When MRP finds a shortage for a material, it will generate a replenishment proposal to cover this shortage.
For materials procured internally, the replenishment proposal is a planning object called a planned order. The planned order will later be used in repetitive manufacturing or converted to a production or process order.
If you are using classic MRP in SAP S/4HANA, you also have the option to let MRP generate planned orders for materials procured externally; those planned orders should later be converted to purchase requisitions.
A planned order is merely a planning object that is deleted from the database after the conversion or the backflush, so there is no archiving object for planned orders. Planned orders are generally created by MRP during the planning run, but they also can be created manually in Transaction MD11 if you expect a future receipt to come on a given date.
SAP S/4HANA 2020 introduced the new Create Order action button in the Manage Material Coverage app, and this button can be used to quickly create planned orders while you are evaluating the MRP results.
There are different planned order profiles available in the SAP S/4HANA system, but the profile for a given order is automatically determined by MRP when it is created. The profile will be determined based on the procurement type, special procurement type, and account assignment. For example, if MRP created a regular planned order for a material procured internally, the order profile will be LA; if a similar planned order is assigned to the sales order special stock (account assignment E), the order profile will be KD. The table below describes the standard planned order profiles and their respective procurement types, special procurement types, and account assignments.
If you are creating a planned order manually, you need to enter the profile manually during order creation. Depending on the profile selected, different fields may be available for input during planned order creation. For example, if you select order profile NB, which is used for externally procured planned orders, you will see an additional Source of Supply tab, where you can select a vendor, a scheduling agreement, or a contract as the source of supply. This tab will not be displayed for a planned order with order profile LA.
The profile may also be automatically redetermined during the manual planned order creation, depending on the data entered in Transaction MD11. For example, if you try to create a planned order with order profile LA, but you add an account assignment to a sales order, then SAP S/4HANA will automatically change the order profile to KD as there is no account assignment on order profile LA.
The figure below shows the creation of a new planned order in Transaction MD11. When creating a new planned order, you need to set the Material, MRP Area, Order Quantity, and Basic End Date values. The Basic Start Date value will be calculated automatically using the in-house production time defined in the material master. SAP S/4HANA will also automatically try to determine a production version (because it is mandatory for the BOM explosion) and storage location.
Note: When a planned order is manually created, the Firming Indicator will be set automatically by the system. This indicator will prevent the planned order from being deleted or changed by a future MRP run. The firming indicator will also be set automatically with any manual change to a planned order created by MRP. If you want to also firm the planned order components, you can check the Components indicator in the Firming area, which will also prevent the BOM from being reexploded by MRP.
The storage location is automatically determined when a planned order is created. If a planned order is procured internally, the system will first check if the Receiving Storage Location setting has been defined in the production version and try to use this storage location. If Receiving Storage Location is empty in the production version, then it will be read from the production storage location in the material master. If the planned order is procured externally, then the storage location will come from the Storage Loc. for EP (storage location for external procurement) field of the material master.
Lead-time scheduling will not be executed automatically for a planned order created manually. If you want to read the routing, generate capacity requirements, and calculate the production dates based on the routing operations, then you need to manually trigger lead-time scheduling by clicking the Calendar icon in the menu above. After you schedule the planned order, a new Detailed Scheduling tab will be displayed as shown in the next figure; here you will see the planned order operations details, including dates and capacity requirements.
Note: A planned order that went through capacity leveling and had an operation dispatched to a work center will automatically receive the Capacity Dispatched flag.
In the header menu, you can also see two different buttons for which the icon is a BOM structure. The first one will simply show the component overview, which is the list of planned order components. The second button will force a new BOM explosion, so the components might be updated if there was any change to the BOM.
Below shows the planned order component overview screen, which is displayed when any of the buttons mentioned previously are clicked. The Collective Entry and Detailed Entry buttons will allow the insertion of new components, collectively and individually.
The storage location for the components is also determined automatically when a planned order is created, and it can come from the BOM, from the Production Storage Location field in the material master, or from the production version’s issuing storage location. You can influence the logic to select the issuing storage location in the MRP group Customizing.
SAP S/4HANA 2021 introduced the new Long Text tab (see final figure), which introduces a free text field where the planner can write notes related to a specific planned order. As of SAP S/4HANA 2022, during the planned order conversion, the production order long text can inherit this long text.
Editor’s note: This post has been adapted from a section of the book Material Requirements Planning with SAP S/4HANA by Caetano Almeida.
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