Enterprise Systems Configuration Production Planning Master Data EGN 5620 Enterprise Systems...

Enterprise SystemsEnterprise SystemsConfiguration Configuration

Production PlanningProduction PlanningMaster DataMaster Data

EGN 5620 Enterprise Systems ConfigurationEGN 5620 Enterprise Systems ConfigurationSpring, 2012Spring, 2012

January 2008January 2008

© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All The Rushmore Group, LLC 2007. All rights reserved.rights reserved. 22

Enterprise Operations Planning Process

Execution

Execution

Detailed Planning

High Level Planning

ForecastingSales and Operations

Planning

Demand

ManagementMPS MRP

Sales Information

System

CO/PA

Manufacturing

Execution

Order

Settlement

Procurement

Process

SalesProcess

BPI – II Final RoadmapBPI – II Final Roadmap



Sales OrderEntry

Check Availability

ProductionProcess

Run MPS w/MRP

Convert ProductionProposal

Scheduleand Release

ProcurementProcess

Pick Materials

GoodsIssue

Purchase Requisition

Purchase Order

GoodsReceipt

InvoiceReceipt

Paymentto Vendor

CompletionConfirmation

Goods Receipt

QualityInspection

Order Settlement

Post Goods Issue

Invoice Customer

Receipt ofPayment

Production and PlanningProduction and PlanningMaster DataMaster Data

Concept & Theories Concept & Theories

Production and PlanningProduction and PlanningProduction planning is a business process

which creates and maintains production plans for manufacturing of semi-finished goods or assembly of finished goods

Common manufacturing processes:Discrete, and Continuous



Production Planning & ExecutionProduction Planning & Execution

DemandManagement

Sales & OperationsPlanning (SOP)

MPS

MRP

ManufacturingExecution

OrderSettlement

ProcurementProcess

Strategic Planning

Detailed Planning

Manufacturing Execution

Production and PlanningProduction and Planning



Players in the Planning◦Strategic Planning

CEO, COO, CIO, CFO, Controller, Marketing Director

◦Detailed Planning Line Managers, Production Scheduler, MRP

Controller, Capacity Planners◦Execution

Line Workers, Shop Floor Supervisors

Sales and Operations Planning Sales and Operations Planning (SOP) - review(SOP) - reviewFlexible forecasting and planning toolUsually consists of three steps:

◦Sales Plan◦Production Plan◦Rough Cut Capacity Plan

Planned at an aggregate level in time buckets

Demand Management - reviewDemand Management - review

Link between Sales Planning (SOP) & Detailed Planning (MPS/MRP)

The results of Demand Mgmt is called the Demand Program, it is generated from our independent requirements – planned independent requirement (PIR) and customer independent requirement (CIR)

Demand ManagementDemand Management

PlannedIndependent

Requirements

CustomerIndependent

Requirements

SalesForecast

DemandProgram

MPS / MRP

Planning StrategiesPlanning Strategies Planning strategies represent the business procedures for

◦ The planning of production quantities ◦ Dates

Wide range of strategies

Multiple types of planning strategies based upon environment◦ Make-To-Stock (MTS)◦ Make-To-order (MTO)

Driven by sales orders◦ Configurable materials

Mass customization of one◦ Assembly orders

Planning Strategy for Make-to-Planning Strategy for Make-to-StockStockPlanning takes place using Independent

RequirementsSales are covered by make-to-stock

inventoryStrategies

◦Net Requirements Planning◦Gross Requirements Planning◦Production by Lot Size◦Planning with Final Assembly

Planning Strategy for Make-to-Planning Strategy for Make-to-OrderOrderPlanning takes place using Customer

OrdersSales are covered by make-to-order

productionStrategies

◦Make to Order Production◦Planning without Final Assembly◦Planning with Planning Material

Master Production Scheduling Master Production Scheduling (MPS)(MPS)

MPS creates and maintains a weekly schedule of production for meeting independent demands.

Material Requirement Planning Material Requirement Planning (MRP)(MRP) In MRP, the system calculates the net requirements while

considering available warehouse stock and scheduled receipts from purchasing and production

During MRP, all levels of the bill of material are planned The output of MRP is a detailed production and/or purchasing

plan Detailed planning level

◦ Primary Functions ◦ Monitor inventory stocks◦ Determine material needs

Quantity Timing

◦ Generate purchase or production orders

Demand-Independent vs. Demand-Independent vs. Dependent Dependent Independent Demand – Original source of

the demand.Dependent Demand – Source of demand

resides at another level.

Net RequirementsNet Requirements

Procurement Proposal

Firmed Receipts

Firmed Orders or Purchase Requisitions

Requirements – Planned Ind. Req.,

ReservationsSales Orders,

Etc.

StockSafety Stock

Shortage

Lot sizingLot sizingStatic

◦Based on fixed values in the Material MasterPeriodic

◦Groups net requirements together from multiple periods

Optimum◦Calculates the optimum lot size for a several

periods of net requirements

Procurement TypeProcurement Type

External Procurement◦Purchase Requisition◦Purchase Order◦Schedule Line

Internal Procurement◦Planned Order◦Production Order◦Process Order

Multi-Level SchedulingMulti-Level Scheduling

Time

Finished Product

Assembly 1

Semi-Finished Good

Raw Material

Component

RequirementsDatePlanned Order


MRP vs. Consumption-Based MRP vs. Consumption-Based

Whether or not a material is planned using MRP or Consumption Based is determined by the MRP Type on the MRP1 screen of the Material Master

MRP

VB – Reorder-Point

Consumption Based

VV – Forecast Based

RP – Replenishment

PD – MRP

VSD – Seasonal MRP

Consumption-Based Consumption-Based

Lot Size

Replenishment Lead Time

Safety Stock

Reorder Point

Output of MRP Output of MRP

MRP

Planned Order

Convert to

In-HouseProduction

ProductionOrders

ProcessOrders

PurchaseRequisitions

PurchaseOrders

ScheduleLines

ExternalProcurement

Production and PlanningProduction and PlanningMaster DataMaster Data

SAP Implementation SAP Implementation

Business Process Integration Business Process Integration


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MM

PP

SD

Org

Dat

a

Rules

MM

PP

SD

Master D

ata

MM

PP

SD

FI SDMM

FI

FI

FI

PP

Business Process IntegrationBusiness Process Integration



PP

Org

Dat

a Ma

ste

r Data

PP

Ru

les

PP

PP

ProductionProcess

Scheduleand Release

Shop FloorDocuments

Goods Receipt

Order Settlement

GoodsIssue

ProductionProposal

(Planning/Other)

CompletionConfirmation

Capacity Planning

Production Process (Make-to-Stock)

PP: Master Production Schedule (MPS)PP: Master Production Schedule (MPS)

MPS focuses on independent demand items only and serves as an input to MRP to generate subsequent dependent demands.

ESET

EPEN StandGiftbox

CartridgeCrown CapBarrel

MPS run MPS Items

Non-MPS Items

Elements of A Production OrderElements of A Production Order



Raw Materials & Sub-Components

Bill of Material

Components

(Production Parts

List)

Work Center

Operations

Production Routing

Production Order




PP

Org

Dat

a

PPPP

PP

Organization DataOrganization DataClientCompany codePlantStorage locationShipping pointWork Center



Enterprise StructureEnterprise Structure

PlantPlant(P0XX)(P0XX)

Client (600)Client (600)

Chart of Chart of AccountsAccounts

CompanyCompanyCode (C0XX)Code (C0XX)

Fiscal YearFiscal YearVariant Variant (2012)(2012)

Credit ControlCredit ControlAreaArea

PurchasingPurchasingOrganizationOrganization

Purchasing Purchasing GroupGroup

Shipping Shipping PointPoint

SalesSalesOrganizationOrganization

Distribution Distribution ChannelChannel

DivisionDivision

Sales AreaSales Area

Controlling Controlling AreaArea

SL10SL10 SL20SL20

Work Work CentersCenters

WCWC 10 10WC 20WC 20

Organization Data - Work Center Organization Data - Work Center

Unique production or assembly areaMay include

◦Equipment ◦Groups of equipment◦Production lines◦Employees◦Groups of employees

Operations carried out at work center



Organization Data Organization Data Plant specific organizational units

◦MRP controller ◦Production controller/production

scheduler/planner group ◦Person responsible (financially)

Non-plant specific organizational units◦ Capacity planner






PP

Ma

ste

r Data

PPPP

PP

Master Data for Production Master Data for Production PlanningPlanning

Bill of Material Master DataWork Center Master DataWork Center Control KeyProduct RoutingMaterial Types Allowed in ProductionControlling Activities For ProductionActivity PricesMaterials



Bill of MaterialsBill of MaterialsBOM is a hierarchical structure of the

materials needed to produce a finished goods or semi-finished goods.

BOMs in SAP are defined as single-level, but can be constructed multi-level by nesting several single-level BOMs.

Nesting refers to a hierarchy in which a bill of materials contains its own bills of materials.



Bill of Material Master DataBill of Material Master Data

Bill of Materials (BOM) are created as single-level or multi-level relationships between one parent material and the sub-component material

January 2008January 2008© SAP AG - University Alliances and The Rushmore Group, LLC © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.2007. All rights reserved. 3838

EPEN

Barrel Cap Crown Cartridge Band Clip


Variant Bill of Materials (BOM)◦Several products with a large proportion of

identical parts.


EPEN - Red

RedCartridge

Band Etc.Black

CartridgeBand Etc.

EPEN - Black

Bill of Material Master DataBill of Material Master DataMultiple versions of Bill Of Materials (BOM)

◦One product produced from alternative components or processes, where the differences are small (usually the quantity of a component).

◦BOM 1 = lot size 1 - 100◦BOM 2 = lot size 101 – 999


BlackCartridge

(Make)

BandEtc.

EPEN - Black

BlackCartridge

(Buy)

Band Etc.

EPEN - Black



Semi-finished goods

Raw Material

Semi-finished good

Finished Good

Raw Material

Raw Material

Raw Material

Raw Material


BOM in SAP consists of a header section and an item section.

Header section includes data that apply to entire BOM, such as finished material number, plant, usage, validity, status, and base quantity.

The BOM is valid from the date specified in the header.

Usage identifies the purpose for which the BOM can be used. For example, 1 is for production.



Bill of Materials Master DataBill of Materials Master Data

Items section identifies all materials needed to make finished goods or semi-finished goods identified in the header.

Item category determines how material is used in the BOM.

Data for each item are: ◦ material number, ◦ description, quantity, and ◦ item category.



Bill of Material Master Data Bill of Material Master Data (item category)(item category)

L: Stock itemN: Non-stock itemR: Variable –size itemT: Text item used to include notes and

comments within the BOM. Notes may explain how to use the material or identify any unusual assembly requirement.

D: Document item used to include document such as engineering drawings, assembly instructions, and photographs.




K: Class item used in variant BOMs to identify a class or group of items. A variant BOM is used to create multiple versions.

M: Intra material, or phantom items used as a logical grouped set of materials that could collectively be considered as a single material. Phantom material is not an actual material and is mostly temporarily used during production planning.




Where is the Bill Of Materials (BOM) used?1. MRP uses BOM to determine dependent

requirements2. Controlling uses BOM to calculate product

costs3. Production uses BOM to issue the proper

quantities of components and raw materials to the shop floor



Work CenterWork CenterWork center is a location where value-added

work needed to produce a material is carried out.

A work center can be a machine, a group of machines, an entire production line, a work area, or a person or group of people who are responsible for completing operations.

A work center is a resource that can be used for a variety of purposes and for multiple processes.



Work CenterWork CenterWork center used to define capacities

◦Labor◦Machine◦Output◦Emissions

Capacities used in◦Capacity requirements planning (CRP)

Detailed schedulingCosting



Work CenterWork CenterAssigned

◦Cost center◦Human Resources (HR)

Qualifications Positions People



Work CenterWork CenterWork Centers have multiple views of:

◦Basic data◦Default values◦Capacity overview◦Scheduling◦Cost center assignment◦Technical data



Work CenterWork Center



Basic data section: ◦ Name, and description of the work center◦ Person or group of people who are responsible for

completing operations◦ Task list: a list of operations that are required to

accomplish a task. Operations are the specific tasks that must be completed, such as drilling, cutting, assembling. In production, a task list takes the form of a product routing or a master recipe.

◦ Standard value key: used to assign standard or planned values for operations, such as setup and execution time. Companies use these values to calculate costs, execution times, and capacity requirements.




Default Values: for operations performed at the work center.

Control Keys: specify how an operation or a sub-operation is scheduling, how costs will be calculated, and how operations will confirmed once they are completed in the work center.

Wage data: used by processes in human capital management, such as payroll.

Standard value keys: identify the normal time elements – the activities that consume time associated with the work center. Typical time elements are setup time, machine time, labor time, and teardown time.




Available capacity defines how much work can be performed at the work center.

A work center can include more than one resource or capacity, such as labor and machine.

Scheduling basis determines the specific capacity to be utilized for production.




A work center is associated with a cost center which is a container for accumulation of costs. Costs associated with operations completed in a work center are calculated using formulas that utilize the costs and standard values associated with each activity type, for example, setup, labor, and machine.

Work Center Control KeyWork Center Control Key

SchedulingDetermine capacity requirementsInspection characteristics requiredConfirmation requiredReworkCostSchedule external operations – std values



Product RoutingProduct Routing

A list of tasks or operations that must be performed to convert a material to a part, component, or product.

Routing is a sequence of operations which detail the manufacture of a product

Routings are used as a template for production orders and run schedules as well as a basis for product costing.



RoutingRoutingRouting are used to determine:

◦Operations◦Work centers◦Material components ◦Production resources and tools◦Quality Checks



RoutingRouting



Routing UseRouting UseRoutings will be used in

◦Scheduling (dates, times)◦Costing◦Capacity planning◦Production orders



RoutingRouting


StandardSequence

AlternateSequence

ParallelSequence

Operation 10

Operation 20

Operation 30

Operation 40

Operation 10

Operation 20

Operation 30

Operation 40

Operation 25

Operation 20

Operation 10

Operation 30

Operation 40

Operation 25

Material Types Allowed In ProductionMaterial Types Allowed In ProductionMultiple material types may be used in a

routing/BOM◦Raw materials◦Semi-finished product◦Trading goods are allowed but not standard◦Text or Reference materials common



Display Routing ListDisplay Routing ListA collective report displaying the available

routings and the material allocations to operations

Four General Types◦Operations Related◦Component Related◦PRT Related◦General List (Operation Control Ticket



Controlling Activities for ProductionControlling Activities for Production

Used to perform internal cost allocation, where activities by a cost center are measured◦Labor time◦Machine hours

Output activities are valuedAllocation of an activity type is always

made with the allocation cost element created in activity type planning



Activity Prices Activity Prices Prices (costs) for planned activities

◦Fixed or Variable Labor = $$/hour Machine = $/hour Overhead = %



Product GroupProduct Group

Aggregate planning that group together materials or other product groups (Product Families)◦Manufacturing procedure◦Product design◦Market niche, etc.

Proportional Factors (Percentages for components)

Product GroupsProduct Groups



• Multi-level or single-level– A product group is multi-level if it contains

other product groups– Lowest level in a product group hierarchy

always consists of materials.– A product group is single-level if its members

are materials only– A material or product group can be a member

of more than one owner product group




PPPP

Ru

les

PP

PP

MRP Control ParametersMRP Control ParametersEnvironment

◦Number rangeMaster Data

◦Materials Requirements Planning controllers◦Float times

Planned Orders◦Conversion order type◦Dependant requirement availability



MRP Control Parameters MRP Control Parameters (continued)(continued)Planning run

◦Bill of Material (BOM) selection ◦External procurement◦Planning horizon

Availability Check◦Material◦Production Resource/Tool (PRT )◦Capacity

Scheduling Control Parameters



General Planning ParametersGeneral Planning Parameters

Order Type Control Parameters◦Types of routings, BOM’s per order type:

manually or automatically◦Availability checking

Create Confirmation Parameters ◦Reservations◦Status Updates

Define Valuation of Goods Received◦Moving Average Price Control evaluation



Material Master Planning Material Master Planning ParametersParametersMaterials Requirements Planning views for

materialsWork Scheduling views for manufactured

products



PEN, Inc. PEN, Inc.

Production and PlanningMaster Data

Pen Inc. Business Module II for Pen Inc. Business Module II for Selling Finished Goods by ProductionSelling Finished Goods by Production


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Pre-Sales Activity

Sales Order

Delivery Billing

Planned Order

Production Order

Completion Confirmation

In Inventory

Plant or Warehouse

Availability Check

NO

YES

Goods Issued to Delivery

Goods from Production Order

General Ledger Accounts

InventoryPostings

AccountsReceivable

Issue Goods to Production

Order


Purchase Order

Goods Receipt

Invoice Receipt

AccountsPayable

NO

Or

Activity Type/Price PlanningActivity Type/Price Planning



Production GroupProduction Group



Orders, orders, ordersOrders, orders, orders

Planned Order (planning)◦A request created in the planning run for a

material in the future (converts to either a production or purchase order)

Production Order (execution)◦A request or instruction internally to produce a

specific product at a specific timePurchase Order (execution)

◦A request or instruction to a vendor for a material or service at a specific time

Exercises:Exercises:212. Create primary cost elements213. Create secondary cost elements214. Create cost element groups215. Create statistical key figure216. Create controlling document number ranges217. Define controlling settlement document number ranges 246. Maintain plant parameters for production planning258. Create vender master records centrally265. Create bill of materials266. Create person responsible for work center267. Create work center location269. Create capacity270. Create activity type labor271. Set activity prices272. Create work center for production

Exercises:Exercises:273. Create finished products routing274. Display routing list275A. Create material master for production group275B. Assign numbers for product group

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