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Module 10. Setup for Production. Plant Parameters. Configuring the SAP R/3 system for production is one of the most challenging tasks in R/3 configuration CO will not be configured for production in this exercise

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module 10

Module 10

Setup

for

Production

plant parameters
Plant Parameters
  • Configuring the SAP R/3 system for production is one of the most challenging tasks in R/3 configuration
    • CO will not be configured for production in this exercise
    • Configuring the CO module to accurately track manufacturing costs is extremely challenging
      • Requires balance between accurate cost allocations and data collection requirements. To much detail can make the SAP system difficult to use, which means it is not likely to be used correctly.
planning vs scheduling
Planning vs. Scheduling
  • Configuring the production planning (PP) module is complicated by the fact that planning and scheduling are two separate, but highly related, activities.
  • Planning, typically implemented via Material Requirements Planning (MRP), is used to create planned orders and purchase requisitions—suggestions by the SAP system as to what should be produced on the shop floor or procured from suppliers (vendors), respectively.
planning vs scheduling1
Planning vs. Scheduling
  • Scheduling is the process of converting planned orders into production orders and purchase requisitions into purchase orders, then managing these orders in detail.

Planned

Scheduled

Internal

Procurement

Planned

Order

Production

Order

External

Procurement

Purchase

Requisition

Purchase

Order

floats
Floats
  • In both planning and scheduling, floats can be added to planning times to provide for a buffer against uncertainty. The production lead time for a material might be 12 days. Of that 12 days, 10 days might be the expected production time with a float of 2 days added to allow for production disruptions.
  • Floats are organized in the SAP R/3 system using Schedule Margin Keys.
floats1
Floats
  • Four floats are defined in a schedule/margin key:
    • Opening period: Workdays prior to order start.
    • Float Before Production: Workdays between order start and scheduled start.
    • Float after Production: Workdays between order due date and scheduled finish date.
    • Release Period: Workdays in release period.
planning parameters
Planning Parameters
  • The MRP 2 view of the material master gives:
    • In-house production time
    • Goods Receipt (GR) processing time
    • Schedule Margin Key, which gives:
      • Opening period
      • Float Before Production
      • Float After Production
      • Release Period
planning parameters1
Planning Parameters

Material Master

MRP 2 View

Schedule Margin

Key

slide9
MRP
  • Planning, which is done by the MRP process, needs:
    • In-house production time
    • GR processing time
    • Opening Period
  • The MRP process will determine the order start and order finish date, as well as the planned opening date
  • The planned opening date can be used by planners to convert planned orders to production orders by groups rather than individually. The MRP planner can convert groups of planned orders based on the planned opening date.
material requirements planning
Material Requirements Planning

Demand

Opening

Period

In-house production

GR

process

Available

for Planning

Order Start

Planned

Opening Date

Order Finish

example in sap
Example in SAP

Available for Planning

Demand (Independent Requirement)

Order start

Order finish

Planned opening date

Planned Order Detail

production order scheduling
Production Order Scheduling
  • The float before production and float are used to calculated the scheduled start and scheduled finish dates when the planned order is converted into a production order.
  • The float before production is a start float. It has two functions:
    • It can compensate for delays in the staging of
    • the material components.
    • If there is a capacity bottleneck at the work centers involved, the production dates can be moved forward in the future. In this way it serves as a float for capacity leveling.
production order scheduling1
Production Order Scheduling
  • The float after production is a finish float. It is used to compensate for unexpected disturbances in the production process, so that they do not delay the scheduled finish date.
  • The system calculates the scheduled start of the order by adding the float before production to the order start date. It calculates the scheduled finish of the order by subtracting the float after production from the order finish date.
production order scheduling2
Production Order Scheduling

In-house production

Float before

Production

Float after

Production

Release

Period

Scheduled

Release

Scheduled

Start

Scheduled

Finish

Order Start

Order Finish

production order scheduling3
Production Order Scheduling
  • Note how the float before production and float after production are used to calculate the scheduled start and scheduled finish time. The in-house production time specified on the MRP 2 View of the material master should be the sum of the expected processing time plus the float before production plus the float after production.
release period
Release Period
  • The SAP system can be configured so that a production order is released as soon as it is created. This means that the production facility can begin production.
  • The SAP system can also be configured to make the release of the production order a separate step. In this case, the SAP system deducts the number of days defined in the release period from the scheduled start of the order to determine the scheduledrelease date of the order. This date can be used by the production scheduler to perform collective release, i.e., release a group of production orders based on the scheduled release date.
number ranges
Number Ranges
  • Every transaction in SAP is numbered. Some companies are very interested in the format of numbers assigned to different objects. The SAP R/3 system gives the user the ability to define different number ranges (number of digits, numeric or alphanumeric, starting number, etc.) and then assign them to different objects.
number ranges1
Number Ranges
  • In defining plant parameters, number ranges must be defined and assigned to:
    • Planned orders
    • Reservations/Dependent requirements
    • Purchase requisitions
    • MRP lists
    • Simulated dependent requirement
mrp controllers
MRP Controllers
  • In the SAP system, the person designated to manage the production and inventory levels for a material is called the MRP Controller.
  • Each material can be assigned to a particular MRP Controller.
  • The MRP Controller is used to select materials for reports like the Stock/requirements list.
  • The Stock/requirements list, is an interactive transaction for managing the production and inventory levels for a material
production scheduling profile
Production Scheduling Profile
  • The production scheduling profile determines how production scheduling is to be carried out in the plant. Settings in the production scheduling profile control things like:
    • When production orders are released for production (upon creation, for example).
    • When production orders are scheduled (on release, for example).
production scheduler
Production Scheduler
  • Similar to the MRP Controller, a Production Scheduler must be defined in the SAP system to control detailed production scheduling for a material. A production scheduling profile is assigned to the Production Scheduler, and the Production Schedule is defined in the Work Scheduling view of the Material Master.
material availability check
Material Availability Check
  • When the MRP system creates a planned order, it can also check whether the components and sub-assemblies required to complete the planned order will be available.
bill of material

## NRG–A

(case)

## Dough NRG–A

(lb)

## Oats

(lb)

## Wheat Germ

(lb)

## Cinnamon

(lb)

## Nutmeg

(lb)

## Cloves

(lb)

## Canola

(gal)

## Honey

(gal)

## Carob Chips

(lb)

## Raisins

(lb)

## Vit/Min Powder

(lb)

Bill of Material
  • The Bill of Material (BOM) defines the relationship between materials that make up an assembled product:
  • It is the “recipe” for

a material

routings
Routings
  • Routings define the relationship between a material and the sequence of workcenters (operations) that are required to produce the material. Routings determine:
    • The operations (work steps) to be carried out during production of a material
    • The activities to be performed in the operations as a basis for determining dates (start, finish, available, etc.), capacity requirements, and costs for a production order
    • The use of materials during production
    • The use of work centers
    • The quality checks to be carried out during production
bom and routing selection id
BOM and Routing Selection ID
  • Different routings and BOMs may be defined for a material. These routings may be applicable for different production quantities, for example. When products change, the BOM and/or routing may change, so BOMs and routings can have validity periods to define when the changes occur.
  • BOM and Routing Selection IDs determine how the SAP system will find the correct BOM and routing for a production order.
bom and routing selection id1
BOM and Routing Selection ID
  • With the routing selection ID 01, when an order is created, the system looks for a routing that is valid for the date the production order is being created and the lot size of the production order. If more than one routing is valid for a production order, the SAP system selects the first valid routing.
  • Similarly, with BOM selection ID 01, the system looks for a BOM for the material with the correct status (active), lot size and validity date.
creating production orders

Manual

MRP

Automatic

Copy Routing

Copy Bill of Material

Read in First

Forms Backbone

Generates

Lead Time Scheduling

Availability Checks

Material and/or Capacity

Save Order

Creating Production Orders
planning horizon
Planning Horizon
  • The planning horizon (measured in days) determines how far in the future the MRP planning process looks to create production orders.
  • A production scheduler can structure the MRP process to create production orders for all demand (forecast demand, customer orders) recorded in the system, or only that demand that is within the number of days in the planning horizon into the future.
production order availability checks
Production Order Availability Checks
  • For standard production order type PP01, availability checks can be specified on a plant-by-plant basis.
  • Availability checks can be performed for:
    • Materials: availability of component materials
    • Production Resources and Tools (PRT)
    • Production Capacity
  • Checks can be specified to be determined when a production order is created, a production order is released, or both times.
production order availability checks1
Production Order Availability Checks
  • If availability checks are specified, then production orders cannot be created if the availability check is not passed.
  • For example, if a material availability check is specified at order creation, then a production order for a batch of snack bar dough cannot be created unless all raw materials (oats, wheat germ, cinnamon, etc. are in stock in sufficient quantities.

## Dough NRG–A

(lb)

## Oats

(lb)

## Wheat Germ

(lb)

## Cinnamon

(lb)

## Nutmeg

(lb)

## Cloves

(lb)

## Canola

(gal)

## Honey

(gal)

## Carob Chips

(lb)

## Raisins

(lb)

## Vit/Min Powder

(lb)

forward and backward scheduling
Forward and Backward Scheduling
  • Two basic methods of production order scheduling are available
    • Forward Scheduling, where a production order is scheduled to start immediately and finish as soon as possible
    • Backward Scheduling, where the scheduling begins at the due date and works backward.
      • Most students use backward scheduling
      • Backward scheduling can lead to problems if there is not enough float time in the schedule to account for disruptions
backward scheduling
Backward Scheduling

Scheduled

Start

Scheduled

Finish

Planned

Finish

Today

Planned Start

Float after

production

In-house production time

Float before

production

forward scheduling
Forward Scheduling

Today

Scheduled

Start

Scheduled

Finish

Planned

Finish

Planned Start

Float after

production

In-house production time

Float before

production

material master views for production
Material Master Views for Production
  • The MRP views in the Material Master define a range of parameters for planning.
  • There are four MRP views (MRP 1, MRP 2, MRP 3 and MRP 4) that contain Production Planning Parameters
  • Production scheduling parameters are entered in the Work Scheduling View
mrp 1 view
MRP 1 View

MRP Type: How the material is planned

PD—Using MRP logic

VB—Consumption-based planning

Lot Size: How many units to make in a

production order

FX—Fixed, make the fixed lot size

EX—Lot-for-lot, make exactly the

quantity required

MRP Controller: Controller responsible for

this material

mrp 2 view
MRP 2 View

In-house production: Number of days

required to produce the material

GR processing time: Number of days

required to process the material

after production before it can be

used. May allow for quality

inspection, for example.

Schedule margin key: Set of floats used.

mrp 3 view
MRP 3 View

Strategy group: setting for how inventory,

forecasts and customer orders affect

the MRP planning process.

Tot. repl. lead time: Total replenishment

lead time. This is used in the sales

order process. If there is no stock

on hand for this material, then the

sales order process will assume

the material will be available in

this number of days if an order is

placed. The SAP system will

calculate a promised delivery date

using the total replenishment lead

time as well as a delivery time

calculated from other system settings.

work scheduling view
Work Scheduling View

Production Scheduler: Production scheduler

responsible for this material.

Prod. Sched. Profile: Production scheduling

profile for this material.

As described previously, the production

scheduler and production scheduling

profile determines the way production

orders are created and managed.

mrp run
MRP Run
  • In Single-item, Single-level planning, only the material is planned, not other materials that may be required to make the material
  • For example, if single-item, single-level planning is used on the dough material, then only the dough is planned and not the materials needed to make dough, like oats, wheat germ, etc.

A number of parameters are

set that in MRP planning to determine

how planning is to proceed and what

it is to produce (planned orders vs.

purchase requisitions, for example).

stock requirements list
Stock/Requirements List
  • The Stock/requirements list is an interactive report that provides a comprehensive set of information about a material, including inventory, planned orders, forecast demand, customer orders.
  • In addition, by double-clicking on specific items, the user can access a variety of data like material masters, detailed stock overviews, production order details, etc.
  • The Stock/requirements list is the primary tool used by planners and schedulers.