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    H84: Make-to-Stock (MTS) Production with

    Batch Management, Warehouse Management

    (WM) and Handling Unit Management (HUM)

    Scenario Overview

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    SAP AG 2006

    The scenario H84 Make-to-Stock (MTS) Production with Batch Management,

    Warehouse Management and Handling Unit Management describes the processes

    involved in sales-order-independent production including a variety of logistic

    functions, such as bulk material, scrap, missing parts with workflow, rework, handlingunit management, batch management, first in first out material consumption and

    manufacturing part numbers.

    Material costing

    Sales order processing and offset against planned independent requirements

    Material requirements planning (MRP)

    Planned orders / purchase requisitions processing

    Procurement with scheduling agreement

    Manufacturers Part Number Processing (MPN)

    Bulk material handling

    Production order processing

    MTS-Production w. Batch Management, WM and HUMOverview I

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    Warehouse management (WM), lean WM processing

    Picking according WM/PP material staging

    Batch management

    Scrap processing

    Rework order process

    Workflow for missing parts (optional)

    Barcode integration (optional) for order confirmations and picking list

    Handling unit management (HUM)

    Goods issue and billing

    Order settlement

    MTS-Production w. Batch Management, WM and HUMOverview II

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    Business Benefits Customer Manufacturer / Supplier Business Benefits

    Material Requirements Planning

    (MRP): The daily MRP run generates

    replenishment elements at each low-

    level code. The system automatically

    generates purchase requisitions for

    purchased parts within the 3-month

    opening period for the planned

    order. The system uses planned

    orders to implement receipt

    elements, which are also required. In

    general, the system also creates

    planned orders for parts, which will

    be produced internally. When the

    planned opening date has beenreached, these planned orders are

    converted to production orders by

    the production planner. As a result,

    the system reserves all of the

    required components. In the material

    master for all of the Interface Cards

    in this series, the planned opening

    date is set to 5 days. Some raw

    materials and packing material are

    planned on a consumption basis.

    Since these parts are required for a

    variety of other Boards and Cards,

    large quantities of this material are to

    be stored in the warehouse.

    Replenishment orders are triggered

    as soon as a specified reorder point

    is reached. The stock issues are

    backflushed when the turn activity is

    confirmed.

    Costing run

    Costing Run: The purpose is to

    calculate prices for the selected

    materials which are then updated in

    the material master records as the

    standard price. The standard price is

    used to valuate goods movements

    within the company. The price update

    involves two steps: marking the

    calculated price and then releasing it.

    Before you can mark the prices, you

    have to allow it for the company.

    Sales order processing with

    availability check: The system checksthe incoming sales orders to

    determine whether the components

    are available. The available warehouse

    stock and the receipts from forecast

    planning are taken into account.

    Therefore, the system calculates the

    confirmed delivery date from the

    receipt date of the next (still

    unplanned) planned or prod. order. If

    a suitable receipt element is found,

    the sales order receives a

    confirmation date, and the order

    confirmation can be printed out. At

    the same time, the system compares

    the forecast details with the specific

    customer requirements.

    MRP at plant level

    Production Order

    Processing -

    Create Production Order

    Scrap treatment and analysis

    Sales Order Processing with

    Availability Check

    Purchasing -

    Create Purchase Orders

    Customer Order is

    transferred via eMail / Fax

    MTS-Production w. Batch Management, WM and HUMBusiness View

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    Business Benefits Customer Manufacturer / Supplier Business Benefits

    Procurement with Manufacturing

    Part Numbers: The process

    integrates the manufacturing parts

    number, batch and quality

    management process in

    procurement.

    Quality Inspection:

    To ensure that the delivery of

    material meets predefined quality

    standards, a quality inspection is

    performed and the result recorded in

    the inspection lot according to thedefined inspection plan. The usage

    decision is made to accept the

    material and it is moved to

    unrestricted stock.

    Purchasing -

    Manufacturing parts numberprocessing

    Purchasing-

    Maintain delivery schedule

    for scheduling agreement

    Post goods receipt

    WM, Lean WM, MPN

    Analysis and treatment for

    bulk materials

    MTS-Production w. Batch Management, WM and HUMBusiness View

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    Business Benefits Customer Manufacturer / Supplier Business Benefits

    Make-to-stock production/ Production

    Order Processing:

    The production planner releases theproduction orders created on the

    release date, and simultaneously

    prints the shop floor papers with bar

    code. Production orders with missing

    parts are usually not released by the

    production planner. However, in

    exceptional cases, the production

    planner can also send orders with

    missing parts to production and the

    planner receives information as soon

    as the missing material comes in. Thewarehouse worker picks the

    production order in the parts

    warehouse based on the FIFO

    strategy, and uses the pick list to pick

    the components managed in the

    temporary warehouse for each order.

    The consumable material is managed

    in service stock at the work center. At

    the beginning of production planning,

    the planned scrap quantity(component scrap, assembly scrap

    and operation scrap) is considered.

    Missing Part Management

    with Workflow Integration

    Production Order

    Processing -

    Release Order

    Picking components for

    semifinished and finished

    products - WM/PP materialStaging

    Production Order

    Processing -

    Confirmations with Barcode

    Integration (optional)

    Handling Unit Management

    MTS-Production w. Batch Management, WM and HUMBusiness View

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    Business Benefits Customer Manufacturer / Supplier Business Benefits

    Cost Object Controlling:Cost object controlling in discrete

    manufacturing is an area in cost

    accounting that assigns the costs

    incurred in the production of company

    activities (such as internally

    manufactured materials) to those

    activities. Product cost by order

    enables you to analyze costs at the

    level of manufacturing orders, process

    orders, and production orders. In

    product cost by order, the

    manufacturing orders themselves are

    the cost objects. Costs charged tomanufacturing orders are usually

    analyzed and settled by lot. This

    means that variances can only be

    analyzed after the entire planned

    production quantity has been put into

    inventory. The settings in Production

    Planning & Control (PP, PP-PI) are

    required to cost manufacturing orders

    as part of production execution.

    Create Delivery for HU and

    Post Goods Issue

    (only DIMP)

    Create Billing Document

    Cost Object Controlling

    WIP Calculation, Variances,

    Order Settlement

    MTS-Production w. Batch Management, WM and HUMBusiness View

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    Supplier/ManufacturerCustomer

    SAP ERP

    Purchase order

    Creation of production order for finished goods

    Production of semi-finished goods

    Planned Independent Requirement Processing (Catt)

    Material requirements planning

    Order release and confirmation

    Rework orderprocess

    Creation of sales order

    Billing

    Cost object controlling

    Delivery processing with handling unit

    S

    crapProcessIing

    P

    rocurementwith

    sch

    edulingagreement

    Picking components with WM/PP

    interface and FIFO strategy

    Normalprocess

    Missingpartsworkflow

    FIFOwithIM/WMpicking

    Confirming production orders (optional: with barcode scanner)

    Creating handling units

    Bulkmaterial

    processing

    Purchase

    order processing

    FIFOwithbackflush

    FIFOwithleanWM

    Production order release and confirmation for finished goods production order

    MTS-Production w. Batch Management, WM and HUMComponent View

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    H84-1000

    Interface Card

    V24/2 HC 150 EHALB

    PD

    H84 -1010

    Hexagon HeadScrew

    ROH

    VB

    H84 -1020IC

    LogicMAX884

    ROH

    VB

    H84 -1030

    Transformer

    ROH

    PD

    H84 -1040

    Circuit BoardPCB 2L 8B 7.6

    HALB

    PD

    H84 -1050

    ConnectorSUB-D2

    ROH

    PD

    H84 -1060

    ResistorRES0805MS392

    ROH

    VB

    H84 -1046Flex Connection

    ROH

    PD

    H84 -1045Panel

    ROH

    PD

    HUSC

    BIM B

    M

    BH

    B LMWM

    B MP

    Operation scrap in

    BOM item with net

    indicator

    SC

    Assembly scrap in Material Master

    Component scrap

    in Material Master

    SC

    B

    Procurement

    with Scheduling

    Agreement

    RW

    SC

    IM

    M

    RW

    MP

    WM

    LM

    BH

    B

    Lean Warehouse Management

    Missing Parts Processing

    Bulk Material Handling

    Batch Management Manufacturer Part Number

    Rework

    Scrap ProcessingWarehouse Management: FIFO

    B

    H84 -1070

    Glue

    ROH

    VB

    H84-1080

    Packaging Material

    for H84-1000VERP

    VB

    BH

    0002 - Production

    H84 -1047Plastic Film

    ROH

    PD

    H84 -1048SuppliesROH

    PDWMWM

    0006 0006 00050006

    LM

    HU Handling Unit Management

    Inventory Management: FIFO

    MTS-Production w. Batch Management, WM and HUMProduct Structure

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    Convert

    PlannedOrder

    Dependent

    Reqmts

    Reservations

    Warehouse

    Material Reqmts

    Planning

    Demand

    Program

    Planned Ind.

    Requirements

    Production

    Order

    MTS-Production w. Batch Management, WM and HUMMaterials Requirement Planning (MRP)

    S

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    Manufact.H8401

    Manufact.

    H8402

    MPN-Nr.H84-1031

    MPN-Nr.

    H84-1032

    Material-Nr.

    H84-1030

    Vendor /

    Distributor

    L8400

    Info-Record

    5300000XX

    Assumptions: Electronical component has one material number and one price

    Update of price in Purchase Order (PO) Material delivered by one Distributor (e.g. exchangeable electronical

    component) The AMPL (Approved Man. Part List) specifies, which components from

    which manufacturer can be reused MPN Information can only be seen in PO (Print version) but not in PO

    document in PO only inventory managed material-number

    MTS-Production w. Batch Management, WM and HUMMPN Processing

    MTS P d ti B t h M t WM d HUM

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    Order proposal

    (planned order)

    Order creation

    Availability

    check

    Order settlement

    Goods Receipt

    Order headerOrder header

    OperationsOperations

    ComponentsComponents

    CostsCosts 2050

    100

    Material withdrawal

    Serial Number

    Assignment

    Production Order

    MTS-Production w. Batch Management, WM and HUMProduction Order Processing

    Scrap Processing Rework Processing

    Order release and

    batch determinationfor componentsFinished / semifinished

    Goods

    MTS P d ti B t h M t WM d HUM

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    Conversion of planned order to production order

    Manual execution of material availability check and control of the

    missing parts list

    Goods receipt of missing parts into plant stock. This operation

    triggers the workflow event (optional)

    The MRP planner is informed about the situation change by means

    of the workflow or a standard customized method by SPRO(optional)

    MTS-Production w. Batch Management, WM and HUMMissing Part Management

    MTS P d ti B t h M t WM d HUM

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    Manually ATP Check

    GR of Missing parts

    Missing Part List

    H84-1050

    Workflow

    Information for MRP controller

    Production Order

    Purchase Order

    MTS-Production w. Batch Management, WM and HUMMissing Part Management

    Missing PartManagement

    MTS P d ti B t h M t WM d HUM

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    MRP

    Convert Planned Order

    Operation confirmation

    Goods Receipt

    Production Order Rel.

    Need to Rework

    N

    Y

    Select Reference

    Operation Set

    Insert Reference

    Operations Set to PO

    Confirmation

    Rework Operations

    MTS-Production w. Batch Management, WM and HUMRework Process

    Planned independent

    requirements/sales order

    Planned Orders/

    Purchase Requisitions

    Rework Process

    MTS P d ti B t h M t WM d HUM

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    Production Plant

    10

    Receiving

    storagelocation

    Production

    Order

    Release

    30

    Quality

    Check

    User StatusControl

    Trigger

    Point

    Reference

    Operation Set

    10

    Operations

    10 20

    ReworkOperations

    20

    Quality

    Check

    Trigger

    Point

    MTS-Production w. Batch Management, WM and HUMRework Process

    MTS Production w Batch Management WM and HUM

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    Goods receipt

    Purchase Requisition

    for bulk material

    External

    procurement

    process

    MRP run for

    bulk material

    Goods issue bulk

    material to cost center

    Bulk Material

    MRP

    Convert Planned Order

    Operation confirmation

    Production Order Rel.

    Planned independent

    requirements/sales order

    Planned Orders/

    Purchase Requisitions

    MTS-Production w. Batch Management, WM and HUMBulk Material Processing

    MTS Production w Batch Management WM and HUM

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    Scrap definition in master data:

    Material master data (assembly scrap, component scrap)

    BOM (operational scrap, component scrap, net indicator)

    Routing (operational scrap factor)

    Process Flow:

    Convert planned order to production order and view its scrap calculation,

    which impacts the quantity of input components and output assembly

    Production order release and production start

    Confirm production order at operation level and view the default

    confirmation parameter values with effect of scrap definition

    MTS-Production w. Batch Management, WM and HUMScrap Processing

    MTS Production w Batch Management WM and HUM

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    Scrap definitionin master data

    View scrap info

    Scrap processing

    in confirmation

    Operation confirmation

    Production Order Rel.

    MRP

    Convert Planned Order

    Planned independent

    requirements/sales order

    Planned Orders/

    Purchase Requisitions

    Goods receipt

    Material master BoM Routing

    MTS-Production w. Batch Management, WM and HUMScrap Processing

    MTS Production w Batch Management WM and HUM

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    Prer.: Production Order

    Process

    the operations

    Deliver printed forms

    to related sites

    Release Production Order

    Create production order

    with operations print production order

    And pick list w. barcode

    Scan barcode

    in the printed order

    Finishing operation

    confirmed in the system

    Print Procedure

    in SAP system

    External

    workflow

    Process: begin

    scanning procedure

    Complete operations

    Scan barcode

    For GI and confirmation

    Beginning operation

    recorded in the system

    Process: finish

    scanning procedure

    Completeoperation process

    MTS-Production w. Batch Management, WM and HUMBarcode Integration (optional)

    MTS Production w Batch Management WM and HUM

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    MTS-Production w. Batch Management, WM and HUMBarcode Integration (optional) Forms: Traveller (DE)

    MTS Production w Batch Management WM and HUM

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    MTS-Production w. Batch Management, WM and HUMBarcode Integration (optional) Forms: Traveller (EN)

    MTS-Production w Batch Management WM and HUM

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    SAP AG 2006

    The following functions are provided to support Batch Management for components and

    finished goods:

    Batch determination according to batch status

    Batch classification goods receipt for purchase order (raw materials) internal number assignment characteristics for batch classification

    Batch creation for finished goods by production order release

    Batch Management in WM Batch Management for picking according to batch search strategy (FIFO)

    Batch Management with HUM

    MTS-Production w. Batch Management, WM and HUMBatch Management

    MTS-Production w Batch Management WM and HUM

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    MTS-Production w. Batch Management, WM and HUMWM/PP material staging in Production Supply Area

    H84 -1040

    Circuit Board

    PCB 2L 8B 7.6

    HALB

    STORAGE LOCATION 0002

    H84 -1045

    Panel

    ROH

    PD B LMWM

    B

    H84 -1047

    XXX

    ROH

    PD

    H84 -1048

    XXX

    ROH

    PDWMWM

    Production Supply Area PROD_MTS

    for Work Center(s)

    STORAGE LOCATION 0006 WM F01

    WM STORAGE TYPE 100

    PRODUCTION SUPPLY

    WM

    STORAGE

    TYPE 001

    HIGH RACK

    STORAGE

    WM

    STORAGE

    TYPE 002

    SHELF

    STORAGE

    WM

    STORAGE

    TYPE 003

    OPEN

    STORAGE

    WM

    STORAGE

    TYPE

    .

    Pick list item(1) Crate part(2) Rel. Order part(3)

    MTS-Production w Batch Management WM and HUM

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    MTS-Production w. Batch Management, WM and HUMWM/PP Material Staging with Pick List Items (1)

    Material masterdefinition

    WM stock in

    storage

    Confirmation of

    transfer order

    Picking: transfer order

    for WM/PP- delivery

    Release of

    production order

    Confirmation of prod.

    order: backflush -> GI

    storage bin supply area control cycle

    WM/PP-delivery (goods

    issue not relevant)

    MTS-Production w Batch Management WM and HUM

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    MTS-Production w. Batch Management, WM and HUMWM/PP Mat.Staging w. Crate Parts(2)/Release Order Parts(3)

    Material master

    definition

    WM staging of crate

    parts/release order parts

    Confirmation of

    transfer order

    Replenishment after

    release of prod. orders

    WM stock in

    Storage

    Confirmation of prod.

    order: backflush -> GI

    storage bin supply area control cycle

    Transfer requirements +

    transfer orders

    MTS-Production w. Batch Management, WM and HUM

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    Definition of handling units:

    A handling unit is a physical unit that consists of the packaging materials (load carrier/

    packaging material) and the goods contained therein. A handling unit is always a

    combination of materials and packaging materials. The MTS scenario uses handling

    units on finished good level. Two ways of packaging (= creating HU) are possible:

    MTS Production w. Batch Management, WM and HUMMTS-Production with Handling Units (HU)

    GR PRODUCTION

    MIGO (101)

    Inbound Delivery

    (FG / HU)

    Goods on Storage Location

    w/o HU (0003)

    Packaging by the end of Production (1) Packaging before Delivery (2)

    Create

    HU

    Outbound Delivery

    (0084 FG/HU)

    GI

    Stock Transfer to FG Storage Location

    (0003 0084 FG/HU)

    MTS-Production w. Batch Management, WM and HUM

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    MTS Production w. Batch Management, WM and HUMHandling Units - Packing by the end of Production (1)

    Sales Order Outbound

    Delivery

    Picking:

    Assigning

    Batch +HU

    to

    Delivery

    Handling

    Unit xxx

    in Storage

    Location 0084(FG H84-1000

    + Pack.Mat.)

    Goods

    Issue

    forDelivery

    Sales/Delivery Process flow for FG H84-1000

    GR for

    Production

    Order with

    TransactionCOWBPACK

    Master data preparation for H84-1000 :

    Material Master / View

    Pl./Stor.1:

    Storage conditions YH

    Picking location determination

    for outbound delivery=

    Default St.Location0084

    MTS-Production w. Batch Management, WM and HUM

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    MTS Production w. Batch Management, WM and HUMHandling Units - Packing before Delivery (2)

    Master data preparation for H84-1000 :

    Material Master / View MRP2:

    Sloc MRP indicator 1

    Stock of storage location 0084

    excluded from MRP

    Material Master / View

    Pl./Stor.1:

    Storage conditions YH

    Picking location determination

    for outbound delivery=

    Default St.Location0084

    Material Master / View MRP3:

    Checking Group Avail. YH

    Availabilty check is carried on

    plant level

    Sales Order

    Outbound

    Delivery

    (Picking

    Location 0084/

    Stock = 0)

    Picking:

    Assigning

    Batch +HU

    to

    Delivery

    Handling

    Unit xxx

    in Storage

    Location 0084(FG H84-1000

    + Pack.Mat.)

    Goods

    Issue

    forDelivery

    Sales/Delivery Process flow for FG H84-1000

    Transaction

    HUPAST:

    Creating HU +

    Tran. PostingSLoc 0003

    SLoc 0084

    MTS-Production w. Batch Management, WM and HUM

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    Costing variant

    Display planned/actual costs

    Cost elementsCost itemizationCost component split

    Planned costsPlanned costs

    Material costs

    Costs for externalprocurement

    Production costs

    Material overhead

    costs

    Production overheadcosts

    Costs for externalprocessing

    Cost elementsCost elements:: Gen. operation values

    Standard values

    Control key costing

    indicator

    ResourcesResources

    Formula key forcosting

    Cost center

    Activity type

    Formula constants

    Cost calculationlog

    Ind. "Rel. to costing"

    Price

    MaterialMaterial componentscomponents

    MTS Production w. Batch Management, WM and HUMProduction Order - Preliminary Costing

    OperationsOperations

    Order type / plantOrder type / plant

    MTS-Production w. Batch Management, WM and HUM

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    Production order costProduction order cost

    Overhead calculationsOverhead calculations

    - Work center

    - Standard value

    - Quantities

    - Cost center

    - Activity types

    - Formulas

    - Activity types

    Operation

    Internal activities costsMaterial costs

    - Quantities

    - Prices

    Work center Cost center Material

    components

    - Periods

    Activity cost

    MTS Production w. Batch Management, WM and HUMCost of Production Order

    MTS-Production w. Batch Management, WM and HUM

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    OrderStatus

    Pre-Released or Released Partially Delivered Finally Delivered or Technically Completed

    Variances

    Delivery

    Value

    Actual Costs

    WIP at

    Actual Costs

    =

    WIP at

    Actual Costs

    =

    -Delivery

    Value

    =

    -

    PREL

    REL PD

    LV DLV

    TECO

    MTS Production w. Batch Management, WM and HUMWIP and Variance Calculation in Lot-Based Cost Object CO

    Actual Costs Actual Costs

    MTS-Production w. Batch Management, WM and HUM

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    Material600

    Product cost planning

    Lotsize 1 PCCO-CO-

    PCPC

    Production OrderMat. C10150

    8001.200

    4002.400

    -2.000

    400

    MaterialProductionSurcharge

    GR

    Variances

    Actual Cost

    CO-

    PC

    Material Master

    Standard Price = 2000

    Target Version 0

    Price 150

    Qty 150

    Structure 100

    Scrap 0

    Lotsize 0

    Production

    1100

    Surcharge

    300

    Warehouse Price difference

    Financial Accounting

    2000 400

    SettlementFI

    CO-

    PA

    g ,Settlement of Production Order

    Copyright 2006 SAP AG All Rights Reserved

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    Copyright 2006 SAP AG. All Rights Reserved

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