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How do SAP Materials Requirements Planning and MRP areas differ?

Wondering what the difference is between SAP Materials Requirements Planning and MRP areas? We have the answer.

What's the difference between SAP Materials Requirements Planning and MRP areas?

In short, while Materials Requirements Planning is a robust planning tool to help with materials planning for the manufacturing process, MRP areas allows companies to plan at a more site-specific, detailed level. Let me explain.

Materials Requirements Planning evaluates requirements or demand for a material for a given time period, such as a month. It then compares the material demand with material supply sources. For supply sources, MRP checks the existing warehouse stock and open purchase or production orders that haven't been delivered to the warehouse. Finally, MRP calculates the net requirements for materials. Net requirements is calculated as the difference between the demand for a material and its supply. If the demand for a material is greater than the supply, MRP creates order proposals or planned orders for procurement or production to meet that demand. If the supply is greater than the demand, MRP does not create any new planned orders.

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The MRP areas feature, on the other hand, allows materials planners to selectively execute procurement or production planning for materials in specific storage facilities or vendor locations. As SAP states, the primary reason customers would want to use MRP areas is that they "need to plan materials, which are required in different shop areas, storage locations or by subcontractors, separately from one another."

Materials planners can, for example, set a reorder point level for a material at a specific storage location. Whenever the material stock falls before the predefined reorder-point level at that storage location is reached, the system triggers a replenishment and creates planned orders to initiate the procurement or production process. The option to implement MRP areas for a storage location works well for consumables because it is often practical to maintain a steady stock of consumable materials stored at a single storage location.

This was first published in April 2014

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