Material Requirements Planning processes quantity on hand, demand, and availability of parts, starting at the lowest level of parts. The calculation begins with the final products and works downward through the structures, level by level. MRP planning consists of a number of phases. For a complete explanation of each phase, follow the appropriate link from the list below:
At the beginning of the MRP run, unreleased MRP proposals generated during an earlier run will be removed. Examples of unreleased proposals include unreleased purchase and shop requisitions, non-firm production schedules, and unreleased distribution orders. If you change the planning mechanism used for a part between MRP runs, MRP will remove unreleased order proposals created by other planning systems. For example, if you change from planning method B, part planned by order proposal, to planning method A, part planned by MRP, MRP will remove the unreleased proposals created by the last order proposal run.
MRP calculates the lowest level at which a part exists in the structure it is used. A parent part, a part that is not a component of another structure, exists at level 0 (zero). A parent's components exist at the next level, level 1. A sub component of a component exists at level 2. Usually, level 0 parts are sales parts, although they can also be from master scheduling.
When running MRP for a planning network, the low level calculations consider inter-site moves. Multi-site planned parts in a distribution structure are defined in the Supplier for Purchase Part page by connecting the part from the supply site to the demand site. When running MRP for a planning network in this situation, the move from one site to another constitutes of one level. For example, top level sales part A on the demand site gets level 0 (zero) and the same part A on the supplying site gets level 1.
The coding of levels is necessary for the correct performance of MRP, the accurate derivation of cost estimates, and the proper calculation of product families and product codes. The calculation of the lowest level updates the value in the Low Level field on the Manufacturing tab of the Inventory Part page.
MRP collects all the necessary information for the parts to be planned and stores it in a temporary location. This snapshot ensures that MRP's planning data remains consistent throughout the MRP run and is not affected by any ongoing transactions. Snapshot information includes planning attributes for the part and inventory balances as well as all the demand and supply information.
For each part, the available supply is netted against the requirements each day beginning with the earliest demands. Existing stocks of inventory are allocated to the demands first, then anticipated receipts are allocated next.
The system calculates the current on-hand quantity by adding the balances at all inventory locations. One exception is the on-hand balance of expense parts at shop inventory locations. This amount is too uncertain to use in the calculation.
In the process of allocating existing anticipated receipts to demands, MRP always suggests moving the dates of existing orders before recommending any new orders to cover the requirements. Action messages are generated to indicate the planned rescheduling events, by moving the order date in if necessary to meet an earlier demand, or suggesting the order date move out if earlier than required. In the event the existing receipts exceed the demands for the part, MRP suggests additional actions to cancel those unnecessary orders and/or order quantities.
After all the existing inventory and anticipated receipts are applied to meet the requirements, only then does MRP plan new order quantities to cover the future demands. MRP planned receipts can take several forms: Make Receipts for manufactured parts, Buy Receipts for purchased parts, and Distribution Order Receipts for multi-site planned parts. Though not typical, with Manufactured/Acquired Split percentages defined for an inventory part, MRP can generate several of these receipt types in response to a single requirement. These planned receipts are eventually converted into corresponding order proposals later in the process as described below.
Once new MRP planned receipt quantities are calculated, the corresponding planned demand for a structure component is generated. The calculated start date, the due date backed off by lead time, is the basis for breaking down the parts into their components, and creating requirements for those components at the next level of the structure. The system multiplies the required quantity of the parent part by the quantity per assembly for the component, along with its scrapping factor. The result is the required quantity of the component. The entire structure of the part is processed in this way.
There are two types of blow-through parts. The blow-through parts are typically parts that do not physically exist but are used as a grouping concept to transfer needs along the structures. The types of blow-through parts are as follows:
Demand explosions also occur in multi-site planning network MRP situations. In the case of distribution order planned receipts, MRP generates planned demands for the part on the supplying sites.
When MRP is running, it can generate errors during the following processes:
Before running MRP, you can select an option that tells the system to either complete or interrupt MRP if an error occurs in any of the processes listed above. These errors appear in the Background Jobs page. Whether MRP stops because of completion or interruption, be sure to check this log for errors. If it contains more than one error, you must fix the errors in the order in which they occurred. If you do not do so, incorrect results from one phase of MRP can affect the results of a later phase. After you have fixed all the errors in the log, you can restart MRP.
The final stage in the MRP process is to generate order proposals according to the planning attributes set for the part. The values that determine the type of order proposal generated include the part type defined on the General tab of the Inventory Part page, the default supply type defined on the Planning Data tab, and the proposal release value defined on the Planning Data tab. The Proposal Release setting indicates whether MRP should generate proposals for a part. The part type indicates whether a part is regarded as a manufactured part or a purchased part and indicates appropriate corresponding proposal types. Optionally, you can define a manufactured/acquired split and the associated percentages on the Planning Data tab. If a split is defined, you can override the default supply type with specific values for the manufactured supply type and purchase supply type. Distribution orders are generated for Multi-Site Planned parts defined on the General tab of the Supplier for Purchase Part page. In the case of multi-site planned parts, distribution orders are generated overriding the normal supply type for the part.
MRP can generate proposals of different types, including: