1. Production Planning Controls Configuration and Reporting
Session Code: 506
Heather J. Stewart Chris J. Wardak Rohit Ravindran
San Francisco, CA New York, NY Stamford, CT
Information Risk Management

2. Content Overview Background Organization Structure Basic Data Risks
Long Range Production Planning
Sales & Operation Plan (SOP)
Demand Management
Master Production Schedule (MPS)
Medium Range Production Planning
Capacity Plan
Material Requirements Planning (MRP)
Short Range Production Planning
Production Order
Links To Other Modules

3. Background Purpose of Controls
Used to mitigate risk
SAP is a large and complex package
Introduces a high degree of risk
Impacts security and internal controls environment
To mitigate the risk, SAP offers the following features:
Configurable Controls (Preventive)
Control Reports (Detective)
Security Design: Segregation of Duties (SoD)
Need to be effective and efficient
Build into each phase of project life cycle
Regulatory Compliance
Sarbanes-Oxley Act (Section 404)

4. Background Design, Implement & Assess Controls
KPMG Methodology
Management of Information Technology Risks
Framework to design effective controls/security
Re-engineering business processes
Implementing new technologies (e.g., SAP R/3)
Potential risk during an upgrade
Based on our experience with clients
Implementing/Reviewing SAP controls/security
Requires experience in
Auditing
Security
Information Systems
SAP

5. Production Planning Organization Structure
No dedicated organization structure: PP component
Uses Logistics organization structure
Plant
Valuation of materials will typically be at a Plant Level (OX14)

6. Production Planning Basic Data
Material Master Record
Bills of Material/Recipe
Work Center/Resource
Routing
Line Design
Rough-cut Planning Profile
Production Resources and Tools
CAPP Standard Values (Computer Aided Process Planning)
Standard Trigger Points
Engineering Change Management
Engineering Workbench

7. Basic Data Material Master
Use in Production Planning and Control
Material Requirements Planning
Scheduling
Work Scheduling
Certain Material Master Record views are relevant
Basic Data 1,2
MRP 1-4
Costing 1,2
Forecasting
Work Scheduling (for Semi-finished and Finished Products)
Quality Management
Security Design: Restrict access to a view (Maint. Status)

8. Material Master Configurable Controls
Assigning MRP Type/Planning Strategy to Material (MM03)

9. Material Master Configurable Controls
Field Status (OMSR, OMS9)

10. Basic Data Bills of Material (BOM)
List of components that make up a product (CS12)
Contains the name, quantity, and unit of measure
Process Industry – Recipe

11. Bills of Material (BOM) Configurable Controls
BOM - Define Modification Parameters (OS27)
Define Valid Material Types in BOM (OICG)
BOM - Define Default Values (OS28)

12. Bills of Material (BOM) Configurable Controls
Number Range for Standard BOM (CS91)
BOM – Field Selection (OPFA)

13. Bills of Material (BOM) Control Reports
Change Documents for Standard BOM (CS81)

14. Basic Data Work Center Location for operation/activity
Specifies position of machine/people
Determines costs, capacities and dates for operations
Process Industry – Resource
Assignment of Work Center to Cost Center (Link to CO)

15. Basic Data Routing Sequence of Work Centers to produce material
Standard time for execution of an operation
Lead Time Scheduling
Capacity Planning
Product Costing
Process Industry - Master Recipe with material list

16. Routing Configurable Controls
Control Keys for Operations (OP00, OPJ8)

17. Production Planning An Overview

18. Production Planning Risks
Inaccurate basic data
Incorrect transaction processing
Material Master (MRP View)
Bills of Material
Work Center
Routing
Ineffective/Inefficient Supply Chain Process
Upstream: Excess vendor orders, production (Links to APO)
Downstream:Inability to meet customer req’ments (Links to CRM)
Overstocking: Storage costs, potential obsolescence
Stock-outs: Stoppage of assembly line, Customer dissatisfaction
Lack of timely goods receipts/issues
Misstated inventory and material records
Miscalculation of Work-in-process cost

19. Long Range Production Plan Sales & Operations Plan (SOP)
Flexible forecasting and planning tool
Based on:
Historical
Existing
Estimated future data
Planned qty is passed to Demand Mgmt.

20. Sales & Operations Plan (SOP) Configurable Controls
Activating Plant for SOP (MC60)
Maintain Checking Groups for Availability Check (OVZ2)

21. Sales & Operations Plan (SOP) Configurable Controls
Availability Check (OMB1)

22. Long Range Production Plan Demand Management
Business activity that places demand on capacity
Includes:
Forecasting Customer Demand
Order Entry
Order Promising (Availability Check, ATP – SD)
Inter-Plant Demand
Inter-Company Demand
Parts & Accessories Requirements
Demand program uses:
Planned Independent Requirements
Customer Requirements

23. Demand Management Configurable Controls
Allocate Requirements Class to Requirements Type (OMP1)
Requirements Type: Maintenance of Messages (OMPJ)

24. Demand Management Configurable Controls
Define Planning Strategy (OPPS)

25. Long Range Production Plan Master Production Scheduling
MPS should be performed for critical items such as:
Finished Products
Assemblies
Raw Materials
Obtained by disaggregating the production plan
Planned with extra attention to ensure accuracy
MPS is the primary input to MRP

26. Master Production Scheduling Configurable Controls
MRP Types for Master Production Scheduling (OMDQ)

27. Medium Range Production Plan Capacity Planning
Supports planning to ensure economic use of resources
Long-term, rough-cut planning
Medium-term planning
Short-term, detailed planning
Capacity Evaluation
Analyse load at a work centre level based on MPS
Compare capacity available against requirements
Capacity Levelling
To optimize capacity commitment (adherence to dates)
Ensure selection of appropriate resources

28. Capacity Plan Configurable Controls
Capacity Leveling: Overall Profiles (OPD0)
Capacity Leveling: Selection Profiles
(OPD1)

29. Capacity Plan Configurable Controls and Reporting
Scheduling Types for Capacity Planning (OPJN)
Capacity Planning Evaluation (CM01)

30. Medium Range Production Plan Material Requirements Planning
MRP is utilized to procure for
Production/Process Order
Project
Sales and Distribution (Customer Order)

31. Material Requirements Planning
Consumption-based planning
Reorder point
Safety stock
MRP
Sales orders
Planned independent requirements
Dependent requirements
Automatic MRP Run
Total planning (at plant level for all materials)
Single-item planning (for a material/product group)
Exception message for MRP controller
If material is ordered but not delivered on time
If stock is below safety level

32. Material Requirements Planning Configurable Controls
Activate requirements planning indicator for plants (OMDU)
MRP Planning Horizon: By Plant or MRP Group (OMDX)

33. Material Requirements Planning Configurable Controls
Plant Parameters for MRP (OPQQ)
Error Handling in Planning Run

34. Material Requirements Planning Configurable Controls
Exception Messages (OPP1)

35. Material Requirements Planning Control Reports
Display Stock Requirement Situation (T-Code: MD04)
MRP List – Collective Display (MD06)
Missing Parts Info System (CO24)
MRP Evaluation (MD45)
Cross Plant Evaluation (MD48)
Maintain Number Ranges for MRP (MD90)

36. Short Range Production Plan Production Order
A production order specifies
Material to be produced
Production dates
Work Center to dispatch capacity load
Production costs
Order status
Created (CRTD)
Released (REL)
Delivered (DLV)
Closed (CLSD)
Technically Complete (TECO)
Should have a zero balance

37. Production Order Configurable Controls
Availability Check during Order Release (OPJK)
Account Assignment Category (OPJP)

38. Production Order Control Reports
Automatic Goods Receipt: Error Handling (COGI)
Production Order Overview (CO26)
Shop Floor Info System (MCPO)
WIP/Results Analysis (KOB8)
Analyze Production Orders by Controlling Area (KKBC_ORD)
Target versus Actuals

39. Production Planning Links To Other Modules
Production Order Settlement Profile OK07)

40. Production Planning Links To Other Modules
Account Determination (FI)
Based on Procedures
Report: RM07C030

41. Production Planning Links To Other Modules
Posting Rules in WIP and Results Analysis (CO) (OKG8)

42. Questions? e-mail address Heather Stewart hjstewart@kpmg.com
Chris Wardak
Rohit Ravindran

43. Thank you for attending!
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