This Blog is mainly on SAP Exam Questions and Selected "How-to" SAP processes

Saturday, July 20, 2024

Q&A in Class (2024-07-17) S4220

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Question: For participants who are new to the MRP techniques! 

Answer: Material requirements planning (MRP) is a system for calculating the materials and components needed to manufacture a product, and it all started in the 1960s. Many software started with the MRP system with integrations of Logistics and Finance for an End-to-End process, AND it is later in the 1980s-1990s that MRPII and later ERP with infusion of Capacity and other business components into an Enterprise Solution. 

As in the past, MRP software vendors today are taking advantage of new technologies to improve their products and offer more capabilities to users. Foremost on the list is the application of machine learning and artificial intelligence (AI) in advanced planning processes to allow the systems to develop even better plans and schedules. Machine learning-enabled planning systems continually monitor conditions and activities to develop more precise models on cause and effect – so that its future recommendations are more comprehensive, more precise, and more effective.


click link to various open knowledge on MRP in Web:

click link to check an introduction to the Mechanics of MRP:
https://froggysap/SAP_MRP_Mechanics(1)
https://froggysap/SAP_MRP_Mechanics(2)

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Question: in MRP 1 view's Assembly Scrap Factor, what is the purpose?

Answer: Scrap Factors are used to represent "wastage" or "handling errors" or "production problems" resulting in component or assembly wastage. The various Scrap Factors can be setup in MRP1, MRP4, BOM Component Detail or Operation Detail; all uses to increase the Quantity of Procurement (internal or external) for Assembly or Components to cater for possible wastages. The settings are also used for Cost Estimates for the Assembly and Component. 

There are 4 scrap factors:

  • Assembly Scrap Factor in Material Master MRP 1 view
  • Component Scrap Factor in Material Master MRP4 view
  • Operation Scrap Factor in Routing Operation
  • Net ID for Operation/Component Scrap Factor in BOM Component Detail
click link to check the demo:
https://froggysap.blogspot.com/2019/10/set-scrap-factors-in-production.html

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Question: What is the use of the Backflushing indicator in the Material Master MRP2 view?

Answer: Backflushing means at the point of Goods Receipt of Production Order, the system will also perform Goods Issues at the same time; this simultaneous GR and GI is called Backflushing.


MRP 2 view in the Material Master can be set with either "Always Backflusing" or "Depending of Backflushing indicator in the Work Center".

click link to check a demo of Staging and Backflush with PP-EWM integration:
https://froggysap.blogspot.com/2022/09/sap-scm-ewm-execute-production-supply.html

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Question: Explain the use of Co-Products in the MRP2 view? 

In MRP 2 view, there is an indicator for Co-Product, we also expect for Material (Assembly or Component) with this indicator to be setup with "Joint Production" so that the Costing of Material, Labor and Overhead can be absorbed separately into the Primary Product and the Co-Product to share to costs between them. By-Products are also assigned as a Component to the Primary Product, plus a Negative indicator to signal GR for the Co-Product at time of Production Confirmation for the Primary Product. 


click link to view the presentation of Co-Products in the Production Order:
https://froggysap.blogspot.com/2019/08/co-products-for-production-orders.html

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Question: Explain the formula in SAP on the calculations of ROP and Safety Stocks.

Answer: Using an appropriate MRP Type, eg: is Standard SAP MRP Type "V2" which is set with "ROP" and "SS" auto calculation, with Consumption History recorded for the Material; it is then possible to use Forecasting Run to derive the update the Material Master with a caculated Re-Order Point and Safety Stock numbers. 


click to google drive for the calculation step for ROP and SS in SAP:
https://docs.google.com/presentation/reorderpoint_safetystock_calculation/

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Question: What is the purpose of the Takt Time indicator in the MRP 1 view of the Material Master ? 

Answer: The Takt time is used in conjunction of the Lot Size Key with either Forward (+) or Backward (-) Overlapping, to allow MRP run to create a "staggered" Qty of delivery from the Supplier instead of a Single Qty delivery. Some of the reason for this is Warehouse capacity or Production do not required ALL the Materials to be delivered on ONE Day as the Production is also spread to multiple days. 


Notice in the above, the Takt time is 1 day with Lot Size key "ZF" ("-" indicating Backward Overlap) plus a Fixed Lot Size of 50. Note in the 2nd slide that the Requirement 100 is split into 2 Planned Orders each of 50 due to the Fixed Lot Size but one of the Planned Order's expected delivery is backward 1 day earlier DUE to the Takt Time of 1 day plus the Backward Overlapping setting. 

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Question: To show the setup of processing steps for Planning at Sub-Assembly level Strategy "70".

Answer: This SAP Planning Strategy "70" is particularly useful when there are multiple (many) variants of Finished Goods that are produced using Common Sub-Assemblies. Due to too many variants, the Forecast (PIR) may not be possible at the Finished Goods level and the Strategy "70" to be assigned to the Sub-Assembly level will allow the PIR to be created for the Common Sub-Assembly level.

In SAP, there are 2 Planning Strategies for the Su-Assembly level ("70" for MTS and "74" for MTO). BUT, for Strategy "70", it will support Finished Goods with  Strategy MTO or MTS. You can see how this works in the Blog Posts below.

click to google drive for the calculation step for ROP and SS in SAP:
https://docs.google.com/presentation/strategy70/

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Question: PIR's "Regular Supplier", Source List in S/4HANA with the new in S/4's PIR's "Auto Sourcing". 

Answer: The "Regular Vendor/Supplier" indicator was introduced to the Info Record in SAP R/4 version 4.0 to be used without a Source List so that Source Determination at Purchase Requisition can be done without a Source List. In this case, as long as only one of the PIR (Info Record) same Material but different Vendor AND only ONE PIR has the "Regular Vendor", this PIR will be selected at Source Determination for PR creation at ME51N. (this is done without a Source List". 

In S/4HANA, due to Simplification project, SAP introduce the "Auto Sourcing" indicator in the Info Record allowing Automatic Source Determination at MRP run AND again negating the need for a Source List. This is possible as long as only ONE Info Record for SAME Material Different Vendor has the "Auto Sourcing" indicator. 

HOWEVER, it is important to note that the SOURCE LIST is NOT no longer useful. FOR, if the USER creates a SOURCE LIST, then it will still be RESPECTED for Source Determination at all situations like Source Determination for PR creation as well Source Determination at MRP run. For example, if the "Auto Sourcing" or "Regular Vendor" is set at the Info Record BUT the Source List was SET to "BLOCK" the Vendor; the associated Vendor is NOT selected at Source Determination. 



click link for a demonstration of Regular Vendor in S/4HANA system
https://docs.google.com/presentation/regular_vendor/
click link for a demonstration of Regular Vendor and Auto Sourcing in S/4HANA system
https://docs.google.com/presentation/regularvendor_autosourcing/

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Question: Predictive MRP explain again.

Answer: in ECC, simulation can be done only via LTP (Long Term Planning) which can ready PIR of either Active or non-Active Version in an LTP scenario. The classic LTP allows the Planner to simulated the PIR's capacity situation for Finished Products and Sub-Assemblies. Mid or Longer Term Purchasing Plan can be written into Purchasing Info System for Procurement Negotiations. When the non-Active PIR in simulation in LTP is found to be accepted, then it can be activated. 

pMRP is a new functionality available only via FIORI App by SAP in S/4HANA to help the user to identify potential capacity issues and to evaluate possible solutions as early as possible based on a simplified requirements plan using a simplified material requirements algorithm.
 

click link to demonstration of SAP Predictive MRP

check the FIORI App in the FIORI Library in the following: 

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Question: to explain DDMRP concept again.



click here to view the basic logic of DDMRP:
https://docs.google.com/presentation/DDMRP_Mechanics/

click here to look at an example of SAP's DDMRP:

click the following to Web resource on DDMRP:
https://demanddriventech.com/blog/what-is-ddmrp/

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Question: Show demo examples of SAP Quota Arrangement applications in SAP.

Answer: The concepts and calculations of the Quota Arrangement has been explained in class which includes using the Lot Size key "ES" for Splitting or Lot Size key "EX" (without Split) and using the formula below to derive each Source Determination to fairly allocate to the Source based on the Quota:

Quota Rating = (Allocated Qty + Quota Based Qty) / Quota
Rule 1: if Quota Rating is not the same then select the Source with the Lower/Lowest Quota Rating.
Rule 2: if Quota Rating are the same for all the source then select Source that is set with the Higher Quota.

Quota Arrangement feature has been carried forward to the S/4HANA system except that the MRP2 view no longer provide the Quota Arrangement Usage field to activate the use of the Quota Arrangement. This is due to the Simplification initiative, and in S/4 when the Quota Arrangement is created, it is now Active for Source Determination whether in MRP run of Source Determination at PR creation (ie: no longer need to activate Quota Arrangement usage in the MRP2 view). 


click below to see examples of applications of SAP Quota Arrangement:
https://froggysap.blogspot.com/2014/07/mrp-quota-arrangement-max-lotsize-1x.html
https://froggysap.blogspot.com/2014/01/mrp-quota-arrangement-min-lot-size.html
https://froggysap.blogspot.com/2016/07/material-management-supplier-capacity.html
https://froggysap.blogspot.com/2016/04/pp-rem-quota-arrangement-line-load-via.html

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