Business Processes in Manufacturing (SAP ERP)

SCM300
Business Processes in
Manufacturing (SAP ERP)
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.
PARTICIPANT HANDBOOK
INSTRUCTOR-LED TRAINING
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Course Version: 15
Course Duration:
Material Number: 50128804
Librería ERP https://libreriaerp.com/us info@libreriaerp.com

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Contents
vii Course Overview
1 Unit 1: Production Execution Overview
3 Lesson: Distinguishing Production Types
9 Unit 2: Production Order Processing
11 Lesson: Outlining Production Orders
23 Lesson: Creating Production Orders
33 Lesson: Releasing Production Orders
35 Lesson: Executing Material Staging for Production Orders
39 Lesson: Executing Confirmation and Goods Receipt for Production
Orders
47 Lesson: Evaluating Production Orders
51 Unit 3: Process Order Processing
53 Lesson: Outlining Process Orders
63 Lesson: Creating and Interpreting Process Orders
71 Lesson: Executing Process Orders
87 Lesson: Using Additional Functions with Process Orders
95 Unit 4: Repetitive Manufacturing Processing
97 Lesson: Outlining Repetitive Manufacturing
103 Lesson: Preparing Repetitive Manufacturing
107 Lesson: Planning Line Loading in Repetitive Manufacturing
111 Lesson: Using Material Staging and Confirmation
115 Lesson: Integrating Costing, Controlling, and Reporting
123 Unit 5: Kanban Principles in Production
125 Lesson: Outlining Kanban
129 Lesson: Using Kanban in Production
© Copyright. All rights reserved. v

Course Overview
TARGET AUDIENCE
This course is intended for the following audiences:
● Application Consultant
● Business Process Architect
● Business Process Owner/Team Lead/Power User
● User
© Copyright. All rights reserved. vii

UNIT 1 Production Execution Overview
Lesson 1
Distinguishing Production Types 3
UNIT OBJECTIVES
● Distinguish production types
© Copyright. All rights reserved. 1

Unit 1: Production Execution Overview
2 © Copyright. All rights reserved.

Unit 1
Lesson 1
Distinguishing Production Types
LESSON OVERVIEW
In this lesson, you will learn about the production types that are supported within the SAP
Business Suite.
Business Example
Your company implements the SAP Business Suite. You are a member of the project team
responsible for implementing the shop floor control functions. You use various scenarios to
gain an overview of the possibilities and functions of the supported production types.
LESSON OBJECTIVES
After completing this lesson, you will be able to:
SAP Applications
As part of the long-term product strategy of SAP, you are offered an SAP Business Suite that
comprises a number of applications.
Figure 1: SAP ERP Application Overview
SAP Enterprise Resource Planning (SAP ERP ) application is a comprehensive application
which enables a company to efficiently plan, control and monitor complex delivery,
procurement and production networks.
This application supports a synchronized and close interaction between all departments
involved (and all people involved) within a logistics chain.
Customers, sales, production planning, manufacturing, warehouse management, purchasing,
and vendors are all included in this complete solution.

SAP SCM Application Overview
Figure 2: SAP SCM Application Overview
SAP Supply Chain Management (SAP SCM ) is a comprehensive application that enables a
company to efficiently plan, implement and monitor complex delivery, procurement and
production relationships (supply chains).
This application supports a synchronized and close interaction between all departments
involved (and all people involved) in a logistics chain.
Customers, sales, production planning, manufacturing, warehouse management, purchasing,
and vendors are all included in this complete solution.
In particular, the processing of cross-company processes and the collaborative planning and
procurement processes, which also enable a connection to open market places, are a main
feature of this application.

SAP Components for Supply Chain Management
Figure 3: SAP Components for Supply Chain Management
In-house production is largely supported by the SAP component SAP ECC (formerly R/3).
SAP SCM provides considerably enhanced planning tools (Advanced Planning and
Optimization (APO)), an enhanced inventory function (Supply Network Collaboration (SNC)),
as well as Event Management (EM).
SAP BW (Business Information Warehouse ) is used to separately store data for variable
evaluations. Sales orders can be managed using the component SAP CRM, but can be
managed in SAP ECC also.
Interfaces for realizing the integration of SAP ECC with SAP SCM, SAP BW or SAP CRM are
provided with an appropriate plug-in.The interface between SAP ECC and SAP SCM (APO) is
called the Core Interface (CIF ).
Production Types
Depending on the manufacturing process, product complexity, stability of production, and
other criteria, a company has various requirements with regard to shop floor control.
For this reason, the SAP ERP and SAP SCM applications support a variety of production
types.
Lesson: Distinguishing Production Types

Figure 4: Production Types for Production
Production Type for Material Flow
Figure 5: Production Type for Material Flow
LESSON SUMMARY
You should now be able to:

Unit 1
Learning Assessment
1. Note down the basic production types according to the ability of controlling the
production process manually.

Unit 1
Learning Assessment - Answers
1. Note down the basic production types according to the ability of controlling the
production process manually.
Shop floor control and process manufacturing (good), repetitive manufacturing (only few
possibilities), Kanban (hardly any; self-controlling)

UNIT 2 Production Order Processing
Lesson 1
Outlining Production Orders 11
Lesson 2
Creating Production Orders 23
Lesson 3
Releasing Production Orders 33
Lesson 4
Executing Material Staging for Production Orders 35
Lesson 5
Executing Confirmation and Goods Receipt for Production Orders 39
Lesson 6
Evaluating Production Orders 47
UNIT OBJECTIVES
● Outline production orders
● Create production orders
● Release a production order
● Execute material staging for production orders
● Execute confirmation and goods receipt for production orders
● Evaluate production orders

Unit 2: Production Order Processing

Unit 2
Lesson 1
Outlining Production Orders
LESSON OVERVIEW
In this lesson you will get an overview of application areas of production orders and the
characteristics of order-based production. Moreover the cross-application functional process
will be outlined and master data for production orders will be introduced.
Business Example
Your company manufactures finished products in an order-related way. You belong to the
team that is implementing production orders in SAP ERP. To implement production orders,
you must implement the whole process chain for in-house production, which will allow your
company to organize, control, and execute production for a plant based on the shop floor
concept.
LESSON OBJECTIVES
Production Orders Applications
Production orders are used in a variety of industries and industry sectors.
Figure 6: Application Areas of Production Orders

Production orders can be used in a numerous production types. These production types are
mainly dependent on the product stability, product complexity, and the production
procedures used.
Production Order Characteristics
Production orders are widely integrated to different applications, systems and modules.
Figure 7: Order-Based Production: Characteristics
Document Type, Order Category, Order Type
In the SAP system, you use the document type to distinguish between business transactions.
Orders are one type of business transactions.

Figure 8: Document Type, Order Category, Order Type
The order category is used to distinguish between the various orders that are used in the
different applications. The client-specific order category definitions for each application
cannot be changed.
Within an application, users can define order types for an order category. The order type
controls various processes and functions:
● Number assignment
● Setting default values
● User-defined status management
● User-defined field control
● Control of special functions
You make all necessary settings in customizing.
Basic Functions for Production Orders
A number of basic functions are available for production orders, which allow for support of
complex production.
Lesson: Outlining Production Orders

Figure 9: Order-Based Production: Basic Functions
Process Integration for Order-Based Production
You have several possibilities to connect to the process control level.
Figure 10: Order-Based Production: Process Integration
● PP-PDC
The PP-PDC (Plant data collection) interface is a widespread interface specially designed
for production orders, whose contents focus on data exchange between the SAP ECC
system and standard plant data collection systems (PDC).

● XSteps
Execution Steps (XSteps) are used for the variable description of process instructions and
messages in the production order. They form the basis on which data can be exchanged
with the process control level (downloading control instructions and uploading process
messages) and interactive work instructions generated for the machine operator.
● SAP ODA
SAP ODA (Online data access) supports data exchange between SAP ECC and process
control systems of different manufacturers in the area of industrial production and is
based on the Standard OPC – Open Connectivity in industrial automation.
● SAP MII
SAP MII (Manufacturing Integration & Intelligence) is an independent SAP software
component and enables real-time data integration in manufacturing execution systems
(MES) like SAP ME by means of standardized, pre-configured connectors.
Cross-Application Functional Process
Production order management is a central part of a complex process chain starting with an
independent requirement and ending with the goods issue of a finished product.
Figure 11: Cross-Application Functional Process
Production order management controls the entire process of in-house production of products
and is integrated in the following functions:
● Capacity requirements planning
● Costing
● Inventory management
● Quality management

● External systems
Production order management uses the following system elements:
● Application link enabling (ALE)
● Workflow
● Customizing
● Text processing
● Factory calendar
● Classification
● Communication
● Graphics
Special Functions of Production Orders
There are several special functions that are supported by production orders.
Figure 12: Order-Based Production: Extended Functions, Part I

Additional Extended Functions of Production Orders
Figure 13: Order-Based Production: Extended Functions, Part II
Depending on requirements of special applications these functions can be made use of.
Mass Processing
Mass processing of production orders can be used for different tasks.

Figure 14: Mass Processing
The following functions are supported:
● Complete orders and complete orders technically
● Set user status in orders
● Delete, print, release orders
● Calculate orders
● Pick material for orders or carry out WM material staging
● Check material availability
● Display log files
● Confirm operations or orders
● Schedule orders
● Generate capacity requirements
Collective Orders
Collective orders are the only option for multilevel management of production orders and
support the complete integration within the SAP ECC system.

Figure 15: Collective Orders
A separate subordinate order is created for each bill of material component whose material
master has special procurement type direct production. Individual orders can be added or
deleted. Other useful special procurement types, for example, production in another plant,
can be combined with direct production (collective order).
Master Data for Production Orders
Master data is data in the SAP system that remains unchanged over a long period of time. It
contains information that is required in the same manner over and over again.

Figure 16: Master Data for Production Orders
Several master data objects are used to characterize and determine production orders in
logistics.
● Material
The material to be produced must have the procurement type in-house production (X,E).
● BOM
The BOMs are single-level. A special selection procedure defined in customizing chooses
the valid BOM.
● Routing
The routings are normal routings. A special selection procedure defined in customizing
chooses the valid routing.
● Work center
Work centers are assigned to operations in the routing.
● Production resources and tools
Production resources and tools are assigned to operations in the routing.
● Documents
Documents are managed in the document management system and can be linked with
and displayed in the production order.
Demo Scenario: Pump Production in Plant 1000
The system work in this lesson is based on a pump production scenario.

Figure 17: Demo Scenario: Pump Production in Plant 1000
Main characteristics of the scenario are the following:
● Pumps and their assemblies (casing, shafts and so on) are manufactured in plant 1000.
● The final and pre-assembly as well as assembly production take place in the warehouse
and partially as make-to-order production. Production is organized on the basis of the
shop floor principle.
● The individual parts for assembly production are transferred from the material stock to
production by picking or using a pull list.
● When the assembly is confirmed, the assembly stock receipt is posted directly to the
storage location that is assigned to the final assembly production line.
● Components for final assembly that are not produced at the assembly production lines are
transferred from material stock via the pull list.
LESSON SUMMARY

Unit 2
Lesson 2
Creating Production Orders
LESSON OVERVIEW
In this lesson, you learn about important elements and functions of a production order as well
as the typical way it is created.
Business Example
Important steps for order-related production are order creation, scheduling, release, printing
papers, material withdrawal, execution, confirmation, goods receipt, and settlement. These
functions are integrated with other areas in your company, such as, controlling and
warehouse management. For this reason, you must take into account the extensive
integration relationships of production orders during implementation.
LESSON OBJECTIVES
Production Order Processing and Structure
Production orders go through several individual activities. A number of settings available in
customizing allow you to successfully perform each step in order processing. Many of these
activities can run automatically or in the background so that manual processing of orders is
minimized.

Figure 18: Production Order Processing
● In the figure, Production Order Processing, functions with the key 1 can be automated via
customizing and functions with the key 2 can be executed via background processing.
● The following periodic work for Cost Object Controlling (COC) is usually processed in the
background:
- WIP determination (work in process)
- Variance calculation
- Settlement
You can use the quality management (QM) tools during the production process and for the
goods receipt. Various interfaces for process integration are available for downloading orders
and uploading process messages.
Elements of a Production Order
Principally, a production order in SAP ERP offers the structure shown in the figure, Elements
of a Production Order.

Figure 19: Elements of a Production Order
● Operations
A standard sequence of operations may have other (parallel, alternative) operation
sequences. You can make a selection from several alternative sequences. The standard
sequence must have at least one operation. If necessary, the system creates one
automatically. You can choose whether to assign material components, production
resources and tools and trigger points to the operation. Suboperations are permitted
within an operation.
● Documents
You can link documents of the document management (drawings, text files, images and so
on) to the production order.
● XSteps
Execution steps are any process instructions (for example, pressure, temperature, texts)
that can be transferred to a recipient of your choice (for example, control instruction in
SAP ERP, process control computer, CNC machine) using the process integration
functions in the form of a control instruction or that can be prepared by this recipient and
sent back to the SAP ECC system in the form of process messages.
● Costs
Costs are determined at operation level, managed at order header level and a settlement
rule is created for the orders for order-related COC only.
Order Creation Options
Creating a production order is technically also referred to as "opening".
Lesson: Creating Production Orders

Figure 20: Order Creation Options
There are different ways to open a production order:
● Create with routing or BOM
Operations, material components and production resources and tools are usually derived
from the routing and the BOM. If not otherwise specified in the routing, the components of
the BOM are assigned to the first operation.
When opening a production order the system uses the criteria validity period and lot-size
area to determine suitable routing or BOM alternatives directly for the material.
● Create with production version
You can use production versions when opening production orders. A production version
determines which routing alternative is to be used along with which BOM alternative for
production. When opening a production order the system uses the criteria validity period
and lot-size area to determine a suitable production version directly for the material.
● Create with planned order
When converting a planned order, the system does not read the BOM again. Instead, the
dependent requirements in the planned order are converted into reservations for the
production order. In this process, any existing production version is also copied to the
production order and the corresponding routing copied.
● Create without planned order
When creating a production order without a planned order, the routing and BOM are
copied directly to the production order.
● Create manually
You can create a production order manually any way you want.

Planning Integration
For planning tasks, both SAP ECC and SAP SCM-APO can be used.
Figure 21: Integration with Planning (SAP ECC or SAP SCM-APO)
Therefore the ERP and SCM applications offer alternatives for integrating planning and
production:
● Planning with the functions of the SAP ECC component
● Planning with the functions of the SAP SCM-APO component
● Planning with both functions of the SAP ECC and SAP SCM-APO component
Planning tasks can usually be either carried out using SAP ECC or SAP SCM-APO. Some
examples are as follows:
● Material requirements planning
● Capacity planning
● Availability check
In contrast to this, the following steps always occur with the functions of the SAP ECC
component:
● Production preparation
● Production execution
● Production control
These functions in SAP ECC include the following tasks:

● Costing
● Release
● Material staging
● Confirmation
● Goods movements
● Settlement
Order Creation with Planned Orders
In planning, planned orders are created using material requirements planning.
Figure 22: Order Creation with Planned Orders
The creation of production orders using planned orders is the most common case of
application. The production order data is created automatically in this way.
Note:
If available, inspection data is copied from the routing. An inspection lot is then
generated, but is not written in the production order.
The conversion of planned orders into production orders can be carried out by MRP
controllers or by reports.
Detailed Planning Integration
Detailed planning (capacity planning, work center commitment) can be carried out both in
SAP ERP and in SAP SCM-APO. A prerequisite for all methods of detailed planning is rough
long-term or medium-term capacity requirements planning.

Figure 23: Detailed Planning on Work Centers
You can use the order information system to create a list of the operations for each work
center.
Example: Graphical Planning Table
In leveling of complex capacity requirements you usually carry out using graphical planning
tools. The figure, Example: Graphical Planning Table shows an example of a graphical detailed
scheduling planning board in the SAP SCM-APO) component. Orders and operations can be
displayed and accessed in Gantt charts.

Figure 24: Example: Graphical Planning Table
A planning board like this is also available in the SAP ECC system. The planning boards can be
customized and therefore can vary considerably in their appearance.
Typical charts for capacity planning are the following:
● Utilization of work centers (capacities)
● Order due list
● Planned operations
● Material stock development
A second basic display method uses tabular capacity planning tables that enable you to
evaluate the utilization of work centers in figures.
Availability Checks
In production orders availability checks can be performed for the following objects:
● Material (components)
● Capacity
● Production resource and tools (PRT)
This can be done manually or automatically, individually or using mass processing.

Figure 25: Availability Checks (Material, Capacity, PRT)
Check instructions control the availability check in customizing.
Check results can be the following:
● Assignment of the confirmed quantity (partial quantities can be confirmed)
● Status material shortage, capacity shortage, PRT shortage
● Missing part record
LESSON SUMMARY

Unit 2
Lesson 3
Releasing Production Orders
LESSON OVERVIEW
In this lesson you will learn how to release production orders and how to print order papers.
Business Example
As production scheduler you must be well versed in the process steps required to release and
print a production order.
LESSON OBJECTIVES
Order Release Functions
The order release is the basis for the processes that follow the production order (printing
order documents, material withdrawal, and so on).
Figure 26: Order Release Functions
Production orders are managed using statuses. When an order is released, an order is set
accordingly.
Releasing an order an availability check can be executed automatically.

You can release the following objects:
● One or several individual operations
● One or several orders
A corresponding function is also available for the mass release of operations or orders.
Shop Floor Reports
The standard system provides various lists. These lists are compiled by list-specific reports.
Figure 27: Standard List Types
The user can generate additional lists. For each order, a maximum of 20 lists may be called.
You use the document distribution to plot document originals.
LESSON SUMMARY

Unit 2
Lesson 4
Executing Material Staging for Production
Orders
LESSON OVERVIEW
In this lesson you will learn the different types of material staging for production orders.
Business Example
As production scheduler you must be well versed in material staging for production orders.
LESSON OBJECTIVES
Material Staging Process
To organize the material staging , the SAP ECC and SAP SCM systems provide the following
different procedures that depend on the type of inventory management and warehousing:
● Warehouse management with the Inventory Management (MM-IM) component
● Replenishment control with the Kanban component
● Storage bin management and replenishment control with a warehouse management
system based on the component Logistics Execution Warehouse Management (LE-WM) in
SAP ERP or Extended Warehouse Management (EWM) in SAP SCM

Figure 28: Material Staging Process
The basis for material withdrawal for production orders are the following:
● Material withdrawal slips
● Pull lists
● Pick lists
● Work instructions
● Weighing systems connected using the PI-PCS interface (or similar documents or
techniques)
For the material staging from a warehouse management system, there are different options
for the production order:
● Pick parts
Pick parts are provided for the production order in exactly the same quantity as the
requirements quantity. The staging of these parts for the production order may occur in a
physical storage bin or a dynamic storage bin. Typical examples are high value parts such
as waves and casings.
● Crate parts
Crate parts are ordered manually when a crate is almost empty.
Typical examples are small parts in containers such as screws, nails, and so on.
● Release order parts
Release order parts are ordered manually. The required quantity is calculated using the
target quantities of the components in the selected released orders.
Typical examples are laminates, paints, and so on.

Production Order: Goods Issue Posting
The goods issue posting (GI ) is executed for consumption of a material component for a
production order. This can take place manually or automatically.
Figure 29: Production Order: Goods Issue Posting
The following functions are executed when a goods issue is posted:
● Storage location-related update of stock and consumption fields.
● Reduction of reservations (for planned withdrawal).
● Determination of actual costs (evaluation) and update of order.
● Generation of material documents, accounting documents and cost accounting
documents.
The following documents are created:
● The material document describes the goods movement from the materials management
(stock) point of view.
● The accounting document describes the goods movement from the financial accounting
point of view.
● The cost accounting documents are used for various cost analysis purposes.
In this context you have the following options:
● When you display the material document, you can branch to the other documents.
● You can print a goods issue document.
Lesson: Executing Material Staging for Production Orders

LESSON SUMMARY

Unit 2
Lesson 5
Executing Confirmation and Goods Receipt for
Production Orders
LESSON OVERVIEW
In this lesson you will confirm production orders and post goods receipt.
Business Example
As production scheduler you must be well versed in confirming production orders and posting
goods receipt.
LESSON OBJECTIVES
Confirmation for Production Orders
Confirmations are an important basis for entering internal activities performed for the order,
for the progress check and subsequent capacity requirements planning. For this reason,
exact real-time confirmations are of particular importance. A confirmation causes various
additional functions to be executed.
Figure 30: Confirmations – Overview

Confirmations are always executed in the SAP ECC component, but can be implemented with
various technical procedures:
● Using online transactions
● Using the browser-based enterprise portal as part of the role of a production scheduler
● Using the PP-PDC interface
● Using automatic process messages
● Using an SAP server, for example, with SAP ME (Manufacturing Execution)
There are various procedures for confirmations. Each procedure implements different
requirements that a company might have. Depending on the application, one or more
procedure may be used. The procedures must be selected to suit the methods of organization
within your company and the allowed workload.
Types of Confirmation
Figure 31: Types of Confirmations
Each confirmation is entered with a status:
● Partial confirmation
● Final confirmation
● Automatic final confirmation
For the most part, the main types are the following:
● Operation-related
An operation confirmation allows you to confirm an order step by step. For this type of
confirmation, there are various procedures available.

● Order-related confirmations
Order confirmation is a confirmation of the entire order at order header level.
Note:
You can carry out a confirmation for an order only if no confirmations have
already been entered for the operations.
Effects of Production Order Confirmations
Once an order has been confirmed, follow-on functions are performed.
Figure 32: Effects of a Confirmation
The following information is written to the production order:
● Confirmed quantity
● Status CNF
● Actual costs
Goods issues and goods receipts posting can be included the following ways:
● Confirmation of an operation
When an operation is confirmed, an automatic goods issue is posted on the basis of the
quantity that has been assigned the material components (backflush).
● Confirmation of last operation
When you confirm the last operation that must be confirmed (or for the operation where
this posting is defined in the control key), an automatic goods receipt is posted.
Capacity reduction is carried out either in proportion to the quantity or activity.
Lesson: Executing Confirmation and Goods Receipt for Production Orders

Note:
If a scrap or rework quantity is confirmed, a quality notification can be generated
automatically.
Process Integration
The process integration forms the interface between SAP ERP shop floor control and the
systems that are involved in process control (such as process control computers, process
control systems, CNC control).
Figure 33: Process Integration
The flexible structure of process integration enables the connection of fully automated,
partially automated and manually operated lines.
Process integration offers the following options:
● Bidirectional communication with standard plant data collection systems via the interface
plant data collection (PP-PDC).
● Communication with the process control level using the PI-PCS (process industries
process control system) interface or using work instructions:
- Generating and sending control instructions with variable process instructions from
released production orders. These process instructions provide a detailed definition of
the process steps to be executed and the actual data to be confirmed (via process
messages).

- Formatting the control instructions in natural language in the form of work instructions
and their manual processing by the machine operator on screen.
- Sending the control instructions to process control computers using the PI-PCS
interface and processing them automatically.
- Receiving, checking and sending manually or automatically entered process messages
with the actual data of the production process from the work instructions or the
process control system using the PI-PCS interface.
● Reading and writing data points and events using the function SAP OPC Data Access (SAP
ODA) by means of the OPC (Object Linking and Embedding for Process Control) server of
the SAP ECC system (reading and writing using work instructions or by means of the
function Automatically Create Process Messages).
● SAP MII (Manufacturing Integration and Intelligence) and SAP ME (Manufacturing
Execution).
● RFID (Radio frequency identification).
Production Order: Goods Receipt Posting
The goods receipt posting (GR) is executed manually or automatically for the stock receipt of
a material produced using a production order.
Figure 34: Production Order: Goods Receipt Posting
The following functions are executed when a goods receipt is posted:
● Generation of documents
- Material documents

The material document describes the goods movement from the materials
management (stock) point of view.
You can print a goods receipt document.
When you display the material document, you can branch to other documents.
- Accounting documents
The accounting document describes the goods movement from the financial
accounting point of view.
- Cost accounting documents
The cost accounting documents are used for various cost analysis purposes.
● Update of the delivered quantity in an order
● Evaluation of the receipt
● Credit to order
● Update of plant activity
Cost Object Controlling
The manner in which a production order is credited and debited depends on the variant of
Cost Object Controlling (COC) selected in Controlling.
You can perform this as follows:
● Order-related
● Product-related
Order-Related Cost Object Controlling
In order related COC the Order settlement credits the order. Settlement is usually periodic. It
is controlled using a settlement profile.

Figure 35: Cost Debit/Credit: Order-Related Cost Object Controlling
It makes sense to use the order-related COC if the following conditions exist:
● Flexible production environment
● Flexible product range
● Cost management of individual production lots
● Cost controlling required for each order
● High setup costs
● Manufacture of co-products
For in-house production of materials, it is generally best to use standard price control.
Product-Related Cost Object Controlling
In product-related COC settlement is period-oriented based on the costs of the product cost
collector. The order settlement for the individual production order does not apply here. In this
case, the production order has no costs and no settlement rule.

Figure 36: Cost Debit/Credit: Product-Related Cost Object Controlling
It makes sense to use the product-related COC if the following conditions exist:
● Make-to-stock production
● Repetitive manufacturing, mass production
● Product cost by sales order only in the profitability analysis
LESSON SUMMARY

Unit 2
Lesson 6
Evaluating Production Orders
LESSON OVERVIEW
In this lesson you will evaluate production orders.
Business Example
As production scheduler you must be well versed in evaluating production orders.
LESSON OBJECTIVES
Information Systems for Order Management
There are flexible evaluation options and several information systems for production orders.
They differ in the way they use the order database (directly or indirectly) as well as in the
results they are able to show.
Figure 37: Information Systems for Order Management
In the figure, Information Systems for Order Management, systems indicated by (1) are
layout-controlled. You set layouts in the respective application. You can use the Enterprise

Portal for the role of a production scheduler to process and track production orders, among
others.
In addition to the above-mentioned evaluation options, there are further possibilities:
● Capacity evaluations
● Event Manager (SAP SCM-EM)
● Alert Monitor (SAP SCM-APO)
● Batch where-used list
● Evaluation of digital signatures
LESSON SUMMARY

Unit 2
Learning Assessment
1. Name some application areas for production orders.
2. Name some basic functions of the production order.
3. Name the logistics master data objects for the production order.
4. Name the main steps in the processing of a production order before the shop floor papers
are printed.
5. Name the main steps when a goods issue for a production order is posted.
6. Which setting is necessary to support an automatic posting of stock receipt during
confirmation?
7. Which transaction code leads to the order information system for production orders?

Unit 2
1. Name some application areas for production orders.
Engineering, automotive, plant engineering, electronics industry, etc.
2. Name some basic functions of the production order.
Status management. scheduling, costing, availability check, material staging, etc.
3. Name the logistics master data objects for the production order.
Material master, BOM, work center, routing, production resource/tools, documents
4. Name the main steps in the processing of a production order before the shop floor papers
are printed.
Order creation, Scheduling, Availability check, Order release
5. Name the main steps when a goods issue for a production order is posted.
Update of stock and consumption fields, reduction of reservations, update of actual costs,
generation of material documents & accounting documents & cost accounting
documents, update of order
6. Which setting is necessary to support an automatic posting of stock receipt during
confirmation?
The auto goods receipt setting in the control key must be activated.
7. Which transaction code leads to the order information system for production orders?
COOIS

UNIT 3 Process Order Processing
Lesson 1
Outlining Process Orders 53
Lesson 2
Creating and Interpreting Process Orders 63
Lesson 3
Executing Process Orders 71
Lesson 4
Using Additional Functions with Process Orders 87
UNIT OBJECTIVES
● Outline process orders
● Create and interpret process orders
● Execute process orders
● Use additional functions with process orders

Unit 3: Process Order Processing

Unit 3
Lesson 1
Outlining Process Orders
LESSON OVERVIEW
In this lesson you will be introduced to the application areas and characteristics of process
orders. You will get an overview of the general process and the relevant master data.
Business Example
Your company is a process manufacturing company. You produce order-related products.
You are on the project team for implementing shop floor control functions based on process
orders.
LESSON OBJECTIVES
Application Areas of Process Orders
Process orders are used in different areas of the process manufacturing industry.
Figure 38: Application Areas of Process Orders
Process orders can be used for various production procedures and identified, for example,
according to the criteria product complexity and product stability.

Process Order Characteristics
Process orders are used in process industries (PI) and are widely integrated to different
applications, systems and modules.
Figure 39: Process Order-Controlled Production: Characteristics
Note:
The creation of process orders corresponds in many ways to the creation of
production orders. In process manufacturing, there are usually increased
requirements with regard to the integration of batch management and quality
management (*) within the supply chain.

Basic Functions of the Process Order
Figure 40: Process Order-Controlled Production: Basic Functions
The following basic functions are usually used in process manufacturing:
1. A production version must be selected for order creation.
2. The materials in process manufacturing are typically managed in batches. There are
functions for batch number assignment for the product and for batch determination of
material components.
3. After order release, control recipes with parameters for the process control level can be
generated and sent to an external system or formatted in the form of a process instruction
sheet (PI sheet) to be processed interactively on the screen.
Connection to Process Control Level
Process management is the interface between the process orders and the systems involved
in process control. Due to its flexible structure, it can be connected to fully automated,
partially automated, and manually operated lines.
Lesson: Outlining Process Orders

Figure 41: Process Order-Controlled Production: Connection to Process Control Level
Process management includes communication with the process control level using the PI-
PCS (process control system) interface or using PI sheets:
● Control recipes are sent from released process orders to process control systems or are
formatted in natural language as a PI sheet in the SAP ECC system.
● Process messages with actual data about the process are accepted from the PI sheet or
process control system.
The following options can also be used to cover process management tasks:
● SAP OPC Data Access (SAP ODA)
SAP ODA enables the reading and writing of data points and events using the OPC server
of the SAP ECC system. OPC stands for OLE for Process Control and Openness,
Productivity and Connectivity and is an industry standard. OPC servers enable you to
access different data sources (for example, process control systems, memory
programmable controls, temperature sensors) and thus provide process data which can
be requested by OPC clients.
● SAP MII
With SAP MII (Manufacturing Integration and Intelligence ) SAP provides an adaptive
manufacturing solution for production. SAP MII gives production companies increased
flexibility by linking the SAP ERP solution better with the production process level and by
making near-real-time information available to employees. SAP MII uses standardized,
pre-configured connectors to facilitate real-time data integration in manufacturing
execution systems (MES) and SCADA systems (Supervisory Control and Data
Acquisition). Real-time analyses can be performed and their results displayed in
dashboards that are browser-based and role-based. They provide important information

for monitoring and supporting decisions, such as warnings, task lists, analyses, reports
and near-real-time messages on production variances.
Process order management is a central part of a complex process chain starting with a
requirement (planned or customer requirement) and ending with the goods issue of finished
products.
Process order management controls the entire process of in-house production of products
and is integrated in the following functions:
● Capacity requirements planning
● Costing
● Inventory management
● Batch management
● Quality management (QM)
● Process control systems (PCS)
● Laboratory information systems ( LIMS)
To Use Process Orders
Several steps are part of a typical process using process orders:
1. Forecasting strategic material (using Sales and Operations Planning, for example).
2. Setting up the demand program (using planning strategies, including requirements from
sales department).

3. If necessary, using Material Requirements Planning to create planned receipts.
4. Convert planned orders to process orders.
5. Execute process orders (capacity planning, material staging, confirmation, etc.).
6. Post goods receipt and settle order.
7. Batch record and archive.
Master Data for Process Orders
Figure 43: Master Data for Process Orders
Several master data objects are used to characterize and determine process orders in
logistics.
● Material
The material is the central master record in logistics. In general, SAP defines a material as
a substance or commodity that is bought or sold on a commercial basis, or is used,
consumed, or created in production.
● Batch
A batch is a uniquely identifiable partial quantity of a material. The batches of one material
are managed separately in stock. With regard to the production process, a batch is a
quantity of a specific material produced during a given production run. This quantity,
therefore, represents a non-reproducible unit with unique specifications.
● Resource

The master data for resources describes the means of production in the production
process.
● Production version:
A production version determines which BOM in combination with which master recipe is
used for process order manufacturing.
● Recipe
The master data of the master recipes describes the production of one or more materials
in one production run without relating to a particular order.
● BOM
Material BOMs describe the structure of products that are produced in a company. They
are usually created and maintained from the master recipe (integrated maintenance).
Relationship between Materials and Batch
Especially in the process industry it is necessary to work continuously through the logistical
quantity and value chain using homogeneous partial quantities of a material.
Figure 44: Material and Batch
In SAP ERP this has the following consequences for the relationship between materials and
the according batches:
● Batch master records always depend on material master records. The system usually
creates batches for a material automatically for certain business operations (such as
goods receipt).
You can also create batch master records manually.

● In general, the data of a material master is valid for all batches assigned to it. In contrast, a
batch master record contains data that uniquely identifies the relevant batch and
characterizes it as a non-reproducible unit.
● The characteristic batch specifications are assigned using characteristics from the
classification system in the material master and are inherited by the corresponding batch
master records.
Batch Management in Supply Chain Management
A batch can be traced across the whole supply chain, from the receipt of the raw material to
processing in production and the creation of the final product, all the way to sales and delivery
to the customer.
Figure 45: Batch Management in Supply Chain Management
A batch master record can be used to assign a batch to a material at different places along
the supply chain. For example, if the partial quantity of a material produced in batches leaves
a process order with certain specifications, it is posted to stock with a batch number and can
be uniquely identified there.
Note:
If a batch is required in the supply chain with certain specifications, the batch
determination can be used to have the system find suitable batches (of
components, for example) in stock.
Demo Scenario: Ice Cream Production in Plant 1100
The system work in this lesson is based on an ice cream production scenario.

Figure 46: Demo Scenario: Ice Cream Production in Plant 1100
LESSON SUMMARY

Unit 3
Lesson 2
Creating and Interpreting Process Orders
LESSON OVERVIEW
In this lesson, you learn about important elements and functions of a process order as well as
the typical way it is created.
Business Example
Important steps in process order management are order creation, batch determination,
scheduling, availability checks, release, transfer of control recipes to process control, material
withdrawal, confirmations, material delivery, and settlement. The first step in process
management is the creation of the process order. Based on this, you will explore some basic
functionalities within the order.
LESSON OBJECTIVES
Process Flow and Structure of Process Order
Process orders go through several individual activities. A number of settings available in
customizing allow you to successfully perform each step in order processing. Many of these
activities can run automatically or in the background so that manual processing of orders is
minimized.

Figure 47: Processing a Process Order
The procedure involved in process order management can be divided into the following steps:
● Process planning
● Process order execution or process management
● Order Completion
The following processes are generally periodic work for Cost Object Controlling (COC) and are
usually processed in the background:
● Variance calculation
● Settlement
Structure of the Process Order
Apart from the header process orders contain operation and material information.

Figure 48: Structure of the Process Order
● Operations
Operations describe the different steps required during the production process. For a
more detailed description of these steps, operations are assigned phases. Exactly one
resource is assigned to an operation. At the same time, the resource assignment applies
for all phases assigned to the operation. The processing sequence of the phases is defined
in relationships.
● Materials
The material list is made up of components representing the materials entering and
leaving the production process as well as temporarily existing materials and their planned
quantities. It also defines the assignment of these material components to phases of the
order according to their appearance in the process. In material quantity calculation, you
define formulas to calculate the material quantities to be used or obtained in a production
process, taking into account the mixing ratios of the input materials, yield ratios of the
products and remaining materials as well as specific material attributes (for example,
active ingredients).
Lesson: Creating and Interpreting Process Orders

Elements of the Process Order
Figure 49: Elements of the Process Order
Different elements typically characterize a process order and its handling:
● Phases and operations
Phases are used for the following processes:
- Scheduling
- Determining capacity requirements
- Costing
The dates and capacity requirements for operations are derived from the corresponding
phases. Operations and phases can be assigned further resources or secondary
resources, if required. The same business transactions can be executed for secondary
resources as for phases. Secondary resources can, for example, be included in the
following processes:
- Scheduling
- Capacity requirements planning
- Costing
● Control key
A control key must be entered for both the phases and the secondary resources. The
control key is used to determine how an operation or phase is to be treated in operative
applications such as the following:

- Process orders
- Costing
● Standard values
A standard value is a planned value used to carry out a phase or secondary resource, such
as the execution time. Standard values are used for calculations in the following
applications:
- Costing
- Scheduling
There are mainly two alternatives for data maintenance in process management:
● Process instructions are structures used to transfer data from process orders to process
control (PI sheets or process control systems). Process instructions are assigned to the
phases of a process order. The process instructions are combined into control recipes,
which are then transferred to the control recipe destinations defined for the phases.
● Data for the process management can alternatively be maintained in the form of SAP
Execution Steps (XSteps). Using XSteps allows you to maintain process instructions in the
form of reusable and referenceable modules. A standard XStep repository is available with
version management.
Order Creation Options
There are different options to create a process order.
Figure 50: Order Creation Options

● Order creation with planned order
To create a planned order in process management, a suitable production version is
determined for the material based on the validity period and charge quantity range. A
production version determines which BOM in combination with which master recipe is
used for production. When a planned order is converted, the production version created
for it is made known to the process order and its recipe is transferred. The BOM is not
reread, rather the dependent requirements of the planned order are converted to
reservations for the process order.
● Order creation without planned order
If a process order is created without a planned order, it takes the recipe and BOM from the
production version directly.
Planning Integration
For planning tasks, both SAP ERP and SAP SCM-APO can be used.
Figure 51: Integration with Planning (SAP ECC or SAP SCM-APO)
Therefore the ERP and SCM applications offer alternatives for integrating planning and
production:
● Planning with the functions of the SAP ECC component
● Planning with the functions of the SAP SCM-APO component
● Planning with both functions of the SAP ECC and SAP SCM-APO component
Planning tasks can usually be either carried out using SAP ECC or SAP SCM-APO. Examples
are:

component:
These functions in SAP ECC include the following tasks:
● Costing
● Release
● Confirmation
● Goods movements
● Settlement
Order Creation Based on Planned Orders
In planning, planned orders are created using material requirements planning.
Figure 52: Order Creation with Planned Orders
The creation of process orders using planned orders is the most common case of application.
The process order data is created automatically in this way.
The conversion of planned orders into process orders can be carried out by MRP controllers
or by reports.

Batch Determination
You can use the batch determination function to assign batches with certain material
specifications required for production.
Figure 53: Batch Determination
Based on a search strategy the system looks for batches in stock and selects them according
to specific selection criteria. An availability check is performed at batch level.
LESSON SUMMARY

Unit 3
Lesson 3
Executing Process Orders
LESSON OVERVIEW
In this lesson, you learn about important elements and functions of a process order as well as
the typical way it is processed.
Business Example
Important steps in process order management are order creation, batch determination,
scheduling, availability checks, release, transfer of control recipes to process control, material
withdrawal, confirmations, material delivery, and settlement. To link the process control level
with process control systems and PI sheets, you must set up the process management
functions. The prerequisite for process order processing is the order release you will deal with
in this lesson. Based on this, you will process an order using the PI sheet.
LESSON OBJECTIVES
Order Release Functions
Process orders have a status management that controls the possible processing sequence of
the individual business operations. When an order is released, a status is set accordingly.

Figure 54: Order Release Functions
The process order must have status "Released" so that the business transactions for process
order execution and process management can be executed.
You can release the following objects:
● Individual Phases
● Individual Operations
● One complete order
● Several orders at once
Various activities can be triggered automatically by an order release:
● Batch number assignment for the product
● Batch determination for the material components
● Material availability check
● Control recipe generation
● Generation of an inspection lot for an in-process quality check
Detailed Planning Integration
Detailed planning (capacity planning, work center commitment) can be carried out both in
SAP ERP and in SAP SCM-APO. A prerequisite for all methods of detailed planning is rough
long-term or medium-term capacity requirements planning.

Figure 55: Detailed Planning on Work Centers
You can use the order information system to create a list of the operations for each resource.
Example: Graphical Planning Table
Leveling of complex capacity requirements you usually carry out using graphical planning
tools. The figure, Example: Graphical Planning Table shows an example of a graphical detailed
scheduling planning board in the SAP SCM-APO) component. Orders and operations can be
displayed and accessed in Gantt charts.
Lesson: Executing Process Orders

Figure 56: Example: Graphical Planning Table
A planning board like this is also available in the SAP ECC system. The planning boards can be
customized and therefore can vary considerably in their appearance.
Typical charts for capacity planning are the following:
● Utilization of resources (capacities)
● Order due list
● Planned operations
● Material stock development
A second basic display method uses tabular capacity planning tables that enable you to
evaluate the utilization of resources in figures.
Availability Checks
In production orders you can perform availability checks for the following objects:
● Material (components)
● Capacity
This can be done manually or automatically, individually or using mass processing.

Figure 57: Availability Checks (Material, Capacity)
Check instructions control the availability check in customizing.
Check results can be the following:
● Assignment of the confirmed quantity
(partial quantities can be confirmed)
● Status material shortage, capacity shortage
● Missing part record
Note:
Production resources/tools are not supported in process industries.
Process Management
Process management is the interface between SAP ERP and the systems involved in process
control. Due to its flexible structure, you can connect it to fully automated, partially
automated, and manually operated lines.

Figure 58: Process Management
Process management includes the following functions:
● Communication with the process control level via the PI-PCS (process control system)
interface or PI sheets:
- Receiving control recipes with process instructions from released process orders
The process instructions define in detail the process steps to be executed and the
process data to be confirmed using process messages.
- Manual maintenance
Control recipes in natural language in the form of PI sheets can be displayed and
maintained on the screen by the process operator.
- Automatic processing
You can set up an automatic transfer of control recipes to process control systems via
the PI-PCS interface.
- Receiving, checking, and sending process messages from the process control system
or the PI sheet
The actual process data is transferred from the external system via the PI-PCS
interface.
● Reading and writing data points and events via the function SAP OPC Data Access (SAP
ODA) using the OPC server of the SAP ECC system:
- Reading and writing using a PI sheet.
- Reading using the function for automatically creating process messages.

HTML-Based PI Sheet
The SAP PI sheet favors processing on the screen, which means the process operator is to
enter, confirm, or complete data interactively.
Figure 59: HTML-based PI Sheet I
PI sheets are created in HTML layout. The browser-based PI sheet gives you the advantage of
a flexible, user-specific layout definition and allows you to define frames, for example, for
including documents, graphics, Internet and Intranet links.

HTML-based PI Sheet II
Figure 60: HTML-based PI Sheet II
In connection with the process instructions contained in a control recipe, the PI sheet has the
following elements and functions:
● Display of information about the process (control instructions, for example)
● Input fields and tables for reporting process data, input validations and signatures
● Batch determination and batch check
● Process data calculation
● Reading and writing data from internal or external applications
● Link to quality management results recording
● Sequence definition for determining the processing sequence of phases
● Comments on documentation and messages from process events
Material Staging Process
To organize the material staging, the SAP ECC and SAP SCM systems provide the following
different procedures that depend on the type of inventory management and warehousing:
1. Warehouse management with the MM-IM (Inventory Management) component
2. Replenishment control with the Kanban component
3. Storage bin management and replenishment control with a warehouse management
system based on the component LE-WM (Logistics Execution Warehouse Management in
SAP ERP) or EWM (Extended Warehouse Management in SAP SCM).

Figure 61: Material Staging Process
The basis for material withdrawal for process orders are the following applications:
● Material withdrawal slips
● Pull lists
● Pick lists
● PI sheets
● Weighing systems linked via the PI-PCS interface (or similar documents or techniques)
For the material staging from a warehouse management system, there are different options
for the process order:
● Pick parts
Pick parts are provided for the process order in exactly the same quantity as the
requirements quantity. The staging of these parts for the process order may occur in a
physical storage bin or a dynamic storage bin.
● Process Management
● Crate parts
Crate parts are ordered manually when a crate is almost empty.
● Release order parts
Release order parts are ordered manually. The required quantity is calculated using the
target quantities of the components in the selected released orders.

Process Orders Postings to System
The standard postings for process orders (goods issue, confirmation, goods receipt) can be
entered manually in the SAP ECC system, or using process messages from a PI sheet or a
process control system.
Figure 62: Standard Postings for Process Orders
The process instructions of the order define which process messages are requested from a PI
sheet or a process control system.

Process Order: Goods Issue Posting
Figure 63: Process Order: Goods Issue Posting
The following functions are executed when a goods issue is posted:
● Storage location-related update of stock and consumption fields
● Reduction of reservations (for planned withdrawal)
● Determination of actual costs (evaluation) and update of order
● Generation of material documents, accounting documents and cost accounting
documents
The following documents are created:
● The material document describes the goods movement from the materials management
(stock) point of view.
● The accounting document describes the goods movement from the financial accounting
point of view.
● The cost accounting documents are used for various cost analysis purposes.
In this context you have the following options:
● When you display the material document, you can branch to the other documents.
● You can print a goods issue document.
Process Orders Confirmation
Confirmations are an important basis for entering internal activities performed for the order,
for the progress check and subsequent capacity requirements planning. For this reason,
exact real-time confirmations are of particular importance. A confirmation causes various
additional functions to be executed.

Figure 64: Confirmations – Overview
Confirmations are always executed in the SAP ECC component, but can be implemented with
different technical procedures:
● Using online transactions
● Using the browser-based Enterprise Portal
● Using the PP-PDC interface
● Using automatic process messages
● Using an SAP MII server
There are various procedures for confirmations. Each procedure implements different
requirements that a company might have. Depending on the application, one or more
procedures may be used. The procedures must be selected to suit the methods of
organization within your company and the allowed workload.

Types of Confirmations
Figure 65: Types of Confirmations
Each confirmation is entered with a status:
● Partial confirmation
● Final confirmation
● Automatic final confirmation
For the most part, the main types are the following:
● Phase-related confirmations
A phase confirmation allows you to confirm an order step by step.
● Secondary resource-related confirmations
A secondary resource can be compared to a suboperation and can be confirmed
separately.
● Order-related confirmations
Order confirmation is a confirmation of the entire order at order header level.
Note:
You can carry out a confirmation for an order only if no confirmations have
already been entered for the phases.
Flexible Data Entry with Process Messages
Process messages are data structures with which actual data for a process is confirmed from
process control to one or more destinations.

Figure 66: Flexible Data Entry with Process Messages
The SAP standard system contains a number of predefined message categories that enable
you to transfer actual data from process control to the SAP ECC system.
Note:
You can define your own process messages in customizing according to your
own specific requirements.
Compliance with GMP in Production
The functions for GMP-compliant production (GMP = Good Manufacturing Practice) fulfill
special requirements from the pharmaceuticals industry (safe production, product liability,
obligation to produce supporting documents).

Figure 67: Functions for production in compliance with GMP
The functions flagged with (*) are supported exclusively as part of process orders.
The guidelines on Good Manufacturing Practice (GMP) laid down by the U.S. Food and Drug
Administration (FDA) and other international institutions have become an international
standard in many areas of process industries. In particular, they must be taken into account in
processes of the pharmaceutical industry.
Production in Compliance with GMP
Figure 68: Production in Compliance with GMP
● Options for GMP-compliant production

- You can specify that a process order can only be created if an approved recipe exists.
The order data is therefore locked and cannot be changed. The approval procedure is
performed in SAP ERP Engineering Change Management.
- You can exchange information about the product quality and analysis values between
the production plant and the laboratory or the quality assurance system. You use the
SAP ERP quality management functionality to do so.
- You can use the inspection results for batch specification by automatically copying
them to the characteristics of the batch produced.
- You can activate the digital signature function to execute certain business operations in
the SAP ECC system.
● Tools for GMP-compliant production
- Material identification function
You use the material identification function to check whether the material that was
picked for the process order is completely available at the production line and will be
used in the correct sequence.
- Material reconciliation function
You use the material reconciliation function to analyze and verify the ingredients and
yield at the end of the production process.
- Batch record
With regard to product liability, the batch record contains all planned and actual data
for the production process of a batch.
LESSON SUMMARY

Unit 3
Lesson 4
Using Additional Functions with Process
Orders
LESSON OVERVIEW
This lesson overviews some of the special functionality that exists for process orders to
support certain industries like pharmaceuticals. You will also look at reporting for process
order.
Business Example
Using process orders you get informed about further special functions.
LESSON OBJECTIVES
Enhanced Process Order Functions
Several additional features enhance the range of standard functions of process orders.
Figure 69: Enhanced Functions for Process Order
The functions flagged with (*) are available for process orders only.

Material Quantity Calculation
Figure 70: Material Quantity Calculation
In material quantity calculation, you define formulas to calculate the material quantities to be
used or obtained in a production process, taking into account the following items:
● Mixing ratios of the input materials
● Yield ratios of the products and remaining materials
● Specific batch attributes (for example, concentration, active ingredient content)
You can also define formulas for calculating phase quantities in material quantity calculation.
Note:
By using batch determination in combination with the material quantity
calculation and batch-specific alternative units of measure, you can implement
active ingredient management in the process order.

Resource Network and Resource Selection
Figure 71: Resource Network and Resource Selection
You can use the resource selection function to find suitable resources for carrying out an
operation at the time of production. In system-aided resource selection, the system
compares the characteristic values maintained for the resources and operations.
The resource network, representing the physical connection of resources, can be taken into
account during resource selection.
Lesson: Using Additional Functions with Process Orders

Batch Derivation
Figure 72: Batch Derivation
Property Example components from the figure above
Component batches can be sender of data B, D, G
Produced batches can be receivers of data B, A
Component can be sender and receiver B
● Process characteristics
- You can use batch derivation to transfer, offer for selection, or display, batch master
data and classification data from component batches that went into batches you
produced.
- To be able to derive batch data, you must have set up the batch where-used list. The
derivation functions along the batch where-used list, which means that only those
component batches are used that went into the batch produced. In the evaluation of the
batch where-used list, both existing and planned goods movements are considered.
- The batch derivation is performed with the help of the condition technique. You
maintain the receiver-sender relationships in the strategy records of the “batch
derivation” application or in the BOM for selected BOM items.
● Restrictions
- It is not possible to transfer from a produced batch to a component batch.
- In the standard system you cannot make derivations in connection with collective
orders, because the batch where-used list cannot evaluate the links.

Process Manufacturing: Information Systems
Various information systems can be used to evaluate process orders and objects in this
context.
Figure 73: Process Manufacturing: Information Systems
Batch Where-Used List
Figure 74: Batch Where-Used List
Lesson: Using Additional Functions with Process Orders

The batch Where-Used list documents the path of the batch through the enterprise. The
batch where-used list is used within the scope of product liability. This report enables you to
find batches which, for example, must be recalled for quality reasons.
Analysis method Aim
Top-down Which batches came a batch from?
Bottom-up Which batches a batch went into?
The batch where-used list is structured on the basis of material movement data for materials
subject to batch management. It also considers the following processes and objects:
● Transfers from charge to charge
● Stock transfers in the two-step procedure
● Purchase orders (including subcontracting orders)
You can start the batch where-used list from the batch management menu or from the Batch
Information Cockpit. If you want to use the batch where-used list, for example, to evaluate
information from the sales or warehouse management areas, you can either use the pick-up
list in the “batch management” menu or the “batch related objects” selection expansion in the
Batch Information Cockpit.
The batch where-used list offers the following display options:
● Hierarchical tree structure
● ALV list (SAP list viewer)
LESSON SUMMARY

Unit 3
Learning Assessment
1. Name some application areas for process orders.
2. Name some basic functions of the process order.
3. Name the master data for the process order.
4. Name some of the main steps in the processing of a process order.
5. Name some of the functions for mapping a GMP-compliant production.

Unit 3
1. Name some application areas for process orders.
Production by customer request, Make-to-order production, Batch production,
Production campaigns, Mass production
2. Name some basic functions of the process order.
Status management, Production by production versions, Scheduling, Calculating capacity
requirements, Costing, Batch number assignment, Manufacture of co-products,
Availibility checks, Material quantity calculation, Active ingredient management, Batch
determination, Resource network, Resource selection, Printing shop floor papers
3. Name the master data for the process order.
Material master records and batch master records (integration with batch management),
Resources, Production versions with master recipes and material BOMs
4. Name some of the main steps in the processing of a process order.
Order Request, Process order creation, Availability check, Resource/line scheduling,
Resource selection, Batch determination, Material quantity calculation, Process order
release, Order print, Send control recipes, Edit PI sheet, Process messages to various
destinations, Material staging/material withdrawals, Order confirmations, In-process
quality checks, Material receipts, Variance calculation, Process order settlement, Batch
record, Archiving/deletion
5. Name some of the functions for mapping a GMP-compliant production.
Material reconciliation, Digital signature, Material identification, Approved recipe,
Approved process order, Batch record, Approved inspection plan, Quality management,
Batch management

UNIT 4 Repetitive Manufacturing
Processing
Lesson 1
Outlining Repetitive Manufacturing 97
Lesson 2
Preparing Repetitive Manufacturing 103
Lesson 3
Planning Line Loading in Repetitive Manufacturing 107
Lesson 4
Using Material Staging and Confirmation 111
Lesson 5
Integrating Costing, Controlling, and Reporting 115
UNIT OBJECTIVES
● Outline repetitive manufacturing
● Prepare repetitive manufacturing
● Plan line loading in repetitive manufacturing
● Use material staging and confirmation
● Integrate costing, controlling, and reporting

Unit 4: Repetitive Manufacturing Processing

Unit 4
Lesson 1
Outlining Repetitive Manufacturing
LESSON OVERVIEW
In this lesson you will deal with application areas and characteristics of repetitive
manufacturing and its functional flow.
Business Example
Your company produces products in large numbers. The production is quantity based and
period based. You belong to the team that implements repetitive manufacturing within the
SAP implementation project. For this purpose, you must implement the entire process chain
for in-house production, which allows your company to organize, control, and execute
production based on SAP functions.
LESSON OBJECTIVES
Application Areas
Repetitive manufacturing is used in a variety of industries and industry sectors.

Figure 75: Application Areas
It is mainly of interest in scenarios with high product stability, high repetition rates, and low
product complexity.
Repetitive Manufacturing Characteristics
Repetitive manufacturing is widely integrated to different applications, systems and modules.
Figure 76: Repetitive Manufacturing: Characteristics

Repetitive Manufacturing: Basic Functions
A number of basic functions are available for repetitive manufacturing, which allow for
support of complex production.
Figure 77: Repetitive Manufacturing: Basic Functions
The complex process chain from independent requirements to the goods issue of the finished
product is modeled in a lean version in repetitive manufacturing.
Lesson: Outlining Repetitive Manufacturing

Typical features are the following:
● Planned orders are used for production (planned orders are not converted to production
orders, they only obtain the new order type of the run schedule quantity- RSQ - when the
production version is assigned).
● Finished products are confirmed with simultaneous backflushing of the components used.
Repetitive Manufacturing Master Data
Figure 79: Master Data for Repetitive Manufacturing
Several master data objects are used to characterize and determine repetitive manufacturing
in logistics.
● Material
To allow a material to be used in repetitive manufacturing, you need to set the repetitive
manufacturing indicator in the material master. This means that you can allow the various
production versions of this material for repetitive manufacturing.
● BOM
The BOM defines the planned material consumption for the components.
● Work center
Production lines are usually created as simple work centers in the SAP ECC system. In the
work center, you define the availability of the production line. The production line is
entered in the production version. This same work center is specified in the single
operation of the routing. Production lines that have more than one work center can be
represented in a line hierarchy.
● Routing

In repetitive manufacturing, the routing defines the production rate (quantity per time
unit) used to produce materials on production lines. The production quantities and their
capacity requirements are scheduled and calculated respectively according to the
production rate.
Note:
You can use standard routings or rate routings for repetitive manufacturing.
Demo Scenario: PC Production in Dresden Plant
The system work in this lesson is based on a PC production scenario.
Figure 80: Demo Scenario: PC Production in Dresden Plant
The demonstration example for repetitive manufacturing deals with personal computers
(PCs) and PC assemblies that are manufactured in plant 1200. Material is usually staged
using the pull-list or Kanban. Confirmations are carried out in a period-based manner.
LESSON SUMMARY
Lesson: Outlining Repetitive Manufacturing

Unit 4
Lesson 2
Preparing Repetitive Manufacturing
LESSON OVERVIEW
In this lesson, you will familiarize yourself with the essential functions and standard process
steps in repetitive manufacturing.
Business Example
Important stages of repetitive manufacturing include the dispatching of quantities on the
production lines, material staging of the components, backflush of quantities produced and
settlement of the costs collector. These functions are integrated with other areas in your
company, such as controlling and warehouse management. Therefore, you must consider the
many integration relationships when implementing repetitive manufacturing.
LESSON OBJECTIVES
Repetitive Manufacturing Process
Despite a streamlined implementation of basic functions, a range of activities is possible in
repetitive manufacturing.
Figure 81: Repetitive Manufacturing: Process Flow
Important stations in the repetitive manufacturing process flow are the following:

● Planning of line loading and simultaneous capacity monitoring:
You can, for example, use the planning table (multilevel access) to check the availability of
assemblies for the finished product.
● Shop floor papers:
The worker gets the information he or she needs from two papers:
- Operational method sheet (a description of the operation is possible, if required)
- Production list (materials, quantities, and dates)
● Material staging:
Material staging is performed using stock transfers or Kanban provision to the line.
● Confirmation:
During production, a reporting point backflush can be used to determine the work in
progress. After production processing, the finished product is confirmed to stock. This
means both the goods receipt and the component backflush are posted.
● Costs:
A product cost collector looks after cost accounting.
Repetitive Manufacturing Planning Integration
There are different general means of integrating planning and production:
● Planning with the functions belonging to the SAP ECC component
● Planning with the functions belonging to the SAP SCM-APO component
● Planning with the functions belonging to SAP ECC and SAP SCM-APO components
Figure 82: Planning in Repetitive Manufacturing

Planning tasks can usually be either carried out using SAP ECC or SAP SCM-APO. Examples
are:
component:
These functions in SAP ERP include the following tasks:
● Costing
● Release
● Confirmation
● Goods movements
● Settlement
Note:
A distinguishing feature of repetitive manufacturing is that planned orders with
order type RSQ (run schedule quantity) are used for production, which means
that planned orders are not converted. Only the order type changes when the
planned order is assigned to the production line.
Basic Repetitive Manufacturing Planning Strategies
Both make-to-stock and make-to-order planning are supported by repetitive manufacturing.
Lesson: Preparing Repetitive Manufacturing

Figure 83: Basic Planning Strategies for Repetitive Manufacturing
● Make-to-stock production:
You can use repetitive manufacturing for pure make-to-stock production. This means you
produce finished products with no direct reference to sales orders. The planned
independent requirements from demand management are used as the basis for planning.
Sales orders are filled from warehouse stock.
● Make-to-order production:
You can use repetitive manufacturing for pure make-to-order production (sales order-
based production). This means you produce products with direct reference to the sales
orders. The products are stored in the sales order stock to deliver the corresponding sales
order.
Note:
If you use variant configuration, you can plan and manufacture configurable
materials using make-to-order repetitive manufacturing.
LESSON SUMMARY

Unit 4
Lesson 3
Planning Line Loading in Repetitive
Manufacturing
LESSON OVERVIEW
In this lesson, you will familiarize yourself with line loading in repetitive manufacturing.
Business Example
settlement of the costs collector. A very central part is the planning of line loading you will
carry out in this lesson.
LESSON OBJECTIVES
Line Loading
Line loading is the process to dispatch and schedule planned orders on the available
production lines.
Figure 84: Overview: Planning Line Loading

Within the two planning systems SAP ECC and SAP SCM-APO, you can use any of the
following four options to plan line loading:
● Selection method
Using this material master setting planned orders are automatically assigned to the line
specified by the production version. If several lines are available, the system assigns the
first line it finds.
● Quota arrangement
If several production lines are available but one is preferred (to reach full capacity load),
you can use quota arrangements to distribute the remaining quantity among the
alternative lines. Generally, you should only use quota arrangements for rough-cut
planning and also carry out postprocessing using a planning table.
● Planning tables
In contrast to the aforementioned methods, quantities are also manually scheduled on the
available lines when planned orders are assigned or reassigned in a planning table (SAP
ECC or SAP SCM-APO).
● Heuristics
If you use SAP SCM-APO heuristics for repetitive manufacturing (REM heuristics), some or
all of the steps of quantity planning, line loading planning, and capacity requirements
planning can be combined and executed automatically. This option is not available in SAP
ERP.
Actions for Manual Line Loading Planning
Figure 85: Actions for Manual Line Loading Planning (Example: SAP ERP)
● SAP ERP planning table
The planner uses the SAP ERP planning table to process the master production schedule.
Among others the following functions are included:

- You can check the production quantities.
- You can change production quantities, if required.
- You can create new production quantities.
- You can determine the capacity utilization of the production line as well as the
availability situation of the products.
- You can display the source of the capacity requirements (pegged capacity).
The display in the planning table is quantity-based and period-based. You can choose any
planning period:
- Shift
- Day
- Week
- Month
- Planning calendar period
In assignment mode, the planner can assign the production quantities to a production
version and thus also to a production line. If this has already been done in MRP, he or she
can also change existing assignments. Changes you make in the planning table are not
written to the database unless you save them.
● SAP SCM-APO planning table
The SAP SCM-APO product planning table is an enhancement of the SAP ERP planning
table and serves as the interactive planning tool in the SAP SCM system. The figure,
Actions for Manual Line Loading Planning (Example: SAP ERP), shows the basic structure
of the SAP ERP planning table. To illustrate the SAP SCM-APO product planning table, the
terms Material and Line/Capacity would have to be replaced by the terms Product and
Resource.
LESSON SUMMARY
Lesson: Planning Line Loading in Repetitive Manufacturing

Unit 4
Lesson 4
Using Material Staging and Confirmation
LESSON OVERVIEW
In this lesson, you will familiarize yourself with stagingand backflushing functions in repetitive
manufacturing.
Business Example
LESSON OBJECTIVES
Material Staging Options
SAP ERP offers various methods to control material staging.
Figure 86: Material Staging Options
The following concepts can be used for repetitive manufacturing:

● Warehouse management with the Inventory Management (MM-IM) component
● Replenishment control with the Kanban component
● Storage bin management and replenishment control with the LE-WM (Warehouse
Management system) component
The pull list enables staging in the following ways:
● Using transfer postings at storage location level
● Using event-driven Kanban
● Using Extended Warehouse Management (EWM)
● Using Warehouse Management (WM)
Note:
Since pick part processing is order-based, the Warehouse Management
system prefers to use release order parts for non order-based repetitive
manufacturing. Release order parts are ordered manually. Here the required
quantity is calculated from the target quantity of the components of the
selected orders that have been released.
Backflush and Goods Receipt
A separate transaction is available for the entering of confirmations manually in the SAP ECC
system. You can use a BAPI interface for confirming from PDC systems.
Figure 87: Backflush and Goods Receipt

When the goods receipt for the finished parts is posted during confirmation, a number of
different actions are performed by default:
● Goods issue posting of the components used (usually by backflushing)
● Statistics update in the Logistics Information System (LIS) or the Business Information
Warehouse (BW)
● Reduction of production quantities and the associated capacity requirements on the
production lines
● Posting of incurred production costs (material costs, production activities, overhead
costs) to a product cost collector
● Creation of a data entry document
Further optional actions include the following:
● Consideration of setup costs for lot size-independent material quantities
● Posting component/assembly scrap
● Collective entry for different materials in a line
● Archiving backflush documents
● Goods issue backflush only or activity backflush only (more/less activity)
● Reporting point backflush
● Time-based decoupled backflushing processes
● Aggregation
● Various postprocessing and reversal options
Note:
Sales-order based production enables backflushing with reference to sales
orders.
Reporting Point Backflush
Reporting point backflush is a special process for production lines with long lead times and
the requirement to post goods issues on-time and not delayed by backflushing with final
confirmation at the end of the production line.
Lesson: Using Material Staging and Confirmation

Figure 88: Backflush: Reporting Point Backflush
● Issue
All components used along the production line are usually backflushed during final
confirmation. If there are long lead times, the goods issues for the components may be
posted much later in the system than when they are actually physically withdrawn.
● Solution
Use the reporting point backflush to post the withdrawal of components (and production
activities) at an earlier stage after operations already completed. The above example
contains the three reporting points that are linked to operations 10 (work center 1-1), 20
(work center 1-2), and 40 (work center 1-4).
Note:
Depending on the application, you should either use optional or mandatory
reporting point backflush. The master data effort for reporting point backflush is
higher than for a standard scenario.
LESSON SUMMARY

Unit 4
Lesson 5
Integrating Costing, Controlling, and Reporting
LESSON OVERVIEW
In this lesson, you are familiarized with some of the most important special functions of
repetitive manufacturing and some neighboring areas.
Business Example
LESSON OBJECTIVES
Product-Related Cost Object Controlling
Settlement in repetitive manufacturing is always period-based and based on the costs of the
product cost collector (product-related cost object controlling).
Figure 89: Cost Debit/Credit (Product-Related Cost Object Controlling)

● Cost debitand cost credit
During the confirmation in repetitive manufacturing, the following costs are automatically
posted to the product cost collector:
- Material costs for the components
- Production activities (only if a material cost estimate with price update has been carried
out in advance)
At the same time the product cost collector is credited with the according price of the
assembly:
- The valuation price is taken for materials controlled with standard price.
- The moving average price is taken for materials controlled with the moving average
price.
Note:
Overhead share determined periodically during period-end closing in Controlling
using an overhead structure and are posted to the product cost collector. You
can use a separate transaction in the Repetitive Manufacturing menu for this.
● Settlement
- Issue
Components that differ from those planned may be used in production or the overhead
cost rates may change. This results in variances in the product cost collector.
- Solution
A settlement must be carried out. The aim of the settlement is to credit the product
cost collector in full. During settlement, the costs not yet credited to the product cost
collector are transferred. For a material that is valuated using the standard price, the
variant costs are posted to the price difference account.
Integration with Controlling
Having covered the logistical master data there is the need for additional controlling master
data.

Figure 90: Integration with Controlling
As orders are not allowed in classic repetitive manufacturing there is the need to cover the
posting of production activities using material cost estimates with price updates.
Repetitive Manufacturing: Information Systems
Repetitive manufacturing supports various evaluation methods, some of the supporting
special processes only.
Figure 91: Repetitive Manufacturing: Information Systems
Lesson: Integrating Costing, Controlling, and Reporting

In addition to analyses that use CO reports, data is updated into the Logistics Information
System LIS by default (exception: planning data must be updated manually or in a
background job). A connection to the Business Information Warehouse (BW) is also standard.
Note:
Evaluations based on orders are not supported because the processing is not
order-related.
Repetitive Manufacturing: Enhanced Functions
Apart from the basic functions, repetitive manufacturing provides and supports several
additional and integrated functions.
Figure 92: Period-Based Repetitive Manufacturing: Additional Functions
Depending on the process you can make use of the following functions:
● Printing
A Microsoft Office link is available for printing work instructions (using Microsoft Word)
and printing the production list (using Microsoft Excel).
● WIP (work in process)
To determine the work in progress or to post component backflushing more promptly, you
can use reporting point processing (only in make-to-stock).
● Action control
In terms of configurable materials, action control enables actions to be triggered
automatically (for example, printing the component list).
● Handling unit management
Repetitive manufacturing supports handling unit management during which goods and
packaging are set up as a logistics unit.
● Serial numbers
A serial number assignment is possible in repetitive manufacturing for a unique
identification.

● Batches
The use of batches is supported.
● Flow manufacturing
The modelling of takts, and the sequence planning it involves, is represented by a separate
function: Takt-based flow manufacturing.
LESSON SUMMARY
Lesson: Integrating Costing, Controlling, and Reporting

Unit 4
Learning Assessment
1. Name some basic functions of repetitive manufacturing.
2. Why do you need a material cost estimate to calculate production activities in repetitive
manufacturing?

Unit 4
1. Name some basic functions of repetitive manufacturing.
Planning line loading, Scheduling, Calculation and monitoring of capacity requirements,
Costing, Avaiability checks, Printing dispatch lists, Printing operational method sheet,
Material staging, Goods issue/backflushing, Goods receipt with final confirmation, Period-
end closing.
2. Why do you need a material cost estimate to calculate production activities in repetitive
manufacturing?
Due to the handling of production quantities with planned orders there is no real "order"
object to collect and carry the production activities. This is covered by a material cost
estimate and subsequent price update in the material master.

UNIT 5 Kanban Principles in Production
Lesson 1
Outlining Kanban 125
Lesson 2
Using Kanban in Production 129
UNIT OBJECTIVES
● Outline Kanban
● Use Kanban in production

Unit 5: Kanban Principles in Production

Unit 5
Lesson 1
Outlining Kanban
LESSON OVERVIEW
This lesson outlines the principle of the Kanban procedure.
Business Example
You decide to organize replenishment using stock transfers, external procurement, and in-
house production with the SAP ERP Kanban functions.
LESSON OBJECTIVES
● Outline Kanban
Application Areas
The application areas of Kanban are not restricted to certain industries. The graphic only
contains one selection.
Figure 93: Application Areas
The Kanban principle can be used together with all other production types.

Kanban Principle
In Kanban, the material flow is organized using containers that are kept directly at the
appropriate work centers in production.
Figure 94: Kanban Principle
With Kanban, material is staged where it is used and is always available in small material
buffers. This means that material staging does not need to be planned. Instead, material that
is consumed is replenished immediately using Kanban.
● The process:
Each box contains the quantity of material that work center personnel need for a certain
period of time. As soon as a container is emptied by the demand source, replenishment is
initiated in Kanban. The supply source for the required material can be another place in
production, an external vendor or a warehouse. The demand source can use material from
other containers until the actual container returns to full.
● The goal
The aim is to control the replenishment process in production itself and to reduce the
manual posting efforts for personnel as much as possible. This self-management process
and the fact that replenishment elements are created close to the time they are actually
consumed means that stocks are reduced and lead times are shortened (replenishment is
only triggered when a material is actually required and not before).
● The key benefit
By using Kanban with the SAP ECC system, you can automate the transfer of
replenishment data. For example, scanning the barcode on a Kanban card is sufficient to
transfer the data required for procurement and to post the goods receipt when the
material is received.

Kanban Characteristics
Using Kanban there are several properties that need to be known:
Figure 95: Kanban: Characteristics
This is only a high level introduction. Major benefits of Kanban are found when mapping
special processes like Kanban with SD, Kanban with RFID (radio frequency identification),and
so on.
LESSON SUMMARY
● Outline Kanban
Lesson: Outlining Kanban

Unit 5
Lesson 2
Using Kanban in Production
LESSON OVERVIEW
This lesson outlines the prerequisites for the Kanban procedure and how it is implemented.
Business Example
You decide to organize replenishment using stock transfers, external procurement, and in-
house production with the Kanban functions.
LESSON OBJECTIVES
Kanban in Production
In the general production process, the Kanban principle is used within material staging.
Figure 96: Kanban in Production
Master Data Implementation
The structure and organization of production are important criteria when introducing Kanban.
Basic master data objects in Kanban are the following:

● Production supply area
● Control cycle
An existing production supply area is a prerequisite for creating a control cycle and will be
dealt with first.
Figure 97: Master Data: Production Supply Area
With Kanban, material is staged in specific areas directly in production, known as supply
areas. A supply area can be used by one or more work centers. The supply areas act as a
buffer for the required materials, for example, on shelves or in marked-out areas on the floor.
The supply area is assigned the following objects in the system:
● Storage location
The production supply area is a data object that is used to organize material flow for
Kanban. It is not an inventory management object. Therefore, storage locations must be
assigned to the supply areas. Inventory management (which is relevant, for example, for
posting goods receipts) takes place at the storage location to which the supply area is
assigned.
● Person responsible
Another significant organizational prerequisite is that you create a person who is
responsible for each supply area. This person is responsible as the demand source for
processing material and for monitoring stocks in the supply area. The person responsible
entered in the control cycle for in-house production is responsible as the supply source for
replenishment, that is, for material provision and, if necessary, for delivery to the demand
source.
● Unloading point
In external procurement, the supplier often does not deliver the material directly to the
production supply area, but delivers it to a certain unloading point from which the Kanbans

are transported to the production supply area. The unloading point defines where the
supplier has to deliver the material, for example, gate 1. It is printed on the Kanban card or
is transferred to the summarized JIT call.
● Delivery address:
You can maintain an address in the supply area. When you create a control cycle, this
address is transferred to the delivery address of the control cycle.
Master Data: Kanban Control Cycle
To control the relationship between supply and demand source, you define a control cycle.
Figure 98: Master Data: Kanban Control Cycle
Among others, the control cycle defines the following objects and parameters:
● Demand source
This is the production supply area.
● Replenishment strategy
This is for example, replenishment using a purchase order for external procurement, using
run schedule quantities for in-house production or using stock transfer reservations for
stock transfer.
● Supply source
This is the supplier or issuing plant for external procurement, the person responsible for in-
house production, the storage location for stock transfer.
● Number of containers
This is the number of Kanbans circulating between the demand and the supply source.
● Quantity
Lesson: Using Kanban in Production

This is the quantity for each container.
● Delivery address
Here, you can enter detailed information required for the supply area. You can print this
data on a Kanban card, for example.
● Print parameters
Print parameters are used for printing the Kanban card.
● The pallet position
The pallet position specifies more precisely the position (for example, a specific shelf
section) of the material in the production supply area. The pallet position can also be
printed on the Kanban card.
● Parameters for the automatic Kanban calculation
Kanban calculation supports the prediction of number of containers or quantity if the
requirements are known.
Note:
You can also delete or lock Kanbans in the control cycle. You lock a Kanban, for
example, if it is not going to be used for a certain period because consumption
has reduced within the control cycle.
Production Supply Using Control Cycles
Figure 99: Production Supply Using Control Cycles
When you use the Kanban procedure, warehouses or vendors are linked to the supply areas
that are assigned to the relevant production storage locations using control cycles.

Since the link to material staging can also take place using in-house production within
Kanban, pre-assembly and final assembly can, for example, be linked using Kanban.
Kanban Status
The progress of production in Kanban is controlled by setting the Kanban to the appropriate
status. Usually, only the Empty and Full statuses are used.
Figure 100: Setting the Kanban to Empty = Triggering Replenishment
If the demand source is set to Empty , the system creates a replenishment element,
instructing the material supply source to deliver.
Note:
Emptying a Kanban does not result in a goods issue posting. In Kanban, goods
issues are usually backflushed when an order is confirmed or when a goods issue
is posted manually for an order.
You can set the status to Empty by the following activities:
● Scanning a bar code on the Kanban card
● Using the manual Kanban signal transaction
● Using the Kanban board

Setting Kanban Status to Full
Figure 101: Setting Kanban to Full = Posting Goods Receipt
If the demand source sets the Kanban to Full, the system automatically posts the goods
receipt for the material with reference to the procurement element.
You can set the status to Full by the following activities:
● Scanning a bar code on the Kanban card
● Using manual Kanban signal transaction
● Using the Kanban board
Demand-Driven Production versus Kanban
Depending on the application the decision between demand-driven production and Kanban is
always based on different criteria.

Figure 102: Plan-Controlled Production versus Kanban
Advantages of Kanban:
● Kanban is a simplified form of production control: as far as possible, replenishment is
controlled by production.
● Manual posting effort is minimized.
● The material is available directly in production. Therefore, you are not required to organize
material staging.
● The production quantities correspond to actual requirements. This automated process
and the fact that replenishment elements are created close to the time they are actually
consumed means that stocks are reduced and lead times are shortened. Replenishment is
only triggered when a material is actually required and not before.
LESSON SUMMARY

Unit 5
Learning Assessment
1. What are the objectives of the Kanban procedure?
2. How is replenishment initiated in the Kanban procedure?
3. Name the basic master data of Kanban.
4. When is the goods issue typically posted in Kanban?
5. When is the goods receipt typically posted in Kanban?

Unit 5
1. What are the objectives of the Kanban procedure?
The following objectives can be achieved in many cases by controlling the production
process in production itself and by reducing the manual posting effort required:
shortening the lead times and reducing the stock
2. How is replenishment initiated in the Kanban procedure?
In the Kanban procedure, replenishment is initiated when the demand source sets the
container in the system to empty.
3. Name the basic master data of Kanban.
Supply areas, Control cycles
4. When is the goods issue typically posted in Kanban?
In Kanban, goods issues are typically backflushed when an order is confirmed (or when a
goods issue is posted manually for an order). Emptying a Kanban does not result in a
goods issue posting.
5. When is the goods receipt typically posted in Kanban?
If the demand source sets the status to Full, the system automatically posts the goods
receipt for the material with reference to the procurement element.

Business Processes in Manufacturing (SAP ERP)

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