Demand management in SAP PP is a crucial planning tool that enables businesses to forecast and manage material demands efficiently. It bridges Sales and Operations Planning (S&OP) and Material Requirements Planning (MRP) by determining quantities and delivery timelines for finished goods or assemblies. Inputs from S&OP feed into demand management, which in turn provides outputs to Master Production Scheduling (MPS) and MRP.
Components of Demand Management in SAP PP
Demand management operates using two primary components, which form the basis for production planning and scheduling:
| Component | Description |
|---|---|
| Planned Independent Requirements (PIRs) | Forecasted demands for materials or product groups created manually or derived from S&OP. Used mainly in Make-to-Stock (MTS) scenarios. |
| Customer Requirements | Actual customer demands in the form of sales orders or scheduling agreements. Used in Make-to-Order (MTO) scenarios. |
This table highlights the distinction between forecasted demands (PIRs) and actual demands (customer requirements), helping organizations differentiate between production strategies like MTS and MTO.
Planned Independent Requirements (PIRs)
PIRs are demand forecasts for materials or product groups and include desired quantities, planning horizons, and requirement dates. They can be defined in daily, weekly, or monthly buckets and are crucial for long-term production planning. PIRs can be created manually or transferred from S&OP.
| Field | Description |
|---|---|
| Desired Quantity | Specifies the quantity required during the planning period. |
| Period Indicator | Defines the time bucket (e.g., daily, weekly, monthly) for demand. |
| Requirement Date | Indicates when the demand is needed. |
| Planning Horizon | Specifies the range of dates for which PIRs are valid. |
Creating Planned Independent Requirements (PIRs)
To create a Planned Independent Requirement (PIR) in SAP, navigate to: Logistics ➤ Production ➤ Demand Management ➤ Planned Independent Requirements ➤ Create, or use Transaction Code MD61.
Enter the material or product group, plant, planning horizon, and planning period (daily, weekly, or monthly). PIRs include desired quantity, period indicator, requirement date, and planned quantity. Existing PIRs from S&OP can be reviewed and split into smaller buckets via the Schedule Lines view.
Scheduling PIRs
PIRs can be created in monthly buckets but may need to be split into weekly or daily schedules for better accuracy. This ensures realistic demand representation and alignment with production capacities.
| Period | PIR Quantity | Schedule Lines |
|---|---|---|
| June 2022 | 1000 | Week 1: 250, Week 2: 250, etc. |
| July 2022 | 1200 | Week 1: 300, Week 2: 300, etc. |
The table illustrates how a monthly PIR (e.g., 1000 units for June) can be split into weekly schedule lines, enabling precise demand planning. This breakdown is essential for aligning production with actual operational timelines.
Customer Requirements
Customer requirements represent actual customer demand received as sales orders or scheduling agreements. These requirements are entered directly into the system using Transaction Code MD81 and are used primarily in Make-to-Order (MTO) scenarios.
| Requirement Type | Description | Scenario |
|---|---|---|
| PIR (MD61) | Forecasted demand for materials or product groups. | Make-to-Stock (MTS) |
| Customer Orders | Actual demand from customers in sales orders or agreements. | Make-to-Order (MTO) |
This table differentiates PIRs and customer orders, showing how each aligns with different production strategies (MTS vs. MTO). PIRs forecast general demand, while customer orders drive specific, customer-focused production.
Splitting and Adjusting PIRs
PIRs created in broader time buckets (e.g., monthly) can be split into smaller buckets for better alignment with production schedules.
| Original Period | Split Period | Resulting Quantities |
|---|---|---|
| June 2022 (Monthly) | Weeks 1, 2, 3, 4 (Weekly) | Week 1: 250, Week 2: 250, etc. |
This table demonstrates how monthly PIRs can be divided into weekly or daily schedules. Such granular adjustments ensure production is planned with precision, reducing inventory and meeting operational needs effectively.
Conclusion
Demand management in SAP PP is pivotal for balancing supply with demand. By leveraging Planned Independent Requirements (PIRs) for forecasted demand and Customer Requirements for actual orders, businesses can optimize production strategies like Make-to-Stock (MTS) and Make-to-Order (MTO). Properly scheduled and split PIRs further ensure alignment with real-world capacities and timelines, enabling streamlined production planning.