERP ... 81
... 3.4 ... Combining ABC and XYZ Analyses ... 83
... ... 3.4.1 ... Optimization Using the ABC/XYZ Matrix ... 83
... ... 3.4.2 ... Using SAP ERP to Create an ABC/XYZ Matrix ... 90
... 3.5 ... Conclusion ... 96

4 ... Materials Planning Process in SAP ... 97
... 4.1 ... Business Overview ... 97
... ... 4.1.1 ... Program Planning ... 98
... ... 4.1.2 ... Quantity Planning ... 100
... ... 4.1.3 ... Scheduling and Capacity Requirements Planning ... 101
... ... 4.1.4 ... Order Conversion and Monitoring ... 102
... 4.2 ... Overview of the Materials Planning Process in the SAP System ... 102
... 4.3 ... Materials Planning Process in SAP ERP ... 104
... ... 4.3.1 ... Program Planning ... 104
... ... 4.3.2 ... Quantity Planning ... 108
... ... 4.3.3 ... Scheduling and Capacity Requirements Planning ... 110
... ... 4.3.4 ... Order Conversion and Monitoring ... 112
... 4.4 ... Materials Planning Process in SAP APO ... 114
... ... 4.4.1 ... Demand Planning ... 115
... ... 4.4.2 ... Supply Network Planning (SNP ... 117
... ... 4.4.3 ... Production Planning and Detailed Scheduling ... 119
... 4.5 ... Conclusion ... 124

5 ... General Materials Planning Master Data ... 127
... 5.1 ... Differences Between SAP ERP and SAP APO ... 127
... 5.2 ... Mass Maintenance of MRP Master Data ... 131
... ... 5.2.1 ... MRP Group ... 131
... ... 5.2.2 ... MRP Profile ... 132
... ... 5.2.3 ... Transaction MASSD ... 133
... 5.3 ... Special Materials ... 133
... 5.4 ... Conclusion ... 134

6 ... Planning Strategies and Requirements Consumption ... 135
... 6.1 ... System Settings in SAP ERP ... 135
... ... 6.1.1 ... Relationship Between the Strategy and Requirements Class ... 136
... ... 6.1.2 ... Assigning a Planning Strategy to a Material ... 139
... ... 6.1.3 ... Consumption Parameter ... 141
... 6.2 ... Planning Strategies in SAP ERP ... 142
... ... 6.2.1 ... Strategies for Make-to-Stock Production ... 143
... ... 6.2.2 ... Final Assembly by Sales Order ... 145
... ... 6.2.3 ... Make-to-Order Production ... 151
... ... 6.2.4 ... Planning with a Planning Material ... 152
... ... 6.2.5 ... Assembly Processing ... 155
... ... 6.2.6 ... Strategies for Configurable Materials ... 156
... ... 6.2.7 ... Reducing Planned Independent Requirements ... 159
... ... 6.2.8 ... Adjusting and Reorganizing Planned Independent Requirements ... 160
... ... 6.2.9 ... Table Summary of Planning Strategies ... 161
... 6.3 ... Planning Strategies in SAP APO ... 168
... ... 6.3.1 ... Requirements Class and Check Mode ... 168
... ... 6.3.2 ... Customizing of Planning Strategies ... 169
... ... 6.3.3 ... Planning Parameters in the Product Master ... 170
... ... 6.3.4 ... Planning Strategy Names in SAP ERP and SAP APO ... 170
... 6.4 ... Conclusion ... 171

7 ... Determination of Requirements Through Planning and Forecasts ... 173
... 7.1 ... Forecasts in SAP ERP and SAP APO ... 173
... ... 7.1.1 ... Forecast Methods ... 175
... ... 7.1.2 ... Forecast Parameters ... 187
... 7.2 ... Forecasting Accuracy ... 192
... ... 7.2.1 ... Error Total (ET ... 192
... ... 7.2.2 ... Mean Absolute Deviation (MAD) ... 193
... ... 7.2.3 ... Mean Square Error (MSE ... 193
... ... 7.2.4 ... Root of the Mean Square Error (RMSE) ... 194
... ... 7.2.5 ... Absolute Percentage Error (APE ... 194
... ... 7.2.6 ... Mean Absolute Percentage Error (MAPE ... 195
... ... 7.2.7 ... Median of the Absolute Percentage Error (MdAPE ... 196
... ... 7.2.8 ... Relative Absolute Error (RAE ... 196
... 7.3 ... Forecast Results and Demand Management ... 197
... ... 7.3.1 ... Adjusting Historical and Forecast Data and Other Influences ... 197
... ... 7.3.2 ... Guidelines for Materials with a High Forecast Error ... 199
... ... 7.3.3 ... Results Evaluation ... 200
... 7.4 ... Conclusion ... 201

8 ... Materials Planning Procedures ... 203
... 8.1 ... Materials Planning Procedures in SAP ERP ... 203
... ... 8.1.1 ... Consumption-Based Planning ... 204
... ... 8.1.2 ... Deterministic MRP ... 212
... 8.2 ... Materials Planning Procedures in SAP APO ... 214
... ... 8.2.1 ... PP Procedure ... 215
... ... 8.2.2 ... Heuristics ... 217
... 8.3 ... Conclusion ... 227

9 ... Procurement Quantity Calculation ... 229
... 9.1 ... Business Background ... 229
... 9.2 ... Procurement Quantity Calculation in SAP ERP ... 233
... ... 9.2.1 ... Static Lot-Sizing Procedures ... 234
... ... 9.2.2 ... Periodic Lot-Sizing Procedures ... 234
... ... 9.2.3 ... Optimum Lot-Sizing Procedures ... 235
... ... 9.2.4 ... Lot-Size Restrictions ... 237
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