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)