SAP PP Course Documentation

3. © 2020 by Ricardo NayaSapyst.com 1. What is an ERP? • ERP = Enterprise Resource Planning ERP - INTEGRATED Information System - It covers all the company processes - It shares data across the different deparments - UNIQUE Database - REAL TIME Data

5. © 2020 by Ricardo NayaSapyst.com 2. What is SAP? • SAP AG = Systemanalyse und Programmentwicklung Systems Analysis and Programs Development SAP ECC MM Materials Management PP Production PlanningSD Sales & Distribution HR Human Resources CO Controlling FI Finance

8. © 2020 by Ricardo NayaSapyst.com 1. What is SAP PP? • SAP PP = SAP Production Planning SAP PP - Production Master Data (Materials, BOMs, Routings, Work Centers) - Demand Management - Planning (MPS, MRP, Consumption-based Planning) - Production Control (Production Order related processes)

14. © 2020 by Ricardo NayaSapyst.com 2. Complete PP Process SOP Sales & Operations Planning MPS Master Production Schedule Scheduling & Capacity Planning Demand Mgmt. Long Term Planning MRP Materials Requirements Planning Production Control

19. © 2020 by Ricardo NayaSapyst.com 4. Demand Management Finished Product Semi-finished Packing Material Raw Material Raw Material Raw Material Sales OrdersIndependent Requirements IRs CustomerForecast SOP

21. © 2020 by Ricardo NayaSapyst.com MRP 5. Planning Finished Product Semi-finished Packing Material Raw Material Raw Material Raw Material Sales OrdersForecast SOP Independent Requirements IRs Customer MPS

23. © 2020 by Ricardo NayaSapyst.com 6. Production Control MPS MRP Purchase Requistion Planned Order Goods Issue Goods Receipt Liquidation & Close Production Order Released Production Order Confirmed Production Order Created Purchase Order Goods Issue Goods Receipt Production Order

28. © 2020 by Ricardo NayaSapyst.com 2. Materials Overview (1) • Each different raw material, component, commodity, semi-finished or finished product must have an entry in the Material Master • For each material we can create different views • Each view groups data related to a funcionality

29. © 2020 by Ricardo NayaSapyst.com 2. Materials Overview (2) MATERIAL Basic Data Classification Sales Purchasing MRP Forecasting Work Scheduling General Plant Data/Storage Warehouse Mngt Quality Mngt Accounting Costing Stock Forecasting MRP Work Scheduling Depending of Material Type Different views

31. © 2020 by Ricardo NayaSapyst.com 3. Organizational Structure • Each field can be defined at 4 different levels: − Global Valid for all the plants − Plant Only valid for the plant where it is defined − MRP Area For performing a different MRP (can include various Storage Locations) − Storage Location Only valid for each Storage Location

33. © 2020 by Ricardo NayaSapyst.com 4. Master Data • Material Master is a basic Master Data − It does not need previous Master Data for its maintenance • Some of the PP fields should be maintained previously in configuration

35. © 2020 by Ricardo NayaSapyst.com General Data 5. Main Views – Fields MRP 1 (1) Material Number Material Description Plant MRP Procedure How the Material is going to be planned (MRP, reorder point, with time fence…)

36. © 2020 by Ricardo NayaSapyst.com MRP Areas In case we want to run different MRPs inside the same plant 5. Main Views – Fields MRP 1 (2) Lot size data How the lot size of Planned and Purchase Requisitions is going to be calculated

37. © 2020 by Ricardo NayaSapyst.com Scheduling Different times to take into account in the MRP run 5. Main Views – Fields MRP 2 Procurement How the MRP will work with materials that are supplied (not manufactured in-house) Net requirements calculation Safety stocks – MRP will planned in excess to build some stock

38. © 2020 by Ricardo NayaSapyst.com Planning Where we can define the different Planning Strategies (like with/without assembly) and the way the Indepent Requirements are consumed 5. Main Views – Fields MRP 3 Forecast Requirements How the MRP manages Independent Requirements Availability check Which entries the MRP will take into account when calculating availability Configuration For configurable materials

39. © 2020 by Ricardo NayaSapyst.com 5. Main Views – Fields MRP 4 BOM explosion How to select the BOM to use in the MRP runs and how much scrap to planDiscontinued parts In case we want to initiate the discontinuation process in the MRP Repetitive Manufacturing / assembly / deployment strategy Further data used in Repetitive environments and special situations Storage Location Data in this view is Storage Location dependent Storage Location MRP For excluding a Storage Location from the MRP

40. © 2020 by Ricardo NayaSapyst.com 5. Main Views – Fields Forecasting General data Forecast model (constant, trend, seasonal, …) Number of periods required Required periods for the calculation Control data Futher factors for the calculation

41. © 2020 by Ricardo NayaSapyst.com 5. Main Views – Fields Forecasting General data Production related data, it will be fetched to the Production Orders In-house production time Parameters for the time calculation Tolerance data

44. © 2020 by Ricardo NayaSapyst.com 1. Goals of this session • To introduce the Bill of Materials • To know Organizational Levels and Master Data involved in BOMs • To see main BOM fields and their functionality

46. © 2020 by Ricardo NayaSapyst.com 2. BOMs Overview (1) • In the Bill of Materials we specify the Components or Raw Materials needed for the manufacture of a Product • When we create a Production Order, the BOM will be automatically copied to it • We can create alternative BOMs for the same product • BOMs can be created for different uses (not only Production)

47. © 2020 by Ricardo NayaSapyst.com 2. BOMs Overview (2) • BOMs are structured in − Header => Finished or Semi-finished Good to produce − Items => Raws, Components or Semi-finished goods that form the Header − Subitems => Assembly places inside each Ítem Header Item Item Item Subitem Subitem Subitem Item Subitem Subitem

48. © 2020 by Ricardo NayaSapyst.com 2. BOMs Overview (3) • At each of the levels different data is required Header: - Alternative - Usage - Status - Base quantity -Texts … Item 1 Item 2 Item 3 - Category - Quantity - % Scrap - MRP data - Texts - Cost relevancy … Subitem 1 Subitem 2 - Installation Point - Text Different Item Categories L – Stock Item N – Non Stock Item D – Document Item T – Text Item

49. © 2020 by Ricardo NayaSapyst.com 2. BOMs Overview (4) • BOMs will be also created for Semi-finished goods building up complex structures Finished Good Package Semi-finished Component Component Semi-finishedComponent Component Component Semi-finished Component

51. © 2020 by Ricardo NayaSapyst.com 3. Organizational Structure • Each BOM can be defined for each Plant: − If manufactured in different plants BOMs the same one can be used − In this way, They might have different values in different Plants • BOM usage: Limits use to different processes − Production => To use in MRP and Production Orders − Cost => To use only for costing − Engineering => To use only for design − Sales => To use only in Sales Orders

53. © 2020 by Ricardo NayaSapyst.com 4. Master Data • All Materials must exist in the Plant where BOM is created − Some data, as Unit of measure, will be retrieved from MM • No other Master Data involved

62. © 2020 by Ricardo NayaSapyst.com 1. Goals of this session • To introduce Work Centers • To know Organizational Levels and Master Data involved in Work Centers • To see main Work Center fields and their functionality

64. © 2020 by Ricardo NayaSapyst.com 2. Work Centers Overview (1) • Each Production Operation must be made in one and only one Work Center • Depending on the Production Process, Work Centers can be modelled in different ways. Each one can represent: − A machine or group of various machines − A Production Line − An assembly or Packaging Workplace − An employee or group of various employees − …

65. © 2020 by Ricardo NayaSapyst.com 2. Work Centers Overview (2) • Work Center Data are used mainly for: − Capacity => To define available capacity for Production Formula Timetable Nº of employees or machines … − Scheduling => To define how employed time is going to be calculated Formula Set up times … − Costing => To define how Manufacturing Cost is going to be calculated Formulas Cost Center Activity Types – For which a rate will be entered

66. © 2020 by Ricardo NayaSapyst.com 2. Work Centers Overview (3) • They will also define: − Parameters to measure during Production Execution − Some Default values which will be copied to the Routing/Production Order

67. © 2020 by Ricardo NayaSapyst.com 2. Work Centers Overview (4) Work Center: Parameters FormulasActivity TypeActivity Rate Routing / Operation: Standard Values 20 USD/h 5 USD/h 30 USD/h Act1 Act2 Act3 Setup Time Machine Time Labor Time Setup Time Op.Qty x Mach.Time Op.Qty x Labor.Time 2 h 5 h 3 h COSTS CALCULATION Setup => 2h x 20 USD/h = 40 USD Machine => 5h x 5 USD/h = 25 USD Labor => 3h x 30 USD/h = 90 USD

69. © 2020 by Ricardo NayaSapyst.com 3. Organizational Structure • Work Center Category − Depending on the use it allows the mainentance of different data • Each Work Center must be defined for only one Plant

80. © 2020 by Ricardo NayaSapyst.com 1. Goals of this session • To introduce Routings • To know Organizational Levels and Master Data involved in Routings • To see main Routing fields and their functionality

82. © 2020 by Ricardo NayaSapyst.com 2. Routings Overview (1) • In the Routings we specify the different steps or operations that must be taken for manufacturing a producto or semifinished material • When we create a Production Order, the Routing will be automatically copied to it. • We can create differents Routings for manufacturing the same Material and they can be created for different usages

83. © 2020 by Ricardo NayaSapyst.com Work Center 4Work Center 3Work Center 2Work Center 1 2. Routings Overview (2) • Routings are structured in − Header => Finished or Semi-finished Good to produce − Operations => Different steps to manufacture it Operation1 Operation2 Operation3 Operation4

84. © 2020 by Ricardo NayaSapyst.com 2. Routings Overview (3) • Components and Raw Materials can be consumed in different Operations • Operations can be: − Internal => Inhouse Manufacture − External => Subcontracted

85. © 2020 by Ricardo NayaSapyst.com 2. Routings Overview (4) • In Internal Operations we must enter a Work Center and its Standard Values − They will allow: To calculate Planned Costs To schedule the Production Order • In External Operations we can enter Vendor, Delivery Time and Price − They will allow: To calculate Planned Costs To schedule the Productioin Order To create transfer requirements to Vendor if necessary

87. © 2020 by Ricardo NayaSapyst.com 3. Organizational Structure • Each Routing must be defined for each Plant • Routing usage: Limits use to different processes − Production => To use in MRP and Production Orders − Cost => To use only for costing − Engineering => To use only for design − Sales => To use only in Sales Orders

89. © 2020 by Ricardo NayaSapyst.com 4. Master Data • The header Material must exist for the creation of the Routing • If we want to assign components to different operations, the BOM must have been created previously • Work Centers for Internal Operations must also have been created previously

97. © 2020 by Ricardo NayaSapyst.com 1. Goals of this session • To introduce Demand Management in SAP • To know Organizational Levels and Master Data involved in Planned Independent Requirements maintenance • To see main Planned Independent Requirements maintenance screen and fields

99. © 2020 by Ricardo NayaSapyst.com 2. Demand Management Overview (1) • There are two possible Demand types: − Customer Demand (Sales Orders) − Forecast (Planned Independent Requirements) • Both of them will be taken into account by MRP in order to calculate the net requirement • Different Planning Strategies can be defined for each Material

100. © 2020 by Ricardo NayaSapyst.com 2. Demand Management Overview (2) Finished Good Semifinished Component Component Component Component Component 40 – Planning with Final Assembly Planned Independent Requirements + Sales Orders Requirements Explosion (MRP) Dependent Requirements

101. © 2020 by Ricardo NayaSapyst.com 2. Demand Management Overview (2) Finished Good Semifinished Component Component Component Component Component 40 – Planning without Final Assembly at Semifinished Level Sales Orders Planned Independent Requirements Requirements Explosion (MRP) Dependent Requirements

112. © 2020 by Ricardo NayaSapyst.com 2. Procurement Types (1) • Each Material can be procured: − Internally (Inhouse Production) – MRP generates Planned Orders − Externally (Purchased) – MRP generates Purchase Requisitions − Both – MRP generates Planned Orders That will be able to be converted in Production or Purchase Orders • Subcontracting − Special Procurement Type Components and Raw Materials are sent to Vendor for the manufacture − Two types: Subcontracting Purchase Order External Operation (one operation inside an inhouse Production Order)

113. © 2020 by Ricardo NayaSapyst.com 2. Procurement Types (2) External Procurement Transfer Procurement Types Inhouse Production SubcontractingIn own Plant In other Plant Procurement Types Special Procurement Types

115. © 2020 by Ricardo NayaSapyst.com 3. MRP Types (1) • Main Planning Methods: − PUSH: From Finished Good requirement date (customer or forecast), dates are calculated for lower BOM levels requirements Used for valuable Materials or difficult to obtain For that MRP is used − PULL Procurement is triggered when stock decreases below a thresold Used for cheap Materials (Stock levels value are not relevant) For that Reorder Point or Kanban are used

116. © 2020 by Ricardo NayaSapyst.com 3. MRP Types (2) • ABC Analysis: − Materials are classified by cost. Example: A: 20% with higher cost B: Next 30% C: Rest of Materials − Depending on classification: A: Planned by MRP C: Planned by Reorder Point or Kanban B: To study case by case − Also take into account. Obsolescence Storage Costs Delivery time

118. © 2020 by Ricardo NayaSapyst.com 4. Reorder Point (1) • A replenishment proposal will be created once stock level is below a predetermined level • Two ways of implementing it: − Visual Control or Kanban cards User enters manually a Purchase Order in the system when he sees level is down the thresold Using kanban cards, when a container is depleted the kanban card is taken to the Procurement Department to ask for a replenishment − SAP Control MRP Type VB (Reorder Point) entered in Material Master (View MRP1) Reorder Point (thresold stock level) also entered in MM View MRP1 When MRP is run, if stock is below Reorder Point a Purchase Requisition is automatically created

121. © 2020 by Ricardo NayaSapyst.com 5. MRP Overview (1) • MRP (Materials Requirement Planning) allows the explosion of requirements from BOM upper levels to the lowest • MRP calculates for each Material the Net Requirements: − Outputs Demand (Sales Order or Planned Independent Requirements) Dependent Requirements (required quantities to fulfill Upper Level Orders) − Inputs Stock in hand Planned or Production Orders Purchase Requisitions or Purchase Orders (for Externally Procured Materials)

122. © 2020 by Ricardo NayaSapyst.com 5. MRP Overview (2) • MRP proposals will be later converted: − Planned Orders => Production Orders (Internally Procured Materials) − Purchase Requisitions => Purchase Orders (Externally Procured Materials) • MPS (Master Production Schedule) runs MRP only to the next level − It is used to Plan at the first level and adjust before exploding down requirements to lower levels • Simulation Mode allows to run MRP and check result before saving it

123. © 2020 by Ricardo NayaSapyst.com Planned Order 5. MRP Overview (3) Downward Requirements Explosion BOM level Time Delivery Time Sales Order Planned Order Planned Order Purchase Requisition Purchase Requisition Finished Good Semi1 Semi2 Raw1 Raw2 Delivery Time Dates calculated based in Delivery and Scheduling times

124. © 2020 by Ricardo NayaSapyst.com 5. MRP Overview (4) Net Requirement calculation and Proposals in each BOM level Net Requirements Calculation Lot Size Calculation Procurement Type Scheduling Requirement Explosion to Lower levels + Stock + Planned Orders + Prod. Orders + Purch. Req. + Purch. Orders -Sales Orders -- Independent Req. -- Dependent Req. -= Net Requirements o Exact o Fixed o Minimum o Autom. Calculated o… Internal External… Taking into account Lead times it calculates Input/Output date Planned Orders: Dependent Req Prod. Orders: Reservations

126. © 2020 by Ricardo NayaSapyst.com 6. Main Screens - Fields MRP Parameters -Processing Key: Net change or Regenerative -- Create Pur.Req: Create directly Pur.Req or Planned Orders -- Delivery Schedules: Only for Open Purchase Orders -- Create MRP list: Save snapshot of status after MRP -- Planning mode: Reexplode BOM or adapt changes -- Scheduling: Use times in Routings or Material Master ones Process control parameters

128. © 2020 by Ricardo NayaSapyst.com Table of contents 1. Goals of this session 2. SAP AFS Overview 3. Material Master 4. Bills of Materials 5. Routings 6. Planned Independent Requirements 7. Materials Requirements Planning 8. Planned Orders & Production Orders

131. © 2020 by Ricardo NayaSapyst.com 2. SAP AFS Overview (1) • SAP AFS: Special functionality for covering special requirements of Apparel and Footwear Industry • Main features => For each Material it is possible to define: − Different SKUs – Master Grid Used for dealing with different sizes, colours, styles It would be possible to explode requirements (presizing) based in Distribution Profiles − Different Categories Used for dealing with different customer segments, quality levels or country of origin − Different Seasons Different prices or processes might be required depending in the Material Season

132. © 2020 by Ricardo NayaSapyst.com 2. SAP AFS Overview (2) • BOMs take into account grid data and can activate/deactivate components based in dimensions • AFS Special BOMs Types: Assortments and Pre-packs • Possibility of multiple Routings based on different categories • MRP exploded from Material to its SKUs • Production Orders − Production Order Bundles for keep maintenance of colour shades − Markers for indicating optimal way of cutting − Combined Production Orders

134. © 2020 by Ricardo NayaSapyst.com 3. Material Master (1) ➢ It Reduces considerably the number of Materials to manage MASTER GRID – SKUs (size, colour, style, …) ➢ It allows planning and operate at Material Level and then disaggregate (Presizing & Distribution Profiles) Trouser Size Colour Material: Characteristics: Grid:

135. © 2020 by Ricardo NayaSapyst.com 3. Material Master (2) ➢ It allows using same Material for very similar products (different quality level, country of origin, …) CATEGORY STRUCTURE & COVERAGE STRUCTURE ➢ It will be possible to define different Routings based in the Category ➢ Coverage Strategy => It defines method by which Requirement Categories match Stock Categories Requirement Category Customer A Customer C Customer B Stock Category Cust. Segment A Cust. Segment C Cust. Segment B Coverage Strategy Sales Orders PIRs Pur. Requisitions Planned Orders Purchase Orders Production Orders

137. © 2020 by Ricardo NayaSapyst.com XS S M L XL BL X X X X X WH X X X X X 4. Bills of Materials ➢ Standard BOM TWO TYPES: ➢ Assortments => They can include Pre-packs They can contain Standard Materials but these ones cannot have AFS Materials below Jeans (AFS Material) Fabric (AFS Material) Lining (AFS Material) Buttons (Standard Material) XS S M L XL BL X X X X X WH X X X X X XS S M L XL X X X X X ➢ Dimension Dependent Consumption ➢ Dimension Dependent Components ➢ Dimension Dependent Dimensions It is also possible to activate/deactivate some components based in the Category

139. © 2020 by Ricardo NayaSapyst.com 5. Routings DEPENDING ON CATEGORY IT IS POSSIBLE TO DEFINE DIFFERENT ROUTINGS Category Quality 1 Operation1 Operation2 Operation3 Operation4 Category Quality 2 Operation1 Operation2 Operation4

143. © 2020 by Ricardo NayaSapyst.com 7. Materials Requirements Planning • Always at SKU Level − It takes into account Grid Values Categories (based in Coverage Strategy) • Some MRP Parameters defined at Material Level while others at SKU • It is possible to group all SKUs required quantities in same Planned Order or disaggregate them • At SKU level: − Safety Stock − Rounding Value − SKU Group − Discontinuation

145. © 2020 by Ricardo NayaSapyst.com 8. Planned Orders & Production Orders • Only 1 Category per Order but Several Grid Values • Information taken from BOM & Routing • Bundle data may be entered for cutting • Combined orders allow to treat as one a group of existing Production Orders − Shared Material or work process (to optimize cutting capacities)

148. © 2020 by Ricardo NayaSapyst.com 1. What is a Production Order? • Document that controls Manufacturing and its associated Costs • It indicates: − WHAT => Which Material is going to be manufactured (only 1 in each PO) − HOW MANY => How many units are going to be manufactured − WHEN => Date / Time in which the process is going to be initated and ended − WHERE => Work Centers that are going to be used − WITH WHAT => Needed Components for the manufacturing − COST => How much is it planed to cost and how much actually costed

150. © 2020 by Ricardo NayaSapyst.com 2. Process Flow Planned Order Order Creation Mat. Availability Check Release Printing Mat. Consumption Confirmation Goods Receipt Settlement & Closing MRP Manually P r o c e s s

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