BPI ASSIGNMENNT CP3 PRODUCTION PPLANNING MODULE SECTION N GROUP MEMBERS: RUCHIT KHULLAR-14 SUMANT PAUL-15 RENUKA DESWAL-13

GROUP ID GBI-369

Q1. OBJECTIVE OF THE CASE ANS. The objective of the case is that we need to make changes in the historical data regarding consumption of products and also the material master record of the bikes when we do this then we can forecast demand for the product. After this we create a annually SOP of the goods receive from the storage location and issue goods to the production order. Finally the produced goods are accounted and costs are assigned to them. Q2. Describe production planning process? Ans. It consists of three stages: 1. Strategic planning: Sales information system (SIS): it gives input about the demand in the market. CO/PA: cost and planning analysis depending upon the demand and production the cost of the manufacturing of the product and required planning is done.. Forecasting: it is essential in manufacturing area as overstock and understock will lead to profit or loss. Demand management: to calculate and read the demand of the product and to determine requirement quantities and delivery dates for finished products, it is a link between strategic planning and detailed planning. 2. Detailed planning: MPS: it allows the company to distinguish planning methods between materials that influence the profit making.

MRP: calculates the net requirement while considering available warehouse stock and scheduled receipt from purchase and production.

3.

Manufacturing execution: to get through the production order and get over with production process.

Q3. Describe the make-to-stock process? Ans. 1. Production proposal : it includes company code, SOP, demand management. Production proposal may come from MRP, MPS, sales order, manulay etc. 2. Capacity planning : it includes MRP, MPS, the role of demand management . it checks wheather we have enough manufacturing capacity to meet the production requirementsfor producing the product. 3. Schedule and release: it is used for company checks and any preparation needed for the processing of the order.an order once released is ready for execution. 4. Shop floor documents: these are printed upon release of the production order Operation based list Component based list Prt list Multi purpose list 5. Goods issue: the different materials which the production department issued. Whether the goods are really picked or not. 6. Completion conformation: used to track the progression of the order throught he production cycle. 7. Goods receipt: acceptance of the confirmed quantity of output from the production order into the stock. Three documents are created: material doc, accounting doc, controlling doc. 8. Order settlement: consists of settling the actual costs incurred in the order to one or more receiver cost objects. Q4. Mention organization data and master data ? Ans. Organization data: Client: an independent environment in the system. Company code: smallest organizational unit for which you can maintain a legal set of books. Plant: operating area or branch within a company. Storage location : unit allowing differentiation between the various stocks of a material in a plant. Work center locations: an organizational unit that defines where and when an operation is performed it has an available capacity.

Master data:

Material: it refers to the finished good. The final product that is ready to be sold . Bills of material (BOM): any component used for the production of the material. Routing: it enables to plan to plan the production of materials, used as a basis for product costing. Work center: a location within a plant where value added work are performed it is used to define labor capacity, machine capacity, output capacity, emissions capacities. Product group: aggregate planning that group together material or other product groups.

Q5. Describe module/component/transactions? Ans. 1. 2. Logistics>Production Logistics>Production Master Data Master Data Change Material Master Record Create consumption value for finished products Change Routing Display product group Create Sales and Operation Plan Transfer SOP to demand management Review demand management Run MPS and MRP Review stock/requirement list Convert planned order into production order Receive goods in inventory Issue goods to production order Review production order status and documents Confirm production completion Receive goods from production order Receive costs assign to PO Settle cost of production order

3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Logistics> Production Logistics> Production Logistics> Production Logistics> Production Logistics> Production Logistics> Production Logistics> Production Logistics> Production Logistics>Material Management Logistics>Production Logistics> Production

Master Data SOP SOP SOP Production Planning Production Planning Production Planning MRP Inventory Management Shop floor control Shop floor control

14. 15. 16. 17.

Logistics> Production Logistics> Production Logistics> Production Logistics> Production

Shop floor control Shop floor control Shop floor control Shop floor control

Q6. Exercise explanation: Ex1 : Change Material Master Record Changing the material features by changing MRP 3, planning strategy of 40 ;it takes different kind of elements. Here we prepare the material master records of the deluxe touring bikes by changing the MRP 3 view.
In the MRP 3 view, strategy group is 40. It means planning with final assembly. Consumption mode is 1. It means backward consumption only, i.e., previous consumption data taken as we have to forecast. In backward consumption, sales orders, dependent requirements or material reservations consume planned independent requirements that lie before the requirements date. In forward consumption, sales orders, dependent requirements, or material reservations consume planned independent requirements that lie after the requirements date. Backward consumption is 30. It is the consumption time period.

Ex2 : Create consumption value for finished products

Exercise 2: Create Consumption Value for finished product

Here we forecast future consumption for the product. We take seasonal and trend model. We have taken trend as historical data taken. Seasonal depends on the type of product. On the Forecasting tab Initialization periods is 12. It means number of historical values you want to use for initialization. Minimum of 12 months data we need otherwise we get zero value in forecasting.

We check Parameter optimization. This will smooth the prediction error that comes from deviation from mean values. Minimum value of Alpha factor is .20 (basic value) Minimum value of Beta factor is .10 (seasonal) Minimum value of gamma is .30(trend) Minimum value of delta factor is .30(mean value absolute deviation)

Basic value smoothing using alpha factor The alpha factor is the smoothing factor for the basic value. The system uses this factor in the forecast to update the basic value. Procedure If this parameter is used for the forecast model and you have not specified a value, the system takes the default value 0.2 that is stored in the forecast module. Trend value smoothing using the beta factor The beta factor is the smoothing factor for the trend value. The system uses this factor to update the trend value in forecasting. Procedure If this parameter is needed by the valid forecast model and you have not specified a value here, the system takes the default value of 0.1 that is stored in the forecast module. Seasonal index smoothing using gamma factor The gamma factor is the smoothing factor for the seasonal index. The system uses this factor to update the seasonal index. Procedure If this parameter is needed for the valid forecast model and you have not specified a value here, the system takes the standard value of 0.3 that is stored in the forecast module.

MAD (mean absolute deviation) smoothing using delta factor The delta factor is the smoothing factor for the mean absolute deviation (MAD). The system uses this factor to update the mean absolute deviation in forecasting. Procedure If this parameter is needed for the chosen forecast model and you have not specified a value, the system takes the default value of 0.3 that is stored in the forecast module.

Ex3 : Change Routing Here components are allocated to individual operations. We change the routing for our red deluxe touring bike.

Ex4: Display product group Our product group is deluxe touring bikes. On the Display Product group members (materials) screen proportions of the 3 bikes are defined. For black bike it is 40%. And it is 30% for red and silver. In these proportions only, these bikes will be produced every time.

Ex5: Create Sales and Operation Plan A 12-month sales and operations plan (SOP) for the product group is created. SOP means planning the operations like production, labor, stock, time etc. We select the active version as what inputs we gave currently we take them only to get the prediction. Target days supply is 5. It means production happens only for 5 days in a month.

Ex6: Transfer SOP to demand management Here we transfer the Sales and Operations plan to Demand Management. We have already found the demand proportions, months and sales targets. Now we fix according to monthly targets for every month.

Ex7: review demand management Here we review the requirements for the product group to ensure that there are production requirements for the individual production items. In the Planned Independent requirement display: schedule lines screen, our plan qty is 567 for the whole product group. In the value/ USD all kinds of expenses are shown.

Ex8: run MPS and MRP The objective of MPS is to create a planned order. At the most we can create 12 planned orders. Here, we run MPS to generate a series of planned orders that satisfy the requirements from SOP and demand management. Concurrently with MPS, the MRP materials will be processed leading to generation of planned orders for dependent requirements that have been created by the BOM explosion process. In the Master Production Scheduling Planning Run screen: Create purchase requirement: 2 it means that no purchasing is done. We check process MRP materials. It sees whether all BOM taken for planning or not. In the Master production scheduling planning run screen, dependent requirements created is 120. This means 12 planned orders for 10 materials have been put.

ex9: Review stock/requirement list This is a list for the deluxe touring bikes. Whenever there is a transaction this list changes. In this exercise we display and review the list for all materials in our product group .our report shows that there is no stock and therefore nothing is available for use at this time

ex10: Convert planned order into production order Here we are converting the planned order generated in the MRP/MPS run to the production order. The stock requirement list will display the suggested planned order from the MPS run. When we convert the planned order to production order, scheduling takes place and an availability check was automatically carried out. The order is automatically released when the production order was created. Our production order no is 1000332.

ex11: Receive goods in inventory At this stage the purchasing department would take over and procure raw material from vendor to fill in inventory so that we can initiate the production process. We are assuming 100 pieces each in the storage location. We consider the Movement type as 561 (receipt per initial entry of stock balances into our unr.-use.

Exd 12: Issue goods to production order Here the goods issue process is defined in the production order, BOM and routing. The quantities and material reserved will be withdrawn with reference to order number and will be used to assign the actual cost. Here the movement type is 261 (Consumption for order from warehouse). We are also over viewing all goods issue quantities for each of the materials.

Ex 13: Review production order status and documents Here we are reviewing the current production order with respect to status of order. We are also reviewing the cost assigned to the order, material document and accounting document. We get automatically the G/L accounts posted related to goods issue to production order

Ex 14: Confirm production completion As the assembly has been completed for the current production order we need to confirm certain procedures and activities we have completed and record the quantity of the end product manufactured.

Ex15: Receive goods from production order

Here we have received the completed products into finished inventory. We are checking whether any discrepancy is there against the quantity specified in the production order and the quantity specified during confirmation. Here the movement type is 101 (Goods receipt for order to warehouse). After review we post goods receipt.

Ex16: Receive costs assign to PO

Here we are reviewing the cost that are assigned t our production order. Now the finished products have been received in the inventory and the manufacturing output settlement variance has been added. In our case there is no variance.

Ex17: Settle cost of production order Here the cost captured in the production order is assigned to appropriate cost object. We are comparing the actual cost with planned cost to identify any deviation or any potential problem if any. In our case there is no difference between the planned and actual cost

Q7. CONCLUSION: ANS. In this case study we created consumption values for a finished product to plan and process a complete manufacturing cycle. When an order is placed it needs to be checked in the inventory for it availability , if its not there then it needs to be ordered for procurement. All the costs involved in manufacturing of a finished good is being stated here. Production Planning consists of all master data, system configuration, and transactions to complete the production planning process. It includes the following information and processes:

Material Master, Bill of Material, Routing and Work Center data Sales and Production Plans Long Term Planning Demand Management Material Requirements Planning (MRP) Capacity Planning Production Orders