The video provides a detailed explanation of Material Requirements Planning (MRP) in the context of SAP’s S/4HANA Materials Management module. MRP is described as an engine that drives planning and procurement activities, balancing demand and supply to ensure the availability of the right materials in the right quantity at the right time.
- Definition and Logic of MRP: MRP is a crucial part of the business process as it links the planning and supply sides. It ensures the right material is available at the right time, which is essential for service level balance, cost reduction, and better productivity.
- Benefits of MRP: MRP helps in maintaining service levels, reducing costs, and improving productivity. It ensures the availability of the right quantity of the right material at the right time.
- Types of Planning: The video discusses deterministic replenishment procedure (MRP) and stochastic replenishment procedure (consumption-based planning).
- MRP Inputs: The system takes into account planning parameters, demand, Bill of Material (BOM), and inventory status to determine gross and net requirements.
- Steps of MRP: The process includes net requirement calculation, lot size determination, procurement decision, scheduling, and BOM explosion.
- Lot Sizing Procedure: The video explains different lot sizing procedures, including static, periodic, and optimum procedures.
- Procurement Types: There are two major procurement types – internal production and external procurement.
- Scheduling in MRP: The video explains the concept of backward scheduling in MRP.
- Impact of Scrap in the Planning Process: The video discusses the role of scrap in MRP and how it can lead to material shortages if not properly planned for.