PP Planning Workshop SAP

Right Solution, Right Time, Right Price
PP Planning Workshop
 SAP America Inc. PP Planning ppt Jan, 1999

Business Process Workshop
The objectives of the PP Planning workshop are to:

 Demonstrate production planning process
 Discuss Company planning process
 Communicate scope expectations

Agenda
Attendees:
 Production Planning
Topics:
 Demand Management
 Master Production Schedule
 Material Requirements Planning
 Convert Planned Orders

Manufacturing Planning & Execution
Customer
Order Mgmt Procurement
Sales & Oper Demand Manufacturing Order

Forecasting MPS MRP
Planning Management Execution Settlement
Not included with PCC
Capacity Inventory Costing
Production Master Data
Reporting and Analysis

Planning Process and Levels
Planning Steps Planning Levels
CO/PA Profitability analysis
Region 1 Region 2
- Revenue plans
OK?
- Sales plans (quantities)
Feedback/Replanning
SOP Sales and Operations Planning
- Sales plan Product group
OK?
- Production plan
MPS Master Production Scheduling

- Demand program Product 1 Product 2
OK?
- Adjusted master plan
MRP Material Requirements Planning Assembly 1 Assembly 2

OK?
- Dependent requirements
- Planned production Part 1 Part 2
- Procurement plan

Demand Management
DEMAND MANAGEMENT
Demand program
MPS or MRP
 Demand management links top-level requirements planning (SOP, independent requirements,

etc.) with material planning (MPS and MRP).
 Demand management determines the requirement dates and quantities for important
assemblies and specifies the strategies for planning and producing or procuring finished
products.
 The result of demand management is the demand program.

Discussion
 What is the Production Forecast made up of ?
 What is the planning periodicity ?
 How often is it updated after initial entry?

MPS vs. MRP
Independent Requirement
Run MPS at this level.

Motorcycle
Run MRP at
this level. Power Train Chassis
Front Rear Brake

Motor Gear Exhaust Frame
Wheel Wheel System

MPS Run
MPS creates planned orders for top-level items
to satisfy independent requirements.
Independent
Requirement
Planned order for the

motorcycle creates
Motorcycle dependent requirements
for all components.
There are no
Power Train Chassis planned orders
at this level.

Planning Run: Single-item Planning
Receipts
Time
Issues
Single-item, single-level planning (MPS)

Options for manually changing the master plan:
+ create
+ delete
+ change
+ reschedule
Single-item, multi-level planning (MRP)
Planning a complete BOM structure
Option of manually changing the production
plan for each material in the BOM.
 In single-item, multi-level planning, the complete BOM structure is planned for a particular
material.
 In single-level planning, the MRP controller can display the planning results of individual
assemblies or components, and correct them if necessary, before planning further.

Control Parameters for MPS/MRP
 Planning run can be carried out at two different levels:

 Single-item planning for an individual material
 Total planning for all materials in a plant
 Planning Run Types
 During regenerative planning, all items are planned for a plant
 The net change planning procedure plans only those items that have undergone a
change relevant to planning since the last MPS/MRP run
 In net change planning in the planning horizon, MPS/MRP is carried out only
within a defined planning horizon

MRP Procedures
Materials planning
Consumption
MRP
based
Reorder point
procedure
Manual
reorder point

Consumption Based Planning
 Material Requirements Planning (MRP) is often the source
of demand for purchased materials in an organization.
 Depending on material master settings and parameters
selected when running MRP, demand from MRP can
generate:
 Planned orders: Can be converted to purchase requisitions or purchase
orders
 Purchase requisitions: Can be converted to purchase orders

Outputs of MRP in Procurement
Material Requirements
Planning
Purchase
Requisition
Material
Quantity
Due Date

Current Stock/Requirements List
Stock/requirements list MRP Elements
Material
Purchase requisition
Plant Purchase order
Material
Planned orders
Sales orders
Element lines: Reservations
- Current stock Warehouse stock
- Supply items Production orders
- Demand items
- Quantity
- Date
 The stock/requirements (S/R) list displays the most up-to-date situation of stocks and
requirements (i.e., supply and demand information)
 The stock/requirements list is displayed according to material and plant
 The S/R list contains the scheduled date, receipts and requirements quantities and resulting
available quantity that represents planned stock

MRP List Structure
MRP list MRP Elements
Material Requirements
Plant Purchase requisitions
Planned orders
Element lines:
Planning result
- Current stock
- Supply items
- Demand items Planning
- Quantity file
- Date
 The MRP list displays the future stock/requirements situation at the time of the last
planning run (i.e., the planning results for the material)
 During the planning run the R/3 System creates MRP lists if the creation indicator was
selected
 The MRP list is a tool for reworking a planning result with selection options (material,
plant, MRP controller, exception messages)

Discussion
 How often is Planning process run ?
 What is the planning periodicity ?
 Should Planning process be initiated auto/manually ?

Planning With Final Assembly
“Planning with final assembly” plans the demand

program, taking sales orders into account.
Process Flow
Warehouse stock
Sales order Planning
finished products
Production
Consumption Process
Sales
Order Customer
Requirement
Total
Comparison with Requirements
planning quantities Master Plan
Forecast Planning
Planning quantities
Customer requirements

Features:
Planning is done at the finished product level
Procurement and production are initiated after the planning stage
Sales orders consume planning quantities
Planned quantities that are not used increase warehouse stock
Additional requirements automatically adjust demand program
Availability check is based on available-to-promise (ATP) logic.

Backward/Forward Consumption
Planned Backward/forward consumption

independent
1 2
requirements
Time
Sales Orders
Backward Forward
period period
In backward/forward consumption when a sales order is created, it is first allocated to the

independent requirement in the most recent past. If the order is larger than the independent
requirement, the sales order is allocated to the next independent requirement that lies in the
past until all independent requirements have been consumed within the defined consumption
period. Once all of the past independent requirements have been consumed, the sales order
is allocated to the first independent requirement in the future.

Planned Orders:
Basic Information
 A planned order represents a planned receipt of a material in a plant. It

specifies when the material is required in stock and the quantity that is
expected.
 Planned orders are converted into production orders for in-house
production or into purchase requisitions for external procurement.
 Planned orders can be created in one of two ways:
 Manually by the MRP controller
 Automatically during the planning run

Structure of a Planned Order
Planned order
A
Header Material
Quantity
Material component
Date
Capacity - Quantity
requirements Items - Date
Operations
t
Periods
 The planned goods receipt determined by net requirements calculation covers the
requirement.
 The planned order creates dependent requirements for component material.
 The planned order is used for pegging.
 The planned order is a source of data for production order.

Planned Orders
t
MRP Planned orders
PF
PF
PS
PO x days later
PS
PO Today
x days earlier
Opening period
 Planned orders have a planned start date (PS), planned finish date (PF) and a planned opening
date (PO).
 The planned opening date is the date on which a planned order should be converted into a
purchase requisition or production order.

Firming Planned Orders
 Planned orders that are created automatically by

the planning run are continually updated as
requirements change.
 To prevent these automatic changes to planned
orders, you can firm them. Changes to order
quantities and dates on firm planned orders can
only be completed manually.

Planned Order Conversion
t
 The system determines whether in-house Planned orders
production or external procurement is required PF
via the procurement type and other control

PF
elements (e.g., special procurement keys).
 When planned orders are converted into PS
PO x days later
production orders, capacity requirements are
PS
created and dependent requirements of the PO Today
components are automatically converted into
reservations. Opening period x days earlier
 Planned orders can be converted on-line via

individual or collective conversions.
Production Purchase
Order requisition

Production Orders
A production order specifies:

 What is to be produced
 How many are to be produced
 The production dates Production
Order
 Where the capacity load will be
dispatched
 The production costs
NEXT BACK EXIT

Creating a Production Order
 A production order can be created either
manually or by converting a planned order.
 At least one operation should exist on the routing
Direct MRP (if not, the system automatically generates an
operation).
Determine the order type  Lead-time scheduling can be carried out
automatically. Lead-time scheduling determines
Define order item the delivery date or the start date of the order
Copy routing and the dates of the individual operations.
 Depending on the direction in which the system
Perform lead-time scheduling
is configured to schedule (forwards or
Copy bill of material backwards), you need to enter a start date or a
delivery date for the order item (product).
Add or change data
Save production order

Production Order
Order header
All information needed for
completing a production order is
Operations included by using:
 Material master
Material components  Bill of material
 Routing
Production resource/tool  Planned cost records

 Other manually entered
Costs Planned
Target 100 20 information
Actual 50

R/3 System Responses to Orders
When a production order is created the system:

 selects a routing and transfers the operations and sequences of
the routing into the order.
 explodes the bill of material (BOM) and transfers the BOM items
into the order.
 creates reservations for all the order components kept in stock.
 calculates planned costs for the order.
 creates capacity requirements for the work centres.
 creates purchase requisitions for all non-stock order components
and externally processed operations.

Scheduling
Scheduling
For External For In-house

Procurement Production
Determine the Determine the

delivery and release basic dates for
dates by production by
Backward or Forward Backward or Forward

scheduling scheduling scheduling scheduling
Lead time scheduling

(determines the
production dates)

Lead Time Scheduling Using the Routing
Float before Float after

production production
10 20 30
Order start Production Production Order

date start date finish date finish date
Operations
(from the routing)
Floats are assigned by the scheduling margin key in the

material master.

Functions of the Order Release
Order creation
Production
Order
Availability check
Order release
Printing of Material Completion Goods

Processing Settlement
documents withdrawal confirmation receipt
 Production orders are managed using statuses

 When the order is released, the system activates a release status
 Order release must be carried out manually
 You can release a production order in create or change modes

Functions of the Order Release (cont.)
Order creation
Production
Order
Availability check
Order release
Printing of Material Completion Goods

Processing Settlement
documents withdrawal confirmation receipt
 An availability check can be performed automatically

 Order release is the basis for many subsequent processes in the production order
(printing order documents, material issues, etc.)
 You can release an individual operation, the entire order or several orders at the same
time

Discussion
 What is the Conversion process ?
 What is the Release process ?

Right Solution, Right Time, Right Price

PP Planning Workshop SAP

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Right Solution, Right Time, Right Price

 SAP America Inc. PP Planning ppt Jan, 1999

The objectives of the PP Planning workshop are to:

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

Sales & Oper Demand Manufacturing Order

Not included with PCC

Capacity Inventory Costing

Production Master Data

Reporting and Analysis

 SAP America Inc. PP Planning ppt Jan, 1999

MPS Master Production Scheduling

MRP Material Requirements Planning Assembly 1 Assembly 2

 SAP America Inc. PP Planning ppt Jan, 1999

 Demand management links top-level requirements planning (SOP, independent requirements,

 SAP America Inc. PP Planning ppt Jan, 1999

 What is the Production Forecast made up of ?

 What is the planning periodicity ?

 How often is it updated after initial entry?

 SAP America Inc. PP Planning ppt Jan, 1999

Run MPS at this level.

Front Rear Brake

 SAP America Inc. PP Planning ppt Jan, 1999

Planned order for the

 SAP America Inc. PP Planning ppt Jan, 1999

Single-item, single-level planning (MPS)

 SAP America Inc. PP Planning ppt Jan, 1999

 Planning run can be carried out at two different levels:

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 How often is Planning process run ?

 What is the planning periodicity ?

 Should Planning process be initiated auto/manually ?

 SAP America Inc. PP Planning ppt Jan, 1999

“Planning with final assembly” plans the demand

 SAP America Inc. PP Planning ppt Jan, 1999

Planning is done at the finished product level

Procurement and production are initiated after the planning stage

Sales orders consume planning quantities

Planned quantities that are not used increase warehouse stock

Additional requirements automatically adjust demand program

Availability check is based on available-to-promise (ATP) logic.

 SAP America Inc. PP Planning ppt Jan, 1999

Planned Backward/forward consumption

In backward/forward consumption when a sales order is created, it is first allocated to the

 SAP America Inc. PP Planning ppt Jan, 1999

 A planned order represents a planned receipt of a material in a plant. It

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 SAP America Inc. PP Planning ppt Jan, 1999

 Planned orders that are created automatically by

 SAP America Inc. PP Planning ppt Jan, 1999

via the procurement type and other control

 Planned orders can be converted on-line via

 SAP America Inc. PP Planning ppt Jan, 1999

A production order specifies:

NEXT BACK EXIT

Save production order

 SAP America Inc. PP Planning ppt Jan, 1999