Enterprise Systems
Configuration
Production Planning
Master Data
EGN 5620
Enterprise Systems Configuration
Spring, 2012
Enterprise Operations Planning Process
Execution
High Level Planning
Procurement
Process
CO/PA
Detailed Planning
Forecasting
Sales and Operations
Demand
Planning
Management
Sales Information
MPS
MRP
Manufacturing
System
Execution
Order
Settlement
Execution
January 2008
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BPI – II Final
Roadmap
Purchase
Order
Purchase
Requisition
Schedule
and Release
Convert Production
Proposal
Goods
Issue
Run MPS w/MRP
Check
Availability
Invoice
Receipt
Production
Process Completion
Confirmation
Sales Order
Entry
Sales
Process
Procurement
Process
Pick
Materials
Quality
Inspection
Goods
Receipt
Payment
to Vendor
Goods
Receipt
Order
Settlement
Receipt of
Payment
Post Goods
Issue
Invoice
Customer
January 2008
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Production and Planning
Master Data
Concept & Theories
Production and Planning
Production planning is a business process
which creates and maintains production
plans for manufacturing of semi-finished
goods or assembly of finished goods
Common manufacturing processes:
 Discrete, and
 Continuous
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Production Planning & Execution
Sales & Operations
Planning (SOP)
Strategic
Planning
Demand
Management
MPS
Detailed
Planning
MRP
Manufacturing
Execution
Order
Settlement
Procurement
Process
Manufacturing
Execution
Production and Planning

Players in the Planning
◦ Strategic Planning
 CEO, COO, CIO, CFO, Controller, Marketing
Director
◦ Detailed Planning
 Line Managers, Production Scheduler, MRP
Controller, Capacity Planners
◦ Execution
 Line Workers, Shop Floor Supervisors
January 2008
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Sales and Operations Planning
(SOP) - review
Flexible forecasting and planning tool
 Usually consists of three steps:

◦ Sales Plan
◦ Production Plan
◦ Rough Cut Capacity Plan

Planned at an aggregate level in time
buckets
Demand Management - review
Link between Sales Planning (SOP) &
Detailed Planning (MPS/MRP)
 The results of Demand Mgmt is called the
Demand Program, it is generated from
our independent requirements – planned
independent requirement (PIR) and
customer independent requirement (CIR)

Demand Management
Forecast
Sales
Planned
Independent
Requirements
Customer
Independent
Requirements
Demand
Program
MPS / MRP
Planning Strategies



Planning strategies represent the business procedures for
◦ The planning of production quantities
◦ Dates
Wide range of strategies
Multiple types of planning strategies based upon
environment
◦ Make-To-Stock (MTS)
◦ Make-To-order (MTO)
 Driven by sales orders
◦ Configurable materials
 Mass customization of one
◦ Assembly orders
Planning Strategy for Make-toStock
Planning takes place using Independent
Requirements
 Sales are covered by make-to-stock
inventory
 Strategies

◦
◦
◦
◦
Net Requirements Planning
Gross Requirements Planning
Production by Lot Size
Planning with Final Assembly
Planning Strategy for Make-toOrder
Planning takes place using Customer
Orders
 Sales are covered by make-to-order
production
 Strategies

◦ Make to Order Production
◦ Planning without Final Assembly
◦ Planning with Planning Material
Master Production Scheduling
(MPS)

MPS creates and maintains a weekly
schedule of production for meeting
independent demands.
Material Requirement Planning
(MRP)




In MRP, the system calculates the net requirements while
considering available warehouse stock and scheduled
receipts from purchasing and production
During MRP, all levels of the bill of material are planned
The output of MRP is a detailed production and/or
purchasing plan
Detailed planning level
◦ Primary Functions
◦ Monitor inventory stocks
◦ Determine material needs
 Quantity
 Timing
◦ Generate purchase or production orders
Demand-Independent vs.
Dependent
Independent Demand – Original source of
the demand.
 Dependent Demand – Source of demand
resides at another level.

Net Requirements
Procurement
Proposal
Firmed Receipts
Firmed Orders
or Purchase
Requisitions
Stock
Shortage
Requirements –
Planned Ind. Req.,
Reservations
Sales Orders,
Etc.
Safety Stock
Lot sizing

Static
◦ Based on fixed values in the Material Master

Periodic
◦ Groups net requirements together from
multiple periods

Optimum
◦ Calculates the optimum lot size for a several
periods of net requirements
Procurement Type

External Procurement
◦ Purchase Requisition
◦ Purchase Order
◦ Schedule Line

Internal Procurement
◦ Planned Order
◦ Production Order
◦ Process Order
Multi-Level Scheduling
Requirements
Date
Planned Order
Purchase Requisition
Finished Product
Assembly 1
Semi-Finished Good
Raw Material
Component
Time
MRP vs. Consumption-Based

Whether or not a material is planned
using MRP or Consumption Based is
determined by the MRP Type on the MRP1
screen of the Material Master
MRP
Consumption Based
PD – MRP
VB – Reorder-Point
VSD – Seasonal MRP
VV – Forecast Based
RP – Replenishment
Consumption-Based
Lot
Size
Reorder Point
Safety Stock
Replenishment
Lead Time
Output of MRP
MRP
In-House
Production
Planned Order
External
Procurement
Convert to
Production
Orders
Purchase
Requisitions
Process
Orders
Purchase
Orders
Schedule
Lines
Production and Planning
Master Data
SAP Implementation
Business Process Integration
FI MM PP SD
Rules
FI
MM
PP
SD
January 2008
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Business Process Integration
PP
Master Data
PP
January 2008
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Production Process (Make-to-Stock)
Capacity
Planning
Schedule
and Release
Shop Floor
Documents
Production
Proposal
(Planning/Other)
Production
Process
Order
Settlement
Goods
Issue
Completion
Confirmation
Goods
Receipt
PP: Master Production Schedule (MPS)

MPS focuses on independent demand items only and serves as an
input to MRP to generate subsequent dependent demands.
MPS Items
MPS run
ESET
Giftbox
Crown
Non-MPS
Items
EPEN
Barrel
Stand
Cartridge
Cap
Elements of A Production Order
Work
Center
Raw Materials &
Sub-Components
Bill of Material
Production
Order
Operations
Components
(Production Parts
Production
Routing
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Business Process Integration
PP
PP
January 2008
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Organization Data






Client
Company code
Plant
Storage location
Shipping point
Work Center
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Work
Centers
Enterprise Structure
Credit Control
Area
Client (600)
Fiscal Year
Variant
(2012)
Chart of
Accounts
Company
Code (C0XX)
Controlling
Area
Purchasing
Organization
Plant
(P0XX)
Purchasing
Group
WC 10 WC 20
Sales
Organization
SL10 SL20
Shipping
Point
Distribution
Channel
Division
Sales Area
Organization Data - Work Center
Unique production or assembly area
 May include

◦
◦
◦
◦
◦

Equipment
Groups of equipment
Production lines
Employees
Groups of employees
Operations carried out at work center
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Organization Data

Plant specific organizational units
◦ MRP controller
◦ Production controller/production
scheduler/planner group
◦ Person responsible (financially)

Non-plant specific organizational units
◦ Capacity planner
January 2008
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Business Process Integration
PP
Master Data
PP
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Master Data for Production Planning








Bill of Material Master Data
Work Center Master Data
Work Center Control Key
Product Routing
Material Types Allowed in Production
Controlling Activities For Production
Activity Prices
Materials
January 2008
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Bill of Materials
BOM is a hierarchical structure of the
materials needed to produce a finished
goods or semi-finished goods.
BOMs in SAP are defined as single-level,
but can be constructed multi-level by
nesting several single-level BOMs.
Nesting refers to a hierarchy in which a bill
of materials contains its own bills of
materials.
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Bill of Material Master Data

Bill of Materials (BOM) are created as singlelevel or multi-level relationships between
one parent material and the sub-component
material
EPEN
Barrel
Cap
January 2008
Crown
Cartridge
Band
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2007. All rights reserved.
Clip
38
Bill of Material Master Data

Variant Bill of Materials (BOM)
◦ Several products with a large proportion of
identical parts.
EPEN - Red
Red
Cartridge
Band
January 2008
EPEN - Black
Etc.
Black
Cartridge
Band
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2007. All rights reserved.
Etc.
39
Bill of Material Master Data

Multiple versions of Bill Of Materials (BOM)
◦ One product produced from alternative
components or processes, where the
differences are small (usually the quantity of a
component).
◦ BOM 1 = lot size 1 - 100
◦ BOM 2 = lot size 101 – 999
EPEN - Black
Black
Cartridge
(Buy)
Band
January 2008
EPEN - Black
Etc.
Etc.
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Band
Black
Cartridge
(Make)
40
Bill of Material Master Data

Finished Good
Semi-finished
goods
Raw
Material
January 2008
Raw
Material
Raw
Material
Semi-finished
good
Raw
Material
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Raw
Material
41
Bill of Material Master Data
January 2008
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Bill of Material Master Data
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Bill of Material Master Data
BOM in SAP consists of a header section
and an item section.
Header section includes data that apply to
entire BOM, such as finished material
number, plant, usage, validity, status, and
base quantity.
The BOM is valid from the date specified in
the header.
Usage identifies the purpose for which the
BOM can be used. For example, 1 is for
production.
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Bill of Materials Master Data
Items section identifies all materials needed
to make finished goods or semi-finished
goods identified in the header.
Item category determines how material is
used in the BOM.
Data for each item are:
◦
◦
◦
material number,
description, quantity, and
item category.
January 2008
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Bill of Material Master Data
(item category)
L: Stock item
N: Non-stock item
R: Variable –size item
T: Text item used to include notes and
comments within the BOM. Notes may
explain how to use the material or identify
any unusual assembly requirement.
D: Document item used to include
document such as engineering drawings,
assembly instructions, and photographs.
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Bill of Material Master Data
K: Class item used in variant BOMs to
identify a class or group of items. A
variant BOM is used to create multiple
versions.
M: Intra material, or phantom items used
as a logical grouped set of materials that
could collectively be considered as a
single material. Phantom material is not
an actual material and is mostly
temporarily used during production
planning.
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Bill of Material Master Data
Where is the Bill Of Materials (BOM) used?
1. MRP uses BOM to determine dependent
requirements
2. Controlling uses BOM to calculate product
costs
3. Production uses BOM to issue the proper
quantities of components and raw materials
to the shop floor
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Work Center
Work center is a location where valueadded work needed to produce a material
is carried out.
 A work center can be a machine, a group
of machines, an entire production line, a
work area, or a person or group of people
who are responsible for completing
operations.
 A work center is a resource that can be
used for a variety of purposes and for
multiple processes.

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Work Center

Work center used to define capacities
◦
◦
◦
◦

Labor
Machine
Output
Emissions
Capacities used in
◦ Capacity requirements planning (CRP)
Detailed scheduling
 Costing

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Work Center

Assigned
◦ Cost center
◦ Human Resources (HR)
 Qualifications
 Positions
 People
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Work Center

Work Centers have multiple views of:
◦
◦
◦
◦
◦
◦
Basic data
Default values
Capacity overview
Scheduling
Cost center assignment
Technical data
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Work Center

Basic data section:
◦ Name, and description of the work center
◦ Person or group of people who are responsible for
completing operations
◦ Task list: a list of operations that are required to
accomplish a task. Operations are the specific tasks that
must be completed, such as drilling, cutting, assembling.
In production, a task list takes the form of a product
routing or a master recipe.
◦ Standard value key: used to assign standard or planned
values for operations, such as setup and execution time.
Companies use these values to calculate costs, execution
times, and capacity requirements.
January 2008
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Work Center
January 2008
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Work Center




Default Values: for operations performed at the
work center.
Control Keys: specify how an operation or a suboperation is scheduling, how costs will be
calculated, and how operations will confirmed
once they are completed in the work center.
Wage data: used by processes in human capital
management, such as payroll.
Standard value keys: identify the normal time
elements – the activities that consume time
associated with the work center. Typical time
elements are setup time, machine time, labor
time, and teardown time.
January 2008
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Work Center
January 2008
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Work Center



Available capacity defines how much work can be
performed at the work center.
A work center can include more than one
resource or capacity, such as labor and machine.
Scheduling basis determines the specific capacity
to be utilized for production.
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Work Center
January 2008
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Work Center
January 2008
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Work Center
A work center is associated with a cost center
which is a container for accumulation of costs.
Costs associated with operations completed in a
work center are calculated using formulas that
utilize the costs and standard values associated
with each activity type, for example, setup, labor,
and machine.
January 2008
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Work Center
January 2008
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Work Center Control Key







Scheduling
Determine capacity requirements
Inspection characteristics required
Confirmation required
Rework
Cost
Schedule external operations – std values
January 2008
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Product Routing
A list of tasks or operations that must be
performed to convert a material to a part,
component, or product.
 Routing is a sequence of operations which
detail the manufacture of a product
 Routings are used as a template for
production orders and run schedules as
well as a basis for product costing.

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Routing

Routing are used to determine:
◦
◦
◦
◦
◦
Operations
Work centers
Material components
Production resources and tools
Quality Checks
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Routing
January 2008
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Routing
January 2008
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Routing
January 2008
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Routing Use

Routings will be used in
◦
◦
◦
◦
Scheduling (dates, times)
Costing
Capacity planning
Production orders
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Routing
Standard
Sequence
Operation 10
Operation 20
Alternate
Sequence
Operation 10
Operation 20
Parallel
Sequence
Operation 10
Operation 20
Operation 25
Operation 25
Operation 30
Operation 30
Operation 30
Operation 40
January 2008
Operation 40
Operation 40
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Material Types Allowed In Production
 Multiple material types may be used in a
routing/BOM
◦
◦
◦
◦
Raw materials
Semi-finished product
Trading goods are allowed but not standard
Text or Reference materials common
January 2008
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Display Routing List
A collective report displaying the available
routings and the material allocations to
operations
 Four General Types

◦
◦
◦
◦
Operations Related
Component Related
PRT Related
General List (Operation Control Ticket
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Controlling Activities for Production

Used to perform internal cost allocation,
where activities by a cost center are
measured
◦ Labor time
◦ Machine hours
Output activities are valued
 Allocation of an activity type is always
made with the allocation cost element
created in activity type planning

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Activity Prices

Prices (costs) for planned activities
◦ Fixed or Variable
 Labor = $$/hour
 Machine = $/hour
 Overhead = %
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Product Group

Aggregate planning that group together
materials or other product groups
(Product Families)
◦ Manufacturing procedure
◦ Product design
◦ Market niche, etc.

Proportional Factors (Percentages for
components)
Product Groups
•
Multi-level or single-level
– A product group is multi-level if it contains
other product groups
– Lowest level in a product group hierarchy
always consists of materials.
– A product group is single-level if its members
are materials only
– A material or product group can be a member
of more than one owner product group
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Business Process Integration
PP
PP
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MRP Control Parameters

Environment
◦ Number range

Master Data
◦ Materials Requirements Planning controllers
◦ Float times

Planned Orders
◦ Conversion order type
◦ Dependant requirement availability
January 2008
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MRP Control Parameters
(continued)
 Planning run
◦ Bill of Material (BOM) selection
◦ External procurement
◦ Planning horizon

Availability Check
◦ Material
◦ Production Resource/Tool (PRT )
◦ Capacity

Scheduling Control Parameters
January 2008
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General Planning Parameters

Order Type Control Parameters
◦ Types of routings, BOM’s per order type:
manually or automatically
◦ Availability checking

Create Confirmation Parameters
◦ Reservations
◦ Status Updates

Define Valuation of Goods Received
◦ Moving Average Price Control evaluation
January 2008
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Material Master Planning
Parameters
Materials Requirements Planning views for
materials
 Work Scheduling views for manufactured
products

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Production and Planning
Master Data
PEN, Inc.
Pen Inc. Business Module II for
Selling Finished Goods by Production
Pre-Sales
Activity
Sales
Order
Delivery
Availability
Check
In
Inventory
NO
Purchase
Requisition
Accounts
Receivable
Inventory
Postings
General
Ledger
Accounts
Goods Issued
to Delivery
YES
Issue Goods
to Production
Order
NO
Billing
Plant or
Warehouse
Purchase
Order
Goods from
Production Order
Goods
Receipt
Invoice
Receipt
Accounts
Payable
Or
Planned
Order
Production
Order
Completion © SAP AG - University Alliances and
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Confirmation
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Activity Type/Price Planning
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Production Group
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Orders, orders, orders

Planned Order (planning)
◦ A request created in the planning run for a
material in the future (converts to either a
production or purchase order)

Production Order (execution)
◦ A request or instruction internally to produce a
specific product at a specific time

Purchase Order (execution)
◦ A request or instruction to a vendor for a
material or service at a specific time
Exercises:
212.
213.
214.
215.
216.
217.
246.
258.
265.
266.
267.
269.
270.
271.
272.
Create primary cost elements
Create secondary cost elements
Create cost element groups
Create statistical key figure
Create controlling document number ranges
Define controlling settlement document number ranges
Maintain plant parameters for production planning
Create vender master records centrally
Create bill of materials
Create person responsible for work center
Create work center location
Create capacity
Create activity type labor
Set activity prices
Create work center for production
Exercises:
273. Create finished products routing
274. Display routing list
275A. Create material master for production group
275B. Assign numbers for product group