What is consumption-based planning in SAP PP-MRP - Material Requirements Planning?

SAP Term: consumption-based planning

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A generic term for the procedure in MRP for which stock requirements and past consumption values are important. Consumption-based planning is divided into the following procedures: Reorder point planning Forecast-based planning Rythmic planning

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• Key Concepts: 
  Consumption-based planning is a type of material requirements planning (MRP) used in SAP's Production Planning (PP) module. It is a method of forecasting and planning for the future needs of a company based on the current consumption of materials. This type of planning helps to ensure that the right amount of materials are available when needed, and that there is no over- or under-stocking of materials. 
  
  How to use it: 
  Consumption-based planning can be used to plan for future needs by taking into account the current consumption of materials. This type of planning helps to ensure that the right amount of materials are available when needed, and that there is no over- or under-stocking of materials. The PP-MRP module in SAP allows users to set up and manage consumption-based planning, as well as other types of MRP. 
  
  Tips & Tricks: 
  When setting up consumption-based planning in SAP, it is important to consider the lead time for each material, as this will affect the amount of material needed for future needs. Additionally, it is important to consider any seasonal fluctuations in demand when setting up consumption-based planning. 
  
  Related Information: 
  Consumption-based planning is just one type of material requirements planning (MRP). Other types include time-phased MRP and capacity requirements planning (CRP). Additionally, SAP also offers other modules such as Production Planning and Control (PP/C) and Supply Chain Management (SCM) which can be used in conjunction with PP-MRP for more comprehensive material requirements planning.