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SAP PP

Presenter: Sashi Sekhar Paramanik Date: 18-Feb-2013 Version: 1.0

Production planning & execution
 What are the components of Production planning & execution?  Sales information system: Information contains total sales orders already obtained, incoming sales orders, pending sales orders – product wise, customer wise and region wise.  Forecasting: Based on past consumption history, future sales projections are made using statistical forecasting methods.  CO/PA: Projections are based on Costing and profitability analysis.  Sales and Operations planning: Overall plan at company level is done for a year/half-year/quarter.  Demand management: Requirements may come from sales forecast, sales orders, etc.

 Production is carried out up to one level before the finished product level. or other planning tools to plan production quantities.  Procurement of the components is planned by means of planned independent requirements (Indreq) entered at the finished product level.  Purpose: Use this planning strategy when the main valueadded process is final assembly in a make-to-order environment.  It is possible to use information from the Sales Information System. SOP. This is basis for Availability check. Final assembly is triggered once a sales order (Order) has been entered.Planning w/o final assembly  Explain process flow and purpose behind planning without final assembly. .

 Planned independent requirement of the finished goods quantities that are left unconsumed increase the warehouse stock of the components and cause procurement to be decreased or not to take place at all in the next period. the unconvertible planned order quantity is increased. This process is called netting.Planning w/o final assembly  The incoming sales order consumes the planned independent requirements. . and this in turn reduces the unconvertible planned order quantity. If the sales order quantity exceeds the planned independent requirements quantity.

Planning w/o final assembly  Sample scenario: 100 pieces are planned for <reqdat1>. Planned requirements are created for production plan and passed on to MRP. Available quantity = 300 Stage 2: Procurement before Sales: Non-convertible planned orders are created for finished product. <reqdat2> and <reqdat3>. Procurement for components takes place. <today> Stock quantity = 0. Available quantity = 200<reqdat3> Indreq quantity = 100-. Planning w/o assembly is done. <reqdat1> Indreq quantity = 100-. Available quantity = 100<reqdat2> Indreq quantity = 100-. During Demand management stage. .

Available quantity = 190 <reqdat2> Indreq quantity = 100-. Available quantity = 190 <reqdat3> Indreq quantity = 100-. Customer stock (Cstock) = 0 <today> Order quantity = 90-.Planning w/o final assembly  Stage 3: Sales order and allocation: A sales order is created for parent material. <reqdat1> Plord quantity = 100. Availability check is not done as per ATP logic. Available quantity = 90 <reqdat3> Plord quantity = 100. Available quantity = 90 . Available quantity = 100 <reqdat1> Indreq quantity = 10-. but is based on planned independent requirements. Available quantity = 90 <reqdat2> Plord quantity = 100. Available quantity = 90<today> Planning w/o assembly is done. <today> Stock quantity = 0.

Available quantity = 0 <today> Planning w/o assembly is done.Planning w/o final assembly  Stage 4: Procurement after Sales: Sales order is linked to planned order and to production order (where applicable). <today> Stock quantity = 0. Customer stock (Cstock) = 0 <today> Order quantity = 90-. Available quantity = 100 <reqdat3> Indreq quantity = 100-. <reqdat1> Plord quantity = 10. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 0 <reqdat3> Plord quantity = 100. .  Stage 5: Goods issue for Delivery: Planned independent requirements are physically reduced. Available quantity = 10 <reqdat1> Indreq quantity = 10-. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 Good receipt from production results in Cstock = 90 above. Available quantity = 90<today> Plord quantity = 90.

Planning w/o final assembly .

 Planned independent requirements are consumed by incoming sales orders so that master plan is always adjusted to suit current requirements. smoothing of master plan is less important.  Planned independent requirements are entered at finished product level and trigger procurement and production of necessary assemblies and components before receipt of sales orders.  An accurate availability check is done as per ATP (available to promise) logic during sales order processing. You can react quickly to customer needs.  Purpose: Use this planning strategy when you can forecast production quantity for final product in make-to-stock environment.Planning with final assembly  Explain process flow and purpose behind planning with final assembly. .

Planned requirements are created for production plan and passed on to MRP. During Demand management stage. <reqdat2> and <reqdat3>. <today> Stock quantity = 0. Available quantity = 300 Stage 2: Procurement before Sales: A procurement requisition is created in MRP run and is starting point for production or procurement. One procurement option is to convert planned order into production order.Planning with final assembly  Sample scenario: 100 pieces are planned for <reqdat1>. Available quantity = 200<reqdat3> Indreq quantity = 100-. Available quantity = 100<reqdat2> Indreq quantity = 100-. . release of production order and goods receipt of yield quantity. Planning w/o assembly is done. <reqdat1> Indreq quantity = 100-. The other option is to use returns or other goods movements for make-to-stock production.

Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 <reqdat3> Plord quantity = 100. Available quantity = 100 <reqdat1> Indreq quantity = 100-. Available quantity = 100 <reqdat3> Indreq quantity = 100-. situation appears as below. Available quantity = 0 <reqdat3> Plord quantity = 100. <reqdat1> Plord quantity = 100.Planning with final assembly <today> Stock quantity = 0. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 100 <reqdat3> Indreq quantity = 100-. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 0 <reqdat2> Plord quantity = 100. Available quantity = 0 . Available quantity = 0 After receipt of order and 2nd MRP run. <today> Stock quantity = 100. <reqdat1> Indreq quantity = 100-.

Available quantity = 0 <reqdat3> Plord quantity = 100. Availability check is done as per ATP logic. Available quantity = 100 <reqdat2> Indreq quantity = 100-. If demand exceeds planning. there may be need for production to take place after sales. apply here. Available quantity = 100 <reqdat3> Indreq quantity = 100-. <today> Stock quantity = 100. Available quantity = 0 <reqdat2> Plord quantity = 100. as a rule. Available quantity = 0  Stage 4: This stage does not. Available quantity = 10 <reqdat1> Indreq quantity = 10-. . <today> Order quantity = 90-.Planning with final assembly  Stage 3: Sales order: A sales order is created.

Available quantity = 0 <reqdat3> Plord quantity = 100. <reqdat1> Indreq quantity = 10-. Available quantity = 0 <reqdat2> Plord quantity = 100. . because planned independent requirement was allocated during sales order processing. <today> Stock quantity = 10. Available quantity = 100 <reqdat3> Indreq quantity = 100-. following situation appears. Available quantity = 100 <reqdat2> Indreq quantity = 100-. Available quantity = 0 Reduction of independent requirements is invisible now.Planning with final assembly  Stage 5: Goods issue for delivery: After delivery and goods issue.

Planning with final assembly .

a quantity notification can be auto generated. an automatic goods receipt is posted. Once an order is confirmed. This can be done if no confirmation is entered for operations. If a scrap or rework quantity is confirmed. These material components must be provided for use at the work center. then confirmed quantity and actual costs are written to production order.Operation/Order confirmations  What is difference between an operation-related and orderrelated confirmation?  Order confirmation is done for entire order at header level. an automatic goods issue is posted on basis of quantity that has been assigned material components (backflush).  Capacity reduction is carried out either in proportion to quantity or activity. as in case of time ticket or milestone confirmation. When you confirm last operation.  When an operation is confirmed. .  Operation confirmation allows you to confirm an order step by step.

.  Routing defines production rate (quantity per time unit) used to produce materials on production lines.Repetitive manufacturing  Consider a product scenario where there is high product stability. high repetition rates and low product complexity. you set Repetitive Mfg indicator in material master (in MRP view). Production quantity is scheduled and capacity requirement is calculated accordingly. What type of manufacturing do you suggest?  To allow material to be used in repetitive manufacturing.

reduced stock and short lead time.  Benefits: no staging plan. Each contains quantity of material that work center personnel needs for a time period.  When container is empty.  Demand source can use material from other containers until actual container returns to full. . vendor or warehouse. How do you process material flow to work centers in event-driven manner?  In KANBAN. The supply source can be a production place. material flow is organized using containers kept at appropriate work centers.KANBAN  Your company follows relatively constant consumption of materials. replenishment is initiated.

.Regenerative and Net change plan  What is difference between regenerative planning and net change planning?  Regenerative planning means you plan all materials from planning file. This implies that they have undergone change relevant to MRP within a plan horizon.  Net change planning means that you can only plan materials for which planning file exists.  Plan is prepared online or as background job.

confirmations (including activity confirm and goods movement).  The report consists of shift notes. . This is useful for shift transfer. maintenance notifications and graphical evaluations.Shift report  Which report collects all important information about work centers for a shift?  The shift report is generated manually by production scheduler once data capture for preceding shift is complete.

 Current costs for a period comprise values for (a) material quantities delivered for the period as per valuation control of goods receipt.  All control functions (process cost allocation. WIP and variance calculation. Individual production orders do not have cost segments or settlement rules. settlement) are carried out at the end of the period on the basis of product costs collector. goods receipt for production order and goods receipt from production) are executed on basis of production order. . overhead allocation.Cost settlement  What is settlement in product cost controller based on?  All costs are debited and credited to a product cost controller. (b) unfinished products (WIP) as per status of operations confirmed and (c) variances (such as scrap). confirmation. All PP and MM functions relevant to costs (material withdrawal.

Cost settlement .