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Business Blueprint

Process Owner : Mr. Sreeram Consultant : Mr. Nudrat Maab Ahamad Process code : Version : 1.0

BUSINESS BLUEPRINT

PRODUCTION MODULE
ON SAP ERP

AT

JYOTHY LABORATORIES LIMITED

Submitted By

INTELLECT BIZWARE SERVICES PVT. LTD.

OVERVIEW – PP.00

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CONTENTS
1. SCENARIO LIST ................................................................................................................................................................................................................................. 3
2. MODULE OVERVIEW ...................................................................................................................................................................................................................... 4
3. STANDARD TERMS ........................................................................................................................................................................................................................ 35
4. MASTER DATA ................................................................................................................................................................................................................................ 39

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1. Scenario List
High-level description of various scenarios of the business processes followed in the company

Scenario
Scenario Scenario Description
No.
PP.01 Long Term Planning
PP.02 MRP
PP.03 Export Order Planning
PP.04 Shop Floor Control
PP.05 De-Packing Process
PP.06 Plant Trial
PP.07 Silvassa Production Process
PP.08 Re-Process

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2. Module Overview
A high-level flowchart of the Module to broadly understand the flow

Introduction:
The PP module supports production planning, and planning control. The integration of the Production planning module in the SAP allows production
management tasks to be combined with other modules such as materials management, Quality, sales and distribution, and finance and controlling.

The following key components are available in PP module:

 Demand Management

 Material Requirement Planning

 Capacity Planning

 Shop Floor Control

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1. Demand Management:

The function of Demand Management is to determine requirement quantities and delivery dates for finished products assemblies. Customer
requirements are created in sales order management. To create a demand program, Demand Management uses planned independent requirements
and customer requirements.
To create the demand program, you must define the planning strategy for a product. Planning strategies represent the methods of production for
planning and manufacturing or procuring a product.

Planning strategies represent the business procedures for the planning of production quantities and dates. A wide range of production planning
strategies is available in the SAP R/3 System, offering a large number of different options ranging from pure Make to order production to make to Stock
production, Depending on the strategy you choose, you can: Use sales orders and/or sales forecast values to create the demand program
Move the stocking level down to the assembly level so that final assembly is triggered by the incoming sales order.

There are two types of requirements fed into the Demand management.
a. Planned Independent Requirement
b. Customer Requirement

Planned Independent Requirement:

Planned independent requirements are used to perform Demand Management functions. A planned independent requirement contains one planned
quantity and one date, or a number of planned independent requirements schedule lines, that is, one planned quantity split over time according to dates.

Methods to create Planned Independent Requirement:

 Manually by entering quantities and dates


 Automatically by copying the material forecast
 Automatically by copying the original plan
 Automatically by copying the planned independent requirements of another material, or by copying another planned independent requirements
version of the same material
 You copy the planned results from Sales and Operations Planning, and you use a fiscal year variant as the planning period.
 You maintain planned independent requirements with reference to a fiscal year variant.

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Customer Requirement:

You can create customer requirements in Demand Management. Customer requirements represent the sales orders in the system. A sales order is a
contractual agreement between a sales organization and a sold-to party. A sales order contains information on the delivery of a quantity of materials (or
service) for a certain date.

Methods to create customer requirements:

 By entering a Sales Order


 Or By creation of manual customer assignment.

1. Material Requirement Planning:

a. Definition:

Material Requirement Planning (MRP) is a tool which helps in planning the requirement quantities and not only ensures availability of the material for
which MRP is carried availability of the components (of all the BOM levels) below in the BOM structure. Apart from assuring material availability, MRP
also carries out scheduling of the procurement proposals using the lead times for the materials/components. When the material is an internally
manufactured material, it will use the lead times or operation lead times from the routings/recipes. And when the external procured material, it will fetch
the lead times or delivery times for the material defined at an appropriate place in the tool/system. Scheduling of the procurement proposals not only
derives the capacity loading of the orders on the work center / Resource but it also calculates the delivery dates of the components that would be
required for manufacturing (delivery date = start date).
The output of MRP proposes order proposals (planned order or purchase requests) so as to material availability and at the same time schedule the
procurement proposals using delivery lead times for the materials/components. Material requirement Planning can be run for finished saleable materials
or subassemblies (semi-finished) used in production.

The following graphic explains how MRP works in SAP.

b. Master Keys of MRP:

There are various masters related to material requirement planning is maintained into material master which play important role in MRP. Some
important fields are explained below.

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1. MRP type

The MRP Type Key determines whether and how the material is planned. You have the following options:

o PD – Relevant for Material Requirement Planning


o ND – No Planning in SAP
o VB - Manual reorder point planning (Consumption based planning)
o VM- Automatic reorder point planning (Consumption based planning)
o VV - Forecast based Planning
o X0 - External Planning i.e., APO or BAAN or I2 or MES or any other external planning system.

MRP types can also be configured to the requirements, but most of the times standards are used.

2. MRP Group:

MRP Groups allows you to have different set of planning parameters for materials helps these materials to get planned in varied specified ways as
described below: These control parameters include, the planning strategy group, the consumption mode, the planning horizon, Rescheduling Horizon,
Planning Time fence, determination strategies for issue storage location, Order type to be used for conversion of planned orders, availability checking
rule, Safety Stock, whether start is allowed to be in the past etc.

3. Re-Order Point:

Re-order point planning is a special procedure in materials planning under the heading of consumption based planning. If the reorder point is greater
than warehouse stock, an order proposal is created by materials planning.

4. Lot Size

Lot Sizing Key determines which lot calculates the quantity to be procured or produced for the material. Lot Sizing procedure in material requirements
planning is used to calculate the order and production quantities (lot sizes). Type of lot sizes are mentioned below.

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Static Lot Sizing Procedure –

Static Lot Sizing procedure means that the lot size is static and it is not be clubbed periodically or for optimum lot size calculations. EX- is the most
commonly used, which means lot for lot quantity. Which means the lot size is equal to the requirement quantity and it is FX- is used for Fixed Lot Size
and HB is used as a lot size to replenish stock to the maximum level.

Periodic Lot Size Procedure –

The clubbing of requirements, on a daily basis or a weekly basis,or on a decided periodic basis. For example - TB is used if you want to carry out
Daily Lot Sizing; WB is used for weekly.
Note:- As per standard SAP, the material is always planned in the start of the period. For example if the material is planned with a weekly-lot-size, then
the required planned start date will be in the start of the week. Nevertheless through con figuration, you can have it starting in the end of the week if
required.

There are many other options of starting and ending of the dates for the lot size planning.

5. Minimum lot size

It is the Minimum Procurement quantity for the material at the given plant and storage location defined.
Example: If the Minimum Lot size is 100 kg and the required Quantity is 80 kg, then the system will create one planned order of minimum 100 kg in
number {if the Plant/Storage location stock for that material is Zero.}

6. Maximum lot size

It is the maximum Lot size for a Procurement quantity.


Examples: If the required quantity through a demand is 120 kg, then the system will create two planned orders of 80 kg & 40 kg {if the Plant/Storage
location stock for that material is Zero}

If the procurement qty is 140 kg, and the Maximum lot is 80 kg and minimum is 15 kg, then the system will create 2 planned orders of 80 kg & 60 kg. {If
Planned orders are the result of MRP run and should be converted to production order for further execution process the Plant/Storage
location stock for that material is Zero}

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If the procurement qty is 85 kg, and the Maximum lot is 80 kg and minimum is 1 5 kg, then the system will create 2 planned orders of 8 0 kg & 15 kg {if
the Plant/Storage location stock for that material is Zero}.

7. Fixed lot size

The Fixed Lot size defines a fixed procurement lot size quantity for the material. This means that you will always procure or produce a material in a fixed
quantity.

Examples: If the required Quantity through demand/demands is 120 and the fixed lot size is 80, then the system will create 2 planned orders with one
planned order of quantity 80 an the other planned order of Qty 80 {if the Plant/Storage location stock for that material is Zero}.

8. Rounding Value

Examples: If the Rounding Value is 20, and the procurement quantity is 70, then the system will always round up the planned order to a multiple of 20.
One more example would be, if we don’t consider the Min/Max Lot size and the procurement quantity is 70, then the system would create a planned
order of 80 to round off to 20 {if the Plant/Storage location stock for that material is Zero}.

9. Rounding Profile

The static rounding value method may not satisfy all the business cases, where a given rounding value is used and the procurement proposals are
rounding to that value. There may be situations where the rounding value may change according to the size of the procurement proposal; this is where
the concept of rounding profile may help you.

Rounding Profile allows you to enter a procurement quantity and the corresponding rounded value that is applicable if the procurement quantities. You
may configure the system to have a rounded value of 10 units, if the procurement quantity is at least 1 unit and a rounded value of 100 units, if the
procurement quantity reaches 70 units.

10. Assembly scrap

It defines the scrap % that is allowed for the material. It is used to define the scrap % of the header material.

Examples:
If the scrap % is 10% and the requirement quantity is 100, the planned order will be created for 100 units and the system will add a column in the MRP
screen to Mention that 10 is the scrap Quantity to be produced for that material.
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The components of the production order or process order are planned proportionately for manufacturing 110 units.

11. Maximum stock level

Maximum Stock level is a Quantity of the material in this plant that may not be exceeded. In materials planning, the maximum stock level is used only if
you have chosen Replenish to maximum stock level as the lot-sizing procedure; that is, you have entered HB as the lot size key. Enter a value if you
have chosen Replenish to maximum stock level as the lot-sizing procedure.

12. Planned delivery time

Number of calendar days needed to obtain the material or service if it is procured externally right from the requisition time to the goods receipt time.
If you have multiple vendors for the material, you must specify an average value. The same applies if you order the material from a fixed vendor that has
varying delivery times.

13. Goods receipt processing time

This is a time required for good s receipt of a material at a given Plant and it does not include the transportation time used bring the material till the
plant.

For Finished Goods & Semi Finished Goods: Number of workdays required after receiving the material from Production for inspection and placement
into storage. It may vary for each product.

For Raw Material & Semi Finished Goods: Number of workdays required after receiving from the source for inspection and/or labeling before its further
shipment or internal usage.

14. Schedule Margin Key:

Key that the system uses to determine the floats required for scheduling an order. You define the following floats with the scheduling margin key. The
definition of the floats or the schedule margin keys are through IMG.

Opening period: Number of working days between the date that the order is created and the planned start date. This time is available for the MRP
controller to convert a planned order into a purchase requisition or a production order.

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Float after production: Number of working days between the scheduled finish date and the order finish date; used as a float in production scheduling.

Float before production: Number of working days between the order start date and the scheduled start date; used as a float in production.
Scheduling release period: Number of workdays between the planned start date and the date for releasing the order. If the order release indicator is set,
the production order is released by a background program that takes all dates into account.

15. Safety Stock

Safety Stock specifies the quantity whose purpose is to satisfy unexpectedly high demand in the coverage period. The risk of shortfalls is reduced by
having a safety stock. The safety stock defined here f or a material in terms of quantity is an additional static requirement and the system adds to this
quantity as an additional requirement quantity. You can use this along with manual reorder point planning as well.

16. Strategy Group:

A Strategy Group represents the procedure used for planning a material. Primarily for Made to Stock the strategy is “10” in SAP and for Made to Order
the Strategy is “20” in SAP.

17. Availability Check

Using this field the system specifies whether and how the system checks availability and generates requirements for materials planning. It specifies
which MRP elements the System takes into account (Purchase Orders, Production/P process Orders, etc) during availability check.

18. Selection Method:

This field determines which Alternative Bill of Material the system selects during g the MRP run. It is a Standard SAP Pre-configured selection.

With Selection by order quantity y, the system chooses the alternative BOM into whose lot size range the order quantity falls. The lot size range and
area of validity of the BOM apply.

With Selection by explosion date, the system chooses the alternative BOM into whose area of validity the date falls according to the setting BOM via
dates.

With Selection by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area of
validity of the production version apply.
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With Selection only by production version, the system chooses the alternative BOM defined in the valid production version. The lot size range and area
of validity of the production version apply. If no production version is found, no production orders or process orders can be created.
19. Individual/Collective Requirements

This field controls how the De pendent Requirement are displayed in the Stock/Requirements list – as individual records or collectively (grouped
together)

Indicator determining whether the following requirements are allowed for the dependent Requirements of the material.

Individual requirements: Requirement quantities of the dependent material are stated individually. This is predominantly done for a Made to order
material, where the requirements are stated individually against a sales order and are not collectively planned.

c. Material Requirement Planning Run :

MRP run is an activity which is performed to generate the order proposals for material requirement planning.MRP can be run in various ways. It can be
run at plant level or can be run for multiple plants. It can also be run at individual material level with single level BOM (Bill of Material) explosion or
multilevel BOM (Bill of Material) explosion.

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There are various method of MRP run are listed below.

MRP Run for individual plant

Using this function, MRP can be run for single plant by entering the plant code as an input. This will be used when required immediately to run.

MRP Run for Multiple plants

By using this function, MRP can be run for multiple plants with sequence. Sequence can be defined in the Scope of Planning.

MRP Run for Single Item, Multi-Level Planning

BOM is exploded and dependent requirements are generated for intermediates, raw materials and packing materials. To cover the dependent
requirements, these materials are also planned. If the materials are also having BOMs, these are also exploded and the materials are planned. This
process is repeated until all levels of BOM are exploded and planned.

MRP Run for Single item Single Level Planning

This involves the planning of an individual material, single level means that the BOM is not exploded and therefore, only the level directly below the
material is planned

Interactive Planning

This is the step wise single level simulative planning which can be used for Multilevel BOMs. It enables you to check planning results carefully and to
carry out fine tuning. It is particularly suitable for materials for which a thorough check is necessary before saving the planning result. System does not
save planning data in the database until you save the interactive planning manually.

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MRP Background Processing

MRP can run in the background as a scheduled job periodically..

MRP Control Parameters for MRP run.

MRP Processing key:

This key determines the procedures for Planning Run. It determines which material to included and what time period to be considered for the MRP run.
There are two possible procedures of MRP run as described below.

o NEUPL – Regenerative Planning:-In this planning run system plans all materials that are relevant for planning.

o NETCH- Net change Planning:- In these procedures all materials that undergo changes relevant to material requirement planning are included
in planning run. This changes could be such as change in stock, new demand ( sales order or forecast), creation of orders (example of PRs,
Pos, process orders) etc. This procedure consumes lesser resources than regenerative planning.

Changes relevant to a requirement that falls within specific period (defined by the user and known as Planning Horizon) are included in planning run.

Creation Indicator:

Creation indicator determines whether purchase requisitions are to be created or planned orders. Creation indicator, purchase requisition will be
selected always for any type of MRP run, system will decide whether purchase requisition will be created or planned order, on the base of procurement
type in material master.

Schedules Lines:

This field is used for scheduled lines need to be created or not for procurement items during MRP Run.

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MRP list:

This field will be used for specifying whether MRP list is to be created and stored in the system. The MRP list is a static report containing planning result
of the last MRP run and serves as working basis for the material planner.

Planning Mode:

This field helps in determining whether during the new planning run, the previous planning results have to be completely erased and overwritten , or
whether last planning results have to be adapted (modified) or whether the BOM needs to be re-exploded. Normally the adapt mode “1” will be used as
this consumes least system resources .In “adapt” mode only changes with respect to previous planning results are overwritten.

If there are any changes made to BOMs and Recipes, the mode “2” should be used. If there are any changes made to material master’s planning
relevant data, mode “3” will be used. Mode” 1” will be used here in background MRP run.

Scheduling:

This field determines whether basic dates scheduling will be done or lead time scheduling will be done for planned order which is created by MRP run.
Basic dates scheduling will be used always for all types of MRP run.

Parallel Processing:

This field is to be ticked when MRP is to be executed for multiple plants using background job. It helps to improve the system performance.

d. Material Requirement Planning Run Analysis:

Stock Requirement List:


This is the most updated report of a given material/materials. Whenever there is a receipt or issue added to the material, the same is updated in stock
requirement list at real time. Also whenever the material is planned and the procurement proposals are added for the material, the same is updated in
the stock requirement list immediately on a real time basis.

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This list is an evaluation list for a material or for a set of material. Individual material stock requirement at a plant can be accessed through this report.
Also the collective stock requirement list for all the materials of a given MRP controller or for a given vendor or a given production line or a material
class, or for all the materials in a product group, can be accessed.

MRP List:

SAP also offers an MRP list, which is displayed right after the planning is carried out for the material. MRP list is generated, only if, the creation
indicators on the planning selection screens opt for a MRP list. MRP list contains the results of the planning run and it is not a real time situation list of a
given material or materials.
If you access the MRP list after the planning run is carried out, it will display the planning situation as per the last MRP Run (it will mention the time
and date of the last planning run on the top of the screen).
It should be noted that all the functions/tools/buttons that are explained in the below given examples are for Stock requirement list, but they hold true
for MRP list evaluation also.

1. Shop Floor Control:

a. Introduction:

Production shop floor control comprises the methods and systems used to prioritize, track, and report against process orders and schedules. It includes
the procedures used to evaluate current resource status, labor, machine usage, and other information required to support the overall planning,
scheduling, and costing systems related to shop floor operation. Shop floor control typically calculates work in process based on a percentage of
completion for each order and operation that is useful in inventory valuations and materials planning.

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Life cycle of a production control order is generally like below:

Production
Control
Cycle
1.Order
11.Report
Creation

10.Technically 2.Availabilty
Completion Check

9. Goods
3. Scheduling
Receipt

8. Order
4. Release
Confirmation

7. Goods
5.Print
Consumption
6. Goods
Issuance

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Order Types:

To work in sap production environment, it is necessary to create order type which is nothing but a document for production. It is used to create a
process order. Order type is responsible for various activities related to process order in the logistic environment which are mentioned as Follows:-

1. Order scheduling
2. Availability check (Material, Capacity)
3. Order confirmation
4. GI and GR control
5. Order settlement etc.

Order type plays an important role in the process order creation, confirmation and settlement.
Order type makes integration between sap production and costing.

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Process Order Master Data

Process order type will be defaulted based on the production scheduler profile of the material.
Order Header
- Order No
- MRP Controller
- Plant

Costs Routes
Settlement Rule
- Planned Costs - Standt. Seq.
- Settlement Profile
- Actual Costs - Other Seq.
- Settlement Receiver

Operations
- Work Center
Routings
- Time

Components Confirmations
- Material No - Qty
BOM
- Qty - Time
- Delivery Dates
The Process order data is divided into following parts:

Header Data:

General: Quantities, dates, committed dates and scheduling data,

Assignment: Responsibility, plants, other assignments

Goods receipt: Tolerances, receipt and delivery


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Control: Reference order, costing data, production scheduling profile

Dates/quantities: Quantities and dates in detail

Master data: Routing, bill of material

Long text: Text field for entering a long text

Administration: Created/changed by

Operation data:

General

Standard values

External processing (only for operations that can be processed externally)

Interoperation times (only for operations that can be scheduled)

Standard Value Calculation

Dates (only for operations that can be scheduled)

User Fields

Quantities/activities (only for operations that can be confirmed)

Confirmed dates (only for operations that can be confirmed)

Assignment of capacity requirements

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Qualification

Components data:

In the production order, components must always be assigned to an operation. All components that were not already assigned to a specific operation
in the routing are assigned by the system to the first operation when the order is created. However, you have the option of adding components from
one operation to another.

Production resources and tools

Production resources/tools (PRTs) are, in contrast to machines and fixed assets, moveable resources that are not tied to a particular location and
can be used several times. In the production order production resources/tools must always be assigned to a specific operation. However, assignment
can already take place in the routing.

Process Order Creation:


Process Order is an info set including; material warehouse, production scheduling and accounting. Planning consists information as from which material
how much to produce and which materials with which quantities to be used. Warehouse data includes all storage locations that material will be issued
from. Production data includes information of operations and all actual confirmations from production and delivery dates. Accounting data includes labor
and component costs.

a) Interactive: When a planned orders (Planned order is created through MRP or manually) is converted to an Order to execute the production
activities.

b) Manual creation: When you create process order manually with reference to a material code or with reference to a Sales order in the cases (in
Process order there is no option to create with reference to a sales order).

Availability check:

Before you start production, you have the option of checking whether all the material components assigned to a process order are available on the
calculated requirements dates.

In a process order, the system can only check a material component, if it is


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Kept in stock

Not a phantom item

Not a bulk material

Availability checks can be triggered either automatically or manually:

The availability of components in an order can be checked automatically during order creation and/or order release. You specify in Customizing per
order type and plant whether the availability should be checked automatically. In addition, an automatic availability check can be carried out when the
order is saved.

Following graphic explains how the Availability Check works in SAP.

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Availability Check Calculation

The availability is determined according to the ATP method (Available to Promise). Using this method, the system checks:

Whether the material requirements can be covered on the requirements date

At what point in time the requirements can be covered if full coverage of the requirements is not possible on the requirements date

As a rule, the system tries to commit the entire requirements quantity of a component, providing the ATP quantity is sufficient.

Committing the entire quantity


Order quantity: 100 pieces

Requirements qty ATP qty Committed qty


Component A 200 PCs 300 PCs 200 PCs
Component B 100 PCs 40 PCs 40 PCs
Component C 50 PCs 200 PCs 50 PCs

If you want to ensure that the system only commits quantities that are needed in production, you can set up the commitment of partial quantities in
Customizing (production scheduling profile).

In a partial commitment, only a percentage of the requirements quantity is committed. The committed quantity received by all components that are
checked is determined by the component with the lowest relative committed quantity (commitment factor).

Confirming partial quantities

Order quantity: 100 pieces

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Requirements qty ATP qty Committed qty


Component A 200 PCs 300 PCs 80 PCs
(40% of 200)
Component B 100 PCs 40 PCs 40 PCs
(40% of 100)
Component C 50 PCs 200 PCs 20 PCs
(40% of 50)

You can access details on the results of an availability check in the following places:

The availability log offers you

o The result of the check (i.e. whether all components are available)
o A list of the missing parts
o A list of the reservations that could not be checked (for example due to incomplete data in the material master)

The log is not stored when you exit the order.

The missing parts overview offers you

o a list of the missing parts


o the ability to process the missing parts (for example by changing the requirements quantity or the issuing storage location)
o the date on which all components are available

The missing parts overview always displays the results of the last availability check carried out in the order, regardless of whether you have since exited
the order.

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The missing parts list offers you

o A list of the missing parts


o A list of the reservations that could not be checked (for example due to incomplete data in the material master)
o A list of all components checked , if you select the menu options View ® Check result ® All components
o The date on which the other components are available

The missing parts list is not stored when you exit the order.

If an availability check is carried out when the order is released, the system writes the results of the availability check in the release log.

Availability Check can be done:


o Inside Process Order / Header / Availability Check (for all components included in BOM)
o Inside Process Order / BOM details / Selecting items & pushing ATP check button (for some parts included in BOM)
o Collective availability check (COMAC transaction , for more than 1 process order at the same time )

Scheduling
Scheduling is the method to process the order in the fashion, to complete the production before deliverable date or required date. The
system uses fixed basic dates as the starting point for scheduling a master recipe or process order. Depending on the scheduling type, it
requires the basic start date or the basic finish date for this.
There are main two scheduling types, Backward and Forward.

Schedule Margin key:


Since malfunctions and disturbances can never be fully prevented in the course of a process, you can define additional floats before and after the
process. You define these floats in the master record of the material you want to produce.

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In scheduling, these floats are used to determine:


The scheduled start or finish date of the recipe or order
One of the basic dates if you have not entered both

Material Staging (Goods Issuance to Production):

Material staging is nothing but transferring the material from your main store to production location. Before production, we have to transfer the material.
In SAP it is called material staging. You can use this for describe also i.e. with respect to process orders.

You stage material you need for production at a certain time, in a particular quantity, and in a particular production storage etc.

Material Staging validate the below parts in SAP

Inventory level at Issuing Storage Location

Batch determination / Stock Determination

Here strategies will be used to determine the batch to search for stock batches with certain properties, in order to use these as input batches or goods
receipt batches in process batch management.
FEFO/ FIFO method will be used
to use the select batches on the first priority. This functionality will be optional if user wish to do.
If an input batch has not been assigned to the component, the system selects all stock batches for the material of the component for which stock exists.
If an input batch has already been assigned to the component, the system uses the characteristic values of the input batch for batch determination.

Material Quantity Calculation:


It is true that with the use of a BOM, the component quantities in a process order are calculated as directly proportional to the order quantity, and the
product quantity cannot be altered with respect to the component quantities and their ever varying specifications.

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But this truth can be falsified in process manufacturing through the use of a concept called “material quantity calculations, which allows changing the
following in a process order, provided you have maintained the “material quantity calculations” through formulas in the master recipe:

a) To change header product quantities, with respect to the component quantities or with respect to the active ingredient proportions.

b) To change the component quantities with respect to each other or the header product or with respect to the active ingredient proportions
(batch characteristics and their values).

c) To calculate the planned phase scrap and include it in planned cost.

d) To change operation/phase quantities when they are not proportional to the product quantity.

A “material Quantity calculation” requires definition of production version in the master recipe. A production version allows the system to identify the
BOM related to the recipe and the list of components that needs to play with.

Planned scrap for the component, as entered in its material master, increases the component quantities automatically. You could also use the planned
scrap of a component as a variable in calculating other component’s material quantity calculation formulas.

The Process order accepts these equations and processes them automatically if the batch allocation is not a criterion (taking active ingredient
concentrations from the batches).

For formulas which are supposed to be processed at batch level and which uses active ingredient proportions (batch characteristics values) in them, the
material quantity calculations have to be manually triggered in the process order after the batch determination. (It is evident that only numeric batch
characteristics are entertained here). If no batch has been assigned in the process order, then the material lines quantities or batch characteristics
values at the material line, as entered in the material master are taken in to account. (When we assign the batch characteristic values at the material
master batch class level, it is considered as a default value which can be overwritten during goods receipt from process order).

Material Quantity Calculation will be used. Basically MQC will be used in the case of Formulations (Liquid and Powder formulation).

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Process Order Release:

Releasing of order plays important role. When you release the process order, the system checks whether the order can be released for production
processing.

Releasing an order will trigger the following activities:


o Releasing an order would change the "CRTD status of the order to "REL"
o Releasing would start allowing order confirmations
o Releasing would start allowing goods issues to the order
o Releasing would start allowing goods receipts from an order

Before Release, the system would carry out a material availability check:

o The Material Availability checks would check the stock availability of all the components and if the materials are not available the
system would generate a "missing part list" showing the shortage quantities.

o As per the Order availability checking rules and controls configuration, the system allows or disallows the Release of order, in case of
shortages.

Process Order Print:

In the SAP system, the printing of shop papers is carried out in the form of lists. A list can be a complete printout of a pull list, for example, or a printout
of time tickets.

The lists that the system generates and prints refer to all operations, phases, components, and contained in a process order.

You can print it from Process order – Function – Print.

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Goods Consumption

So as to produce or a process order quantity, you need to issue components in a quantity proposed in the order component list or as proposed in the
reservation list.

The issue of components can happen from the Warehouse or from the storage location near the Shop floor itself.

A process order component list is shown below. The reservation list is a replica of the component list in the order component overview.
Once you create an order, the system creates a reservation list as shown below. You can access the reservation list from the order itself. The
Reservation list created from an order is not editable.

Confirmation of Process Order:

A confirmation documents the processing status of orders, operations, phases and individual capacities. It is an instrument for controlling orders.

With a confirmation you specify

o The quantity in an operation that was produced as yield, scrap and the quantity to be reworked
o How much work was actually done
o Which work center was used for the operation.
o Who carried out the operation

Exact confirmation shortly after completion of an operation is essential for realistic production planning and control. The following business transactions
can be executed via confirmations:

o Updating order data (for example, quantities, activities, dates, status)


o Back flushing of components
o Automatic goods receipt (for one operation per order max.)
o Capacity reduction in the work center
o Updating costs based on confirmed data
o Updating MRP-relevant excess or missing quantities in the order

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You can enter confirmations for a phase.

Operations, sub-operations and individual capacities are generally dealt with the same way in the confirmation. Therefore, only confirmation of
operations is described. However, any differences are pointed out.

You can confirm the following data:

Quantities

You can confirm the quantity produced the quantity of scrap that has occurred, and a rework quantity.

Activity data

You can confirm the activities performed, for example setup time or machine time. You can also enter forecast values for individual standard values.
These are used for determining the remaining activities and capacity requirements.

The actual or planned evaluation of work can take place using a cost centre (activity type’s assignment) or using a Business Process. For more
information about the business process refer to Quantity Determination.

Dates

You can confirm when setup, processing or teardown were started or finished.

Resource

You can confirm at which resource the operation was carried out.

Posting date

A posting date is entered for every confirmation. The default value is today’s date You can however enter another date. On the basis of the posting
period in which the posting date falls, the system determines the rate for settling activities.

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Goods movements

You can enter planned and unplanned goods movements for every confirmation. For more information, refer to Goods Movements in Confirmations

Reason for Variance

If the actual values differ from the planned values due to unpredictable events (for example, machine breakdown), you can enter a key in the Reason
field, which documents the reason for the variance.

If you combine the reason for variance key with a user status, you can trigger a follow-on function automatically via the reason for variance (for example,
sending a mail to the responsible MRP controller). You can combine reasons for variance with user statuses in Customizing. For more information, see
Example: Linking a User Status with a Reason for Variance.

Goods Receipt for Process Order:


When you produce something against an SAP order (Production order or a process order) you would first confirm the operations or phases (or confirm
the whole order) and then bring to stock quantities which are produced through all the given operations/phases.

Confirmations in SAP do not necessarily bring goods to stock unless you have planned for Auto Goods Receipts from the final operation/phase in the
order task list.

Goods receipt in SAP, stocks produced quantities from a production order in to storage locations.

When the produced goods are brought to stock they are priced at the material master's current standard cost or variable price derived at the time of
goods receipts as per the costing method in the material master accounting 1 view. A goods receipt from an order is a credit from an order, while a
goods issue to an order is a debit on the order.

Technically Completion:
Technical completion means ending a production order from a logistical viewpoint. This function is usually used, if the execution of an order has to be
stopped prematurely or if the order could not be executed in the required manner and open requirements for the order (reservations, capacities) should
be deleted.

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The Technically complete function must be allowed for the operation, that is, it cannot be disallowed due to a system or user status.

The following actions are executed if an order is set to technically complete.


 The order is not relevant for MRP planning
 Reservations are deleted
 Capacity requirements are deleted
 Purchase requisitions for external operations or non-stock materials are deleted
 The order and its operations receive the system status Technically complete (TECO)
If an order is technically complete, you cannot change it. The fields in the order are displayed but cannot be changed. You can however cancel technical
completion, for instance if order data has to be changed.

After technical completion you can still make postings for the order. For instance, material withdrawal or a confirmation can be posted if they were
previously forgotten.

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1. Standard Terms
Definition of terms used in this document

SAP PP (Production Planning) is one the largest functional module in SAP. This module mainly deals with production process like capacity planning,
Master production scheduling, Material requirement planning, shop floor etc. Manufacturing types in SAP PP are Repetitive Manufacturing, Discrete
Manufacturing & Process Industries.

Repetitive Manufacturing:-

 In this type, products remain unchanged over a longer period and are not manufactured in individually defined lots.

 Instead, a total quantity is produced over a certain period at a certain rate

Discrete Manufacturing:-
 In this type, involves varying the sequence of work centres through which the products can pass during production.
 The order of work centres (machine) is determined in routings, which can often be very complex.
 There can be waiting times between the individual work centres

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Process Manufacturing:-

 This is used mainly in a process industry where in process is usually batch managed .
 In this manufacturing, you copy the process described in a master recipe and adjust it to the actual production run.
 It is primarily designed for the chemical, pharmaceutical, food and beverage industries as well as the batch-oriented electronics industry

Planned Order:-
 Planned order is an internal document used by the MRP Controller, specifying how much of a material is needed and when.

 Planned order is only used within the company and it is not binding, so does not trigger procurement directly, just help the planning.
It can be changed or deleted any time.
 Planned orders are the result of MRP run and should be converted to production order for further execution process

Production Order:-

 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.

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Parameters Value Description Business


Factory Calendar JLL Calendar JLL
(Working Days)
Manufacturing Methods Process JLL
Manufacturin
g(Consumer
goods
company)
Material. Type FERT Finished JLL
HALB Semi JLL
Finished
ROH Raw material JLL
HAWA Trading JLL
goods
VERP Packaging
Material
MRP Strategy Group 10 & 11 Make to JLL
Stock
Prod. Supervisor JLL
JLL

JLL
JLL

Prod. Order Types PI01 Make to JLL


Stock
RW01 Re-work JLL
order
Consumption Mode Backward JLL
Availability. Check 02 JLL
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Ind. Coll. Req. 02 JLL


Resource Category 0008 Processing JLL
Unit
Work Centre Control PI01 JLL
Key
Costing Activity Type JLL
JLL
JLL
JLL
JLL
JLL
Recipe - Usage 1 Production JLL
Recipe - Status 4 Released JLL
general

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2. Master Data
Description of masters relevant for the company. Master data is used to simplify transaction entry by allowing certain data to be copied from the
master. Masters can enhance reporting, control the way system displays / determines data.

Bills of Materials:

A formally structured list of the components that makes a product or assembly. The list contains the object number of each component, together with the
quantity and unit of measure.

BOMs are used in their different forms in various situations where a finished product is assembled from several component parts or materials.
Depending on the industry sector, they can also be called recipes or lists of ingredients and so on.

Resource:

Resources are production facilities and persons involved in a production process that have capacities. They are subdivided into categories to specify
their suitability for certain purposes or their use in certain processes.
Resources can be, for example:

o Machines, machine groups


o Processing Unit
o Employees, groups of employees

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Recipe:
Master Recipe enables you to plan the production of materials (products). Therefore, Master Recipes are used as a template for process orders and
run schedules as well as a basis for product costing. In the SAP System, Master Recipe is nothing but a task list type like routing, rate routing and
inspection plan.

A Master Recipe is a description of which operations or phases have to be carried out and in which order to produce a material (product). As well as
information about the operations and the order in which they are carried out, a Master Recipe also contains details about the resources at which they
are carried out..Standard values for the execution of individual operations are also saved in Master recipe.

Master Description Source Count


Bill of Materials Packing BOM/ Brand BOM
Resource Resource List Contains Machine
list and manual production line.
Recipe Recipe of Materials

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