IPEG - PP - Business - Blue - Print - Document - v1 (2) New

BUSINESS BLUEPRINT DOCUMENT
PRODUCTION PLANNING
PROJECT IDENTIFICATION
Project Name CPI Project Number
IPEG SAP Project—APOLLO-15 IPEG-SAP-20140617-V1.4
Customer Name Customer Number
IPEG INC IPEG
SAP Project Manager Customer Project Manager
RAMESH SUBBARAO ROBERT PULEO
DOCUMENT IDENTIFICATION
Author Document Location (repository/path/name)

Ramendra Bisen / Madhu Kondapani :C/PROJECTS/3VS/IPEG/BLUEPRINT
Version Status Date (MM-DD-YYYY) Document Classification
1.0 DRAFT 09-05-2014 Confidential
REVISION HISTORY
Version Date Description

1.0 09-05-2014 DRAFT
1.1
1.2
REVIEW AND APPROVAL
Name: Robert Puleo Date (MM-DD-YYYY)

Customer Project Manager
Ramesh 11 Sept 2014
Name: Ramesh Subbarao Date (MM-DD-YYYY)

SAP Project Manager
Name: Jon Lashley Date (MM-DD-YYYY)

Key Stakeholder
Name: John Erkhert Date (MM-DD-YYYY)

Key Stakeholder
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TABLE OF CONTENT
1. EXECUTIVE SUMMARY ....................................................................................................................... 5

2. INTRODUCTION ................................................................................................................................... 5
3. AS IS PROCESS ................................................................................................................................... 6
4. OBJECTIVES AND BENEFITS OF THE MODULES ........................................................................... 6
5.1 Business Objectives and Expected Benefits ......................................................................................... 9
5.2 Major Business Pain Points (to achieve business objective) ................................................................ 9
5.3 BPML List/Scenario List ....................................................................................................................... 10
5.4 Key Business Requirement (to achieve business objective) ............................................................... 11
5.5 Key Financial Performance Indicators (KPIs) ...................................................................................... 13
6. TO BE PROCESS ............................................................................................................................... 14
6.1 Material Master ................................................................................................................................... 14
6.1.1 Business Scenario/End-to-End Process Description ................................................................ 14
6.1.2 Change & Improvements of the Existing Process ..................................................................... 20
6.1.4 Gaps/Issue Identified & Solution ................................................................................................. 20
6.1.5 Organizational Change Impact ..................................................................................................... 20
6.2 Bill of material .................................................................................................................................... 21
6.2.3 Configuration Data ........................................................................................................................ 22
6.3 Work Center........................................................................................................................................ 23
6.3.4 Gaps / Issue Identified & Solution ............................................................................................... 25
6.4 Routing ............................................................................................................................................... 26
6.5 Manufacturing Process Of Engineer To Order (ETO) / Assemble To Order (ATO) ..................... 28
6.6 Manufacturing Process Of Standard Machines .............................................................................. 33
6.7 Rework / Repair Production Execution ........................................................................................... 37
6.8 Operation subcontracting Process .................................................................................................. 40
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7. Functional and Process Design (in SAP) ........................................................................................ 42
7.1 Organizational Structure (in SAP) ....................................................................................................... 42
7.2 Master Data Elements ......................................................................................................................... 43
7.3 Business Scenario/End-to-End Process Scope .................................................................................. 43
7.4 Business Scenario/End-to-End Process Diagrams ............................................................................. 43
8. RICEF – (Report, Interfaces, enhancements and forms) ............................................................... 44
9. Legacy Systems Being Replaced and/or Interface To ........................................................................ 44
10. Initial List of Major Identified Gaps ...................................................................................................... 45
11. Initial List of Major Integration and Policy/SOX Considerations .......................................................... 45
12. Initial List of Major Data Sources for Conversion ................................................................................ 45
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1. EXECUTIVE SUMMARY
IPEG is a family of leading brands serving the global plastics-processing, waste-recycling, and
industrial heat-transfer markets. It is headquartered in Cranberry Township, PA and employs over
700 people worldwide. With the objective to create a competitive advantage for its brands and drive
better solutions for their customers, IPEG provides its brands with best-in-class business and
manufacturing support around the world. IPEG brands include:
Conair is a global leading supplier of auxiliary equipment and solutions for plastics processors.
Founded in 1956, Conair manufactures and markets over 450 different products, including resin-
drying systems, blenders, feeders and material-conveying systems, temperature-control equipment
and granulators. Extrusion solutions include gravimetric control systems, film and sheet scrap
reclaim systems and downstream equipment for pipe, profile and tubing extrusion. Conair is also a
leader in plastics process integration, engineering and installing complete manufacturing systems
that help plastics processors manage their valuable raw materials, handle their critical manufactured
parts, and improve their process yield. Conair manufactures in the USA, China and India and has
additional sales and service offices in Mexico, Singapore and Taiwan.
Conair is the leading producer of auxiliary equipment for plastics processing in the world. They make
and market over 450 different products, including resin-drying systems, blenders, feeders and
material-conveying systems, temperature-control equipment and granulators. Extrusion solutions
include gravimetric control systems, film and sheet scrap-reclaim systems and downstream
equipment for pipe and profile extrusion. Conair is also a leader in plastics process integration,
engineering and installing complete manufacturing systems that help plastics processors manage
their valuable raw materials, handle their critical manufactured parts, and improve their process
yield.
Rapid was established in Bredaryd, Sweden, in 1942. Local plastics molders were asking the
company to develop a machine for grinding up plastic waste, which was done in close cooperation
with them.
After that, there was no stopping the success in this size reduction of plastic field, and today the
plant is totally dedicated to manufacturing an extensive range of granulators for in-plant recycling of
plastic waste.
Headquarter and main manufacturing plant is still located in Bredaryd, Sweden, with company
owned plants in the USA, Germany, France, Italy, Singapore, China and Middle East. Rapid has
about 300 employees worldwide, and supply about 150 countries with products supported by more
than 90 agents and distributors worldwide. The customers know that the creativity and problem-
solving skills are as valuable to them as the products they manufacture.
2. INTRODUCTION
Production Planning is an integral part of the logistics function in SAP and it is fully integrated with
other SAP components including Materials Management (MM), Sales & Distribution (SD), Controlling
(CO) and Plant Maintenance (PM). Every business that has a manufacturing operation will have
implemented production planning functionality to ensure that finished goods can be manufactured at
the committed delivery date for customer's sales orders to be delivered. Production planning is
important to a company's supply chain function as it encompasses the functions that are used to
plan the sale and manufacture of items.
SAP Production Planning is mainly divided into planning and execution.

Planning contains materials requirement planning and capacity requirement planning. Materials
planning can be done for different lengths : long term planning, material requirements planning etc.
Execution contains creation of production order, scheduling of production order, work flow (such as
release Work Order printing), confirmations, goods movements, technical completion.
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Most of the above mentioned sub processes need master data to be maintained, when, executed,
they generate transactional data like planned orders, production orders, accounting documents etc.
Also, there are sub modules for different types of industries like discrete production, process
production (like chemicals) & repetitive production. All these normally follow the above mentioned
sub processes.
The Production Planning module of SAP takes care of Master data needed like Bill Of Materials,
Routings and Work Centers.
3. AS IS PROCESS
 Sales persons are receiving order from customer and entering it into BIG Machine with
respective features & options.
 Engineering Department evaluates Sales order items features & option. If feature & options are
available with existing Generic items of Bill of Materials & Task Lists (Routing) then Engineering
directs Production Planning Department for Production. If features & options are not available
with existing Generic items of Bill of Materials & Task Lists (Routing) then Engineering directs
Production Planning Department to change/modify Master Bill of Material & Task List for new
features & Options.
 Production Planning Department executes the Production requirement Planning (PRP) every
day against sales order items and generates procurement/production proposals. These
proposals are planned orders for in-house produced goods & purchase requisitions for external
procured goods.
 Planned proposal then converted into shop order by checking components required for shop
order. Also checks capacity availability. Once components availability & Capacity availability
checks get over then it release for production.
 Shop Floor planner checks the Shipping / Dispatch Schedule every day & based on the shipping
schedule, accordingly production order is rescheduled.
 Once Shop order delivered to Shop floor, Shop floor executive issue goods against shop order
and confirmed shop order at order level with item receipt.
 After Item receipt against the Shop order, Item will be available for shipping to customer.
4. OBJECTIVES AND BENEFITS OF THE MODULES
Manufacturing is a complex process. Companies are making variety of products. Each uses a variety
of processes, machinery, equipment, labor skills and material. All these must be organized efficiently
for better profitability. Goods must be manufactured at right quality and quantity at right time and
must be delivered at right place. Priority and Capacity of a firm must be balanced. Production
Planning System must perform this task.
Normally Production Planning System has five major levels.
o Strategic Business Plan.
o Production Plan (Sales and Operation Plan: SOP).
o Master Production Schedule.
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o Materials Requirement Plan (MRP).
o Production Execution & Control.
Each level varies in purpose, time span and level of detail.
 The Strategic Business Plan is a statement of major goals and objectives of the company
expects to achieve over next two to ten years.
 The Production Plan gives quantities of each product group that must be produced each
period.
 Master Production Schedule is the plan for individual end items. Production Plan limits the
Master Production Schedule.
 Materials Requirement Plan is the plan of components required to make the end items
planned in Master Production Schedule. Master Production Schedule drives Materials
Requirement Plan.
 Production Activity Control is the implementation of the Production Plan
An effective computerized Production Planning System can keep track of all the changes. There is
no need to keep high safety stock. The inventory blocked in terms of money in the excessive safety
stock can be released. At the same time, opportunity costs due to stock-outs can be minimized. SAP
R/3 Production Planning (PP) module is one of the effective computerized production planning
systems available.
Production planning module of SAP takes care of Master data needed like Bill of Materials, Routings
and Work Centers and stores it in one separate component.
Various stages of planning system can be planned by using components like

- Sales and Operation Planning
- Long Term Planning
- Demand Management
- Materials Requirement Planning
SAP has distinguished different types of production like Discrete Manufacturing, Repetitive
Manufacturing and Process Manufacturing processing. It can take care of various planning strategies
like 'Make-to-stock', 'make-to-order', 'planning without final assembly' etc.
Production planning module can also plan Capacity Planning. The capacity Planning sub-module is
taking into account various capacities like pooled capacity etc.
Production Orders reporting has flexibility of confirming orders with or without back flush. The
material can be staged to production site from the Warehouse after releasing order. Costing can be
triggered automatically by integrating the module with Cost Accounting Module.
Integration with other modules like Material management, Financial Accounting, Cost Accounting,
Human Resources & Development, Sales and Distribution etc adds on to reliability of the production
planning system in SAP R/3. The system is a real time system. The changes in demand (cancelled
or added sales order etc) and supply (high/low rejection, early/late supply from supplier, breakdown
of facilities etc) are reflected in real time and the production controller can react fast to these
changes.
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Production planning module is a very effective tool for production planning. As is gives many
alternatives, it must be configured correctly to utilized optimum potential.
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5. VALUE REALIZATION
5.1 Business Objectives and Expected Benefits
Business Objectives and Expected Benefits

Business Process Change Value Biz Case KPI
Target Benefit
Objectives (Key Business Requirement) Owner (financial)
ATO Machine orders are created
from a generic Features & Options
list during sales process. During
production process, system
dynamically determines the BOM
components & operations with a Optimized &
Material predetermined program. Improvement transparent
Requirement Production
in Processing process of
Planning Planner time Requirement
(Configurable Item) ETO Machine orders are created as
Planning
an extension to ATO orders where
some Features & Options are
defined as Text and engineering
team edits the BOM & Operations
manually for accommodating those
custom requirements.
Material Optimized &
Standard Machine orders are created Improvement transparent
Requirement Production
against the demand from safety stock & in Processing process of
Planning (Standard Planner
Sales order demand time Requirement
Machines) Planning
Labor & Machine Capacity needs to be
Capacity checked during the order scheduling Improvement
Requirement Production in Production Order Scheduling
Planning & Based on the priority Order needs to be Planner Scheduling will be improvised
Scheduling rescheduled. Production Order can be process
advanced or postponed.
Production Execution process
accommodates the components issue, Improvement Production order
Production operation confirmation & Goods receipts. Production in Production execution
Execution Executive Execution process will be
Further settlement of Order for process improvised.
completed order.
5.2 Major Business Pain Points (to achieve business objective)
Major Pain Points from weaknesses analysis
Pain Point ID Pain Point Description Impact on Business Contact

There is no control of quantity of plan Vs There is financial impact
actual, over components issue against that cost of machine
production. manufacturing go high
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5.3 BPML List/Scenario List
Business Process Requirement list (High level)

BPML. ID BPML Description BPML Process Details Priority
Maintain Material Master Determine whether material Master MRP & Work
BPML_PP_001 - MRP & Work Scheduling Scheduling view exists or needs to be change for High
view respective item or product.
Determine whether Bill of Material exists for
BPML_PP_002 Maintain Bill of Material respective item or product or needs to be High
changed for respective item or product.
Determine whether work center exists or needs to
BPML_PP_003 Maintain Work Center High
be changed for respective machine or labor.
Determine whether Routing for the respective
BPML_PP_004 Maintain Routing item or product exists or needs to be changed for High
respective item or product.
1. ) MRP run against Sales order line item, so that
it will explode Bill of material and create purchase
requisition / schedule lines for external
procurement and planned orders for inhouse
production.
2. ) check Work Center Capacity through CM01 ->
do the capacity leveling & schedule or reschedule
Manufactruing Process -
BPML_PP_005 the plan / Production order through CM21 High
ETO / ATO
3. ) Conversion of Planned Order to Production
Order with reference to sales order - > Release of
production orders with or without serial number -
> Availability Checks , Misssing part list - > Print
Shop flor paper / pick list - > Goods issue to
production order -> Milestone Confirmation - >
Goods receipts against production order.
1. ) MRP run against Sales order line item, so that
it will explode Bill of material and create purchase
requisition / schedule lines for external
procurement and planned orders for inhouse
production production
2. ) check Work Center Capacity through CM01 ->
do the capacity leveling & schedule or reschedule
Manufactruing Process -
BPML_PP_006 the plan / Production order through CM21 High
Standard Machine
3. ) Conversion of Planned Order to Production
Order with reference to sales order - > Release of
production orders with or without serial number -
> Availability Checks , Misssing part list - > Print
Shop flor paper / pick list - > Goods issue to
production order -> Milestone Confirmation - >
Goods receipts against production order.
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Create Rework / Repair Order without reference
of Bill of Material & Routing. - > Create Production
Rework / Repair order and assign the components required /
BPML_PP_007 High
Production Execution dismantle & Operation required.-> Release the
order. -> Goods issue to production order - >
Milestone Confirmation
At Production Order Confirmation, if any of the
opeation performed externally then its called
Operation Sub operation subcontracting. The Operation
BPML_PP_008 High
Contracting Subcontracting have to be confirmed after the
part go out & activities completed by
subcontractor and send back to plant
Postprocessing of some pending goods movement
Goods movement error in case of unavailability of stock for carrying out
BPML_PP_009 processing & Order GI, GR. - > Complete the Production order by High
Completion entering the flag TECO (Technically completed) by
Mass transaction
Table 5.3: Business Process Master List
5.4 Key Business Requirement (to achieve business objective)
Standard
Req. ID Requirement Description Priority
/ Gap
How expense items can be handled ? so that
IPEG-PP-0001 STD High
requirement will not get generated ?
How to see the capacity collectivelly for processes
IPEG-PP-0002 STD Medium
like Blending etc. ?
How to see the capacity load, overload collectivelly
for processes like Blending etc. ?
How do capacity adustement & reschedule firm
orders ?
Can Planner do scheduling of dates (Forward /
Backward) while releasing production order ?
How to capture wait time, during production order
confirmation ?
Following MRP controllers needs to be created
P001: Franklin
100 : Conair
101 : Rapid
102 : Thermal Care
103 : General
P002: Michigan
200 : Conair
201 : Thermal Care
202 : General
P004: Louisville
400 : Rapid
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How to automate Material Requirement Planning for
IPEG-PP-0008 both Configurable material as well as for Standard STD High
Machines ? Is background scheduling is possible ?
How to exclude the stock of "OUT" & "RGW" storgae
location during Planning ?
IPEG-PP-0010 How to evaluate MRP results ? STD High
IPEG-PP-0011 How floats can be maintained ? STD Medium
IPEG-PP-0012 How working shifts can be maintained ? STD Medium

How to capacture Labor capacity, Machine capacity
for different Plants ?
Standard Value key for Franklin, Michigan & Luisville
Key1 : Setup
Labor
IPEG-PP-0014 STD
Key2 : Machine
Setup
Labor
How automatic scheduling will be carried out in SAP
?
How shop order can be differentiate for ATO, ETO &
Standard Machine ?
How to assign different number ranges for shop
IPEG-PP-0017 orders of Variant Machine, Standard Machine & STD High
Rework shop orders ?
Separate Number range to be created for Standard
IPEG-PP-0018 STD
machines, Variant machines and Rework orders
Is it possible to convert group of planned orders into
firm shop orders ?
Is it possible to release shop orders of assemblies
automatically / Collectivelly ?
How Production Supply area will be maintained for
issue of components ?
How to capature Machine hour, Labor hour during
operation confirmation ?
How serial number will be capatured for Configurable
items & standard machine ?
Serial Number should contain Warranty details like
Warranty start & end Date.
For IPEG Finished Goods Global Serial Number with
internal number range will be used.
IPEG-PP-0025 For RAPID external number range material specific STD High
number will be used also used for purchase
machines.
IPEG-PP-0026 How do you process Goods issue errors ? STD High
Pick List needs to be created for all Pick Parts for
each production order
IPEG-PP-0028 Standard SAP reports will be used STD Medium
A customized report is required which represents the
Custom machine, Standard machine orders
Table 5.4: Key Business Requirement List
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5.5 Key Financial Performance Indicators (KPIs)
NA
Key Performance indicators
KPI Name
Owner
Definition
Calculation
Drill Down Capabilities
Supporting SAP
Solution Components
Planned Data Source
Reporting Method
Frequency
Used by
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6. TO BE PROCESS
6.1 MATERIAL MASTER
6.1.1 BUSINESS SCENARIO/END-TO-END PROCESS DESCRIPTION
Material Master is centrally maintained database using Transaction Code MM01. All materials
maintained by MDM cell to eliminate duplicity and errors in codification and will follow governance model
to maintain integrity and quality of data.
Materials with the same basic attributes are grouped together and assigned to a material type. This
allows you to manage different materials in a uniform manner in accordance with your company's
requirements.
Material Description Materials

Type
ROH Raw material All the materials procured externally and converted during
production.(ex-Sheet metal)
HALB Semi finished All the materials
product - Produced in-house (sub assemblies)
- Procured (Components, Spares)
- Subcontracted (sub assemblies)
FERT Finished All the finished machines (without configuration) produced

product in-house or purchased.
KMAT Configurable All the finished machines with assemble to order
material configuration or engineer to order configuration.
VERP Packaging All the materials used for packaging
Material
NLAG Expense Items Material those are consumed directly in production but not
issued against individual production order.
Since different departments in a company work with the same material, but each department uses
different information on the material, data in a material master record is subdivided by user department.
 Basic data view for maintaining material description, unit of measure, configurability of material,
design documents and allocation structure.
 Classification view for maintaining material class & characteristics classification view used. Class
are depend on category of the class. For varient class, Batch class etc.
 Purchasing view for maintaining unit of measure/dimension, basic purchase data, material status,
tax indicator, purchase order texts, defining purchasing values and source determination.
 Storage view to maintain unit of measure/dimension data, hazardous material number, storage
condition, shelf life, goods receipt/issue, cycle counting
 Classification view to classify materials based on specific attributes and properties.
 MRP view to determine MRP profile, maintain strategy group, MRP group, MRP procedure,
procurement data, net requirements calculation data, scheduling data, co-products, storage location
MRP, availability check, repetitive manufacturing data, discontinued parts, BOM data and
configurability of material.
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 Work Schedule View to maintain production control data, tolerances and production times and
check production alternatives.
 Sales view for maintaining tax data, data relevant to price determination, sales status, quantity
stipulations, shipping data, availability check, sales texts, product attributes, general plant
parameters, foreign trade data and various groupings by statistics, volume rebate, commission,
account assignment.
 Accounting view to define valuation category, basic data such as valuation class, standard
price/moving average and balance sheet valuation data
All departments will use Material Master information for execution of transactions. At IPEG Inc. one
material will be maintained at no. of locations of different plants. When the report for the inventory of
material is called the system will show the current status of the stock individually at each location,
plant and companyl.
Since different departments in a company work with the same material, but each department uses
different information on the material, the data in a material master record is subdivided by user
department. The key Material Master Data fields relevant for Production & Planning in IPEG Inc. are
listed below
Production Planning View of Material Master Data:

Basic Data MRP View Work Scheduling View
Material Number Procurement type. Issue /base unit of measure
Cross – Plant material Planning procedure (MRP Type, Production scheduler.
Status. MRP Contr., other). Indicator: Delivery tolerances.
Size ,weight, etc. Planning Strategy. In-house production time.
Lot size/ safety stock rule. Default receipt/issue storage
Plant –specific material status. location.
MRP group and controller.
Assembly/ Component Scrap.
In-house production time.
Table 6.1.1-1: Production planning view of Material Master
MDM cell will be responsible for maintain respective views in material master. Basic data view
consists of common material information, which can be used by all business functions and
processes. The unit of measure is used in PP BOMs and routings.
Classification View
In a variant configuration, a class is used to hold the characteristics that describe a configurable
material. In the standard R/3 System, the class type for variants is class type 300.
In IPEG Class represents Model number & Characteristic represent as Features & its value
represent the options. One class holds the number of characteristics.
MRP data is plant-specific. At IPEG Inc. MRP specific data will depend on the plant and the same
can be maintained using Standard SAP functionality
Material Requirement Planning Data

MRP is a Generic term for procedures in requirements planning which takes into account and plan
every future requirement during the creation of order proposals. The Material requirement planning
data is achieved by maintaining MRP views in the material master.
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MRP 1 View
MRP Type is key that determines whether the material will be planned, and if so, how it will be
planned. Planning options at IPEG Inc.
MRP Type Description
PD MRP (Planning)
ND No Planning
Table 6.1.1-2: MRP Type used
MRP Controller: A unique three-character key that identifies the Materials Planner (i.e. MRP
controller) or a group of planners responsible for planning material requirements. Several MRP
Controllers keys can be defined for a Plant. A particular material in a plant can be assigned only one
MRP Controller key. The same MRP Controller key may be assigned to several materials.
Proposed values (options) for MRP Controller for all Plants under IPEG Inc.are
Plant MRP Controller Description of MRP Controller
P001 100 Conair
P001 101 Rapid
P001 102 Thermal Care
P001 103 General
P002 200 Conair
P002 201 Thermal Care
P002 202 General
Table 6.1.1-3: MRP Controller used
Lot-size Data:
Lot Size key specifies the lot-sizing procedure the system uses during MRP to calculate the quantity
to be produced or procured.
 Lot-for-lot order quantity (EX) - the proposed lot size will be exactly the same as the net
requirement quantity. Proposed for Semi finished & Finished goods.
 Fixed order quantity (FX) – proposal for a fixed lot quantity or multiple proposals each for
the fixed lot quantity will be created to cover the net requirements.
 Replenish to maximum stock level (HB) – proposal for a quantity that will raise the stock
level of the material to the specified maximum stock level will be created
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Proposed values (options) for Material Type and Lot Size keys for all Plants under IPEG Inc.are:
Material Type MRP Type Description Lot Size

keys
Configurable Material – KMAT PD Deterministic MRP EX
Finished Material – FERT PD Deterministic MRP EX
Semi finished – HALB PD Deterministic MRP EX
Raw Materials – ROH PD Deterministic MRP EX

Table 6.1.1-4: Lot Size Procedure used
MRP2 View
Procurement Type is key that signifies how the material is procured — either in-house (E),
externally (F), or both in-house and externally (X). Default procurement types keys proposed per
material types for IPEG Inc. are:
 Finished & Configurable Materials – E
 Semi-finished – E or X (Semi finished products can be in-house as well as externally, so we
propose procurement type X for Semi finished Product)
 Raw Materials – F Raw material are procured from externally so the procurement key will be
F i.e. External
Procurement Type Description
E Material is produced in-house
F Material is externally procured
X Material can be both produced in-house and

procured externally
Table 6.1.1-5: Procurement Type used
Production Storage Location: Issue Storage Location - If the material is a component, it should be
posted from issuing storage location. If the material is produced, it should be posted from receiving
storage location. Production storage Location is to be entered in Material Master.
Special procurement keys and procurement type controls the procurement and storage of a
material. The special procurement type always refers to a procurement type.
Special Description
Procurement
30 Subcontracting
40 Stock transfer
50 Phantom assembly
Table 6.1.1-6: Special Procurement used
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Phantom assembly - A phantom assembly is a logical grouping of materials. These materials are
grouped and managed together for a certain reason (for example, from the engineering point of
view). However, a phantom assembly is not actually produced. Therefore, phantom assemblies pass
the dependent requirements directly to the lower BOM level. At IPEG Inc. require phantom assembly
.For phantom assembly special procurement key “50” will be used.
Stock transfer – In case of stock transfer, materials are ordered from the receiving plant and are
delivered by the delivering plant. The requirement is determined in the receiving plant. At IPEG Inc.
STO is prepared by the Planning Dep’t and material is delivered as per the STO. Please refer to MM
BBP for Stock transfer.
Subcontracting – In case of materials are maintained as subcontracting then the requirement

determined as material operation is managed by vendor. The requirement is determined in the
subcontracting material at IPEG Inc. is prepared by the Planning Dep’t and material is process with
subcontrating process. Please refer to MM BBP for Subcontracting.
Scheduling Data:
In-house Production Time: Number of days required to produce the material in-house, independent
of lot size.
Planned Delivery Time: Number of calendar days needed to obtain the material or service if it is
procured externally.
Goods Receipt Processing Time: Number of workdays required after receiving the material for
inspection and placement into storage.
Scheduling Margin Key: A numeric key that determines the floats and opening period required for
scheduling an order.
Net Requirements Calculation Data:

Safety Stock: The quantity of stock to satisfy unexpectedly high requirements in the stocking-up
period. The purpose of the safety stock is to prevent material shortage.
MRP3 View
Strategy Group: The strategy group, groups all the planning strategies that can be used for a
particular material. The planning strategy represents the procedure used for planning a material and
is (technically speaking) controlled by the MRP types.
Material Type Strategy Group Availability Check
Configurable Material ( Make to Order) 25 02
Planning with Final Assembly 40 02
Planning at Phantom Assembly 59 02
Table 6.1.1-7: Planning Strategy used
Consumption Mode: The consumption mode controls the direction on the time axis in which the
system consumes requirements.
 In backward consumption, sales orders, dependent requirements or material reservations
consume planned independent requirements that lie before the requirements date.
 In forward consumption, sales orders, dependent requirements, or material reservations
consume planned independent requirements that lie after the requirements date.
As per IPEG Inc. requirement, backward scheduling is proposed.
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Availability Check: A key that specifies if and how the system checks availability and generates
requirements for MRP. At Make to order production is proposed.
MRP 4 View
Selection Method: Indicator determining the selection of the alternative BOM when requirements
are exploded in material requirements planning.
Individual / Collective Requirements Indicator:

This indicator controls whether individual or a collective customer requirement planning is allowed for
dependent requirements (For Raw materials).
If you define individual requirements for explosion, dependent requirements for a component are
shown individually for every sales order.
If you define collective requirements for explosion, required quantities for the material are
summarized independently of the sales order.
Production Version:
Production version determines the various production techniques according to which a material can
be manufactured. Basically its a combination of Bill of material & Routing.
Work Scheduling View Data
Production scheduling profile: Profile are used to specify

 Business transactions that are carried out in parallel in a Production Order (for example
create and release an order at the same time, or release an order and print the shop papers)
 Specify an overall profile (set of parameters) for capacity leveling
Following Production Scheduling profiles observed for IPEG Inc.:
Sr. No Production Scheduling Profile Profile Description
1 Z00001 Production scheduling Profile for KMAT / FG
2 Z00002 Production scheduling Profile for SFG
Table 6.1.1-8: Production Scheduling Profile used
Serial Number profile: Profile are used to specify unique identification number.
Serial Number Profile Description
Z001 For IPEG materials global internal number range
Z002 For Rapid and external purchase machines it will be

material specific external number range
Table 6.1.1-9: Serial Number Profile used
Tolerance Data:
Under delivery tolerance: (limit) Percentage rate that specifies the percent below which, the
quantity posted for a goods receipt may drop below the production order quantity.
Over delivery tolerance: (limit) Percent by which the quantity that is posted to goods receipt may
exceed the production order quantity.
Unlimited over delivery: (allowed) Indicator that specifies whether the quantity actually delivered
may infinitely exceed the required production order quantity.
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Work scheduling data is plant-specific. The issue/production units of measure and default issue
storage location are used in BOMs and routings. SAP provides the flexibility to maintain plant
specific Work scheduling data.
6.1.2 CHANGE & IMPROVEMENTS OF THE EXISTING PROCESS

Changes in Material Master Data are controlled
6.1.3 Configuration Data
 MRP controller : Refer Table 6.1.1-2

 Standard setting for Planning Strategy : Refer Table 6.1.1-4
 Production scheduler as per IPEG Inc. Requirement
 Serial Number Profile as per IPEG Inc. Requirement
6.1.4 GAPS/ISSUE IDENTIFIED & SOLUTION

None as of now
6.1.5 ORGANIZATIONAL CHANGE IMPACT

Process Step Description
ID Organization Entity Role Potential Change

Material Master changes
Material Master MDM
controlled
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6.2 BILL OF MATERIAL
A bill of material is a complete, formally structured list of the components that make up a product or
assembly. The list contains the object number of each component, together with the quantity and
unit of measure. A bill of material contains essential master data for integrated materials
management and production control. This master data is used in Routing and Production Orders to
identify which components are being used in manufacturing.
BOM data is structured as follows in the SAP System

 The BOM header contains data that applies to entire Bill of Material (e.g. BOM usage, Technical
Type, Plant, BOM group no., Validity period, base quantity, BOM status – active / inactive)
 The BOM Items Overview contains a list of Components.
 BOM item details screen contains data that, only applies to a specific component of the BOM
BOM Header
Validity Period: is the time during which the BOM header or BOM items are valid.
BOM Usage: This key defines the area (such as engineering/design or production) where a BOM
can be used. Production BOM: Production BOM contains items that are relevant to production. These
items are copied to the planned order. Dependent requirements are generated for them, and they are
copied to the production order.
BOM Usage
BOM Usage BOM Usage text Application
1 Production Used for Production only
Will be used for development purpose only and
could not be used for production. After the
2 Engineering / Design
development is complete the same BOM can be
copied as Production BOM
Table 6.2.1-1: BOM Usage
BOM Status: This indicator controls subsequent processing of the BOM in various other organizational
areas (for example, engineering, costing, MRP).
1 - BOM active – BOM will be exploded in MRP and released for planned orders.
2 - BOM not active - BOM cannot be processed as described above.
BOM Status
BOM Status Status Description Remark
This BOM can, for example, be exploded in
1 Active MRP and released for planned orders.
This BOM cannot be processed as described
2 Inactive above.
Table 6.2.1-2: BOM Status
BOM Items Overview contains the data that has to be specified for all item categories e.g.
 Item no.
 Item category
 Material no. and other related data (e.g. material description, unit of measure that
are picked up by the system from the material master) Quantity. It also indicates whether sub-
items are specified for the items, whether the item has its own BOM, change no. and validity.
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BOM Item Category
The item category defines the characteristics and functions of a BOM item. It identifies when special
data must be entered and it controls further system activities. It also controls field and screen
selection for detail screens in BOM maintenance.
Item Catagory
Item
Description Remark
Catagory
This item category is used to manage material
L Stock Item
data that allows an item to be kept in stock.
For items not kept in stock and procured for
N Non-Stock item
specific process order only
T Text Item This represents the Text Itme.
Table 6.2.1-3: BOM Item Category
BOM item details screen include,

 Relevance for costing
 Indicator for fixed quantity
 % component scrap and operation scrap
 Alternative items group
 Issue storage location
BOM Dependencies:
SAP provides standard method of write Dependencies (constraints) in Bill of Materials.
Dependencies of Bill of Materials do the following:
 Describe the interdependencies between characteristics and characteristic values
 Control which components are selected from a bill of material (BOM).
 Change the values of fields in BOM items and operations during configuration.
 There are special syntax in the dependency editor to define dependencies in Bill of
Materials
Dependencies can be written for IPEG existing Generic Bill of Material as per standard SAP method.
Standard SAP methods also allow you to add / Delete / Change existing dependency of Bill of
Materials.

Changes in the BOM are controlled
6.2.3 CONFIGURATION DATA

BOM usage : Refer Table 6.2.1-1
Standard settings maintained.
Costing relevancy indicator (X) maintained based on BOM usage. History requirement indicator is
active for BOM usages.

None as of now.


Bill of Material Production Planner BOM Change controlled
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6.3 WORK CENTER

This master data helps to identify the production centers that are used in Production Planning and
Execution. Work Center’s are used in Routing and Production orders to identify which machines /
production centers are being used in manufacturing.
Example of Resource or Work centre
 Machines, machine groups
 Production / Assembly lines
 Work stations on a production line
 Employees, groups of employees
Work Center‘s are the most important master data in the SAP production planning and control
system. Work Centers are used in many task lists (Routing, Rate Routing, Master Recipe, Inspection
Plan, Plant Maintenance etc.).
Work Centers are used for the following functions in Production & Planning:
 Capacity planning - the available capacity and formulas for calculating capacity requirements
are entered in the Resource.
 Scheduling - formulas for calculating lead times for setup, processing, teardown (dismantling
setup) are entered in the work center, so that the duration of an operation can be calculated.
 Costing - formulas are entered in the work centers, so that the costs of an operation can be
calculated. A work center is also assigned to a cost center.
Work Center is created with Plant and category combination.
If multiple machines of same operating capacity are available, it will be maintained as one work
center with appropriate number of machines.
Apart from the details of capacity, the standard value key defined in the Work Center will identify the
parameters to be captured at the time of production confirmation in the production order. The typical
standard values are setup time, machine time, labor time etc.
Work Center will be assigned to a cost center and there will be activity types defined in these cost
centers. Activity types are evaluated for each cost center and period with a charge rate that consists
of a fixed portion and a variable (work-related) portion. These activity types determine the charge
rate with which internal standard values are to be costed viz., machine hours; setup time and labor
hours are defined in the controlling module
Work Center category
Work Center Category Work Center Description
0001 Machine
0003 Labour
Table 6.3.1-1: Work Center Category
The Standard Value Key represents a set of up to six standard value parameters. Standard values
are planned values of these parameters for the execution of an operation and are maintained in the
operation. The planned and actual execution time, costs and capacities are calculated in operations
using formulas from the Work Center and standard / actual values from the operations
In IPEG Inc., Standard Value Keys is defined for mapping of Costing Requirement
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Standard Value Keys for IPEG Inc. are listed below.
Standard Value Key Description
IPG1 Normal Production (Setup, Labor)
IPG2 Normal Production (Setup, Machine)
IPG3 Normal Production (Setup, Machine, Labor)

Table 6.3.1-2: Standard Value Key
Default value view

In the Default Values tab page, default values are specified which are then copied when you assign
the work center to the operation or sub-operation in a Routing. In case of IPEG Inc. the relevant
default values parameters are:
 Control Key: a four-character key used to specify the standard value parameters used to
depict the operation for capacity requirements and lead time calculations
 Standard Text Key: can be used to suggest a standard text for an operation or sub-
operation while creating routings
 Default Units of Measure: for the standard value parameters.
Following Control Keys decided for IPEG Inc.
Control
Description Function
Key
PP01 In-house Production This can be used in operations where its

required Manual confirmation
PP02 External Processing This can be used in operations which are

subjected to external processing
ZP01 Milestone Confirmation This can be used in operations where its

required Auto confirmation
Table 6.3.1-3: Control Key
Capacity View
In the Capacities tab page the capacity data for different capacities associated with the work center.
This data includes:
 Capacity Category: a three number key that specifies the nature of capacity e.g. a
processing unit or labor capacity
 Formula keys for formulae for computing the planned capacity requirements.
 The formula used for:
o Calculation of execution time
o Calculation of capacity requirements
o Calculation of costs of a work center's activity type
Scheduling View
In the Scheduling tab page, you can enter the following scheduling data in work center:
 Scheduling basis: The scheduling basis is a capacity (machine / labor), whose operating
time is to be used for scheduling orders.
 Formulas: You use formulae to calculate the execution times of operations in production
orders using standard values.
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Costing View
In the Costing tab page, enter costing data, if it is required to cost the activities performed at the
Work Center.
 Cost center and the validity period
 For every standard value a formula key and an activity type. The system calculates the
activity quantities from the formulas and the standard values. CO Controlling can then
evaluate these using the activity prices.
Production costs for a product produced at the work center can be settled to the product.
Activity types and cost center assignment is done in the costing view of the work center.

Changes in Work Center data should be controlled. Maintaining the Work Center master data is
critical for routing and scheduling in the production. This data can also be used for different analyses
including capacity evaluation, capacity planning etc.

Standard value key : Table 6.3.1-2
Processing formula for scheduling
6.3.4 GAPS / ISSUE IDENTIFIED & SOLUTION

None as of now.

Changes in work center
Work Center Production Planner
will be controlled
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6.4 ROUTING

A routing is a sequence of operations (process steps), which have to be carried out to produce a
material (product). Routing contains details about the work centers at which they are carried out and
the components required at each step.
A routing is used as a source for creating a production order or a Planned Order as well as a basis
for product costing. Routing would help in defining the manufacturing process flow. Also it would help
in determining the Planned/Production Order start and finish dates.
A Routing contains details about the following:

 Work Center at which operations are carried out
 Standard values (e.g. processing time) for individual operations
 BOM components allocations to the operations
Calculating the capacity requirements of an operation for manufacturing a material takes place in
scheduling using formulas from the work center. For this, you must enter a formula to calculate the
capacity requirements of the operations for each of operation segments setup, processing time,
Capacity overview in work center maintenance.
 Routing for Semi and finished products should be created separately. Where the respective
BOM, Operation and work centre should be attached.
 Each Routing (group counter) has a standard sequence of operations. The standard
sequence is the default method of manufacturing.
Routing will be defined for All In-house produced materials i.e. for finished products (All types), Semi
finished products (All types) across all plants.
Transaction Transaction Code
Create Routing CA01
Change Routing CA02
Display Routing CA03
 The header contains data that is valid for the whole routing. For instance, information about
 Status and use of the routing
 validity period
 You can call up the following information from the header:
 Details about assignments of material component to the routing. That is, about the
materials which are to be produced by the routing.
 A long text for a more detailed description of the routing
 The operation overview is the central screen for routing maintenance. Operation overview
contains,
o Operations and sub-operation, which describe the process steps in the routing
o Work Center where process carried out
o A short description of the process step
o Details about external processing or personnel qualifications
o Standard values and other information for scheduling
Object Dependency:
 Object Dependency are used in Variant configuration
 The dependencies can be assigned to Routing. Dependencies of Routing controls which
operation to be selected from a Super Routing
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Master routing will be used for Configurable Materials. As per the selection of features & option in
sales order, Routing Operation will be selected & validated through dependencies.

SAP standard Setting will be used

None as of now.

Changes in Routing will
Routing Production Planner
be controlled
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6.5 MANUFACTURING PROCESS OF ENGINEER TO ORDER (ETO) / ASSEMBLE TO ORDER (ATO)
Manufacturing Process : ATO/ETO Machines

Event
Sales Order
MPS Run MPS

(Manual/Batch Job) Evaluation
Production Planner
External Create Review Change

MRP Run Create Planned BOM/Routing
Procured N Production BOM/ Y Production
(Manual/Batch Job) Order Change Req?
Material? Order Routing Order
Y N
Procurement of Create Release Capacity

Capacity
MRP Evaluation Stock Material Purchase Production Y Leveling
Leveling
Process Requisition Order Required?
N
Production
Order Output
Shopfloor Executive
N
Add rework Operation
Rework Analyze COGI
& Components as Y
Req? error
required
N
N
Production All
Component
Order Y operations TECO
Available?
Confirmation Completed?
Warehouse
Clerk
Create Backflush
WM-PP Component Y
Transfer GR for FG
Staging Staged at PSA Components
Requirement
The solution map describes about the Manufacturing process of Engineer to Order (ETO) &
Assemble to Order (ATO). Different Process Steps involved in manufacturing process of Engineer to
Order and Assemble to Order.
The process steps include:
 Material Requirement Planning

 Capacity Planning
 Shop Floor Execution
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6.5.1.1 Material Requirement Planning
Materials Requirement Planning (MRP) is a generic term for procedures in requirements planning
that take into account and plan every future requirement during the creation of order proposals
The main purpose of material requirements planning (MRP) is material availability at right time, right
quantity at right place.
Material Requirement Planning (MRP against Sales order)

The main function of Material Requirements Planning against Sales order is to guarantee material
availability or promise to available. This process involves the monitoring of stocks and automatic
creation of procurement proposals for purchasing and production.
Sales Order line item is initiation for MRP. In order to cover these requirements, MRP calculates
procurement quantities and dates as well as plans the corresponding procurement elements.
The planning strategy make to order for configuraable material will be used for production. Planning
strategies represent the business procedures for the planning of production quantities and dates.
The MRP controller & lot-sizing procedure will be defined for each material to determine
procurement proposals. MRP Controllers will evaluate the results of the planning run. SAP
recommends MRP run in background i.e. Daily, Weekly or Monthly
The following evaluations are available for analyzing the planning result:
 MRP List
 Current Stock/Requirement List
 Compare: MRP List and Stock/Requirements List
 Status Report
 Various evaluations criterion will be made available
Using MRP Tool, the planner will determine the appropriate actions to take (e.g., re-schedule
production, expedite purchase orders, etc.). If the orders are reasonable then they will be released.
Otherwise, the planner will manually override and correct the data that led to the MRP error (so that
the next MRP run will not create the same error)
In case material is produced in-house, the system calculates the dependent requirements, i.e. The
quantity of components required to produce the finished product by exploding the BOM.
Whenever there is material shortage, planned orders are created at every BOM level to cover
requirements.
Order proposals can be converted into Planned Orders (for in-house manufacturing) as well as into
purchase requisitions (for externally procured items)
MRP run at multi-level for both total planning and single item planning. This essentially means that
the system explodes the Bill of Material for a material and generates dependent requirements for
assemblies and components. These components are also planned to cover dependent
requirements. If the components also have BOMs, the system explodes these BOMs also and plans
the components. The system repeats this process until all BOM levels have been exploded.
While BOM explosion is carried out, the system will check for the status and validity of the BOM and
consider specific BOM with active status and which falls within the said validity period. In case of
alternate BOMs being active and valid, the system shall consider only the basic BOM.
The output of the MRP run is the planned order. These planned orders are converted into Production
Orders either through collective conversion or individual conversion. When the planned order is
being converted into production the BOM (Planning BOM) is copied on to the Production order. Any
changes to the BOM at the Production order level has to be carried out manually in the system.
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In case of materials, which are not produced in-house, the MRP run will create Purchase
Requisitions. MRP generated Purchase requisitions will be identified by Separate document type
and separate number range.
The production or procurement quantity shall be based on the lot sizing procedure specified for that
material in the material master.
During the planning run, the system recognizes exceptional situations and errors. These exceptions
are reported particularly in cases where manual reprocessing of the planning result is necessary.
6.5.1.2 Capacity Requirement Planning

Capacity evaluations are to analyze capacity loads in work center which exist in your plant. You can
adjust & analysis for each work center according to the planning level. Available capacities and
capacity requirements can be selected according to various criteria and cumulated using any period
split as per selection.
The system will highlight the periods when overload exists in each work center. In such situation
capacity needs to be leveled so that production plan becomes final. In capacity leveling, all the
orders, which require that particular work center, will be dispatched to the committed schedule one
after other as per the priority. After leveling, the load on work center will be evened out for the
planning bucket. The revised scenario and schedule will be immediately reflected in the evaluation.
The objectives of capacity leveling include:

 Leveling overloads and under loads at work centers
 Achieving optimum commitment of machines/labor.
When you create a plan / production order, the system automatically carries out lead time scheduling
and writes capacity requirements records. Capacity leveling at the plan / production order level is
used for detailed planning.
Following standard Transaction code are used for Capacity List & Capacity Levelling
Process T code
Capacity Load on Work Centre CM01

Capacity Levelling CM21
6.5.1.3 Shop Floor Execution

After MRP run, planned orders are generated. These planned orders are converted into production
orders for in-house produced materials. At the time of conversion material availability is checked for
the components. When a production order is created the following actions are carried out:
Following Order Types are decided for IPEG Inc.
Order Type Description Number Range Proposed
ZP01 Configurable Machines (ETO) 1 - 1999999

ZP02 Configurable Machines (ATO) 1 - 1999999
ZP03 Standard Machines 1 - 1999999
ZP04 Custom Machines 2000000-2999999
ZP05 Rework Operation 3000000-3999999
Table 6.5.1.2-1: Order Types
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When a production order is created, following actions are carried out:
 A routing is selected; its operations and sequences are transferred to the order.
 The Bill of Materials is exploded and the items in the Bill of Material are transferred to the
order.
 Availability check of components in stock
 Reservations are generated for Bill of Material items held in stock.
 The planned costs for the order are generated.
 Serial Number will be generated for ETO/ATO machines
Production order release will happen only if the material is available. This can be controlled by Order
type. Once production order is released, planned costs are calculated and saved.
Back flush & Confirmation

Back flushing is automatic goods issue. System will automatically post the goods issue (standard
quantity based on actual production). Back flushing is automatic accounting (Goods issues - 261
Material Movement) of components consumed for production order, at the time of confirmation.
After Back flush of components & Operation confirmation, Goods receipt is carried out using SAP
standard transaction and the material is posted into stock (Goods receipts – 101 Material
movements).
TECO can be used once the delivery of the production order is completed or if the order to be
completed abruptly then TECO to be used. However once the TECO is done still goods movement is
possible. After Technically completed (TECO) Order settlement of the production order is carried out.
Once Production order is closed then no costing is possible and production order doesn’t allow any
goods movement.
Explaination of the Process

 Production Planner has to check sales order line item & perform Master Production
Schedule (MPS) Evaluation.
 Production Planner has to run Material Requirment Planning (MRP) manual or through
Background job.
 Production Planner has to evaluate MRP results. ie Procurement Proposals
 If Procurement proposals having external procurement then it should routed for purchase
order process.
 If Procurement proposals having in-house production then Planner needs to convert planned
order into production order by reviwing Bill of material & routing. If require to Change existing
BOM & Routing then modified BOM & routing should have to include in Production order.
 Production Planner needs to schedule the order after Capacity evaluation.
 Production Planner needs to release Production Order along with outputs and send to Shop
floor department for production execution process.
 Once Production Order is released then WM-PP material staging process should have to
performed and all the components required for production order needs to be make available
at production supply area.
 Shop Floor Executive or Production Supervisor will review the production order & execute
production operations. If any operation required rework then he needs to add rework
operation in production order along with required components.
 Shop Floor Executive or Production Supervisor has to check that all the components
required for production are Backflush or issued to production order on not.
 If all components are not Backflush or issued then COGI (automatic Goods movement with
error) has to evaluated & corrected.
 Once all components issued then all operation has to complete and have to perform goods
receipts of ETO/ATO Machine.
 Once ETO/ATO Machine comes into stock then finally need to set TECO (Technicall
completed) status in production order so that production order will be available for order
settlement process.
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 MRP generated Purchase requisitions are separately tracked.
 Capturing availability of relevant, correct and up-to-date material information.
 Capacity load based on the work centre and system will give report for analysis purpose.
 Auto generataed material documents & accounting doucments during goods issue & goods
receipts.

MRP parameters are maintained for Plant. Following MRP types will be used.
“PD” Represents for planning
“ND” Represents for No Planning.
Order Type : Refer Table 6.5.1.3-1

None as of now.

MPS Evaluation
MPS / MRP Planning Production Planner
MRP Output Evaluation
Conversion into Firm Order
Production Order Availability Check
Production Planner
Processing Capacity Evaluation
Schedule Order
Issue components
Operation confirmation
Production confirmation Production Supervisor
Goods Receipts
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6.6 MANUFACTURING PROCESS OF STANDARD MACHINES
Manufacturing Process : Standard Machines

Event
Stock below
Sales Order
safety stock level
MPS Run
MPS Evaluation
(Manual/Batch Job)
Production Planner
External Create Capacity

MRP Run Create Planned
Procured N Production Leveling
(Manual/Batch Job) Order
Material? Order Required?
Y N Y
Procurement of Release
Create Purchase Capacity
MRP Evaluation Stock Material Production
Requisition Leveling
Process Order
Production
Order Output
N
Shopfloor Executive
Add rework Operation

Analyze COGI
& Components as Y Rework Req?
error
required
N
N
Production
Component All operations TECO
Order Y
Available? Completed?
Confirmation
Warehouse
Clerk
Create Backflush
WM-PP Component
Transfer Components Y GR for FG
Staging Staged at PSA
Requirement
The solution map describes about the Manufacturing process of Standard Machines. Different
Process Steps involved in manufacturing process of Standard Machines.
 Material Requirement Planning

 Capacity Planning
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6.6.1.1 Material Requirement Planning
Materials Requirement Planning (MRP) is a generic term for procedures in requirements planning
that take into account and plan every future requirement during the creation of order proposals
The main purpose of material requirements planning (MRP) is material availability at right time, right
quantity at right place.
Material Requirement Planning (MRP against Saftey Stock & Configurable Sales order item)
The main function of Material Requirements Planning against Sales order is to guarantee material
availability. This process involves the monitoring of stocks and automatic creation of procurement
proposals for purchasing and production
Material Requirement Planning (MRP) for Standard Machine will take place with two types:
1) MRP against Safety stock
2) MRP against Configurable Sales order item
MRP run against Safety Stock

MRP run against Safety stock checks the existing stock of the material and if it falls below the safety
stock then it raise the requirement proposal.
For example: If safety stock is 2000 units and existing stock is 1890 units then MRP will raise the
requirement of 110 units.
MRP run against configurable sales order line item.

Standard Machine are the components of the Configurable materials, So standard machine comes
under the BOM components of the Configurable materials. So when MRP run against the sales
order line item of configurable materials. During MRP run, Configurable material’s BOM get explode.
MRP calculates the BOM components requirement and Systems checks the existing stock & safety
stock. Based on this calculation system raise the procurement proposal.
For example : if BOM componets requirement is 200 units, existing stock of components is 1900
units and safety stock is 2000 units then system will propose the procurement proposal of
components is 300 units.
The following evaluations are available for analyzing the planning result:
 MRP List
 Current Stock/Requirement List
 Compare: MRP List and Stock/Requirements List
 Status Report
 Various evaluations criterion will be made available
In case material is produced in-house, the system calculates the dependent requirements, i.e. The
quantity of components required to produce the standard machine by exploding the BOM. Whenever
there is material shortage, planned orders are created at every BOM level to cover requirements
including considering safety stock.
In case of materials, which are not produced in-house, the MRP run will create Purchase
Requisitions. MRP generated Purchase requisitions will be identified by Separate document type
and separate number range.
Order proposals can be converted into Planned Orders (for in-house manufacturing) as well as into
purchase requisitions (for externally procured items)
The production or procurement quantity shall be based on the lot sizing procedure specified for that
material in the material master.
During the planning run, the system recognizes exceptional situations and errors. These exceptions
are reported particularly in cases where manual reprocessing of the planning result is necessary.
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6.6.1.2 Capacity Requirement Planning
Refer section : 6.5.1.2
6.6.1.3 Shop Floor Execution
Refer section 6.5.1.3

 Standard Machine requirement will be carried out by two types:
1) Requirement generated through Safety stock as MRP output
2) Requirement generated through BOM explosion of configurable item as MRP output.
 Production Planner has to evaluate MRP results. ie Procurement Proposals
 If Procurement proposals having external procurement then it should routed for purchase
order process.
 If Procurement proposals having in-house production then Planner needs to convert plan
order into production order.
 Production Planner needs to schedule the order after Capacity evaluation.
 Production Planner needs to release Production Order along with outputs and send to Shop
floor department for production execution process.
 Once Production Order is released then WM-PP material staging process to be performed
and all the components required for production order needs to be make available at
production supply area.
 Shop Floor Executive or Production Supervisor will review the production order & execute
production operations. If any operation required rework then he needs to add rework
operation in production order along with required components.
 Shop Floor Executive or Production Supervisor has to check that all the components
required for production are Backflushed or issued to production order on not.
 If all components are not Backflushed or issued then COGI (automatic Goods movement
with error) has to evaluated & have to corrected.
 Once all components issued then all operation has to complete and have to perform goods
receipts of Standard Machine.
 Once Standard Machine comes into stock then finally need to set TECO (Technicall
completed) status in production order so that production order will be available for order
settlement process.

 MRP generated Purchase requisitions are separately tracked.
 Capturing availability of relevant, correct and up-to-date material information.
 Capacity load based on the work centre and system will give report for analysis purpose.
receipts.

MRP parameters are maintained for Plant. Following MRP types will be used.
“PD” Represents for planning
“ND” Represents for No Planning.
Safety stock has to be maintained in Material Master.

None as of now.
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Production Order Schedule Production order
Production Planner
Processing Capacity Evaluation
Issue components
Operation Confirmation
Production Execution Production Supervisor
Final Goods receipts
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6.7 REWORK / REPAIR PRODUCTION EXECUTION
Rework Process – Standard/ATO/ETO

Event
ATO/ETO Sales Existing Std Stock

Order Rework needed
Can RGW/ ATO/ETO

Other stock be Production
used? Process
Production Planner
Transfer Posting Create Rework Capacity

Sales Order to Minor Modify BOM/
Y Production Leveling Y
Sales Order Stock Rework? Routing
Order (CO07) Required?
Release
Shipping Major Create Production Capacity
Production N
Process Rework? Order (CO08) Leveling
Order
Production
Order Output
N
Shopfloor Executive
Add Operation &

Change Analyze COGI
Components as Y
Routing Req? error
required
N
N
Production TECO
Component All operations
Order Y
Available? Completed?
Confirmation
Warehouse
Create
Clerk
WM-PP Component Backflush

Transfer Y GR for FG
Staging Staged at PSA Components
Requirement
The solution map describes about the Rework / Repair process of ETO / ATO & Standard Machines.
Different Process Steps involved in Rework / Repair process of ETO / ATO & Standard Machines.
 Shop Floor Planning

 Capacity Planning & Evaluation
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Rework process will be carried out for the following reason
1) Customer sales order of ETO/ATO machine can be fulfilled with existing stock of
ETO/ATO Machine by rework. Existing stock of ETO/ATO machine comes under
Customer return goods.
2) Customer Sales order of Standard machine can be fulfilled with existing stock of
standard machine by some rework.

ETO/ATO Machine
 Production Planner needs to check the requested ETO/ATO machine stock of ETO/ATO
exists or not in RGW warehouse
 If requested ETO/ATO material Stock not exists then it should go to direct manufacturing
process of ETO / ATO (Refer section 6.5)
 If requested ETO/ATO material stock exists then
 Production Planner needs to do transfer posting from sales order to sales order.
 Production Planner needs to check it required Major rework or Minor rework.
 If Minor rework required then
o Rework Production Order to be created with modified Bill of Material & Routing.
o Needs to schedule the rework produciton order using Capacity Leveling.
o Release Rework Production Order using availability check of components.
o Production order Output/Paper to be sent to Shop floor.
o During Shop floor execution, If required change in routing then add operation in
rework production order.
o Confirm rework production order & with Back flush components (Issue) to rework
production order.
o Analyze COGI error ie Postprocessing of error records of automatic goods
movements.
o Confirm all operation and take goods receipts of ETO/ATO Machines
 If Major rework required then
o Production Order needs to be created with reference to sales order with modified
Bill of Material & Routing.
o Needs to schedule the produciton order using Capacity Leveling.
o Release Production Order using availability check of components.
o Production order Output/Paper to be sent to Shop floor.
production order.
o Confirm production order & with Back flush components (Issue) to production
order.
movements.
o Confirm all operation and take goods receipts of ETO/ATO Machines.
 Finally, set the Technically complete (TECO) status of production order for further order
settlement process.
Standard Machine
 Production Planner needs to check the requested Standard Machine stock exists or not in
RGW warehouse
 If requested Standard machine Stock not exists then it should go to direct manufacturing
process of Standard Machine (Refer section 6.6)
 If requested Standard Machine exists & minor rework is required
o Production Planner needs to check it required Major rework or Minor rework.
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o Rework Production Order to be created with modified Bill of Material & Routing.
o Needs to schedule the rework produciton order using Capacity Leveling.
o Release Rework Production Order using availability check of components.
o Rework Production order Output/Paper to be sent to Shop floor.
o Confirm rework production order & with Back flush of components (Issue) to
movements.
o Confirm all operation and take goods receipts of Standard Machines.
 Finally, set the Technically complete (TECO) status of Rework production order for further
order settlement process.

 Capturing availability check of relevant, correct and up-to-date material information.
 Capacity load based on the work centre and system will give report for analysis purpose.
 Auto generataed material documents & accounting doucments during goods issue & goods
receipts.

Different order type will be used for Rework Process

None as of now.

Stock evaluation
Rework Order Processing Production Planner Capacity Evaluation
Schedule Order
Components Issue
Order Execution Production Supervisor Operation confirmation
Goods receipts
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6.8 OPERATION SUBCONTRACTING PROCESS
Subcontracting Procurement of Stock Material

Vendor
Receive
Process
Receive PO & Electronic
Shipment
Components Process ASN? Y & Invoice
Ack
MRP/Production
Production
Planning/
Subcontract Pur
Requisition RFQ/
Source List Process ASN
N SOURCING
Exists? N Interface
Manual Process
Subcontract Pur
Requisition
Assign and Email/Fax/Mail Receive

Change/Cancel
Plant Buyer
Process Purchase Purchase Order Delivery

Requition Purchase Order
Output Confirmation
Print Purchase Create Purchase Change/

Update PO
Order Order or Release Cancel PO N
Confirmation
Order Item?
Warehouse
Goods Issue Goods

for Receipt for
Subcontract Stock
PO Material
Payables
Account
Accounts Receive
Payable Supplier
Process Invoice
The solution map describes about the Operation Subcontracting Process. Different Process Steps
involved in Operation Subcontracting process.
 Subcontracting procurement process

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During the production execution process of a Production order, if any of the operation needs to
perform outside the plant then it will be routed through operation subcontracting process.
 Subcontracting purchase requisition will generates after releasing of production order.

 Subcontracting Purchase requisition refers Source list.
 Purchase requisition will be then converted into subcontracting Purchase order
 Vendor will receive subcontracting material with reference to subcontracting Purchase order
 After completing subcontracting operations by vendor, Vendor needs to supply back the
subcontracting material.
 Warehouse will receive subcontracting material from vendor and will be updated through Goods
receipt process.
 Further these materials will be consumed in production for further in-house production
operations.

 External processing by subcontracting
receipts.

Control Key has to be defined for external operation

None as of now.

Subcontracting Purchase
Purchase Executive
Order
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7. FUNCTIONAL AND PROCESS DESIGN (IN SAP)
7.1 Organizational Structure (in SAP)
US02
IPEG Inc
P001 P002 A001

Franklin Plant Michigan Plant Cranberry Office
PLANT
FRS MIS CRS

Franklin Main Michigan Main Cranberry Main
USED USED
Used Machine Used Machine
RGW RGW
Return Goods Return Goods
STORAGE
LOCATION
Organizational Structure
Relevant Organizational Corresponding organization Explanation if necessary
ID
Unit SAP (e.g. Customer) (e.g. Mandatory)
US02 IPEG Inc.
P001 Franklin Plant Manufacturing Unit
P002 Michigan Plan Manufacturing Unit
A001 Cranberry Office Office
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7.2 Master Data Elements
Refer section 6.1, 6.2, 6.3, 6.4
7.3 Business Scenario/End-to-End Process Scope
Business Scenario/End-to-End Process Scope
ID Process Name Description In Scope SAP Solution

Production planning activities of
Production Planning Manufacturing of ETO / ATO
Manufacturing Process Machines that includes
of Engineer to Order  Material Requirement Planning Yes PP, WM, MM
(ETO) & Assemble to
 Capacity Requirement Planning
Order (ATO)
Manufacturing of Standard
Production Planning Machines that includes
Manufacturing Process  Material Requirement Planning Yes PP, WM, MM
of Standard Machine
 Capacity Requirement Planning
Manufacturing of Rework Production
Production Planning of ETO / ATO & Standard Machines
Rework Production that includes Yes PP, WM, MM
Execution  Material Stock Evaluation
Production Planning Operation Subcontracting includes
Operation  Subcontracting Procurement Yes PP, WM, MM
Subcontracting
 Material Stock Evaluation
Process
7.4 Business Scenario/End-to-End Process Diagrams

Refer Section 6.5
Refer Section 6.6
Refer Section 6.7.
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8. RICEF – (REPORT, INTERFACES, ENHANCEMENTS AND FORMS)
RICEF ID RICEF TYPE RICEF DESCRIPTION

RICEF_PP_001 INTERFACE Inbound interface for updating the Drawing number, Revision
Number, Document type in SAP material master from PRADOX
RICEF_PP_002 FORM Shop paper needs to be created in the IPEG format for Operation
Details against production order
RICEF_PP_003 FORM Pick List needs to be created in the IPEG format for issue of the
components against production order
RICEF_PP_004 FORM Variant sheet needs to be created in the IPEG format as per
selection of sales order against production order
RICEF_PP_005 REPORT Capacity Planning with work center & hierarchical work center
RICEF_PP_006 REPORT Work Center wise Production Order List as per selection of the
work center and start date & End Date
RICEF_PP_007 REPORT A Customized report of production order in which orders are
complete on planned date & which order are not completed on
planned date. Details & summery
9. Legacy Systems Being Replaced and/or Interface To
RICEF ID RICEF TYPE RICEF DESCRIPTION

RICEF_PP_001 INTERFACE Inbound interface for updating the Drawing number,
Revision Number, Document type in SAP material master
from PRADOX
Engineering Department updating and keeping the Drawing Number, Revision number,
Document type in Pradox system. Latest Drawing Number, Revision number, Document type
needs to be update in to material master of SAP system. This information are very important
and needs to update immedietly into SAP material master so that Production shop floor
people will choose correct drawing of machines during production. Latest drawing information
will be used in purchasing & production process.
To capature Latest Drawing Number, Revision number, Document type for respective
material in to material master of SAP system, We need to develop a interface program which
will be the bridge between between Paradox system and SAP system.
Paradox SAP PI SAP ECC

Databse
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Source Source Direction Destination Information in Destination
System Information System System
Drawing Number, Drawing Number, Revision
Revision Number, Number, Document Type to be
Paradox SAP
Document Type update in Material Master Basic
Data2 view
10. Initial List of Major Identified Gaps

Nil as of Now
11. Initial List of Major Integration and Policy/SOX Considerations

NA
12. Initial List of Major Data Sources for Conversion
Sr. Conversion Item Conversion Remark

Type
01 Material Master – MRP & Work Master Data Conversion Program
Scheduling view
02 Bill Of Material Master Data Conversion Program
03 Bill of Material Dependencies Master Data Manual / Program
04 Work Center Master Data Conversion Program
04 Routing Master Data Conversion Program
05 Routing Dependencies Master Data Manual / Program
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Author Document Location (repository/path/name)

Version Date Description

Name: Robert Puleo Date (MM-DD-YYYY)

Ramesh 11 Sept 2014

Name: Ramesh Subbarao Date (MM-DD-YYYY)

Name: Jon Lashley Date (MM-DD-YYYY)

Name: John Erkhert Date (MM-DD-YYYY)

1. EXECUTIVE SUMMARY ....................................................................................................................... 5

SAP Production Planning is mainly divided into planning and execution.

4. OBJECTIVES AND BENEFITS OF THE MODULES

Normally Production Planning System has five major levels.

o Strategic Business Plan.

o Production Plan (Sales and Operation Plan: SOP).

o Master Production Schedule.

o Production Execution & Control.

Each level varies in purpose, time span and level of detail.

Various stages of planning system can be planned by using components like

5.1 Business Objectives and Expected Benefits

Business Objectives and Expected Benefits

5.2 Major Business Pain Points (to achieve business objective)

Major Pain Points from weaknesses analysis

Pain Point ID Pain Point Description Impact on Business Contact

Business Process Requirement list (High level)

Table 5.3: Business Process Master List

5.4 Key Business Requirement (to achieve business objective)

IPEG-PP-0012 How working shifts can be maintained ? STD Medium

Table 5.4: Key Business Requirement List

Drill Down Capabilities

Planned Data Source

6.1 MATERIAL MASTER

6.1.1 BUSINESS SCENARIO/END-TO-END PROCESS DESCRIPTION

Material Description Materials

FERT Finished All the finished machines (without configuration) produced

 Classification view to classify materials based on specific attributes and properties.

Production Planning View of Material Master Data:

Table 6.1.1-1: Production planning view of Material Master

Material Requirement Planning Data

MRP Type Description

Table 6.1.1-2: MRP Type used

Plant MRP Controller Description of MRP Controller

P001 100 Conair

P001 101 Rapid

P001 102 Thermal Care

P001 103 General

P002 200 Conair

P002 201 Thermal Care

P002 202 General

Table 6.1.1-3: MRP Controller used

Material Type MRP Type Description Lot Size

Configurable Material – KMAT PD Deterministic MRP EX

Finished Material – FERT PD Deterministic MRP EX

Semi finished – HALB PD Deterministic MRP EX

Raw Materials – ROH PD Deterministic MRP EX

Procurement Type Description

E Material is produced in-house

F Material is externally procured

X Material can be both produced in-house and

Table 6.1.1-5: Procurement Type used

Table 6.1.1-6: Special Procurement used

Subcontracting – In case of materials are maintained as subcontracting then the requirement

Net Requirements Calculation Data:

Material Type Strategy Group Availability Check