INTRODUCTION TO

SAP PP

Muhammad Zahid Malik

PRODUCTION AND PLANNING
MASTER DATA
Business Process Integration

FI MM PP SD

Rules
FI

MM

PP

SD

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Business Process Integration

PP

Master Data
PP

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Production Process (Make-to-Stock)
Capacity Schedule
Planning and Release

Shop Floor
Production Documents
Proposal
(Planning/Other)
Production
Process Goods
Issue

Completion
Order Settlement Confirmation
Goods
Receipt
Organization Data
■ Client
■ Company code
■ Plant
■ Storage location
■ Shipping point
■ Work Center

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 Work Centers

Organization Structure
Credit Control Client (600) Fiscal Year
Area Variant

Chart of Company Controlling Area

Accounts Code (C _ _ _)

Purchasing
Organization
Plant Sales
Purchasing Organization
WC 10 WC 20
Group
SL10 SL20
Distribution Division
Shipping Channel
Point
Sales Area
Organization Data - Work Center
■ It is a unique production or assembly area
■ It may include
– Equipment
– Groups of equipment
– Production lines
– Employees
– Groups of employees
■ Operations are carried out at work center

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Organization Data
■ Plant-specific organizational units
– MRP controller
– Production controller
– Production scheduler
– Planner group
– Person responsible (financially)
■ Non-plant specific organizational units
– Capacity planner

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BPI PP master data

PP

Master Data
PP

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Master Data for Production Planning
■ Bill of Material Master Data
■ Work Center Master Data
■ Work Center Control Key
■ Product Routing
■ Material Types Allowed in Production
■ Controlling Activities For Production
■ Activity Prices
■ Materials

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Bill of Materials
BOM is a hierarchical structure of the materials needed to produce a finished goods or semi-finished
goods.
BOMs in SAP are defined as single-level, but can be constructed multi-level by nesting several single-
level BOMs.
Nesting refers to a hierarchy in which a bill of materials contains its own bills of materials.

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 Bill of Material Master Data
■ Bill of Materials (BOM) are created as single-level or multi-level relationships between one parent
material and the sub-component material

EPEN

Barrel Cap Crown Cartridge Band Clip

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 Bill of Material Master Data
■ Variant Bill of Materials (BOM)
– Several products with a large proportion of identical parts.

EPEN - Red EPEN - Black

Red Black
Band Etc. Band Etc.
Cartridge Cartridge

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 Bill of Material Master Data
■ Multiple versions of Bill Of Materials (BOM)
– One product produced from alternative components or processes, where the differences
are small (usually the quantity of a component).
– BOM 1 = lot size 1 - 100
– BOM 2 = lot size 101 – 999

EPEN - Black EPEN - Black

Black Black
Band Etc. Etc. Band
Cartridge Cartridge
(Buy) (Make)

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Bill of Material Master Data
■
Finished Good

Semi-finished Raw Semi-finished

goods Material good

Raw Raw Raw Raw

Material Material Material Material

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Bill of Material Master Data

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 Bill of Material Master Data
■ BOM in SAP consists of a header section and an item section.

■ Header section includes data that apply to entire BOM, such as finished material
number, plant, usage, validity, status, and base quantity.

■ Usage identifies the purpose for which the BOM can be used. For example, 1 is
for production.

■ The BOM is valid from the date specified in the header.

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Bill of Materials Master Data
■ Items section identifies all materials needed to make finished goods or semi-
finished goods identified in the header.

■ Item category determines how material is used in the BOM.

■ Data for each item are:

– material number,
– description, quantity, and
– item category.

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BOM MM Item Category
L: Stock item
N: Non-stock item
R: Variable –size item
T: Text item used to include notes and comments within the BOM. Notes may explain how to use the
material or identify any unusual assembly requirement.
D: Document item used to include document such as engineering drawings, assembly instructions,
and photographs.

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BOM MM Item Category
K: Class item used in variant BOMs to identify a class or group of items. A variant BOM is used to
create multiple versions.
M: Intra material, or phantom items used as a logical grouped set of materials that could collectively
be considered as a single material. Phantom material is not an actual material and is mostly
temporarily used during production planning.

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Where to use BOM?
1. MRP uses BOM to determine dependent requirements

2. Controlling uses BOM to calculate product costs

3. Production uses BOM to issue the proper quantities of components and raw
materials to the shop floor

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Work Center
■ Work center is a location where value-added work needed to produce a material
is carried out.

■ A work center can be a machine, a group of machines, an entire production line,

a work area, or a person or group of people who are responsible for completing
operations.

■ A work center is a resource that can be used for a variety of purposes and for
multiple processes.

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Work Center
■ Work center used to define capacities
– Labor
– Machine
– Output
– Emissions
■ Capacities used in
– Capacity requirements planning (CRP)
■ Detailed scheduling
■ Costing

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Work Center
■ Work Center is used:
– To be assigned as cost center
– To be allocated with Human Resources (HR)
■ Qualifications
■ Positions
■ People

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Work Center
■ Work Centers have multiple views of:
– Basic data
– Default values
– Capacity overview
– Scheduling
– Cost center assignment
– Technical data

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 Work Center
■ Basic data section:
 Name, and description of the work center
 Person or group of people who are responsible for completing operations
 Task list: a list of operations that are required to accomplish a task. Operations are the
specific tasks that must be completed, such as drilling, cutting, assembling. In production, a
task list takes the form of a product routing or a master recipe.
 Standard value key: used to assign standard or planned values for operations, such as setup
and execution times. Companies use these values to calculate costs, execution times, and
capacity requirements.

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Work Center

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Work Center
■ Default Values: for operations performed at the work center.
■ Control Keys: specify how an operation or a sub-operation is scheduling, how
costs will be calculated, and how operations will confirmed once they are
completed in the work center.
■ Wage data: used by processes in human capital management, such as payroll.
■ Standard value keys: identify the normal time elements – the activities that
consume time associated with the work center. Typical time elements are setup
time, machine time, labor time, and teardown time.

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Work Center

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Work Center
■ Available capacity defines how much work can be performed at the work center.
– A work center can include more than one resource or capacity, such as labor and machine.

■ Scheduling basis determines the specific capacity to be utilized for production.

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Work Center

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Work Center

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Work Center
■ A work center is associated with a cost center which is a container for
accumulation of costs. Costs associated with operations completed in a work
center are calculated using formulas that utilize the costs and standard values
associated with each activity type, for example,
 setup,
 labor, and
 machine.

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Work Center

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Work Center Control Key
■ Scheduling
■ Determine capacity requirements
■ Inspection characteristics required
■ Confirmation required
■ Rework
■ Cost
■ Schedule external operations – std values

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Product Routing
■ A list of tasks or operations that must be performed to convert a material to a part, component,
or product.
■ Routing is a sequence of operations which detail the manufacture of a product
■ Routings are used as a template for production orders and run schedules as well as a basis for
product costing.

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Routing
■ Routing are used to determine:
 Operations
 Work centers
 Material components
 Production resources and tools
 Quality Checks

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Routing

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Routing

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Routing

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Routing Use
■ Routings will be used in
– Scheduling (dates, times)
– Costing
– Capacity planning
– Production orders

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Routing
Standard Alternate Parallel
Sequence Sequence Sequence
Operation 10 Operation 10 Operation 10

Operation 20
Operation 20 Operation 20 Operation 25

Operation 25

Operation 30 Operation 30
Operation 30

Operation 40 Operation 40 Operation 40

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Material Types Allowed in Production
■ Multiple material types may be used in a routing/BOM
 Raw materials
 Semi-finished product
 Trading goods are allowed but not standard
 Text or Reference materials common

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Display Routing List
■ A collective report displaying the available routings and the material allocations to operations
■ Four General Types
– Operations Related
– Component Related
– Production Resource/Tool (PRT ) Related
– General List (Operation Control Ticket)

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Controlling Activities for Production
■ Used to perform internal cost allocation, where activities by a cost center are measured
– Labor time
– Machine hours
■ Output activities are valued
■ Allocation of an activity type is always made with the allocation cost element created in activity
type planning

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Activity Prices
■ Prices (costs) for planned activities
– Fixed or Variable
■ Labor = $$/hour
■ Machine = $/hour
■ Overhead = %

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Product Group
■ Aggregate planning that group together materials or other product groups (Product Families)
– Manufacturing procedure
– Product design
– Market niche, etc.
■ Proportional Factors (Percentages for components)
Product Groups
• Multi-level or single-level
– A product group is multi-level if it contains other product groups
– Lowest level in a product group hierarchy always consists of materials.
– A product group is single-level if its members are materials only
– A material or product group can be a member of more than one owner product group

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BPI PP Rules

PP

PP

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 MRP Control Parameters
■ Environment
– Number range
■ Master Data
– Materials Requirements Planning controllers
– Float times
■ Planned Orders
– Conversion order type
– Dependant requirement availability

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 MRP Control Parameters
■ Planning run
– Bill of Material (BOM) selection
– External procurement
– Planning horizon
■ Availability Check
– Material
– Production Resource/Tool (PRT )
– Capacity
■ Scheduling Control Parameters

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General Planning Parameters
■ Order Type Control Parameters
– Types of routings,
– BOM’s per order type:
■ manually or automatically
– Availability checking
■ Create Confirmation Parameters
– Reservations
– Status Updates
■ Define Valuation of Goods Received
– Moving Average Price Control evaluation

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MM Planning Parameters
■ Materials Requirements Planning views
– for materials
■ Work Scheduling views
– for manufactured products

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Pen Inc. Business Module II for
Selling Finished Goods by Production

Pre-Sales Sales Order Accounts

Delivery Billing
Activity Receivable

Availability Goods Issued to

Check Delivery
YES General Ledger
In Inventory Plant or Warehouse Inventory
Postings Accounts
Issue Goods to
Production Order Goods from Production
NO
Order
NO
Purchase Purchase Order Goods Receipt Invoice Receipt Accounts
Requisition Payable

Or

Planned Order Production Completion Confirmation

Order

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Activity Type/Price Planning

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Production Group

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PPP Orders
■ Planned Order (planning)
– A request created in the planning run for a material in the future (converts to either a
production or purchase order)
■ Production Order (execution)
– A request or instruction internally to produce a specific product at a specific time
■ Purchase Order (execution)
– A request or instruction to a vendor for a material or service at a specific time