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© 2009 SAP AG Production Planning & Execution (PP) SAP University Alliances Version 1.0 Authors Bret Wagner Stefan Weidner Stephen Tracy Product SAP ERP 6.0 Global Bike Inc. Level Beginner Focus Cross-functional integration Production Planning Production Execution
SAP ERP SAP University Alliances Page 1-2 © 2009 SAP AG 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 not Bike Set FG GlovesHelmet SaddleFrameEtc.Handle Bars MPS run MPS Items Non-MPS Items
SAP ERP SAP University Alliances Page 1-3 © 2009 SAP AG 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
SAP ERP SAP University Alliances Page 1-4 © 2009 SAP AG Demand-Independent vs. Dependent Independent Demand – Original source of the demand. Dependent Demand – Source of demand resides at another level. MPS Bike Set Planned Order MPS FG MRP Helmet Planned OrderPurchase Order MRP Brake Kit Purchase Order Dep Indep Single-Level Multi-Level
SAP ERP SAP University Alliances Page 1-5 © 2009 SAP AG Material Requirement Planning (MRP) MRP is used to ensure the availability of materials based on the need generated by MPS or the Demand Program -5 Logical Steps Net Requirements Calculation Lot Size Calculation Procurement Type Scheduling BOM Explosion
SAP ERP SAP University Alliances Page 1-6 © 2009 SAP AG Net Requirements Procurement Proposal Firmed Receipts Firmed Orders or Purchase Requisitions Requirements – Planned Ind. Req., Reservations Sales Orders, Etc. Stock Safety Stock Shortage
SAP ERP SAP University Alliances Page 1-7 © 2009 SAP AG 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
SAP ERP SAP University Alliances Page 1-8 © 2009 SAP AG Procurement Type External Procurement -Purchase Requisition -Purchase Order -Schedule Line Internal Procurement -Planned Order -Production Order -Process Order
SAP ERP SAP University Alliances Page 1-9 © 2009 SAP AG Multi-Level Scheduling Time Finished Product Assembly 1 Semi-Finished Good Raw Material Component Requirements Date Planned Order Purchase Requisition
SAP ERP SAP University Alliances Page 1-10 © 2009 SAP AG 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 VB – Reorder-Point Consumption Based VV – Forecast Based RP – Replenishment PD – MRP VSD – Seasonal MRP
SAP ERP SAP University Alliances Page 1-11 © 2009 SAP AG Consumption-Based Lot Size Replenishment Lead Time Safety Stock Reorder Point
SAP ERP SAP University Alliances Page 1-12 © 2009 SAP AG Output of MRP MRP Planned Order Convert to In-House Production Orders Process Orders Purchase Requisitions Purchase Orders Schedule Lines External Procurement
SAP ERP SAP University Alliances Page 1-13 © 2009 SAP AG 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
SAP ERP SAP University Alliances Page 1-14 © 2009 SAP AG Manufacturing Execution Process Schedule and Release Shop Floor Documents Goods Receipt Order Settlement Goods Issue Production Proposal (Planning/Other) Completion Confirmation Capacity Planning
SAP ERP SAP University Alliances Page 1-15 © 2009 SAP AG Production Order Production orders are used to control production operations and associated costs -Production Orders define the following Material produced Quantity Location Time line Work involved Resources used How to costs are settled
SAP ERP SAP University Alliances Page 1-16 © 2009 SAP AG Production Order BOM How What Quantity Time Line
SAP ERP SAP University Alliances Page 1-17 © 2009 SAP AG Schedule Calculates the production dates and capacity requirements for all operations within an order -Determines a Routing Operation specific time lines Material Consumption Points -Material Master Scheduling Margin Key (Floats) -Work Center Formulas Standard Inter-operation Times
SAP ERP SAP University Alliances Page 1-18 © 2009 SAP AG Release Two release processes -Header Level Entire order and all operations are released for processing, order is given a REL status -Operation Level Individual 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 status Automatic vs. Manual
SAP ERP SAP University Alliances Page 1-19 © 2009 SAP AG Availability Check Automatic check to determine whether the component, production resource tools, or capacities in an order are available -Can be automatic or manually executed -Determines availability on the required date Generates an availability log -Displays results of the check -Missing parts list -Reservations that could not be verified
SAP ERP SAP University Alliances Page 1-20 © 2009 SAP AG Schedule & Release The time between scheduling and releasing an order is used for company checks and any preparation needed for the processing of the order Once an order has been released it is ready for execution, we can at this time -Print shop floor documents -Execute goods movements -Accept confirmations against the order
SAP ERP SAP University Alliances Page 1-21 © 2009 SAP AG Shop Floor Documents Shop Floor Documents are printed upon release of the Production Order, examples would be: -Operation-based Lists Time Tickets, Confirmation Slips -Component-based Lists Material Withdrawal Slips, Pull List (consumption list) -PRT Lists Overview of PRT’s used and in which operations -Multi-Purpose Lists Operation Control Ticket, Object Overview
SAP ERP SAP University Alliances Page 1-22 © 2009 SAP AG Material Withdrawal When 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 components Upon release of the order (or operation) you can withdraw the reserved materials from inventory -Reservation is updated -Inventory is updated -Costs are assigned to the order as actual costs
SAP ERP SAP University Alliances Page 1-23 © 2009 SAP AG Confirmations Confirmations are used to monitor and track the progression of an order through its production cycle -Confirmation can be done at the operation or order level Exact confirmation shortly after completion of an operation is essential for realistic production planning and control Data that needs confirmation include -Quantities – yield, scrap, rework -Activity data – setup time, machine time -Dates – setup, processing, teardown started or finished -Personnel data – employee who carried out the operation, number of employee involved in the operation -Work center -Goods movements – planned and unplanned -Variance reasons -PRT usage
SAP ERP SAP University Alliances Page 1-24 © 2009 SAP AG Confirmations
SAP ERP SAP University Alliances Page 1-25 © 2009 SAP AG Goods Receipt Acceptance of the confirmed quantity of output from the production order into stock -Effects of the Goods Receipt Updates stock quantity Updates stock value Price stored for future valuation changes Production order is updated -Three documents are created Material document Accounting document Controlling document
SAP ERP SAP University Alliances Page 1-26 © 2009 SAP AG Order Settlement Consists of settling the actual costs incurred in the order to one or more receiver cost objects -Receivers could include: a material, a cost center, an internal order, a sales order, a project, a network, a fixed asset Parameters for Order Settlement -Settlement Profile Specifics the receivers, distributions rules and method -Settlement Structure Determines how the debit cost elements are assigned to the settlement cost elements Settlement Rule -Automatically assigned on creation of order, the parameters are used to define this rule Has one or more distribution rules assigned to it Distribution rules defines: cost receiver, settlement share, settlement type
SAP ERP SAP University Alliances Page 1-27 © 2009 SAP AG Order Settlement Settling a Production Order to Stock -Debt posting is made to the Production Order with the value of the material -Difference between the debt posting and credit posting is posted to a price difference account MaterialProd. OrderPrice Diff **Material Price determine by the quantity produced times the Standard Price in the Material Master.
SAP ERP SAP University Alliances Page 1-28 © 2009 SAP AG Order Settlement Costs analyzed -Primary Materials External Processing -Secondary Production, Material, and Administrative Overhead Labor Cost Analysis Reporting -Calculate and analyze planned costs, target costs, and actual costs of the production order. -Calculate and analyze variances
SAP ERP SAP University Alliances Page 1-29 © 2009 SAP AG Order Settlement
SAP ERP SAP University Alliances Page 1-30 © 2009 SAP AG Order Status
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