5 Master data in PP

1) Material Master
2) BOM

BOM are used for MRP and Product costing

We can create 99 alternative BOM for a single product

3) Routing

Routing is nothing, but sequence of operation performed at Workcenter. It also specifies

the machine time, labor time etc for the execution of operations

4) WorkCentre

A WorkCentre is a machine or a group of machines where production operations are

performed. WorkCentre are used in task list operations i.e. in Routing.

It contains the data for

Scheduling

Capacity

Costing

5) Product Version

Production version is a combination of BOM and Routing data for production.

Production planning cycle

PR (Externally Procured)

PIR MRP

Planned orders Production

Orders

(Inhouse Production)
Production is carried out based on the activities maintained in the Routing where the
master data like Work Center is mentioned against each operation in the Routing.

Once the production is completed, the Confirmations of orders are executed, and goods
movement for material consumptions & goods receipt are posted against the Order.
Hence, the Order gets the Delivered (DLV) status, and the material is received into
desired storage location.

Usually at the month end before doing order settlement, production order needs to be
set to technically completed status to calculate production variances by the controlling
personnel.

Planning strategies must be defined for a product. It represents the methods of

production for planning and manufacturing. There are two methods by which we can do
this.

Make to Stock: Production of goods without having sales orders, i.e., stock is produced
independently of orders.

Make to Order: This strategy applies to the production of material for a specific
individual sales order or line item.

Demand management: The function of Demand Management is to estimate requirement

quantities and delivery dates for finished products and important assemblies. Demand
Management uses PIR (planned independent requirements) and customer
requirements.

MRP: MRP determines any shortages and creates the appropriate procurement
elements. It does net requirement calculation and generate planned orders for in-house
produced materials and purchase requisition for raw materials.

It does lead time scheduling and calculate production dates in planned orders.

It explodes the BOM and generates procurement proposals at each BOM levels.

Capacity planning and Levelling: Capacity Planning is used to analyze the capacity
overloads at work center and shift the orders to avoid any capacity bottlenecks.
Capacity requirements are generated via MRP on Work Center and since MRP works
with infinite capacity and plans everything on work center without considering any
capacity constraints. It is required to level the capacity at the work center.

Capacity can be levelled at each work center through planning table to create constraint
production plan.

Production Orders: The output of MRP will be "Planned Orders", which needs to be
converted to production orders for further execution of the process.

The Production Order is firmed receipt element, which is not affected by MRP run,
unlike Planned Orders.

Production Order is a document which specifies what material needs to be produced

and in what quantity. It also contains the BOM components and routing operation data
to be performed at the work center.

Production Order is released for execution, and material availability checks can be
carried out which determines if there are any missing components.

Production Order Confirmation: When goods are produced physically at the shop floor,
then production order must be confirmed.

During confirmation, components materials can be consumed automatically via back

flush mechanism and Goods receipt of material can be performed automatically via
operation Control key in Routing.

However, instead of auto goods movement, manual Goods Issue and receipt can be
performed separately from confirmation.

Any failed goods movement due to a deficit of component stock can be reprocessed
manually.

Activity costs such as machine, labor, etc. will also be updated in the production order
during confirmation on an actual basis.

If confirmation is posted wrongly, then we can cancel the confirmation and post it again
with correct data.

Production Order Close:

After the production order is delivered completely or we don't want to execute the
order further then Order should be technically completed.

After Order gets TECO status, it gets deleted from stock/requirement list and is no
longer considered in material requirement planning run. All dependent reservations
also get deleted from the system.

BOM: CS01/CS02/CS03
Enter parent material and plant code

BOM usage as 1

Valid from date

Press Enter

Item Category as L (Stock Item)

Workcenter: CR01/CR02/CR03

Routing: CA01/CA02/CA03

Production Version: C223

The production version is the link between a product BOM and the process Routing.

Planned Independent Requirements: MD61/MD62/MD63

Stock/Requirement List: MD04

PIR version "00" has an active indicator, which specifies that requirements would be
considered in Material Requirement Planning (MRP).

PIR's are associated with requirement type which is driven from planning strategies in
the material master, which determines methods of planning – Make to Stock or Make to
Order.

PIR's are displayed in stock requirement list so that Planner can see and plan the
production based on it.

PIR's are generally used in Make to stock environment where business wants to build
the stock based on the forecast and not on sales orders.

Impact of Planning Strategies

Planning strategies are broadly categorized into Make to Stock (MTS) and Make to
Order (MTO).

Make to Stock

Make-to-stock production is implemented if you produce stock without waiting for sales
orders to arrive because you want to deliver your customers immediately with
materials from that stock later. You might even want to build stock without having sales
orders, if you predict that there might be customer demand in the near future.
Make-to-stock strategies are usually associated with a lot-size key or a rounding value.
For example, you may want to produce the entire amount for the whole month once in a
month only, or you may want to produce for the exact PIR quantity.

In Planning Strategy 10, only PIR quantity is considered for MRP run and sales orders
are completely ignored. PIR is reduced when you deliver the stock to the customer. PIR
has requirement type LSF.

In Planning Strategy 40, Max of 2 (PIR and sales orders) are considered for MRP and PIR
is reduced as soon as sales orders are entered. PIR has requirement type VSF.

Make to Order

You do not want to produce finished products until you receive a sales order from the
customer.

PIR are not considered in MTO, and only sales orders are considered in MRP.

You produce sales order stock and can deliver to the specific customer only unlike in
MTS scenario.

Planning strategy (20) is widely used for make to order process and strategy 25 is used
for MTO with variant where customer asks for variants in products.

Delete PIR data: MD74/MD75

MRP: MD01/MD02

Production orders or Purchase orders are created after conversion of planned orders
and purchase requisition respectively.

MRP type "PD" in material master MRP 1 view is essential to run the MRP for the
materials. If, you don't want to run MRP on the material then MRP type "ND" can be
maintained in the material master.

MPS: MD40/MD43

It is used specifically for critical materials usually high valued products where you do
not want changes in your production plan within planning time fence in next MPS run,
and production plan gets firmed automatically as soon as it comes within planning time
fence unlike MRP run.

A separate run occurs for the MPS items; they are not included in the MRP run.
Basically, it ensures the availability of the critical resources, which should not hamper
the production by maintaining the stock.

Planning time fence (number of days starting from current date) is useful in case of MPS
scenario where one can save the procurement proposals (planned orders) from
undergoing any change since the last MRP run.

No automatic changes happen to the procurement proposals once they enter in the
planning time fence (PTF is maintained in material master). So, all planned orders in
planning time fence get automatically firmed by the system.

MRP type " P0" to "P3" in material master should be maintained to run MPS for
materials.

Goods movement against Production Order in PP

Movement type: 101

Movement type: 261

Production Order: CO01/CO02 : Production Order creation is required to produce the

material and consume the components which are used, and it also specifies the
sequence of operations to be performed at the work center.

The release of order signifies that the order is ready to be executed at the shop floor.
You can do an automatic release of order also during creation mode by using relevant
production scheduling profile in the material master with auto release indicator set.

Conversion of Planned orders to Production orders: MD16

Confirm Production order: CO15

3 activities occur at the same time with confirmation.

Generate confirmation document

Consume raw materials or semi-finished goods

Goods receipt of finished goods or semi-finished goods.

How to TECO (technically complete) production order: Technical completion of the order
is required when production order is either fully delivered, or it is not to be processed
further at shop floor.

Reports: COOIS /MB51/MB52/CS13