scm100 en col62 fv part a4

SCM100Business Processes in Planning

(SAP ERP)mySAP Supply Chain Management

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Participant HandbookCourse Version: 2006 Q2Course Duration: 2 Day(s)Material Number: 50078625

An SAP course - use it to learn, reference it for work

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Copyright 2006 SAP AG. All rights reserved.

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About This Handbook SCM100

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iv 2006 SAP AG. All rights reserved. 2006/Q2

ContentsCourse Overview ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Course Goals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii

Unit 1: Overview of Supply Chain Planning ... .. . . . . . . . . . . . . . . . . . . . . 1Introduction ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Supply Chain Planning Overview ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Unit 2: Master Data ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21General Master Data in the Supply Chain .. . . . . . . . . . . . . . . . . . . . . . . . 22Additional Master Data for In-House Production.. . . . . . . . . . . . . . . . . 34

Unit 3: Demand Planning ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Executing Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Releasing Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Unit 4: Demand Management ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Make-to-Stock Production ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Make-to-Order Production ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106Availability Check .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Unit 5: Long-Term Planning .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119Planning Scenarios and Environment of Long-Term Planning.120Executing Long-Term Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130

Unit 6: Material Requirements Planning..... . . . . . . . . . . . . . . . . . . . . . . 147MRP Procedures... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148Executing Material Requirements Planning .. . . . . . . . . . . . . . . . . . . . .153Material Requirements Planning Evaluations .. . . . . . . . . . . . . . . . . . .174

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Contents SCM100

vi 2006 SAP AG. All rights reserved. 2006/Q2

Course OverviewSupply chain planning is carried out using the SAP ECC and SCM (APO)components. This course introduces you to the classic planning functions ofthe SAP ECC (ERP (Enterprise Resource Planning) Central Component). Thefollowing topics are covered:

Business Processes in Planning Master Data for Planning Demand Planning Demand Management Long-Term Planning Material Requirements Planning

Information about the SAP software components

The information in this training course is based on the following SAP softwarecomponents and releases:

SAP ECC 6.0 (SAP ERP Central Component 6.0)

Target AudienceThis course is intended for the following audiences:

Project team members and key users who are responsible for implementingsupply chain planning with ECC (ERP Central Component)

Course PrerequisitesRequired Knowledge

SAPSCM (mySAP SCM Overview)

Recommended Knowledge

PLM100 (Life-Cycle Data Management)

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Course Overview SCM100

Course GoalsThis course will prepare you to:

Gain a basic understanding of the SAP functions in the area of supply chainplanning using SAP ECC (ERP Central Component)

Describe the prerequisites for the planning process using SAP ECC Understand the interaction between the individual planning functions Carry out the basic processes involved in supply chain planning

Course ObjectivesAfter completing this course, you will be able to:

Describe the tasks and goals of supply chain planning Specify which master and transaction data is used for supply chain planning Explain the interaction between the individual planning functions Perform basic planning functions: sales and operations planning, demand

management, long-term planning and material requirements planning

SAP Software Component InformationThe information in this course pertains to the following SAP Software Componentsand releases:

viii 2006 SAP AG. All rights reserved. 2006/Q2

Unit 1Overview of Supply Chain Planning

Unit OverviewParticipants receive a brief overview of the mySAP SCM solution. The functionsof supply chain planning are summarized and particular reference is also madeto the options for enhanced planning using SAP APO. Finally, the individualplanning functions are introduced.

Unit ObjectivesAfter completing this unit, you will be able to:

Put the SAP ECC and SAP APO supply chain planning components intoperspective

Name the individual subprocesses of supply chain planning Define the SAP ECC planning functions

Unit ContentsLesson: Introduction .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Lesson: Supply Chain Planning Overview.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

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Unit 1: Overview of Supply Chain Planning SCM100

Lesson: Introduction

Lesson OverviewThis section provides a summary of the SAP Supply Chain Planning solutions.

Lesson ObjectivesAfter completing this lesson, you will be able to:

Put the SAP ECC and SAP APO supply chain planning components intoperspective

Business ExampleYou are a member of the project team responsible for implementing the supplychain planning functions using SAP ECC and you want to familiarize yourselfwith the SAP supply chain planning solutions in general.

mySAP Solutions

Figure 1: Value added by using the mySAP Business Suite solutions

The mySAP Business Suite offers both cross-industry and industry-specificsolutions. The cross-industry solutions include mySAP SCM (Supply ChainManagement) and mySAP PLM (Product Lifecycle Management).

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SCM100 Lesson: Introduction

The individual solutions comprise different key areas. For example, SCMPlanning and SCM Manufacturing are key areas in the mySAP SCM solution.

Components are used to execute each solution and key area. The key areas of SCMPlanning and SCM Production use the SAP ECC, SAP APO (Advanced Plannerand Optimizer) and SAP BW (Business Information Warehouse) components,among others.

mySAP Business Suite is based on SAP NetWeaver, an open-ended, scalableinfrastructure that allows the integration of heterogeneous environments(SAP and non-SAP components). SAP NetWeaver incorporates SAP WebApplication Server, the portal infrastructure, SAP Exchange Infrastructure andInformation Integration. The SAP Web Application Server supports nativeInternet technologies (HTTP, XML), JAVA and ABAP.

SAP backs up the solutions by providing corresponding services: SAP CustomerService Network helps customers maximize their ROI with mySAP Business Suite.

The SAP Customer Service Network incorporates the following components:Business Solutions Consulting (Business Solution Design: Creating businesssolutions, project management, Continuous Business Improvement); SolutionsOperations Services (technical implementation and continuous optimization);training; support (24x7 support, EarlyWatch, GoingLive).

Figure 2: Solutions



Planning within mySAP SCM

Figure 3: Structure of the mySAP SCM solution

The mySAP SCM (Supply Chain Management) solution is divided into the areasof SC Planning, SC Execution, SC Coordination and SC Collaboration.

In particular, the SC Planning area incorporates Demand Planning, (cross-plant)distribution and procurement planning as well as detailed production planning allthe way down to operation level. You can execute these functions in SAP ECCand/or in SAP SCM in the APO-DP, APO-SNP and APO-PP/DS components.

Supply Chain Execution incorporates the execution of planning in the context ofmanufacturing. Materials Management is also included in this area. The SAPECC component plays a central role in the use of these functions.


SCM100 Lesson: Introduction

Figure 4: SAP components used in Supply Chain Planning

SC Planning primarily uses the following SAP components: SAP ECC, SAPSCM (incorporating APO, Advanced Planner and Optimizer), SAP BW (BusinessInformation Warehouse). The SAP SCM system contains many components thatconstituted separate systems in earlier releases. Supply Chain Event Management(EM) and Inventory Collaboration Hub (ICH) are also found in SCM 500 inaddition to APO 5.0 functions.

The interfaces that govern the integration of ECC with BW or APO are providedby a corresponding plug-in. The interface between ECC and APO is called theCore Interface (CIF).



Lesson Summary

You should now be able to: Put the SAP ECC and SAP APO supply chain planning components into

perspective


SCM100 Lesson: Supply Chain Planning Overview

Lesson: Supply Chain Planning Overview

Lesson OverviewThis lesson outlines the processes involved in supply chain planning. You willalso become familiar with the individual functions of supply chain planning inSAP ECC.


Name the individual subprocesses of supply chain planning Define the SAP ECC planning functions

Business ExampleYou are a member of the project team responsible for implementing supply chainplanning with SAP ECC.

You are gaining an initial overview of the individual planning functions.

Overview

Figure 5: Supply chain planning scenario



Usually, the fundamental problem in supply chain planning is that theproduct-to-customer delivery time is supposed to be significantly shorter thanthe manufacturing time or lead time. To achieve this, stocks and safety stocksof components or finished products normally have to be built up at plants ordistribution centers (DCs).

You use postponement strategies to specify to what extent the sales order influencesthe supply chain; that is, the point at which make-to-stock production (pushstrategies) becomes separated from make-to-order production (pull strategies).

Figure 6: Supply Chain Planning Overview

Supply chain planning is generally divided into several steps and can be executedusing various components from SAP ECC and/or SAP APO. It is both possibleand useful to use the two systems together for integrated planning. The systemsare integrated using the CIF interface (CIF: Core Interface).

The process of demand planning, which is used to derive a future demand programfrom the demand figures in the past, can either be executed in ECC within flexibleplanning (with the special case of standard SOP (SOP: Sales and OperationsPlanning) or in demand planning in APO.

Demand management in the true sense of the word takes place in ECC. However,it is also possible to derive planned independent requirements from APO-DP.

Sales orders are always entered in the ECC system. The ATP check for a salesorder can be carried out globally in APO (integration with PP/DS is also possible).

You can use Supply Network Planning in APO to perform cross-plant planning.

Material requirements planning can be performed in ECC or in APO.



Production, that is, the processing of manufacturing orders (production orders orprocess orders), is executed in Manufacturing.

Demand Planning

Figure 7: Demand Planning (1)

The aim of Demand Planning is to forecast future demand. Therefore, it canbe performed at the level of a distribution center, for example, with the aim ofpredicting future developments based on historical buying and selling behavior.

SAP ECC offers Flexible Planning, which is a complex, powerful and flexibletool that supports your company's demand planning and production planningprocesses. The result of the forecast typically takes the form of demand forecastsat the level of distribution centers (DCs) or directly in the production plants.



Figure 8: Demand Planning (2)

Demand Planning can be performed in SAP ECC as part of flexible planningor in Sales and Operations Planning. Within this context, Sales and OperationsPlanning can be regarded as a special form of flexible planning.

In Demand Planning, a forecast is carried out on the basis of aggregated historicaldata. The historical data may come from SAP ECC-LIS (Logistics InformationSystem), for example. In this case, the relevant ECC-LIS data structures offer yougreat flexibility in defining the structure and format of the planning data. This ismade possible by the use of characteristics (for example, plant and sold-to-party),according to which the key figures (for example, the billing quantity) can bebroken down.



Demand Management

Figure 9: Demand Management

Demand management affects management of the independent requirements. Thebehavior of independent requirements in material requirements planning (forexample, whether they are effective, or whether they consume other requirements)is determined by their requirements type or by the planning strategy.

Planned independent requirements are stock requirements that are derived froma forecast of the future requirement situation. In make-to-stock production, youwant to start procurement of the affected materials without waiting for specificsales orders. On the one hand, this kind of procedure allows you to reduce deliverytimes, while on the other hand, you can use forecast planning to spread the burdenas evenly as possible across your production resources.

Sales orders (customer independent requirements) are entered from Sales andDistribution. Depending on the requirements type that you have set, customerrequirements can go directly into material requirements planning. This is alwaysdesirable if you want to plan for specific customers.

Sales orders can act as the sole sources of the requirement, for which procurementis then specifically triggered (make-to-order production). Alternatively, they canbe combined with planned independent requirements to form the total requirement.Planned independent requirements can also be consumed.



Production Planning

Figure 10: Production Planning

Production planning is used for planning production, external procurement orstock transfer on the basis of existing requirements in the plant (depending on theprocurement type). Therefore, the requirements are fulfilled by the creation ofplanned orders (for planning in-house production) and purchase requisitions orscheduling agreement schedule lines (for planning external procurement).

For planning in-house production, you can then carry out capacity planning. Thisis used to check whether the existing work center capacities are sufficient to allowproduction to take place.

Production planning is completed when the planned orders are converted intomanufacturing orders (production orders or process orders) or purchase orders orscheduling agreement scheduling lines.



Simulation using long-term planning

Figure 11: Simulation using long-term planning

Long-term planning can be executed using operative master data: BOMs, tasklists, work centers and material masters. Therefore, you do not have to create anynew operative data. However, you can choose between creating BOMs or tasklists for long-term planning, for example, if you want to simulate the effects ofdata changes on operative planning.

Long-term planning allows you to perform simulative MRP at all BOM levels atthe level of detail of operative planning. Dependent requirements quantities andcapacity requirements resulting from the production plan can be calculated andevaluated.

The tools available for long-term planning are used in the same way as the tools inoperative planning. Therefore, very little additional training is required.



Material Requirements Planning

Figure 12: Material Requirements Planning

Material requirements planning represents the first step in Production Planningand Detailed Scheduling. You generally execute this step in the short-tem horizonin the plant.

In material requirements planning (ECC MRP: Material Requirements Planning),the procurement dates for the required assemblies and components are determinedbased on the requirement dates for the finished product (for example, a sales order).

Procurement is scheduled for products produced in-house based on the tasklist. The production operations to be executed and the length of the individualoperations are specified in the task list. The assemblies (from the BOM) requiredfor production must be available when production of the finished product isstarted. Procurement of these assemblies must therefore be started earlier. Startingwith the dependent requirements date as availability date, the order dates of thecomponents are determined in backward scheduling using the in-house productiontime or the planned delivery time.



Figure 13: Material requirements planning and capacity planning

In material requirements planning, you can use the task list to calculate thecapacity requirements that result from the planned orders. Requirements planningonly creates the requirements; for the time being, no check is performed to verifywhether the work center is still available on the relevant dates (ECC MRP).

In a second step, a check is made to see if planning can be implemented; that is,to see if the work centers are available on the requested dates. This takes placewithin capacity planning.

Capacity planning is usually work center-specific. The role of capacity planning isto schedule all operations from the planned or manufacturing orders so that theproduction plan can be fulfilled.



Lesson Summary

You should now be able to: Name the individual subprocesses of supply chain planning Define the SAP ECC planning functions


SCM100 Unit Summary

Unit SummaryYou should now be able to: Put the SAP ECC and SAP APO supply chain planning components into

perspective Name the individual subprocesses of supply chain planning Define the SAP ECC planning functions


Unit Summary SCM100


SCM100 Test Your Knowledge

Test Your Knowledge

1. Supply chain planning is an area of the solutionand you can perform it by using the SAP ECC mySAP component.Fill in the blanks to complete the sentence.

2. At what level does operative planning along the supply chain occur?

3. Production planning is completed when the planned orders areconverted into or

.Fill in the blanks to complete the sentence.


Test Your Knowledge SCM100

Answers

1. Supply chain planning is an area of the mySAP SCM solution and you canperform it by using the SAP ECC mySAP component.

Answer: mySAP SCM

2. At what level does operative planning along the supply chain occur?

Answer: Demand Planning for demand forecasts at aggregated level,simulative planning, material requirements planning, production andcapacity planning in the production plants.

3. Production planning is completed when the planned orders are converted intomanufacturing orders or purchase orders.

Answer: manufacturing orders, purchase orders


Unit 2Master Data

Unit OverviewIn this unit, you will learn about the master and transaction data used for supplychain planning with SAP ECC.

All planning is based on master data that is used to define the objects that are tobe planned: locations such as plants, distribution centers, customers or suppliers,materials to be planned, resources that are available for production. In addition,BOMs and task lists are used to define the production processes in the productionplants. The material flow between different locations is displayed using externalprocurement relationships.

Planning itself is carried out based on transaction data: Available stocks areincluded in the planning, in addition there may also be sales orders or plannedindependent requirements for which procurement must occur. Planning results inprocurement elements (planned and manufacturing orders for in-house production,purchase requisitions and purchase orders for external procurement) that are usedto cover requirements. This transaction data relates to the available master dataobjects.


Describe the type of master data used in supply chain planning in SAP ECC Explain the roles played by customers, vendors and plants Display material masters Display and describe bills of material, work centers and routings Name the transaction data used in the supply chain

Unit ContentsLesson: General Master Data in the Supply Chain.. . . . . . . . . . . . . . . . . . . . . . . . . 22

Exercise 1: Material Master Data ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Lesson: Additional Master Data for In-House Production .. . . . . . . . . . . . . . . . . 34

Exercise 2: Master Data for In-House Production.. . . . . . . . . . . . . . . . . . . . . . 43


Unit 2: Master Data SCM100

Lesson: General Master Data in the Supply Chain

Lesson OverviewThis lesson will introduce you to the basic types of master data used in supplychain planning.


Describe the type of master data used in supply chain planning in SAP ECC Explain the roles played by customers, vendors and plants Display material masters

Business ExampleAs a member of the project team responsible for implementing supply chainplanning with SAP ECC, you want to familiarize yourself with the necessarymaster data.

Master data objects in the supply chain

Figure 14: Master data objects in the supply chain

The locations used in supply chain planning are created in ECC: Plants,distribution centers (DCs), vendors, customers. Supply chain planning deals withmaterials, which are defined in the form of material masters. For the plants usedfor production, you must also create resources, BOMs and task lists in additionto the materials for planning.


SCM100 Lesson: General Master Data in the Supply Chain

You can use special procurement types to define transportation lanes between theindividual locations (that is, the plants, vendors and so on) in the supply chain.These transportation lanes define the flow of materials along the supply chain.

The supply relationship between a vendor and the plant is stored in ECC in theform of a purchasing info record or an outline agreement.

Plants and Sales Centers

Figure 15: Plants and Distribution Centers

A plant is an organizational unit that divides the activities of a company intomanufacturing, procurement, stockholding or material planning. A plant canproduce materials or provide goods and services. For a plant, you must specify anaddress, a language, a country assignment and a plant calendar.

Distribution centers (DCs) are plants where the predominant activity is sellingor plants that are involved in the distribution of materials in general. The onlyfunctional difference between distribution centers and plants is determined by acorresponding entry in ECC Customizing. This means that plants also contain allthe functions of sales and distribution and, conversely, that production can alsotake place in distribution centers. Different icons are used to represent plants anddistribution centers in the supply chain.

You can define one or more storage locations within a plant. A storage locationspecifies where a material is stored. Storage locations therefore allow you todifferentiate between the material stocks in a plant.



Customers and vendors

Figure 16: Customers and vendors

Customers and vendors are stored in the ECC system as business partners. Theyallow you to control various processes in sales and distribution or purchasing.These locations do not generally affect the individual functions of supply chainplanning, but are nevertheless important when the plans are converted.

The sources for external procurement can be determined during materialrequirements planning.



Procurement relationships

Figure 17: Procurement relationships

Before products can be transferred between two locations in the same supplychain, that is, from a production plant to a distribution center, a correspondingtransportation lane must exist. In ECC, the information relating to atransportation lane is stored using special procurement keys in the material master.

Purchasing info records or outline agreements, which you can use to store priceand supply agreements with certain suppliers, represent external procurementrelationships.



Materials

Figure 18: Materials (1)

Planning the flow of materials along the supply chain occurs at material level.Materials are defined using corresponding material masters.

A material master contains global data, which is valid across all locations (forexample, data that is the same for this material in all production plants) andlocation-specific data, which contains settings for the relevant location (forexample, a specific production plant). General data such as the measurements orthe weight of a material is set globally, whereas settings for planning are usuallypredefined locally. This data may therefore differ, depending on the location.




To provide a clear display, material master data is subdivided into views.The views are partially valid globally (for example, basic data) and partiallylocation-specific (for example, MRP).

The material master is the data object that contains all information necessaryfor the business use of a material, in particular, all settings for procurement,production, storage or sales. Not all settings in the material master are relevantfor Supply Chain Planning. Some of them are more applicable to the functionsof evaluation and sales management.

Settings for Supply Chain Planning are mainly found in the material requirementsplanning views. The procurement type or planning strategy, for example, isdetermined here. In different locations, these settings can be maintained entirelydifferently.


The most important settings for Supply Chain Planning are contained in materialrequirements planning views 1 to 4 of the ECC material master.

The MRP type specifies how a material should be planned (MRP,consumption-based planning, no planning).

The lot-sizing procedure determines the lot size of the respective procurementproposals. The procurement type is used to determine whether a material is to beproduced in-house or procured externally. The in-house production times or theplanned delivery times specify how long procurement takes.

A level of safety stock can be set.



The strategy group controls how the independent requirements behave. Moreover,control of the ATP check takes place on the basis of the availability check group.

You can use a production version to define a manufacturing process. Morespecifically, you can select a task list and bill of material in a production version.



Exercise 1: Material Master Data

Exercise ObjectivesAfter completing this exercise, you will be able to: Display the ECC material master data required to produce a material in

a plant.

Business ExamplePumps with the material number R-F1## (## denotes your group number) areproduced in plant 1000. Using the material master data, you familiarize yourselfwith the production planning process.

Task:Display the material master for pump R-F1## in plant 1000. To do so, use thetransaction for displaying material masters in the ECC system. You can call thistransaction from the production master data menu.

1. When you call the transaction, enter material R-F1## and, on the nextscreen, select the views Basic Data 1, MRP 1 to MRP 4 andWorkScheduling. Finally, enter the plant 1000 as an organizational level.

2. First, look at the Basic Data 1 view. What is the exact name of the material?To which material type does the material belong?

3. Choose Enter to go to the next selected view, that is, the MRP 1 view. Isthe material planned using consumption-based planning or MRP (note theMRP type)?

Continued on next page



Will the material be produced in-house or procured externally (see theMRP 2 view)?

4. Proceed to the MRP 4 view (by choosing Enter twice, for example). Has aproduction version been recorded for the material?

5. Select the Work Scheduling view. What in-house production time has beenentered here?Approximately how long does it take to produce 100 pumps?Does this time include the procurement of the required assembly groupsand components?



Solution 1: Material Master DataTask:Display the material master for pump R-F1## in plant 1000. To do so, use thetransaction for displaying material masters in the ECC system. You can call thistransaction from the production master data menu.

1. When you call the transaction, enter material R-F1## and, on the nextscreen, select the views Basic Data 1, MRP 1 to MRP 4 andWorkScheduling. Finally, enter the plant 1000 as an organizational level.

Answer: ECC menu path: Logistics Production Master DataMaterial MasterMaterial Display Display Current

2. First, look at the Basic Data 1 view. What is the exact name of the material?

To which material type does the material belong?

Answer: Name of the material: PumpMaterial type (info button) : FERT (Finished good)

3. Choose Enter to go to the next selected view, that is, the MRP 1 view. Isthe material planned using consumption-based planning or MRP (note theMRP type)?

Will the material be produced in-house or procured externally (see theMRP 2 view)?

Answer: The PD MRP type is used to perform MRP for the material.The material is produced in-house (procurement type E).

4. Proceed to the MRP 4 view (by choosing Enter twice, for example). Has aproduction version been recorded for the material?

Answer: No, a production version has not been defined. The versionindicator has not been set.




5. Select the Work Scheduling view. What in-house production time has beenentered here?

Approximately how long does it take to produce 100 pumps?

Does this time include the procurement of the required assembly groupsand components?

Answer: In-house production time: A setup time of 0.09 days, a queuetime of 3.90 days and a processing time of 20.24 days per 100 pieceshas been entered.Time taken to produce 100 pumps: The total of the aforementioned timeelements gives the time needed to produce 100 pumps, that is, roughly24 days.Is procurement of the required assemblies and components included? No,this is the time taken to produce the pumps only.



Lesson Summary

You should now be able to: Describe the type of master data used in supply chain planning in SAP ECC Explain the roles played by customers, vendors and plants Display material masters



Lesson: Additional Master Data for In-House Production

Lesson OverviewThis lesson will introduce you to the master data that is used to plan the productionprocesses.

This lesson also provides an overview of the transaction data used in the supplychain.


Display and describe bills of material, work centers and routings Name the transaction data used in the supply chain

Business ExampleAs a member of the project team responsible for implementing supply chainplanning with SAP ECC, you want to familiarize yourself with the master datafor in-house production.

Bills of material

Figure 21: Bills of material (1)


SCM100 Lesson: Additional Master Data for In-House Production

The bill of material contains the assemblies or components that are involved inthe production of a material. BOMs are used in material requirements planning,production, procurement and for product costing.

A BOM consists of a BOM header and BOM items. The base quantity in theBOM header specifies the amount of the finished product referred to by the itemquantities.

Bills of material are single-level. An item of a BOM may itself also containcomponents. In this way, multilevel production is described using the single-levelBOMs of the finished product, of the assemblies and, where required, of theassemblies of the assemblies and so on.

A BOM may also contain documents or text items in addition to stock items thatare required for the finished product.

Figure 22: Bills of material (2)

The BOM header contains the settings that apply for the whole BOM. BOM usagedetermines the business applications for which a BOM can be used. The status ofthe BOM controls whether the BOM is active for particular applications (MRP,for example).

Multiple BOMs, which consist of multiple alternative BOMs, can also exist inaddition to simple BOMs. The different alternative BOMs can then be valid foreach of the different lot-size areas, for example.

The components required to produce the finished product are entered as items inthe BOM. The item category specifies the kind of item you are dealing with:Stock items are executed in the warehouse and are used in production. In



contrast, non-stock items are directly assigned to a manufacturing order (andnot via the warehouse). Variable-size items contain variable-size data (a steelsheet with a particular surface area, for example) and finally, document itemscontain a supplementary document that describes production (a kind of design andconstruction diagram).

The individual items can also contain many other settings that only refer to thatparticular item.

Work Centers

Figure 23: Work centers (1)

A work center is where an operation or an activity is carried out in a plant. Ittherefore specifies where production ultimately takes place. Work centers areused in routings or they may also be used in networks, inspection plans (QualityManagement) or in maintenance routings.

A work center is generally a specific geographical location in the plant, forexample, a specific machine or department in a plant.

The data of the work center is assigned according to thematic views. In particular,the available capacity of the particular work center and the data needed to calculatethe costing of work completed is stored in the work center. The default valuesdefine data that has to be transferred into the operation of the routing or usedas a reference.



Figure 24: Work centers (2)

The capacities that are available to a work center are explicitly specified in thework center. In this case, you may certainly use more than one capacity per workcenter. For example, you can assign both machine capacity and labor capacityto a work center.

The capacities contain the available working time. Moreover, formulas specifyhow long the capacities will be loaded by a certain operation.

In addition to standard available capacity, intervals of available capacity and shiftschedules can also be stored. These specify exactly when a particular machine isavailable, for example.



Routings

Figure 25: Routings (1)

A routing contains the work steps required to carry out production. These includethe relevant operations, the sequence in which they occur and the work centers atwhich these operations are to be executed.

An ECC routing can be defined using the routing group and the group counter.Moreover, the routing contains reference to the material whose production itdescribes. A routing can contain parallel or alternative sequences in addition tothe standard sequence.

Alongside the standard values, the routing also contains the time elements that arerelevant for scheduling operations. Note that each operation in the routing maycontain its own base quantity, to which these time elements may refer.



Figure 26: Routings (2)

A work center is assigned to the ECC operation. The work center uses its standardvalue key to specify which time elements (standard values) can be taken intoconsideration during the planning process (for example, setup time, machine time,personnel time). The scheduling formulas stored in the work center define theduration from the allowed time elements in the routings.

The setup, processing and tear down of an ECC operation are all displayed using acorresponding formula. The steps for which a formula is defined are executed (forexample, tear down may not be necessary).

If multiple capacities are stored in a work center, the scheduling basis is used todetermine which of these capacities is relevant for the scheduling process.



Routing and bill of material

Figure 27: Routing and bill of material

Production is described by a routing and a bill of material. In this case, the BOMcomponents can be assigned to a specific operation. The procurement of thesecomponents is then planned at the beginning of the particular operation.

The component assignment is performed in the routing. BOM components thatare not explicitly assigned are regarded as being assigned to the first operation.

Along with the BOM components, you can also assign production resources/toolsin the routing. Production resources/tools are operating facilities that are notlocation-bound, but are necessary for production, such as a measuring instrumentor a support.



Master data in the process industry

Figure 28: Master data in the process industry

As previously described, discrete manufacturing master data is used whenthe controlling of production is mapped with production orders. Therefore, aproduction order uses routings, work centers and BOMs.

Other master data is required if production with process manufacturing (PP-PI) isto be mapped. A master recipe (instead of the routing) and resources (instead ofwork centers) are used for the process order.

Discrete manufacturing master data can logically be transferred to the rangeof concepts in the process industry. The master recipe is actually a specialrouting that was enhanced with process industry-specific functions. Moreover, inProduction Planning-Process Industries (PP-PI), production versions are usuallyused, so that the corresponding BOMs are assigned directly to a recipe. You cantherefore maintain the BOM directly from the recipe.

The resource largely corresponds to the routing.

All of the relationships displayed so far are therefore also valid in PP-PI. Materialrequirements planning, for example, is completely identical for PP and PP-PI.



Transaction data objects in the supply chain

Figure 29: Transaction data objects in the supply chain

Supply chain planning is carried out based on the master data (for example, thework centers). This type of planning results in transaction data, which is thenused to plan procurement.

Independent requirements usually represent the starting point for planning. Theseare entered in the form of planned independent requirements or sales orders.They are used to specify requirements in a distribution center or sales center,for example. However, independent requirements can also be created for anindividual production plant.

The planning process that ensures that the independent requirements are covered iscarried out in the network. The requirements are covered either by stock transfers,by in-house production or by external procurement.

Stock transfers are represented by stock transport requisitions, in-house productionby planned and manufacturing orders and external procurement by purchaserequisitions and purchase orders.



Exercise 2: Master Data for In-HouseProduction

Exercise ObjectivesAfter completing this exercise, you will be able to: Display important ECC master data required to produce a material in a plant

Business ExamplePumps with the material number R-F1## (## denotes your group number) areproduced in plant 1000. You have the material master data. Using other masterdata, you familiarize yourself with the production planning process.



Task 1:To determine which assemblies and components are required to produce theR-F1## pump, take a look at the BOM for the material:

1. Display the material BOM for the material R-F1## . You can find thecorresponding transaction in the Master Data under Production. When youcall the transaction, enter the material, the plant 1000 and usage 1. ChoosingEnter takes you to the item overview. Which components are required forproduction of the pump (4 materials, one document)?

2. Which components are themselves composed of other components (look atthe Assembly indicator)?

3. You can go to the BOM for the assembly by double-clicking on theassembly indicator in the BOM item. In this way, you can see whichcomponents the R-B1## assembly contains.

Task 2:Finally, display the different steps that have to be carried out to produce pumpR-F1##.

1. Display the standard routing for the R-F1## material. You can find thecorresponding transaction in the Master Data under Production. Call thetransaction and enter the material and the plant 1000. Choose Enter to go tothe operation overview for the plan.

Which operations (make a note of the operation descriptions) are executed atwhich work centers?




0010: ________________________________________________

0020: ________________________________________________

0030: ________________________________________________

0040: ________________________________________________

0050: ________________________________________________

0060: ________________________________________________

0070: ________________________________________________

2. Now go to the component overview (choose the Comp. alloc. -gen. button).Are the components assigned to an operation other than the first one?

Hint: Note: If nothing is explicitly assigned, this means thatcomponents belong to the first operation.



Solution 2: Master Data for In-HouseProductionTask 1:To determine which assemblies and components are required to produce theR-F1## pump, take a look at the BOM for the material:

1. Display the material BOM for the material R-F1## . You can find thecorresponding transaction in the Master Data under Production. When youcall the transaction, enter the material, the plant 1000 and usage 1. ChoosingEnter takes you to the item overview. Which components are required forproduction of the pump (4 materials, one document)?

Answer: ECC menu path: Logistics Production Master Data Billsof Material Bill of Material Material BOM DisplayComponents needed to produce the pump: Materials R-B1##, R-B2##,R-B3##, R-B4##, Document Assembly drawing for pump.

2. Which components are themselves composed of other components (look atthe Assembly indicator)?

Answer: The components R-B1##, R-B2##, R-B3##, R-B4## are composedof other components.

3. You can go to the BOM for the assembly by double-clicking on theassembly indicator in the BOM item. In this way, you can see whichcomponents the R-B1## assembly contains.

Answer: Materials R-T1##, R-T2##, R-T3##.

Task 2:Finally, display the different steps that have to be carried out to produce pumpR-F1##.

1. Display the standard routing for the R-F1## material. You can find thecorresponding transaction in the Master Data under Production. Call thetransaction and enter the material and the plant 1000. Choose Enter to go tothe operation overview for the plan.

Which operations (make a note of the operation descriptions) are executed atwhich work centers?

0010: ________________________________________________

0020: ________________________________________________

0030: ________________________________________________

0040: ________________________________________________Continued on next page



0050: ________________________________________________

0060: ________________________________________________

0070: ________________________________________________

a) ECC menu path: LogisticsProductionMaster Data Routings RoutingsStandard Routings Display

b)

Operations and Work Centers:Operation Short text operation Work center0010 Material staging R-M##0020 Press flywheel in

casingR-V##

0030 Paint casing R-L##0040 Insert hollow shaft in

casingR-E##

0050 Install controlelectronics

R-E##

0060 Final assembly ofpump

R-F##

0070 Deliver to stock R-P##

2. Now go to the component overview (choose the Comp. alloc. -gen. button).Are the components assigned to an operation other than the first one?

Hint: Note: If nothing is explicitly assigned, this means thatcomponents belong to the first operation.

a) No, none of the components are explicitly assigned.



Lesson Summary

You should now be able to: Display and describe bills of material, work centers and routings Name the transaction data used in the supply chain


SCM100 Unit Summary

Unit SummaryYou should now be able to: Describe the type of master data used in supply chain planning in SAP ECC Explain the roles played by customers, vendors and plants Display material masters Display and describe bills of material, work centers and routings Name the transaction data used in the supply chain


Unit Summary SCM100



Test Your Knowledge

1. Supply chain planning reverts to the locations ,, and

.Fill in the blanks to complete the sentence.

2. Supply chain planning is based on materials. Material masters containand data.

Fill in the blanks to complete the sentence.

3. The flow of materials in the supply chain is determined using. For example, a

material for a production plant can use toprocure for a distribution center.Fill in the blanks to complete the sentence.

4. The production of a material in a plant is described byand . The individual work

steps are executed at .Fill in the blanks to complete the sentence.



Answers

1. Supply chain planning reverts to the locations plant, distribution center,customer and vendor.

Answer: plant, distribution center, customer, vendor

2. Supply chain planning is based on materials. Material masters containgeneral and location-specific data.

Answer: general, location-specific

3. The flow of materials in the supply chain is determined using procurementrelationships. For example, a material for a production plant can use stocktransfers to procure for a distribution center.

Answer: procurement relationships, stock transfers

4. The production of a material in a plant is described by bills of material androutings. The individual work steps are executed at work centers.

Answer: bills of material, routings, work centers


Unit 3Demand Planning

Unit OverviewIn this unit, you will learn primarily about quantity-based demand planning inSAP ECC, including the relevant inbound and initial data.


Explain the concepts and tasks of Demand Planning Describe the procedures used in Sales & Operation Planning Transfer the results of Sales and Operations Planning to demand management

Unit ContentsLesson: Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Lesson: Executing Demand Planning... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Exercise 3: Executing Sales and Operations Planning.. . . . . . . . . . . . . . . . 65Lesson: Releasing Demand Planning... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Exercise 4: Releasing Demand Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73


Unit 3: Demand Planning SCM100

Lesson: Demand Planning

Lesson OverviewThis lesson will introduce you to the concepts and the main tasks of Sales andOperations Planning, SOP.


Explain the concepts and tasks of Demand Planning

Business ExampleAs a member of the project team responsible for implementing the supply chainplanning functions of SAP ECC, you are drafting an outline concept for DemandPlanning.

Tasks of Demand Planning

Figure 30: Tasks of Demand Planning

The purpose of Demand Planning is to forecast future demand. It can thereforebe performed at the level of a distribution center, for example, with the aim ofpredicting future developments based on historical buying and selling behavior.

SAP ECC offers Flexible Planning, which is a complex, powerful and flexibletool that supports your company's demand planning and production planningprocesses. The result of the forecast typically takes the form of demand forecastsat the level of distribution centers (DCs) or directly in the production plants.


SCM100 Lesson: Demand Planning

Planning Levels of Flexible Planning

Figure 31: Planning Levels of Flexible Planning

Flexible planning allows you to create quantity-based as well as value-basedplans. You are free to choose the planning levels. This means that you can planyour future requirements for specific customers, regions or for different salesorganizations. You can also define the time buckets profiles as you wish.

The planning levels are defined using characteristics in the information structuresof the Logistics Information System (LIS) on which the planning is based.Therefore, characteristic values are the objects for which you aggregate,disaggregate and evaluate business data.

Planning data is stored as key figures. Key figures contain numerical values thatrepresent either a quantity or a value; for example, the projected sales value ineuro or projected sales quantities in pallets.

Time characteristics define the buckets in which you view, plan and store data.

The multidimensional nature of the data store allows for powerful data analysiscapabilities using the Demand Planning selection and drill up/drill down functions.



Demand Planning

Figure 32: Demand Planning

Sales and Operations Planning, SOP comprises two core elements: Flexibleplanning and Standard SOP.

Demand Planning can be performed either as part of flexible planning or in Salesand Operations Planning. In this case, Sales and Operations Planning can beregarded as a special form of flexible planning.

In Demand Planning, a forecast is generally carried out on the basis of aggregatedhistorical data. The historical data may come from SAP ECC-LIS (LogisticsInformation System), for example. The relevant ECC-LIS (Logistics InformationSystem) data structures can offer you great flexibility in defining the structure andformat of the planning data. This is made possible by the use of characteristics(for example, plant and sold-to-party), according to which the key figures (forexample, the billing quantity) can be broken down.

In addition to the usual forecasting techniques, flexible planning also allows youto use dedicated macros, which you can then use to define dedicated algorithmsfor processing the key figures.


SCM100 Lesson: Demand Planning

Lesson Summary

You should now be able to: Explain the concepts and tasks of Demand Planning



Lesson: Executing Demand Planning

Lesson OverviewThis lesson will introduce you to the forecasting techniques and the planning tableused in Sales & Operations Planning. You will also learn about the levels at whichyou can disaggregate and store data.


Describe the procedures used in Sales & Operation Planning

Business ExampleAs a member of the project team responsible for implementing the ECC supplychain planning functions, you are trying to decide which forecasting technique touse for your company's products.

Flexible Planning as Consistent Planning

Figure 33: Flexible planning as consistent planning

Both consistent planning and level-by-level planning can be executed as part offlexible planning. Consistent planning means that planning data on all planninglevels can be maintained consistently (automatic aggregation and disaggregation).Consistent planning throughout the entire enterprise allows detailed plans to beautomatically consolidated. Level-by-level planning means that the planning datacan only be disaggregated from the higher-level stage into the detail levels.


SCM100 Lesson: Executing Demand Planning

In theory, consistent planning allows three different procedures: Top-downplanning (an aggregated plan is automatically distributed to the detail levels(products, customers, sales areas and so on) in accordance with proportionalfactors), middle-out planning (mid-level planning data is summarized for theentire plan and distributed down to the detail levels), bottom-up planning (detaileddata is automatically summarized for the entire plan).

The lower part of the graphic shows you how to change planning data consistentlyat various levels: First, you increase the planned sales for pump P-102 from 50 to60 pieces. This increases the total sales quantity for all pumps. The sales quantityfor all pumps is now doubled, which also causes the quantities of the individualpumps to double.

The data (key figures) used in Flexible Planning is broken down according tocharacteristics and stored in LIS information structures. The data is accessedand planning is executed using a corresponding planning type, which is used todefine the layout of the planning table.

Forecasting Techniques

Figure 34: Forecasting techniques

You can choose the type of historical data to be used for the forecast: You can useany key figure. For example, you can forecast material consumptions, incomingorder quantities, invoiced quantities or sales revenues.

The system uses various forecasting models to determine the future developmentof the key figure under consideration. In this case, the exact forecasting processis determined by the forecast profile.



Key Characteristics of Flexible Planning

Aggregated historical data by means of an LIS update Planning on LIS information structures (database) with a maximum of

9 characteristics Simple macros Rough-cut capacity planning is possible Integration with Profitability Analysis Fixed drilldown Standard forecasting techniques

Demand Planning and Production Planning

Figure 35: Demand Planning and Production Planning

Demand planning can form the starting point for the entire production planningprocess. In the context of demand planning, for example, you can createproduction plans (for example, in a production key figure), which you can thentransfer to operative planning in the form of planned independent requirements.



Flexible Planning and Standard SOP

Figure 36: Flexible planning and standard SOP

Demand Planning (SOP) comprises two core elements: Flexible planning andstandard SOP.

You can and, to a large extent, must use the relevant information structures andplanning types to create settings for flexible planning yourself, whereas standardSOP is designed as a standard process that is installed by default.

Standard SOP is based on the S076 information structure. This informationstructure uses level-by-level planning where the planning hierarchy levels areindependent of one another. This means that plans at different levels do not haveto be consistent. Standard SOP is a simplified variant of flexible planning inwhich a specific planning process is already defined. Therefore, the use of thisfunction does not require a detailed knowledge of the settings of the LogisticsInformation System on which it is based.



Planning Levels in Standard SOP

Figure 37: Planning Levels in Standard SOP

You can execute planning in SOP for product groups or materials. Planning athigher product group levels can be disaggregated to the members of the productgroup.

Product groups are created in SOP. You can define them by specifying theirmembers and the associated proportional factors that determine how the planningdata is divided among the members. The proportional factors can be definedmanually or automatically calculated based on historical consumption values.The sum of all the proportional factors of a planning level is usually 100%. Aproportional factor could also be 0%.

Product groups can contain either materials or other product groups. However, thelowest product group in the hierarchy must consist of materials. For each productgroup, the system creates a material master with the PROD material type.

Cross-plant planning is possible.



Planning Using the Standard Planning Table

Figure 38: Planning Using the Standard Planning Table

The demand and production plans are developed in the planning table for Sales& Operation Planning. A planning table exists for all members of a productiongroup hierarchy.

You can execute planning in parallel in multiple independent versions. In thiscase, planning in the active version A00 always occurs in change mode, whereasthe planning in inactive versions must first be created before it can be changedduring a subsequent revision.

The standard planning table for Sales & Operation Planning consists of one linerespectively for the demand plan, the production plan, the warehouse stock level(determined by the system), the target stock level, the day's supply (determined bythe system) and the target day's supply.

You can create demand plans by transferring data from the Sales InformationSystem (SIS), from the Controlling/Profitability Analysis (CO/PA), by using thesales history to forecast sales targets, by transferring data from another productgroup or by creating entries manually.

You can create production plans synchronous to sales, according to the targetstock level and according to the target day's supply. You can of course manuallycreate or correct the plans at any stage.

The distribution function provides a simple method of entering data for the variouskey figures and periods.



Exercise 3: Executing Sales andOperations Planning

Exercise ObjectivesAfter completing this exercise, you will be able to: Execute Sales and Operations Planning at material level based on given

sales figures

Business ExampleThe Sales department executes a sales forecast for pumps with material numberR-F1## (## indicates your group number) for the period from the current month+6 to the current month +11 and provides you with the relevant data. You usethese values to execute Sales and Operations Planning.

Task:You execute Sales and Operations Planning at material level formaterial R-F1##in plant 1000. Since you are working in active version A00, access the ChangePlanning for Material transaction from the SOP menu.

1. On the initial screen of the transaction, enter material R-F1## and plant1000 and go to the active version (A00). This brings you to the planningtable, which contains the Sales and Production key figures.The Sales department has created a forecast of future sales and they provideyou with the following figures:Current month +6: 100 PCCurrent month +7: 110 PCCurrent month +8: 110 PCCurrent month +9: 120 PCCurrent month +10: 140 PCCurrent month +11: 150 PCEnter these figures in the Sales key figure and press Enter to confirm.What stock level is displayed for the last date of the planning figures youentered?What does this figure indicate?




2. Since the sales forecast for the current month +8 and the current month +9is uncertain, enter a target stock level of 20 PC here. Enter the values andpress Enter to confirm. Does the displayed stock level change?What is the significance of this specification of the target stock level?

3. Finally, plan production. Edit the plan by creating the production plan inaccordance with the target stock level. Which stock level results fromthis production plan? Why?Note down the production figures:Current month +6: ___________Current month +7: ___________Current month +8: ___________Current month +9: ___________Current month +10: ___________Current month +11: ___________

4. Finally, save your Sales and Operations Planning.



Solution 3: Executing Sales andOperations PlanningTask:You execute Sales and Operations Planning at material level formaterial R-F1##in plant 1000. Since you are working in active version A00, access the ChangePlanning for Material transaction from the SOP menu.

1. On the initial screen of the transaction, enter material R-F1## and plant1000 and go to the active version (A00). This brings you to the planningtable, which contains the Sales and Production key figures.

The Sales department has created a forecast of future sales and they provideyou with the following figures:

Current month +6: 100 PC






Enter these figures in the Sales key figure and press Enter to confirm.What stock level is displayed for the last date of the planning figures youentered?

What does this figure indicate?

Answer: ECC system menu path: Logistics ProductionSOPPlanning For Material ChangeStock level on the last date: A stock level of minus 730 PC is displayed.Meaning: In this planning table, the stock level is an evaluation forcomparison with the expected sales of production. Since no productionfigures exist at this point, the stock level only consists of the total salesfigures in this case.




2. Since the sales forecast for the current month +8 and the current month +9is uncertain, enter a target stock level of 20 PC here. Enter the values andpress Enter to confirm. Does the displayed stock level change?

What is the significance of this specification of the target stock level?

Answer: Does the stock level change?: No, the stock level does notchange. It only changes if the sales figures or production figures change.Significance of the specification: The target stock level can be used forplanning production. It allows you to specify that only this stock level shouldbe available at the end of the period.

3. Finally, plan production. Edit the plan by creating the production plan inaccordance with the target stock level. Which stock level results fromthis production plan? Why?

Note down the production figures:

Current month +6: ___________






Answer: Stock level with production plan: The product plan matches thetarget stock level exactly. Planning was executed using the value you defined.Production figures:Current month +6: 100Current month +7: 110Current month +8: 130Current month +9: 120Current month +10: 120Current month +11: 150

4. Finally, save your Sales and Operations Planning.

Answer: No solution required.



Lesson Summary

You should now be able to: Describe the procedures used in Sales & Operation Planning



Lesson: Releasing Demand Planning

Lesson OverviewThe release of the sales and operation plans results in the generation of plannedindependent requirements in demand management. This lesson will introduce youto the release process.


Transfer the results of Sales and Operations Planning to demand management

Business ExampleThe project team is faced with the following questions:

How often (at what intervals) are the demand plans to be released? Which plants are to be informed of the requirements? Do the released plans for production planning represent various requirements

or requirement types?

Disaggregation and Transfer

Figure 39: Disaggregation and Transfer


SCM100 Lesson: Releasing Demand Planning

The creation of a demand or production plan at one level in the product hierarchydoes not automatically result in the creation of plans at lower levels. In this case,you must carry out a disaggregation into the product group members.

When performing the disaggregation, you have various options. For example,the production plan of a product group can be disaggregated into the individualmaterials. The step of transferring the planning figures to demand managementis also referred to as disaggregation. Finally, both steps can be combined:Product group data can therefore be transferred directly as planned independentrequirements at material-plant level. This procedure does not generate anydisaggregated planning data at material level.

You can transfer either the demand data or the production data to demandmanagement. In addition to this, the target version and the characteristics of theplanned independent requirements can be defined.

The Demand Planning cycle

Figure 40: The Demand Planning cycle

Past sales order quantities are used as a basis for forecasting future requirements.This historical data is managed in an information structure in the LIS. Specialextraction structures are used to transfer the data from the operational ECC systemto the information structure. In addition, market intelligence or one-off events(such as trade fairs) can be included in the forecast.

The demand plan (or any other key figure) as a result of the forecast is released asa planned independent requirement. Planned independent requirements providethe basis for procurement and production planning and may be consumed bythe current sales orders, for example.



Exercise 4: Releasing Demand Planning

Exercise ObjectivesAfter completing this exercise, you will be able to: Release the results of Sales and Operations Planning to demand management

Business ExampleYou have just executed Sales and Operations Planning for material R-F1##(## indicates your group number). You now transfer the results to demandmanagement.

Task:To use the results of your Sales and Operations Planning in the following planningsteps, you must disaggregate the planning. In other words, you transfer theproduction figures to demand management in the form of planned independentrequirements.

1. Access the Transfer Material to Demand Management transaction fromthe SOP menu and enter the following data:

Material: R-F1##Plant: 1000Version: A00 (active version)

Make the following selections for the independent requirement:

Requirements type: VSFVersion: ##Active indicator not set

After you have checked again that you have made all required entries (checkin particular that you have entered the correct version ## and that the activeindicator is not set!), Select the Transfer Now button.




2. Does the planning step you have just executed affect operative materialrequirements planning? Why (not)?



Solution 4: Releasing Demand PlanningTask:To use the results of your Sales and Operations Planning in the following planningsteps, you must disaggregate the planning. In other words, you transfer theproduction figures to demand management in the form of planned independentrequirements.

1. Access the Transfer Material to Demand Management transaction fromthe SOP menu and enter the following data:

Material: R-F1##Plant: 1000Version: A00 (active version)

Make the following selections for the independent requirement:

Requirements type: VSFVersion: ##Active indicator not set

After you have checked again that you have made all required entries (checkin particular that you have entered the correct version ## and that the activeindicator is not set!), Select the Transfer Now button.

a) ECC system menu path: Logistics Production SOPDisaggregation Transfer Material to Demand Management

2. Does the planning step you have just executed affect operative materialrequirements planning? Why (not)?

Answer: No, the step you have just executed has no effect on operativeplanning, since the disaggregation with settings you made results in inactiveplanned independent requirements.



Lesson Summary

You should now be able to: Transfer the results of Sales and Operations Planning to demand management


SCM100 Unit Summary

Unit SummaryYou should now be able to: Explain the concepts and tasks of Demand Planning Describe the procedures used in Sales & Operation Planning Transfer the results of Sales and Operations Planning to demand management


Unit Summary SCM100



Test Your Knowledge

1. What does consistent planning mean?

2. What are the two core elements of Sales & Operation Planning and howdo they differ?

3. What is created when the Sales & Operation Planning is released?



Answers

1. What does consistent planning mean?

Answer: Consistent planning means that the planning data is held in aconsistent manner at all planning levels, that is, it is automatically aggregatedand disaggregated at runtime.

2. What are the two core elements of Sales & Operation Planning and howdo they differ?

Answer: The core elements of Sales & Operation Planning are flexibleplanning, which allows a high degree of configuration by the user, andstandard SOP, which is largely preset.

3. What is created when the Sales & Operation Planning is released?

Answer: Planned independent requirements, which are displayed in demandmanagement.


Unit 4Demand Management

Unit OverviewIn this unit, you will learn how to forecast the requirement quantities andrequirement dates for finished goods and important assemblies. You will alsobecome familiar with the strategies used to schedule and produce or procurefinished products. Finally, this unit provides an overview of the availability check.


Explain the function of planned independent requirements Describe the make-to-stock production process Explain the role of the planning strategies Trace the consumption of planned independent requirements by sales orders Describe the make-to-order production process Explain the basics of how the availability check works

Unit ContentsLesson: Make-to-Stock Production .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Exercise 5: Planning with Final Assembly .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Lesson: Make-to-Order Production.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106Lesson: Availability Check... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111


Unit 4: Demand Management SCM100

Lesson: Make-to-Stock Production

Lesson OverviewIndependent requirements provide the starting point for procurement planning.These include planned independent requirements derived from a demand forecast,as well as customer independent requirements or sales orders. The behavior ofthese requirements can be adjusted: The planning strategy controls how therequirements behave.

This lesson explains how to initiate the procurement of materials without referenceto specific sales orders.


Explain the function of planned independent requirements Describe the make-to-stock production process Explain the role of the planning strategies Trace the consumption of planned independent requirements by sales orders

Business ExampleYou are the production planner in a company that produces stock independently oforders. You can even forecast the production quantities of some finished products.


SCM100 Lesson: Make-to-Stock Production

Demand program in the production plant

Figure 41: Demand program in the production plant

Demand management concerns the management of independent requirements.Independent requirements can be created directly for a production plant.Alternatively, they can be derived from Demand Planning.

Planned independent requirements are stock requirements, that is, requirementsfor a product in a certain plant that are derived from a forecast of the futurerequirements situation. For example, forecast results can be released from flexibleplanning or standard SOP as planned independent requirements: They are thenavailable in material requirements planning as planned independent requirements.Planned independent requirements can also be transferred from APO-DP toECC. You can also create planned independent requirements. In make-to-stockproduction, you want to initiate procurement of the affected materials withoutwaiting for specific sales orders.

Sales orders (customer independent requirements) are entered by the Salesdepartment. Customer requirements can be entered directly in materialrequirements planning. This is always necessary if you want to plan for specificcustomers.

The behavior of a planned independent requirement or a customer requirementis controlled by its requirements type.

Stock transfer requirements, that is, requirements from other locations in thesupply chain (such as distribution centers) can be included in the demand programtogether with the independent requirements entered in the production plant.



Sales orders and planned independent requirements

Figure 42: Sales orders and planned independent requirements

Sales orders are created in Sales and Distribution (ECC-SD). They represent anorder made by a customer, whereby a certain quantity of a product is required by agiven date. Sales orders represent a requirement in the delivering plant.

Planned independent requirements are used to carry out make-to-stock planningin a distribution center or production plant. Procurement takes place as a resultof this planning. In an ideal scenario, any concrete requirements that exist at alater stage (in the form of sales orders or dependent requirements, for example)can be covered by the warehouse stock.


SCM100 Lesson: Make-to-Stock Production

Stock transfers

Figure 43: Stock transfers

Requirements can be covered by stock transfers from other locations in thelocation network. For this purpose, a purchase requisition is created in the locationthat requires the stock for procurement from the delivering plant. In return,the delivering plant receives a requirement in the form of a purchase requisitionrelease.

Planning Strategies

Make-to-Stock Production

(Production based on make-to-stock planning, using warehouse stock tomeet requirements)

Subassembly planning (make-to-stock production for assemblies) Order-related production (the finished product is produced using in-house

production in the sales order stock or assemblies are made to stock usingmake-to-stock production).

There are several options for planning production using planned independentrequirements. The planning strategy controls the behavior of planned independentrequirements.



If you use make-to-stock production strategies, production usually takes placewithout any existing sales orders for the relevant material. If sales orders arethen received, these can be fulfilled using warehouse stock, which ensures shortdelivery times. With make-to-stock production, it is also possible to keep theproduction process as constant as poss

scm100 en col62 fv part a4

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