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SAP Production Planning Overview

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Notes on slide 1

CSP: Category Supply Plan

Demand Management provides the consensus forecast. Category Supply Planning evaluates constraints and makes recommendations through the rough cut capacity planning processes S&OP is both a supplier to and a customer of the Site Integrated Planning processes Distribution Requirements Planning (DRP) helps make the demand more realistic by taking into account known transit times and lot sizes

SIP helps align the plan to the strategy Everything builds on the operating strategy Planning parameter choices help align the plan to the operating strategy Executing the integrated planning work processes ensure the plan is executed in a way that is consistent with the operating strategy Results improve when all business functions are aligned with the operation strategy

Managing Master Data is the first work process in Integrated Planning. Master Data must be managed routinely and effectively Parameters are aligned with the business operating strategy and S&OP requirements Parameters are set to support total supply chain integration

In order to properly execute the planning process and to achieve optimum results it is mandatory for the Site Integrated Planner to set up the system utilizing valid and up-to-date master data. Material type (Finished Product, Intermediate/Semi-finished, Raw/Pack) Scrap factors Time fences Lead times Lot sizes/cycles/order quantities Safety inventory parameters Material planning ownership Phase In/Phase Out is supported

Material Types raw, pack, intermediate, finished product Material Number, Description and Unit of measure Production or Procurement Source Safety Stock/Safety Time Lot Size/Order Quantities Time Fence Lead Time Scrap Factors Material Batch Numbers (not in material master)

The Site Integrated Planner is responsible for establishing and maintaining correct BOM’s . This should be fit for use with planning manufactured and purchased materials, costing and production reporting (backflush).

A bill of material in SAP is identified by: material code plant BOM usage Alternative BOM BOM Usage defines which departments must, can or cannot use this BOM Production, Costing Alternative BOM Several BOMs can be defined for material/plant/usage

Resources need to be set up in SAP for production facilities in order to enable detailed scheduling and capacity requirements planning Resource hierarchies and superior resources may be used to evaluate capacities for groups of resources.

Interval of available capacity (1) is used to define a capacity different from the standard capacity for a specified period. This can be used to model downtime or shifts. In the example above, there is zero capacity for the period between 1/9/97 and 5/9/97.

Recipes are process descriptions detailing the method of manufacture for a particular item (finished product of intermediate). Individual operations and resources involved, as well as their sequence and production rates/setup time for specific material are included in the recipe.

A Recipe Group is used to group together recipes. You have to enter a recipe group to create a recipe within that recipe group for a plant. This screen shows different recipe under the recipe group.

- Production versions define alternative production methods for a material. - Each version needs to specify and link resource, BOM and recipe.

The production version defines exactly how production is done, including alternative BOM, recipe, resource. The use of production version is a prerequisite to work with the planning table.

Quota arrangement - Used for assigning individual planned orders to resources or to split orders for external procurement Allows volume assignment to multiple sources Multiple resource assignments for one material Allows networking of DRP They are time phased DRP Planning Source identification (time phased) Network leadtimes Safety inventory parameters Order sizes - minimums & increments Quotas for multiple sourcing

By defining a split percentage, as in the screen print above, quantities to produce are automatically split over different production versions, according to the percentage. Another option is to use maximum release quantities (2), in which case quantities to produce will be assigned to different production version according to capacity .

Some businesses may require more detailed planning beyond the short-term planning window. In this case, the long-term plan might be by superior resource AND by individual resource. The business operating strategy should address: - Capacity Utilization/Staffing - Initiatives - Capacity/Demand Ratio - Inventory Strategy

The most important reports that summarize the Long Term Planning results are the following: SPI Report CE Report

The STP Intend is to firm capacity balance and sequence the near term part of the long-term plan for use by production modules and suppliers.

The most important reports that summarize the Long Term Planning results are the following: Production Schedule Report Supplier Delivery Scheduling Report

The DP Respond to action and exception messages generated by the system

Make sure Requirement Class, Requirement Type and Strategy Group

Production Execution Policies: a) Master Production Schedule (MPS) All production (making and packing) is performed according to the Master Production Schedule (MPS) Each business will develop a policy concerning the publication of the production schedule and changes to the production schedule. Production and the planners work together so that the plan can be successfully executed. Production personnel will meet periodically with the integrated planners to resolve capacity issues and provide input to the production schedule. Each business will determine the length of process orders for each production process based on the frequency for MPS measurement (e.g. If MPS will be measured daily for a given operation, then the process order can not exceed 24 hours in a calendar day). The production module is responsible to quickly communicate any problems in meeting the MPS to Integrated Planning (silence is approval). All production must be reported before the daily MRP run b) Production Execution and Site Integrated Planning agree on plan assumptions c) Continuous improvement of schedules and Bills of Material Process Order: a) Contract between SIP and Production b) Contract between Quality and Production c) Cost Collector

A production process is triggered by production requirements . Production requirements are created in material requirements planning (MRP) in the form of planned orders . Planned orders define the basic dates and planned production quantities. During process planning, planned orders are converted into process orders . The actual production dates are calculated using the basic dates. A process order provides a detailed description of the actual production of materials in one production run. It is the main control instrument in production, describing and monitoring all planned and actual data relating to production. A production version is used as the basis for a process order. It defines the specific Master Recipe and Bill of Material (BOM) which will be used during manufacturing. An Order Type is used to classify process orders for costing purposes and to control the requirements of Electronic Batch Records (EBR) and Engineering Change Management (ECM). After a process order has been released for production, production execution processes are used to record component and production material activity. Schedule information for the process control system is provided via a report. It must be manually communicated to production units. Information from the production units about production activities can be used as input into the production execution processes. This too is accomplished via reports and manual data entry.

10 10 Planning create manually the Delivery Lines via transaction ME38.

8 8 MRP generates automatically the delivery schedules.

10 10 Allocate Source and Process - Primary tool of buyer to manually assign requisitions to valid sources and process requisition into purchase order. This is one of the first tasks a buyer does each day.

9 9 Outline Agreements for CBO controlled materials are interfaced from GSDB. Local purchasing creates these documents directly in SAP as they are not working with GSDB. Source Lists and Quota Arrangements are always managed in SAP only (by purchasing and/or SIP).

The planner may wish to view the following information from the planning table: - monthly / weekly capacity utilization - by work center peaks / valleys - available hours by work center - additional data by production line - additional capacity category information

The planner should use the following menu’ path in order to use the report shown above: Logistics >> Production Process >> Process Planning Evaluation >> Resource View >> Load Input new selections under the fields: capacity unit, Hierarchy, intervals to be evaluated, and periods.

This is a custom program that should be run in background.

Selection has been done by Production Line

The planning table is used often by the planner to evaluate the capacity situation by work center and/or superior work center. It is the same screen for Long-Term Planning. The initial planning table will default to time period selected in the initial screen. If the planner would like to view the data in monthly buckets, use the menu path: view / period / month to convert to months. The planner can access a variety of detailed data from this view.

Create Independent Requirements for a material via MD61. Upload Independent Requirement into SAP from UNIX file (using the report RM60IN00). Split Independent Requirements across a period of time (using the report RM60ROLL).

MPS (Master Production Schedule) refers to the programs that calculate the production and procurement plans for finished products and intermediates. MRP (Material Requirements Planning) refers to the programs that calculate the requirements and procurement plans for non-master scheduled materials. SAP uses a traditional MPS calculation which does not modify the planned requirements based on capacity limitations. MPS and MRP are both commonly referred to as MRP because the mechanics of the calculations are the same.

Safety Stock is the quantity of stock planned to be in inventory to protect against uncertainty in demand and/or supply. It is a fixed quantity excluded from the availability quantity. Safety time is a form of safety stock. (Is maintained in the MRPII view of the Material Master). Will generate planned orders and exception messages to maintain a constant number of days forward coverage. It is dynamic, changed by forecasts, actual days coverage. Coverage profile is a parameter selection within the Material Master MRPI view. This parameter is selected by material to support “dynamic” Safety Stock calculations, changed by forecasts, average days coverage. Will generate planned orders and exception messages to maintain an average number of days forward coverage. The “average day” demand is calculated by adding the demand over the calculation horizon and dividing it by the number of factory calendar days. [Total Demand/# of days = 50 cases/28 days = 1.8 cases per day (Average day)]

Planned order is not created until the projected inventory falls below the safety target Planned orders are placed on the day they are needed (lot size =lot for lot) Planned order quantity is always at least 6 and a multiple of 3 (minimum order and rounding value) Ending inventory is never less than the safety target

Planned order is created when the projected inventory fails to cover the next 4 days of demand (safety target) Planned orders are placed on the day they are needed (lot size =lot for lot) Planned order quantity is always at least 6 and a multiple of 3 (minimum order and rounding value) Ending inventory is never less than the safety target

Planned order is triggered when projected inventory falls below the safety target but the order is placed at the end of the week (period lot size =1W with order at end of period) The planned order quantity is sufficient to stay at or above safety through the end of the period Planned order quantity is always at least 6 and a multiple of 3 (minimum order and rounding value) Ending inventory can fall below target during the period but is at or above target at the end of the period

During the week, the MRP calculations for components are done for the planning horizon. On the weekend, they are done for the full horizon.

Menu Path: Logistics >> Production process >> Master planning >> MPS MPS >> Sng-item, multi-lvl or Sng-item, sng-lvl Settings can and should be saved to ensure mrp is run as desired (settings >> settings >> save) Standard settings are: NETCH, 2-2-1-2-2. Other options include run by product group and display results.

Menu Path: Logistics->Production process->Master planning->MPS Evaluation->MRP list - material To drill into any mrp element double click on the element (options to display or change the details of a planned order are represented by the glasses or the pencil buttons) To see material master fields that influence the mrp list click on the header (hat) button To see the impact of the GR processing time or Safety Lead time on the mrp list click Settings->Reqmt/Receipt date-> GR or Safety time - on To view the current inventory levels and locations click Go to->Stock statistics and then select the “Stock overview” button

Menu path for stock requirements list : Logistics>Production-process>Master planning>MPS. Evaluations>Stock/reqmts list.

- Please see the complete list of MRP elements in the file attached above.

Integration DRP / MPS is established by Lot size key, rounding values in receiving plant Delivery Lead time in receiving plant Planning time fence in sending plant Forecast consumption in receiving plant Lot size key in receiving plant should reflect Shipment capability of sending site, f.e. Minimum quantities (like pallet) Shipment cycle (f.e. weekly)

Demand refresh happens only after MRP/MPS run.

Complex deployment process expected when supply constraint is experienced. Planners might need to consider impact on each market, determine the basis of deployment (fair share in what sense?), considering availability of stock in next production cycle, drill depth into SR/List if required (only available to same box importers), conduct simulation in STLPSI format (with consideration of lead time offset and availability).

1. All these planning parameters will be covered with more details in the next training. 2. Forecast consumption - how customer orders are used to “consume” forecasts. Setup in Material Master overwrites configuration in MRP Group*. 3. Planning Time Fence - “firm zone” during which SAP will not change any within PTF, just provides exception messages - to maintain schedule stability. 4. Rescheduling period : A period during which SAP will first give exception messages on existing firmed orders before recommending new orders. - to maintain schedule stability. 5. Recommended parameter : Need to define by site based on APFIR* key (Site IT to support creation/transport). * APFIR (Adjustment Period for Independent Requirements) is only defined in MRP group.

Quotas are used within DRP to allocate business across multiple producing locations within a network. In DRP, quotas are used to link net demand.

The column widths were modified above in order to show all of the fields. Be sure to scroll to the right to see all of the quota fields! Quotas determine the percentage allocated to the specified production version P = Procurement Type (internal or external); S = Special Procurement Type; PPl = Plant Quota = % allocation, use with lot sizes defined to use splitting quotas. Max. Quantity - specifies the maximum quantity to be allocated to the specified production version. Use with quota splitting arrangements. Max. Rel. Quantity - Use with priorities to define the maximum quantity to be allocated to a production version before the next priority production version is utilized. Pr = Priority - specifies the relative priority of the referenced production version. May be used with lot sizes defined as not using splitting quotas (eg. ZY) Alloc. qty - identifies the total quantity planned per allocated version in the quota.

* Also, it is recommended to use Alphabetical order instead of number as the latter will run out sooner. An aligned & standard convention will be required for application within the box.

Run DRP Deployment Process Description Set deployment strategy. The deployment strategy is set on the MRP 4 screen of the material master record. Select the fair share rule “A” to be used when demand is greater than supply. Select the push logic (pull, push, or pull/push) to indicate the distribution method you want the system to use when supply is greater than demand . Also, you select the number of days for the deployment horizon (push horizon ) which is the number of days for which the system considers the ATP quantity and any additional quantity produced. Any quantity produced beyond the push horizon is not considered in the deployment calculation. Perform deployment run . Perform a deployment run for a material, plant or total planning. Requisitions within horizon available? The system determines if the purchase requisitions within the deployment (push) horizon are available and can be shipped according to plan. Shipment confirmed . If the purchase requisition can be shipped according to plan, the shipment is confirmed. Use alternate strategies . If purchase requisitions cannot be shipped, the system uses the strategies defined on the MRP 3 screen of the material master record. Purchase requisitions converted to purchase orders . After the deployment run, the system automatically converts purchase requisitions into purchase orders,. Materials shipped . After the purchase requisition have been converted to purchase orders, the system also ships the materials to the Distribution Centers.

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SAP Production Planning Overview - Presentation Transcript

  1. Site Integrated Planning Overview SAP R/3
  2. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  3. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  4. R/3 Integration R/3 Client / Server ABAP/4 CO Controlling AM Fixed Assets Mgmt. PS Project System WF Workflow IS Industry Solutions MM Materials Mgmt. HR Human Resources SD Sales & Distribution PP Production Planning QM Quality Mgmt. FI Financial Accounting PM Plant Maintenance
  5. Supply Chain Planning SIP Material Requirements Planning Derive material requirements by exploding the production plan through a bill of material (BOM) and inform the customers SIP DRP Deployment  Develop transport recommendations based on available inventory and firm production plans and execute them. SIP Site Master Production Planning Create a feasible production plan including sequencing of runs, managing inventory and line capacities. CSP Rough Cut Capacity Planning   Match supply & demand by leveling capacity over a longer horizon over different plants at an aggregated or detailed level. CSP SIP DRP Planning Net off the inventory and actual orders and roll-up the demand through a distribution network to the producing plant CSP Source Allocation Allocating the forecast to different DCs DP Demand Planning Creating a forecast per week and Country / Customer Group
  6. Definition
    • Site Integrated Planning -
    • Is the process of developing realistic supply plans and schedules for all levels of the operation that support the business strategies and objectives .
  7. Definition
    • … Realistic …
    • - Based on demonstrated performance
    • - Accounts for bottlenecks / constraints
    • - Accounts for known changes to the business plan
    • … Supply Plans and Schedules …
    • - Accounts for different levels of precision required for different parts of the horizons
  8. Definition
    • … All Levels of the Operation …
    • - Plans and schedules for finished products, intermediates, and raw materials.
    • - Evaluate constraints at each level of the plan.
  9. Definition
    • … Support the business strategies and objectives.
    • - Plans are consistent with business strategies and operating plans
    • - Are tied to the Sales and Operating Plan (S&OP)
  10. Oliver Wight MRP II Chart Business Planning Demand Management Master Production Scheduling Detailed Capacity Planning and MRP Execution (Prod.&Purch.) Rough-Cut Capacity Planning Production & Supplier Scheduling Sales & Operations Planning Distribution Requirements Planning S I P APO - SNP A dvanced P lanner O ptimizer S upply N etwork P lanner
  11. Plan  Strategy Improved Results Integrated Planning Work Processes Planning Parameters Business Operating Strategy
  12. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  13. SIP Key Responsibilities
    • Distribution Requirements (Replenishment, Resource) Planning Deployment
      • deploys finished product inventory into the DRP network
      • pursues Customer Service and Inventory objectives
    • Master Production Scheduling
      • sets the plan for the full horizon
      • manages schedule stability in the fixed MRPII zone
      • covers multiple production levels
    • Material Requirements Planning
      • determines component material requirements
      • manages schedule stability in the supplier’s fixed zone
      • issues schedules to suppliers
  14. SIP Key Responsibilities
    • S&OP Support
      • develops site SPI plans given S&OP direction
      • brings site supply issues to S&OP via CSP
    • Category Operating Strategy
      • provides site supply input to strategy
      • translates strategy into site planning parameters
    • Initiative Planning and What Ifs
      • provides site input to plans
      • establishes site plans consistent with overall initiative plan
  15. SIP Key Objectives & Principles
    • 1. Effective Integration Across Planning
      • Demand Planning
      • Category Supply Planning
      • Site Integrated Planning
    • 2. Fully Support MRPII Class A
      • single plan
      • supports integration of execution & planning
      • data accuracy & integrity
      • minimum 18 month horizon
      • supports planning reliability & schedule stability zones
      • clear responsibility & accountability
      • supports MRPII Measures
    • 3. Take Full Advantage of SAP Capabilities
      • utilize standard and custom functionalities in SAP
      • build custom reports as required
      • pursue bolt-on functionality for critical needs
    • 4. Effective Integration Beyond Planning
      • especially where SAP dependent
      • including Cost, Execution, Procurement, Order Management
  16. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  17. Project Master Data Coordinator
    • Ideally the same person who will continue as the On-going Master Data Coordinator after the Project.
    • Project Master Data Coordinator defines & executes the preparation and upload of Master Data for testing, trial cutovers, training and going live.
    • Must:
    • Understand the SAP master data map
    • Sequence & dependencies of data
    • Preparation time & complexities
    • Eliminate obsolete data
    • Provide data to the project for from SIT onwards
  18. Master Data Coordination Material Master Basic Views Warehouse Purchases Cost Plant B Planning Warehouse Purchases Cost Plant A Planning Other Master Data Planning Cost Purchasing Work process for creating new materials in GMDB GMDB CPDB SAP Work process for creating new materials in CPDB Communicate to functional single points of contact Each Function monitors the "Missing Views" and "Material Views" reports CPDB distribution patterns items produced Initiative process new codes Raw, Pkg. & Intermediates Finished Products Trigger database Category Logistics
  19. On-going Master Data Coordinator
    • The Category Master Data Coordinator (CMDC) owns the process for creating new material codes in SAP.
    • The process is:
    • Global data client feeds new material codes into SAP through interfaces
    • The interface creates the Basic Data View in SAP (code#, description and unit of measure)
    • The CMDC communicates to each row through a single point of contact that new master data is needed
    • CMDC is responsible to monitor “Material Master Missing Views” report
  20. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  21. How do we plan?
    • Parameter Management
    • Planning
    • Scheduling
    • Monitoring and adjusting
  22. Parameter Management
    • The Site Integrated Planner maintains
    • planning parameters to:
    • Define the business to be planned
    • Specify how to plan the business
    • Enable SAP to generate a “rough plan” that supports the operating strategy
  23. Parameter Management Parameters (Master Data) are used by SAP to create a supply plan by the MRP/MPS “calculator” Forecast Master Data Inventories Supply Plan & Projected Inventories When the calculation is started it re-evaluates the existing plan based on the changes since the last time the MRP/MPS calculations occurred.
  24. Site Integrated Planning Processes Manage Master Data Perform Long-Term Planning Perform Short-Term Planning Perform Daily Planning Perform Special Planning Generate Reports Perform Integrated Planning Measures Related Work Processes
  25. Master Data - Parameter Management
    • The term “master data” is frequently used to refer to such things as material master, BOM’s, resources, recipes, etc.
    • Master data contains planning parameters such as lead time, safety stock, order quantities, etc.
  26. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (i.e. change in raw material) - Quota Arrangement Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant)
  27. Master Data Set Up MRP 1 View - 1
  28. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (e.g. change in raw material) Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant) Quota Arrangement
  29. Master Data Set Up BOM - Material Item Overview
  30. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (change in row material eg.) Quota Arrangement Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant)
  31. Master Data Set Up Resources: Intervals of Avail. Capacity
  32. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (change in row material eg.) Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant) Quota Arrangement
  33. Master Data Set Up Master Recipes: Overview
  34. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (i.e. change in row material) Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant) Quota Arrangement
  35. Master Data Set Up - Production Version
  36. Master Data Parameters Material Master(s) Resource BOM Recipe Production Version - firm zones - lead times - lot sizing - safety stocks - scrap factors - hours available - planned downtime - efficiency - factory calendar - cost centers - material / resource combination - capacity data / rates (machine & labor) - sequence preference - formula card structures - usage quantities - alternate BOM - BOM / recipe combination - time-phase planning (i.e. change in row material) Allocate percentage of business: - Production Version allocation - Capacity allocation - Source allocation (vendor, plant) Quota Arrangement
  37. Master Data Set Up - Quota Arrangement
  38. Time Bucket & Evaluation Area
    • Work Process Focus Time Bucket Evaluate Area
    • Long-Term Planning 3-24 mo. Monthly/Weekly Superior WC
    • Short-Term Planning 0-3 mo. Weekly/Daily WC/Material
    • Daily Planning 0-1 mo. Daily Material
  39. Long Term Planning
    • LTP is a set of work processes that are
    • performed monthly and focus on the
    • 3-18 Month portion of the integrated plan to ensure it:
    • is feasible
    • is consistent with the S&OP
    • supports the operating plan
    • provides a basis for scheduling
  40. Long Term Planning - Input/Output
    • Business operating strategy
    • Master data
    • Category demand plan verified against supply capacity (multi-sourced items)
    • S&OP interplant & inventory recommendations (if applicable)
    • Resource hierarchy groupings
    • Balanced long-term plan by superior resource, for alignment with the S&OP plan
    • Interplant plan created within the SAP system (if applicable)
    INPUT OUTPUT
  41. Long Term Planning
  42. Short Term Planning & Scheduling
    • STP is a set of work processes that are performed at least weekly and focus on the 0-3 month portion of the integrated plan.
    • The processes are designed to:
    • Balance the capacity load at the resource level
    • Convert the plan to a detailed schedule
    • Generate supplier delivery schedules
  43. Short Term Planning - Input/Output
    • Long Term plan balanced
    • Master data accurate
    • Planning parameters accurate
    • New Demand (0-3 months)
    • Balanced short -term plan by resource/material
    • Convert the weekly schedule to a daily schedule within the planning time fence
    • Communicate production schedule
    • Communicate vendor’s schedule
    INPUT OUTPUT
  44. Short Term Planning
  45. Daily Planning
    • Monitor the execution of the short term schedules
    • Assess the on-going validity of the schedule and adjust as necessary
    Daily Planning is a set of work processes that are performed daily to monitor the execution of the integrated plan. The processes are designed to :
  46. Daily Planning - Input/Output
    • Short Term plan balanced
    • Master data accurate
    • Planning parameters accurate
    • Communication process across department established
    • Monitor the validity of the planning process (daily)
    • Make sure the production plan is consistent (daily)
    • Make sure the supplier scheduling are consistent (daily)
    • Provide a link between Planning and Execution
    INPUT OUTPUT
  47. Daily Planning
  48. Summary Points
    • Site Integrated Planning helps link the plan to the operating strategy
    • All functions must work together and be aligned to the operating strategy
    • The business to be planned is defined by maintaining planning parameters & master data
    • The plan is generated by an MRP/MPS run that is based on the parameters & master data
    • The plan is a continuum that consists of scheduling and planning horizons
  49. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  50. Key Business Partners
    • Category Supply Planning
    • Site Integrated Planning
    • Production/Execution
    • Shipping/Receiving
    • Purchasing
    • Accounting
    • Maintenance
    The effective execution of the operating strategy requires the coordinated efforts of:
  51. Data „from“ SIP
    • Production Execution
      • line supply driven by Planning BOM’s
      • production as scheduled and recorded against the process order
      • planned downtime reflected in the production schedule
      • MPS performance measure data
    • Cost Accounting
      • annual budgeting and standard cost setting
    • Purchasing
      • planning data used by Purchasing with supply base
      • tight loop of plans / orders / receipts / invoices / payments
      • SSP and MRP performance measure data
    • Plant Maintenance
      • planned maintenance downtime reflected in the production schedule
    • Shipping & Receiving
      • stock transport/replenishment orders provided to shipping
      • material receipt plans provide an outlook for receiving planning
  52. Data „to“ SIP
    • Production Execution
      • process order production confirmation (partials & finals)
      • component material usage recording either
        • backflush with staging area reconciliation
        • direct goods issue to the process order
    • Cost Accounting
      • variance reports provide data to aid BOM accuracy efforts
    • Purchasing
      • purchasing data drives component material acquisition (sourcing & pricing)
    • Plant Maintenance
      • planned maintenance built into work center available hour plans
    • Shipping & Receiving
      • planned shipments and resulting inventory reservations
      • ASNs provide visibility to Planning for incoming materials
  53. SIP-SD
    • Sales documents consume logically IndReq
    • (i.e.: IndReq 100, Order 20, MRP run >> Order becomes an order of 20 and IndReq is reduced to 80. The total requirement is still 100)
    • Transfer of Requirements (TOR) is transmitted to SIP during the sales order creation. (TOR must be configured according to the MM and PP inputs)
    • Delivery consumes physically the stock
    • Define the consumption mode
    • Define the availability check functionality
    • Use Stock Requirement List/Monitoring tools
    • Make sure all business cases are covered
  54. Processing Procedure Completion confirmations Production Receipt Archiving / Deleting Batch Number Assigned Staging Materials 11 Control recipe creation Operations PO header Phases Process Instructions Resource allocations Material components Release of process order Demand for process order (MRP ...) Relationships Relationships Process order execution Process order settlement Process order creation SIP-PP/PI 9 8 6 5 3 Costs 4 1 2 7 10 1
  55. Data Flow in PP-PI Bill of Material Master Recipe Production Version Process order
    • Resources
    • Control Key
    • Printed Report
    Production Execution Production rqmts Planned order Process control Manually
    • Order Type
    SIP-PP/PI WH QA SIP PE CO
  56. SIP-Purchasing
    • Purchasing Vision Planning
    • Purchasing Vision Execution
    • - Manual Delivery Schedules
    • - Automatic Delivery Schedules
    • - Manual Purchase Order
    • - Auto PO
  57. Purchasing Vision Planning Vendor Master Material Master Request for Quotation Entry of quotation data Quotation Comparison Create Outline Agreement Create Source List Create Quota Arrangement SIP-Purchasing
  58. Scheduling Agreement Delivery Schedules Send to Vendor Valid Source List Purchasing Vision Execution Manual Delivery Schedules Generation Manual Creation SIP-Purchasing
  59. Purchasing Vision Execution Delivery Schedules MRP Sch. Agreement SIP Master Data Requirements Source List Automatic Delivery Schedules Generation SIP-Purchasing Send to Vendor
  60. Approved Requisition Purchase Order Send to Vendor Allocate Source and process Purchasing Vision Execution Manual Purchase Order Generation (Assign&Process) SIP-Purchasing
  61. Automatic Purchase Order Generation (Auto PO) Approved Requisition Quota Arrangement Send to Vendor Purchase Order Run Auto P.O. Program Source List Non-Sourced Requisition Purchasing Vision Execution SIP-Purchasing
  62. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  63. Capacity Evaluation
    • The planner can view the superior work
    • center capacity situation using two methods:
    • Capacity Evaluation
    • (Logistics/Production/Capacity Planning)
    • Planning Table
    • (Logistics/Production/Repetitive Manufacturing)
  64. Capacity Planning
  65. Capacity Leveling: Auto. Leveling
  66. Planning Table
  67. Planning Table
  68. Graphical Planning Table orders include average setup time orders spread across the week 7 days cycle
  69. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
    • Use of Forecast Consumption
      • Determines plan’s responsiveness to actual order activity
      • Integrates Orders and Forecast
      • Evaluate impact of demand coming in early or late
      • Backward / Forward / Both, with set horizons
      • Key MRPII Stability Tool
    Demand Management
  71. Manage Demand Work Process
  72. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
  73. MPS/MRP
    • What is it?
    • How does it work?
    • How shall we use it?
  74. MPS/MRP
    • A set of SAP programs that are designed to calculate a production plan based on configuration settings, master data and raw data inputs.
    What is it?
  75. MPS/MRP
    • Processes one code at a time
    • Calculates from the present out into the future
    • The primary steps are
      • determine if orders are needed
      • calculate the quantity and timing of the orders
      • assign internal production versions or external sourcing based on the mrp quotas
      • schedule the orders (calculate start and stop times based on the recipe and the resource)
      • explode out dependent requirements based on the BOM
    How does it work?
  76. Inventory Strategy
    • Here are three methods that can be used
    • in SAP for inventory strategy (buffers):
    • Safety Time
    • Safety Stock
    • Coverage Profile
  77. MPS/MRP Example 1 Impact of Safety Stock 42 40 45 44 43 42 40 41 42 41 41 40 40 50 60 Ending Inventory 12 0 6 6 6 12 9 24 21 15 21 15 0 0   Planned Order 30 40 39 38 37 30 31 17 21 26 20 25 40 50   Projected Inventory 10 5 5 5 5 10 10 25 20 15 20 15 10 10   Demand Su Sa F Th W T M Su Sa F Th W T M   Lot for Lot Lot size type 3 Rounding Value 40 Safety Stock 6 Minimum Order Qty A Material Code Planning Table (days)
  78. MPS/MRP Example 2 Impact of Safety Time 0 10 15 20 25 24 28 32 51 65 71 82 70 62 60 Ending Inventory 0 0 0 0 6 6 6 6 6 9 9 27 18 12   Planned Order 0 10 15 20 19 18 22 26 45 56 62 55 52 50   Projected Inventory 10 5 5 5 5 10 10 25 20 15 20 15 10 10   Demand Su Sa F Th W T M Su Sa F Th W T M   Lot for Lot Lot size type 3 Rounding Value 4 Safety Time (days) 6 Minimum Order Qty A Material Code Planning Table (days)
  79. MPS/MRP Example 3 Period Lot Size 41 0 5 10 15 20 30 40 -43 -23 -8 12 27 37 47 Ending Inventory 51 0 0 0 0 0 0 108 0 0 0 0 0 0   Planned Order -10 0 5 10 15 20 30 -68 -43 -23 -8 12 27 37   Projected Inventory 10 5 5 5 5 10 10 25 20 15 20 15 10 10   Demand Su Sa F Th W T M Su Sa F Th W T M   1W at end of week Lot size type 3 Rounding Value 40 Safety Stock 6 Minimum Order Qty A Material Code Planning Table (days)
  80. MPS/MRP
    • MRP is run in a batch mode for all plants
    • It starts at 4:00 AM and completes by 6:00 AM eastern time
    • It is run Monday through Sunday
    How shall we use MRP to generate our plans?
  81. MPS/MRP - Running MRP
  82. MPS/MRP - The MRP List
  83. MPS/MRP
    • MRP List vs. Stock Requirements List
    MRP List : 1. Is a static picture of the planning position as of the last mrp run 2. Has exception messages that provide useful information regarding the plan Stock Requirements List: 1. Is a dynamic list that reflects the most up to date picture of all the mrp elements 2. Does not have all the exception messages generated during the mrp run 3. Is the same as the mrp list at the end of the mrp run but then deviates as changes are made to the mrp elements.
  84. MPS/MRP
    • MRP Elements and their relationships
    Finished Product Intermediate Raw Material Demand: IndReqsCusReqs RelOrds Supply: PlOrd.PrOrd. SchlneShipNt Demand: Supply: DepReqOrdRes PlOrd.SchAgr RelOrd SchLneShipNt Demand: Supply: DepReqOrdRes PlOrd.PrOrd. RelOrd SchLneShipNt
  85. DRP
    • What is it?
    • How does it work?
    • DRP master data
  86. What is DRP?
    • Distribution Requirements Planning (DRP) is composed of work processes and tools in SIP that handle “distribution demand” across a specific network of Plants/Warehouse/DCs/Contract Manufacturing/Importers/Exporters/
    • Customers.
  87. How does it work?
    • DRP in general is divided in 2 sub components:
      • Planning
      • Deployment
    • Planning
      • Determines how much and when inventory and planned supplies should be deployed to distribution centers, importers and direct customers taking into account of lead time, transportation mode, schedule, loadability, order mixing, and other constraints
    • Deployment
      • To optimize the distribution of available stock in the distribution network.
  88. Planning Process
    • Establishing network sourcing strategy.
    • Parameters management – setting planning parameters to support operating strategy.
    • Uploading the demand forecast into SAP’s demand management module
    • Calculating replenishment orders for distributions centers through MRP run .
    • Feeding/aggregating net demand to production plant (MPS run)
  89. Distribution Resource Planning Bill of Distribution Customer Orders Sales Forecasts Inventory Records In-Transit Shipments To: Master Production Scheduling No Yes Transportation Planning Warehouse Space & Resource Planning Distribution Requirements Planning Realistic?
  90. Distribution Network Planning Tools Sales to Customers Sales to Customers Sales to Customers Sales To Customers MPS MRP Warehouse (A) DRP Warehouse (B) Warehouse (C) Puree Chemical Company Main Plant Warehouse
  91. Parameter Management Planning Tools Sales to Customers Sales to Customers Sales to Customers Sales To Customers Inventory policy F/c Consumption logic Sourcing plant/DC Total Order Lead time Replenishment Frequency Local Repacking Warehouse (A) Warehouse (B) Warehouse (C) Puree Chemical Company Main Plant Warehouse MPS MRP DRP
  92. Upload of Forecast Sales to Customers Sales to Customers Sales to Customers Planning Tools Sales To Customers Forecast Forecast Forecast Forecast Warehouse (A) Warehouse (B) Warehouse (C) Puree Chemical Company Main Plant Warehouse MPS MRP DRP
  93. Generating Replenishment Plan Sales to Customers Sales to Customers Sales to Customers Planning Tools Sales To Customers Forecast Forecast Forecast Forecast Warehouse (A) Warehouse (B) Warehouse (C) Puree Chemical Company Main Plant Warehouse MPS MRP DRP
  94. MRP Element Linkage MPS run MRP run MRP run
  95. Deployment Process
    • Evaluating the day-to-day capability of the source sites to ship the required ideal DRP replenishment orders.
    • Simulating deployment plans and analyzing impact on individual markets/DCs if required*.
    • Developing priorities & alternatives plans when all of the DRP replenishment orders cannot be met.
    • Creating orders for properly weighted & cubed vehicles for shipping.
  96. DRP - Planning Master Data
    • DRP Planning data is contained in MRP1, MRP2, MRP3, and MRP4 views
      • MRP1 view - general data, material owner, and lot size data
      • MRP2 view - lead time scheduling and inventory strategy
      • MRP3 view - planning and availability check
      • MRP4 view - enablers (BOM and material transition)
  97. DRP - Material Master - MRP Group
    • Pre-set control parameters representing category specific planning strategy
    • MRP Group is set up in configuration
    • MRP Group is included as part of an MRP Profile
    • Key planning parameters in MRP group :
      • Planning Time Fence
      • Re-scheduling Period
      • Forecast Consumption
  98. DRP - Quotas - Overview
    • Quota at plant with production facilities is used to determine how production will be allocate across multiple production version.
    • Quotas setup for DRP is used differently.
    • Quota for importers determine how supply will be allocated across multiple external source (exporters).
    • Importers’ quota setup also defines if ‘ Planned Stock Tr ansfer Order (STO)’ is used .
  99. DRP - Quotas - Data Entry Screen
    • Quota Setup to enable Planned STO (net demand) link to supply site:
    • Special Procurement Type (S): U (Stock Transfer)
    • Populate both Plant (PPl) and vendor fields.
  100. DRP - Special Procurement Type (1)
    • - The quota must be used where there are two
    • (or more) sources supporting a single location.
    • This the use of the special procurement key (or type) can be used in situations where there is a single source.
    • Just need to enter the newly defined SP type in MRP 2 will allow the link of demand without quota setup.
    • Maintained in customizing (OMD9)
  101. DRP - Special Procurement Type (2) Receiving Plant Source Plant Special Proc. Type* F: External Procurement Defines the procurement more specifically
  102. DRP
  103. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
    • Performs netting, lead time offsetting, lot sizing, BOM explosion, sourcing (according to Supply Parameters)
    • Works Multi-level, e.g. from FP to Intermediate to Raw/Pack materials
    • MPS: Master Production Scheduling
    • MRP: Material Requirements Planning
    SIP’s MPS/MRP Engine
  105. Site Integrated Planning Process
    • 1. MRP Engine
      • drives multi-level/echelon planning
      • generates exception messages to review/fix plans
    • 2. DRP Deployment (currently shared btw SAP and Legacy systems)
      • driven by DRP Planning parameters
      • replenishment recommendations
      • scarcity deployment & allocation
      • vehicle building capability (truck assignment tool, cube, weight, unit load capacities)
  106. Site Integrated Planning Process
    • 3. Master/Material Production Scheduling MPS
        • long term planning
        • short term planning & scheduling
        • driven by master data & planning parameters
        • production resource capacity balancing
        • use of MRP II fixed & firm zones
    • 4. Material Requirements Planning MRP / Supplier Scheduling
        • driven by master data & planning parameters
        • driven by Procurement data (supplier data)
        • use of MRP II fixed & firm zones
    • 5. Key Outputs
        • Production Schedules, Supplier Schedules (via fax)
        • SPI Plans - for site and CSP use
    • Aggregation Capabilities - through hierarchies and groups (very flexible), D/W/M views
    • Capacity Evaluation Analysis - user decision support provides work center loads (machine & people)
      • User controls resolution.
      • Use alternate line, build inventory, take inventory risk.
      • Automatic Leveling Functionality
    • Planning Tables - worksheet like capability with interactive work center loads (MF50, CM29)
    • Time Phased Functions to program supply parameter changes for the future, and plan/evaluate accordingly
    • Decision Support Reports (on line) - stock requirements list, MRP list & exception messages, SPI report, also What-If
    • Key Output Reports - production schedule (to Excel, e-mail), Supplier schedules (with auto fax), SPI report
    Key Site Integrated Planning Tools
  108. “ SIP Tools at work”
    • Below are listed the “SIP Tools at work“
    • 1. Aggregation Capabilities
    • 2. Capacity Evaluation
    • 3. Automatic Leveling Tool
    • 4. Planning Tables and Tools
    • 5. Time Phased Functions
    • 6. Decision Support Reports
    • 7. Key Output Reports
    • 8. SIP Measure Reports
    • Data Accuracy Audit Support
      • MRP Parameters Report
      • Bill of Material Accuracy
      • Recipe/Routing Accuracy
      • Recipe Rate Analysis
    • MPS Performance Measure
    • MRP Performance Measure
    • SSP Performance Measure
    Key Site Integrated Planning Measures
  110. Agenda
    • -What is Site Integrated Planning?
    • - Key Responsibilities
    • - Master Data Parameters
    • - Planning Strategies
    • - Integration Points
    • - Capacity Evaluation
    • - Demand Management
    • - DRP/MPS/MRP
    • - Reports & Measures
    • - Key SIP implementation challenges
    • Planning Parameter Choices
      • Driven by Operating Strategy
      • Assessed across the Supply Chain
    • Building Organization Capability
      • Site Key Users
      • Site End Users
      • Master data coordinator
    • Organization Design
      • Site Integrated Planner concept
      • Site Supply Chain Leader
    Key SIP Project Challenges (1)
  112. Key SIP Project Challenges (2)
    • Allocating sufficient, experienced resources Full-time to the project as Key-Users.
    • Assigning End-Users Full-time during BAT, Q-pilot and Training.
    • Defining the “Final Organization Setup“ early in the project. (before BAT)
    • Preparing for the Matching Session.
      • Documenting all business cases thoroughly and in great detail
      • Documenting “future“ business cases which is in scope
      • Documenting current and future (if required) setup for the whole production (lines, etc.), material flow, and planning process
    • Preparing to convert to Site Integrated Planning.
    • - Migration Strategy
    • - Migration Tools
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+ Rupesh BrahmankarRupesh Brahmankar Nominate

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Production Planning

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