Dividing and Conquering Your Materials: Using Quotas in SAP PP

In the Production Planning (PP) world within SAP, ensuring a steady flow of materials is crucial. But what if you have multiple sources for a particular material? This is where quotas come in, as a handy tool to distribute your requirements strategically.

What is a Quota Arrangement?

A quota arrangement is a pre-defined allocation plan for material across various sources of supply. These sources can be internal (another plant within your company) or external (vendors). The quota specifies the percentage or fixed quantity each source should contribute to fulfilling the overall material demand over a specific period.

Why Use Quotas in SAP PP?

Here are some key benefits of leveraging quotas in your SAP PP processes:

• Control and Flexibility: You gain control over how materials are procured, allowing you to prioritize specific vendors based on factors like cost, quality, or delivery lead time.
• Spread the Risk: By not relying solely on one source, quotas mitigate risks associated with supplier disruptions or unexpected capacity changes.
• Improved Planning: Clear allocation plans allow you to make more informed decisions about production scheduling and inventory management.

How to Set Up Quotas in SAP PP

While quotas are primarily defined in the Materials Management (MM) module, they seamlessly integrate with PP. Here’s a simplified breakdown:

1. Maintain Quota Arrangements: Use transactions like MM01/MM02 (Material Master) or MEQ1 (Quota Arrangement) to define quotas for specific materials and timeframes. You can assign percentages or fixed quantities to each source.
2. MRP Takes Over: The system considers these quota arrangements during the Material Requirements Planning (MRP) run. It allocates planned orders or purchase requisitions to sources based on the defined quotas.

Pro Tip: Splitting quotas can be beneficial for high-volume scenarios. This allows you to distribute demand further within a single source (like a vendor with multiple plants) based on additional criteria.

In Conclusion

Quotas in SAP PP offer a powerful way to optimize your material sourcing strategy. You gain better control, mitigate risks, and ensure a smoother production flow by effectively dividing your requirements. So, the next time you’re juggling multiple material sources, remember – quotas can be your secret weapon!