Production Planning Master Data EGN 5620 Enterprise Systems

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Production Planning Master Data EGN 5620 Enterprise Systems Configuration Spring, 2014

Production and Planning Master Data SAP Implementation

Business Process Integration PP SD Data MM Master FI Rules Org Data FI MM PP SD FI FI MM MM PP PP SD SD January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 3

Production Process (Make-to-Stock) Capacity Planning Production Proposal (Planning/Other) Order Settlement Schedule and Release Shop Floor Documents Production Process Goods Issue Completion Confirmation Goods Receipt

Organization Structure for PP Client (620) Company Code (C _ _ _) Plant (P_ _ _) SL 10 SL 20 SL 30

Organization Data Plant-specific organizational units ◦ MRP controller ◦ Production scheduler ◦ Planner group ◦ Person responsible (financially) Non-plant specific organizational units ◦ Capacity planner January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 8

Master Data for Production Planning 1. 2. 3. 4. 5. Materials Master Record Bill of Material Master Data Work Center Master Data Product Routing PRTs (Production Resources/Tools) January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 10

1. Material Master Record To provide a clear display, material master data is subdivided into views. A material master contains global data, which is valid across all locations (for example, data that is the same for this material in all production plants) and location-specific data, which contains settings for the relevant location (for example, a specific production plant). General data such as the measurements or the weight of a material is set globally, whereas settings for planning are usually predefined locally The material master is the data object that contains all information necessary for the business use of a material, in particular, all settings for procurement, production, storage or © SAP AG - University Alliances sales. and The Rushmore Group, LLC January 2008 2007. All rights reserved. 11

1. Material Master Record The most important settings for Material Planning are contained in material requirements planning (MRP) views 1 to 4 of the ECC material master. MRP type specifies how a material should be planned (MRP, consumption-based planning, no planning). Lot-sizing procedure determines the lot size of the respective procurement proposals. Procurement type is used to determine whether a material is to be produced in-house or procured externally. The in-house production times or the planned delivery times specify how long procurement takes. A level of safety stock can be set. Strategy group controls how the independent requirements behave. Moreover, control of the ATP check takes place on the basis © SAP AG - University Alliances of the availability check group. and The Rushmore Group, LLC January 2008 2007. All rights reserved. 12

2. Bill of Materials BOM is a hierarchical structure of the materials needed to produce a finished goods or semi-finished goods. BOMs in SAP are defined as single-level, but can be constructed multi-level by nesting several single-level BOMs. Nesting refers to a hierarchy in which a bill of materials contains its own bills of materials. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 13

2. Bill of Materials (BOM) are created as singlelevel or multi-level relationships between one parent material and the sub-component material EPEN Barrel Cap January 2008 Crown Cartridge Band © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. Clip 14

2. Bill of Materials Variant Bill of Materials (BOM) ◦ Several products with a large proportion of identical parts. EPEN - Red Cartridge Band January 2008 EPEN - Black Etc. Black Cartridge Band © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. Etc. 15

2. Bill of Materials Multiple versions of Bill Of Materials (BOM) ◦ One product produced from alternative components or processes, where the differences are small (usually the quantity of a component). ◦ BOM 1 = lot size 1 - 100 ◦ BOM 2 = lot size 101 – 999 EPEN - Black Cartridge (Buy) Band January 2008 EPEN - Black Etc. Band © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. Black Cartridge (Make) 16

2. Bill of Material Finished Good Semi-finished goods Raw Material January 2008 Raw Material Semi-finished good Raw Material © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. Raw Material 17

2. Bill of Materials BOM in SAP consists of a header section and an item section. Header section includes data that apply to entire BOM, such as finished material number, plant, usage, validity, status, and base quantity. Usage identifies the purpose for which the BOM can be used. For example, 1 is for production. The BOM is valid from the date specified in the header. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 19

2. Bill of Materials Items section identifies all materials needed to make finished goods or semi-finished goods identified in the header. Item category determines how material is used in the BOM. Data for each item are: ◦ material number, ◦ description, quantity, and ◦ item category. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 20

2. Bill of Materials BOM MM Item Category L: Stock item N: Non-stock item R: Variable –size item T: Text item used to include notes and comments within the BOM. Notes may explain how to use the material or identify any unusual assembly requirement. D: Document item used to include document such as engineering drawings, assembly instructions, and photographs. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 21

2. Bill of Materials K: Class item used in variant BOMs to identify a class or group of items. A variant BOM is used to create multiple versions. M: Intra material, or phantom items used as a logical grouped set of materials that could collectively be considered as a single material. Phantom material is not an actual material and is mostly temporarily used during production planning. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 22

2. Bill of Materials Where to use BOM? 1) MRP uses BOM to determine dependent requirements 2) Controlling uses BOM to calculate product costs 3) Production uses BOM to issue the proper quantities of components and raw materials to the shop floor January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 23

3. Work Center Work center is a location where value-added work needed to produce a material is carried out. A work center can be a machine, a group of machines, an entire production line, a work area, or a person or group of people who are responsible for completing operations. A work center is a resource that can be used for a variety of purposes and for multiple processes. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 24

3. Work Center Work center used to define capacities ◦ Labor ◦ Machine ◦ Output ◦ Emissions Capacities used in ◦ Capacity requirements planning (CRP) Detailed scheduling Costing January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 25

3. Work Center is used: ◦ To be assigned as cost center ◦ To be allocated with Human Resources (HR) Qualifications Positions People January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 26

3. Work Centers have multiple views of: ◦ Basic data ◦ Default values ◦ Capacity overview ◦ Scheduling ◦ Cost center assignment ◦ Technical data January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 27

3. Work Center 3. 1 Basic data Tab: v. Name, and description of the work center v. Person or group of people who are responsible for completing operations v. Task list: a list of operations that are required to accomplish a task. Operations are the specific tasks that must be completed, such as drilling, cutting, assembling. In production, a task list takes the form of a product routing or a master recipe. v. Standard value key: used to assign standard or planned values for operations, such as setup and execution times. Companies use these values to calculate costs, execution times, and capacity requirements. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 28

3. Work Center 3. 2 Default Values Tab: for operations performed at the work center. Control Keys: specify how an operation or a suboperation is scheduling, how costs will be calculated, and how operations will confirmed once they are completed in the work center. Wage data: used by processes in human capital management, such as payroll. Standard value keys: identify the normal time elements – the activities that consume time associated with the work center. Typical time elements are setup time, machine time, labor time, and teardown time. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 30

3. Work Center 3. 3 Capacities Tab Available capacity defines how much work can be performed at the work center. ◦ A work center can include more than one resource or capacity, such as labor and machine. Scheduling basis determines the specific capacity to be utilized for production. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 32

3. Work Center 3. 4 Scheduling Tab Capacity category: Machine, Person, Processing unit • Execution time: - Set up formula - Processing formula • - January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 34

3. Work Center 3. 5 Costing Tab A work center is associated with a cost center which is a container for accumulation of costs. Costs associated with operations completed in a work center are calculated using formulas that utilize the costs and standard values associated with each activity type, for example, v setup, v labor, and v machine. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 36

3. Work Center Control Key: Scheduling Determine capacity requirements Inspection characteristics required Confirmation required Rework Cost Schedule external operations – std values January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 38

4. Product Routing A list of tasks or operations that must be performed to convert a material to a part, component, or product. Routing is a sequence of operations which detail the manufacture of a product Routings are used as a template for production orders and run schedules as well as a basis for product costing. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 39

4. Routing are used to determine: 1) 2) 3) 4) 5) 1) Operations Work centers Material components Production resources and tools Quality Checks January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 40

4. Routing Use Where use routings: 1) 2) 3) 4) Scheduling (dates, times) Costing Capacity planning Production orders January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 44

4. Routing Standard Sequence Operation 10 Operation 20 Alternate Sequence Operation 10 Operation 20 Parallel Sequence Operation 10 Operation 25 Operation 30 Operation 40 January 2008 Operation 40 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 45

4. Routing Material Types Allowed in Production: Multiple material types may be used in a routing/BOM v. Raw materials v. Semi-finished product v. Trading goods are allowed but not standard v. Text or Reference materials common January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 46

4. Display Routing List A collective report displaying the available routings and the material allocations to operations Four General Types ◦ Operations Related ◦ Component Related ◦ Production Resource/Tool (PRT ) Related ◦ General List (Operation Control Ticket) January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 47

4. Routing Controlling Activities for Production Used to perform internal cost allocation, where activities by a cost center are measured ◦ Labor time ◦ Machine hours Output activities are valued Allocation of an activity type is always made with the allocation cost element created in activity type planning January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 48

4. Routing Activity Prices (costs) for planned activities ◦ Fixed or Variable Labor = $$/hour Machine = $/hour Overhead = % January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 49

MRP Control Parameters Environment ◦ Number range Master Data ◦ Materials Requirements Planning controllers ◦ Float times Planned Orders ◦ Conversion order type ◦ Dependant requirement availability January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 52

MRP Control Parameters Planning run ◦ Bill of Material (BOM) selection ◦ External procurement ◦ Planning horizon Availability Check ◦ Material ◦ Production Resource/Tool (PRT ) ◦ Capacity Scheduling Control Parameters January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 53

General Planning Parameters Order Type Control Parameters ◦ Types of routings, ◦ BOM’s per order type: manually or automatically ◦ Availability checking Create Confirmation Parameters ◦ Reservations ◦ Status Updates Define Valuation of Goods Received ◦ Moving Average Price Control evaluation January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 54

MM Planning Parameters Materials Requirements Planning views ◦ for materials Work Scheduling views ◦ for manufactured products January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 55

Production and Planning Master Data PEN, Inc.

Pen Inc. Business Module II for Selling Finished Goods by Production Pre-Sales Activity Sales Order Availability Check Inventory Postings YES NO Accounts Receivable General Ledger Accounts Goods Issued to Delivery In Inventory Issue Goods to Production NO Order Purchase Requisition Billing Delivery Plant or Warehouse Purchase Order Goods from Production Order Goods Receipt Invoice Receipt Accounts Payable Or Planned Order Production Order Completion © SAP AG - University Alliances and The Rushmore Group, LLC Confirmation January 2008. All rights reserved. 57

Product Group Aggregate planning that group together materials or other product groups (Product Families) ◦ Manufacturing procedure ◦ Product design ◦ Market niche, etc. Proportional Factors (Percentages for components)

Product Groups • Multi-level or single-level – A product group is multi-level if it contains other product groups – Lowest level in a product group hierarchy always consists of materials. – A product group is single-level if its members are materials only – A material or product group can be a member of more than one owner product group January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. 59

PPP 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

Exercises: (Due Date – 3/19/2014) 212. 213. 214. 215. 216. 217. 258. 265. 266. 267. 269. 270. 271. 272. Create primary cost elements Create secondary cost elements Create cost element groups Create statistical key figure Create controlling document number ranges Define controlling settlement document number ranges Create vender master records centrally Create bill of materials Create person responsible for work center Create work center location Create capacity Create activity type labor Set activity prices Create work center for production

Exercises: (Due Date – 3/19/2014 273. Create finished products routing 274. Display routing list 275 A. Create material master for production group 275 B. Assign numbers for product group