Professional Documents
Culture Documents
SAP Production Planning Script PDF
SAP Production Planning Script PDF
Through the Production Planning module managers can plan and forecast the
utilization and availability of resources for the production process. The aim of this
module is to increase throughput and to reduce product stock. This enables
organizations to increase efficiency and productivity and at the same time minimize
production time and costs.
Sales Starting
Forecasting Inventory
Demand Management
Detailed MRP
Scheduling
Production Purchasing
Page 1 of 37
(c) 2009 SAP AG
The production process flows through the steps shown above. In the following
section, each step will be explained in greater detail.
Sales Forecasting
Sales Forecasting is the process of developing a prediction of the future demand for
a company’s products. There are a range of different forecasting techniques that
can be used to predict customer demand. With its built in integration tools, SAP’s
R/3 system allows historical data to be used in forecasting.
Demand Management
This is the process of breaking down the production plan into finer time units, such
as weekly or even daily production figures, to meet demand for individual products.
The output of the Demand Management process is the master production schedule
(MPS), which is the production plan for all finished goods.
Detailed Scheduling
This uses Demand Management’s productions plans as an input for a production
schedule. A detailed plan must be created stating what needs to be developed,
considering machine capacity and available labor. In detailed scheduling, longer
production runs means fewer machine setups are required, reducing the production
costs and increasing the effective capacity of the equipment. On the other hand,
shorter production runs can be used to lower the inventory levels for finished
products. Thus, the production run length requires a balance between setup costs
and holding costs to minimize total costs to the company. Methods of detailed
scheduling depend on the manufacturing environment.
Production
Production uses the detailed schedule to manage daily operations, answering the
questions, “What should we be producing?” and “What staffing do I need?”
Material Master
Material is defined as any product that takes part in business activity that could be
traded, consumed, or produced. The data related to a particular material is stored
as a “material master” associated with a particular level of organizational structure.
Basically, a material master is a database that contains all critical information about
materials. It contains information about all of the materials that a company
produces, stores, and sells. Material masters are created for every assembly,
component, tool, or spare part. The information that is stored could be descriptive
(a name, a size, or a dimension) or control function forms. There are several views
in a material master that contain different types of information. This may include a
basic data view, a Materials Requirement Planning (MRP) view, a sales view, a
warehouse management view, a costing view and an accounting view.
Work Center
Work centers are organizational units that perform operation functions within a
plant. A work center might include a production line, quality checkpoint, packaging
line, and a warehouse. All manufacturing processes are routed through work
centers. Each work center is connected to a cost center as defined in the Work
Center Master Records. These allow costing, scheduling, and capacity planning to
be done for each functional production area individually. The amount of work that
can take place at a work center is represented as its capacity. When capacity is
used, the operations are evaluated by charge rates. Generally, a work center is a
Page 3 of 37
(c) 2009 SAP AG
combination of machinery, equipment, vehicles, employees, production lines, and
assembly lines.
Product Structure
Product structure is a graphical view that displays information about the product
data. The information in product structure is helpful for engineering and design as
well as for production. The graphical view enables the user to have a quick
overview of product-defined data. The user can navigate within a product structure
and access all data that is relevant for a particular product.
Routing
A routing defines the sequence of steps and the resources required to complete the
production of a planned order for materials. A routing can have one or more
alternative sequences and parallel sequences. An alternative sequence gives
options to choose other operations in place of operations in the standard sequence.
A parallel sequence allows different operations to be performed at the same time.
Routings list work centers, activity descriptions, and additional information
necessary to perform production. They may have one or several steps. A routing
includes standard time value for activities, work center where operation is carried,
materials assigned to the operations, production resources required for the
operations, etc.
MRP controllers can interact with MRP to verify that the correct amount of
production will take place. They can create and maintain planned orders, re-run
MRP for individual materials when necessary, and consult MRP reports to check for
errors. The system calculates the order quantity according to a lot-sizing procedure
that is specified in the MRP view at the material master. The system allows us to
define various MRP and lot sizing procedures for material masters.
MRP can be carried out for an individual material or for all of the materials in a
plant. In the total planning procedure, one can plan all the materials in a particular
plant starting with the basic database of planned independent requirements, the
BOM, and the material master, or can plan the materials that have undergone
change relevant to the requirement planning since the last planning run.
Page 4 of 37
(c) 2009 SAP AG
Production Order
Production order is a data object that specifies the material to be produced by
internal processes. It also defines what activities have been carried out, when the
material is available for delivery, and the production costs. Production order
processes begin with a planned order or other internal request that has been
generated by a planning process such as MRP. Another source can be an assembly
order where the task is to put components together.
The planned dates and costs associated with the production order allow it to be
used to monitor the progress of production activities and to calculate the costs of
various activities involved. Although we can schedule using either the start date or
the finish date, production orders are generally scheduled backwards from the
finish date. The production order also shows where the outputs of various
production facilities will be available for dispatch.
Goods Issue
The goods necessary for a production planning order have to be physically issued
from stock and accounted for by posting a goods issue document. When these
goods arrive and are counted as stock, they are acknowledged and accounted by
posting goods receipts. Each goods movement is assigned to a movement type in
the system. Movement types will enable the system to find predefined posting
rules to determine how stock and consumption accounts are to be posted. If
movement for the reservation is not allowed then goods issue is not allowed.
Order Confirmation
Order confirmations are used to enter activities carried out within a company for a
production order. The purpose of the confirmation is to record a phase in the
progress of a production order. With order confirmation, the progress carried out
for a production order can be monitored.
Purchase Requisition
In cases where a planned order is not assigned for in-house production or to an
external party, a purchase requisition can be generated. A purchase requisition is
an internal document that requires the purchasing department to procure a
material. It is the primary instrument for identifying materials that must be
procured externally, it is an internal document that is not used outside of the
company, and it authorizes the purchasing department to purchase materials in
specified quantities and at specified time.
Purchase Order
Purchase orders contain information on the purchase terms and conditions and are
designed to give legal protection. The Purchase Order identifies information such
as order quantity, material or service specifications, quality requirements, price,
delivery date, order date, method of shipment, and terms of payment. In addition,
Page 5 of 37
(c) 2009 SAP AG
the purchase order determines whether the ordered material is placed in stock or
consumed directly upon the receipt of goods.
Gantt Chart
A Gantt Chart is a type of bar chart that illustrates a project schedule. Gantt charts
illustrate the start and finish dates of the terminal elements and summary elements
of a project. Terminal elements and summary elements comprise the work
breakdown structure of the project. By using a Gantt Chart, the user can view the
work schedule for each component of a production plan broken down into a desired
unit of time such as hour, half hour, quarter hour, etc.
Cost centers are organizational units within a controlling area that represent a
defined location of cost incurrence. You can make organizational divisions on the
basis of functionality, settlement-related, activity-related, spatial, and/or
responsibility-related business requirements.
You plan standard activity costs in the corresponding cost centers using activity
types. When an activity type is allocated to a cost center, it is given a value, for
example, in dollars per hour. The work center specifies production activity
availability for operations at the work center. One work center can perform up to
six different production activities within different charge rates. Examples of activity
types are labor, machine, materials, setup costs, quality costs, and resource
consumption.
In the following example, 150 units of a motorcycle were produced. Of the finished
units, 30 have been sold thus far. This is seen in the figures below.
Page 6 of 37
(c) 2009 SAP AG
Work In
Progress
Debit Credit
Beginning 150
Work is
completed 150
Ending 0
Finished Goods
Inventory
Debit Credit
Beginning 0
Work is
completed 150
Units are Sold 30
Ending 120
Units Sold
Debit Credit
Beginning 0
Work is
completed
Units are Sold 30
Ending 30
When the units are completed, work in progress must be credited for the 150 units,
and the finished goods inventory must be debited the same. When the 30 units are
sold, the Units Sold must be debited for the units and the finished goods inventory
must be credited.
When looking at a financial point of view, there are actual costs of $233,211.00,
$336.11, and $156.52. The standard cost of creating the motorcycles is $210,000.
This can be found by taking the price of $1400 per motorcycle and multiplying it by
the 150 units. When the 30 units are sold, they have a cost of $42,000, and there is
$168,000 remaining in the finished goods inventory. This can be seen in the figures
below.
Page 7 of 37
(c) 2009 SAP AG
Work In Process
Actual Standard
Cost $233,211.00 210,000
336.16
156.52
Total Cost 233,703.68 210,000
Production
Variance $23,703.68
Finished Goods
Inventory
Debit Credit
Beginning $0
Work is
completed 210,000
Units are Sold 42,000
Ending $168,000
Units Sold
Debit Credit $210,000.00 cost = $1400.00 Standard cost
Beginning $0 150 Units
Work is
completed $233,703.68 cost = $1558.03 Actual cost
150 Units
Units are Sold 42,000
Ending $42,000
Because of the difference between the standard cost and the actual cost, there is a
Production variance of $23,703.68. When broken down by units, this variance is
$158.02. Was the production of these motorcycles efficient?
Sections:
Within SAP You Will Do The Following
1. Create a Sales Operating Plan
2. Create A Planned Order
3. Evaluate Stock Requirements
4. Create A Production Order
5. Release Orders for Production
6. Confirm Production Order
7. Display and Evaluate Production Reports
Page 8 of 37
(c) 2009 SAP AG
1.1 Production System
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SOP, PLANNING, FOR MATERIAL,
CHANGE (T-Code = MC88) by double clicking it.
Page 9 of 37
(c) 2009 SAP AG
Step Action
1. Enter LAST NAME–0XX in the Material box.
3.
Click on .
Step Action
1. Enter 40 in the box in the M Current Month column and Sales row.
2. Enter 50 in the box in the M Second Month column and Sales row.
3. Enter 60 in the box in the M Third Month column and Sales row.
4. Enter 70 in the box in the M Fourth Month column and Sales row.
5. Enter 10 in the box in the M Current Month column and the Target stock level row.
6. Enter 15 in the box in the M Second Month column and the Target stock level row.
7. Enter 20 in the box in the M Third Month column and the Target stock level row.
8. Enter 20 in the box in the M Fourth Month column and the Target stock level row.
Page 10 of 37
(c) 2009 SAP AG
1.1.4 Change Rough-Cut Plan
Step Action
1. Click on .
Step Action
1.
Click on the menu item to execute it.
2.
Click on the menu item to execute it.
3.
Click on Save .
4.
Click on Exit .
Page 11 of 37
(c) 2009 SAP AG
1.1.6 SAP Easy Access
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SOP, DISAGGREGATION,
TRANSFER MATERIAL TO DEMAND MANAGEMENT (T-Code = MC74) by double
clicking it.
Page 12 of 37
(c) 2009 SAP AG
Step Action
1. Enter LAST NAME-0XX in the Material box.
2. Enter 3000 in the Plant box.
4. Click on .
5. Invisible transfer is deselected.
6. Active is selected.
7.
Click on .
8.
Click on Exit .
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, MRP, PLANNING, SINGLE ITEM –
MULTI-LEVEL (T-Code = MD02) by double clicking it.
Page 13 of 37
(c) 2009 SAP AG
1.1.9 Single-Item, Multi-Level
Step Action
1. Enter NETCH in the Processing key box.
Page 14 of 37
(c) 2009 SAP AG
1.1.10 Single-Item, Multi-Level
Step Action
1.
Click on Exit .
Page 15 of 37
(c) 2009 SAP AG
1.1.11 SAP Easy Access
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, MRP, EVALUATIONS,
STOCK/REQUIREMENTS LIST (T-Code = MD04) by double clicking it.
Step Action
1. Enter LAST NAME-0XX in the Material box.
2. Enter 3000 in the Plant box.
3.
Click on Continue .
Page 16 of 37
(c) 2009 SAP AG
1.1.13 Stock/Requirements List
Step Action
1. Click on the Most Recent Production Order in the MRP element box.
Step Action
1.
Click on .
2.
Click on Save .
3.
Click on Exit .
Page 17 of 37
(c) 2009 SAP AG
1.1.15 SAP Easy Access
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SHOP FLOOR CONTROL, ORDER,
CHANGE (T-Code = CO02) by double clicking it.
Step Action
1.
Click on Enter .
Page 18 of 37
(c) 2009 SAP AG
1.1.17 Production order Change: Header
Step Action
1. Click on .
Step Action
1.
Click on the menu item to execute it.
2.
Click on Save . Please write down your Order Number.______________________.
Page 19 of 37
(c) 2009 SAP AG
1.1.19 Production Order Change: Initial Screen
Step Action
1.
Click on Exit .
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SHOP FLOOR CONTROL,
CONFIRMATION, ENTER, FOR ORDER (T-Code = CO15) by double clicking it.
Page 20 of 37
(c) 2009 SAP AG
1.1.21 Create Production Order Confirmation: Initial Screen
Step Action
1. Enter YOUR PRODUCTION ORDER # in the Order box. (Note: You should have
written this number down in the previous step. If not, you can search for it.)
2.
Click on Enter .
Step Action
1. Select .
2.
Click on Save .
3.
Click on Exit .
Page 21 of 37
(c) 2009 SAP AG
1.1.23 SAP Easy Access
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SHOP FLOOR CONTROL, GOODS
MOVEMENTS, GOODS RECEIPT (T-Code = MB31) by double clicking it.
Page 22 of 37
(c) 2009 SAP AG
Step Action
1. Enter 101 in the Movement Type box.
2. Enter YOUR PRODUCTION ORDER # in the Order box. (Note: You should have
written this number down in the previous step. If not, you can search for it.)
3. Enter 3000 in the Plant box.
4. Enter 0001 in the Stor. Location box.
5.
Click on Enter .
Step Action
1.
Click on Post .
2.
Click on Exit .
Page 23 of 37
(c) 2009 SAP AG
1.1.26 SAP Easy Access
Step Action
1. Start the transaction LOGISTICS, PRODUCTION, SHOP FLOOR CONTROL, ORDER,
DISPLAY (T-Code = CO03) by double clicking it.
Step Action
1. Enter YOUR PRODUCTION ORDER # in the Order box. (Note: You should have
written this number down in the previous step. If not, you can search for it.)
2.
Click on Enter .
Page 24 of 37
(c) 2009 SAP AG
1.1.28 Production order Display: Header
Step Action
1. Click on .
2.
Click on the menu item to execute it.
3.
Click on the menu item to execute it.
Step Action
1.
Click on Close .
Page 25 of 37
(c) 2009 SAP AG
1.1.30 Production order Display: Header
Step Action
1. Click on .
2.
Click on the menu item to execute it.
3.
Click on the menu item to execute it.
Step Action
1.
Click on the menu item to execute it.
2.
Click on the menu item to execute it.
3.
Click on Close .
Page 26 of 37
(c) 2009 SAP AG
1.1.32 Production order Display: Header
Step Action
1. Click on .
2.
Click on the menu item to execute it.
3.
Click on the menu item to execute it.
Step Action
1. Double click on .
Page 27 of 37
(c) 2009 SAP AG
1.1.34 Display Actual Cost Line Items for Orders
Step Action
1. Double click on .
Step Action
1.
Click on the tab to select it.
2.
Click on .
Page 28 of 37
(c) 2009 SAP AG
1.1.36 Display Material Document
Step Action
1. Double click on .
Step Action
1.
Click on Back .
Page 29 of 37
(c) 2009 SAP AG
Step Action
1.
Click on Back .
Step Action
1.
Click on Cancel .
2.
Click on Back .
Step Action
1.
Click on Back .
Page 30 of 37
(c) 2009 SAP AG
1.1.41 Display Actual Cost Line Items for Orders
Step Action
1.
Click on .
Step Action
1.
Click on Back .
Page 31 of 37
(c) 2009 SAP AG
1.1.43 Production order Display: Header
Step Action
1. Click on .
Step Action
1.
Click on the menu item to execute it.
2.
Click on the menu item to execute it.
Page 32 of 37
(c) 2009 SAP AG
1.1.45 Production order Display: Header
Step Action
1.
Click on Continue .
Step Action
1.
Click on Exit .
Page 33 of 37
(c) 2009 SAP AG
Simulation
Regenerate a new production order for the second month of production. Go to the
cost screen and determine what your actual cost was, what your standard cost was,
and what the variance is.
Quiz
1. The acronym SOP stands for:
a) Systems, Operations, and Products in Data Processing
b) Systems Operating Processes
c) Sales and Operations Plan
d) Sales, Organization, and Process
e) None of these
Page 34 of 37
(c) 2009 SAP AG
4. What is the central purpose of the screen that is shown?
a) To analyze past inventory levels of the Raymond Motorcycle
b) To calculate the demand for the Raymond Motorcycle
c) To review the proposed production plan for the Raymond
Motorcycle
d) To enter inventory information for logistical purposes
e) All of the above
6. What is the planned stock level for the Raymond Motorcycle for January?
a) 60
b) 65
c) 20
d) 3
e) 10
Page 35 of 37
(c) 2009 SAP AG
7. How many motorcycles are to be produced in the month of January?
a) 65
b) 60
c) 3
d) 20
e) 10
10. What is the value of the inventory (at standard) transferred out of the factory
into the finished goods inventory warehouse?
a) $210,000.00
b) $139,726.50
c) $233,211.00
d) $23,703.68
Page 36 of 37
(c) 2009 SAP AG
11. Which of the following are true with respect to BOM?
a) BOM stands for Basic Operations Management.
b) A BOM is a recipe for building a product.
c) A BOM lists every component piece or sub-assembly needed to
manufacture a product.
d) A BOM lists every manufacturing operation needed to manufacture a
product.
Essay 1
Looking at the cost schedule, what was the standard cost of production that was
transferred out of factory into finished goods inventory warehouse? How many
units is this based on? What was the unit standard cost? Where did the standard
cost information come from?
Essay 2
What is meant by bill of materials? What are the components that make up the
motorcycle?
Essay 3
How is the sales forecast determined? Who is responsible for determining it?
Essay 4
What is meant by material requirements planning?
Essay 5
If you were interested in finding out the number of units to be produced three
months from now, what schedule would you look at?
Page 37 of 37
(c) 2009 SAP AG