Presentation on SAP PP Module

Date 02.08.2007, Tuesday

SAP Training Room

Agenda
Attendees:
Business Managers, Process Owners
Topics:
Master Data
Demand Management
Production Planning
Production Execution

Why Production Planning?

How to make products efficiently

How much to make? When to make?
When and how much we need raw material?
Can the resources support the production plan?
Do we need additional capacity? How much? Where?
How to schedule orders, tasks, labors in the production process?
What is the best batch size and inventory levels etc.?

Contents of Presentation
Demonstrate the planning/execution process
Discuss Company production process
Communicate scope expectations

Production Planning Master Data

BOM

PP- Maser Data

ROUTING

WORK CENTER

Material Master Records

The
The material
material master
master is
is aa
central
central data
data object
object in
in the
the
SAP
SAP R/3
R/3 System.
System. The
The
material
master
includes:
material master includes:
Ent materials
raw
raw
itlmaterials
em
ent supplies
operating
s supplies
operating
semi-finished
semi-finished products
products
finished
finished products
products

The material master is a central data object in the SAP R/3 System.

All the information required to manage products and equipment is stored in the material
master record.

Each user department has its own view of the material master which permits easy access
to and maintenance of data.

Bill of Material
Motorcycle

Power Train

Motor

Gea
r

Exhaus
t

Chassis

Front
Whee
l

Rear
Whee
l

Fram
e

Brake
System

A bill of material is a complete, formally structured list of the components

of a product or assembly.
A bill of material contains the description of each component, the
quantity, and unit of measure.
A bill of material creates the relationships between an assembly and all
of its direct components.

Types of Bills of Material

SIMPLE BOM

PRODUCT-1
ITEM - 1

VARIANT BOM

PRODUCT-2

ITEM - 1

MULTIPLE BOM

ITEM - 2

PRODUCT-1
ITEM - 2

PRODUCT-1

ITEM -2

ITEM - 1

ITEM - 2

Bills of Material Usage

BOM Usage
Production

Engineering

Production
order

Operations

Material
BOM

Costing

Technical data

Plant maintenance

Sales & distr.

Sales
order

Price

Location data

Order quantity

SAP AG

Work centres
Work centres are used to describe where work is performed.
Each work centre is defined by the machines or employees
involved in the production process.
Each work centre contains distinct capacity, costing, and
scheduling information.

Work centre 1

WC 5
WC 4

WC 2

WC 3

Work centre 6

New York Plant Shop Floor

WC = Work centre

Work Center
WORK CENTER IS A LOCATION WHERE A PARTICULAR
OPERATION IS EXECUTED
THE FOLLOWING CAN BE DEFINED AS WORK CENTERS :INDIVIDUAL WORK CENTER
WORK CENTER GROUP
PRODUCTION LINE
INDIVIDUAL PERSON
GROUP OF PERSON

AUTO LATHE NO : 10
LATHE SHOP
ASSY LINE NO: 1
MR.RAM
POOL OF 12

Primary Function of Work Center

Work
Work center
center
10
Default
Default
values
values

Task
Tasklists
lists

11

Costing
Costing
data
data

Scheduling
Scheduling data
data
and
and
Available
Available capacity
capacity

Costing
Costing

Lead
Lead time
time
scheduling
scheduling
Capacity
Capacity planning
planning

2724.00
2724.00
1200.00
1200.00
124.00
124.00
4048.00
4048.00

Types of Work Center Scheduling

Basic scheduling
Data from the material master is used for scheduling

Lead time scheduling

Data from the routing is used for scheduling

Finite scheduling
Data from the routing in addition to the existing load (on a day to day basis)
on the work center is used for scheduling

Approaches to Scheduling

Forward scheduling.
Scheduling type in which the operations an order are scheduled forward starting
the planned start date.

Backward scheduling.
Scheduling type in which the operations of an order are scheduled backward
starting from the planned finish date.

Today scheduling.
Today scheduling is forward scheduling starting from the current date.

Scheduling

Routings
Material

Routing
group

Operation 20
Operation 10
Work centre
Texts
Control data
Times

Material
components

PRT

Routings describe the sequence of operations required to produce a specific material.

For each operation, the material components and the production resources and tools
required to produce the material are maintained in the routing.

Routing : Input Component

A
Material

B
Material

Routing

Bill
Billof
ofmaterial
material

Op. 10

Item 10

Op. 20

Item 20

Op. 30

Manufacturing Planning & Execution

Procuremen
t

Customer
Customer
Order
Order Mgmt
Mgmt

SOP
Forecasting

Sales &
Operations
Planning

MPS
Demand
Management
Demand
Management

MPS

Capacity
Capacity
Production
ProductionMaster
MasterData
Data
Reporting
Reportingand
andAnalysis
Analysis

MRP
MRP

EXECUTION
Manufacturing
Execution

Order
Settlement

Inventory
Inventory

Costing
Costing

Manufacturing Planning
Manufacturing Planning is the process of using
forecasts and customer demand to create
production and procurement schedules for finished
products and component materials.

Demand Management
DEMAND MANAGEMENT

Demand
Demand program
program

MPS or MRP

Demand management links top-level requirements planning (Planned 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.

Make to Order

Sales
Order

M.R.P.
M.R.P.

C.R.P.
C.R.P.

Production
Production
Execution
Execution

Sales
Sales Order
Order
Stock
Stock

The cycle can not start till we get any sales order.
After we get the sales order for the final product dependent
requirements are generated through M.R.P.
After the production execution the stock produced is for that particular
order, it can not be shared by any other order.

Make to stock

Forecast

M.R.P.
M.R.P.

C.R.P.
C.R.P.

Production
Production
Execution
Execution

warehouse
warehouse
Stock
Stock

The cycle starts without any sales order.

We get Planned Independent Requirement on the basis of data
Dependent requirements are generated for items through M.R.P.
After the production execution the stock produced is not for any
particular sales order, it is warehouse stock.

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

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

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.

Master Production Scheduling (MPS)

Use the independent requirements from Demand Management plan to create the Master Production
plan.

Master Production Scheduling (MPS) creates planned order proposals for each master schedule item
and generates the dependent requirements for the first-level components in each products bill of
material.

The master planners review and update the suggested master production schedule before generating
a detailed production schedule.

Material Requirements Planning (MRP)

In material requirements planning (MRP), the system calculates the net requirements
while considering available stock and scheduled receipts from purchasing and
production.

During MRP, all levels of the bill of material are planned.

The output of MRP is a detailed production and purchasing plan.

Steps During MRP Run

STEPS
STEPSDURING
DURINGMRP
MRPRUN
RUN

NET REQUIREMENT CALCULATION

LOT SIZING CALCULATION

PROCUREMENT SPECIFICATION

SCHEDULING

BOM EXPLOSION

MRP : Material Planning Procedure

Planning procedures

Consumptionbased planning

MRP

Forecast-based
planning

Reorder point
planning

Automatic
reorder point

Manual
reorder point

MRP : Material Planning Procedure

MRP including BOM explosion
Using the forecast for unplanned additional reqmts
Using the forecast for the total requirements
MPS represents a separate planning run
Stock

Consumption-based planning
Manual reorder point planning
Automatic reorder point planning
Forecast-based planning

Reorder
level
Safety stock
Reorder
point

No materials planning

Delivery date

Time

Capacity Requirement Planning

Purpose is to provide planners with

A flexible system of overviews of the capacity utilization at all work centers
at a plant
A tool used to effect capacity leveling
Different types of capacities
Labor
Machine capacity
Energy consumption
Waste from the process

Capacity Requirement Planning

Capacity requirement calculation

Based on planned orders and production orders
Evaluating capacity load situation
To compare available capacity with capacity requirement
Capacity leveling
Optimum commitment of machines and production lines
Selection of available resources
Capacity availability checking

Planning Result

Planning
Planned
Order

MRP

Purchase
Requisition

Execution
Production
Order

Order
Release

Goods
Issue

Completion
Confirmation

Goods
Receipt

Order
Settlement

Production Order Creation and Release

Order creation

Production
Order

Availability check
Order release
Printing
Printing of
of
documents
documents

Material
Material
withdrawal
withdrawal

Completion
Completion
Processing
Processing confirmation
confirmation

Goods
Goods
receipt
receipt

Order
Order
Settlement
Settlement

Manufacturing Execution

Initiate Manufacturing Execution by releasing each production order to the shop floor.

The material handlers pick the appropriate quantities of component materials and
perform the necessary inventory transactions.

The production and assembly operations are performed, labour is reported, and the
completed product is received into stock.

Withdrawing Material Components

When a production order is created, the system automatically
creates a reservation for the necessary material components
but does not activate that reservation (i.e., reserve quantities)
until the order is released.
Both types of goods movement (issues and receipts) trigger
the following transactions:

A material document is created to record the goods movement.

The stock quantities of the materials are updated.

The stock values are updated in the material master records and
the stock/consumption accounts are updated in the General
Ledger.

Completion Confirmation
A completion confirmation documents the processing status of
operations. As such, completion confirmations are used to
monitor the progress of production orders.
A completion confirmation is used to record:

The yield quantity and quantity of scrap that was produced in an

operation.

The amount of activity used to carry out the operation.

The work centre at which the operation was performed.

Who performed the operation.

Goods Receipts

A goods receipt with reference to a production order offers

the following advantages:

Data is proposed from the production order.

The delivered quantity is updated in the order.
The goods receipt is valuated with the standard price.
We can check whether the production process is complete.

Order Settlement

Order settlement is the final step in manufacturing planning and execution.

During confirmations, the actual hours performed, quantities produced, and costs
incurred are confirmed.

The plant cost analyst then closes the production order and settles any cost
balances and variances (if any) to the appropriate financial accounts.

Where are we as on today . . .

We are
here

2 Weeks
(ending
July 23)

6 Weeks
(ending
Sep 03)

12 Weeks
(ending
Nov 30)

4 Weeks
(ending
Dec 31)

Go-live Jan 01,

2008
4 Weeks support
(ending Jan 31)

Immediate job in hand (As-Is preparation)

Immediate job in hand (As-Is preparation) Contd..

Immediate job in hand (As-Is preparation) Contd..

Immediate job in hand (As-Is preparation) Contd..

Thanking you all

...