SAP PP

Presenter: Sashi Sekhar Paramanik Date: 18-Feb-2013 Version: 1.0

Production planning & execution

What are the components of Production planning & execution? Sales information system: Information contains total sales orders already obtained, incoming sales orders, pending sales orders product wise, customer wise and region wise. Forecasting: Based on past consumption history, future sales projections are made using statistical forecasting methods. CO/PA: Projections are based on Costing and profitability analysis. Sales and Operations planning: Overall plan at company level is done for a year/half-year/quarter. Demand management: Requirements may come from sales forecast, sales orders, etc.

Planning w/o final assembly

Explain process flow and purpose behind planning without final assembly. Purpose: Use this planning strategy when the main valueadded process is final assembly in a make-to-order environment. It is possible to use information from the Sales Information System, SOP, or other planning tools to plan production quantities. Procurement of the components is planned by means of planned independent requirements (Indreq) entered at the finished product level. This is basis for Availability check. Production is carried out up to one level before the finished product level. Final assembly is triggered once a sales order (Order) has been entered.

Planning w/o final assembly

The incoming sales order consumes the planned independent requirements, and this in turn reduces the unconvertible planned order quantity. If the sales order quantity exceeds the planned independent requirements quantity, the unconvertible planned order quantity is increased. Planned independent requirement of the finished goods quantities that are left unconsumed increase the warehouse stock of the components and cause procurement to be decreased or not to take place at all in the next period. This process is called netting.

Planning w/o final assembly

Sample scenario: 100 pieces are planned for <reqdat1>, <reqdat2> and <reqdat3>. During Demand management stage, Planned requirements are created for production plan and passed on to MRP. <today> Stock quantity = 0. Planning w/o assembly is done. <reqdat1> Indreq quantity = 100-. Available quantity = 100<reqdat2> Indreq quantity = 100-. Available quantity = 200<reqdat3> Indreq quantity = 100-. Available quantity = 300 Stage 2: Procurement before Sales: Non-convertible planned orders are created for finished product. Procurement for components takes place.

Planning w/o final assembly

Stage 3: Sales order and allocation: A sales order is created for parent material. Availability check is not done as per ATP logic, but is based on planned independent requirements. <today> Stock quantity = 0. Customer stock (Cstock) = 0 <today> Order quantity = 90-. Available quantity = 90<today> Planning w/o assembly is done. <reqdat1> Plord quantity = 100. Available quantity = 100 <reqdat1> Indreq quantity = 10-. Available quantity = 90 <reqdat2> Plord quantity = 100. Available quantity = 190 <reqdat2> Indreq quantity = 100-. Available quantity = 90 <reqdat3> Plord quantity = 100. Available quantity = 190 <reqdat3> Indreq quantity = 100-. Available quantity = 90

Planning w/o final assembly

Stage 4: Procurement after Sales: Sales order is linked to planned order and to production order (where applicable). <today> Stock quantity = 0. Customer stock (Cstock) = 0 <today> Order quantity = 90-. Available quantity = 90<today> Plord quantity = 90. Available quantity = 0 <today> Planning w/o assembly is done. <reqdat1> Plord quantity = 10. Available quantity = 10 <reqdat1> Indreq quantity = 10-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0 Good receipt from production results in Cstock = 90 above. Stage 5: Goods issue for Delivery: Planned independent requirements are physically reduced.

Planning w/o final assembly

Planning with final assembly

Explain process flow and purpose behind planning with final assembly. Purpose: Use this planning strategy when you can forecast production quantity for final product in make-to-stock environment. Planned independent requirements are consumed by incoming sales orders so that master plan is always adjusted to suit current requirements. You can react quickly to customer needs, smoothing of master plan is less important. Planned independent requirements are entered at finished product level and trigger procurement and production of necessary assemblies and components before receipt of sales orders. An accurate availability check is done as per ATP (available to promise) logic during sales order processing.

Planning with final assembly

Sample scenario: 100 pieces are planned for <reqdat1>, <reqdat2> and <reqdat3>. During Demand management stage, Planned requirements are created for production plan and passed on to MRP. <today> Stock quantity = 0. Planning w/o assembly is done. <reqdat1> Indreq quantity = 100-. Available quantity = 100<reqdat2> Indreq quantity = 100-. Available quantity = 200<reqdat3> Indreq quantity = 100-. Available quantity = 300 Stage 2: Procurement before Sales: A procurement requisition is created in MRP run and is starting point for production or procurement. One procurement option is to convert planned order into production order, release of production order and goods receipt of yield quantity. The other option is to use returns or other goods movements for make-to-stock production.

Planning with final assembly

<today> Stock quantity = 0. <reqdat1> Plord quantity = 100. Available quantity = 100 <reqdat1> Indreq quantity = 100-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0 After receipt of order and 2nd MRP run, situation appears as below. <today> Stock quantity = 100. <reqdat1> Indreq quantity = 100-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0

Planning with final assembly

Stage 3: Sales order: A sales order is created. Availability check is done as per ATP logic. <today> Stock quantity = 100. <today> Order quantity = 90-. Available quantity = 10 <reqdat1> Indreq quantity = 10-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0 Stage 4: This stage does not, as a rule, apply here. If demand exceeds planning, there may be need for production to take place after sales.

Planning with final assembly

Stage 5: Goods issue for delivery: After delivery and goods issue, following situation appears. <today> Stock quantity = 10. <reqdat1> Indreq quantity = 10-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0 Reduction of independent requirements is invisible now, because planned independent requirement was allocated during sales order processing.

Planning with final assembly

Operation/Order confirmations
What is difference between an operation-related and orderrelated confirmation? Order confirmation is done for entire order at header level. This can be done if no confirmation is entered for operations. Once an order is confirmed, then confirmed quantity and actual costs are written to production order. Operation confirmation allows you to confirm an order step by step, as in case of time ticket or milestone confirmation. When an operation is confirmed, an automatic goods issue is posted on basis of quantity that has been assigned material components (backflush). These material components must be provided for use at the work center. When you confirm last operation, an automatic goods receipt is posted. Capacity reduction is carried out either in proportion to quantity or activity. If a scrap or rework quantity is confirmed, a quantity notification can be auto generated.

Repetitive manufacturing
Consider a product scenario where there is high product stability, high repetition rates and low product complexity. What type of manufacturing do you suggest? To allow material to be used in repetitive manufacturing, you set Repetitive Mfg indicator in material master (in MRP view). Routing defines production rate (quantity per time unit) used to produce materials on production lines. Production quantity is scheduled and capacity requirement is calculated accordingly.

KANBAN
Your company follows relatively constant consumption of materials. How do you process material flow to work centers in event-driven manner? In KANBAN, material flow is organized using containers kept at appropriate work centers. Each contains quantity of material that work center personnel needs for a time period. When container is empty, replenishment is initiated. The supply source can be a production place, vendor or warehouse. Demand source can use material from other containers until actual container returns to full. Benefits: no staging plan, reduced stock and short lead time.

Regenerative and Net change plan

What is difference between regenerative planning and net change planning? Regenerative planning means you plan all materials from planning file. Net change planning means that you can only plan materials for which planning file exists. This implies that they have undergone change relevant to MRP within a plan horizon. Plan is prepared online or as background job.

Shift report
Which report collects all important information about work centers for a shift? The shift report is generated manually by production scheduler once data capture for preceding shift is complete. This is useful for shift transfer. The report consists of shift notes, confirmations (including activity confirm and goods movement), maintenance notifications and graphical evaluations.

Cost settlement
What is settlement in product cost controller based on? All costs are debited and credited to a product cost controller. Individual production orders do not have cost segments or settlement rules. All PP and MM functions relevant to costs (material withdrawal, confirmation, goods receipt for production order and goods receipt from production) are executed on basis of production order. All control functions (process cost allocation, overhead allocation, WIP and variance calculation, settlement) are carried out at the end of the period on the basis of product costs collector. Current costs for a period comprise values for (a) material quantities delivered for the period as per valuation control of goods receipt, (b) unfinished products (WIP) as per status of operations confirmed and (c) variances (such as scrap).

Cost settlement