145 Scen Overview EN PK by 8OU78k


									Make-to-Stock Production –
Discrete Industry
SAP Best Practices Baseline Package

SAP Best Practices
Scenario Overview – 1

     Purpose and Benefits:

           This scenario describes a business process, which is typical for companies with lot-size
            oriented production.
           The production scenario produces a finished good and all dependent components in make-to-
            stock production (MTS).
           Furthermore, the scenario is supported by the main cost object controlling functions required,
            such as preliminary costing and period-end closing.

           Production triggered by a production plan
           Serial number and batch management included
           Optional with: quality management, consigned inventory, external processing

      Key process flows covered
           Creating Planned Independent Requirements
           Material Requirements Planning at Plant Level
           In-House Production (subassembly)
           In-House final assembly (Finished Good)
           Capacity Leveling
           Confirming Assembly Activities
Scenario Overview – 2

     SAP Applications Required:

             EHP3 for SAP ERP 6.0

        Company roles involved in process flows
             Production Planner
             Manufacturing
             Warehouse Clerk
             Plant Controller
             Buyer
Scenario Overview – 3

    Detailed Process Description:
       Make-to-Stock Production – Discrete Industry
       This scenario describes a business process, which is typical for companies with lot size oriented
            production. The production scenarios consist of both goods movements (goods issues and
            receipts) and confirmation of completion of the production order.
           Furthermore, the scenario is supported by the main cost object controlling functions required,
            such as preliminary costing and period-end closing.
           The typical planning process starts with sales quantity planning. The previous period’s actual
            sales figures can be used as a basis for future planning.
           In Sales and Operations Planning, you ensure that production stays in line with sales so that
            you may create the production plan synchronously to sales. The planning data is transferred
            from Sales and Operations Planning to Demand Management. Demand Management
            generates independent requirements, which are used in the subsequent Material
            Requirements Planning (MRP) run.
           In material requirements planning, the bill of materials (BOM) for the top-level material
            demand gets exploded and production is planned right down to procured component level.
            MRP results in planned orders being generated for the material to be produced.
           If insufficient warehouse stock is available, purchase requisitions are created for the raw
            materials required. When the order is created, target costs are calculated for the order lot size
            (preliminary costing).
           During the production process, costs incurred are updated on the order, which enables you to
            keep track of and compare target costs and actual costs at any time.
           Period-end-closing activities are applied to the order. This includes Work In Progress
            calculation and variance calculation.
           After this, Work in Progress is settled to financial accounting and production variances are
            settled to management and financial accounting.
Process Flow Diagram
Make-to-Stock Production – Discrete Industry

                       Beginning of                            Periodic Plan
                        Planning                                 Revision


                          Creating                         Material Requirements                                                            Capacit
  Production Planner

                          Planned                          Planning at Plant Level                                 Update                      y
                        Independent                                                                                                  No     Levelin
                                                           & Evaluation of Stock /                                Capacity
                       Requirements                           Requirement List                                                              g O.k.?
                                                                                            MRP List

                                                                          Convert                  Material                                              Release
                              Purchase           Planned               Planned Order                                             Capacity                                   Order Print
                              Requisitio                                                           Availabl         Yes                                 Production
                                                 Orders                to Production                 e?                          Leveling                 Order
                                  n                                        Order


                                                                             Material                                      Assembly            Semi-Finished          Inventory @
                          Pick List                                                                                         Activities                               Standard. Cost
                                                                           Staging for                                                         Goods Receipt
                                                                         Planned Orders                                      / Final

                                                                          Consumption             Goods Issue/                                 Goods Receipt
                                                                          @ Standard.              Back flush                                      Slip

                                                                                                  Goods Receipt                               Finished Goods
                                                                                                      Slip                                        Receipt

                                                                                                                                                                        Period End

                                                                                        Procurement                                                PP-

                            Procurement                Procurement                            &
                                                         of Stock                                                         MM                  Subcontractin
                              w/o QM                                                    Consumption                  Subcontractin             g (External
                               (130)                   Material with                    of Cosigned
                                                         QM (127)                                                       g (138)                Processing)
                                                                                         Inventory                                                (150)

Symbol                         Description                                                Usage              Symbol                 Description                           Usage Comments

                               Band: Identifies a user role, such as Accounts             Role band                                 To next / From last Diagram: Leads    Flow chart continues on the next /
                                                                                                                                    to the next / previous page of the    previous page
                               Payable Clerk or Sales Representative. This band           contains tasks                            Diagram

                               can also identify an organization unit or group,           common to that               Diagram
                               rather than a specific role.                               role.                       Connection
                               The other process flow symbols in this table go into
                               these rows. You have as many rows as required to
                               cover all of the roles in the scenario.                                                              Hardcopy / Document: Identifies a     Does not correspond to a task
                                                                                                                                    printed document, report, or form     step in a document; instead, it is
                                                                                                                      Hardcopy /                                          used to reflect a document
                               External Events: Contains events that start or end the                                 Document                                            generated by a task step; this

                               scenario, or influence the course of events in the                                                                                         shape does not have any outgoing
   to SAP

                               scenario.                                                                                                                                  flow lines

                                                                                                                                    Financial Actuals: Indicates a        Does not correspond to a task
                               Flow line (solid): Line indicates the normal sequence      Connects two                              financial posting document            step in a document; instead, it is
                                                                                          tasks in a                   Financial                                          used to reflect a document
                               of steps and direction of flow in the scenario.            scenario                                                                        generated by a task step; this
                               Flow line (dashed): Line indicates flow to infrequently-
                                                                                          process or a                                                                    shape does not have any outgoing
                               used or conditional tasks in a scenario. Line can          non-step event                                                                  flow lines
                               also lead to documents involved in the process flow.

                               Business Activity / Event: Identifies an action that       Does not                                  Budget Planning: Indicates a          Does not correspond to a task
                               either leads into or out of the scenario, or an outside    correspond to a                           budget planning document              step in a document; instead, it is
                Business       Process that happens during the scenario                   task step in the                                                                used to reflect a document
                                                                                                                        Budget                                            generated by a task step; this
                Activity /                                                                document
                                                                                                                       Planning                                           shape does not have any outgoing
                 Event                                                                                                                                                    flow lines

                               Unit Process: Identifies a task that is covered in a       Corresponds to
                               step-by-step manner in the scenario                        a task step in                            Manual Process: Covers a task         Does not generally correspond to
                                                                                          the document                              that is manually done                 a task step in a document;
                Unit Process                                                                                            Manual                                            instead, it is used to reflect a task
                                                                                                                        Proces                                            that is manually performed, such
                                                                                                                           s                                              as unloading a truck in the
                                                                                                                                                                          warehouse, which affects the
                                                                                                                                                                          process flow.
                               Process Reference: If the scenario references another      Corresponds to
                               scenario in total, put the scenario number and name        a task step in
                  Process      here.                                                      the document
                                                                                                                                    Existing Version / Data: This block   Does not generally correspond to
                 Reference                                                                                                          covers data that feeds in from an     a task step in a document;
                                                                                                                        Existing    external process                      instead, this shape reflects data
                                                                                                                        Version /                                         coming from an external source;
                                                                                                                          Data                                            this step does not have any
                               Sub-Process Reference: If the scenario references          Corresponds to                                                                  incoming flow lines
                               another scenario in part, put the scenario number,         a task step in
                   Sub-        name, and the step numbers from that scenario here         the document
                 Reference                                                                                                          System Pass / Fail Decision: This     Does not generally correspond to
                                                                                                                        System      block covers an automatic             a task step in the document;
                                                                                                                        Pass/F      decision made by the software         instead it is used to reflect an
                               Process Decision: Identifies a decision / branching        Does not
                                                                                                                          ail                                             automatic decision by the system
                                                                                                                        Decisio                                           that is made after a step has been
                               point, signifying a choice to be made by the end           usually                                                                         executed.
                               user. Lines represent different choices emerging           correspond to a                 n
                  Proces       from different parts of the diamond.                       task step in the
                     s                                                                    document;
                  Decisio                                                                 Reflects a
                    n                                                                     choice to be
                                                                                          made after step
Materials Requirement Planning - MRP

                          Material Reqmts   Planned Ind.
                          Planning          Requirements


                           Planned Order



Alternative Planning Strategies for Finished

Strategy                              Net Requirements Planning (10)                 Planning with Final Assembly (40)
Customer requirements passed on to
production                                                   No                                          Yes

This means . . .                      ... sales orders do not influence production   ... sales orders that exceed planned
                                                                                     independent requirements can influence

                                      ... the main objective is to ensure smooth     ... the most important factor here is the
                                      production                                     ability to react flexibly to customer demand

Planned independent requirements
allocated and reduced during sales
order processing                                             No                                          Yes

Planned independent requirements
reduced at goods issue for delivery                          Yes                                          No
Work Center

                               Work Center: Assembly

              Default values        Costing Data   Sched. Data
              Routings                             Capacity Data

              Routings               Costing           Scheduling
                                                       & Capacity

Routing Work Center / Operation

        Routing Header

                                             Work center
                                             Control key
             Operation 10:                   Standard values
             Final Assembly                  Activity types

                              Material Components
Planned Order Conversion

                   Planned                     Production
                    orders                        order

                             Individual Conversion
                              Individual Conversion

                   Planned                       Production
                    orders                         orders

                             Collective Conversion
                             Collective Conversion
Production Order Creation
                                                Friday   Tuesday
                                               January     July
                                               25 2008   15 2008

    Manually              Requirements planning                    Automatically

               Specify order type

                     Define order item

                             Copy routing

                              Lead time scheduling

                                    Copy bill of material

                                            Availability check

                                                   Optional changes

    Optional (Customizing)                                Save production order
  Production Order Processing

                                                      Order proposal
Order settlement                                      (planned order)
                       Order header
                      Production Order


                                                      Order creation
Goods receipt             Components

Confirmations           Costs        100     20

                                                    Order release and
                                                  batch determination
Material withdrawal                                   for components
Goods Movement

          Warehouse                                     Prod. order


                                                                Mat. comp.
                            Goods movement

     Material                                    Accounting
     document                                    document

                         Update of stock quantities
                         Update of stock values
                         materials can be batch controlled
Goods Issue

                               Goods issue

                        Material         Acctg.
                        document         document

                 Updating stock quantities
                 Updating stock values
                 Reducing reservations
                 Calculating actual costs and up-
                  dating the order
Production Order Confirmations

                                    Manual entry

                                               Operation 0010

                                               Operation 0020

                                               Operation 0030
                Order confirmation                    .

                                                   Operation . . . .

Production Order - Preliminary Costing

                                  Planned costs
       Material components                                      Phases
                                 Cost elements:
    l   Ind. "Rel. to costing"                         l   Gen. operation values
    l   Price                    Material costs        l   Standard values
                                                       l   Control key “costing
                                 Costs for external        indicator”

         Order type / Plant      Production costs              Resources
    l   Costing variant                                l   Formula key for
                                 Material overhead         costing
                                 costs                 l   Cost center
 Display planned/actual costs                          l   Activity type
                                 Production overhead   l   Formula constants
                                                             Cost calculation
                                 Costs for external                log
   l    Cost elements
   l    Cost itemization         processing
   l    Cost component split
Cost of Production Order

     Material         Operation         Work center        Cost center
                   - Work center       - Cost center
                                                          - Activity types
   - Quantities    - Standard value    - Activity types
   - Prices        - Quantities        - Formulas

                                                           Activity cost

                                                             - Periods

  Material costs   Internal activities costs

                      Overhead calculations

                      Production order cost
WIP and Variance Calculation in Lot-Based Cost
Object Controlling

                                           Actual Costs                Actual Costs

                                                   -                         -
              Actual Costs
                                            Delivery                     Delivery
                                             Value                        Value

                   =                           =                            =
                 WIP at                      WIP at
              Actual Costs                Actual Costs


Pre-Released or Released     Partially Delivered          Finally Delivered or Technically Completed
Settlement of Order (Example)

Product cost planning         Production Order                   PC
    Lotsize 1 PC              Mat. F126
                                  CO-              Actual Cost
 Material                         PC
   600       Surcharge
                             Material                  800         Target Version 0
Production                   Production              1.200
                             Surcharge                 400         Price       150
                                                                   Qty         150
                                                                   Structure   100
   Material Master           GR                     -2.000         Scrap         0
Standard Price = 2000                                              Lotsize       0
                             Variances                400

                                                         Settlement                   CO-
                 Financial Accounting                                                 PA

              Warehouse    Price difference

             2000           400

To top