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BBP for PP Module process:

1.1 Production Planning & Control


1.1.1

Logistics Planning

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

1.1.2

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.

Make-to-Stock Production Discrete Industry

The scenario Make-to-Stock (MTS) Production focuses on:

Sales-order-independent production using MTS (Make-to-stock) production / production order


processing.

Planned independent requirements

Production triggered by a production plan

Make-to-stock production - Two-level-production for subassembly and finished part

Use of production versions

Optional enhancement: Serial number for finish product

Optional enhancement: External processing

Optional enhancement: Batch management processing

References to different procurement scenarios for raw materials

The product manufactured anonymously and delivered to the warehouse is a Finished Good MTS.

Planned Independent Requirements Creation

The process can be started with two different starting points:


o start with SOP (Sales Operation Planning) proceed Scenario XXX (AOP SOP LTP)
and XXX (Logistics Planning) and start XXX (Make to Stock Process Industry) with the
second step: Material Requirements Planning (MRP)
o start with creating Independent Requirements manually proceed XXX (Make to Stock
Process Industry) with the first step

Irrespective of the starting point you choose, the result is independent requirements for your BOM
header material, which are then used as input for MRP planning.

Material Requirements Planning (MRP)

The daily MRP run generates replenishment elements at each low-level code. The system
automatically generates purchase requisitions for purchased parts within the 3-month opening period
for the planned order. The system uses planned orders to implement receipt elements, which are also
required.
In general, the system also creates planned orders for parts, which will be produced internally. When
the planned opening date has been reached, these planned orders are converted to production orders
by the production planner. As a result, the system reserves all of the required components.
Capacity requirements have been created for planned orders and process orders, allowing capacity
evaluation for the required resources at each level. Order schedules may be changed in case of
capacity overload, requiring MRP run again in order to reschedule dependent material requirements.
Some materials (for example, the Raw Material Batch 3 (R30)) are planned on a consumption basis.
Since these materials do not have storage restrictions due to shelf-life-management, larger quantities
of this material can be stored in the warehouse. Replenishment orders are triggered as soon as a
specified reorder point is reached.

Make-to-stock production for semifinished and finished products

The production planner converts the planned orders with selection of start date. It is assumed that
material availability at the plant is assured due to prior MRP planning. The components are usually
stored at the general warehouse location, and staged to the shop floor level as requested for daily
production.
In order to ensure data consistency (batch-managed components such as ingredients are issued with
the same batch number as physically used), goods issue with order reference is posted at production
start. Backflushing can be used for non-batch-managed components such as packaging materials.
While the semifinished material production still is running, it is already handed over to the next line as
input material for the finished product. Therefore the goods receipt postings are done for partial
quantities already, allowing their immediate consumption for the next production step and thereby also
ensuring batch traceability.
Once the daily production run for the semifinished product is finished, the sum of the produced
quantity (as well as the additional scrap quantity) is transferred into the final order confirmation.
Generally, only the last operation phase is confirmed, thereby confirming prior operation phases via
milestone confirmation. Only in case of exceptions such as unplanned scrap earlier operation phases
may be confirmed step by step.
Final confirmation updates process order status automatically, then triggering production controlling.
Variance analysis and order settlement may be performed distinctively for every finished order, or as
part of period end closing, dependent on reporting requirements.

1.1.3

Make-to-Order Production w/o Variant Configuration

This scenario describes the entire process sequence for a standard sales process (Make-to-Order)
with a customer. The business process encompasses all steps from the customer quotation to the
clearing of a customer account after payment is received.
Quotation processing is the first stage of the production process. The scenario starts with an incoming
request for quotation. A quotation is then created in the SAP system in response to the customer's
RFQ. The customer requests a change to the quotation and a follow-on quotation is created. Finally,
the customer accepts the second quotation and a referenced sales order is created. An order
confirmation is send to the customer and production process is started. Now, the customer requests a
technical change. Sales order and bill of material are therefore recalculated. The process ends with
the delivery and the billing of the produced goods.
The process can be enhanced individually by executing optional steps, like serial number creation,
subcontracting, QM in production, credit management and plant- and company closing.

1.1.4

PP Subcontracting (External Processing)

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.
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 suboperation 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 output of the subcontracting order via printer / EDI is normally performed by the purchasing
department (in the SAP standard). As the production process for the finished product is ongoing (not
stock relevant), a material provision by the warehouse manager via delivery note or goods movement
is not possible in the standard system.
If it is necessary to have a delivery note in addition to the subcontracting order, 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.
Another alternative (not part of this scenario) is that you can customize an additional output type with
a special output form only for operations within the operation control key for external processing in
production orders. In the output form, designed as delivery note for the external processed operation,
it is useful to put the number of the purchase order and the production order.
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.

1.1.5

Rework Processing (Stock-Manufactured Material)

This process focuses on rework activities and material postings after production execution for the
original material (including goods receipt of the product), with an additional rework production order.
In real business case issues with the produced material are observed after it has been posted into
inventory. For realization of this process it gives several possibilities:
After execution of a material transfer posting from the original product onto a dedicated rework
material, a new production order is raised. The rework material is then used as a component, the
product again is the original material. Material valuation of the rework material should reflect the
finished product value minus rework costs. Costs are collected within the new production order and
settled into controlling as production variances. Additionally the financial posting triggered from the
material transfer posting covers the average rework costs.
Since material transfer posting is not always accepted, its not part of this scenario.
In this scenario the rework process of stock manufactured material is realized with creating a new
production order, using the material that has to be reworked as input and getting the same material

again as output. Costs are collected within the new production order and settled into controlling as
production variances. Input component and product have the same material number.

1.1.6

Rework Processing (Work-in-Process)

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.

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