Inventory & MRP in SAP

Everything on the Inventory line ends up as settings in the material master, in its MRP views, maintained per plant (MM01 to create, MM02 to change):

Concept	Where it lives in SAP
How the item is planned	MRP type: PD for full MRP, VB for manual reorder point planning, VM for automatic reorder point, ND for no planning
Reorder point	Reorder point field (used by VB and VM)
Safety stock	Safety stock field, or a coverage profile for dynamic safety stock in days
How much to order	Lot size: EX lot-for-lot, FX fixed quantity, HB replenish up to a maximum, plus minimums and rounding values
Lead time	Planned delivery time (purchased) or in-house production time, plus goods receipt processing time

MRP reads these settings. MRP Live (MD01N) runs planning; for each material it compares demand (sales orders and planned independent requirements) with stock and open supply, and creates planned orders (to make) or purchase requisitions (to buy), with dates offset by the lead times. The stock/requirements list (MD04) shows the result: every receipt and requirement for a material, line by line, which is where planners investigate shortages. Stock overview (MMBE) shows quantities by plant, storage location and stock type.

The formulas from the safety stock stop don’t run themselves inside basic MRP. Someone calculates the safety stock and reorder point, or an inventory optimization tool such as IBP for inventory does, and the results are written into these fields. Wrong values here, such as a lead time that’s too short, a forgotten lot-size minimum, or a material not extended to a plant, are behind many real MRP problems.

One MRP run, step by step

For each material in the planning file (materials with changes since the last run, or all materials):

1. Net requirements: available stock (minus safety stock) plus firmed receipts, against requirements (sales orders, PIRs, dependent requirements, reservations).
2. Lot size: shortages are grouped and rounded by the lot-sizing procedure (lot-for-lot, fixed, weekly and so on), minimums and rounding values.
3. Procurement type: in-house (E) creates planned orders; external (F) creates purchase requisitions or schedule lines; special procurement keys handle cases such as transfers from another plant.
4. Scheduling: dates are calculated backwards from the requirement date.
5. BOM explosion: for in-house items, planned orders create dependent requirements for components, which are planned in turn.
6. Exception messages flag where existing orders no longer fit the plan.

Dating a purchase requisition

For an externally procured material, MRP works backwards from the date the material is needed:

• Goods receipt processing time (days to inspect and put away) moves the delivery date earlier.
• Planned delivery time (the supplier’s lead time) gives the date the order must be placed.
• Purchasing processing time (days for the buyer to process the requisition) gives the requisition’s release date.

If any of these is too short in the master data, every requisition is created too late, and planners spend their days expediting.

A material has a reorder point of 60, safety stock of 20 and a fixed lot size of 100. When stock (plus fixed receipts) falls to 55, below the reorder point, the next MRP run creates a purchase requisition for 100. The reorder point should equal expected demand over the replenishment lead time plus safety stock; with MRP type VM, the system calculates it from the material’s consumption forecast instead.

Reading MD04 and its exception messages

The stock/requirements list (MD04) shows each receipt and requirement in date order with the projected available quantity. Common exception messages:

• 10: bring the order forward (it arrives after it is needed).
• 15: postpone the order (it arrives earlier than needed).
• 20: cancel the order (no longer needed).
• 96: stock has fallen below the safety stock.

Collective lists (MD06, MD07) and Fiori apps such as Manage Material Coverage let planners work through exceptions across many materials.

Lot-sizing options

• Static: lot-for-lot (EX), fixed lot size (FX), replenish up to a maximum stock level (HB).
• Periodic: daily (TB), weekly (WB) or monthly (MB) lots, grouping all requirements of the period.
• Optimum: procedures that balance ordering and holding costs period by period, such as part-period balancing, least unit cost, dynamic lot size creation and Groff’s procedure.
• Modifiers: minimum and maximum lot sizes, rounding values or rounding profiles (for pallets or cases), and scrap percentages.

Safety stock, static and dynamic

• Static safety stock: a fixed quantity in the MRP 2 view, calculated outside or by an optimization tool.
• Dynamic safety stock: a range of coverage profile sets safety stock as days of average future demand, so it rises and falls with the forecast.
• Safety time: plans receipts a set number of days early, protecting against supply delays rather than demand surprises.

Inventory optimization in IBP can calculate targets across echelons and write them into these fields.

Consumption-based planning

Not every material needs full MRP. Cheap, regularly used items can be planned on reorder points (VB, or VM with an automatic reorder point) or on a forecast of their own consumption (VV), using the forecast view of the material master. This keeps the MRP effort on the materials that matter.

MRP areas

MRP normally plans at plant level. MRP areas allow separate planning for parts of a plant (a storage location with its own replenishment), for stock provided to a subcontractor, or for other special cases, each with its own MRP parameters.

Where bad plans come from

• Materials not extended to the plant, or not marked as relevant for MRP.
• Wrong procurement type or special procurement key (planned orders for something bought, or the reverse).
• Lead times, lot sizes and rounding values set years ago and never reviewed.
• Unconsumed old PIRs and forgotten open orders creating phantom requirements or receipts.
• Inaccurate stock, so MRP plans from numbers that aren’t on the shelf.