SAP PP Overview

At the End of this session, you will be able to

Overview of SAP PP

Master data for SAP PP - Discrete Manufacturing

PP Flow in Discrete Manufacturing

Master data for SAP PP - REM

PP Flow in Repetitive Manufacturing (REM)

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Over view of SAP PP :
PP Module in SAP deals with planning and manufacturing process. Basically there are three types of
manufacturing process handled in SAP.

Production Methods Handledin SAP

There are three types of Production Methods

Discrete manufacturing
Various products are made in different qty with frequent changes in processing
Example : Eng Industries, Industrial valves,battery and Textile & Apparel industries
Method : Entire Mfg activities are handled through " Production Order'.
Repetitive Manufacturing
Similar products are produced over a long period of time with least or no changes in process
Example : Bottling plant, automobile manufacturing
Method : Entire Mfg activities are handled through " Planning table through Planned Order'.

Process Industries
Its similar to discrete manufacturing
Example : Manufacture of Dairy products and chemicals
Method : Entire Mfg activities are handled through " Process Order'.

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The Planning Process consists of six basic steps as seen in the diagram above.

1 Planning of expected sales quantity and production quantity done by sales in discussion
with planner

2 Entering the planned quantity in SAP system through demand management

3 Materials Requirement Planning(MRP) – considering the stock, expected receipts and

calculating the balance requirement for all material including component and finished
products

4 Calculating the capacity required to manufacture the planned quantity

5 System generates planned order for required quantities for both component and finished
products.

6 Production activity commences.

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The Production Process again involves six basic steps as listed in the above
diagram:

1 Planned orders are viewed by the production planner and firmed.

2 Firmed planned orders are converted to production order

3 Product is produced in the shop floor

4 Reporting to the SAP system is done through confirmation. Raw materials are issued
through backflush and activities are recorded.

5 Product is inspected by quality department if required

6 Final product is received in to the respective storage location and ready to sale.

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 Integration in SAP PP Module with other module

1. Planning or forecast is done by sales and distribution and Planning department in

discussion with production department.

2. Material Requirement Planning is done by the system which takes input from
purchasing, warehouse, quality and production modules.

3. During production execution, quality module checks the final product. Costing
department analyze the cost of production.

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Integration in SAP PP Module with other module

Case 1. Let’s say we have purchased raw materials necessary for production and we
need to issue these to the shop floor.

Handled by SAP: There are three documents, which will be passed simultaneously in
SAP.

a) Material Document: A goods issue document is passed which reduces the stock from
raw material storage location. This is a quantity updation.

b) Finance Document: A parallel accounting document is created in FI debiting

Consumption Account and crediting the Material Inventory for the value of the
material.

c) Controlling Document: The Production order is debited with the raw material costs.

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 Integration in SAP PP Module with other module

Case 2:
Let’s say that the production is now complete and requires inspection.

Handled by SAP:
While posting a goods receipt in the SAP system, stock will be first posted to the
quality stock. The quality guy after physically inspecting the stock will release the
quality stock to unrestricted stock in SAP.
This then makes the stock available for sales. The sales cannot take place while the
material is in the quality stock.

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 Terminologies in PP module

Work center : Machines may be referred as work center. It is defined as the place where
operations are carried out. Apart from machine, group of person (e.g. in maintenance
department, certain group of people may be employed for any machinery movements etc..)
may be treated as a labor work center
Planned order : It specifies when the material is to be produced and the quantity to be
produced. It may also be referred as preparatory step towards production. Production
information is available in Planned order and it will be transferred to production order.
Production order : Entire manufacturing activities are accounted in the system through
production order. It is suggested to create production order from planned order. All
subsequent activities in production are carried out only with reference to the production
order.

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 Confirmation :
Reporting of
 How much yield, scrap and rework
Quantity of work done
 Which work center is used
Who has done it
Above reporting is done with respect to production order.

Backflush :
Issuing of raw materials components to shop floor automatically during
confirmation.

Goods Issue : Issuing material from stores

Goods receipt : Receiving material into the stores

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 Status - Created :Status of production order indicating that the production order is
created.

Status – Released :This status of production order indicates that the actual
production is started.

Status – TECO :Technically completed status, indicates that there is no more

activity to be performed to a particular production.

Status –DLV :This indicates Delivered status. Entire production to a particular

production order is completed.

Settlement :It is related to accounts, it is settling of all the cost collected in one
particular production order to the material. Normally it is done by accounts and at
times by production also.

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Float Before Production :Number of days to be counted before the actual start date of
production. It is a additional timing used for scheduling

Float After Production : Number of days to be counted after the actual finish date of
production. It is a additional timing used for scheduling

Standard value key :Key contains the activities for each work center. A standard value
key can have Maximum of six activities.

MRP Type :It indicates how the material is to be planned. i.e whether the material is to
be planned by MRP, consumption based planning or through MPS.

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 MRP : Material Requirements Planning is a process where BOM of all
products are exploded and shortages and requirements are calculated. MRP run
will consider purchase order, purchase requisition and quality stock.

Lot Size : Lot size to which the requirements will be grouped

Planning Strategy : Method of planning for final product, it can be make to

stock or make to order etc.

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 Master Data in SAP PP - DISCRETE MFG :

Material master ( SAP T.CODE : MM01)

Bill of Materials ( SAP T.CODE : CS01)

Work center (SAP T.CODE : CR01)

Routing (SAP T.CODE : CA01)

Production version (SAP T.CODE : C223) (Optional)

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 Master Data in SAP PP - REM :

Material master ( SAP T.CODE : MM01)

Bill of Materials ( SAP T.CODE : CS01)

Work center (SAP T.CODE : CR01)

 Rate routing (SAP T.CODE : CA21)

Production version (SAP T.CODE : C223)

Product cost collector (SAP T.CODE : KKF6N)

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 Master Data in SAP PP-PI :

Material master ( SAP T.CODE : MM01)

Bill of Materials ( SAP T.CODE : CS01)

Resources (SAP T.CODE : CRC1)

Master Recipes (SAP T.CODE : C201)

Production version (SAP T.CODE : C223)

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There are three very essential master data in PP module.
Bills Of Material
Work center
 Routing

Bills Of Material (BOM):-

BOM is a list of components that make up the product. List contains component number
along with the required quantity and its unit of measure.

Work center:-
Machines may be referred as work center. It is defined as the place where operations are
carried out. Apart from machine, group of persons (e.g. in maintenance department, certain
group of people may be employed for any machinery movements etc.) may be treated as a
labor work center.
Data in work center determines
Scheduling – start and end of operation
Costing – Cost incurred during production
Capacity planning - to plan the required capacity

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Routing:-

Routing explains how the product is to be manufactured. It may be compared to a

process sheet in the conventional system.

It contains

Operations to be carried out during manufacturing

Use of material during production

Use of work centers

Quality checks to be carried out during production

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 DEMAND MANAGEMENT
Demand Management helps you to determine requirement quantities and date for
finished products.

There are two types of Demand in SAP.

Customer Demand
PIR (Planned Independent requirement)

Customer demands are created through SD module.

Stock requirements are created through PIR in PP Module.
Demand management uses PIR and customer requirement.

Pre-requisite for Demand Management:

Planning Strategy is to be defined for a product.

Planning strategy defines how a product is to be planned (Whether make-to-stock

or make-to-order) and produced.

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 PLANNING STRATEGY

Planning Strategy
Planning Strategy represent the business procedures for the planning of production qty's and dates

Two very important strategies are

Make To Stock
Make To Order

PS are denotedby two digit numeric no in standardSAP

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 MAKE TO STOCK CONCEPT

Strategy No : 10 - Make To Stock with Net requirement

This strategy will not consider the customer requirement.Planned stock requirement
I.e PIR in the DM are reduced only when the sale is made

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 MAKE TO STOCK CONCEPT

Strategy No : 11 - Make To Stock with Gross requirement

This strategy will not consider the customer requirement and warehouse stock while planning
Planned stock requirement
I.e PIR in the DM are reduced only when the production is completed

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 STRATEGY 10 VS 11

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 MAKE TO STOCK CONCEPT
Strategy No : 40 - Planning with Final Assembly
This strategy will consider both the customer requirement and stock requirement
I.e PIR while planning. PIR in the DM are reduced only when the sales is completed.

Pls note that sales order will consume the PIR . i.e 100 nos planned qty will not be sufficient to meet the requirement; hence planned
order of 120 will be created by MRP

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 MAKE TO ORDER CONCEPT

Strategy No : 20 - Make To Order

This strategy will consider only the customer requirement while planning. PIR in the DM are NOT CONSIDERED during planning

Note : For a product having strategy 20, it is not possible to plan through PIR

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 Planning
Three important way of planning is used in SAP. They are

Sales and Operations Planning (SOP)

 Sales & Operations Planning (SOP) is a flexible forecasting and planning
tool with which sales, production, and other supply chain targets can be set
on the basis of historical, existing, and estimated future data.

Long Term Planning (LTP)

 Provides support for long-term production planning and for carrying out
simulations in short and mid-term planning.
 Helps to know whether the results of sales planning can actually be
produced with capacity on hand
 Provides information on the future requirements quantities of raw material
to estimate future orders.

Material Requirement Planning (MRP)

 It ensures right quantity of material at right time.
Optimize the service level and minimize the inventory cost

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 Material Requirement Planning

Planning Procedure:-
There are three major Planning procedures,
1. Material Requirement Planning (MRP)
2. Master Product Scheduling (MPS)
3. Consumption Based Planning (CBP)

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 MRP IN SAP

MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that

is, it is used to procure or produce the requirement quantities on
time. This process involves the monitoring of stocks and
demand, leading to the automatic creation of procurement
proposals for purchasing or production.

The main objective of MRP is to determine which material is

required, the quantity required and by when it is required.

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 MRP Integration and components:-

Following five components are essential for MRP run

1. Material master
2. Bills of material
3. Work center
4. Routing
5. Demand management

Material master and Bills of material is required as a master data component.

Work center and routing are required to determine the production start and end dates

Demand management to define requirement quantities and requirement dates to the

finished product and important critical assemblies.

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 Process Flow in MRP

1. Sales department gets the requirement from market

2. Requirement quantities are maintained in the demand management.
3. MRP run calculates the requirement of entire material to cover the plan.
Planned orders are generated as a proposal for required quantities.
4. Planned order are then firmed by planner and converted in to production
order for those Materials which are made in-house.
5. Planned orders are converted in to purchase requisition for those materials
which are procured from outside
6. Materials received into the stock either from internal manufacturing or from
external source.

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 Production Process:-

Production process is handled very well in SAP with excellent integration

with other related modules.

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 Production Order:-

Production order is the fundamental part of Production process. All manufacturing

processes are handled thorough production orders.

Production order defines,

Which material is to be produced
Which location
What quantity
How much work is required
What machines are to be used
How the cost are captured and settled

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 PRODUCTION ORDER STATUS IN SAP

Created (CRTD) – Order is created and changes can be made

Released (REL) – Order released, suggested not to make any change

Partially confirmed (PCNF)– Production qty/activity partially confirmed

Fully confirmed (CNF) – Production qty/activity fully confirmed

Delivery completed (DLV) – Entire order quantity has been received

Technically completed (TECO) – Order processing is over, ready for month end
processing by accounts

Closed (CLSD) – Order closed finance point of view.

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 REPORTS IN SAP

Reports available in SAP

There are three types of Reports available in SAP

StandardList Reports
Reports which will only display the data. No transaction can be performed through this report display is known as standard list reports.
This reports is used to
Example : Display " Master data related information" Such as MM03,CR05…etc
Worklist Reports
Reports which will allow user to perfomtransaction while displaying the report is known as Worklist reports.
This report is used to display and work with production orders.
Example : COOIS - Production order information system.

Logistics Information Structure Reports

Information structure is the place where data are stored in addition to the SAP database.
Reports generated using the data stored in the information structure is known as LIS Reports.
Example : MMBE- Stock Reports

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 EXAMPLE : REPORTS in SAP

Reports related to Master Data

MM60 – Material List
MMBE – Stock Overview
CS11 – Multi level BOM Explosion
CS15 – Where used List
CR05 – Work Center List

Reports related to MRP

MD04 – Stock/Requirement List
MD05 – MRP List
MD06 – MRP list collective display
MD16 – Display planned order

Reports related to Production processing

COHV – Mass processing
COOIS – Production Order Information system

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Thank You

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