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Lesson 1 of 5

Demand in SAP

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Production planning starts with demand. SAP Learning names three basic kinds: planned independent requirements (PIRs), sales orders, and stock transfer requirements from other plants or distribution centers. Together they form the demand program that MRP plans against. Demand management is the part of SAP S/4HANA that holds the PIRs and decides how they interact with real customer orders.

Forecast sourcesStatistical forecast, sales and operations planning, an external planning tool, or a planner's judgment
Planned independent requirementsQuantity per product, plant and period; version 00 active for MRP
Customer requirementsSales order schedule lines for a delivering plant
Stock transfer requirementsDemand from other plants in Contoso's network
Demand programEverything MRP plans against, combined by the planning strategy
Where demand comes from and how it reaches MRP.
The Sign-Off Table · thesignofftable.com/academy/sap-pp-202

Planned independent requirements

A PIR is a quantity of a product needed in a plant in a period, independent of any specific customer. It can come from a forecast or be entered by hand. Contoso's planner plans 400 CMC-ALT-100 per month in plant 1710 for the next six months. PIRs are created in transaction MD61 (change MD62, display MD63) or in the Fiori app for planned independent requirements, where the name and layout depend on your release.

FieldMeaningContoso example
Product and plantWhat and whereCMC-ALT-100, plant 1710
Version and active flagSeveral versions can exist; only active ones are plannedVersion 00, active
Requirements typeDerived from the strategy; decides consumption and planning behaviorProposed from strategy group 40
Period and quantityMonthly, weekly or daily buckets400 pc per month, October to March

The key fields of a PIR.

The requirements type matters more than it looks. SAP Learning explains that the behavior of PIRs and customer requirements is controlled by requirements classes, which are determined from the requirements type in Customizing. Normally the type is proposed from the planning strategy in the product master. Overriding it by hand changes how the PIR is consumed and planned.

The planner rarely picks a requirements type: the strategy group proposes one for PIRs and one for sales orders, and their requirements classes decide how the two meet.
The Sign-Off Table · thesignofftable.com/academy/sap-pp-202

Versions, periods and housekeeping

PIR versions let planners keep alternatives, such as an optimistic and a cautious forecast, and activate one for MRP. Period splits matter: a monthly PIR is due on the first workday of the month, so MRP plans the whole month's quantity for that day unless you plan in weeks. Old PIRs that were not consumed stay in the system as demand in the past. SAP Learning mentions MD74 to reorganize them (reduce unconsumed quantities); run it on a schedule so last quarter's forecast does not keep driving production.

A PIR is a header per product, plant and version with dated schedule lines; MRP only plans the lines of the active version.
The Sign-Off Table · thesignofftable.com/academy/sap-pp-202
  1. MonthlyS&OP sign-offSales and operations agree the volume plan for the next six months
  2. MonthlyTransfer to PIRsPlanner updates version 00 for CMC-ALT-100 in 1710
  3. DailySales orders arriveCustomer requirements consume PIRs according to the strategy
  4. DailyMRP LivePlans the remaining demand program
  5. Month endReorganizeUnconsumed past PIRs reduced (MD74 or equivalent)
Contoso's demand management cycle.
The Sign-Off Table · thesignofftable.com/academy/sap-pp-202

Customer requirements

Sales orders enter demand management through their schedule lines: the confirmed or requested quantity and date for the delivering plant. Whether a sales order is relevant to MRP at all, and whether it consumes a PIR or gets its own segment, is decided by the requirements type the sales order item receives, which again comes from the strategy. That is why Maria's order-to-cash tests and the planner's tests meet here: the same sales order is a revenue document for her and a demand element for planning.

What would you do?

After a forecast upload, MRP creates no planned orders for CMC-ALT-100, although 400 pieces per month are visible in the planning table. What is the first thing to check?

Where the forecast comes from is changing. In ECC, many plants used Sales and Operations Planning (SOP) or a spreadsheet; in SAP S/4HANA, SOP is not future technology and SAP Integrated Business Planning (IBP) is SAP's successor for demand and supply planning, typically sending PIRs to SAP S/4HANA through standard integration. Planners maintain PIRs in MD61 to MD63 or the Fiori Manage PIRs app; in SAP S/4HANA Cloud Public Edition only the Fiori route exists. Whatever the source, the test question is the same: does the PIR arrive in the right plant, version, requirements type and period?

Check after every forecast loadWhereExpected for CMC-ALT-100
Plant and versionPIR display or Manage PIRsPlant 1710, version 00 active
Requirements typePIR itemVSF (proposed by strategy 40)
PeriodsSchedule linesMonthly, first workday, 400 each for six months
TotalSum of schedule lines2,400 for the six-month horizon

A four-line check after each PIR load, run before any MRP test.

Key points
  • Demand = PIRs + sales orders + stock transfer requirements; together the demand program.
  • PIRs are per product, plant, version and period; only active versions are planned.
  • The requirements type, proposed from the strategy, controls consumption through requirements classes.
  • Reorganize unconsumed past PIRs regularly so old forecasts stop driving production.

Check your understanding · not graded

Lesson check

  1. 1. Which three basic demand types does SAP Learning name?

  2. 2. Which transaction creates planned independent requirements?

  3. 3. Two PIR versions exist for the alternator. Which one does MRP plan?

  4. 4. What does MD74 help with?