Material Requirements Planning

Material requirements planning is used to transform incoming demands to appropriate planned order that relieve a shortage. These planned orders are created in a timely manner, taking into consideration the lead time for the actual item to be ready on demand.

Material requirements planning is used in all parts of M3 where material planning is used, except where material supply applies to the distribution of items to different locations. In those cases, Distribution Requirements Planning is used.

Regardless of the planning method used per item to generate demands, material planning works in the same manner. A planned order is put in the material plan when signals are sent indicating a shortage. Planned orders are planned in a timely manner from the source of the shortage; that is, the requirement that brought about the shortage.

Regardless of whether the demand is material that is part of the product structure or if it represents a main item, the requirement is treated the same way. Use pegging to find the source of a demand. There, a demand in the material plan can be traced to the order that created the original demand.

The process is completed when planned orders for all demands have been generated.

In 'Item. Connect Warehouse' (MMS002) enter the following information for an item per warehouse, which determines how material requirements planning is done:

  • Acquisition code
  • Order type
  • Planning method
  • Multiple supply

Except in the cases when orders create shortages (order-initiated planning method), a master production schedule is the basis for shortage signals that become the basis for acquisition.

Before you start

The concept can be used when the following prerequisites are met:

  • One or several warehouses are entered in 'Warehouse. Open' (MMS005).
  • Item/warehouse data are entered in 'Item. Connect Warehouse' (MMS002) for all combinations of items and warehouses where MRP/DRP should be used.

Follow these steps

  1. Master Production Schedule

    The basis for future material plans is created in the master production schedule. Demands are gathered using forecast simulations.

  2. Manufacturing, Work, Project or Customer Order

    Aside from planned requirements, other more direct order-initiated demands can occur. An example of this is a customer order that does not exist in the forecasted basis for the master production schedule.

  3. Planned Order

    The planned order created from the material requirements plan is then put in the material plan according to the rules given. From 'Material Plan. Open' (MMS080), the planner can get an overview of the actual situation and take action to prevent possible planning shortages. For more information, see Planning Workbench.

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