Production Planning Cycle in SAP

1. PRODUCTION PLANNING MODULE

2. PP FI CO SD MM PM QM PS HR

3. Manufacturing Planning and Execution Organizational and Master Data Business Process for Manufacturing Planning and Execution Reporting and Analysis

4. Manufacturing Planning and Execution Sales Info System CO/PA Forecasting Procurement Sales & Oper. Planning Demand Mgmt MPS/MRP Material planning Manufacturing Execution Order Settlement Planning Process Execution Process

5. Manufacturing Planning and Execution Requirement from sales/marketing Production Planning Check Availability Components Capacity Run Schedule Qtys Sch & Cap Levelling Mfg. Execution Backflushing Receipt of Fin Goods In Stores Shift dates / Provide Addl. capacities Purchasing yes no no yes REM

6. Manufacturing Planning and Execution Requirement from sales/marketing Production Planning Check Availability Components Capacity Production Order Sch & Cap Levelling Mfg. Execution Production Confirmation Receipt of Fin Goods In Stores Shift dates / Provide Addl. capacities Purchasing yes no no yes Discrete

12. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS Stock/Requirements List Lists the latest stock/requirement position of a material in the plant i.e. planned orders, production orders,etc. Production Plan This report lists the monthly production plans – material and plant wise . Orders This report lists the orders pending/completed for a material material wise or work center wise..

13. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS Quantity produced This report lists the quantity of the material produced during the Period in question. Work center Loads This report lists the available capacities, required capacities, remaining available capacities and %load for the work center. Consumption Lists the consumption of a material for the period in question.

14. Backlogs Lists the backlog of the load at a work center for the period in question. Missing parts Lists the missing parts that are required for the production of a material. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS

15. Production Planning Basic Data Routings Work Centers Materials Capacities Inspection Plans Production Facilities Bills of Material PP Basic Data Production Resources/Tools F06010

16. SAP R/3 Integration Model Sales & Distribution Production Planning Materials Management Finance & Controlling Customer Sales Order Shipment Receivable Accounts / Cash Receipt Credit Limit Material Availability Check Transfer of Requirements Goods Issue to SO Goods Receipt Invoice Receipt Purchase Order Accounts Payable Invoice Accounting Document Production Cost Production Order Production Order Receipt Sales Forecast / Plan Vendor

17. Organizational Structures in R/3 Cost accounting Accounts Internal logistics (MRP/Production) Inventory management Group Controlling areas Sales organizations Company codes Valuation areas Plants Storage locations/batches/special stocks External logistics Purchasing organizations Levels Views

18. Material Master Data General Data St. Loc. Specific Data Plant Specific Data Sales Specific Data Material Master Data applicable throughout the client e.g. Material number Description Units of measure Weight Volume Product hierarchy Data dependent on sales organization and distribution channel e.g. Delivering plant Sales text Sales units Shipping data Division Data relevant for planning and production e.g. MRP profile Production costs Planning data Valuation Data referring to storage and inventory management e.g. Quantities Special stock Warehouse attributes

19. Material Types in the Standard SAP Material Type DIEN ERSA FERT HALB HAWA HIBE LEER NLAG ROH VERP WETT PROD Service Spare Part Finished Product Semi-finished Product Trading Good Operating Supply Empty Containers Non stock Item Raw Material Packaging Competitor Product Production Resources/ Tools Description

21. Engineering Design Sales Production Stock Finance Purchasing Examples of How Data is Used Texts copied to purchase orders Maintains stock levels by plant, storage location, and batch Data used to calculate MRP lead times Controls customer ordering rules for material Controls which General Ledger Account is updated Material description used in reporting Product Data

22. Bills of Material Simple BOM Variant BOM Multiple BOM Simple BOM representing single material Similar materials represented by variants on one BOM BOM representing a material which can be made up of multiple compositions e.g. different components and quantities

24. BOM Structure BOM Header Plant Assignment Validity Period Release Indicator Stock Items Non-stock Items Variable Size Items Document Items Text Items Additional component details e.g. installation points for components Item 10 Item 20 Item 30 Sub Item 10 Sub Item 20

29. Assembly Line Machines People Production Line Capacity Requirements Planning Scheduling, Execution Times Costing Work Centers Work Centers Cost Center

30. Work Centers and Routings Routing Operation 10 Operation 20 Operation 30 Work Center W1 Cost Center 100 Assembly Cost Centre 200 Work Center W2 Finishing Cost Center 200 Work Center W1 Cost Center 100 Assembly

32. Cost Center Assignment to Work Center for Operation Costing Cost Center Oper 0010 Oper 0020 Oper 0030 Oper 0040 Routing with standard values Set Up (SET) Machine (MACH) Labor (LAB) Work Center with Activities during production Activity Rates Set Up $70.00 Mach $60.00 Labor $80.00 Overhead $70.00

33. Work Center Capacity Oper 0010 Oper 0020 Oper 0030 Oper 0040 Routing with standard values Set up Formula Machine Time Formula Teardown Formula Work Center Formulas Set up 1.0 hrs Machine 5.5 hrs Teardown .5 hrs Operation Std Values Work Center Schedule Use of Formulas in Work Centers

34. 8 hrs 1 hr 7 hrs 1 hr 6 hrs Working Hours Break Time Working Hours less Breaks Planned Downtime Productive Working Hours Available Capacity at a Work Center

35. Routing Structure Views Routing Operation 30 Operation 20 Operation 10 Work Centre: PP-ASSEM Control Key: - Time Tkts - Costing Operation Text: Pre-assemble frame Std Values: Lab:10 mins Mach:10 mins Materials Components BOM Process Resource Tool (PRT)

36. BOM Groups Production Master Data Materials and PRTs Bills of Material Routings Work Centers Routing Groups Cost Centers Components Allocated to Operations Item Category Material Type W/C Category

38. Operation / Sub-operation Operation 0010 Operation 0020 Sub Operation 0010 / 10 at Work Center A1 Sub Operation 0010 / 20 at Work Center A2 Sub Operation 0010 / 30 at Work Center A3 Schedule at Operation Level Useful when processing for operation 0010 occurs over multiple work centers Capacity Planning & Costing possible at Sub Operation Level Level

39. Material Allocation Op. 10 Op. 20 Op. 30 Op. 10 Op. 30 Routing Product BOM

41. Routing Default Values Routing Material Master Work Center Base Unit of Measure Planner Group Short Text Control Key Standard Values Activities Standards Text Key HR data

42. External Processing Oper 0010 Oper 0020 Oper 0040 Oper 0050 Purch Reqn Purch Ord Vendor Proc Goods Rec Routing data copied to order including quantities and dates Purchasing creates P.O. At goods receipt, the operation is confirmed

43. Operation Lead Time Float Before Float After Oper 0010 Oper 0020 Oper 0030 Queue | Setup | Process | Teardown | Wait | Move Execution Time Interoperation Time Interoperation Time Operation Lead Time

44. Routing Operation Sequences Overlapped Routing defines process where one operation is to overlap with the following operation Standard Routing represents a standard sequence defining production procedure Parallel Routing includes processes which can be performed simultaneously to achieve time efficiencies Split Routing includes processes which can/must be split across a number of work centers

45. The Planning Concept in SAP SOP MPS Planned Independent Requirements Customer Independent Requirements Requirements (Orders) from SD Module Offset Keep Balanced Order Proposals MRP Planned Orders Production Orders Purchase Requisitions Demand ie Requirements Order proposals, planned orders etc are created and adjusted by running the MRP or MPS programs. Sales Plan Production Plan

57. Copy from Sales Plan Copy from Prodn Plan Copy from Forecast Copy from Orig Plan Demand Management “ Demand Program” Manual Planned Independent Requirements Sales Demand from Sales Orders MRP/MPS Sales and Operations Planning

59. Sale from stock Planning Production Push Warehouse Stock Finished Product Strategy: Make-To-Stock Production Example: Common shelf items such as a bike accessory (light)

61. Sales Order Planning Production Push Warehouse Stock Finished Product Example: Custom furniture such as a cherry table Final Assembly to Sales Order Purchase Produce MRP without reference to sales order Planned Independent Requirements Strategy: Planning with Final Assembly

63. Sales Order Planning Warehouse Stock Finished Product Warehouse Stock Assembly 01 Warehouse Stock Assembly 02 Example: Option oriented product such as a car Stop at level Planned Independent Requirements Assembly when Sales Order Scheduled Purchase Produce Strategy: Planning Without Final Assembly Production Push Final Assembly Pull

65. Sales Order Planning Customer Stock Finished Product Planning Material Warehouse Stock Assembly 01 Warehouse Stock Assembly 02 Example: Bikes with the same features except for the color Purchase Produce Note: Percentages drive lower level demands for sub assemblies Strategy: Planning with Planning Material Planned Independent Requirements Production Push Final Assembly Pull

66. Sales Order Warehouse Stock Finished Product Example: Combine customer orders for the same item Strategy: Production by Lot Size Production by Lot Size Pull

68. Sales Order Warehouse Stock Finished Product Example: New machinery Strategy: Make-To-Order Production Production by Lot Size Pull

69. MRP Features MRP Lot sizing Order scheduling and generation Internal production and external purchasing Net requirements calculation Bill of Material Explosion Forecasting

70. MRP Overview

71. Overview Purchased Items MRP Purchasing Accounting Warehouse management system Goods receipt Inventory management Valuation Goods Transfer issue posting Invoice receipt Invoice verification Master data Material Batches Vendors Customers :

72. MRP: Reorder Point Planning Reorder Point Safety Stock Order Date Delivery Date Time Stock

73. Purchasing Process Time Vendor Planned Delivery Time Desired Delivery Date Release Order Date Forward Scheduling for External Procurement Today Goods Receipt Process Time Forward scheduling used for reorder point material

74. Daily Accumulation: Entries from Planning File Warehouse Stock + Open Order Proposals Shortages Net Change Planning Coverage calculation per requirement date Sales Orders Planned Individual Requirements Reservations Order Proposal

80. MRP Types VB VM VV PD M0 Manual Reorder Point Planning : MRP produces order proposals when stock falls below a “reorder point”. The reorder point and safety stock levels are entered manually Automatic Reorder Point Planning : The reorder point and safety stock level are calculated based on the forecast results Forecast Planning The latest forecast is copied as requirements which are used to create order proposals Deterministic Planning MRP produces order proposal(s) to match the exact quantity of the requirements based on independent and dependent demands Master Production Scheduling Similar to PD but used for master schedule items

81. Lot Sizing Static Periodic Optimum (Cost ) Lot for Lot Fixed Lot size Replenish up to maximum stock level Daily Lot size Weekly Lot size Monthly Lot size Flexible period Lot size according to planning calen. Part period balancing Least unit cost procedure Dynamic Lot size creation Groff reorder procedure

82. MRP: Static Lot Sizing Lot for Lot Order Quantity: Shortage Quantity = Ordered Quantity Replenishment up to Maximum Stock Level: Stock required to achieve maximum stock level set in the material master Order Quantity = Material Fixed Order Quantity = Shortage Quantity Order = Fixed Order Quantity If Fixed Lot Size: Shortage Quantity > Fixed Order Quantity If Order Order Order

85. MRP List MRP Controller Group of Materials for which controller is responsible Controller’s MRP Listing MRP Order Proposals and Planner Messages from MRP Planning run. Planner can drill down to review material movement activity Goods Receipt Goods Issues

86. Stock Requirements List Date MRP Element Supply/Demand Ref EM Quantity Available 01/01 STOCK 100 01/08 ORDER Sales Order 25 75 01/15 PL ORD 1000 120 05 100 175 02/01 -----------------------------------------------------> Planning Time Fence Stock Requirements List brings together all the supply orders, independent and dependent demands and stock balances for the material. MRP makes order proposals to balance the supply/demand position for the material

90. E1 Independent Requirements Customer Requirements Planned Orders Dependent Requirements B2 B1 R1 R2 R3 Planned Orders Dependent Requirements Dependent Requirements Level 0 Level 2 Level 1 Planned Orders Planned Orders Planned Orders Planned Orders Planning Structure Multi-Level = Demand = Supply

91. Order Proposals: Planned Orders Procurement Type is In-house Production MRP MRP Controller Planned Order Order Qty Order Date Capacity Reqts. Resource Reqts. Production Order

92. Planning for In-house Production Planned Order Production Order Auto Change/ Delete if situation changes Auto Creation Collective Conversion into Production Order Manual changes/ deletion Manual Creation Planning Run MRP Controller Individual Conversion into Production Order Production Order Release

93. The Production Cycle Issue Materials to Order Select BOM Select Routing Schedule Times & Dates Calculate Capacity Purchase Requisitions Goods Issue Calculate Planned Costs Release Order Check Availability Print Shop Floor Papers Create Order Create Required Purchases Confirm Completion Receive complete goods into stock Goods Receipt Confirmation Slip Calculate Actual Costs Actual Labor Production Order

96. Material Availability Check Stock on Hand 150 Units Reservation for 50 Units Net Available 150 100 300 100 Planned Order for 200 Units Dependent Requirement for 200 Units Requirement for 50 Units are Available

97. Goods Movement for a Production Order Material 1 Material 2 Production Goods receipt of Material 3 Goods Issue Consumption of Material 1 and 2 Reservation Planned Goods Issue Unplanned Goods Issue Goods issues only apply to stock items

98. Goods Issue Results Goods Issue Posting Update Reservations G/L Account Update Accounting Material Document Material Usage Statistics Cost Object Allocation