Enterprise Wide Information Systems
Manufacturing Planning
and Execution (cont.)
Instructor: Richard W. Vawter
University of
Southern California
Topics
 Organizational Elements and Master Data
 Business Process for Manufacturing Planning and
Execution
 Reporting and Analysis
University of
Southern California
Manufacturing Planning and Execution
 Manufacturing Planning is the process of using
forecasts and customer demand to create production
and procurement schedules for finished products and
component materials.
 Manufacturing Execution is the process of producing
finished products and component materials and
recording all shop floor activities and inventory
movements.
University of
Southern California
Manufacturing Planning and Execution
 The overall manufacturing planning process comprises:

Forecast values and requirements are first determined

Master schedule items are planned

Material requirements planning is then calculated
 The overall manufacturing execution comprises:

Production orders are first released

Materials are issued next

Completion confirmations are then performed

Goods are finally received into stock
 The manufacturing process affects capacity, costing,
inventory, reporting, and analysis
University of
Southern California
Five Phases of the Manufacturing Processes
1.
SOP
Sales Info
System
Forecasting
5.
2.
Sales & Oper
Planning
Production
Order exec.
Procurement
Demand
Mgmt
3.
MPS
4.
MRP
Manufacturing
Execution
Order
Settlement
CO/PA
Inventory
Costing
Capacity
Production Master Data
Reporting and Analysis
Planning process
Execution process
University of
Southern California
Sales and Operations Planning (Phase 1)
The forecast values and/or requirements from customer order
management, sales information system, and controlling are
inputs to the sales and operations planning phase.
Planning process
Execution process
SOP
Forecasting
Sales & Oper
Planning
Demand
Mgmt
MPS
MRP
Manufacturing
Execution
Order
Settlement
University of
Southern California
Sales and Operations Planning (cont.)
 The main steps in sales and operations planning are:
1. Creating a sales and production plan
2. De-aggregating the planning values
3. Transferring the planning values to demand management
 There are four ways to create a production plan:

Based on sales

Based on target inventory

Based on current days on sales supply

Based on running down the inventory to zero
University of
Southern California
Demand Management (Phase 2)
Demand Management links top-level requirements planning
(SOP) with materials planning (MPS and MRP).
Planning process
Execution process
SOP
Forecasting
Sales & Oper
Planning
Demand
Mgmt
MPS
MRP
Manufacturing
Execution
Order
Settlement
University of
Southern California
Demand Management (cont.)
 Demand Management...
1. Determines the requirements dates and quantities for important
assemblies and
2. Specifies the strategies for planning and producing or
procuring finished products.
 The result of Demand Management is the demand
program.
University of
Southern California
Demand Management (cont.)
Requirements Input:
Maintain
planned
independent
requirements
Copy from
sales plan
Copy from
production
plan
Copy from
forecast
Maintain
customer
independent
requirements
Demand program
MPS or MRP
University of
Southern California
Master Production Scheduling (Phase 3)
The independent requirements from Demand Management
initiate the master scheduling process for process for MPS
designated items. The master production schedule is the
anticipated build schedule.
Planning process
Execution process
SOP
Forecasting
Sales & Oper
Planning
Demand
Mgmt
MPS
MRP
Manufacturing
Execution
Order
Settlement
University of
Southern California
MPS Drives MRP
Motorcycle
Run MPS at
this level
Power
Train
Run MRP at
this level
Motor
Independent Requirement
Gear
Exhaust
Chassis
Front
Wheel
Rear
Wheel
Frame
Brake
University of
Southern California
MPS Run
MPS creates planned orders for top-level items to satisfy
independent requirements from Demand Management.
Planned order for the
motorcycle creates dependent
requirements for all components
Independent Requirement
Power Train
Motorcycle
There are no planned
orders at this level, only
dependent requirements.
Chassis
University of
Southern California
Material Requirements Planning (Phase 4)
In material requirements planning (MRP), the system calculates
the net requirements while considering available warehouse
stock and scheduled receipts from purchasing and production.
Planning process
Execution process
SOP
Forecasting
Sales & Oper
Planning
Demand
Mgmt
MPS
MRP
Manufacturing
Execution
Order
Settlement
University of
Southern California
Material Requirements Planning (cont.)
 In material requirements planning (MRP), the system
calculates the net requirements while considering
available warehouse stock and scheduled receipts
from purchasing and production.
 MRP requires exact requirement quantities, which
allows you to work with particularly low safety stocks.
 The output of MRP is either a planned production
order, a purchase requisition, or a planned purchase
order.
Note: The purpose of MPS and MRP is to guarantee material
availability !
University of
Southern California
Material Requirements Planning (cont.)
Converting Planned Orders
MPS
Planned
Order
MRP
?
Conversion depends on the
requirement type and the
special procurement key.
Purchase
Order
Production
Order
Purchase
Requisition
University of
Southern California
Summary of the Four Planning Phases of the
Manufacturing Process.
 Each step in the manufacturing planning process
corresponds to a different material planning level.
 Each planning level provides input to the next level.
CO/PA
OK?
SOP
OK?
MPS
OK?
MRP
OK?
Forecasting (Profitability Analysis)
- Revenue forecasting
- Sales forecasting (quantities)
Sales and Operations Planning
- Sales plan
- Production plan
Master Production Scheduling
- Demand program
- Adjusted master plan
Material Requirements Planning
- Dependent requirements
- Planned production
- Procurement plan
Planning Levels
Co. Region 1
Co. Region 2
Product group
Product 1
Product 2
Assembly of 1
Assembly of 2
Parts for 1
Parts for 2
Feedback / Replanning
Planning Steps
Manufacturing Execution
Manufacturing Execution is initiated by releasing each production
order to the shop floor.
Planning process
Execution process
SOP
Forecasting
Sales & Oper
Planning
Demand
Mgmt
MPS
MRP
Manufacturing
Execution
Order
Settlement
Execution Phase
University of
Southern California
Production Orders: Contents
1999
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
When to Execute
Raw Materials
Quantity of Finished
Goods
Production
Order
Production Costs
Incurred
Resources
University of
Southern California
Production Order Execution Process
Production orders go through a series of steps:
Planning
Planned
Order
MRP
Purchase
Requisition
Execution
Production
Order
Order
Release
Goods
Issue
Completion
Confirmation
Goods
Receipt
Order
Settlement
University of
Southern California
Topics
 Organizational Elements and Master Data
 Business Process for Manufacturing Planning and
Execution
 Reporting and Analysis
University of
Southern California
Standard Reporting
 The standard production reports and analyses provide
an overview of production transaction data.
 Examples of standard reports and lists displays for
each category include:

Master Data

Production Control

Sales and Operations Planning

Capacity Planning

Master Planning

Kanban

Material Requirements
Planning

Product Costing
University of
Southern California
Logistics Information System (LIS)
LIS Planning functionality is combined with sales and
operations planning (SOP) to form one central planning
and forecasting tool.
Logistics Information Systems
Sales
Information
System
Purchasing
Information
System
Sales and
Distribution
(SD)
Inventory
Controlling
Materials
Management
(MM)
Shop Floor
Information
System
Production
Planning
(PP)
Maintenance
Information
System
Plant
Maintenance
(PM)
Quality
Management
Information
System
Quality
Management
(QM)
SAP’s Logistics Processing Modules
University of
Southern California
In Summary:
 Manufacturing Planning is the process of using
forecasts and customer demand to create production
and procurement schedules for finished products and
component materials.
 Manufacturing Execution is the process of producing
finished products and component materials and
recording all shop floor activities and inventory
movements.
 The output of MRP can be planned orders or purchase
requisitions. Planned orders are converted into either
production orders or purchase requisitions.
University of
Southern California
In Summary (cont.)
 The reporting tools used in the manufacturing
environment are:

Standard Reporting - e.g. Lists

Logistics Information Systems - e.g. Shop floor information
systems
University of
Southern California