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SAP PP Training
Chapter 5 –Production Planning

December, 2007
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© 2007, everis. All rights reserved

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Index
0. Introduction
1. SAP Technical Overview
2. Enterprise Structures in Production Planning
3. Overview of Production Planning
4. Master Data in Production Planning
5. Production Planning
6. Production Control
7. Product Cost Management
8. Reporting

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Index
0. Introduction
1. SAP Technical Overview
2. Enterprise Structures in Production Planning
3. Overview of Production Planning
4. Master Data in Production Planning

5. Production Planning
• SOP, Demand Management, MRP, CRP

6. Production Control
7. Product Cost Management
8. Reporting

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Production Planning
Overview

 In Demand Planning, a forecast is carried

out on the basis of aggregated historical
data. The historical data may come from
SAP LIS (Logistics Information System),
for example. In this case, the relevant LIS
data structures offer you great flexibility in
defining the structure and format of the
planning data. This is made possible by the
use of characteristics (for example, plant and
sold-to-party), according to which the key
figures (for example, the billing quantity)
can be broken down.
 In Riviana, this forecast is carried out on
SAP CO-PA.

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Production Planning
Overview

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Production Planning
SOP

 Demand planning can form the starting point for the entire
production planning process. In the context of demand
planning, for example, you can create production plans, which
you can then transfer to operative planning in the form of
planned independent requirements.
 Demand Planning (SOP) comprises two core elements: Flexible
planning and standard SOP.
 You can and, to a large extent, must use the relevant
information structures and planning types to create settings for
flexible planning yourself, whereas standard SOP is designed as
a standard process that is installed by default.
 Standard SOP is based on the S076 information structure. This
information structure uses level-by-level planning where the
planning hierarchy levels are independent of one another.
 Standard SOP is a simplified variant of flexible planning in
which a specific planning process is already defined. Therefore,
the use of this function does not require a detailed knowledge
of the settings of the Logistics Information System

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Production Planning
SOP – Planning Level

 You can execute planning in SOP

for product groups or materials.
Planning at higher product group
levels can be disaggregated to the
members of the product group.
 Product groups are created in SOP.
You can define them by specifying
their members and the associated
proportional factors that determine
how the planning data is divided
among the members. The
proportional factors can be defined
manually or automatically
calculated based on historical
consumption values.
 Cross-plant planning is possible.

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Production Planning
SOP – Planning Level

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Production Planning
SOP – Planning Table

 The demand and production plans are developed in

the planning table for Sales & Operation Planning.
A planning table exists for all members of a
production group hierarchy.
 You can execute planning in parallel in multiple
independent versions. In this case, planning in the
active version A00 always occurs in change mode.
 The standard planning table for Sales & Operation
Planning consists of one line respectively for the
demand plan, the production plan, the warehouse
stock level (determined by the system), the target
stock level, the day's supply (determined by the
system) and the target day's supply.
 You can create demand plans by transferring data
from the Sales Information System (SIS), from the
Controlling/Profitability Analysis (CO/PA), by
using the sales history to forecast sales targets, by
transferring data from another product group or by
creating entries manually.

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 Production Planning
SOP – Planning Table

 To copy a planning version you may use the transaction code MC8V

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 Production Planning
SOP – Planning Table

 To delete a planning version you may use the transaction code MC8W

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Production Planning
SOP – Disaggregation and Transfer

 The creation of a demand or production plan at one

level in the product hierarchy does not
automatically result in the creation of plans at
lower levels. In this case, you must carry out a
disaggregation into the product group members.
 The step of transferring the planning figures to
demand management is also referred to as
disaggregation. Finally, both steps can be
combined: product group data can therefore be
transferred directly as planned independent
requirements at material-plant level. This
procedure does not generate any disaggregated
planning data at material level.

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 Production Planning
SOP – Disaggregation and Transfer

 Disaggregation: MC76

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 Production Planning
SOP – Disaggregation and Transfer

 Transfer material to Demand Management: MC74

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 Production Planning
SOP – Disaggregation and Transfer

 Transfer material to Demand Management (Mass Processing): MC8G

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Production Planning
Demand Management – Overview

 Independent requirements provide the

starting point for procurement planning.
 These include planned independent
requirements derived from a demand
forecast, as well as customer independent
requirements or sales orders. The behavior
of these requirements can be adjusted: The
requirements strategy controls how the
requirements behave.
 Stock transfer requirements, that is,
requirements from other locations in the
supply chain (such as distribution centers)
can be included in the demand program
together with the independent requirements
entered in the production plant.

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Production Planning
Demand Management – Strategies

Planning Strategies SAP

Make-to-stock production 10
Make-to-stock
Planning with final assembly 40
production
Planning at assembly level 70
Make-to-order production 20
Sales-order-
Planning without final assembly 50
related
Planning with planning material 60
production
Assembly processing 82

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 Production Planning
Demand Management

 You use the transactions MD62 and MD63 in order to change or display the planned independent requirements

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Production Planning
MRP – MRP Procedures

 The basic planning type is defined for each material

using the MRP type in the MRP1 view of the
material master.
 A material can be planned using:
 Material requirements planning is based on
current and future sales and is executed for the
entire BOM structure. The planned
requirements quantity (in the form of planned
independent requirements or sales orders)
triggers the requirements calculation
 Consumption-based planning is based on
historical consumption values and uses
forecasting or statistical procedures to
determine future requirements. Consumption-
based planning is characterized by its simplicity
and is mainly used for low-value B and C parts.

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Production Planning
MRP – Net requirements calculation

 In MRP, a net requirements calculation is executed

in the planning run to determine whether a material
shortage exists for a certain material. The stock and
the existing fixed receipts (for example, purchase
orders, production orders, fixed purchase requisitions
and planned orders) are compared with the safety
stock and requirements.
 If the quantity available for MRP is lower than zero,
a material shortage exists. MRP reacts to material
shortages by creating new procurement proposals,
that is, by creating purchase requisitions or planned
orders, depending on the procurement type. The
proposed procurement quantity results from the lot-
sizing procedure that is set in the material master.

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Production Planning
MRP – Scheduling

 Material requirements planning generally uses

backward scheduling. In this type of scheduling, the
required start dates are determined on the basis of a
predefined finish date.
 Procurement proposals are created for the finished
product and dependent requirements for the
components are calculated using the BOM
explosion. The dependent requirements date is based
on the start date of the planned order that is the
source of the requirement.
 Starting with the dependent requirements date as the
availability date, the order dates of the components
are determined in backward scheduling using the in-
house production time or the planned delivery time.

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Production Planning
MRP – Planning Material Requirements

 You can execute the planning run at two levels: as

total planning for a plant or for an individual
material. This means that you can execute a total
planning run for several plants and/or MRP areas.
 You can execute a single-item planning run for a
specific material (single-level) or for all BOM levels
(multi-level).
 You can execute total planning online or as a
background job.
 Total planning for a plant encompasses all MRP-
relevant materials for this plant and includes the
BOM explosion for materials with BOMs.

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Production Planning
MRP – Parameters of MRP Run

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Production Planning
MRP – Results of MRP

 If MRP discovers shortage quantities, procurement

proposals are generated. Purchase requisitions and
planned orders are internal planning elements that can
be changed, rescheduled or deleted at any time.
 With in-house production, the system creates planned
orders for planning the production quantities. When
planning is completed, planned orders can be
converted into process orders.
 With external procurement, the system either uses a
planned order or uses a purchase requisition directly to
plan the external procurement quantity. When planning
is completed, the planned order is converted into a
purchase requisition, which in turn is converted into a
purchase order at a later stage (in Purchasing).

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Production Planning
MRP – Material Requirements Planning Evaluations
 The header with the material
number is above the list.
More information is
 You can evaluate the results of displayed above the header
the MRP run to verify that the details.
planned orders proposed by the
system would enable the
production of the finished
product, keeping inventories at
the appropriate level.
 The current stock/requirements
list (MD04) is a dynamic list
that shows the current levels of
stock, requirements, and
receipts. Changes are visible
immediately when the current  The list itself contains the
stock/requirements list is called individual MRP elements and
or the elements in the current the corresponding available
stock/requirements list display quantities.
are read from the database using
the Refresh function.

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Production Planning
MRP – Material Requirements Planning Evaluations

 You use exception messages to

monitor the MRP results.
Exception messages provide
information about specific
operations. They alert you to
items that require your attention
(such as a start date in the past,
stocks falling below the safety
level and so on).
 If scheduling problems occur,
the system displays a relevant
exception message in the
stock/requirements list and MRP
list and displays a rescheduling
proposal. If this proposal is
accepted, you must adjust the
dates for the receipt element
manually.

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Overview of Production Planning
CRP – Overview

 In material requirements planning, you can use the task list to

calculate the capacity requirements that result from the planned
orders. Requirements planning only creates the requirements; for
the time being, no check is performed to verify whether the work
center is still available on the relevant dates.
 In a second step, a check is made to see if planning can be
implemented; that is, to see if the work centers are available on
the requested dates. This takes place within capacity planning.
 Capacity planning is usually work center-specific. The role of
capacity planning is to schedule all operations from the planned
or manufacturing orders so that the production plan can be
fulfilled.
 Summarizing, you plan in two steps:
 MRP: takes place based on “infinite capacities” and capacity
requirements are created for the work centers.
 CRP: available capacity is checked for the production dates
and operations are scheduled at the relevant work center.

CRP in Riviana IS DONE IN BOB

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Overview of Production Planning
CRP – Capacity Planning Table

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Overview of Production Planning
CRP – Capacity Planning Table

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