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ERP Production Planning

Master Data

Material Master -
Material Master Records contain information about a material that defaults to an SAP system task when you enter the material number. The Material Code, for each unique material, is generated by the SAP system.

Work Centers or Resources -
Operations are carried out at a work center. Work Center and Resource can be anything you use in the process of manufacturing. It can be Machine, Person, Production line, machines group etc. A workcenter or Resource is assigned to a Cost Center.

Bill of Material -
A Complete formally structured list of components that make up a product. The list contains the material number of each component, with the quantity, unit of measure and item category. BOMs are used in their different forms in various situations where a finished product is assembled from several component parts or materials. You can create the following BOMs in the SAP system:

Material BOMs
Equipment BOMs
Functional location BOMs
Document structures
Order BOM
Work breakdown structure (WBS) BOM

Routings or Master Recipes -
Routings enable you to plan the production of materials (products). Therefore, routings are used as a template for production orders and run schedules as well as as a basis for product costing. Master recipes are mainly used for planning the manufacture of products. Master recipes are used as a reference for process orders as well as the basis for product costing.

Overall Flow in SAP PP

The Flow in Production Planning and Control and consists of Planning and Execution.

Planning -

Production planning is usually done from budget sales plan. The Production plan is then divided into Quarterly plan, monthly plan.... etc.
Everything is based on the Sales plan to meet the sales requirements as per the production time cycles. Demand for the Product is produced through demand mangement, this data from demand management is transferred to MRP or it becomes input to MRP.
MRP checks for the availability of various raw materials used for prodcution at different stages using the master data Bill of material and available stocks. Purchase requistions are created for materials which are externally procured and with deficit stock, planned orders are created for inhouse produced materials. These purchase requisitions initiate the Procurement Cycle and the Planned orders the Execution Cycle of Production.

Execution -

These Planned orders are converted to Production/ Process orders, Using the master data Routings/ Master recipes. These orders are scheculed as per the production timings and released by the Production Supervisor. For all the materials used in production order a reservation is raised to stores department and as per the request the materials are issued to production personnel. Production is carried outbasing on the steps maintained in the Routing/ Recipes where the master data Resource/ Work Center is mentioned against each operation in the Recipe/ Routing. Once the production is completed the Confirmations and material consumptions are posted against the Order and the Goods Receipt is taken.

The above is the very crisp overview of SAP PP. 

Planning Process - Overview

Sales & Operations Planning (SOP) is a flexible forecasting and planning tool with which sales, production, and other supply chain targets can be set on the basis of historical, existing, and estimated future data. Rough-cut planning can also be carried out to determine the amounts of the capacities and other resources required to meet these targets. Use SOP to streamline and consolidate your company's sales and production operations. SOP is particularly suitable for long- and medium-term planning.

http://help.sap.com/saphelp_46c/helpdata/en/a5/632f3b43a211d189410000e829fbbd/frameset.htm

Demand Management determines the requirement dates and requirement quantities for important assemblies and specifies the strategies for planning and producing/procuring finished products. The result of Demand Management is the demand program. The demand program differentiates planned independent requirements and customer independent requirements. It gives the information needed in MPS and MRP for planning at SKU level. The placing of sales orders eventually consumes planned requirements and triggers updating to the Sales Information System.

http://help.sap.com/saphelp_46c/helpdata/en/a5/632f3b43a211d189410000e829fbbd/frameset.htm

You can transfer data both to and from Profitability Analysis (CO-PA). For example, you might use the sales and profitability plans you receive from Sales & Profit Planning (CO-PA-SPP) as the basis for creating sales and production plans in Flexible Planning. Having finalized these plans, you might pass the results back to CO-PA-SPP, which works out the cost of producing the planned number of units. You trigger the transfer of data from Flexible Planning to CO-PA in Flexible Planning. This is done with mass processing. You trigger the transfer of data from CO-PA to Flexible Planning in CO-PA. This is done either online or in the background.

http://help.sap.com/saphelp_46c/helpdata/en/a5/632f3b43a211d189410000e829fbbd/frameset.htm

The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production. In doing so, MRP tries to strike the best balance possible between "optimizing the service level and minimizing costs and capital lockup."

The MRP component (PP-MRP) assists and relieves MRP controllers in their area of responsibility. The MRP controller is responsible for all activities related to specifying the type, quantity, and time of the requirements, in addition to calculating when and for what quantity an order proposal has to be created to cover these requirements. The MRP controller needs all the information on stocks, stock reservations, and stocks on order to calculate quantities, and also needs information on lead times and procurement times to calculate dates. The MRP controller defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals.

http://help.sap.com/saphelp_46c/helpdata/en/f4/7d3f9344af11d182b40000e829fbfe/frameset.htm

Following process flow diagrams gives a crisp idea on planning process -

Useful OSS Notes (SMP Login Required)

632752

Using the MLCCS_KO88_TREATMENT program

667876

Transactions COOIS and COHV

1122048

Stock determination for confirmation without quantity

1082779

System does not return to variant transaction

728749

Backflushing not executed

641995

Account assignment check in the confirmation

612004

Limit and price determination in confirmation

3 Comments

  1. Hi there,

               It gives the the overall picture of SAP-PP module in a succinct way........ I must say that it's a very helpful doc for the newbies........

     Regards

    Kaushik

  2. Hi Chandra,

    Very well explained......keep it up buddy

    Useful for beginners.

    Thanks and Regards,

    Uzair Hussain

  3. Hi chandra,

    Thanks for the overview of PP. Its very useful and easy to understand.

    Thanks you,

    Prabhu.