SAP Sales and Operations Planning Tutorial

By this point you should have completed the first task of your SAP internship: the 2005 sales forecast. In this tutorial you will learn a out SAP!s uilt in Sales and "perations Plannin# $S"P% tool. &his plannin# tool will allow you to formulate a rou#h' cut production plan ased on the sales data you have created. It is important to note that the rou#h'cut plan is (ust that) only a plan. *hen you create the plan you are not schedulin# production in the system. SAP separates the action of plannin# from production schedulin# to allow different plans to e created and analy+ed efore they are actually used in production. &his process allows a company to run a few different plans to see which is est. ,ollowin# the creation of the rou#h'cut plan you will learn how to transfer this data to the demand mana#ement function. -emand mana#ement is the link etween the rou#h'cut plan and production schedulin#. *hile SAP wanted companies to have the a ility to check several different plans without actually schedulin# production) it was still necessary to allow the rou#h'cut plan to e turned into a production schedule. .ot only is this a very fast and easy way to create a production schedule ased on the rou#h'cut plan) ut it keeps the plannin# data secure from human data entry errors. .e/t) you will activate the material re0uisition plannin# $12P% run for the S"S Inc. Beach cruiser model 34 $B5'34%. ,inally) you will convert the planned production order for the Beach 5ruiser 34 into and actual production order. Part 1: Display Stock/Requirements List Before we create our rou#h'cut sales and operations plan) let!s take a look at the current production for the S"S Beach 5ruisers. &his data is displayed on the stock6re0uirements list screen. &he stock re0uirements list screen displays pretty much what the name implies7 the stock level and future re0uirements for a material. 8very material used in Beach 5ruiser production has one of these screens. In the case of a finished #ood $B5'S) B5'34% the re0uirements will e derived from production orders. If there is a production order for 50 B5'34s) then a re0uirement of 50 will appear on the B5'34 stock6re0uirements pa#e for that production date. In the case of raw materials and semi'finished materials used in the production of Beach 5ruisers) the re0uirement is derived from the production order for the finished #ood and the ill of material $B"1% for that finished #ood. If a production order is created for 50 B5'34s and the B"1 for the B5'34 calls for 2 steerin# controllers $part BP'09%) then the stock6re0uirements list screen for steerin# controllers will show a re0uirement of 900 for that production date. It is important to understand that the SAP system automatically determines the 0uantity of materials needed to uild the num er of finished #oods listed in the production order. All the production scheduler needs to do is create the production order for the finished #oods) and the system calculates the rest. &o display the stock6re0uirements list for the B5'34 complete the followin# navi#ation.

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From t e SAP !asy Access "ser menu: Logistics Production #RP !$aluations -ou le click on Stock62e0uirements list to access the initial screen. 8nter B5' 34 in the material o/. ;our plant should already appear in the Plant o/. 5lick the enter utton to display the stock6re0uirements list. As it stands ri#ht now) you should see that you have a stock of 20 Beach 5ruisers model 34 $Availa le 0ty%. &he rest of the screen should e empty) due to the fact that you have not created any planned orders or production orders for your plant. .ow let!s start lookin# at the process of creatin# your rou#h'cut plan. 2eturn to your SAP 8asy Access <ser menu. Part %: Display Product &roup As mentioned in the introduction) the rou#h'cut plan is a tool used to determine the est way to schedule production. &he rou#h'cut plan takes into account dates) pro(ected sales) and inventory to produce the est possi le production plan. &hrou#h the use of the SAP shared data ase structure) the rou#h'cut plan tool already knows how many production employees are availa le) how many hours these employees work) and how many workdays are availa le durin# the specific plannin# periods $in our case) num er of workdays per month%. As you will see) this makes creatin# a plan much easier) and accurate. In SAP) the rou#h'cut plan can e formulated usin# two different methods. A plan can e formed to include a sin#le product) or) the plan can e created usin# a predefined product #roup. 1any companies) S"S included) manufacture and sell several closely related products. ,or this reason it usually ecomes necessary to create a production plan usin# a##re#ate sales. ,or e/ample) throu#h marketin# analysis) S"S has predicted that =0> of future Beach 5ruiser sales will come from the S model) while 20> of sales will e derived from the 34 model. Instead of completin# two separate operations plans) one can e created. &his is due to the fact that the company does not e/pect total Beach 5ruiser demand to rise simply due to the introduction of the 34 model. Instead) S"S e/pects 20> of those customers in the market for a Beach 5ruiser to select the 34 model over the S model. As the 34 and S model Beach 5ruisers share total consumer demand num ers) it makes sense to complete a sin#le sales and operations plan. Instead of creatin# an a##re#ate plan) and then calculatin# how many of each individual Beach 5ruiser model to produce) the SAP product #roup will automatically complete the calculation for you. .ow let!s take a look at the S"S Beach 5ruiser product #roup. From t e SAP !asy Access #enu: Logistics Production SOP Product &roup Display "n the -isplay Product ?roup Initial Screen) enter B5P? $short for Beach 5ruiser Product ?roup% in the Product #roup o/. ;our plant should already e filled in. 5lick the enter utton to display the product #roup. As you can see) the Beach 5ruiser

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product #roup consists of two products) the Beach 5ruiser S and the Beach 5ruiser 34. If you look at the Proportion 5olumn) you will see that 20> of the product #roup will consist of the 34 model) and =0> will consist of the S model. It is also important to note that the A##r. fact $a##re#ation factor% is set at 9 for oth products. &his means that durin# the plannin# forecast) the system will schedule 2 34 models to e made every time = S models are scheduled. &his may sound pretty asic) ut what if we are runnin# short of supplies and wanted to make sure we had enou#h materials to create =0 S models $since they sell etter% efore schedulin# the creation of the 20 34 models@ In this case) we could simply set the A##r. fact to =0 for the Beach 5ruiser S. &he system would then complete the plannin# for =0 model S Beach 5ruisers efore schedulin# the 34 models $actually) if the 34 A##r. fact were left at 9) the system would schedule 9 34 and =0 S out of the first =9 cruisers scheduled) then schedule the remainin# 9A 34 models if enou#h supplies remain%. By usin# this function) we could make sure that enou#h of either model is uilt to meet demand efore the other model is scheduled. 2eturn to your SAP 8asy Access <ser menu. Part ': (reating t e Roug )cut Plan .ow that you have e/amined the product #roup for S"S Beach 5ruisers) it!s time to create the rou#h'cut plan. From t e SAP !asy Access #enu: Logistics Production SOP Planning For Product &roup (reate ;ou should now e at the 5reate Plan: Initial Screen. 8nter B5P? for Product ?roup. ;our plant should already e filled in. 5lick the enter utton. A -efine Bersion o/ will appear on your screen. SAP allows for multiple plan versions to e created and saved. &his allows several different plans to e created) which improves a company!s a ility to 0uickly ad(ust production due to unforeseen circumstances in the future. ;ou should see a three di#it num er in the Bersion o/. *rite t is num+er do,n , ere you ,ill not -orget it. t en click enter/ <pon enterin# the 5reate 2ou#h'5ut Plan screen) you will notice that the plannin# time frame e#ins with the current month. &o help avoid potential user error due to attemptin# to schedule production in the past) the system will only allow schedulin# to take place durin# the current or future periods. 8/amine the screen for a moment. .otice that there are areas for you to enter the pro(ected sales) pro(ected production) tar#et stock level) and tar#et day!s supply. *e will e concentratin# on the entries for sales and production. .otice that there are a few o/es #rayed out. &hese are the fields which SAP will automatically calculate once you have entered your sales and production num ers. Before the sales and production num ers are entered) we must consider the impact of e#innin# inventory $called openin# stock in SAP%. As SAP is #oin# to automatically calculate your stock level accordin# to the sales and production num ers you insert) we have to enter the openin# stock level in the system. 5lick on &oto on the menu at the top of the screen. .ow select Opening stock le$el/ 8nter your e#innin# inventory of 900 in the Stock level o/) and click the enter utton. ;ou should see your e#innin# inventory num er displayed for each month

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in the Stock level row. So) how many 34 models) and S models are currently in your inventory@ It is important to remem er that we are dealin# with a product #roup on this screen. ;our current inventory is comprised of 20> of the 34 model and =0> of the S model. ;ou therefore have =0 B5'S and 20 B5'34 in your inventory. .ow let!s start creatin# our rou#h'cut plan. Before we start enterin# our sales and production num ers) we need to chan#e the view of our screen. S"S Inc. uses a daily schedule. Cowever) your screen currently shows a monthly reakdown. &o chan#e the view) 5lick on !dit) then select Period Splitting. .e/t select Total) and then click on Days. ;ou should now see a daily schedule on your screen) startin# with the first day of the current month. &o pa#e ahead to the ne/t month) click the dou le arrow at the ottom of the screen which is facin# to the ri#ht. &o advance one day at a time) click the sin#le arrows at the ottom of the screen. Advance your schedule to the start of the month which you wish to schedule. *e now need to determine how many Beach 5ruisers to schedule for production. Accordin# to the sales report homework you completed earlier) S"S Inc. can e/pect to sell :=5 Beach 5ruisers in 1arch) and 592 in April. &o determine how many Beach 5ruisers to schedule) simply count the num er of days in the month you wish to schedule y advancin# your on screen schedule one day at a time. .ow divide the num er of Beach 5ruisers from your monthly sales total y the num er of days listed for that month to #et your daily re0uirement. ,or e/ample) the SAP schedulin# screen shows that 1arch has 29 workdays $notice that weekends are not included on the schedule%. &o find the num er we need to schedule per day) divide :=5 y 29. &his #ives us a result of 9=.:: Beach 5ruisers per day. Since we cannot make part of a Beach 5ruiser) we will simply round this num er to 9A $havin# a couple e/tra sittin# around is often etter than havin# none to sell%. &o complete the rou#h'cut plan for 1arch) enter 9A in the sales and production rows for each day in 1arch. .e/t) click the enter utton to see the result. &he system will automatically display your stock level as it chan#es due to production and sales. In addition) the system will tell you how many days worth of sales you have on hand $-ay!s supply%. &o calculate this num er) SAP determines the avera#e daily sales from the num ers you entered) and divides the amount of stock you have on hand durin# that period. *e will not e concentratin# on day!s supply) ut it is used in many or#ani+ations for plannin#) especially if the company is tryin# to uild up a specific amount of supply ased on historic sales data. ,or your assi#nment) complete a 2ou#h'cut plan for April usin# the same steps as you did for the 1arch) keepin# in mind your daily num ers will e different. Remem+er to ,rite do,n your 0ersion num+er as instructed a ove) and make sure you SA0! your 2ou#h'cut plan efore e/itin# SAP.

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Demand #anagement and #RP Tutorial

.ow that you have successfully created your rou#h'cut plan) we will continue forward with demand mana#ement and 12P. Part 1: Trans-er Roug )(ut Plan to Demand #anagement As mentioned in the introduction to the Sales and "perations Plannin# &utorial) the demand mana#ement function is the link etween sales and operations plannin# and the actual production plannin# system. Assumin# that the rou#h'cut plan you created is appropriate) S"S will decide to use the plan for schedulin# production. &o avoid the possi ility of a production scheduler enterin# your production num ers incorrectly $can you ima#ine the pro lems an e/tra +ero could cause@%) SAP allows the plan data to e transferred to production schedulin# automatically. From t e SAP !asy Access #enu: Logistics Production SOP Planning For Product &roup Trans-er Product &roup to Planning &he product #roup) and plant should already e filled in. 5lick in the empty Bersion o/) and enter your version num er from your April schedule from Part : a ove. In the &ransfer strate#y and period) make sure Prod. Plan for mat. or P? mem ers as proportion of P? is selected. &his is tellin# the system that we want to create a production plan from our rou#h'cut plan data while takin# the product #roup proportions into consideration. 1ake sure the Invisi le transfer o/ is checked) and click the &ransfer now utton. ;ou will pro a ly see a yellow messa#e flash across the ottom of the screen tellin# you that the plan version you are tryin# to transfer is not the current version. &his is (ust a warnin#. 5lick the enter utton to continue. After a moment) the sales and operations data will e transferred) and individual re0uirements $as opposed to product #roup re0uirements% for the Beach 5ruisers will e created. .ow let!s take a look at the effect of transferrin# the sales and operations data to demand mana#ement. 2eturn to the SAP 8asy Access <ser menu) and navi#ate to the stock6re0uirements list initial screen. From t e SAP !asy Access "ser menu: Logistics Production #RP !$aluations Stock/Requirements List Eust as you did in part 9) display the stock6re0uirements list for B5'34. As you can see) independent re0uirements $Ind2e0% have een created. 3ook at the 2ec.6re0d. 0ty $received6re0uired 0uantity% column for "cto er. .otice that the num er listed is 20> of the total a##re#ate production you entered on the sales and operations plan. At this point) no production plan has actually een created) only a re0uirement for the Beach 5ruisers. &o create the production plans) we need to run the material re0uirements plannin# function for the Beach 5ruisers. 2eturn to your SAP 8asy Access <ser menu.

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Part 2: #RP By runnin# the 12P function for the Beach 5ruisers) the system #oes throu#h the process of accessin# the ill of material $B"1% for the Beach 5ruiser) and calculates what will e necessary as part of the production plan. Before we run the 12P however) let!s take a 0uick look at the B"1 for the Beach 5ruiser 34. From t e SAP !asy Access "ser menu: Logistics Production #aster Data 3ills o- #aterial 3ill o- #aterial #aterial 3O# Display 8nter B5'34 for 1aterial) and 9 for B"1 usa#e. ;our plant should already e filled in. 5lick the enter utton enter to display the B"1. As you can see) there are 9F different materials which #o into one 34 model Beach 5ruiser. ;ou can also see that more than one of some materials are necessary for each Beach 5ruiser. ,or e/ample) : of material *CSA are re0uired. *CSA stands for wheel su 'assem ly. &hese are the wheels and hu s for the Beach 5ruisers) and are assem led in .o#ales) 1e/ico. &he last three materials listed in the B"1 $Battery) 5- player) and ?PS% are what makes the B5' 34 different from the B5'S. If you would like) you can look at the B"1 for B5'S y returnin# to the initial B"1 display screen and enterin# B5'S for material. .ow that you have seen the B"1) let!s run the 12P for the 34 Beach 5ruisers. From t e SAP !asy Access "ser menu: Logistics Production #RP Planning -ou le click on Sin#le Item) 1ulti'3evel. &his is tellin# SAP that you wish to run the 12P function so that is takes into account all those materials you saw in the B"1. 8nter B5'34 for material $leave all other o/es as is%) and click the enter utton. A yellow warnin# messa#e will flash across the ottom of the screen askin# you to check the input parameters. 5lick the enter utton a#ain to continue. After a short delay $durin# which the system is locatin# all the necessary B"1 data and applyin# it to the plannin# process% the run report will e displayed. ;ou do not need to e concerned with the actual report as it (ust shows the amount of time it took the system to run all of the B"1 data. 3et!s take a look at the result of the 12P run in the stock6re0uirements list. In the same manner as efore) display the stock6re0uirements list for the B5'34. <pon e/amination) you will notice that there are now planned production orders $Pl"rd.% listed with the independent re0uirements. 1ake a note of the num er of B5'34 which will e uilt in the first planned production order $the num er in the 2ec.6re0d. 0ty column%. &o really see the effect of the 12P run) chan#e the material from B5'34 to 34'02 $the material num er for the 5- player%) and click enter. -urin# the 12P run) the system used the B"1 to determine that 9 5- player is necessary to uild each Beach 5ruiser. &he system then automatically created a dependent re0uirement $-ep2% e0ual to one 5- player for every B5'34 in the individual planned production orders. .otice that the dependent re0uirement num er for the first entry is the same as the num er of B5' 34s in the first planned production order. &his is how SAP keeps all stock levels in

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control) and keeps all orderin# and manufacturin# completely accurate at all times. ;ou will notice that there was never a time when the incorrect num er of 5- players could e calculated or entered for the planned production plans. .ow that we have created the production plan for our 34 Beach 5ruisers) we need to convert the planned production orders into solid production orders. At this point the production runs are only planned) and could e chan#ed without pro lem. *hen the plans are converted into solid production orders) the production is actually scheduled makin# the data availa le to the system as an actual event. Part 4: (on$erting t e Planned Production Order ;our last step in this tutorial will e to create a solid production order. Since the SAP system already contains all of the necessary information) this step ecomes very simple. If you are not already there) navi#ate to the stock6re0uirements list screen) and display the stock re0uirements list for the Beach 5ruiser 34 $B5'34%. 3ocate the planned production order for D62G62005 $Pl"rd%) and click on the small ma#nifyin# #lass directly to the left of that line. At the ottom of the small screen which appears) you will see a utton readin# 'H Prod.ord. &his utton) when pressed) will tell the system that you a#ree with the information contained in the planned production order) and you would like to concert it into a solid production order. 5lick the utton now. After a moment you will e taken to the Production order create screen) and a messa#e will flash across the ottom of the screen tellin# you that the release has een carried out. &his messa#e confirms that the planned order data has een released and transferred into a production plan. 5lick the save utton to save the production order. .ow click the #reen ack utton to return to the stock6re0uirements screen. "nce you are ack to the stock6re0uirements screen) click the refresh utton) and you will see the planned production order ecome a production order $Prd"rd%. ;ou have now successfully created a production order for the Beach 5ruiser 34. 5lick on the ma#nifyin# #lass utton to the left of your Production "rder line and record the production order num er in the upper left part of the pop up screen at the ottom of this pa#e.

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