Right Solution, Right Time, Right Price

PP Planning Workshop

SAP America Inc. PP Planning ppt Jan, 1999

Business Process Workshop

The objectives of the PP Planning workshop are to:
Demonstrate production planning process
Discuss Company planning process

Communicate scope expectations

SAP America Inc. PP Planning ppt Jan, 1999

Agenda
Attendees:
Production Planning

Topics:
Demand Management
Master Production Schedule
Material Requirements Planning

Convert Planned Orders

SAP America Inc. PP Planning ppt Jan, 1999

Manufacturing Planning & Execution

Customer
Customer
Order
Order Mgmt
Mgmt

Forecasting

Sales & Oper

Planning

Procurement

Demand
Management

MPS

MRP

Manufacturing
Execution

Order
Settlement

Inventory
Inventory

Costing
Costing

Not included with PCC

Capacity
Capacity
Production
ProductionMaster
MasterData
Data

Reporting
Reportingand
andAnalysis
Analysis

SAP America Inc. PP Planning ppt Jan, 1999

Planning Process and Levels

Not Included with PCC

CO/PA
OK?

SOP
OK?

MPS
OK?

MRP

OK?

Profitability analysis
- Revenue plans
- Sales plans (quantities)

Planning Levels
Region 1

Region 2

Sales and Operations Planning

- Sales plan
- Production plan

Master Production Scheduling

- Demand program
- Adjusted master plan

Material Requirements Planning

- Dependent requirements
- Planned production
- Procurement plan

SAP America Inc. PP Planning ppt Jan, 1999

Product group

Product 1

Product 2

Assembly 1

Assembly 2

Part 1

Part 2

Feedback/Replanning

Planning Steps

Demand Management
DEMAND MANAGEMENT

Demand
Demand program
program

MPS or MRP

Demand management links top-level requirements planning (SOP, independent requirements,

etc.) with material planning (MPS and MRP).

Demand management determines the requirement dates and quantities for important
assemblies and specifies the strategies for planning and producing or procuring finished
products.

The result of demand management is the demand program.

SAP America Inc. PP Planning ppt Jan, 1999

Discussion
What is the Production Forecast made up of ?

What is the planning periodicity ?

How often is it updated after initial entry?

SAP America Inc. PP Planning ppt Jan, 1999

MPS vs. MRP

Independent Requirement
Run MPS at this level.

Motorcycle
Run MRP at
this level.

Power Train

Motor

Gear

Exhaust

SAP America Inc. PP Planning ppt Jan, 1999

Chassis

Front
Wheel

Rear
Wheel

Frame

Brake
System

MPS Run
MPS creates planned orders for top-level items
to satisfy independent requirements.
Independent
Requirement
Planned order for the
motorcycle creates
dependent requirements
for all components.

Motorcycle

Power Train

SAP America Inc. PP Planning ppt Jan, 1999

Chassis

There are no
planned orders
at this level.

Planning Run: Single-item Planning

Receipts

Time
Issues
Single-item,
Single-item,single-level
single-levelplanning
planning(MPS)
(MPS)
Options
for
manually
changing
Options for manually changingthe
themaster
masterplan:
plan:
++create
create
++delete
delete
++change
change
++reschedule
reschedule
Single-item,
Single-item,multi-level
multi-levelplanning
planning(MRP)
(MRP)
Planning
Planningaacomplete
completeBOM
BOMstructure
structure
Option
Optionof
ofmanually
manuallychanging
changingthe
theproduction
production
plan
planfor
foreach
eachmaterial
materialin
inthe
theBOM.
BOM.

In single-item, multi-level planning, the complete BOM structure is planned for a particular
material.

In single-level planning, the MRP controller can display the planning results of individual
assemblies or components, and correct them if necessary, before planning further.

SAP America Inc. PP Planning ppt Jan, 1999

Control Parameters for MPS/MRP

Planning run can be carried out at two different levels:

Single-item planning for an individual material

Total planning for all materials in a plant

Planning Run Types

During regenerative planning, all items are planned for a plant

The net change planning procedure plans only those items that have undergone a
change relevant to planning since the last MPS/MRP run

In net change planning in the planning horizon, MPS/MRP is carried out only
within a defined planning horizon

SAP America Inc. PP Planning ppt Jan, 1999

MRP Procedures
Materials planning

Consumption
based

Reorder point
procedure

Manual
reorder point

SAP America Inc. PP Planning ppt Jan, 1999

MRP

Consumption Based Planning

Material Requirements Planning (MRP) is often the source
of demand for purchased materials in an organization.
Depending on material master settings and parameters
selected when running MRP, demand from MRP can
generate:

Planned orders: Can be converted to purchase requisitions or purchase

orders

Purchase requisitions: Can be converted to purchase orders

SAP America Inc. PP Planning ppt Jan, 1999

Outputs of MRP in Procurement

Material Requirements
Planning

Purchase
Requisitio
n

Material
Quantity
Due Date

SAP America Inc. PP Planning ppt Jan, 1999

Current Stock/Requirements List

MRP Elements

Material
Plant

Element lines:

- Current stock
- Supply items
- Demand items
- Quantity
- Date

Material

Stock/requirements list

Purchase
Purchaserequisition
requisition
Purchase
Purchaseorder
order
Planned
orders
Planned orders
Sales
Salesorders
orders
Reservations
Reservations
Warehouse
Warehousestock
stock
Production
Productionorders
orders

The stock/requirements (S/R) list displays the most up-to-date situation of stocks and
requirements (i.e., supply and demand information)

The stock/requirements list is displayed according to material and plant

The S/R list contains the scheduled date, receipts and requirements quantities and resulting
available quantity that represents planned stock

SAP America Inc. PP Planning ppt Jan, 1999

MRP List Structure

MRP Elements

MRP list

Requirements
Requirements
Purchase
Purchaserequisitions
requisitions
Planned
Plannedorders
orders

Element lines:

- Current stock
- Supply items
- Demand items
- Quantity
- Date

Planning result

Material
Plant

Planning
file

The MRP list displays the future stock/requirements situation at the time of the last
planning run (i.e., the planning results for the material)

During the planning run the R/3 System creates MRP lists if the creation indicator was
selected

The MRP list is a tool for reworking a planning result with selection options (material,
plant, MRP controller, exception messages)

SAP America Inc. PP Planning ppt Jan, 1999

Discussion
How often is Planning process run ?

What is the planning periodicity ?

Should Planning process be initiated auto/manually ?

SAP America Inc. PP Planning ppt Jan, 1999

Planning With Final Assembly

Planning with final assembly plans the demand
program, taking sales orders into account.
Process Flow
Warehouse stock
finished products

Planning
Planning

Production
Production

Sales
Sales order
order

SAP America Inc. PP Planning ppt Jan, 1999

Planning With Final Assembly

Sales
Order

Customer
Customer
Requirement
Requirement

Consumption Process
Comparison
Comparison with
with
planning
planning quantities
quantities

Forecast
Forecast

Total
Total
Requirements
Requirements
Master
Master Plan
Plan

Planning
Planning quantities

Customer requirements

SAP America Inc. PP Planning ppt Jan, 1999

Planning With Final Assembly

Features:
Planning is done at the finished product level
Procurement and production are initiated after the planning stage
Sales orders consume planning quantities
Planned quantities that are not used increase warehouse stock
Additional requirements automatically adjust demand program

Availability check is based on available-to-promise (ATP) logic.

SAP America Inc. PP Planning ppt Jan, 1999

Backward/Forward Consumption
Planned
independent
requirements

Backward/forward consumption
1

Time

Sales Orders
Backward
period

Forward
period

InInbackward/forward
backward/forwardconsumption
consumptionwhen
whenaasales
salesorder
orderisiscreated,
created,ititisisfirst
firstallocated
allocatedtotothe
the
independent
requirement
in
the
most
recent
past.
If
the
order
is
larger
than
the
independent
independent requirement in the most recent past. If the order is larger than the independent
requirement,
requirement,the
thesales
salesorder
orderisisallocated
allocatedtotothe
thenext
nextindependent
independentrequirement
requirementthat
thatlies
liesininthe
the
past
until
all
independent
requirements
have
been
consumed
within
the
defined
consumption
past until all independent requirements have been consumed within the defined consumption
period.
period. Once
Onceall
allofofthe
thepast
pastindependent
independentrequirements
requirementshave
havebeen
beenconsumed,
consumed,the
thesales
salesorder
order
isisallocated
to
the
first
independent
requirement
in
the
future.
allocated to the first independent requirement in the future.

SAP America Inc. PP Planning ppt Jan, 1999

Planned Orders:
Basic Information
A planned order represents a planned receipt of a material in a plant. It
specifies when the material is required in stock and the quantity that is
expected.
Planned orders are converted into production orders for in-house
production or into purchase requisitions for external procurement.

Planned orders can be created in one of two ways:

Manually by the MRP controller

Automatically during the planning run

SAP America Inc. PP Planning ppt Jan, 1999

Structure of a Planned Order

Planned order
Header
Quantity
Date

Capacity
requirements

Items

A
Material

Material
Materialcomponent
component
--Quantity
Quantity
--Date
Date

Operations

Periods
Periods

The planned goods receipt determined by net requirements calculation covers the
requirement.

The planned order creates dependent requirements for component material.

The planned order is used for pegging.

The planned order is a source of data for production order.

SAP America Inc. PP Planning ppt Jan, 1999

Planned Orders
MRP

Planned orders

PF
PF
PS
PO
PS
PO

Opening period

x days later
Today

x days earlier

Planned orders have a planned start date (PS), planned finish date (PF) and a planned opening
date (PO).

The planned opening date is the date on which a planned order should be converted into a
purchase requisition or production order.

SAP America Inc. PP Planning ppt Jan, 1999

Firming Planned Orders

Planned orders that are created automatically by
the planning run are continually updated as
requirements change.

To prevent these automatic changes to planned

orders, you can firm them. Changes to order
quantities and dates on firm planned orders can
only be completed manually.

SAP America Inc. PP Planning ppt Jan, 1999

Planned Order Conversion

Planned orders

The system determines whether in-house

production or external procurement is required
via the procurement type and other control
elements (e.g., special procurement keys).

PF
PF

PS

When planned orders are converted into

production orders, capacity requirements are
created and dependent requirements of the
components are automatically converted into
reservations.

PO
PS
PO

Opening period

x days later
Today

x days earlier

Planned orders can be converted on-line via

individual or collective conversions.

Production
Order

SAP America Inc. PP Planning ppt Jan, 1999

Purchase
requisition

Production Orders

A production order specifies:

What is to be produced

How many are to be produced

The production dates

Where the capacity load will be

dispatched

The production costs

NEXT

BACK

EXIT

SAP America Inc. PP Planning ppt Jan, 1999

Production
Order

Creating a Production Order

Direct

MRP

Determine the order type

A production order can be created either

manually or by converting a planned order.

At least one operation should exist on the

routing (if not, the system automatically
generates an operation).

Lead-time scheduling can be carried out

automatically. Lead-time scheduling determines
the delivery date or the start date of the order
and the dates of the individual operations.

Depending on the direction in which the system

is configured to schedule (forwards or
backwards), you need to enter a start date or a
delivery date for the order item (product).

Define order item

Copy routing
Perform lead-time scheduling
Copy bill of material
Add or change data

Save production order

SAP America Inc. PP Planning ppt Jan, 1999

Production Order

Order header

All information needed for completing a

production order is included by using:

Operations

Material components

Production resource/tool

Costs

Planned
100 20
Target
50
Actual

SAP America Inc. PP Planning ppt Jan, 1999

Material master
Bill of material
Routing
Planned cost records
Other manually entered
information

R/3 System Responses to Orders

When a production order is created the system:

selects a routing and transfers the operations and sequences of

the routing into the order.

explodes the bill of material (BOM) and transfers the BOM items
into the order.

creates reservations for all the order components kept in stock.

calculates planned costs for the order.

creates capacity requirements for the work centres.

creates purchase requisitions for all non-stock order components

and externally processed operations.

SAP America Inc. PP Planning ppt Jan, 1999

Scheduling
Scheduling

For External
Procurement
Determine the
delivery and release
dates by
Backward
scheduling

or

Forward
scheduling

For In-house
Production
Determine the
basic dates for
production by
Backward
scheduling

or

Forward
scheduling

Lead time scheduling

(determines the
production dates)

SAP America Inc. PP Planning ppt Jan, 1999

Lead Time Scheduling Using the Routing

Float before
production

Float after
production

10

Order
Order start
start
date
date

20

Production
Production
start
start date
date

30

Production
Production
finish
finish date
date

Order
Order
finish
finish date
date

Operations
Operations
(from
(from the
the routing)
routing)

Floats are assigned by the scheduling margin key in the

material master.
SAP America Inc. PP Planning ppt Jan, 1999

Functions of the Order Release

Order creation

Production
Order

Availability check
Order release

Printing
Printingof
of
documents
documents

Material
Material
withdrawal
withdrawal

Processing
Processing

Completion
Completion
confirmation
confirmation

Goods
Goods
receipt
receipt

Production orders are managed using statuses

When the order is released, the system activates a release status

Order release must be carried out manually

You can release a production order in create or change modes

SAP America Inc. PP Planning ppt Jan, 1999

Settlement
Settlement

Functions of the Order Release (cont.)

Order creation

Production
Order

Availability check
Order release

Printing
Printingof
of
documents
documents

Material
Material
withdrawal
withdrawal

Processing
Processing

Completion
Completion
confirmation
confirmation

Goods
Goods
receipt
receipt

Settlement
Settlement

An availability check can be performed automatically

Order release is the basis for many subsequent processes in the production order
(printing order documents, material issues, etc.)

You can release an individual operation, the entire order or several orders at the same
time

SAP America Inc. PP Planning ppt Jan, 1999

Discussion
What is the Conversion process ?

What is the Release process ?

SAP America Inc. PP Planning ppt Jan, 1999

Right Solution, Right Time, Right Price

SAP America Inc. PP Planning ppt Jan, 1999