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Module : PP (Production Planning). Organizational Elements. The SAP PP business processes uses the following organizational elements: Client Company Code Plant Storage Location. Organizational Elements Client. A Highest Hierarchical Level in SAP (e.g. a corporation)

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Module pp production planning

Organizational Elements

The SAP PP business processes uses the following organizational elements:

  • Client

  • Company Code

  • Plant

  • Storage Location


Module pp production planning

Organizational Elements

Client

  • A Highest Hierarchical Level in SAP (e.g. a corporation)

  • Used to Differentiate between a Development, Quality Assurance, and Production System within SAP R/3

  • Common Set of Rules

    • Common Tables

    • Common Master Files

    • Common Data Bases

  • Standardized data across the client

    • A vendor number and name is common across the client

    • A customer is common across the client

    • A material number and description is common across the client


Module pp production planning

Organizational Elements

Company Code

  • A company code represents an independent balancing/legal accounting entity, for example, a company within a corporate group.

  • Balance sheets and profit & loss statements, required by law, can be created at the company code level.

Company Code ****

BALANCING / (LEGAL)

ENTITY

Liabilities

Assets

=

Revenues

- Expenses

Profit/Loss


Module pp production planning

Organizational Elements

Plant

  • Usually a manufacturing facility, a warehouse, or a location that stocks , manages, and valuates inventory

  • May be a physical site with multiple manufacturing/production lines

  • May be multiple manufacturing/production lines at one physical site

  • Can be a physical location (cost centers may or may not be associated to a plant i.e. Administrative vs. Manufacturing cost centers)

  • Links to production (PP), materials management (MM), and sales and distribution (SD)

  • A plant is assigned to a company code

  • Purchasing organization are assigned to plants.


Module pp production planning

Organizational Elements

Storage Locations

  • A storage location is the place where stock is physically kept within a plant

  • A storage location has the following attributes:

    • There may be one or more storage locations within a plant.

    • Stocks are managed only on a quantity basis and not on a value basis at storage location level.

    • Physical inventories are carried out at storage location level.

    • Storage locations are always created for a plant.


Module pp production planning

  • Master Data

    List of Master Data in SAP PP Module are:

    • Material Master

    • Bills Of Material

    • Work Centers

    • Routings


Module pp production planning

Master Data

Material Master



Module pp production planning

Material Master

  • Material master record is a company's main source of material-specific data. It is used by all components in the R/3 Logistics System.

  • The integration of all material data in a single database object prevents the problem of data redundancy. Every area, such as Purchasing, Inventory Management, Materials Planning, and Invoice Verification can use the data stored.


Module pp production planning

Material Master

  • Since materials are processed by various user departments within a company and each department stores different information for the materials, the material master is subdivided into information grouped by user departments.

  • Each user department has a different view of the material master record and is responsible for maintaining the data to support its function.

  • The data maintained within a view may be valid for more than one organizational level.








Module pp production planning

Material Master – Units of Measure

Base unit: Piece

16

72

4

Pallet

(sales unit)

Crate

(order unit)

Box

(unit of issue)




Module pp production planning

Master Data

Bills Of Material


















Module pp production planning

Master Data

Work Centers




















Module pp production planning

Master Data

Routings
















Production planning
Production Planning

Demand Management

Material Requirement Planning

Planning of Purchased parts

Planning of in house assemblies


Planning process process flow
Planning Process: Process flow

Central marketing office

Demand (Weekly)

Dispatch plan

Demand planning cell

Production Requirement (Week wise, Model wise)

Planned Prod.

MRP Run

PPC

Confirmed

Vendor

Schedule

Planned Vendor Schedule

Vendor

Web site

Production

Dispatch sheet

Confirmed Production

Third Party Log


Module pp production planning

While doing planning, you need to decide which planning strategy to use when the customer places their order.

Make-to-Stock Production

Make-to-stock production means we build stock in anticipation of customer demand. We ship the customer order from our stock of finished goods

Make-to-order Production

We wait for a customer order before we start production/procurement. i.e. We produce as per demand from customer

Planning Process: Strategies


Module pp production planning

Planning process: Demand Planning strategy to use when the customer places their order.

Dealer

Dealer

Dealer

Dealer

Dealer

Dealer

Territory office

Territory office

Area Office

Area Office

Area Office

Area Office

Consolidation of Demand

Zonal

Central Marketing office

PPC


Module pp production planning

Planning Process: Demand Management strategy to use when the customer places their order.

Demand management is the link between top-level requirements planning (SOP) and materials planning (MRP).

Input for the demand program can come from several sources:


Materials requirement planning
Materials Requirement Planning strategy to use when the customer places their order.


Mrp overview
MRP Overview strategy to use when the customer places their order.


Uses of mrp
Uses of MRP strategy to use when the customer places their order.


Mrp functions
MRP Functions strategy to use when the customer places their order.


Mrp prerequisites
MRP Prerequisites strategy to use when the customer places their order.


Planning run
Planning Run strategy to use when the customer places their order.


Planning run types
Planning Run - Types strategy to use when the customer places their order.


Mrp control parameters
MRP - Control Parameters strategy to use when the customer places their order.


Net change planning
Net Change Planning strategy to use when the customer places their order.


Planning in planning horizon
Planning in Planning Horizon strategy to use when the customer places their order.


Planning run single item
Planning Run - Single Item strategy to use when the customer places their order.


Single item multi level planning
Single-item, Multi-Level Planning strategy to use when the customer places their order.


Single level mrp
Single-Level MRP strategy to use when the customer places their order.


Multi level mrp
Multi-Level MRP strategy to use when the customer places their order.


Total planning
Total Planning strategy to use when the customer places their order.


Mrp procedure
MRP Procedure strategy to use when the customer places their order.


Mrp control parameters1
MRP Control Parameters strategy to use when the customer places their order.


Mrp control parameters2
MRP Control Parameters strategy to use when the customer places their order.


Mrp control parameters3
MRP Control Parameters strategy to use when the customer places their order.


Mrp control parameters4
MRP Control Parameters strategy to use when the customer places their order.


Mrp control parameters5
MRP Control Parameters strategy to use when the customer places their order.


Mrp control parameters6
MRP Control Parameters strategy to use when the customer places their order.


Net requirements calculation
Net Requirements Calculation strategy to use when the customer places their order.


Requirement quantities
Requirement Quantities strategy to use when the customer places their order.


Safety stock
Safety Stock strategy to use when the customer places their order.


Safety time
Safety Time strategy to use when the customer places their order.


Safety time in production
Safety Time in Production strategy to use when the customer places their order.


Lot size calculation
Lot Size Calculation strategy to use when the customer places their order.


Lot sizing overview
Lot Sizing - Overview strategy to use when the customer places their order.


Static lot sizing
Static Lot Sizing strategy to use when the customer places their order.


Period lot sizing procedure
Period Lot - Sizing Procedure strategy to use when the customer places their order.


Optimum lot sizing
Optimum Lot Sizing strategy to use when the customer places their order.


Long term lot sizing
Long Term Lot Sizing strategy to use when the customer places their order.


Other lot sizing features
Other Lot Sizing Features strategy to use when the customer places their order.


Lot size rounding profiles
Lot Size Rounding Profiles strategy to use when the customer places their order.


Layout of mrp list
Layout of MRP List strategy to use when the customer places their order.


Stock req list layout
Stock Req. List - Layout strategy to use when the customer places their order.


Mrp list collective display
MRP List - Collective Display strategy to use when the customer places their order.


Mrp list functions
MRP List - Functions strategy to use when the customer places their order.


Exception messages
Exception Messages strategy to use when the customer places their order.


Rescheduling checks
Rescheduling Checks strategy to use when the customer places their order.


Old new exception message
Old / New Exception Message strategy to use when the customer places their order.


Planned new exception message order conversion
Planned New Exception Message Order Conversion strategy to use when the customer places their order.


Material supply for production
Material Supply for Production strategy to use when the customer places their order.


Collective display
Collective Display strategy to use when the customer places their order.


Search in individual list
Search in Individual List strategy to use when the customer places their order.


Current list functions
Current List - Functions strategy to use when the customer places their order.


Pegged requirements
Pegged Requirements strategy to use when the customer places their order.


Order report
Order Report strategy to use when the customer places their order.


Planning time fence
Planning Time Fence strategy to use when the customer places their order.


Planning time fence1
Planning Time Fence strategy to use when the customer places their order.


Scheduling in pp1
Scheduling in PP strategy to use when the customer places their order.


Scheduling basic dates
Scheduling - Basic Dates strategy to use when the customer places their order.


Scheduling production time
Scheduling - Production Time strategy to use when the customer places their order.


Module pp production planning

External strategy to use when the customer places their order.

Procurement

In-House

Production

Planning Process

Supply

Plant

Stock

Demand

Planning

Parameters

MRP

Order

Proposal


Module pp production planning

Planning Process strategy to use when the customer places their order.


Module pp production planning

Production Execution strategy to use when the customer places their order.

  • Stock transfer to WIP location

  • Order Execution

    • Production confirmation

    • Error handling


Module pp production planning

Planning Process strategy to use when the customer places their order.


Module pp production planning

Planning Process strategy to use when the customer places their order.


Module pp production planning

Storage Loc MAIN strategy to use when the customer places their order.

Storage Loc WIP

Production Execution

Physical Movement


Module pp production planning

Production Execution strategy to use when the customer places their order.

Planned Order

Availability Check

Convert Order

BOM

Production

Move

Routings

Order

floorstock

Work Center

Release

Avail check

Goods issue

Production

Confirmation

Goods receipt

TECO


Best practices
Best Practices strategy to use when the customer places their order.

  • Logistics Planning

  • Make-To-Stock Discrete Manufacturing

  • Production Subcontracting (External Processing)

  • Rework Processing (Stock-Manufactured Material)

  • Rework Processing (Work-In-Process)


Logistics planning

Purpose strategy to use when the customer places their order.

The purpose of logistics planning is to make sure that future demand can be satisfied by your company’s available resources and to point out situations where demand cannot be met in time or in the desired quantities.

Benefits

Seamless Integration in complete planning cycle

CO-PA  SOP  LTP  Demand Planning

Key process flows covered

Sales and Operation Planning

Long Term Planning

Logistics Planning

Purpose and Benefits:


Logistics planning1

This process sometimes is called ‘Sales and Operations Planning’. The process usually takes place in a simulative mode and at an aggregated (usually product group rather than end-item) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).

The Best Practice scenarios in this section cover the following planning workflow:

Planning/forecasting of future demand

Aggregated production planning including capacity check in order to check at product group level if demand can be satisfied (using the SOP functionality)

Transfer of results to Long Term Planning (using the LTP module) to enable simulation of material requirements, based on the production plan (s)

Planning takes place in separate (simulative) planning versions within LTP

Review and adjustments of planned requirements as needed

Once the simulated requirements are accepted, the demand (independent requirements) is then transferred to active demand management for detailed MRP and Production Planning / Scheduling in the active version.

Logistics Planning

Detailed Process Description:


Module pp production planning

Logistics Planning – Process Flow Diagram Planning’. The process usually takes place in a simulative mode and at an aggregated (usually product group rather than end-item) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).

No

Yes

Event

Operational Production Planning & Control

(Production scenarios)

Periodic Sales and Operations Meeting

Revenue Planner

Sales Qty Budget and Transfer to SOP (with CO-PA), Revenue Planning (172)

Sales Quantity forecast (179)

Strategic Planner

  • SOP Verification Demand Verification (Check Sales Plan)

  • Create Rough-Cut Production Plan

Transfer Rough Cut Production Plan to Inactive Demand Management

Create LTP Planning Scenario

Execute LTP MRP

Evaluate Capacity Planning

Operative Production Data

Acceptable Plan

Copy to Active Demand Management

CO-PA = Profitability Analysis, SOP = Sales and Operations Planning, LTP = Long Term Planning, MRP = Material Requirements Planning


Make to stock production with discrete manufacturing

Purpose Planning’. The process usually takes place in a simulative mode and at an aggregated (usually product group rather than end-item) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).

This scenario describes a business process, which is typical for companies with lot-size oriented production.

The production scenario produces a finished good and all dependent components in make-to-stock production (MTS).

Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing.

Benefits

Production triggered by a production plan

Serial number and batch management included

Optional with: quality management, consigned inventory, external processing

Key process flows covered

Creating Planned Independent Requirements

Material Requirements Planning at Plant Level

In-House Production (subassembly)

In-House final assembly (Finished Good)

Capacity Leveling

Confirming Assembly Activities

Make-To-Stock Production with Discrete Manufacturing

Purpose and Benefits:


Make to stock production with discrete manufacturing1

This scenario describes a business process, which is typical for companies with lot size oriented production. The production scenarios consist of both goods movements (goods issues and receipts) and confirmation of completion of the production order.

Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing.

The typical planning process starts with sales quantity planning. The previous period’s actual sales figures can be used as a basis for future planning.

In Sales and Operations Planning, you ensure that production stays in line with sales so that you may create the production plan synchronously to sales. The planning data is transferred from Sales and Operations Planning to Demand Management. Demand Management generates independent requirements, which are used in the subsequent Material Requirements Planning (MRP) run.

In material requirements planning, the bill of materials (BOM) for the top-level material demand gets exploded and production is planned right down to procured component level. MRP results in planned orders being generated for the material to be produced.

If insufficient warehouse stock is available, purchase requisitions are created for the raw materials required. When the order is created, target costs are calculated for the order lot size (preliminary costing).

During the production process, costs incurred are updated on the order, which enables you to keep track of and compare target costs and actual costs at any time.

Period-end-closing activities are applied to the order. This includes Work In Progress calculation and variance calculation.

After this, Work in Progress is settled to financial accounting and production variances are settled to management and financial accounting.

Make-To-Stock Production with Discrete Manufacturing

Detailed Process Description:


Module pp production planning

Yes for companies with lot size oriented production. The production scenarios consist of both goods movements (goods issues and receipts) and confirmation of completion of the production order.

No

Yes

No

Make-to-Stock Production – Discrete Industry – Process Flow Diagram

Event

Periodic Plan Revision

Beginning of Planning Cycle

StrategicPlanner

Creating Planned Independent Requirements

Logistics Planning (144)

Production Planner

Capacity Leveling O.k.?

Material Requirements Planning at Plant Level & Evaluation of Stock / Requirement List

Update Capacity

1

MRP List

Order Print

Release Production Order

Material Available?

Capacity Leveling

Convert

Planned Order to Production Order

Purchase Requisition

Planned Orders

Manufacturing

Confirming Assembly Activities

/ Final Confirmation

Semi-Finished Goods Receipt

Inventory @ Standard. Cost

Pick List

Material Staging for Planned Orders

Inventory Consumption @ Standard. Cost

Goods Issue/ Back flush

Goods Receipt Slip

Ware-house Clerk

Finished Goods Receipt

Goods Receipt Slip

Plant Controller

Period End Closing “General” Plant

(181)

Buyer

Procurement w/o QM

(130)

Procurement of Stock Material with QM (127)

MM Subcontracting (138)

PP-Subcontracting (External Processing)

(150)

Procurement & Consumption of Cosigned Inventory (139)


Module pp production planning

Make-to-Stock Production – Discrete Industry – Process Flow Diagram

Event

Production Supervisor

Review Operation List

1


Production subcontracting external processing

Purpose Flow Diagram

During the Manufacturing process, when a "Planned Order" for Production is converted to a "Production Order", the system will check to see if there are any routing/work-center operations which require external processing. External processing is when you have individual production steps, that are operations or sub-operations, which are performed outside of your company by a vendor. This type of processing is particularly important for subcontracting. It can also provide a company with a feasible alternative to in-house processing, if capacity bottlenecks occur.

Benefits

An outline agreement can specify that a certain operation of the production order is executed by an external subcontractor on a regular basis

In the case of capacity bottlenecks, the assembly procedure of the finished product can be assigned to a subcontractor

Key process flows covered

Creating Purchase Order for External Processing

Goods Receipt for “subcontracting” Purchase Order

Enter Invoice

Periodic Payment

Production Subcontracting (External Processing)

Purpose and Benefits:


Production subcontracting external processing1

Production Subcontracting (External Processing) Flow Diagram

When a Production Order is scheduled, external operations need to be taken into account. The duration of an external operation is calculated either by using the planned delivery time or using the standard values. The system automatically creates a purchase requisition for the operation or sub-operation that requires external processing. The Production scheduler should inform the buyer they need to check the workload for requisitions that require external processing.

When data is maintained for an external activity, a cost element is specified. The cost element determines how the external activity is to be valuated. A decision needs to be made as to whether an operation or sub-operation is processed externally via its control key. In the control key, it is determined whether externally processed operations are scheduled on the basis of their standard values or the planned delivery time. This information is needed to settle externally processed operations and sub-operations that have been marked as relevant for costing in their control keys.

Purchasing should not convert the purchase requisition until the external processing is required. The reason for this is that any quantity changes on the production order will automatically update the requisition.

Once the purchase order is created it is printed and sent to the vendor. The purchase order informs the vendor which service is required. The buyer/planner/scheduler creates a manual shipping document and provides the information to the shipping department on what components need to be gathered for the external processing and ships the components to the vendor.

When the vendor has completed the external processing, the material is shipped back. The warehouse clerk receives the externally processed goods back into the warehouse. The vendor service is reflected on the production order via an operation confirmation. The purchase order and the production order show the quantity received.

The goods receipt of an externally processed material causes the status of the operation to be updated: For a partial delivery of an external process operation, the status is: EOPD (External operation - partial delivery) and for final delivery of a external process operation the status is: EOFD (External operation - final delivery).

Production Subcontracting (External Processing)

Detailed Process Description:


Module pp production planning

Production Subcontracting (External Processing) – Process Flow Diagram

Vendor

Vendor Receives Material and Performs External Services

Perform External Services

Ship External Material Back to Plant

Incoming Vendor Invoice

Event

Production Order Generates Purchase Requisition for External Services

Completion Confirmation of Production Order

Production Supervisor

Check Order Operations

Purchaser

Create PO from Purchase Req (Vendor assigned by Info record)

Print Purchase Order

Warehouse Clerk

Subcontract Services GR/IR

Ship Material to Vendor

Goods Receipt for Subcontracting PO

Deliver Material Back to Shop Floor

Accounts Payable Accountant

Periodic Payment:

Accounts Payable (158)

Invoice Receipt

GR/IR PPV Vendor

PP = Production Planning,RFQ = Request for Quotation, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance


Rework processing work in process

Purpose Flow Diagram

Processing of defective material on a production order.

Benefits

Scraps at defined operation automatically trigger rework process.

After rework, additional activity and material consumption can be confirmed.

Fully integrated in the production process

Key process flows covered

Confirming Production Activities

Confirm Scrap defective material

Confirm Parent Order at Rework Operation

Continue Shop floor-Activities

Rework Processing (Work-In-Process)

Purpose and Benefits:


Rework processing work in process1

This scenario focuses on a rework process within production. All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

Rework Processing (Work-In-Process)

Detailed Process Description:


Module pp production planning

No All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

Yes

Rework Processing (Work-in-Process) – Process Flow Diagram

Event

Confirming Production Activities

End Process

Shop Floor Specialist

Confirm Parent Production Order for Reworked Quantity That Can Proceed to Subsequent Operations

Continue Shop-Floor-Activities for Non-Defective-Quantity

Confirm Scrap Defective Material

Any Complaint Quantity to Be Scrapped?

Confirm Parent Production Order at Rework Operation for Non-Defective Quantity

Insert Rework Operation on Parent Production Order Automatically

Scrap Defective Quantity that Can’t Be Reworked


Rework processing stock manufactured material

Purpose All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

This process covers the rework of defective manufactured materials that are found in the warehouse.

Benefits

Transparent costs for rework activities

Use of all standard shop-floor control functionalities is possible

Key process flows covered

Create rework production order

Goods issue for defective material

Confirmation of rework production activities

Posting goods receipt for rework production order

Rework Processing (Stock-Manufactured Material)

Purpose and Benefits:


Rework processing stock manufactured material1

Rework Processing (Stock-Manufactured Material) All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.

For materials that can be reworked, a production order is created for correcting the defect. The costs associated with the rework production order will be settled to profitability as a material variance.

Rework Processing (Stock-Manufactured Material)

Detailed Process Description:


Module pp production planning

Rework Processing (Stock-Manufactured Material) – Process Flow Diagram

Event

Identified Component in Stock Requires Changes

End Process

Production Planner

Create Rework Production Order

Release Rework Production Order

Shop floor Specialist

Confirmation of Rework Production Activities

Warehouse Clerk

Goods Issue for defective Material

Posting Goods Receipt for Rework Production Order

Production Supervisor

Review Order Confirmations