Hi Suresh,
First of all the basic concept/process behind using this is as follows below.
Material requirements planning with MRP areas cannot be reversed once activated. During conversion i, SAP will automatically create a MRP area for all your existing Plants. Now, you can start creating the MRP area for storage location or vendor to be planned separately. That's is the whole purpose for using MRP area. Here you define whether the MRP area type :- 01 - Plant 02 - Storage Location 03 - Vendor . In Material Master MRP 1, the MPR area section will appear once you successfully complete the above Steps. Assign MRP Areas to Materials You assign the MRP areas to the materials by creating an MRP area segment for each MRP area in the material master. You can assign several MRP areas to one material. MRP with MRP areas for the material is not activated until an MRP area has been assigned to a material. If you have not assigned an MRP area to a material, that is, you have not created an MRP area segment in the material master, the material will continue to be planned in the plant MRP area only. If you have assigned an MRP area to the material, the system can plan it in the plant MRP area and in the assigned MRP area. You can display an overview for all materials in an MRP area. To do this, you go into Customizing for MRP and choose the IMG activity Define MRP areas. Call up an MRP area by double-clicking and choose Material overview for MRP area. Check Storage Locations If you have already entered a storage location in the BOM (BOM item), in the work center (supply area) or in the production version, you should check whether this storage location is the storage location for the MRP area that you have assigned in the material master. The materials are assigned to an MRP area via the storage location that the system determines during the planning run. You should therefore check the storage locations that you have maintained in the material master. The storage location in the material master must be a storage location for the MRP area, for which you have created an MRP area segment in the material master. You can therefore ensure that material requirements planning will be carried out for the correct MRP area The MRP area represents an organizational unit for which material requirements planning is carried out independently. Basically, there are three types of MRP area: Plant MRP Area The plant MRP area initially contains the plant together with all its storage locations and stock with subcontractors. When you have defined MRP areas for storage locations and for subcontractors and you have assigned the materials, the plant MRP area is reduced by exactly this number of subcontractors and storage locations. This is because they are now to be planned separately. MRP Areas for Storage Locations You can define an MRP area that consists of a particular storage location, by creating an MRP area and assigning the storage location to it. Material requirements for this storage location are then planned separately from the rest of the plant. You can also group several storage locations into one MRP area, by creating an MRP area and assigning the storage locations to it. These storage locations are then planned together. A storage location of a plant may be assigned to only one MRP area. MRP Areas for Subcontractors You can also define an MRP area for each subcontractor. A subcontractor may be assigned to only one MRP area.
MRP areas of the storage location or subcontractor type are only suitable for: 1. components that are planned and produced for stock 2. finished products that are planned and produced for stock. By assigning a storage location in a sales order or by entering an MRP area when creating the planned independent requirements, you can define whether a material is planned in the plant MRP area or in the MRP area of the storage location. Material requirements planning for each MRP area allows you to have specific control over the staging and procurement of parts produced in-house and purchased parts for each shop floor and assembly area. If, for example, you define an MRP area for the production storage location of an assembly line, the system plans the material requirements for the assembly line separately from all other requirements. Example: Subcontractor You can also carry out planning for components to be provided in subcontracting using an MRP area by defining an MRP area for every subcontractor and assigning the components to be provided to the MRP area of the subcontractor. You therefore plan the requirements to be provided for these components for one subcontractor separately from all other requirements. Depending on the requirements situation, the system creates either stock transfer reservations from the plant to the stock of material provided of the subcontractor or it creates purchase requisitions within subcontracting/third-party order processing, according to the special procurement key settings.
hope this would be useful for you at some extent.
please revert if required.
Regards
Chandra
Edited by: Saraswati chandra on Jan 18, 2011 11:33 AM
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