Lot-size for continuous production and process industry

A suitable lot-size for continuous production can be hard to come up with. Picture the situation of a mineral oils manufacturer that refines crude oil to 3 co-products. The planner wishes to control the process flow to align the production with demand (i.e. the refinery is not continuously refining at the same speed as it would in make-to-stock). Another requirement for ATP is that the production quantities are issued on a daily basis. Hence we want MRP to come up with weekly planned orders that are distributed on a daily basis. In abundance: 1 planned/process order per week, with equal quantities released per day.

Lot-size

IMG > Production > Material Requirements Planning > Planning > Lot-Size Calculation

The lot-size that can be set up for this could be (a variant of):

Custom lot size for continuous production

Custom lot size for continuous production

Lot-size procedure is P for period lot-sizing. Lot-size indicator is K for sizing according to a custom planning calendar (pick factory calendar if this suits you). This enables you to create planned orders e.g. from Wednesday to Tuesday.

For scheduling you choose 3 for Period Start = Start and period end = delivery date.

Distribution key

IMG > Production Planning for Process-Industries > Master Data > Master Recipe > Material List > Item Data > Item Data from Related Application Areas > Define Distribution Keys

You set up a distribution key for the production version that enables a equal distribution through time.

Equal distribution key

Equal distribution key

The distribution key consists of standard SAP distribution function S20 for Equal Distribution and standard SAP Distribution Type 01 for continuous distribution through time.

Production version

Last thing to do is assign the distribution key to the production version in the material master (tab MRP4). If you’re not working with production versions and you’re going to create a new one: make sure the BOM Selection method is set to Selection by production version (also in the MRP4 tab).

Distribution key in production version

Distribution key in production version

MRP

Now you run MRP and you will find that a planned order is spread over seven days with equal quantities. Take note that the order number is the same for every day (indicating that it is indeed just one planned order and not seven).

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2 thoughts on “Lot-size for continuous production and process industry

  1. Dan

    Could you please tell me the difference between running MRP in weekly buckets as opposed to monthly buckets?

    Reply

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