Materials Planning Procedures in SAP (MRP & CBP)

You should read previous post about materials planning overview before reading this post. In this article we will explain in detail about materials planning procedure in SAP R/3. Its basic concept is similar with other inventory control software, but SAP R/3 has its own unique procedures for materials planning.

Basically, there are two types of standard materials planning procedures in SAP, which are:

1. Traditional Material Requirements Planning (MRP)

In traditional SAP MRP system, sales order, planned independent requirements, reservations, dependent requirements that are created by BOM explosion, and so on are planned directly as requirements. The materials planning procedure will create procurement proposal only if these requirements will result in shortage of material stocks at a certain time. There are no other requirement that can trigger a procurement proposal. This procedure is used in “PD-MRP” MRP Type in standard SAP R/3.
MRP is especially useful for the planning of finished products and important assemblies and components (A materials).

2. Consumption Based Planning (CBP)
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Materials Planning in SAP ERP- Overview

Materials planning is one of the key of good inventory control systems. The objective of materials planning is to monitor stocks to ensure material availability. As a leader in ERP software, SAP R/3 also has a special materials planning function that works like and even better than other inventory control software. With materials planning in SAP, we can determine automatically which material is required, the quantity required and when it is required. By doing so, we can prevent lacking of materials when we need it.

Materials planning in SAP can automatically create procurement proposals for purchasing and production (planned orders, purchase requisitions or delivery schedules). This target is achieved by using various materials planning methods which each cover different procedures.

An example of how SAP materials planning and other SAP functionalities can help company to excel its business.

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