Demand to supply

MRP has one job: make sure the right material is available in the right quantity at the right time, without piling up stock nobody needs. SAP Learning describes the run as matching supply (stock, purchase orders, production receipts, stock transfers) against demand (sales orders, forecasts, reservations and dependent requirements) to flag shortages and propose solutions.

Three steps inside every MRP run

1. Net requirements calculation. For each date, demand minus available stock and firm receipts. If nothing is short, nothing is planned. Safety stock counts as a requirement to protect.
2. Lot sizing. The lot-sizing procedure in the material master decides how much to propose: exactly the shortage, a fixed quantity, or a period total such as a week.
3. Scheduling. The system works out when to start. For in-house items it uses the in-house production time (or the routing, with lead-time scheduling); for purchased items it uses the planned delivery time plus goods receipt processing time.

Make or buy

The procurement type in the product's MRP view decides what MRP proposes. Type E means in-house production (planned order), F means external procurement (purchase requisition), and X allows both. Special procurement keys refine this further, for example for subcontracting or stock transfer from another plant.

At Contoso, the alternator is made in-house (E) and the rotor CMC-RTR-200 is bought from Lakeside Components (F). When MRP explodes the alternator's BOM, each planned order creates dependent requirements for one rotor per alternator. MRP then plans the rotor the same way, one low-level code down: net requirement, lot size, schedule, and a purchase requisition because the rotor is bought.

Requisitions then flow into procure-to-pay. A rotor requisition for 280 pieces at about $40 each is roughly $11,200, which is above Contoso's $10,000 release threshold, so it needs release before it becomes a purchase order. The planner should know that a requisition stuck in release is a supply risk, not just a purchasing detail.

Proposals stay flexible until someone commits to them. The next MRP run can change or delete a planned order or requisition that nobody has touched, which is how the plan keeps up with demand. Once a planner firms a proposal or converts it into a production order or purchase order, later runs leave it alone and only report problems with it. That is why converting too early locks in yesterday's plan, and converting too late leaves no time to build or buy.

Where planners work

In SAP S/4HANA, planners mostly work in SAP Fiori apps: Monitor Material Coverage to find materials with shortages, Manage Material Coverage to resolve them, and the Stock/Requirements List (also available as transaction MD04) to see every receipt and requirement for one material. MRP itself runs as MRP Live (transaction MD01N or the Schedule MRP Runs app).