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Material Requirements Planning (PP-MRP) Implementation Options

The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production. In doing so, MRP tries to strike the best balance possible between • • optimizing the service level and minimizing costs and capital lockup.

The MRP component (PP-MRP) assists and relieves MRP controllers in their area of responsibility. The MRP controller is responsible for all activities related to specifying the type, quantity, and time of the requirements, in addition to calculating when and for what quantity an order proposal has to be created to cover these requirements. The MRP controller needs all the information on stocks, stock reservations, and stocks on order to calculate quantities, and also needs information on lead times and procurement times to calculate dates. The MRP controller defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals.

You must first create the master data to be able to work with the MRP component. To do this, you require the following components: • • material master (LO-MD-MM) bills of material (LO-MD-BOM)

When you use MRP for in-house production, you also need the following components if you want to determine production dates: • • work center (PP-BD-WKC) routings (PP-BD-RTG)

You also need the following components: • demand management (PP-MD-DEM) You need the Demand Management component to define requirement quantities and requirements dates for finished products and important assemblies. Demand Management also determines the strategy you are to use for planning, procuring, or producing a certain finished product. • sales and distribution, if necessary

Features MRP at Plant or MRP Area Level
You can plan material requirements at plant level or for different MRP areas. With MRP at plant level, the system adds together stocks from all of the individual storage locations, with the exception of individual customer stock, to determine total plant stock. The requirements are combined in the planning run and procurement elements are created for these pegged requirements with unknown sources. Individual storage locations can be planned separately or be excluded from planning. In the case of material requirements planning on an MRP area level, only the stocks from the storage locations or subcontractor assigned to the respective MRP area are taken into account. Only the requirements in this MRP area are combined and procurement elements are created for them. This enables you to plan material requirements specifically for certain areas.

Lot-Sizing and MRP Procedures
The most common lot-sizing procedures are available in the system and you can easily integrate user-defined formulas. You can use MRP or consumption-based planning as the materials planning procedure.

Automatic Planning Run
The automatic planning run in MRP determines any shortages and creates the appropriate procurement elements. The system generates messages for critical parts and unusual situations so that you can rework the planning results in the specific area with problems. Read more: Material Requirements Planning (PP-MRP) - Wikipedia NewForum

Bills of Material in Production Planning
The Production Planning application component provides a solution for both the production plan (type and quantity of the products) and the production process. Preparations for production include the procurement, storage, and transportation of materials and intermediate products.

Bills of Material in Production Planning

Bills of material (BOMs) and routings contain essential master data for integrated materials management and production control.

German standard (DIN) number 199.In the design department. Bills of material 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. Read more: Bills of Material in Production Planning . The graphic below shows some components of a bicycle that are included in a BOM. defines a bill of material as follows: A bill of material is a complete.Wikipedia NewForum How are Bills of Material Used in PP? The data stored in bills of material serves as a basis for production planning activities such as: . The list contains the object number of each component. together with the quantity and unit of measure. they may also be called recipes or lists of ingredients. a new product is designed such that it is suitable for production and for its intended purpose. This list is the bill of material. A bill of material can only refer to a quantity of at least 1 of an object. formally structured list of the components that make up a product or assembly. number 51. The structure of the product determines whether the bill of material is simple or very complex. part 2. The result of this product phase is drawings and a list of all the parts required to produce the product.

Read more: How are Bills of Material Used in PP? . A work scheduling department uses bills of material as a basis for operation planning and production control. A single-level BOM can be either a complete machine or an individual part. .Wikipedia NewForum Single-Level BOMs You can break down large and complex product structures into a number of related units. In practice. • • • The data stored in bills of material is also used in other activities in a company such as: • Sales orders As an aid to data entry.• A design department (working with CAD) can base its work on bills of material. Each unit can be represented by a BOM. via the SAP-CAD interface. • Reservation and goods issue As an aid to data entry • Product costing To calculate the costs of materials required for a specific product This simultaneous use of BOM data in different areas of a company illustrates the advantage of a system based on integrated application components. giving all users access to the latest data at all times. A production order management department. the term single-level BOM will be shortened to BOM. a single-level BOM is often a collection of standardized assemblies. Links between application components facilitate continuous data exchange between different application areas. You can also create and maintain a BOM specifically for a sales order (variant configuration). A material requirements planning (MRP) department explodes bills of material on a certain date to calculate cost-effective order quantities for materials. uses bills of material to plan the provision of materials. You can also create a BOM in the R/3 System from your CAD program. In the following. A single-level BOM describes one or more assemblies by means of component quantities. referred to in this documentation as a single-level BOM.

level BOM. such as MRB01 Men’s racing bicycle (see graphic in topic Single-Level BOMs). you can use it whenever you need it and combine it with other BOMs as required. The term "assembly"comes from material BOM applications. In document structures (in document management applications) this term refers to a coherent grouping of a quantity of documents and texts. The graphic below shows the assembly " GEARS" .Wikipedia NewForum Assemblies A group of semi-finished products or parts that are assembled together and form either a finished product or a componentof a finished product is known as an assembly. a Derailleur gear system that is made up of four components. Once you have defined your solution in the form of a single. A product defined as an assembly. Read more: Single-Level BOMs . An assembly is identified by a material number and generally functions as a single unit. . can in turn be used as a component in another assembly.You can use single-level BOMs to define one-time solutions for recurring tasks. such as the Derailleur gear system in the graphic above . The graphic below shows single-level BOMs for a men’s racing bicycle for different levels of the production process.

Wikipedia NewForum Work Center Definition Operations are carried out at a work center. machine groups Production lines Assembly work centers Employees. In the R/3 System work centers are business objects that can represent the following real work centers. these materials are grouped together to form an assembly. Dependent requirements for the superior assembly are passed directly down to the components of the phantom assembly. these materials are not actually assembled to form a physical unit. groups of employees . Read more: Assemblies .Phantom Assemblies A phantom assembly is a logical (rather than functional) grouping of materials. The components of a phantom assembly are grouped together to be built into the assembly on the next level up the product structure. Planned orders and purchase requisitions are also produced only for the components of the phantom assembly. skipping the phantom assembly. • Assembling a pair of gearwheels Engineering/design view: one assembly Assembly view: Gearwheel 1 goes into the driving gear Gearwheel 2 goes into the output gear You can define the special procurement key phantom assembly in the material requirements planning (MRP) data of the material master record for a material. • From the design point of view. From the production point of view. for example: • • • • Machines.

A work center is also assigned to a cost center. • • Simplifying operation maintenance Various default values for operations can be entered in the work center. so that the duration of an operation can be calculated. Task lists are for example routings. maintenance task lists. so that the costs of an operation can be calculated. Work orders are created for production. inspection plans and standard networks. .Use Together with bills of material and routings. • • Capacity planning The available capacity and formulas for calculating capacity requirements are entered in the work center. • • Costing Formulas are entered in the work center. Work centers are used in task list operations and work orders. quality assurance. work centers belong to the most important master data in the R/3 production planning and control system. The following graphic illustrates the use of work center data. plant maintenance and for the Project System as networks. Data in work centers is used for • • Scheduling Operating times and formulas are entered in the work center.

which you define in Customizing the work center. The work center category. The data is grouped thematically together in screens and screen groups.Use of work center data Structure A work center is created for a plant and is identified by a key. Human Resource Management System (HR)) Capacities Scheduling Default values . Examples of such screen or screen groups are: • • • • • • • • • • • Basic Data Assignments (to cost centers. determines which data can be maintained in the work center.

Read more: Routings (PP-BD-RTG) . These are important in capacity planning.• • • Hierarchy Technical data Integration Task Lists Work centers are assigned to operations in task lists. You use hierarchies to cumulate available capacities and capacity requirements in a hierarchy work center. Assignments to other HR-objects. the changes are effective in the task list if a reference indicator has been set for the default value. Assignments to Objects in the Human Resource Management System A Logistics work center can be assigned to either an organizational unit or a work center in the Human Resource Management System (HRMS). If you change default values in a work center. can be maintained via the HR work center. for example employees or qualifications. Work Center Hierarchies Work centers can be arranged in hierarchies. • • Formulas .Wikipedia NewForum Scheduling Data in Work Centers You can enter the following scheduling data in work centers: • • Scheduling basis The scheduling basis is a capacity whose operating time is to be used for scheduling orders.

Controlling application. Internal activities and business processes that are used when a product is produced at the work center can be settled to the product. Features A work center can • • use resources from a cost center In this case. If you use integrated incentive wages and logistics. or to calculate the internal processing times in networks and maintenance task lists. You can select activity descriptions from the following texts: Standard value key. activity types. Integration The data for costing is evaluated in the CO .You use formulas to calculate the execution times of operations in production orders using standard values. • • • • Interoperation times Dimension and units of measure for internal processing operations Read more: Scheduling Data in Work Centers . then here you can define from which incentive wage earner the corresponding activity type is displayed. the work center is linked to cost center accounting. You can find further information in the documentation for Product Cost Planning (CO-PC-PCP) under Work Centers in Costing. which enables you to model the processes in your company according to responsibilities and functions. if you want to cost the activities performed at the work center. You can find further information in the documentation for Cost Center Accounting (COOM-CCA) • • use resources from a business process .Wikipedia NewForum Costing Use You have to enter data for costing. in Customizing freely defined text (Production -> Basic Data -> Work Center -> General Data -> Standard Value -> Process Alternative Activity Descriptions).

.In this case.Wikipedia NewForum Work center hierarchy Work centers can be grouped into a work center hierarchy. which enables you to model the processes in your company according to activities in a cross-function manner. Read more: Costing . Apart from the top of the hierarchy the hierarchy root . Work center hierarchy Use of Work Center Hierarchies Work center hierarchies are used in capacity planning to cumulate available capacity and capacity requirements. One work center can exist in several work center hierarchies. Costing data is always entered for a certain validity period. Data that you have already entered for another valid ity period is overwritten. the work center is linked to Activity based controlling. particularly under Method of Quantity Consumption (Pull) .every work center in the hierarchy is subordinate to another work center. A work center hierarchy can include several plants. You can cumulate available capacities from subordinate work centers to a superior work center level in order to determine the total available capacity for the superior work center. You can find further information in the documentation for Activity-Based Costing (COOM-ABC).

In the R/3 System you can • use predefined SAP formulas .In your factory you have several lathes. Portraying Hierarchies You can display a hierarchy in work center maintenance or hierarchy maintenance as a list or a graphic. • • As a list The work centers that belong to a hierarchy are listed together with their hierarchy level. in hierarchy maintenance you can also edit the structure. called "Machine center 3".Wikipedia NewForum Formulas You use formulas in the work center to calculate the following data in costing. Refer to Displaying Hierarchy Structure as a List • • As a graphic The hierarchy graphic displays the hierarchy as a tree. which you use to cumulate the available capacity of several lathes. Refer to Calling up a Hierarchy Graphic In work center maintenance you can only display the hierarchy structure. for example you can delete or change work center assignment. You create a higher-level work center. Read more: Work center hierarchy Locate the document in its SAP Library structure Work centers . scheduling and capacity planning: • • • • Costs Execution times for production orders Internal processing times for networks and maintenance orders Capacity requirements.

scheduling and capacity requirements calculation.• define your own formulas. Relationships between work centers. routings and formulas Costs In production orders each of up to six standard values in a work center can be assigned an activity type and a formula with which the costs of the operations conducted in the work center are calculated. they take their values from the work center (formula constants) and the routing (standard values. routings and formulas The following graphic illustrates the relationships between work centers. . Relationships between work centers. routings and formulas for costing. For networks and service orders an activity type and formula can be defined. Formulas are entered in the work center. You can create formulas in Customizing Work centers under Define formulas for work centers. general operation data and user-defined fields.

processing and tearing down) by assigning a formula to each of these segments. If you do not enter a formula. which you need to schedule production orders You can calculate the execution time for each operation segment separately (setting up. the execution time of this segment will be set to zero. processing and tearing down) to calculate the capacity requirements. Capacity Requirements You can assign a formula to each operation segment (setting up.Execution Time You use formulas to calculate execution time and consequently the duration of operations. If you do not assign a formula to an operation segment. For more information about this section. If you do not assign a formula to an operation segment. The execution time for the whole operation is the sum of the execution times of the individual segments. the system will use the time given in the network or maintenance order. the execution time of this segment will be set to zero. If you do not enter a formula. in which you take into account the durations of the other segments. Internal Processing Time Formulas are used to determine internal processing time for scheduling networks and maintenance orders. The capacity requirements for the whole operation are then calculated from the individual segments. You can however just assign a formula to one segment (for instance processing). The program checks that the formula has the dimension "time". see: Formula Parameters Rules for Maintaining Formulas Read more: Formulas . no capacity requirements will be determined. You can also use a formula to calculate capacity requirements for internal processing in a network or a service order. for example.Wikipedia NewForum Routings (PP-BD-RTG) Purpose . The program checks that the formula has the dimension "time".

Features In a routing you plan •The operations (work steps) to be carried out during production •The activities to be performed in the operations as a basis for determining dates. routings have the same basic structure as the following objects: •Master recipes •Inspection plans •Maintenance plans •Standard networks Therefore.Routings enable you to plan the production of materials (products).Wikipedia NewForum Business Object . routings are used as a template for production orders and run schedules as well as as a basis for product costing.Routing (Generic) Definition A routing is a description of which operations (process steps) have to be carried out and in which . routings are cumulated with these objects under the superordinate term Task list. and costs •The use of materials during production •The use of work centers •The quality checks to be carried out during production Read more: Routings (PP-BD-RTG) . Therefore. capacity requirements. Integration In order to Plan the usage of materials Plan the use of work centers Plan the external processing of operations Plan quality inspections that accompany production Prepare cost calculation according to routings Plan and to document changes to routings Classify routings Automatically calculate the planned values for the activities to be produced You also require the components Material master (LO-MD-MM) Work centers (PP-BD-WKC) Purchasing (MM-PUR) Quality planning (QM-PT) Controlling (CO) Engineering Change Management (LOECH) Classification system (CA-CL) CAPP Standard Value Calculation (PP-BDCAP) In the R/3 System.

Operations describe individual process steps. which are carried out during production (see Routing graphic) A routing is identified by its group and group counter. Structure A routing is composed of a header and one or more sequences.order to produce a material (product). Standard values for the execution of individual operations are also saved in routings. Routings (generic) consist of the following objects: • • • • Routing Rate routing Reference operation set Reference rate routing Use A routing is used as a source for creating a production order or a run schedule header by copying. The header contains data that is valid for the whole routing. As well as information about the operations and the order in which they are carried out. . a routing also contains details about the work centers at which they are carried out as well as about the required production resources and tools (includes jigs and fixtures). A sequence is a series of operations.

In the graphic the three routings in group A are identified by their group counter 1.2 or 3.Routing Integration Group and Group counter Routings within a group are distinguished by their group counter. .

Assignment of material components to operations If a bill of material (BOM) has been assigned to a routing. you cannot use the routing (rate routing) in a production order or run schedule header. According to the task list type. (This is relevant for normal routings and rate routing that are used directly for producing a material. • • Have no material to be produced assigned to it This applies to reference operation sets and reference rate routings that can only be used as part of a routing or rate routing.Group Assignment of a material to be produced to a routing Before you can produce a material with a routing. The routing and the material can exist in different plants. you have to assign the material to the routing. .) You do not have to assign a material to a routing. a routing can • • Have one or more materials to be produced assigned to it. However. In general the BOM assigned to a routing is the material BOM for the material to be produced by the routing (see Assignment of Materials graphic)You can also assign BOMs to reference operation sets or reference rate routings. you can assign its components to the routing operations. until you have done so.

with which you can arrive at any screen. .Routing (Generic) Locate the document in its SAP Library structure .Routing (generic) The following graphic illustrates the navigation levels and some of the navigation routes for routings. See also: Business Object . There are clear and uniform navigation routes. it is assigned to different levels in the structure.Assignment of Materials to be Produced and Material Components Read more: Business Object .Wikipedia NewForum Routing Structure and Navigation Use According to how detailed the data in the routing is.

a parallel sequence or an alternative sequence. On the header overview the routings in a group are displayed. information about • The status and use of the routing General parameters for quality checks during production The validity period o o o You can call up the following information from the header: • Details about assignments of material component to the routing. about the materials that are produced by the routing. for instance. o o • The operation overview contains. for instance. . that are a group of process steps in a routing The sequence category. The header contains data that is valid for the whole routing. • The sequences. A long text for a more detailed description of the routing o o • The sequence overview contains. whether the sequence is a standard sequence. That is.The individual data can be found on the following levels: • • • On the initial screen you enter data that is required to identify or select routings. For instance.

• Details about external processing or personnel qualifications Standard values and other information for scheduling Parameters for quality checks during production o o o • Further overview screens exist for the assignments and assignments to each operation or sub-operation. for instance if the production of a material is planned by several departments according to their own business points of view. This process documentation describes those aspects of editing routings and rate routings that are . • On the detail screens for operations and sub-operations you can find data that is relevant to individual operations or sub-operations. which can all be carried out by a single person. such as. which describe the process steps in the routing The work center where they are carried out A short description of the process step The operation overview is the central screen for routing maintenance. Sometimes however. Read more: Routing Structure and Navigation .Wikipedia NewForum Maintaining Routings and Rate Routings Purpose This process describes how to create or change a routing or rate routing.o o o • Operations and sub-operation. the process is more complicated. the detail screens for operations and sub-operations as well as other overviews for routings. This could be scheduling data for work centers or control indicators for inspection characteristics. An overview is presented of the following objects that are relevant for a process step: • Material components Work centers Production Resources/Tools Inspection characteristics Trigger points o o o o o • The additional information for each assignment or assignment is contained on the relevant detail screen. From here you can branch to the header. Editing a routing is often a very simple process consisting of only a few steps.

3. If required. refer to the relevant process documentation. you can carry out the following steps in which ever order you like. You design the basics of the production process by creating one or more sequences of operations 6. For simplicity’s sake only routings are discussed in the following topic. You can also assign materials later. for the operations: – For in-house operations you enter standard values and if necessary user fields with extra data that is not included in the standard system. – You plan the usage of material components in production. You can do this by entering a purchasing info record. If necessary you transfer the scheduling results to the material master record of the . You schedule the routing. You can also assign materials in the first step. You create a routing by first entering only the data that is absolutely essential. According to your needs. 5. 2. you can assign one or more materials to the routing. you enter the inspection specifications and if necessary the PRTs that you need as test equipment. refer to the special process documentation Prerequisite For information about the prerequisites for individual process steps. This could be useful. enter the following detailed data 3.generally the most important. 6. if for instance you know from the start that a certain material is to be assigned to the routing. 5. – For in-house operations you plan the use of work centers. 1. You check the consistency of the routing data. For more detailed information about the individual process steps. If you want to schedule a routing (see process step 9). Possibly some of the steps described here are not so important for your individual needs. If you intend to inspect the quality during production. Process flow This process is valid for both routings and rate routings. 1. 4. – For externally processed operations you enter the details of the vendor.) Please note that this data is also taken into account in product costing and capacity planning 4. You edit the routing header. However you can only carry out certain steps after you have assigned material to a routing. 2. (See general operation data.

This data forms the basis for determining basic dates in material requirements plannin 7. You set this status in the general header data. You save the routing. After you have finished editing the routing. Read more: Purpose This process describes how to create or change a routing or rate routing.Wikipedia NewForum . 8.material to be produced. E . you release it for use in production orders and/or costing.

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