Understanding SAP PP Strategy 11: Gross Requirements Planning

Proper planning strategy is crucial for efficient inventory management and production scheduling in SAP Production Planning (PP). Today, we’ll explore SAP PP Strategy 11, or Gross Requirements Planning.

What is Strategy 11?

Strategy 11 is a make-to-stock planning approach that prioritizes production plans over existing stock levels and sales orders. It generates production orders based solely on Planned Independent Requirements (PIRs), manually entered forecasts, or transferred from Sales & Operations Planning (SOP).

Key Features of Strategy 11

• Focus on Production Plans: Stock levels and sales orders don’t influence production planning. MRP generates production orders to fulfill PIRs regardless of available inventory.
• Independent of Stock and Sales Orders: This strategy suits scenarios where production must happen irrespective of current stock or customer demand.
• PIR Management: Accurate PIRs are vital as they directly drive production planning.
• Mixed MRP Indicator: Set the Mixed MRP indicator (2) in the MRP view to ensure MRP considers planned and unplanned independent requirements.
• PIR Reduction: PIRs are reduced only when finished products are received into stock, not when customer sales orders are fulfilled.

When to Use Strategy 11?

• Heavy Industries: This strategy is commonly used in industries like steel, cement, and chemicals, where production processes are complex and lead times are long.
• Legacy System Integration: It can help integrate a non-SAP MRP system with SAP for production execution.
• Planned Production Runs: Useful for scenarios with pre-determined production plans that must be strictly followed.

Advantages of Strategy 11

• Production Focus: Ensures a clear production Aplan based on PIRs.
• Flexibility: Allows for independent production planning irrespective of stock fluctuations.

Disadvantages of Strategy 11

• Overproduction Risk: If PIRs are inaccurate, it can lead to excess inventory.
• Less Responsive to Demand: This doesn’t directly consider actual sales orders, potentially leading to stockouts.

In Conclusion

SAP PP Strategy 11 offers a production-centric planning approach. It’s ideal for industries with pre-determined production plans or those integrating legacy MRP systems. However, careful PIR management and a good understanding of demand are crucial to avoid overproduction and stockouts.