Sap Presentation

SAPSAP

ERP - SAP OVERVIEW ERP - SAP OVERVIEW

AgendaAgenda

Brief introduction of participantsBrief introduction of participants

Understanding ERP Understanding ERP

Overview of SAPOverview of SAP

SAP introduction sessionSAP introduction session

SAP PP sessionSAP PP session

AgendaAgenda

Organization structureOrganization structure

SAP TerminologySAP Terminology

UnderstandingUnderstanding

ERP DefinitionERP Definition

An ERP system is• A unified environment • Comprising of key business and management

processes, information blocks and functional areas• to deliver consistent, reliable and detailed

information• to facilitate timely and quality business decisions

But, beyond that it is…

Why ERPWhy ERP

Before ERPs became popular, the typical company had many specialized computer systems.

Each system was specified designed to serve the needs of an individual department

Why ERPWhy ERP

One system might manage accounting. Another might control production planning. A third might serve the Human Resources department.

Some large companies had hundreds of different systems, and many companies built custom systems from scratch to meet their business needs.

Why ERPWhy ERP

Sometimes different computer systems didn't communicate with each other. Duplicate information had to be entered by hand in each system. This was slow, inefficient and subject to errors.

After ERPAfter ERP

Sales

Accounts

Production

HR

Purchase

Sales Admin.

SAP OverviewSAP OverviewSAP – What, How & WhySAP – What, How & Why

--------------------------------------------------------------SAP R/3 is an Enterprise Resource Planning

application, or ERP.

An ERP is an integrated information system that usually serves many departments within a company.

You may hear SAP R/3 called simply SAP or R/3

SAP – What, How & WhySAP – What, How & Why

SAP was founded in 1972 in Mannheim, Germany.

The name SAP is derived from the German phrase meaning “Systems, Applications, and Products in Data Processing.”

It is pronounced as separate letters, and not as the word “sap.”

SAP – What, How & WhySAP – What, How & Why As the software is

integrated, information no longer had to be entered more than once. Changes made in one part of the business were immediately visible to users working in other parts of the business, because the different parts of SAP's software were in constant communication. Users could have better, more accurate information with less effort.

SAP R/3 ModulesSAP R/3 Modules

Sales &Sales &DistributionDistribution

SDSD

MMMM

PPPP

QMQM

PMPM

HRHR

FIFI

COCO

TRTR

PSPS

WFWF

ISIS

MaterialsMaterialsMgmt.Mgmt.

ProductProductPlanningPlanning

QualityQualityMgmt.Mgmt.

Plant Mainte-Plant Mainte-nancenance

HumanHumanResourcesResources

FinancialFinancialAccountingAccounting

ControllingControlling

TreasuryTreasury

ProjectProjectSystemSystem

WorkflowWorkflow

IndustryIndustrySolutionsSolutions

R/3R/3R/3R/3Client/ServerClient/Server

ABAP/4ABAP/4Client/ServerClient/Server

ABAP/4ABAP/4

Organization Structure

SAP AG 2002

ClientClient 400 400

CompanyCompany codecode00010001

CompanyCompany codecode00020002

Plant 1000Plant 1000 Plant 1100Plant 1100 Plant 2000Plant 2000

SLocSLoc00030003

SLocSLoc00020002

Lagerort002

SLocSLoc00010001

SLocSLoc00020002

SLocSLoc00010001

Organizational Levels in Inventory Management

SAP TerminologySAP TerminologyTRANSACTIONTRANSACTION

A transaction is a task that you perform in SAP.

Any time you view a report, or create or display a document,

you are running a transaction.

TRANSACTION CODETRANSACTION CODE

Most transactions within SAP are associated with a four-character code called a transaction code. This transaction code can be used in the command field to jump directly to a transaction without having to follow the navigation path. You will learn how to do this in a later lesson.

MASTER DATAMASTER DATA

Master data is important, long-term data stored within the SAP system.

Vendors, customers, plant IDs, the chart of accounts, and product numbers are all examples of information that is stored as master data records

DOCUMENTDOCUMENT A document is data created in

association with a particular business event or transaction.

Sales orders, purchase orders, material requisitions, and general ledger postings are all examples of documents stored within SAP.

Every document created in SAP is assigned a document number that uniquely identifies it.

SAP Overview - Integration with other Modules

Finance / Asset ManagementFinance / Asset Management

ProcurementProcurement

QualityQuality

Sales LogisticsSales Logistics

ProductionProduction

Project systemsProject systems

ModulesModulesFinanceFinanceControllingControllingProject SystemsProject SystemsProduction PlanningProduction PlanningQuality managementQuality managementMaterials ManagementMaterials ManagementSales and distributionSales and distributionHuman ResourceHuman ResourceCustomer support Customer support Service managementService management

- Master Data- Master Data

- Material Master- Material Master

- Bill Of Material- Bill Of Material

- Work Centers- Work Centers

- Routings- Routings

- Sales and Operation Planning- Sales and Operation Planning

- Demand Management- Demand Management

- Materials Requirements Planning- Materials Requirements Planning

- Capacity Planning - Capacity Planning

- Production Control- Production Control

ContentsContents

Production PlanningProduction Planning

Master DataMaster Data

Master Data in PPMaster Data in PP

Material MasterMaterial Master Bills of MaterialBills of Material Work CentersWork Centers RoutingsRoutings

Master Data in PPMaster Data in PP

Work Center

Routing

BOM

Process Order

Material Master


Material MasterMaterial Master

Concept of Material Master in Concept of Material Master in SAP.SAP.

The material master contains information on all The material master contains information on all the materials that a company procures, produces, the materials that a company procures, produces, stores, and sells.stores, and sells.

The material master is used by all modules in the The material master is used by all modules in the SAP.SAP.

Different departments in a company work with the Different departments in a company work with the same material, so data in a material master record same material, so data in a material master record is subdivided in the form of user departments. is subdivided in the form of user departments.

Material description and base unit of measure Material description and base unit of measure appear in all user departments.appear in all user departments.

User departments(cont..)User departments(cont..)

ViewsViews Basic dataBasic data MRP1MRP1 MRP2MRP2 MRP3MRP3 MRP4MRP4 ForecastingForecasting Work scheduling,Work scheduling,

Basic dataBasic data

On this data screen, data that is also used On this data screen, data that is also used by other user departments is entered.by other user departments is entered.

Data like description of the Data like description of the materialmaterial, base , base unit of measure, Division, Item Category, unit of measure, Division, Item Category, material group,, Weight of the item, material group,, Weight of the item, Document or Drawing No etc are Document or Drawing No etc are maintained. maintained.

The above data is maintained across two The above data is maintained across two views Basic Data 1&2 views.views Basic Data 1&2 views.

Material Requirements Planning (MRP).Material Requirements Planning (MRP). The following Data relating to MRP is maintained:The following Data relating to MRP is maintained:

• PlanningPlanning• Lot size (Fixed, Variable)Lot size (Fixed, Variable)• Procurement Procurement • Scheduling time(lead times : Planned In-house Scheduling time(lead times : Planned In-house

Production Times, Planned Delivery times etc.).Production Times, Planned Delivery times etc.).• Stock levels (Ex Safety Stock)Stock levels (Ex Safety Stock)• Planning Strategy Planning Strategy

The above data is maintained in Four screens The above data is maintained in Four screens MRP1,MRP2,MRP3,MRP4.MRP1,MRP2,MRP3,MRP4.

ForecastingForecasting

Data related to forecasting of material is maintained here.

Consumption values and forecast values as a basis for calculations are maintained on this screen.

Individual forecast models for a material can be maintained.

Work SchedulingWork Scheduling

The following data is maintained on The following data is maintained on this screenthis screen : :• Production scheduler,production scheduler Production scheduler,production scheduler

profile Serial No Profile.profile Serial No Profile.• Batch Management (If required).Batch Management (If required).• The base quantity to which the processing The base quantity to which the processing

time relates, under Lot size dependent in-time relates, under Lot size dependent in-house production time.house production time.

Production Planning-Bill Of MaterialProduction Planning-Bill Of Material 3333


Bill Of MaterialBill Of Material

Concept of Bill of materials in SAPConcept of Bill of materials in SAP A bill of material is a complete, formally structured list A bill of material is a complete, formally structured list

of the components required to produce the product or of the components required to produce the product or assembly. assembly.

The BOM contains the object number of each The BOM contains the object number of each component, together with the quantity , unit of component, together with the quantity , unit of measure and item category of component.measure and item category of component.

Bills of material (BOMs) contain essential master data Bills of material (BOMs) contain essential master data for integrated materials management and control.for integrated materials management and control.

BOM Usage BOM Usage The data stored in bills of material serves as a basis for activities such as:The data stored in bills of material serves as a basis for activities such as:• A design department (working with CAD) can base its work on bills of A design department (working with CAD) can base its work on bills of

material. You can also create a BOM in the R/3 System from your CAD material. You can also create a BOM in the R/3 System from your CAD program, via the SAP-CAD interface.program, via the SAP-CAD interface.

• A material requirements planning (MRP) department explodes bills of A material requirements planning (MRP) department explodes bills of material on a certain date to calculate order quantities and dates for material on a certain date to calculate order quantities and dates for materials.materials.

• A work scheduling department uses bills of material as a basis for A work scheduling department uses bills of material as a basis for operation planning and production control. operation planning and production control.

• Sales orders, As an aid to data entry. You can also create and maintain Sales orders, As an aid to data entry. You can also create and maintain a BOM specifically for a sales order.a BOM specifically for a sales order.

• Reservation and goods issueReservation and goods issue• Product costing, To calculate the costs of materials required for a Product costing, To calculate the costs of materials required for a

specific production order.specific production order.

Scrap DataScrap Data R/3 allows you to define different scrap factors for BOM components. R/3 allows you to define different scrap factors for BOM components.

Three different scrap factors accumulate in MRP:Three different scrap factors accumulate in MRP:

• Component scrap : Component scrap : Is defined in the BOM item. It shows the % of the component Is defined in the BOM item. It shows the % of the component that is lost as scrap.that is lost as scrap.

• Assembly scrap : Assembly scrap : Is defined in the BOM header or in the material master record of Is defined in the BOM header or in the material master record of the component. It shows the percentage of the finished or semi-the component. It shows the percentage of the finished or semi-finished product that is lost as scrap due to manufacturing finished product that is lost as scrap due to manufacturing problems across all operations.problems across all operations.

• Operation scrap : Operation scrap : Is defined in the BOM item. It shows the percentage of the Is defined in the BOM item. It shows the percentage of the component that is lost as scrap in a specific operation. component that is lost as scrap in a specific operation. Operation scrap overrides assembly scrap. This option is useful Operation scrap overrides assembly scrap. This option is useful for materials of high value.for materials of high value.

Overview of BOM Reporting FunctionsOverview of BOM Reporting Functions The R/3 System supports the following reporting functions:The R/3 System supports the following reporting functions: Mass Changes : You can use the mass change function to Mass Changes : You can use the mass change function to

change items in several BOMs at once.change items in several BOMs at once. BOM Explosion: The system determines all the components BOM Explosion: The system determines all the components

which are contained in an assembly. which are contained in an assembly. BOM level by levelBOM level by level Multi-level BOMMulti-level BOM

Where-Used List :To determine which BOMs an object is used in.Where-Used List :To determine which BOMs an object is used in. BOM Comparison: Two BOMs can be compared for single or BOM Comparison: Two BOMs can be compared for single or

multilevel. multilevel. Displaying Change DocumentsDisplaying Change Documents

Work CentersWork Centers

Work centersWork centers

A work center is a place where A work center is a place where production operations are production operations are performedperformed..• Machines, machine groupsMachines, machine groups• Employees, groups of employeesEmployees, groups of employees

Together with bills of material and routings, Together with bills of material and routings, work centers belong to the most important work centers belong to the most important master data in the R/3 and control system. master data in the R/3 and control system.

Work center data in R/3Work center data in R/3

The data is grouped together in The data is grouped together in screens and screen groups :screens and screen groups :• Basic DataBasic Data• Assignments (To cost centers) Assignments (To cost centers) • CapacitiesCapacities• SchedulingScheduling• Default valuesDefault values• Technical dataTechnical data

Basic dataBasic data In the Basic data screen the following data is In the Basic data screen the following data is

maintained.maintained.• Short and long texts for description of work center.Short and long texts for description of work center.• Various administrative data, such as the person responsible and the Various administrative data, such as the person responsible and the

location of the work centerlocation of the work center• Usage type: This specifies which type of task lists the work center can Usage type: This specifies which type of task lists the work center can

be used in. (for Production, Maintenance)be used in. (for Production, Maintenance)• Standard value key:Standard values are planned values for the Standard value key:Standard values are planned values for the

execution of an operation and are maintained in the operation. execution of an operation and are maintained in the operation. E.g.:set-up and processingE.g.:set-up and processing The execution time, costs and capacities are calculated in The execution time, costs and capacities are calculated in

operations using formulae from the work centers and standard operations using formulae from the work centers and standard values from the operations. values from the operations.

• Performance Efficiency Rate Key :The performance efficiency rate key Performance Efficiency Rate Key :The performance efficiency rate key is the ratio between an individual's actual output and the planned is the ratio between an individual's actual output and the planned average output .average output .

Standard available capacityStandard available capacity Standard available capacity is used, Standard available capacity is used,

among other things, for calculating among other things, for calculating execution time in a routing without execution time in a routing without reference to an order reference to an order • It is valid indefinitely.It is valid indefinitely.

• It has a fixed working timeIt has a fixed working time

• It is valid on all working days in the factory It is valid on all working days in the factory calendarcalendar

Units of Measurement for Available Units of Measurement for Available CapacityCapacity

The base unit of measure for the available The base unit of measure for the available capacity must be a unit with dimension capacity must be a unit with dimension "time"."time".

the available capacity can be expressed in the available capacity can be expressed in any unit for instance in “numbers".any unit for instance in “numbers".

A conversion factor must be specified , that A conversion factor must be specified , that is how many units of the new dimension is how many units of the new dimension correspond to a particular period of time, correspond to a particular period of time, for instance 1 number = 30 minutes.for instance 1 number = 30 minutes.

Scheduling Data Scheduling Data Formulas Formulas

• Formulas are used to calculate the execution times of Formulas are used to calculate the execution times of operations in production orders using standard valuesoperations in production orders using standard values

Formulas are used in the work center to calculate the Formulas are used in the work center to calculate the following data in costing, scheduling and capacity following data in costing, scheduling and capacity planning:planning:

CostsCosts Execution times for production ordersExecution times for production orders Internal processing times for networks and maintenance Internal processing times for networks and maintenance

ordersorders Capacity requirements.Capacity requirements.

Concept Of Formulae in Work Concept Of Formulae in Work CentersCenters

Cost center dataCost center data

Work center is assigned to activity Work center is assigned to activity typestypes..

Activity types are used to describe Activity types are used to describe the various forms of activity that the various forms of activity that are performed at a cost center.are performed at a cost center.

The activity types are used to The activity types are used to calculate the costs for these calculate the costs for these activities. activities.

Cost center dataCost center data

RoutingsRoutings

ROUTINGS in SAP R/3 SYSTEM.ROUTINGS in SAP R/3 SYSTEM.

A routing is a description of A routing is a description of

• Which operations (process steps) have to be carried outWhich operations (process steps) have to be carried out

• The order in which they are carried out,The order in which they are carried out,

• Information about the operations .Information about the operations .

• Details about the work centers at which they are carried out Details about the work centers at which they are carried out

• About the required production resources and tools (includes About the required production resources and tools (includes jigs and fixtures). jigs and fixtures).

• Standard values for the execution of individual operationsStandard values for the execution of individual operations..

• Quality Inspection to be carried out for each operationQuality Inspection to be carried out for each operation A routing is used as a source for creating a A routing is used as a source for creating a production production

order.order.

Structure of routing.Structure of routing.

External Processing DataExternal Processing Data Operations or sub-operations, carried Operations or sub-operations, carried

out outside of your company by a vendor out outside of your company by a vendor is External processing . is External processing .

When a production order is created the When a production order is created the system automatically creates a purchase system automatically creates a purchase requisition for the operation or sub-requisition for the operation or sub-operation for External Operationoperation for External Operation

An operation or sub-operation is An operation or sub-operation is processed externally is decided by its processed externally is decided by its control keycontrol key. .

Maintaining Material ComponentsMaintaining Material Components

Materials are to be made available Materials are to be made available in a production process.in a production process.

The following data already exists in The following data already exists in the system:the system:• The operations in the routingThe operations in the routing

• The master record for the material to be The master record for the material to be producedproduced

• The bill of material (BOM) for the material to The bill of material (BOM) for the material to be producedbe produced

Production Resources/ToolsProduction Resources/Tools Production Resource/Tool(PRT) is a moveable Production Resource/Tool(PRT) is a moveable

operating resource used in production or operating resource used in production or plant maintenance.plant maintenance.

Production resources/tools can be assigned to Production resources/tools can be assigned to operation, activities or phases in task lists.operation, activities or phases in task lists.

Production resources/tools that are used for Production resources/tools that are used for testing during production, can be assigned to testing during production, can be assigned to the corresponding inspection characteristic in the corresponding inspection characteristic in the inspection plan.the inspection plan.

Sales &Sales &Operations PlanningOperations Planning

Integration between Sales and Integration between Sales and ManufacturingManufacturing

h

Process Flow in PlanningProcess Flow in Planning

h

CONCEPTS of SOP.CONCEPTS of SOP.Sales & Operations Planning (SOP) is a flexible forecasting and Sales & Operations Planning (SOP) is a flexible forecasting and

planning toolplanning tool SOP constitutes the planning functionality in SAP.SOP constitutes the planning functionality in SAP. SOP is used to perform company’s sales and production SOP is used to perform company’s sales and production

operations Sales, production targets can be set on the basis operations Sales, production targets can be set on the basis of historical, existing, and estimated future data. of historical, existing, and estimated future data.

Rough-cut planning can be carried out to determine the Rough-cut planning can be carried out to determine the amounts of the capacities and other resources required to amounts of the capacities and other resources required to meet these targets.meet these targets.

SOP plans are passed on to Demand Management (PP-MP-SOP plans are passed on to Demand Management (PP-MP-DEM) in the form of independent requirements.DEM) in the form of independent requirements.

This data is fed to Material Requirements Planning (PP-MRP).This data is fed to Material Requirements Planning (PP-MRP).

Transfer to Demand Management.Transfer to Demand Management.

Demand Management determines Demand Management determines the requirement dates and the requirement dates and requirement quantities for requirement quantities for important assemblies and specifies important assemblies and specifies the strategies for planning and the strategies for planning and producing / procuring finished producing / procuring finished products in the form of planned products in the form of planned independent requirements. independent requirements.

This ends the phase of SOP.This ends the phase of SOP.

Demand ManagementDemand Management The function of Demand Management is to determine The function of Demand Management is to determine

requirement quantities and delivery dates for atyerials / requirement quantities and delivery dates for atyerials / Components and important assemblies. Components and important assemblies.

• The result of Demand Management is the demand program. The result of Demand Management is the demand program. The demand program is created in the form of planned The demand program is created in the form of planned independent requirements.independent requirements.

Demand Management uses planned independent Demand Management uses planned independent requirements and customer requirements. Customer requirements and customer requirements. Customer requirements are created in sales order management. requirements are created in sales order management.

To create the demand program for a material , planning To create the demand program for a material , planning strategy must be defined for it.strategy must be defined for it.

Planning strategies represent the methods of production Planning strategies represent the methods of production for planning and manufacturing or procuring a product. for planning and manufacturing or procuring a product.

Material Requirements Material Requirements PlanningPlanning

Material Requirements Planning in R/3Material Requirements Planning in R/3

Functions of material requirements planning isFunctions of material requirements planning is

• To guarantee material availability.To guarantee material availability.

• It is used to procure or produce the requirement quantities on time both It is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution.for internal purposes and for sales and distribution.

• Monitoring of stocks, creation of order proposals for purchasing and Monitoring of stocks, creation of order proposals for purchasing and production.production.

• Determines any shortages and create the appropriate procurement Determines any shortages and create the appropriate procurement elements.elements.

• Create messages that inform the MRP controller of critical parts and Create messages that inform the MRP controller of critical parts and exceptional situations so that the MRP controller can quickly reprocess the exceptional situations so that the MRP controller can quickly reprocess the results of the automatic planning run in the specific area with problems. results of the automatic planning run in the specific area with problems.

MASTER DATA FOR MRPMASTER DATA FOR MRP

• Material Master Material Master

• BOMsBOMs

• Work Centers Work Centers

• RoutingsRoutings

• Demand ManagementDemand Management

• Sales and Distribution, if necessarySales and Distribution, if necessary

Concepts of MRPConcepts of MRP Single-Item or Total PlanningSingle-Item or Total Planning. For an individual material, . For an individual material,

planning is referred to as planning is referred to as single-item planningsingle-item planning. For a . For a certain plant, where all materials to be planned are certain plant, where all materials to be planned are included, it is referred to as included, it is referred to as total planningtotal planning..

Scope of the Planning Run Scope of the Planning Run

• Regenerative planning: All materials are planned for a plant. Regenerative planning: All materials are planned for a plant. Usually, the regenerative planning run is only carried out in Usually, the regenerative planning run is only carried out in the implementation stages.the implementation stages.

• Net change planning: only materials which are included in Net change planning: only materials which are included in the planning run are those which have undergone a change the planning run are those which have undergone a change relevant to MRP since the last planning run. relevant to MRP since the last planning run.

Lot-Sizing ProceduresLot-Sizing Procedures

• Static lot-sizing procedures:Using quantity specifications entered in the Static lot-sizing procedures:Using quantity specifications entered in the material master record.material master record.

Lot for lot order quantityLot for lot order quantity Fixed lot sizeFixed lot size Replenish up to maximum stock levelReplenish up to maximum stock level

Planning Time FencePlanning Time Fence

• To protect the master plan from any automatic changes to master schedule To protect the master plan from any automatic changes to master schedule items in the near future by using a planning time fence.items in the near future by using a planning time fence.

Manual Reorder Point PlanningManual Reorder Point Planning

• Specify both the reorder level and the safety stock level manually in the Specify both the reorder level and the safety stock level manually in the material master record.material master record.

Automatic Reorder Point PlanningAutomatic Reorder Point Planning

• Both the reorder level and the safety stock level are determined by the Both the reorder level and the safety stock level are determined by the integrated forecasting program , using past past consumption data (historical integrated forecasting program , using past past consumption data (historical data) to forecast future requirements.data) to forecast future requirements.

Concepts of MRPConcepts of MRP

Role of MRP controllerRole of MRP controller The MRP controller is responsible for all activities for specifying the type, The MRP controller is responsible for all activities for specifying the type,

quantity and time of the requirements quantity and time of the requirements He must also confirm when and for what quantity an order proposal has He must also confirm when and for what quantity an order proposal has

to be created to cover these requirements. to be created to cover these requirements. He is provided with the information on stocks, stock reservation and He is provided with the information on stocks, stock reservation and

stock on order to calculate quantities and he needs all the information stock on order to calculate quantities and he needs all the information on lead times and procurement times to calculate dates. on lead times and procurement times to calculate dates.

The MRP controller determines a suitable MRP and lot-sizing procedure The MRP controller determines a suitable MRP and lot-sizing procedure for material to determine procurement proposals. for material to determine procurement proposals.

The planning run in MRP determines any shortages and creates the The planning run in MRP determines any shortages and creates the appropriate procurement elements. appropriate procurement elements.

The system creates messages that inform the MRP controller of critical The system creates messages that inform the MRP controller of critical parts and exceptional situations so that the MRP controller can quickly parts and exceptional situations so that the MRP controller can quickly reprocess the results of the planning run in the specific area with reprocess the results of the planning run in the specific area with problems.problems.

Role of MRP controller (cont..)Role of MRP controller (cont..) The most important exception messages are rescheduling and The most important exception messages are rescheduling and

reversal proposals. These messages refer to receipt reversal proposals. These messages refer to receipt components that cannot automatically be changed by the components that cannot automatically be changed by the system (for example, production orders or purchase orders).system (for example, production orders or purchase orders).

In the SAP system, new dates are also proposed for firmed In the SAP system, new dates are also proposed for firmed order proposals if the requirements situation has changed order proposals if the requirements situation has changed since the order proposal was firmed.since the order proposal was firmed.

In case of capacity planing the MRP controller receives the In case of capacity planing the MRP controller receives the information on possible bottlenecks and overloads from the information on possible bottlenecks and overloads from the comparison of the available capacity with the capacity comparison of the available capacity with the capacity requirements. As a result, planned orders can be re-planned in requirements. As a result, planned orders can be re-planned in the planning run before the master plan is passed on to the planning run before the master plan is passed on to production. production.

Exception messages provide information that refer to a Exception messages provide information that refer to a situation that may require attention, for example, start date of situation that may require attention, for example, start date of the planned order in past, stock level fallen below the safety the planned order in past, stock level fallen below the safety stock level, and so on. stock level, and so on.

During availability check In the planning results and in the During availability check In the planning results and in the evaluations of the planning run, the MRP controller can use the evaluations of the planning run, the MRP controller can use the ATP quantity to determine whether all issues are covered by ATP quantity to determine whether all issues are covered by the master plan and how many of the receipts are still open for the master plan and how many of the receipts are still open for new issues (such as sales orders) that may arise. new issues (such as sales orders) that may arise.

This provides the MRP controller with all the information he This provides the MRP controller with all the information he requires for deciding whether the master plan has to be requires for deciding whether the master plan has to be changed. changed.

After the planning run, the MRP controller can check and edit After the planning run, the MRP controller can check and edit the order proposals created using the various evaluation the order proposals created using the various evaluation functions available. functions available.

The MRP controller can also firm order proposals so that the The MRP controller can also firm order proposals so that the system makes no changes to them in the next planning run.system makes no changes to them in the next planning run.

Role of MRP controller (cont..)Role of MRP controller (cont..)

Capacity Planning Capacity Planning

Capacity PlanningCapacity Planning

Capacity planning enables use of resources andCapacity planning enables use of resources and• Comparing available capacity and capacity requirements, displayed in lists Comparing available capacity and capacity requirements, displayed in lists

or graphics. or graphics.

• Allotting available capacities to requirements.Allotting available capacities to requirements.

• Selection of appropriate resources.Selection of appropriate resources.

Capacity Requirements:Capacity Requirements:• Calculating the capacity requirements of an operation for manufacturing a Calculating the capacity requirements of an operation for manufacturing a

material takes place in scheduling using formulas in the work centermaterial takes place in scheduling using formulas in the work center

• Orders generate capacity requirements and thus a load on the Orders generate capacity requirements and thus a load on the resources(work centers) that are to process them. The following types of resources(work centers) that are to process them. The following types of orders are relevant:orders are relevant:

Production orders in Shop Floor Control (SFC).Production orders in Shop Floor Control (SFC).

Planned orders .Planned orders .

Concepts of capacity planningConcepts of capacity planning

Scope of functions in capacity evaluationScope of functions in capacity evaluation• Gives an overview of the load situation of selected work centers . Gives an overview of the load situation of selected work centers .

• This is a list predefined by SAP showing data on the This is a list predefined by SAP showing data on the capacity situation at work centerscapacity situation at work centers

• Columns displayed:Columns displayed:

• Period Period

• Capacity requirements in the period Capacity requirements in the period

• Available capacity in the period Available capacity in the period

• Capacity load (capacity requirements/available Capacity load (capacity requirements/available capacity in percentage terms) in the period capacity in percentage terms) in the period

• The various evaluations can be displayed both in tabular The various evaluations can be displayed both in tabular and graphical form.and graphical form.

• The SAP-Gantt diagram gives you an overview of the dates The SAP-Gantt diagram gives you an overview of the dates of the operations at a work center. of the operations at a work center.

Capacity LevelingCapacity Leveling Capacity leveling is used in a company with the Capacity leveling is used in a company with the

following objectives:following objectives: • Leveling overloads and underloads at work centers Leveling overloads and underloads at work centers • Achieving commitment of machines and production lines Achieving commitment of machines and production lines • Selecting appropriate resourcesSelecting appropriate resources

Operations are dispatched to the time when there is sufficient Operations are dispatched to the time when there is sufficient capacity for them to be executedcapacity for them to be executed

In the dialog box Dispatch manually you can enter the date and In the dialog box Dispatch manually you can enter the date and the time when the operation is to start or finish as well as the the time when the operation is to start or finish as well as the work center.work center.

An operation can be dispatch to a different work center from the An operation can be dispatch to a different work center from the one to which it is planned.one to which it is planned.

Production ControlProduction Control

Production OrdersProduction Orders Production orders are used to control Production orders are used to control

production within a company.production within a company. A production order defines A production order defines

• Which material is to be processed or produced,Which material is to be processed or produced,

• At which location I.e work center,At which location I.e work center,

• At what time (When to produce ?),At what time (When to produce ?),

• How much work (quantity) is required,How much work (quantity) is required,

• Which materials are required,Which materials are required,

• Which resources are to be used andWhich resources are to be used and

• How the order costs are to be settled.How the order costs are to be settled.

Elements of Production OrderElements of Production Order

Creation and release of Production OrderCreation and release of Production Order An order can be generated in the following ways:An order can be generated in the following ways:

• By converting a planned order to a production orderBy converting a planned order to a production order

• Without any previous requirement, that is by creating it manuallyWithout any previous requirement, that is by creating it manually When a production order is created the following actions are carried out:When a production order is created the following actions are carried out:

• A routing is selected, its operations and sequences are transferred to the order.A routing is selected, its operations and sequences are transferred to the order.

• The bill of materials is exploded and the items in the bill of material are The bill of materials is exploded and the items in the bill of material are transferred to the order.transferred to the order.

• Reservations are generated for bill of material items held in Stock.Reservations are generated for bill of material items held in Stock.

• The planned costs for the order are generated.The planned costs for the order are generated.

• The capacity requirements are generated for the work centers.The capacity requirements are generated for the work centers.

• Purchase requisitions are generated for non-stock items and externally-Purchase requisitions are generated for non-stock items and externally-processed operations.processed operations.

Other data of Production orderOther data of Production order

• Production resources/toolsProduction resources/tools Production resources/tools (PRTs) are, in contrast Production resources/tools (PRTs) are, in contrast

to machines and fixed assets, moveable to machines and fixed assets, moveable resources that are not tied to a particular resources that are not tied to a particular location and can be used several times. In the location and can be used several times. In the production order production resources/tools production order production resources/tools must always be allocated to a specific operation. must always be allocated to a specific operation. However, the allocation can already take place in However, the allocation can already take place in the routing.the routing.

Checking the Availability of MaterialChecking the Availability of Material

Before you start with production, check Before you start with production, check can be done whether all the material can be done whether all the material components allocated to the production components allocated to the production order are available on the calculated order are available on the calculated requirements dates.requirements dates.

In a production order, the system can In a production order, the system can only check a material component, if it is only check a material component, if it is

kept in stockkept in stock

not a phantom itemnot a phantom item

not a bulk materialnot a bulk material

Release of production orderRelease of production order The following restrictions apply to a production order with the The following restrictions apply to a production order with the

status "created” and which is not released.status "created” and which is not released. Completion confirmations cannot yet be carried out for Completion confirmations cannot yet be carried out for

the order.the order. Shop papers cannot be printed.Shop papers cannot be printed. Stock movements I.e goods issues, receipts cannot be Stock movements I.e goods issues, receipts cannot be

carried out for the order. carried out for the order. The release of the order cancels these restrictions.The release of the order cancels these restrictions. Printing orders is possible once the order is released.Printing orders is possible once the order is released. Shopfloor papers include:Shopfloor papers include:

• operation control ticket operation control ticket

• job ticket job ticket

• pick list pick list

• time ticket time ticket

• confirmation slip confirmation slip

ConfirmationsConfirmations Part of order monitoring, this documents the Part of order monitoring, this documents the

processing status of operations or sub-operations. In processing status of operations or sub-operations. In the SAP System, a distinction is made between partial the SAP System, a distinction is made between partial and final confirmations.and final confirmations.

With confirmation you specifyWith confirmation you specify The quantity in an operation that was produced as yield, scrap and the The quantity in an operation that was produced as yield, scrap and the

quantity to be reworked quantity to be reworked

DatesDates

How much work was actually done How much work was actually done

Which work center was used for the operation Which work center was used for the operation

Reason for varianceReason for variance

Usually confirmations are made forUsually confirmations are made for An order An order

An operation An operation

Order SettlementOrder Settlement When a production order is settled, the actual costs When a production order is settled, the actual costs

incurred for the order are settled to one or more incurred for the order are settled to one or more receiver cost-objects (for example, to the account for receiver cost-objects (for example, to the account for the material produced or to a sales order). the material produced or to a sales order).

If the costs for the production order are settled to a If the costs for the production order are settled to a material account, the order is credited each time material account, the order is credited each time material is delivered to stock. The material stock material is delivered to stock. The material stock account is debited accordingly.account is debited accordingly.

If the costs for the production order are settled to If the costs for the production order are settled to another receiver (for example to a sales order), the another receiver (for example to a sales order), the order is credited automatically at the time of settlement. order is credited automatically at the time of settlement.

ContentsContents

Production Order CreationProduction Order Creation Order ConfirmationOrder Confirmation Goods MovementGoods Movement

Increase awareness about:

the cross-functional implications, system checks and

the results of the transactions

ObjectiveObjective

Production Order CreationProduction Order CreationA production order definesA production order defines

Which material is to be processed or producedWhich material is to be processed or produced

At which location I.e work center.At which location I.e work center.

At what time( when to produce ? )At what time( when to produce ? )

How much work(quantity) is required.How much work(quantity) is required.

Which resources/work centers are to be used andWhich resources/work centers are to be used and

How the order costs are to be settled.How the order costs are to be settled.

Production Order CreationProduction Order Creation

You can create production orders either:

with or without material


When a production order is created the When a production order is created the

following actions are carried out:following actions are carried out:

A routing is selected, its operations and sequences A routing is selected, its operations and sequences

are Transferred to the order. are Transferred to the order.

The bill of materials is exploded and the items in The bill of materials is exploded and the items in

the bill of material are transferred to the order.the bill of material are transferred to the order.


When a production order is created the When a production order is created the

following actions are carried out:following actions are carried out:

The planned costs for the order are generated. The planned costs for the order are generated.

The capacity requirements are generated for the The capacity requirements are generated for the

work centers. work centers.

Purchase requisitions are generated for non-stock Purchase requisitions are generated for non-stock

items and externally-processed operations.items and externally-processed operations.

Process Order CreationProcess Order Creation

DataData

HeaderHeader: Quantities, dates and scheduling data. : Quantities, dates and scheduling data. AllocationAllocation: Inspection Lot, Created/changed by, : Inspection Lot, Created/changed by,

responsibility, plants, other assignments responsibility, plants, other assignments Goods receipt:Goods receipt: Tolerances, receipt and delivery Tolerances, receipt and delivery Master data:Master data: Recipe, production version, Recipe, production version,

costing datacosting data

Production Order CreationProduction Order Creation The following information is listed for every The following information is listed for every

operation:operation: The The operation number operation number (this number specifies the (this number specifies the

sequence in which operations are processed). sequence in which operations are processed). The work centerThe work center where the operation is to be executed where the operation is to be executed The The control key control key that determines how the operation is that determines how the operation is

to be used (for example, whether it must be confirmed, to be used (for example, whether it must be confirmed, whether it can be scheduled, whether it can be printed, whether it can be scheduled, whether it can be printed, and so on) and so on)

The current The current status status of the operation (for example, of the operation (for example, whether it has already been created or released) whether it has already been created or released)

A A short description short description of the operationof the operation


If a bill of material exists for the material to be If a bill of material exists for the material to be produced, the BOM items contained in the bill of produced, the BOM items contained in the bill of material are automatically taken over into the material are automatically taken over into the production order as components. production order as components.

Production Order ConfirmationProduction Order Confirmation A confirmation documents the state processing of A confirmation documents the state processing of

orders, operations, sub-operations and individual orders, operations, sub-operations and individual capacities. It is an instrument for controlling capacities. It is an instrument for controlling orders.orders.

With confirmation you specifyWith confirmation you specify The quantity in an operation that was produced as The quantity in an operation that was produced as

yield yield datesdates How much duration was required How much duration was required Which work center was used for the operation Which work center was used for the operation reworkrework reasons for deviationreasons for deviation

Production Order ConfirmationProduction Order Confirmation

Usually confirmations are made forUsually confirmations are made for

An order An order An operation An operation

Production Order ConfirmationProduction Order Confirmation Confirmations Result inConfirmations Result in

a reduction in the capacity load on the resourcea reduction in the capacity load on the resource

an update of the costs, based on the confirmed dataan update of the costs, based on the confirmed data

an update of the order data, such as times or order an update of the order data, such as times or order statusstatus

withdrawal postings for backflushed componentswithdrawal postings for backflushed components

an automatic goods receipt an automatic goods receipt

Goods MovementGoods MovementBefore you can start producing a material, all the necessary material components have to be issued from stock via goods issues. The delivery to stock of the manufactured material is documented in the system via a goods receipt. :

A material document is created to record the goods movement.

The stock quantities of the material are updated.

The stock values are updated in the material master record and the stock/consumption accounts are updated.

Goods MovementGoods MovementMovement types

‘261’ for GI to order

‘101’ for GR from order

SettlementSettlement

RM cost5 Rs

+

Processing cost10Rs

FG cost15 Rs=

Single FG


RM cost5 Rs

+

Processing cost10Rs

FG1 cost? Rs

=

Multiple FG

FG2 cost? Rs


To decide the % of cost breakup we need the equivalence number

Sap Presentation

Technology

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