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An overview of the

SAP R/3 Production Planning


(PP) module
Automotives
Building Materials
Chemicals
Engineering Construction and Operations
Fabricated materials
Power plant Construction
Healthcare
Utilities
Services
Apparel and Footwear
Discrete manufacturing
Food and Beverages

Industry Sectors for Production
Manuf. Type Strategy Example
Discrete MTS
MTO
ETO
Standard Assemblies
Custom Req. Material
Construction
Repetitive MTS Spare Parts
Process Industry MTS
MTO
Foods, Beverages &
Pharmaceuticals
Production Planning Overview
Agenda
Review of Materials Management
PP Organization
Bills of Material
Work Centers
Routings
Material Requirements Planning
Agenda (Contd)
Processing Planning Results
Production Order Management
Capacity Planning and Leveling
Product Cost
The Production Cycle
Sales and Operations Planning
Master Planning and Demand
Management
Master Production Scheduling
Review of MM Organization
Material Type
e.g. Raw material, semi-finished good, service, trading good, finished product
Controls access security
Determines how material is procured
Controls how material movements affect financial accounts
Linked to material number ranges
Controls what fields appear on what screens
Industry Sector
Controls what fields appear on what screens
Unit of Measure
e.g. Piece, box, crate, pallet, Each, KG, Litre
Different parts of the business can measure quantities in different units
Multi-Lingual Texts
Material Master Data
Material Master Data
General Data St. Loc. Specific Data Plant Specific Data Sales Specific Data
Material Master
Data applicable
throughout the client
e.g.
Material number
Description
Units of measure
Weight
Volume
Product hierarchy
Data dependent on sales
organization and
distribution channel
e.g.
Delivering plant
Sales text
Sales units
Shipping data
Division
Data relevant
for planning and
production
e.g.
MRP profile
Production costs
Planning data
Valuation
Data referring to storage
and inventory management
e.g.
Quantities
Special stock
Warehouse
attributes
Material Types in the Standard SAP
Material Type
DIEN
ERSA
FERT
HALB
HAWA
HIBE
LEER
NLAG
ROH
VERP
WETT
PROD
Service
Spare Part
Finished Product
Semi-finished Product
Trading Good
Operating Supply
Empty Containers
Non stock Item
Raw Material
Packaging
Competitor Product
Production Resources/ Tools
Description
Product
Data
Engineering
Design
Sales

Production
Stock
Finance

Purchasing
Master data is a key piece
of information in the system
Master data can be seen from
a number of views
Each view can correspond
to an SAP module
Each view has a number
of information screens
Each view belongs to an org unit within the
business
One product may have multiple plant and
sales views, one for each plant or sales
area
Master Data Views
Engineering
Design
Sales

Production
Stock
Finance

Purchasing
Examples of How Data is
Used
Texts copied
to purchase orders
Maintains stock levels
by plant, storage
location, and batch
Data used to
calculate MRP
lead times
Controls customer
ordering rules
for material
Controls which
General Ledger
Account is updated
Material description
used in reporting
Product
Data
Production Planning
Production Planning Basic Data
Routings
Work Centers Materials
Capacities Inspection
Plans
Production
Facilities
Bills of Material
PP Basic Data
Production
Resources/Tools
F06010
Production Planning Functionality
Provides overviews from rough-cut through
to detailed shop floor planning
PP-CRP
Capacity Requirements
Planning
Controls production costing
PP-PC
Product Costing
Generation of order proposals based on
requirements defined by PP-SOP
PP-MRP
Material
Requirements Planning
Generates data used for processing orders,
e.g., dates, costs and resources
PP-SFC
Production Order Control
Coordination and planning of production activities
PP-SOP
Sales and
Operations Planning
Monitoring / analyzing on-going production
activities / data
PP-IS
Shop Floor
Information System
Products, Production Processes
and Resource Requirements
PP-BD
Basic Data for Production
Bills of Material
Bills of Material
Simple BOM Variant BOM Multiple BOM
Simple BOM representing
single material
Similar materials
represented
by variants on one BOM
BOM representing a material
which can be made up of
multiple compositions
e.g. different
components
and quantities

Bill of Material Validity
Area of Validity The same Bill of Material can
be allocated to several plants. Before you can
allocate the BOM to a different plant, the material
must exist at the new plant, the unit of issue on
the BOM item must be the same.
Validity Period (Valid from/to dates)
Becomes effective with the valid from date
The validity date is determined by the system
automatically to be either the next effective from date, or
12/31/1999.
A A

B C B D
X----------------------------------------------------------->>>>
from 1/1/95 from 12/31/95
to 12/30/95 to 12/31/99
BOM Scrap Data
Assembly Scrap yield or process scrap resulting from
the assembly of components into a finished or sub-
assembly. It is used for calculating material used in an
assembly. MRP increases the material requirements for all
components contained in the assembly.
Example: Quantity to produce 1000 units with a 1%
assembly scrap = 10 units
Component Scrap considers component loss before the
component is used in an assembly. For example,
shrinkage during storage. The scrap refers only to the
component in the assembly. When the BOM is exploded,
MRP increases the quantity of the component.
Example: Component Qty of 1000 units with a 5%
component scrap would need 1050 units required.
Bill of Material Glossary
BOM Category categorizes BOMs to represent different
objects; for example:
Material BOM -- structure of products manufactured
Equipment BOM -- structure of equipment for plant
maintenance
Document BOM -- structure of documents such as drawings
(3.0)
BOM Group is a collective number for all BOMs in a group
which allows for one or several similar products to be decribed
under one number.
All Alternatives of a multiple Bill of Material
All variants of a variant Bill of Material
BOM Usage special view of the BOM which represents a
specific area of the company in which the BOM is used; for
example, Engineering, Production, Costing, Sales, Plant
Maintenance. The BOM Usage allows different views to exist
without separate BOMs for each usage.
Technical Type the system distinguishes BOMs according to
whether they represent product variants or production alternatives.
If you create a variant for the BOM, the system marks it as a
Variant Bill . If there is more than one alternative for a material,
the system marks the BOM as a Multiple Bill.
Bill of Material Glossary
BOM Validity Bills of Material are valid over an area and effectivity period.
Area of Validity -- identifies which plants the BOM has been allocated to
Validity Period -- identifies the from and to effectivity dates. The default to date is
12/31/9999
Item Category When you enter a new Bill of Material item, an item category must be
assigned.
It has important control functions such as:
Screen selection
Specific processing, such as material number required, negative values supported.
The Item Category cannot be changed once set. It must be deleted and re-added.
Sizes are maintained for variable-size items
Item categories include:
Stock Items -- material in stock as a component
Non-stock Items -- material not stocked - with or without a material number
Variable-size -- system calculates the quantity required using formulas
PM Structure Item -- used with plant maintenance equipment
Document Item -- used with Document BOMs
Sub-Items are typically used to represent different installation points for partial
quantities of an item.
In assembling resistors on a printed circuit board, the installation points are described.
There is no logic related to sub-items

BOM Structure
BOM Header
Item 10
Item 20
Item 30
Sub Item 10
Sub Item 20
Plant Assignment
Validity Period
Release Indicator
Stock Items
Non-stock Items
Variable Size Items
Document Items
Text Items
Additional component details
e.g. installation points
for components
BOM Structure
Product
Component 2
Component
31
Component
32
Component
33
Component 3
(assembly)
Component 1




By-product
Document
Part
Class
Components:
Stock material
Non-stock material
Variable-sized item
Text item
Scrap/waste
Variant Bills of Material
Several similar products are represented in one bill of material
Bike with
Black Frame
Handlebar
Assembly
Gear Assembly
Bike with
Red Frame
Bike with
Blue Frame
Red Frame/Fork
Assembly
Blue Frame/Fork
Assembly
Chrome Forks
Black Frame
Red Frame
Blue Frame
Qty. for variant 1
Qty. for variant 2
Black Frame/Fork
Assembly
Multiple BOM
A finished product can be manufactured using different methods of
production with different components or component quantities
Qty. for alternative 1
Qty. for alternative 1
Qty. for alternative 2
Alt 1 - Lot Size 1 to 100
Alt 2 - Lot Size 101 to 500
Alt 3 - Lot Size 501 to 1000
Qty. for alternative 2
Pigment 2
Production Variants
Blue Paint
Solvent
Water
Pigment 1
One material but with different combinations of
component material based on production method
BOM explosion
Single-level Bill of Material
Multi-level Bill of Material
Summarized Bill of Material

BOM Reporting
Component Where used
Single-level Where used
Multi-level Where used
Summarized Where used
C
A B
BOM Recursiveness
E1
K1 B3
K2
E1 K3
Work Centers
Assembly
Line
Machines
People
Production
Line
Capacity
Requirements
Planning
Scheduling,
Execution Times
Costing
Work Centers
Work
Centers
Cost
Center
Work Center Hierarchy
Plant 1
Production
Assembly
Assm
Line 1
Assm
Line 2
Work
Center 1
Work
Center 2
Fabrication
Plant 2
Production
Fabrication
Mach = 10 hrs
Labor = 8 hrs
Mach = 6 hrs
Labor = 10 hrs
Mach=16 hrs
Labor=18 hrs
Work Centers and Routings
Routing
Operation 10
Operation 20
Operation 30
Work Center W1
Cost Center 100
Assembly
Cost Centre 200
Work Center W2
Finishing
Cost Center 200
Work Center W1
Cost Center 100
Assembly
Work Center Category
Work centers are allocated to different work center categories

The work center category is used to control the field and screen selection
for work centers during work center maintenance.

Work Center Category Screen View

Statistical Work center Basic Data

Production Work Center Basic Data
Default Values
Capacity Values
Scheduling
Cost Center Assignment


Cost Center Assignment to Work

Center for Operation Costing
Cost Center
Oper 0010 Oper 0020 Oper 0030 Oper 0040
Routing with standard values
Set Up (SET)
Machine (MACH)
Labor (LAB)
Work Center
with Activities
during production
Activity Rates
Set Up $70.00
Mach $60.00
Labor $80.00
Overhead $70.00
Work Center Capacity
Oper 0010 Oper 0020 Oper 0030 Oper 0040
Routing with standard values
Set up Formula
Machine Time Formula
Teardown Formula
Work Center
Formulas
Set up 1.0 hrs
Machine 5.5 hrs
Teardown .5 hrs
Operation Std Values
Work Center Schedule
Use of Formulas in Work
Centers
Available Capacity at a Work
Center
8 hrs
1 hr
7 hrs
1 hr
6 hrs
Working
Hours
Break
Time
Working
Hours less
Breaks
Planned
Downtime
Productive
Working
Hours
Routings
BOM
Groups
Production Master Data
Materials
and PRTs
Bills of
Material
Routings
Work
Centers
Routing
Groups
Cost
Centers
Components
Allocated to
Operations
Item Category
Material Type
W/C Category
Routing Structure Views
Routing
Operation 30 Operation 20 Operation 10
Work Centre:
PP-ASSEM
Control Key:
- Time Tkts
- Costing
Operation Text:
Pre-assemble
frame
Std Values:
Lab:10 mins
Mach:10 mins
Materials
Components
BOM
Process
Resource Tool
(PRT)
Operation
Operation types
(Main) operation
Sub-operation
Sub-operation
HierarchyCosting
Completion confirmations
Scheduling always takes place on the
(main) operation level
The control key defines whether completion confirmations and
costing are carried out on the (main) operation level, or on the
sub-operation level.
Indicator: group operation sub-operation level
combined operation (main) operation
Operation / Sub-operation
Operation
0010
Operation
0020
Sub Operation
0010 / 10
at Work Center A1
Sub Operation
0010 / 20
at Work Center A2
Sub Operation
0010 / 30
at Work Center A3
Schedule at Operation Level
Useful when processing for operation 0010
occurs over multiple work centers
Capacity Planning & Costing
possible at Sub Operation Level Level
03

02

Sequence Categories
Material
Routing
Group 01
Oper 10

Oper 20

Oper 30

Oper 40

Oper 50

Oper 60
Oper 10

Oper 15

Oper 20
Oper 40

Oper 50
Alternate Seq 0001
Parallel Seq 0002
Standard Seq 0000
Branch
operations
Return
Operations
Routing Types
Standard Routing




Reference Routing
10 20 N
10 20 N
Material
R 1

Reference Operation
Set Z


Reference Operation
Set Y

Reference Operation Sets
Oper 0010
Oper 0020
Oper 0030
Oper 0040
Oper 0050
Oper 0022
Oper 0024
Oper 0026
Oper 0045
Reference Operation
Set X
Material Allocation
Op. 10
Op. 20
Op. 30
Op. 10
Op. 30
Routing BOM
Product
Material
1


1


2


2
01


02


01


02
1


1


1


2


3
1


2


3


1


1
Routing
Group
Routing
Group
Counter
Material-Routing Allocations
A routing alterative can be allocated to several materials.
A material in a plant can be allocated to several alternatives.
Routing Default Values
Routing





Material
Master
Work
Center
Base Unit of Measure
Planner Group
Short Text
Control Key
Standard Values
Activities
Standards Text Key
HR data
External Processing
Oper 0010
Oper 0020
Oper 0040
Oper 0050
Purch Reqn
Purch Ord
Vendor Proc
Goods Rec
Routing data copied to order
including quantities and dates

Purchasing creates P.O.





At goods receipt, the operation
is confirmed


Operation Lead Time
Float Before Float After Oper 0010 Oper 0020 Oper 0030
Queue | Setup | Process | Teardown | Wait | Move
Execution Time
Interoperation
Time
Interoperation
Time
Operation Lead Time
Routing Operation Sequences
Standard
Routing represents a standard
sequence defining production
procedure
Parallel
Routing includes processes which
can be performed simultaneously
to achieve time efficiencies
Split
Routing includes processes which
can/must be split across a number
of work centers
Overlapped
Routing defines process where one
operation is to overlap with the
following operation
Parallel Operation Sequences
Special form of overlapping
Positioning the parallel sequence at the beginning or end of an operation
Usage: for example in the chemical industry for analytical processes
which run parallel to the production process
Op. 10
Op. 20 Op. 20
Op. 30 Op. 90
Op. 40
Material Requirements Planning
MRP Features
MRP
Lot sizing
Order scheduling
and generation
Internal production
and external purchasing
Net requirements
calculation
Bill of Material
Explosion
Forecasting
MRP Overview
Overview Purchased Items
MRP
Purchasing
Accounting
Warehouse
management
system
Goods receipt

Inventory management
Valuation
Goods Transfer
issue posting
Invoice receipt

Invoice
verification
Master data

Material
Batches
Vendors
Customers
:
MRP: Reorder Point Planning
Reorder Point
Safety Stock
Order Date Delivery Date
Time
Stock
Purchasing
Process Time
Vendor Planned Delivery
Time
Desired Delivery Date
Release
Order Date
Forward Scheduling for External Procurement
Today
Goods Receipt
Process Time
Forward scheduling used for reorder point material
Daily Accumulation:
Sales Orders
Planned Individual
Requirements
Reservations
Entries
from
Planning
File
Warehouse
Stock
+
Open Order Proposals
Shortages
Order
Proposal
Net Change Planning
Coverage calculation per requirement date
MRP Types
VB



VM


VV


PD



M0
Manual Reorder Point Planning:
MRP produces order proposals when stock falls below a reorder point. The reorder point
and safety stock levels are entered manually

Automatic Reorder Point Planning:
The reorder point and safety stock level are calculated based on the forecast results

Forecast Planning
The latest forecast is copied as requirements which are used to create order proposals

Deterministic Planning
MRP produces order proposal(s) to match the exact quantity of the requirements based on
independent and dependent demands

Master Production Scheduling
Similar to PD but used for master schedule items
Carrying Out the Planning
Run
Total Planning All materials in a given plant
All materials are reviewed by MRP regardless of activity

Only the materials in a plant that have undergone a change relevant
to planning since the last planning run (net change planning)
Planning Interval Limiting the MRP Planning Interval
Time
Planned requirements and
supply order receipts
example:
100 days
MRP Planning Horizon
MRP List
MRP Controller
Group of Materials
for which controller
is responsible
Controllers MRP
Listing
Goods Receipt Goods Issues
MRP Order Proposals
and Planner Messages
from MRP Planning run.

Planner can drill down
to review material
movement activity
Stock Overview
The Stock Overview shows the stock position for all locations within a
Company/Plant/Storage Location/Batch for all dispositions of material
Total Company 100 20 15

Plant US01 Total 100 20 15

SLoc 0001Total 75
Batch 01 Total 45
Batch 02 Total 30

SLoc 0001Total 25

Unrestricted Quality Ins Reserved On Order ...
Stock Requirements List
Date MRP Element Supply/Demand Ref EM Quantity Available

01/01 STOCK 100
01/08 ORDER Sales Order 25 75
01/15 PL ORD 1000 120 05 100 175
02/01 -----------------------------------------------------> Planning Time Fence



Stock Requirements List brings together all the supply orders, independent
and dependent demands and stock balances for the material. MRP makes
order proposals to balance the supply/demand position for the material
Processing Planning Results
Order Proposals: Planned Orders
Procurement Type is
In-house Production
MRP
MRP
Controller
Planned Order
Order Qty
Order Date
Capacity Reqts.
Resource Reqts.
Production
Order
Planning for In-house
Production
Planned
Order
Production
Order
Auto Change/ Delete
if situation changes
Auto
Creation
Collective Conversion
into Production Order
Manual changes/
deletion
Manual
Creation
Planning Run MRP Controller
Individual Conversion
into Production Order
Production
Order Release
Planning for External
Procurement
Planned Order
Auto Creation
Convert Planned Orders
to Requisitions
Manual Change/
Deletion
Manual Creation
Planning Run MRP Controller
Purchase
Requisition
Purchase Order
Delivery
Schedule
Auto Change/Deletion
Auto Creation
Auto Change/Deletion
Auto Creation
Manual Change/Deletion
Manual Creation
Manual Change/Deletion
Create PO via Requisition
Manual Creation
Purchasing Group
Auto Change or Delete
Link to Scheduling
Agreements
Quota Arrangement
External Supplier
MRP Planning Run
Source List
Schedule Agreement
Lines Created
MRP Supplier
from Source List
Scheduling Agreement
50 Units 50 Units
50 Units
Distribution Function
50 Units 50 Units
Several planned orders are created for partial quantities of the dependent
requirement quantity
The planned orders are scheduled for various dates within the
run time of the production order
A daily provisioning of partial quantities distributed over the run time
of the order is possible
Models a continuous flow process
Total Requirement of 250 units for the week
Master Planning and Demand Management
Master Planning
Demand Management
Planning and Consumption Strategies
Specification of Requirement Quantities
and Delivery Dates
Master Production Scheduling
Planning for Master Schedule Items
Planning Time Fence
Interactive MPS
Copy from
Sales Plan
Copy from
Prodn Plan
Copy from
Forecast
Copy from
Orig Plan
Demand Management
Demand Program
Manual Planned
Independent
Requirements
Sales
Demand from
Sales Orders
MRP/MPS
Sales and Operations Planning
Demand Management
Planning Strategy Make-to
Stock
Make product for stock in expectation of customer sales
Plan using planned independent requirements for
anonymous make-to-stock production.
Use Net or Gross Requirements Planning
Net Requirements -- includes warehouse stock, planned
issues and receipts
Gross Requirements -- excludes warehouse stock. Just
includes planned and open orders
Example is a shelf stock item such as a bike accessory
light
Planning Requirement Type is LSF - make to stock which is
used in the planned independent requirements transaction
Sales Order Requirement is KSL - which is sale from stock
Sale from stock Planning
Production Push
Warehouse Stock
Finished Product
Strategy: Make-To-Stock
Production
Example: Common shelf items such as a bike accessory (light)
Planning Strategy Planning
with Final Assembly
Make product in expectation of customer sales
Plan using planned independent requirements at finished goods level
to drive demand to long lead time components
Typically there is a longer lead time to produce than the customer is
willing to wait for
Sales orders consume the planned independent requirement
quantities
Planned quantities that are not consumed by sales orders result in
excess stock
Example is a long lead time custom product
Planning Requirement Type is VSF planning with final assembly
Sales Order Requirement is KSV which is sales order with
consumption
Sales Order
Planning
Production Push
Warehouse Stock
Finished Product
Example: Custom furniture such as a cherry table
Final
Assembly
to Sales Order
Purchase Produce
MRP without reference to sales order
Planned Independent
Requirements
Strategy: Planning with Final
Assembly
Planning Strategy Planning
Without Final Assembly
Final assembly is initiated by the
customer sales order
Stop production at sub-assembly level
Final assembly pull
Example is automobile assembled with
unique combination of features (sub-
assemblies)
Planning Requirement Type is VSE --
planning without final assembly
Sales Order Requirement is KEV --
independent customer order with
consumption
Sales Order
Planning
Production Push
Final Assembly Pull
Warehouse Stock
Finished Product
Warehouse Stock
Assembly 01
Warehouse Stock
Assembly 02
Example: Option oriented product such as a car
Stop at level
Planned Independent
Requirements
Assembly when
Sales Order
Scheduled
Purchase Produce
Strategy: Planning
Without Final Assembly
Planning Strategy Planning
with Planning Material
Planned independent requirements of Planning Material
initiate procurement of the planning bill components
Sales orders for the final assembly create planned orders of
the finished product and reduce planning quantities for the
planning material
Possible to plan a family of products from forecast placed
on the planning bill. The planning bill details, through
percentages, the quantity required for common parts
Example is a bike with common sub-assemblies used in
many finished items
Planning Requirement Type is VSEF -- planning with
planning material
Sales Order Requirement is KEVV -- independent customer
order with planning material
Sales Order
Planning
Production Push
Final Assembly Pull
Customer Stock
Finished Product
Planning
Material
Warehouse Stock
Assembly 01
Warehouse Stock
Assembly 02
Example: Bikes with the same features except for the color
Purchase
Produce Note: Percentages drive lower level
demands for sub assemblies
Strategy: Planning with
Planning Material
Planned Independent
Requirements
Planning Strategy Planning at
(Sub)Assembly Level
Used if forecasts are more reliable at the sub-assembly
level. (hour-glass)
Sales orders received initiate an explosion of the finished
product level
Resulting dependent requirements consume the planning
quantities of the finished product
Must maintain the Mixed MRP Indicator in the Material
Master MRP2 View for
sub-assembly planning. Maintain the consumption
indicator in the item screen of demand management
Example is a PC where the forecast for individual features
is more accurate than forecasts for the completed PCs
Planning Requirement Type is VSFB -- planning at
assembly level
Sales Order
Planning
Production Push
Final Assembly Pull
Warehouse Stock
Finished Product
Warehouse Stock
Assembly 02
Warehouse Stock
Assembly 03
Example: A PC with a large number of end item configurations
Brake Assembly
Common Sub Assembly
Strategy: Planning At
Assembly Level
Sales Order
Production by Lot Size Pull
Warehouse Stock
Finished Product
Example: Combine customer orders for the same item
Strategy: Production
by Lot Size
Planning Strategy Make to
Order Production
Sales orders are planned according to sales
order number
Produced quantities for each sales order are
managed individually
Production and procurement costs are
managed in either a settlement order or
a project
Example is a custom product with a unique
structure such that it only applies to a
particular customers order
Sales Requirement Type is KE -- independent
customer order without consumption
Sales Order
Production by Lot Size Pull
Warehouse Stock
Finished Product
Example: New machinery
Strategy: Make-To-
Order Production
Customer requirements consume planning requirements directly before or after it
Consumption mode is either determined in the material master record or
in the configuration menu of demand management
Consumption mode determines either --
Backward consumption requirements directly before the sales order
Forward consumption requirements directly after the sales order
Both types are allowed the system looks for the next closest planning requirements
If no consumption periods exist, then you can only consume requirements planned
on the same day.
Example -- Forward Consumption
01/07 01/14 01/21 01/28
Planned Requirements 0 0 0 100
Customer Requirements 25 -------^

Example -- Backward Consumption
01/07 01/14 01/21 01/28
Planned Requirements 0 100 0 100
Customer Requirements ^----- 25
Consumption Logic
Production Order
Management
Material at 0010
------------------------------
Material Number
Quantity
Date
Operation 0020
------------------------------
Work Center
Control Info
Operation Times
Elements of a Production
Order
Order Header
------------------------------
Settlement Rule
Planned/Actual Costs
Operation Sequence
Operation 0010
------------------------------
Work Center
Control Information
Operation Times
Material at 0010
------------------------------
Material Number
Quantity
Date
Production Order Header
Order Header
Main View
Order Type
Order Number
Production Order Quantity
Production Order Date
Order Header
Master Data
For Routing
For Bill of Material
For Costing
Order Header
Allocation Data
For Plant
MRP Controller
Order Header
Acct Assignment
Settlement
Rates
Order Header
Order Monitoring
Date
Quantity
Production Order Operation
Operation
Overview
Operation Sequence
Operation
General View
Work Center
Control Key
Text
Status
Operation
Standard Values
Base Quantity
Standard Times (Setup, Machine, Labor)
Operation
Dates
Dates per time element
Splitting Default Values
Overlap Default Values
Continuous Flow Production
Operation
Overlap/Split
Production Order
Component
Material Number
Requirement Quantity
Requirement Date
Reservation
Item Category
Bulk Material Indicator
Operation
Long Text
Text Key
Component
Overview
Component
General Data
Production Order
Material: A, Qty: 100 PCS
Schd Type: B
Basic dates: Start/Finish

Components Operations
0010 B 1 0010 PHNASM00
0020 C 1 0020
0030
0040

User fields:
General text data
Quantity data
Value data
Date fields
Production Order
0010 PHNASM00
0020
0030
0040
PHNASM00
Std Values:
Setup: 005
Prodn: 075
TDown: 005
Routing
Work Center
A
B C
Bill of
Material
The Production Cycle
The Production Cycle
Issue
Materials to
Order
Select
BOM
Select
Routing
Schedule
Times & Dates
Calculate
Capacity
Purchase
Requisitions
Goods
Issue
Production
Order
Calculate
Planned Costs
Release
Order
Check
Availability
Print Shop
Floor Papers
Create
Order
Create
Required
Purchases
Confirm
Completion
Receive complete
goods into stock
Goods
Receipt
Confirmation Slip
Calculate
Actual Costs
Actual
Labor
Production Order Cycle Status
CREATED RELEASED DISPATCHED CONFIRMED DELIVERED COMPLETE

. BOM and RTG . Completion Conf- . Capacity Leveling . Actual Production . Goods Receipt . Actual costs
selected irmation possible possible for oper usage and time delivered settled to
captured cost objects
. Lead Time . Shop paper printed
Scheduling . Milestone operation
(MILE)
. Reservations . Availability Check
created for possible, at or
components before release

. Capacity Reqmts . Material issues
for Work Centers after oper release

. Planned Order
costs created (PRC)

. Settlement Rule
Determined (SETC)
CRT REL DSPT CNF DLV COMP
Production Order Creation
Manual
Order Creation
Order Proposal
MRP Conversion
Determine
Order Type
Routing
Selection
Lead Time
Scheduling
Bill of Material
Selection
Enter start or finish date
depending on scheduling direction
Component Overrides
Material Reservations
Item Categories
Alternate Sequence Assignments
One operation is required
Changes are allowed
before order release
Production Order Release
Production Order
Ready for Release
Material Availability
Check
Order or
Operation Release
Shop Paper
Printing Possible
Material
Withdrawals Possible
Order release is carried out manually
Uses checking rules defined in configuration
On-line or in background
Pick List, Confirmation Slips,...
Material Availability Check
Stock on
Hand

150 Units
Reservation
for

50 Units
Net
Available 150 100 300 100
Planned Order
for

200 Units
Dependent
Requirement
for
200 Units
Requirement
for 50 Units
are Available
Material Availability Check
Stock on
Hand

150 Units
Reservation
for

50 Units
Net
Available 150 100 300 100
Planned Order
for

200 Units
Dependent
Requirement
for
200 Units
Requirement
for 150 Units
not Available
06/01/95
Today
Goods Movement for a
Production Order
Material 1
Material 2
Production
Goods
receipt of
Material 3
Goods Issue
Consumption of
Material 1 and 2
Reservation
Planned Goods Issue
Unplanned Goods Issue
Goods issues only apply to stock items
Goods Issue Results
Goods Issue
Posting
Update
Reservations
G/L Account
Update
Accounting


Material
Document
Material
Usage
Statistics
Cost Object
Allocation
Completion Confirmations

Production Order
Operations

0010 - Assemble Board

0020 - Assemble Case

0030 - Assemble unit

0040 - Final Test


C
Confirm
Operation 0010
Activities
Confirm
Operation 0020
Activities
Confirm
Operation 0030
Activities
Confirm
Operation 0040
Activities
Partial or Final Confirmation
Single or Collective Confirmation
Milestone Confirmation
Reduction of Capacity Requirements
Determination of Actual Costs
Milestone
Confirmation Data
Quantity
Dates
Labor
Yield
Scrap Quantity
Scrap Reason
Start date
Finish date
Work Center
Personnel Number
Qualification
Wage Group
Wage Type
Capacity
Capacity Planning
MRP Requirements
Capacity Requirements
Capacity Evaluation
Work Center Capacity
Master
Data

Material

BOM

Routes

Work
Center
Capacity Leveling
to adjust capacity
periods
Standard Values
Formula Key
Formula
Constants
Std Values
Set up .5 hrs
Proc 5.5 hrs
Teardown .5 hrs
No. Splits
Formulas
Setup | Process | T/D
Work Center
Operation
Capacity
Requirements
Formulas
for
Scheduling
and
Capacity
Reqmts
Tables
Capacity Scheduling
Float Before Float After
Oper 0010
Oper 0020 Oper 0030
Queue | Setup | Process | Teardown | Wait | Move
Execution Time
Interoperation
Time
Interoperation
Time
Operation Lead Time
Material Master Lead Time
Lead Time Reduction
Measures
Float Before Float After
Queue | Setup | Process | Teardown | Wait | Move
(2) (1) (6) (1) (2) (2)
Use Minimum
Queue Time
Optional Splitting
or Overlapping
Use Minimum
Move Time
Reduce
Float Time
Reduce
Float Time
Queue
(1)
Split Process
Set up
(1)
Split Process
Wait
(1)
T Down
(1)
Move
(1)
Float After
Float Before
Standard Formulas
Operation Time is ....

Queue Time + Execution Time + Wait Time


Queue Time specified in the operation

Execution Time = Setup + Proc Time * Lot Size/Base Qty

Wait Time specified in the operation
Product Costing
Costing Integration
PP
PP-PC
Product Costing
PP-MRP
Mat. Requirements
Planning

PP-MPS
Demand Management

PP-BD
Basic Data

PP-IS
Shop Floor Info
System

PP-CRP
Capacity Planning

PP-SFC
Production Activity
Cntrl.
CO
CO-PC
Product Cost Acctg.
CO-PA
Profitability Analysis

CO-PA
Profit Centers

CO-OPA
Orders

CO-CCA
Cost Center
Accounting
R/3
Client / Server

SD
MM
PP
QA
PM
HR IS
OC
PS
AM
CO
FI
Sales &
Distribution
Materials
Mgmt.
Production
Planning
Quality
Assurance
Plant Main-
tenance
Human
Resources
Industry
Solutions
Office &
Communi-
cation
Project
System
Fixed Assets
Mgmt.
Controlling
Financial
Accounting
Costing and Organizational
Structures
Plant PP01 Plant PP02 Plant PP03 Plant 0001
Valuation
area PP01
Valuation
area PP02
Valuation
area PP03
Valuation
area 0001
Company
code 0001
Company
code 0002
Company
code PP01
Controlling
area 0001
Controlling
area PP01
Client
Chart of
accounts
GKR
Logistics and Cost Accounting
Logistics
Materials management
Production planning
Material requirements planning
Production orders
Capacity planning
Cost elements
Cost centers
CO orders
Cost Accounting
Pricing

Valuation

Profitability analysis

Controlling
Cost object controlling:
Preliminary and standard costing
Final costing
Master Data for Costing
Material Master Record
Costing View Product Costing Indicator,
Costing Lot Size, Overhead Group
Accounting View Valuation Class, Category,
Price Control
Bills of Material Materials required to make the
product
Cost Center Accounting data
Work Center Standard Value key and Efficiency
Rate
Routing Relevancy to Costing Indicator
Component Cost Layout 02
Cost Component 1 Raw Materials
Cost Component 2 Production
Cost Component 3 Overhead-Material
Cost Component 4 Overhead-
Production
Cost Component 5 Overhead-Admin
Cost Component 6 Overhead-Sales
Cost Component 7 External Processing
.
.
Cost Component 15 Miscellaneous
.
Cost Components
Cost components are defined in Product Costing Customizing
Each costing variant (standard cost, current cost, ...) points to a cost component layout
There can be up to 40 cost components in a cost component layout
For each cost component identify which costs are rolled up to the next higher level
Component Cost Layout 01
Cost Component 1 Raw Materials
Cost Component 2 Production
Cost Component 3 Overhead-Material
Cost Component 4 Overhead-Production
Cost Component 5 Overhead-Admin
Cost Component 6 Overhead-Sales
Cost Component 7 External Processing
.
.
Cost Component 15 Miscellaneous
.
The Production Order and
Inventory Accounting
A Production Order collects all costs associated with making an inventoriable item. The order
picks up costs through the manufacturing process from the Bill of Material and the Routing.
Bill
of
Material
Routing
Production Order
STATUS:
Created, Released,
Confirmed, Delivered,
Settled
Order: 73 Type: PP01
Plant: LR001
Sys Status:
CRT REL CNF DLV SETC
Quantities:
Total Produced: 100 Tons
Scrap: .001
Confirmed: 100 Tons
Dates:
Schedule 09/15/95
Confirmed 09/16/95
Costing Production Orders
Preliminary
Order Costing
Final
Order Costing
Simultaneous
Order Costing
Planned Order Costs are
calculated from target
input quantities according
to BOM and Routing
Standard Price for R/M
Planned Activity Prices
Planned Overhead Rates
Actual material and
activities used & confirmed
Invoices for external
activities
Overhead Calculated Rates
Order confirmed complete
Quantities delivered have
been posted
Last operation confirmed
complete
Calculating Production Costs
Cost
Center
Formula
Routing
Standard values
General standard
values
Work center
Formula constants
Activity type
Actual time/quantity
Activity price
Costs
Overhead Costing
Direct material costs
Indirect material costs
Direct production costs
Indirect production costs
Costing
sheet
+
+
=
=
Material costs
Production costs
+
=
Manufacturing costs
Indirect management
costs
Indirect sales costs
Cost of goods sold
+
+
=
The Costing Sheet
Calculation basis
Cost element
Origin
Overhead
Percentage rates
Planned/actual
Dependencies
Order type/category
Plant
Company code
Business area
Overhead key
Credit
Cost element
Origin
Object
Cost center
Order
Make-to-Order Production
Order
Delivery
Goods issue
Invoice
Material
requirements planning
Production
Sales order
stock
Target

Actual
Individual customer requirements
Production memo
Reduction
of
sales order
stock
Cost Objects with Make-to-
Order Production
Objects of integrated R/3 modules

Material number (MM)
Production order, operation (PP)
Sales order (SD)
Project item (PS)
Network (PS)
CO order (CO)
Basic General Functions for
Cost Object Controlling
Master data
Cost object, cost object hierarchy
Internal/external numbering system
Preliminary costing
Costing items
Automatic valuation
Planning aids (revalue, copy, reference)
Cost component structure
Simultaneous costing
Actual quantity used * price
Overheads
Actual yield
Calculation of target costs
Variances according to category
Work in progress
Analysis of actual product costs
Closed periods
Settlement to stock (at standard price)
Settlement to profitability analysis (variances)
Controlling
Summarization using classifiable characteristics
Selection using classifiable characteristics
Cost object analysis
Cost Roll-up
Costs for assemblies in the low-level code with the highest number are calculated first
Upper level is production costs at this production level
Lower level is costs of all material components processed at this production level
Total costs are the sum of the costs for the upper and lower level costs
Cost Component Split - Total
Material Internal Activity External Activity Overhead
Cost Component Split - Upper Level
Material
Cost Component Split - Lower Level
Material Internal Activity External Activity Overhead
Cost Component Split - Upper Level
Internal Activity External Activity Overhead
Cost Component Split - Total
Material Internal Activity External Activity Overhead
Finished
Product
Semi-Finished
Product
Raw
Material
Master Production Scheduling
Separate Planning Run for Master Schedule Items
During an MPS run, only master schedule items are planned
Dependent requirements are created for the BOM level directly below the planning level
Levels below the master schedule items are not planned
Changes can be made to the master plan without effecting lower BOM levels
Supply orders are reviewed for timing and quantity to match requirements
Allows for daily planning without a negative impact on system performance
MPS Item
Assembly 1 Assembly 2
MPS level
MRP level
MPS Functions
Protects the master plan from automatic changes to the master schedule
During a planning run, no automatic change proposals are made within the
planning time fence which is determined for each item in the Material Master.
The system calculates the planning time fence starting from the planning date
Planning Date Planning Time Fence
Automatic Order Proposals Order Proposals are Fixed
Planning Time Fence
Create Planned
Independent
Requirements
Carry out
Separate MPS
Planning Run
Make Changes Using
Interactive MPS
Start MRP Run
for Lower Levels
Using Demand Management
Proposal Changes within Planning Time Fence
System Creates Order Proposals Outside PTF
Fine tune MPS Items within
Planning Time Fence
Carry-out MRP
MPS Procedure
Planning Run Types
Regenerative Planning all master schedule items are
planned for a plant. It is generally used during initial start-
up to insure all items are planned or when heavy
maintenance causes most items to be re-planned.
Net Change Planning only master schedule items which
have undergone a change to the supply/demand balance,
such as warehouse receipts and issues, are re-planned. It is
common to run net change MPS daily.
Net Change Planning in the Planning Horizon shortens
the period over which MPS plans to the planning horizon,
which is set in Customizing. It is typically set to the length
of time of the longest lead time item. This means that only
those master schedule items which have undergone a
relevant change within the planning horizon are planned.
The system does not plan new order proposals within the planning time fence. Instead,
new requirements needed within the planning time fence are scheduled at the end of the
planning time fence, depending on the fixing type.
Planning Date Planning Time Fence
Automatic Order Proposals Order Proposals are Fixed
During the next planning run, the system places all order proposals that crossed over
the planning time fence at the PTF. The master scheduler needs to fix or firm these
order proposals to the correct date inside the PTF. Once fixed, the system will not change.

Orders can be firmed collectively (Planned orders->firm) through selection of MRP controller,
material, run schedule, production version, or planning id.
Firming Planned Orders
Availability Check
Inward movement
of goods
Outward movement
of goods
Stock
Purchase
Order
Purchase
Requisition
Planned
Order
Delivery
Sales
Order
Reservation
Other factors to
take into account:
Safety stock
Stock in transfer
Replenishment lead time
Blocked stock in QA

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