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Automotives Building Materials Chemicals Engineering Construction and Operations Fabricated materials Power plant Construction Healthcare Utilities Services Apparel and Footwear Discrete manufacturing Food and Beverages
Repetitive
MTS
Spare Parts
Process Industry
MTS MTO
Agenda
Review of Materials Management PP Organization Bills of Material Work Centers Routings Material Requirements Planning
Agenda (Contd)
Processing Planning Results Production Order Management Capacity Planning and Leveling Product Cost The Production Cycle Sales and Operations Planning Master Planning and Demand Management Master Production Scheduling
Review of MM Organization
Industry Sector
Controls what fields appear on what screens
Unit of Measure
e.g. Piece, box, crate, pallet, Each, KG, Litre Different parts of the business can measure quantities in different units
Multi-Lingual Texts
General Data
Data applicable throughout the client e.g. Material number Description Units of measure Weight Volume Product hierarchy
Sales text
Sales units Shipping data Division
Production costs
Planning data Valuation
Description
Service Spare Part Finished Product Semi-finished Product Trading Good Operating Supply Empty Containers Non stock Item Raw Material Packaging Competitor Product Production Resources/ Tools
Finance
Engineering Design
Sales
Product Data
Production Stock
Purchasing
One product may have multiple plant and sales views, one for each plant or sales area
Sales
Product Data
Production
Purchasing
Stock
Production Planning
Materials
Work Centers
Production Facilities
PP Basic Data
Production Resources/Tools
Capacities
F06010
Generation of order proposals based on requirements defined by PP-SOP Provides overviews from rough-cut through to detailed shop floor planning Generates data used for processing orders, e.g., dates, costs and resources Controls production costing Monitoring / analyzing on-going production activities / data
Bills of Material
Bills of Material
Simple BOM Variant BOM Multiple BOM
BOM representing a material which can be made up of multiple compositions e.g. different components and quantities
Area of Validity The same Bill of Material can be allocated to several plants. Before you can allocate the BOM to a different plant, the material must exist at the new plant, the unit of issue on the BOM item must be the same.
Becomes effective with the valid from date The validity date is determined by the system automatically to be either the next effective from date, or 12/31/1999.
A B C B from 12/31/95 to 12/31/99 A D
X----------------------------------------------------------->>>>
from 1/1/95 to 12/30/95
Assembly Scrap yield or process scrap resulting from the assembly of components into a finished or subassembly. It is used for calculating material used in an assembly. MRP increases the material requirements for all components contained in the assembly. Example: Quantity to produce 1000 units with a 1% assembly scrap = 10 units
Component Scrap considers component loss before the component is used in an assembly. For example, shrinkage during storage. The scrap refers only to the component in the assembly. When the BOM is exploded, MRP increases the quantity of the component. Example: Component Qty of 1000 units with a 5% component scrap would need 1050 units required.
Material BOM -- structure of products manufactured Equipment BOM -- structure of equipment for plant maintenance Document BOM -- structure of documents such as drawings (3.0)
BOM Group is a collective number for all BOMs in a group which allows for one or several similar products to be decribed under one number.
All Alternatives of a multiple Bill of Material All variants of a variant Bill of Material
BOM Usage special view of the BOM which represents a specific area of the company in which the BOM is used; for example, Engineering, Production, Costing, Sales, Plant Maintenance. The BOM Usage allows different views to exist without separate BOMs for each usage. Technical Type the system distinguishes BOMs according to whether they represent product variants or production alternatives. If you create a variant for the BOM, the system marks it as a Variant Bill . If there is more than one alternative for a material, the system marks the BOM as a Multiple Bill.
BOM Validity Bills of Material are valid over an area and effectivity period.
Area of Validity -- identifies which plants the BOM has been allocated to Validity Period -- identifies the from and to effectivity dates. The default to date is 12/31/9999
Item Category When you enter a new Bill of Material item, an item category must be assigned. It has important control functions such as:
Screen selection Specific processing, such as material number required, negative values supported. The Item Category cannot be changed once set. It must be deleted and re-added. Sizes are maintained for variable-size items Item categories include: Stock Items -- material in stock as a component Non-stock Items -- material not stocked - with or without a material number Variable-size -- system calculates the quantity required using formulas PM Structure Item -- used with plant maintenance equipment Document Item -- used with Document BOMs
Sub-Items are typically used to represent different installation points for partial quantities of an item.
In assembling resistors on a printed circuit board, the installation points are described. There is no logic related to sub-items
BOM Structure
Plant Assignment Validity Period Release Indicator
BOM Header
Stock Items Non-stock Items Variable Size Items Document Items Text Items
BOM Structure
Product
Component 1
Component 2
Component 3
(assembly)
Component 31 Components:
Stock material Non-stock material Variable-sized item Text item Scrap/waste
Component 32
Component 33
Handlebar Assembly
Gear Assembly
Multiple BOM
Production Variants Blue Paint
Alt 1 - Lot Size 1 to 100 Alt 2 - Lot Size 101 to 500 Alt 3 - Lot Size 501 to 1000
Solvent
Qty. for alternative 1 Qty. for alternative 2
Water
Pigment 1
Qty. for alternative 1
One material but with different combinations of component material based on production method A finished product can be manufactured using different methods of production with different components or component quantities
Pigment 2
Qty. for alternative 2
BOM Reporting
BOM explosion
BOM Recursiveness
E1
K1
B3
K2
E1
K3
Work Centers
Work Centers
Machines
Cost Center
Assembly Line
Work Centers
People
Costing
Production Line
Work Center W1
Assembly
Work Center W1
Assembly
Operation 20
Work Center W2
Finishing
Operation 30
Work centers are allocated to different work center categories The work center category is used to control the field and screen selection for work centers during work center maintenance. Work Center Category Statistical Work center Production Work Center Screen View Basic Data Basic Data Default Values Capacity Values Scheduling Cost Center Assignment
Machine (MACH)
Labor (LAB)
Oper 0040
Working Hours
Routings
BOM Groups
Cost Centers
W/C Category
Item Category
Bills of Material
Routings
Work Centers
Routing
Operation 10
Operation 20
Operation 30
Operation
Operation types
(Main) operation Sub-operation
Sub-operation HierarchyCosting Completion confirmations Scheduling always takes place on the (main) operation level
The control key defines whether completion confirmations and costing are carried out on the (main) operation level, or on the sub-operation level. Indicator: group operation combined operation sub-operation level (main) operation
Operation / Sub-operation
Schedule at Operation Level
Operation 0010
Capacity Planning & Costing possible at Sub Operation Level Level Sub Operation 0010 / 10 at Work Center A1 Sub Operation 0010 / 20 at Work Center A2
Operation 0020
Useful when processing for operation 0010 occurs over multiple work centers
Sequence Categories
Standard Seq 0000 Alternate Seq 0001 Branch operations
Material Oper 10
03 02 Routing Group 01 Oper 20 Oper 30 Oper 40 Oper 50 Oper 60
Return Operations
Oper 40 Oper 50
Routing Types
Standard Routing
10 20 N
Material
Reference Routing
R 1
10
20
Oper 0030
Material Allocation
Product
Routing BOM
Op. 10 Op. 30
Material-Routing Allocations
Material 1 1 2 2 01 02 01 02
Routing Group
1 1 1 2 3
A routing alterative can be allocated to several materials. A material in a plant can be allocated to several alternatives.
Work Center
External Processing
Oper 0010 Oper 0020 Purch Reqn Purch Ord
Routing data copied to order including quantities and dates Purchasing creates P.O.
Vendor Proc
Goods Rec Oper 0040 Oper 0050
At goods receipt, the operation is confirmed
Float Before
Oper 0010
Oper 0020
Oper 0030
Float After
Operation Lead Time Queue | Setup | Process | Teardown | Wait | Move Interoperation Time Execution Time Interoperation Time
Parallel
Split
Routing includes processes which can/must be split across a number of work centers
Overlapped
Routing defines process where one operation is to overlap with the following operation
Op. 10
Op. 30
Op. 90
Op. 40
Special form of overlapping Positioning the parallel sequence at the beginning or end of an operation Usage: for example in the chemical industry for analytical processes which run parallel to the production process
MRP Features
Net requirements calculation Lot sizing
MRP
Forecasting
MRP Overview
Purchasing
Master data
Goods receipt Warehouse management system Inventory management Valuation Goods issue Transfer posting
Invoice receipt
Invoice verification
Accounting
Stock
Reorder Point
Safety Stock
Time
Order Date
Delivery Date
Today
Sales Orders
+
Order Proposal Shortages
Reservations
MRP Types
VB
Manual Reorder Point Planning: MRP produces order proposals when stock falls below a reorder point. The reorder point and safety stock levels are entered manually Automatic Reorder Point Planning: The reorder point and safety stock level are calculated based on the forecast results
VM VV PD
Forecast Planning The latest forecast is copied as requirements which are used to create order proposals
Deterministic Planning MRP produces order proposal(s) to match the exact quantity of the requirements based on independent and dependent demands Master Production Scheduling Similar to PD but used for master schedule items
M0
MRP List
MRP Controller Group of Materials for which controller is responsible Controllers MRP Listing
MRP Order Proposals and Planner Messages from MRP Planning run. Planner can drill down to review material movement activity
Goods Issues
Goods Receipt
Stock Overview
The Stock Overview shows the stock position for all locations within a Company/Plant/Storage Location/Batch for all dispositions of material
Unrestricted Quality Ins Reserved On Order ...
100 20
20 15
15
75 45 30
25
01/01 STOCK 01/08 ORDER Sales Order 25 01/15 PL ORD 1000 120 05 100 02/01 -----------------------------------------------------> Planning Time Fence
Stock Requirements List brings together all the supply orders, independent and dependent demands and stock balances for the material. MRP makes order proposals to balance the supply/demand position for the material
Production Order
Planned Order
MRP
MRP Controller
Production Order
Auto Creation
Auto Change/Deletion
Purchase Requisition
Purchasing Group
Manual Creation Manual Change/Deletion
Purchase Order
Auto Creation
Auto Change/Deletion
Delivery Schedule
Manual Change/Deletion
Quota Arrangement
MRP Supplier from Source List
Source List
External Supplier
Scheduling Agreement
Distribution Function
Total Requirement of 250 units for the week
50 Units 50 Units 50 Units 50 Units 50 Units
Several planned orders are created for partial quantities of the dependent requirement quantity The planned orders are scheduled for various dates within the run time of the production order A daily provisioning of partial quantities distributed over the run time of the order is possible Models a continuous flow process
Master Planning
Demand Management
Planning and Consumption Strategies Specification of Requirement Quantities and Delivery Dates
Planning for Master Schedule Items Planning Time Fence Interactive MPS
MRP/MPS
Demand Management
Make product for stock in expectation of customer sales Plan using planned independent requirements for anonymous make-to-stock production. Use Net or Gross Requirements Planning
Net Requirements -- includes warehouse stock, planned issues and receipts Gross Requirements -- excludes warehouse stock. Just includes planned and open orders
Example is a shelf stock item such as a bike accessory light Planning Requirement Type is LSF - make to stock which is used in the planned independent requirements transaction Sales Order Requirement is KSL - which is sale from stock
Strategy: Make-To-Stock Production shelf items such as a bike accessory (light) Example: Common
Sale from stock
Warehouse Stock Finished Product
Planning
Production Push
Typically there is a longer lead time to produce than the customer is willing to wait for
excess stock
Example is a long lead time custom product Planning Requirement Type is VSF planning with final assembly
Sales Order
Planning
Warehouse Stock Finished Product
Purchase
Produce
Production Push
Sales Order
Purchase
Warehouse Stock Assembly 01
Produce
Warehouse Stock Assembly 02
Production Push
Planned independent requirements of Planning Material initiate procurement of the planning bill components Sales orders for the final assembly create planned orders of the finished product and reduce planning quantities for the planning material Possible to plan a family of products from forecast placed on the planning bill. The planning bill details, through percentages, the quantity required for common parts Example is a bike with common sub-assemblies used in many finished items Planning Requirement Type is VSEF -- planning with planning material Sales Order Requirement is KEVV -- independent customer order with planning material
Purchase
Produce
Planned Independent Requirements Note: Percentages drive lower level demands for sub assemblies
Production Push
Used if forecasts are more reliable at the sub-assembly level. (hour-glass) Sales orders received initiate an explosion of the finished product level Resulting dependent requirements consume the planning quantities of the finished product Must maintain the Mixed MRP Indicator in the Material Master MRP2 View for sub-assembly planning. Maintain the consumption indicator in the item screen of demand management
Example is a PC where the forecast for individual features is more accurate than forecasts for the completed PCs
Planning Requirement Type is VSFB -- planning at assembly level
Sales Order
Planning
Production Push
Sales Order
Sales orders are planned according to sales order number Produced quantities for each sales order are managed individually Production and procurement costs are managed in either a settlement order or a project Example is a custom product with a unique structure such that it only applies to a particular customers order Sales Requirement Type is KE -- independent customer order without consumption
Sales Order
Consumption Logic
Customer requirements consume planning requirements directly before or after it Consumption mode is either determined in the material master record or in the configuration menu of demand management Consumption mode determines either -Backward consumption requirements directly before the sales order Forward consumption requirements directly after the sales order Both types are allowed the system looks for the next closest planning requirements If no consumption periods exist, then you can only consume requirements planned on the same day.
Example -- Backward Consumption 01/07 01/14 01/21 01/28 Planned Requirements 0 100 0 100 Customer Requirements ^----- 25
Material at 0010 -----------------------------Material at 0010 Material Number ----------------------------- Quantity Material Number Date Quantity Date
Order Type Order Number Production Order Quantity Production Order Date
For Routing For Bill of Material For Costing For Plant MRP Controller
Operation Sequence
Operation Dates
Operation Overlap/Split
Text Key
Production Order
Production Order
Bill of Material A
Material: A, Qty: 100 PCS Schd Type: B Basic dates: Start/Finish Components Operations 0010 B 1 0010 PHNASM00 0020 C 1 0020 0030 0040 User fields: General text data Quantity data Value data Date fields
Routing
0010 PHNASM00 0020 0030 0040
Work Center
PHNASM00 Std Values: Setup: 005 Prodn: 075 TDown: 005
Select Routing
Select BOM
Check Availability Actual Labor Issue Materials to Order Confirm Completion Calculate Actual Costs Receive complete goods into stock
Goods Receipt
Create Order
Production Order
Calculate Capacity
Purchase Requisitions
Goods Issue
REL
RELEASED . Completion Confirmation possible . Shop paper printed
DSPT
DISPATCHED . Capacity Leveling possible for oper
CNF
CONFIRMED . Actual Production usage and time captured . (MILE)
DLV
DELIVERED
COMP
COMPLETE
. Goods Receipt . Actual costs delivered settled to cost objects Milestone operation
. Availability Check possible, at or before release . Material issues after oper release
Routing Selection
Alternate Sequence Assignments One operation is required Enter start or finish date depending on scheduling direction
Net Available
150
300
100
06/01/95
Net 100 300 100
Material 1
Unplanned Goods Issue
Production
Goods Issue
Completion Confirmations
Production Order Operations
0010 - Assemble Board 0020 - Assemble Case C
Confirm Operation 0010 Activities
Milestone
Confirm Operation 0030 Activities
Partial or Final Confirmation Single or Collective Confirmation Milestone Confirmation Reduction of Capacity Requirements Determination of Actual Costs
Confirmation Data
Quantity
Dates
Start date Finish date Work Center Personnel Number Qualification Wage Group Wage Type
Labor
Capacity
Capacity Planning
MRP Requirements Master Data Material BOM Capacity Requirements Capacity Leveling to adjust capacity periods
Routes
Work Center
Capacity Evaluation
Standard Values
Tables Formulas for Scheduling and Capacity Reqmts Work Center Formula Key Formula Constants Operation Std Values
Set up .5 hrs Proc 5.5 hrs Teardown .5 hrs
No. Splits
Capacity Requirements
Capacity Scheduling
Material Master Lead Time Float Before Oper 0010 Oper 0020 Oper 0030 Float After
Execution Time
Interoperation Time
Queue | Setup | Process | Teardown | Wait | Move (2) (1) (6) (1) (2) (2)
Use Minimum Queue Time Optional Splitting or Overlapping Use Minimum Move Time
Float After
Reduce Float Time
Float Before
Queue (1)
Set up (1)
T Down (1)
Wait (1)
Move (1)
Float After
Standard Formulas
Operation Time is ....
Product Costing
Costing Integration
PP PP-PC Product Costing
MM SD FI
CO
Sales & Distribution Materials Mgmt. Financial Accounting
Controlling
CO
PP-MRP Mat. Requirements Planning PP-MPS Demand Management PP-BD Basic Data PP-IS Shop Floor Info System PP-CRP Capacity Planning PP-SFC Production Activity Cntrl.
Production Planning
PP
AM
R/3
Client / Server
PM
Human Resources
Quality Assurance
QA
Plant Maintenance
HR
Industry Solutions
IS
OC
Project System
PS
CO-PA Profitability Analysis CO-PA Profit Centers CO-OPA Orders CO-CCA Cost Center Accounting
Plant PP01
Plant PP02
Plant PP03
Plant 0001
Cost Accounting
Cost elements Cost centers CO orders
Cost Components
Cost components are defined in Product Costing Customizing Each costing variant (standard cost, current cost, ...) points to a cost component layout There can be up to 40 cost components in a cost component layout For each cost component identify which costs are rolled up to the next higher level Component Cost Layout
Cost Component 2 Cost Component 3 Cost Component 1 Cost Component 4 Cost Component 2 Production Cost Component 3 Cost Component 5 Cost Component 4 Cost Component 6 Cost Component 5 Cost Component 7 Cost Component 6 . Cost Component 7 . . . Cost Component 15 . Cost Component 15 Cost Component 1 Raw Component Cost Layout Materials 01
02
Production Overhead-Material Raw Materials OverheadProduction Overhead-Material Overhead-Admin Overhead-Production Overhead-Sales Overhead-Admin External Processing Overhead-Sales External Processing Miscellaneous Miscellaneous
Routing
Cost Center
Activity type
Formula
Activity price
Actual time/quantity
Costs
Overhead Costing
Direct material costs
Material costs
=
+ =
Production costs
=
Manufacturing costs
Indirect management costs
Costing sheet
Make-to-Order Production
Order
Individual customer requirements
Delivery
Production memo
Production
Goods issue
Invoice
Preliminary costing
Costing items Automatic valuation Planning aids (revalue, copy, reference) Cost component structure
Simultaneous costing
Actual quantity used * price Overheads Actual yield Calculation of target costs Variances according to category Work in progress
Controlling
Summarization using classifiable characteristics Selection using classifiable characteristics Cost object analysis
Cost Roll-up
Costs for assemblies in the low-level code with the highest number are calculated first Upper level is production costs at this production level Lower level is costs of all material components processed at this production level Total costs are the sum of the costs for the upper and lower level costs Finished Product Cost Component Split - Total
Material Internal Activity External Activity Overhead
MPS Functions
Separate Planning Run for Master Schedule Items
During an MPS run, only master schedule items are planned Dependent requirements are created for the BOM level directly below the planning level Levels below the master schedule items are not planned Changes can be made to the master plan without effecting lower BOM levels Supply orders are reviewed for timing and quantity to match requirements Allows for daily planning without a negative impact on system performance
MPS Item
Assembly 1
Protects the master plan from automatic changes to the master schedule During a planning run, no automatic change proposals are made within the planning time fence which is determined for each item in the Material Master. The system calculates the planning time fence starting from the planning date
Planning Date
MPS Procedure
Create Planned Independent Requirements
Proposal Changes within Planning Time Fence System Creates Order Proposals Outside PTF
Carry-out MRP
Regenerative Planning all master schedule items are planned for a plant. It is generally used during initial startup to insure all items are planned or when heavy maintenance causes most items to be re-planned. Net Change Planning only master schedule items which have undergone a change to the supply/demand balance, such as warehouse receipts and issues, are re-planned. It is common to run net change MPS daily. Net Change Planning in the Planning Horizon shortens the period over which MPS plans to the planning horizon, which is set in Customizing. It is typically set to the length of time of the longest lead time item. This means that only those master schedule items which have undergone a relevant change within the planning horizon are planned.
The system does not plan new order proposals within the planning time fence. Instead, new requirements needed within the planning time fence are scheduled at the end of the planning time fence, depending on the fixing type.
Order Proposals are Fixed Automatic Order Proposals
Planning Date
During the next planning run, the system places all order proposals that crossed over the planning time fence at the PTF. The master scheduler needs to fix or firm these order proposals to the correct date inside the PTF. Once fixed, the system will not change. Orders can be firmed collectively (Planned orders->firm) through selection of MRP controller, material, run schedule, production version, or planning id.
Availability Check
Inward movement of goods Purchase Order Purchase Requisition
Stock
Planned Order
Other factors to take into account: Safety stock Stock in transfer Replenishment lead time Blocked stock in QA
Delivery
Sales Order
Reservation