The Material Requirements Planning (MRP) process identifies the material requirements necessary to meet a company's product demand. Enter independent demand (demand that is not tied to a higher-level assembly) for parts in the Manage Sales Orders (Costpoint Sales Order Entry), Manage Inventory Reservations (Costpoint Inventory), Manage Inventory Requests (Costpoint Inventory), and Manage Master Production Schedules (Costpoint Master Production Scheduling) screens. Costpoint Material Requirements Planning will take this independent demand, explode Bills of Material (BOMs) as necessary, and determine part-by-part what material needs to be purchased and manufactured to meet the requirements and when. The products of MRP will be planned orders, which inventory planners can turn into manufacturing orders or requisitions; planner action messages, which will alert the planners of the activities they need to perform; and supply and demand information stored in a form that can be used to generate standard and customized MRP reports.
MRP can operate in Full Regeneration or Net Change modes, which you can select using the options in the MRP Method group box in the Update Material Requirements Plan screen. Select Full Regeneration mode to review all active MRP parts in the part master and determine which planned orders need to be generated. All previously created MRP planned orders and requirements will be deleted at the beginning of this process and re-added as necessary during the process. In Net Change mode, only those parts (and components) that have had some relevant activity since the last time MRP was run will be checked. Running in Full Regeneration mode will take longer than running in Net Change mode, but if you select the Allow Net Change MRP check box in the Corporate Settings block of the Configure Material Requirements Planning Settings screen, most Materials maintenance applications will require additional processing.
Costpoint performs a version of MRP called Project MRP. This means that you have the option of splitting up the MRP supply and demand by project, top-level project, or project netting group, as well as by project planning group and warehouse. You can customize this using the Project Selection Option drop-down list in the Manage Detailed Part Schedule or the Manage MRP Action Messages screens. The options are as follows:
All Projects — Supply and demand from all inventory projects will be included.
Single Project — Supply and demand calculations will be based on the specified project only.
Top-Level Project — Supply and demand calculations will be based on all inventory projects that share the same top-level project as that of the specified project.
Netting Group — Supply and demand calculations will be based on all inventory projects within the specified netting group.
Costpoint generates project-planning groups for each inventory project that is planned by MRP. Separate groups are created for common stock parts and non-common stock parts. Inventory projects that belong to the same project-planning group as the specified project will be considered for supply and demand calculations. Project- planning groups are based on the MRP planning option code defined for each project, and depend on whether or not the planned part is a common stock part. Scenarios for various MRP project planning option codes of the specified project are as follows:
Project-No CS — For common stock and non-common stock parts, supply and demand calculations will be based only on the specified inventory project.
Project-CS — For common stock parts, supply and demand calculations will include the specified project, along with other projects that have an MRP Planning Option Code of Project-CS, Top-Level Project-CS, Netting Group-CS, or All Projects. For non-common stock parts, supply and demand calculations will be based only on the specified project.
Top-level Project-No CS — For common stock parts, supply and demand calculations will be based on the specified inventory project, along with other projects that have the same top-level project as the specified project and have an MRP Planning Option Code of Top-level Project-No CS. For non-common stock parts, supply and demand calculations will be based on the specified inventory project, along with other projects that have the same top-level project as the specified project and have an MRP planning option code of Top-level Project-No CS or Top-level Project CS.
Top-level Project-CS — For common stock parts, supply and demand calculations will include the specified project, along with other projects that have an MRP Option Code of Project-CS, Top-level Project-CS, Netting Group-CS, or All Projects. For non-common stock parts, supply and demand calculations will be based on the specified inventory project, along with projects that have the same top-level project as the specified project and have an MRP planning option code of Top-level Project-No CS or Top-level Project CS.
Netting Group-CS — For common stock parts, supply and demand calculations will include the specified project, along with other projects that have an MRP Option Code of Project-CS, Top-level Project-CS, Netting Group-CS, or All Projects. For non-common stock parts, supply and demand calculations will be based on the specified inventory project, along with other projects that have the same netting group as the specified project and have an MRP planning option code of Netting Group-CS or Netting Group-No CS.
Netting Group-No CS — For common stock parts, supply and demand calculations will be based on the specified inventory project, along with other projects that have the same netting group as the specified project and have an MRP planning option code of Netting Group-No CS. For non-common stock parts, supply and demand calculations will be based on the specified inventory project, along with other projects that have the same netting group as the specified project and have an MRP planning option code of Netting Group-No CS or Netting Group-CS.
All Projects — For common stock parts, supply and demand calculations will include the specified project, along with other projects that have an MRP Option Code of Project-CS, Top-Level Project-CS, Netting Group-CS, or All Projects. For non-common stock parts, supply and demand calculations will include the specified project, along with other projects that have an MRP planning option code of All Projects.
You can configure Costpoint to plan separately by warehouse by selecting the Plan Warehouse Separately check box in the Corporate Settings block of the Configure Material Requirements Planning Settings screen. If you select this option, you cannot use a part's supply from a warehouse to meet the demands allocated to another warehouse, even if it belongs to the same project planning group. If you select this option, all inventory purchase requisition and purchase order lines will need to have a warehouse loaded on them.
For a given part/inventory abbreviation/warehouse during MRP processing, Costpoint reviews gross requirements (demand), compares them with existing inventory and scheduled receipts (supply), considers the associated need dates and availability dates, and generates planned order supplies and planned order demands to balance the required supply and demand.
If you selected the Safety Stock check box in the Configure Material Requirements Planning Settings screen, it is considered a demand in the inventory project's planning warehouse, with the need date matching the current date. If planning is done separately by warehouse and no planning warehouse is specified for the project, safety stock is not considered a requirement, and no planned orders will be generated for it.
All approved reservations are considered demand and include approved reservations for Inventory, Sales Order, Manufacturing Order, and Purchase Orders. In addition, the demand also includes pending MO and Purchase Requisition reservations. See below for transfer reservations. If you selected the Pending Sales Orders or Pending Inventory Requests check boxes in the Configure Material Requirements Planning Settings screen, demand also includes pending reservations for sales orders, along with pending reservations for inventory issues and inventory transfers (as long as the From Inventory Abbreviation against which the reservation is made is active).
All requisitions with a status of Pending, In-Approval, or Approved are considered as supply, as long as the requested quantity is greater than the generated quantity (including quantity assigned to purchase orders). The planned available date for such requisitions is based on the requested date (or assigned PO due date) plus lead times for purchasing receiving and purchasing inspection.
All inventory purchase orders with a status of Pending or Open are considered as supply, as long as the open order quantity (On Order Qty - Received Qty + Reject/Replace Qty) is greater than zero. Only the releases to blanket orders are not considered as supply. Planned available dates for such purchase orders are based on the due date plus lead times for purchasing receiving and purchasing inspection.
All manufacturing orders with a status of Firm Planned, Released, or In-Shop are considered as supply, as long as the allocated Build Qty is greater than Completed Qty. Closed or completed MOs are not included as supply quantities. MOs of the Customer Repair type are also not included as supply if you selected the Exclude Customer Repair MOs as Supply check box in the MRP Settings screen. The planned available date the due date plus lead times for manufacturing stocking.
All transfer reservations with a status of Approved or Pending (if the Pending Inventory Requests check box is selected in the MRP Settings screen) are considered scheduled receipts to the associated project/inventory abbreviation/warehouse. The need date of the reservation line is the scheduled receipt date. Transfer reservations are a demand on the part/inventory abbreviation from which it is to be transferred, and a supply for the part/inventory abbreviation to which it is to be transferred.
This is determined for each part by project planning group (and warehouse) by adding the quantities in the following types of inventory warehouse locations: On-Hand, In-Inspection, Re-inspection, Shipping, and MRB (only if you selected the Incl MRB as Available Inventory check box in the Configure Production Control Settings screen of Costpoint Production Control). Inventory with an inactive inventory abbreviation is excluded.
In order to balance any supply shortages with the existing demand, Costpoint Material Requirements Planning will create planned orders with suggested quantities and due dates.
Planned order quantities match the required quantities, and are adjusted if scrap/yield percentages are included in the planning process (select the Incl Scrap/Yield % in Planning Process check box in the Configure Production Control Settings screen in Costpoint Production Control). If the part's inventory unit of measure = each, quantities are rounded up to the nearest whole number.
This is the date the manufacturing order or purchase order must be received from the shop or vendor in order to meet the planned available date determined by Costpoint Material Requirements Planning. If the planned order is to be purchased, Costpoint determines the due date by subtracting the purchasing receiving and purchasing inspection lead times from the need date. If the planned order is to be made, Costpoint determines the due date by subtracting the manufacturing stocking lead time from the need date. If the lead-time calculation is based on shop days instead of the standard calendar (the Shop Days option is selected in the Configure Production Control Settings screen in Costpoint Production Control), the system subtracts the number of lead-time days from the shop day number corresponding to the requirement need date (if the need date does not fall on a shop day, it uses the next earlier day).
For a purchased part, the ship ID will correspond to the one in the planned order warehouse. If a ship ID is not available there, the default ship ID from the Configure Purchasing Settings screen in Costpoint Purchasing will be used.
This is based on the planner corresponding to the demand. If a planner is not defined there, the planner assignment will be based on the Part, Inventory Project, Netting Group, or Commodity (as selected in the Configure Production Control Settings screen in Costpoint Production Control). If a planner cannot be assigned by this method, Costpoint will use the default planner from the Configure Material Requirements Planning Settings screen for the planned order.
For a purchased part, the preferred vendor (from the Vendor field in the Assign Vendors to Items screen in Costpoint Product Definition) will default in as the vendor for the planned order.
For a purchased part, buyer assignment is determined in the Requisition Settings screen in Costpoint Procurement Planning. If buyers are assigned by Proj/Acct/Org, the default buyer for the planned order will be based on the buyer ID associated with the proejct planning group corresponding to the planned order inventory project. If that is not available, it defaults in from the planned order inventory abbreviation's material account/org. If buyers are assigned by Commodity code, the buyer ID associated with the commodity code of the planned-order part is used. If buyers are assigned by Item/Misc Type, the buyer ID associated with the part is used. If the buyer is assigned by Preferred Vendor, and a vendor has been assigned to the planned order, the buyer associated with that vendor is used.
Planned orders will use the inventory abbreviation corresponding to that of the requirement. If the Active Code = N (Inactive) or O (Outgoing only), inventory can be moved only out of this inventory abbreviation; an exception message will be generated, but the planned order will still be generated.
This process calculates the requirements for MRP planned orders and for flow-through requirements for phantom and MPS planned components.
When processing, manufacturing bills of material are exploded from the highest level down (one level at a time) and requirements are calculated for the matching part. If a BOM is generated from a planned order, the system uses the planned order's configuration ID and effective dates to determine the exact BOM components to use during the explosion. If a BOM is generated from a phantom part or MPS-planned flow-through requirement, Costpoint uses the configuration ID and effective dates of the original gross requirement to determine the exact BOM components. If no effective date is provided, Costpoint will use the current date to determine the effectivity of the components. The BOM components are not used in requirement calculations if the component has not been released to the assembly, if you selected the Omit Requirement check box (on the Release Multiple Manufacturing Bill of Materials screen in Costpoint Bills of Material), if quantity equals zero, if the component is of the reference or tool type, or if it has been deleted from the BOM. Component parts will also be excluded if they are inactive, have a release status of Pre-Release or Estimating, or are non-inventory parts.
The quantity type code of the component part in the assembly determines whether BOM quantities will be calculated on a per order or per assembly basis. Adjustments will be made if you selected the Incl Scrap/Yield % in Planning Process check box in the Configure Production Control Settings screen in Costpoint Production Control. If the part's inventory unit of measure is Each, quantities are rounded up to the nearest whole number.
For component requirements of planned orders, Costpoint determines the need date by adding the BOM lead-time offset in days to the planned release date of the planned order. If the lead-time calculation is based on shop days (the Shop Days option is selected in the Configure Production Control Settings screen) instead of the standard calendar (the Standard Calendar option is selected in the Configure Production Control Settings screen), the lead-time offset days are added to the shop-day number corresponding to the planned release date. If the date does not fall on a shop day, the next lowest day is used.
The planner assignment will be based on the Part, Inventory Project, Netting Group, or Commodity (as selected in the Planner Assignment group box in the Configure Production Control Settings screen in Costpoint Production Control).
For safety stock, default finished goods or the raw material inventory abbreviation for the associated project will be used, depending on whether the part is to be manufactured or purchased.
This message is created for every planned order in Costpoint. If the calculated order date comes before the current date, the message shows that it is inside the lead time.
This message is created when a purchase requisition, purchase order, or manufacturing order needs to be rescheduled to meet the demand. If the planned available date of the scheduled receipt does not match the gross requirement need date, Costpoint calculates the difference in standard calendar days or shop calendar days (depending on the selection in the Lead Time Calculation group box in the Configure Production Control Settings screen in Costpoint Production Control). A reschedule message is generated if this difference is more than the settings established in the Reschedule Message Filters (in Days) group box in the Configure MRP Report Print Options screen. The reschedule action message also shows this variance as the number of change days and displays as a negative number if the need date is earlier than the planned available date. The MRP suggested due date is then calculated as the current due date plus the change days.
This message is created when a purchase requisition, purchase order, or manufacturing order needs to be reduced because the supply is greater than the demand. Scrap/yield and minimum/multiple logic is incorporated in the calculations if the part's order policy dictates it.
This message is created if a purchase requisition, purchase order, or manufacturing order needs to be cancelled because there is no demand.