SAP PP Course Documentation

SAP PP
(PRODUCTION PLANNING)
© 2020 by Ricardo Naya
Sapyst.com
Introduction

© 2020 by Ricardo NayaSapyst.com
Table of contents
1. What is an ERP?
2. What is SAP?
3. What is SAP PP?

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

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

2. What is SAP?
SAP
Server
SAP GUI
SAP GUI
SAP GUI
SAP GUISAP GUI
SAP GUI
SAP GUI
SAP GUI

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

2. What is SAP?
SAP
Server
SAP GUI
SAP GUI
SAP GUI
SAP GUISAP GUI
SAP GUI
SAP GUI
SAP GUI
SAP
PP
SAP
MM
SAP
SD
SAP
FISAP
CO

SAP PP
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SAP PP Overview

Table of contents
1. Goals of this session
2. Complete PP process
3. Master Data
4. Demand Management
5. Planning
6. Production Control

• See the big picture
• Introduce SAP PP Concepts
(Each topic will be explained further in next lectures)

2. Complete PP Process
SOP
Sales &
Operations
Planning
MPS
Master
Production
Schedule
Scheduling
&
Capacity
Planning
Demand
Mgmt.
Long
Term
Planning
MRP
Materials
Requirements
Planning
Production
Control

3. Master Data – Organizational Structure
Company
Code
Plant 1 Plant 2 Plant 3
Storage
Location 1
Storage
Location 2
Storage
Location 1

3. Master Data – PP Objects
• Material Master Views
MRP (4)
Work Scheduling
Forecasting
• Bills of Materials
• Work Centers
• Routings
• Production Versions

4. Demand Management
Finished
Product
Semi-finished
Packing
Material
Raw Material
Raw Material Raw Material
Sales OrdersIndependent Requirements
IRs
CustomerForecast
SOP

MRP
5. Planning
Finished
Product
Semi-finished
Packing
Material
Raw Material
Raw Material Raw Material
Sales OrdersForecast
SOP
Independent Requirements
IRs
Customer
MPS

6. Production Control
MPS
MRP
Purchase
Requistion
Planned
Order
Goods
Issue
Goods
Receipt
Liquidation
&
Close
Production
Order
Released
Production
Order
Confirmed
Production
Order
Created
Purchase
Order
Goods
Issue
Goods
Receipt
Production
Order

SAP PP
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Materials Overview

Table of contents
2. Materials Overview
3. Organizational Structure
4. Master Data
5. Main Views – Fields

• To introduce the Material Master
• To show which are the PP Views
• To see main PP fields and their functionality

Table of contents
2. Materials Overview
4. Master Data
5. Main Views - Fields

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

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

• Each field can be defined at 4 different levels:
− Global
Valid for all the plants
− Plant
Only valid for the plant where it is defined
− MRP Area
For performing a different MRP (can include various Storage Locations)
− Storage Location
Only valid for each Storage Location

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

General
Data
MRP 1 (1)
Material
Number
Material
Description
Plant
MRP
Procedure
How the Material
is going to be
planned
(MRP, reorder
point, with time
fence…)

MRP Areas
In case we want to
run different MRPs
inside the same
plant
MRP 1 (2)
Lot size data
How the lot size of
Planned and
Purchase
Requisitions is
going to be
calculated

Scheduling
Different times to
take into account in
the MRP run
MRP 2
Procurement
How the MRP will
work with materials
that are supplied
(not manufactured
in-house)
Net requirements
calculation
Safety stocks – MRP will
planned in excess to
build some stock

Planning
Where we can
define the different
Planning Strategies
(like with/without
assembly) and the
way the Indepent
Requirements are
consumed
MRP 3
Forecast
Requirements
How the MRP
manages
Independent
Requirements
Availability check
Which entries the MRP
will take into account
when calculating
availability
Configuration
For configurable
materials

MRP 4
BOM
explosion
How to select the
BOM to use in the
MRP runs and how
much scrap to planDiscontinued
parts
In case we want to
initiate the
discontinuation process
in the MRP
Repetitive
Manufacturing /
assembly /
deployment
strategy
Further data used in
Repetitive environments
and special situations
Storage Location
Data in this view is
Storage Location
dependent
Storage Location
MRP
For excluding a Storage
Location from the MRP

Forecasting
General data
Forecast model
(constant, trend,
seasonal, …)
Number of
periods required
Required periods for the
calculation
Control data
Futher factors for the
calculation

Forecasting
General data
Production related data,
it will be fetched to the
Production Orders
In-house
production time
Parameters for the time
calculation
Tolerance data

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BOMs Overview

Table of contents
2. BOMs Overview
4. Master Data
5. Main Screens – Fields

• To introduce the Bill of Materials
• To know Organizational Levels and Master Data
involved in BOMs
• To see main BOM fields and their functionality

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

• BOMs are structured in
− Header => Finished or Semi-finished Good to produce
− Items => Raws, Components or Semi-finished goods that form the Header
− Subitems => Assembly places inside each Ítem
Header
Item Item Item
Subitem Subitem
Subitem
Item
Subitem
Subitem

• At each of the levels different data is required
Header:
- Alternative - Usage
- Status - Base quantity
-Texts
…
Item 1
Item 2
Item 3
- Category - Quantity
- % Scrap - MRP data
- Texts - Cost relevancy
…
Subitem 1
Subitem 2
- Installation Point - Text
Different Item Categories
L – Stock Item
N – Non Stock Item
D – Document Item
T – Text Item

• BOMs will be also created for Semi-finished goods building up
complex structures
Finished Good
Package Semi-finished Component Component
Semi-finishedComponent
Component
Component
Semi-finished
Component

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

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

Header Texts
Header (1)
Header
Material
Number
Material
Description
Plant
Base Quantity
Alternative Usage
Status:
1. Active
2. Inactive

Quantity
Data
Item (1)
Item Number
Component
Material
Number
General
Data
Item
Category
MRP Data

Item
Texts
Item (2)
Item
Status
Other Data

Item data
Subitems
BOM
Subitems

Overview
Header
data
Items
Data

SAP PP
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Work Centers Overview

Table of contents
2. Work Centers Overview
4. Master Data

• To introduce Work Centers
involved in Work Centers
• To see main Work Center fields and their
functionality

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

• Work Center Data are used mainly for:
− Capacity => To define available capacity for Production
Formula
Timetable
Nº of employees or machines
…
− Scheduling => To define how employed time is going to be calculated
Formula
Set up times
…
− Costing => To define how Manufacturing Cost is going to be calculated
Formulas
Cost Center
Activity Types – For which a rate will be entered

• They will also define:
− Parameters to measure during Production Execution
− Some Default values which will be copied to the Routing/Production Order

Work Center:
Parameters FormulasActivity TypeActivity Rate
Routing / Operation:
Standard Values
20 USD/h
5 USD/h
30 USD/h
Act1
Act2
Act3
Setup Time
Machine Time
Labor Time
Setup Time
Op.Qty x Mach.Time
Op.Qty x Labor.Time
2 h
5 h
3 h
COSTS CALCULATION
Setup => 2h x 20 USD/h = 40 USD
Machine => 5h x 5 USD/h = 25 USD
Labor => 3h x 30 USD/h = 90 USD

• Work Center Category
− Depending on the use it allows the mainentance of different data
• Each Work Center must be defined for only one Plant

4. Master Data
• No previous Master Data is required for the creation of a
Work Center

Basic Data
Plant/Work
Center Number
and Description
Standard
Values
Work Center
Category
Person
Responsible

Default Values
Control Key
Units of
Measure of
Standard
Values

Capacity
Category
Capacities
Capacity
Formulas

Capacity
Category for
Scheduling
Scheduling
Formulas

Costing
Cost
Center
Activity Types and
Formulas
Assignment

SAP PP
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Routings Overview

Table of contents
2. Routings Overview
4. Master Data

• To introduce Routings
involved in Routings
• To see main Routing fields and their functionality

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

Work Center 4Work Center 3Work Center 2Work Center 1
• Routings are structured in
− Header => Finished or Semi-finished Good to produce
− Operations => Different steps to manufacture it
Operation1 Operation2 Operation3 Operation4

• Components and Raw Materials can be consumed in different Operations
• Operations can be:
− Internal => Inhouse Manufacture
− External => Subcontracted

• In Internal Operations we must enter a Work Center and its Standard Values
− They will allow:
To calculate Planned Costs
To schedule the Production Order
• In External Operations we can enter Vendor, Delivery Time and Price
− They will allow:
To calculate Planned Costs
To schedule the Productioin Order
To create transfer requirements to Vendor if necessary

• Each Routing must be defined for each Plant
• Routing usage: Limits use to different processes
− Production => To use in MRP and Production Orders
− Cost => To use only for costing
− Engineering => To use only for design
− Sales => To use only in Sales Orders

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

Header Details(1)
Header
Material
Number
Status
Usage
Lot Size

Work
Centers
Operation Overview (1)
Header
Material
Operation
Description
Operation
Number
Control
Key

Operation Details (1) – Internal Operation Fields
Standard
Values

Vendor
Operations Details (2) – External Operation
Price
Delivery
Time

SAP PP
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Demand Planning Overview

Table of contents
2. Demand Management Overview
4. Master Data

• To introduce Demand Management in SAP
involved in Planned Independent Requirements
maintenance
• To see main Planned Independent Requirements
maintenance screen and fields

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

Finished Good
Semifinished Component Component Component
Component Component
40 – Planning with Final Assembly Planned
Independent
Requirements
+ Sales Orders
Requirements
Explosion
(MRP)
Dependent
Requirements

Finished Good
Semifinished Component Component Component
Component Component
40 – Planning without Final Assembly at Semifinished Level
Sales Orders
Planned
Independent
Requirements
Requirements
Explosion
(MRP)
Dependent
Requirements

• Planned Independent Requirements must be defined for
each Plant

4. Master Data
• Strategy is defined in Material Master (View MRP3):
Strategy
Group

Planning Table
Depending on the chosen Planning Period, quantities can
be distributed:
- Daily
-Weekly
-Monthly

SAP PP
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MRP Overview

Table of contents
2. Procurement Types
3. MRP Types
4. Reorder Point
5. MRP Overview

• To introduce how MRP works in SAP
• To see the main available options
• To see main screens / fields for using this
functionality

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

2. Procurement Types (2)
External
Procurement
Transfer
Procurement Types
Inhouse Production
SubcontractingIn own Plant In other Plant
Procurement Types
Special Procurement Types

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

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

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

4. Reorder Point (2)
Stock
level
Time
Reorder
Point
Safety
Stock
Delivery Time
Lot Size

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

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

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

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

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

SAP PP
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AFS Apparel and Footwear

Table of contents
2. SAP AFS Overview
3. Material Master
4. Bills of Materials
5. Routings
6. Planned Independent Requirements
7. Materials Requirements Planning
8. Planned Orders & Production Orders

1. Goals of this Session
• Introduce the Industry Solution AFS
• See main AFS special functionality in the Production
Planning module

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

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

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

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

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

5. Routings
DEPENDING ON CATEGORY IT IS POSSIBLE TO DEFINE DIFFERENT ROUTINGS
Category Quality 1
Operation1 Operation2 Operation3 Operation4
Category Quality 2
Operation1 Operation2 Operation4

6. Planned Independent Requirements
• Possible to enter different PIRs by Category
• Rest of functionality equal to Standard

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

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

SAP PP
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Production Order
Overview

Index
1. What is a Production Order?
2. Process Flow

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

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

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