Supply Chain Management in SAP Environment: Production Planning

SAP Production Planning consists of the following:

  • Master Data – includes the material master, work centers, routings and bill of materials.
  • S&OP – Sales and Operations Planning (SOP) provides the ability to forecast sales and production plans based on historical, current and future data.
  • DRP – Distribution Resource Planning allows companies the ability to plan the demand for distribution centers.
  • Production Planning – includes material forecasting, demand management, long term planning and master production scheduling (MPS).
  • MRP – Material Requirements Planning relies on demand and supply elements with the calculation parameters to calculate the net requirements from the planning run.
  • MPS – helps to plan the items that profoundly influence company’s profit or consume critical resources.
  • Routing – consists of task list or the list of operations in the sequence they will be performed. It is a part of Master Data.
  • Work Center – is where the tasks or operations are performed. These work centers have cost centers assigned to them. It is a part of Master Data.
  • Shop Floor Control – includes the processing of production orders, goods movements, confirmations and reporting tools for production.
  • Capacity Planning – evaluates the capacity utilized based on the work centers available capacity to show capacity constraints.
  • Repetitive Manufacturing – in repetitive manufacturing, the manufacturing process is usually simple in that the same products are produced over a long period of time. This module provides the transactions and business process for companies to run repetitive manufacturing in SAP.
  • KANBAN – is a process of replenishment based on a pull system using KANBAN cards to generate the replenishment cycle.
  • Product Cost Planning – is the process of evaluating all the time values and value of component materials to determine the product cost. 

Production Planning process and master data can be explained with the help of the following diagram:



(Reference: www.erptips.com)

Although I have already explained the most important components of production planning – MRP and MPS in my July blog postings, other important components such as Production Master Data, Work Centers, Routing, Operations, and Cost Centers can be understood with the help of following diagrams:

A detailed explanation of production planning master data and process flow has been provided in this presentation:  SAP PRODUCTION PLANNING presentation

Also below are the videos with demos of how to create Routing, BOM, and Work Centers in SAP Production Planning:

 Creating Routing:

 Creating BOM:

 Creating Work Centers:

Here is the video link of how to create a work center. I could not embed this video here for some reason.

Creating Production Version:

The objective of this blog is not to impart supply chain training but to explain the concepts of supply chain management. It is not possible to go into too much detailed description of the subject and in my last three posts of Sales & Distribution, Materials Management and Production Planning, I have tried my best to encompass all the necessary points in minimum words. If you still have any question, please feel free to post your questions here and I will try my best to answer your questions at the earliest.