ERP - SAP

PRODUCTION PLANNING MODULE

PRESENTATION

TOPICS:

1. ENTERPRISE STURCTURE,2. PRODUCTION PLANNING FLOW,3. BASIC DATA,

MATERIAL MASTER RECORD, BILL OF MATERIAL, WORK CENTER, ROUTING.

4. SALES AND OPERATION PLANNING,5. DEMAND MANAGEMENT

PLANNING STRATEGIES, PIR, CR,

6. MRP / MPS.

ENTERPRISE STRUCTURE

COMPANY

COMPANY CODE COMPANY CODE

PLANT01 PLANT02 PLANT01 PLANT02

SL01 SL02 SL01 SL02

PRODUCTION PLANNING FLOW

MRP PIR SDPROCESSDEPENDENT

REQUIREMENT

PLANNEDORDER

CONVERSION

WAREHOUSE

PRODORDER

ORDERPROCESS

PURCHASEREQ.

PURCHASEORDER

SCHEDULING

INVOICEVERIFICATION

FINALCOSTING

CAPACITYPLANNING

BASIC DATA

MATERIAL MASTER RECORD,

BILL OF MATERIAL,

WORK CENTER,

ROUTING.

MATERIAL MASTER RECORDPurposeThe material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company's central source for retrieving material-specific data. This information is stored in individual material master records.IntegrationThe material master is used by all components in the SAP Logistics System. The integration of all material data in a single database object eliminates redundant data storage. In the SAP Logistics System, the data contained in the material master is required, for example, for the following functions:

In Purchasing for orderingIn Inventory Management for goods movement postings and physical inventoryIn Invoice Verification for posting invoicesIn Sales and Distribution for sales order processingIn Production Planning and Control for material requirements planning, scheduling, and work scheduling

BILLS OF MATERIAL

Bills of Material in Production PlanningBills of material (BOMs) and routings contain essential master data for integrated materials management and production control. In the design department, a new product is designed such that it is suitable for production and for its intended purpose. The result of this product phase is drawings and a list of all the parts required to produce the product. This list is the bill of material.

A bill of material is a complete, formally structured list of the components that make up a product or assembly. The list contains the object number of each component, together with the quantity and unit of measure.A bill of material can only refer to a quantity of at least 1 of an object.

WORK CENTERSDefinitionOperations are carried out at a work center. In the R/3 System work centers are business objects that can represent the following real work centers, for example:

Machines, machine groups, Production linesAssembly work centers, Employees, groups of employees

UseData in work centers is used for

SchedulingOperating times and formulas calculates duration of an operation.

CostingThe costs of an operation can be calculated.

Capacity planningThe available capacity and formulas for calculating capacity requirements.

ROUTINGDefinitionA routing is a description of which operations (process steps) have to be carried out and in which order to produce a material (product). As well as information about the operations and the order in which they are carried out, a routing also contains details about the work centers at which they are carried out as well as about the required production resources and tools (includes jigs and fixtures). Standard values for the execution of individual operations are also saved in routings.Routings (generic) consist of the following objects:

Routing Rate routing Reference operation set Reference rate routing

UseA routing is used as a source for creating a production order or a run schedule header by copying.

INTEGRATION OF THE MASTER DATA

MATERIAL MASTER BOM

WORK CENTER ROUTING

PRT

ECM

SALES AND OPERATION PLANNING

SOP constitutes the planning functionality of the LIS information systems.You pass on SOP plans to Demand Management (PP-MP-DEM) in the form of independent requirements. In turn, this data is fed to Master Production Scheduling (PP-MP-MPS) and Material Requirements Planning (PP-MRP).An interface with Profitability Analysis (CO-PA) allows you to use CO-PA data as the basis for sales planning in SOP.You can also pass on the results of SOP to Profitability Analysis (CO-PA), Cost Center Accounting (CO-OM-CCA), and Activity-Based Costing (CO-OM-CCA).Application Link Enabling (CA-BFA-ALE) supports the distribution of data to different operating units in your enterprise.

FOUR MAIN STEPS IN SOP

1. PRODUCT GROUP – MC84

2. ROUGH CUT PLANNING – MC81

3. AGGREGATION / DISAGGREGATION – MC76

4. TRASFER TO DEMAND MANEGMENT – MC75

DEMAND MANAGEMENT

The function of Demand Management is to determine requirement quantities and delivery dates for finished products assemblies. Customer requirements are created in sales order management. To create a demand program, Demand Management uses planned independent requirements and customer requirements.To create the demand program, you must define the planning strategy for a product. Planning strategies represent the methods of production for planning and manufacturing or procuring a product. Using these strategies, you can decide if production is triggered by sales orders (make-to-order production), or if it is not triggered by sales orders (make-to-stock production).You can have sales orders and stock orders in the demand program. If the production time is long in relation to the standard market delivery time, you can produce the product or certain assemblies before there are sales orders. In this case, sales quantities are planned, for example, with the aid of a sales forecast.

PLANNING STRATEGIES

Planning strategies represent the business procedures for the planning of production quantities and dates. A wide range of production planning strategies are available in the SAP R/3 System, offering a large number of different options ranging from pureMAKE-TO-ORDER PRODUCTION toMAKE-TO-STOCK PRODUCTIONDepending on the strategy you choose, you can:

Use sales orders and/or sales forecast values to create the demand program Move the stocking level down to the assembly level so that final assembly is triggered by the incoming sales order Carry out Demand Management specifically for the assembly

The materials are not segregated. In other words, they are not assigned to specific sales orders. Costs need to be tracked at material level, and not at sales order level.You should always use make-to-stock production if you produce stock independently of orders because you want to provide your customers immediately with goods from that stock later on. You might even want to produce goods without having sales orders, if you expect that there might be customer demand in the future. This means that make-to-stock strategies can support a very close customer-vendor relationship because your objective here is to provide your customers with goods from your stock as quickly as possible. Returns that have passed quality inspection and other unexpected goods receipts can be used for other sales orders.This does not mean that you have unreasonably high stock levels. You can avoid them by doing one of the following:

Create a production plan in advance (in Demand Management) to plan your stock.

If you make use of this option, you may also want to decide whether sales orders exceeding your plan are to affect production or not.

MAKE TO STOCK PRODUCTION

MAKE TO ORDER PRODUCTION

The materials are segregated. In other words, they are uniquely assigned to specific sales orders. Costs must be tracked at sales order level and not on material level.

Make-to-order strategies should always be combined with lot-size key EX (lot-for-lot. Rounding values should not be used. If you maintain rounding values, they have no effect due to the make-to-order properties of these strategies.

DefinitionPlanned independent requirements are used to perform Demand Managment functions. A planned independent requirement contains one planned quantity and one date, or a number of planned independent requirements schedule lines, that is, one planned quantity split over time according to dates.

PLANNED INDEPENDENT REQUIREMENTS

CUSTOMER REQUIREMENTS

Definition You can create customer requirements in Demand Management.Customer requirements represent the sales orders in the system. A sales order is a contractual agreement between a sales organization and a sold-to party. A sales order contains information on the delivery of a quantity of materials (or service) for a certain date.

MRP is carried out using current and future sales figures. The planned and the exact requirement quantities trigger the net requirements calculation. The requirement elements of this calculation include sales orders, planned independent requirements, dependent requirements received from BOM explosion, and so on. The net requirements calculation can give the exact requirements for each day. As you require exact requirement quantities for MRP, this means that you can work with particularly low safety stocks.

MATERIAL REQUIREMENT PLANNING

To reduce high storage costs, and at the same time to increase planning stability, the planning of finished products and main assemblies should be closely coordinated. The master plan of these products greatly influences the entire production process: The planning of the dependent parts depends on the planning result of the finished products and main assemblies, even if the finished products represent a small share of all the materials to be planned. Frequent changes at finished product level can render the complete MRP run unstable. It makes sense, therefore, to plan finished products and important assemblies separately, with extra attention. Such materials can be indicated in the SAP System as master schedule items, which can be planned and finely tuned using a series of special tools. Planning these master schedule items with special care leads to a reduction in stock levels and at the same time an improved delivery performance and a reliable service level. This procedure ensures that planning remains consistent and transparent. net requirements calculation can give the exact requirements for each day. As you require exact requirement quantities for MRP, this means that you can work with particularly low safety stocks.

MASTER PRODUCTION SCHEDULING

END OF PRESENTATION