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SAP Consumer Products for Apparel & Footwear

SAP Consumer Products for Apparel &
Footwear: Production Planning (PP)
Production Planning and Production
R/3 Standard production planning and production control functionality
comprehensively plans the demand program (product type and quantity) and
production. Production encompasses procurement, and the storage and
transport of materials and intermediate products, as well as material
requirements planning (MRP) for all levels of bill of materials (BOM).
Production planning and production control in AFS (AFS PP) has been designed
for the special needs of the apparel and footwear industry. In particular, demand
management, material requirements planning (MRP), planned orders and
production orders include a product structure (style/color/size) and categories
specific to this industry sector.
The logistical cycle begins either with sales and operations planning (SOP)
including forecasting, or with sales and production demand management. The
sales department receives customer requirements from the market and demand
management forecasts sales. The resulting independent requirements, i.e.
requirements for finished products and trading goods, trigger material
requirements planning (MRP). Order quantities and delivery dates have to be
determined and the respective procurement activities have to be launched to
ensure requirement coverage.
Ordering transactions or subcontracting are initiated for outsourced products.
Appropriate vendors must be selected or outline agreements made.
Quantities resulting from production or outsourced procurement are put on
stock and administered by inventory management.
The following diagram illustrates the logistical cycle between sales and
procurement in the R/3 system. The system comprehensively plans, monitors
and coordinates all functions.
SAP Consumer Products for Apparel & Footwear
Fig. 21: Materials Requirements Planning
In addition, AFS supports various procurement processes relevant to the apparel
and footwear industry such as private labels and make-to-order (e.g. custom-
made products).
Sales and Operations Planning (SOP)
Sales and Operations Planning Sales and operations planning (SOP) is a flexible forecasting and planning tool
which determines not only sales and production targets, but targets from other
areas throughout the logistical cycle. Forecasting and planning can be based
on historical data, current data and/or estimated future figures. Furthermore,
capacities and resources imperative for reaching these targets can also be
determined using SOP.
Fig. 22: Sales and Operations Planning
SAP Consumer Products for Apparel & Footwear
SOP functionality builds on information structures, such as a statistic file
containing operational data. This can either be planned future data or actual
historical data, containing characteristics, key figures and a time base.
Information structures are used for evaluation, projection and analysis of data
in all logistical information systems.
SOP is especially useful for long- and mid-term planning. In the apparel and
footwear industry, long and mid-term planning is generally carried out on
product group and style level (style, style/color). The underlying historical
statistical data is saved online in the logistical information system (LIS) with
each logistical transaction (e.g. sales order, purchase order, production order).
Production Demand Management (PP-MP-DEM)
Production Demand Management Production demand management determines requirement quantities and
delivery dates for finished products. Customer requirements are created in order
processing. Demand management uses planned independent requirements and
customer requirements to create a demand program.
The input from SOP can be copied to the planned independent requirements as
default data. It is possible to break this data down to the level of style/color/
size (pre-sizing) in AFS.
Pre-Sizing AFS pre-sizing distributes aggregated planned independent requirements to
detailed planned figures at SKU level using so-called distribution profiles.
Distribution to a more detailed period split, e.g. from annual planned figures to
weekly planned figures, is also possible. Furthermore, seasonal influences can
be taken into account in the distribution profiles, for example, so that an annual
planning value can be distributed to mid-year periods. Planning values would
then be increased for certain seasons (e.g. back-to-school, Christmas, etc.).
Distribution profiles can be calculated from available historical statistical values
stored in the logistical information system.
AFS pre-sizing functions include:
I Manual determination of percentage distribution values per size or period
I Interface to external (forecasting) systems for the calculation of percentage
distribution values
I Calculation of percentage distribution values based on available historical
data from the logistical information system
SAP Consumer Products for Apparel & Footwear
I Calculation of distribution profiles for new products with no historical data
based on the historical data of reference products
I Aggregation and disaggregation of historical data that can be used to
calculate distribution curves (e.g. historical data per product group, per
season, a combination of a number of seasons, or for individually selected
reference products, etc.)
I Simulation option based on user-defined criteria
Material Requirements Planning (MRP)
Bill of Materials (BOM) Bill of material (BOMs) and routings contain important data to ensure integrated
materials management and production control. Pattern making, grading and
pattern engineering form the production structure of a new product waiting to
be produced. The result is a number of sketches, a list of all necessary
components and their size-specific consumption and technical and product
costing conversion, the BOM and routing.
In AFS, the R/3 Standard BOM has been enhanced so that all size-specific
dependencies on material consumption, selection of certain components and
cost accounting are included in one BOM. You can also maintain dependencies
for other product characteristics (e.g. color, shade, quality, customer-specific
extras, etc.) in the BOM.
Fig. 23: AFS Bill of Materials
SAP Consumer Products for Apparel & Footwear
Alterations to the product or different (seasonal) characteristics mean it is
frequently necessary to make regular changes to a large proportion of the
product range. This is easily achieved in AFS using mass change and reference
Routing You can establish the effect of various product characteristics on lead times and
each production operation in the routing for AFS-specific products. Routings
are selected on different characteristics for determination of load times and
production order processing and then taken into account during lead time
scheduling and capacity planning.
Standard and AFS MRP The main task of material requirements planning (MRP) is to ensure material
availability, i.e. to procure the necessary material requirements on schedule for
sales and manufacturing. This includes monitoring stock and in particular
making suggestions for procurement, purchasing and production.
MRP is triggered by primary requirements from sales and demand management
forecasting, i.e. requirements for finished products and trading goods. MRP
determines order quantities and delivery dates and the respective procurement
documents - planned order for internally produced goods, purchase requisition
for outsourced production - created to ensure coverage. Both documents are
planned internally and they can be changed, rescheduled or deleted at any time.
In addition, secondary requirements, i.e. quantity of material components (e.g.
leather, fabric, lining) or assemblies (e.g. shoe sole, bootleg etc.), are determined
for internally produced goods using BOM explosion. Secondary requirements
are necessary for the production of the finished product or assembly. Planned
orders and purchase requisitions are created at each BOM level if there is a
material shortage.
Once MRP has completed quantity planning and scheduling, the planned
documents are converted into fixed procurement documents (planned order to
production order, purchase requisition to purchase order).
In AFS, both R/3 Standard MRP and a special MRP for AFS products are
available. AFS MRP deals with the size- and dimension-specific products and
material components relevant to the apparel and footwear market. MRP
functions have been tailored to meet the requirements of the industry.
SAP Consumer Products for Apparel & Footwear
New lot size procedures and planning parameters are available in AFS to ensure
an optimized calculation of the entire order quantity and each individual size/
dimension in the order. The most common lot size procedures are made available
to you in the system, but you can also integrate your own customized ones.
AFS lot size procedures enable planning results to show only certain size groups
in one order, or that a particular relationship between size quantities are
calculated for each order. It is also possible to distribute order quantities across
the different sizes automatically using pre-defined distribution profiles.
By using AFS planning parameters for SKU level you can define, for example,
minimum order quantities, rounding values and safety stock for each size or size
AFS MRP enables you to plan in one time frame at size level for future periods
and all requirements lying beyond that time frame at style level. This ensures
that planning only occurs at the necessary level of detail.
Fig. 24: Size Level Horizon in AFS MRP
All products labeled as AFS-specific are processed by AFS MRP, i.e. products
with more logistically relevant characteristics (e.g. size, color, shade, quality,
etc.). R/3 Standard MRP processes all other non-AFS products.
Parallel Processing The total planning runtime for AFS materials is improved considerably by using
parallel processing. It can run either on different servers or in different server
modes to further speed up processing.
SAP Consumer Products for Apparel & Footwear
Fig. 25: Parallel Processing
Automatic Planning Run The automatic planning run in MRP determines material shortage and generates
the respective procurement document. The system informs you of critical areas
and exceptions so you can modify planning results accordingly.
Evaluation of Planning Results Planning results can be reviewed and evaluated by a series of different methods
(e.g. stock requirements list, MRP list, planning results per MRP controller,
product group, order report, etc.). Evaluation functions allow the MRP controller
to process planning results from an aggregated level to the most detailed SKU
level, with the help of diverse selection criteria. The system points to critical
areas without delay.
Capacity Planning
Economic resource planning is present in various areas of a company. R/3 ca-
pacity planning supports all phases of planning: long-term estimated planning,
mid-term planning and short-term detailed planning. Capacity planning is
comprised of three components:
Capacity Analysis I Capacity Analysis: Available capacities and capacity requirements are deter-
mined and illustrated in lists and graphics.
Capacity Leveling I Capacity Leveling: Deals with optimum reservation of capacity and selection
of appropriate resources. In R/3, planning boards in graphic and table form
are available to illustrate the capacity situation and process capacity leveling.
Capacity Planning I AFS Capacity Planning: Capacity loading for AFS-specific products is based
on routings that are selected on the above mentioned criteria. The influence
of different product characteristics in the individual production operations
and lead times can be established in the routing for AFS-specific products.
Routings for lead time scheduling and production order processing are se-
lected according to these criteria.
SAP Consumer Products for Apparel & Footwear
Production Order
Production Order R/3 production orders determine which product or assembly is produced, as well
as the work center, activity, delivery date and production costs. The production
order also includes details of the resources (personnel, materials, production
resources and tools etc.) required to calculate lead times, capacity loads and the
order cost. You can use the production order to monitor the order status for
inhouse produced goods.
When a production order is created, the following actions are carried out:
I Routing selection: Routing operations and sequence are transferred to the
production order
I BOM explosion: BOM items are transferred to the production order
I Reservations: Reservations are generated for BOM items kept in stock
I Planned costs are established for the production order
I Capacity requirements are generated for the work centers
I Purchase requisitions are generated for non-stock components and externally
processed operations
AFS Enhancements in Production
The specific characteristics of the production process in the apparel and
footwear industry have been combined with R/3 Standard functionality.
Production in bundles is typical in the apparel industry and production in
boxes is typical in the footwear industry. AFS-specific information contained
in BOMs and routings reappears in the production order.
Production orders in the apparel and footwear industry therefore usually consist
of several logistical subdivisions:
I Total quantity of the product to be produced
I Different sizes (SKUs) with varying quantities
I Grouping together of products in smaller logical production lots, like
bundles in the apparel industry and boxes in the footwear industry
Central transactions such as confirmations, monitoring production status, goods
issue and goods receipt can also be processed in AFS for individual bundles/
boxes, individual sizes, or a combination of the two.
In addition, you can integrate markers into the production order and planned
order. The production order sizes resulting from a marker and the quantities
derived from the ply height form the rates for sizes and quantities of the order.
If necessary, planned quantities in the order are adapted accordingly.
SAP Consumer Products for Apparel & Footwear
Fig. 26: Markers: Quantity Adjustment
Combined Orders In the apparel and footwear industry several production orders are often
combined, especially in production phases such as cutting and pattern
engineering. This might be the case, for example, when the same fabric is used
for different products. By collecting several production orders, cutting and use
of fabric are rationalized. However, settlement, costs and logistics of each
production order remain separate for each finished product.
In AFS, several production orders can be logically grouped in a combined order.
Transactions such as roll selection, confirmations, goods receipt and goods issue
can be processed either for the combined orders together or for each individual
production order separately.
SAP Consumer Products for Apparel & Footwear
Selection of suitable rolls of fabric and leather for a production order based on
criteria such as shade, leather quality etc. plays an important role in production
for the apparel and footwear industry. AFS uses roll selection functionality
where the optimum choice of material input for a production order (e.g. fabric,
leather) is selected. You can freely define criteria on which the system sorts and
selects data to allocate a quantity of input material for a production order or
the whole combined order efficiently.
Fig. 27: Combined Orders