SAP PP Module

Demand Management

Demand Management
To create a demand program, Demand Management uses planned independent
requirements and customer requirements.

To create the demand program, you must define the planning strategy for a product.
Planning strategies represent the methods of production for planning and
manufacturing or procuring a product.

Using these strategies, you can decide if production is triggered by sales orders (make-
to-order production), or if it is not triggered by sales orders (make-to-stock production).

Demand Management
Planned Independent Requirements (PIR).
It is a planned quantity for the assembly for a
given time.

Customer requirements.
Customer requirements represent the sales
orders in the system.

Planning Strategy
Planning strategies represent the business procedures for the planning of production
quantities and dates.

Make to order.
Make to stock.

You can assign a planning strategy to a material in the material master record.
(MRP 3 view).

Make To Order - 20

In make-to-order production, a product is produced specifically for an
individual sales order.

Pre-requisites.
You also must maintain the following master data settings for the finished
product:
Strategy group 20 on the MRP screen
Item category group (such as NORM) on the Sales Organization screen

Make To Stock - 40
Planned independent requirements are consumed by incoming sales orders so that the
master plan is always adjusted to suit the current requirements situation. This means
that the important feature of this planning strategy is that you can react quickly to
customers requirements.

MRP run considers both PIR as well as sales requirements in order to calculate
procurement proposal.

This strategy is used where sales forecast also need to be considered while planning.
Make To Stock - 10
Net requirement planning - 10

This strategy is used when the production needs to be determined by production plan
& the sales order need not to influence the production directly.

PIR will be reduced at the time of goods issue against sales order.

Sales order will not consume PIR in this case.


Strategy 10 & 40
Strategy 10 40
Customer requirements passed
on to production
No Yes
This means... ... sales orders do
not influence
production
... sales orders that exceed
planned independent
requirements can influence
production
... the main
objective is to
ensure smooth
production
... the most important factor
here is the ability to react
flexibly to customer demand
Planned independent
requirements allocated during
sales order processing
No Yes
Planned independent
requirements reduced at goods
issue for delivery
Yes Yes
Planning strategy
Define Strategy
The planning strategy represents an
appropriate procedure to be used for
planning and produced a material.
The planning strategy is defined by:
A requirements type from demand
management
A requirements type from sales
order management

Planning strategy