The interface between the Sales and Production departments is a critical one.

Very often the two

departments work in silos. All strategies discussed here, are at the crossroads between demand and
supply. It is a goal to be agile and fulfill every customers wish on time and on quantity, but it is also
important to minimize waste and enable smooth replenishment and production. Proper use of the
planning strategy helps achieving both goals.

A big problem, one that I encounter a lot, is that products are not optimally set up for either one of
these strategies. Either the wrong assignment happens, or Production has a different idea than
Sales, about what the product assignment should be. Additionally there is the need to periodically
analyze the product portfolio because what’s MTO today might be MTS tomorrow.

The ultimate achievement, one that both Production and Sales strive for, is to have the right product
at the right place in the right quantity at the right time. Planning strategies are one of the most
important drivers to achieve exactly that.

Make To Stock Planning

When your product is a commodity that can be sold out of a catalog and is defined and specified
through a master record, it can be planned; if it is somewhat predictable. A steady consumption in
the past helps predicting the future, however, there may be events in the future which require a more
forward-looking planning process.
In any case, if you can somewhat predict what will happen, you may consider a Make To Stock
strategy. Even if it is hard to predict the future, but the customer does not accept long delivery times,
you might be required to make some of your product to stock.
Making to stock means production without actual requirements. The Sales Order does not drive the
production program but the forecast does. Incoming Sales Orders use existing inventory for the
delivery which keeps the customer lead time to a minimum.

Once your product is identified as a ‘Make To Stock’ the availability check in the Sales
Order must look for inventory and not place additional load in the production program. If there is no
stock your service level degrades and the customer needs to wait for the next receipt from
production.
Disconnect between Sales and Production #1: the “customer is king” paradigm does not have any
validity in an MTS scenario. If you want to make the customer the king you need to make your
product to that customer’s order.
Make To Order Production
This strategy still is for standard products which have a clearly defined specification. Other than
MTS, there is absolutely no forecast on products which are made to an order from a customer. You
start production after the customer’s request comes in and not, like with MTS, beforehand.
When you identify a product to be made to order, the availability check in the Sales Order needs a
lead time; the time it takes to replenish or produce the product from soup to nuts. Therefore when a
customer requests the item, no freely available stock to fulfill the order can be found. Everything is
made from scratch and takes its time.
Disconnect between Sales and Production #2: You cannot plan for a 100% (or more!) utilization on
the production line and allow for the free flow of orders, which were set to MTO, into the production
schedule. All too often there is pressure to fully utilize the line; and that can only be done with orders
resulting from a forecast. If MTS fills the line and MTO orders drop on top, they fall into backlog and
the quoted lead time to the customer is a farce.
Assemble To Order or Finish To Order with placement of
the Inventory/Order interface
This type of strategy allows for a placement of a stocking point, the inventory/order interface, at the
most effective spot in the product structure. What this means is that you can decide at what point in
the BoM, material is kept in stock readily available for further processing. Therefore upstream of the
inventory/order interface we are making to stock and downstream from it we are pulling to order.
This also means that downstream from the I/O interface we have lead time to the customer whereas
the availability check does not need to consider time for the processes upstream from the I/O
interface.
ATO provides flexibility, speed and helps reduce waste. Other people would say its agile and lean at
the same time.

Disconnect between Sales and Production #3: Assembly strategies have the capability to generate a
production order to assemble the finished product right out of the sales order. As this happens, the
system can also check on component availability and if there is a shortage, it can provide a
reasonable date for when the finished product can be delivered. If that date is not fixed, and I have
not seen a Sales person fix a date yet, production scheduling is burdened with a demand for today…
and tomorrow for tomorrow… and so on and so forth. Please take a moment to think about what is
done here: the Sales Rep agrees a date with the Customer who would be quite happy to get the
product on that date in the future. However, that same Sales Rep tells the Production people that the
product needs to be available right away. Consider how many orders there are and that this
pressure pops up every day from now on until the order is delivered, you can easily see that there is
room for improvement in the communication department.
Configure To Order
When a standard product has variations in its specification, one needs to answer the question
whether to create a material master record number for every variation or to make use of the variant
Configurator. In case the VC is used, an underlying structure will have to be build, which allows you
to configure a variation of one (configurable) material number based on features and options. The
underlying structure has optional values and characteristics that have dependencies and
limitations. Be cautious to know that In the same way that there is a line where it becomes more
efficient to use options and characteristics to build a spec, there is also a line where it becomes
more feasible to use a whole new project to build a complex product which has never been built
before; or in other words: to build the underlying structure with features and options and
dependencies becomes far too complex.
So there is an upper limit as well as a lower limit in complexity where Configure To Order has its
right to exist.
Configure To Order is a strategy that closely resembles MTO or ATO for the finished product and
components can be made to stock using a forecast based on probability factors maintained for
options and features.

Engineer To Order
The Variant Configurator most always fails when that fine line was crossed where ETO should have
taken over! It is not the lack of functionality and features of the VC which make it fail, it is mostly that
the VC is used for a structure where projects and work breakdown structures would much better suit
the handling of the complex product or structure in question.

Engineer To Order is used when complex structures are build. In most cases these projects organize
many tasks and follow a long timeline to produce large, highly customized products to specific
customer specifications. The finished product, and also many components and subassemblies, have
never been built before and receive brand new product codes. Work Breakdown Structures and
Projects are used to structure and manage the procurement of long lead-time purchased parts, the
dependencies in production and procurement and cost and timely delivery of the final product.
All of these strategies have many variations. What was discussed above is just a generic
description. A more detailed discussion is to be had around SAP planning strategies where there are
countless combinations and opportunities.

…so here is a summary of my view on these strategies on a very generic level.

MTS: standard product made to a forecast before any committed orders come in
MTO: standard products not held in inventory and made after a committed order comes in
ATO: standard product where some components are held in stock and the finished product is
finished after the order comes in
CTO: The standard product has variations; as many as not to justify the creation of a part number for
every variation but not as many as to make the underlying structure too complex to handle
ETO: complex structures and customer specified projects which were never built before and make it
impossible to be handled with standard variations

Your first (very simple) MRP run using Re-order

Point planning
By Willem Hoek

This post is for some of you who have never done a MRP run on SAP and want to get a very simple
example going.

Simple steps

1. create material (or change existing)

2. View current stock on hand
3. Run MRP for the material
4. Evaluate MRP run (View results of MRP run)

Step 1 -- Create / change material

Transaction mm01 (create material) or mm02 (change material) if material exist

Ensure that material is created with at least the following views: Basic data, purchasing, MRP 1,
Storage, Accounting. Enter Plant / Sloc as required.

The key information for this demo is the MRP screen. Here is the one that I created.
The key MRP parameters are the MRP Type and Lot Size.

MRP Type - Defines when the rule used to determine WHEN the PR or Planned Order will be be
created.
Lot size - Determine calculation to be used to determine the QUANTITY in the PR or Planned Order

For my simple demo I will use standard SAP MRP type = V1 and Lot size = HB

For V1 (Manual reord.point w. ext.reqs

) a re-order point must be spesified, make ROP = 100.

For HB (Replenish to maximum stock level) a maximum level must be spesified, make Max value =
1000.

Step 2 -- View current stock on hand.

For this you can use Stock Requirement List (MD04)

Make sure that your ROP is higher than your current stock on hand, otherwise MRP willl not create
any documents. In this case Stock on hand (20) < ROP (100), so MRP will suggest you purchase
stock.

Step 3 -- Lets run MRP.

Do a single item run. Use transaction MD02 (Single Item, Multi Level MRP run). The Single
Item means for one material only. Multi Level refer to all levels of Bill of Material (BOM). This is not
relevant in our example.
Step 4 -- Lets evaluate results of MRP run.

Use Stock Requirement List again (transaction MD04)

You should now have a Purchase Requisition or Planned Order for a quantity to take stock up to
maximum level (as was spesified in material master).
Configuration related to MRP

As mentioned -- main MRP parameters are MRP type and Lot Size.

Configuration for MRP Type.

IMG Menu: MM > Consumption Based Planning > Master Data > Check MRP Type

Configuration of Lot Size

IMG Menu: MM > Consumption Based Planning > Planning > Lot-Size calculation > Define Lot Size
SAP version used for this post: SAP R/3 Enterprise (v4.7)

SAP MRP (Material Requirement Planning)

Tutorial: MD01, MD02, MD04
The main function of MRP is to guarantee material availability on time.

MRP is required to procure or produce the required quantities on time for in- house
purpose or for fulfilling customer demand.

The main objective is to plan the supply based on requirements and considering the
current stock in hand and meets the shortages.
In this tutorial- you will learn

 MRP Process flow

 Master Production Schedule (MPS)
 MRP Planning Parameters
 How to run MRP for all Products
 How to run MRP for single material
 How to run Master Production schedule (MPS)
 How to do MRP evaluation - Stock/Requirement List

MRP Process flow

 With MRP, inventory can be optimized via planning receipts according to the
needs so that surplus inventory could be avoided.
 Sales and distribution give concrete customer requirements from the market.
 In Demand Management, sales are planned in advance via a sales forecast.
The sales forecast is entered in demand management in the form of Planned
Independent Requirement (PIR), i.e., the requirement for the finished product.
 In order to cover these requirements, MRP does net requirement calculation
and plans procurement quantities and dates on which the material needs to
be procured or produced.
 If a material is produced in-house, the system explodes the BOM and
calculates the dependent requirements, that is, the quantity of components
required to produce the finished product.
 If a material shortage exists, planned orders are created at every BOM level
to fulfill the requirements and purchase requisitions are generated for
externally procured raw materials. You can also create planned orders for
externally procured materials which can be converted to purchase requisition.
 MRP does lead time scheduling and calculates planned order dates based on
routing times. Basically, it does backward scheduling starting from
requirement date minus (GR processing times, in-house production time, float
time before production ) and calculates the duration of planned orders.
 Production orders or Purchase orders are created after conversion of planned
orders and purchase requisition respectively.
 MRP type "PD" in material master MRP 1 view is essential to run the MRP for
the materials. If, you don't want to run MRP on the material then MRP type
"ND" can be maintained in the material master.

Master Production Schedule (MPS)

It is used specifically for critical materials usually high valued products where you do
not want changes in your production plan within planning time fence in next MPS
run, and production plan gets firmed automatically as soon as it comes within
planning time fence unlike MRP run.

 A separate run occurs for the MPS items; they are not included in the MRP
run.

 Basically, it ensures the availability of the critical resources, which should not
hamper the production by maintaining the stock.

 Planning time fence (number of days starting from current date) is useful in
case of MPS scenario where one can save the procurement proposals
(planned orders) from undergoing any change since the last MRP run.

 No automatic changes happen to the procurement proposals once they enter

in the planning time fence (PTF is maintained in material master). So, all
planned orders in planning time fence get automatically firmed by the system.

 MRP type " P0" to "P3" in material master should be maintained to run MPS
for materials.

MRP Planning Parameters

MRP parameters are required for MRP run in terms of considering the requirements
(PIR) in planning horizon, scheduling parameters and about the usage of BOM and
routing data.

1. Processing Key

1. Net change (NETCH): In this run, the system considers those materials in the
planning run from their last MRP run which have undergone some changes
pertaining to receipts and issues or any stock changes.
2. Net Change in Planning Horizon (NETPL): In this run, the system considers
those materials in the planning run from their last MRP run which have
undergone some changes pertaining to receipts and issues or any stock
changes. It considers the requirements in a pre-defined planning horizon,
unlike NETCH key which considers the total futuristic requirements.
3. Regenerative Planning (NEUPL): It plans all the materials for the MRP Run
irrespective of the changes they undergo. This plan is not so widely used. It
takes a long time to obtain the final result.

2. Planning Mode
 1. Adapt planning data: It only processes the changed data.
2. Re explodes BOM and Routing: Read BOM and routing data again for the
existing orders.
3. Delete and recreate planning data: It completely deletes the planning data (all
receipts) and creates again.

3. Scheduling

1. Basic Scheduling: MRP calculates only basic dates for the orders and in
house production time for the material master is used.
2. Lead Time Scheduling: The production dates are determined by the lead time
scheduling for planned orders. The routings are read to schedule and
calculate the capacity requirements on work centers.

How to run MRP for all Products

Step 1) From SAP easy access screen, open transaction MD01, we will run MRP at
Plant level.

1. Enter your manufacturing Plant for which you want to take MRP run.

2. Enter Processing key as "NETCH" ( Net change in total horizon)

3. Input "1" in Create Purchase req. Which means for externally procured
materials, MRP will generate purchase requisitions instead of planned orders.

4. Enter "3" for schedule lines which means MRP will generate schedule lines
for raw materials having scheduling agreement.

5. Enter "1" in MRP List and system will create MRP list similar to stock
/requirement list for later analysis of previous MRP run.

6. Enter Planning mode "3" as we will delete and recreate all planning data for
all materials.

7. Enter Scheduling indicator "2" which means MRP will do lead time scheduling
and consider routing times to calculate planned order dates.
After filling in all the fields, click to go to the next screen.

Press enter to ignore this message.

The system asks you nicely to re-check your input parameter because the MRP run
is going to reschedule and overwrite all existing data. Are you sure??? If so, press
enter.
Are you really, really sure that you want to continue??? If so, then again press enter.

Step 2) System will take some time to calculate the material requirement.

1. After the calculation is done, a report will appear. Here, it is possible to see
how many materials were planned and on what parameters were given during
the run.

MRP Run for single material

Step 1) In Transaction MD02, we will run MRP for a single material.

1. Input the material code for which you want to run MRP.

2. Enter your manufacturing Plant code for which you want to take MRP run.
 3. Enter Processing key as "NETCH" ( Net change in total horizon)

4. Input "1" in Create Purchase req which means for externally procured
materials, MRP will generate purchase requisitions instead of planned orders.

5. Enter "3" for schedule lines which means MRP will generate schedule lines
for raw materials having scheduling agreement.

6. Enter "1" in MRP List and system will create MRP list similar to stock
/requirement list for later analysis of previous MRP run.

7. Enter Planning mode "3" as we will delete and recreate all planning data for
all materials.

8. Enter Scheduling indicator "2" which means MRP will do lead time scheduling
and consider routing times to calculate planned order dates.

After filling in all the fields, click to go to the next screen.

The system asks you nicely to re-check your input parameter because the MRP run
is going to reschedule and overwrite all existing data. Are you sure??? If so, press
enter.

Are you 100% sure that you really want to continue??? If so, then again press enter.

Step 2) System will take some time to calculate the material requirement.

1. After the calculation is done, a report will appear. Here, you can see how
many materials were planned.

Note : As there are 22 materials available in the plant, so only these 22 materials
were planned.

Master Production schedule (MPS) run

Step 1) In Transaction MD43, we will run MPS for a single material.

1. Input the material for which you want to run MPS. Here we have taken ID
"13967476".

2. Enter your manufacturing Plant "INA2" for which you want to take MPS run.

3. Enter Processing key as "NETCH" ( Net change in total horizon)

4. Input "1" in Create Purchase req. Which means for externally procured
materials, MPS will generate purchase requisitions instead of planned orders.

5. Enter "3" for schedule lines which means MPS will generate schedule lines for
raw materials having scheduling agreement.

6. Enter "1" in MRP List and system will create MRP list similar to stock
/requirement list for later analysis of previous MPS run.

7. Enter Planning mode "3" as we will delete and recreate all planning data for
all materials.

8. Enter Scheduling indicator "2" which means MRP will do lead time scheduling
and consider routing times to calculate planned order dates.
Click to next screen after filling all the fields, the system will show message
, click again, if everything is O.K.

Step 2) In this step, we are going to generate the interactive planning data by which
simultaneously you can see the planning results.

1. Press "Planning" button which will generate planned orders for the shortage
quantity.

2. Check the planned orders generated.

MRP evaluation - Stock/Requirement List

In this list, you will see the requirements, current stock and planned receipts, i.e.,
orders for the material.

Step 1) From SAP easy access screen, open transaction MD04

1. Enter material for which stock/requirement list needs to be displayed.

2. Enter Plant Code.
Step 2) After entering information in all the fields, click to go to the next screen,
and Stock/requirement list displayed.

1. Display stock/requirements list of the material is generated, where you can

see

 BOM for material D13967476 was exploded and

 Purchase requisition of 50 (fixed lot size 50 maintained in material master
code A01232589) was generated against the net requirement of – 41.606.

Troubleshooting

 There might be the case wherein material master record does not exist. For
this, you need to create the material master for the material before running
MPS/MRP.
  Ensure BOM and routing data is in place before running MRP to generate
procurement proposals based on requirements at all BOM levels otherwise,
Planned orders would be generated without BOM and hence would create
issues in further consumption process.

Long Term Planning (LTP) Tutorial in SAP PP:

MS31, MS02, MD61
Long term planning (Simulative MRP) is used to simulate the future demand and
supply situation in all BOM levels. The main function is to check the capacity
situation, material requirement and vendor ability to provide the material in desired
time.

This is not an actual run but a simulative run where actual planning situation is not
being affected, and we can see the capacity situation of the work centers well ahead
in time. If such information is available in advance, then we can decide at an early
date whether additional machines will be required to cope with capacity bottlenecks.

 LTP (Long Term Planning) is nothing but MRP run in simulation version to
simulate the production plan for the future.

 It is possible to transfer the plan from simulative version to operative version

"00"(actual planning) if through simulation it is found that all capacity and
requirement can be fulfilled.

 The purchasing department can also utilize the outcome of long-term

planning. They use the information on the future requirement quantities to
estimate future purchase orders. This provides them with an opportunity to
negotiate delivery schedules and contracts with vendors.

 Vendors also have an advantage from long-term planning results as they are
sent a preview of future estimated purchase orders and delivery schedules.

 Generally, Planned Independent Requirement (PIR) version can be either

active or inactive. For LTP planned independent version should be inactive as
it is a simulative version. Only active PIR version is being taken for operative
planning (MRP).

 Existing master data can be used for LTP. But to have a different master data
(BOM and Routing) for LTP is also possible.
  If you want to delete the Long term planning data, then you need to delete the
planning scenario and you can re-run whole cycle again with new requirement
again in another inactive version.

 Long term planning data can also be utilized to transfer routing activity
quantities to the respective cost centers. Controlling department can calculate
activity price calculation by dividing the cost center budget value and activity
quantity (calculated by LTP run) which is used for standard cost calculation.

In this tutorial- you will learn

 How to Create Inactive version of Independent requirement (PIR)

 How to Create Planning Scenario
 How to run Long Term Planning
 How to Check Stock/requirement list
 How to check Capacity situation
 How to analyse Simulative Purchase info system

How to Create Inactive version of Independent

requirement (PIR)
Step 1) From SAP easy access, open Transaction MD61
 1. Enter material code for which requirement needs to be created

2. Enter Plant Code.

3. Enter version as "02" which is inactive version and requirements would be

considered in Long Term planning run and not MRP.

4. Enter the Planning horizon dates for which demand needs to be created.

5. Enter planning period as month M.

After filling in all the fields, click or press Enter to go to the next screen.

Step 2) In this screen, we will input the requirement quantity of the material in
monthly buckets.

1. Version "02" and Active check box is unflagged which means it is an

inactive/simulative requirement and would be considered in LTP run only.

2. Enter the requirement quantity in monthly buckets.

Click to save after fill all the data, the system will show message .

How to Create Planning Scenario

Planning scenario creation is required for Long term planning run. Annual simulative
requirements in the form of PIR are assigned to the planning scenario.BOM
selection ID is assigned to the scenario for selection of relevant BOM in LTP run.
We can also include or exclude current stock , existing planned receipts from LTP
run.

Step 1) From SAP easy access screen open Transaction MS31

 1. Enter Planning scenario (numeric or alphanumeric of your choice) and give
the description of the scenario.

Press enter on the keyboard to move to next screen.

Step 2) In this screen,

 1. Enter planning periods for which LTP run needs to take place.

2. Keep Opening stock as blank which means the current stock will not be
considered in LTP run.

3. BOM selection id "01" means active BOM will be exploded in LTP run.

Step 3) In the same screen,

 1. Press "planned Independent requirement" button on top, a small pop-up
window will appear.

2. In the small pop up screen, enter version "02" and planning periods.

Step 4) In the same screen,

1. Press "Plants" button on top and a small pop-up screen appears.

2. Enter your manufacturing Plant code.

3. Press button "confirm", after verifying all the details

Step 5) In the same screen,

1. Press "Release+save" button and planning file entries will be generated.

2. Click "yes" in the pop-up window to release the scenario.

On clicking yes button, system will ask you to create planning file entries in online
mode or background mode.

Step 6) In this screen,

1. Planning file entries are generated. Click on button "immediately" to generate

the entries.
Messages will be generated regarding planning file entries which means system has
identified number of materials relevant for Long term planning run.

You can close this screen or can move back to easy access screen.

How to run Long Term Planning (LTP)

Step 1) In Transaction MS02, we will take LTP run.
1. Enter your planning scenario.

2. Enter the material code.

3. Enter your manufacturing Plant code for which you want to take MRP run.

4. Enter Processing key as "NETCH" ( Net change in total horizon)

5. Enter "1" in MRP List and system will create MRP list similar to stock
/requirement list for later analysis of previous MRP run.

6. Enter Planning mode "1" as we will take LTP run.

7. Enter Scheduling indicator "2" which means LTP will do lead time scheduling
and consider routing times to calculate the duration of simulative planned
order.

8. Enter "1" to use settings from planning scenario i.e. firmed receipts will not be
considered in LTP run.
Press 2 times enter from keyboard to run the LTP. System will take some time to run
LTP and will throw messages regarding planning.

Step 2) In this screen,

1. Check the messages regarding number of procurement proposals created.

How to Check Stock/requirement list
This list will show you the requirement (inactive PIR) and receipt elements like
simulative planned orders for the planning scenario. This list will show all simulative
data and not the real time operative data.

Step 1) In Transaction MS04

1. Enter Planning scenario.

2. Enter material code.

3. Enter Plant code

Press enter to move to next screen.

Step 2) In this screen,

1. Check whether the planned orders got generated against the PIR and check
the rescheduling dates in the planned orders. These are all simulative
planned orders and nothing to do with real time data.
How to check capacity situation
Step 1) From SAP easy access, open transaction CM38 to check the capacity
requirement at the work center ie. Work center will be loaded with simulative
planned orders which has resulted in capacity requirements in terms of time.

1. Enter planning scenario.

2. Enter plant code.
Press enter to move to next screen

Step 1) In this screen,

1. Check the capacity load at the work center which is basically ratio of capacity
requirement (in hours) and available capacity (in hours).
How to analyze Simulative Purchase info system
LTP generates 'planned orders' instead of purchase requisitions and there is no
'Source of supply' in planned orders. However, we can see the Vendor in the
Standard Information System reports.

After the LTP activity, a new version of the PURCHIS information system would be
created.

Step1) In Transaction MS70

 1. Enter Planning Scenario.

2. Select the option "Standard/moving avg. price", which means simulative

planned orders will be evaluated at standard/moving avg price.

3. Unmark "Test mode" and execute. Version info structure 001 will
automatically be created.

When you press execute button, System updates the Purchase information system
in version 001 with simulative purchase order quantity with value so that purchase
planner can plan the raw materials for the whole year and can negotiate with the
suppliers.

When you press the execute button, it will take you to the next screen.

Step 2) In Transaction MCEC, you can see the updates of purchase information
system done in previous step. Order quantity can be seen vendor wise for given
period. This is all done in simulation version.

1. Enter Planning scenario.

2. Enter your plant code.

3. Enter period to analyze

Press execute button on top or press F8 from keyboard to run this report. The report
will display the simulative purchase order quantity in next screen.

Step 3) This screen will display the anticipated Purchase Quantity and value for raw
materials based on simulative annual year production plan.

1. Check the PO quantity and value in simulation version

Troubleshooting

 All PP master data like BOM and routing needs to be in place to effectively
run Long term planning because without master data, you cannot drill down
and plan to lowest level in BOM i.e. raw materials.

 Ensure to enter the PIR quantity in inactive version to avoid any conflicts in
real data.

Capacity Requirement Planning in SAP PP:

CM01, CM21
The main function of capacity planning is to check the load at Work Center and do
the capacity leveling i.e. balance the load at Work Center. It helps to calculate the
production capacity based on the requirement of the product against the available
capacity of the work center.

 MRP works with infinite capacity

and creates planned orders at the
Work Center at the same time
since it assumes that Work Center
is available all the time. So, it
 creates planned orders on the
same date based on the
requirements despite capacity
shortages. You can execute those
orders on that Work Center in the
system which is not practically
feasible in the shop floor.

 The main objective of the capacity leveling includes leveling overloads at

Work Center and to achieve optimum utilization of Work Centers.

 MRP generated planned orders are converted to production orders which

determine which Work Center is to be used, and accordingly the capacity
requirements are generated on that Work Center.

 Capacity leveling at production order level is used for detailed production

planning purpose. This is done through planning table which is used to carry
detailed planning of capacity requirements over time in future.

 The capacity load needs to be checked at Work Center, and if it is

overloaded, then we need to shift the orders ahead to the same Work Center
or plan it in different Work Center to eliminate any capacity constraints.

In this tutorial- you will learn,

 How to check capacity loads

 How to do capacity leveling

How to check capacity loads

Capacity evaluation is used to analyze the load at Work Center, and you can see the
load % (in step 2), available capacities and the requirements. You can also see the
orders which have generated capacity requirements.

Step 1) From SAP easy access screen, open transaction CM01.

1. Enter your manufacturing Plant for which you want to check capacity load.
After filling in all the fields, click to go to the next screen.

Step 2) In this screen, the capacity situation at Work Center can be seen.

1. Check the capacity requirement (generated from production orders), available

capacity ( determined from Work Center master data) and capacity load % at
the Work Center.
How to do Capacity leveling
Capacity leveling is done through planning table, and you need to dispatch the
orders to the Work Center in the sequence in which they are supposed to be
processed at shop floor.

Step 1) From SAP easy access screen, open Transaction CM21

1. Input the plant for which you want to level capacity

After filling in all the fields, click execute button on top to go to the next screen.

Step 2) In this screen, you can see orders pool at the bottom and Work Center pool
at the upper half of the screen in the planning table.

1. Check the several orders in the orders pool.

2. Check the list of Work Centers in Work Centers pool.

Step 3) In the same screen of planning table, select the data as given below.

1. Select one order from orders pool.

2. Click on dispatch button to assign that order to the Work Center.

Step 4) In the same screen,

1. Check the dispatched order in the Work Center pool. Similarly, you can
dispatch the others orders to the Work Center pool which would shift adjacent
to the previously dispatched orders.
This is how you can do the capacity leveling.

Troubleshooting

 Ensure that right control key with "capacity requirement" indicator is placed in
operation data in routing.
 Ensure that in the capacity tab of the Work Center, "finite scheduling"
indicator in flagged.

Goods Movement against Production Order in

SAP PP: MIGO
There are two types of goods movement against production order which impacts the
inventory of the material. These movements are done through movement types in
SAP.
  Goods Receipt (GR) against Order is executed with movement type 101
which is done when we produce the material. After goods receipt, the system
increases the stock of the material at the relevant storage location.

 Goods Issue (GI) against Order is executed with movement type 261 which is
done whenever we consume the component materials to produce some other
material. After goods issue, the system decreases the inventory of the
components at the relevant storage location.

In this tutorial- you will learn

 How to Create Goods receipt (GR) against Order

 How to create Goods issue (GI) against order

Lets begin-

How to Create Goods receipt (GR) against Order

Step 1) From SAP Easy access screen open transaction MIGO

1. Select Goods Receipt as you are going to do goods receipt.

2. Select Order as you are doing goods receipt against production order.

3. Enter your Production order number.

After filling in all the fields, click or press Enter to go to the next screen.

Step 2) In this Screen

1. Check movement type "101" which is relevant for GR against Order.

 2. If the material is subject to quality inspection, then you will see the stock type
as "quality inspection".

3. If the material is handled in batches, then enter the batch number in which
inventory will be updated.

Step 3) In the same screen,

1. Enter the date of manufacture, i.e., the date when the material was produced.

2. Check flag of "Item Ok ".

3. Click "check" button on top and you will see the message at the bottom of the
screen.
Click to save the document. The system will show a message

like .

How to create goods issue (GI) against order

Step 1) From SAP Easy access screen open transaction MIGO

1. Select "Goods Issue" in the first box.

 2. Select "Order" in the second box which means we will do GI against Order.

3. Enter the production order.

After filling in all the fields, click to go to the next screen

Step 2) In this screen,

1. You can see the list of components automatically fetched from the Order
along with required quantity. You can change the quantity as per the actual
consumption.

Step 3)In the same screen,

1. Check flag of "Item Ok ".

2. Click "check" button on top and you will see the message at the bottom of the
screen.

3. You can see the green color status which indicates that document is OK for
posting.
Click to save the document. The system will show a message like

Troubleshooting

 For manual goods issue, the material master should not have any back flush
indicator which means we will do manual goods issue rather automatic goods
issue during confirmation.
  For manual goods receipt, routing operation data should have control key
without auto GR flag, which means we will do manual goods receipt rather
automatic goods receipt during confirmation.

Production Order in SAP: CO01, MD16, CO02,

CO15
A production order defines which material is to be processed, at which location, and
at what time and how much quantity is required. It also defines which components
and sequence of operations are to be used and how the order costs are to be
settled.

 Planned orders are results of running MRP. Shortages of materials that are
set to internal procurement will create planned orders, which can be
converted into production orders. Production orders are "hard copies"; they
cannot be adjusted by an MRP run anymore.

 BOM and routing data of the materials are copied into the production order
which determines the list of components and operational data in the order.

 Planned Costs also gets updated in the production order via component price
and routing activity price.

 You can run an availability check on production orders which determines any
missing components in the order so that you can bring that missing
component for the order execution at shop floor.

 You can print the production order for shop floor which indicates the list of
components to be consumed and what kind of operations to be performed in
sequence at the work center.

 After you have physically produced the material, you can declare the
production through order confirmation which updates the activities cost such
as machine running price, labor price on the order.

 You can decide to automatically do the backflush (consumption) of

components during order confirmation according to the BOM. The
consumption will reduce the inventory of components and it is carried out with
movement type 261 in SAP.

 You can also post goods receipt of the material automatically during order
confirmation. Goods receipt would increase the inventory of the material, and
it is carried out with movement type 101 in SAP.
  After Order Confirmation, all the cost such as the cost of components and
activity cost will be debited on the order, and once you post goods receipt,
costs will be credited on the order.

 Once, production order is fully confirmed and delivered, or business has

decided not to execute that order, then it needs to be technically closed which
means order will no longer be considered in MRP run and will be deleted from
stock/requirement list. Order reservation on components will also be deleted.

In this tutorial- you will learn

 How to Create and release Production Order

 How to Create Production Order by converting planned order
 How to Change production Order
 How to confirm production order
 How to TECO (technically complete) production order

How to Create and release Production Order

Production Order creation is required to produce the material and consume the
components which are used, and it also specifies the sequence of operations to be
performed at the work center.

The release of order signifies that the order is ready to be executed at the shop
floor. You can do an automatic release of order also during creation mode by using
relevant production scheduling profile in the material master with auto release
indicator set.

Step 1) From SAP Easy access screen open transaction CO01

1. Enter the material code for which production order needs to be created.

2. Enter Plant Code.

After filling in all the fields, click or press Enter to go to the next screen.

Step 2) In this Screen

1. Input the order quantity.

2. Select the option"current date" in scheduling sub-screen.

After filling the entire fields press click to confirm, the system will then copy BOM
and Routing data in the order.

Step 3) In the same screen,

1. Click to release the order. The following message will appear in the bottom
left corner: .

2. Click to check material availability. The system will show the message
regarding the availability of components.
Note: You can also decide not to release the order if there are missing parts found in
availability checks.

Click button to save, the following message will show in the bottom left
corner: .

How to Create Production Order by converting Planned

Order
Planned orders are the result of MRP run and should be converted to production
order for further execution process.

You cannot directly declare production using planned orders and, therefore, it needs
to be converted to Production Order.

Once, planned order is converted to production order, planned order gets deleted
from the system and is no longer available to be considered in MRP (Material
Requirement Planning).

Step 1) From SAP Easy access screen open transaction MD16

1. Select radio button "MRP controller" from the list, which is a group of
materials.

2. Press right mark sign on top or press enter from your keyboard.
The system will show the screen as below.

Step 2) In this screen, we will fetch the planned orders based on MRP controller and
selection dates.

1. Enter plant code.

2. Enter MRP controller

3. Enter end selection date till all planned orders will be extracted.

Click right mark sign from the bottom or enter from the keyboard to move to the next
screen.

Step 3)In this screen,

 1. Select the grid for which you want to convert the planned orders

2. Press "convert to production order" button for the conversion.

Production orders will be created after conversion of planned orders.

How to Change production Order

You might require to change production order incase if your business wants to
change some planning quantity or if BOM/Routing has been changed after the order
has already been created.

Step 1) From SAP Easy access screen open transaction CO02

1. Enter production order number which you want to modify.

In the same window you can see "Display Overview" button is selected, it is selected
by default.

After filling in all the fields, click to go to the next screen.

Step 2) In this screen, the order will be modified.

1. Change the Order quantity to 9000 or whatever your requirement is as shown

below.
After finishing all modifications, click button to save the order. The system will
show a message like Order number saved 6600000887 at the lower left corner.

How to confirm production order

Step 1) From SAP Easy access screen open transaction CO15, three activities
occur at the same time with confirmation.

1. Generate confirmation document

2. Consume raw materials or semi-finished goods

3. Good receipt of finished goods or semi-finished goods

1. Enter Production order number

After filling in all the fields, click to go to the next screen

Step 2) In this screen, we will enter the actual yield quantity to be confirmed.

1. Enter the yield quantity which is the produced quantity you want to declare

2. Press Goods Movement button at the top to check the automatic goods
movement happening along with confirmation

Step 3) In this screen, you will see the goods receipt of parent material and goods
issue of components.

If the control key of the last operation in the order specifies automatic goods receipt,
the system automatically posts the produced material to unrestricted stock.
Automatic goods receipt can also be activated by the production scheduling profile
in the material masterwork scheduling view.

If you confirm an order with components that have the Backflushing indicator set in
the material master MRP1 view, the system automatically posts a goods issue (GI)
for these components.

1. Auto Goods receipt (GR), production of material carried out using movement
type 101.

2. Auto Goods issue (GI), consumption of components carried out using

movement type 261.

Click button to save.

The system will show a message like at the

lower left corner, to hint how many goods movement are posted successfully or
failure.

Failed goods movements due to a deficit of stock for consumption are reprocessed
manually.

How to TECO (technically complete) production order

Technical completion of the order is required when production order is either fully
delivered, or it is not to be processed further at shop floor.

After technical completion order status changes to TECO, no further goods

movement can be done against the order.
Order is no longer available in MRP run and gets deleted from stock/requirement
list.

The controlling department can then carry out the variance calculation on the
production Order after TECO status.

Step 1) From SAP easy access, open transaction CO02

1. Enter the order number which you want to TECO.

Click to next screen after filling all fields,

Step 2) In this screen, we will see how to place production order to TECO status,

1. Click in menu Function-> Restrict processing ->complete technically System

will show message in status- TECO
2. System will show message in status- TECO
Troubleshooting

 BOM and Routing must exist before creation of production order else it will
not be copied into the production order and can cause issues in planned costs
updation and consumption of components during confirmation process
thereby impacting the inventory of the components.

 Production order must be released before doing order confirmation as the

released status of the order allows confirmation to happen.

 If you receive any Accounting error during goods movement in the

confirmation process, then ensure the right valuation class is set in the
material master Accounting view or contact Finance team.

 Ensure that standard cost for the material is updated to avoid any costing
related errors such as activity price missing etc. during production order
confirmation.

 If some goods movement gets failed during confirmation process due to the
stock deficit, then you should process them separately once components are
brought to stock.

SAP PP Reports Tutorial: COOIS, MB52, CS15,

CS12
There are many reports available in SAP pertaining to Master Data, Production
Orders and Goods Movement against orders.

 It helps users to view the overall situation of the plant with ease
  Through PP reports, you can view Production and Consumption data about
the material for the specific time period. Current Plant stock can also be
displayed real time

 You can also see target order quantity to be executed and track the orders
through various order status via standard SAP reports

In this tutorial - you will learn,

 How to display order information systems

 How to display material document list
 How to display Stock of multiple materials
 How to display "where-used list" in BOM
 How to display summarized multi level BOM

How to display order information systems

This order info system displays the list of orders along with the quantity, dates, and
their status. You can also see the goods movement on the orders.

This gives view for the shop floor person to plan and execute the orders which are
on priority, and you can see the actual delivered quantity against the plan.

Step 1) From SAP Easy access screen open transaction COOIS

1. Select the option "Order Headers" in the List field

2. Flag production orders checkbox

3. Enter your manufacturing plant code.

4. Enter your Order type for which you want to fetch the Production Orders.If you
don't enter any order type, the report will show the data for all orders type for
the plant.
After filling in all the fields, click execute button on top or press F8 from keyboard to
go to the next screen.

Step 2) In this Screen, you are going to see the list of Orders.

1. List of orders with material code and target quantity are displayed.

2. Order basic start and finish dates are displayed for the planner.

3. Order status are shown by which you can identify whether the order is
delivered or yet to be executed at shop floor.

Press back button in order to exit from the report.

Step 3)In the Initial screen of Production Order information system( COOIS), you
can also view the goods movement which has occurred against that order.

1. Select "Documented goods movement " from the List field

2. Check flag of "Production Orders "

3. Enter your production plant code

4. Enter your Production Order type for which you want to display the
documented goods movement. If you don't enter any order type, the report
will show the data for all orders type for the plant.

Click execute button from the top or press F8 from the keyboard to run the report.

When you run the report, it will open another screen where goods movement are
displayed.

Step 4)In this screen, documented goods movement against order are displayed.

1. List of Orders along with parent material and its component material are
displayed.
 2. You can see the movement type 261 and 101 which occurred against the
order along with the batch number.

Press back button in order to exit from the report.

How to display material document list

Material Document is generated whenever you do any kind of goods movement
such as goods receipt, goods issue against production order, etc.

We can view the list of the material document which specifies the production and
consumption of data for a plant.

Step 1) From SAP easy access screen, open transaction MB51.

1. Enter your manufacturing plant code.

2. Input the movement type 101 if you want to see Production data (Goods
Receipt) for all materials.

3. Enter the posting periods for which you want to display the production.
Press execute button on top or press f8 from the keyboard to move to the next
screen.

Step 2)In this screen, you will see the production data of all materials.

1. List of material codes along with movement type 101 displayed.

2. Movement quantity is displayed along with the posting date.

Press F3 from the keyboard to exit the report.Now, we go back to SAP easy access
screen to run other transaction.

Step 3) From SAP easy access screen, open transaction MB51.

1. Enter your manufacturing plant code.

2. Input the movement type 261 to see consumption data (Goods issue) for all
the materials.

3. Enter the posting periods for which you want to display the consumption.
Press execute button on top or press f8 from the keyboard to move to next screen.

Step 2) In this screen, you will see the consumption data for all materials.

1. List of material codes along with movement type 261is displayed.

2. Movement quantity is displayed along with the posting date.
Press F3 from the keyboard to exit the report.

How to display Stock of multiple materials

After all goods movement are done, it updates the stock of the materials.Real time
stock is available in this report for multiple materials at a single shot.

Step 1) From SAP easy access screen, open transaction MB52.

1. Input single material code or range of material codes or keep it blank to pull
the report for all materials.

2. Enter your manufacturing plant code.

3. Input storage location code or keep it blank to pull the report at plant level for
all storage locations.
Press execute button from top or press F8 from the keyboard to move to next
screen.

Step 2) In this screen, you will see the stock of all materials.

1. List of material codes along with stock quantity and value at the storage
location is displayed.

Press F3 from the keyboard to exit the report.

How to display "where-used list" in BOM
This report is used to find out whether a component exists in the BOM's. With this
report, you can find out the parent material in which a component is used as BOM
item.

It is basically reverse BOM explosion which means through component child code,
you can find out the parent material code. For example Component like Tread is
used as an item in BOM of Tyres.

Step 1) From SAP easy access screen, open transaction CS15.

1. Input single material code for which you want to see the parent material.

2. Flag "Direct" check box.

3. Flag "Material BOM" as you are looking the component up in material BOM.

4. Press Next button to move to next screen.

Step 2) In this screen,

 1. Enter required quantity as "1".

2. Input your manufacturing plant.

3. Flag "Multi-level" which means you want to see all upper BOM levels for the
component.

Press execute button on top or press F8 from the keyboard to move to next screen.

Step 3)In this screen,

1. You can see the different levels of BOM in which this component exists

2. You can see the parent material in which the component exists.
Press F3 from the keyboard to exit the report.

How to display summarized multi level BOM

This report is used to explode multi-level BOM for the product. With this report, you
can see all the components at all BOM levels in a single screen.

Step 1) From SAP easy access screen, open transaction CS12.

1. Input single material code for which you want to see the list of components at
all levels of BOM.

2. Input your manufacturing plant code

3. Input BOM application "PP01" which means you are going to explode
production BOM.
Press execute button from top or press F8 from the keyboard to move to next
screen.

Step 2) In this screen,

1. You will see the list of components along with quantity at all BOM explosion
levels.
Press F3 from the keyboard to exit the report.

Troubleshooting

 If you are unable to execute any report, ensure your selection criterions are
correct, and there are transactions data in the system for which you want to
display reports.

 For BOM reports, ensure material master is in place and BOMs already exists
in the system then only you will be able to display such kinds of reports in
SAP.

 Ensure that you are aware of movement types before looking at any
production or consumption reports in SAP.

Top 26 SAP PP Interview Questions & Answers

1) Explain what is SAP PP?
SAP PP process is related to production planning of a company and it encompasses
all activities like MRP (Material Requirement Planning), BOM (Bills Of Material),
Routing, Capacity planning, etc. but mainly it contains two segments

 Material Planning: Material requirements planning, long term planning,

 Execution Planning: Creation of production order, workflow, conformations,
technical completion and good movement

2) Mention what are the production process in SAP?

There are three types of production process in SAP

 Discrete Manufacturing
 Repetitive Manufacturing
 Production- Process Industries

3) List out the activities carried out in Production Planning?

Activities involved in Production Planning includes

 Processing material master

 Creation of Bill of Material
 Displaying work center and routing
 Maintaining planning calendar
 Maintaining production lot
 Maintaining quota file
 Defining range of coverage profile and profile for safety time
 Defining MRP views

4) Explain what is Routing in SAP PP?

Routing in SAP PP is referred to a list of activities which are required to produce any
material. For example, when you do cost estimation for the material, the system
triggers the relevant routing and activity rates for all those described in routing.
Which will helpful to calculate the processing cost in product costing.

5) What are the steps of Production Execution Process?

Production Execution steps include

 Converting planned order to production order

 Releasing the production order
 Goods issue for production order
 Confirmation of production order
 Goods receipt against production order
6) What are the reports generated in product cost controlling information
system?

Product Cost Controlling information system generates information for following

areas

 Product cost planning

 Cost object controlling with the subcomponents
o Product cost by period
o Product cost by order
o Product cost by sales order
o Costs for intangible goods and services
 Actual costing / Material Ledger

7) Explain what is "work center" in SAP PP and what is the use of Data in
Work Centers?

"Work Centers" are business objects in SAP-PP that is used in task list operations (
routings, maintenance task lists, inspection plans) and work orders.Data in work
center is used for

 Scheduling: Formulas and operating time are entered, so that the duration of
an operation can be calculated
 Costing: Formulas are entered so that the costs of an operation can be
calculated
 Capacity Planning: The available capacity and formulas for capacity
requirements is entered
 Simplifying operation maintenance: Various default values can be included
in the work center

8) What is the use of MRP PP evaluations?

This role contains a function for evaluating the MRP result. This function can be
used to find information about the availability of material and to identify any material
shortage situation.

9) Mention what is the purpose of using Capacity Planning?

Capacity Planning supports planning in all phases

 Long term rough cut planning

 Medium term planning
 Short term planning
It can be integrated with various SAP applications like SAP-SD, PP, PP-SOP, PP-
LTP, PP-SFC, etc.

10) Explain how can you create production order without routing and BOM?

Without BOM and routing you can create a production order by changing the config
in OPL8 ( order type dependent parameters) as routing optional. When we try to
create an order using C001 it may ask for a sales order.

11) Explain what happens to planned after it has been converted into
production order?

When planned order is converted to the production order, the planned order are
offset by production order. The planned order reference can be seen in the
production order.

12) Mention what is the difference between stock transport order and stock
transfer order?

 Stock transfer order: It is referred to the transfer of stock for the usage in the
same company
 Stock transport order: It is referred to the change of title of stock in the
name of the buyer

13) Explain what is PRT (Production Resource Tools) in SAP PP?

PRT (Production Resource Tools) are moveable operating objects used to perform
repeated activities in plant or production maintenance, for example, documents such
as drawings or programs for which document management functions are used.
Various other PRT components include

 Engineering drawings
 Jigs
 Fixtures
 Measurement Instruments

14) Explain how to create PRT master records?

To create PRT master records you have to follow the following steps

1. Choose logistics/Accounting -> Project System -> Basic data -> Master data -
> Production resources and tools -> Create
2. The initial screen for creating a PRT appears
3. Enter a number for the PRT and choose continue
4. The basic data screen appears
 5. Maintain the basic data
6. Choose Goto -> Defaults and enter the default values
7. Save the PRT

15) Mention what is the t-code for changing production order and to display
production order?

T-code to change the production order = C002

T-code to display the production order = C003

16) Explain what is PLM (Product Lifecycle Management) in SAP PP and what
is the use?

It is a collection of solutions with which you digitally create, maintain and make
product information, available in the whole company and for the entire life cycle of
the product.

PLM provides you the function with which you do following things

 The workplace is an open portal in the world wide web and allows you to
access all application and information that you need to work with all external
and internal business partners
 It can link with other internet applications like program management, change
and configuration management and engineering collaboration.

17) In SAP-PP what are the costing parameters?

In SAP-PP, the costing parameters are as below

 Work Center: Activity types and the formulas, cost center

 Routing: The time, activity types

18) In cost controlling information system mention the fields that are listed in
the list screen of the report?

Following fields are listed in the list screen of the report

 Key Figures
o Costing/MM
o %Costing/MM
o Revaluation
o VarCstRuns
o %VarCstRuns
 Basic data
  Valuation
 Cost component group 1/ Cost component group 2
 CostCompGr(fix)1 / CostCompGr( fix)2

19) Explain what is the use of SAP Material View and list out other parameters
where SAP Material View is applicable?

SAP Material View is an SAP object that not only hold name of the material, but
various other information related to material like

 Material production related information

 Material planning related information
 Material sales related information
 Material purchase related information
 Material storage and warehousing related information
 Material costing and Accounting related information
 Material batch specification information

20) Mention what are the types of Master Views for Production and Planning?

For production and planning types of Master Views are

 SAP MRP1 View

 SAP MRP2 View
 SAP MRP3 View
 SAP MRP4 View
 SAP Work Scheduling View

21) Mention how MRP (Material Requirement Planning) types are classified?

MRP types are classified in two leagues

 Materials for consumption based planning

 Planning based on demand

22) Mention what are the keyfields found in MRP View 1?

MRP views 1 are mostly maintained for production purposes.

 General Data
 MRP Procedure
 Lot size data

23) List out the basic procedure for dispatching operations in capacity
leveling?;
For dispatch operations basic procedure includes

 Either the user determines the date of dispatch or else it is specified by

scheduling
 A dispatching sequence needs to be determined if several operations need to
be dispatched
 The systems checks for
o The dates to which operations are to be dispatched
o The work center to which operations are to be dispatched
 Finite scheduling is performed
 Operation check is performed
 Status for the operation is set as "dispatched."
 System carries out midpoint scheduling

24) Explain what is the need of MRP list if the stock requirement list is already
given?

MRP list displays the result of the last planning run, changes that occurred between
planning runs are ignored in the MRP list. While contrary to this, in the stock or
requirement list all changes that occurred in the stock, issues and receipts are
displayed by the system.

25) Mention what are the t-codes for creating, changing and summarizing
BOM?

BOM transaction codes for

 Creating BOM= CS01

 Changing BOM= CS02
 Summarized BOM=CS13

26) Mention what is the use of t-code CS20 in BOM?

With t-code CS20 you can do Mass changes to BOM like

 Change the item data

 Creating new material
 Replacing it with another material

Make-to-Stock Strategies: Strategy 10

Introduction:
Strategy ’10’ is one of the frequently used and frequently discussed MTS strategies. In this
document we try to explore this strategy with the relevant configuration setttings.
Strategy ‘10’ is particularly useful for pure make-to-stock scenarios and the sales requirements have
no effect in the production. The production is based on production plans transferred via demand
program/ manually entered PIR’s. Strategy ‘10’ is also referred as ‘Net Requirements Planning’ and
few important features of this strategy are:

 Sales Order requirements do not affect the production.

 No concept of PIR consumption through customer requirements, since customer requirement
is not relevant for pure make-to-stock production.
 PIR reduction happens with PGI’s for Sales Order delivery.
 It is often used in make-to-stock REM.

Important Master Data:

In this example we will consider a simple BOM structure, one FERT containing one ROH as the
BOM component. Strategy 10 is used for finished products exclusively, thus the important
parameters relevant to this strategy is set up for the FERT item as shown.

Item category group ‘NORM’ in the Sales Organization view:

Strategy Group ‘10’ and a suitable availability check group without RLT (in standard, availability
check group ‘02’):
Relevant configuration settings:
Strategy group ‘10’ contains only main strategy ‘10’ in the standard system, the same can be
verified/ maintained in OPPT transaction (alternatively in SM30 transaction, view V_T461P) and this
configuration is stored in T461P database table. More about the requirement type, requirement class
and their connection to the planning strategy is discussed in this document when required.

Availability check group without RLT can be verified in OVZ9 transaction. The checking rule for
make-to-stock strategies is ‘A’, and for make-to-order it is ‘AE’. In OVZ9, we check for the ‘check
without RLT’ indicator for checking rule ‘A’ and checking group ‘02’ (can be checked/ maintained at
table level in SE16N transaction T441V table; alternatively in SM30 transaction V_441V view – field
name is T441V – OWBZP).

We will discuss the relevance of Consumption mode, Backward Consumption period and Forward
Consumption period a little later when we discuss the consumption logic and strategies. According to
the requirements of the planning perspective, these fields need to be maintained.

In PP point of view, these are the relevant master data that we need to provide.

Standard Scenario Flow:

Demand Management:
The PIR’s are created in this step, which can be manually inserted or derived from Sales and
Operations planning. In this example we create the PIR’s manually through MD61 transaction.
In the initial screen of MD61, the user can change the format (Monthly, Daily etc.) in the Planning
period field (RM60X-ENTLU). In this example, we switch to the daily view and provide requirement
quantities on three different dates as shown (note the ‘Active’ indicator in MD61).

When working with multiple BOMs and production version wise BOM selection, use the menu
function Settings -> Production Version in the schedule line tab in MD61/ MD62 to enable the
production version column, so that you can define PIR’s according to the production versions.
The system finds requirement type as ‘LSF’ derived from the configuration of the strategy 10. It is
defined in OPPS transaction (for a reference of assignment of Requirement Types to the planning
strategies, take a dump from T461S table). Check the entry for ‘requirement types for independent
requirements’ in OPPS configuration for strategy ‘10’. Since stock/requirements list or MD04 is a
dynamic report, we should be able to see the PIR’s entered (here in MD61) in MD04.

Procurement before Sales:

In this step, we need to procure (produce, ‘procurement’ is a generic and broad term) the FG so that
we can sell the same later against the customer orders.
We run MRP, get the procurement proposals from MRP (in this example planned orders), and
convert them to production orders (in case of REM, the production is based on planned orders and
the planned orders are non-convertible), and produce against the production orders and do the PGI
against SO delivery.
After running MRP, system generates planned orders to cater the requirements; lot size plays an
important factor for the planned receipt quantities.

In this example, I have converted the first planned order (you can perform partial conversion) fully.

Now we post confirmation for the production order (for simplicity, we have activated auto GR through
control key PP03 in routing of the FERT and auto GI through backflush indicator of the ROH material
master backflush indicator in MRP2 view), and get the stock of the FERT.
Sales Order:
We now create a sales order of 30 pieces in VA01 transaction.

In the procurement tab, we find the Requirement Type as ‘KSL’ and Schedule line category as ‘CP’
in standard system. The system finds the item category as ‘TAN’ in standard system.
These are derived from the settings for planning strategy OPPS, and from the configurations in SD.
As discussed earlier, the requirement type for customer requirements is defined as KSL for strategy
‘10’ in OPPS (table T461S).

The schedule line category and the item category are derived as discussed here. In SPRO -> Sales
and Distribution -> Sales -> Sales Documents -> Sales Document Item -> Assign Item
Categories (SM30 transaction view V_T184), we define that based on the Sales Document type and
item category group the value for the item category. The SD document type that I chose in this
example is ‘ZDSE’, and the item category group in Sales Organization view of the material master
we have selected ‘NORM’.
In SPRO -> Sales and Distribution -> Sales -> Sales Documents ->Schedule Lines -> Assign
Schedule Line Categories (SM30 transaction view V_TVEPZ), it is defined that the proposed
schedule line category for item category TAN and MRP Type ‘PD’ combination will be ‘CP’:

We save the sales order and check the stock/requirements list. The sales order is displayed, but it
does not affect the available quantity.
Technically speaking, this depends on the value of VBBE – NODIS (No MRP) field value for the
sales order, line item and schedule line combination. For requirement type ‘KSL’, in standard it is ‘1’.

This is derived from the SD configuration as discussed in the following section. In OVZH
configuration, we maintain the requirement type to requirement class mapping; for KSL it is 030. In
OVZG configuration for requirement class 030, the No MRP field is maintained as ‘1’. If you want to
switch off the display of sales order in MD04, you can maintain this value as ‘2’. Please note, do not
maintain this as ‘blank’ for requirement class 030, the requirement transfer can generate serious
consequences.
Also, it can be noted that the PIR quantities have not been consumed. For strategy ‘10’, no concept
of PIR consumption is there since the SO’s are not relevant to change the planned quantities.

Goods Issue for Delivery and PIR Reduction:

We create a delivery in VL01N and post the Goods Issue for Delivery on 08.12.2013. For strategy
’10’, PIR’s are reduced by the 601 movement against the delivery.

We face an issue in this example, the PIR is not reduced:

The reason the PIR is not reduced is that the PIR lays in future 11.12.2013 than the PGI for delivery
08.12.2013 and we do not have any forward consumption period maintained in material master. As
per OSS note 772857 Question # 3, “the reduction occurs in the time scale up to the current date
and the oldest planned independent requirements are reduced first. By maintaining the consumption
period forwards, planned independent requirements are used for the reduction from the current date
up to the number of days in the future entered there. The used consumption mode is not
effective.” It is recommended to go through OSS note 38687.
So we reverse the Goods Issue in VL09, change the consumption mode to 2 or 3 with a forward
consumption period of say 15 days, and post the Goods issue again and check.

The first PIR has been reduced now.

Considering OSS note 38687, the oldest PIR’s are reduced first up to the current date, then system
checks whether forward consumption is allowed for a certain period and can reduce the same. The
consumption mode, backward consumption period and forward consumption period can also be
maintained at an MRP group level in OMD1 or OPPR configuration, but the values entered in the
Material Master MRP3 view has the highest priority. We should also consider BAdI
MD_PIR_FLEX_CONS for flexible consumption/ reduction according to the MRP elements.
After reduction in the PIR’s, the old PIR quantities can be checked in MD63 Schedule line tab.

References:

Make to Order strategies – Strategy 20

Hi,

Strategy 20 – Pure make to order is one of the strategies of Make to Order in Demand
Management..In this 20 strategy product is specifically manufactured for a sale order or customer
order…There is no forecasting involved. Sale order or customer order will be the trigger point for
production…
This strategy is useful or applied in the following situations in the industries..

1. Product is very slow moving product in the market…

2. You cannot anticipate the future forecast of the product

3. Product is newly launched in the market
4. Product is very costly product and you can not keep the inventory or stock in the plant…
The sales order quantities are planned for production using the sales order number. The quantities
produced for the individual sales orders cannot be changed. Each quantity is maintained specifically for
the individual sales order. A separate segment is created in the MRP list or Stock req. list (MD04) for
make-to-order production.
Process flow of Strategy 20:
1. Creation of sale order – VA01
2. MRP run – MD01/MD02
3. Planned order conversion to production order – MD04

4. Production Execution – CO02, MB1A, CO15, MB31

5. Sale order stock in plant- MD04

6. Delivery of the stock to customer against the sale order – VL01N

Settings Required for Make to order strategy 20 :

Maintain planning strategy 20 in the material master in MRP 3 view in as shown below….
Detailed Process flow…

Initial situation of material with 299.5 KG unrestricted use stock..this stock is kept make the
understanding of difference between unrestricted stock and sale order stock…

Now create sale order for the product with VA01

Now save the order…

Now check in MD04…

Now create one more sale order for qty 200 same as above with VA01…after the creation of second
sale order situation in MD04…

here you can observe that two sales orders managed in different segments independently…
Now carry out MRP run with MD02….
Now check in MD04..You can observe that two separate planned orders are created for each sale
order…even though there is a stock of 299.5 KG it is not considered in the net requirement
calculation..
Now convert the first planned order to production order and then release
here you can observe the sales order reference in the production order as shown below….

Now release the order and save the order…after this situation in MD04…

Now convert the second planned order of second sale order to production order as shown in the
above procedure and release the order…now situation of MD04…
Now after the completion of production activity complete the Goods issue, Confirmation and Goods
receipt of the two production orders….
Now you will sales order stocks as shown below in the MD04…these stocks are not unrestricted use
stocks like 299.5 KG

Now make the delivery of the first sale order

Now complete Post goods issue…

Now after this delivery sale order and sale order stock both disappear from MD04 as shown below…
Now complete the delivery for the second sale order also with VL01N as per the procedure shown
above….
Now final situation of MD04….