S - 4HANA Demand Driven MRP (DDMRP) Functionality - SAP Blogs

14/11/2019 S/4HANA Demand Driven MRP (DDMRP) Functionality | SAP Blogs
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Lingaiah Vanam
February 17, 2019 7 minute read
S/4HANA Demand Driven MRP (DDMRP) Functionality

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This blog gives you an understanding of demand-driven MRP and how it works in SAP S/4HANA
environment.
Material requirements planning (MRP) is a well-known planning tool. Material planning is a very critical and
complex process due to complex supply chain networks and it is not easy to ful ll the requirements based
on classical planning all the times.
MRP is a planning tool and available in SAP ERP (ECC) and Advanced Planning Optimization (APO) interface
with Core Interface (CIF). SAP material requirements planning brings e ciency and optimization to
production and procurement plans. Every planner dream to accurately plan materials timely available
across the logistics and entire supply chain. Planner main goal is to ensure that enough stock available for
sale to customers without escalating the inventory carrying cost or facing a shortage of raw or packing
materials needed for production processes.
MRP planning runs generate purchase requisition or planned order is a proposal that a planner can
interactively convert to purchase order or production order for external procurement or in-house
production. SAP MRP creates a planned order or purchase requisitions based on a material’s net
requirement quantity and its needed availability. The net requirement calculation takes into account existing
warehouse stock, the quality of stock, existing or open purchase orders, or production orders to calculate
the material’s shortage quantity. If the system nds that there is a material shortage, it creates a planned
order or purchase requisition for the shortage quantity. MRP is not restricted to quantity planning it also
takes timelines into account, such as the time it takes to procure a material (known as replenishment lead
time or planned delivery time), the time required to process goods receipt in the warehouse or the
quality inspection times (goods receipt processing time).
https://blogs.sap.com/2019/02/17/s4hana-demand-driven-mrp-ddmrp-functionality/ 1/17
SAP Business Suite 4 SAP HANA is a business suite that is built on SAP’s proprietary operational database
system and in-memory computing platform called SAP HANA. SAP S/4HANA is being called SAP’s biggest
update to its ERP strategy and platform in over two decades that means S/4HANA is just a new
transformation to an ERP system.
DDMRP available in the S/4HANA product o ering consists of two editions: SAP S/4HANA On-Premise and
SAP S/4HANA Cloud and Integrated Business Planning (IBP). If you look at the high-level earlier ECC and
APO and now S/4HANA and IBP.
Demand Driven Material Requirements Planning (DDMRP) is an innovative multi-echelon pull methodology

to plan inventories and materials. It enables a company to build more closely to actual market requirements
and promotes better and quicker decisions and actions at the planning and execution level. DDMRP was
introduced to the world in the book Orlicky’s Material Requirements Planning, Third Revised Edition by Carol
Ptak and Chad Smith.
I am mainly focused on S/4HANA 1709 on-promise version Demand-Driven Replenishment

process. Demand-Driven Replenishment helps you plan and manage supply chains e ciently based on
customer demand, rather than through traditional MRP procedures. You do this by strategically decoupling
material ows, becoming less vulnerable to disruptions in the supply chain, and by protecting the ow
through dynamically-managed bu er (stock) levels for relevant products.
DDMRP uses strategic decoupling points to drive supply order generation and management throughout a
supply chain.
1. Strategic decoupling: De-coupling the supply chain creates independence between processes or entities
and is the only way to stop the bullwhip e ect, mitigate variability and compress lead times.
2. Bu er sizing: Bu er sizing is the shock absorber to ease both supply and demand variability and reduce
or eliminate the bullwhip e ect.
3. Dynamic adjustments: A dynamic adjustment of the bu er pro les further calms the supply chain and
smooths operating for all variabilities within a set period.
4. Demand-driven planning: Demand-driving planning comprises generating supply orders by evaluating
actual inventory, stock that has been ordered but not received, and quali ed sales order demand.
5. Visible and collaborative execution: When users have visibility into inventory through alerts that track
usage, ordering lead times and material delivery can be synchronized.
To implement the DDMRP process following are the two steps.
1. Con guration and setup in ori applications

2. Operational ori applications
The rst steps to identify the materials which are relevant for DDMRP planning (critical and long lead time)
and update the MRP type D1 (planning procedure C) in material master MRP 1 view.
Schedule Product Classi cation (DD):
With this app, you can classify your products by systematically evaluating them based on their goods issue
value (ABC classi cation), usage across BOMs (PQR classi cation) and variation in actual demand (XYZ
classi cation) across a speci ed evaluation interval. Classifying your products will help identify whether
they are relevant for Demand-Driven Replenishment, and will help de ne inputs for their bu er settings.
Once the application job opens click on “New” and classi es products and schedule job as below.
After job completed products classi ed and additional information messages also displayed.
Mass Maintenance of Products (DD)
With this app, you can display and change product details (master data records) relevant to Demand-Driven
Replenishment. After you have classi ed or re-classi ed your products, you can view the results of the
classi cations in this app, and based on the results, select products that are relevant to Demand-Driven
Replenishment. You can use the mass change feature to change the master data records for several
products simultaneously. This is the second app that you’ll use when you start with Demand-Driven
Replenishment.
Once the application job opens select materials and which you want to do mass change and click on “Mass
change” new popo window displayed and do the changes based on requirement (this step is optional in this
case).
Schedule Lead Time Classi cation of Products (DD)
With this app, you can classify your Demand-Driven Replenishment-relevant products by evaluating them
based on their Decoupled Lead Time (EFG classi cation) across a speci ed evaluation interval. Classifying
your products based on their Decoupled Lead Time (DLT) will help de ne inputs for their bu er settings.
Additionally, you can schedule runs to re-classify your products periodically to keep their classi cations up-
to-date, so that you get accurate results as you proceed with Demand-Driven Replenishment. This is the
third app that you’ll use when you start with Demand-Driven Replenishment.
Once the application job opens click on “New” and classi es products and schedule job as below.
After job completed products classi ed and additional information messages also displayed.
Schedule Bu er Proposal Calculation
With this app, you can generate bu er (stock) level proposals for your Demand-Driven Replenishment-
relevant products based on their average daily usage, decoupled lead time, bu er pro les and several other
factors. Additionally, you can schedule runs to re-calculate the bu er proposals periodically to keep them
up-to-date, so that you maintain appropriate levels of inventory while using Demand-Driven Replenishment.
This is the fourth app that you’ll use when you start with Demand-Driven Replenishment.
Once the application job opens click on “New” and calculates bu ers and schedule job as below.
After job completed products bu er calculation completed and additional information messages also
displayed.
Bu er calculation
Bu er (stock) level proposals help you manage the safety stock, reorder point and maximum stock for your
products through the Manage Bu er Levels app. Several factors are taken under consideration when
calculating bu er proposals for your Demand-Driven Replenishment-relevant products.
A bu er pro le is one of the several factors taken under consideration when calculating bu er proposals for
Demand-Driven Replenishment-relevant products.
SAP not provided the standard transaction code to maintain the bu er parameters. You can manage bu er
pro les using the cluster table “PPH_DD_PROFILE_ASG_VC” in SM30 transaction code in S/4HANA 1709
on-premise version.
Manage Bu er Levels
With this app, you can ensure products are available when needed by managing the safety stock, reorder
point and maximum stock through bu er proposals for optimized Demand-Driven Replenishment.
Based on Schedule Bu er Proposal Calculation job material R-100-100 Red Zone value 323 PC, Yello Zone
599 PC and Green Zone 179 PC classi ed.
Now looking at the R-100-100 detailed analysis.
Bu er zones
Bu er Levels
Average Daily Usage
Decouple Lead Time
Classi cations
Stock requirement list (MD04)
Replenishment Planning by Planning Priority
With this app you have an overview of the bu er information sorted by the planning priority. Using this
information, you can trigger replenishment on time to avoid stock shortages and possible delays in the
completion of production or sales orders as a result of insu cient stock.
Replenishment Execution by On-Hand Status
With this app you can view today’s stock situation for each product and check that su cient on-hand stock
is available for production. Using this information, the planner can try to speed up replenishment by
contacting the supplier of a purchase order or the production supervisor of the component production
order, for example.
Please refer to the following link for additional documentation.
https://www.demanddriveninstitute.com/ddmrp
https://help.sap.com/viewer/e93a1ed5d8d9422faa3acd132b27e7ba/1709%20000/en-
US/4694a223d18b4f648ea0b2872cf1d2c5.html
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Assigned tags
MAN Material Requirements Planning | MAN Production Planning (PP) | MM (Materials Management) | SAP
S/4HANA | SAP S/4HANA Cloud |
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5 Comments
You must be Logged on to comment or reply to a post.
kumar semmalai
February 18, 2019 at 10:02 am
Very good Blog Lingaiah Vanam.. Keep up the good Work. .
Like (0)
Vignesh Veerasamy
March 8, 2019 at 11:32 am
Hi @Lingaiah Vanam,
Very informative.
How was that position , pull ow chart made it looks like a class.
#Happylearning.
Vignesh V
Like (0)
Fernando Meneses
July 23, 2019 at 8:17 pm
hello, thank you very much for your help, I have a question Is the fiori app "Replanishm
Why can't I find the "Replanishment Planning" on the Fiori portal? Do you know what the
Thank you
Like (0)
Saiteja Joginapally
August 31, 2019 at 1:48 pm
Hi Lingaiah Vanam,
Thank you for sharing knowledge. I have a question though, while calculating the Bu er Zones, we use
values of Variability factor & Lead time factor to calculate Green & red zones in particular. How are these
values calculated? Could you please help me nd answers to this?
Thanks
Sai Teja
Like (0)
Jyoti Prakash
September 23, 2019 at 3:03 pm
Hello Lingaiah,
Thanks for sharing.
Like (0)
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14/11/2019 S/4HANA Demand Driven MRP (DDMRP) Functionality | SAP Blogs

Ask a Question Write a Blog Post Login

S/4HANA Demand Driven MRP (DDMRP) Functionality

13 Likes 9,128 Views 5 Comments

Demand Driven Material Requirements Planning (DDMRP) is an innovative multi-echelon pull methodology

I am mainly focused on S/4HANA 1709 on-promise version Demand-Driven Replenishment

To implement the DDMRP process following are the two steps.

1. Con guration and setup in ori applications

Schedule Product Classi cation (DD):

Mass Maintenance of Products (DD)

Schedule Lead Time Classi cation of Products (DD)

Schedule Bu er Proposal Calculation

Now looking at the R-100-100 detailed analysis.

Average Daily Usage

Decouple Lead Time

Stock requirement list (MD04)

Replenishment Planning by Planning Priority

Replenishment Execution by On-Hand Status

Please refer to the following link for additional documentation.

Related Blog Posts

SAP S/4HANA vs ECC MRP Essential Changes

S/4HANA Classical MRP vs MRP Live

DepReq not considered in DDMRP S/4 HANA

MD01N Planning Mode "Delete and Recreate Planning Data" issue

You must be Logged on to comment or reply to a post.

February 18, 2019 at 10:02 am

Very good Blog Lingaiah Vanam.. Keep up the good Work. .

March 8, 2019 at 11:32 am

July 23, 2019 at 8:17 pm

August 31, 2019 at 1:48 pm

September 23, 2019 at 3:03 pm

Thanks for sharing.

Privacy Terms of Use

Legal Disclosure Copyright

Trademark Preferencias para cookies

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