Article 38 - MRP

Article 38 - MRP


Article 38: What is Material Requirements Planning (MRP) in SAP?

What is MRP?

Material Requirements Planning (MRP) is the core planning engine in SAP that ensures material availability by automatically balancing supply and demand. It calculates whether you have enough materials to meet all requirements and generates procurement proposals when shortages are detected.

What does MRP do?

  • Analyzes current stock levels against future requirements
  • Identifies material shortages before they impact production or sales
  • Generates procurement proposals automatically (purchase requisitions or planned orders)
  • Optimizes inventory levels to reduce carrying costs
  • Ensures on-time delivery by planning ahead

What types of requirements does MRP consider?

Customer Demand:

  • Sales orders from customers
  • Planned independent requirements (forecasts)
  • Service orders and maintenance requirements

Internal Demand:

  • Dependent requirements from production BOMs
  • Safety stock requirements
  • Pipeline stock for distribution

What procurement proposals can MRP create?

Proposal Type

When Used

Purpose

Purchase Requisition

External procurement needed

Buy from vendors

Planned Order

Internal production needed

Manufacture in-house

Transfer Requirement

Stock transfer needed

Move between plants


Who uses MRP results?

  • Production planners - to schedule manufacturing
  • Procurement teams - to place purchase orders
  • Inventory managers - to optimize stock levels
  • Supply chain coordinators - to ensure material flow

What are the business benefits?

  • Reduced stockouts through proactive planning
  • Lower inventory costs by avoiding excess stock
  • Improved customer service with better availability
  • Better cash flow through optimized procurement timing



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