UNIT 6 LESSON 1 : APPLYING MASTER PRODUCTION SCHEDULING

Master Production Scheduling: Fig 146

MPS enables you to plan materials that have great influence on value creation on for a
company, or that use critical resources and therefore need to be planned more carefully.
You plan the master schedule items and non-master schedule items in separate
planning runs. You can specify finished products or assemblies for master schedule
items, provided that you have entered a corresponding MRP type for each plant or
each MRP area in the MRP, 1 view of the material master.
The MPS run plans only the master schedule items. MPS is executed with the same logic
as MRP. Dependent requirements are created for the next low-level code.
The results of MPS are not passed on to dependent parts until the master plan for the
critical parts has been processed and fine-tuned. Master schedule items are not planned
along with the MRP run to ensure that you can plan these materials independently.
MPS & MRP:The total planning run involves the following:
1)MPS plans the master schedule items on the basis of the requirements that exist for the
parts, for example, planned independent requirements. The MPS run generates planned
orders for the master schedule items and the corresponding dependent requirements at
the bill of materials (BOM) level below. Capacity leveling is possible at MPS level.
2) MRP plans the other assemblies and components in the BOM structure.

UNIT 6 LESSON 2 : SETTING UP LONG TERM PLANNING

Long-Term Planning Scenario : Following are the objectives of long-term planning:

1)Simulation of a demand program at all BOM levels
2)Reconciliation of capacities
3)Reconciliation of cost center planning
4)Purchasing forecast
5)Inventory controlling forecast
The following can be evaluated and optimized from the simulation:
1)Material requirements planning (MRP)
2)Capacity planning
3)Order volumes
4)Purchasing budget
5)Cost Center planning
6)Inventory controlling
The data determined in long term planning for the activity requirement is transferred to
Cost Center Accounting as planning data. This allows you to calculate the production costs
for each cost center and to cost the Products. The activity requirements determined in
long-term planning can be transferred to Cost Center Accounting using a separate report
after long term planning has been completed.
Simulative Planning Areas : Figure 148
The principle of long-term planning is to simulate different versions of the demand
program. The simulation can include operative data (for example, master data, sales
orders, purchase orders, and production orders).
In long-term planning, independent planning areas can be created that are integrated into
operative planning. Within these planning areas, separate simulation stock data is
calculated and maintained which can be used to carry out planning in scenarios.
Simulative planning can be executed long-term or short-term. There is no time restriction
on the execution of long-term planning.

Embedding in the functional environment:

Long-term planning can use the following operative master data:
1)Bill of materials (BOM)
2)Routings
3)Material master records
You do not have to create any new operative data.
You can create the following special master data for long-term planning:
1)You can create special long-term planning routings and run simulations with regard to
lead
time scheduling and capacity planning.
2)You can use special long-term planning BOMs.
Planning scenario(1): Fig 150
When you create a planning scenario, you load certain settings for the scenario by
selecting one of the following default settings:
1)Long-term planning
2)Gross long-term planning
3)Short-term simulation

In the planning scenario, the settings you make and the items you define include the
following:
1)The plants for which the simulation is to be executed
2)The planned independent requirements versions (active or inactive) that are to be
simulated
3)The opening stock on which the simulation is based (zero stock, safety stock, plant stock
at the time of planning, and average plant stock)
4)Whether fixed receipts (purchase orders, production orders, and material reservations)
are to be included in the net requirements calculation
5)Whether dependent requirements are generated for consumption-based materials,
KANBAN materials, and bulk material
6)What is the version of the available capacity used in the simulation
Consumption-based materials:
They are not planned inMRP because no dependent requirements are created for them. In
long-term planning, dependent requirements can be created for consumption-based
materials, bulk material, and KANBAN materials, that is, the material is planned in the
scenario as though it were a material planned using MRP.
Planning scenario (2):
In the planning scenario, you also set the following:
1)Whether the system should work with direct production. That is, whether during
planning, it should create a collective order for materials that are to be produced directly.
When using direct production in long-term planning, only the header order can be
changed, not the subordinate orders in the collective order.
2)Whether the long-term planning should be executed as gross requirements planning and
whether the calculation of scrap in the long-term planning run should be deactivated.
3)Whether long-term planning BOMs should be used.
4)Whether firmed planned orders are to be transferred (copied) from operative MRP to
longterm planning (the firmed planned orders can be changed) and whether firmed
purchase requisitions in operative planning are to be taken into account in the simulative
planning area (these cannot be changed).
5)Whether the planning time fence applies in long-term planning for materials that are
affected by a planning time fence in MRP.
6)Whether sales orders are to be included in long-term planning (these cannot be
changed).
7)Whether make-to-order production or individual project planning should be executed for
the materials in the corresponding strategy. Make-to-order planning presupposes that
sales orders with a requirements type for make-to-order planning are taken into account. If
the Make-to-order and project planning indicator is not set, the sales orders with a make
to-order planning requirements type are ignored in the scenario.
Simulative planned Independent Requirements: Fig 153
Several planned independent requirements versions can be created for one material.
Planned independent requirements versions can be created using the following:
1)The sales and operations planning for a material or a product group
2)The results of flexible planning from sales and operations planning
3)Forecasting
4)Planned independent requirements of other materials
5)Planned independent requirements versions of the same materials
6)Manually
A planned independent requirements version can be set as active or inactive. Inactive
versions are created for simulation purposes. Only active planned independent
requirements versions are taken into account in operative planning.

UNIT 6 LESSON 3 : EXECUTING LONG TERM PLANNING

Long term planning run: Fig 154

A planning scenario must be released before long-term material requirements planning
(MRP)can be carried out. Once the planning scenario is released, planning file entries for
all materials of the plants assigned to the planning scenario are created in the background.
Operative data that flows into long-term planning cannot be changed in the simulative
planning area. Firm operative planned orders are the exception: The order headers for firm
planned orders (basic dates and order quantity) are copied to the simulative area, but the
capacity requirements and dependent requirements are not copied.
You can execute long-term planning in any of the following ways:
1)Total planning
2)Single-item planning
3)Single-item planning in simulation mode
4)Using the repetitive manufacturing planning table
After the simulative planning results have been evaluated and adjusted, the required
planned independent requirements version can be activated in the planning scenario and
assigned a new version number, if required. When you activate the planned
independent requirements version, it becomes relevant for operative planning. You
can also transfer firmed, simulative planned orders from long-term planning to
operative planning.

Transferring Firmed Planned Orders : Fig 155

You can copy firmed planned orders from operative MRP to the simulative planning area.
Only the planned order headers are copied during the copying process.
The firmed planned orders are copied per material by the simulative planning run in the
simulative planning area. During this process, all firmed planned orders are selected for
each material of a BOM structure and are adopted (copied to the simulative planning
area).
When copying a firmed planned order from operative planning, all firmed and unfirmed
simulative planned orders in the simulative planning area with order finish dates within the
copying period are deleted.
Planning levels for capacity data:
Capacity data can be found at the following levels:
1)Detailed planning level in operative MRP .
2)Detailed planning level in long-term planning, whereby the data is managed separately
for each scenario .
3)Rough-cut planning level in Sales and Operations Planning
The capacity evaluations in operative MRP and in long term planning are executed
separately.
Capacity check with overload display:
A planning run with scheduling indicator 2(lead time scheduling and capacity planning) is a
prerequisite for the capacity check. A planning run with sch indicator 1 (basic-date sch)
does not reduce capacity req.
Long term planning and operative planning : Fig 158
You can activate a planned independent requirement with in the following ways:
1)Set the active indicator of the planned independent requirements version.
2)Activate it in the scenario
Transferring firmed planned orders(1): Fig 159
Following the simulation, you can transfer firmed simulative planned orders for a simulative
planning area to operative planning (copied to the operative planning area). In the
operative area, you can create purchase requisitions or schedule lines for materials
procured externally.
Transferring firmed planned orders(2):
After the simulation, you can transfer firmed simulative planned orders for a simulative
planning area to operative planning. For materials procured externally, you can create
firmed purchase requisitions or firmed schedule lines for simulative planned orders with
order type NB when transferring the orders to the operative area.
Long term planning- initial data: Fig 161
It is possible to transfer the following items to the simulative planning area.
1)Active or inactive planned independent requirements versions
2)Sales orders
3)Firmed,operative planned orders
4)Firmed purchase requisitions
5)Production orders
6)Purchase orders
Long term planning- results data: Fig:162
It's possible to transfer the following items from the simulative to the operative planning
area:
1) Active planned independent requirements versions
2) Firmed, simulative planned orders (as purchase requisitions or scheduling agreement
schedule lines for externally procured materials.

UNIT 6 LESSON 4 : ANALYZING MULTI-SITE PLANNING

Fig 163: Multi-Site Planning:

A stock transfer between two plants can be executed using different procedures. A transfer
posting uses only the component materials management (MM). In contrast to a storage
location-to-storage-location stock transfer, a plant- to- plant transfer always affects material
requirements planning(MRP). A change in the plant stock is taken into account by MRP.
The following procedures are available for the physical transfer of materials from
one plant to another:
1) One-step procedure
2) Two-step Procedure
The procurement of a material using a stock process is defined in the material Master
using a special procurement type of type stock transfer, which categorizes the relevant
procurement type in more detail.
One-Step Stock Transfer (Transfer Posting) :Fig 164
When companies want a very simple process of transferring stock from one plant to
another, they can make use of the one-step procedure. This procedure is normally used if
the plants are close together. Therefore, the transit time and costs are not very high, and
thus, they do not play a role in planning (for example, a plant and distribution Centre with
two plant codes and the same physical location).
In the case of the one-step procedure, the goods issue and goods receipts are posted in a
single material document. The movement type in the standard system is 301.
Two-Step Stock Transfer (Transfer Posting): Fig 165
In the case of a two-step procedure, when removing the material from storage (movement
type 303), you must specify the receiving plant in addition to the material and the issuing
organizational levels. This is necessary because valuation of the stock transfer takes place
when the material is removed from storage and posted to the stock in transfer at the
receiving plant. You can either enter the put away (movement type 305) with reference to
the material document of the stock removal or enter all the data manually.
Stock Transport order without delivery: Fig 166
The type of stock transfer involves not only inventory management but also
purchasing in the receiving plant. The process begins in the receiving plant with the
entry of a stock transport order in the purchasing department. A goods issue
referencing this stock transport order is then entered in the issuing plant. The
quantity booked out is initially managed as stock in transit at the receiving plant.
The process ends by the posting of the goods receipt against the stock transport
order at the receiving plant.

In comparison to a stock transfer without a stock transport order, a stock transfer

using a stock transport order has the following characteristics:
1)You can convert purchase requisitions, which are generated from material requirements
planning, to stock transport orders, as the stock transport order is integrated into MRP. In
addition, you can plan the receipt at the receiving plant.
2)You can post the goods receipt directly to consumption.
3)You can also post the material to stock in quality inspection or to blocked stock in case of
a goods receipt into the warehouse.
4)You can use the purchase order history to monitor the entire process (goods issue and
goods receipt).
Stock Transport Order Two-Step with Delivery :
In the two-step procedure with stock transport order and shipping Processing, stock in
transit is created when the goods issue is posted. As a result, stock in transit is monitored.
With this action, you can display the stock in transit in the stock overview for the material.
Stock in transit is valuated, but not for unrestricted use. It is stocked at the receiving plant
level.
You create stock transport orders for stock transfer within a company code using
document type UB in the default.
The stock transport order has the following characteristics:
1)The quantity of stock booked out is first stocked in the stock in transit of the
receiving plant.
2)Only when the goods receipt is posted is the quantity is posted to the stock of the
receiving plant. In this way, it is possible to monitor the quantity that is in transit.
3)The stock transfer is evaluated with the valuation price of the material in the
delivering plant.
A pre-requisite for this process is that the receiving plant must be set up as an
(internal) customer so that it can be displayed in Sales and Distribution.

Special Case - Withdrawal from Alternative Plant :

You can withdraw from an alternative plant other than the planning plant for components
both produced in-house and procured externally. In Customizing for MRP, a special
procurement type, which can also be used as a template for some special procurement
types, is defined for both procedures.
Special Case - Production in Another Plant: Fig 169
You can define that a particular product is to be produced in an alternative plant (that is,
the production plant) from the planning plant. The planning of the product is carried out in
the planning plant; however, it is actually produced in the production plant. The product's
bills of material (BOM) is created in the production plant.
A customer-defined special procurement type is also used for production in another plant.
Depending on the production plant, a separate special procurement type is maintained in
Customizing for MRP. The special procurement type is assigned to a specific material.
The production flow in the other plant is as follows:
1) You first plan material requirements in the planning plant. During the planning run, the
system creates a planned order for the assembly in the planning plant, if this is necessary.
During scheduling of planned orders in the planning plant, note the following:
-The system determines the basic dates using the in-house production times and the
scheduling margin key entered for the planning plant in the material master record.
-If MRP is executed with lead-time scheduling using the routing, the routing and the
scheduling margin key in the production plant form the basis for determining the
production date.
-When you define that you want the basic dates during lead-time scheduling to be
adjusted to the production dates (Customizing activity Define Scheduling Parameters
for Planned Orders), the system determines the basic dates by adding the production end
date and the float after production.
-The system uses the production start date minus float before production as the order start
date.
- The system determines the float before production and the float after production from
the scheduling margin key in the material master record for the production plant.
2)You plan material requirements in the production plant. The system explodes the BOM
for the assembly in the production plant and determines the dependent requirements.
3) You convert the planned order in the planning plant into a production order.
4) The dependent requirements in the production plant are converted into a dependent
reservation and production of the components in the production plant is initiated. When
creating the goods receipt for the production order, the stock in the planning plant is
increased.

UNIT 6 LESSON 5 : MRP AREAS SETUP

MRP Areas Setup: Fig 170:

Without MRP areas, MRP takes place at plant level.
Planning with MRP areas:
With the introduction of MRP areas, a larger degree of differentiation is possible in MRP.
Planning takes place separately for each MRP area it is possible to plan the requirements
separately for different production lines.
In storage location MRP areas, one or more storage locations are grouped together in one
organizational unit. This unit is planned separately from the remaining plant and MRP
areas. A storage location can be assigned to one MRP area only.
An MRP area is also defined for a subcontractor (supplier), and the corresponding
subcontracting components are assigned to this MRP area.
In each MRP area, separate evaluation of the planning results takes place with individual
MRP list or stock/requirements lists.
Plant organizations with MRP areas:
MRP areas are of the following types:
1)Plant MRP areas (mandatory)
2)Storage location MRP areas
3)Subcontractor MRP areas
Conversion of planning file entries:
The existing planning file entries at plant level are converted into planning file entries at
MRP area level. The conversion uses a report that is triggered in Customizing for MRP, in
the activity Convert Planning File Entries for MRP Areas. The system creates the plant
MRP area automatically for every plant, with the result that for every plant there is exactly
one plant MRP area with the same number as the plant.
Setting Up and Executing Planning with MRP Areas : Figure 174
To introduce material requirements planning with MRP areas, the existing planning file
entries at plant level must first be converted to planning file entries at MRP area level
(Customizing activity Convert Planning File Entries for MRP Areas). MRP for MRP areas
can then be activated( customizing activity activate MRP for MRP Areas) and you can
create MRP areas(customizing activity define MRP areas).
MRP area segment in the material master:
A material can be assigned to any number of MRP areas, as long as you create a segment
in each MRP area.
Strategies of Make-to-Stock Production in MRP areas:
In storage location MRP areas, the materials can only be planned with the make-to-
stock production planning strategies (strategies 10,11,30, 40, 70).
Make to-order planning strategies can be used only in the plant MRP area.

UNIT 6 LESSON 6 : APPLYING MRP AREAS

Planned independent requirements are created for each MRP area Sales orders are
assigned to an MRP area according to their storage location (the issue storage location in
the Shipping screen of the item details).
Dependent requirements are automatically assigned to an MRP area in the planning run,
depending on their production or issue storage location.
The requirement elements (such as planned independent requirements and sales order)
are covered following the assignment to an MRP area within this MRP area. If a production
storage location (or an external procurement storage location) is determined for a
corresponding procurement element (that is the relevant planned order) that does not
belong to this MRP area, then the receiving storage location of the MRP area is used
instead.
Special Procurement Types in the MRP Area : fig 178
Materials that are planned in an MRP area can be procured using the special procurement
type Stock Transfer From Plant To MRP Area.
You have to create a special procurement key in customizing for MRP which contains
procurement type U (stock transfer), and your own plant as the stock transfer plant.
The stock transfer process takes place in storage location MRP. A stock transfer
reservation is created at MRP area level, and a reservation with reference to this stock
transfer reservation is created at plant level.
ATP check with MRP areas:
As soon as MRP with MRP areas has been activated, the Available-to-Promise (ATP)
check is also activated at MRP area level. The availability check is then carried out for the
individual MRP areas.
Sales orders for make-to-order production are always planned in the plant MRP area. For
the customer requirements types in make-to-stock production, the assignment to a MRP
area is made using the storage location.
As in the previous ATP check at plant level, the ATP check can be carried out with or
without the storage location check in Customizing, depending on how the availability
check is controlled.
Scope of planning with MRP areas: Fig 180:
The total planning run can be triggered for each plant, for example, as a background job
with a variant for each plant to be planned. In planning with MRP areas, it is also possible
to plan only individual MRP areas.
You can group together several MRP areas or plants in a scope of planning for a
planning sequence and plan on a cross-plant basis in a total planning run. The
system automatically takes mutual dependencies, such as those arising through
stock transfer, into account.
You define the scope of planning for total planning in the Customizing activity Define
Scope of Planning for Total Planning for MRP. You can also specify only an individual
MRP area in the scope of planning.

Notes: MPS:
• This is planning procedure thro which we can plan some high value critical items
separately.
• Pre-req to use MPS: MRP type M0, M1, M2, M3, M4
• MPS is top level planning. We cannot execute MPS & MRP together. First MPS, then
MRP.
• MPS run will explode BOM to only one level & it will give procurement proposal for only
MPS item. For next item it will generate only dep req.
• We can declare any items as MPS items (FERT, HALB or ROH) if it is of high value &
critical.
Long Term Planning: Simulative planning in a simulative area
• Operative data (master data & transaction data) can be used for simulation.
• LTP can be done for long term & short term both.
• LTP includes all items (MRP, MPS, CBP)
• We cannot convert planned order to prodn order/process order or purchase requisition to
purchase order. For conversion we need to transfer simulative data from simulative area to
operative area for actual MRP via demand mgmt.
• Pre-Req to use LTP concept: A planning scenario must be created, released & saved.
• We can use SOP Data in LTP.
• Objectives of LTP: To optimize inventory, controlling, mtrl planning, purchasing,capacity
planning.
Multi-site Planning:
•Stock Transfer Procedure
! One step procedure (MIGO/MBIB/Mov Type 301)
! Two step procedure (MIGO/MBIB/Mov Type 303 & 305(put away movement))
! With stock transport order (STO)
! ! With delivery
! ! Without delivery
• Withdrawal from alt plant
•Planning plant & prodn plant (separate) thro spl proc key 80 or 90