Sunny,
Are you using standard Strategy type 11 or you have customized anything?
Reduction is based on Statergy and Movement type settings.
The Strategy is assigned with Customer RequirementsType then The Requirement Type is assigned with Requirement Class (OVZH) Then Requirement Class has the Ind.Req.Reduction indicator Set (OVZG)
I suggest you to read below SAP Note for further details
772857 - FAQ: Independent requirements reduction/withdrawal quantity.
9. Question:
What are common reasons for the reduction not occurring?
Response:
For planning strategies with planned independent requirements consumption: Have the prerequisites for the consumption been fulfilled (see Note 772856)? Were there independent requirements quantities to be reduced at the time of the goods movement in the forward/backward consumption periods (planning quantity > 0)?
For goods movements from inventory management (MM): Is the 'Independent requirements reduction' (PABKZ) indicator set for the movement type (transaction OMJJ)?
For goods movements from SD (for example, transaction VL02) for reducing the make-to-stock production (requirements type LSF): Is the 'Requirement reduction' (PABKZ) indicator set in the requirements class of the customer requirement (transaction OVZG)?
For stock transfers/transfer postings: A reduction does not occur for stock transfers in a planning segment. Only stock transfers between different plants, MRP areas and planning segments can reduce planned independent requirements.
Is an MRP type that provides 'Reorder point planning', 'Forecast-based planning' or 'No material requirements planning' set for the material? See the modification of Note 68641 if you want to allow the reduction for these materials.
If eveything is perfect try with standard movement type 101 or 131 in case REM and see whether PIR reduction is happening.
BR
KK