Integrated Business Processes with ERP Systems

CHAPTER 8

The Material Planning Process¹

LEARNING OBJECTIVES

After completing this chapter you will be able to:

1. Explain the master data associated with the material planning process.
2. Analyze the key concepts associated with material planning.
3. Identify the basic steps in the material planning process and the data, documents, and information associated with them.
4. Effectively use SAP^® ERP to execute the basic steps in the material planning process.
5. Extract and evaluate meaningful information about the material planning process using the SAP ERP system.

Material planning at GBI historically has been very informal. Planning for various types of materials has not been integrated with other processes. Instead, the company acquires or produces materials when it needs them. As GBI has expanded to include more facilities, materials, and customers, however, this informal planning has created myriad problems for the company. Inventory levels are rarely what they should be—too much in some cases, not enough in others. On several occasions, customers have expected products to be available sooner than GBI could provide them. The results of this lack of overall planning and coordination have been increased costs due to expedited procurement or production, unplanned expenses resulting from storing excess inventory, and lost sales. GBI's management fully understands that failing to plan adequately is equivalent to planning for failure. Their strategy for alleviating these problems is to implement ...