Module 10
Setup
for
Production
Plant Parameters
Configuring the SAP R/3 system for production is one
of the most challenging tasks in R/3 configuration
CO will not be configured for production in this
exercise
Configuring the CO module to accurately track
manufacturing costs is extremely challenging
Requires balance between accurate cost
allocations and data collection requirements. To
much detail can make the SAP system difficult to
use, which means it is not likely to be used
correctly.
Planning vs. Scheduling
Configuring the production planning (PP)
module is complicated by the fact that planning
and scheduling are two separate, but highly
related, activities.
Planning, typically implemented via Material
Requirements Planning (MRP), is used to
create planned orders and purchase
requisitions—suggestions by the SAP system
as to what should be produced on the shop
floor or procured from suppliers (vendors),
respectively.
Planning vs. Scheduling
Scheduling is the process of converting planned
orders into production orders and purchase
requisitions into purchase orders, then
managing these orders in detail.
Planned Scheduled
Internal Planned Production
Procurement Order Order
External Purchase Purchase
Procurement Requisition Order
Floats
In both planning and scheduling, floats can be
added to planning times to provide for a buffer
against uncertainty. The production lead time
for a material might be 12 days. Of that 12
days, 10 days might be the expected
production time with a float of 2 days added to
allow for production disruptions.
Floats are organized in the SAP R/3 system
using Schedule Margin Keys.
Floats
Four floats are defined in a schedule/margin
key:
Opening period: Workdays prior to order start.
Float Before Production: Workdays between order
start and scheduled start.
Float after Production: Workdays between order
due date and scheduled finish date.
Release Period: Workdays in release period.
Planning Parameters
The MRP 2 view of the material master gives:
In-house production time
Goods Receipt (GR) processing time
Schedule Margin Key, which gives:
Opening period
Float Before Production
Float After Production
Release Period
Schedule Margin Material Master
Key MRP 2 View
Planning Parameters
MRP
Planning, which is done by the MRP process, needs:
In-house production time
GR processing time
Opening Period
The MRP process will determine the order start and
order finish date, as well as the planned opening date
The planned opening date can be used by planners to
convert planned orders to production orders by groups
rather than individually. The MRP planner can convert
groups of planned orders based on the planned
opening date.
Material Requirements Planning
Demand
Opening GR
In-house production
Period process
Opening Date
Planned
Order Start
Order Finish
for Planning
Available
Example in SAP
Available for Planning Demand (Independent Requirement)
Order start
Planned Order Detail Order finish
Planned opening date
Production Order Scheduling
The float before production and float are used to
calculated the scheduled start and scheduled finish
dates when the planned order is converted into a
production order.
The float before production is a start float. It has two
functions:
It can compensate for delays in the staging of
the material components.
If there is a capacity bottleneck at the work
centers involved, the production dates can be
moved forward in the future. In this way it serves
as a float for capacity leveling.
Production Order Scheduling
The float after production is a finish float. It is
used to compensate for unexpected
disturbances in the production process, so that
they do not delay the scheduled finish date.
The system calculates the scheduled start of
the order by adding the float before production
to the order start date. It calculates the
scheduled finish of the order by subtracting
the float after production from the order finish
date.
Production Order Scheduling
In-house production
Float before Float after
Production Production
Release
Period
Release
Scheduled
Order Start
Start
Scheduled
Finish
Scheduled
Order Finish
Production Order Scheduling
Note how the float before production and float
after production are used to calculate the
scheduled start and scheduled finish time.
The in-house production time specified on the
MRP 2 View of the material master should be
the sum of the expected processing time plus
the float before production plus the float after
production.
Release Period
The SAP system can be configured so that a
production order is released as soon as it is created.
This means that the production facility can begin
production.
The SAP system can also be configured to make the
release of the production order a separate step. In this
case, the SAP system deducts the number of days
defined in the release period from the scheduled start
of the order to determine the scheduled release date
of the order. This date can be used by the production
scheduler to perform collective release, i.e., release a
group of production orders based on the scheduled
release date.
Number Ranges
Every transaction in SAP is numbered. Some
companies are very interested in the format of
numbers assigned to different objects. The
SAP R/3 system gives the user the ability to
define different number ranges (number of
digits, numeric or alphanumeric, starting
number, etc.) and then assign them to different
objects.
Number Ranges
In defining plant parameters, number ranges
must be defined and assigned to:
Planned orders
Reservations/Dependent requirements
Purchase requisitions
MRP lists
Simulated dependent requirement
MRP Controllers
In the SAP system, the person designated to
manage the production and inventory levels for
a material is called the MRP Controller.
Each material can be assigned to a particular
MRP Controller.
The MRP Controller is used to select materials
for reports like the Stock/requirements list.
The Stock/requirements list, is an interactive
transaction for managing the production and
inventory levels for a material
Production Scheduling Profile
The production scheduling profile determines
how production scheduling is to be carried out
in the plant. Settings in the production
scheduling profile control things like:
When production orders are released for
production (upon creation, for example).
When production orders are scheduled (on
release, for example).
Production Scheduler
Similar to the MRP Controller, a Production
Scheduler must be defined in the SAP system
to control detailed production scheduling for a
material. A production scheduling profile is
assigned to the Production Scheduler, and the
Production Schedule is defined in the Work
Scheduling view of the Material Master.
Material Availability Check
When the MRP system creates a planned
order, it can also check whether the
components and sub-assemblies required to
complete the planned order will be available.
Bill of Material
The Bill of Material (BOM) defines the
relationship between materials that make up
an assembled product:
It is the “recipe” for ## NRG–A
(case)
a material
## Dough NRG–A
(lb)
## Oats ## Wheat Germ ## Cinnamon ## Nutmeg
(lb) (lb) (lb) (lb)
## Cloves ## Canola ## Honey ## Carob Chips ## Raisins ## Vit/Min Powder
(lb) (gal) (gal) (lb) (lb) (lb)
Routings
Routings define the relationship between a material
and the sequence of workcenters (operations) that are
required to produce the material. Routings determine:
The operations (work steps) to be carried out during
production of a material
The activities to be performed in the operations as a
basis for determining dates (start, finish, available,
etc.), capacity requirements, and costs for a
production order
The use of materials during production
The use of work centers
The quality checks to be carried out during
production
BOM and Routing Selection ID
Different routings and BOMs may be defined
for a material. These routings may be
applicable for different production quantities,
for example. When products change, the BOM
and/or routing may change, so BOMs and
routings can have validity periods to define
when the changes occur.
BOM and Routing Selection IDs determine
how the SAP system will find the correct BOM
and routing for a production order.
BOM and Routing Selection ID
With the routing selection ID 01, when an order is
created, the system looks for a routing that is valid for
the date the production order is being created and the
lot size of the production order. If more than one
routing is valid for a production order, the SAP
system selects the first valid routing.
Similarly, with BOM selection ID 01, the system looks
for a BOM for the material with the correct status
(active), lot size and validity date.
Creating Production Orders
Manual MRP Automatic
Copy Routing
Read in First Copy Bill of Material
Forms Backbone
Generates Lead Time Scheduling
Material and/or Capacity Availability Checks
Save Order
Planning Horizon
The planning horizon (measured in days)
determines how far in the future the MRP
planning process looks to create production
orders.
A production scheduler can structure the MRP
process to create production orders for all
demand (forecast demand, customer orders)
recorded in the system, or only that demand
that is within the number of days in the
planning horizon into the future.
Production Order Availability Checks
For standard production order type PP01, availability
checks can be specified on a plant-by-plant basis.
Availability checks can be performed for:
Materials: availability of component materials
Production Resources and Tools (PRT)
Production Capacity
Checks can be specified to be determined when a
production order is created, a production order is
released, or both times.
Production Order Availability Checks
If availability checks are specified, then production
orders cannot be created if the availability check is not
passed.
For example, if a material availability check is specified
at order creation, then a production order for a batch of
snack bar dough cannot be created unless all raw
materials (oats, wheat germ, cinnamon, etc. are in
stock in sufficient quantities. ## Dough NRG–A
(lb)
## Oats ## Wheat Germ ## Cinnamon ## Nutmeg
(lb) (lb) (lb) (lb)
## Cloves ## Canola ## Honey ## Carob Chips ## Raisins ## Vit/Min Powder
(lb) (gal) (gal) (lb) (lb) (lb)
Forward and Backward Scheduling
Two basic methods of production order
scheduling are available
Forward Scheduling, where a production
order is scheduled to start immediately and
finish as soon as possible
Backward Scheduling, where the scheduling
begins at the due date and works backward.
Most students use backward scheduling
Backward scheduling can lead to
problems if there is not enough float time
in the schedule to account for disruptions
Backward Scheduling
Scheduled Scheduled Planned
Today Planned Start Start Finish Finish
Float after
production
In-house production time
Float before
production
Forward Scheduling
Today Scheduled Scheduled Planned
Planned Start Start Finish Finish
Float after
production
In-house production time
Float before
production
Material Master Views for Production
The MRP views in the Material Master define a
range of parameters for planning.
There are four MRP views (MRP 1, MRP 2,
MRP 3 and MRP 4) that contain Production
Planning Parameters
Production scheduling parameters are entered
in the Work Scheduling View
MRP 1 View
MRP Type: How the material is planned
PD—Using MRP logic
VB—Consumption-based planning
Lot Size: How many units to make in a
production order
FX—Fixed, make the fixed lot size
EX—Lot-for-lot, make exactly the
quantity required
MRP Controller: Controller responsible for
this material
MRP 2 View
In-house production: Number of days
required to produce the material
GR processing time: Number of days
required to process the material
after production before it can be
used. May allow for quality
inspection, for example.
Schedule margin key: Set of floats used.
MRP 3 View
Strategy group: setting for how inventory,
forecasts and customer orders affect
the MRP planning process.
Tot. repl. lead time: Total replenishment
lead time. This is used in the sales
order process. If there is no stock
on hand for this material, then the
sales order process will assume
the material will be available in
this number of days if an order is
placed. The SAP system will
calculate a promised delivery date
using the total replenishment lead
time as well as a delivery time
calculated from other system settings.
Work Scheduling View
Production Scheduler: Production scheduler
responsible for this material.
Prod. Sched. Profile: Production scheduling
profile for this material.
As described previously, the production
scheduler and production scheduling
profile determines the way production
orders are created and managed.
MRP Run
In Single-item, Single-level
planning, only the material is
planned, not other materials that
may be required to make the
material
For example, if single-item, single-
level planning is used on the dough
material, then only the dough is
planned and not the materials
needed to make dough, like oats,
wheat germ, etc.
A number of parameters are
set that in MRP planning to determine
how planning is to proceed and what
it is to produce (planned orders vs.
purchase requisitions, for example).
Stock/Requirements List
The Stock/requirements list is an
interactive report that provides a
comprehensive set of information
about a material, including
inventory, planned orders, forecast
demand, customer orders.
In addition, by double-clicking on
specific items, the user can access
a variety of data like material
masters, detailed stock overviews,
production order details, etc.
The Stock/requirements list is the
primary tool used by planners and
schedulers.