What's the difference between SAP Materials Requirements Planning and MRP areas?
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
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.
For more on SAP and manufacturing:
Simplify discrete manufacturing processes with SAP XSteps
What is SAP Process Management?
Use SAP Backflush to automate processes
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.
Dig Deeper on Buying SAP ERP software
Related Q&A from Jawad Akhtar
These seven Advanced Planning and Optimization tools in Production Planning and Detailed Scheduling can help materials and capacity planners do their...continue reading
Cross-docking can help your company lessen the need for materials storage, speed deliveries and generally improve your supply chain management. ...continue reading
SAP EHS software can help keep employees safe and make sure companies comply with local, national and global safety and quality standards. Here's a ...continue reading
Have a question for an expert?
Please add a title for your question
Get answers from a TechTarget expert on whatever's puzzling you.