MD04 explained

Be rest assured, many people pretend to understand it but most do not. You being a first timer
and asking this MOST IMPORTANT question is a good sign that you are on your way to
becoming a good consultant.
MD04 can be called a MATERIAL LEDGER. SAP calls it Stock / Requirement list.
In ANY materials planning system (buying, selling, making, transferring. moving, writing off,
adjusting etc), a material can be planned or not planned. As a large manufacturing company
making cars, you probably do not plan for toilet rolls used in employees washrooms in SAP
(some people do that too but they are in Govt) but you need to plan for paint, engines and tires
depending on the demand of cars in the form of orders from customer OR as a forecast or
sometimes both...but those are details not directly related to MD04. MD04 is the FINAL outcome.
HOW (the method/strategy) the material is planned is identified by MRP Type. e.g. ND is an MRP
Type that means material is not planned. That means you will see nothing in MD04 for this
material at a said location (Plant or MRP area).
SAP has its own cryptic keys and text labels for various MRP type to confuse the hell out of first
timers like you, who expect knowledge without attending expensive training classes :-). PD
means the material is planned using the MRP run (e.g. MD01). There are other ways of planning
materials like consumption based planning, re-order point based planning, time phased planning.
This is the science part of planning that you will need to master separately if you want to know
why the plan created by each of these methods does not fit all or why one MRP type can be
BETTER than others. One size doesn't fit all. You need a strategy specific for material, may be
location (plant) or some other consideration.
AP External planning
M0 MPS, fixing type -0-
M1 MPS, fixing type -1-
M2 MPS, fixing type -2-
M3 MPS, fixing type -3-
M4 MPS, fixing type -4-
ND No planning
P1 MRP, fixing type -1-
P2 MRP, fixing type -2-
P3 MRP, fixing type -3-
P4 MRP, fixing type -4-
PD MRP
R1 Time-phased planning
R2 Time-phased w.auto.reord.point
RE Replenishment plnd externally
RF Replenish with dyn.SafetyStock
RP Auto-replenishment
RR Tmphsd. repl. w. dyn.trgt.stck
RS Time-phased replenishment plng
SMMRP
SS MRP with Safety Stock Planning
V1 Manual reord.point w. ext.reqs
V2 Autom. reord.point w. ext.reqs
VB Manual reorder point planning
VI Vendor Managed Inventory
VMAutomatic reorder point plng
VS Seasonal MRP
VV Forecast-based planning
X0 External planning
.
Here something like X0 means the material is planned but in some other system... could be from
SAP (e.g. APO) or could be someone other software
No matter what your MRP Type is, in any planning system, the ELEMENTS of planning be classified
into one of these 4 high level categories
Stock
Receipt
Requirements
Forecast
Srinivas's list above can be neatly grouped along these categories. Each of this high level category
can have constituents that ORIGINATE from somewhere within your sales, procurement, materials
management, inventory management and production activities. This origin depends on the
configuration, document flow, inventory documents, movement types, other customization that your
consultants did before you came into the scene. IF it is not documented well (any changes to standard
behavior), you will live with wrong assumptions DESPITE understanding the basic arithmetic on the
screen :-)

A stock transport order (POitm) can be requirement for the sending plant but a receipt for the
receiving plant but this depends on how the STO document flow in configured..... I hope it is
making sense ?!
Then depending on the CURRENT situation, you have exception messages that MD04 shows if
you double click on the element. The exception message tells you whether you are doing good or
bad and what action should you take in the interest of meeting your OBLIGATIONS and
APPREHENSIONS and that includes customer service. Usually the message is very clear.