SAP Production Processes

Production Planning
(PP)
- Overview -

January 2008 SAP AG - University Alliances and The Rushmore
Group, LLC 2007. All rights reserved.
2
Overview
Components of Production Planning
Production Process Overview
Planning Process Overview
MRP
Elements of a Production Order
3
Components of Production Planning
Production
Planning
(PP)
Production
Planning
SOP
Capacity
Planning
MRP
Product
Cost
Planning
Repetitive
Mfg.
Production
Control
KANBAN
Master
Data
DRP
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Planning Process
Execution
Execution
Detailed Planning
High Level Planning
Forecasting
Sales and Operations
Planning
Demand
Management
MPS MRP
Sales Information
System
CO/PA
Manufacturing
Execution
Order
Settlement
Procurement
Process
5
Material Requirements Planning
A set of techniques utilizing bills of materials,
inventory data (lead times and current status) and
the master production schedule to calculate
requirements for raw materials, components, and
subassemblies
A time-phased planning tool with a defined, specific
algorithm
Balances supply and demand

6
Inventory
Master
Schedule
Planning
Rules
Bill of
Material
Orders Forecasts
M
R
P

P
r
o
c
e
s
s
Recommended
Procurement
Recommended
Production
Inputs
Outputs
MRP Process
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Material Requirements Planning
Elements
Requirement elements (demand)
Withdrawals from inventory
Maintenance must be done at source of demand
Two types of demand
Replenishment elements (supply)
Receipts into inventory
Maintenance can be adjusted manually
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Elements of A Production Order
Raw Materials &
Sub-Components
Bill of Material
Components
(Production Parts
List)
Work
Center
Operations
Production
Routing
Production
Order
Organizational Data
Client
Company code
Plant (shipping plant)
Storage location

Work center location

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Schedule
and Release
Shop Floor
Documents
Goods
Receipt
Order
Settlement
Goods
Issue
Production
Proposal
(Planning/Other)
Completion
Confirmation
Capacity
Planning
Production Process (Make-to-Stock)
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Organization
Plant specific organizational units
Materials Requirements Planning controller
Production controller/production scheduler/planner group
Person responsible (financially)

12
Organization
Non-plant specific organizational units
Capacity planner

13
MRP Control Parameters
Environment
Number range
Master Data
Materials Requirements Planning controllers
Float times
Planned Orders
Conversion order type
Dependant requirement availability

14
MRP Control Parameters (continued)
Planning run
Bill of Material (BOM) selection
External procurement
Planning horizon
Availability Check
Material
Production Resource/Tool (PRT )
Capacity
Scheduling Control Parameters

15
General Planning Parameters
Order Type Control Parameters
Types of routings, BOMs per order type: manually or
automatically
Availability checking
Create Confirmation Parameters
Reservations
Status Updates
Define Valuation of Goods Received
Moving Average Price Control evaluation

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Material Master Planning Parameters
Materials Requirements Planning views for
materials
Work Scheduling views for manufactured products

Business Rules and Parameters
Automatic postings (account determination)
COGS, Material consumption, inventory
Activate MRP
Availability checks
Scheduling parameters
Order parameters
Confirmation parameters
Planning parameters
Consumption based planning
MRP

18
Master Data
Master data is relatively fixed
Material master data
Vendor master data
Purchasing information record
General Ledger master data
Before making the master data configurations, you
must have completely defined the organizational
structures

19

Overview
Material Group
Material Master
Material Types
Material Master Views
Purchasing Info Record
Source List
20
Material Group
The material group field allows similar materials to
be managed together
Material group is used in reporting
Executive Information Systems (EIS)
Logistics Information Systems (LIS)
Etc.
21
Material Master
Material master data can be related directly to all
organizational levels
General information of a material (description,
number, base unit of measure) however has to be
related to the highest level of organization - the
client
Further tailor the material master at the plant level or
lower
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Material Type
Categorizes materials
Defines the material attributes
Valuation
Procurement
Price control
Etc.
Controls transaction involving the material
Controls screen sequence, number assignment,
field selection, account determination
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Material Types
Standard material types are used in all industries
ROH: Raw Materials
Purchased externally only
No sales view
HAWA: Trading Goods
Always purchased externally
Sold without any change to the material
No manufacturing views exist
FERT: Finished Products
Are normally produced internally
No purchasing views exist
24
Additional Material Type
HIBE: Operating Supplies
VERP: Customer returnable packaging
LEER: Empty containers
KMAT: Configurable material
ERSA: Spare parts
DIEN: Services
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Material Master Views
Basic data
Classification
Sales: sales organization data
Sales: general/plant data
Sales text
Purchasing
Purchase order text
Forecasting
Executive
Pen
26
Material Master Views (continued)
MRP 1, 2
Work scheduling
Storage
Warehouse management
Quality management
Accounting
Costing
Executive
Pen
27
Material Master Forecasting
Number of Periods Required
Historical Periods
The number of historical values the system uses for the forecast
Forecast Periods
Number of period splits for which a forecast should be created
Forecast Values
The numeric quantity for future periods
Consumption Values
The sum of planned and unplanned consumption
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Material Master MRP 1
General Data
Purchasing Group
The buyer(s) who are responsible for certain purchasing
activities
MRP Procedures
MRP Type
Determines whether and how the material is planned
Reorder Point
If stock falls below this point, the system is flagged to create a
planned order
MRP Controller
The person(s) responsible for the material planning
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Material Master MRP 1 (cont.)
Lot Size Data
Lot Size
The lot sizing procedure to calculate the quantity to be produced
or procured
Minimum Lot Size
The smallest order quantity
Fixed Lot Size
The quantity to be ordered
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Scheduling
Planned Delivery Time
Number of calendar days needed to obtain the material
Scheduling Margin Key
Used to determine the floats required for scheduling
Net Requirement Calculation
Safety Stock
Specifies the quantity whose purpose is to satisfy unexpectedly
high demand in the coverage period

31
Availability Check
Specifies whether and how the system checks
availability and generates requirements for materials
planning

32

Production oriented Master data
Bill of Material Master Data
Work Center Master Data
Work Center Control Key
Routing
Routing Use
Material Types and Production
Controlling Activities For Production
Activity Prices

33
Bill of Materials (BOMs) are created as single-level
relationships between one parent material and the
sub-component material
EPEN
Barrel Cap Crown Cartridge Band Clip
34
Variant Bill of Material (BOM)
Several products with a large proportion of identical
parts.
EPEN - Red
Red
Cartridge
Band Etc.
Black
Cartridge
Band Etc.
EPEN - Black
35
Multiple Bill Of Materials (BOM)
One product produced from alternative components
or processes, where the differences are small
(usually the quantity of a component).
BOM 1 = lot size 1 - 100
BOM 2 = lot size 101 999
Black
Cartridge
(Make)
Band Etc.
EPEN - Black
Black
Cartridge
(Buy)
Band Etc.
EPEN - Black
36
Where is the Bill Of Material (BOM) used?
MRP uses the BOM to determine dependent
requirements
Controlling uses the Bill Of Material (BOM) to calculate
product costs
Production uses the Bill Of Material (BOM) to issue the
proper quantities of components and raw materials to the
shop floor
37
Unique production or assembly area
May include
Equipment
Groups of equipment
Production lines
Employees
Groups of employees
Operations carried out at work center
38
Work center used to define capacities
Labor
Machine
Output
Emissions
Capacities used in
Capacity requirements planning (CRP)
Detailed scheduling
Costing
39
Assigned
Cost center
Work Center only assigned to one cost center
Human Resources (HR)
Qualifications
Positions
People
40
Work Center
Work Centers have multiple views
Basic data
Default values
Capacity overview
Scheduling
Cost center assignment
Technical data

41
Work Center Control Key
Scheduling
Determine capacity requirements
Inspection characteristics required
Automatic goods receipt by operation
Print time tickets & confirmations
Rework
Cost
Schedule external operations std values
Confirmations

42
Routing
Routings enable you to plan the production of
materials
Routings are used as a template for production
orders and run schedules as well as a basis for
product costing.
Routing is a sequence of operations which detail
the manufacture of a product

43
Routing
Routing are used to determine:
Operations
Work centers
Material components
Production resources and tools
Quality Checks
44
Routing Use
Routings will be used in
Scheduling (dates, times)
Costing
Capacity planning
Production orders

45
Routing
Standard
Sequence
Alternate
Sequence
Parallel
Sequence
Operation 10
Operation 20
Operation 30
Operation 40
Operation 10
Operation 20
Operation 30
Operation 40
Operation 25
Operation 20
Operation 10
Operation 30
Operation 40
Operation 25
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Material Types Allowed In Production
Multiple material types may be used in a
routing/BOM
Raw materials
Semi-finished product
Trading goods are allowed but not standard
Text or Reference materials common
47
Display Routing List
A collective report displaying the available routings
and the material allocations to operations
Four General Types
Operations Related
Component Related
PRT Related
General List (Operation Control Ticket)
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Controlling Activities for Production
Used to perform internal cost allocation, where
activities by a cost center are measured
Labor time
Machine hours
Output activities are valued
Allocation of an activity type is always made with
the allocation cost element created in activity type
planning

49
Activity Prices
Prices (costs) for planned activities
Fixed or Variable
Labor = $$/hour
Machine = $/hour
Overhead = %
50
Transaction Data
Includes transactions that describe business
activities
Unlike master data, aggregate transactional data is
dynamic - it constantly changes, usually many
times per day
Transactions use organizational structure, master
data, and rules

51
Schedule
and Release
Shop Floor
Documents
Goods
Receipt
Order
Settlement
Goods
Issue
Production
Proposal
(Planning/Other)
Completion
Confirmation
Capacity
Planning
Production Process
(Make-to-Stock)
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Production Order
Production Order Defines
Material is to be processed
At what location (work center)
At what time
How much work is required
Resources to be used
Order costs settlement
53
Production Order Standard Process
Documents/Procedures used in the manufacture of
material
Order creation/Order Conversion
Capacity planning
Order scheduling
Order release/processing
Shop floor documents
Completion confirmation
Goods receipts
Order settlement
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Production Order Release
When a production order is created the following
actions are carried out:
A routing selected: operations and sequences
The bill of materials transferred
Reservations generated for bill of material items in stock
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Production Order Release (cont.)
When a production order is created the following
actions are carried out:
The planned costs are generated
The capacity requirements generated for the work centers
Purchase requisitions generated for non-stock items and externally-
processed operations

56
Production Order Elements
Order header
Order number
Material produced
Plant
Quantity
Dates
PRT
Tooling
Equipment
Operations
Tasks
Work centers
Times
Dates
Control keys
Components
Material components
Quantity

57
Production Order Completion and
Settlement
Completion
confirmation
Quantities of material
used
Operations completed
Time
Personnel
Costs
Planned costs and
actual costs
Settlement rule for the
order for accounts/cost
centers
Settlement profile
Settlement receiver

58
Production Order Completions
Completion confirmation:
Confirms both the yield and scrap quantities
Backflushing
Can create goods movements
Reduction of component reservations
Receipt of product if automatic Goods Receipt (G/R) set
Activity costs
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Production Order Costs
Planned costs
Primary Costs
Material Costs (BOM)
Based on material master price for each component
Cost for External Processing
Secondary Cost
Production Costs (Routing)
Material Overhead Costs
Production Overhead Costs
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Production Order Costs
Actual costs
Primary Costs
BOM components
Updated when goods are issued to order, or when purchased
materials are received
Secondary Costs
Uses routing
Time Cards from Operations
May include activity costs
Material Overhead Costs
Production Overhead Costs

Gets updated at completion confirmation
61
Production Order Status
REL: Released
CRTD: Created
PRT: Printed
CNF: Confirmed
DLV: Delivered
PRC: Pre-costed

GMPS: Goods
movement posted
MACM: Material
Committed
MANC: Mat.
Availability
not checked
NTUP: Dates are not
updated
SETC: Settlement
rule created
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Sales Order
Process
Sales Order
Entry
Check
Availability
Production
Process
Run MPS w/MRP
Convert Production
Proposal
Schedule
and Release
Procurement
Process
Pick
Materials
Goods
Issue
Purchase
Requisition
Purchase
Order
Goods
Receipt
Invoice
Receipt
Payment
to Vendor
Completion
Confirmation
Goods
Receipt
Quality
Inspection
Order
Settlement
Post Goods
Issue
Invoice
Customer
Receipt of
Payment
Overall Process

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