There are two possible Demand Types:

  • Customer Demand (Sales Orders)
  • Forecast (Planned Independent Requirements)

Both of them will be taken into account by the MRP in order to calculate Net Requirements.

 

It is possible to define different Planning Strategies for each Material (they are assigned in the Material Master).

 

Planning with Final Assembly

For instance, one of the most used Planning Strategies is the Strategy 40 – Planning with Final Assembly.

Planning Strategy 4 - Planning with Final Assembly   

 

 

When we plan a Finished Good with this strategy, the requirements will be exploded down through the different BOM levels till the lowest level Components or Raw Materials.

 

 

 

In every level, the required lead time will be taken into account, so starting from the demand date, the system will calculate the requirement date for the lowest levels.

 

Planning without Final Assembly at Semi-finished Level

Another commonly used Planning Strategy, is the 50 – Planning without Final Assembly at Semifinished Level.

 

In this one, we are required to quickly react to the Customers Orders but with Products which require some kind of custom configuration or assembly for each of these Orders.

So we don’t want to build stock of Finished Good till we receive the definitive Sales Orders.

But, on the other hand, in order to reduce the lead time of delivering of these Sales Orders, we can build stock in one or more Semi-finished Materials (common to various Finished Goods).

This might be one of the reasons of using this Strategy, although there could be others.

 

 

 

As we see in the chart, in these cases what we can do is to place the Forecast or Independent Requirements into a Semi-finished Material and the Sales Order in the Finished Good.

 

In this way, the MRP will plan the lowest level Components based in the forecast of the subassembly, but the ones used directly in the Finished Good, only based in firmed Sales Orders.

 

ORGANIZATIONAL STRUCTURE AND MASTER DATA INVOLVED

Planned Independent Requirements must be defined for each Plant.

 

And about Master Data, the Planning Strategy must be defined in the Material Master view MRP4.