sap-sop
DESCRIPTION
SAP Sales and Operations Planning and Long Term PlanningTRANSCRIPT
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Module : PP (Production Planning)
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The SAP PP business processes uses the following organizational elements:
– Client
– Company Code
– Plant
– Storage Location
Organizational Elements
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Organizational ElementsClient
A Highest Hierarchical Level in SAP (e.g. a corporation)
Used to Differentiate between a Development, Quality Assurance, and Production System within SAP R/3
Common Set of Rules Common Tables Common Master Files Common Data Bases
Standardized data across the client A vendor number and name is common across the client A customer is common across the client A material number and description is common across the client
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BALANCING / (LEGAL)BALANCING / (LEGAL)ENTITYENTITY
==Company Code ****
AssetsLiabilitiesRevenues
- Expenses
Profit/Loss
Organizational ElementsCompany Code
A company code represents an independent balancing/legal accounting entity, for example, a company within a corporate group.
Balance sheets and profit & loss statements, required by law, can be created at the company code level.
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Organizational ElementsPlant
Usually a manufacturing facility, a warehouse, or a location that stocks , manages, and valuates inventory
May be a physical site with multiple manufacturing/production lines
May be multiple manufacturing/production lines at one physical site
Can be a physical location (cost centers may or may not be associated to a plant i.e. Administrative vs. Manufacturing cost centers)
Links to production (PP), materials management (MM), and sales and distribution (SD)
A plant is assigned to a company code
Purchasing organization are assigned to plants.
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Organizational ElementsStorage Locations
A storage location is the place where stock is physically kept within a plantA storage location has the following attributes:
There may be one or more storage locations within a plant.
Stocks are managed only on a quantity basis and not on a value basis at storage location level.
Physical inventories are carried out at storage location level.
Storage locations are always created for a plant.
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Master DataList of Master Data in SAP PP Module are:
– Material Master– Bills Of Material– Work Centers– Routings
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Master DataMaterial Master
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Material Master
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Material master record is a company's main source of material-specific data. It is used by all components in the R/3 Logistics System.
The integration of all material data in a single database object prevents the problem of data redundancy. Every area, such as Purchasing, Inventory Management, Materials Planning, and Invoice Verification can use the data stored.
Material Master
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Since materials are processed by various user departments within a company and each department stores different information for the materials, the material master is subdivided into information grouped by user departments.
Each user department has a different view of the material master record and is responsible for maintaining the data to support its function.
The data maintained within a view may be valid for more than one organizational level.
Material Master
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Material Master
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Material Master
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Material Master
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Material Master
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Material Master
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Material Master
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Base unit: Piece
Box(unit of issue)
Crate(order unit)
Pallet(sales unit)
4
16 72
Material Master – Units of Measure
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Material Master
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Material Master
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Master DataBills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Bills Of Material
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Master DataWork Centers
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Work Center
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Master DataRoutings
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Routing
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Routings - Components
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Routing - Components
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Routings
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Routing - Group
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Routing - Group
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Material Allocation
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PRT Assignments
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Sequences in Routing
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Parallel Sequences
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Scheduling in PP
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Scheduling
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Sub Operations in Routing
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Scheduling
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Production Planning
• Demand Management• Material Requirement Planning
−Planning of Purchased parts
−Planning of in house assemblies
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Planning Process: Process flow
Demand planning cell
PPC
Production
MRP Run
Third Party Log
Vendor Web site
Demand (Weekly)
Production Requirement (Week wise, Model wise)
Planned Prod.
Confirmed Production
Planned Vendor Schedule
Confirmed Vendor Schedule
Dispatch plan
Central marketing office
Dispatch sheet
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While doing planning, you need to decide which planning strategy to use when the customer places their order.
• Make-to-Stock Production− Make-to-stock production means we build stock in anticipation of customer
demand. We ship the customer order from our stock of finished goods
• Make-to-order Production− We wait for a customer order before we start production/procurement. i.e. We
produce as per demand from customer
Planning Process: Strategies
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Dealer
Territory office
Area Office Area Office Area Office Area Office
Zonal
Central Marketing office
Consolidation of Demand
Territory office
PPC
Dealer Dealer Dealer Dealer Dealer
Planning process: Demand Planning
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Demand management is the link between top-level requirements planning (SOP) and materials planning (MRP).Input for the demand program can come from several sources:
Planning Process: Demand Management
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Materials Requirement Planning
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MRP Overview
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Uses of MRP
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MRP Functions
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MRP Prerequisites
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Planning Run
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Planning Run - Types
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MRP - Control Parameters
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Net Change Planning
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Planning in Planning Horizon
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Planning Run - Single Item
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Single-item, Multi-Level Planning
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Single-Level MRP
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Multi-Level MRP
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Total Planning
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MRP Procedure
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MRP Control Parameters
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MRP Control Parameters
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MRP Control Parameters
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MRP Control Parameters
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MRP Control Parameters
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MRP Control Parameters
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Net Requirements Calculation
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Requirement Quantities
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Safety Stock
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Safety Time
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Safety Time in Production
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Lot Size Calculation
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Lot Sizing - Overview
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Static Lot Sizing
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Period Lot - Sizing Procedure
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Optimum Lot Sizing
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Long Term Lot Sizing
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Other Lot Sizing Features
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Lot Size Rounding Profiles
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Layout of MRP List
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Stock Req. List - Layout
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MRP List - Collective Display
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MRP List - Functions
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Exception Messages
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Rescheduling Checks
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Old / New Exception Message
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Planned New Exception Message Order Conversion
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Material Supply for Production
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Collective Display
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Search in Individual List
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Current List - Functions
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Pegged Requirements
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Order Report
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Planning Time Fence
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Planning Time Fence
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Scheduling in PP
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Scheduling - Basic Dates
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Scheduling - Production Time
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Planning Process
PlantStockPlantStock
MRP
OrderProposalExternal
ProcurementIn-HouseProduction
SupplySupply
DemandDemand
PlanningParameters
PlanningParameters
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Planning Process
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Production Execution
• Stock transfer to WIP location• Order Execution
−Production confirmation
−Error handling
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Planning Process
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Planning Process
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Production Execution
Physical MovementStorage Loc MAINStorage Loc MAINStorage Loc MAINStorage Loc MAIN Storage Loc WIPStorage Loc WIPStorage Loc WIPStorage Loc WIP
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ProductionOrder
BOM
Work Center
Routings
Release Avail check
Goods issue
Production
Goods receiptConfirmation
TECO
Movefloorstock
Planned Order
Availability Check
Convert Order
Production Execution
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Best PracticesLogistics PlanningMake-To-Stock Discrete ManufacturingProduction Subcontracting (External
Processing)Rework Processing (Stock-Manufactured
Material)Rework Processing (Work-In-Process)
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Logistics Planning
• Purpose − The purpose of logistics planning is to make sure that future demand can be
satisfied by your company’s available resources and to point out situations where demand cannot be met in time or in the desired quantities.
• Benefits − Seamless Integration in complete planning cycle
• CO-PA SOP LTP Demand Planning
• Key process flows covered− Sales and Operation Planning
− Long Term Planning
Purpose and Benefits:
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Logistics Planning
•This process sometimes is called ‘Sales and Operations Planning’. The process usually takes place in a simulative mode and at an aggregated (usually product group rather than end-item) level. Once a feasible production plan is found that satisfies demand it can be used as the basis for operational production planning (MRP and Detailed Capacity Scheduling).•The Best Practice scenarios in this section cover the following planning workflow: Planning/forecasting of future demand Aggregated production planning including capacity check in order to check at
product group level if demand can be satisfied (using the SOP functionality) Transfer of results to Long Term Planning (using the LTP module) to enable
simulation of material requirements, based on the production plan (s) Planning takes place in separate (simulative) planning versions within LTP Review and adjustments of planned requirements as needed Once the simulated requirements are accepted, the demand (independent
requirements) is then transferred to active demand management for detailed MRP and Production Planning / Scheduling in the active version.
Detailed Process Description:
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Logistics Planning – Process Flow DiagramR
even
ue
Pla
nn
er
Str
ate
gic
Pla
nn
er
Even
t
Acceptable Plan
Sales Qty Budget and Transfer to SOP (with CO-PA), Revenue Planning (172)
Operational Production Planning & Control(Production scenarios)
SOP Verification Demand Verification (Check Sales Plan)
Create Rough-Cut Production Plan
Periodic Sales and Operations Meeting
Operative Production Data
CO-PA = Profitability Analysis, SOP = Sales and Operations Planning, LTP = Long Term Planning, MRP = Material Requirements Planning
Transfer Rough Cut Production Plan to Inactive Demand Management
Copy to Active Demand Management
Execute LTP MRP
Create LTP Planning Scenario
No
Yes
Evaluate Capacity Planning
Sales Quantity forecast (179)
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Make-To-Stock Production with Discrete Manufacturing
• Purpose
− 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.
• Benefits
− 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
Purpose and Benefits:
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Make-To-Stock Production with Discrete Manufacturing
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.
Detailed Process Description:
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Make-to-Stock Production – Discrete Industry – Process Flow Diagram
Man
ufa
ctu
rin
gEven
t
Pla
nt
Con
tro
ller
Period End Closing “General” Plant(181)
Material Requirements Planning at Plant Level & Evaluation of Stock / Requirement List
Beginning of Planning Cycle
Purchase Requisition
MRP List
Inventory @ Standard. Cost
Pro
du
ctio
n P
lan
ner
Periodic Plan Revision
Release Production Order
Capacity Leveling
Material Staging for Planned Orders
Confirming Assembly Activities/ Final Confirmation
Semi-Finished Goods Receipt
Goods Issue/ Back flush
Update Capacity
Goods Receipt Slip
Pick List
Order PrintPlanned Orders
Capacity Leveling O.k.?
Material Available?
Bu
ye
rW
are
-h
ou
se
Cle
rk
Goods Receipt Slip
Procurement of Stock Material with QM (127)
Procurement & Consumption of Cosigned Inventory (139)
Str
ate
gi
c Pla
nn
er
Creating Planned Independent Requirements
ConvertPlanned Order to Production Order
Inventory Consumption @ Standard. Cost
Procurement w/o QM(130)
Finished Goods Receipt
MM Subcontracting (138)
PP-Subcontracting (External Processing)(150)
No
Yes
No
Yes
Logistics Planning (144)
1
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Make-to-Stock Production – Discrete Industry – Process Flow DiagramPro
du
ctio
n
Su
perv
isor
1 Review Operation List
Even
t
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Production Subcontracting (External Processing)
• Purpose − During the Manufacturing process, when a "Planned Order" for Production is
converted to a "Production Order", the system will check to see if there are any routing/work-center operations which require external processing. External processing is when you have individual production steps, that are operations or sub-operations, which are performed outside of your company by a vendor. This type of processing is particularly important for subcontracting. It can also provide a company with a feasible alternative to in-house processing, if capacity bottlenecks occur.
• Benefits − An outline agreement can specify that a certain operation of the production order
is executed by an external subcontractor on a regular basis− In the case of capacity bottlenecks, the assembly procedure of the finished
product can be assigned to a subcontractor• Key process flows covered
− Creating Purchase Order for External Processing− Goods Receipt for “subcontracting” Purchase Order− Enter Invoice− Periodic Payment
Purpose and Benefits:
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Production Subcontracting (External Processing)
•Production Subcontracting (External Processing)− When a Production Order is scheduled, external operations need to be taken into account. The
duration of an external operation is calculated either by using the planned delivery time or using the standard values. The system automatically creates a purchase requisition for the operation or sub-operation that requires external processing. The Production scheduler should inform the buyer they need to check the workload for requisitions that require external processing.
− When data is maintained for an external activity, a cost element is specified. The cost element determines how the external activity is to be valuated. A decision needs to be made as to whether an operation or sub-operation is processed externally via its control key. In the control key, it is determined whether externally processed operations are scheduled on the basis of their standard values or the planned delivery time. This information is needed to settle externally processed operations and sub-operations that have been marked as relevant for costing in their control keys.
− Purchasing should not convert the purchase requisition until the external processing is required. The reason for this is that any quantity changes on the production order will automatically update the requisition.
− Once the purchase order is created it is printed and sent to the vendor. The purchase order informs the vendor which service is required. The buyer/planner/scheduler creates a manual shipping document and provides the information to the shipping department on what components need to be gathered for the external processing and ships the components to the vendor.
− When the vendor has completed the external processing, the material is shipped back. The warehouse clerk receives the externally processed goods back into the warehouse. The vendor service is reflected on the production order via an operation confirmation. The purchase order and the production order show the quantity received.
− The goods receipt of an externally processed material causes the status of the operation to be updated: For a partial delivery of an external process operation, the status is: EOPD (External operation - partial delivery) and for final delivery of a external process operation the status is: EOFD (External operation - final delivery).
Detailed Process Description:
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Production Subcontracting (External Processing) – Process Flow DiagramP
urc
haser
Ven
do
rW
are
hou
se
Cle
rk
Create PO from Purchase Req (Vendor assigned by Info record)
Vendor Receives Material and Performs External Services
Ship Material to Vendor
Print Purchase Order
Subcontract Services GR/IR
PP = Production Planning, RFQ = Request for Quotation, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance
Ship External Material Back to Plant
Incoming Vendor Invoice
Completion Confirmation of Production Order
Production Order Generates Purchase Requisition for External Services
Goods Receipt for Subcontracting PO
Deliver Material Back to Shop Floor
Accou
nts
P
ayab
le
Accou
nta
nt
Even
t
Invoice Receipt
GR/IR PPV Vendor
Periodic Payment: Accounts Payable (158)
Perform External Services
Pro
du
cti
on
S
up
erv
isor
Check Order Operations
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Rework Processing (Work-In-Process)
• Purpose − Processing of defective material on a production order.
• Benefits − Scraps at defined operation automatically trigger rework process.
− After rework, additional activity and material consumption can be confirmed.
− Fully integrated in the production process
• Key process flows covered− Confirming Production Activities
− Confirm Scrap defective material
− Confirm Parent Order at Rework Operation
− Continue Shop floor-Activities
Purpose and Benefits:
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Rework Processing (Work-In-Process)
This scenario focuses on a rework process within production. All required rework activities are related to the parent production order. For this reason, errors are recognized and corrections initiated such as insertion of a rework operation within the same production order. The additional rework operation is confirmed and settled within the original production order, causing production variances within controlling and price differences for the dedicated product.
Detailed Process Description:
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Rework Processing (Work-in-Process) – Process Flow DiagramS
hop
Flo
or
Sp
ecia
list
Even
t
Any Complaint Quantity to Be Scrapped?
Confirm Scrap Defective Material
Confirming Production Activities
No
End Process
Insert Rework Operation on Parent Production Order Automatically
Confirm Parent Production Order at Rework Operation for Non-Defective Quantity
Scrap Defective Quantity that Can’t Be Reworked
Confirm Parent Production Order for Reworked Quantity That Can Proceed to Subsequent Operations
Continue Shop-Floor-Activities for Non-Defective-Quantity
Yes
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Rework Processing (Stock-Manufactured Material)
• Purpose − This process covers the rework of defective manufactured materials
that are found in the warehouse.
• Benefits − Transparent costs for rework activities
− Use of all standard shop-floor control functionalities is possible
• Key process flows covered− Create rework production order
− Goods issue for defective material
− Confirmation of rework production activities
− Posting goods receipt for rework production order
Purpose and Benefits:
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Rework Processing (Stock-Manufactured Material)
•Rework Processing (Stock-Manufactured Material)•For materials that can be reworked, a production order is created for correcting the defect. The costs associated with the rework production order will be settled to profitability as a material variance.
Detailed Process Description:
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Rework Processing (Stock-Manufactured Material) – Process Flow DiagramEven
tP
rod
ucti
on
P
lan
ner
Pro
du
cti
on
S
up
erv
isor
Ware
hou
se
Cle
rk
Create Rework Production Order
Identified Component in Stock Requires Changes
End Process
Confirmation of Rework Production Activities
Posting Goods Receipt for Rework Production Order
Goods Issue for defective Material
Sh
op
floor
Sp
ecia
list
Review Order Confirmations
Release Rework Production Order