Module : PP (Production Planning)

The SAP PP business processes uses the following organizational elements:

– Client

– Company Code

– Plant

– Storage Location

Organizational Elements

Organizational ElementsClient

A Highest Hierarchical Level in SAP (e.g. a corporation)

Used to Differentiate between a Development, Quality Assurance, and Production System within SAP R/3

Common Set of Rules Common Tables Common Master Files Common Data Bases

Standardized data across the client A vendor number and name is common across the client A customer is common across the client A material number and description is common across the client

BALANCING / (LEGAL)BALANCING / (LEGAL)ENTITYENTITY

==Company Code ****

AssetsLiabilitiesRevenues

- Expenses

Profit/Loss

Organizational ElementsCompany Code

A company code represents an independent balancing/legal accounting entity, for example, a company within a corporate group.

Balance sheets and profit & loss statements, required by law, can be created at the company code level.

Organizational ElementsPlant

Usually a manufacturing facility, a warehouse, or a location that stocks , manages, and valuates inventory

May be a physical site with multiple manufacturing/production lines

May be multiple manufacturing/production lines at one physical site

Can be a physical location (cost centers may or may not be associated to a plant i.e. Administrative vs. Manufacturing cost centers)

Links to production (PP), materials management (MM), and sales and distribution (SD)

A plant is assigned to a company code

Purchasing organization are assigned to plants.

Organizational ElementsStorage Locations

A storage location is the place where stock is physically kept within a plantA storage location has the following attributes:

There may be one or more storage locations within a plant.

Stocks are managed only on a quantity basis and not on a value basis at storage location level.

Physical inventories are carried out at storage location level.

Storage locations are always created for a plant.

Master DataList of Master Data in SAP PP Module are:

– Material Master– Bills Of Material– Work Centers– Routings

Master DataMaterial Master

Material Master

Material master record is a company's main source of material-specific data. It is used by all components in the R/3 Logistics System.

The integration of all material data in a single database object prevents the problem of data redundancy. Every area, such as Purchasing, Inventory Management, Materials Planning, and Invoice Verification can use the data stored.

Material Master

Since materials are processed by various user departments within a company and each department stores different information for the materials, the material master is subdivided into information grouped by user departments.

Each user department has a different view of the material master record and is responsible for maintaining the data to support its function.

The data maintained within a view may be valid for more than one organizational level.

Material Master

Base unit: Piece

Box(unit of issue)

Crate(order unit)

Pallet(sales unit)

Material Master – Units of Measure

Material Master

Master DataBills Of Material

Bills Of Material

Master DataWork Centers

Work Center

Master DataRoutings

Routing

Routings - Components

Routing - Components

Routings

Routing - Group

Material Allocation

PRT Assignments

Sequences in Routing

Parallel Sequences

Scheduling in PP

Scheduling

Sub Operations in Routing

Scheduling

Production Planning

• Demand Management• Material Requirement Planning

−Planning of Purchased parts

−Planning of in house assemblies

Planning Process: Process flow

Demand planning cell

Production

MRP Run

Third Party Log

Vendor Web site

Demand (Weekly)

Production Requirement (Week wise, Model wise)

Planned Prod.

Confirmed Production

Planned Vendor Schedule

Confirmed Vendor Schedule

Dispatch plan

Central marketing office

Dispatch sheet

While doing planning, you need to decide which planning strategy to use when the customer places their order.

• Make-to-Stock Production− Make-to-stock production means we build stock in anticipation of customer

demand. We ship the customer order from our stock of finished goods

• Make-to-order Production− We wait for a customer order before we start production/procurement. i.e. We

produce as per demand from customer

Planning Process: Strategies

Dealer

Territory office

Area Office Area Office Area Office Area Office

Central Marketing office

Consolidation of Demand

Territory office

Dealer Dealer Dealer Dealer Dealer

Planning process: Demand Planning

Demand management is the link between top-level requirements planning (SOP) and materials planning (MRP).Input for the demand program can come from several sources:

Planning Process: Demand Management

Materials Requirement Planning

MRP Overview

Uses of MRP

MRP Functions

MRP Prerequisites

Planning Run

Planning Run - Types

MRP - Control Parameters

Net Change Planning

Planning in Planning Horizon

Planning Run - Single Item

Single-item, Multi-Level Planning

Single-Level MRP

Multi-Level MRP

Total Planning

MRP Procedure

MRP Control Parameters

Net Requirements Calculation

Requirement Quantities

Safety Stock

Safety Time

Safety Time in Production

Lot Size Calculation

Lot Sizing - Overview

Static Lot Sizing

Period Lot - Sizing Procedure

Optimum Lot Sizing

Long Term Lot Sizing

Other Lot Sizing Features

Lot Size Rounding Profiles

Layout of MRP List

Stock Req. List - Layout

MRP List - Collective Display

MRP List - Functions

Exception Messages

Rescheduling Checks

Old / New Exception Message

Planned New Exception Message Order Conversion

Material Supply for Production

Collective Display

Search in Individual List

Current List - Functions

Pegged Requirements

Order Report

Planning Time Fence

Scheduling in PP

Scheduling - Basic Dates

Scheduling - Production Time

Planning Process

PlantStockPlantStock

OrderProposalExternal

ProcurementIn-HouseProduction

SupplySupply

DemandDemand

PlanningParameters

Planning Process

Production Execution

• Stock transfer to WIP location• Order Execution

−Production confirmation

−Error handling

Planning Process

Physical MovementStorage Loc MAINStorage Loc MAINStorage Loc MAINStorage Loc MAIN Storage Loc WIPStorage Loc WIPStorage Loc WIPStorage Loc WIP

ProductionOrder

Work Center

Routings

Release Avail check

Goods issue

Production

Goods receiptConfirmation

Movefloorstock

Planned Order

Availability Check

Convert Order

Best PracticesLogistics PlanningMake-To-Stock Discrete ManufacturingProduction Subcontracting (External

Processing)Rework Processing (Stock-Manufactured

Material)Rework Processing (Work-In-Process)

Logistics Planning

• Purpose − The purpose of logistics planning is to make sure that future demand can be

satisfied by your company’s available resources and to point out situations where demand cannot be met in time or in the desired quantities.

• Benefits − Seamless Integration in complete planning cycle

• CO-PA SOP LTP Demand Planning

• Key process flows covered− Sales and Operation Planning

− Long Term Planning

Purpose and Benefits:

Logistics Planning

•This process sometimes is called ‘Sales and Operations Planning’. The process usually takes place in a simulative mode and at an aggregated (usually product group rather than end-item) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).•The Best Practice scenarios in this section cover the following planning workflow: Planning/forecasting of future demand Aggregated production planning including capacity check in order to check at

product group level if demand can be satisfied (using the SOP functionality) Transfer of results to Long Term Planning (using the LTP module) to enable

simulation of material requirements, based on the production plan (s) Planning takes place in separate (simulative) planning versions within LTP Review and adjustments of planned requirements as needed Once the simulated requirements are accepted, the demand (independent

requirements) is then transferred to active demand management for detailed MRP and Production Planning / Scheduling in the active version.

Detailed Process Description:

Logistics Planning – Process Flow DiagramR

Acceptable Plan

Sales Qty Budget and Transfer to SOP (with CO-PA), Revenue Planning (172)

Operational Production Planning & Control(Production scenarios)

SOP Verification Demand Verification (Check Sales Plan)

Create Rough-Cut Production Plan

Periodic Sales and Operations Meeting

Operative Production Data

CO-PA = Profitability Analysis, SOP = Sales and Operations Planning, LTP = Long Term Planning, MRP = Material Requirements Planning

Transfer Rough Cut Production Plan to Inactive Demand Management

Copy to Active Demand Management

Execute LTP MRP

Create LTP Planning Scenario

Evaluate Capacity Planning

Sales Quantity forecast (179)

Make-To-Stock Production with Discrete Manufacturing

• Purpose

− This scenario describes a business process, which is typical for companies with lot-size oriented production.

− The production scenario produces a finished good and all dependent components in make-to-stock production (MTS).

− Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing.

• Benefits

− Production triggered by a production plan

− Serial number and batch management included

− Optional with: quality management, consigned inventory, external processing• Key process flows covered

− Creating Planned Independent Requirements

− Material Requirements Planning at Plant Level

− In-House Production (subassembly)

− In-House final assembly (Finished Good)

− Capacity Leveling

− Confirming Assembly Activities

Make-To-Stock Production with Discrete Manufacturing

This scenario describes a business process, which is typical for companies with lot size oriented production. The production scenarios consist of both goods movements (goods issues and receipts) and confirmation of completion of the production order.

Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing.

The typical planning process starts with sales quantity planning. The previous period’s actual sales figures can be used as a basis for future planning.

In Sales and Operations Planning, you ensure that production stays in line with sales so that you may create the production plan synchronously to sales. The planning data is transferred from Sales and Operations Planning to Demand Management. Demand Management generates independent requirements, which are used in the subsequent Material Requirements Planning (MRP) run.

In material requirements planning, the bill of materials (BOM) for the top-level material demand gets exploded and production is planned right down to procured component level. MRP results in planned orders being generated for the material to be produced.

If insufficient warehouse stock is available, purchase requisitions are created for the raw materials required. When the order is created, target costs are calculated for the order lot size (preliminary costing).

During the production process, costs incurred are updated on the order, which enables you to keep track of and compare target costs and actual costs at any time.

Period-end-closing activities are applied to the order. This includes Work In Progress calculation and variance calculation.

After this, Work in Progress is settled to financial accounting and production variances are settled to management and financial accounting.

Make-to-Stock Production – Discrete Industry – Process Flow Diagram

Period End Closing “General” Plant(181)

Material Requirements Planning at Plant Level & Evaluation of Stock / Requirement List

Beginning of Planning Cycle

Purchase Requisition

MRP List

Inventory @ Standard. Cost

Periodic Plan Revision

Release Production Order

Capacity Leveling

Material Staging for Planned Orders

Confirming Assembly Activities/ Final Confirmation

Semi-Finished Goods Receipt

Goods Issue/ Back flush

Update Capacity

Goods Receipt Slip

Pick List

Order PrintPlanned Orders

Capacity Leveling O.k.?

Material Available?

Goods Receipt Slip

Procurement of Stock Material with QM (127)

Procurement & Consumption of Cosigned Inventory (139)

Creating Planned Independent Requirements

ConvertPlanned Order to Production Order

Inventory Consumption @ Standard. Cost

Procurement w/o QM(130)

Finished Goods Receipt

MM Subcontracting (138)

PP-Subcontracting (External Processing)(150)

Logistics Planning (144)

Make-to-Stock Production – Discrete Industry – Process Flow DiagramPro

1 Review Operation List

Production Subcontracting (External Processing)

• Purpose − During the Manufacturing process, when a "Planned Order" for Production is

converted to a "Production Order", the system will check to see if there are any routing/work-center operations which require external processing. External processing is when you have individual production steps, that are operations or sub-operations, which are performed outside of your company by a vendor. This type of processing is particularly important for subcontracting. It can also provide a company with a feasible alternative to in-house processing, if capacity bottlenecks occur.

• Benefits − An outline agreement can specify that a certain operation of the production order

is executed by an external subcontractor on a regular basis− In the case of capacity bottlenecks, the assembly procedure of the finished

product can be assigned to a subcontractor• Key process flows covered

− Creating Purchase Order for External Processing− Goods Receipt for “subcontracting” Purchase Order− Enter Invoice− Periodic Payment

Production Subcontracting (External Processing)

•Production Subcontracting (External Processing)− When a Production Order is scheduled, external operations need to be taken into account. The

duration of an external operation is calculated either by using the planned delivery time or using the standard values. The system automatically creates a purchase requisition for the operation or sub-operation that requires external processing. The Production scheduler should inform the buyer they need to check the workload for requisitions that require external processing.

− When data is maintained for an external activity, a cost element is specified. The cost element determines how the external activity is to be valuated. A decision needs to be made as to whether an operation or sub-operation is processed externally via its control key. In the control key, it is determined whether externally processed operations are scheduled on the basis of their standard values or the planned delivery time. This information is needed to settle externally processed operations and sub-operations that have been marked as relevant for costing in their control keys.

− Purchasing should not convert the purchase requisition until the external processing is required. The reason for this is that any quantity changes on the production order will automatically update the requisition.

− Once the purchase order is created it is printed and sent to the vendor. The purchase order informs the vendor which service is required. The buyer/planner/scheduler creates a manual shipping document and provides the information to the shipping department on what components need to be gathered for the external processing and ships the components to the vendor.

− When the vendor has completed the external processing, the material is shipped back. The warehouse clerk receives the externally processed goods back into the warehouse. The vendor service is reflected on the production order via an operation confirmation. The purchase order and the production order show the quantity received.

− The goods receipt of an externally processed material causes the status of the operation to be updated: For a partial delivery of an external process operation, the status is: EOPD (External operation - partial delivery) and for final delivery of a external process operation the status is: EOFD (External operation - final delivery).

Production Subcontracting (External Processing) – Process Flow DiagramP

Create PO from Purchase Req (Vendor assigned by Info record)

Vendor Receives Material and Performs External Services

Ship Material to Vendor

Print Purchase Order

Subcontract Services GR/IR

PP = Production Planning, RFQ = Request for Quotation, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

Ship External Material Back to Plant

Incoming Vendor Invoice

Completion Confirmation of Production Order

Production Order Generates Purchase Requisition for External Services

Goods Receipt for Subcontracting PO

Deliver Material Back to Shop Floor

Invoice Receipt

GR/IR PPV Vendor

Periodic Payment: Accounts Payable (158)

Perform External Services

Check Order Operations

Rework Processing (Work-In-Process)

• Purpose − Processing of defective material on a production order.

• Benefits − Scraps at defined operation automatically trigger rework process.

− After rework, additional activity and material consumption can be confirmed.

− Fully integrated in the production process

• Key process flows covered− Confirming Production Activities

− Confirm Scrap defective material

− Confirm Parent Order at Rework Operation

− Continue Shop floor-Activities

Rework Processing (Work-In-Process)

This scenario focuses on a rework process within production. All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

Rework Processing (Work-in-Process) – Process Flow DiagramS

Any Complaint Quantity to Be Scrapped?

Confirm Scrap Defective Material

Confirming Production Activities

End Process

Insert Rework Operation on Parent Production Order Automatically

Confirm Parent Production Order at Rework Operation for Non-Defective Quantity

Scrap Defective Quantity that Can’t Be Reworked

Confirm Parent Production Order for Reworked Quantity That Can Proceed to Subsequent Operations

Continue Shop-Floor-Activities for Non-Defective-Quantity

Rework Processing (Stock-Manufactured Material)

• Purpose − This process covers the rework of defective manufactured materials

that are found in the warehouse.

• Benefits − Transparent costs for rework activities

− Use of all standard shop-floor control functionalities is possible

• Key process flows covered− Create rework production order

− Goods issue for defective material

− Confirmation of rework production activities

− Posting goods receipt for rework production order

Rework Processing (Stock-Manufactured Material)

•Rework Processing (Stock-Manufactured Material)•For materials that can be reworked, a production order is created for correcting the defect. The costs associated with the rework production order will be settled to profitability as a material variance.

Rework Processing (Stock-Manufactured Material) – Process Flow DiagramEven

Create Rework Production Order

Identified Component in Stock Requires Changes

End Process

Confirmation of Rework Production Activities

Posting Goods Receipt for Rework Production Order

Goods Issue for defective Material

Review Order Confirmations

Release Rework Production Order

Module : PP (Production Planning)

Documents

Transcript of Module : PP (Production Planning)

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Module Bond Pp t

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