Presentation on theme: "Production Planning & Execution (PP)"— Presentation transcript:
1 Production Planning & Execution (PP) SAP University AlliancesVersion 1.0Authors Bret WagnerStefan Weidner Stephen TracyProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationProduction PlanningProduction Execution
2 Master Production Scheduling (MPS) MPS allows a company to distinguish planning methods between materials that have a strong influence on profit or use critical resources and those that do notMPS runMPS ItemsBike SetNon-MPS ItemsHelmetFGGlovesUsing MPS you can carefully plan important parts or bottleneck parts in a separate planning runat the highest BOM level before the planning results have an effect on all of the production levels.FrameHandle BarsSaddleEtc.
3 Material Requirement Planning (MRP) In MRP, the system calculates the net requirements while considering available warehouse stock and scheduled receipts from purchasing and productionDuring MRP, all levels of the bill of material are plannedThe output of MRP is a detailed production and/or purchasing planDetailed planning levelPrimary FunctionsMonitor inventory stocksDetermine material needsQuantityTimingGenerate purchase or production ordersThe central role of MRP is to monitor stocks and in particular, to automatically create procurement proposals for purchasing and production (planned orders, purchase requisitions or delivery schedules). This target is achieved by using various materials planning methods which each cover different procedures.Consumption-based planning is based on past consumption values and uses the forecast or other statistical procedures to determine future requirements. The procedures in consumption-based planning do not refer to the master production schedule. That is, the net requirements calculation is not triggered either by planned independent requirements or dependent requirement. Instead, it is triggered when stock levels fall below a predefined reorder point or by forecast requirements calculated using past consumption values.
4 Demand-Independent vs. Dependent Independent Demand – Original source of the demand.Dependent Demand – Source of demand resides at another level.IndepSingle-LevelMulti-LevelMPSBike SetPlanned OrderDepDepMPSFGMRPHelmetPlanned OrderPurchase OrderDepMRPBrake KitPurchase Order
5 Material Requirement Planning (MRP) MRP is used to ensure the availability of materials based on the need generated by MPS or the Demand Program5 Logical StepsNet Requirements CalculationLot Size CalculationProcurement TypeSchedulingBOM Explosion
7 Lot sizing Static Periodic Optimum Based on fixed values in the Material MasterPeriodicGroups net requirements together from multiple periodsOptimumCalculates the optimum lot size for a several periods of net requirementsThe lot-size calculation is carried out in MRP. In the net requirements calculation, the system determines material shortages for each requirement date. These shortage quantities must be covered by receipt elements. The system then calculates the quantities required for the receipts in the planning run in the procurement quantity calculation.In static lot-sizing procedures, the procurement quantity is calculated exclusively by means of the quantity specifications entered in the material master.FeaturesThe following static lot-sizing procedures are available:Lot-for-lot order quantityFixed lot sizeFixed lot size with splitting and overlappingReplenishment up to maximum stock levelIn period lot-sizing procedures, the system groups several requirements within a time interval together to form a lot.You can define the following periods:daysweeksmonthsperiods of flexible length equal to posting periodsfreely definable periods according to a planning calendarThe system can interpret the period start of the planning calendar as the availability date or as the delivery date.In static and period lot-sizing procedures, the costs resulting from stock keeping, from the setup procedures or from purchasing are not taken into consideration. The aim of optimum lot-sizing procedures, on the other hand, is to group shortages together in such a way that costs are minimized. These costs include lot size independent costs (setup or order costs) and storage costs.
8 Procurement Type External Procurement Internal Procurement Purchase RequisitionPurchase OrderSchedule LineInternal ProcurementPlanned OrderProduction OrderProcess Order
10 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 MasterMRPVB – Reorder-PointConsumption BasedVV – Forecast BasedRP – ReplenishmentPD – MRPVSD – Seasonal MRP
11 Replenishment Lead Time Consumption-BasedLot SizeReplenishment Lead TimeSafety StockReorder Point
12 Output of MRP MRP In-House Production External Procurement Planned OrderConvert toProductionOrdersPurchaseRequisitionsProcessOrdersPurchaseOrdersScheduleLines
13 Planned Order (planning) Orders, orders, ordersPlanned 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 timePurchase Order (execution)A request or instruction to a vendor for a material or service at a specific timeA request or instruction from a purchasing organization to a vendor (external supplier) or a plant to deliver a quantity of material or to perform services at a certain point in time.
14 Manufacturing Execution Process CapacityPlanningScheduleand ReleaseProductionProposal(Planning/Other)Shop FloorDocumentsOrder SettlementGoodsIssueGoodsReceiptCompletionConfirmation
15 Production OrderProduction orders are used to control production operations and associated costsProduction Orders define the followingMaterial producedQuantityLocationTime lineWork involvedResources usedHow to costs are settled
17 ScheduleCalculates the production dates and capacity requirements for all operations within an orderDetermines a RoutingOperation specific time linesMaterial Consumption PointsMaterial MasterScheduling Margin Key (Floats)Work CenterFormulasStandard Inter-operation Times
18 Release Two release processes Automatic vs. Manual Header Level Entire order and all operations are released for processing, order is given a REL statusOperation LevelIndividual operations within an order are released, not until the last operation is released does the order obtains a REL status until then it is in a PREL statusAutomatic vs. Manual
19 Generates an availability log Availability CheckAutomatic check to determine whether the component, production resource tools, or capacities in an order are availableCan be automatic or manually executedDetermines availability on the required dateGenerates an availability logDisplays results of the checkMissing parts listReservations that could not be verified
20 Schedule & ReleaseThe time between scheduling and releasing an order is used for company checks and any preparation needed for the processing of the orderOnce an order has been released it is ready for execution, we can at this timePrint shop floor documentsExecute goods movementsAccept confirmations against the order
21 Shop Floor DocumentsShop Floor Documents are printed upon release of the Production Order, examples would be:Operation-based ListsTime Tickets, Confirmation SlipsComponent-based ListsMaterial Withdrawal Slips, Pull List (consumption list)PRT ListsOverview of PRT’s used and in which operationsMulti-Purpose ListsOperation Control Ticket, Object OverviewList TypesThe SAP system differentiates between the following types of lists:Operation-based lists, for example, time tickets, confirmation slipsComponent-based lists, for example Pull List, material withdrawal slipsPRT lists, for example, PRT overviewMulti-purpose lists, for example, object overview, operation control ticketThis type of list can contain information about operations or production resources and tools, for example.The lists that the system generates and prints refer to all operations, suboperations, components, and production tool and resources contained in a production order.
22 Material WithdrawalWhen a production order is created it references a BOM to determine the necessary components to produce the material, it then places a reservation on each of the componentsUpon release of the order (or operation) you can withdraw the reserved materials from inventoryReservation is updatedInventory is updatedCosts are assigned to the order as actual costsYou can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.
23 Data that needs confirmation include ConfirmationsConfirmations are used to monitor and track the progression of an order through its production cycleConfirmation can be done at the operation or order levelExact confirmation shortly after completion of an operation is essential for realistic production planning and controlData that needs confirmation includeQuantities – yield, scrap, reworkActivity data – setup time, machine timeDates – setup, processing, teardown started or finishedPersonnel data – employee who carried out the operation, number of employee involved in the operationWork centerGoods movements – planned and unplannedVariance reasonsPRT usage
25 Goods ReceiptAcceptance of the confirmed quantity of output from the production order into stockEffects of the Goods ReceiptUpdates stock quantityUpdates stock valuePrice stored for future valuation changesProduction order is updatedThree documents are createdMaterial documentAccounting documentControlling document
26 Parameters for Order Settlement Consists of settling the actual costs incurred in the order to one or more receiver cost objectsReceivers could include: a material, a cost center, an internal order, a sales order, a project, a network, a fixed assetParameters for Order SettlementSettlement ProfileSpecifics the receivers, distributions rules and methodSettlement StructureDetermines how the debit cost elements are assigned to the settlement cost elementsSettlement RuleAutomatically assigned on creation of order, the parameters are used to define this ruleHas one or more distribution rules assigned to itDistribution rules defines: cost receiver, settlement share, settlement type
27 Settling a Production Order to Stock Order SettlementSettling a Production Order to StockDebt posting is made to the Production Order with the value of the materialDifference between the debt posting and credit posting is posted to a price difference accountMaterialProd. OrderPrice Diff.Since production costs were higher than planned, the additional expenditure negatively affects the operating profit. This means that the profit decreases by the amount by which the actual costs charged to the production order exceed the standard price.The actual costs charged to the production order affect net income just as the posting of the inventory change at the time of the goods receipt. Since the actual expense was 20 higher than expected, the operating profit is 200 lower than it would have been if production had been at standard cost.8010020**Material Price determine by the quantity produced times the Standard Price in the Material Master.
28 Cost Analysis Reporting Order SettlementCosts analyzedPrimaryMaterialsExternal ProcessingSecondaryProduction, Material, and Administrative OverheadLaborCost Analysis ReportingCalculate and analyze planned costs, target costs, and actual costs of the production order.Calculate and analyze variancesCalculate and analyze planned costs, target costs, and actual costs of production orders and process ordersCalculate or update the work-in-process inventory and the finished goods inventoryCalculate and analyze variancesTransfer data to Financial Accounting (FI)Transfer data to Profitability Analysis (CO-PA)Transfer data to Profit Center Accounting (EC-PCA)Transfer data to Actual Costing / Material Ledger (CO-PC-ACT)
29 Order Settlement– = 83.0083.00 is the difference between what it cost to make the product and what we value it at in the Material Master.Accounting 1 Screen Material Master=So we make it cheaper then we value the product.