Requirement Prioritization in SAP Materials Management

[mohamedhasanrifaie_m]

Summary

This document helps SAP Procurement consultants to understand the requirement prioritization in SAP.

Requirement Prioritization

This function helps to prioritize the requirements based on urgency in Logistics management. This will reduce the lead time from planning to available.

Application

Purchase Requisitions

Requirement urgency can be assigned at item level when creating purchase requisitions manually. The requirement priority will be determined based on requirement urgency. Requirement urgency and requirement priority is interconnected in configuration.

If you change requirement urgency to next level or another level, requirement priority will also change in accordance with requirement urgency.

Purchase order

Requirement priority can be assigned when creating automatic purchase order so that the corresponding priority PRs will be selected for conversion. In case of STO, Conversion only takes place if sufficient stock is determined at the issuing storage location in the course of the availability check. When creating manual purchase order, requirement urgency can be assigned at item level.

Via Requisition Assignment List

Transaction code: ME58

Please refer to the below screenshot to know the selection screen for requisition assignment list with requirement priority field.

Requirement priority "1" assigned Purchase requisitions will be displayed by executing the above transaction (ME58). From there, you can create a purchase order.

Automatically via Purchase Requisitions

Transaction code: ME59N

Another way of creating creating purchase order automatically is via ME59N. Here on the selection screen input the required priority to be selected and execute the transaction.

Please refer to the below screenshot to know the selection screen for Automatic creation of POs with requirement priority field

Selected Priority "1" PRs are converted in to POs succesfully.

As explained previously, requirement priority can be assigned direcly while creating a purchase order. Here, you assign a requirement urgency manually at line item level and the requirement priority will be calculated based on configuration settings.

The following display shows requirement priority "1" and "4" assigned manually on the purchase order at item level.

Reservation

Requriement urgency can be assgined to reservation at item level so that requirement priority is determined automatically.

Via Picking List

Transaction code: MB26

Pick list is used to list down the reservations created for the particular material with reservation quantity. if the reservation is created with the requirement priority then the corresponding reservations will be picked according to the selection criteria (priority 1, etc).

Material requirements planning

The requirement priority is determined for purchasing and reservation documents is displayed in the stock/requirements list, in the planning result, and in the MRP list.

Configuration Overview

Activate Requirement Prioritization

Menu Path:

IMG-->Materials Management-->General Settings for Materials Management-->Requirement Prioritization--> Activate Requirement Prioritization

In this activity, the requirement priority is activated with the combination of requirement priority and requirement urgency. The requirement priority and urgency shall be customized as per business requirement.

Define Requirement Urgency Groups

Menu Path:

IMG-->Materials Management--> General Settings for Materials Management--> Requirement Prioritization--> Define Requirement Urgency Groups

Here, urgencies are grouped and defined as requirement urgency groups. Urgency groups shall be defined as low, medium, high. Either alphabetic or numeric shall be used for the definition. Later the requirement urgency groups shall be assigned to the requirement urgency.

Define and Assign Requirement Urgencies

Menu path:

IMG-->Materials Management--> General Settings for Materials Management--> Requirement Prioritization--> Define and Assign Requirement Urgencies

In this step, create requirement urgency and assign the same to urgency group created in the previous step. Requirement urgency and urgency group have one to one relationship.

Define Organizational Priorities

Menu path:

IMG-->Materials Management--> General Settings for Materials Management--> Requirement Prioritization--> Define Organizational Priorities

In this step, create organizational priorities. Later, the organizational priorities will be assigned to the plant and storage location. The combination of requirement urgency group and organizational priorities will be determined the required requirement priority.

Assign Plants and Storage Locations (Optional)

Menu path:

IMG-->Materials Management--> General Settings for Materials Management--> Requirement Prioritization--> Assign Plants and Storage Locations

In this step, assignment of plant and storage location with organizational priority takes place. The assigned organizational priority along with urgency group determined the required requirement priority and defaulted for the plant and storage location. If you assign the organizational priority for the plant and it will be applicable for all the storage location belongs to the plant. If you want to default for a particular storage location, then assign plant and storage location combination for the organizational priority.

Define Requirement Priorities

Menu path:

IMG-->Materials Management-->General Settings for Materials Management-->Requirement Prioritization--> Define Requirement Priorities

It is the final determination of requirement priority based on the urgency group and the organizational priority. Assignment of urgency group is mandatory here and the organizational priority assignment is optional.

Assign Delivery Priorities

Menu path:

IMG-->Materials Management-->General Settings for Materials Management-->Requirement Prioritization-->Assign Delivery Priorities

In this step, assign delivery priorities to the combination of requirement priority and requirement urgency. based on this assignment, the requirement priority from the purchase order will be converted in to delivery priority in deliveries. The same will be displayed at item level of the purchase order.

Assign Order Priorities

Menu path:

IMG-->Materials Management-->General Settings for Materials Management-->Requirement Prioritization-->Assign Order Priorities

In this step, assign the order type (like QM order, PM order) and the priorities to the requirement urgency so that the requirement priority will be determined based on this configuration and used in reservation for the QM, PM orders, etc..

Conclusion

How the requirement prioritization could be used in supply chain and the configuration part has been explained in a simple and understandable way. Any suggestions towards this document will be always welcome.

Author Bio:

Mohamed Hasan Rifaie,  a SAP Certified Procurement consultant, is now an employee of Larsen & Toubro Infotech Ltd. He has overall 12 years of experience, out of which more than 6+ years in SAP Consulting (P2P, SRM & WM). He has business experience in various industries like Manufacturing, Electro mechanical Construction and process industries as a Procurement Executive.