Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

SAP Production Planning

Production Planning Cycle in SAP

  • Be the first to comment

SAP Production Planning

  3. 3. Manufacturing Planning and Execution Organizational and Master Data Business Process for Manufacturing Planning and Execution Reporting and Analysis
  4. 4. Manufacturing Planning and Execution Sales Info System CO/PA Forecasting Procurement Sales & Oper. Planning Demand Mgmt MPS/MRP Material planning Manufacturing Execution Order Settlement Planning Process Execution Process
  5. 5. Manufacturing Planning and Execution Requirement from sales/marketing Production Planning Check Availability Components Capacity Run Schedule Qtys Sch & Cap Levelling Mfg. Execution Backflushing Receipt of Fin Goods In Stores Shift dates / Provide Addl. capacities Purchasing yes no no yes REM
  6. 6. Manufacturing Planning and Execution Requirement from sales/marketing Production Planning Check Availability Components Capacity Production Order Sch & Cap Levelling Mfg. Execution Production Confirmation Receipt of Fin Goods In Stores Shift dates / Provide Addl. capacities Purchasing yes no no yes Discrete
  7. 7. Manufacturing Planning and Execution <ul><li>Sales Info System </li></ul><ul><li>Information contains total sales orders already obtained, </li></ul><ul><li>incoming sales orders, pending sales orders – product wise, </li></ul><ul><li>customer wise, region wise. </li></ul><ul><li>Forecasting </li></ul><ul><li>Based on the past history of consumption, a forecast of </li></ul><ul><li>the sales figures for a product can be made. </li></ul><ul><li>Future projections are made using one of the Statistical </li></ul><ul><li>forecasting methods. </li></ul>COMPONENTS
  8. 8. Manufacturing Planning and Execution <ul><li>Sales & Operations Planning </li></ul><ul><li>Higher level planning i.e.overall planning at company level </li></ul><ul><li>Yearly/Half yearly/Quarterly Planning </li></ul><ul><li>Demand Management </li></ul><ul><li>Management of Requirements </li></ul><ul><li>Requirements can be from sales forecasts, sales orders,etc. </li></ul><ul><li>CO/PA </li></ul><ul><li>Projections will be based on the company’s future projection </li></ul><ul><li>of costing and profitability analysis. </li></ul>
  9. 9. Manufacturing Planning and Execution <ul><li>MRP </li></ul><ul><li>This is the total planning of all the components taking into </li></ul><ul><li>consideration the existing requirements and stocks. </li></ul><ul><li>Creation of purchase requisitions, production orders,etc. </li></ul><ul><li>Final step in the planning process. </li></ul><ul><li>MPS </li></ul><ul><li>Planning of items that greatly influence the company’s profits </li></ul><ul><li>or consume critical resources/dominate production processes. </li></ul><ul><li>After the production plan of these critical items are firmed up, </li></ul><ul><li>the planning of other components are taken up. </li></ul>
  10. 10. <ul><li>Repetitive Manufacturing - </li></ul><ul><li>Run Schedule quantities are viewed </li></ul><ul><li>Quantities are confirmed by Backflushing </li></ul><ul><li>Goods are received into stock </li></ul><ul><li>MANUFACTURING EXECUTION </li></ul><ul><li>Discrete Manufacturing - </li></ul><ul><li>Production orders are released </li></ul><ul><li>Materials are issued </li></ul><ul><li>Completion confirmations are performed </li></ul><ul><li>Goods are received into stock </li></ul>Manufacturing Planning and Execution
  11. 11. <ul><li>ORDER SETTLEMENT </li></ul><ul><li>Costs accrued to an order are debited to one or several </li></ul><ul><li>allocation receivers belonging to financial or managerial </li></ul><ul><li>accounting. </li></ul>Manufacturing Planning and Execution
  12. 12. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS Stock/Requirements List Lists the latest stock/requirement position of a material in the plant i.e. planned orders, production orders,etc. Production Plan This report lists the monthly production plans – material and plant wise . Orders This report lists the orders pending/completed for a material material wise or work center wise..
  13. 13. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS Quantity produced This report lists the quantity of the material produced during the Period in question. Work center Loads This report lists the available capacities, required capacities, remaining available capacities and %load for the work center. Consumption Lists the consumption of a material for the period in question.
  14. 14. Backlogs Lists the backlog of the load at a work center for the period in question. Missing parts Lists the missing parts that are required for the production of a material. Manufacturing Planning and Execution STANDARD PRODUCTION PLANNING REPORTS
  15. 15. Production Planning Basic Data Routings Work Centers Materials Capacities Inspection Plans Production Facilities Bills of Material PP Basic Data Production Resources/Tools F06010
  16. 16. SAP R/3 Integration Model Sales & Distribution Production Planning Materials Management Finance & Controlling Customer Sales Order Shipment Receivable Accounts / Cash Receipt Credit Limit Material Availability Check Transfer of Requirements Goods Issue to SO Goods Receipt Invoice Receipt Purchase Order Accounts Payable Invoice Accounting Document Production Cost Production Order Production Order Receipt Sales Forecast / Plan Vendor
  17. 17. Organizational Structures in R/3 Cost accounting Accounts Internal logistics (MRP/Production) Inventory management Group Controlling areas Sales organizations Company codes Valuation areas Plants Storage locations/batches/special stocks External logistics Purchasing organizations Levels Views
  18. 18. Material Master Data General Data St. Loc. Specific Data Plant Specific Data Sales Specific Data Material Master Data applicable throughout the client e.g. Material number Description Units of measure Weight Volume Product hierarchy Data dependent on sales organization and distribution channel e.g. Delivering plant Sales text Sales units Shipping data Division Data relevant for planning and production e.g. MRP profile Production costs Planning data Valuation Data referring to storage and inventory management e.g. Quantities Special stock Warehouse attributes
  19. 19. Material Types in the Standard SAP Material Type DIEN ERSA FERT HALB HAWA HIBE LEER NLAG ROH VERP WETT PROD Service Spare Part Finished Product Semi-finished Product Trading Good Operating Supply Empty Containers Non stock Item Raw Material Packaging Competitor Product Production Resources/ Tools Description
  20. 20. Product Data Engineering Design Sales Production Stock Finance Purchasing <ul><li>Master data is a key piece of information in the system </li></ul><ul><li>Master data can be seen from a number of views </li></ul><ul><li>Each view can correspond to an SAP module </li></ul><ul><li>Each view has a number of information screens </li></ul><ul><li>Each view belongs to an org unit within the business </li></ul><ul><li>One product may have multiple plant and sales views, one for each plant or sales area </li></ul>Master Data Views
  21. 21. Engineering Design Sales Production Stock Finance Purchasing Examples of How Data is Used Texts copied to purchase orders Maintains stock levels by plant, storage location, and batch Data used to calculate MRP lead times Controls customer ordering rules for material Controls which General Ledger Account is updated Material description used in reporting Product Data
  22. 22. Bills of Material Simple BOM Variant BOM Multiple BOM Simple BOM representing single material Similar materials represented by variants on one BOM BOM representing a material which can be made up of multiple compositions e.g. different components and quantities
  23. 23. Bill of Material Validity <ul><li>Area of Validity – The same Bill of Material can be allocated to several plants. Before you can allocate the BOM to a different plant, the material must exist at the new plant, the unit of issue on the BOM item must be the same. </li></ul><ul><li>Validity Period (Valid from/to dates) </li></ul><ul><ul><li>Becomes effective with the valid from date </li></ul></ul><ul><ul><li>The validity date is determined by the system automatically to be either the next effective from date, or 12/31/1999. </li></ul></ul><ul><ul><ul><li>A A </li></ul></ul></ul><ul><ul><ul><li>B C B D </li></ul></ul></ul><ul><ul><ul><li>X----------------------------------------------------------->>>> </li></ul></ul></ul><ul><ul><ul><li>from 1/1/95 from 12/31/95 </li></ul></ul></ul><ul><ul><ul><li>to 12/30/95 to 12/31/99 </li></ul></ul></ul>
  24. 24. BOM Structure BOM Header Plant Assignment Validity Period Release Indicator Stock Items Non-stock Items Variable Size Items Document Items Text Items Additional component details e.g. installation points for components Item 10 Item 20 Item 30 Sub Item 10 Sub Item 20
  25. 25. Bill of Material Glossary <ul><li>BOM Category – categorizes BOM’s to represent different objects; for example: </li></ul><ul><ul><li>Material BOM -- structure of products manufactured </li></ul></ul><ul><ul><li>Equipment BOM -- structure of equipment for plant maintenance </li></ul></ul><ul><ul><li>Document BOM -- structure of documents such as drawings (3.0) </li></ul></ul><ul><li>BOM Group – is a collective number for all BOM’s in a group which allows for one </li></ul><ul><li>or several similar products to be described under one number. </li></ul><ul><ul><li>All Alternatives of a multiple Bill of Material </li></ul></ul><ul><ul><li>All variants of a variant Bill of Material </li></ul></ul><ul><li>BOM Usage – special view of the BOM which represents a specific area of </li></ul><ul><li>the company in which the BOM is used; for example, Engineering, Production, </li></ul><ul><li>Costing, Sales, Plant Maintenance </li></ul><ul><li>The BOM Usage allows different views to exist without </li></ul><ul><li>separate BOM’s for each usage. </li></ul>
  26. 26. <ul><li>Technical Type – the system distinguishes BOM’s according to whether they </li></ul><ul><li>represent product variants or production alternatives. If you create a variant </li></ul><ul><li>for the BOM,the system marks it as a Variant Bill . If there is more than one </li></ul><ul><li>alternative for a material, the system marks the BOM as a Multiple Bill . </li></ul>Bill of Material Glossary (cont.) <ul><li>BOM Validity – Bills of Material are valid over an area and effectivity period. </li></ul><ul><ul><li>Area of Validity -- identifies which plants the BOM has been allocated to </li></ul></ul><ul><ul><li>Validity Period -- identifies the from and to effectivity dates. </li></ul></ul><ul><ul><li>The default to date is 12/31/9999 </li></ul></ul>
  27. 27. <ul><li>Item Category – When you enter a new Bill of Material item, an item category must be assigned. </li></ul><ul><ul><li>It has important control functions such as: </li></ul></ul><ul><ul><li>Screen selection </li></ul></ul><ul><ul><li>Specific processing, such as material number required, negative values supported. </li></ul></ul><ul><ul><li>The Item Category cannot be changed once set. It must be deleted and re-added. </li></ul></ul><ul><ul><li>Sizes are maintained for variable-size items </li></ul></ul><ul><ul><li>Item categories include: </li></ul></ul><ul><ul><ul><li>Stock Items -- material in stock as a component </li></ul></ul></ul><ul><ul><ul><li>Non-stock Items -- material not stocked - with or without a material number </li></ul></ul></ul><ul><ul><ul><li>Variable-size -- system calculates the quantity required using formulas </li></ul></ul></ul><ul><ul><ul><li>PM Structure Item -- used with plant maintenance equipment </li></ul></ul></ul><ul><ul><ul><li>Document Item -- used with Document BOM’s </li></ul></ul></ul><ul><li>Sub-Items – are typically used to represent different installation points for partial quantities of an item. </li></ul><ul><ul><li>In assembling resistors on a printed circuit board, the installation points are described. </li></ul></ul><ul><ul><li>There is no logic related to sub-items </li></ul></ul>Bill of Material Glossary (cont.)
  28. 29. Assembly Line Machines People Production Line Capacity Requirements Planning Scheduling, Execution Times Costing Work Centers Work Centers Cost Center
  29. 30. Work Centers and Routings Routing Operation 10 Operation 20 Operation 30 Work Center W1 Cost Center 100 Assembly Cost Centre 200 Work Center W2 Finishing Cost Center 200 Work Center W1 Cost Center 100 Assembly
  30. 31. Work Center Category <ul><li>Work centers are allocated to different work center categories </li></ul><ul><li>The work center category is used to control the field and screen selection for work centers during work center maintenance. </li></ul><ul><li>Work Center Category Screen View </li></ul><ul><li>Statistical Work center Basic Data </li></ul><ul><li>Production Work Center Basic Data </li></ul><ul><li>Default Values </li></ul><ul><li>Capacity Values </li></ul><ul><li>Scheduling </li></ul><ul><li>Cost Center Assignment </li></ul>
  31. 32. Cost Center Assignment to Work Center for Operation Costing Cost Center Oper 0010 Oper 0020 Oper 0030 Oper 0040 Routing with standard values Set Up (SET) Machine (MACH) Labor (LAB) Work Center with Activities during production Activity Rates Set Up $70.00 Mach $60.00 Labor $80.00 Overhead $70.00
  32. 33. Work Center Capacity Oper 0010 Oper 0020 Oper 0030 Oper 0040 Routing with standard values Set up Formula Machine Time Formula Teardown Formula Work Center Formulas Set up 1.0 hrs Machine 5.5 hrs Teardown .5 hrs Operation Std Values Work Center Schedule Use of Formulas in Work Centers
  33. 34. 8 hrs 1 hr 7 hrs 1 hr 6 hrs Working Hours Break Time Working Hours less Breaks Planned Downtime Productive Working Hours Available Capacity at a Work Center
  34. 35. Routing Structure Views Routing Operation 30 Operation 20 Operation 10 Work Centre: PP-ASSEM Control Key: - Time Tkts - Costing Operation Text: Pre-assemble frame Std Values: Lab:10 mins Mach:10 mins Materials Components BOM Process Resource Tool (PRT)
  35. 36. BOM Groups Production Master Data Materials and PRTs Bills of Material Routings Work Centers Routing Groups Cost Centers Components Allocated to Operations Item Category Material Type W/C Category
  36. 37. Operation Operation types (Main) operation Sub-operation <ul><li>Sub-operation </li></ul><ul><li>HierarchyCosting </li></ul><ul><ul><li>Completion confirmations </li></ul></ul><ul><li>Scheduling always takes place on the (main) operation level </li></ul>The control key defines whether completion confirmations and costing are carried out on the (main) operation level, or on the sub-operation level. Indicator: group operation sub-operation level combined operation (main) operation
  37. 38. Operation / Sub-operation Operation 0010 Operation 0020 Sub Operation 0010 / 10 at Work Center A1 Sub Operation 0010 / 20 at Work Center A2 Sub Operation 0010 / 30 at Work Center A3 Schedule at Operation Level Useful when processing for operation 0010 occurs over multiple work centers Capacity Planning & Costing possible at Sub Operation Level Level
  38. 39. Material Allocation Op. 10 Op. 20 Op. 30 Op. 10 Op. 30 Routing Product BOM
  39. 40. 1 1 2 2 01 02 01 02 1 1 1 2 3 1 2 3 1 1 Routing Group Routing Group Counter Material-Routing Allocations <ul><li>A routing alterative can be allocated to several materials. </li></ul><ul><li>A material in a plant can be allocated to several alternatives. </li></ul>Material
  40. 41. Routing Default Values Routing Material Master Work Center Base Unit of Measure Planner Group Short Text Control Key Standard Values Activities Standards Text Key HR data
  41. 42. External Processing Oper 0010 Oper 0020 Oper 0040 Oper 0050 Purch Reqn Purch Ord Vendor Proc Goods Rec Routing data copied to order including quantities and dates Purchasing creates P.O. At goods receipt, the operation is confirmed
  42. 43. Operation Lead Time Float Before Float After Oper 0010 Oper 0020 Oper 0030 Queue | Setup | Process | Teardown | Wait | Move Execution Time Interoperation Time Interoperation Time Operation Lead Time
  43. 44. Routing Operation Sequences Overlapped Routing defines process where one operation is to overlap with the following operation Standard Routing represents a standard sequence defining production procedure Parallel Routing includes processes which can be performed simultaneously to achieve time efficiencies Split Routing includes processes which can/must be split across a number of work centers
  44. 45. The Planning Concept in SAP SOP MPS Planned Independent Requirements Customer Independent Requirements Requirements (Orders) from SD Module Offset Keep Balanced Order Proposals MRP Planned Orders Production Orders Purchase Requisitions Demand ie Requirements Order proposals, planned orders etc are created and adjusted by running the MRP or MPS programs. Sales Plan Production Plan
  45. 46. <ul><li>SOP specifies sales quantities for the long and intermediate term to roughly assess the feasibility of sales and operation plans </li></ul><ul><li>Sales and Operations Planning at the Product Group or F/G level </li></ul><ul><ul><li>Materials may be planned together in Product Groups </li></ul></ul><ul><ul><li>Sales quantities are determined for future periods </li></ul></ul><ul><ul><li>Production quantities are then determined on the basis of sales </li></ul></ul>Sales and Operations Planning Functions
  46. 47. <ul><li>MRP II is concerned with integrating individual plans within a supply chain </li></ul><ul><li>Profitability Analysis – Revenue and Sales Plans </li></ul><ul><li>Sales and Operations Planning – Sales and Production Plans </li></ul><ul><li>Master Planning – Demand Program and Master Schedule </li></ul><ul><li>Material Requirements Planning – Dependent Requirements and Procurement Plan </li></ul>Sales and Operations Planning – Planning Levels
  47. 48. <ul><li>Step 1 – Sales Planning of Future Sales Quantities </li></ul><ul><ul><li>Copy in from Sales Information System or Profitability Analysis </li></ul></ul><ul><ul><li>Automatic forecast based on historical factors </li></ul></ul><ul><ul><li>Manual entry of sales quantities </li></ul></ul><ul><li>Step 2 – Production Planning </li></ul><ul><ul><li>Synchronize production plan with sales plan </li></ul></ul><ul><ul><li>Stock level equal to zero </li></ul></ul><ul><ul><li>Specify a target days supply by period </li></ul></ul><ul><ul><li>Specify a target stock level by period </li></ul></ul><ul><ul><li>Enter planning data manually </li></ul></ul>Sales and Operations Planning – Steps
  48. 49. <ul><li>Step 3 – Disaggregation of Planning Values </li></ul><ul><ul><li>Determine the sales and production quantities of product group members </li></ul></ul><ul><ul><li>Modify the disaggregated sales planning data and create a production plan for each member </li></ul></ul><ul><li>Step 4 – Transfer of Planning Values to MRP </li></ul><ul><ul><li>Pass the planned sales and production quantities as independent requirements to demand management </li></ul></ul><ul><ul><li>If product group data is transferred, the system automatically disaggregates the planning data to the finished product level </li></ul></ul>Sales and Operations Planning – Steps
  49. 50. Sales and Operations Planning – Product Groups <ul><li>A Product Group brings together materials according to some criteria such as similar type or manufacturing process. </li></ul><ul><li>Link material master data with product groups </li></ul><ul><li>Materials and product groups can be members of more than one group for different planning scenarios </li></ul><ul><li>Assignment of members from different plants to the same product group for cross-plant planning </li></ul><ul><li>A product group may have a different unit of measure from its members e.g. aggregate in cartons vs pieces </li></ul><ul><li>Proportional factors for disaggregation - how the product group quantitiy is distributed to its members </li></ul><ul><li>Supports production versions for a material or group </li></ul><ul><li>Supports multi-level product group hierarchy </li></ul><ul><li>Graphical support of one or more levels </li></ul>
  50. 51. <ul><li>Sales and Production Planning is carried out using a Planning Table which shows the stock level that results from the sales and operations planning for both materials and product groups </li></ul><ul><li>The Planning Table is divided into: </li></ul><ul><ul><li>Sales Quantities </li></ul></ul><ul><ul><li>Production Quantities </li></ul></ul><ul><ul><li>Target Day’s Supply and Target Stock Levels </li></ul></ul>Sales and Operations Planning – The Planning Table
  51. 52. Sales and Operations Planning – Creating a Sales Plan <ul><li>Manual Data Entry and Distribution Functions </li></ul><ul><ul><li>Entered directly into the Planning Table as a % or qty </li></ul></ul><ul><li>Copying Data from Sales Information System </li></ul><ul><ul><li>Planned order, invoiced or delivery quantities </li></ul></ul><ul><ul><li>The planning data is aggregated across all materials in the group </li></ul></ul><ul><li>Copying from Profitability Analysis </li></ul><ul><ul><li>Quantity and performance measures </li></ul></ul><ul><li>Copying the Forecast </li></ul><ul><ul><li>Aggregates the consumption values for all the materials in the product group </li></ul></ul>
  52. 53. Sales and Operations Planning – Creating a Production Plan <ul><li>Determine the quantities to produce to meet the sales plan </li></ul><ul><li>Synchronize to the Sales Plan – the system copies the sales quantities into the production quantities </li></ul><ul><li>Zero Stock Level – Use existing stock to cover sales quantities. When used up, production quantities will synchronize with the sales quantities </li></ul><ul><li>Target Stock Level – The system determines production quantities based on sales and target stock levels </li></ul><ul><li>Target Days Supply – Coverage is expressed in days </li></ul>
  53. 54. Sales and Operations Planning – Disaggregation <ul><li>Functionality is based on proportionality factors of product group members </li></ul><ul><li>The result of disaggregation is the sales plan of its members </li></ul><ul><li>Strategy parameters are used to create the production plan from the sales plan on to a product group member </li></ul><ul><li>Disaggregation can be carried out for the product group or for selected members only </li></ul>
  54. 55. Sales and Operations Planning – Transferring Data to Demand Management <ul><li>Transfer a single-level product group (multiple) or individual material (single) </li></ul><ul><li>Independent Requirements Parameters </li></ul><ul><ul><li>Specify Requirements Type </li></ul></ul><ul><ul><li>Version Number </li></ul></ul><ul><ul><li>Limit scope of the time period </li></ul></ul>
  55. 56. Master Planning <ul><li>Demand Management </li></ul><ul><ul><li>Planning and Consumption Strategies </li></ul></ul><ul><ul><li>Specification of Requirement Quantities and Delivery Dates </li></ul></ul><ul><li>Master Production Scheduling </li></ul><ul><ul><li>Planning for Master Schedule Items </li></ul></ul><ul><ul><li>Planning Time Fence </li></ul></ul><ul><ul><li>Interactive MPS </li></ul></ul>
  56. 57. Copy from Sales Plan Copy from Prodn Plan Copy from Forecast Copy from Orig Plan Demand Management “ Demand Program” Manual Planned Independent Requirements Sales Demand from Sales Orders MRP/MPS Sales and Operations Planning
  57. 58. <ul><li>Make product for stock in expectation of customer sales </li></ul><ul><li>Plan using planned independent requirements for “anonymous” make-to-stock production. </li></ul><ul><li>Use Net or Gross Requirements Planning </li></ul><ul><ul><li>Net Requirements -- includes warehouse stock, planned issues and receipts </li></ul></ul><ul><ul><li>Gross Requirements -- excludes warehouse stock. Just includes planned and open orders </li></ul></ul><ul><li>Example is a shelf stock item such as a bike accessory light </li></ul><ul><li>Planning Requirement Type is LSF - make to stock which is used in the planned independent requirements transaction </li></ul><ul><li>Sales Order Requirement is KSL - which is sale from stock </li></ul>Planning Strategy – Make-to Stock
  58. 59. Sale from stock Planning Production Push Warehouse Stock Finished Product Strategy: Make-To-Stock Production Example: Common shelf items such as a bike accessory (light)
  59. 60. <ul><li>Make product in expectation of customer sales </li></ul><ul><li>Plan using planned independent requirements at finished goods level to drive demand to long lead time components </li></ul><ul><li>Typically there is a longer lead time to produce than the customer is willing to wait for </li></ul><ul><li>Sales orders consume the planned independent requirement quantities </li></ul><ul><li>Planned quantities that are not consumed by sales orders result in excess stock </li></ul><ul><li>Example is a long lead time custom product </li></ul><ul><li>Planning Requirement Type is VSF – planning with final assembly </li></ul><ul><li>Sales Order Requirement is KSV – which is sales order with consumption </li></ul>Planning Strategy – Planning with Final Assembly
  60. 61. Sales Order Planning Production Push Warehouse Stock Finished Product Example: Custom furniture such as a cherry table Final Assembly to Sales Order Purchase Produce MRP without reference to sales order Planned Independent Requirements Strategy: Planning with Final Assembly
  61. 62. Planning Strategy – Planning Without Final Assembly <ul><li>Final assembly is initiated by the customer sales order </li></ul><ul><li>Stop production at sub-assembly level </li></ul><ul><li>Final assembly pull </li></ul><ul><li>Example is automobile assembled with unique combination of features (sub-assemblies) </li></ul><ul><li>Planning Requirement Type is VSE -- planning without final assembly </li></ul><ul><li>Sales Order Requirement is KEV -- independent customer order with consumption </li></ul>
  62. 63. Sales Order Planning Warehouse Stock Finished Product Warehouse Stock Assembly 01 Warehouse Stock Assembly 02 Example: Option oriented product such as a car Stop at level Planned Independent Requirements Assembly when Sales Order Scheduled Purchase Produce Strategy: Planning Without Final Assembly Production Push Final Assembly Pull
  63. 64. Planning Strategy – Planning with Planning Material <ul><li>Planned independent requirements of Planning Material initiate procurement of the planning bill components </li></ul><ul><li>Sales orders for the final assembly create planned orders of the finished product and reduce planning quantities for the planning material </li></ul><ul><li>Possible to plan a family of products from forecast placed on the planning bill. The planning bill details, through percentages, the quantity required for common parts </li></ul><ul><li>Example is a bike with common sub-assemblies used in many finished items </li></ul><ul><li>Planning Requirement Type is VSEF -- planning with planning material </li></ul><ul><li>Sales Order Requirement is KEVV -- independent customer order with planning material </li></ul>
  64. 65. Sales Order Planning Customer Stock Finished Product Planning Material Warehouse Stock Assembly 01 Warehouse Stock Assembly 02 Example: Bikes with the same features except for the color Purchase Produce Note: Percentages drive lower level demands for sub assemblies Strategy: Planning with Planning Material Planned Independent Requirements Production Push Final Assembly Pull
  65. 66. Sales Order Warehouse Stock Finished Product Example: Combine customer orders for the same item Strategy: Production by Lot Size Production by Lot Size Pull
  66. 67. Planning Strategy – Make to Order Production <ul><li>Sales orders are planned according to sales order number </li></ul><ul><li>Produced quantities for each sales order are managed individually </li></ul><ul><li>Production and procurement costs are managed in either a settlement order or a project </li></ul><ul><li>Example is a custom product with a unique structure such that it only applies to a particular customers order </li></ul><ul><li>Sales Requirement Type is KE -- independent customer order without consumption </li></ul>
  67. 68. Sales Order Warehouse Stock Finished Product Example: New machinery Strategy: Make-To-Order Production Production by Lot Size Pull
  68. 69. MRP Features MRP Lot sizing Order scheduling and generation Internal production and external purchasing Net requirements calculation Bill of Material Explosion Forecasting
  69. 70. MRP Overview
  70. 71. Overview Purchased Items MRP Purchasing Accounting Warehouse management system Goods receipt Inventory management Valuation Goods Transfer issue posting Invoice receipt Invoice verification Master data Material Batches Vendors Customers :
  71. 72. MRP: Reorder Point Planning Reorder Point Safety Stock Order Date Delivery Date Time Stock
  72. 73. Purchasing Process Time Vendor Planned Delivery Time Desired Delivery Date Release Order Date Forward Scheduling for External Procurement Today Goods Receipt Process Time Forward scheduling used for reorder point material
  73. 74. Daily Accumulation: Entries from Planning File Warehouse Stock + Open Order Proposals Shortages Net Change Planning Coverage calculation per requirement date Sales Orders Planned Individual Requirements Reservations Order Proposal
  74. 75. MRP Prerequisites <ul><li>Activated for MRP </li></ul>PLANT LEVEL MATERIAL LEVEL <ul><li>Valid MRP Type </li></ul><ul><li>Valid Material Status </li></ul><ul><li>Material MRP Views Maintained </li></ul><ul><ul><li>MRP Controller </li></ul></ul><ul><ul><li>Planned Lead Time </li></ul></ul><ul><ul><li>MRP Group </li></ul></ul><ul><ul><li>Lot Size Data </li></ul></ul>
  75. 76. Material Master – MRP I Key Fields <ul><li>Basic, General, and Lot Size Data </li></ul><ul><li>Procurement Type indicates if the material is externally procured, or produced internally or both. </li></ul><ul><li>Special Procurement identifies special planning rules which may be used for in-house production or external procurement </li></ul><ul><li>MRP Type determines how the material is planned such as MRP, MPS, or consumption based planning </li></ul><ul><li>Material Lead Time identifies for material planning the planned delivery days or in-house production days </li></ul><ul><li>Lot Size determines which lot-sizing procedure the system uses to calculate order quantities </li></ul>
  76. 77. Material Master – MRP 1Key Fields <ul><li>Scheduling Parameters </li></ul><ul><li>Planning Time Fence: defines a period during which MRP/MPS will not automatically add or reschedule orders </li></ul><ul><li>Scheduling Margin: controls the release period, opening period for a material and scheduling floats for production </li></ul><ul><ul><li>Release period is the number of working days in the release period </li></ul></ul><ul><ul><li>Opening period is the number of working days between the order creation and planned start date </li></ul></ul><ul><ul><li>Order floats allows for safety margin before and after production </li></ul></ul><ul><li>Planned Delivery: lead-time for purchased material </li></ul><ul><li>In-house Production: lead-time for manufactured material </li></ul><ul><li>GR Processing Time: goods receipt processing time </li></ul><ul><ul><li>Example: dock-to-stock time </li></ul></ul>
  77. 78. Material Master – MRP 2 Key Fields <ul><li>Availability Check indicates whether the system generates individual or summarized requirements for sales orders for this material and for planning, which MRP items the system includes in the availability check. </li></ul><ul><li>Mat./PPC Status is used to limit the usability of materials for certain activities such as, purchasing, bills of material </li></ul>
  78. 79. Material Master MRP 3 Key Fields <ul><li>Independent Requirements </li></ul><ul><li>Consumption Mode: controls consumption of planned independent requirements by customer requirements </li></ul><ul><ul><li>Selections: backward, forward, or both </li></ul></ul><ul><li>Consumption Periods Backward/Forward: specifies the number of periods of forward or backward consumption </li></ul><ul><ul><li>Used in conjunction with consumption mode </li></ul></ul><ul><li>Storage Location MRP </li></ul><ul><li>MRP Indicator: determines whether or not requirements, for a specific storage location, are planned separately from the overall plan </li></ul><ul><li>Reorder Level: used for storage location MRP </li></ul><ul><li>Replenishment Quantity: used for storage location MRP </li></ul>
  79. 80. MRP Types VB VM VV PD M0 Manual Reorder Point Planning : MRP produces order proposals when stock falls below a “reorder point”. The reorder point and safety stock levels are entered manually Automatic Reorder Point Planning : The reorder point and safety stock level are calculated based on the forecast results Forecast Planning The latest forecast is copied as requirements which are used to create order proposals Deterministic Planning MRP produces order proposal(s) to match the exact quantity of the requirements based on independent and dependent demands Master Production Scheduling Similar to PD but used for master schedule items
  80. 81. Lot Sizing Static Periodic Optimum (Cost ) Lot for Lot Fixed Lot size Replenish up to maximum stock level Daily Lot size Weekly Lot size Monthly Lot size Flexible period Lot size according to planning calen. Part period balancing Least unit cost procedure Dynamic Lot size creation Groff reorder procedure
  81. 82. MRP: Static Lot Sizing Lot for Lot Order Quantity: Shortage Quantity = Ordered Quantity Replenishment up to Maximum Stock Level: Stock required to achieve maximum stock level set in the material master Order Quantity = Material Fixed Order Quantity = Shortage Quantity Order = Fixed Order Quantity If Fixed Lot Size: Shortage Quantity > Fixed Order Quantity If Order Order Order
  82. 83. Carrying Out the Planning Run Total Planning – All materials in a given plant <ul><li>All materials are reviewed by MRP regardless of activity </li></ul><ul><li>Only the materials in a plant that have undergone a change relevant to planning since the last planning run (net change planning) </li></ul>Planning Interval – Limiting the MRP Planning Interval Time Planned requirements and supply order receipts example: 100 days MRP Planning Horizon
  83. 84. Planning Run Options for Automatic Creation of Requisitions and Delivery Schedules <ul><li>MRP Control Parameter: determine whether or not MRP will automatically create requisitions or delivery schedules </li></ul><ul><li>Options are: </li></ul><ul><ul><li>Do not automatically create. Only create planned order </li></ul></ul><ul><ul><li>Automatically create within the opening period </li></ul></ul><ul><ul><li>Automatically create for the entire planning horizon </li></ul></ul><ul><li>Opening Period Parameter: allows the user to take advantage of MRP’s automatic creation features while retaining control over the number of open purchasing documents </li></ul>
  84. 85. MRP List MRP Controller Group of Materials for which controller is responsible Controller’s MRP Listing MRP Order Proposals and Planner Messages from MRP Planning run. Planner can drill down to review material movement activity Goods Receipt Goods Issues
  85. 86. Stock Requirements List Date MRP Element Supply/Demand Ref EM Quantity Available 01/01 STOCK 100 01/08 ORDER Sales Order 25 75 01/15 PL ORD 1000 120 05 100 175 02/01 -----------------------------------------------------> Planning Time Fence Stock Requirements List brings together all the supply orders, independent and dependent demands and stock balances for the material. MRP makes order proposals to balance the supply/demand position for the material
  86. 87. MRP Planning Result MRP List vs Stock Requirements List <ul><li>The MRP List displays the result of the last planning run </li></ul><ul><li>The Stock Requirements List displays the most up-to-date stock and requirements situation </li></ul>MRP Planning Process Last planning run results Stock Requirements List uses current data Current Stock, Rqmts, Balances, planned Receipts, Issues
  87. 88. Purchasing Process Time Vendor Planned Delivery Time Desired Delivery Date Calculated Order Release Date Backward Scheduling for External Procurement Future Requirement Date Goods Receipt Process Time <ul><li>MRP determines the basic scheduling dates using backward scheduling </li></ul><ul><li>If the release date lies in the past, the system automatically switches to forward scheduling </li></ul>MRP Planning Date -- today MRP Planning Lead Time
  88. 89. Order Release Process Time In-house Production Time Order Finish Date Order Start Date Backward Scheduling for In-house Production Future Requirement Date Goods Receipt Process Time <ul><li>MRP determines the basic scheduling dates using backward scheduling </li></ul><ul><li>If the release date lies in the past, the system automatically swithches to forward scheduling </li></ul>MRP Planning Date -- today MRP Planning Lead Time Order Release Date
  89. 90. E1 Independent Requirements Customer Requirements Planned Orders Dependent Requirements B2 B1 R1 R2 R3 Planned Orders Dependent Requirements Dependent Requirements Level 0 Level 2 Level 1 Planned Orders Planned Orders Planned Orders Planned Orders Planning Structure Multi-Level = Demand = Supply
  90. 91. Order Proposals: Planned Orders Procurement Type is In-house Production MRP MRP Controller Planned Order Order Qty Order Date Capacity Reqts. Resource Reqts. Production Order
  91. 92. Planning for In-house Production Planned Order Production Order Auto Change/ Delete if situation changes Auto Creation Collective Conversion into Production Order Manual changes/ deletion Manual Creation Planning Run MRP Controller Individual Conversion into Production Order Production Order Release
  92. 93. The Production Cycle Issue Materials to Order Select BOM Select Routing Schedule Times & Dates Calculate Capacity Purchase Requisitions Goods Issue Calculate Planned Costs Release Order Check Availability Print Shop Floor Papers Create Order Create Required Purchases Confirm Completion Receive complete goods into stock Goods Receipt Confirmation Slip Calculate Actual Costs Actual Labor Production Order
  93. 94. Production Order Creation Manual Order Creation Order Proposal MRP Conversion Determine Order Type Routing Selection Lead Time Scheduling Bill of Material Selection <ul><li>Enter start or finish date depending on scheduling direction </li></ul><ul><li>Component Overrides </li></ul><ul><li>Material Reservations </li></ul><ul><li>Item Categories </li></ul><ul><li>Alternate Sequence Assignments </li></ul><ul><li>One operation is required </li></ul>Changes are allowed before order release OAK BROOK TECHNOLOGIES
  94. 95. Production Order Release Production Order Ready for Release Material Availability Check Order or Operation Release Shop Paper Printing Possible Material Withdrawals Possible <ul><li>Order release is carried out manually </li></ul><ul><li>Uses checking rules defined in configuration </li></ul><ul><li>On-line or in background </li></ul><ul><li>Pick List, Confirmation Slips,... </li></ul>
  95. 96. Material Availability Check Stock on Hand 150 Units Reservation for 50 Units Net Available 150 100 300 100 Planned Order for 200 Units Dependent Requirement for 200 Units Requirement for 50 Units are Available
  96. 97. Goods Movement for a Production Order Material 1 Material 2 Production Goods receipt of Material 3 Goods Issue Consumption of Material 1 and 2 Reservation Planned Goods Issue Unplanned Goods Issue Goods issues only apply to stock items
  97. 98. Goods Issue Results Goods Issue Posting Update Reservations G/L Account Update Accounting Material Document Material Usage Statistics Cost Object Allocation
  98. 99. Completion Confirmations Production Order Operations 0010 - Assemble Board 0020 - Assemble Case 0030 - Assemble unit 0040 - Final Test C Confirm Operation 0010 Activities Confirm Operation 0020 Activities Confirm Operation 0030 Activities Confirm Operation 0040 Activities <ul><li>Partial or Final Confirmation </li></ul><ul><li>Single or Collective Confirmation </li></ul><ul><li>Milestone Confirmation </li></ul><ul><li>Reduction of Capacity Requirements </li></ul><ul><li>Determination of Actual Costs </li></ul>Milestone
  99. 100. Confirmation Data Quantity Dates Labor <ul><li>Yield </li></ul><ul><li>Scrap Quantity </li></ul><ul><li>Scrap Reason </li></ul><ul><li>Start date </li></ul><ul><li>Finish date </li></ul><ul><li>Work Center </li></ul><ul><li>Personnel Number </li></ul><ul><li>Qualification </li></ul><ul><li>Wage Group </li></ul><ul><li>Wage Type </li></ul>