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Manual: SCM 240: Production Planning

Note: Numbers mentioned on left side are page numbers of book (upper left corner)

 “Qs” Qs means it can be a Exam Question

Legend (for the abbreviations used in this document):

Qs: Question
Q: Question
RTG: Routing
WCT: Work Center
SCM: Supply Chain Management
BOM: Bill of Materials
CCT: Cost Center
PG: Page number of the book (top left corner)
Manf: Manufacturing
ORG: Organizational
STR: Structure / Structural
S.LOC: Storage Location
Mat: Material
ECM: Engineering Change Management
LESS: Lesson
Pts: Points
UOM: Unit of Measure
PP: Production Planning
Imp: Important
Plng: Planning
CRP: Capacity Requirements Planning
Cap: Capacity

Unit: 1: Overview of PP in ERP

Block level goal of PP:

 To ensure high CUSTOMER SATISFACTION while minimizing the COST

Page No.15 - Production Planning Process diagram (Manf. Cycle)

Demand mgt.: a Link between Top Level Requirements Planning (sop) and materials plng (mps and mrp)

Pg. 19: RESULT of Demand program: PIRs

19: Dem. Mgt in pp

21: Simulation Planning can be achieved through LTP

Pg. 22: Planning Procedures

o MRP/MPS take into account Current inventory and any frozen production as starting
 Consumption Based Planning (based on Past Usage values, mainly for B & C parts)
o Re-Order Point Plng
o Forecast Based Plng
o Time Based Planning

24: CRP (Capacity Requirements Planning): 2 Steps

 Cap. Evaluation
o (Looking for results of MRP/MPS and to see which WCs are overburdened.
 Cap. Levelling
o Performing an Optimization Run and to group similar production together.

26: Repetitive Manf: Less complicated products made several times a week/month.

26: Project System is often used in Engineer-to-Order Industries.

41: UNIT: 2: Evaluating the Planning Results

43: Lesson: using MR and stock req. List

44: MRP & Stock Req. List
 MRP >> Static list >> provides info of the Last Planning Result
o Can be create at Mat./Plant/MRP area level
o MRP Elements
 Purchase Requisition

 Stock Req. List >> Provides updated info.

44: Planning will generate the Following Items:

 Planned orders
 Purchase requisitions
 Schedule Lines
 Stock Transfer Requests
 Material Transfers
 Dependent Requirements
 Exception messages

85: Exception Messages: are those messages, which alert you to perform further operations.

91: Exception messages can be customized

 Per client specific
107: Unit: 3: MRP BASICS

P-107... MRP Basics

110: Definition: Actual purpose of MRP

 To create mat. Replenishments to offset current and future demands.

110. 2 Basic kinds of demand:

 Independent (not dep. On BOM explosion)
Customer Requirements.
o Forecast (PIRs)
 Sales order history
 Statistical methods

 Dependent

112- MRP steps – Read 5 steps+Fig.

1. Net Requirements Calculation (Do we need any?) : This is a time phased comparison of
supplies vs. demand. Determines if there is a shortage and when.
2. Lot Size Calculation (How many do we get?): Determination of how many
should be procured. For example: minimum lot size or rounding value.
3. Procurement Type (Where do we get them?): Determine the source. Manufactured or
4. Scheduling (When do we need to start?): Schedule based on the items lead time.
This provides a start date and finish date.

Note: If the material is to be purchased, the order is created. Step 5 is not performed.
5. Bill of Material explosion (What components will be required?) The BOM will be exploded
to determine what materials are required to complete the manufacturing A planned order is
created and dependent requirements are passed to the component materials. Step 1 then begins all over
again with the components.
113: Good explanation of MRP process

Procurement Proposals


If the system determines shortage of material quantities during MRP, the system
generates procurement proposals. Purchase requisitions and planned orders are
internal planning elements that you can change, reschedule, or delete at any time.

In the case of in-house production, the system creates planned orders to plan the
production quantities. When planning is complete, planned orders can be converted
into production or process orders.

In the case of external procurement, the system either creates a planned order or a
purchase requisition to plan the external procurement quantity. When planning is
complete, the planned order is converted into a purchase requisition, which is
subsequently converted to a purchase order.

In the case of in-house production, the system creates planned orders to plan the
production quantities. In multi-level production, that is, when a finished product is
made up of assemblies or components, the corresponding assembly group
requirements are mapped using dependent requirements.

During a planning run, dependent requirements created for the assembly act as
requirements. This ensures timely staging of the assemblies.

When planning is complete, planned orders can be converted into production

When this is done, the system transforms the dependent requirements of the
planned order into production order reservations.


117 – MRP procedures in sap

 Consumption based (basic type of plng)
o HISTORICAL consumption values
o 3 types are:
 Re-order point
 Automatic
 Manual
 Forecast based
 Time based

119: MPS (Master Production Scheduling)

Master production Scheduling is a different organizational process rather than
different functional goal. The goal of MPS is to generate material supplies (planned
orders, purchase requisitions, schedule lines) to offset current or future material
shortages. Therefore it is functionally equivalent to MRP.

The concept of MPS is to enables you to plan materials that greatly influence a
company’s profits and critical resources and therefore need to be planned more
carefully. It is typical for theses materials that the master production schedule is
initially defined on the level of this critical or important material before the
dependent assemblies and purchased parts are planned and procured. This means
that changes made to these critical parts are not copied to the dependent parts,
thus avoiding any disruption arising during production and procurement of
purchased parts.

You plan the master schedule items (MPS items) and the non-master schedule
items in separate planning runs. You are able to specify finished products or
assemblies for master schedule items in the "MRP 1" view of the material master.
The master production scheduling run only plans the master schedule items. Master
production scheduling is executed with the same logic as material requirements
planning but without planning materials that are not labelled as MPS items.
Dependent requirements are created for the next low-level code, but planning is not
executed for these items unless they are MPS items. The results of master
production scheduling are not passed on to dependent parts until the master plan
for the critical parts has been processed and finely-tuned. Master schedule items
are not planned along with the MRP run to ensure that you can plan these materials
 Items marked as Master Scheduled. Items in MRP 1 view of Mat. Man.

121: Planning Time Fence

 To protect the production shed. For Mat. From being changed automatically.
 You can define the firming period by planning time fence.

127: Roll Forward in SAP ERP

 We used Roll fwd period to delete the firm but out of date planned orders to CLEAR or
UPDATE production scheduled. Or planning.
 128 - Defined in MRP group
 128 – RD Last parameter

132: Pre-Requisites of MRP

 Planning file setup

 Activate MRP
 Maintain MRP data
 Valid MRP type
 Valid MRP Status

192: Customized Settings for MRP at 3 levels

 Material (if settings possible on all 3 levels then it has highest priority)
 MRP group (higher then plant)
o MRP Group is the set of parameters applicable for Group of Materials

 Plant parameters

138: MRP Controllers:

 For Certain Plant, individuals responsible for planning

 Defined in MRP 1 view
 Controller Codes are based on Logical grouping of PARTS, NOT on person NAMES...
o Advantage: one person can act for multiple MRP controllers.


 LLC Maintained at Client level in MRP1 View

149: Scope of Planning

 Plant
 Several plants
 MRP Area
 Multiple MRP areas
 In MPS and in LTP

150, 151: MRP Areas

 Plant (assign plant)

 Storage Locations (assign multiple S.Locs)
o S.loc 1 or s.loc 2 view in Mat. Man must exist
 For Consistent planning
 Sub-Contractor (assign 1 Sub-Contractor only)

Without MRP areas, Req. Planning takes place at PLANT level.

152: line 1: convert planning file entries at PLANT level to the entries at MRP AREA level.

168: Scope of the Planning Run

o Regenerative Planning
o Planning of ALL MRP relevant Mats. Of PLANT
o It`s normally run 1st time.
o Loads on the system
o Less consistency
o Net change for Total Horizon
o Only those Mats. Which under gone MRP relevant changes
o Net Change for Planning Horizon
o Mats. With MRP relevant changes in Planning horizon

169: Planning File Entries


194: Dem. Mgt.

Demand management is the link between planned requirements, sales customer requirements and
materials planning (MPS and/or MRP).


 To which MRP and MPS respond
 Translate Requirements from no. Of Resources and make it understandable for MRP n

194: Fig.

195: 2 types of Demand Program.

 PIRs
o Can be assigned to Version
 CIRs

Read all Strategies carefully and with thorough understanding

202,3: MTS vs MTO (Make to Stock vs Make to Order)

o MTS Production
o Planning with final assembly

 Read. 205 MTO

o Linked with Sales order line items
o MRP planned orders are created directly w.r.t Sales orders
o Production / process orders are created w.r.t Sales orders
o ...
o ...


 Uses PIRs
 ST. 10: (Net Reqs. Calc.)
o Used where DD and Sales fluctuate but prod. Kept on same capacity
o Fluctuations are balanced using WAREHOUSE stock
o 211: AC carried out using ATP logic

 ST. 11: (Gross Reqs. Calc.)

o Only receipt elements are taken into account (not W.H stk)

 RD..214: ST: 40 Planning with Final Assembly

o Fast reaction to customers
o Sale ord. Consume PIRs
o Production Triggered by PIRs b4 Sales ord. Comes

 219: ST. 70: Planning at Assembly Level

o Sads
 223: ST. 59: Phantom assembly planning

236: MTO Planning Strategies

(20, 50, 60, 74, Assemble to order (81, 82, 83..)

 ATO: Assemble to Order

St. 50/52 : Planning without Final Assembly 239

 Goods produced based on Sales Orders

St. 60: Planning with a Planning Material

 When certain finished products have the same assemblies

St. 74: Planning without Final assembly at the Sub Assembly

 Production of the Assembly is not triggered till the receipt of planned order or
production order

274: IMP: ATO

St. 81, 82, 83

Assembly processing

 Form of sales order processing

 Components of finished product have already been manufactured

St. 82: Creation of sales order triggers the Creation of Production Orders

St. 81: creation of sales order triggers the creation of Planned orders

St. 83: creation of sales order triggers the creation of

Strategy Group: used to combine several planning strategies

 Assigned to mat. In Mat. Master Record (MRP view) or through the MRP group


Page 286: Definition of MPS.

 Only plans MPS items

 Same as MRP
 Dep. Requirements create for next LLC
 2 Steps process
o Capacity planning through LEAD TIME SCHEDULING
 290: Firming Period

307: UNIT: 6: Influencing the Planning Run

Less: Net Requirements Calculation

310: Read...Low Level Codes

319: Buffers in the Planning (Time and Quantity)

 Safety Stock
 Safety Stock Partially available
 Dynamic Safety Stock
 Safety Time Read

Pg. 368

Important reading on 369

Pg. 373

Unit: 7: Technical Processes of the Planning Run

Less: Basic Dates Scheduling in the Planning Run

 Using mat. man

Less: Lead Time Scheduling in the Planning Run

 Using routing /master recipe, task list


Master Data Selection

 BOM Selection Methods for MRP

o By BOM usage
o Alternate BOM
 Route Selection
Unit: 8: Multiple Sources of Supply in Planning


Either to procure or to produce.

504: In Mat. Man, we decide the type of Replenishment Item to be created

 Buy
 Make
 Both
 Blank

Read from Book...

523: LESS: Quota Arrangements

If the Qta arrangement exists for a mat. It has HIGHEST priority.


 Before allocating Qta, Src of Supply must Exist.

 Business applications for which Qta to be used:
o Materials planning
o Purchase requisition

529: Quota Rating Calc. Formula

During src. Det, the src, with lower Quota Rating will be assigned.

LESS: 541,2,3: Src. Det. In Procurement

Src. List


LESS: 572: Simple and Parallel Discontinuation

 Due to New Safety Regulations

 Cost Intensive part

When AC for Disc. Mat. Reaches to 0, then dependent reqs. For that mat. Are shifted to Follow up mat.

573: Caution ****** SAFETY STOCK OF DISC. MAT is NOT touched by MRP

 WHEN COMP. IS OBSOLETE, the Safety Stock is Removed

 If stock of Discontinued Mat is more than Zero again, this MAT is used again....
 Item categories allowed
o Stock
o Variable size
 NOT supported for Co-Products
 Same base UOM


598: GR posting in W.H in 3 stock types

 Unrestricted Used Stock

o Withdrawal possible here only
 Quality Inspection & Blocked
o No withdrawal
o Just for one Sample, posting of Inventory or Scrap a Quantity
 For all Goods Movements, there is
o A MAT. Doc. generation
o If Valuation change occurs then
 Accounting doc. generation

Cross Plant Stock in Planning

 One Step
 Two Step
o Stock in Transit
 Stock Transport Order without Delivery
o Entry of Stock Transport Order at receiving plant
o Purchasing at Receiving plant
o The Quantity booked managed initially as Stock in Transit

Quality Inspection in Production Planning

608: Damaged goods on GR

 Creation of Inspection Lot

Inspection in the Manufacturing

o Inspection Ops in Routing / Master Recipe

o ATP Check is used for Inspection Planning
627: UNIT: 11 Components Availability (ATP)

Less: ATP in the Planned Order

 ATP (works both for Internal and External Customers)

o Collective
 For multiple planned orders
o Interactive

630: ATP Application is used in:

 Sales
 Planned Order
 Production / Process Order
 Inventory Management

652: Less: Configuration of ATP

 Checking (ATP) Group (in MRP3)

o Group MATERIAL. According to checking properties
 Checking Rule (Customization)
o Key for Specific business process
 Check Control
o Application specific, which scope of check is to be used.
 E.g. MM, PP, PM, SD etc etc
 Scope of Check
o Connection between GP and Rule

669: UNIT: 12: Simulating the Production Plan

 LTP (Long Term Planning)
o Simulation of different versions of Demand Programs
o LTP executed on the basis of Operative Master Data:

Less: LTP Requirements

 Calculate:
o Capacity Requirements
o Activity types requirements. For Cost Centers
 For Calculating the PRODUCTION COSTS
o Req. Of Purchased Parts

Evaluation of Simulation according to:

 Capacity planning
 Order Volumes
 Purchasing Budget
 Cost Center Planning
 Inventory Controlling