Article 43: What procurement proposals does MRP generate and how do I process them?

What procurement proposals can MRP create?

When MRP identifies a material shortage, it automatically generates procurement proposals - recommendations for specific actions to resolve the shortage.

What are the main types of procurement proposals?

Purchase Requisitions

When generated:

• Material has procurement type "F" (External)
• Vendor sourcing is the preferred method
• Lead time and cost favor external procurement

What information is included:

• Material number and description
• Required quantity to cover shortage
• Delivery date needed
• Suggested vendor (if source list exists)
• Cost center or account assignment

How to process:

1. Review requirements in MD04 or MD05
2. Verify quantities and delivery dates
3. Convert to Purchase Order via ME57 or ME59
4. Send to vendor for fulfillment

Planned Orders

When generated:

• Material has procurement type "E" (In-house)
• Internal production is preferred method
• Manufacturing capability exists

What information is included:

• Material to be produced
• Production quantity needed
• Start and finish dates
• BOM and routing references
• Resource requirements

How to process:

1. Review production capacity and scheduling
2. Firm the planned order if approved (MD11)
3. Convert to production order (CO40)
4. Release for production when ready

Transfer Requirements

When generated:

• Material sourced from another plant or storage location
• Special procurement key configured for transfers
• Stock available at source location

Processing steps:

1. Verify source availability
2. Create transfer order or stock transport order
3. Coordinate logistics between locations
4. Monitor transfer until receipt

How do I efficiently process multiple proposals?

Mass Processing Tools

Transaction ME57 (Convert PRs to POs):

• Bulk conversion of purchase requisitions
• Automatic vendor selection based on source determination
• Exception handling for complex cases

Transaction MD11 (Firming Planned Orders):

• Mass firming of planned orders
• Capacity checking integration
• Priority-based processing

Transaction MD15 (Collective Conversion):

• Mixed proposal types handled together
• Planner-specific workload management
• Exception reporting for failed conversions

What factors should I consider before converting?

Before Converting Purchase Requisitions:

Supplier Evaluation:

• Vendor capacity to deliver on time
• Price competitiveness and terms
• Quality capability and certifications
• Current workload and priority

Internal Considerations:

• Budget approval and authorization
• Delivery coordination with receiving
• Quality inspection requirements
• Payment terms alignment

Before Converting Planned Orders:

Production Feasibility:

• Manufacturing capacity availability
• Component availability from BOM
• Resource scheduling and conflicts
• Quality requirements and setup time

Strategic Alignment:

• Make vs buy economics
• Load balancing across work centers
• Inventory strategy and turnover goals
• Customer priority and delivery promises

What monitoring is needed after conversion?

Purchase Order Monitoring:

• Vendor confirmations and delivery updates
• Expediting for critical requirements
• Quality issues and corrective actions
• Invoice verification and payment

Production Order Monitoring:

• Material availability for production start
• Progress reporting and milestone tracking
• Quality control and testing results
• Goods receipt upon completion