SAP PP- Production Planning

SAP Production Planning is one of the key modules in ERP and deals with planning processes, such as capacity
planning, material planning, execution of production order, bill of material and goods movement. SAP PP module
handles the master data required for Bill of Materials (BOMs) activity, work center and routing, and keeps it in a
separate component.

SAP PP sub modules vary as per industry type like discrete production, repetitive production, or production industries.

Discrete production is an industry where produce materials change with each lot and costs are calculated as per orders
and lots.

In repetitive production, the product is not changed for a long period of time. Production takes place in total quantity
and not in the form of individual lots.

Before the production execution, many steps are performed as a part of the planning process −

 Material Requirement Planning (MRP) run (More details later in this tutorial).

 Bill of material and routing master data is entered in a planned order automatically with MRP run.

 Planning quantities are maintained in the system.

Key Steps in Production Execution

Following are the key steps in executing a production order

Convert Planned Order to Production Order

 The first step is to convert a planned order to production order. When you create a production order, type is
defined in SAP PP system.

Issue the Production Order

 To start the production process, it is necessary to issue production order. Till a production order is released,
execution of the production process cannot start.

Issue Goods for Production Order

 To execute the production order, goods need to be issued. Once goods are issued, the document number can be
updated in the system.

Production Order Confirmation

 All the sub processes are executed in accordance with the required operations to confirm the production as per
the production order.

Good Receipts w.r.t Production Order

 Once the execution of production order is complete, goods produced w.r.t production order are received and
placed in the storage area.

To perform Production Planning and Control activities, SAP PP is closely integrated with other SAP ERP
modules: SAP Sales and Distribution (SD), SAP Material Management (MM), Quality Management, Finance
Accounting, and Project System.
Master Data
Master data contains the main detailed objects in SAP Production Planning module. In SAP PP, main objects are Bill
of Materials, material master, routing, and work center. Master data contains the key properties of these objects such
as production order, material type, planning requirements, goods issue, and goods receipt.

Following are the types of master data that exists in PP −

Bill of Materials
Bill of materials master data is related to material requirement planning and provides the list of components to produce
the product.

Material Master
Material master contains information related to different material types like finished product, raw material.
Material master can be used for identifying a product, purchase material, goods issue or good receipt, MRP,
and production confirmation.

Work Center
Work center consists of master data related to routing of products. It contains data related to scheduling,
capacity planning, and production costing.

Routing
Routing defines the sequence of activities performed at the work center. Routing plays an important role in
calculating production cost, machine time, and labor time.

Organization Structure
SAP PP

Q 1 - In Production Planning, which of the following is first step to start Production process?

A - Production order confirmation B - Issuing goods for production order

C - Converting planned order to Production Order D - Issue the production order

Q 2 - When you specially tailor the make-to-order production of products as per requirements of the customers, which
of the following BOM can be used?

A - Material BOM B - Cost BOM C - Equipment BOM D - Sales Order BOM

Q 3 - Which of the following statement is incorrect about Routing?

A - Only one material can follow single routing group at a time.

B - For Routing, it is mandate that you first define work center.

C - Routing is used for scheduling and costing of operation for raw and finished products.

D - You can calculation operation cost for finished product.

Q 4 - Which of the following Planning strategy is used to produce stock without Sales Order?

A - Make to Order B - Make to Stock C - Both of These D - None of these

Q 5 - Which of the following doesn’t represent an issue Material Requirement Planning element?

A - Sales Order B - PIR C - Transfer Order D - Production Order

Q 7 - Simulative planning is performed only for long duration and it is not performed for short term and when there is
no time restriction?

A - True B - False

Q 8 - Goods issue can be cancelled till order status is confirmed CNF in system?

A - True B - False

Q 9 - A Storage location is defined as location where materials are stored in plant?

A - True B - False
 SAP PM

SAP Plant Maintenance (SAP PM) application component provides an organization with a tool for all maintenance
activities to be performed. All the activities that are performed under maintenance are interconnected and hence this
module is closely integrated with other modules - Production Planning, Material Management, and Sales and
Distribution.

Using SAP PM, you can perform automatic repairs and facilitate maintenance requests in an organization. It allows
you to record problems in SAP system, plan labor and material activities, and to record and settle the cost.

In an organization, you can identify, document, manage problems and perform enterprise asset management for any
required assets.

To perform these activities, Plant Maintenance contains the following sub modules −

 Management of technical objects and equipment master record.

 Planning of maintenance task.
 Manage workflow notifications and work orders under maintenance order management.
Key Functions of Plant Maintenance
Following activities are performed under Plant Maintenance −

Inspection
Inspection is done to check the actual condition of a technical system.

Preventive Maintenance
Preventive maintenance is used to maintain high availability of the technical system. It includes maintenance planning
and work scheduling activities for technical objects.

Repair
Repair involves all measures that can be performed to restore the ideal condition. Repair process can be performed at
many planning stages - like work scheduling, resource planning and initial costing, etc. You can respond immediately
w.r.t to a damage events causing production shutdown. You can create required purchase requisition and processed
work orders to reduce the downtime.
The work order notification process and shows how it is executed under Plant Maintenance
SAP QM

SAP Quality Management is a part of SAP R/3 system and is integrated with other SAP modules like SAP
Material Management (MM), Production Planning (PP), and Plant Maintenance (PM). QM is an integral part
of logistic management and it is used to perform quality functions such as quality planning, quality assurance,
and quality control, at various stages such as incoming material stage, in-process manufacturing process
stage, and after production as well.

With Quality Management module, you can implement the key modules of QM system as defined in
manufacturing standards like ISO 9000.

As SAP Quality Management is an integral part of SAP R/3 system, it performs the following key functions
in manufacturing of goods −

 Quality Planning − Quality planning allows to plan the inspection of goods from the vendor, raw
material, work-in-process, and final product.

 Quality Notifications − Quality notification includes the defect identification and steps to be taken
by quality department.

 Quality Inspection − Here, quality results are captured and decision is taken as to whether an
inspection lot is to be accepted or rejected.

In the following diagram, you can see the key components that are involved in SAP Quality Management
process.

Standard Reports
You can create reports in QM system to check how many times a product has been identified with a defect and
improvement areas that your company has to implement. There are number of reports that can be generated in QM −

 Material Defects Report

It can be used to check the number of times an item has been identified with a defect status.

 Vendor Defect Report

This report is used to show the number of defected material supplied by a vendor. This can be checked by examining
the inspection lots of the goods received. A quality department can highlight vendors who have supplied material which
are failing in inspection.

 Customer Defect Report

This report is used to show the defects that were found on inspections for outbound deliveries. This helps the
organization to improve the quality of goods delivered and hence raise the customer satisfaction.
SAP QM – Functions
These functions comprise to form Quality Management process. In SAP QM system, you can perform the
following functions −

 Quality Planning
 Quality Inspection
 Quality Control
 Quality Certificates
 Quality Notifications
 Test Equipment Management

Using SAP QM process, you can achieve the following benefits −

 SAP Quality Management integration with other modules is one of the key aspect of quality
management. You can implement the quality process in Material Management, Production Planning
and other SAP modules.

 You can access the data maintained in the system related to customer, vendor and supplier master.

 Using SAP QM, a standardized process can be implemented.

 SAP Quality Management process helps you to incorporate the improvement process- by monitoring
the processes, defect identification and quality notifications.

 You can perform automation of information flow by which inspection lot is created automatically
when you release the production order or goods receipt.

 Using SAP Quality Management process, you can perform the quality compliance of raw materials
when it is first delivered by vendors/suppliers and in process manufacturing and also after the
production process is completed.

 SAP QM is also responsible to perform compliance with a customer’s quality specifications; you ship
the goods to customer as per the Purchase order.

 In SAP MM process, SAP QM allows a company's representative to visit the supplier office to check
the quality of the goods they produce. You call this process as source inspection in Quality
Management module.

 The common type of quality inspection includes checking the goods for Purchase Order upon delivery.
When goods are delivered, an inspection lot is automatically created. You perform the result recording
and usage decision is made if the delivered quantity is acceptable or not acceptable.

 SAP QM is directed linked to controlling for costing and to decide how many goods are accepted.
You update the vendor quality record in the system and this helps to find out if same vendor should
continue to supply the material or there is a need to find a new source.
https://blog.udemy.com/sap-fico/

https://kissflow.com/bpm/business-process-reengineering/