Module : PP (Production Planning)

Organizational Elements

The SAP PP business processes uses the following organizational elements: Client Company Code

Plant
Storage Location

Organizational Elements
Client

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

Organizational Elements
Company 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.

Company Code ****

BALANCING / (LEGAL) ENTITY

Assets Liabilities Revenues - Expenses Profit/Loss

Organizational Elements
Plant

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 Elements
Storage Locations
A

storage location is the place where stock is physically kept within a plant A 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 Data
List of Master Data in SAP PP Module are: Material Master Bills Of Material Work Centers Routings

Master Data Material Master

Material 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

Material Master

Material Master

Material Master

Material Master

Material Master

Material Master Units of Measure

Base unit: Piece

16 4 72

Box
(unit of issue)

Crate
(order unit)

Pallet
(sales unit)

Material Master

Material Master

Master Data Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Bills Of Material

Master Data Work Centers

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Work Center

Master Data Routings

Routing

Routings - Components

Routing - Components
R o u tin g s
R o u tin g s c o n ta in :

T h e s te p s re q u ire d to p ro d u c e o r m a k e a n a s s e m b ly T h e w o rk c e n te rs w h e re th e s te p s a re to b e p e rfo rm e d T h e re s o u rc e s a n d to o ls n e c e s s a ry to c o m p le te a s te p a t a w o rk c e n te r M a te ria l a llo c a tio n

T h e m a te ria l b e in g m a n u fa c tu re d is a llo c a te d to th e g ro u p c o u n te r (h e a d e r) C o m p o n e n t m a te ria ls a re a llo c a te d to o p e ra tio n s

S ta n d a rd v a lu e s fo r s e tu p , p ro c e s s in g , a n d te a r-d o w n tim e In s tru c tio n s o f w h a t to d o a t e a c h w o rk s te p S k ills re q u ire d to d o e a c h s te p in th e a s s e m b ly p ro c e s s

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Routings
R o u tin g s
A m a te ria l c a n b e m a n u fa c tu re d in d iffe re n t w ays. F o r e a c h m a te ria l, y o u c a n c re a te s e v e ra l ro u tin g s fo r d iffe re n t

L o t s iz e ra n g e s W o rk c e n te rs U s a g e s , in c lu d in g

P ro d u c tio n R e w o rk P ro to ty p e
R

Routing - Group
R o u tin g s
R o u tin g s a re s to re d in g ro u p s o f s im ila r o r re la te d ro u tin g s . E a c h in d iv id u a l ro u tin g is re fe rre d to a s a g ro u p c o u n te r w ith in th e g ro u p

R o u tin g G ro u p

G ro u p C o u n te r 0 1

G ro u p C o u n te r 0 2

G ro u p C o u n te r 0 3

G ro u p C o u n te r 0 4
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S A P A G 0 6 /2 3 /9 7

Routing - Group

Material Allocation
M a te ria l A llo c a tio n
B M a te ria l A M a te ria l

BOM

R o u tin g

BOM

Ite m 1 0 Ite m 2 0

O p. 10 O p. 20 O p. 30

Ite m 1 0 Ite m 2 0 Ite m 3 0

SAP AG

PRT Assignments
P ro d u c tio n R e s o u rc e /T o o l A s s ig n m e n ts
R o u tin g

O p e ra tio n 1 0

PRT 1

O p e ra tio n 2 0

PRT 2

O p e ra tio n 3 0

SAP AG

Sequences in Routing
S e q u e n c e s in R o u tin g

A lte rn a tiv e s e q . 0002

M a in s e q u e n c e 0000

A lte rn a tiv e s e q . 0001

20 25 30

O p e ra tio n 1 0 O p e ra tio n 2 0 O p e ra tio n 3 0 O p e ra tio n 4 0 O p e ra tio n 5 0

10 15 20 25 30

Parallel Sequences
P a ra lle l S e q u e n c e s
20 O p e ra tio n 10 20 30 40 25 30

20

30

SAP AG

Scheduling in PP
S c h e d u lin g in P ro d u c tio n P la n n in g
M a te ria l R e q u ir e m e n ts P la n n in g
S e p a ra te s c h e d u lin g o f p la n n e d o r d e r s E x a c t to th e d a y B a s ic d a te s c a lc u la te d P la n n e d s ta rt d a te P la n n e d d e liv e r y d a te C re a tio n d a te U s e s lo t-d e p e n d e n t/lo t-in d e p e n d e n t in -h o u s e p r o d u c tio n o r re p le n is h m e n t le a d tim e O p tio n a lly u s e b a s ic p la n n in g d a y s fro m th e m a te r ia l m a s te r to im p ro v e p e rfo rm a n c e O p tio n a l c a lc u la tio n o f c a p a c ity re q u ire m e n ts
P er io d s t

P r o d u c tio n o r d e r m a n a g e m e n t
L e a d tim e s c h e d u lin g E x a c t to th e s e c o n d B a s e d o n b a s ic d a te

O rd e r h e a de r

o p er at io n s

m a te ria l c om po n e n ts

M RP M an u al T a rg e t d a te s c a lc u la te d (s c h e d u le d d a te s ) T a rg e t s ta rt d a te T a rg e t fin is h d a te O p e r a tio n s p e c ific d a ta u s e d to c a lc u la te o rd e r d a te s C a p a c ity r e q u ire m e n ts c a lc u la te d

P RT s

c o st s

p la n n ed t arg e t a ct u al

100 20 50

SAP AG

Scheduling
S c h e d u lin g : T im e E le m e n ts in a n O rd e r
F loa t b e f. O p e r. O p e r. O p e r. O p e r. p ro d u c tio n 0 0 1 0 0 0 2 0 0 0 3 0 0 0 4 0
BS SS

........

O p e r. 0099
SF

F loa t a fte r p ro d u c tio n

GR P ic k /p a c k L o a d in g p ro c e s s in g
BF AD LT GI

T ra n s it
DDD

Q u e ue
ES LS

S e tu p P ro c e s s in g T e a rd o w n
EF

W a it
LF

M ov e

O rd e r d a te s
BS SS SF BF AD LT GI DDD B a s ic s ta rt d a te S c h e d u le d s ta rt d a te (p ro d u c tio n s ta rt d a te ) S c h e d u le d fin is h d a te B a s ic fin is h d a te A v a ila b ility d a te (e x p e c ted ) L o a d in g tim e G o o ds is s u e D e s ire d d e liv e ry da te

O p e ra tio n d a te s
ES LS EF LF E a rlie s t s tart d a te L a tes t s ta rt d a te E a rlie s t s tart d a te L a tes t fin is h d a te

T im e te rm s
L e a d tim e o rd e r o r o p e ra tio n F loa t tim e s o rd e r E x e c u tio n tim e o p e ra tio n In te ro p e ra tio n tim e s P ro c e s s in g tim e s in S a le s a n d D is trib u tio n

SAP AG

Sub Operations in Routing

S u b -o p e ra tio n
O p e ra tio n 1 0
S u b -o p 1 0 /1 0 S e tu p

S u b -o p 1 0 /2 0

P ro c e s s in g 1

S u b -o p 1 0 /3 0

P ro c e s s in g 2

O p e ra tio n 2 0

SAP AG

Scheduling
S c h e d u lin g S u b -o p e ra tio n s
10 BS SS Q ueue E x e c u tio n W a it 20 30 SF M ove BF

2 0 /1 0

F in is h re fe re n c e to o ffs e t

2 0 /2 0

S ta rt re fe re n c e to o ffs e t

TS

F in is h re fe re n c e 2 0 /3 0

S ta rt re fe re n c e to o ffs e t

Production Planning

Demand Management Material Requirement Planning

Planning of Purchased parts Planning of in house assemblies

Planning Process: Process flow

Central marketing office Demand (Weekly)

Dispatch plan Demand planning cell Production Requirement (Week wise, Model wise)

Planned Prod. Confirmed Vendor Schedule

PPC

MRP Run

Planned Vendor Schedule

Vendor Web site Confirmed Production Production Dispatch sheet

Third Party Log

Planning Process: Strategies

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: Demand Planning

Dealer Dealer Dealer Dealer Dealer Dealer

Territory office

Territory office

Area Office

Area Office

Area Office

Area Office

Zonal

Consolidation of Demand

Central Marketing office

PPC

Planning Process: Demand Management

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:

Materials Requirement Planning

M R P P ro c e d u re s : O v e rv ie w

M a te ria ls P la n n in g P ro c e d u re s

MRP

C o n s u m p tio n -b a s e d p la n n in g

F o re c a s t-b a s e d p la n n in g

R e o rd e r p o in t p la n n in g

T im e -p h a s e d p la n n in g

SAP AG

MRP Overview

Uses of MRP
M R P U ses

M a te ria l re q u ire m e n ts p la n n in g is u s e d to p la n th e o n tim e p ro d u c tio n o r p ro c u re m e n t o f th e re q u ire d q u a n titie s fo r b o th in te rn a l c o n s u m p tio n a n d c u s to m e r dem and. T h is p ro c e s s in v o lv e s m o n ito rin g s to c k le v e ls a n d a u to m a tic a lly c re a tin g o rd e r p ro p o s a ls fo r p u rc h a s in g a n d p ro d u c tio n . F o r m a te ria ls p ro d u c e d in -h o u s e , th e d e p e n d e n t re q u ire m e n ts o f th e c o m p o n e n ts a re d e te rm in e d d u rin g B O M e x p lo s io n .
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MRP Functions
MRP Functions
Material requirements planning (MRP) consists of the following important functions:

Net change planning (short- and long-term) and regenerative planning MRP and consumption-based planning Various lot-sizing procedures Single-item or collective planning Processing and rescheduling proposals Easy-to-use options for evaluating the planning result Single and multi-level pegging Planning at multi-plant level
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SAP AG 06/23/97

MRP Prerequisites

Planning Run

Planning Run - Types

P la n n in g R u n
T y p e o f P la n n in g Run W h a t is it?
P la n n in g a ll m a te ria ls fo r a s p e c ifie d p la n t P la n n in g a c o m p le te B O M s tru c tu re fo r a s in g le m a te ria l P la n n in g a s in g le m a te ria l o n e le v e l S to p p in g th e M R P ru n p e rio d ic a lly to m a k e c h a n g e s

T o ta l P la n n in g

S in g le -ite m , M u lti-le v e l P la n n in g S in g le -ite m , S in g le -L e v e l P la n n in g In te ra c tiv e P la n n in g

S A P A G 06/2 3/97

MRP - Control Parameters

C o n tro l P a ra m e te rs fo r M R P
P la n n in g ru n c a n b e c a rrie d o u t a t tw o d iffe re n t le v e ls :

S in g le -ite m p la n n in g fo r a n in d ivid u a l m a te ria l T o ta l p la n n in g fo r a ll m a te ria ls in a p la n t

P la n n in g R u n T y p e s

D u rin g re g e n e ra tive p la n n in g , a ll M R P ite m s a re p la n n e d fo r a p la n t. T h e n e t ch a n g e p la n n in g p ro ce d u re p la n s o n ly th o se M R P ite m s th a t h a ve ch a n g e d re le va n t to p la n n in g sin ce th e la st M R P ru n . In n e t ch a n g e p la n n in g in th e p la n n in g h o rizo n , M R P is ca rrie d o u t o n ly w ith in a d e fin e d p la n n in g h o rizo n .

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Net Change Planning

Planning in Planning Horizon

P la n n in g in th e P la n n in g H o riz o n

P la n n in g h o riz o n

N Ne ett c ch ha an ng ge ep pla lan nn nin ing g in th e p la n n in g h o riz in th e p la n n in g h o rizo on n:: m ma ate teria riall is is p pla lan nn ne ed d T im e

Tod ay

P la n n in g h o riz o n

N Ne ett c ch ha an ng ge ep pla lan nn nin ing g in in th e p la n n in g h o riz o n : th e p la n n in g h o riz o n : m ma ate teria riall is is n no ott p pla lan nn ne ed d

!!!
Tod ay

T im e

SAP AG

Planning Run - Single Item

E x e c u tin g th e P la n n in g R u n fo r S in g le Ite m s
S in g le -ite m , m u lti-le v e l p la n n in g
- p la n n in g a B O M s tru c tu re - p o s s ib ility o f c h a n g in g th e m a s te r p la n fo r e a c h m a te ria l in th e b ill o f m a te ria l m a n u a lly

S in g le -ite m , s in g le -le v e l p la n n in g
- p o s s ib ility o f c h a n g in g th e m a s te r p la n m a n u a lly + c re a te + d e le te + change + re s c h e d u le
SAP AG

Single-item, Multi-Level Planning

S in g le -Ite m , M u lti-L e v e l P la n n in g
F in is h e d p ro d u c t A s s e m b ly 1 C om ponent 1 A s s e m b ly 2

C om ponent 2

E x e c u te p la n n in g ru n

P ro c e s s p la n n in g re s u lts

M a te ria ls o v e rv ie w S e le c t m a te ria ls A id s : - s o rtin g o p tio n s - s e a rc h o p tio n s - in o v e rv ie w - in in d iv id u a l lis ts

SAP AG

E x e c u te p la n n in g ru n
R

Single-Level MRP

Multi-Level MRP
M u lti-L e v e l M R P
M o to rc y c le
MRP
A ll le v e ls re c e iv e d ep en dent re q u ire m e n ts fro m th e u p p e r le v e l a n d th e n p la n o rd e rs to s a tis fy th o s e re q u ire m e n ts D ependent R e q u ire m e n ts fro m M P S ru n

P o w e r T ra in

C h a s s is

P la n n e d = D ependent O rd e r R e q u ire m e n ts fro m M R P ru n

M o to r

G ear

Exhaust

F ro n t W heel

R ear W heel

F ra m e

B ra k e S y s te m

P la n n e d O rd e r o r P u rc h a s e R e q u is itio n

M u lti-le v e l p la n n in g p la n s a c o m p le te B O M s tru c tu re . T h e p ro c e s s fo r m u lti-le v e l p la n n in g is th e s a m e a s fo r s in g le le v e l e x c e p t th a t it c o n tin u e s fo r e a c h le v e l in th e B O M s tru c tu re .

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Total Planning
C a rry in g O u t T o ta l P la n n in g
P Pla lan nn nin ing g ty typ pe es s:: P Pla lan nn nin ing ga all ll th the em ma ate teria rials ls in in a ap pa artic rticu ula larr p pla lan nt, t, o orr P Pla lan nn nin ing ga all ll th the em ma ate teria rials ls w wh hic ich hh ha av ve eu un nd de errg go on ne ea ac ch ha an ng ge e re rele lev va an ntt to to p pla lan nn nin ing g (n (ne ett c ch ha an ng ge ep pla lan nn nin ing g))
P la n n e d re c e ip ts P la n t

P la n n in g in te rv a l: U n lim ite d o r P la n n in g in th e p la n n in g h o riz o n

R e q m ts P la n n in g h o riz o n T im e

In th e to ta l p la n n in g p ro c e d u re , y o u c a n p la n a ll th e m a te ria ls in a p a rtic u la r p la n t (re g e n e ra tiv e ) o r p la n th e m a te ria ls th a t h a v e u n d e rg o n e a c h a n g e re le v a n t to re q u ire m e n ts p la n n in g s in c e th e la s t p la n n in g ru n (n e t c h a n g e ). W h e n p la n n in g w ith in th e p la n n in g h o riz o n , o n ly th o s e m a te ria ls th a t h a v e c h a n g e d re le v a n t to p la n n in g in th e n e a r te rm a re in c lu d e d .

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MRP Procedure
A b o u t th e M R P P ro c e d u re
D u rin g th e n e t re q u ire m e n ts c a lc u la tio n in M R P , th e S A P R /3 S y s te m c o m p a re s a v a ila b le w a re h o u s e s to c k o r th e s c h e d u le d re c e ip ts fro m p u r c h a s in g a n d p r o d u c tio n , w ith p la n n e d in d e p e n d e n t re q u ire m e n ts , m a te ria l re s e r v a tio n s , a n d in c o m in g s a le s o r d e r s . If a v a ila b le s to c k is le s s th a n th e q u a n tity r e q u ire d , th e s y s te m c re a te s a n o rd e r p ro p o s a l. T h e s y s te m c a lc u la te s th e q u a n tity re c o rd e d in th e o rd e r p ro p o s a l a c c o rd in g to th e lo t-s iz in g p ro c e d u re y o u s p e c ifie d in th e m a te ria l m a s te r. T h e o rd e r p r o p o s a l is a ls o s c h e d u le d (i.e ., d e liv e r y a n d re le a s e d a te s a re d e te rm in e d fo r m a te ria ls p r o c u re d e x te rn a lly ).
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MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

U Us sin ing gN Ne ett c ch ha an ng ge e fo forr to tota tall h ho oriz rizo on n,, M MR RP P is is p e rfo rm e d th ro u g h o u t th e e n tire p la n n in g h p e rfo rm e d th ro u g h o u t th e e n tire p la n n in g ho oriz rizo on n.. O On nly ly th tho os se em ma ate teria rials ls th tha att h ha av ve ec ch ha an ng ge ed d re rele lev va an ntt to to M MR RP Pa are re re re-p -pla lan nn ne ed d..

S A P A G 0 6 /2 3 /9 7

MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

T Th he eD De eliv live ery ry s sc ch he ed du ule le c co on ntro troll p pa ara ram me ete terr d de ete term rmin ine es s if if s c h e d u lin g lin e s w ill b e c re a te d fo r th o s e p u rc h a s e d m s c h e d u lin g lin e s w ill b e c re a te d fo r th o s e p u rc h a s e d ma ate teria rials ls th tha att h ha av ve ea ac ctiv tive es sc ch he ed du ulin ling ga ag gre ree em me en nts ts in in th the es sy ys ste tem m..

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MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

T Th he eC Cre rea ate te M MR RP P lis listt c co on ntro troll p pa ara ram me ete terr d de es sig ign na ate tes s if if th the e M MR RP P lis listt w will ill b be ec cre rea ate ted da as sa a re res su ult lt o off th this is p pla lan nn nin ing g ru run n..

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MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

T Th he eP Pla lan nn nin ing gm mo od de ec co on ntro troll p pa ara ram me ete terr d e te rm in e s h o w th e s y s te m re a c ts to d e te rm in e s h o w th e s y s te m re a c ts to o ord rde err p pro rop po os sa als ls,, fro from mp pre rev vio iou us sp pla lan nn nin ing g ru run ns s,, w wh he en n th e y s till m e e t th e n e w re q u ire m e n ts s itu a tio n th e y s till m e e t th e n e w re q u ire m e n ts s itu a tio n..

S A P A G 0 6 /2 3 /9 7

MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

T Th he eS Sc ch he ed du ulin ling gc co on ntro troll p pa ara ram me ete terr d de ete term rmin ine es sh ho ow w th e le a d tim e fo r e a c h o rd e r w ill b e c a lc u la te d . th e le a d tim e fo r e a c h o rd e r w ill b e c a lc u la te d . Y Yo ou um ma ay yc ch ho oo os se e to to c ca alc lcu ula late te th the e le lea ad d tim time eb ba as se ed d o n th e o p e ra tio n s in th e ro u tin g o r to u s e th e b a s o n th e o p e ra tio n s in th e ro u tin g o r to u s e th e b a sic ic p pla lan nn nin ing gd da ate tes s fro from m th the em ma ate teria riall m ma as ste ter. r.

S A P A G 0 6 /2 3 /9 7

MRP Control Parameters

S in g le -Ite m , M u lti-L e v e l M R P
M MR RP P -- S Sin ing gle le-Ite -Item m,, M Mu ulti-L lti-Le ev ve ell

T Th he eP Pro roc ce es ss sc co on ntro troll p pa ara ram me ete ters rs d de ete term rmin ine e if if c o m p o n e n ts w ill b e p la n n e d w h e th e r o r n o t th c o m p o n e n ts w ill b e p la n n e d w h e th e r o r n o t the e B BO OM Mh ha as sb be ee en nc ch ha an ng ge ed d,, w wh he eth the err th the eM MR RP P lis listt w will ill b e d is p la y e d b e fo re s a v in g th e o rd e r p ro p o s a ls , a b e d is p la y e d b e fo re s a v in g th e o rd e r p ro p o s a ls , an nd d w wh he eth the err th the e ru run n-tim -time es sta tatis tistic tics sw will ill b be ed dis isp pla lay ye ed d..
R

S A P A G 0 6 /2 3 /9 7

Net Requirements Calculation

N e t R e q u ire m e n ts C a lc u la tio n fo r M a te ria ls P la n n in g U s in g M R P
S to c k F irm e d re c e ip ts R e q m ts
T im e

S a fe ty s to c k

A v a ila b le q u a n tity N e t re q u ire m e n ts S h o rta g e

R

T im e

SAP AG

Requirement Quantities
H o w to D e a l w ith U n fo re s e e n D e v e lo p m e n ts in R e q u ire m e n t Q u a n titie s ?

S a fe ty s to c k S a fe ty s to c k p a rtia lly a v a ila b le D y n a m ic s a fe ty s to c k S a fe ty tim e

SAP AG

Safety Stock
S a fe ty S to c k P a rtia lly A v a ila b le
S to c k O rd e r p ro p o s a l

A v a ila b le p o rtio n S a fe ty s to c k
T im e

R e q m ts

SAP AG

Safety Time
S a fe ty T im e

T im e

S a fe ty tim e

Safety Time in Production

S a fe ty T im e in M u lti-L e v e l P ro d u c tio n

F in is h e d p ro d u c t

P la n n e d o rd e r T im e Reqm t S a fe ty tim e P la n n e d o rd e r

C o m p o n e n ts
T im e In d e p .re q m ts S a fe ty tim e D e p e n d e n t re q m ts

SAP AG

Lot Size Calculation

L o t-S iz e C a lc u la tio n

N e t re q u ire m e n ts
T im e

O rd e r p ro p o s a ls

T im e

SAP AG

Lot Sizing - Overview

Overview of Lot-Sizing Procedures
Lot-Sizing Procedures
Static procedures Period procedures Optimum procedures

Lot-for-lot order quantity

Daily lot size

Part period procedure Least unit cost procedure Groff reorder procedure Dynamic lot size creation
R

Fixed lot size Replenish up to maximum stock level

Weekly lot size

Monthly lot size Flexible periods according to planning calendar

SAP AG

Static Lot Sizing

S ta tic L o t-S iz in g P ro c e d u re s
L o t-fo r-lo t o rd e r q u a n tity Q u a n tity R e c e ip ts R e q m ts T im e P la n n e d w a re h o u s e s to c k = F ix e d lo t s iz e

R e p le n is h u p to m a x im u m s to c k le v e l
R

SAP AG

Period Lot - Sizing Procedure

P e rio d L o t-S iz in g P ro c e d u re s

R e c e ip ts T im e R e q m ts P e rio d 1 P e rio d 1 P e rio d 1

SAP AG

Optimum Lot Sizing

O p tim u m L o t-S iz in g P ro c e d u re s
M a n y d e liv e rie s / H ig h o rd e r c o s ts M in im a l s to c k k e e p in g / M in im a l s to ra g e c o s ts

F e w d e liv e rie s / L o w o rd e r c o s ts

M o re e x te n s iv e s to c k k e e p in g / H ig h e r s to ra g e c o s ts

SAP AG

Long Term Lot Sizing

L o n g -T e rm L o t S iz e
P Pla lan nn nin ing gh ho oriz rizo on n

S rm rio Sh ho ort-te rt-te rm p pee riod d ee .g ., lo t-fo r-lo t o rd .g ., lo t-fo r-lo t o rdeerr q qty ty

L rio Lo on ng g-te -term rm p pee riod d ee .g ., m o n th ly lo t iz ee .g ., m o n th ly lo t ss iz

P la n n in g h o riz o n is s p lit in to tw o p e rio d s . D iffe re n t lo t-s iz in g p ro c e d u re s c a n b e d e fin e d fo r e a c h p e rio d . P la n n in g ru n is c a rrie d o u t in re g u la r in te rv a ls u s in g a tim e -p h a s e d p la n n in g ru n .

R

S A P A G 0 6 /2 3 /9 7

Other Lot Sizing Features

O th e r N e w L o t-S iz in g F e a tu re s
L o t-s iz e c a lc u la tio n fo r m a k e -to -o rd e r O v e rla p p in g o f fix e d lo t s iz e w ith s p littin g P e rio d lo t-s iz e w ith s p littin g a n d o v e rla p p in g
F ix e d lo t s iz e 3 0 0 , c y c le tim e 1 d a y F o rw a rd o v e rla p p in g B a c k w a rd o v e rla p p in g Reqm t 3 /1 5 900 3 0 0 p c b y 3 /1 5 3 0 0 p c b y 3 /1 4 3 0 0 p c b y 3 /1 3 3 0 0 p c b y 3 /1 5 3 0 0 p c b y 3 /1 6 3 0 0 p c b y 3 /1 7
R

N E W 3 .0

Reqm t 3 /1 5 900

S A P A G 0 6 /2 3 /9 7

Lot Size Rounding Profiles

L o t S ize R o u n d in g P ro file
R o u n d in g p ro file X Y L e v e l T h re s h o ld v a lu e 1 2 2 32 R o u n d in g v a lu e 5 40

R eqm t

O rd e r p ro p o s a l 0 5 5 10 20 25 30 40 40 80
R

1 2 6 7 21 22 31 32 41 74

S A P A G 0 6 /2 3 /9 7

Layout of MRP List

Stock Req. List - Layout

L a y o u t o f th e C u rre n t S to c k /R e q u ire m e n ts L is t
C u rre n t s to c k /re q u ire m e n ts lis t
V a ria b le h e a d e r C o n te n ts M a te ria l in fo rm a tio n R e c e ip t/S to c k lis t P la n n e d o rd e rs P u rc h a s e re q u is itio n s P ro d u c tio n o rd e rs P u rc h a s e o rd e rs
...

M R P e le m e n ts D a te E x c e p tio n m e s s a g e R e c e ip t/R e q m ts q u a n tity A v a ila b le q u a n tity

C o n te n ts re a d w h e n lis t is accessed

P la n t s to c k / S to ra g e lo c a tio n s to c k F o re c a s t re q u ire m e n ts S a le s o rd e rs R e s e rv a tio n s

R

SAP AG

MRP List - Collective Display

MRP List - Functions

Exception Messages
Exception Messages
Exeptions indicate :
New order proposals created in the planning run Dates in the past (start, finish or opening date) Problems in BOM explosion Problems in scheduling Rescheduling

The following settings can be made in Customizing:

Priority: if several exception messages exist for one MRP element, the system will display the message allocated the highest priority. Creation of the MRP list depending on the exception message created. Splitting into exception groups for the selection.
R

SAP AG

Rescheduling Checks
R e sc h e d u lin g C h e c k fo r F irm e d R e c eip ts
e .g . p ro d u c tio n o rd er, p u rch ase o rd er, p lan n e d o rd er)

EM R e s ch e d u le in

noEM R e s ch e d u le o u t? N o ! R e v ers e R e c eip ts T im e

T o le ran c e

T o le ran c e R e q m ts

R e s ch e d u lin g h o rizo n

Old / New Exception Message

Old / New Exception Messages
Old MRP list Exception: bring forward
10.10 .

Purchase order 4711/10 Time

Processing by MRP controller; Processing indicator set Reschedule

Time New MRP list after the next planning run Same exception ==> Old exception Purchase order 4711/10
10.10 .

Time
R

SAP AG

Planned New Exception Message Order Conversion

C o n ve rtin g P la n n ed O rd e rs C o llec tiv e ly

P lan n ed o rd e rs
C o n v e rt

O p e n in g d ate

T im e

T o d ay

SAP AG

Material Supply for Production

Collective Display

Search in Individual List

Current List - Functions

C u r r e n t S to c k /R e q m ts L is t: F u n c tio n s
P Pro roc ce es ss sin ing go op ptio tion ns s M a te ria l m e m o C h e c k re s c h e d u lin g S e a rc h o p tio n s S to c k s ta tis tic s G o to n e x t M R P lis t in c o lle c tiv e d is p la y

H He ea ad de err d da ata ta M a te ria l m a s te r d a ta

V a ria b le h e a d e r

S to c k s C o n s u m p tio n v a lu e s

P la n n in g s e g m e n ts
D Dis isp pla lay yo op ptio tion ns s P e rio d to ta ls G ro u p in g re q m ts V a ria b le d is p la y o f d a te s
SAP AG

A Ac ctio tion ns s fo forr M MR RP Pe ele lem me en nts ts D is p la y C hange

R e c e ip ts R e q m ts

C o n v e rt P e g g e d re q m ts
R

O rd e r re p o rt

Pegged Requirements
P e g g e d R e q u ire m e n ts
P la n n e d o rd e rs F Fin inis ish he ed dp pro rod du uc ctt T im e S a le s o rd e r In d e p . re q m ts

P u rc h a s e o rd e r

C Co om mp po on ne en nts ts T im e D e p e n d e n t re q m ts

SAP AG

Order Report
O rd e r R e p o rt
F Fin inis ish he ed dp pro rod du uc ctt S a le s o rd e r P Pla lan nn ne ed do ord rde err

A As ss se em mb blie lies s

D e p e n d e n t re q m ts

D e p e n d e n t re q m ts

P la n n e d o rd e r

P Pro rod du uc ctio tion no ord rde err

C Co om mp po on ne en nts ts

D e p e n d e n t re q m ts

R e s e rv a tio n

R e s e rv a tio n

P Pu urc rch ha as se e o ord rde err

S Sto toc ck k

P Pro rob ble lem m !!! !!!

SAP AG

Planning Time Fence

D e te rm in in g th e P la n n in g T im e F e n c e
BOM
M PS M RP B1 R1 E1

L e a d tim e d ia g ra m
M a n u a l m o n ito rin g
P la n n in g tim e fe n c e
B2 R2

A u tom a tic or de r p ro p o s a ls

P la n n in g le v e l

E1 B1 B2 R1 R2

Open p e rio d

D e te rm in e
- M a te ria l m a s te r - M R P g ro u p

P la n n in g h o rizo n

B y u s in g th e p la n n in g tim e fe n c e , th e M R P c o n tro lle r c a n d e fin e a s p e c ific p e rio d , fo r e a c h m a s te r s c h e d u le ite m , in w h ic h n o a u to m a tic c h a n g e s c a n b e m a d e to th e m a s te r p la n . T h e M R P c o n tro lle r c a n d e fin e th e p la n n in g tim e fe n c e p e r m a te ria l in th e m a te ria l m a s te r re c o rd (M R P 1 s c re e n ), p e r p la n t, o r p e r th e M R P g ro u p .
R

S A P A G 0 6 /2 3 /9 7

Planning Time Fence

Scheduling in PP
S c h e d u lin g in P ro d u c tio n P la n n in g
M a te ria l R e q u ir e m e n ts P la n n in g
S e p a ra te s c h e d u lin g o f p la n n e d o r d e r s E x a c t to th e d a y B a s ic d a te s c a lc u la te d P la n n e d s ta rt d a te P la n n e d d e liv e r y d a te C re a tio n d a te U s e s lo t-d e p e n d e n t/lo t-in d e p e n d e n t in -h o u s e p r o d u c tio n o r re p le n is h m e n t le a d tim e O p tio n a lly u s e b a s ic p la n n in g d a y s fro m th e m a te r ia l m a s te r to im p ro v e p e rfo rm a n c e O p tio n a l c a lc u la tio n o f c a p a c ity re q u ire m e n ts
P er io d s t

P r o d u c tio n o r d e r m a n a g e m e n t
L e a d tim e s c h e d u lin g E x a c t to th e s e c o n d B a s e d o n b a s ic d a te

O rd e r h e a de r

o p er at io n s

m a te ria l c om po n e n ts

M RP M an u al T a rg e t d a te s c a lc u la te d (s c h e d u le d d a te s ) T a rg e t s ta rt d a te T a rg e t fin is h d a te O p e r a tio n s p e c ific d a ta u s e d to c a lc u la te o rd e r d a te s C a p a c ity r e q u ire m e n ts c a lc u la te d

P RT s

c o st s

p la n n ed t arg e t a ct u al

100 20 50

SAP AG

Scheduling - Basic Dates

S c h e d u lin g : C a lc u la tio n o f B a s ic O rd e r D a te s
B a c k w a rd s c h e d u lin g
BS BF BS

R e q u ire m e n ts d a te fo r p ro d u c t
BF

V a ria b le -s iz e p a rt

P ro d u c t

A s s e m b ly
BS BF

P la n n e d d e liv e ry tim e In -h o u s e p ro d u c tio n tim e

In -h o u s e p ro d . tim e T im e

F lo a t b e fo re p ro d u c tio n

E x e c u tio n tim e

F lo a t a fte r p ro d u c tio n

SAP AG

Scheduling - Production Time

S c h e d u lin g : In -H o u s e P ro d u c tio n T im e
C a lc u la tio n o f p la n n e d d a te s R e q u ire m e n ts d a te
BS BF

In -h o u s e p ro d u c tio n tim e fro m m a te ria l m a s te r

10

20

30

40

50

F lo a t b e fo re p ro d u c tio n

L e a d tim e s c h e d u lin g u s in g ro u tin g

F lo a t a fte r p ro d u c tio n

C a lc u la tio n o f p ro d u c tio n o rd e r d a te s In -h o u s e p ro d . tim e g re a te r th a n s c h e d u lin g in ro u tin g In -h o u s e p ro d . tim e s m a lle r In c o rre c t in -h o u s e p ro d u c tio n tim e in m a te ria l m a s te r ?

SAP AG

Planning Process
Supply Plant Stock Demand

MRP

Planning Parameters

External Procurement

Order Proposal

In-House Production

Planning Process

Production Execution

Stock transfer to WIP location Order Execution

Production confirmation Error handling

Planning Process

Planning Process

Production Execution
Physical Movement Storage Loc MAIN Storage Loc WIP

Production Execution
Planned Order

Availability Check

Convert Order BOM Routings Work Center Release Goods issue Production Avail check Production Order Move floorstock

Goods receipt

Confirmation TECO

Best Practices
Logistics Planning

Make-To-Stock Discrete Manufacturing

Production Subcontracting (External Processing)

Rework Processing (Stock-Manufactured Material) Rework Processing (Work-In-Process)

Logistics Planning
Purpose and Benefits:

Purpose
The purpose of logistics planning is to make sure that future demand can be satisfied by your companys available resources and to point out situations where demand cannot be met in time or in the desired quantities. Seamless Integration in complete planning cycle CO-PA SOP LTP Demand Planning Sales and Operation Planning Long Term Planning

Benefits

Key process flows covered

Logistics Planning
Detailed Process Description:
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 and

Once the simulated requirements are accepted, the demand (independent requirements) is then transferred to active demand management for detailed MRP Production Planning / Scheduling in the active version.

Logistics Planning Process Flow Diagram

Periodic Sales and Operations Meeting Operational Production Planning & Control (Production scenarios)

Revenue Planner

Event

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

Sales Quantity forecast (179)

SOP Verification Demand Verification (Check Sales Plan) Create Rough-Cut Production Plan

Transfer Rough Cut Production Plan to Inactive Demand Management

Create LTP Planning Scenario

Execute LTP MRP

Evaluate Capacity Planning

Strategic Planner

Operative Productio n Data

No

Acceptable Plan

Copy to Active Demand Management

Yes

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

Make-To-Stock Production with Discrete Manufacturing

Purpose and Benefits:

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-tostock 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

Detailed Process Description:
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 periods 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

Event
Beginning of Planning Cycle Periodic Plan Revision

Strategic Planner

Creating Planned Independent Requirements

Logistics Planning (144)

Production Planner

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

No Update Capacity

Capacit y Levelin g O.k.? Yes

MRP List

Purchase Requisition

Planned Orders

Convert Planned Order to Production Order No

Material Available ?

Yes

Capacity Leveling

Release Production Order

Order Print

Manufacturing

Pick List

Material Staging for Planned Orders Inventory Consumption @ Standard. Cost

Confirming Assembly Activities / Final Confirmation

Semi-Finished Goods Receipt

Inventory @ Standard. Cost

Goods Issue/ Back flush

Goods Receipt Slip

Plant WareControl house ler Clerk

Goods Receipt Slip

Finished Goods Receipt

Period End Closing General Plant (181) Procurement & Consumption of Cosigned Inventory (139) PPSubcontracting (External Processing) (150)

Buyer

Procurement w/o QM (130)

Procurement of Stock Material with QM (127)

MM Subcontracting (138)

Make-to-Stock Production Discrete Industry Process Flow Diagram

Production Supervisor

Event

Review Operation List

Production Subcontracting (External Processing)

Purpose and Benefits:

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. 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 Creating Purchase Order for External Processing Goods Receipt for subcontracting Purchase Order Enter Invoice Periodic Payment

Benefits

Key process flows covered

Production Subcontracting (External Processing)

Detailed Process Description:
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 suboperation 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 Diagram

Vendor
Vendor Receives Material and Performs External Services Perform External Services Ship External Material Back to Plant Incoming Vendor Invoice

Event

Production Order Generates Purchase Requisition for External Services

Completion Confirmation of Production Order

Production Supervisor

Check Order Operations

Warehouse Clerk

Purchaser

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

Print Purchase Order

Ship Material to Vendor

Subcontract Services GR/IR

Goods Receipt for Subcontracting PO

Deliver Material Back to Shop Floor

Accounts Payable Accountant

Periodic Payment: Accounts Payable (158)

GR/IR PPV Vendor

Invoice Receipt

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

Rework Processing (Work-In-Process)

Purpose and Benefits:

Purpose
Processing of defective material on a production order. Scraps at defined operation automatically trigger rework process. After rework, additional activity and material consumption can be confirmed. Fully integrated in the production process Confirming Production Activities Confirm Scrap defective material Confirm Parent Order at Rework Operation Continue Shop floor-Activities

Benefits

Key process flows covered

Rework Processing (Work-In-Process)

Detailed Process Description:
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 Diagram

Confirming Production Activities

End Process

Event

Confirm Scrap Defective Material

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

Continue Shop-FloorActivities for NonDefective-Quantity

No

Shop Floor Specialist

Insert Rework Operation on Parent Production Order Automatically

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

Any Complaint Quantity to Be Scrapped?

Yes

Scrap Defective Quantity that Cant Be Reworked

Rework Processing (Stock-Manufactured Material)

Purpose and Benefits:

Purpose
This process covers the rework of defective manufactured materials that are found in the warehouse. Transparent costs for rework activities Use of all standard shop-floor control functionalities is possible

Benefits

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)

Detailed Process Description:
Rework
For

Processing (Stock-Manufactured Material)

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 Diagram

Production Planner

Event

Identified Component in Stock Requires Changes

End Process

Create Rework Production Order

Release Rework Production Order

floor Warehouse Clerk Shop Specialist

Confirmation of Rework Production Activities

Goods Issue for defective Material

Posting Goods Receipt for Rework Production Order

Production Supervisor

Review Order Confirmations