The Purpose of this document is to explain the significance of “Storage Location MRP”. This feature gives you flexibility to:
1) Exclude storage location stock from MRP
2) Plan storage location stock separately
Material requirement planning generally runs at plant level. When you run it for a material, system sums-up total stock from all storage locations and considers it as "available stock" to full fill the demand elements.
The control of storage location on Material Master is maintained in MRP 4 view:
Let’s consider a raw material RM0001 maintained in plant FP01. This material is extended to storage locations SL01 and SL02. I have kept both the Sloc as non WM managed in order to simplify the example.
RM0001 has following stocks in 2 storage locations
SL01 – 20
SL02 – 50
FP01 = 70 (Plant)
The stock requirement list shows:
Case 1: When the indicator is blank
This is the default case where stock of material at storage location is considered for MRP run (Plant level). This is the default case in which total stock of all storage locations is used together in MRP at plant level.
Case 2: With indicator “1”
The storage location stock gets excluded from MRP
Example: let’s set this indicator “1” for sloc SL01 (with 20 quantity)
MRP 4:
MD04:
The important point to note here is that total 70 is still unrestricted quantity and available for use but since we have set indicator “1” in SL01, the sloc stock will get EXCLUDED in MRP run.
Now if there is demand for this material for 60 quantities
System will only consider 50 for MRP calculation and ignore 20 from SL01 (excluded)
After MRP:
There is a demand of 60 and out of which 50 is covered by stock in MRP calculation and system finds a deficit of 10 quantities. Even though there is an extra stock of 20 in SL01 but since we have excluded it from MRP run, system generates a purchase requisition of 10 quantities.
Case 3: with indicator "2"
Storage location stock is planned separately
Separate storage location MRP is carried out using consumption-based planning. In this case, one must define a reorder level and a replenishment quantity (fixed lot size) at storage location level. In so doing, it is possible to monitor this storage location's stock automatically, and if the stock level falls below the reorder level the storage location is also replenished automatically.
MRP 4 settings
After consumption of 10 quantities form SL01. The current stock level comes (10) below reorder point (15) and it should trigger transfer requirement of 25 quantity from SL02 as stock is already present in different storage location under same plant.
After MRP run
Once the transfer posting is made against the reservation, stock situation looks like this:
Stock from SL02 has moved to SL01
Apart from transfer posting with movement 311, there are possibilities to use special procurement key for Sloc to be planned separately. They can be maintained in MRP 4 at storage location details:
Scenario 1
Material RM0001 in plant FP01 in Sloc SL01 (Storage location to be planned separately with SPK 40 – Stock transfer)
Reorder point – 15
Replenishment Quantity - 25
Current Stock of RM0001 – 10 (below reorder point)
Demand plant - FP01
Supplying plant - FP02
MD04 in Demand Plant FP01
After MRP run:
System creates a planned order that can be converted in Purchase requisition then to Stock Transfer order
STO gets created with Suppling plant as FP02
After Goods Receipt, the stock gets updated
Situation where such Indicator is useful:
1. When you want to have some quantity of material separate for specific purpose (only for manual goods issue)
2. When you DO NOTwant to have a particular material considered for net requirement planning.
3. When stores / warehouse is geographically too far from the production location that is planned with the storage location MRP
4. When stock of a storage location is only available for service and not for production
5. etc...
There could be multiple other cases where Storage Location MRP functionality can be used instead of setting up complex scenarios.
* Request all readers to please suggest other possible cases where this functionality can be used so that this documents can be updated and improved with the course of time.