Consumption Based Planning Procedure

·         Reorder point planning

The system checks whether the stock available for MRP (sum of plant stock and fixed receipts) falls short of the re-order point determined for the material in the master record. If the stock falls short of re-order point, procurement must be initiated. In manual reorder point the MRP controls the manuals re-order point, and in automatic re-order point planning the system calculates the re-order point using the forecast.

·         Forecast based planning

The future requirement is calculated using the forecast on the basis of consumption values, and is relevant to MRP as a forecast. The forecast calculation is executed at regular intervals.

·         Time phased planning

It also uses historical values in the forecast to estimate future requirements. However the planning run is only executed according to predefined intervals in a particular rhythm. Like the delivery cycle of the vendor.

The manual re-order point indicator for MRP = VB

The basis of re-order point planning is the comparison of the available warehouse stock with re-order point. If the available stock is less a procurement requirement is generated.

Re-order point = Safety Stock + present consumption or future requirement +   replenishment lead time.

Available stock for MRP =Warehouse Stock + on order Stock (purchase orders, firm planned orders, fixed purchase requisitions)

So if available stock is less than the re-order point, there is a shortage, which results in a procurement requirement generation as per the lot size.

            Customizing

            Consumption based planning à master data à Check MRP types

Use the indicator “include ext req” for the MRP type re-order point planning to determine whether the external requirements (sales orders and manual reservations) are to considered.