MRP type VB

Question

Dear All,
Please someone suggest me why should we use VB and to maintain safety stock for materials which is having longer lead time?
Thanks,
Rinky

Answer 1

Hi,
VB is the MRP TYPE for consumption based planning. Please go through the below for understanding the CBP and safety stock.
In consumption-based planning, the following MRP procedures are available:
Reorder point procedure
Forecast-based planning
Time-phased materials planning
Reorder Point Planning
Use
In reorder point planning, procurement is triggered when the sum of plant stock and firmed receipts falls below the reorder point.
Features
The reorder point should cover the average material requirements expected during the replenishment lead time.
The safety stock exists to cover both excess material consumption within the replenishment lead time and any additional requirements that may occur due to delivery delays. Therefore, the safety stock is included in the reorder level.
The following values are important for defining the reorder point:
Safety stock
Average consumption
Replenishment lead time
The following values are important for defining the safety stock:
Past consumption values (historical data) or future requirements
Vendor/production delivery timelines
Service level to be achieved
Forecast error, that is, the deviation from the expected requirements
Manual Reorder Point Planning
In manual reorder point planning, you define both the reorder level and the safety stock level manually in the appropriate material master.
Automatic Reorder Point Planning
In automatic reorder point planning, both the reorder level and the safety stock level are determined by the integrated forecasting program.
The system uses past consumption data (historical data) to forecast future requirements. The system then uses these forecast values to calculate the reorder level and the safety stock level, taking the service level, which is specified by the MRP controller, and the material's replenishment lead time into account, and transfers them to the material master.
Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that a contribution is made towards keeping stock levels low.
Forecast-Based Planning
Use
Forecast-based planning is also based on material consumption. Like reorder point planning, forecast-based planning operates using historical values and forecast values and future requirements are determined via the integrated forecasting program. However, in contrast to reorder point planning, these values then form the basis of the planning run. The forecast values therefore have a direct effect in MRP as forecast requirements.
Features
The forecast, which calculates future requirements using historical data, is carried out at regular intervals. This offers the advantage that requirements, which are automatically determined, are continually adapted to suit current consumption needs. The forecast requirement is reduced by the material withdrawal so that the forecast requirement quantity that has already been produced is not included in the planning run again.
Reducing Forecast Requirements
Reducing forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system also reduces future forecast requirements.
Reducing current forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system does not reduce future forecast requirements.
Average reduction of the forecast requirements
The reduction of the forecast requirements is based on average daily consumption. Actual consumption data is not relevant.
The system calculates the average daily requirement first using the formula forecast requirement/number of workdays in the forecast period.
The forecast requirements are then reduced by the quantity resulting from the following formula: number of workdays worked x average daily requirements.
Period Pattern and Forecast Periods
You can specify the period pattern for the forecast (daily, weekly, monthly or per accounting period) and the number of periods to be included in the forecast individually for each material. It is possible, however, that the forecast period pattern is not specific enough for planning purposes. In this case, you can define per material that the forecast requirements should be divided according to a finer period pattern for planning. You can also define how many forecast periods are to be taken into account during requirements planning. The splitting indicator is defined in Customizing for MRP per plant and per period unit and is assigned to the material in the material master.
Time-Phased Planning
Use
If a vendor always delivers a material on a particular day of the week, it makes sense to plan this material according to the same cycle, in which it is delivered.
Features
Materials that are planned using the time-phased planning technique are provided with an MRP date in the planning file. This date is set when creating a material master and is re-set after each planning run. It represents the date on which the material is to be planned again and is calculated on the basis of the planning cycle entered in the material master.
The net change planning indicator and the net change planning horizon indicator are irrelevant for materials planned using the time-phased planning procedure. The system does not therefore set these if changes are made in the planning run.
If you want to plan a material earlier than the specified MRP date, you can enter an MRP date during the planning run. For example, if the planning run is set for Monday, you can bring it forward to Saturday instead.
If you use the SAP Retail System, the system proposes the planning cycle from the vendor sub-range when you create a material master record. The vendor sub-range contains all the goods of a particular vendor that, from a logistical view, can be planned similarly.
Time-phased planning can be executed using consumption-based planning or MRP:
If you want to carry out time-phased planning using consumption-based planning techniques, the requirements have to be created using the material forecast. If you use consumption-based planning, only the forecast requirements are included in the net requirements calculation. For reducing the forecast requirements, you can choose the same settings in Customizing as used for forecast-based planning.
If you want to carry out time-phased planning using MRP, all the requirements that are relevant to MRP are included in the net requirements calculation. For this purpose, the indicator Time-phased with requirements must have been selected in the MRP type. The forecast requirements can also be taken into account in this process.
Safety Stock Calculation
The safety stock depends on the service level that you specified in the MRP II view of the material master record and on the accuracy of the forecast. The more accurate the forecast, the smaller your safety stock can be.
The following figure shows that, without safety stock, customer demand can be satisfied by 50%. It also shows that it is almost impossible to satisfy customer demand 100% of the time. Factor R describes the relationship between forecast accuracy and service level (SL).
If replenishment lead time is greater than the forecast period by factor W, then the mean absolute deviation (MAD) is recalculated for this period (formula 17). The MAD is a parameter of forecast accuracy. Otherwise, see formula 18.
Safety Stock (SS) Formulas
If the material is produced in-house, the delivery time is: opening period + in-house production time + goods receipt processing time. It is expressed in workdays. The forecast period is taken from the material master record and is also expressed in workdays.
If the material is procured externally, the delivery time is: goods receipt processing time + planned delivery time + goods receipt processing time. It is expressed in calendar days. The forecast period is taken from the material master record and is also expressed in calendar days.
The safety stock calculation may lead to rounding effects.
Minimum Safety Stock
You can specify a minimum safety stock. If the result of the safety stock calculation is lower than this limit, the safety stock is then automatically set to this minimum value. You enter the minimum safety stock in the material master record (the MRP 2 screen).