SCM240+ +Production+Planning+(SAP+R 3)+ +Instructor+Handbook

SCM240 Production Planning (SAP R/3) mySAP Supply Chain Management

Date Training Center Instructors Education Website

Instructor Handbook Course Version: 2004 Q3 Course Duration: 5 Day(s) Material Number: 50066127 Owner: Bill Welch (i008505)

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

Copyright Copyright © 2003 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.

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About This Handbook This handbook is intended to complement the instructor-led presentation of this course, and serve as a source of reference. It is not suitable for self-study.

Typographic Conventions American English is the standard used in this handbook. The following typographic conventions are also used. Type Style

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Icons in Body Text The following icons are used in this handbook.

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About This Handbook

Icon

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Meaning For more information, tips, or background Note or further explanation of previous point Exception or caution Procedures

Indicates that the item is displayed in the instructor’s presentation.

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Contents Course Overview ......................................................... vii Course Goals ...........................................................vii Course Objectives ..................................................... ix

Unit 1: Overview of Production Planning in SAP ERP ............ 1 SAP ERP Supply Chain Planning Overview ........................2

Unit 2: Evaluation the Planning Results............................ 29 Using the MRP and Stock/Requirements List ..................... 31 Exception Messages in SAP ERP .................................. 68 Days’ Supply........................................................... 78

Unit 3: MRP Basics ...................................................... 89 Concept of MRP....................................................... 91 MRP Types ............................................................ 97 Prerequisites for Running MRP .................................... 112 Methods for Executing a planning run.............................125 Settings in the Planning Run .......................................142

Unit 4: Demand Management in SAP ERP ........................ 169 Overview of Demand Management................................171 Make to Stock versus Make to Order .............................180 Make to Stock Planning Strategies ................................186 Make to Order Planning Strategies ................................ 211 Settings and Customizing...........................................240

Unit 5: Master Production Scheduling ............................. 259 Master Production Scheduling .....................................260

Unit 6: Influencing the Planning Run............................... 279 Net Requirements Calculation .....................................281 Using Buffers in Planning ...........................................291 Controlling order quantities in the planning run ..................324 Multi-Site Planning ...................................................345 Continuous Input/Output ............................................370

Unit 7: Technical Process of the Planning Run .................. 393 Basic Dates Scheduling in the Planning Run ....................395 Lead Time Scheduling in the Planning Run ......................413

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Master Data Selection during the Planning Run .................433

Unit 8: Multiple Sources of Supply in Planning.................. 461 Source Determination Overview ...................................463 Source Determination in Manufacturing ..........................468 Quota Arrangements ................................................481 Source Determination in Procurement ............................502

Unit 9: Life Cycle Planning ........................................... 531 Discontinuation in Production Planning ...........................532

Unit 10: Effects of Inventory in the Planning Run............... 553 Stock Types in Production Planning...............................554 Modeling Quality Inspection in Production planning.............565

Unit 11: Component Availability ..................................... 585 ATP in the Planned order ...........................................587 Configuration of ATP ................................................608

Unit 12: Simulating the Production Plan .......................... 623 Long-term planning requirements .................................624

Index ....................................................................... 659

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Course Overview [Enter a brief overview of the course.]

Target Audience This course is intended for the following audiences: • •

Consultants Implementing MRP/MPS in SAP ERP Customers or Users who will be using MRP/MPS on a daily basis

Course Prerequisites Required Knowledge •

Working knowledge of the following master data objects in SAP ERP – – – – –

Material Masters Bills of material Task Lists/Routings Work Centers/Resources Master Recipes

Recommended Knowledge • •

General understanding of Production Planning process and industry terms General understanding of SAP ERP applications and the integration to Production Planning (PP)

Course Duration Details Unit 1: Overview of Production Planning in SAP ERP SAP ERP Supply Chain Planning Overview Exercise 1: Overview of SAP ERP Supply Chain Planning

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45 Minutes 25 Minutes

Unit 2: Evaluation the Planning Results Using the MRP and Stock/Requirements List Exercise 2: Using the MRP Lists Exception Messages in SAP ERP Days’ Supply

30 Minutes 10 Minutes 30 Minutes 25 Minutes

Unit 3: MRP Basics Concept of MRP MRP Types

20 Minutes 40 Minutes

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Course Overview

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Prerequisites for Running MRP Methods for Executing a planning run Exercise 3: Executing a planning run in SAP ERP Settings in the Planning Run Exercise 4: Settings in the planning run Unit 4: Demand Management in SAP ERP Overview of Demand Management Exercise 5: Managing your Planned Independent Requirements Make to Stock versus Make to Order Make to Stock Planning Strategies Exercise 6: Using Make to Stock planning strategies Make to Order Planning Strategies Exercise 7: Make to Order in SAP ERP Settings and Customizing Unit 5: Master Production Scheduling Master Production Scheduling Exercise 8: Master production scheduling (MPS) and material requirements planning (MRP) Unit 6: Influencing the Planning Run Net Requirements Calculation Using Buffers in Planning Exercise 9: Dynamic Safety Stock Controlling order quantities in the planning run Exercise 10: Controlling Order Quantities in the Planning Run Multi-Site Planning Exercise 11: Multi-Site Planning Continuous Input/Output Exercise 12: Continuous Input/Output in the Planning Run (OPTIONAL) Unit 7: Technical Process of the Planning Run Basic Dates Scheduling in the Planning Run Exercise 13: Basic DateScheduling in the Planning Run Lead Time Scheduling in the Planning Run Exercise 14: Lead Time Scheduling in the Planning Run Master Data Selection during the Planning Run Unit 8: Multiple Sources of Supply in Planning Source Determination Overview Source Determination in Manufacturing Exercise 15: Source Determination in Manufacturing Quota Arrangements

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20 Minutes 30 Minutes 30 Minutes 30 Minutes 20 Minutes 30 Minutes Minutes 10 Minutes 45 Minutes 30 Minutes 45 Minutes Minutes 50 Minutes 25 Minutes 25 Minutes 20 Minutes 30 Minutes 25 Minutes 45 Minutes 25 Minutes 30 Minutes 30 Minutes 35 Minutes 25 Minutes 30 Minutes Minutes 40 Minutes 15 Minutes 20 Minutes 30 Minutes 30 Minutes Minutes 30 Minutes

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Course Overview

Exercise 16: Production Versions and Quota Arrangements Source Determination in Procurement Exercise 17: Source Determination in Procurement

Minutes 30 Minutes Minutes

Unit 9: Life Cycle Planning Discontinuation in Production Planning Exercise 18: Discontinuation in production planning

45 Minutes 25 Minutes

Unit 10: Effects of Inventory in the Planning Run Stock Types in Production Planning Modeling Quality Inspection in Production planning Exercise 19: QM lots in Production Planning

30 Minutes 30 Minutes Minutes

Unit 11: Component Availability ATP in the Planned order Exercise 20: Availability Checking in the Planned order Configuration of ATP Unit 12: Simulating the Production Plan Long-term planning requirements Exercise 21: MRP Run

45 Minutes 25 Minutes 30 Minutes 50 Minutes 25 Minutes

Course Goals This course will prepare you to: • • • •

Gain an overview of the basic principals of SAP ERP Production Planning Demonstrate the tools that a production planner would use on a daily basis Demonstrate how Planning strategies are used to control the planning and inventory process Gain detailed working knowledge of:

•

– Demand Managements (DM) – Materials Requirements Planning (MRP) – Master Production Scheduling (MPS) – Long Term Planning (LTP) Demonstrate how to configure MRP in SAP ERP

Course Objectives After completing this course, you will be able to: • •

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Gain an overview of the basic principals of SAP ERP Production Planning Demonstrate the tools that a production planner would use on a daily basis

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Course Overview

• • •

SCM240

Demonstrate how Planning strategies are used to control the planning and inventory process Gain detailed working knowledge of MRP/MPS in SAP ERP Demonstrate how to configure MRP in SAP ERP

SAP Software Component Information The information in this course pertains to the following SAP Software Components and releases: Several of the Tasklists for the R-F##, and R-B## at plant 1000 are in German. Use T-Code ZPSL or YILA to translate tasklists from English to German. Prior to the start of this class CATT ZT_SCM240 must be run in order to generate the following data: Configuration •

Change Calendar in Plant 2400 from IT to 01. This allows the R-F1## at 2400 to be included in a product group to introduce the multi-site planning lesson.

Master Data: Create the Following Material Masters: • • • •

R-F3##/1000 R-F4##/1000 R-F5##/1000 R-F1##/2400

Create BOM and Routings for the Following materiasl copying from the R-F1##/1000 • • •

R-F3##/1000 R-F4##/1000 R-F5##/1000

Chage the following settings to the the mateiral master records • • • • • •

R-F1##/1000: R-F2##/1000: R-F3##/1000: R-F4##/1000: R-F5##/1000: R-F1##/2400:

Strategy 10 Strategy 40 Strategy 50 Strategy 52 Strategy 20 Strategy 40

Creat Product groups Pump-00 thru Pump-30, Include the following settings:

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Course Overview

Material

Plant

Agg Factor

Proportion

R-F1##

1000

1

20

R-F2##

1000

1

20

R-F3##

1000

1

20

R-F4##

1000

1

20

R-F1##

2400

1

20

Create Rough Cut Planning Profile for Pump-## Plant at 1000 Time Span: 20 Days Base Qty: 1 pc Status: 4 – Release General Usage: 1- Production From Lot Size: 1 To Lot Size: 999,999,999 work center: R-L## /1000 Running Rate 7 min/pc

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Course Overview

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Unit 1 Overview of Production Planning in SAP ERP

1

Unit Overview This unit will give you an overview of some of the steps that be performed by a supply chain planner using SAP ERP.

Unit Objectives After completing this unit, you will be able to: • •

Outline the steps in the SAP ERP Supply Chain Planning process Demonstrate knowledge of the different planning techniques in SAP ERP

Unit Contents Lesson: SAP ERP Supply Chain Planning Overview .........................2 Demonstration: Sales and Operations Planning ..........................5 Demonstration: Display Requirement in Demand Planning .............7 Demonstration: Materials Requirements Planning...................... 10 Exercise 1: Overview of SAP ERP Supply Chain Planning............ 15

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Unit 1: Overview of Production Planning in SAP ERP

Lesson: 2

SCM240

SAP ERP Supply Chain Planning Overview Lesson Duration: 45 Minutes

Lesson Overview In this lesson you will get an overview of supply chain planning as it could be implemented with SAP ERP. This will involve understanding the different steps in the process and how they are interrelated.

Lesson Objectives After completing this lesson, you will be able to: • •

Outline the steps in the SAP ERP Supply Chain Planning process Demonstrate knowledge of the different planning techniques in SAP ERP

The idea of this unit is to give students a high level overview of the entire process. An exercise will be done at the end of the lesson to setup the evaluation unit and demand management unit.

Business Example The Precision Pump company manufactures and sells pumps. Some manufactured goods are produced in-house and the rest are externally procured. As a planning manager, you need to plan and manage the requirement, sales, and manufacture of pumps. To do so, you need to evaluate and analyze the SAP ERP solution for Supply Chain Planning. To do this you will identify the different step in the process and compare them to the functionality in the Production Planning (PP) module of SAP ERP.

SAP ERP Supply Chain Planning Process Any business that sell products or services typically needs to perform some sort of planning process to ensure enough supply is available to support demand. Depending upon the types of products or services a company offers, or the industry in which they may compete, the process might be altered slightly. The overall goal of production planning is to maintain high customer service levels while minimizing costs. The process may be adapted based on certain characteristics of the material during the sales, inventory management or production process.

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Lesson: SAP ERP Supply Chain Planning Overview

Figure 1: The Production Planning Process

In the graphic above you can see the different steps that can be used in SAP ERP to start what is often referred to as the Plan to Inventory process. This process is typical in a make to stock type of environment, where a forecast, sales plan, or demand plan is required to triggered procurement of some nature. This demand can be at the finished good, semi finished good, or raw material level.

Sales and Operations Planning (S&OP) The first step in any make to stock process is to derive some type of demand at the plant with a forecast. This demand plan will be the basis or input in the operational process. S&OP is a strategic process. This typically entails developing a sales plan from any where between six to eighteen months or longer, depending upon the industry.

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Figure 2: Sales and Operation Planning (S&OP)

The S&OP process is typically made up of a minimum of three steps: 1. 2. 3.

Sales Plan Production Plan Rough Cut Capacity Planning

The sales plan is typically generated using historical consumption (sales) data then applied to a statistical model in order to generate a “forecast”. During the first pass at creating sales plans, they should be developed without regards to operational constraints. This will give the operations team a look at the “true”demand. The process it self is rough in nature due to the fact the demand is typically created at aggregate levels than what is typically executed. This means that the sales plan may be created at the regional, division, or product group level. In addition it is often developed in weekly or monthly buckets of time, compared to the operations team that will plan at material and daily level. When demand is created at a higher level than which inventory is stored, a disaggregation process is required. Disaggregation will require proportional factors or percentages to ultimately get a “high-level” plan down to the material level. The first time the production plan is generated, it is typically equivalent to that of the sales plan. This assumes that the operations team will attempt to meet demand as it is planned by sales. Once the initial production plan is generated, it will be evaluated using rough cut capacity planning. In rough cut capacity planning, planners will identify one or more bottleneck work centers, and/or several critical materials for which supply is tight. If the capacity check identifies overloads then planners will typically adjust the production plan

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Lesson: SAP ERP Supply Chain Planning Overview

in accordance with the work centers capabilities. This might typically involve moving production forward of the demand in order to build inventory ahead of the capacity constrained period.

Demonstration: Sales and Operations Planning Purpose

System Data System: SAP ERP Client: 8XX User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → SOP → Product Group → Display (MC85) 2.

Enter Product group Pump-## at plant 1000

3.

The product group should contain the following data: Plant

Agg Factor

Proportion

R-F1##

1000

1

20

R-F1##

2400

1

20

R-F2##

1000

1

20

R-F3##

1000

1

20

R-F4##

1000

1

20

4.

Exit Transaction

5.

SAP ERP menu path: Logistics → Production → SOP → Planning → For Product Group → Change (MC82)

6.

Enter Product Group PUMP-## at plant 1000 and select the Active version.

7.

Enter the following demand starting in the third period:

8.

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Material

Period Month 3

Month 4

Month 5

Month 6

Month 7 Month 8

Sales

800

1000

900

1000

1000

1100

Edit → Create productn plan → Synchronous to sales

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Unit 1: Overview of Production Planning in SAP ERP

9.

SCM240

Views → Capacity situation → Rough-cut planning → Show Save

10. Select

11. SAP ERP menu path: Logistics → Production → SOP → Disaggregation→ Break Down PG Plan (MC76) 12. Enter Product Group PUMP-## at plant 1000 and select the Active version. 13. Select Create Sales Plan and select

Continue

14. Scroll to review the details of the disaggregated sales plan 15. SAP ERP menu path: Logistics → Production → SOP → Planning → For Product Group→ Transfer Product Group to Planning (MC75) enter the following: Field

Value

Product Group

Pump-##

Plant

1000

Version

A00

Transfer strategy and period

Prod.plan for mat. or PG members as proportion of PG

From/To

Leave defaults

Invisible Transfer

Leave Selected

Rqmts type

Leave Blank

Version

00

Active

Select

16. Select Transfer Now

Demand Management Demand management is the link between top-level requirements planning (S&OP) and materials planning (MPS and/or MRP).

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Lesson: SAP ERP Supply Chain Planning Overview

Figure 3: Demand Management in Production Planning

Demand management may contain one or more demand programs or versions that will help drive the production planning process. Input for the demand programs can come from one or more sources: • • • • •

The Sales Plan or Production Plan from S&OP A Material Forecast Manual Entry Another program Plan Transferred from SAP SCM

The result of the demand programs are called Planned Independent Requirements (PIRs). Demand management determines the requirements dates and quantities of the materials we are planning. Planning strategies are used to determine how these PIRs will be used during the MPS/MRP planning runs. Demand Management can be tied into the Sales and Distribution module to ingrate sales orders with the planning run. Sales orders can serve as a sole requirements source, for which procurement is then triggered specifically (make-to-order), or together with planned independent requirements, they can create the “total” demand.

Demonstration: Display Requirement in Demand Planning Purpose

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System Data System: SAP ERP Client: 8XX User ID: Password: Set up instructions: 1. SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Change (MD62) 2.

Select Product Group and enter Pump-## at plant 1000.

3.

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

4.

Enter R-F1## at Plant 1000

Long Term Planning Over the course of normal business, planners will often be presented with “What if......”. Whether the situation be a shift in demand patterns, extensions of existing product lines or the creating of new product lines, each situation could present a problem with available capacity or material availability.

Figure 4: Long Term Planning

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Lesson: SAP ERP Supply Chain Planning Overview

In SAP ERP, simulation planning can be obtained through the use of the Long Term Planning (LTP) module. Long term planning is an optional tool that will allow planners to simulate demand changes and run a full Materials Planning and Capacity Planning analysis. These analyses allow planners to identify possible work center overloads or issues obtaining semi-finished or raw materials. Long term planning will have the same capabilities and analysis tools that the operational planners will use to constantly evaluate the production plan.

Production Planning Procedures When deciding how to use SAP ERP for planing you will need to identify how materials behave over the course of time. Certain characteristics will decide how materials are going to be handled in SAP ERP Planning runs.

Figure 5: Planning Procedures in SAP ERP

Planning procedures will be typically made at the material/plant level. Therefore planners can group products that behave similarly together so that they can use common planning techniques. In SAP ERP there are three main techniques that planners can use to drive the production planning process: • • •

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Master Production Scheduling (MPS) Material Requirements Planning (MRP) Consumption Based Planning

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Unit 1: Overview of Production Planning in SAP ERP

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MPS and MRP will be discussed at great length in this course. MPS/MRP take into account current inventory and any frozen production as a starting point. Then using future planned demand (PIRs) or actual demand (sales orders), trigger a calculation process to predict future procurement or need. In contrast Consumption Based Planning is based on past usage values and uses a forecast to statistical procedure to determine future requirements. Consumption based planning is characterized by its simplicity and is mainly used for B and C parts with low value.

Demonstration: Materials Requirements Planning Purpose Describe at an overview level the purpose of MRP

System Data System: SAP ERP Client: 8XX User ID: Password: Set up instructions: 1. From the system menu at the top: System → Create Session 2.

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

3.

Use the following parameters for the planning run for product groupPump-## at plant 1000:

4.

10

Field

Value

Product Group

Selected

Processing Key

NETCH

Create Purchase Req.

1 - Purchase requisitions

Delivery Schedules

3 - Schedule lines

Create MRP List

MRP List

Planning Mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

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Lesson: SAP ERP Supply Chain Planning Overview

Capacity planning The economic use of resources is an objective for many areas of a company. In recent years many companies have consolidated facilities in order to obtain a higher rate of utilization on resources. This trend has caused many companies to place more focus on the creation of a detail plan or a shop floor schedule

Figure 6: Capacity Planning

In SAP ERP this process is called Capacity Requirements Planning (CRP). This process typically consists of two steps: • •

Capacity Evaluation Capacity Leveling

With capacity evaluation, schedulers are reviewing the results of MPS/MRP and are looking for any time periods in which certain work centers may have more production planned than can be actually executed. This is called an overload. When and overload has been identified the production scheduler begins rescheduling the orders based on additional planning criteria. This may include performing finite scheduling to ensure that the resource is not overloaded, or performing an optimization run to improve the schedule by grouping like production runs together to reduce the amount of setup time between jobs. Note: Capacity planning in SAP ERP can occur in: • • • • •

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SOP After MPS After MRP With Production and Process orders Long Term Planning

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Unit 1: Overview of Production Planning in SAP ERP

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The result of CRP will be a detailed schedule that will be issued to the shop floor. This schedule will instruct production management of the sequence and priorities of the production.

Shop Floor Control Once a shop floor scheduled has been created and issued, the next step is execution, or shop floor control. In SAP ERP, companies will have several options to choose from on how they wish to execute and track production.

Figure 7: Production Execution

The graphic above identifies four types of execution process in SAP ERP: • • • •

Repetitive Mfg (REM) Production Orders Process orders. Project systems

Repetitive Manufacturing is the simplest form of execution. This is often used for less complicated products that are made several times a week/month, or endure long production runs while receiving production continuously. This type of execution is often used in consumer products or the chemical industry. With this type of execution process communication between scheduling and execution must remain tight, but the control of the process remains simple. The shop floor will use planned orders to communicate production runs, and production will be tracked on a material basis not an order basis.

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Lesson: SAP ERP Supply Chain Planning Overview

Production orders are typically used in a more complicated manufacturing process. Complex products typically require a higher degree of control on the production floor. With production orders, companies can control and track the production process through the uses of order status. The production orders also act as a cost and data collector for each production run. This allows management to review each production run if necessary, for efficiency and profitability. Process orders are used more often in regulated industries. Process orders are very similar to production orders in that they act as a cost and data collector for each production run. However, industries like pharmaceuticals and food require tighter controls and tracability. Process orders have a tighter integration with Engineering Change Management (ECM) and can develop electronic batch records of each production run to give details of every step of the production process. Project Systems (PS) is often used in Engineer-to-Order industries. This would be applicable in construction and aero space and defense to name a few. Project systems provides tight control and accounting for long extremely complex manufacturing. Using a Work Break down structure and activities tied to production orders, allows companies to tie several levels of production or services together for better supervision and cost control.

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Unit 1: Overview of Production Planning in SAP ERP

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Lesson: SAP ERP Supply Chain Planning Overview

Exercise 1: Overview of SAP ERP Supply Chain Planning Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Create a high level sales and production plan for your Product group Pump-## • Transfer a production plan at the product group level to the material level • Execute MRP to initiate a procurement plan

Business Example As a senior planner, you must be able to explain how SAP ERP will be used to model your entire production planning process. Enter a simple sales plan in S&OP and run it through a simplified production planning process to get a basic overview of the functionality.

System Data System: Client: User ID: Password:

SAP ERP 8XX

CATT: Set up instructions:

Z_SCM240

1.

CAT ZSCM240 Must be run prior to executing this exercise

Task 1: Create a Sales and Operations Plan in SAP ERP To better understand the SAP ERP production planning process, we will create a sales plan for one of your pump product groups. You will then release the sales plan to demand management as the demand plan, which will drive the MRP/MPS process for IDES. 1.

A product group Pump-## has been created for you at plant 1000 to represent the materials that you will be responsible for planning. Display your product group and fill in the table below:

Continued on next page

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Unit 1: Overview of Production Planning in SAP ERP

Material Number

2.

SCM240

Plant

Proportion

Create /Change a sales plan for your product group PUMP-## at plant 1000 in the active version (A00). Enter the following demand starting in the third period: Period Month 3

Month 4

Month 5

Month 6

Month 7 Month 8

Sales

700

800

900

1000

1000

1100

3.

Create a production plan that equals the sales plan

4.

View the rough cut capacity to see if your demand is going to cause any potential capacity overloads, at work center R-L##, at any point within the planning horizon.

5.

Save your plan

Task 2: Planned Independent Requirements Once a sales and production plan is complete at the strategic level, it must be transferred to the operations level were it can be viewed at the material level. Once demand is active in demand management, it can be used to drive the MPS/MRP process. 1.

Now that you have created a high level or rough production plan for your product group, PUMP-## at plant 1000 for version A00, disaggregate and release the plan, to the locations, at the material level using the product group’s proportions.

2.

Now that demand has been disaggregated and transferred to the material level, review the planned independent requirements in demand management. Fill out the following table based on the results of your transfer: Mat.

Plant

Ver.

P1

P2

P3

P4

P5

P6

Continued on next page

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Lesson: SAP ERP Supply Chain Planning Overview

Mat.

Plant

Ver.

P1

P2

P3

P4

P5

P6

3.

Now that you have transferred demand from the strategic high-level plan, down to a tactical material level, use the stock requirements list to review what the transfer has actually accomplished for your material R-F1## at plant 1000:

4.

What is your current planning situation?

Task 3: Material Requirements Planning After releasing the production plan from the S&OP process, you have populated demand management with planned independent requirements. These requirements are causing negative inventory. Using material requirements planning, you will create a procurement plan for product R-F1## . 1.

After reviewing the stock/requirements list, it is obvious that demand is exceeding supply. In a second session, run a single-item, multi-level MRP run for R-F1## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling and capacity planning

Also plan unchanged components

Select

Continued on next page

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Unit 1: Overview of Production Planning in SAP ERP

18

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2.

Now that a MRP run has been executed, review the stock requirements list, for R-F1## at plant 1000, to determine if the planning situation has changed.

3.

What has changed as a result of the MRP run?

© 2003 SAP AG. All rights reserved.

2004/Q3

SCM240

Lesson: SAP ERP Supply Chain Planning Overview

Solution 1: Overview of SAP ERP Supply Chain Planning Task 1: Create a Sales and Operations Plan in SAP ERP To better understand the SAP ERP production planning process, we will create a sales plan for one of your pump product groups. You will then release the sales plan to demand management as the demand plan, which will drive the MRP/MPS process for IDES. 1.

2.

A product group Pump-## has been created for you at plant 1000 to represent the materials that you will be responsible for planning. Display your product group and fill in the table below: Material Number

Plant

Proportion

R-F1##

1000

20

R-F1##

2400

20

R-F2##

1000

20

R-F3##

1000

20

R-F4##

1000

20

a)

SAP ERP menu path: Logistics → Production → SOP → Product Group → Display (MC85)

b)

Enter Product group Pump-## at plant 1000

Create /Change a sales plan for your product group PUMP-## at plant 1000 in the active version (A00). Enter the following demand starting in the third period: Period Month 3

Month 4

Month 5

Month 6

Month 7 Month 8

Sales

700

800

900

1000

1000

1100

a)

SAP ERP menu path: Logistics → Production → SOP → Planning → For Product Group → Change (MC82)

b)

Enter Product Group PUMP-## at plant 1000 and select Active version.

c)

Enter the demand as indicated in the table above.

Continued on next page

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Unit 1: Overview of Production Planning in SAP ERP

3.

Create a production plan that equals the sales plan a)

4.

SCM240

Edit → Create productn plan → Synchronous to sales

View the rough cut capacity to see if your demand is going to cause any potential capacity overloads, at work center R-L##, at any point within the planning horizon. a)

Views → Capacity situation → Rough-cut planning → Show Note: Any production overloads would manually be addressed by decreasing or increasing production to keep the capacity load under 100%.

5.

Save your plan a)

Select

Save

Continued on next page

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© 2003 SAP AG. All rights reserved.

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Lesson: SAP ERP Supply Chain Planning Overview

Task 2: Planned Independent Requirements Once a sales and production plan is complete at the strategic level, it must be transferred to the operations level were it can be viewed at the material level. Once demand is active in demand management, it can be used to drive the MPS/MRP process. 1.

Now that you have created a high level or rough production plan for your product group, PUMP-## at plant 1000 for version A00, disaggregate and release the plan, to the locations, at the material level using the product group’s proportions. a)

b) 2.

SAP ERP menu path: Logistics → Production → SOP → Planning For Product Group→ Transfer Product Group to Planning (MC75) enter the following: Field

Value

Product group

Pump-##

Plant

1000

Version

A00

Transfer strategy and period

Prod.plan for mat. or PG members as proportion of PG

From/To

Leave defaults

Invisible Transfer

Leave Selected

Rqmts type

Leave Blank

Version

00

Active

Select

Select Transfer Now, to transfer the product group’s production plan to the material level in Demand Management.

Now that demand has been disaggregated and transferred to the material level, review the planned independent requirements in demand management. Fill out the following table based on the results of your transfer: Mat.

Plant

Ver.

P1

P2

P3

P4

P5

P6

R-F1##

1000

00

200

140

160

180

200

220

R-F1##

2400

00

200

140

160

180

200

220

Continued on next page

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Unit 1: Overview of Production Planning in SAP ERP

3.

Mat.

Plant

Ver.

P1

P2

P3

P4

P5

P6

R-F2##

1000

00

200

140

160

180

200

220

R-F3##

1000

00

200

140

160

180

200

220

R-F4##

1000

00

200

140

160

180

200

220

a)

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Change (MD62)

b)

Select Product Group and enter Pump-## at plant 1000. Select Enter.

c)

Select the Table tab to review the period details of all materials.

d)

Exit the Planning Table.

Now that you have transferred demand from the strategic high-level plan, down to a tactical material level, use the stock requirements list to review what the transfer has actually accomplished for your material R-F1## at plant 1000: a)

4.

SCM240

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

What is your current planning situation? Answer: Current inventory balance is Zero (0). The independent requirements, from the production plan, are causing a negative available balance. These requirements which are acting like a demand plan, will drive production planning at the material level.

Task 3: Material Requirements Planning After releasing the production plan from the S&OP process, you have populated demand management with planned independent requirements. These requirements are causing negative inventory. Using material requirements planning, you will create a procurement plan for product R-F1## . 1.

After reviewing the stock/requirements list, it is obvious that demand is exceeding supply. In a second session, run a single-item, multi-level MRP run for R-F1## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions Continued on next page

22

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SCM240

Lesson: SAP ERP Supply Chain Planning Overview

2.

Field

Value

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling and capacity planning

Also plan unchanged components

Select

a)

From the system menu at the top: System → Create Session

b)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

c)

Select

d)

Select

Back twice to return to the main menu

Now that a MRP run has been executed, review the stock requirements list, for R-F1## at plant 1000, to determine if the planning situation has changed. a)

3.

Enter twice to execute the run.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

What has changed as a result of the MRP run? Answer: As a result of MRP, a planned order has been created to cover each planned independent requirement. This results in a zero inventory balance after each requirement. NOTE: due to different working days in each month, during some teaches the first planned order may be late.

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Unit 1: Overview of Production Planning in SAP ERP

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Lesson Summary You should now be able to: • Outline the steps in the SAP ERP Supply Chain Planning process • Demonstrate knowledge of the different planning techniques in SAP ERP

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SCM240

Unit Summary

Unit Summary You should now be able to: • Outline the steps in the SAP ERP Supply Chain Planning process • Demonstrate knowledge of the different planning techniques in SAP ERP

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Unit Summary

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SCM240

Test Your Knowledge

21

Test Your Knowledge 1.

Define Sales and Operations Planning?

2.

Standard SOP is the only functionality provided to support this process. Determine whether this statement is true or false.

□ □ 3.

True False

How may demand be provided to the SOP tool? Choose the correct answer(s).

□ □ □ □ □ 4.

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A B C D E

Statistical forecast Manually entered Copy from COPA Copy from Sales info System All of the above

Why is shop floor control important in the planning process?

© 2003 SAP AG. All rights reserved.

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Test Your Knowledge

22

SCM240

Answers 1.

Define Sales and Operations Planning? Answer: SOP is typically a monthy process where representatives from various areas of the company meet and review the supply and demand situation from a very high level (typically at the product group level).

2.

Standard SOP is the only functionality provided to support this process. Answer: False Flexible planning may also be used.

3.

How may demand be provided to the SOP tool? Answer: E All of the above are valid.

4.

Why is shop floor control important in the planning process? Answer: It provides the latest information to the planning tools as to what has actually occured.

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Unit 2 Evaluation the Planning Results

23

Unit Overview This unit will introduce you to the tools that would be used on a day to day basis during the planning process. You will customize some of the views that speed up tasks in later units.

Unit Objectives After completing this unit, you will be able to: • • • • •

Demonstrate how to use the MRP and Stock Requirements List for use in day to day planning. Describe the differences between the MRP List and Stock Requirements (S/R) list Explain how exception messages are used in the production planning process Demonstrate how to configure exception messages. Interpret day’s supply and receipt day’s supply

Unit Contents Lesson: Using the MRP and Stock/Requirements List ..................... 31 Demonstration: Navigating the Stock Requirements list ............... 35 Procedure: Navigating the Stock Requirements list .................... 36 Demonstration: Changing MRP Elements in the Stock Requirements list.............................................................................. 37 Demonstration: Navigate the Overview Tree ............................ 40 Demonstration: Order Report .............................................. 42 Demonstration: Pegged Requirements................................... 43 Demonstration: Navigation Profiles ....................................... 49

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Demonstration: Collective Access to MRP Lists and Stock/Requirements Lists .................................................. 52 Exercise 2: Using the MRP Lists .......................................... 55 Lesson: Exception Messages in SAP ERP................................... 68 Demonstration: Use of Exception messages ............................ 73 Procedure: Using Exception Messages .................................. 74 Demonstration: Exception Message Configuration ..................... 75 Lesson: Days’ Supply ........................................................... 78 Demonstration: Days’ Supply and Receipt Days’ Supply .............. 80

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Lesson: 24

Lesson: Using the MRP and Stock/Requirements List

Using the MRP and Stock/Requirements List Lesson Duration: 30 Minutes

Lesson Overview In this lesson, you will learn about the usage of Material requirements planning (MRP) List and Stock/Requirements List and it’s functions. In addition, you will learn how to collectively access the both result lists.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate how to use the MRP and Stock Requirements List for use in day to day planning. Describe the differences between the MRP List and Stock Requirements (S/R) list

Processing the MRP results usually follows a total planning run. The aim is to manually process problem situations, which have led to the creation of exception messages. The typical tools for this manual processing are the stock/requirements list and the MRP list with their respective collective accesses. Alongside the exception messages, these lists offer a range of functions for processing the planning results: Rescheduling data, firming, evaluation functions such as order report or pegged requirements, days’ supply and receipt days’ supply.

Business Example As a production planner, you need to ensure that the production plan generated by the SAP ERP system, meets the demand requirements. In order to do this you need a tool that will help you manage problems with the production plan, and give detailed information as to the supply and demand situation. Explore the MRP List and Stock/Requirements (S/R) List as an option for managing the production plan.

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Planning Run List Evaluations As a result of a planning run in SAP ERP, a production and procurement schedule will have been created. The planning run will have generated the following items: • • • • • • •

Planned orders Purchase requisitions Schedule Lines Stock Transfer Requests Material Transfers Dependent Requirements Exception messages

Planners will require a tool that will allow them to view the results and to identify if any problems have occurred. Prior to the initiating the planning run a planner can decide if they want an MRP list to be generated to display the results of the planning run. The MRP list will be created at the Material/MRP Area/Plant level. The MRP list always displays the supply and demand situation at the time of the last planning run and it also provides a work basis for the MRP controller. Changes that are made after the planning date are not taken into consideration, so the list is static. MRP lists are stored in the system until they are either deleted manually or replaced by new lists from a subsequent planning run. While the MRP list is a result of the planning run, a real evaluation tool is available in the Stock/Requirements (S/R) list. The structure of the lists are very similar in nature. Each list will have it’s own unique attribute to display the relevant information for which it was designed; Static or Real time.

Figure 8: MRP List and Stock/Requirements (S/R) List Layout

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Lesson: Using the MRP and Stock/Requirements List

The MRP list and S/R lists are made up of several different components to which the user can navigate to at any time: • • • • •

Material Header Material Header Details (Dynamic) Material Tree (Dynamic) MRP Elements Period Totals (Dynamic)

The material header will identify which material/location is being viewed as well as the unit of measure. The header details are dynamic, and can be turned on or off. These details refer to information about the material master or planning statistics that were a result of the last planning run. The overview tree is used for toggling between various material numbers selected by the user. If users access the the collective list and select several materials, all materials will appear in the tree. If a user access’s the MRP list using a product group, the list will contain all the members of the product group. The MRP Elements section will give the details about the supply and demand situation. An MRP Element is a term for all objects displayed as items in the MRP list or in the S/R list. Such objects include planned orders, purchase orders, reservations, and sales orders. The MRP Elements are listed individually by day. By selecting any MRP element and pressing the F1 key, users can get a list of all the MRP elements used by SAP ERP. MRP Elements are created on the basis of the supporting master data. Not all MRP Elements will be applicable for a material. The period totals display will aggregate the MRP elements to a larger bucket of time, by summarizing the same MRP elements for the same day/week/month or user defined period. The basic structure of both lists is the same:

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SCM240

Figure 9: Planning Segments

The MRP and S/R list is divided into various planning segments. This means that related MRP elements are also displayed together. Depending upon which planning strategy(s) are being used the list reports might be broken down into several segments. For example in a make-to-order scenario, each order and its associated inventory will be planned separately from any other inventory or order. The individual stocks, receipts, and issues are displayed and planned within the appropriate segment. The MRP calculation takes place within the individual segments. Within each segment, the system will display the receipt first, followed by the requirement. If a receipt will be late then it will show up after the requirement, and typically, exception messages will appear describing any issues with the plan.

Variable Headers The header details of the List reports contain additional data for the planning run. In particular, they contain the number of exception messages that have occurred during the planning of a material (MRP List Only). You define the display of the header details for the MRP evaluations in the Customizing IMG activity “Define screen sequence for header details”. Using the IMG menu path Production → MRP → Evaluation → Define Screen Sequence for Header details , companies can create there own sequence of headers. The header details show an overview of master data and transaction data for each material. This data is grouped together according to topic in individual screens. The MRP type controls the screens that are displayed in the requirements planning evaluations. For this, the screen sequences have a key that is assigned to the MRP type. Therefore, you can display different master data for the evaluation of consumption-based materials than for planning-based materials.

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Lesson: Using the MRP and Stock/Requirements List

Demonstration: Navigating the Stock Requirements list Purpose

System Data System: Client: User ID: Password: Set up instructions: must be complete.

Exercise from Lesson Production Planning overview

CATT Z_SCM240 should be run to generate master data. 1.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/ Requirements List

2.

Enter Material R-F1## at plant 1000 and press ENTER

3. Caution: To show the Material header information select Expand Header details.

2004/Q3

4.

Switch To show the MRP elements in an Aggregated time bucket select to period totals and select the tab with the correct period of aggregation.

5.

Select

Switch to individual lines.

© 2003 SAP AG. All rights reserved.

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Unit 2: Evaluation the Planning Results

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SCM240

Navigating the Stock Requirements list 1.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/ Requirements List

2.

Enter Material R-F1## at plant 1000 and press ENTER

3.

To show the Material header information select

4.

Switch To show the MRP elements in an Aggregated time bucket select to period totalsand select the tab with the correct period of aggregation.

5.

Select

Expand Header details.

Switch to individual lines.

Functions of the MRP list Once in the MRP list a planner can use the data displayed to make intelligent business decisions. In addition to displaying information, the MRP list is interactive and can carry out several functions.

Figure 10: Functions of the MRP List

Once inside the List reports, users can create/change the material memo. This is a working script of notes regarding the material. In the List reports, the material memo will be marked with whom ever has updated the memo last and the date it was last changed. Details of Each MRP element can be viewed in more detail. By selecting Element, users can view more summary information about the specific MRP element. In addition it will give the user additional options to possibly

36

© 2003 SAP AG. All rights reserved.

Change

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Lesson: Using the MRP and Stock/Requirements List

or Display the element. Depending upon which element is chosen other options are available such as converting a planned order to a production order, partially converting to a production order, convert to a process order, or convert to a purchase requisition. Over time planners will make changes to the plan that should be documented. This may be required to adhere to company wide accountability standards. By Material Memo icon, users can leave long text notes, which will selecting the be cumulated over time. After saving the material memo, the icon will show who and when last changed the long text on the material memo. Users can also access the following functions: • • • •

Change/Display Material master Display ATP Quantities View Stock/Sales Statistics Compare results to Long Term Planning

Demonstration: Changing MRP Elements in the Stock Requirements list Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/ Requirements List 2.

Enter Material R-F1## at plant 1000 and press ENTER

3.

Select the first Planned order and Double click or select element then select

4.

2004/Q3

Change element

Select the first planned independent requirement and select elementthen select

Details of

Details of

Change element

5.

In the material field, replace R-F1## with R-B1## and press ENTER

6.

Details of element, for the first dependent demand and display the Select parent planned order number

© 2003 SAP AG. All rights reserved.

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Unit 2: Evaluation the Planning Results

SCM240

7.

In the material field, replace R-B1## with R-T1## and press ENTER

8.

Select

9.

Demonstrate changing the material master. From S/R List Menu Path: Environment → Change Material

Details of element, for the first purchase Requisition.

List Report Display Structure Throughout the course of a day planners will have to review the supply and demand situation as it relates to several materials. Depending upon how the user enters the list reports, they may have access to a tree structure on the left side of the screen that will make navigating between materials easier. Displaying the material tree is optional. Upon entering either list report, the overview tree can be accessed by selecting Show Overview tree button. You can change the layout of the tree and display the following: • • •

Worklist tree Order tree Product group tree

After accessing one of the lists, each user can set the overview tree to appear automatically. To set the overview tree to appear automatically, users must select Save Settings, and in the Display tab select Overview Tree Displayed option. Caution: This setting will be relevant for both the MRP List and the S/R list.

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Lesson: Using the MRP and Stock/Requirements List

Figure 11: Overview Tree

The worklist tree displays all materials in the current session. When accessing the list through the collective process, all materials that were selected are displayed. Otherwise as you type over the material number, the new product will be added to the worklist. The work list can be customized by each user. You can set in which order the fields are to be displayed. User-specific definitions for the traffic lights are also possible. User-specific sortings and groupings, such as according to the processing indicator, are possible. You can search for specific materials according to exception messages. You can display the stock/requirements list or MRP list for a material by double-clicking on the material in the tree.

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Unit 2: Evaluation the Planning Results

SCM240

Figure 12: Order Tree

The order tree will display the individual component requirements for the selected order or requirement are displayed on several levels. By selecting the planned order in the MRP Elements section, and selecting Order Tree, the multi level order will be displayed. In addition to the order details, exception messages and information will appear to the right of the material number. By selecting the line dividing the tree from the MRP elements a user can re-size the window and see more order information. Note: As of SAP ERP release 4.7, it is possible to now view order network exceptions. These messages are generated and placed at the top assembly if there is an exception at a lower level. When you navigate in the order tree, by selecting a material the correct stock/requirements list or MRP list is displayed in the MRP Element area, and the element involved in the order report is highlighted. This way, you can quickly get an overview of the stock situations at all levels of the order structure. The product group tree will only appear if users have accessed the collective lists and used Product group as the selection criteria. By selecting a particular material, the MRP Elements section will display the supply and demand situation.

Demonstration: Navigate the Overview Tree Purpose

40

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2004/Q3

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Lesson: Using the MRP and Stock/Requirements List

System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List 2.

Enter Material R-F1## at plant 1000 and press ENTER

3.

Display the order tree, by selecting the first planned order and then select Set Up Order Structure.

4.

Double click on several of the components, in the tree structure, to show the MRP elements changing and the element being highlighted in blue.

5.

Show students the MRP exceptions. Move your cursor just to the right of the “alert” icons to get the quick info on the exceptions.

6.

Show the worklist tree by selecting

Work list.

Order Report

Figure 13: Order Report

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Unit 2: Evaluation the Planning Results

SCM240

The evaluation “Order report” enables you to gain an overview of the status of all BOM levels from the list of MRP elements: Sales order, production order including collective and process order, and planned order. In doing so, you can recognize problems in the production and procurement of assemblies and components at an early stage. You access the transaction directly from the stock/requirements list or the MRP list. The system determines the receipt elements that are planned for each MRP element. The MRP controller checks how the production of a certain sales order is progressing or if there are missing parts or scheduling problems on a certain BOM level or for certain components. The receipt elements are color coded. This enables the MRP controller to foresee possible future problems on subordinate BOM levels: • • • •

Red: There are exception situations on subordinate BOM levels. White: The requirement is covered by warehouse stock on the subordinate BOM levels. Green: Receipt elements have been created on subordinate BOM levels, yet no exception situations exist. No color coding: You cannot explode the receipt element any further.

Demonstration: Order Report Purpose To demonstrate Order Report/Order Tree/Pegged Requirements

System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List 2.

Enter Material R-F1## at plant 1000 and press ENTER

3.

Display the order tree for the first planned order. Select the first planned order, and select

42

Order Report.

4.

Drill down to show the details of the report by selecting lines.

5.

Double Click on the planned order to see the dependent requirements.

© 2003 SAP AG. All rights reserved.

Open all

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Lesson: Using the MRP and Stock/Requirements List

6.

Call the list of the component R-T1##. Call the pegged requirements for the first requirement in the list and reproduce the path to the order.

Pegged Requirements Report

Figure 14: Pegged Requirements

You can use the evaluation “Pegged requirements” ( you can access this directly from the stock/requirements list and MRP list) to trace from any BOM level on a multilevel basis which requirements have caused an order proposal and which independent requirements (particularly sales orders) are affected by the change in date or quantity of an order proposal on a lower level. In SAP ERP 4, you can navigate from the requirements element directly to the pegged requirement on the level above in the stock/requirements or MRP list. The system displays the stock/requirements or MRP list of the superordinate level and automatically positions the cursor on the correct line of the pegged requirement. This makes it much easier to find pegged requirements on different MRP levels. You can call up this function from the details display of the requirements element. The function is available for the requirements, such as dependent requirements, order reservations, stock transfer requirements, and stock transfer reservations.

Demonstration: Pegged Requirements Purpose To demonstrate Order Report/Order Tree/Pegged Requirements

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SCM240

System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List 2.

Enter Material R-T1## at plant 1000 and press ENTER

3.

Display the pegged requirements report for the first purchase req/planned order. Select the first purchase requisition or planned order, and select Pegged Requirements.

4.

This report shows the origin of the requirement at the top of the order structure.

5.

Select Order Route to see the trail of requirements as it blew through the bill of material.

6.

To see and order graphic chart, select

Back, then select

Graphic.

Advanced Functions of MRP and Stock/Requirements List Navigation profile The navigation profile function is enhanced by the possibility of defining your own favorites. See notes : Changeability of Customizing Tables in the Production System and Authorization for Maintenance of Own Favorites, for maintaining favorites. Customizing: Production → Material Requirements Planning → Evaluation → Define Navigation Profiles Over time Planners will find the stock requirements list invaluable due to the amount of information that it contains as it relates to supply and demand. However, planners are often put into a situation where others in the business will asked for data related to certain MRP elements. As of SAP ERP release 4.6, users can now filter and select which MRP elements can be viewed and used in the available quantity calculation.

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Lesson: Using the MRP and Stock/Requirements List

Figure 15: Display Filter and Selection Rule

Display filters are used in the Stock/Requirements list and in the MRP list. This is a display function, and display filters have no influence on the MRP elements that are used in the calculation of the available quantity. You define display filters in the Customizing IMG: Production → MRP → Evaluations → Filter → Define Display Filter . In the configuration of the display filter users can choose: • •

• •

•

which MRP elements are displayed of the MRP elements that you select, and that are procurement proposals (planned order, purchase requisitions, schedule lines), whether only the firmed elements are displayed which MRP segments are displayed which period (display horizon) is displayed You either directly define the display horizon or allow the user to make the setting in the respective transaction. whether the MRP elements selected should be further limited using certain additional selections (for example, customer, vendor, storage location) You either define these additional selections directly or allow the user to define them in the respective transaction

The filters can be accessed in either of the lists by selecting Filter On. This will allow users to choose the selection filter that fits the particular requirements. To turn the filter off users can select a “blank” filter with no limitations or select Filter off to remove the filter. Selection rules apply to the stock/requirements list only. You define which MRP elements are displayed and which of these elements are used in the calculation of the available quantity. Selection rules enable the analysis in the stock/requirements

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list of various planning situations that are different with regard to the MRP elements taken into account. Selection rules have no influence on the requirements calculation. You define these in the Customizing: IMG Production → MRP → Evaluations → Filter → Define Selection Rules. In detail, you define •

which MRP elements are selected to set up the respective evaluation list and/or to calculate the quantity available and the ranges of coverage –

• • • •

do not consider: the element is not displayed and is not used to calculate the quantity available and the ranges of coverage – display: the element is displayed but is not used in the calculation – show affecting availability: the element is displayed and is used in the calculation which stocks are used to calculate the stock available whether schedule lines in the display are replaced by the more current forecast delivery schedules or JIT delivery schedules whether dependent requirements and dependent reservations for bulk materials are displayed and, if necessary, also calculated which period (selection horizon) should be represented. You determine the selection horizon either directly or allow the user to make this setting in the respective transaction

You define whether selection rules and display filters are to be used when accessing the list. This is done by choosing the indicator “With filter” in the initial screen, or by choosing the “Filter on” icon in the list, or in the user-specific settings. Due to its important content planners will use the List reports several times a day. Due to it’s frequency of use, as of SAP ERP release 4.6, the list reports can be customized by each user. Through users settings, planners will be able to add their own icon buttons to jump to the most well used transactions for certain types of materials.

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Lesson: Using the MRP and Stock/Requirements List

Figure 16: Navigation profile

Each user can be assigned a navigation profile. A navigation profile contains transaction calls for transactions that can be called directly from the stock/requirements list or the MRP list. The transactions are either general, which means actions at the material level, or they refer to a particular MRP element (planned order, dependent requirement). A navigation profile is defined in Customizing Production → MRP → Evaluations → Define navigation profiles, and the user is assigned to a profile in the user-specific settings on the General Settings tab page. In a navigation profile, you can determine any number of transaction calls. However, the display in the list is limited to five general transaction calls and two transaction calls per MRP element. The system always displays the first five or first two transaction calls that are relevant for the context. For each transaction call, you can preassign three parameters for the initial screen of the transaction. You can also connect the offering of a transaction to certain parameters from the material master, such as procurement type, material type, MRP group, and MRP type. A function similar to the navigation profiles is available with the selection of personal favorites where you can also activate up to five general transaction calls. To do this, choose Environment - Own favorites. In addition, you can activate two favorites per MRP element as transaction calls. For this, choose the * button in the details for the MRP element.

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Caution: During the user-specific maintenance of own favorites in the stock/requirements list and MRP list, users may not have the corresponding authorization. However, also users who have generally no table maintenance authorization should be able to maintain these tables in the requirements planning. Authorization group ’MCMD’ is assigned to the affected views. This authorization group refers to authorization object ’S_TABU_DIS’ and is, in general, assigned to the tables and views of the MRP Customizing. Therefore, users who have no general authorization for the table maintenance in MRP do not have this authorization group. If it is required that also users who are not allowed to maintain the other tables should be able to maintain entries for their own favorites, a separate authorization group should be created for this and assigned to these users. In order to create the authorization group for the affected views proceed as follows: 1.

2. 3. 4. 5. 6.

With the ABAP Dictionary (Transaction SE11), call up the table maintenance generator for views V_U444B and V_U444C (Utilities -> Table maintenance generator). Here, choose ’Environment -> Authorization -> Authorization groups’. Create a new authorization group for authorization object ’S_TABU_DIS’ using ’New entries’. Return to the previous screen and here replace entry ’MCMD’ by your new authorization group in field ’Authorization group’. Save your change. Assign this authorization group to the corresponding user profiles.

See note 501318 - MD04: Authorization group for maintenance of own favorites, for more information.

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Lesson: Using the MRP and Stock/Requirements List

Figure 17: Settings that Can Be Made Individually

You can use your personal settings to specify a number of default display options for the stock/requirements list and the MRP list. Your personal settings, as well as your “Own favorites” in Environment - Own Favorites, determine the screen that appears when accessing the lists. From the lists, you can change the various settings at any time. For example, you can show or hide the overview tree. You define the screen sequence of the header details in Customizing for the MRP type. A user exit for showing user-specific categories is available. As of SAP ERP 4.6, you can set the indicator Buffered Reading of Order Report/Tree in the general settings of the stock/requirements list. If you set the indicator, stock and requirements situations on the individual MRP levels are buffered in the memory when the order report or tree is being compiled. This ensures that subsequent calls of the order report and tree can be carried out much faster.

Demonstration: Navigation Profiles Purpose To demonstrate Navigation Profiles in the List reports

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System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List 2.

Enter Material R-T1## at plant 1000 and press ENTER

3.

Select

4.

Scroll through the tabs and select the General settings Tab.

5.

Save Settings .

In the Navigation profile field select SAPPPMRP00 - MRP Controller. Save and enter through any informational messages.

6.

Select

7.

Discuss the changes in the application toolbar.

8.

Add the Stock Overview Report to your own favorites.

Collective Access to MRP and Stock/Requirements List After a planing run is completed, every planner will have the same question, “Where do I start”? Due to the amount of materials most planners are responsible for, it is impossible and illogical to review the results of every material. Therefore, after the conclusion of every “ batch”planning run, planners will review the collective list reports to derive the situation that warrants the highest attention. From there planners will work through the less severe problems until the next planning run.

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Lesson: Using the MRP and Stock/Requirements List

Figure 18: Collective Access to MRP List and Stock/Requirements List

Both the MRP List and the Stock/Requirements list can be collectively accessed to review a large number of materials. Users, will typically use broad selection criteria to gather large amounts of information. For example, you can display all the lists for which you are responsible as MRP controller. Note: Each list report will have a different method of selecting materials, based on the situation that will presented to the planner, real-time versus static data. First, a material overview is displayed with all of the selected materials. If you have set the “Set up lists in background” indicator, the following are available as orientation help: Traffic lights, various search functions in the overview and in the individual lists, and sort functions for individual customer segments by date or number. You can use the search function to specifically select materials according to particular exception messages. You can make user-specific definitions for the display of traffic lights according to day’s supply violations or exception groups. You can also define user-specific sort criteria. Note: As of release 4.6, users can not save the sort criteria as “user-specific” settings. From the overview, you can branch to the individual lists and process the materials there. If you have used the search function to select several lists for processing, you can go from one list directly into the next selected list. The selection criteria for collective access in the MRP lists are not the same as those in the stock/requirements lists. Here, the MRP or processing date and/or the processing

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indicator for the selection are available. The orientation guides in the material overview correspond with those in the stock/requirements list. It is also possible search for processing indicators or new exceptions. In the material list of the collective display of the stock/requirements list (Transaction MD07) or the display of the MRP lists (Transaction MD06), the system sorts among other things according to the criterion ’Traffic light’. The following sequence is displayed: Ascending order: Red - green - yellow Descending order: Yellow - green - red The following sequence is expected: Ascending: Red - yellow - green Descending: Green - Yellow - red The unexpected sort sequence only occurs in systems which use an EBCDIC character set, for example, with operating system OS/400. With an ASCII character set, the system sorts as expected. To achieve the required sort sequence with an EBCDIC character set, you can implement the following modification. Here, the previous icon for the red traffic light is replaced with a different icon. This is not a correction in the standard system! Note: See SAP Note : 509928 - MD07/MD06: Sorting according to traffic light, for more details or updates.

Demonstration: Collective Access to MRP Lists and Stock/Requirements Lists Purpose To demonstrate collective access to MRP lists and stock/requirements lists

System Data System: Client: User ID: Password: Set up instructions: Note: The two collective accesses have different selection screens. However, you do not have to explain every individual field.

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Lesson: Using the MRP and Stock/Requirements List

1.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → MRP List - Collective Display (MD06)

2.

Select your MRP controller 0## at plant 1000.

3.

In the initial screen of the collective MRP list , display and explain the various selection parameters:

4.

• MRP controller • Product group • MRP date • Exception groups • Processing indicator, only in MRP lists • Material data Select the Exception groups Tab, and select all exception groups and select Continue (Enter)

2004/Q3

5.

In the Material List, point out the settings and functions of the traffic lights and the sort and search functions. Select Define Traffic Light and explain to the students the concept of sorting.

6.

Select

7.

Select several materials and select Selected MRP lists

8.

Using the Overview tree or the “Next/Previous Materials” icons, scroll through the list of materials.

Sort. Sort the list by traffic light in ascending order.

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Lesson: Using the MRP and Stock/Requirements List

Exercise 2: Using the MRP Lists Exercise Duration: 10 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Use the display filter and the selection rule • Use the collective display of Materials Requirement Planning (MRP) lists • Use the processing indicator

Business Example Your batch planning run has just been completed therefore you need to process the results and resolve any issues. You process the MRP lists of the materials for which you are responsible as MRP controller and which were created this week. You concentrate on situations for which rescheduling proposals exist. After having clarified the situation in production, you change the scheduled dates of the planned orders according to the rescheduling proposals that are in the MRP list.

System Data System: Client: User ID: Password:

SAP ERP 4.7 x 2.00 8XX SCM240-##

CATT: Set up instructions:

Z_SCM240

1.

The production Planning overview exercise must be completed before any of these exercises can be completed.

Task 1: Navigation Profiles in the Stock Requirements list Upon completion of a planning run, certain exceptions or problems will be raised. As a planner you need a tool that will allow you to resolve any exceptions that have come about since the last planning run. Customize the List reports so that you can have several “hot buttons” that will allow planners to speed up the exception process. 1.

2004/Q3

As a planner, you often have more exceptions to deal with, than time to correct them. You have been told that the Stock/Requirements list is a very flexible tool to manage the supply and demand situation. However you need to make it more flexible. Use your material R-F1## at plant 1000 to access the Stock/Requirements list Continued on next page

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Using your user settings, add the Navigation profile SAPPPMRP00 - MRP Controller so you can use the List Reports more easily. 2.

What changes took place as result of adding the navigation profile?

3.

In the S/R list, review your purchased material R-T1##. Did the icons change at all?

4.

One of the transactions that you normally run, the stock overview report (MMBE) is not available through the navigation profile. Add the stock overview report to your “Own Favorites ” so that you can access it at any time. Use the following settings: Field

Value

Navigation no.

1

Transaction code

MMBE

Text in menu

Stock Overview Report

Icon

Select Any

Icon text

First select enter to refresh the screen, then enter Stock

Info text

Stock Overview Report

5.

What were the results of your activity?

6.

Exit the stock requirements list Continued on next page

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Lesson: Using the MRP and Stock/Requirements List

Task 2: Filters in the Stock Requirements list (Optional) Your production manager has just requested the production plan for one of your pumps R-F1## at plant 1000. In this instance she would like the firmed schedule compared to the current demand. Demonstrate how this is possible by using the filters and selection rules in the stock/requirements list for material R-F1##. Choose Filter on then, the system displays two new fields in the list header where you can define a display filter or a selection rule. 1.

Access the Stock/Requirements list for material R-F1## at plant 1000. Use the display filter with the description SAP requirements and firmed receipts. What changes do you observe in the display of the MRP elements?

2.

Do you also see changes in the available quantity that is calculated for each MRP element?

3.

Test the effect of display filter SAP Only Receipts. What was the affect on the display

4.

Enter a selection rule with the description SAP Only Receipts. What is the affect of the selection rule?

5.

Select

Filter off to work without a display filter or a selection rule.

Task 3: Using the Collective MRP List Your nightly planning run has just completed. The first thing that you must do as a planner is to evaluate your planning results. You are responsible for more materials than you have time to review. Use the collective MRP List to identify what materials have issues that you must resolve. 1.

As a planner, you need to find out what materials need your immediate attention. Access the MRP list - Collective display and select the MRP lists by plant 1000 and your MRP controller number 0## and MRP lists have been created in the current week. In addition, filter using only exception groups 8, 7, and 4. You want to edit MRP lists with exceptions that affect the rescheduling of procurement proposals, such as Selection group 7. Restrict the selection by selecting the exception group 7 on the tab page Exception groups. Start the selection by choosing Enter. How many materials were selected? ___________

2.

Define your traffic light so that exception group 7 and 8 will give your a red light, and 4, 5, and 6 will give you a yellow light.

Continued on next page

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3.

Did any changes occur in the Material overview screen?

4.

The system displays the overview of the materials selected. This means, it displays all materials for the MRP controller 0##, for which there are MRP lists in which receipt elements with exception messages for rescheduling have been created. Choose all the materials and review the details

5.

In the lists, find a planned order for which exception message 10, 15, or 30 is displayed and for which the rescheduling date is not today. Make a note of the material number and the number of the selected planned order: __________

6.

For the order in question, see how many exception messages exist. In the detailed data for the selected MRP element, two rescheduling dates are executed in the exception messages for rescheduling. What are the two dates and what significance do they have? 1. Date: __________ Significance: _______________________ 2. Date: __________ Significance: _______________________

7.

If the order in question has a rescheduling date to the right of the MRP Element data we need to reschedule the planned order for the date it is suggesting. Change the Planned order so it will arrive in time to cover the requirement in question.

8.

After making the changes to the plan, you need to acknowledge that the material list has been processed. Set the processing indicator for the material and return to the Material List. In which MRP list, that is, in which material MRP list, did you set the processing indictor? Material: ____________________________ Exit the collective display of the MRP lists.

9.

58

Return to the S/R list and for the planned order that you firmed remove the firming indicator and save.

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Lesson: Using the MRP and Stock/Requirements List

Solution 2: Using the MRP Lists Task 1: Navigation Profiles in the Stock Requirements list Upon completion of a planning run, certain exceptions or problems will be raised. As a planner you need a tool that will allow you to resolve any exceptions that have come about since the last planning run. Customize the List reports so that you can have several “hot buttons” that will allow planners to speed up the exception process. 1.

As a planner, you often have more exceptions to deal with, than time to correct them. You have been told that the Stock/Requirements list is a very flexible tool to manage the supply and demand situation. However you need to make it more flexible. Use your material R-F1## at plant 1000 to access the Stock/Requirements list Using your user settings, add the Navigation profile SAPPPMRP00 - MRP Controller so you can use the List Reports more easily.

2.

a)

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

b)

Enter Material R-F1## and plant 1000and press ENTER

c)

Select

d)

Scroll through the tabs and select the General settings Tab

e)

In the Navigation profile field select SAPPPMRP00 - MRP Controller

f)

Select

Save Settings

Save and enter through any informational messages.

What changes took place as result of adding the navigation profile? Answer: Several icons were added to the icon bar for planning transactions, (MRP, Planning File, etc.)

3.

In the S/R list, review your purchased material R-T1##. Did the icons change at all? Answer: Yes, due to settings in the navigation profile, different transactions show up for those materials that are “purchased” versus being manufactured.

4.

One of the transactions that you normally run, the stock overview report (MMBE) is not available through the navigation profile. Add the stock overview report to your “Own Favorites ” so that you can access it at any time. Use the following settings:

Continued on next page

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5.

SCM240

Field

Value

Navigation no.

1

Transaction code

MMBE

Text in menu

Stock Overview Report

Icon

Select Any

Icon text

First select enter to refresh the screen, then enter Stock

Info text

Stock Overview Report

a)

From the S/R list menu path Environment → Own Favorites → Maintain

b)

Select New Entries

c)

Enter the parameters in the table

d)

Select

e)

Select

Save Back twice and answer YES to saving the changes.

What were the results of your activity? Answer: A new icon was added, with the icon and the icon text. In addition if you place your cursor on the icon, quick info, will give you the description for you transaction. Lastly, if you use the menu path Environment → Own Favorites , the text for your menu appears.

6.

Exit the stock requirements list a)

Continued on next page

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Lesson: Using the MRP and Stock/Requirements List

Task 2: Filters in the Stock Requirements list (Optional) Your production manager has just requested the production plan for one of your pumps R-F1## at plant 1000. In this instance she would like the firmed schedule compared to the current demand. Demonstrate how this is possible by using the filters and selection rules in the stock/requirements list for material R-F1##. Choose Filter on then, the system displays two new fields in the list header where you can define a display filter or a selection rule. 1.

2.

Access the Stock/Requirements list for material R-F1## at plant 1000. Use the display filter with the description SAP requirements and firmed receipts. What changes do you observe in the display of the MRP elements? a)

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

b)

Enter your material R-F1## at plant 1000 and press ENTER.

c)

Select

d)

Set the filter to display: Requirements and firmed receipts.

Do you also see changes in the available quantity that is calculated for each MRP element? a)

3.

Effect of display filter SAP Only Receipts: The system only displays the receipt elements and no change to the Available Qty

Enter a selection rule with the description SAP Only Receipts. What is the affect of the selection rule? a)

5.

Changes to the available quantity: No, the available quantity is not changed by the display filter.

Test the effect of display filter SAP Only Receipts. What was the affect on the display a)

4.

Filter On.

The available quantity have been recalculated using only receipts.

Select

Filter off to work without a display filter or a selection rule.

a)

Continued on next page

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Task 3: Using the Collective MRP List Your nightly planning run has just completed. The first thing that you must do as a planner is to evaluate your planning results. You are responsible for more materials than you have time to review. Use the collective MRP List to identify what materials have issues that you must resolve. 1.

As a planner, you need to find out what materials need your immediate attention. Access the MRP list - Collective display and select the MRP lists by plant 1000 and your MRP controller number 0## and MRP lists have been created in the current week. In addition, filter using only exception groups 8, 7, and 4. You want to edit MRP lists with exceptions that affect the rescheduling of procurement proposals, such as Selection group 7. Restrict the selection by selecting the exception group 7 on the tab page Exception groups. Start the selection by choosing Enter. How many materials were selected? ___________ a)

SAP ERP Menu path: Logistics → Production → MRP → Evaluations → MRP List - Collective Display (MD06)

b)

Enter the following Data: Field Name

Value

Plant

1000

MRP Controller

0##

MRP date from:

Beginning of the week to: Today

Select the Exception groups Tab Field Name

Value

General messages

Select

Exception during rescheduling

Select

Terminations

Select

Select

Continue (Enter)

Continued on next page

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Lesson: Using the MRP and Stock/Requirements List

2.

3.

Define your traffic light so that exception group 7 and 8 will give your a red light, and 4, 5, and 6 will give you a yellow light. a)

From the Material List select Define traffic light.

b)

Set the radio buttons for exception groups 7 and 8 so that they will trigger a red traffic light.

c)

Set the radio buttons for exception groups 4, 5, and 6 so they will trigger a yellow traffic light.

d)

Select

Save as user setting.

Did any changes occur in the Material overview screen? Answer: Some or all of the materials should have changed from green to yellow or red.

4.

The system displays the overview of the materials selected. This means, it displays all materials for the MRP controller 0##, for which there are MRP lists in which receipt elements with exception messages for rescheduling have been created. Choose all the materials and review the details a)

5.

Select All and then select Display selected MRP lists to Select display the corresponding lists in order.

In the lists, find a planned order for which exception message 10, 15, or 30 is displayed and for which the rescheduling date is not today. Make a note of the material number and the number of the selected planned order: __________ a)

To navigate through the list of materials select

Next Material

and/or Previous Material to switch between the lists. Additionally you can use the Show Overview Tree button and use the worklist to navigate between the materials. b) 6.

Number of selected planned order: Varies

For the order in question, see how many exception messages exist. In the detailed data for the selected MRP element, two rescheduling dates are executed in the exception messages for rescheduling. What are the two dates and what significance do they have? 1. Date: __________ Significance: _______________________

Continued on next page

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2. Date: __________ Significance: _______________________ a)

Details of element for this order. In the additional data, a Select maximum of two exception messages are saved. To display the long text of an exception message, you can select the respective message in the detail screen for the MRP element and select

b)

Exception-Info.

1. Date: Varies Significance: Availability date 2. Date: Varies Significance: Goods receipt date

7.

8.

If the order in question has a rescheduling date to the right of the MRP Element data we need to reschedule the planned order for the date it is suggesting. Change the Planned order so it will arrive in time to cover the requirement in question. Details of element for the order in questions.

a)

Select

b)

In the MRP list for this order, select

c)

Enter the Reschedule date, less one day as the order finish in the dates section. Delete the dates in the fields Start and Plnd Open. Choose Enter so that the system determines the current start and opening dates.

d)

Select

Change element.

Save

After making the changes to the plan, you need to acknowledge that the material list has been processed. Set the processing indicator for the material and return to the Material List. In which MRP list, that is, in which material MRP list, did you set the processing indictor? Material: ____________________________ Exit the collective display of the MRP lists. a)

Select Processing indicator on in the list. Check in the header details that the processing indicator is set. If not, repeat the last step.

b)

Exit the material MRP List

c)

In the Material List, the material that has been process has the following indicator set

.

d)

Material: Varies, for example R-F1##.

e)

Exit the collective display of the MRP List.

Continued on next page

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Lesson: Using the MRP and Stock/Requirements List

9.

2004/Q3

Return to the S/R list and for the planned order that you firmed remove the firming indicator and save. a)

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

b)

Enter your material R-F1## at plant 1000 and press ENTER.

c)

Double click on the firm planned order with the * at the end.

d)

Select

e)

In the bottom right corner remove the check from the Firmed indicator.

f)

Select

change element.

Save.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson: Using the MRP and Stock/Requirements List

Lesson Summary You should now be able to: • Demonstrate how to use the MRP and Stock Requirements List for use in day to day planning. • Describe the differences between the MRP List and Stock Requirements (S/R) list

Related Information The follow Notes may offer more information about the list reports: •

2004/Q3

94145: MD04: Explanation note for displaying columns

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Lesson: 53

SCM240

Exception Messages in SAP ERP Lesson Duration: 30 Minutes

Lesson Overview In this lesson, you will learn about monitoring MRP result by using exception messages.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain how exception messages are used in the production planning process Demonstrate how to configure exception messages.

Business Example As a production planner you are responsible for the procurement plan and inventory of hundreds of materials. Based on the number of changes that happen every day you can not review the procurement plans of every production.

Using Exception Messages Upon completion of almost every planning run, problems will have arisen from scheduling issues. Planners need a method to identify each problem as it relates to a material/locaton. SAP ERP uses exception messages to identify any issues with a production plan.

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Lesson: Exception Messages in SAP ERP

Figure 19: Exception Messages

As a result of a planning run or simple changes to supply and demand, the plan results are monitored using exception messages. Exception messages alert you to situations that require further processing, such as start date in the past or stocks falling below the safety level. The MRP controller can then select those materials from the planning results to process them manually. When using either the MRP List or the Stock/Requirements list, users should be aware that different exception messages could be displayed for the same material/plant combination. The MRP list shows the exception messages that were generated as a results of the planning run. The Stock/Requirements list will show exception messages in a real time environment. When dealing with make-to-stock materials, the Stock/Requirements list will show alerts based on dynamic pegging. Pegging is the relationship between a specific requirement and the receipt that was created to supply the demand. Make-to-stock products are constantly re-pegging based on chronological order. Exception messages indicate the following: Newly created order proposals from planning, dates in the past, problems with BOM explosion or scheduling, rescheduling proposals. Here is a list of the current exception messages in SAP ERP:

2004/Q3

Group

No.

Exception message

6

96

Stock fallen below safety stock level

8

98

Abnormal end of requirements planning

6

70

Max. release qty - quota exceeded

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Group

No.

Exception message

4

01

Newly created

1

02

New, opening date in the past

2

03

New, and start date in the past

3

04

New, and finish date in the past

4

61

Scheduling: Customizing inconsistent

4

62

Scheduling: Master data inconsistent

2

63

Production start before order start

3

64

Production finish after order finish

5

50

No BOM exists

5

52

No BOM selected

5

54

No valid run schedule

5

55

Phantom assembly not exploded

5

53

No BOM explosion due to missing config.

6

58

Uncovered reqmt after effective-out date

6

56

No Requirements coverage

6

40

Coverage not provided by master plan

69

Recursive BOM components possible

1

05

Opening date in the past

2

06

Start date in the past

3

07

Finish date in the past

7

10

Bring process forward

7

15

Postpone process

7

20

Cancel process

7

30

Plan Process according to schedule

6

25

Excess stock

6

26

Shortage in individual segment

6

57

Disc. matl partly replaced by follow-up

6

59

Receipt after effective-out date

4

42

Order proposal has been changed

4

44

Order proposal re-exploded

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Lesson: Exception Messages in SAP ERP

Group

No.

Exception message

4

46

Order proposal has been manually changed

4

80

Reference to retail promotion

4

82

Item is blocked

If scheduling problems occur, the system displays a corresponding exception message in the stock/requirements list and the MRP list as a rescheduling proposal. If this proposal is to be accepted, you must adjust the dates for the receipt element manually. The automatic adjustment of these dates is possible in the planning result display or evaluation, for example, in interactive planning or when the indicator, “Display results before saving” has been selected in the initial screen of the planning run. The rescheduling proposal can be accepted here using the function, “Reschedule order proposal”.

Figure 20: Old/New Exception Messages

You can differentiate between old and new exceptions in the MRP list if you work with the processing indicator. For processed MRP lists, the system compares the exceptions with those from the old MRP list during the planning run. If the exception corresponds to an element in both lists, it is flagged as an “old” exception. In the collective list display, you can specifically select the lists with new exception messages.

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When using collective display of the MRP lists, you can specifically select the lists with new exceptions and even search for new and old exceptions in the individual lists. Note: In the planning run, exceptions can be characterized as ’old’ or ’new’. This function only refers to the exceptions with the highest priority

The mode of operation in the planning run can be sketched roughly as follows: First, all exceptions are regarded as ’new’. The exceptions of the old and the new MRP list are only adjusted if a processed MRP list exists for the material/plant. If the system finds correspondences, the exception of the new list is characterized as ’old’. Refer to Note 30684 for more details on this point. During the materials planning of a material, an exception adjustment is executed for the previously available MRP list if this is characterized as processed. If there are exception messages in the MRP list that was just created, the system searches for matching exceptions in the old MRP list that is indicated as processed. If the corresponding exception is then found, it is characterized in the new list as ’old’. If this applies to all the exceptions of the new list, the processing indicator of the MRP list is retained. In addition, the MRP list does not appear if only lists with new exceptions are selected in the collective display for MRP lists (MD06). It is possible for a line of the MRP list to have two exceptions, but the adjustment only affects the exceptions that are directly visible when displaying the MRP list, which is normally that with the higher priority. The following exceptions can never be regarded as ’old’: • • • • • • • • •

newly scheduled new. Creation date in the past new. Start date in the past new. End date in the past order proposal automatically changed newly exploded material has no bill of material no valid bill of material version without valid SAFK record

In contrast, the exception “Order proposal manually changed” must always be ’old’ since a change was consciously made to the corresponding line of the list.

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All remaining exceptions take part in the adjustment. In this case, the old list is first searched for the corresponding element. If this exists and has the same exception then the exception is marked as ’old’ if one of the following special cases does not apply: • •

Rescheduling exception: The rescheduling date must then also agree Stock material surplus: Then quantity and reduction quantity must also agree

Demonstration: Use of Exception messages Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. SAP ERP menu path: Logistics → Production → MRP → Evaluations → MRP List - Collective Display

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2.

Select using your MRP Controller 0## at plant 1000

3.

Select the Exception groups tab, and select all exception groups.

4.

Press ENTER .

5.

Point out the exception message groups.

6.

Select a material that has an exception message in group 7 and select Display selected MRP list.

7.

Details of element to see the exception messages for the MRP Select element.

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Using Exception Messages 1.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → MRP List - Collective Display

2.

Select using your MRP Controller 0## at plant 1000.

3.

Select the Exception groups tab, and select all exception groups.

4.

Press ENTER .

5.

Select a material that has an exception message in group 7 and select Display selected MRP lists.

6.

Details of element to see the exception messages for the MRP Select element.

Customizing Exception Messages When exception messages are generated, only SAP developed exception messages will be used. Therefore companies can only use those exception messages are delivered by SAP.

Figure 21: Exception Message Configuration

In the Customizing IMG Production → Materials Requirements Planning → Evaluation → Exception Messages → Define and Group Exception Messages. In this activity companies can: • • • • •

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Text of the exception message Determine the priority of each message (99 = highest priority) Assign which group the exception messages belong Turn off the exception message Create the MRP list depending on the exception message created

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Lesson: Exception Messages in SAP ERP

Caution: These settings are client specific and affect all plants during the planning run. Per line of the MRP list (for example planned order, purchase order ...) you can save a maximum of two exception message in the planning run. If an element has more than two exception messages, the two messages with the higher priority are selected. Only the exception with the highest priority is displayed in the list. On the detail screen for the line (double-click on the element) the system displays concerning both exception messages. In addition, there is a search function the exception messages in the details of the MRP element. This only refers to the exceptions with the highest priority. In addition to configuring each exception message, companies can change the text of each exception message group. following the IMG menu path: Production → Materials Requirements Planning → Evaluations → Exception Messages → Check Exception Group TextsGroups can not be added or removed, only renamed.

Demonstration: Exception Message Configuration Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. In the Customizing IMG Production → Materials Requirements Planning → Evaluations → Exception Messages → Define and group together exception messages 2.

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Double click on first entry and explain the settings.

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Facilitated Discussion Discuss the Purpose of Exception messages and what reports will be relevant to review them.

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain how exception messages are used in the production planning process • Demonstrate how to configure exception messages.

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Lesson: 61

SCM240

Days’ Supply Lesson Duration: 25 Minutes

Lesson Overview In this lesson, you will learn how to interpret the day’s supply and receipt day’s supply for a material.

Lesson Objectives After completing this lesson, you will be able to: •

Interpret day’s supply and receipt day’s supply

Discuss the need for using the day’s supply function. Then, explain the process of interpreting day’s supply and receipt supply.

Business Example The Precision Pump company constitutes a number of independent business units for manufacturing pumps. As a planning manager, you need to identify potential shortages for the material supply.

An Overview to Day’s Supply

Figure 22: Days’ Supply

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Lesson: Days’ Supply

The days’ supply enables you to determine potential shortages at an early stage. This function provides you with information about when the material shortage will occur if no goods receipt is delivered (worst case). In the “Safety stock” field in the IMG activity, “Define receipt elements for receipt days’ supply”, you define per plant whether or not the days’ supply should be defined as the point where the stock falls below the physical stock level (indicator “Safety stock” = “1”) or the safety stock level (indicator = “blank”). The days’ supply is entered in workdays and the value entered after the decimal point indicates the portion of the requirement that can still be covered on the shortage day. For example, a days’ supply of 24.6 means that the stock can cover the requirements for the next 24 days and on day 25, there will be enough stock to cover 60% of the requirement). You can flag materials with critical days’ supplies using a red traffic light in the stock/requirements list and in the MRP list.

Figure 23: Receipt Days’ Supply

The receipt days’ supply provides you with information about when the material shortage will occur if certain firmed receipts are delivered. You can define two different receipt days’ supplies that are different with reference to the selection of firmed receipt elements that are taken into account. You choose which firmed receipts are to be taken into account in the calculation per plant in the Customizing activity, “Define receipt elements for receipt days’ supply”. In the “Safety stock” field, you define whether or not the receipt days’ supply should be defined as the point where stock falls below the physical stock level or the safety stock level (see days’ supply).

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Figure 24: Receipt Days’ Supply 1 and 2 (Example)

You can analyze two different receipt days’ supplies (1 and 2). These supplies are different with reference to the selection of their receipt elements, which is defined in the Customizing IMG activity, “Define receipt elements for receipt days’ supply”. You define for various firmed receipts whether or not they are taken into account, for both receipt days’ supplies (“X”), receipt days’ supply 1 (“1”), or only for receipt days’ supply 2 (“2”). In the above example, production orders and firmed planned orders are taken into account to calculate receipt days’ supply 1, whereas receipt days’ supply 2 supplies information about the size of the receipt days’ supply taking the production orders into account.

Demonstration: Days’ Supply and Receipt Days’ Supply Purpose To demonstrate days’ supply and receipt days’ supply.

System Data System: Client: User ID: Password: Set up instructions:

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Lesson: Days’ Supply

1.

Call the stock/requirements list for material R-F1## plant 1000: Expand the header and scroll to the Stocks/coverage tab. Display the days’ supply and the two receipt days’ supplies in the header details; if necessary, explain how the days’ supplies are calculated using goods receipts and additional planned independent requirements.

2.

In Customizing, show how to define the days’ supply and receipt days’ supply and include safety stock. Customizing: Production → Material Requirements Planning → Evaluation → Define Receipt Elements for Receipt Days’ Supply. Demo example: For plant 1000 enter “1” in the “Firmed Planned Orders” (FPOrd) column in Customizing. Enter “1” in the “Safety Stock” column. Create a new material by copying R-F1##. Warehouse stock 7 pieces; (static) safety stock 5 pieces; create planned independent requirements: current week + 2 weeks to current week + 6, each 10 pieces; planning run, refresh MD04 , and explain values for days’ supply and receipt days’ supply (all three values are the same); Convert the first planned order in a production order. Manually fix the second planned order. Explain the calculated values for both receipt days’ supply; Enter “blank” in the “Safety stock” column in Customizing. Call up MD04 again (do not refresh ) and explain the calculated value for the days’ supply.

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Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. What information is provided by the receipt day’s supply?

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Lesson: Days’ Supply

Lesson Summary You should now be able to: • Interpret day’s supply and receipt day’s supply

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Unit Summary

SCM240

Unit Summary You should now be able to: • Demonstrate how to use the MRP and Stock Requirements List for use in day to day planning. • Describe the differences between the MRP List and Stock Requirements (S/R) list • Explain how exception messages are used in the production planning process • Demonstrate how to configure exception messages. • Interpret day’s supply and receipt day’s supply

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Test Your Knowledge

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Test Your Knowledge 1.

What does it mean to say the stock requirements list and the MRP list are split into various planning segments.

2.

Where can you see many pieces of master data for the material in the MRP list ?

3.

If I wished to look at only those materials for which I was responsible as the MRP controller, how can I do so?

4.

Can I control what data is displayed and in what order in the variable header?

5.

What is the purpose of exception messages?

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6.

What exception messages should be displayed generated and displayed to the planner?

7.

How can the number of rescheduling exception messages be reduced or limited? Choose the correct answer(s).

□ □ □ □ 8.

86

A B C D

Net Change planning Tolerance Values Planning time fence Reduce all lead times to 1

What is the purpose of the receipt days’ supply?

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Test Your Knowledge

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Answers 1.

What does it mean to say the stock requirements list and the MRP list are split into various planning segments. Answer: This means that the MRP elements that are linked with each other are also displayed together.

2.

Where can you see many pieces of master data for the material in the MRP list ? Answer: In the detailed (variable) header.

3.

If I wished to look at only those materials for which I was responsible as the MRP controller, how can I do so? Answer: Using the collective display of the MRP or stock requirements list and limit the selection accordingly.

4.

Can I control what data is displayed and in what order in the variable header? Answer: Yes. Through customizing for MRP type.

5.

What is the purpose of exception messages? Answer: Exception messages alert the planner that a planning situation has occured that the system could not resolve completely and therefore should require manual intervention.

6.

What exception messages should be displayed generated and displayed to the planner? Answer: Too many exception messages will lead to the planner ignoring all of them. In general the only exception messages that should be displayed are the exceptions that will have action taken against them. IE: only the ones you will do something about.

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How can the number of rescheduling exception messages be reduced or limited? Answer: B, D Tolerance values can be set to limit the exception messages generated. Although reducing the lead time will reduce the exception messages; it’s not a feasible solution. Adding a planning time fence would actually increase the number of rescheduling messages.

8.

What is the purpose of the receipt days’ supply? Answer: The receipt days’ supply provides you with information about when the material shortage will occur if certain firmed receipts are delivered.

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Unit 3 MRP Basics

71

Unit Overview This unit will discuss the basics relevant to production planning. You will be introduced to various concept of planning ins SAP ERP as well as some of the transactions that will be used throughout the balance of the course to trigger replenishments for large amounts of material.

Unit Objectives After completing this unit, you will be able to: • • • • • • • • • • •

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Explain the Fundamental concept of Materials Requirements Planning (MRP) Explain the purpose of independent requirements. Explain how the different planning techniques can influence your business process Explain how MPS is used in SAP ERP Explain how MRP is used in SAP ERP Explain how Consumption based planning is used in SAP ERP Demonstrate the configuration of MRP Types in SAP ERP Identify the minimum configuration requirements in order to execute a planning run in SAP ERP Explain the different techniques of executing planning runs in SAP ERP Demonstrate the purpose of the settings in the planning run Explain the purpose of the planning file and how it influences the settings in the planning run.

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Unit Contents Lesson: Concept of MRP ....................................................... 91 Lesson: MRP Types ............................................................. 97 Demonstration: Firming Settings .........................................104 Procedure: Planning time fences.........................................106 Procedure: MRP Type and MRP Group Configuration ................107 Lesson: Prerequisites for Running MRP..................................... 112 Demonstration: Prerequisites for Material Requirements Planning (Optional) .................................................................... 114 Procedure: MRP Activation and Create planning files................. 115 Demonstration: MRP Settings in the Material Master, MRP Group, and Plant .......................................................................... 116 Procedure: MRP Settings in the Material Master, MRP Group, and Plant .......................................................................... 118 Demonstration: MRP Controllers ......................................... 119 Procedure: Create and Maintain MRP Controllers.....................120 Demonstration: Material Status...........................................121 Procedure: Creating and setting the Material Status ..................122 Lesson: Methods for Executing a planning run .............................125 Procedure: Setting up MRP to run in the background .................128 Demonstration: Executing MRP ..........................................135 Exercise 3: Executing a planning run in SAP ERP ....................137 Lesson: Settings in the Planning Run ........................................142 Exercise 4: Settings in the planning run .................................151

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Lesson: 73

Lesson: Concept of MRP

Concept of MRP Lesson Duration: 20 Minutes

Lesson Overview The concept of enterprise wide planning can encompass numerous tasks with many different groups or departments getting involved. In this lesson we will focus on the topics of material oriented planning, such as MPS and MRP, etc. This lesson will address these topics from a high-level perspective and be discussed in detail in other lessons.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain the Fundamental concept of Materials Requirements Planning (MRP) Explain the purpose of independent requirements.

This lesson is designed to introduce the concept of production planning. Keep it at a very high level as if it was to be delivered to people with no SAP ERP planning experience. Based on the make up and experience of the class, the instructor can decided how much time is required to discuss rudimentary concepts of planning. Essentially that this is a material/location based planning process. We need to explain the concept of planning against independent requirements. What they are, why they are important in the supply chain planning process.

Business Example As a senior production planner you are often required to train new planners or explain your sophisticated planning process to other members of management. At this time we will outline the General concepts of Materials Requirements Planning.

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Basic MRP Concept

Figure 25: MRP Overview

The ultimate goal of Material Requirements Planning (MRP) is in reality very straight forward. MRP’s purpose is to create material replenishments to offset current and future demands. Supplies are considered on hand inventory and existing open orders. Demands are critical and they are the key for driving MRP. Throughout this entire course we will discuss two basic types of demand that are relevant to MRP: 1. 2.

Independent Demand: Customer requirements or Forecast. Dependent Demand: Requirements for component parts on the Bill of Material.

Independent demand is demand that is not dependent upon a bill of material explosion. It is not driven by the requirements of another higher level assembly. The two basic kinds of independent demand are customer requirements (actual) and forecast (planned). Customer requirements typically take the form of Sales Orders, Customer Independent Requirements or Schedule Lines (blanket orders). A Forecast is a projection of what an organization believes the demand may be in the future. This projection is normally derived using sales history and statistical methods. However those details are beyond the scope of this course. This forecast then serves as a baseline for planning. This way a plan can be put together and the organization is ready when the actual customer demand is received. The term used in SAP ERP planning for this future projection is Planned Independent Requirements.

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Dependent demand is demand for a component item used in a Bill of Material. It may be a purchased raw material or a sub-assembly. The requirements are directly related to, and in most cases proportionally related to, the demand requirements of the upper level item.

MRP Process

Figure 26: Basic MRP processing steps

Material Requirements Planning (MRP) is a process of logical steps: 1.

2. 3. 4.

Net Requirements Calculation (Do we need any?) : This is a time phased comparison of supplies vs. demand. Determines if there is a shortage and when. Lot Size Calculation (How many do we get?): Determination of how many should be procured. For example: minimum lot size or rounding value. Procurement Type (Where do we get them?): Determine the source. Manufactured or purchased. Scheduling (When do we need to start?): Schedule based on the items lead time. This provides a start date and finish date. Note: If the material is to be purchased, the order is created. Step 5 is not performed.

5.

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Bill of Material explosion (What components will be required?) The BOM will be exploded to determine what materials are required to complete the manufacturing process. A planned order is created and dependent requirements are passed to the component materials. Step 1 then begins all over again with the components.

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Procurement Proposals

Figure 27: Principles and Results of MRP

If the system determines shortage of material quantities during MRP, the system generates procurement proposals. Purchase requisitions and planned orders are internal planning elements that you can change, reschedule, or delete at any time. In the case of in-house production, the system creates planned orders to plan the production quantities. When planning is complete, planned orders can be converted into production or process orders. In the case of external procurement, the system either creates a planned order or a purchase requisition to plan the external procurement quantity. When planning is complete, the planned order is converted into a purchase requisition, which is subsequently converted to a purchase order. In the case of in-house production, the system creates planned orders to plan the production quantities. In multi-level production, that is, when a finished product is made up of assemblies or components, the corresponding assembly group requirements are mapped using dependent requirements. During a planning run, dependent requirements created for the assembly act as requirements. This ensures timely staging of the assemblies. When planning is complete, planned orders can be converted into production orders. When this is done, the system transforms the dependent requirements of the planned order into production order reservations.

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Facilitated Discussion Ensure that students can give a general purpose for why companies do material based planning.

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. •

How does production planning fit into the Supply Chain Planning process. In SAP ERP it is a material/location based planning process, that is designed to plan the procurement and production from the Finished product at a distribution center, to the raw material at a vendor.

•

What is the purpose of Independent Requirements, and what form do they take. Independent requirements are used to drive the make-to-stock process at some level of the Bill of material. They can take the form of Sales orders or Planned Independent Requirements. This is used to initial the planning process.

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Lesson Summary You should now be able to: • Explain the Fundamental concept of Materials Requirements Planning (MRP) • Explain the purpose of independent requirements.

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Lesson: 78

Lesson: MRP Types

MRP Types Lesson Duration: 40 Minutes

Lesson Overview In order for a planner to succeed on a day to day basis, one must be aware of the functionality that can be used that best fits the traits of how a products reacts in your business environment. In this lesson you will explore how MRP types can be used to group products together in a planning process that limits that amount of time a person will have to spend adjusting production and procurement plans.

Lesson Objectives After completing this lesson, you will be able to: • • • • •

Explain how the different planning techniques can influence your business process Explain how MPS is used in SAP ERP Explain how MRP is used in SAP ERP Explain how Consumption based planning is used in SAP ERP Demonstrate the configuration of MRP Types in SAP ERP

Consumption based planning should be covered from a very high level. Details are covered in SCM525. Firming, planning time fence and MRP Type concepts should be covered in detail. MPS should be covered from a level just so they understand the various MRP Types. There is a separate unit covering MPS.

Business Example As a senior production planner it is your responsibility to manage and over see all the production planning processes in SAP ERP. In the manufacturing of pumps, your company experiences many different scenarios in which it must manage the demand for all of your finished goods, semi finished goods and raw materials. To properly guide your planners we must identify the different planning techniques in SAP ERP.

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MRP Procedures in SAP ERP

Figure 28: Overview of Planning Procedures

MRP is a time phased material replenishment plan. Detailed procurement elements are generated at the appropriate time to ensure specific quantities are available to meet demands. If the material is to be manufactured, the bill of material is exploded to also assure proper planning of component materials. A more basic type of planning known as Consumption based planning is available. These methods are based on historical consumption values. A significant difference is that the requirements for these materials are based on a statistical forecast as opposed to being driven a master plan. It is characterized by simplicity and is therefore not as complex as the standard MRP procedure. It is typically well suited for high volume, low value materials. For example: pallets and common packaging materials.

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There are three basic consumption based planning methods; reorder point planning, forecast-based planning and time-phased planning. 1.

In reorder point planning, the quantity available for planning results from the following calculation: Warehouse stock + fixed receipts. For example, purchase orders, fixed planned orders, and fixed purchase requisitions. The reorder point is made up of the expected average material requirement during the replenishment lead time and the safety stock. In accordance with this, the following points must be considered when defining the reorder point: • • •

Safety stock Previous consumption or future requirements Replenishment lead time

The safety stock must cover both the unplanned material excess consumption during the replenishment lead time, as well as the additional requirements caused by delayed deliveries. The reorder point can be determined manually or automatically using the material forecast. If the quantity available for planning is less than the reorder point, there is a material shortage. The purchase order quantity is created from the lot-sizing procedure in the material master record. The system sets the planning date as the basis for the requirements date. For automatic reorder point planning, the reorder point and the safety stock are calculated during the forecast run on the basis of the forecast values, the service level, and the replenishment lead time. 2.

In forecast-based planning, historical data is used in the material forecast to estimate future requirements. These requirements are forecast requirements and are immediately available in planning. The system only takes into account forecast requirement quantities as issues. The shortage quantity is calculated by comparing the receipt elements, such as warehouse stock, order proposals, and purchase orders, with the safety stock and the forecast requirement quantities. Other issue elements such as sales orders or reservations are only displayed in forecast-based planning. These are not taken into account in the net requirements calculations.

3.

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In time-phased planning, forecast requirements are also calculated. The material is only planned on the days that have been specified by the planning cycle. In addition, the forecast requirements are used to define the procurement quantity for covering the relevant time interval until the receipt of the next procurement quantity. To compensate for unforeseen fluctuations in requirements, time-phased material planning can be combined with a reorder point.

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Master Production Schedule (MPS) in SAP ERP

Figure 29: MPS Concept

Master production Scheduling is a different organizational process rather than different functional goal. The goal of MPS is to generate material supplies (planned orders, purchase requisitions, schedule lines) to offset current or future material shortages. Therefore it is functionally equivalent to MRP. The concept of MPS is to enables you to plan materials that greatly influence a company’s profits and critical resources and therefore need to be planned more carefully. It is typical for theses materials that the master production schedule is initially defined on the level of this critical or important material before the dependent assemblies and purchased parts are planned and procured. This means that changes made to these critical parts are not copied to the dependent parts, thus avoiding any disruption arising during production and procurement of purchased parts. You plan the master schedule items (MPS items) and the non-master schedule items in separate planning runs. You are able to specify finished products or assemblies for master schedule items in the "MRP 1" view of the material master. The master production scheduling run only plans the master schedule items. Master production scheduling is executed with the same logic as material requirements planning but without planning materials that are not labelled as MPS items. Dependent requirements are created for the next low-level code, but planning is not executed for these items unless they are MPS items. The results of master production scheduling are not passed on to dependent parts until the master

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Lesson: MRP Types

plan for the critical parts has been processed and finely-tuned. Master schedule items are not planned along with the MRP run to ensure that you can plan these materials independently.

Firming/Fixing in SAP ERP

Figure 30: Firming planned orders

If a planned order is changed manually, the system automatically sets the “firmed” indicator for this planned order. This means that the header data of the planned order will not be changed in the next planning run. If a component in a planned order is changed manually, the system also sets the “firmed” indicator for the components as well as for the header information. This means that the components of the planned order will not be changed in the next planning run. The firming indicators for the planned order or the components of the planned order can only be changed manually. If the planned orders are flagged as firmed while defining a firming period in the stock/requirements list and the MRP list, this occurs independent of the firming indicator for the planned order or its components. By resetting the conversion indicator in the planned order, you can prevent the planned order being converted into a production order or purchase requisition.

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Planning Time Fence in SAP ERP

Figure 31: Planning Time Fence

Using the planning time fence, you can protect the production schedule for a material from being automatically changed. Procurement proposals within the planning time fence are no longer changed automatically during the MRP run. You can define the firming period using the planning time fence. The system calculates the finish date of the firming period based on the MRP date. You can define the planning time fence either per material in the material master record or using the MRP group assigned to the material master. The length of the firming horizon, in workdays, should be based on the total lead time of the material. The firming horizon is only effective in connection with an MRP type that has a firming type. The firming type defines for the planning run how the procurement proposals are firmed and how the dates are set within the planning time fence.

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Lesson: MRP Types

Configuration of Firming Types

Figure 32: Overview of Firming Types

The MRP type controls two important aspects of the planning run. First it identifies which materials are to be planned during the MPS and which materials are planned by MRP. Secondly it controls use of the planning time fence. MPS materials are identified with an MRP type that starts with “M”: M0, M1, M2, M3 or M4. MRP materials are identified with an MRP type that starts with “P”: PD, P1, P2, P3 or P4. The difference between the various types is defined by how they treat the planning time fence. In firming types, 1 and 2 procurement proposals will be automatically firmed as they roll into the planning time fence. As a result, the procurement proposals can no longer be changed by the planning run but only by the scheduler. Firming type 1: The planning run covers all the shortages that have occurred during the firming period at the end of the firming period. This means that a planned order will have a end date at the time fence and will be backward scheduled. Firming type 2: The planning run does not cover any shortages that have occurred during the firming period. However, Exception messages will be created. Firming type 3: All procurement proposals that have not been manually firmed within the firming period are moved to the end of the firming period. If new shortages occur within the fixing period, they are covered at the end of the fixing period.

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Firming type 4: All procurement proposals that have not been manually firmed within the firming period are deleted. If new shortages occur within the fixing period, they are not covered, and exceptions are generated. Firming types: •

• • • •

Firming Type 0: MRP Types M0 and PD. The planning time fence is not considered. Even if a value is entered into the planning time fence field of the material master, it is not taken into consideration during planning. Firming Type 1: MRP Types M1 and P1. Firming Type 2: MRP Types M2 and P2. Firming Type 3: MRP Types M3 and P3. Firming Type 4: MRP Types M4 and P4.

Demonstration: Firming Settings Purpose To demonstrate firming settings

System Data System: Client: User ID: Password: Set up instructions: 1. Display the Customizing for MRP types: Customizing: Production → Material Requirements Planning → Master Data → Check MRP Types. •

2.

Explain the MRP type field and, in this context, explain the difference between types, PD, P1, P2, and so on. Display the planning time fence in the material master of R-F1## (MRP 1) Change the MRP Type to either a firming type 1 or 3. Display the planning time fence in the Stock requirements list.

3.

Show how it is possible to define a planning time fence in the Customizing of the MRP groups. Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups or

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Customizing: Production → Material Requirements Planning → Planning → MRP Calculation → Define Planning Time Fence and Roll Forward Period.

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Planning time fences 1.

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Change the material master for material R-F1##. Transaction MM02.

2.

Note the value in the MRP Type and Planning time Fence fields on the MRP 1 view. Enter 30 days for the Planning Time Fence and change the MRP type to a firming type that uses the planning time fence. Suggest either type 1 (P1) or type 3 (P3).

3.

Access the Stock Requirements, transaction MD04. The planning time fence should now be displayed.

4.

Return to the material master (step 1). Change the MRP Type and Planning time fence back to the original noted values.

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MRP Type and MRP Group Configuration 1.

Access the configuration for the MRP Type. Customizing: Production → Material Requirements Planning → Master Data → Check MRP Types.

2.

Access the configuration for MRP Groups. Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups

Manual Firming Dates in SAP ERP Manual Firming Date In contrast to the planning time fence, the manual firming date is also effective for materials of MRP types with firming type 0 or without a firming type.

Figure 33: Manual Firming Date

You can also define the firming period by manually entering a date in the future, such as the “manual firming date”. The manual firming date causes automatic firming for materials that have firming types 1 and 2 and lie before the manual firming date.

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Unlike the planning time fence, materials without a firming type (firming type 0) are considered as materials with firming type 1 with reference to the manual firming date. This means that the procurement proposals that lie before the firming date are firmed and new procurement proposals are moved to the manual firming date. If you have set a manual firming date and a planning time fence is active, then if this date is later than the manual firming date, the firming period is determined by the end of the planning time fence. If the manual firming date is the later of the two dates, then this defines the firming period. You set and reset the manual firming date in the stock/requirements list, in the planning results, or in single-term, interactive planning. You can apply this function in material requirements planning, master production scheduling, or long-term planning.

Roll Forward in SAP ERP Roll Forward Period You use the roll forward period to delete firmed but out-of-date planned orders to clear or update planning. You activate the function in the Customizing of the MRP type. Customizing: Production → Material Requirements Planning → Master Data → Check MRP Types. You define the start and the length of the roll forward period in the Customizing of the MRP group: Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups → Planning time fence. or Customizing: Production → Material Requirements Planning → Planning → MRP Calculation → Define Planning Time Fence and Roll Forward Period.

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Figure 34: Roll Forward Period

In addition to the planning time fence, you can maintain the roll forward period in the MRP group. You can use the roll forward period to delete firmed but out-of-date planned orders to automatically update the production schedule. The “Roll forward indicator” in the Customizing for the MRP type controls whether or not the roll forward mechanism is applied for a material. All firmed planned orders with an end date within the roll forward period are deleted in the planning run and either new planned orders are created with suitable dates or if the corresponding firming type applies, the orders are moved to the end of the planning time fence.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain how the different planning techniques can influence your business process • Explain how MPS is used in SAP ERP • Explain how MRP is used in SAP ERP • Explain how Consumption based planning is used in SAP ERP • Demonstrate the configuration of MRP Types in SAP ERP

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Prerequisites for Running MRP Lesson Duration: 20 Minutes

Lesson Overview Prior to running Material Requirements Planning. The appropriate minimum configuration settings must be set. In this lesson we will explore those settings. Certain settings may also be maintained at different levels (ie: plant vs. MRP group). We will also review the controls and priorities here.

Lesson Objectives After completing this lesson, you will be able to: •

Identify the minimum configuration requirements in order to execute a planning run in SAP ERP

The following points must be explained in order for MRP to function in SAP ERP • • • • • •

Activate MRP and Set Up Planning File Define Planning File Entries for Goods Movements Plant configuration MRP group configuration Order number configuration (manual vs system gen. orders) MRP controllers

Business Example As the senior production planner you are responsible to ensure the production planning run generates the correct results for your procurement plan. Identify the necessary configuration steps to execute a planning run.

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Activating MRP in SAP ERP

Figure 35: MRP Activation

By selecting "Material requirements planning" in the Customizing IMG activity "Activate MRP and set up planning file", you can specify for which plant an MRP run is to be carried out. Entries in the planning file can be made only after this indicator has been set. That means, once the indicator has been set: - when a material that is relevant for MRP is created, the system copies the material number to the planning file and sets both the "total change indicator" and the "net change indicator", - whenever a change relevant to MRP is made for the material, the system sets the "total change" or the "net change planning" indicator (dependent on the planning horizon) in the planning file. If materials have been created, and subsequently the MRP run for a plant is activated, you must create an entry in the planning file for all materials relevant to MRP in this plant. This function can only be used as background processing. You activate this function in the activity "Set up planning file" in the Customizing IMG activity "Activate MRP and set up planning file", which you can access directly from the MRP menu. Materials already in the planning file can be excluded from the MRP run using the MRP type in the material master (for example, by using the MRP type ND). In addition, you are able to lock a material using the material status for MRP or generate a warning regarding the planning. Note: for new customers, when creating material masters via a legacy upload do not create a planning file entry. Therefore a consistency check should be run to create the planning file entries.

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Demonstration: Prerequisites for Material Requirements Planning (Optional) Purpose To explain the prerequisites for MRP

System Data System: Client: User ID: Password: Set up instructions: 1. Display where SAP R/3 Enterprise Material Requirements Planning is activated: Customizing: - Production → Material Requirements Planning → Planning File Entries → Activate MRP and Set Up Planning Files. “Activate MRP” and “Set Up Planning File” needs to be executed only once. The consistency check is only required if material requirements planning is to be deactivated for one plant, for example, or if MRP is to be deactivated for individual materials using the MRP type “No planning”. The planning file entries that are no longer relevant are then deleted. The consistency check is also relevant if material masters are transferred inappropriately to the system using transfer programs created by the user. It is not certain whether or not the low-level code in the material master matches the code in the planning file. Structure of the planning file and the consistency check are also under the following menu path:Production → MRP → Planning → Planning File Entry....... 2.

Using pump R-F1##, plant 1000 as an example, show the entries for the MRP type (material master, MRP 1). Graphic from SCM240, as a result, this section is described briefly.

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MRP Activation and Create planning files 1.

Display where SAP R/3 Enterprise Material Requirements Planning is activated: Customizing: - Production → Material Requirements Planning → Planning File Entries → Activate MRP and Set Up Planning Files. “Activate MRP” and “Set Up Planning File” needs to be executed only once. The consistency check is only required if material requirements planning is to be deactivated for one plant, for example, or if MRP is to be deactivated for individual materials using the MRP type “No planning”. The planning file entries that are no longer relevant are then deleted. The consistency check is also relevant if material masters are transferred inappropriately to the system using transfer programs created by the user. It is not certain whether or not the low-level code in the material master matches the code in the planning file. Structure of the planning file and the consistency check also under the following menu path:Production → MRP → Planning → Planning File Entry.......

Customizing for MRP in SAP ERP

Figure 36: MRP Parameter Priorities

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The Customizing settings for the requirements planning are controlled at three levels: • • •

Material master MRP group (Customizing step “Carry Out Overall Maintenance of MRP Groups”) Plant parameters (Customizing step “Carry Out Overall Maintenance of Plant Parameters”)

The MRP group is an organizational object that is used to allocate certain control parameters for MRP to a group of materials. This includes the creation indicators for purchase requisitions, schedule lines, and the planning horizon. In Customizing, you define the MRP group with these specific control parameters and assign the material to the corresponding MRP group in the material master record (MRP 1 view). If a setting is possible on several levels, the setting in the material master takes priority over that in the MRP group to which the material is assigned. The setting in the MRP group takes priority over the setting in the plant parameters.

Demonstration: MRP Settings in the Material Master, MRP Group, and Plant Purpose To learn about MRP settings in material master, MRP Group, and Plant

System Data System: Client: User ID: Password: Set up instructions: 1. Display the material master R-F1##: MRP 1: Explain the MRP group field. MRP 3: Display the settings for consumption. The same settings are also possible in the MRP group. 2.

Display the MRP group 0031 in Customizing: Customizing: Production → Material Requirements Planning → MRP Groups → Carryout Overall Maintenance of MRP Groups. Consumption/adjustment: You can set up consumption and adjustment in the MRP group. Display the planning horizon. This can also be entered in the plant.

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3.

Display the plant parameters in Customizing: Customizing: Production → Material Requirements Planning → Plant Parameters → Carryout Overall maintenance of Plant Parameters. Display the planning horizon

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MRP Settings in the Material Master, MRP Group, and Plant 1.

Display the material master R-F1##: MRP 1: Display the MRP group field. MRP 3: Display the settings for consumption. The same settings are also possible in the MRP group.

2.

Display the MRP group 0031 in Customizing: Customizing: Production → Material Requirements Planning → MRP Groups → Carryout Overall Maintenance of MRP Groups. Consumption/adjustment: You can set up consumption and adjustment in the MRP group. Display the planning horizon. This can also be entered in the plant.

3.

Display the plant parameters in Customizing: Customizing: Production → Material Requirements Planning → Plant Parameters → Carryout Overall Maintenance of Plant Parameters. Display the planning horizon

MRP Controllers in SAP ERP

Figure 37: MRP Controllers

An organization typically has many materials. Therefore a corresponding number of material masters must be created and maintained. The majority of these materials will also be planned by MRP.

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These planned materials must be managed by the appropriate individual who is responsible for the specific item. This identification in SAP ERP is the MRP Controller. The MRP Controller represents who is responsible for the planning of a material in a certain plant. It is maintained in the material master on the MRP 1 view. Typically MRP Controller codes are based on logical groupings of parts. Rather than based planner names. This provides the flexibility for one person (planner) to be responsible for multiple MRP Controllers. This controller code can then be used to access and process the planning results for a specific group of materials. It can also be used for reporting.

Demonstration: MRP Controllers Purpose To learn about MRP controllers

System Data System: Client: User ID: Password: Set up instructions: 1. Display the material master R-F1##: MRP 1: Display and explain the MRP Controller field. 2.

Display the customizing for MRP Controller 0##. Customizing: Production → Material Requirements Planning → Master Data → Define MRP Controllers OR SAP Menu → Logistics → Production → MRP → Environment → Current Settings → Define MRP Controllers

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Create and Maintain MRP Controllers 1.

Display the material master R-F1##: MRP 1: Display the MRP Controller field.

2.

Display the customizing for MRP Controller 0##. Customizing: Production → Material Requirements Planning → Master Data → Define MRP Controllers OR SAP Menu → Logistics → Production → MRP → Environment → Current Settings → Define MRP Controllers

Material Status SAP ERP

Figure 38: Material Status

The material status enables you to control how a material is used in various business applications. You define this in the Customizing IMG activity "Define material status". You can define the material status cross-plant ("Basic data 1" view) or for an individual plant ("MRP 1" view). If both have been maintained, the more restrictive of the two applies for the respective application. In general, you can limit how a material is used in various ways: - It can be flagged for deletion. - It can be locked for specific business transactions by the material status (materials management and production planning and control views). You can display whether a material is subject to certain restrictions by means of the status information function. You call up this function from the MRP 1 view of the material master by choosing the push-button "Information on material".

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Demonstration: Material Status Purpose To explain material status

System Data System: Client: User ID: Password: Set up instructions: 1. Display the definition of the material status in Customizing Customizing: Logistics - General → Material Master → Settings for Key Fields → Define Material Statuses 2.

Display and explain the assignment of the material status (cross-plant and plant-specific) in the material master.

3.

Enter plant-specific material status “01” (blocked for procurement/warehouse) in material R-F1##, plant 1000 - material requirements planning can no longer be executed. Then delete the material status you entered.

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Creating and setting the Material Status 1.

Display the definition of the material status in Customizing Customizing: Logistics - General → Material Master → Settings for Key Fields → Define Material Statuses

2.

Display the assignment of the material status (cross-plant and plant-specific) in the material master.

3.

Enter plant-specific material status “01” (blocked for procurement/warehouse) in material R-F1##, plant 1000 - material requirements planning can no longer be executed. Then delete the material status you entered.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Identify the minimum configuration requirements in order to execute a planning run in SAP ERP

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Lesson: Methods for Executing a planning run

Methods for Executing a planning run Lesson Duration: 30 Minutes

Lesson Overview Over the course of a day or a week, production planners will have to execute planning runs at will, in order to evaluate the impact of supply or demand changes. It should be the goal of each planner to touch as few materials as possible, and manage their business by exception. Once faced with exceptions, it will be the planners job to correct these problems. Review the different methods of executing planning runs to eliminate the exceptions.

Lesson Objectives After completing this lesson, you will be able to: •

Explain the different techniques of executing planning runs in SAP ERP

Discuss the following concepts: MRP Run You can execute MRP as total planning not only at the plant level but also in the planning scope (see the following graphics). If MRP areas are activated, plant planning includes planning in the plant MRP area. To set up the user exit in the total planning run, you can refer to SAP Note 208025. Cross-Plant Total Planning •

•

Planning scope as summary of plants/MRP areas in a particular planning sequence, taking into account mutual dependencies, for example, stock transfers Planning with planning scope only with parallel processing

At this point, refer to planning with MRP areas (unit 8). Parallel Processing During the Planning Run Customizing: Select Production → Material Requirements Planning → Define Parallel Processing in MRP or select Logistics → Production → MRP → Environment → Current Settings → Define Parallel Processing in MRP. Division of the planning run between various sessions of an application server or between various servers: Each low-level code is divided into work packages, which are processed by different sessions or servers. A low-level code is only processed after all the work packages of the previous one have been completed.

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Target: Improving performance and robustness. • • • • • • •

Total planing Parallel Processing Scope of planning MRP Areas Background planning (how to set one up) Single item planning methods. etc.

Business Example As the senior production planner you are given the responsibility of planning some of the more critical parts in the manufacturing of pumps. In order to do this effectively you will need to run MRP several times a week and in some instances, several times a day. Identify the different ways to execute a planning run.

Low Level Codes in SAP ERP

Figure 39: Low-Level Codes

The low-level code is the lowest level at which the material appears in a BOM. A material’s low-level code is always greater than the low-level code of all its predecessors in all BOMs. The low-level code controls the planning sequence: First, materials with low-level code 0 are planned, followed by low-level code 1, and so on. This allows all the materials to be planned in the correct sequence in one run.

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The low-level code is calculated and saved at the client level during BOM maintenance. You can display the low-level code in the material master from the MRP 1 view by choosing “Information on material” or in the planning file entry, provided that an entry for that material exists in the planning file.

Total MRP

Figure 40: Total MRP Run

You can execute the planning run at two levels, as total planning for a plant or for an individual material. You can also execute a total planning run for several plants and/or MRP areas (planning scope). You can execute single-item planning either for one BOM level only (single-level) or for all BOM levels (multi-level). Interactive planning of a material is also possible. You can execute multi-level single-item planning for a Sales and Operations Planning (SOP) product group. You can execute total planning online or as a background job. Total planning for a plant consists of all materials relevant to MRP for this plant and includes the BOM explosion for materials with BOMs. From the MRP menu, you can execute total planning “Online” or “As background job”. In order to execute total planning as a background job, you select a report variant limiting it to the corresponding plant and schedule the job. A user exit enables you to limit the total planning run specifically to those materials, which fulfill the freely definable criteria. You can use this, for example, to select all the materials belonging to a particular MRP controller.

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Setting up MRP to run in the background 1.

Create a variant MRP or MPS (program names: RMMRP000or RMMPS000) using transaction code SE38 OR SA38. This variant should contain the appropriate settings for the MRP run.

2.

Schedule the background job using transaction code SM37.

Parallel Processing of the Planning Run

Figure 41: Parallel Processing of the Planning Run

When planning with a planning scope, you must set the indicator, “Parallel processing”, in the planning run. Parallel processing means that the planning run is divided into several independent work packages that run parallel to each other in different sessions. You define the sessions in the Customizing activity, “Define parallel processing in MRP”. You can access this activity directly from the MRP menu. Advantages of parallel processing: •

•

128

Improves performance: If several computers or processors are available for these sessions, the time required for a planning run can be reduced significantly. Robustness: The planning run can continue if there is a run-time error for a material. This material is indicated with a corresponding entry in the material list. Without parallel processing, the planning run terminates with a dump and the remaining materials are not planned.

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The work packages are divided by low-level code. The improvement in performance is clear if the BOMs have a wide structure, that is, if the individual elements in the BOM are made up of several components.

Scope of Planning in SAP ERP

Figure 42: Cross-Plant Total Planning

The total planning run can be triggered per plant, for example, as a background job with a variant for each plant to be planned. If there are mutual dependencies. For example, due to stock transfer, plants may have to be planned several times (plant 1000 in the graphic). As a result, you can group together several plants (or MRP areas) in the scope of a planning run in a planning sequence and plan on a cross-plant basis in a total planning run. The system automatically takes into account mutual dependencies, such as those arising through stock transfer. The situation displayed in the graphic requires plant 1000 and plant 1100 to be entered in the scope of planning planning takes place for each material in the proposed sequence, plant 1000, plant 1100, and where necessary, in plant 1000 again. You define the scope of planning for total planning in the MRP Customizing activity, “Define scope of planning for total planning”. If you have activated MRP with MRP areas, you can group together plants and MRP areas within a planning scope. In particular, you can plan all the materials in an MRP area. The planning scope allows you to execute a total planning run online or as a background job for a plant, for several plants, for an MRP area, for several MRP areas in MRP, in master production scheduling, and in long-term planning. The planning run with planning scope must always be started with parallel processing.

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MRP Areas in SAP ERP

Figure 43: Requirements Planning Without MRP Areas

Without MRP areas, the requirements planning takes place at the plant level. This means that all requirements of a material, such as dependent requirements, planned independent requirements, and customer requirements for all storage locations that are not planned separately or excluded from MRP, flow into requirements planning together at the plant level. Depending on the procurement type of the material, in-house production or external procurement is used to satisfy the requirements. The settings defined in the material master of the material for MRP are valid for the entire plant, excluding storage locations planned separately or excluded from MRP.

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Figure 44: Planning with MRP Areas

With the introduction of MRP areas, a larger degree of differentiation is possible in MRP. Planning takes place separately for each MRP area. For example, it is possible to plan the requirements separately for different production lines. In storage location MRP areas, one or several storage locations are grouped together in one organizational unit. This unit is planned separately from the remaining plant and MRP areas. You can assign a receipt (procurement) or issue element (requirement) to a storage location area using the storage location. One storage location can be assigned to one MRP area only. The provision of components for individual subcontractors can be planned separately using a MRP area. An MRP area is also defined for a subcontractor (supplier) and the corresponding components to be provided are assigned to this MRP area. In each MRP area, separate evaluation of the planning results takes place with individual MRP lists or stock/requirements lists. In the collective display, you can select materials specifically for one MRP area and for all MRP areas of a plant. For each MRP area, you can assign various MRP parameters to a material so that requirements planning can be specifically tailored to the needs of the individual MRP areas.

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Figure 45: Preparing for Planning with MRP Areas

For introducing requirements planning with MRP areas, the existing planning file entries at the plant level must be converted to planning file entries at the MRP area level (Customizing: Convert Planning File Entries for MRP Areas). The requirements planning for MRP areas can be activated (Customizing: Activate Requirements Planning for MRP Areas) and you can create MRP areas (Customizing: Define MRP Areas). In Customizing: Define MRP Areas, you define the MRP area, type, and plant assignment. In storage location MRP areas, you are asked to define a receiving storage location. To complete the process of defining the storage location MRP area, assign one or more storage locations. For defining subcontractor MRP areas, assign one subcontractor only. The materials to be planned in MRP areas other than the plant MRP area must be assigned to these MRP areas by creating the corresponding MRP area segments in the MRP 1 view of the material master. As the assignment to a storage location MRP area takes place using the storage locations that the system determines in the planning run, you should check whether certain factors are included in the MRP area that you assigned in the material master. These factors are like, storage location already specified in the Bill of material (BOM) (BOM item), the work center (production supply area), and in the production version or material master. To ensure consistent planning, it is also important that either the Storage 1 or the Storage 2 view exists in the material master for this storage location.

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Single Item MRP in SAP ERP

Figure 46: Executing the Planning Run for Single Items

During single-item, multilevel planning, the system explodes the material’s Bill of material (BOM) and creates and plans the dependent requirements of the assemblies and components. If the components also have BOMs, these BOMs are also exploded and the components are planned. This is repeated until all BOM levels are exploded. All materials are planned according to the parameters entered in the initial screen of single-item, multilevel planning. Planning is carried out as “top-down planning”. The MRP controller has the option of displaying and manually changing the planning result of assemblies or components before planning is resumed. During single-item, single-level planning, the system generates dependent requirements for materials at the next BOM level. Single-item, interactive planning is available as a variant in which the system displays the current planning situation before the planning run can be triggered manually. You can check and process planning results for single-item, single-level, or multilevel planning before saving them using the indicator “Display results before they are saved” in the initial screen. The MRP controller is able to create, change, delete, and reschedule procurement proposals before planning is resumed.

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Interactive MRP Planning in SAP ERP

Figure 47: Options in “Interactive” Planning

You have the following options for influencing the planning result interactively: •

•

“Single-level planning, interactive”: You plan on a single-level, the system displays only the current planning situation when you access the function. You trigger the planning manually from the menu for single-item, interactive planning and save the result when closing the function. “Single-item, multi-level” setting the indicator “Display results before they are saved” (function also possible for multi-level planning). This has the advantage that the results are not saved until they have been checked and changed by the MRP controller, if necessary. The materials to be planned this way are displayed as breakpoints, and you are able to control at which point a material can be stopped. Then, you are able to display the planning result for the desired breakpoint and change the planning result before proceeding with further planning. The changes take immediate effect on subsequent planning. If you do not set the “Display results before they are saved”, the planning results are automatically written to the database in the planning run. In addition, you have the option of checking the result for all planned materials directly at the end of planning by selecting the “Display matl. list” on the initial screen.

•

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“Single-item, multi-level”, setting the indicator “simulation mode”: You can plan a planned order on multiple levels.

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Lesson: Methods for Executing a planning run

Demonstration: Executing MRP Purpose To explain how to display the different possibilities to execute the MRP run

System Data System: Client: User ID: Password: Set up instructions: 1. Display the different possibilities to execute the MRP run. • • • •

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Total planning of a plant (or of a plant MRP area) Planning with planning scope (only with parallel processing) Single-item, single-level, and multi-level planning Single-item, interactive planning

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Exercise 3: Executing a planning run in SAP ERP Exercise Duration: 30 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how to run a single-time MRP run

Business Example Product Group Pump-## contains five material/plant combinations: R-F1## (plant 1000 and plant 2400), R-F2## (plant 1000), R-F3## (plant 1000), R-F4## (plant 1000). MRP has been executed for material R-F1## in plant 1000. To complete the full planning process, we must run MRP for the other materials in our product group.

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

Task: Material Requirments Planning for a Product Group After releasing the production plan from the S&OP process, you have populated demand management with planned independent requirements. These requirements are driving your stocking position into negative territory. Using material requirements planning, you will build a procurement plan for all of the products in your product group PUMP-##. 1.

Run a single-item, multi-level MRP run for all products in the product group PUMP-##. Use the following parameters for the planning run: Hint: Enter your Product Group PUMP-## in the material field of the MRP run transaction. Be sure to select the check box “Product Group” in the scope of planning area. Continued on next page

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Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

2.

How many materials have been planned?

3.

Now that a MRP run has been executed, execute the stock requirements list to see if the planning situation has changed for material R-F2## in plant 1000.

4.

What has changed as a result of the MRP run?

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Lesson: Methods for Executing a planning run

Solution 3: Executing a planning run in SAP ERP Task: Material Requirments Planning for a Product Group After releasing the production plan from the S&OP process, you have populated demand management with planned independent requirements. These requirements are driving your stocking position into negative territory. Using material requirements planning, you will build a procurement plan for all of the products in your product group PUMP-##. 1.

Run a single-item, multi-level MRP run for all products in the product group PUMP-##. Use the following parameters for the planning run: Hint: Enter your Product Group PUMP-## in the material field of the MRP run transaction. Be sure to select the check box “Product Group” in the scope of planning area.

2.

Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

a)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu

How many materials have been planned? Answer: Varies. But each material contained in the product group has been planned. Along with their corresponding component parts.

Continued on next page

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3.

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Now that a MRP run has been executed, execute the stock requirements list to see if the planning situation has changed for material R-F2## in plant 1000. a)

4.

SAP ERP menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List (MD04)

What has changed as a result of the MRP run? Answer: As a result of MRP, a planned order has been created to cover each planned independent requirement. This results in a zero inventory balance after each requirements. NOTE: due to different working days in each month, during some teaches the first planned order may be late.

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Lesson: Methods for Executing a planning run

Lesson Summary You should now be able to: • Explain the different techniques of executing planning runs in SAP ERP

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Lesson: 114

SCM240

Settings in the Planning Run Lesson Duration: 30 Minutes

Lesson Overview Due to constant changes in demand, planners often must execute a planning run during the day. In order to mimimize the use of system resources, planners must be aware of the settings used in the planning run to finish the run as quick as possible. Review the various Planning run settings and execute a planning run.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate the purpose of the settings in the planning run Explain the purpose of the planning file and how it influences the settings in the planning run.

Include the following topics: • • • • •

MRP Processing KEY (NEUPL, NETCH, NETPL) Different Planning run Settings MRP Group Settings for Planning run Planning File entries Etc... Note: Scheduling will be done in a later unit. Discuss it at a high level.

Business Example As the senior planner you are given the most critical items to plan. Therefore you need to ensure that when a planning run is executed, the results are as accurate as possible the first time round. Identify the purpose of each of the settings in the planning run to ensure accurate results. Demonstrate how changes in demand and master data can affect the settings in the planning run.

MRP Control Settings MRP Control Parameters The indicators to create purchase requisitions, scheduling agreements, and MRP lists can be defined in the initial screen for the planning run and in the MRP group.

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Lesson: Settings in the Planning Run

Important note on the creation indicators for each MRP group: Customizing: Production → Material Requirements Planning → Planning → Define Creation Indicator. For the total planning run: The creation indicators, which can be entered in the initial screen at the start of a planning run only function as proposals. These indicators are only valid if the system does not find a creation indicator in the MRP group. For single-item planning (single-level and multi-level): Only the settings on the initial screen are valid in this case. The Customizing settings have no effect. This rule is valid for both single-level and multi-level planning. Similar to total planning, in the case of multi-level planning, several materials are accessed, which may have settings in their MRP group. The planning mode, which is set in the planning file for a material, may be overridden by the planning mode in the initial screen of the planning run. The planning mode controls how procurement proposals from the previous planning run, which are not firmed, should be dealt with in the next planning run. Scope of the Planning Run Restricting the planning run and using the net change procedure avoids performance problems: You should not plan more materials then necessary. The net change planning procedure (NETCH) only includes materials that have undergone a planning-relevant change since the last planning run. This is controlled in the planning file. By defining a planning horizon, you also restrict the planning scope as far as time is concerned (NETPL). The planning horizon should, at least, span the time period in which sales orders are received. In addition, the planning horizon should contain the delivery and total lead times for the material. You should only choose complete planning (NEUPL) in exceptional cases or if there are data inconsistencies. You cannot use NEUPL in single-item planning. Already in SCM240. As a result, this section is described briefly. Planning File and MRP (1) Planning File and MRP (2) SA → record type: B = MRP part, D = phantom assembly The planning mode is automatically set in the planning file and can be defined in the initial screen for every planning run. NETCH/NETPL (equivalent to planning mode 1) → If the NETCH/NETPL indicators are set, the existing planning data is reactivated in the planning run, which means that procurement proposals that are not firmed remain in the

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database and are only adjusted if they do not match the new planning situation with reference to dates or quantities. The BOM and the routing are only exploded for newly adjusted procurement proposals. This improves performance. Examples of changes, which lead to planning mode 1: •

• • •

Changes, additions, or deletions to planned orders, purchase requisitions, purchase orders, sales requirements, forecast requirements, dependent requirements, or reservations Changes to the stock Changes to fields relevant to planning for these goods receipts or issues Changes to the lot-sizing procedure or the MRP type

Re-explode BOM (equivalent to planning mode 2) → The existing non-firmed procurement elements are transferred but the BOM and the routing are exploded again, even for those that do no have to be adjusted. Examples of changes, which lead to planning mode 2: • • • • •

Changes to BOMs, sales order BOMs, phantom assemblies Changes to the dependency that is assigned in the BOM Classification of a material Classification of a material Changes to the production version in the material master or in the planned order Changes to or new key assignment of BOM explosion number

Rest procurement proposals (equivalent to planning mode 3) → Any existing planning data is deleted and created again. Examples of changes, which lead to planning mode 3: • • • •

Changes to the lot size-independent in-house production time (MRP 2) Change to planned delivery time Change to scheduling margin key Change to MRP controller

No planning file entry is created for the following changes: • •

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Changes in Customizing, for example, changes to the purchasing department processing time in the plant parameters Changes relevant to planning in the routing, for example, changes to the standard time and component assignment, or a change to the lot size independent in-house production time (work scheduling view); you can overcome this functional gap by setting this indicator manually following a change to a routing and/or in-house production time or by executing a planning run with planning mode 2 or 3.

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SCM240

Lesson: Settings in the Planning Run

You can define whether or not to retain or delete the planning file entries following a termination of the planning run in the following Customizing activity:Customizing: Production → Material Requirements Planning → Planning → MRP Calculation → Define Error Handling in Planning Run. Net Change Planning in the Planning Horizon If a requirement drifts into the planning horizon, this is not an MRP-relevant change. Solution: Carry out NETCH (complete time-axis) regularly in addition to NETPL (net change planning in the planning horizon); Or: Indicator “Plan Regularly” in the MRP type together with the“ Maximum MRP Period” per MRP group.

Figure 48: MRP Control Parameters

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When starting the planning run, specify the following control parameters for materials planning: •

•

Processing key: You define the planning type as regenerative planning or net change planning over the whole period or restricted to the planning horizon. Explained further in the next section. The “Create purchase requisition” and “Schedule lines” indicators are only relevant for materials that are procured externally. MRP typically creates planned orders. However you can set this indicator if purchase requisitions and schedule lines are required as a result of the planning run. The appropriate purchasing data must be set up accordingly: Info records, source lists or schedule agreements. Three options are available for each purchase requisitions and schedule lines: None (always planned orders), always create and only create within the opening period defined in the material master (planned orders after).

•

•

You can also determine whether or not the planning run should generate MRP lists. It can also be based on the exception message. ie: Only generate MRP lists when certain exception messages have appeared for a material. The exception messages that should trigger an MRP list to be generated can be defined in the Customizing activity, “Define and group exception messages”. With the planning mode, you define whether or not the existing planning data should simply be adjusted, whether or not BOMs and routings should also be re-exploded, or whether or not the existing unfirmed plan should be deleted and rescheduled from the very beginning again. (Caution: The final option of deleted and recreating the planned orders could have performance implications. It could also use a large portion of the number range.) Examples of changes, which lead to planning mode 3: – – – –

Changes to the lot size-independent in-house production time (MRP 2) Change to planned delivery time Change to scheduling margin key Change to MRP controller

You can also set the creation indicator for purchase requisitions, schedule lines, and MRP lists in the MRP group. The materials that are assigned to this MRP group are then planned accordingly in the total planning run.

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Lesson: Settings in the Planning Run

Scope of the Planning run

Figure 49: Scope of the Planning Run

During regenerative planning, the system plans all the materials of a plant. This is practical when carrying out the planning run for the first time and in a productive system when, due to technical errors, the consistency of the data cannot be guaranteed. In a working plant, when you use a lot of materials, you need to execute MRP only for those materials that have undergone MRP-relevant changes, such as through goods issues, new sales orders, and changes to the BOM structure. Due to its short run time, net change planning, which is used to plan only these materials, enables you to carry out the planning run at short time intervals so that you can always work with the current planning results. During net change planning in the planning horizon, the system only takes the changes within the planning horizon into account. The system only plans those materials that have been subject to an MRP-change within the planning horizon. The materials are planned within this horizon only. You set the planning horizon in Customizing for MRP as a plant or MRP group parameter. The planning horizon should at least span the time period in which sales orders are received and should contain the delivery and total lead times for the material. You specify the type of planning run using the “processing key” field in the initial screen for planning. In single-item planning, you can only decide whether or not “net change planning” (NETCH) or “net change planning in the planning horizon” (NETPL) is executed. In total planning, you also have the option of using the NEUPL key, using which all the materials in the planning file are planned.

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Planning File Entries in SAP ERP

Figure 50: Planning File Entries and MRP

The planning file contains all the materials relevant to MRP for each plant. Net change planning only plans those materials that have been subject to a change relevant to MRP. Changes relevant to MRP lead to a planning file entry being created specific to the plant and material. Examples of MRP-relevant changes include changes to the procurement type, changes to the operation times, and also creation of sales orders, dependent requirements, and stock changes. The respective entries in the planning file are made automatically by the business application of the system. You can also make the entries manually from the MRP menu in individual cases. When doing this, you should remember that a change in the routing does not automatically cause an indicator to be set in the planning file. The planning file entry includes the following information: • • •

The low-level code of the material Whether or not the material has been subject to an MRP-relevant change (NETCH or NETPL indicator) Whether or not the BOM has to be re-exploded or whether or not all existing order proposals are to be deleted

You can use the transaction, Display planning file entry, from the MRP menu to analyze the contents of the planning file entry record for the materials.

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Lesson: Settings in the Planning Run

Figure 51: Planning File Entries and MRP (2)

During the planning run, the system checks every entry for a material in the planning file. • • •

In the case of regenerative planning, the system plans all the materials contained in the planning file without taking the indicators into account. In the case of net change planning, the system only plans those materials that have been flagged with the “NETCH planning file entry” indicator. In the case of net change planning in the planning horizon, the system only plans those materials that have been flagged with the “NETPL planning file entry” indicator.

After the planning run has been executed, the entry in the planning file is automatically deleted. The “NETCH planning file entry” and “NETPL planning file entry” indicators are reset upon regenerative and net change planning. During net change planning in the planning horizon, only the “NETPL planning file entry” indicator is reset. The planning horizon is maintained in the Customizing for MRP as a plant parameter or per MRP group. You can define whether or not a planning entry is to be retained or deleted if a termination should occur while planning a material. You can do this in the IMG activity, “Define error processing in the planning run”, in the Customizing for MRP calculation by choosing “Del. planning flag”. This determines whether or not the material is taken into account in the next planning run.

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Net Change within the Planning Horizon

Figure 52: Net Change Planning in the Planning Horizon

You can only restrict material requirements planning to the planning horizon if you need to accelerate MRP for performance reasons. Only those requirements within the planning horizon are covered by the goods receipts. If you only execute net change planning in the planning horizon, the system does not plan those requirements that are outside the planning horizon. It is important to note that, as time lapses, requirements may fall into the planning horizon that have not yet been covered by goods receipts. As long as no other changes relevant to MRP are made, these requirements will not be covered until the next planning run for the whole time axis (“NETCH” indicator). This type of planning run should be carried out on a regular basis. A further possibility for dealing with the problem shown in the graphic is to set the indicator, “Regular MRP”, in the Customizing for the MRP type of the material and to maintain the maximum MRP interval in the MRP group. An entry for the next planning date is generated automatically in the planning file. The material is included in MRP automatically by the MRP date at the latest, regardless of the other settings in the planning file. To plan the changes outside the planning horizon, you must carry out net change planning at larger intervals.

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Exercise 4: Settings in the planning run Exercise Duration: 20 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate the relationship between planning file entries and Material Requirements Planning.

Business Example MRP relevant changes to either transactional data (sales orders, forecast, etc) or master data (BOM, Material Master, etc) should flag materials to be planned in the subsequent MRP run. This will ensure complete planning of all materials. The project team needs to familiarize itself with the relationship between the planning run and the planning file. In addition, we must examine the effect of master data changes on Material Requirements Planning (MRP).

System Data System: Client: User ID: Password: CATT: Set up instructions:

Task: Analyze the relationship between the planning run and the planning file. 1.

Display the planning file for the material R-F1## in the plant 1000. Which of the following indicators are set? NChgplng ____ NChgePHor. ____ ExplodeBOM____

2.

Production has determined that the most efficient method to produce the product is in lots of at least 10 pcs. Change the material master (MRP 1 View) for material R-F1## to reflect this minimum lot size.

3.

Review the planning file again for material R-F1## and note the entries. Select the planning file entry for the material R-F1## in the plant 1000. Which of the following indicators are set now? Continued on next page

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NChgplng ____ NChgePHor. ___ ExplodeBOM ____ 4.

5.

Run a single-item, multi-level MRP run for R-F1## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also Plan Unchanged components

Select

Review the planning file again for material R-F1## and note the entries. Select the planning file entry for the material R-F1## in the plant 1000. Which of the following indicators are set now? NChge plng ____ NChgePHor. ___ ExlodeBOM ____

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Lesson: Settings in the Planning Run

Solution 4: Settings in the planning run Task: Analyze the relationship between the planning run and the planning file. 1.

Display the planning file for the material R-F1## in the plant 1000. Which of the following indicators are set? NChgplng ____ NChgePHor. ____ ExplodeBOM____ a)

Menu path: Logistics → Production → MRP → Planning → Planning File Entry → Display

b)

Enter material R-F1## and plant 1000.

c)

Select Indicators set: NChge plng No NChgePHor. No ExplodeBOM. No

2.

Production has determined that the most efficient method to produce the product is in lots of at least 10 pcs. Change the material master (MRP 1 View) for material R-F1## to reflect this minimum lot size. a)

Menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately (MM02)

b)

Enter material R-F1##. Select

. .

Choose MRP 1 View and select Enter Plant 1000 and select c) 3.

.

Enter 10 in the field “Minimum lot size” and select

Save.

Review the planning file again for material R-F1## and note the entries. Select the planning file entry for the material R-F1## in the plant 1000. Which of the following indicators are set now? NChgplng ____ NChgePHor. ___

Continued on next page

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ExplodeBOM ____ a)

Menu path: Logistics → Production → MRP → Planning → Planning File Entry → Display Indicators set: NChgeplngYes NChgePHor. Yes ExplodeBOM No

4.

5.

Run a single-item, multi-level MRP run for R-F1## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also Plan Unchanged components

Select

a)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu

Review the planning file again for material R-F1## and note the entries. Select the planning file entry for the material R-F1## in the plant 1000. Which of the following indicators are set now? NChge plng ____ NChgePHor. ___

Continued on next page

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Lesson: Settings in the Planning Run

ExlodeBOM ____ a)

Menu path: Logistics → Production → MRP → Planning → Planning File Entry → Display Indicators set: NChge plng No NChgePHor. No ExplodeBOM No

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Lesson Summary You should now be able to: • Demonstrate the purpose of the settings in the planning run • Explain the purpose of the planning file and how it influences the settings in the planning run.

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Unit Summary

Unit Summary You should now be able to: • Explain the Fundamental concept of Materials Requirements Planning (MRP) • Explain the purpose of independent requirements. • Explain how the different planning techniques can influence your business process • Explain how MPS is used in SAP ERP • Explain how MRP is used in SAP ERP • Explain how Consumption based planning is used in SAP ERP • Demonstrate the configuration of MRP Types in SAP ERP • Identify the minimum configuration requirements in order to execute a planning run in SAP ERP • Explain the different techniques of executing planning runs in SAP ERP • Demonstrate the purpose of the settings in the planning run • Explain the purpose of the planning file and how it influences the settings in the planning run.

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Unit Summary

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Test Your Knowledge

129

Test Your Knowledge 1.

What is the overall purpose of MRP?

2.

What supplies will MRP create to offset shortages? Choose the correct answer(s).

□ □ □ □ □ □ 3.

A B C D E F

Planned Independent Requirements Sales Orders Production Orders Planned Orders None of the above

Sales orders are dependent demand. Determine whether this statement is true or false.

□ □ 4.

True False

Requirements for a screw needed to manufacture a pump are dependent demand. Determine whether this statement is true or false.

□ □ 5.

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True False

What is a planned independent requirement used for?

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6.

If you wish to run single-item MRP for an item designated as MRP type “M1”, what will happen?

7.

Why is a planning time fence used?

8.

What is the difference between “firming” and “fixing” when dealing with MRP types?

9.

Explain the relationship between the PTF and MRP TYPE.

10. If both the PTF and the manual firming date are maintained, which takes precedent?

11. Can a manual firming date be assigned in MRP, MPS and long-term planning?

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Test Your Knowledge

12. What is the “MRP Group”

13. Material Master settings can override settings in the MRP group, which in turn can override settings in the plant parameters. Determine whether this statement is true or false.

□ □

True False

14. What field can be configured to control the transactions that may take place for a material?

15. What is the danger of not allowing inventory movements?

16. What is the MRP Controller?

17. One planner may only be responsible for one MRP controller. Determine whether this statement is true or false.

□ □

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True False

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18. What are the three levels on which a planning run can be carried out?

19. The low level code is calculated by the system and saved at the client level during BOM maintenance. Determine whether this statement is true or false.

□ □

True False

20. What is the main advantage of using Scope of Planning?

21. Parallel Processing must be active to use scope of planning. Determine whether this statement is true or false.

□ □

True False

22. If MRP Areas are used, all materials in the given storage location are planned at the MRP area level. Determine whether this statement is true or false.

□ □

True False

23. Explain “net change planning”

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Test Your Knowledge

24. Give some examples of changes “relevant to MRP”

25. How does R/3 know what materials have undergone a change relevant to production?

26. What is the reason an MRP controller would likely choose to run net change in the planning horizon as opposed to net change in the total horizon?

27. What is the danger in running NETPL only ?

28. You have activated MRP and set up the planning file, yet you are unable to include a material in the planning run. Why may this happen?

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Answers 1.

What is the overall purpose of MRP? Answer: The purpose of MRP is to assure material is available when needed. To accomplish this it must balance supply versus demand. If a shortage occurs MRP must create more supply to offset the shortage. This is done through all levels of the Bill of Material.

2.

What supplies will MRP create to offset shortages? Answer: D MRP will create planned orders.

3.

Sales orders are dependent demand. Answer: False Sales orders are independent demand.

4.

Requirements for a screw needed to manufacture a pump are dependent demand. Answer: True Dependent demand because the quantity required is dependent on the number of pumps to be manufactured.

5.

What is a planned independent requirement used for? Answer: Planned independent requirements represent a projection of what the demand will be. Another term might be forecast. These requirements are used to drive planning in a proactive manner so that materials are available when needed.

6.

If you wish to run single-item MRP for an item designated as MRP type “M1”, what will happen? Answer: You will get a message stating you cannot carry out this transaction. (you can, however, run MPS on an MRP item)

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Test Your Knowledge

7.

Why is a planning time fence used? Answer: The planning time fence delineates the time frame for which MPS/MRP will not automatically make changes to the plan.

8.

What is the difference between “firming” and “fixing” when dealing with MRP types? Answer: Nothing.

9.

Explain the relationship between the PTF and MRP TYPE. Answer: The MRP Type , through “firming type” controls how and if the MRP run will firm existing and new order proposals in relation to the firming period.

10. If both the PTF and the manual firming date are maintained, which takes precedent? Answer: The later in time of the two. 11. Can a manual firming date be assigned in MRP, MPS and long-term planning? Answer: yes 12. What is the “MRP Group” Answer: A material master field with which you can assign special planning control parameters to materials. 13. Material Master settings can override settings in the MRP group, which in turn can override settings in the plant parameters. Answer: True Material master take the higher priority 14. What field can be configured to control the transactions that may take place for a material? Answer: The Material Status field

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15. What is the danger of not allowing inventory movements? Answer: Excess material may not be disgarded. 16. What is the MRP Controller? Answer: The MRP Controller field defines who is responsible for a specific material in a plant. 17. One planner may only be responsible for one MRP controller. Answer: False MRP controllers should be structured by logically grouping materials. Therefore one physical person may be responsible for more than one MRP Controller. 18. What are the three levels on which a planning run can be carried out? Answer: Single item, Total plant, Product group 19. The low level code is calculated by the system and saved at the client level during BOM maintenance. Answer: True Low level code is calculated following BOM Maintenance. 20. What is the main advantage of using Scope of Planning? Answer: Multiple plants and/or MRP areas can be selected for the MRP run. If dependencies exist between the locations; this will be automatically accomodated for by the planning run. Therefore it isn’t necessary to run the plants multiple time in a specific sequence. 21. Parallel Processing must be active to use scope of planning. Answer: True Parallel processing must be activated.

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Test Your Knowledge

22. If MRP Areas are used, all materials in the given storage location are planned at the MRP area level. Answer: False Assignment to the MRP area is material specific. 23. Explain “net change planning” Answer: This is the planning of only those materials that have undergone a change relevant to MRP since the last planning run. 24. Give some examples of changes “relevant to MRP” Answer: BOM changes, sales orders, goods movements, etc. 25. How does R/3 know what materials have undergone a change relevant to production? Answer: R/3 reads the planning file which will contain an entry specific to plant and material. 26. What is the reason an MRP controller would likely choose to run net change in the planning horizon as opposed to net change in the total horizon? Answer: To accelerate MRP. 27. What is the danger in running NETPL only ? Answer: Requirements that were outside the planning horizon move into the planning horizon as time marches on. They are not covered until the next planning run. 28. You have activated MRP and set up the planning file, yet you are unable to include a material in the planning run. Why may this happen? Answer: The mrp type and the material status must also be set to allow MRP for each material.

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Unit 4 Demand Management in SAP ERP

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Unit Overview This unit will introduce you to the Demand Management tool in SAP ERP. While only a select employees of a company will have access directly to the tool itself, you will see how various master data fields affect demand management and its interaction with the planning runs.

Unit Objectives After completing this unit, you will be able to: • • • • • • • • • • • •

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Explain where Demand Management is in the flow of the supply chain planning process. Demonstrate various functions in Demand Management Explain how make to stock and make to order will be represented in SAP ERP Explain how Net Requirments planning differs from Planning with Final Assembly Demonstrate how to plan at the sub assembly level Explain the concepts of Consumption and Reduction Identify several popular planning strategies and their characteristics. Explain how make to order works in SAP ERP Demonstrate how to plan at the sub assembly level while still maintaining make to order at the finished good level Identify several popular planning strategies and their characteristics Explain the difference between make to order and assembly to order Customize MRP settings

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Unit Contents Lesson: Overview of Demand Management ................................171 Exercise 5: Managing your Planned Independent Requirements....175 Lesson: Make to Stock versus Make to Order ..............................180 Lesson: Make to Stock Planning Strategies.................................186 Demonstration: Net Requirements Planning............................189 Procedure: Make-toStock .................................................191 Demonstration: .............................................................194 Demonstration: .............................................................196 Exercise 6: Using Make to Stock planning strategies .................201 Lesson: Make to Order Planning Strategies ................................ 211 Demonstration: SAP R/3 Strategy 60 (Planning With Planning Material)......................................................................217 Demonstration: Subassembly Planning Without Final Assembly (74) ...........................................................................220 Demonstration: Assembly Processing...................................223 Exercise 7: Make to Order in SAP ERP .................................225 Lesson: Settings and Customizing ...........................................240 Demonstration: Planning with Final Assembly (Strategy 50/52) .....240 Demonstration: MRP Settings in the Material Master, MRP Group, and Plant ..........................................................................244 Demonstration: Customizing Planned Independent Requirements Management ................................................................245

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Lesson: 141

Lesson: Overview of Demand Management

Overview of Demand Management Lesson Duration: 30 Minutes

Lesson Overview There are many different types of demand that may or may not be relevant to Material Requirements Planning: Sales Demand, Planned Independent Requirements, Dependent Requirements, etc. In order to execute supply chain planning in SAP ERP, planners must be aware of how and where requirements will be stored. In addition, companies must often make changes to planned demand in order to better communicate the changes through the rest of the supply chain. In this lesson you will learn how the basic functions of demand management work in SAP ERP.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain where Demand Management is in the flow of the supply chain planning process. Demonstrate various functions in Demand Management

Discuss the following topics: • • • • •

Purpose of Demand Mgt. Holds both planned and actual independent rqmts. Requirements plans Versions and active flag Period and automatic splitting Item text and item history Note: Make sure you include several demonstrations/procedures.

Business Example As the senior production planner, you will be advising other planners on how to use the planning functionality in SAP ERP. You realize that various products sell and react differently to demand. In order to minimize inventory, but keep service levels high you must make sure all demand is being represented properly in SAP ERP. You will review the different techniques in SAP ERP in order to position your demand properly.

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Demand Management Demand Management Discuss that demand management creates the demand program. The demand program is NOT software, but rather is the requirements plan to which MRP plans. MRP and MPS will plan to the demand program. In effect, demand management acts as a funnel or pipeline to translate requirements or forecasts from a number of different sources to standard formats to which MRP and MPS can plan. Without values in Demand Management, MRP/MPS can do no planning. Because a variety of different processes may exist between and among our customers, demand management can pull its numbers from many sources. Transfer of requirements can be done at a number of different levels depending on the appropriate business processes of the company. Planning horizon is unlimited – discuss how this can affect a customer. Period splitting is important because sales and marketing often forecast in months, but production must plan in daily buckets or weekly buckets. We can therefore split the periods as required manually or automatically. We can maintain a change history so that we can compare results with forecasts.

Figure 53: Demand Management

Demand management is the link between planned requirements, sales customer requirements and materials planning (MPS and/or MRP). Contained within Demand Management may be two types of demand. • •

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Planned Independent Requirements Customer Independent Requirements

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Lesson: Overview of Demand Management

Planned Independent Requirements are sometimes synonymous with a forecast. They are the “planned”demands that a company believes will be required in the future. A procurement plan can then be put together to assure product is available when the “actual” demand is received. Planned Independent requirements may come from the following sources: • • • •

The sales plan or the production plan from SOP A material forecast Manual entry Another program plan

Customer Independent Requirements can be input into demand management in place of sales orders. For planning purposes they are treated just like a sales order. Normally this is done only when the Sales and Distribution (SD) module is not used. However they can be very useful for testing. Hint: Demand Management is very important. However it is not a program that must be run. As the diagram above depicts, it serves as a filter for the demands being passed to MRP. Planned Independent Requirements and Customer Independent Requirments are stored and maintained in Demand Management. Actual customer requirements are managed via the Sales and Distribution module. The demand program analyzes all of these demands and determines the appropriate quantity and dates that should be passed to the planning function(s).

Figure 54: Demand Management

The planning horizon is unlimited.

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We can split periods into finer detail. For example, if the SOP plan we transferred to demand management was in monthly periods, we could split the requirements into weeks and/or days, or into user-defined lengths. We can do this for a material or a group of materials. We can create a change history of our plan, as well as descriptive texts. Planning data (sales or production quantities) can be transferred to demand management from an individual material (single transfer), or from all materials in a product group (multiple transfer). Multiple requirements can be managed using a Requirements plan number.This allows easier organization and access to requirements for multiple materials. Planned independent requirements are assigned to a version. This allows multiple demand plans to be maintained for the same product. Only the “active” version is passed to the operative planning functions. Multiple versions can be active at once. Inactive versions may be used for “what if” planning.

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Exercise 5: Managing your Planned Independent Requirements Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate the ability to manually change planned independent requirements. • Display the change history for requirements. • Split planned independent requirements into smaller time buckets for more precise planning.

Business Example Management has decided that the forecast should be increased. We will manually change the forecast to reflect these changes. You, as a planner, have decided that the forecast should be split into weekly buckets so the product can be planned in more finite time buckets. These changes must also be logged and noted for traceability purposes.

System Data System: Client: User ID: Password: CATT: Set up instructions:

Task: Planned Independent Requirements Once a sales and production plan is complete at the strategic level, it must be transferred to the operations level were it can be viewed at the material level. Once demand is active in demand management it can be used to drive the MPS/MRP process. 1.

Now that you have created planned independent requirements, changes have been suggested and they must be revised. There are only a few changes for material R-F1## in Plant 2400. The requirements for this material in plant 2400 must be increased by 25 each month. Therefore we will make these changes directly in demand management.

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2.

Since we made a manual override to the requirements, we will document the change with item text.

3.

You wish to plan the first three periods in weekly buckets as opposed to monthly. Split the requirement into weekly buckets.

4.

Return to the Planning Table , of the PIRs and review the history of changes made to the independent requirement.

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Lesson: Overview of Demand Management

Solution 5: Managing your Planned Independent Requirements Task: Planned Independent Requirements Once a sales and production plan is complete at the strategic level, it must be transferred to the operations level were it can be viewed at the material level. Once demand is active in demand management it can be used to drive the MPS/MRP process. 1.

Now that you have created planned independent requirements, changes have been suggested and they must be revised. There are only a few changes for material R-F1## in Plant 2400. The requirements for this material in plant 2400 must be increased by 25 each month. Therefore we will make these changes directly in demand management. a)

SAP ERP menu path: Logistics → Production → Production Planning → Demand Management→ Planned Independent Requirements → Change (MD62) , and enter the following: Field

Value

Material

R-F1##

Plant

2400

All active versions

Select

Planning horizon

Leave defaults

Planning period

Leave default

b)

Select enter,

to access the maintenance screens.

c)

Highlight the line with your material and select the Sched. lines tab.

d)

Select all the periods with an independent requirement and select Chge sched.lines

e)

Enter 25 in the Change quantity field and plus “+” in the OP field. Select enter

f)

.

.

Return to the Table tab.

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2.

3.

Since we made a manual override to the requirements, we will document the change with item text. a)

Highlight the line containing material R-F1##, Plant 2400.

b)

Menu path: Goto → Item text. Confirm any information message since long text does not yet exist.

c)

Enter text. For example: “I increased the requirements because my boss told me to.”

d)

Select

e)

Select Table

Save Back to return to the Plnd ind. reqmts Change:Planning

You wish to plan the first three periods in weekly buckets as opposed to monthly. Split the requirement into weekly buckets. a)

Highlight the line with your material and select the Sched. lines tab.

b)

Place a W in the Splt column for the first three requirements and select

4.

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.

c)

The requirement has been split, based on the number of workdays, into weekly buckets.

d)

Select

Save

Return to the Planning Table , of the PIRs and review the history of changes made to the independent requirement. a)

Highlight the line with your material.

b)

Menu path: Goto → Item history. Note: The changes you just made are shown in the item history.

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Lesson: Overview of Demand Management

Lesson Summary You should now be able to: • Explain where Demand Management is in the flow of the supply chain planning process. • Demonstrate various functions in Demand Management

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Make to Stock versus Make to Order Lesson Duration: 10 Minutes

Lesson Overview In certain industries the replenishment lead times of a product and the manufacturing process itself will dictate how a planning process will unfold for various products. When planning production, a planner, must know how SAP ERP will allow them to mimic the products demand patterns as best as possible. Review the process of make-to-stock and make-to-order in SAP ERP.

Lesson Objectives After completing this lesson, you will be able to: •

Explain how make to stock and make to order will be represented in SAP ERP

Introduce the concept of Make-to-stock and make-to-order in simple terms. Demonstrate the unrestristriced versus sales order stock so students begin to get an idea of what Make -to-order means in SAP ERP.

Business Example The pumps that your company manufacturers have different demand patterns. Some pumps sell directly from inventory that is placed ahead of time at your distribution centers. Other pumps can only be manufactured upon receipt of a sales order and can only be sold to that specific customer. Identify how SAP ERP will model these two processes.

Make-to-Stock vs. Make-to-Order Make-to-Stock Production Discuss the concepts of make-to-stock versus planning with final assembly. Ensure that students are aware that with make to stock, planning is to the forecast only, regardless of sales orders. With planning with final assembly, planning is to the higher of sales or forecasts. Describe the different concept between Make-to-Stock and Make-to-Order planning. Specific strategies will be covered in a later lesson.

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Lesson: Make to Stock versus Make to Order

Figure 55: Requirements Strategies

Requirements strategies represent the business procedures to plan production quantities and production dates. Various requirement strategies are available, ranging from make-to-order production to make-to-stock production.

Make-to-Stock Planning Make-to-Order Planning R/3 contains several different make-to-stock processes in order to allow companies to meet a number of business requirements. In this lesson we will discuss MTS vs MTO. Other strategies are highlighted on the graphic; point out that this is a subset of Make-to-Order planning strategies and will be discussed in a later lesson.

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Figure 56: Make-to-Stock overview

Make-to-stock production means we build general stock in anticipation of customer demand. We ship the customer order from our stock of finished goods. If strategies are used for make-to-stock production, production takes place without sales orders already having to be present for the material concerned. If sales orders are received, these orders can be met by warehouse stock so that reduced delivery times can be realized. Make-to-stock production can also be executed for assemblies. In this case, the finished products are not produced to stock but the necessary assemblies are procured. A sales order for a finished product can then be met quickly because it is only the final assembly that has to be executed because the assemblies already exist.

Make-to-Order Planning Make-to-Order Planning R/3 contains several different make-to-order processes in order to allow companies to meet a number of business requirements. In this lesson we will discuss MTS vs MTO. Other strategies are highlighted on the graphic; point out that this is a subset of Make-to-Order planning strategies and will be discussed in a later lesson.

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Figure 57: Make-to-Order Overview

In the Make-to-Order planning; execution cannot take place until actual customer demand is realized. Typically Planned Independent Requirements are not entered for the product and planning is not done ahead of time for the product. Only when the sales order is received can execution take place. In Make-to-Order planning all aspects of planning and execution are linked directly to the sales order line item. • • • •

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MRP planned orders are created directly with reference to the sales order item. Execution (production orders, process orders, etc) are created with reference to the sales order item. Material is placed in specific inventory with reference to the sales order item. Shipment occurs from specific inventory only.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson: Make to Stock versus Make to Order

Lesson Summary You should now be able to: • Explain how make to stock and make to order will be represented in SAP ERP

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Make to Stock Planning Strategies Lesson Duration: 45 Minutes

Lesson Overview Several of your products have extensive lead times and volatile demand. In order to combat this and ensure high levels of customer service, you have decided to place product in inventory in anticipation of customer demand. Review several make-to-stock (MTS) planning strategies to see how SAP ERP will allow planners to model different approaches with this concept.

Lesson Objectives After completing this lesson, you will be able to: • • • •

Explain how Net Requirments planning differs from Planning with Final Assembly Demonstrate how to plan at the sub assembly level Explain the concepts of Consumption and Reduction Identify several popular planning strategies and their characteristics.

Discuss the following techniques: • • • • • •

Strategy 10 Strategy 40 Thorough discussion in Consumption and reduction Strategy 70 Strategy 52 (demo) Strategy 59

Business Example As a production planner several of your pumps sell directly from inventory. Some have very predictable demand others have very erratic demand. In addition some of you pump assemblies are common to several finished pump products and you want to reduce lead times and inventory. You will use several planning strategies to minimize inventory and keep service levels high.

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Lesson: Make to Stock Planning Strategies

Strategies of Make-to-Stock Production Go through the basic characteristics of make-to-stock production again and derive the two strategies, 11 and 59, from the familiar strategies, 10, 40, and 70: • •

Strategy 11 corresponds to strategy 10 but does not take existing warehouse stock into account. Strategy 59 corresponds to strategy 70, except for phantom assemblies.

Brief explanation of the net requirements planning logic based on a numerical example: 1. 2.

Stock: 15 pieces, planned ind. req.: 10 pieces, procurement? No. The stock is taken into account in the net requirements calculation. Goods issue of 5 pieces: Stock 15 pieces → planned ind. req. 10 pieces → 5 pieces (oldest requirement is reduced).

Make-to-Stock Production Gross Requirements Planning (11) Gross requirements planning, focus on load on production. Brief explanation of the gross requirements planning logic based on a numerical example: 1. 2.

Stock 15 pieces, planned ind. req. 10 pieces, procurement? Yes. Stock is not taken into account. Goods issue of 7 pieces: Stock 15 pieces → 22 pieces, planned ind. req. 10 pieces → 3 pieces (oldest requirement is reduced).

Settings for Gross Requirements Planning (11) Mixed MRP indicator 2 is required for gross requirements planning. (Pay special attention to this when resetting the planning data.)

Make-To-Stock Strategies and Concepts Make-to-Stock Strategies

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Figure 58: Strategies of Make-to-Stock Production

The make-to-stock production strategies plan production or procurement using planned independent requirements, which can be created from sales or forecast figures. Sales orders are met by the warehouse stock. Make-to-stock production strategies are used in industries in which demand and sales fluctuate but where production is to be kept at the same capacity. Fluctuations in demand and sales are balanced using warehouse stock.

Make-to-Stock

Figure 59: Anonymous Make-to-Stock (10)

The demand is defined without reference to sales orders. Sales orders are not relevant to MRP, but can be displayed for information purposes. You make this setting in the "No MRP" field in Customizing for the appropriate requirements class (workstep, "Defining Requirements Classes" in Customizing for SD).

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Lesson: Make to Stock Planning Strategies

Sales orders are covered by warehouse stock. In Sales and Distribution, you can carry out the availability check according to ATP logic. Material withdrawals for a sales order reduce this sales order’s quantity. The consumption of the demand program (that is of the planned independent requirements) is carried out at goods issue (the indicator "PIR reduction" in Customizing of the requirements class 30 must be set if you want to reduce the demand program when delivering to a sales order). The oldest planned independent requirement is reduced first according to the FIFO (first-in-first-out) principle using the requirement date. Future planned independent requirements are also reduced by goods issues, if allowed by the consumption mode and the forward consumption period. In addition to net requirements planning (Strategy 10), gross requirements planning (Strategy 11) is another strategy of make-to-stock production. In the case of gross requirements planning, no warehouse stock is taken into account. Only receipt elements are included in the net requirements calculation. In net requirements planning, the available warehouse stock for planning is taken into account.

Demonstration: Net Requirements Planning Purpose To explain net requirements planning

System Data System: Client: User ID: Password: Set up instructions: Note: You can set navigation profile SCM001 during this demonstration to call the main functions from the stock/requirements list. Refresh the stock/requirements list after each step. Execute the goods receipt and goods issue transactions in a separate session or define up to five favorites for the purpose. 1.

Material R-F1##, Plant 1000 Check the material master and make the following settings: MRP type PD, strategy group 10 (F4 help for strategy group).

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2.

Convert the first two planned orders into production orders. Release both production orders.

3.

Post a goods receipt for the production orders (goods issue for order, movement type 101, storage location 0002).

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→ The stock level increases by the amount of the posted goods receipt; the planned independent requirements remain the same. A new MRP run does not cause any new planned orders because the stock level that now exists is taken into account in net requirements planning. 4.

Create a customer requirement: 8 pieces for today + 6 weeks → The customer requirement does not affect planning (make-to-stock production). This can be determined by the fact that the available quantity in the list is not affected.

5.

Post a goods issue for the customer requirement (movement type 231, storage location 0002). Reduction of the customer requirement, reduction of the warehouse stock, reduction of the oldest planned independent requirement according to the FIFO rule (first-in-first-out). If more material was removed than there were planned independent requirements in the past, then planned independent requirements in the future are also reduced if a corresponding entry exists in the consumption period forward (although this function does not actually have anything to do with consumption). You can display the subsequent documents for a customer requirement, such as partially processed goods issue for a customer requirement, from the display of the requirements under Environment → Status overview.

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156

Make-toStock 1.

Material R-F1##, Plant 1000 Check the material master and make the following settings: MRP type PD, strategy group 10 (F4 help for strategy group). MM02

2.

Convert the first planned order into a production order from the S/R List.

3.

Post a goods receipt for the production orders (goods issue for order, movement type 101, storage location 0002). Logistics → Production → Production Control → Goods Movements → Goods Receipt (MB31) → The stock level increases by the amount of the posted goods receipt; the planned independent requirements remain the same. A new MRP run does not cause any new planned orders because the stock level that now exists is taken into account in net requirements planning.

4.

Customer requirement: 8 pieces for today + 6 weeks. Logistics → Production → Production Planning → Demand Management → Customer Requirements → Create (MD81) → The customer requirement does not affect planning (make-to-stock production). This can be determined by the fact that the available quantity in the list is not affected.

5.

Post a goods issue for the customer requirement (movement type 231, storage location 0002). Logistics → Production → Production Control → Goods Movements → Goods Issue (MB1A) → Reduction of the customer requirement, reduction of the warehouse stock, reduction of the oldest planned independent requirement according to the FIFO rule (first-in-first-out). If more material was removed than there were planned independent requirements in the past, then planned independent requirements in the future are also reduced if a corresponding entry exists in the consumption period forward (although this function does not actually have anything to do with consumption).

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Planning with Final Assembly

Figure 60: Planning with Final Assembly Overview

In planning with final assembly (strategy 40), the main focus is on flexibility in reacting to customers’ demands. Production, including final assembly, is triggered by the planned independent requirements before the sales order is received. You plan the planned independent requirements for the finished product in Demand Management. Incoming sales orders consume these planned independent requirements. Planned independent requirements left unconsumed increase the warehouse stock - as long as they are not adjusted to customer requirements (“Adjust Requirements“ is a function to be run periodically to ensure that old, unconsumed planned independent requirements no longer have an effect on planning). If customer requirements exceeds planned independent requirements, the system automatically creates a planned order for the unplanned quantity in the next MRP run. In effect planning is on the higher of the two: Planned Independent Requirements vs. Actual sales Requirements.

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Lesson: Make to Stock Planning Strategies

Figure 61: Consumption

To set up consumption of customer requirements, subassembly planning of dependent requirements, or reservations with planned independent requirements, you must set the consumption mode and the consumption period in the material master in the MRP 3 view or in the MRP group. The consumption mode defines the direction on the time axis in which the consumption with planning should occur, starting from the date of the sales order to the dependent requirement. In backward consumption (consumption mode 1), the sales order or dependent requirements consume planned independent requirements that are available before the customer requirement. In forward consumption (consumption mode 3), the sales order or dependent requirements consume planned independent requirements that are available after meeting the customer requirement. You can combine backward and forward consumption only if you take the consumption periods into account (consumption mode 2 or 4). If no values are entered for the consumption mode and the consumption interval, the system uses the default setting with backward consumption for 999 days. Note: If consumption mode 1 and the backward consumption period are not maintained, only requirements on the same day are consumed. The consumption indicator (consumption type) is important in addition to the consumption mode and consumption periods. The consumption indicator controls whether or not the planned independent requirements are consumed

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using requirements and/or dependent requirements and order reservations. The consumption indicator is defined as a default value for each planned independent requirement class in Customizing for demand management. The indicator can be overridden in the item detail screen of planned independent requirements management. Consumption vs. reduction Consumption is not the only integration between actual sales requirements and planned independent requirements. Reduction of the planned independent requirements will also take place as a result of the sales requirement. Reduction is the process of actually reducing the value of the planned ind. requirement as it’s stored in the system. Whereas during “consumption” the actual value stored was not changed, only the quantity passed to planning was lowered. With the exception of planning strategy 11 (gross requirements planning) reduction takes place when the goods are actually issued. In gross requirements planning reduction takes place when the goods are received into inventory.

Demonstration: Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Follow exercise:

Planning at the Assembly Level Planning at the Assembly Level (70) Consumption Brief revision of the terms, consumption mode, consumption period, and consumption indicator (consumption type): Consumption mode, consumption interval: Maintain these in the material master (MRP 3) or in the Customizing for the MRP group parameters.

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Lesson: Make to Stock Planning Strategies

Customizing: Select Production → Production Planning → Demand Management → Planned Independent Requirements → Maintain consumption mode and period of adjustment. Default values for the consumption type for each requirements class: Determination of concrete requirements, such as customer requirement, dependent requirement, and reservations, with which consumption occurs. Customizing: Select Production → Production Planning → Demand Management → Planned Independent Requirements → Default Values and Presettings → Define default values for consumption type per requirements class Brief explanation of the subassembly planning logic based on a numerical example: The motor assembly is to be developed into three different car models: A, B, and C. Planning is executed for the motor: 1000 pieces in January and procurement is triggered. Sales orders are received for the cars. 400 pieces for A, 500 pieces for B, and 300 pieces for C. The dependent requirements for the motors consume the planned independent requirements; however, the dependent requirements exceed the planning quantity by 200 pieces. This means that 1000 pieces can be obtained from the warehouse stock and 200 pieces must still be procured. Phantom Assemblies Do not describe the planning strategy but describe the functions of a phantom assembly. In exceptional cases, phantom assemblies can be placed in stock and withdrawn at a later date. You control the withdrawal using the function, “Edit components” of the planned order of the material at a level higher than the phantom assembly level (for a detailed view of a component item click the button “From warehouse”). Phantom Assembly Planning (59) This strategy is very complicated and difficult to explain. You can think of it as a modification of strategy 70, in which the missing stock level of the assembly creates a further complication. Go through the individual steps of this strategy based on the notes. While doing so, you should point out that the prerequisite to backflush the phantom assembly components is of a technical nature and not part of the strategy. Technically, at least one component of the phantom assembly must be subject to backflushing so that the planned independent requirements and reservations are reduced with the phantom assembly.

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Figure 62: Planning at the Assembly Level (70)

Planning at the assembly level (strategy 70 + assembly planning indicator set) is appropriate for production with variants, for example, when it is easy to specify a requirements forecast for certain assemblies than it is to do so for the variant diversity of the finished product. In this planning strategy, the planned independent requirements for an assembly are planned separately. The requirements are created at the assembly level and these requirements trigger the production of the assembly. If sales orders are received for the finished product, the BOM is exploded for the finished product. Dependent requirements or reservations are also created for the assembly as a result of planned orders or production orders for the finished product. These dependant requirements consume the planned independent requirements of the assembly. If, due to sales orders, planned orders, or production orders at finished product level, the dependent requirements or reservations exceed the assembly’s planned independent requirements, a planned order is created for the assembly during the next planning run. In the strategy group of the material master record, you must enter strategy 70 and the mixed MRP indicator must be set for assembly planning.

Demonstration: Purpose

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System Data System: Client: User ID: Password: Set up instructions: 1. Follow exercise:

Planning at the Phantom Assembly level

Figure 63: Phantom Assembly

A phantom assembly can represent a subassembly, which is created in the production process, which is not placed into stock but used immediately. Phantom assemblies can also represent a logical grouping. For example, a car radio assembly consists of the radio, speakers, and an aerial. You flag a phantom assembly by entering a special procurement type in the material master (view MRP 2) or by entering the indicator (or overriding it) in the BOM item. In the planning run, the dependent requirements of the higher-level assembly are directly passed down to the components of the phantom assembly. In exceptional cases, phantom assemblies can be placed in stock and withdrawn at a later date.

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Figure 64: Phantom Assembly Planning (59)

You must have entered strategy 59 (phantom assembly planning) in the material master of the phantom assembly and set the mixed MRP indicator 1 (subassembly planning) and the special procurement type 50 (phantom assembly). The planned quantities for the phantom assembly are set in step one (1). This planned independent requirement leads to a dependent requirement for the components of the phantom assembly in MRP. Procurement of the components is triggered in step two (2). The customer requirement or the planned order/production order at the finished product level creates a dependent requirement/reservation at the phantom assembly level. Normally, this is not the case for phantom assemblies. However, with strategy 59, these dependent requirements/reservations are created to balance the planned independent requirements. However, these are not relevant for planning. Consumption of the planned independent requirements also means that the dependent requirements are reduced at the component level. However, MRP-relevant dependent requirements/reservations are created at the component level as a result of the planned order/production order for the finished product in step three (3). After final assembly has been carried out in step four (4), the phantom assembly is confirmed and, if necessary, the components of the assembly are backflushed. The planned independent requirement and the reservation of the phantom assembly and the reservations of the components are reduced in step five (5). Backflushing is important so that the planned independent requirements and the reservations can be reduced consistently.

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Figure 65: Phantom Assembly Planning Settings (59)

If you want to use the Phantom assembly planning (59) strategy, you must make the following settings in the material master of the assembly (“MRP” view): • • •

Special procurement type = 50 (phantom assembly). Strategy group = 59 (planning at the phantom assembly level). Mixed MRP indicator = 1 (assembly planning with final assembly).

In the material master of all the components of the phantom, set the indicator for backflush (MRP 2 view) to ensure consistent reduction of the planned independent requirements and the reservations. You should also assign the components to the same operation in the routing to ensure that the components are confirmed at the same time.

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Reorganizing the Planned Independent Requirements

Figure 66: Reorganizing Planned Independent Requirements

Planned independent requirements that have not been reduced can be reorganized using SAP R/3 transactions MD74, MD75, and MD76. The goal of this is to delete obsolete planned independent requirements from the database. Reorganization takes place in 3 steps: 1.

Adjust requirements: Quantities that have not been consumed/assigned before the reorganization key date which is to be specified (this date can also be in the future; the reorganization period is also possible per plant) are set to 0 and are flagged for reorganization. Note: This should not be confused with adjustment according to MRP group in SAP R/3 Enterprise, whereby planned independent requirements within an adjustment period are ignored by the system during planning, but remain quantitatively preserved.

2. 3.

Reorganization of schedule lines: Schedule lines with quantity 0 before the key date are deleted from the database. Delete history: The history can be deleted by determining a (further) key date.

Alternatively, a reorganization period can be maintained per plant in SAP R/3 Enterprise (demand management Customizing). This can be calculated backwards from the current date. It is recommended that you periodically execute reorganization, such as once per month.

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Exercise 6: Using Make to Stock planning strategies Exercise Duration: 30 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Maintain the planning strategy settings in the material master of product R-F2##. • Receive a sales order for the product. • Verify the requirements type and consumption process are functioning as expected.

Business Example Finished product R-F2## is built in advance and inventoried so customer shipments can be made on an on-time basis. However, if sales orders exceed the expected planned demand, additional product must be produced. Planning strategy 40 (Planning with final assembly) will be used to control this planning situation. If we oversell the current month’s projection; that does not mean less will be sold in another month. Therefore our business environment will dictate backward consumption only. Assembly R-B4## is required for the production of R-F2##. It is also sold as a spare part and used in other finished products that are not planned. Therefore, we must plan this material at the component level.

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Task 1: Planning with final assembly: Requirements Strategy 40 Material R-F2##, plant 1000 is to be planned using strategy 40 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then verify the planned independent requirements using the stock requirements list. After the requirements have been entered, they will be verified and we will run MRP. Finally, an actual sales order is received, which will consume the independent requirements. The material will then be re-planned for accuracy. 1.

Maintain the material master for pump R-F2##. Assure it is setup for planning strategy “Planning with final assembly”. Consumption mode “Backward Only ”and backward consumption period of 30 days.

2.

Access the stock requirements list to review the current planning situation for material R-F2##at plant 1000.

3.

What is the requirements type of the planned independent requirements?

4.

Have planned orders been created to offset the shortages? On what dates?

5.

Enter a sales order (type OR) for 50 pcs of material R-F2## to be delivered in two months.

6.

Return to the stock requirements list to see if the planning situation has changed.

Continued on next page

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7.

Have the planned independent requirements been consumed.

8.

Has the planning situation changed?

9.

If MRP is run again, how will it change the planning results?

10.

In a second session, run a single-item, multi-level MRP run for R-F2## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

11. Access the stock requirements list to review the current planning situation.

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12. Have the planned orders been adjusted to the revised demand situation?

Task 2: Planning at assembly level: Requirements Strategy 70 Material R-B4##, plant 1000 is to be planned using strategy 70 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then enter planned independent requirements into demand management and verify them using the stock requirements list. After the requirements have been entered, they will be verified and we will check consumption.

204

1.

Maintain the material master for component assembly R-B4##. Assure it is setup for planning strategy “Planning at assembly” level. Consumption mode “Backward Only ”and backward consumption period of 30 days.

2.

Projected total demand for R-B4##in plant 1000is 1200 pcs per month (for the next six months). Enter these as planned independent requirements

3.

Access the stock requirements list to review the current planning situation.

4.

What is the requirements type of the planned independent requirements?

5.

Why are the planned independent requirement quantities not displaying the values entered in the previous step?

6.

Display the consumed quantities using the total requirements display.

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Lesson: Make to Stock Planning Strategies

Solution 6: Using Make to Stock planning strategies Task 1: Planning with final assembly: Requirements Strategy 40 Material R-F2##, plant 1000 is to be planned using strategy 40 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then verify the planned independent requirements using the stock requirements list. After the requirements have been entered, they will be verified and we will run MRP. Finally, an actual sales order is received, which will consume the independent requirements. The material will then be re-planned for accuracy. 1.

Maintain the material master for pump R-F2##. Assure it is setup for planning strategy “Planning with final assembly”. Consumption mode “Backward Only ”and backward consumption period of 30 days. a)

SAP ERP menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately (MM02) , and enter the following: Enter material R-F2## and select enter

b)

Choose the MRP 3 view and select enter

c)

Enter plant 1000 and select enter

d)

On the MRP 3 tab, make sure the entries are made per the table below:

e) 2.

Field

Value

Strategy group

40

Consumption mode

1

Bwd consumption per.

30

Fwd consumption per.

Leave blank

Select save

. Enter through any warning messages.

Access the stock requirements list to review the current planning situation for material R-F2##at plant 1000. a)

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04) Continued on next page

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What is the requirements type of the planned independent requirements? Answer: The requirements type is VSF.

4.

Have planned orders been created to offset the shortages? On what dates? Answer: A previous MRP run has created planned orders to satisfy the demand. The planned orders are scheduled to be completed by the requirements date of the planned independent requirements.

5.

Enter a sales order (type OR) for 50 pcs of material R-F2## to be delivered in two months. a)

System → Create session

b)

SAP ERP menu path: Logistics → Sales and Distribution → Sales → Order → Create (VA01). On the initial screen enter data from the table below and select

c)

d)

Order Type

OR

Sales Organization

1000

Distribution Channel

10

Division

00

Enter the data per the table below: Field

Value

Sold-to party

1000

Ship-to party

1000

PO Number

PO##

Req.deliv.date

two months from today

Material

R-F2##

Order quantity

50

Select then save

6.

, and confirm any warnings regarding the billing date and .

Return to the stock requirements list to see if the planning situation has changed. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting Continued on next page

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7.

Have the planned independent requirements been consumed. Answer: As a result taking the sales order, planned independent requirements in the appropriate period have been lowered by the amount of the sales order.

8.

Has the planning situation changed? Answer: As a result of the sales order, the total demand quantity has not changed. However, the requirement dates have changed. But the planned order for the total quantity is still due on the date of the planned independent requirement.

9.

If MRP is run again, how will it change the planning results? Answer: The planned order generated to offset the planned independent requirement will be lower. Another planned order will be created for the quantity of the sales order and due on the sales requirement date. In all, the total demand for the period will remain the same.

10.

In a second session, run a single-item, multi-level MRP run for R-F2## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

a)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu

11. Access the stock requirements list to review the current planning situation. a)

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

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12. Have the planned orders been adjusted to the revised demand situation? Answer: Yes

Task 2: Planning at assembly level: Requirements Strategy 70 Material R-B4##, plant 1000 is to be planned using strategy 70 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then enter planned independent requirements into demand management and verify them using the stock requirements list. After the requirements have been entered, they will be verified and we will check consumption. 1.

Maintain the material master for component assembly R-B4##. Assure it is setup for planning strategy “Planning at assembly” level. Consumption mode “Backward Only ”and backward consumption period of 30 days. a)

SAP ERP menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately (MM02) , and enter the following: Enter material R-B4## and select enter

b)

Choose the MRP 3 view and select enter

c)

Enter plant 1000 and select enter

d)

On the MRP 3 tab, make sure the entries are made per the table below:

e)

Field

Value

Strategy Group

70

Consumption mode

1

Bwd consumption per.

30

Fwd consumption per.

Leave blank

Mixed MRP

1

Select save

. Enter through any warning messages.

Continued on next page

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2.

Projected total demand for R-B4##in plant 1000is 1200 pcs per month (for the next six months). Enter these as planned independent requirements a)

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Create (MD61)

b)

Enter material R-B4## at plant 1000.

c)

Starting with the current period; enter 1200 in each monthly period for the next six months.

d) 3.

Access the stock requirements list to review the current planning situation. a)

4.

Save SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

What is the requirements type of the planned independent requirements? Answer: The requirements type is VSFB.

5.

Why are the planned independent requirement quantities not displaying the values entered in the previous step? Answer: R-B4## is set for planning strategy 70. The planned independent requirements for this item are consumed by dependant requirements. There are dependant requirements for this material to be used in R-F2##.

6.

Display the consumed quantities using the total requirements display. a)

From within the stock/requirements list: Environment → Total Reqmts Display

b)

The original planned independent requirement quantity is displayed. As well as the details of what has consumed this requirement. Hint: This display can also be accessed from the standard menu path. Logistics → Production → Production Planning → Demand Management → Evaluations → Display Total Reqmts Note: MRP should be run again to correctly plan the material based on the increased demand. That is not necessary at this point. But can be done at the students discretion.

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Lesson Summary You should now be able to: • Explain how Net Requirments planning differs from Planning with Final Assembly • Demonstrate how to plan at the sub assembly level • Explain the concepts of Consumption and Reduction • Identify several popular planning strategies and their characteristics.

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Lesson: 175

Lesson: Make to Order Planning Strategies

Make to Order Planning Strategies Lesson Duration: 45 Minutes

Lesson Overview Several of your products have limited demand and respectable lead times. In order to deal with this sporadic demand and ensure high levels of customer service, you have decided to only produce this product in response to actual customer demand. Review several planning strategies in the make-to-order (MTO) manner to see how SAP ERP will allow planners to model different approaches of this concept.

Lesson Objectives After completing this lesson, you will be able to: • • • •

Explain how make to order works in SAP ERP Demonstrate how to plan at the sub assembly level while still maintaining make to order at the finished good level Identify several popular planning strategies and their characteristics Explain the difference between make to order and assembly to order

Discuss the following techniques: • • • • • •

Strategy 20 Strategy 50 Strategy 60 (demo) Strategy 74 (demo) Assemble to Order (81, 82,..... ) (demo) Individual collective flag

Business Example As a production planner several of your pumps are very complex and expensive which prohibits you from keeping them from selling directly out of inventory. Some have very predictable demand others have very erratic demand. In addition some of your pump assemblies are common to several finished pump products and you want to reduce lead times and inventory. You will use several planning strategies to minimize inventory and keep service levels high.

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Make-to-Order

Figure 67: Production Based on Sales Orders

When working with the strategies for make-to-order production, the sales order is the only pegged requirement. In addition to classic make-to-order production, planning without final assembly is also possible. This means that although planning occurs at the finished product or assembly level, the final assembly is triggered by a sales order.

Figure 68: Strategy 20: Make-to-Order

The net requirements calculation is carried out individually for every sales order. Stock cannot be swapped back and forth between sales orders. The procurement elements, that is the planned orders are created with reference to the sales order and are managed in the individual customer segment. This direct reference to the sales order also remains in the production order.

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Influencing MTO at the Component Level

Figure 69:

The individual/collective indicator in the material master record determines whether a component is procured for a special customer requirement in the individual segment. The indicator "1" for individual requirements means that the material is being specially manufactured or procured for a sales order. A special individual segment is created for each requirement. An individual requirement is only created if the higher-level material does not create a collective requirement. The indicator "2" for collective requirements means that the material is produced or procured for various requirements. You can find these requirements in the net requirements segment. The indicator "blank" means that the component is to be planned in the same way as the higher-level assembly. In the above example, two individual segments are created for the shaft for sales orders A and B. If you want to control the material item individually for the respective BOM, use the "explosion control" field in the component’s item data (general data view). The setting in the BOM overrules the setting in the material master record.

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Planning without Final Assembly

Figure 70: Planning Without Final Assembly (50/52):

With strategy 50 (planning without final assembly), the finished product is produced based on the sales order. To achieve short delivery times, certain assemblies should be produced or procured before the sales order for the finished product is received. Planning that is independent of the sales order occurs using planned independent requirements for the finished product. In the MRP run, the system creates planned orders for the finished product to cover these requirements. Note: These planned orders are created with an Order Type: VP. Planned orders of this type cannot be changed or converted into an executable order such as a production order. Planned orders of type VP exist to drive dependant requirements and capacity requirements. However, the system creates planned orders in the MRP run at the subassembly and component levels in case of a material shortage exists. These planned orders can be converted into a production order or a purchase requisition. These planned orders cannot be converted into production orders, such as order type VP. However, the system creates planned orders in the MRP run at the subassembly and component levels in case of a material shortage exists. These planned orders can be converted into a production order or a purchase requisition. Final assembly is triggered on the receipt of the sales order. With the strategy 50, the sales order appears in an individual customer planning segment in the stock/requirements list, in which planning is executed separately for the sales

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order. With the strategy 52, the sales order is administered in the net requirements planning segment. This means that during requirements planning and creation of a sales order, any existing make-to-stock inventory and other receipt elements can be taken into account in the net requirements planning segment. The quantity produced on the basis of a sales order is also posted to the make-to-stock inventory. You can only carry out the availability check for planned independent requirements. That is, the check of planned independent requirements at the finished product level.

Figure 71: Planning Without Final Assembly (52)

Note for this procedure that the lot-size procedure “lot-for-lot” is used. You also need to make sure that neither rounding values/rounding profiles nor minimum or maximum lot sizes are maintained. Otherwise, the assignment logic is not compatible with an availability check, which could lead to excess planning or incorrect results in the availability check.

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Planning with a Planning Product

Figure 72: Overview: Planning with a planning material

The planning strategy "Planning with planning material" is particularly useful if you have several finished products with the same main assemblies. Here, you define a planning material which contains the common assembly and its BOMs. The planning run is carried out for the planning material which triggers the production and procurement of the planning material’s components. The sales order for a finished product which refers to the planning material reduces the planned independent requirements of the planning material and simultaneously triggers final assembly. When processing the sales order, you can check whether the planned independent requirements quantities cover the demand (that is, the availability check as a check against the planned independent requirements). In the material master record of the planning material, you must enter strategy 60, the consumption mode and the consumption periods. In the material master records which refer to the planning material, you must enter the planning material as a reference and strategy 60. The consumption periods are calculated starting from the planned independent requirements of the planning material.

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Demonstration: SAP R/3 Strategy 60 (Planning With Planning Material) Purpose To demonstrate Planning with Planning Material Strategy Note: Carry out this demonstration if the course participants are interested in this strategy and you have enough time. You do not need to go into changes and effects on the assemblies here. Otherwise, explanation of the above mentioned graphics, which also contain a deviant example, should suffice.

System Data System: Client: User ID: Password: Set up instructions: 1. Material master for R-F130, plant 1000, MRP 3, strategy group 60, consumption mode 2, consumption period forward/backward each 30 days. 2.

Material masters for R-F126, R-F127, R-F128, plant 1000, MRP3: Each with strategy group 60, planning material R-F130, planning plant 1000, planning conversion factor 1.

3.

Create planned independent requirements for R-F130, plant 1000: From the current month +2 to the current month +4 each for 10 pieces.

4.

Transaction MC84 (this can be found under Production → SOP → Product Group → Create). Create product group: PLNGRP, product group, plant 1000, base unit: Pieces (PC). Materials R-F126, R-F127, R-F128, R-F130 all plant 1000, Enter, confirm, save.

5.

Select MRP Run for product group PLNGRP.

6.

Current stock/requirements list, collective display for PLNGRP. Leave all blank except for R-F130 (VSEV requirements)

7.

Create customer requirements (KEVV): 3 pieces R-F126, current month +2 24 pieces R-F127, current month + 3 5 pieces R-F128, current month +4

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8.

Look at the stock/requirements list.

9.

Multilevel planning run for product group PLNGRP.

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10. Look at the stock/requirements list. Display the procurement elements and explain the consumption situation. 11. If necessary, clean the data or do not continue to use the same materials.

Planning without Final Assembly at the Sub-Assembly

Figure 73: Planning at Assembly Level w/o Final Assembly (74) (1)

The strategy “Assembly planning without final assembly” (strategy 74) is a mixture of the strategies “assembly planning” (strategy 70) and “planning without final assembly” (strategy 50 or 52). As in strategy 70, in strategy 74 also, the planned independent requirements for an assembly are regarded separately to the end product and independent of any lot size. You do not have to know the finished production for which the assembly is required. The planned independent requirements are created at the assembly level. As opposed to the strategy 70 and as in the strategies 50 and 52, the creation of the planned independent requirements does not trigger the production of the assemblies but rather the procurement of the components. The components are placed into stock till the planned order or the production order for the finished product is received. The production of the assembly is not triggered till the planned order or the production order for the finished product is received. The planning run is carried out for the assembly and initially creates planned orders for the assembly’s planned independent requirements. These cannot be converted into a production order nor can they be converted in repetitive manufacturing (order type VP). The planned independent requirements and the

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planned orders for the assembly are in the planning segment. Conversion and procurement (assembly) are not possible until a planned order or a production order for the finished product is created. However at component levels below the assembly, the system creates planned orders in the planning run if a material shortage exists. These planned orders can be converted into a production orders or a purchase requisition. At this stage of planning, the stock at the assembly level is not taken into account. Production of the assembly is not triggered till receipt of the planned order or the production order for the finished product. The dependent requirements and reservations created as a result of the planned order or the production order consume the planned independent requirements of the assembly (as in the strategy 70). Depending on the strategy of the finished product and the individual/collective indicator of the assembly in the net segment, the dependent requirements and reservations of the assembly and the accompanying planned orders of the assembly appear in an individual customer segment or in the individual customer planning segment. In the planning run, dependent requirements and reservations in the net requirements segment or an individual customer segment result in planned orders that can be converted or that can be dispatched in repetitive manufacturing. This allows the production of the assembly. At this stage of planning, stock at the assembly level is regarded as stock in the net segment or as sales order stock. In the planning segment, the planned order quantity of the VP planned order is reduced according to the new requirements situation. In the first step, you create the requirement quantities expected in the future for the assembly. You do this in demand management. Sales orders, planned orders, or production orders are created for the finished product. The resulting dependent requirements or reservations for the assembly consume the planned independent requirements of the assembly. The consumption mode and the consumption periods are calculated according to the reservation or the dependent requirements.

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Figure 74: Planning at Assembly Level w/o Final Assembly (74) (4)

If you want to use the “Planning without final assembly” strategy (74) for the assembly, you must make the following settings in the material master record (“MRP” view): • • •

The strategy group 74 (planning without final assembly at assembly level) for the assembly. Mixed MRP indicator = 3 (assembly planning without final assembly). Consumption parameters (consumption mode, backward consumption period, and forward consumption period).

Individual/collective indicator = 2 (collective requirements only) for the components to be procured and stored before receipt of the planned or production order. Individual/collective indicator = 1 (individual requirements only) or blank (individual and collective requirements) for the components not to be procured until receipt of the planned order or the production order for the finished product.

Demonstration: Subassembly Planning Without Final Assembly (74) Purpose To learn about subassembly planning without final assembly

System Data System:

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Client: User ID: Password: Set up instructions: Materials R-F1##, R-B1##, R-T1##, R-T2##, R-T3##, in Plant 1000 1. Change the material master R-B1##: MRP 3: Strategy group 74, consumption mode 2, consumption interval backward and forward each 30 days, mixed MRP indicator 3 2.

Change material master R-T2##: Individual/collective indicator = blank. There should be no warehouse stock.

3.

Create planned independent requirements: 200 pieces R-B1## for current month +4.

4.

Execute multilevel requirements planning for R-B1##. → Planned order (not convertible) in planning segment created. Procurement of the component R-T1## is triggered using dependent requirements. For R-T2##, the dependent requirements end up in the planning segment due to the ind/coll indicator = blank. Also, display the stock/requirements list for R-T3##. No dependent requirement is created. Ask the participants why not: → MRP type VB (manual reorder point planning).

5.

→ Ensure that strategy group 20 is entered for R-F1##. Create customer requirement for R-F1##: 50 pieces for 15th of the current month + 4.

6.

Execute multilevel requirements planning for R-F1##. → Planned order created.

7.

Display stock/requirements list for R-B1##: A convertible planned order was created in the net planning segment for R-F1##. Demonstrate the consumption of the dependent requirements for R-F1## with the planned independent requirements for R-B1##. Display the stock/requirements lists for R-T1## and R-T2## and explain the changed situation.

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Assemble-to- Order (ATO)

Figure 75: Overview: Assembly Processing

Assembly processing is a form of sales order processing. The procurement elements are created when you create the sales order items. In general, the components of the finished product have already been manufactured. Once you have created the sales order, the system checks the availability of the components (for the production order). It also determines a possible delivery date and costs the order. With strategy 82, creating the sales order triggers the creation of a production order. It is not necessary to carry out a separate MRP run. With strategy 81, when you create a sales orders, the system creates a planned order for repetitive manufacturing and with strategy 83, it creates a network for engineer-to-order production. Order processing is carried out using the tools available in production control, delivery is made in Sales and Distribution. The total confirmation date depends on the date of the components which are last to be available. The confirmation quantity depends on the available quantity of the components with the lowest confirmed quantity on the requirements date. Assembly processing can either be carried out statistically (an assembly order per sales order item) or dynamically (several assembly orders per sales order item). Dynamic processing enables you to execute partial deliveries. In this case, however, the direct reference to the sales order is lost.

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Demonstration: Assembly Processing Purpose To learn about assembly processing

System Data System: Client: User ID: Password: Set up instructions: 1. Material master R-F1##: Enter the strategy group 82 (MRP 3). 2.

Material master of the assembly R-B3## (I/C = blank): Checking group ZN (no check).

3.

Create planned orders manually (MD11) for R-B1## and R-B4##, today + 10 weeks, each 10 pieces.

4.

Create sales order (order type TA) (VA01): Sold-to the party 1000, ship-to the party 1000, any order number, the sales organization 1000, distribution channel 10, division 00, today + 6 weeks, R-F1##, 12 pieces. → The system automatically creates an assembly order or rather due to the strategy 82, a production order. The component availability check is executed on the basis of this. Set the scheduling of the production order to “backward” without a time. Adopt the generated total commitment date as the finish date. Complete delivery, indicator fix date not set? The sales order remains on the desired date in the transaction MD04. This should still be relevant for planning. Only the schedule line remains on the confirmed date, the production order has a rescheduling message.

5.

Postpone the order finish date of the production order by one week→ the schedule line of the sales order is also postponed. Changes to the quantity or dates in the production order only affect the schedule lines of the sales order.

6.

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Change to the sales order quantity → new availability check: Complete delivery, “fix date” set → in the transaction MD04. The sales order date is adjusted to suit the availability date of the production order, which no longer has a rescheduling message.

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Exercise 7: Make to Order in SAP ERP Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how to a produce in a pure make-to-order environment (strategy 20) • Demonstrate how to plan components and subassemblies while maintaining make-to-order at the finished product level. • Generate a production plan for an assembly using strategy 50.

Business Example Several of our products are complex and expensive. The demand can also be very erratic. Therefore we do not keep the finished product in inventory. The product will be produced as the customer requires it. We also have a number of assemblies that are commonly used throughout many finished products. These assemblies are expensive once produced. However, the lead time to produce is not long. For these items, we will project with planned independent requirements, however we will not assemble them until the actual dependant demand is received. The plan will serve to drive component requirements and capacity planning.

System Data System: Client: User ID: Password: CATT: Set up instructions:

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Task 1: Make-to-Order: requirements Strategy 20 For Material R-F5##, plant 1000 we will only begin the planning and execution process when actual customer demand is received. For this we will use strategy 20. To assure proper planning we will maintain the material master. Actual sales orders will be received. These sales order will drive planning and execution in their own “planning segments”. ie: Planning and execution will be tied directly to the sales demand. One assembly R-B3## must also be tied directly to the sales order demand. The other components should be planned as “collective” or general stocking. 1.

Maintain the material master for pumpR-F5## . Assure it is setup for make-to-order planning.

2.

Create a sales order type OR for 50 pcs of material R-F5## to be delivered in two months to customer 1000 and ship-to 1000.

3.

Access the stock requirements list to review the current planning situation.

4.

Is there any inventory available? Can this inventory be used to satisfy sales order demand in the given scenario (strategy 20)?

5.

Enter another sales order type OR for 15 pcs of material R-F5## to be delivered in three months. Do this in another session.

6.

Return to the stock requirements list to see if the planning situation has changed.

7.

Run a single-item, multi-level MRP run for R-F5## at plant 1000. Do this in another session. Use the following parameters for the planning run: Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

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Field

Value

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

8.

View the planned orders that were generated.

9.

Display the stock requirements list for assembly R-B3##.

10. From the Stock/Requirements lists for the R-F5## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number. 11. Confirm production of the order. 12. Return to the stock requirements list to see if the planning situation has changed.

Task 2: Planning without final assembly: Requirements Strategy 50 Material R-F4##, plant 1000 is to be planned using strategy 50 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then verify the planned independent requirements using the stock requirements list. After the requirements have been entered, they will be verified and we will run MRP. Finally an actual sales order then gets received that will consume the independent requirements. The material will then be re-planned for accuracy. 1.

Maintain the material master for pump R-F4##. Assure it is setup for planning strategy “Planning without final assembly”. Consumption mode “Backward Only ”and backward consumption period of 30 days.

2.

Access the stock requirements list to review the current planning situation.

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3.

What is the requirements type of the planned independent requirements?

4.

In what planning segment are the independent requirements and planned orders contained?

5.

What is the order type of these planned orders? What does this mean?

6.

Enter a sales order (type OR) for 10 pcs of material R-F4## to be delivered in two months for customer 1000 and ship-to 1000.

7.

Return to the stock requirements list to see if the planning situation has changed.

8.

In a second session, run a single-item, multi-level MRP run for R-F4## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing Key

NETCH

Create Purchase Req.

1 - Purchase Requisitions

Delivery Schedules

3 - Schedule lines

Create MRP List

MRP List

Planning Mode

1 - Adapt Planning Data

Scheduling

2 - Lead time Scheduling

Also Planning Unchgd comp.

Select

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9.

Return to the stock requirements list to see if the planning situation has changed.

10. From the Stock/Requirements list, display the consumed quantities using the total requirements display for your R-F4## at plant 1000.

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Solution 7: Make to Order in SAP ERP Task 1: Make-to-Order: requirements Strategy 20 For Material R-F5##, plant 1000 we will only begin the planning and execution process when actual customer demand is received. For this we will use strategy 20. To assure proper planning we will maintain the material master. Actual sales orders will be received. These sales order will drive planning and execution in their own “planning segments”. ie: Planning and execution will be tied directly to the sales demand. One assembly R-B3## must also be tied directly to the sales order demand. The other components should be planned as “collective” or general stocking. 1.

Maintain the material master for pumpR-F5## . Assure it is setup for make-to-order planning. a)

SAP ERP menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately (MM02) , and enter the following: Enter material R-F5## and select enter

b)

Choose the MRP 3 view and select enter

c)

Enter plant 1000 and select enter

d)

On the MRP 3 tab, make sure the entries are made per the table below:

e)

Field

Value

Strategy group

20

Consumption mode

blank

Bwd consumption per.

blank

Fwd consumption per.

blank

Select save

.

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2.

Create a sales order type OR for 50 pcs of material R-F5## to be delivered in two months to customer 1000 and ship-to 1000. a)

System → Create session

b)

SAP ERP menu path: Logistics → Sales and Distribution → Sales → Order → Create (VA01). On the initial screen enter data from the table below and select Enter.

c)

d)

Order Type

OR

Sales Organization

1000

Distribution Channel

10

Division

00

Enter the data per the table below: Field

Value

Sold-to party

1000

Ship-to party

1000

PO Number

PO##

Req.deliv.date

two months from today

Material

R-F5##

Order quantity

50

Select

Enter

, to confirm any warnings regarding the billing date and 3.

Access the stock requirements list to review the current planning situation. a)

4.

Save..

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

Is there any inventory available? Can this inventory be used to satisfy sales order demand in the given scenario (strategy 20)? Answer: Inventory is available and displayed on the top line (general stock). This inventory is not available for use in the make-to-order scenario. It would have to be transferred to sales order stock to be available to satisfy the demand. Continued on next page

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Enter another sales order type OR for 15 pcs of material R-F5## to be delivered in three months. Do this in another session. a)

System → Create session

b)

SAP ERP menu path: Logistics → Sales and Distribution → Sales → Order → Create (VA01). On the initial screen enter data from the table below and select

c)

d)

Order Type

OR

Sales Organization

1000

Distribution Channel

10

Division

00

Enter the data per the table below: Field

Value

Sold-to party

1000

Ship-to party

1000

PO Number

PO##

Req.deliv.date

three months from today

Material

R-F5##

Order quantity

15

Select

Continue (enter), to confirm any warnings regarding the

billing date and 6.

7.

Save..

Return to the stock requirements list to see if the planning situation has changed. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting

c)

The sales order should be displayed in it’s own planning segment.

Refresh

Run a single-item, multi-level MRP run for R-F5## at plant 1000. Do this in another session. Use the following parameters for the planning run:

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8.

Field

Value

Processing key

NETCH

Create purchase req.

1 - Purchase Requisitions

Delivery schedules

3 - Schedule lines

Create MRP list

MRP List

Planning mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components

Select

a)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu.

View the planned orders that were generated. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting

c)

Double click on a planned order in the sales order planning segment.

d)

Select change

e)

Select the “Assignment” Tab and the sales order that the planned order is tied to is displayed. Select

9.

to return to the list.

Display the stock requirements list for assembly R-B3##. a)

Go to your other session that should be open. From within the stock requirements list; enter R-B3## in the material field and enter

b)

.

The assembly is also planned in individual segments referring to the sales requirement. This is due to the individual/collective indicator being set to “1 or blank.”

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10. From the Stock/Requirements lists for the R-F5## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number. a)

Return to the final assembly material by entering R-F5## in the material field.

b)

Double click on the planned order for the customer demand.

c)

Select Select

d)

to convert to a production order. to release the order.

Save and note the production order number. Production Order: _______________________

11. Confirm production of the order. a)

Logistics → Production → Production Control → Confirmation → Enter → For Order (CO15).

b)

Enter the production order number and select

c)

Accept the default values and save.

.

12. Return to the stock requirements list to see if the planning situation has changed. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting

c)

The inventory received by confirming the production order is only available in the individual planning segment. Note: The inventory contained in the individual segment cannot be used for any other demands.

Continued on next page

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Task 2: Planning without final assembly: Requirements Strategy 50 Material R-F4##, plant 1000 is to be planned using strategy 50 (30 days backward consumption only). To assure proper planning we will maintain the material master. We will then verify the planned independent requirements using the stock requirements list. After the requirements have been entered, they will be verified and we will run MRP. Finally an actual sales order then gets received that will consume the independent requirements. The material will then be re-planned for accuracy. 1.

Maintain the material master for pump R-F4##. Assure it is setup for planning strategy “Planning without final assembly”. Consumption mode “Backward Only ”and backward consumption period of 30 days. a)

SAP ERP menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately (MM02) , and enter the following: Enter material R-F4## and select enter

2.

b)

Choose the MRP 3 view and select enter

c)

Enter plant 1000 and select enter

d)

On the MRP 3 tab, make sure entries are made per the below table: Value

Strategy Group

50

Consumption mode

1

Bwd consumption per.

30

Fwd consumption per.

Leave blank

Access the stock requirements list to review the current planning situation. a)

3.

Field

SAP ERP menu Path: Logistics → Production → Production Planning → Demand Management → Environment → Stock/Requirements List (MD04)

What is the requirements type of the planned independent requirements? Answer: The requirements type is VSE.

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In what planning segment are the independent requirements and planned orders contained? Answer: Independent requirements and planned orders are contained in the segment planning without assembly.

5.

What is the order type of these planned orders? What does this mean? Answer: The order type is displayed the planned order is double clicked. These are order type VP. Orders of type VP cannot be executed. They cannot be converted or changed. They exist strictly to drive dependant demand and capacity requirements.

6.

Enter a sales order (type OR) for 10 pcs of material R-F4## to be delivered in two months for customer 1000 and ship-to 1000. a)

System → Create session

b)

SAP ERP menu path: Logistics → Sales and Distribution → Sales → Order → Create (VA01). On the initial screen enter data from the table below and select

c)

d)

Order Type

OR

Sales Organization

1000

Distribution Channel

10

Division

00

Enter the data per the table below: Field

Value

Sold-to party

1000

Ship-to party

1000

PO Number

PO##

Req.del.date

two months from today

Material

R-F4##

Order quantity

10

Select date and

Enter, to confirm if any warnings regarding the billing Save.

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7.

8.

9.

Return to the stock requirements list to see if the planning situation has changed. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting

c)

The sales order should be displayed in it’s own planning segment.

d)

The planned independent requirements have been consumed.

Refresh

In a second session, run a single-item, multi-level MRP run for R-F4## at plant 1000. Use the following parameters for the planning run: Field

Value

Processing Key

NETCH

Create Purchase Req.

1 - Purchase Requisitions

Delivery Schedules

3 - Schedule lines

Create MRP List

MRP List

Planning Mode

1 - Adapt Planning Data

Scheduling

2 - Lead time Scheduling

Also Planning Unchgd comp.

Select

a)

SAP ERP menu path: Logistics → Production → MRP → Planning → Single-Item, Multi-Level Planning (MD02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu

Return to the stock requirements list to see if the planning situation has changed. a)

Go to your other session that should be open.

b)

Refresh the stock/requirements situation by selecting

c)

The planned order has been generated in the sales order planning segment.

d)

This new planned order is a type KD (make-to-order) and can be executed to.

Refresh

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10. From the Stock/Requirements list, display the consumed quantities using the total requirements display for your R-F4## at plant 1000. a)

From within the stock/requirements list: Environment → Total Reqmts display

b)

The original planned independent requirement quantity is displayed. As well as the details of what has consumed this requirement. Hint: This display can also be accessed from the standard menu path. Logistics → Production → Production Planning → Demand Management → Evaluations → Display Total Reqmts Note: MRP should be run again to correctly plan the material based on the increased demand. That is not necessary at this point. But can be done at the students discretion.

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Lesson Summary You should now be able to: • Explain how make to order works in SAP ERP • Demonstrate how to plan at the sub assembly level while still maintaining make to order at the finished good level • Identify several popular planning strategies and their characteristics • Explain the difference between make to order and assembly to order

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Lesson: 199

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Settings and Customizing Lesson Duration: 50 Minutes

Lesson Overview In this lesson, you will learn about customizing settings for MRP.

Lesson Objectives After completing this lesson, you will be able to: •

Customize MRP settings Hint: Setting the Requirement Parameters: In transactions MD61, 62, 63 (Create, change, display planned independent requirements), you can preset the requirements parameters. This function is not advisable if using strategies, and then only for displaying and changing.

Business Example The Precision Pump company constitutes a number of independent business units for manufacturing pumps. While planning for the company products, you need to adjust MRP settings and customize strategies for requirements planning.

Demonstration: Planning with Final Assembly (Strategy 50/52) Purpose To learn about planning with final assembly

System Data System: Client: User ID: Password: Set up instructions: Materials R-F1##, R-B1##, R-B3##, Plant 1000 1. Change material master R-F1##: MRP 3: Strategy group 50, consumption mode 2, and consumption period backward and forward each 30 days.

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2.

Create warehouse stock 10 pieces for R-F1##: Goods receipt → Other → Without Purchase order (movement type 501, storage location 0002).

3.

Create planned independent requirements: 120 pieces R-F1## for current month +2. → Planned independent requirements are displayed in a separate planning segment.

4.

Execute multilevel requirements planning for R-F1##. → R-F1##: VP planned order is created. This cannot be converted to a production order. For details, see conversion indicator in planned order. Existing warehouse stock is not taken into account. → R-B1##: Dependent requirements and convertible planned order in collective segment (I/C=2). In addition, existing warehouse stock is taken into account. → R-B3##: Dependent requirement and non-convertible planned order in planning segment (I/C=blank).

5.

Create customer requirement: 11 pieces R-F1## for the fourth of the current month + 2 and another for 13 pieces for the same date. → Display of customer requirements in individual customer segment, consumption with planned independent requirements.

6.

Change the material master R-F1##: Enter the strategy group 52.

7.

Create additional customer requirements, now with a new strategy: 15 pieces R-F1## for the sixth of the current month + 2, and another for 16 pieces for the same date. → Display customer requirements in collective segment and consumption with planned independent requirements.

8.

Execute multilevel requirements planning for R-F1##. → R-F1##: Convertible customer planned orders for 11 and 13 pieces in individual customer segments, convertible planned order for 15+16-10=21 pieces in the collective segment taking into account the warehouse stock, planned order for 120 -11 -13 -15 -16 = 65 pieces reduced in planning segment. → R-B1##: Planned orders in the collective segment adjusted to fit the new situation as far as dates are concerned. → R-B3##: As R-F1##.

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MRP Settings and Strategy Customizing

Figure 76: Customizing: Planned Indep. Reqmts Management

The planning strategy is an effective procedure for planning a material. You define the planning strategy using a requirements type from planned independent requirements management, a requirements type from sales order management, or by effectively combining both requirements types. The strategy group enables you to combine several planning strategies.

Figure 77: Strategy Groups and Planning Strategies

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You can create the strategy groups in Customizing, that is, in the work step “Defining Strategy Groups”. A strategy group can contain a main strategy and up to seven alternative strategies. You can also create the strategies in the Customizing for Demand Management. You assign the strategy group to the material in the material master record (MRP view) or through the MRP group. When you create the customer requirements or the planned independent requirements, the system uses the customer requirements type or planned independent requirements type defined in the main strategy of the strategy group assigned to the material. You can do this provided that the requirements type is not defined by user parameters or manual entry when creating the planned independent requirements or customer requirements, such as a sales order. You can determine the requirements types that can be used for a material in the alternative strategies. In a sales order, you can access the customer requirements type in the sales order item on the “procurement” tab. You can also determine the customer requirements type from the item type of the sales order if no strategy group has been assigned to the material. For example in Customizing for SD, specify the work step “Determination of Requirements Type Using Transaction”.

Figure 78: Requirement Types and Classes

Generally, a planning strategy groups two requirements types - for planned independent requirements and for customer requirements.

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The requirements type is allocated to exactly one requirements class. Therefore, the requirements class represents a kind of “values list” for the settings of the requirements type. This means that any changes to the requirements type are made through the corresponding requirements class. In the requirements class, you control how the customer requirements should be settled against the planned independent requirements. The definition of the requirements class is made in the Customizing for Demand Management for planned independent requirements classes and in the Customizing for SD for customer requirements classes. The requirements class controls requirements-relevant functions for sales orders in logistics. In the requirements class, you define the type of availability check, whether the requirement is relevant to MRP (“No MRP” field), and which type of consumption is to be executed (“Assignment indicator” field). The exact type of assembly processing is defined using the customer requirements type of the corresponding sales order. You also save specifications used in cost accounting, such as in the settlement profile for settling a requirements class.

Demonstration: MRP Settings in the Material Master, MRP Group, and Plant Purpose To learn about MRP settings in material master, MRP Group, and Plant

System Data System: Client: User ID: Password: Set up instructions: 1. Display the material master R-F1##: MRP 1: Explain the MRP group field. MRP 3: Display the settings for consumption. The same settings are also possible in the MRP group. 2.

Display the MRP group 0031 in Customizing: Consumption/adjustment: You can set up consumption and adjustment in the MRP group. Display the planning horizon. This can also be entered in the plant.

3.

244

Display the plant parameters in Customizing:

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Display the planning horizon

Demonstration: Customizing Planned Independent Requirements Management Purpose To learn about customizing PIR management

System Data System: Client: User ID: Password: Set up instructions: 1. Display and explain the following fields and functions in the Customizing for Demand Management and Sales and Distribution: Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → ...... Customizing: Sales and Distribution → Basic Functions → Availability Check and Transfer of Requirements → Transfer of Requirements → ....... 2.

Strategy:The strategy is defined by entering a planned independent requirement type and a customer requirement type. Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Planning Strategy → Define Strategy

3.

Strategy group:Definition of main and secondary strategy Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Planning Strategy → Define Strategy Group

4.

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Requirement types:

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Strategy for determining the requirements type (from documentation) 1. 2. 3.

4.

First, the system tries to find a requirements type using the strategy group from the material master. If the strategy group in the material master is not maintained, the system determines it using the MRP group. If the MRP group is not defined, the system uses the material type while accessing the corresponding control tables. According to Martin Preiss, this is no longer relevant as it is a relic from the transition of R/2 to R/3. For the customer requirement type: If the system does not find a requirement type here, the system assumes a special rule and tries to locate a requirement type with the aid of the item category and the MRP type. Customizing: Sales and Distribution → Basic Functions → Availability Check and Transfer of Requirements → Transfer of Requirements → Determination of Requirement Types Using Transaction

5. 6.

If this is not possible, the system makes a final attempt to find a requirements type using only the item category. If the last attempt fails, the system declares that the transaction is not relevant for the availability check and the transfer of requirements. Message output for invalid requirements type: Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Requirements Types/Requirements Classes → Message Output for Invalid Requirements Type The check occurs against the requirements types defined in main strategy and secondary strategies assigned in respective strategy group. The way in which a requirements type works is determined by assigning a requirements class. Changes to a requirements type occur using the corresponding requirements class. Changes to a requirements type occur using the corresponding requirements class. Independent requirements type: .......Requirements Types/Requirements Classes → Define Requirements Types and Allocate Requirements Class Customer requirements type: .......Define Requirements Types

5.

Requirements classes: Planned independent requirements classes:

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......Requirements Types/Requirements Classes → Maintain Requirements Classes Customer requirements class: ......Define Requirements Classes 6.

Consumption mode, consumption period: In material master (MRP 3) or for each MRP group: Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups or Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Maintain consumption mode and period of adjustment Default values for consumption type for each requirements class: Determination of concrete requirements (customer requirement, dependent requirement, reservations) with which consumption occurs. Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Default Values and Presettings → Define default values for consumption type per requirements class

7.

Period of adjustment (per MRP group): Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups or Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Maintain consumption mode and period of adjustment

8.

Reorganization interval (per plant): Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Define the reorganization interval

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Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. Discuss the various requirements types and classes.

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Lesson: Settings and Customizing

Lesson Summary You should now be able to: • Customize MRP settings

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Unit Summary

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Unit Summary You should now be able to: • Explain where Demand Management is in the flow of the supply chain planning process. • Demonstrate various functions in Demand Management • Explain how make to stock and make to order will be represented in SAP ERP • Explain how Net Requirments planning differs from Planning with Final Assembly • Demonstrate how to plan at the sub assembly level • Explain the concepts of Consumption and Reduction • Identify several popular planning strategies and their characteristics. • Explain how make to order works in SAP ERP • Demonstrate how to plan at the sub assembly level while still maintaining make to order at the finished good level • Identify several popular planning strategies and their characteristics • Explain the difference between make to order and assembly to order • Customize MRP settings

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Test Your Knowledge 1.

How does Demand Management interact with the planning tools?

2.

There is only one version of planned independent requirements. Determine whether this statement is true or false.

□ □

True False

3.

Explain the difference between Planned Independent Requirements and Customer Independent requirements.

4.

What are two benefits of using customer independent requirements?

5.

In the make to stock environment; procurement can be executed prior to the actual sales demand being reveived. Determine whether this statement is true or false.

□ □ 6.

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True False

In the make to order environment what event must take place before procurement may be started?

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7.

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MTS planning strategies 10 and 11 do not consider customer orders so they are not displayed on the stock requirements list. Determine whether this statement is true or false.

□ □

True False

8.

Explain the term “consumption” from the standpoint of Demand Management.

9.

With MTS strategy 40 (Planning with final assembly) , the final assembly can not be completed until the receipt of a sales order. Determine whether this statement is true or false.

□ □

True False

10. If demand fluctuates, but production is always used to full capacity, what planning strategy makes most sense?

11. With planning strategy 70 , Planning at Assembly Level, there is consumption of planned independent requirements by dependent requirements. Explain.

12. If you designate backward/forward consumption with a backward period of 30 days and forward period of 20 days, the system will consume past requirements for a period of 30 calendar days before consuming any future requirements. Determine whether this statement is true or false.

□ □

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True False

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Test Your Knowledge

13. With the MTO strategy planning without final assembly, what triggers the production of the sub-assemblies and components?

14. What is the “stocking level”?

15. This material master field indicates whether or not a component will be planned collectively or with direct pegging to a requirement.

16. What is the main difference between “assemble-to-order” planning strategies and “make-to-order” planning strategies?

17. While customizing MRP settings, you assign the strategy group to the material in the material master record or through the

.

Fill in the blanks to complete the sentence.

18. Choose the true statement (s) Choose the correct answer(s).

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□ □ □

A B C

□

D

Strategy groups can contain up to seven main planning strategies. A strategy group will contain one main planning strategy. The main planning stategy will indicate the “default” requirement type when entering independent requirements Strategy groups are only necessary for the materials for which independent demand will be placed

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19. The configuration of the planning strategy is made up a a requirements type for independent requirement and a requirements type for Fill in the blanks to complete the sentence.

20. The configuration of the requirements types is the assignment of a Fill in the blanks to complete the sentence.

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Answers 1.

How does Demand Management interact with the planning tools? Answer: Demand management determines what quantities should be considered as demand.

2.

There is only one version of planned independent requirements. Answer: False Multiple versions may be maintained. Although usually only one is active.

3.

Explain the difference between Planned Independent Requirements and Customer Independent requirements. Answer: The difference is how they are treated in the planning run. Planned independent requirements are projections (forecast). The planning run treats Customer Independent Requirements exactly as it would a true sales order.

4.

What are two benefits of using customer independent requirements? Answer: 1) They are very efficient for testing. 2) They could be used to model customer demand if the SD module is not implemented.

5.

In the make to stock environment; procurement can be executed prior to the actual sales demand being reveived. Answer: True True, procurement may take placed simply based on planned independent requirements.

6.

In the make to order environment what event must take place before procurement may be started? Answer: Actual sales demand must be entered.

7.

MTS planning strategies 10 and 11 do not consider customer orders so they are not displayed on the stock requirements list. Answer: False They can be displayed for information only.

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8.

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Explain the term “consumption” from the standpoint of Demand Management. Answer: This is the settling of customer orders against planned independent requirements. The customer orders “consume” the PIR’s

9.

With MTS strategy 40 (Planning with final assembly) , the final assembly can not be completed until the receipt of a sales order. Answer: False In Planning with final assembly, execution may take place prior to an actual sales order being taken.

10. If demand fluctuates, but production is always used to full capacity, what planning strategy makes most sense? Answer: Strategy 10 - Make to stock 11. With planning strategy 70 , Planning at Assembly Level, there is consumption of planned independent requirements by dependent requirements. Explain. Answer: PIR are entered for the assembly, triggering production. When the sales order is received for the finished product, the BOM is exploded resulting in dependent requirements for the assembly. These dependent requirements are settled against the PIR for the assembly. 12. If you designate backward/forward consumption with a backward period of 30 days and forward period of 20 days, the system will consume past requirements for a period of 30 calendar days before consuming any future requirements. Answer: False The consumption period is in working days. 13. With the MTO strategy planning without final assembly, what triggers the production of the sub-assemblies and components? Answer: MRP is carried out for the planned independent requirements of the final assembly, resulting in dependant req’t and planned orders for the sub-assemblies and components.

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14. What is the “stocking level”? Answer: The level up until which the material is produced before the sales order is received. 15. This material master field indicates whether or not a component will be planned collectively or with direct pegging to a requirement. Answer: The individual / collective indicator. 16. What is the main difference between “assemble-to-order” planning strategies and “make-to-order” planning strategies? Answer: With ATO , production orders are created automatically when sales orders are received. With MTO , the MRP process must be carried out to generate planned orders, which are then converted to production orders. 17. While customizing MRP settings, you assign the strategy group to the material in the material master record or through the MRP group. Answer: MRP group 18. Choose the true statement (s) Answer: B, C, D B,C and D are all true. There may be seven sub strategies. 19. The configuration of the planning strategy is made up a a requirements type for independent requirement and a requirements type for Customer requirements. Answer: Customer requirements. 20. The configuration of the requirements types is the assignment of a requirements class. Answer: requirements class.

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Unit 5 Master Production Scheduling

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Unit Overview This unit will introduce you to the concept of MPS from a business process stand point and how various tools in SAP ERP will be used to support the MPS process in supply chain planning.

Unit Objectives After completing this unit, you will be able to: • •

Explain how master production scheduling will fit into the production planning process Demonstrate how to execute and MPS planning run.

Unit Contents Lesson: Master Production Scheduling ......................................260 Demonstration: Defining Master Scheduling Items ....................261 Demonstration: Executing and MPS run ................................264 Exercise 8: Master production scheduling (MPS) and material requirements planning (MRP).............................................265

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Lesson: 214

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Master Production Scheduling Lesson Duration: 25 Minutes

Lesson Overview In this lesson, you will learn about master production scheduling and its relationship with MRP in the overall production planning process.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain how master production scheduling will fit into the production planning process Demonstrate how to execute and MPS planning run.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Several of your products sell direct from the distribution centers. This demand must explode back to the production facility where there are several work centers that are highly utilized. To ensure proper customer service, only plan the finished pump production so that capacity planning may be done on those resources that are overloaded.

An Overview to MPS Planning Master Production Scheduling (MPS) enables you to plan materials that influence a company’s profits or use critical resources. Therefore, these materials need to be planned carefully. For these materials, the master production schedule is initially defined on the level of this critical or important material. This is done before the dependent assemblies and purchased parts are planned and procured. This means that changes made to these critical parts are not copied to the dependent parts. This helps avoid any disruption arising during production and procurement of purchased parts.

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Lesson: Master Production Scheduling

Figure 79: Master Production Scheduling and Material Requirements Planning (1)

You plan the master schedule items, MPS items, and the non-master schedule items in separate planning runs. You can specify finished products or assemblies for MPS items, provided that you have entered a corresponding MRP type per plant or per MRP area in the “MRP 1” view of the material master. You must define the MRP procedure “M”, which is MPS item procedure, in this MRP type in Customizing for MRP types (Customizing activity “Check MRP types”). The MPS run only plans the MPS items. MPS is executed with the same logic as MRP but without planning materials that are not labeled as MPS items. Dependent requirements are created for the next low-level code, but planning is not executed for these items unless they become MPS items. The results of MPS are not passed to dependent parts till the master plan for the critical parts has been processed and fine-tuned. The MPS items are not planned along with the MRP run to ensure that you can plan these materials independently.

Demonstration: Defining Master Scheduling Items Purpose To explain the process of master scheduling

System Data System: Client: User ID:

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Password: Set up instructions: 1. Change the material master for material R-F2## plant 1000: In the MRP 1 view, enter the MRP type M1 with the MRP procedure “M”, which is defined in the Customizing of the MRP type. Enter a planning time fence of 10 days. Save. 2.

Display the planning file entry for material R-F2##: The MPS item indicator is set. Now, the material is a part of the master production scheduling run rather than that of the normal MRP run.

MPS Planning Process Firming Master schedule items have to be planned with increased attention and the corresponding capacity load may have to be adjusted. Therefore, firming the master production schedule is important in master production scheduling.

Figure 80: Master Production Scheduling and Material Requirements Planning (2)

There are two steps in the total MPS run:

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Lesson: Master Production Scheduling

MPS plans the MPS items on the basis of the requirements that exist for these parts, such as planned independent requirements. The MPS run generates planned orders for the MPS items and the corresponding dependent requirements on the BOM level below. The second is capacity leveling. Capacity leveling is possible if lead-time scheduling is performed during the MPS run. Lead time scheduling will be discussed in another lesson. MRP plans the other assemblies and components in the BOM structure. You can combine both steps by setting the indicator “Process MRP materials” in the initial screen.

Figure 81: Firming in Long-Term Planning

With the help of the firming period, you can protect the MPS schedule for MPS items from being automatically changed. This makes planning easy. Within the firming period that is defined individually for each material, procurement proposals are not automatically changed during the MRP run. You should define the firming period with reference to the total lead time of the material. In the above example, the order finish date of the planned order, E1, lies one day before the end of the firming period. The system treats it as firmed and does not automatically reschedule it. Therefore, the master production schedule for the components is stabilized. You can define the firming period using the planning time fence or a manual firming date. In addition, you can manually firm or unfirm planned orders.

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The system draws your attention to any possible changes to the MPS in the form of an exception message in the MRP list. It is up to the MRP controller to process these changes. Note: Firming or the planning time fence is not limited to MPS. It is controlled by the configuration of the MRP type of a material.

Demonstration: Executing and MPS run Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Demonstrate the exercises.

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Lesson: Master Production Scheduling

Exercise 8: Master production scheduling (MPS) and material requirements planning (MRP) Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Explain the relationship between Master Production Scheduling (MPS) and Material Requirements Planning (MRP)

Business Example Some finished products, including pump R-F2## use critical resources. Therefore, you should define these as master production items and plan these separately. You do this in order to review the plan results, evaluate capacity, and make any necessary changes. While doing this, you do not want to waste time and energy planning the lower level components as the requirements dates are likely to change.

System Data System: Client: User ID: Password: Set up instructions: Prior to the students performing this exercise, the instructor will need to run a Plant wide MRP run.

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Field

Value

Processing key

NETCH

Create Purchase req.

1

Schedule Lines

3

Create MRP list

1

Planning mode

3

Scheduling

2

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Task 1: Setup Master Production Scheduling in SAP ERP Demand on your pump R-F2## has been erratic and capacity to manufacture the pump is limited. Due to this situation, as a planner, you want to look at the results of the planning run prior to exploding the rest of the Bill of Material. Set the material R-F2## at plant 1000, to an MPS item, execute a planning run and review the results and make changes as necessary. 1.

To better understand the MPS functionality, we will create some demand in the short term. Enter the following demand, in weekly buckets starting from the 2nd period, into your active version of demand management for R-F2## at plant 1000. Period

Week 2

Week 3

Week 4

Week 5

Week 6

Amount

20

10

10

10

10

2.

From the Stock/Requirements list change material R-F2## in plant 1000 to a master schedule item, fixing type 1. In addition you promised the production manager that you would freeze the schedule for two weeks. Insert a Planning time fence of 10 working days.

3.

What affect did the changes have, and why?

4.

What affect will the Fixing Type 1 have on the planning run?

5.

Check the planning file. Which of the following indicators are set? MPS Indicator ____ NChge plng ____ NChgePHor. ____

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Lesson: Master Production Scheduling

Task 2: Executing an MPS processes in SAP ERP Now that you have set your material R-F2## to an MPS item and have indicated the need for using a planning time fence. Execute a Single-item, Single-level MPS run. 1.

From the Stock/Requirements list execute single-item, multi-level planning for the material R-F2## in the plant 1000 (MD02). Is this possible? _____________

2.

Execute single-item, single-level planning for master schedule items (MD42) for the material R-F2## in the plant 1000 from the menu of master production scheduling. Use the following parameters Field

Value

Processing key

NETCH

Create purchase req.

1

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

2

Task 3: Evaluate the MPS run results Now that you have executed an MPS run for you product R-F2## at plant 1000, you must review the plan results. Check the capacity situation of the resources involved. If you have sufficient capacity, reschedule the items inside the fence using simulative MRP to make sure all components will be available as well. 1.

Now that your MPS run has completed for R-F2## at plant 1000, view the results in the stock requirements list. Are the planned independent requirements now covered by corresponding procurement elements?

2.

From the Stock/Requirements list, access the capacity situation for the resources pertinent to the production of R-F2##. Review the detailed capacity in weekly buckets. Are there any overloads? Is there enough capacity to plan production in the current period or next period?

3.

Execute a single item, multi-level MPS run in simulation mode for R-F2## at plant 1000.. Check to see if the dependent requirements created by the MPS run can be replenished in time to support the requirements date of R-F2## at plant 1000. Use the following planning parameters:

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Field

Value

Processing key

NETCH

Create purchase req.

1

Delivery schedules

3

Create MRP list

1

Planning mode

3

Scheduling

2

Also plan unchanged components Select Simulation mode

Select

Note: Upon selecting the Simulation Mode the detailed materials list indicator will automatically be set.

268

4.

Are there any delays for the planned orders for R-F2## that lie outside the planning time fence? Will Rescheduling the orders to the “reschedule data” improve or worsen the delays. Exit the planning run without saving.

5.

Remove the settings from Task 1 for material R-F2## in plant 1000 by setting the MRP type back to “PD”. Save the material master.

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Lesson: Master Production Scheduling

Solution 8: Master production scheduling (MPS) and material requirements planning (MRP) Task 1: Setup Master Production Scheduling in SAP ERP Demand on your pump R-F2## has been erratic and capacity to manufacture the pump is limited. Due to this situation, as a planner, you want to look at the results of the planning run prior to exploding the rest of the Bill of Material. Set the material R-F2## at plant 1000, to an MPS item, execute a planning run and review the results and make changes as necessary. 1.

To better understand the MPS functionality, we will create some demand in the short term. Enter the following demand, in weekly buckets starting from the 2nd period, into your active version of demand management for R-F2## at plant 1000. Period

Week 2

Week 3

Week 4

Week 5

Week 6

Amount

20

10

10

10

10

a)

Follow SAP ERP menu path Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Change (MD62)

b)

Enter material R-F2## plant 1000. Set the Planning period to W -Weeks

c)

Press ENTER

d)

Enter the quantities from the above chart starting in the 2nd week

e)

When finished select

Save

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2.

3.

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From the Stock/Requirements list change material R-F2## in plant 1000 to a master schedule item, fixing type 1. In addition you promised the production manager that you would freeze the schedule for two weeks. Insert a Planning time fence of 10 working days. a)

Follow SAP ERP menu path Logistics → Production → MRP → Evaluations→ Stock/Requirements List (MD04)

b)

Enter Material R-F2## at plant 1000, and press ENTER

c)

Follow the menu path:Environment → Change material .

d)

In the MRP 1 view, change the MRP type to M1 - MPS, Fixing Type 1, and set the Planning Time Fence to 10 days.

e)

Select F1, field level help for information regarding the calculation of days.

What affect did the changes have, and why? Answer: From the Stock/Requirements list you can see the MRP type has changed. In addition, a MRP segment has been created 10 days from the current date, stating the end of the planning time fence. This was caused by using the MRP type that allowed use of a planning time fence and setting the planning time fence to 10 days.

4.

What affect will the Fixing Type 1 have on the planning run? Answer: Any existing orders inside the planning time fence will be firmed. This is identifiable by the * after the planned order number. Note the Planning time fence does not set the firming indicator in the planned order. This is in case a user changes the MRP type or the length of the planning time fence. The system may need to replan/remove those orders previously firmed by the MRP type. In addition, if any new requirements fall inside the fence, during the next planning run new orders will be created and scheduled backwards from the planning time fence.

5.

Check the planning file. Which of the following indicators are set? MPS Indicator ____ NChge plng ____ NChgePHor. ____ a)

From the Stock/Requirements list select Display Planning File Entries.. Note this icon was place in the S/R list by the navigation profile. or Logistics → Production → MRP → Planning → Planning File Entry → Display (MD21)

b)

Indicators set in the planning file: MPS indicator: yes NChge plng yes NChgePHor. yes Continued on next page

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Lesson: Master Production Scheduling

Task 2: Executing an MPS processes in SAP ERP Now that you have set your material R-F2## to an MPS item and have indicated the need for using a planning time fence. Execute a Single-item, Single-level MPS run. 1.

2.

From the Stock/Requirements list execute single-item, multi-level planning for the material R-F2## in the plant 1000 (MD02). Is this possible? _____________ a)

Follow SAP ERP menu path Logistics → Production → MRP → Evaluations→ Stock/Requirements List (MD04)

b)

From inside the Stock/Requirements list select Sng-item, Multi-Lvl

c)

Single-item, multi-level planning for master schedule items possible: No

Execute single-item, single-level planning for master schedule items (MD42) for the material R-F2## in the plant 1000 from the menu of master production scheduling. Use the following parameters Field

Value

Processing key

NETCH

Create purchase req.

1

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

2

a)

SAP ERP menu path:Logistics → Production → Production Planning → MPS → Master schedule items→ Single-Item, Single-Level (MD42)

b)

Select Enter twice.

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Task 3: Evaluate the MPS run results Now that you have executed an MPS run for you product R-F2## at plant 1000, you must review the plan results. Check the capacity situation of the resources involved. If you have sufficient capacity, reschedule the items inside the fence using simulative MRP to make sure all components will be available as well. 1.

2.

Now that your MPS run has completed for R-F2## at plant 1000, view the results in the stock requirements list. Are the planned independent requirements now covered by corresponding procurement elements? a)

Follow SAP ERP menu path Logistics → Production → MRP → Evaluations→ Stock/Requirements List (MD04)

b)

Planned independent requirements covered by procurement elements: Yes. However, due the planning time fence several orders were created outside the fence. This was a result of using an MRP type with fixing type 1.

From the Stock/Requirements list, access the capacity situation for the resources pertinent to the production of R-F2##. Review the detailed capacity in weekly buckets. Are there any overloads? Is there enough capacity to plan production in the current period or next period? a)

From the Stock/Requirements list follow menu path: Goto → Capacity situation .

b)

select Detailed Planning and Weeks, then select

c)

To review any overloads at related work centers select Overload

d)

There are NO overloads in the current period or next period for the

Continue (Enter).

work centers related to the production of R-F2##. Select (Enter)to return to the Detailed Planning screen.

3.

Continue

e)

In the Utilization per period report, review the available capacity for the next two weeks and compare it to the capacity requirements for the Material in week three.

f)

There is adequate capacity at all resources to support production requirements for the R-F2##.

g)

Exit the Detailed Planning screen.

Execute a single item, multi-level MPS run in simulation mode for R-F2## at plant 1000.. Check to see if the dependent requirements created by the MPS run can be replenished in time to support the requirements date of R-F2## at plant 1000. Use the following planning parameters:

Continued on next page

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Field

Value

Processing key

NETCH

Create purchase req.

1

Delivery schedules

3

Create MRP list

1

Planning mode

3

Scheduling

2

Also plan unchanged components Select Simulation mode

Select

Note: Upon selecting the Simulation Mode the detailed materials list indicator will automatically be set.

4.

a)

SAP ERP menu path:Logistics → Production → Production Planning → MPS → Master schedule items→ Single-Item, Multi-Level (MD41)

b)

Press ENTER twice. Confirm any warning messages.

c)

Select material R-F2## and select Display the planning results of the selected materials

d)

Select

Execute planning run

Are there any delays for the planned orders for R-F2## that lie outside the planning time fence? Will Rescheduling the orders to the “reschedule data” improve or worsen the delays. Exit the planning run without saving. Answer: Varies. If Delays already exist for those orders outside the planning time fence with rescheduling dates, moving the orders up (closer to today) will only increase the delays. Therefore, the orders can not be moved in any closer even though capacity exists for all work centers.

5.

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Remove the settings from Task 1 for material R-F2## in plant 1000 by setting the MRP type back to “PD”. Save the material master. a)

Follow the SAP ERP menu path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately

b)

Select material R-F2##, select MRP 1 and plant 1000.

c)

After making the changes select

Save.

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Lesson Summary You should now be able to: • Explain how master production scheduling will fit into the production planning process • Demonstrate how to execute and MPS planning run.

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Unit Summary

Unit Summary You should now be able to: • Explain how master production scheduling will fit into the production planning process • Demonstrate how to execute and MPS planning run.

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Unit Summary

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Test Your Knowledge 1.

What purpose does MPS serve?

2.

If you do not review the exception messages or capacity prior to planning the entire BOM, than MPS is not a step you need in your planning process? Determine whether this statement is true or false.

□ □ 3.

True False

If an item is marked as an MPS item you can not plan down to its required raw material. Determine whether this statement is true or false.

□ □ 4.

True False

The planning time fence is only a function of MPS? Determine whether this statement is true or false.

□ □

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True False

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Answers 1.

What purpose does MPS serve? Answer: MPS allows a planner to limit the bill of material explosion during a planning run. This is done in order to review capacity and exception messages in order to make changes prior to planning the balance of the Bill of Material items.

2.

If you do not review the exception messages or capacity prior to planning the entire BOM, than MPS is not a step you need in your planning process? Answer: True Processing exception messages and capacity planning are the two main reasons for Master Production Scheduling.

3.

If an item is marked as an MPS item you can not plan down to its required raw material. Answer: False You can plan down to the raw material by running a single-item, multilevel MPS run, or Executing total planning and selecting the process MRP materials, or set all materials down to the raw materials as MPS items.

4.

The planning time fence is only a function of MPS? Answer: False The planning time fence can be used during an MPS or MRP run. This controlled by the MRP type and how the firming functionality is configured.

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Unit 6 Influencing the Planning Run

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Unit Overview This unit will introduce you to various techniques of influencing the output of the planning run. It will involve defining how order quantities are calculated as well as interpreting various types of demand in the planning run.

Unit Objectives After completing this unit, you will be able to: • • • • • • • • • • •

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Explain how the planning run works in detail. Describe the different methods of modeling buffers in the planning run Demonstrate how several of the different methods of safety stock work Demonstrate how Lot size techniques an influence the size of a planned orders Demonstrate how use several fields in the material master to influence the size of a planned order Explain how planning calendars can be used to specifically coordinate the quantity and timing of receipts. Explain the configuration process of Lot Size techniques. Explain how to perform Cross location planning in SAP ERP Demonstrate how cross location planning work in SAP ERP Demonstrate how to initiate a continuous output for a long production run Demonstrate how to initiate continuous input for components that will not be used discretely but continuously

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Unit Contents Lesson: Net Requirements Calculation ......................................281 Demonstration: Rescheduling Check ....................................287 Lesson: Using Buffers in Planning............................................291 Demonstration: Static Safety Stock ......................................293 Demonstration: Safety Stock Calculation ...............................296 Procedure: Calculated Safety Stock .....................................298 Demonstration: Safety Stock Partially Available .......................300 Procedure: Safety Stock Partially Available ............................302 Demonstration: Dynamic Safety Stock ..................................307 Demonstration: Safety Time .............................................. 311 Exercise 9: Dynamic Safety Stock .......................................313 Lesson: Controlling order quantities in the planning run...................324 Demonstration: Periodic lot sizes ........................................329 Demonstration: Planning Calendar ......................................330 Demonstration: Rounding .................................................334 Demonstration: Special Lot-Sizing Procedures ........................338 Exercise 10: Controlling Order Quantities in the Planning Run ......339 Lesson: Multi-Site Planning ...................................................345 Demonstration: One Step Stock Transfer ...............................348 Demonstration: Two Step Stock Transfer Posting .....................350 Demonstration: Demonstrate Two Step Stock Transfer Without delivery.......................................................................355 Demonstration: Demonstrate withdrawal from another facility .......361 Demonstration: Demonstrate Production in another plant ............364 Exercise 11: Multi-Site Planning .........................................365 Lesson: Continuous Input/Output.............................................370 Exercise 12: Continuous Input/Output in the Planning Run (OPTIONAL).................................................................377

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Lesson: 235

Lesson: Net Requirements Calculation

Net Requirements Calculation Lesson Duration: 20 Minutes

Lesson Overview In this lesson we will briefly discuss what is net requirements calculation and how can we influence the result of the planning run.

Lesson Objectives After completing this lesson, you will be able to: •

Explain how the planning run works in detail.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example As a production planner you are responsible for a the results of the planning run. In order to manage the business properly you need to ensure the accuracy of your planning run results. Review how the MRP process will work in order to better understand how to influence the results.

Details of the Planning Run Low-Level code has already been discussed in the Methods for Executing a planning run lesson. Based on the level of understanding, the instructor must decided how much time to spend on this section. If you have many experienced planners, gloss over it and move on to the next section. In order to better understand how the calculations are being performed, we need to look at how the process as a whole is going to take place. Is SAP ERP, the planning run process takes place in a “Level-by-Level” methodology. Level-by-Level refers that during the planning run, all finished goods will be run first then, all materials at the next level of the bill of material followed by the next level, and so on till the raw materials are planned.

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Figure 82: Low Level Code

Some components may appear in several products and in several production levels of a product. The low-level code represents the lowest level of usage of a material within all product structures. It determines the sequence in which the materials are planned. The system plans materials with the low-level code 0 first and then those with 1 and so on. The lower the low-level code is, the higher the number assigned to the level. The low-level code is stored in the BOM management program in the material master (Additional data, ) and is entered in the planning file. If a planner is concerned with the correctness of the low-level code, by the consistency check of the planning file entry in requirements planning should also correct the low-level codes in table ’Entry in MRP File’. Use the menu path Logistics → Production → MRP → Planning → Planning file entry → Consistency check. Note: The consistency check calls up report RMMDVM10 internally which adjusts the low-level codes in field MDKEY in table MDVM to the low-level codes of table MARA. As a planner who is responsible for the production and procurement of materials it is your responsibility to understand how the calculations are being performed during the planning runs. In having a better understanding of how the calculations work, a planner has more opportunity to influence the out come of planning run.

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Figure 83: MRP Process

Knowing how the system will process the numerous materials during a planning run, we have to consider what affect it will have. By processing the materials by low-level code, planners will have the opportunities to cover several sets of requirements with one replenishment element if that is their choice. Note: Planners must be aware that it is that function of the a planned order creating the depended demand not the planning run. The Planning run, creates planned orders, which copy the bill of material, and are then scheduled, thus determining the quantity and the timing of the dependent demand.

Calculation in the Planning Run The net requirements calculation is the first step in the MRP run and is executed at the plant level or MRP area level. During the MRP run, the system checks whether or not the demand (requirements) can be met by the supply (on hand inventory and fixed receipts).

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Figure 84: Overview: Net Requirements Planning

Here are some examples of various demands considered during the planning run: • • • • • • •

Planned independent Requirements (strategy dependent) Customer requirements (Sales orders/Deliveries/Schedule Lines - strategy dependent) Dependent demand from planned orders Order reservations from production/process orders Material reservations from goods movement request Stock transfer requests/orders (outbound ) Safety stock

Here are some examples of fixed receipts: • • • • •

Production/Process orders Firmed Planned orders Purchase orders Firmed Purchase requisitions Stock Transfer order ( inbound )

When comparing demand to supplies, if shortages exist, the system creates a procurement proposal.

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Figure 85: Net Requirements Calculation

In MRP, a net requirements calculation is executed in the planning run to determine whether or not a material shortage exists for a particular material. In addition, stock and fixed receipts that currently exist, such as purchase orders, production orders, fixed purchase requisitions, and planned orders, are compared with the safety stock and requirements to determine the quantity available for planning. The stock available for planning combines the following stock from all the storage locations that belong to this plant or MRP area and are not excluded from MRP or planned separately: Stock that is usable without restrictions, quality inspection stock, consignment store stock that is usable without restriction, and consignment store stock in quality inspection. In the Customizing a company can decide wether certain stock types are relevant for planning. In the IMG,Production → MRP → Planning → MRP Calculation → Stocks → Define Availability Stock in Transfer/Blocked Stock/Unrestricted Stock, you can define for each plant whether or not the stock in transfer from plant-to-plant stock transfers is included in the plant stock, whether the blocked stock or restricted stock for batches is included in plant stock. If the quantity available for planning is less than zero, a material shortage exists. MRP reacts to material shortages by creating new procurement proposals, that is, by creating purchase requisitions or planned orders, independent of the procurement type. The suggested procurement quantity results from the lot-sizing procedure that is set in the material master.

Rescheduling Horizon One consideration planners will have to consider is how scheduling will be affected by firmed receipts. Firmed receipts are not

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Figure 86: Rescheduling Check for Firmed Receipts

The planning run does not automatically reschedule firmed receipts. If the dates of these elements no longer fall within the rescheduling horizon, the system generates the following exception messages: • • •

“Reschedule in operation”: If the requirements date is less than that of the receipt element. “Reschedule out operation”: If the requirements date is greater than that of the receipt element. “Reverse operation”: If the requirement no longer exists.

Using the rescheduling horizon, you can stop the system from using receipts that are a long time into the future to cover the requirements in the near future. In this case, the system checks within the period, consisting of the in-house production time, goods receipt processing time, and the rescheduling horizon (starting from the planning date), to see whether or not the existing dates for firmed receipts are still suitable or whether or not the firmed receipts can be rescheduled to cover requirements. In Customizing, you define at the plant level which firmed receipts the system checks. You can maintain the rescheduling horizon and the tolerance values for each plant and each MRP group. If the system cannot find a receipt element within the rescheduling horizon that can be rescheduled in or out to cover requirements, the system creates a new receipt element. The rescheduling check of firmed elements is not restricted to a horizon.

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To reduce the number of exception messages, you can set tolerance values for rescheduling in and out. The system only creates an exception message when the difference between the current receipt date and the rescheduling date exceeds the tolerance value.

Demonstration: Rescheduling Check Purpose To demonstrate rescheduling check for firmed receipts.

System Data System: Client: User ID: Password: Set up instructions: Show the Customizing settings for the rescheduling check: Rescheduling horizon, tolerance value, firmed elements 1.

In the plant parameters: Customizing: Production → Material Requirements Planning → Plant Parameters → Carry Out Overall Maintenance of Plant Parameters → Select Maintain → Enter Plant 1000 → Select Maintain → Rescheduling.

2.

In the settings for the MRP group Customizing: Production → Material Requirements Planning → MRP Groups → Carry Out Overall Maintenance of MRP Groups → Enter Plant 1000 → Select Maintain → Enter MRP Group 0031 → Select Maintain→ Rescheduling horizon. Optional Demo for Rescheduling Check (Firming Demo Continued) Starting point: The customer independent requirement was increased by 15 pieces; the subsequent planning run creates an unfirmed planned order with more than 15 pieces with the exception message, “Schedule operation on time”, for the end of the firming area defined here by the manual firming date;

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Single-item, interactive: 1.

2. 3.

4. 5.

288

Create additional planned orders with more than 12 pieces with the order finish time today in 2 months; the planned order is firmed due to manual creation. Rescheduling key → both planned orders receive the exception messages, “Schedule operation on time” and/or “Bring forward”. Execute planning → the first unfirmed planned order is reduced from 15 to 3 pieces and retains the exception message, “Schedule operation on time”; the second firmed planned order retains the original date with the original quantity of 12 pieces and retains the exception message, “Bring forward”; the firmed elements are first considered for planning and the rescheduling check and then the unfirmed. Reschedule both the planned orders, save the orders, and refresh the stock/requirements list. Reschedule the date of the planned order to two days before the rescheduling date to explain the tolerance values; the rescheduling date disappears.

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Lesson: Net Requirements Calculation

Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain how the planning run works in detail.

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Lesson: 243

Lesson: Using Buffers in Planning

Using Buffers in Planning Lesson Duration: 30 Minutes

Lesson Overview This lesson describes net requirements planning by taking safety stock and dynamic safety stock into account. It also describes the quantity and time buffers used to calculate demand.

Lesson Objectives After completing this lesson, you will be able to: • •

Describe the different methods of modeling buffers in the planning run Demonstrate how several of the different methods of safety stock work

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Due to an imperfect planning and manufacturing process, you are constantly faced with shortages of materials due to scrap during manufacturing, delays in production or delays in the delivery of externally procured products. Demonstrate how using several fields in the material master will allow planners to account for these types of problems without affecting service.

Buffers in Planning Due to an imperfect planning and manufacturing process, you are constantly faced with shortages of materials due to scrap during manufacturing, delays in production, or delays in the delivery of externally procured products. While faced with these realities, planners must have a methods of accounting for these short falls or delays, so that customer service is not negatively impacted. Planners usually use some time of quantity or time buffer to offset these problems. Here are some methods of counter acting delays and shortages: • • • •

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Safety stock Safety stock partially available Dynamic safety stock Safety time

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There are two types of buffers that you can plan to take into account uncertainties in the development of demands: • •

Quantity buffer: Safety stock, partially available safety stock, and dynamic safety stock Time buffer: Safety time

Static Safety stock in the Planning Run One of the quantity based methods of buffering against production shortages or delays is the use of Safety stock. There are two philosophies regarding safety stock 1. 2.

Safety stock should never be used Some portion of safety stock can be used to offset expensive delays.

Figure 87: Static Safety Stock

You can define the safety stock level per material plant in the “MRP 2 view” of the material master or per MRP area in the MRP area segment. Safety stock acts as a requirement during the planning run thus reduces the stock available for planning. Upon entering a value in the material master, the safety stock is valid until the end of time and is effective immediately, based on the system date.

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The safety stock MRP element will appear immediately after the stock MRP element in either the MRP or Stock/Requirements list. When the on hand balance is less than the defined safety stock level, the system replenishes the safety stock during the planning run. Note that this is also the case if the safety stock is only slightly below the defined safety stock level. Note: Due to the fact that safety stock appears as a requirement, as soon as the available quantity falls below zero, during the next planning run the system will create a replenishment to return the available balance to zero. Even though there is physical stock on hand. Caution: While safety stock is used during the planning runs, the inventory is not technically classified as safety stock. In order to assure the quantity of safety stock is not physically used, you would need to use Available-to-Promise ( ATP) functionality. In the configuration of ATP, you can select wether to include/exclude the Safety stock values from the availability check. Depending upon how you have this coded it could show the user a warning or produce an error that would stop the transaction from occurring.

Demonstration: Static Safety Stock Purpose Demonstrate how Safety stock is used during the planning runs.

System Data System: Client: User ID: Password: Set up instructions: 1. From the stock requirements list for you material R-F2## at plant 1000, Environment → Change Material.

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2.

In the MRP 2 Screen add a safety stock of 10 pcs. Save the material master

3.

Refresh the stock the S/R list

4.

Point out to the students that the safety stock is now visible as a requirement

5.

Run Single-item, Multi-Level MRP to see how the planning run reacts to the changes

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Calculating Safety Stock The previous method of safety stock is a very simple process, choose a value for your safety stock or calculate the value outside of SAP ERP and enter the value in the material master at the pertinent time. SAP ERP also allows you another slightly more sophisticated method of calculating. While this method will take some knowledge of statics and forecasting, it is still static; relevant for the entire horizon.

Figure 88: Calculated Safety Stock

Note: This method will use a calculation process to derive the safety stock value that will be placed in the material master. The information in the previous section apply after the calculation has been complete. Prerequisites for Calculation Safety Stock: • • •

Service level maintained in the material master Consumption values captured via goods issues transactions. Maintenance of the forecasting tab in the material master. (requires statistical background)

With this method, calculating the safety stock depends on the service level that you specified in the MRP II view of the material master record and on the accuracy of the forecast. The more accurate the forecast, the smaller your safety stock can be. The following figure shows that, without safety stock, customer demand can be satisfied by 50%. It also shows that it is almost impossible to satisfy customer demand 100% of the time. Factor R describes the relationship between forecast accuracy and service level (SL).

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If replenishment lead time is greater than the forecast period by factor W, then the mean absolute deviation (MAD) is recalculated for this period (formula 17). The MAD is a parameter of forecast accuracy. Note: Safety Stock Calculation: SS = R xV_W x MAD W = Planned Delivery time/ Forecast Period Otherwise the following formula is used: Note: SS = R x W X MAD If the material is produced in-house, the delivery time is: opening period + in-house production time + goods receipt processing time. It is expressed in workdays. The forecast period is taken from the material master record (Forecast Tab) and is also expressed in workdays. If the material is procured externally, the delivery time is: goods receipt processing time + planned delivery time + goods receipt processing timee. It is expressed in calendar days. The forecast period is taken from the material master record (forecast and is also expressed in calendar days. The safety stock calculation may lead to rounding effects. You can specify a minimum safety stock. If the result of the safety stock calculation is lower than this limit, the safety stock is then automatically set to this minimum value. You enter the minimum safety stock in the material master record (the MRP 2 screen). The calculation of the safety stock in the SAP ERP system is always performed according to formula 17 of the documentation. SS = R * MAD * sqrtW In this case, it is important that for W a special calculation is performed which will be described in the following. The planned delivery time is defined in calendar days. For the forecast, however, it needs to be defined in workdays. 1. WZEIT = PLIFZ * 5/7 days Note that in this case only an integral planned delivery time is useful. Therefore, it is always rounded. Then, the goods purchasing processing time from the material master and the processing time of the purchasing from table T399D are added to the planned delivery time. 2. WZEIT(*) = WZEIT + WEBAZ + T399D-BZTEK

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Afterwards, the result is divided by the period. Generally, these values are as follows: length of the period: 5 for period indicators = W length of the period: 21.4 for period indicators = M. 3. W = WZEIT(*) / length of the period Then, this value is inserted in the above formula and can be used for the calculation of the safety stock. Consequently, the reorder point is the total of the safety stock plus the forecasted requirements within the replenishment lead time.

Demonstration: Safety Stock Calculation Purpose Demonstrate to students how SAP ERP can use consumption values and a service level to calculate safety stock.

System Data System: Client: User ID: Password: Set up instructions: 1. Access the stock requirements list for R-T1## at plant 1000. Logistics Production → MRP → Planning → Evaluations → Stock/Requirements List (MD04) 2.

Go to the materials Master MRP 1 view Environment → Change Material

3.

In the MRP 1 view change the MRP type to SS - MRP with Safety stock planning

4.

In the MRP 2 view set the Service level to 90 %, and set a minimum safety stock level of 15 pcs.

5.

In the Forecast tab make the following settings:

6.

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Field

Value

Forecast Model

K -

Forecast Periods

1

Initialization

Leave Blank

At the bottom of the forecast tab select Consumption Values. Enter the following values in the corrected value column.

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Previous Period

650

Previous Period - 1

700

Previous Period - 2

800

Previous Period - 3

750

Previous Period - 4

800

Previous Period- 5

850

Previous Period - 6

900

Previous Period - 7

950

Previous Period - 8

1000

Previous Period - 9

1050

When finished select Main Data 7.

Return to the forecast tab and select Execute Forecast

8.

Select

9.

Select the constant model and select Execute forecasting twice.

10. Review the results of the forecast, and notice the Safety stock Calculation 11. Select

Copy, then return to the MRP 2 view to review the results

12. Select

Save.

13. Upon returning to the S/R list select

Refresh

14. Note the safety stock MRP Element

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Calculated Safety Stock 1.

Access the stock requirements list for R-T1## at plant 1000. Logistics Production → MRP → Planning → Evaluations → Stock/Requirements List (MD04)

2.

Go to the materials Master MRP 1 view Environment → Change Material

3.

In the MRP 1 view change the MRP type to SS - MRP with Safety stock planning

4.

In the MRP 2 view set the Service level to 90 %, and set a minimum safety stock level of 15 pcs.

5.

In the Forecast tab make the following settings:

6.

Field

Value

Forecast Model

K -

Forecast Periods

1

Initialization

Leave Blank

At the bottom of the forecast tab select Consumption Values. Enter the following values in the corrected value column. Previous Period

650

Previous Period - 1

700

Previous Period - 2

800

Previous Period - 3

750

Previous Period - 4

800

Previous Period- 5

850

Previous Period - 6

900

Previous Period - 7

950

Previous Period - 8

1000

Previous Period - 9

1050

When finished select Main Data 7.

Return to the forecast tab and select Execute Forecast

8.

Select

9.

Select the constant model and select Execute forecasting twice. Continued on next page

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10. Review the results of the forecast, and notice the Safety stock Calculation 11. Select

Copy, then return to the MRP 2 view to review the results

12. Select

Save.

13. Upon returning to the S/R list select

Refresh

14. Note the safety stock MRP Element

Safety Stock Partially Available Another philosophy on safety stock is that part of the inventory should be available for use in planning. This is often the case in certain industries where the cost of tearing down and setting up a production line out-ways the risk of additional customer service problems.

Figure 89: Safety Stock Partially Available

You can define the proportion of safety stock that is available for planning for each MRP group in Customizing, Production → MRP → Planning → MRP Calculation → Stocks → Define Safety Stock Availability or Production → MRP → Carry Out Overall Maintenance of MRP Groups. The availability of the safety stock is defined at the MRP Group level. This way planners can decide which materials should plan to use safety stock. The value is defined as a percentage of the safety stock level, which was entered in the material master, MRP 2 view.

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A new order is not created until the stock falls below the available portion of safety stock. This order proposal replenishes the stock up to the safety stock level. This means that no individual order proposals are created for small material shortages. This reduces the amount of administrative work and planning, since orders will not be created every time the available quantity dips below zero.

Demonstration: Safety Stock Partially Available Purpose To learn about partially available safety stock

System Data System: Client: User ID: Password: Set up instructions: 1. Add 45 pcs of inventory for you R-F2## at plant 1000. Use transaction MB1C and movement type 501. Place inventory in storage location 0001. Select

Save.

2.

Access the stock requirements list for product R-F2## at plant 1000. Logistics → Production → MRP → Evaluations → Stock/Requirements List ( MD04 )

3.

Change material R-F2##, Environment → Change Material . Enter safety stock: 10 pieces (MRP 2) if you have not yet done so, and Lot-sizing procedure exact. Select

4.

Save.

Refresh the stock requirements list

Refresh.

→ Safety stock is displayed – it flows into the net requirements calculation as a requirements element. 5.

Execute material requirements planning for R-F2##, and display the results: → If there is a shortage in the safety stock, a receipt element for the amount of the material shortage is generated.

6.

Definition of partially available safety stock in the Customizing for MRP groups Customizing: Select Production → Material Requirements Planning → Planning → MRP Calculation → Stocks → Define Safety Stock Availability. For MRP Group 0031 Enter 50% and Save.

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7.

Execute the planning run again. A new receipt element is only created in the amount of the safety stock when the safety stock that is partly available is below the permissible limit. No more planning is executed.

8.

Remove the setting in Customizing.

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Safety Stock Partially Available 1.

Add 45 pcs of inventory for you R-F2## at plant 1000. Use transaction MB1C and movement type 501. Place inventory in storage location 0001. Select

2.

Save.

Refresh the stock requirements list

Refresh.

→ Safety stock is displayed – it flows into the net requirements calculation as a requirements element. 3.

Refresh the stock requirements list

Refresh.

→ Safety stock is displayed – it flows into the net requirements calculation as a requirements element. 4.

Refresh the stock requirements list

Refresh.

→ Safety stock is displayed – it flows into the net requirements calculation as a requirements element. 5.

Execute material requirements planning for R-F2##, and display the results: → If there is a shortage in the safety stock, a receipt element for the amount of the material shortage is generated.

6.

Definition of partially available safety stock in the Customizing for MRP groups Customizing: Select Production → Material Requirements Planning → Planning → MRP Calculation → Stocks → Define Safety Stock Availability. For MRP Group 0031 Enter 50% and Save.

7.

execute the planning run again. A new receipt element is only created in the amount of the safety stock when the safety stock that is partly available is below the permissible limit. No more planning is execute

8.

Remove the setting in Customizing.

Dynamic Safety Stock in MRP Certain industries, and for that matter certain products, would not find the method of static safety stock applicable to their business. When products tend to have seasonal periods or periods where demand spikes, planners often like to keep different levels of safety stock. While the static method is more of a fixed safety stock, the method of Dynamic Safety Stock allows safety stock to fluctuate with the rise and fall of demand.

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Figure 90: Dynamic Safety Stock (1)

Using the Range of Coverage calculation, you can determine a dynamic level of safety stock that meets the requirements of time and demand dependency. The concept of the range of coverages is similar to that of Target Days Supply or Days of forward coverage. The goal of the range of coverage is to design a profile that will define a minimum, target, and maximum level of supply coverage over and above that of the existing demand. During every planning run, the system checks whether or not the available quantity is below the minimum stock level. If this is the case, the system creates an order proposal to increase the available quantity to the target stock level (dynamic safety stock). If the available quantity exceeds the maximum stock level, the quantity is adjusted as long as a firmed procurement proposal is not involved. The system issues an exception message for firmed procurement proposals. Caution: Unlike static safety stock which appears as a separate MRP element, dynamic safety stock does not have its own MRP element. Dynamic safety stock, is simply production that going to be produced earlier. By looking at the pegging report for a planned order, you can see that it pegs to future demand. Therefore without using the pegging report, at first glance planners will not know why production is being pulled up. For any additional static safety stock and the dynamic safety stock, add to each other.

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Figure 91: Dynamic Safety Stock (2)

The dynamic safety stock is calculated according to the average daily requirements. As a result, the dynamic safety stock automatically adjusts itself to changes in demand. The dynamic safety stock is calculated using the following formula: Average daily requirement x Target range of coverage.

Figure 92: Range of Coverage configuration

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In the Customizing, Production → MRP → Planning → MRP Calculation → Define Range of Coverage Profile (Dynamic Safety Stock), you will define a profile that will be used in the material master . You can define the periodicity (week, month, or period according to the planning calendar) and the number of periods for which the average daily requirements are to be determined. The average daily requirement is calculated for each period. For example in the figure above, if each period were a month, the system calculates the average daily demand by summing two months of requirements, and dividing by the number of days in each total for both periods. In the profile, users will define what type of days they want to use: • • •

Work days according to the plant calendar Calendar days, according to the Gregorian calendar Standard days, user defined number in the profile.

In the definition of the profile you will have the opportunity to define three time periods. The first number of periods will be valid from the current system date, to the end of the periods specified. The second period will start with the end of the first, and the end date based on the number of periods entered for the length of the second period. The third period starts at the end of the second period and is valid till the end of time. In addition, you enter the minimum and target range of coverage as the number of days in which a material must still be available. You can also enter a maximum range of coverage. You can determine the minimum, target, and maximum stock by multiplying the average daily requirements with the values for the minimum, target, and maximum range of coverage defined in the profile. During the planning run, the system checks whether or not the range of coverage (available quantity divided by average daily requirement) is below the minimum range of coverage or above the maximum range of coverage.

Figure 93: Dynamic Safety Stock (3)

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You can enter the ranges of coverage (minimum, target, and maximum ranges of coverage) for up to three periods and maintain different ranges of coverage for each period. If you have maintained only one period, the validity of the range of coverage is unlimited. The values used for the individual parameters of the dynamic safety stock can either be checked directly after single-item planning in the planning results or in the stock/requirements list. In both evaluations, the dynamic safety stock data is available in the periods total displ The following data is displayed: target range of coverage, minimum range of coverage, maximum range of coverage, target stock (dynamic safety stock), and minimum stock. The parameters that calculate the dynamic safety stock are stored in a range of coverage profile in the Customizing for MRP, in the IMG activity, “Define Range of Coverage (Dynamic Safety Stock)”. You can access this activity directly from the MRP menu by selecting Environment → Current Settings. The range of coverage profile is assigned to the material in the material master record (MRP data screen 2 or MRP area segment).

Figure 94: Time Dependent Dynamic Safety Stock

While often times planners find this method of safety stock workable, it still has its faults. With dynamic safety stock, the periods are always being calculated based on the current system date. Planners often need levels of coverage to be time dependent. In addition to the three intervals for which you can define different ranges of coverage, you can set up fixed periods with a different range of coverage. This is useful, for example, if a high safety stock is to be planned because of increased demand in a particular period.

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In the Customizing activity, “Define Range of Coverage (Dynamic Safety Stock)”, within the details of the profile, you define validity periods in which you assign a range of coverage, which is different from an existing range of coverage profile. You can define as many deviating periods as you want, with various ranges of coverage for one profile. Each deviating period is defined by entering the start date and finish date.

Demonstration: Dynamic Safety Stock Purpose To learn about the dynamic safety stock

System Data System: Client: User ID: Password: Set up instructions: Note: To provide a better overview, use a material for which no planning date exists. The lot-sizing procedure must be exactly same. Note that in the period totals display, changed days’ supplies and stock are displayed only after accessing the display again. You cannot view the display by refreshing the display. 1. Review the Range of the Coverage Profile in Customizing for profile 001 Customizing: Select Production → Material Requirements Planning → Planning → MRP Calculation → Define Range of Coverage Profile (Dynamic Safety Stock). or Select Logistics → Production → MRP → Planning → Environment → Current Settings → Define Range of Coverage Profile (Dynamic Safety Stock). Display and explain.

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2.

Delete the existing set of requirements and create new planned independent requirements for R-F1## at plant 1000: 50 pieces each for the current month +2 until the current month +7 (6 x 50 pieces).

3.

Call the stock/requirements list for material R-F1##; Period totals display: No days’ supply

4.

Execute a Single-item, Multi-level planning run for the R-F1##. Use the default settings.

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5.

Refresh the S/R list and then change material master R-F1##: Assign range of coverage profile 001 (MRP 2)

6.

Call the stock/requirements list again, period totals display (months): The average daily requirement, minimum stock level, target stock level, and maximum stock level are displayed according to the range of coverage profile.

7.

Execute the planning run, call the stock/requirements list again, period totals display (months): The available quantities are displayed. Optional demo for minimum range of coverage:

8.

Current month + 2, 7th day: Create planned independent requirements, 5 pieces

9.

Execute planning run; a planned order was generated by the system for the precise quantity to cover the material shortage.

10. Current month + 2, 14th day: Create additional planned independent requirements, 5 pieces 11. Execute planning run; another planned order was generated by the system for the precise quantity to cover the material shortage. 12. Assign range of coverage profile 003 instead of range of coverage profile 001 (minimum days’ supply 2, target range of coverage 5, maximum days’ supply 10 days), call the current stock/requirements list again and clarify changed days’ supply and requirements in the period totals display. 13. Execute the planning run; only one planned order is created for the 14th of the current month + 2 and replenished to the target stock level. No more planning is executed. Conclusion: The minimum range of coverage for the dynamic safety stock has the same function as the amount of the static safety stock that is not available for planning.

Safety Time Note: Do not confuse the safety time with the negative and positive lead times from the BOM item, which have a completely different function.

With certain products safety stock might not cover problems that are caused by delays. For some product safety stock may not even be an option due to excessive costs, obsolescence, or space issues, so there is an need for other options.

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Figure 95: Safety Time

Safety time is one time based buffer that SAP ERP offers to planners. The goal of safety time is to have material arrive earlier than the requirement date. The safety time is a float after production or arrival of purchased materials. This is in contrast to the lead time and lead-time offset in the component data of a Bill of material (BOM) item, which is used to move the dependent requirement date. The safety time is used to avoid material shortages caused, for example, by an unreliable vendor. Order proposals are pushed back from the delivery date by the number of workdays specified in the safety time. The actual requirements dates are not changed. You define the safety time for each plant in the material master in the MRP 2 view or for each MRP area in the MRP area segment. The system simulates bringing the requirements forward (closer to current period) by the specified number of days and the planning for the receipts, created for these requirements in the planning run, is also brought forward by this number of days. Hint: The work scheduler defines a safety time / actual range of coverage of 2 days. A requirement exists for January 31st. In the planning run, the system brings the requirements date forward by 2 days in simulative mode and creates a planned order with the end date on January 29th. However, the actual requirements date (January 31st) does not change.

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Caution: The disadvantage of this procedure is that a procurement element is created for each requirement. The system only groups the procurement quantities for the requirements into one procurement element if you work with weekly lot sizes or monthly lot sizes. Note: You can display the requirements dates that have been moved forward in simulation by selecting the function key Switch On Safety Time in the stock/requirements list. The System then shows the earlier, calculated requirements date instead of the actual requirements date

Figure 96: Safety Time in Multilevel Production

If a safety time has been defined at the finished product level and also at assembly level, these two safety times are added together when planning the assemblies. This may not be desired. As a result, you can define for each material whether or not the safety time is valid for all the requirements or only for independent requirements, such as sales orders. You define the following in the safety time indicator in the MRP 2 view of the material for each plant or for each MRP area in the MRP area segment: • • •

310

Safety time is not to be taken into account (indicator = blank). Safety time is only to be taken into account for independent requirements (indicator = 1). Safety time is to be taken into account for all requirements (indicator = 2).

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Lesson: Using Buffers in Planning

Figure 97: Period Profile for the Safety Time

You define the safety time in the material master per plant (view “MRP 2”) or per MRP area (in the MRP area segment). In addition, you can assign a safety time period profile to a material per plant (view “MRP 2”). You can use the period profile to define deviating safety times for particular periods, which are freely definable. These could, for example, be periods when a special marketing campaign is being used. You define safety time period profiles in the Customizing activity, “Define Period Profile for Safety Time/Actual Range of Coverage”. You can access this activity directly from the MRP menu by selecting Environment → Current Settings. You then create a period profile to which you can assign many periods with different safety times.

Demonstration: Safety Time Purpose To learn about safety time

System Data System: Client: User ID: Password: Set up instructions: 1. Access the S/R list for R-F1##, plant 1000. MD04

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2.

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Change the Material master – MRP 2: R-F1##, plant 1000 Set the Safety time indicator to 2 - all requirements Set the Safety time/Actual range of coverage to 4 days

3.

Save the results and return to the stock requirements list and refresh.

4.

Upon refreshing the stock requirements list exception messages will appear. It is imperative that students understand the system is considering the requirements dates pulled forward four days causing the procurement proposals to be late.

5.

Execute a single-item, multi-level plan. As a result you will see the procurement proposals pulled forward by four days.

6.

In a separate session, access the Production → Material Requirements Planning → Planning → MRP Calculation → Define Period Profile for Safety Time/Actual Range of Coverage. or Logistics → Production → MRP → Environment → Current Settings → Define Period Profile for Safety Time/Actual Range of Coverage. Create profile P00 in plant 1000: Period: 1st day of current month + 6 to last day of current month + 7, safety time 10 workdays. Enter period profile P00 and safety time indicator 1 in the material master, execute the planning run, and show the effects. Finally, reset the range of coverage profile and the safety time indicator and execute the planning run.

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Exercise 9: Dynamic Safety Stock Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how to use static safety stock as a quantity buffer • Demonstrate how to use dynamic safety stock as a quantity buffer

Business Example Following the production phase-in period, it is apparent that the pump R-F1## is sold in larger quantities. In the future, the pump is to be planned, assembled, and put into storage so that sales orders can be filled as quickly as possible. Uncertainties in planning are to be taken into account using dynamic safety stock. Any delivery delays, on the part of production, caused by reorganizational measures should be intercepted using safety time.

Task 1: Static Safety stock Due to minor fluctuations in demand, and the need to assure high customer service on your R-F1## pump, you will use static safety stock to buffer unpredictable demand. 1.

Delete the existing independent requirements for R-F1## at plant 1000.

2.

Now, create the following planned independent requirements for the pump R-F1## in the plant 1000: Current month +3

Current month +4

Current month +5

Current month +6

90

70

120

100

Save your entries. 3.

From the Stock/Requirements list, execute single-item, multilevel planning for the pump R-F1## in plant 1000. In the initial screen of the planning run, check the creation indicators, and save these as your defaults: Processing key

NETCH

Create purchase req.

2

Delivery schedules

3 Continued on next page

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Create MRP list

1

Planning mode

1

Scheduling

1

Also plan unchanged components

Select

Display results before they are saved Do not select Display material list

Select

Simulation mode

Do not select

Before executing select Settings → Save and confirm the warning message. Start the planning run by choosing Enter two times. 4.

Refresh the stock/requirements list for the material R-F1## in the plant 1000. What is the available quantity at the end of the net planning segment?

5.

From the Stock/Requirements list, add a safety stock of 80 pieces in the material master for R-F1## in the plant 1000 in the MRP 2 view.

6.

Refresh the stock/requirements list. What is the available quantity at the end of the net planning segment? Explain this shortage.

7.

Execute a single-item, multilevel requirements planning run one more time using the settings below and explain the result after you have refreshed the stock/requirements list. Processing key

NETCH

Create purchase req.

2

Delivery schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1

Also plan unchanged components

Select

Display results before they are saved Do not select Display material list

Select

Simulation mode

Do not select

Continued on next page

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Task 2: Dynamic Safety Stock Due to fluctuating demand, the definition of static safety stock does not seem practical. The safety stock should adjust to the requirements situation more. The range of coverage of the safety stock should be 5 days. 1.

From the Stock/Requirements list Change the material master for R-F1## in the plant 1000 as follows: Delete the Safety Stock . Enter a coverage profile of 002 instead. Save the changes.

2.

Open an additional session and check the range of coverage profile 002 in plant 1000 in the Customizing for MRP. What are the parameters for determining the average daily requirement and what values do these parameters have?

3.

From the stock/requirements list, execute single-item, multilevel planning using the settings listed below: Processing key

NETCH

Create purchase req.

2

Delivery schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1

Also plan unchanged components

Select

Display results before they are saved Do not select

4.

Display material list

Select

Simulation mode

Do not select

Refresh the stock/requirements list. Go to the Period totals display and view the details in Months . Determine that the available quantity differs from one month to another. What is the available quantity in the current month + 4? Reconstruct the calculation method.

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Task 3: Safety Time in Planning During the months current month + 5 and current month + 6, there are likely to be delivery delays on the part of production due to various reorganization measures.

316

1.

In the Customizing for MRP, create a period profile P## for the plant 1000 for the safety time with the description “Period profile group ##” for the period first day of current month + 5 to last day of current month + 6 with a safety time of 3 workdays. Save your entries.

2.

From the Stock/Requirements list for your R-F1## at plant 1000, and change your material master to by entering the new period profile P## in the MRP 2 view. Remove the coverage profile before saving

3.

From the Stock/Requirements list, execute single-time, multi-level planning for material R-F1## in plant 1000 with planning mode 3.

4.

Refresh the stock/requirements list. In the two critical months, do the availability dates correspond to the requirements dates?

5.

From the Stock/Requirements list for your R-F1## at plant 1000, and change your material master to by removing the safety time period profile P##in the MRP 2 view.

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Lesson: Using Buffers in Planning

Solution 9: Dynamic Safety Stock Task 1: Static Safety stock Due to minor fluctuations in demand, and the need to assure high customer service on your R-F1## pump, you will use static safety stock to buffer unpredictable demand. 1.

Delete the existing independent requirements for R-F1## at plant 1000. a)

Menu path: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Create

b)

Enter your material R-F1## and plant 1000 and press ENTER

c)

In the table tab, select the row with the existing requirements and select Delete line item

2.

Now, create the following planned independent requirements for the pump R-F1## in the plant 1000: Current month +3

Current month +4

Current month +5

Current month +6

90

70

120

100

Save your entries. a) 3.

From the Stock/Requirements list, execute single-item, multilevel planning for the pump R-F1## in plant 1000. In the initial screen of the planning run, check the creation indicators, and save these as your defaults: Processing key

NETCH

Create purchase req.

2

Delivery schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1

Also plan unchanged components

Select

Continued on next page

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Display results before they are saved Do not select Display material list

Select

Simulation mode

Do not select

Before executing select Settings → Save and confirm the warning message. Start the planning run by choosing Enter two times.

4.

a)

Menu path: Logistics → Production → MRP → Planning → Evaluations → Stock/Requirements list (MD04)

b)

Select the Single-item, multi-level MRP button at the top.

Refresh the stock/requirements list for the material R-F1## in the plant 1000. What is the available quantity at the end of the net planning segment? a)

5.

Quantity available for planning at the end of the net requirements planning segment: 0 pieces.

From the Stock/Requirements list, add a safety stock of 80 pieces in the material master for R-F1## in the plant 1000 in the MRP 2 view. a)

Change the material master from the stock/requirements list through Environment → Change Material or through Menu Path: Logistics → Production → Master Data → Material Master → Material → Change → Immediately

6.

Refresh the stock/requirements list. What is the available quantity at the end of the net planning segment? Explain this shortage. a)

Quantity available for planning at the end of the net requirements planning segment: Minus 80 pieces. Reason: The newly entered safety stock flows into the net requirements calculation as a requirement.

7.

Execute a single-item, multilevel requirements planning run one more time using the settings below and explain the result after you have refreshed the stock/requirements list. Processing key

NETCH

Create purchase req.

2

Delivery schedules

3

Create MRP list

1

Planning mode

1 Continued on next page

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Lesson: Using Buffers in Planning

Scheduling

1

Also plan unchanged components

Select

Display results before they are saved Do not select Display material list

Select

Simulation mode

Do not select

a)

The available quantity at the end of the net requirements planning segment is 0 pieces. The requirement from the safety stock was fulfilled as a result of requirements planning.

Task 2: Dynamic Safety Stock Due to fluctuating demand, the definition of static safety stock does not seem practical. The safety stock should adjust to the requirements situation more. The range of coverage of the safety stock should be 5 days. 1.

From the Stock/Requirements list Change the material master for R-F1## in the plant 1000 as follows: Delete the Safety Stock . Enter a coverage profile of 002 instead. Save the changes. a)

Menu path: Logistics → Production → MRP → Planning → Evaluations → Stock/Requirements list (MD04)

b)

From the stock requirements list select Environment → Change Material

c)

Select the MRP 2 view and make the necessary changes, the select Save

Continued on next page

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2.

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Open an additional session and check the range of coverage profile 002 in plant 1000 in the Customizing for MRP. What are the parameters for determining the average daily requirement and what values do these parameters have? a)

Follow system menu: System → Create Session

b)

IMG Menu path: Production → Material Requirements Planning → Planning → MRP Calculation → Define Range of Coverage Profile (Dynamic Safety Stock)

c)

Select the line for plant 1000 and profile 002. Select

Details.

Parameters for determining the average daily requirement: Number of periods: 3 Type of period length: 3 (standard days) Days per period: 20 3.

From the stock/requirements list, execute single-item, multilevel planning using the settings listed below: Processing key

NETCH

Create purchase req.

2

Delivery schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1

Also plan unchanged components

Select

Display results before they are saved Do not select Display material list

Select

Simulation mode

Do not select

a) 4.

Refresh the stock/requirements list. Go to the Period totals display and view the details in Months . Determine that the available quantity differs from one month to another. What is the available quantity in the current month + 4?

Continued on next page

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Reconstruct the calculation method. Refresh

a)

To update the stock/requirements list, select

b)

To view the period totals in months select and select the Months tab.

c)

Available quantity in Current month + 4: 25 pieces

Switch to Period Totals,

Calculation method: Planned independent requirements from 3 periods: Period 1: Current month + 4: 70 pieces Period 2: Current month +5: 120 pieces Period 3: Current month + 6: 100 pieces Total: 290 pieces 290 pieces divided by 3 x 20 days = 4.83 pieces/day 4.83 pieces/day x coverage range 5 days = 24.16 pieces 24.16 pieces rounds up to 25 pieces

Task 3: Safety Time in Planning During the months current month + 5 and current month + 6, there are likely to be delivery delays on the part of production due to various reorganization measures. 1.

In the Customizing for MRP, create a period profile P## for the plant 1000 for the safety time with the description “Period profile group ##” for the period first day of current month + 5 to last day of current month + 6 with a safety time of 3 workdays. Save your entries. a)

Menu path: Customizing-Production → Material Requirements Planning → Planning → MRP Calculation → Define Period Profile for Safety Time/Actual Range of Coverage

b)

Select New Entries

c)

Enter the plant, period profile, and description from above and press ENTER.

d)

Select your entry P## and double click on the folder to the left called Periods from/to

e)

Select New Entries and enter the date parameters specified above

f)

Select

Save.

Continued on next page

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2.

3.

From the Stock/Requirements list for your R-F1## at plant 1000, and change your material master to by entering the new period profile P## in the MRP 2 view. Remove the coverage profile before saving a)

Menu path: Logistics → Production → MRP → Planning → Evaluations → Stock/Requirements list (MD04)

b)

From the stock requirements list select Environment → Change Material

c)

Select the MRP 2 view and make the necessary changes, and remove the Coverage profile 002, enter your Safety Time Period Profile P##, and set Safety time indicator to 1.

d)

Select

Save

From the Stock/Requirements list, execute single-time, multi-level planning for material R-F1## in plant 1000 with planning mode 3. a)

4.

SCM240

Select Single-item, Multi-Level at the top of the S/R list

Refresh the stock/requirements list. In the two critical months, do the availability dates correspond to the requirements dates? Answer: No. Reason: Due to the period profile entered with a safety time of 3 workdays, the availability dates are 3 workdays before the requirements dates in the defined period.

5.

322

From the Stock/Requirements list for your R-F1## at plant 1000, and change your material master to by removing the safety time period profile P##in the MRP 2 view. a)

From the stock requirements list select Environment → Change Material

b)

Select the MRP 2 view and make the necessary changes, and remove the safety time period profile P## and the safety time indicator of 1.

c)

Select

Save

© 2003 SAP AG. All rights reserved.

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Lesson: Using Buffers in Planning

Lesson Summary You should now be able to: • Describe the different methods of modeling buffers in the planning run • Demonstrate how several of the different methods of safety stock work

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Lesson: 270

SCM240

Controlling order quantities in the planning run Lesson Duration: 45 Minutes

Lesson Overview In this lesson, you will learn about lot-sizing procedures and how to optimize these procedures. You will also learn about special lot-sizing procedures for make-to-order production.

Lesson Objectives After completing this lesson, you will be able to: • • • •

Demonstrate how Lot size techniques an influence the size of a planned orders Demonstrate how use several fields in the material master to influence the size of a planned order Explain how planning calendars can be used to specifically coordinate the quantity and timing of receipts. Explain the configuration process of Lot Size techniques.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example As a senior production planner, it is your responsibility to see that inventories are kept to a minimum on all products. Demonstrate using the fields in the material master to control specific planned order quantities based on business requirements.

An Overview to Lot-Sizing Procedures In the net requirements calculation, the system determines the shortage quantities on the respective requirements dates. These shortage quantities must be covered by receipt elements. Within the material master lies a definition that controls the quantity for each proposal and number of proposals in planning run.

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Lesson: Controlling order quantities in the planning run

Figure 98: Overview: Lot-Size Calculation

You can define how the lot sizes are calculated by selecting the lot-sizing procedure when maintaining the material master record (MRP 1). The result of the lot-size calculation is the quantity to be produced or procured, which you can change and display in the order proposal. There are three groups of lot-sizing procedures: static, periodical, and optimizing. You can also enter restrictions in the material master that the system is to take into account when forming the lot sizes: • • • •

Minimum lot size (minimum procurement quantity, below which the lot size is not allowed to fall) Maximum lot size (maximum procurement quantity for each lot) Rounding value (the system rounds up to a multiple of the rounding value) Rounding profile (for the creation of scaled rounding)

You define the different lot-sizing procedures in the Customizing activity “Check Lot-Sizing Procedure”. You assign the procedure to a material on a plant basis in the material master (MRP 1) or per MRP area in the MRP area segment of the material.

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Static Lot-Sizing Procedures Before initiating a planning run, planners must decide how they choose to influence the lot size of a planning run. In static lot-sizing procedures, the procurement quantity is calculated exclusively by means of the quantity specifications entered in the material master. The following static lot-sizing procedures are available: • • • •

Lot-for-lot order quantity Fixed lot size Fixed lot size with splitting and overlapping Replenishment up to maximum stock level

Figure 99: Static Lot-Sizing Procedures

With the lot-for-lot order quantity, the system creates an order proposal for the amount of the material shortage. If there are several requirements for one day, which leads to a shortage, only one procurement proposal for the total shortage quantity is created in SAP ERP Enterprise for this date. Note: This technique is recommending in use with Make-to-Order based strategies. If you use the fixed lot size, the system creates an order proposal for the amount of the fixed lot size should material shortages occur. If this order proposal does not sufficiently cover the requirements, the system creates as many additional order proposals for the same date in this lot size as are necessary to cover the requirements. Fixed lot sizes are often used to order things in specific quantities, like truck loads, shift based production, or more frequently batches with a fixed yield.

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Caution: This lot-sized Technique will typically cause the available balance to be greater than zero. When replenishing to the maximum stock level, if a material shortage occurs, a procurement proposal is created for the amount defined in the material/ master record as the maximum stock level. If the shortage quantity for a day is larger than the maximum stock level, the lot size is then the same as the shortage quantity. A balanced stock/requirements situation takes priority over the lot-sizing procedure. As a variant, you can instruct the system to order enough to bring the stock level up to the maximum stock level and also to cover all requirements. Note: You can use this lot-sizing procedure with reorder point planning or MRP.

Periodic Lot-Sizing When considering what lot-size techniques to apply to a material, a planner should review the demand and capacity situations. If a product does not cycle into production that often and demand is low, but change over costs high, one should consider grouping together requirements. This grouping will allow planners to create one replenishment to cover several periods. Caution: However, it would be prudent to review the capacity plan, as the planning run will not split a replenishment amongst several supply options, unless instructed by the master data. Capacity should be available to cover the requirement whenever production is needed.

Figure 100: Period Lot-Sizing Procedures

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In the periodic lot-sizing procedures, the system groups procurement of requirements quantities within one period in one lot size. The period lengths can be days, weeks, months, or freely defined periods according to the planning calendar. You can freely define the number of periods within which to summarize the procurement quantities. The specifics of periodic lot-sizes are controlled in customizing. If the number of periods is to be larger than one, the number is entered in the No. of periods field in the SAP ERP Customizing step Production → MRP → Planning → Lot Size Calculation → Check Lot-Sizing Procedure for the lot-sizing procedure selected in the SAP ERP material master. Within in the lot-size procedure you can control the placement of the resulting receipt at the period start, period finish, or on the date of the first requirement, by maintaining the relevant value in the Scheduling field in the Customizing step. If, in Customization, you have defined that the availability date is at the start or finish of the period, the date of the planned order that is generated is accordingly moved.

Figure 101: Lot Size According to Planning Calendar

In certain situations planners need to be more specific in the procedure to group quantities together for lot-sizing. For example, you may have a vendor that request that they deliver every Wednesday, or a certain product is always scheduled to be manufactured on a certain day of the week. In the period lot-sizing procedure according to the planning calendar, the system groups the procurement of the requirements quantities within a period defined by the planning calendar in one lot. You assign a planning calendar to a material on a plant basis in the SAP ERP material master (MRP 2 view) or per MRP area in the MRP area segment.

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You maintain a planning calendar (period divisions) in the master data in the MRP menu in SAP R/3 Enterprise or in the Customizing activity Maintain Planning Calendar. The basis of the planning calendar will be a factory calendar that will be assigned during the definition process. The factory calendar will define work days, non-work days (weekends and holidays). When defining the planning calendar the user much chose a calculation rule. The calculation rule determines the calculation of the periods for the planning calendar. Some examples are : • • •

•

•

•

Weeks (weekdays) - Example: period start on Monday and Wednesday every week Months (weekdays) - Example: period start on every second Wednesday of the month Months (workdays) - Example: period start on every fifth workday of the month. You can specify the workday(s) of the planning calendar according to the workdays defined in the factory calendar. Years (workdays) - Example: period start on every fifth workday of the year You can specify the workday(s) of the planning calendar according to the workdays defined in the factory calendar. Workdays - Example: period start on every fifth workday from a particular start date You can specify the workday(s) of the planning calendar according to the workdays defined in the factory calendar. Weekdays - Example: period start on every second Wednesday from a particular start date

Demonstration: Periodic lot sizes Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. From the S/R list for R-F1## at plant 1000, select one of the planned independent requirements and select 2.

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Select

Details of element.

Change Element.

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3.

SCM240

Goto the schedule lines tab and in the split column enter d - day, for one of the periods of demand Hint: Enter through and warnings about the planning time fence.

4.

Select

5.

Refresh the stock requirements list. Run MRP and refresh again

6.

From the S/R list change the material and enter a lot-size technique of 3D - Three day lot size

7.

Save and re-run MRP and refresh the S/R list.

Save.

Demonstration: Planning Calendar Purpose Demonstrate how planning calendars are used.

System Data System: Client: User ID: Password: Set up instructions: 1. Follow the menu Path: Logistics → Production → MRP → Master Data → Planning Calendar → Create Periods. 2.

Create a calendarSCM, at plant 1000, with a description of SCM240 Demo.

3.

Set a minimum period of 30 days. Leave the work period settings as is and press ENTER

4.

We want to delivery product every Wednesday of every week. Therefore select Weeks (weekdays).

5.

In the area Calculation rule for period specification set the period to begin on 3 - Wednesday. Select Enter.

6.

Change the start date to the first day of the current month and then end date Continue (enter) to specify the month to the last day of next year select in which the calendar will be generated from

7.

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Select

Save

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8.

Change the Lot-size technique for material master for R-F1## to PK Period. LS according to Planning Calendar. Set the planning cycle to SCM.

9.

Select

Save

10. From the S/R list run MRP to see the results. All planned orders should be arriving on a Wednesday.

Optimizing Lot-Sizing Procedures

Figure 102: Optimizing Lot-Sizing Procedures

Optimizing lot-sizing procedures optimize the total costs resulting from lot size fixed (order and setup costs) and storage costs. You enter the ordering costs in the material master (MRP 1) or, where applicable, in the MRP area segment. The system determines the storage costs based on the storage costs indicator, which you define in the Customizing activity “Check Lot-Sizing Procedure” by entering a storage cost interest rate. You assign the storage costs indicator to the material master (or per MRP area). The formula for calculating storage costs is then: Storage costs = Requirement x Price x Storage cost interest rate x Time in storage / 100 / 365. Based on the first material shortage date determined in the net requirements planning, the system groups requirements until the optimum cost has been reached. The optimizing lot size procedures differ only by the type of the minimum cost.

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Part period balancing: Sum of storage costs equals lot-sized fixed costs Least unit cost procedures: Minimum total costs per piece Groff reorder procedure: Groups requirements quantities in one lot until the rise in the average storage costs per period is greater than the reduction in the order costs per period. Dynamic planning invoice: Groups the requirement quantities in one lot until the additional storage costs are greater than the lot size fixed costs.

Additional Lot-Size Influences In addition to configurable lot-size techniques, there is another set of other parameters in the material master that can influence the quantities in the replenishment suggestions generated by the planning run.

Figure 103: Minimum Lot Size / Maximum Lot Size

For example, you can define limiting values (minimum lot size, maximum lot size). During lot-size calculation, the system takes into account these limiting values. When using the minimum lot size the planning run will generate a replenishment for the minimum quantity identified in the product master. If the requirement is larger than the minimum, the system will refer back to a lot-for-lot result. The maximum lot-size places ceiling on the size of the replenishment order. If the requirement exceeds the maximum the system will generate another replenishment on the same day till the requirement is fulfilled. Note: The minimum and maximum work well together in batch related production. Your formula is approved for between 10,000 kgs and 100,000 kgs.

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Caution: Using minimums and maximums will cause your available balance to exceed zero.

Figure 104: Rounding

Another technique for influencing the lot-size is by rounding the production quantities up. By specifying a rounding value, for example, the system will determine during lot-size calculation that the lot size quantity to be created in increments of a specified quantity (for example, pallet size, if the material is only delivered in complete pallets). In addition to that, you can use rounding profiles. A rounding profile is used to define settings for rounding up or rounding down the order proposal quantity into deliverable units. You define the rounding profiles in Customizing, Production → MRP → Planning → Lot Size Calculation → Maintain Rounding profile (OWD1)A rounding profile consists of the threshold value and the rounding value. The threshold value is the value from which the system rounds up to the value of the next deliverable unit. The rounding value is the value to which the system should round up as soon as the threshold value is exceeded. You can define several combinations of threshold and rounding values for a rounding profile.

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Requirement

Procurement Qty

1

1

2

5

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6

10

7

10

21

25

31

35

32

40

41

45

74

80 Hint: •

•

For a requirement of 7 pieces, the system checks how many times 5 fits into 7. This results in a procurement quantity of 5 pieces (1x5 = 5). The system rounds up the remaining 2 pieces to 5 pieces. Thus, for a requirement of 7 pieces, one procurement proposal is created for 10 pieces. For a requirement of 74 pieces, the system checks how many times 40 in fits into 74. This results in a procurement quantity of 40 pieces (1x40 = 40). The system rounds up the remaining 34 pieces to 40 pieces. Thus, for a requirement of 74 pieces, a procurement proposal is created for 80 pieces.

A simulation is available for checking the rounding profile Customizing settings.

Demonstration: Rounding Purpose To learn about rounding

System Data System: Client: User ID: Password: Set up instructions: 1. From the S/R list for R-F1## at plant 1000, change the material master by setting the lot-size technique to EX - lot for lot and set a rounding profile to 0002 - SCM240 (E) Demo 2.

The Rounding profile, consisting of a threshold value and a rounding value; create a new static rounding profile: Rounding profile 0002 in plant 1000:

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Level 1: Threshold value 2, rounding value Level 2: Threshold value 32, rounding value 40 Demonstrate how the rounding profile works using the simulation (from 1 to 200), exit without saving. 3.

Save the material Master, and Re-run MRP. Refresh and explain the results

Special Lot-Sizing Procedures When planners run across special situations such a multiple sources of supply or make-to-order, special adjustments need to be made.

Figure 105: Special Lot-Sizing Procedures

Since lot-sizes are controlled in configuration, planners will not always have the chance to configure new techniques on fly. This is why it might be necessary to have several profiles set up to adapt to other master data or the planning situation itself. Planners may run into a situation where the material is typically make-to-stock and therefore have special lot size parameters. However, when a sales order is assigned a certain requirements type, the line item can become make to order and periodic lot sizes could cause a built in inventory.

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Figure 106: Lot Size Configuration

When configuring a lot-size technique which may at times be used for make-to-order situating planners can set a parameter in configuration called MTO Lot Size. You use this indicator to control the selection of the lot-sizing procedure for make-to-order production and for project production. You can select the following procedures: • •

•

The system calculates the order quantity using the lot-for-lot order quantity. The system calculates the order quantity using the lot-for-lot order quantity and it also takes the rounding quantity or the minimum and maximum lot sizes into account he system calculates the order quantity using the lot-sizing procedure specified in the short-term period.

Certain products will have the opportunity to be multi-sourced. These may be products that are purchased from one or more vendors or products that can be transferred from more than one plant, or made with more than one production version. In this situation, planners can set up quota arrangements which will split the demand between the multiple sources. This is normally done by reviewing each requirement to determine its supply source. By setting the “splitting quota” indicator in the Customizing for lot-size procedures, you can distribute the procurement quantity across various sources. By setting this flag you will split each requirement by the designated quota arrangement settings. To do this, you must set the quota arrangement usage indicator in the material master record (Purchasing or MRP 2 view). You maintain the portions of the various sources in the quota arrangement in the master data of purchasing. You can set the “overlapping” indicator for all lot-sizing procedures in Customizing in order to distribute the order quantity into partial quantities. These quantities are not produced at the same time, but rather in regular, overlapping

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periods. Procurement proposals can overlap in the future and in the past. You also maintain the tact time and, depending on the lot-size procedure, the maximum lot size or the rounding value.

Figure 107: Long-Term Lot Size

Certain materials based on their popularity or long lead time may have a long demand horizon. To create planned orders in a lot-for-lot environment for 18 months would consume precious processing time. After a certain point in the horizon, planners loose interest in the details and want rough numbers. The purpose of the long-term lot size is to divide the time axis for MRP into a short-term and a long-term area, enabling the lot-size calculation to be carried out using different lot-sizing procedures in these two areas. Creating larger lots in the long-term area has a particularly positive effect on performance. It is therefore possible to receive a rough preview of the future master production schedule in the long-term area and to have a more precise analysis in the short-term area. You maintain the settings for the long-term lot size, just as for the other lot-sizing procedures, in the Customizing for MRP in the IMG activity “Check Lot-Sizing Procedures”. You can define the lot size that is to be used in the short-term period and the lot size that is to be used in the long-term period, as well as the end of the short-term/beginning of the long-term periods using the key of the lot-sizing procedure. You defined the length of the short-term area by entering the periodicity (for example, month, week) and the number of periods. If a material is planned with short-term and long-term lot sizes, the period of validity of both lot-sizing procedures is determined during the planning run. The order quantities in the short-term horizon are calculated using the lot size in the

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short-term area. The system switches to the long-term lot size on the date from which the long-term lot size is valid. To calculate this date, the system always rounds up to the beginning of the next full long-term period. It is possible that a material planned using long-term lot size is not changed. The material is then not included in new planning when using NETCH or NETPL planning. The planning order would then be converted in the long-term lot size. In order to prevent this from occurring, you can set the “Recurring MRP” indicator in Customizing for the MRP type of the material, and also maintain the “Max. MRP Interval” in the MRP group. The material is then included in planning after the maximum MRP interval has been processed and is planned with the short-term lot size, if required.

Demonstration: Special Lot-Sizing Procedures Purpose To learn about special lot-sizing procedures

System Data System: Client: User ID: Password: Set up instructions: 1. For each lot-sizing procedure, the lot-sizing procedure is defined specially for make-to-order production. Explain this in Customizing using lot-sizing procedures FX and FK.

338

2.

Lot-size with splitting quota: Splitting the lot across various sources according to the quota in the master data for purchasing; you must also set the “splitting quota” indicator in the Customizing for the lot-size procedure and the quota arrangement usage indicator in the material master (purchasing and MRP 2 views). Do not confuse this with the quota arrangement in the procurement type segment, with which the individual lots are to be drawn alternately from various sources.

3.

Lot-size with overlapping: Forward or backward overlapping (in time) of partial quantities of an order; possible demonstration based on lot-sizing procedure FS, showing it first in Customizing, set overlapping to “-”, and then entering it in the material master R-F1## (MRP 1), which was used for the demonstration of safety stock; enter a fixed lot size (120 pieces), talk time (1 AT), and a rounding value (40 pieces), and remove any range of coverage profile that may exist; execute material requirements planning and explain the results; finally, reset the settings.

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Exercise 10: Controlling Order Quantities in the Planning Run Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate and explain how lot sizing parameters affect the results of the planning run.

Business Example As the senior planner, it is import that you be able to answer all questions regarding the planning run. Lot size parameters will have a major influence in the efficiency of the production floor as well as the amount of product in inventory. Test several different lot-size parameters to showcase their affects on the replenishment proposals.

System Data System: Client: User ID: Password: CATT: Set up instructions:

Task: Lot-size Parameters in the Planning Run As the senior planner, it is your responsibility to ensure low inventories but also high efficiency in procurement and production. Therefore, you must test several lot-size parameters to ensure they do not affect your inventory or replenishment plans in a negative way. 1.

From the stock/requirements list of your product R-F1## at a plant 1000, you need to change the demand into smaller buckets of time. Take the monthly requirements and split them into daily buckets.

2.

Run MRP to correct the plan using the Ex - lot-for-lot parameter.

3.

After conversations with your pump production manager, you will not have enough capacity to cycle in and produce the R-F1##. However, after reviewing the demand you can run it about every three days. From the S/R

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list, change the material master so that R-F1## at plant 1000, will group together three days of demand into one requirement. Re-run MRP to review the results.

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4.

After reviewing the results with your production manager, he is still not happy. He figures to meet minimum profitability on the shop floor he must produce a minimum of 25 pumps with every production run. How would you accomplish this in MRP?

5.

Set a minimum lot-size of 25 pcs for R-F1## at plant 1000. Re-run MRP and review the results use the default settings for the planning run.

6.

After further conversations with your pump production manager, the 25 pcs is still too small. From the S/R list, change the material master so that R-F1## at plant 1000, will group together two weeks of demand into one requirement. Re-run MRP to review the results.

7.

Now that the two week lot size is more manageable, you want to clean things up. Your pumps fit 6 to a pallet in the warehouse. Make sure that your lot size is in pallet increments. From the S/R list, change the material master so that R-F1## at plant 1000, will group together two weeks of demand into one requirement as well as round up to pallet quantities. Re-run MRP to review the results.

8.

From the S/R list, change the material master so the R-F1## at plant 1000, on a lot-to-to basis for lot sizing.

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Solution 10: Controlling Order Quantities in the Planning Run Task: Lot-size Parameters in the Planning Run As the senior planner, it is your responsibility to ensure low inventories but also high efficiency in procurement and production. Therefore, you must test several lot-size parameters to ensure they do not affect your inventory or replenishment plans in a negative way. 1.

From the stock/requirements list of your product R-F1## at a plant 1000, you need to change the demand into smaller buckets of time. Take the monthly requirements and split them into daily buckets. a)

Follow the menu path: Logistics →Production → MRP → Evaluations → Stock/Requirements lists (MD04)

b)

From the S/R list for R-F1## at plant 1000, select one of the planned independent requirements and select

Details of element

c)

Select

d)

Goto the Sched. lines tab and in the split column enter d - day, for the periods of demand.

Change Element.

Hint: Enter through and warnings about the planning time fence. e) 2.

Select

Save.

Run MRP to correct the plan using the Ex - lot-for-lot parameter. a)

Expand header, and select the Lot-size From the S/R list select data tab to ensure it is set to EX.

b)

Select the Single-item, Multi-level MRP button to execute MRP and then select

3.

Refresh update to see the new results.

After conversations with your pump production manager, you will not have enough capacity to cycle in and produce the R-F1##. However, after reviewing the demand you can run it about every three days. From the S/R

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list, change the material master so that R-F1## at plant 1000, will group together three days of demand into one requirement. Re-run MRP to review the results. a)

From the S/R list Environment → Change

b)

In the MRP 1 view, set the lot size to 3D - Three day lot size

c)

Select

d)

Select the Single-item, Multi-level MRP button to execute MRP and

Save.

then select 4.

Refresh update to see the new results.

After reviewing the results with your production manager, he is still not happy. He figures to meet minimum profitability on the shop floor he must produce a minimum of 25 pumps with every production run. How would you accomplish this in MRP? Answer: A minimum lot size would allow you to set a minimum of 25 units but if requirements were higher, the system would propose a larger quantity.

5.

Set a minimum lot-size of 25 pcs for R-F1## at plant 1000. Re-run MRP and review the results use the default settings for the planning run. a)

From the S/R list Environment → Change

b)

In the MRP 1 view set the minimum lot- size to 25 pcs

c)

Select

d)

Select the Single-item, Multi-level MRP button to execute MRP and

Save.

then select 6.

After further conversations with your pump production manager, the 25 pcs is still too small. From the S/R list, change the material master so that R-F1## at plant 1000, will group together two weeks of demand into one requirement. Re-run MRP to review the results. a)

From the S/R list Environment → Change

b)

In the MRP 1 view set the lot size to - 2W - Two Week Lot Size

c)

Select

d)

Select the Single-item, Multi-level MRP button to execute MRP and

Save.

then select 7.

Refresh update to see the new results.

Refresh update to see the new results.

Now that the two week lot size is more manageable, you want to clean things up. Your pumps fit 6 to a pallet in the warehouse. Make sure that your lot size is in pallet increments. From the S/R list, change the material master

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so that R-F1## at plant 1000, will group together two weeks of demand into one requirement as well as round up to pallet quantities. Re-run MRP to review the results. a)

From the S/R list Environment → Change

b)

In the MRP 1 view set the lot size to - 2W - Two Week Lot Size

c)

Set the rounding value to 6.

d)

Select

e)

Select the Single-item, Multi-level MRP button to execute MRP and

Save.

then select 8.

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Refresh update to see the new results.

From the S/R list, change the material master so the R-F1## at plant 1000, on a lot-to-to basis for lot sizing. a)

From the S/R list Environment → Change

b)

In the MRP 1 view set the lot size to - EX - Lot for Lot and remove the rounding value.

c)

Select

Save.

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Lesson Summary You should now be able to: • Demonstrate how Lot size techniques an influence the size of a planned orders • Demonstrate how use several fields in the material master to influence the size of a planned order • Explain how planning calendars can be used to specifically coordinate the quantity and timing of receipts. • Explain the configuration process of Lot Size techniques.

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Lesson: 289

Lesson: Multi-Site Planning

Multi-Site Planning Lesson Duration: 30 Minutes

Lesson Overview In this lesson, you will gain an overview of stock transfer options. In this lesson, you will familiarize yourself with stock transport orders for the transfer of material within a company code.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain how to perform Cross location planning in SAP ERP Demonstrate how cross location planning work in SAP ERP

This is lesson is not to discuss Stock transfers in detail but how it is involved in planning. If customers wish to know more details direct them to the following classes: •

SCM500 - Processes in Procurement (5 days)

• •

SCM510 - Inventory Management and Physical Inventory (5 days) SCM680 - Cross Application Business Process (2 days)

Do not allow students to get into a debate. Currently we cannot ship between locations 1000 and 2400 since they belong to different purchase orgs. Hope to deliver a demo at a later time.

Business Example Some of your make to stock pumps are sold out of several of your distribution centers but are manufactured in several locations. Examine how to use the SAP ERP functions to model this process.

Overview of Stock Transfers and Transfer Postings During the initial design process of materials planning, planners must always consider the source of supply. Often time planners are faced with situations where some locations such as distribution centers do not perform any manufacturing activities, and must replenish their supply form other locations. This situation will often require stock to be transferred from another location.

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When organizations follow a make-to-stock process, forecasts will be placed at distribution centers and the periodic resupply must be a planned process. Using SAP ERP the process can be accomplished through many different methods called transfer postings or stock transfers. A change of the stock ID or stock type of a material is prominent in transfer postings. Transfer postings do not need to be connected to an actual goods movement. In stock transfers, however, a physical goods movement always takes place. In the case of a plant-to-plant stock transfer, the plants between which material is transferred can belong either to the same company code or to different ones. As a general rule, cross-plant stock transfers can only be booked out of unrestricted-use stock.

Figure 108: The Stock Transfer Procedures

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A stock transfer between two plants can be executed using different procedures. The procedures used to execute a stock transfer posting solely use the component MM - materials management. In contrast to a storage-location-to-storage-location stock transfer, a plant-to-plant transfer affects Financial Accounting and Material Requirements Planning. •

Financial Accounting (only if the two plants are assigned to different valuation areas): A cross-plant stock transfer leads to a value update in the stock accounts. An accounting document is generated parallel to the material document for the stock transfer. The stock transfer is valuated at the valuation price of the material in the issuing plant. A cross-plant stock transfer leads to a value update in the stock accounts. An accounting document is generated parallel to the material document for the stock transfer. The stock transfer is valuated at the valuation price of the material in the issuing plant. In the case of a cross-company-code stock transfer, two accounting documents are created at the time of posting: one for each company code. The offsetting entry to the stock posting is then made to a company-code clearing account. Hint: If the stock transfer is entered in two separate steps, valuation always takes place at the time of the first step.

•

Material Requirements Planning (MRP): A change in the plant stock is taken into account by MRP.

Several procedures are available for the physical transfer of materials from one plant to another: • •

One-step procedure Two-step procedure Possible reasons for a stock transfer using the two-step procedure are that the plants are located a long distance from each other and the goods remain in transit for a certain time, or that a different employee is responsible in each plant, each of whom can post movements only in his or her own plant.

• •

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Stock transport order without delivery Stock transport order with delivery via shipping (also possible with billing document).

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One Step Stock Transfer (Transfer Posting) When companies want a very simple process of transferring stock from one plant to another, they can make use of the one step procedure. This will typically be used when plants are a short distance from each other and transit time is not an issue and is not needed for planning purposes. Hint: This situation often works when a plant and distribution center (two plant codes) share the same physical location.

Figure 109: One Step Stock Transfer Posting

In the case of the one-step procedure, the goods issue and goods receipt are posted in a single material document. You must therefore enter all relevant data, such as the material, issuing plant, issuing storage location, receiving plant, and receiving storage location in this one step. The movement type (in the standard system) is 301. This transaction is accomplished by using the normal transfer posting transaction MB1B.

Demonstration: One Step Stock Transfer Purpose Demonstrate how a one step stock transfer posting is performed

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System Data System: Client: User ID: Password: Set up instructions: 1. Create material master for R-F1## at location 1200. SD view, MRP view, Acctg/costing Views 2.

create inventory for 200 pcs of R-F1## at location 1000. Materials Management → Inventory mgmt → Goods Movement → Goods Receipt → Other (MB1C). Use movement type 501.

3.

Create Transfer posting for 25 pieces for the R-F1## at location 1000 to the new product R-F1## at location 1200. Materials Management → Inventory mgmt → Goods Movement → Transfer Posting (MB1B). Use movement type 301.

4.

Review the S/R list for R-F1## at location 1200.

5.

Drill down on the Stock MRP Element and note the 25 pcs is in Unrestricted Stock.

Two Step Stock Transfer (Transfer Posting) When considering transferring stock between locations, many members of management do not like the two step stock transfer posting since the shipping location is making the transaction. If there are issues with quantity discrepancies, this could cause problems in planning since the material has already been posted to unrestricted stock.

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Figure 110: Two Step Stock Transfer Posting

In the case of the two-step procedure, when removing the material from storage (movement type 303), you must specify the receiving plant in addition to the material and the issuing organizational levels. This is necessary because valuation of the stock transfer takes place when the material is removed from storage and posted to stock in transfer at the receiving plant. You can either enter the put away (placement in storage, movement type 305) with reference to the material document of the stock removal or enter all data manually. As a result of the put away, the quantity is booked out of stock in transfer and into unrestricted-use stock at the receiving plant. Valuation of the put away is not necessary, since the stock in transfer and the unrestricted-use stock at the receiving storage location belong to the same plant.

Demonstration: Two Step Stock Transfer Posting Purpose Demonstrate how to perform a two step stock transfer posting.

System Data System: Client: User ID: Password: Set up instructions:

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1.

Access the S/R list for R-F1## plant 1000. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element.

2.

Access the S/R list for R-F1## plant 1200. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element.

3.

Using Tcode MB1B, Transfer 20 pcs of inventory of the R-F1## in plant 1000 to the receiving plant 1200. Use Movement type 303 - Transfer Posting Plant to Plant remove from storage

4.

Access the S/R list for R-F1## plant 2400. Review the on-hand inventory notice the increase and review the details of it by double clicking on the Stock MRP element.

5.

. Note the 20 pcs are still in transfer.

6.

Using Tcode MB1B, Transfer 20 pcs of inventory of the R-F1## in plant 1200. Use Movement type 305 - Transfer Posting Plant to Plant receive into storage

7.

Refresh S/R list for R-F1## at plant 1200. and notice the change to the On-hand balance is now 20 pcs due to the receipt.

8.

Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element. Note the 20 pcs are still in inventory

Damage to Goods During Transportation If goods are damaged during transportation, leading to their destruction, you must report this as scrapping so that the system can correct the figure for the quantity of stock in transit. This can be done in different ways: •

•

Reverse the removal from storage at the issuing plant and then post the scrapping of the material at the issuing plant. In this case, the scrapping is posted on a value basis in the issuing plant. Alternatively, place the full quantity of the goods into storage at the receiving plant and then post the scrapping at the receiving plant. The scrapping is then posted on a value basis at the receiving plant. Hint: Movement types 557 (issue from stock in transit - adjustment posting) and 558 (receipt to stock in transit - adjustment posting) are reserved for use by SAP. They are used to make adjustment postings for stock in transit. These movement types can only be posted with transaction MB1A.

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It is important that the quantity destroyed does not remain in stock in transfer but is reported in the system as scrapped.

Stock Transfer and MRP Companies that engage in a make-to-stock environment, often store their product as close to the customer as possible in distribution centers. For high volume products it is necessary to plan the replenishments of these locations in order to explode the demand through the entire supply chain and take into account the necessary lead times. You can define the procurement type for the material within the MRP data in the material master record of the receiving plant. You can assign a special procurement key to the materials that are predominantly procured via a stock transport order from another plant.

Figure 111: Stock transfer in the material master record

You define special procurement keys in the Customizing of MRPProduction → MRP → Master Data → Define Special Procurement Key. You define special procurement keys based on a plant-dependent basis. If you set up special procurement keys for stock transfers, you must define a key for each supplying plant.

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Figure 112: Stock Transfer Configuration

In the case of a supply shortage, the program can generate purchase requisitions with item category stock transfer (U) for these materials. This requirement can be seen in the supplying plant straight away.

Stock Transfer Without Delivery This type of stock transfer involves not only Inventory Management but also purchasing at the receiving plant. The process begins in the receiving plant with the entry of a stock transport order in the purchasing department. A goods issue referencing this stock transport order is then entered in the issuing plant. The quantity booked out is initially managed as stock in transit at the receiving plant. The process is ended by the posting of the goods receipt against the stock transport order at the receiving plant.

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Figure 113: Stock Transfer Without Delivery

In contrast to a stock transfer without a stock transport order, a stock transfer via a stock transport order has the following advantages: • • • • • •

The stock transport order is integrated within MRP; purchase requisitions generated by MRP can be converted into stock transport orders. The receipt can be planned at the receiving plant. You can enter delivery costs and a forwarder/carrier in the stock transport order. The goods receipt can be posted directly to consumption. In the case of a goods receipt into the warehouse, you can also post the material to stock in quality inspection or to blocked stock. The entire process (goods issue and goods receipt) can be monitored via the PO history.

Displaying Stock in Transit The stock in transit is shown in the material master record in the plant stock view for the receiving plant. A special report for the analysis of transit stocks is available in the Inventory Management menu under Environment →Stock →Stock in Transit (MB5T). With this report, you can select transit stocks for the receiving or issuing plant, for example.

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Stock in transit is also displayed in the Stock Overview and the Warehouse Stocks of Material report. In the Warehouse Stocks of Material report, stocks in transit and stocks in transfer are summarized at plant level in a stock line without a storage location.

Demonstration: Demonstrate Two Step Stock Transfer Without delivery Purpose System Data System: Client: User ID: Password: Set up instructions: Change the following IMG settings: Materials Management → Purchasing → Purchase order → Setup Stock Transport order → Define Shipping Data for plants Review the details for Plant 1200. change the distribution channel from 12 to 10 and SAVE. 1.

Change the material master for R-F1## in plant 1200 to include the procurement key 40 and Save.

2.

Enter Several PIRs (MD61) for 10 pieces per piece for several weeks.

3.

Execute a Single-item, Multi-level MRP run. Be sure to set the purchase requisition indicator to 1 - purchase requisition.

4.

From the S/R list on the first PurRqs. select

5.

Select Convert Purchase Requistion to Purchase Order

6.

From the Document Overview, select the Purchase Requisition number and then select

Details of Element.

Adopt.

7.

Enter the goods receipt for the stock transport order. Logistics → Materials Managment → Inventory Managment → Goods movment → Goods Movement (MIGO)

8.

Choose Goods Receipt and reference Purchase Order.

9.

Enter purchase order number 4151-08## .

10. Check the movement type 351 (Transfer Posting: Unrestricted to Stock in Transit). 11. Choose

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SCM240

12. Set the Item OK indicator for both items. 13. Enter Storage Location 0001 for both items. 14. Choose

Post.

Stock Transfer Two Step with Delivery When initiating the stock transfer process between two locations, companies must consider the impacts of goods issue (shipping) and goods receipt (receiving). If companies are separated by a large distance it is often important to represent the shipment of the product in order to adjust for the goods issue from the shipping facility, but also the intransit or planned receipt. In the two step procedure with stock transport order and shipping processing, stock in transit is created when the goods issue is posted. Stock that is intransit is thus montitored. With this action, one can display the stock in transit in the stock overview for the material.

Figure 114: Two Step Stock Transfer with Delivery

Stock in transit is valuated, but not for unrestricted use. It is stocked at the receiving plant level. A goods receipt is posted in the receiving plant when the goods are received. Depending on the decision you make, you can transfer the stock to unrestricted-use stock, blocked stock, or quality inspection stock.

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You create stock transport orders for stock transfer within a company code using document type UB in the default. In addition to the receiving plant, you also specify the supplying plant here. You also use the item category U (stock transfer) here.A stock transport order with an own MRP element is displayed in the requirements/stock overview. You use document type NB (purchase requisition) , and item category U (stock transfer) for the purchase requisition. You use the stock transport scheduling agreement if stock transfers are to be executed in regular time intervals, or if you want to schedule the delivery dates of a stock transfer precisely. Moreover, you can make settings in Customizing that define whether an availability check is executed or not in the delivering plant when a purchase order is created. Characteristics of a stock transport order: • •

•

The quantity of stock booked out is first stocked in the stock in transit of the receiving plant. Only when the goods receipt is posted is the quantity posted to the stock of the receiving plant. In this way, it is possible to monitor the quantity that is in transit. The transfer posting with the valuation price of the material is valuated in the issuing plant. If the two plants belong to different company codes, the stock transport order is also a stock transfer from company code to company code. In this case, two accounting documents are created when the goods issue is posted. The offsetting entry for the stock posting occurs in a company-code clearing account.

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Menu paths to demonstrate configuration if necessary: IMG → Materials Management → Purchasing → Purchase Order → Setup Stock transfer Order: • •

•

Define Shipping Data for plants (assign internal customer number to receiving plants Assign Delivery Type and Check rule - In this step, you specify whether an SD delivery is to be created in the case of a PO with a certain combination of supplying plant and document type. You can also specify which delivery type is to be used. The delivery type in Sales and Distribution (SD) determines how a delivery is handled. In the standard system, the delivery type ’NL’ is used for stock transfers without a billing document. For stock transfers with a billing document, the delivery type ’NLCC’ is used. Assign Document type, One-step procedure. –

–

If the supplying and receiving plants belong to the same company code, choose the document type ’UB’ or a comparable document type of your own. A physical stock transfer is then carried out without a billing document. If the supplying and receiving plants belong to different company codes, choose the document type ’NB’ or a comparable document type of your own. A physical stock transfer is then carried out with delivery and billing document.

Prerequisites Stock Transfer: • • • •

Create customer master to represent receiving plant in SD. Reviewing plant must be set up as an internal customer (Define shipping data for plants) Define delivery type and assign check rule Assign Document type (one or two step procedure) Note: For more detailed information on Stock transfers attend SCM680 Cross-Application Processes in MM and SD. Course SCM510 deals with the different stock transfers that are possible within inventory management.

Withdrawal from Alternative Plant Often time planners are faced with supply chain planning dilemmas that arise due the geographic closeness of facilities that supply each other. In some situations companies have manufacturing locations within a close geographical area, which tend to support each other with manufactured components. During normal business activity large amounts of goods movements and affect system

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performance negatively. In and effort to minimize master data and other transactions that arise with vertical integration planners can use the special procurement method Withdrawal from Another Plant

Figure 115: Withdrawal from Another Plant

Another alterative for planning vertical integration is using the You can specify for an assembly that the components required to build the assembly are to be withdrawn from a different plant from the planning plant (that is, the issuing plant). Dependent requirements for these components are directly created in the issuing plant. You can use withdrawal from alternative plant for both components produced in-house and procured externally. A special procurement key is defined for both procedures.

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Figure 116: Configuration of Withdrawal from Another Plant

This procedure provides an alternative to using stock transport orders and is especially useful when plants are close together. Prerequisites to Withdrawing from alternative plant •

•

•

In Customizing for MRP, in the IMG activity Define special procurement type, you have maintained a special procurement key for Withdrawal from alternative plant and you have entered the issuing plant there. You have assigned the component, which is to be withdrawn from an alternative plant, to this special procurement key in the material master of the planning plant (MRP 2 view). In the withdrawal plant, you have created a material master for the component to be withdrawn.

Example: Assume you pump that you manufactured is used in a larger cooling unit that is produced in plant 1200. Plant 1200 is on the other side of town about an hour away. Due to such short lead times there is not sense in generating stock transfers as it would be too much work. The heat exchanger that goes into the cooling unit is also manufactured in plant 1200. You carry out the planning run in the planning plant for your cooling unit, that is, in plant 1200. During the planning run, the system creates a planned order for the assembly in plant 1200, if this is necessary.

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The system then creates a dependent requirement for the heat exchanger in plant 1200, and then creates a dependent requirement for the pump in plant 1000. A dependent requirement is created in the issuing plant, that is, in plant 1000, for the pump with the special procurement Withdrawal from alternative plant. When the planned order for the cooling unit is converted into a production order, the dependent requirements of the components are automatically converted into order reservations. The withdrawal for the production order is carried out in plant 1200 for the heat exchange and in plant 1000 for the pump. Note: One of the main purposes of this scenario is to cut down on goods movement transactions.

Demonstration: Demonstrate withdrawal from another facility Purpose System Data System: Client: User ID: Password: Set up instructions: 1. Extend material master R-B1## to location 1100, with MRP, work scheduling, Acctng, and work scheduling views, using R-B1## at 1000 as a template

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2.

change the Material master for R-B1## at location 1000, and enter a special procurement key of 70 - Reservation in alternative Plant 1100.

3.

Using T-Code MB1C, create 1000 pcs of inventory in plant 1100, storage location 0001, movement type 501

4.

With existing requirements for the R-F1## at plant 1000, from the S/R list you will execute a single item multi level MRP (ensure to delete orders).

5.

From the S/R list review the BOM for one of the new planned orders. Pay attention to the Plant for the R-B##.

6.

convert the planned order into a production order

7.

From within the production order set all materials to backflush by setting the backflush indicator on the item overview.

8.

Release and Save the order.

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9.

SCM240

Confirm the production order using transaction CO15. Set to final confirmation and select the Goods movement button. Note the issue storage location

10. Note the inventory in both locations 1000 and 2400 for the R-B1##. The inventory should have been issued at location 1100.

Production in Alternative Plant

Figure 117: Production in Alternative Plant

You can define that a particular product is to be produced in an alternative plant (that is, the production plant) from the planning plant. The planning of the product is carried out in the planning plant but it is actually produced in the production plant. The product’s BOM is created in the production plant. •

• •

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In Customizing for MRP, in the IMG activity Define special procurement type, you have maintained a special procurement key for production in an alternative plant and you have entered the different production plant there. You have assigned this special procurement key to the assembly in the material master of the planning plant (MRP 2 view). You have created a material master for the material in the production plant

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Figure 118: Configuration for Production in Alternative Plant

You first plan material requirements in the planning plant. During the planning run, the system creates a planned order for the assembly in the planning plant, if this is necessary. The following is to be taken into account for the scheduling of the planned orders in the planning plant: The system uses the in-house production times and scheduling margin key entered in the material master record for the planning plant to determine the basic dates. If MRP is carried out using lead time scheduling via the routing, the routing and scheduling margin key in the production plant are the basis of the production date calculation in. If you have defined that the basic dates are to be adjusted for the production dates in lead time scheduling (Customizing, IMG activity Define scheduling parameters for planned orders) the system calculates the basic date by adding the production finish date and the float after production. The system uses the production start date minus float before production as the order start date. The system determines the float before production and the float after production from the scheduling margin key in the material master record for the production plant. You plan material requirements in the production plant. The system explodes the BOM for the assembly in the production plant and determines the dependent requirements. You convert the planned order in the planning plant into a production order. The dependent requirements in the production plant are converted into a dependent reservation and production of the components in the production plant is initiated. When creating the goods receipt for the production order, the stock in the planning plant is increased.

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Demonstration: Demonstrate Production in another plant Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Change Material R-F1## in plant 2400, by setting the special procurement key to 91 - production in plant 1100. In addition make sure the procurement type is set to E. 2.

PIRs were already created in another exercises.

3.

Execute an Multi-level MRP run (MD02), for R-F1##/2400 make sure to select “All Unchanged components”.

4.

Review the Stock/Requirements list (MD04) for R-F1## at plant 2400, and plant 1000.

5.

Review the details of the planned order for R-F1## in plant 2400. Notice the order type is Production in Plant 2 and can not be converted.

6.

Review the S/R list for R-F1## in plant 1000. Notice the planned order with no requirement, however the receiving plant is plant 2400. Review the details of the order.

7.

convert one of the planned orders to a production order and release it. Notice on the assignment tab in the production order the planning and production plant.

8.

review the results in location 2400 in the stock requirements. Note the stock level and the new production location

9.

Confirm the production order using transaction CO15.

10. Note the inventory in both location 1000 and 2400.

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Exercise 11: Multi-Site Planning Exercise Duration: 30 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Initiate multi-site planing by using the special procurement key

Business Example A majority of your pumps are of a make-to-stock nature. The lead times are too great and demand to volatile to plan them as a make to order. However, due to your global customer base you need to stock your product closer to the customer. Plant 2400 is just such a distribution center. You have forecasted at plant 2400 via the S&OP process. Set up plant 2400 so that it will automatically source the R-F1## out of Plant 1000.

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

CATT Z_SCM240 must be run prior to this exercise. It will create the mateiral R-F1## at location 2400.

Task: Planning Stock Transfers The majority of your pumps are of a make to stock nature. In order to provide a high level of customer service, your company has established distribution center/plant 2400. Plant 2400 will need to procure internally, the R-F1## from plant 1000, in order to support customer demand. During the S&OP process you have already created demand at location 2400 for the R-F1##. Change the material master in location 2400 so that it will create stock transfers to location 1000. Execute a multi-level MRP and review the results. 1.

From the stock requirements list for R-F1## at plant 2400, change the material master setting the special procurement key so that demand is source via a stock transfer from location 1000.

2.

From the Stock/Requirements list for you material R-F1## at plant 2400, execute Single-item, Multi-Level, using the following settings Continued on next page

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Field

Value

Purchase req.

1 - Purchase requisitions

Planning mode

3 - Delete

Scheduling

2 - Lead time w/ cap. rqmts

Also plan unchanged components

Select

3.

Refresh the stock requirements list and what do you now see?

4.

Change the stock requirements list and review the R-F1## at plant 1000. What do you see here?

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Solution 11: Multi-Site Planning Task: Planning Stock Transfers The majority of your pumps are of a make to stock nature. In order to provide a high level of customer service, your company has established distribution center/plant 2400. Plant 2400 will need to procure internally, the R-F1## from plant 1000, in order to support customer demand. During the S&OP process you have already created demand at location 2400 for the R-F1##. Change the material master in location 2400 so that it will create stock transfers to location 1000. Execute a multi-level MRP and review the results. 1.

2.

From the stock requirements list for R-F1## at plant 2400, change the material master setting the special procurement key so that demand is source via a stock transfer from location 1000. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

From the S/R list select Environment → Change material, and proceed to the MRP 2 View

c)

In the MRP 2 view set Special Procurement to 41 - Stock Transfer (proc. from plant 1000).

d)

Select

Save

From the Stock/Requirements list for you material R-F1## at plant 2400, execute Single-item, Multi-Level, using the following settings Field

Value

Purchase req.

1 - Purchase requisitions

Planning mode

3 - Delete

Scheduling

2 - Lead time w/ cap. rqmts

Also plan unchanged components

Select

a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level, Use the settings in the table above.

c)

Select

Refresh update

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3.

Refresh the stock requirements list and what do you now see? a)

4.

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As a result you should now see MRP elements PurRqs (Purchase Requisition), being displayed. Additionally you will see the delivering plant column appear to identify the source of supply.

Change the stock requirements list and review the R-F1## at plant 1000. What do you see here? a)

Type over plant 2400 with plant 1000. Press ENTER and elect Refresh

b)

As a result, you should now see MRP elements PRqRel (Release order for a stock transfer requisition ) , being displayed. Additionally you will see the receiving plant column appear to identify the source of supply.

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Lesson Summary You should now be able to: • Explain how to perform Cross location planning in SAP ERP • Demonstrate how cross location planning work in SAP ERP

Related Information • •

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FAQ: Stock transfer with delivery in purchasing (SAP Note number: 0000498143) FAQ: Stock transfer to stock transport order (SAP Note number: 0000521090)

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Lesson: 309

SCM240

Continuous Input/Output Lesson Duration: 35 Minutes

Lesson Overview Learn how distribution keys can be used to model continuous consumption of components and the continuous receipt of assemblies.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate how to initiate a continuous output for a long production run Demonstrate how to initiate continuous input for components that will not be used discretely but continuously

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Some of your production assemblies are so common you are constantly making long runs. In addition the cycle time for manufacturing is quite short. Use the distribution keys in the production version to depict a constant stream of production receipts, while also using the distribution key in the bill of material to show a continuous consumption of components.

Discrete Consumption As a result of scheduling during the planning run, all component requirements and receipts are planned in a discrete manner.

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Figure 119: Discrete Consumption

In supply chain planning the term discrete means at a specific point in time. When scheduling occurs, either basic date or lead time, the receipt is planned at the order finish date. the order finish date is the production finish date + goods receipt processing time. This can be misleading for some types of production. Typically, manufactures that produce product with short cycle times, begin receiving production shortly after the production starts. With a discrete output, it is misleading to the down steam activities, since they only see one receipt, when in actuality, production is being received continuously. Another similar situation is the component consumption during the manufacturing of an assembly. Again this is typical in repetitive type manufacturing were cycle time to manufacture a product is relatively short. In certain situations planners might not have the warehouse space or production floor space to store all the necessary components. However, if a component will be continuously consumed, a planner could possibly spread the receipts or transfers for the components over the duration of the entire order.

Continuous Input The concept of continuous input is relatively simple, but one must understand that is not something that should be used by every material. Continuous input is something that should be used when a planner has relatively simple routings and the production cycle time is short.

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Figure 120: Continuous Input in the Planning Run

Continuous input ins SAP ERP uses functionality called the Distribution Key. This distribution key is defined in the IMG, but applied in the item details of the BOM in the Distribution Key field. In this field, you can enter the distribution key for dividing up dependent requirements or reservations for this component over time. If you enter a distribution function for a component, portions of the dependent requirement are distributed over the runtime of the planned or production order in accordance with the distribution function. This means that dependent requirements are not available in full on the order start date. Instead, they are brought into the production process continuously between the order start date and the order finish date. Note: The system will only create one dependent requirement number for each item and planned order. However, this will trigger multiple replenishment elements to cover the distributed requirement. Caution: When using distribution keys in Planning, you must remember we are typically dealing in days. Even when performing lead time scheduling which is in seconds, receipts and requirements are still planned at daily levels. When a distribution key with equal distribution is used, the dependent demands will distributed evenly over the total number of days between the order start date and the order finish date. Remember this will include floats before and after, so it may not give you a true distribution!

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Caution: Use of the distribution key would not be recommended for order with a long cycle time that have many operations that are performed sequentially. In this type of situation a planner would typically allocate components to an operation to improve detailed scheduling. Use of the distribution key and component allocation in SAP ERP would be a conflict in functionality.

Continuous Output The concept of continuous output is very similar to continuous input, however the results can only be used in a limited fashion. Continuous output is something that should be used when a planner has relatively simple routings and the production cycle time is short. Note: Continuous input and output are mutually exclusive functionality.

Figure 121: Continuous Output in the Planning Run

You can specify that the output/receipt of a planned order is to be spread over the validity period of the planned order or production order automatically during the planning run or in repetitive manufacturing. To do so, enter a distribution key in the production version when maintaining the material master record. In materials planning, only one planned order will be created. However if you review the Stock/Requirements list you will see the planned order has been split into daily buckets, noting the order number is the same.

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Caution: The distribution function has no effect on the materials planning of the material but on the availability check of ATP logic. If you are not using ATP the distribution key in the production version serves not purpose. . To clarify to this and for better understanding of the planning result, these orders are not displayed as distributed in the MRP list. This causes differences between the MRP list and current stock/requirements list. Caution: When using distribution keys in Planning, you must remember we are typically dealing in days. Even when performing lead time scheduling which is in seconds, receipts and requirements are still planned at daily levels. When a distribution key with equal distribution is used, the planned order receipts will distributed evenly over the total number of days between the order start date and the order finish date. Remember this will include floats before and after, so it may not give you a true distribution!

Distribution Keys The concept of distributing data over periods of time is a common function in SAP ERP. In the planing of production and procurement we will use the distribution key in several areas: • • • • •

Demand Management: Splitting demand from larger periods of time to smaller periods of time during the transfer from SOP/Flexible Planning MRP/MPS: Displaying continuous output planned/production/process orders (ATP) MRP/MPS: Generating continuous dependent demand (input) for a given order. Planning Table: Display the production quantities for one order over a period of time Capacity planning: Distributing capacity requirements based on the scheduling duration.

The distribution functionality for capacity planning is different than in the other areas. In capacity planning the capacity requirements will be distributed over the lead time scheduling duration, so you will get a more exact distribution In the planning run, the distribution functionality works over the order dates, not the production dates/times. For distribution to work in the planning run, planners must apply a distribution key in the item details in the BOM or the details of the production version. While the master data fields call it distribution key, in configuration it is defined as the Distribution Strategy.

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Figure 122: Distribution Strategy

The distribution strategy consists of two parts: • •

Distribution Function Distribution Types

The Distribution Function defines the percentage of the quantity that is to be produced after a certain percentage of the total production time. This will be defined in another customizing table.

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Figure 123: Distribution Function

In the definition of a distribution function you specify the percentage of the quantities that are to be produced within a certain percentage of the production time. In the duration field indicates what percentage of the demand/receipts should be planned based on how much of the order has elapsed. The Percent Requirement field determines what percentage of the receipts or demand should be planned after a certain percentage of the order has elapsed. These fields are mutually inclusive The distribution function is made up of a series of basic values, each consisting of a percentage time value and a percentage requirements value. The percentage time value defines a point in the duration of the order. The percentage requirements value specifies the proportion of the demand/receipt that must be scheduled by a certain point in time. In the case of a discrete distribution strategy, the receipts/requirements are scheduled at the specified points in time. In the case of a continuous dispatching strategy, the requirements are distributed equally between two points in time. The Distribution Type defines whether the requirement is distributed exactly according to the points defined in the function or over the time axis according to the distribution function. The definition of the distribution type is hard coded in the software but you have two choices: • •

376

01 - Carry out distribution continuously through time 02 - Carry out distribution according to discrete points

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Exercise 12: Continuous Input/Output in the Planning Run (OPTIONAL) Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how distribution keys can be used in the BOM to model continuous input • Demonstrate how distribution keys can be used in the production version to model continuous output

Business Example Some of your production assemblies are so common you are constantly making long runs. In addition the cycle time for manufacturing is quite short. Use the distribution keys in the production version to depict a constant stream of production receipts, while also using the distribution key in the bill of material to show a continuous consumption of components.

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

CATT Z_SCM240 must be run

Task 1: Continuous Input in the Planning Run The fly wheel (R-B2##) for you pump (R-1##) is an expensive item. You are receiving pressure from accounting to minimize the amount of inventory over a period of time. The assembly for your pump R-F1##, has a relatively short cycle time in production, yet you typically schedule long runs. Use the distribution key for your turbo drive R-B2## to distribute the dependent demand over the entire production run. 1.

For product R-B2## at plant 1000, review the Stock/Requirements list, focusing on the first dependent requirement for product R-F1## at plant 1000.

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2.

In another session, change the bill of material for product R-F1## at plant 1000, usage production. Your fly wheel is consumed in a continuous fashion. Change item R-B2## so that is consumed equally over the duration of the planned order.

3.

From the Stock/Requirements list for you material R-F1## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling.

4.

Select a specific planned order for R-F1## at plant 1000 and populate the following table: Planned Order Number Order Start Date Order Finish Date Production Start Date Production Finish Date

5.

Review the stock requirements list for your product R-B2## at plant 1000.

Continued on next page

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6.

Select the first dependent requirement that came from R-F1##. What is the date of the first dependent requirement? What is the Dependent Requirement number for R-B2##? What is the planned order number for R-F1##?

7.

Select the second dependent requirement that came from R-F1##. What is the Dependent Requirement number for R-B2##? What is the planned order number for R-F1##?

Task 2: Continuous Output in the Planning Run Some of your pumps are assembled very quickly, but you may have long production runs due to high demand. Your colleagues in shipping need to plan the shipment of product, so knowing the variability of production is essential. When assembling R-F2##, you have very short cycle times. Therefore, you want to use the distribution key to show multiple production receipts. Create a production version and use an equal distribution key to spread the receipts over time. 1.

From the stock requirements list for R-F2## at plant 1000, change the material master by creating a production version A001 (continuous Output BOM 01) in the MRP 4 view, which will include the alternative BOM 1 with a usage 1- Production and a “detailed” standard routing for your product R-F2## at plant 1000. Be sure to include the distribution key for plant. Make the production version valid from today until the end of next year. Before saving set your selection method in the MRP 4 view to 2 Selection by Production version.

2.

From the Stock/Requirements list for you material R-F2## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling.

3.

Select a specific planned order and populate the following table: Continued on next page

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SCM240

Planned Order Number Order Start Date Order Finish Date Production Start Date Production Finish Date 4.

Select a second MRP element for the same planned order you selected in the previous step and populate the following table: Planned Order Number Order Start Date Order Finish Date Production Start Date Production Finish Date

5.

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Where there any similarities between the two planned order numbers.

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Solution 12: Continuous Input/Output in the Planning Run (OPTIONAL) Task 1: Continuous Input in the Planning Run The fly wheel (R-B2##) for you pump (R-1##) is an expensive item. You are receiving pressure from accounting to minimize the amount of inventory over a period of time. The assembly for your pump R-F1##, has a relatively short cycle time in production, yet you typically schedule long runs. Use the distribution key for your turbo drive R-B2## to distribute the dependent demand over the entire production run. 1.

For product R-B2## at plant 1000, review the Stock/Requirements list, focusing on the first dependent requirement for product R-F1## at plant 1000. a)

2.

3.

4.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

In another session, change the bill of material for product R-F1## at plant 1000, usage production. Your fly wheel is consumed in a continuous fashion. Change item R-B2## so that is consumed equally over the duration of the planned order. a)

Follow menu path: Logistics → Production → Master Data → Bills of Material → Bill of Material → Material BOM → Change (CS02)

b)

Select the item for R-B2##, and select

c)

In the Basic Data view, enter a Distribution Key of 1000 - GLEI (Equal Distribution)

d)

Select

item.

Save.

From the Stock/Requirements list for you material R-F1## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling, and then refresh the S/R list

Select a specific planned order for R-F1## at plant 1000 and populate the following table:

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5.

Planned Order Number

Varies

Order Start Date

Varies

Order Finish Date

Varies

Production Start Date

Varies

Production Finish Date

Varies

Review the stock requirements list for your product R-B2## at plant 1000. a)

6.

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Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

Select the first dependent requirement that came from R-F1##. What is the date of the first dependent requirement? What is the Dependent Requirement number for R-B2##? What is the planned order number for R-F1##? Answer: Place your cursor in the dependent requirement and select Details of Elements. The first date of the dependent requirement is: VARIES R-B1## Dependent Requirement Number: VARIES R-F2## Planned order number:VARIES

7.

Select the second dependent requirement that came from R-F1##. What is the Dependent Requirement number for R-B2##? What is the planned order number for R-F1##? Answer: Place your cursor in the dependent requirement and select Details of Elements. R-B2## Dependent Requirement Number: VARIES , and is the same as the first dependent demand MRP element. R-F1## Planned order number:VARIES, however it comes from the same planned order as the first dependent requirement

Continued on next page

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Task 2: Continuous Output in the Planning Run Some of your pumps are assembled very quickly, but you may have long production runs due to high demand. Your colleagues in shipping need to plan the shipment of product, so knowing the variability of production is essential. When assembling R-F2##, you have very short cycle times. Therefore, you want to use the distribution key to show multiple production receipts. Create a production version and use an equal distribution key to spread the receipts over time. 1.

From the stock requirements list for R-F2## at plant 1000, change the material master by creating a production version A001 (continuous Output BOM 01) in the MRP 4 view, which will include the alternative BOM 1 with a usage 1- Production and a “detailed” standard routing for your product R-F2## at plant 1000. Be sure to include the distribution key for plant. Make the production version valid from today until the end of next year. Before saving set your selection method in the MRP 4 view to 2 Selection by Production version. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

From the S/R list select Environment → Change material, and proceed to the MRP 4 View

c)

Select Production Versions button

d)

Enter version A001, with description Continuous Output, and enter today’s date and the date for the end of next year, then select Details.

e)

In the Planning Data section, under Detailed Planning, select Task list type Routing, then using the search functionality, search for your Group No./Counter, by using your material R-F2## at plant 1000.

f)

Enter Alternative BOM 1, and BOM Usage 1.

g)

In the distribution key field select 1000 GLEI Equal Distribution

h)

select Continue twice and

i)

Set the selection method in the MRP 4 view to 2 - Selection by production version

j)

Select

continue through any messages.

Save

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2.

3.

4.

5.

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From the Stock/Requirements list for you material R-F2## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 -Lead time scheduling, and then refresh the S/R list

Select a specific planned order and populate the following table: Planned Order Number

Varies

Order Start Date

Varies

Order Finish Date

Varies

Production Start Date

Varies

Production Finish Date

Varies

Select a second MRP element for the same planned order you selected in the previous step and populate the following table: Planned Order Number

Varies

Order Start Date

Varies

Order Finish Date

Varies

Production Start Date

Varies

Production Finish Date

Varies

Where there any similarities between the two planned order numbers. Answer: The order numbers were the same, and the order start date were the same. The planning run only creates one planned order however, the individual MRP elements will have the same start day however a different finish date for each element.

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Lesson Summary You should now be able to: • Demonstrate how to initiate a continuous output for a long production run • Demonstrate how to initiate continuous input for components that will not be used discretely but continuously

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Unit Summary You should now be able to: • Explain how the planning run works in detail. • Describe the different methods of modeling buffers in the planning run • Demonstrate how several of the different methods of safety stock work • Demonstrate how Lot size techniques an influence the size of a planned orders • Demonstrate how use several fields in the material master to influence the size of a planned order • Explain how planning calendars can be used to specifically coordinate the quantity and timing of receipts. • Explain the configuration process of Lot Size techniques. • Explain how to perform Cross location planning in SAP ERP • Demonstrate how cross location planning work in SAP ERP • Demonstrate how to initiate a continuous output for a long production run • Demonstrate how to initiate continuous input for components that will not be used discretely but continuously

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Test Your Knowledge 1.

What is considered in the net requirements calculation.(What is compared?)

2.

Your planners will not attempt to reschedule out a procurement element (delay) if it’s less than three days early. This will simply cause too much confusion with vendors. Where would this be defined? Choose the correct answer(s).

□ □ □ □ □ □

A B C D E F

Schedule Margin Key Safety time Tolerance value Min Queue time Vendor delay factor Withdrawl period

3.

Where is the tolerance value maintained?

4.

Dynamic safety stock shows up as an MRP elements throughout the horizon? Determine whether this statement is true or false.

□ □ 5.

True False

If a safety time of 2 days has been specified, the requirement date is brought forward 2 days. Determine whether this statement is true or false.

□ □

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6.

What are the three different groups of lot-size procedures?

7.

If you wish to define the period lot-size other than standard week , month etc. how can this be accomplished?

8.

If , when using lot size procedure, “replenish up to maximum stock level”, the shortage quantity for a day exceeds the max. stock level , what will the response of the system?

9.

Lot-sizing procedures are defined in the Customizing activity . Fill in the blanks to complete the sentence.

10. For optimizing lot-sizing procedures, what is the formula used to calculate storage costs?

11. What is the benefit to using a two step stock transfer process?

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12. For material planning purposes, what controls the relationship between plants? Choose the correct answer(s).

□ □ □ □ □

A B C D E

Plant Master GR Processing Time Transportation Lanes Process Models Schedule Margin Key

13. Assume you two buildings on the same physical grounds. Close proximity to each other. Each building has been configured as a plant. If one plant produces a component that the other needs for their manufacturing process, how could this be modelled in SAP ERP? Choose the correct answer(s).

□ □ □ □

A B C D

Stock transfers between the plants Trucks and forklifts Withdrawl from another plant Set the procurement type to E

14. Non discrete input and output is controlled using the Fill in the blanks to complete the sentence.

15. The distribution key is entered on what master data object(s)? Choose the correct answer(s).

□ □ □ □ □ □

A B C D E F

Material Master Production Version BOM Header BOM Item Routing Work center

16. If a distribution is used the material must be distributed equally among the individual time periods. Determine whether this statement is true or false.

□ □

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Answers 1.

What is considered in the net requirements calculation.(What is compared?) Answer: Stock available for planning, fixed receipts, and firm orders are compared with requirements plus safety stock.

2.

Your planners will not attempt to reschedule out a procurement element (delay) if it’s less than three days early. This will simply cause too much confusion with vendors. Where would this be defined? Answer: C The tolerance value defines a period for which is necessary to generate exception messages.

3.

Where is the tolerance value maintained? Answer: Tolerance value is maintained in the MRP Group .

4.

Dynamic safety stock shows up as an MRP elements throughout the horizon? Answer: False Dynamic safety stock does not have its own MRP element. It pegs to future requirements and plans the production in advance?

5.

If a safety time of 2 days has been specified, the requirement date is brought forward 2 days. Answer: False It is the order proposal that is moved ahead.

6.

What are the three different groups of lot-size procedures? Answer: Static, Periodic and Optimum

7.

If you wish to define the period lot-size other than standard week , month etc. how can this be accomplished? Answer: Define the periods by a planning calendar.

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Test Your Knowledge

8.

If , when using lot size procedure, “replenish up to maximum stock level”, the shortage quantity for a day exceeds the max. stock level , what will the response of the system? Answer: The system prioritizes a balanced stock/requirements situation over the lot-sizing procedure so will cover the shortage.

9.

Lot-sizing procedures are defined in the Customizing activity Check Lot-Sizing Procedure. Answer: Check Lot-Sizing Procedure

10. For optimizing lot-sizing procedures, what is the formula used to calculate storage costs? Answer: The formula is: Storage costs = Requirement x Price x Storage cost interest rate x Time in storage / 100 / 365. 11. What is the benefit to using a two step stock transfer process? Answer: With the two step process In-Transit inventory is visable. 12. For material planning purposes, what controls the relationship between plants? Answer: E The schedule margin key (MRP2) identifies a relationship for the specific material. 13. Assume you two buildings on the same physical grounds. Close proximity to each other. Each building has been configured as a plant. If one plant produces a component that the other needs for their manufacturing process, how could this be modelled in SAP ERP? Answer: A, C A and C are both viable options. C is more efficient. However A provides more visibility. 14. Non discrete input and output is controlled using the Distribution Key. Answer: Distribution Key.

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15. The distribution key is entered on what master data object(s)? Answer: B, D The distribution key is entered on the BOM Items or Production Version. 16. If a distribution is used the material must be distributed equally among the individual time periods. Answer: False Proportions may also be used in addition to equal distribution.

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Unit Overview This unit will introduce you into some of the details of how scheduling and master data selection are performed during the planning. These topics will have direct impact into the arrival dates of replenishments as well as the quantity and requirements dates of sub-assemblies and raw materials.

Unit Objectives After completing this unit, you will be able to: • • • • • • • •

Demonstrate how Basic Scheduling works in the Planning run Demonstrate how scheduling works for Externally Procured materials. Demonstrate how Lead Time Scheduling works in the Planning run Demonstrate knowledge of configuring lead time scheduling. Demonstrate how a bill of material will be chosen during the planning run if multiple BOMs exist Demonstrate how a task list will be chosen during the planning run if multiple routings exist. Demonstrate how a production version will be chosen during the planning run if multiple versions exist. Identify how configuration can influence master data determination

Unit Contents Lesson: Basic Dates Scheduling in the Planning Run .....................395 Demonstration: Basic Date Scheduling .................................401

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Exercise 13: Basic DateScheduling in the Planning Run .............405 Lesson: Lead Time Scheduling in the Planning Run.......................413 Demonstration: Lead-Time Scheduling .................................416 Demonstration: .............................................................421 Demonstration: Reduction and Adjustment .............................422 Demonstration: Order Dates with Lead-Time Scheduling and Postponing the Dependent Requirement Dates ........................423 Exercise 14: Lead Time Scheduling in the Planning Run .............425 Lesson: Master Data Selection during the Planning Run..................433 Demonstration: BOM Selection ID/BOM Usage........................438 Demonstration: Lot Size Selection .......................................439 Demonstration: BOM Dates in MRP .....................................445 Demonstration: BOM Explosion Numbers ..............................447 Demonstration: Routing Selection .......................................452

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Lesson: 334

Lesson: Basic Dates Scheduling in the Planning Run

Basic Dates Scheduling in the Planning Run Lesson Duration: 30 Minutes

Lesson Overview In this lesson, you will learn about how basic data scheduling is performed during the planing run or during manual planned order creation.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate how Basic Scheduling works in the Planning run Demonstrate how scheduling works for Externally Procured materials.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Due to a large number of materials that must be run on nightly basis you need to run MRP as fast as possible. In order to do this you must be aware of how scheduling is going to impact your planning run. Execute MRP with basic dates planning and interpret the results.

An Overview of Procurement Type During the planning run, once the system determines a replenishment is required, it is necessary to determine the source of the supply.At this time, the system checks whether the receipt is to be produced in-house or procured externally. During scheduling, the system calculates the start and finish dates of the procurement elements for materials produced in-house or externally. To calculate these dates, the system uses the in-house production time for parts produced in-house and the delivery time in the material master or purchasing info record for parts procured externally.

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Figure 124: Procurement Types

The procurement type defines whether a material is produced in-house or procured externally. The procurement type is predefined by the material type in the Customizing for the material master and is defined in the material master record. Most material types allow the user to decided how the material will be procured. This can be set in the MRP 1 tab in the procurement type field. Material types such as ROH RAW, come pre-configured as buy only, but this can be changed in configuration of the material type. If the procurement type allows both in-house production and external procurement, the MRP is always based on in-house production. Note: You can set a different type of procurement to in-house production or external procurement using the special procurement key in the material master. The special procurement key will be discussed in the Multi-site planning lesson.

Basic Dates Scheduling Prior to executing , a planning run planners must decided what type of scheduling to perform. In any of the planning run programs there is an indicator called Scheduling. SAP ERP offers two types of scheduling: 1. 2.

396

Basic Dates Scheduling - Using the material master Lead Time Scheduling - Using routing or master recipe (task list).

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Lesson: Basic Dates Scheduling in the Planning Run

Basic dates scheduling is a rough from of scheduling since it will schedule in daily buckets. Lead time scheduling will perform detail scheduling to the second, since it has the detailed information contain in the routing Note: Only lead time scheduling will generate capacity requirements which will all companies to perform capacity evaluation and leveling functions. In this section we will focus on basic dates scheduling. Customizing: Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Parameters for Determining the Basic Dates During the planning run, when a material has a procurement type E - Inhouse or X - Both, the system will generate a planned order when a replenishment is required. With materials planned using MRP, and future requirements dates are known, backward scheduling is used for these materials.

Figure 125: Backward Scheduling for In-house Production

With backward scheduling, first the system determines the order finish date by scheduling the goods receipt processing time backwards from the requirements date. The Goods Receipt (GR) processing time is located in the MRP 2 view of the material master. This valued specifies the number of workdays that are required after the receipt of the goods for entering the receipt into the system and placing it in storage.

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Caution: Be careful when determining the GR processing time. It is not the best scenario to use this buffer to determine quality inspection time. When the receipt is entered into the system the GR processing time is no longer valid. Therefore if this was used to model Quality inspection time, planners have no idea when the product is available. Starting from the order finish date, the system counts backward by the length of the in-house production time to determine the order start date. In the material master two types of inhouse production times are available: • •

Lot-size Independent - (Integer values only) MRP 2 or Work Scheduling view Lot-size Dependent - (real numbers - decimal) Work Scheduling view

You can only have one of these items populated at any time. The lot-size dependent value consists of Setup time (fixed duration), Inter-operation times/floats (fixed duration) and processing/production time (variable duration). Both the lot-size dependent and independent can be updated via the routing/recipe. Note: When using lot-size independent values, these are the only values used in determining the order start and order finish date. Note: When using the lot-size dependent values, the in-house production time comprises: • • • • •

Float after production (fixed duration - Scheduling margin key) Processing time (variable) Setup time (fixed duration) Inter-operation times (fixed duration) Float before production (fixed duration - Scheduling margin key)

While all of these elements may be used, users will not see each of the individual segments, only the order start and finish time. Caution: If safety time is being used, it will offset the requirements date first prior to calculating the order finish day. Safety time is used in scheduling regardless of which lot size type you use. After using the lot-size parameters, the order start date is derived. Once the order start date is calculated, the system determines the opening date. The opening date is determined by subtracting the opening period from the order start date. The opening period reflects the processing time that the MRP controller requires to convert planned orders. You define the opening period as a float of the scheduling margin key in the Customizing for MRP, Production → MRP → Planning →

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Lesson: Basic Dates Scheduling in the Planning Run

Scheduling and Capacity Parameters → Define Floats (Scheduling Margin Key). The scheduling margin key can be entered in the material master (MRP 2) or for each plant . Note: The Opening period does not influence the order start or finish date. Therefore depending upon the situation, the opening periods may be scheduling on past date. However, exception messages are generated to inform the planner the standard “lead times” have been breached.

Figure 126: Forward Scheduling for In-House Production

If during backward scheduling of materials planned using MRP, the system determines an order start date is in the past, it automatically switches to forward scheduling in order to receive realistic scheduling data. With forward scheduling, the system sets the current date as the order start date. The in-house production time is added to the current date, which determines the order finish date. The goods receipt processing time is added to the order finish date to determine the MRP date. The material is available from this date onwards. While this is not the best scenario, an exception message will be generated identifying the opening date is in the past. There is no order creation date with forward scheduling because the opening date calculated is in the past. In Customizing for MRP, Production → MRP → Planning → Scheduling and Capacity Parameters → Parameters for Determining the Basic Dates, you define for each plant that the system does not automatically switch to forward scheduling when determining the basic dates but all the order to schedule in the past. If the indicator is set, backward scheduling is always used to determine the basic dates even if the start date is in the past.

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Figure 127: Order Dates for Basic Scheduling

Once the planned order is scheduled, the bill of material will be copied into the planned order. At this time using the order start date, the system creates dependent requirements for the bill of mateiral items. Taking the dependent requirements date as the availability date, the system determines the basic order dates of the components by means of backward scheduling using in-house production time or planned delivery time. Caution: With basic scheduling, no capacity requirements are calculated or dispatched for the order.

Figure 128: Changing Dependent Requirement Dates

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Lesson: Basic Dates Scheduling in the Planning Run

In the BOM explosion, the required components or assemblies are determined for the relevant BOM. Often times due quality requirements, planners would like to bring materials in early. In addition when dealing with long production times, planners would like to delay the arrival of certain materials, delivering them closer to their point of consumption. When performing basic dates scheduling planners can offset the dependent requirements dates using the Lead time offset field in the bill of material. When scheduling the dependent requirement date, of a particular component, the date can be adjusted using the negative lead time or positive lead times. Enter a positive number of days and the component is not required until after the start date. Enter a negative number of days and the component is required before the start date. Caution: The lead time offset field will only be used in Basic Dates Scheduling. It is not applicable in Lead time scheduling. In converse, the operation lead time offset is only applicable during lead time scheduling. The positive lead time is not taken into account in lead-time scheduling. It is used for the simulation of component assignment in the routing during basic-date scheduling.

Demonstration: Basic Date Scheduling Purpose To know more about basic scheduling.

System Data System: Client: User ID: Password: Set up instructions: Explain basic scheduling with the help of a planned order: 1.

Call up the material master R-F1##, the plant 1000. Display and explain the following fields: • • • •

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Scheduling the margin key (MRP 2) Lot-size-independent in-house production time (MRP 2) and lot-size-independent (work scheduling) Goods receipt processing time (MRP 2) Planned delivery time (MRP 2)

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2.

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Display and explain the following in Customizing: •

Definition of the scheduling margin key: Customizing: Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Define Floats (Scheduling Margin Key)

•

Order Start Date in the Past indicator at plant level: Customizing: Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Parameters for Determining the Basic Dates or Customizing: Production → Material Requirements Planning → Plant Parameters → Carry Out Overall Maintenance of Plant Parameters The parameter order start date in the past is maintained only per plant. The switch in the MRP group parameter is wrong!

3.

Execute Material Requirements Planning for material R-F1##, plant 1000, using planning mode 3 and scheduling indicator 1.

4.

Stock/requirements list of material R-F1##, plant 1000. Double-click a planned order and “Change element”. The planned order contains only the basic dates, not production dates or capacity requirements.

Scheduling for External Procurement Planners are typically responsible for all materials that are relevant for production. When dealing with high volume materials your purchasing department will often setup blanket purchase orders. These are referred to as scheduling agreements in SAP ERP. Prior to the planning run, there are two indicators that are relevant to purchasing activities, Create Purchase req., and Delivery Schedules. If the indicators are set to Planned Orders, only planned orders will be created. Otherwise purchasing related documents will be created. In order for purchasing documents to be created the procurement type must be set to F- External in the MRP 2 view of the material master.

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Figure 129: Scheduling for External Procurement

Scheduling for externally-procured materials takes place in the same way as for materials produced in-house. Working back from the dependent requirements date, the system will adjust the delivery date by subtracting the GR processing time. This will determine the Delivery date/Order finish date. The system will then backwards schedule using the Planned delivery lead time in the material master. You enter the planned delivery time in calendar days. It can be determined on a non-vendor-specific or vendor-specific basis.

Figure 130: MRP/Purchasing configuration

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In Customizing Production → MRP → Planning → Procurement Proposals → Define External Procurement, planners can set by Plant or MRP group the selection of vendor specific planned delivery times. By setting the indicator Scheduling Information req/agreement, planners can choose vendor specific lead times over the non-vendor specific delivery time in the material master. In addition in the plant parameters, you can define the purchasing department processing time in workdays. Lastly in the plant/MRP group you can define settings for the planning run, that will over-ride what has been set in the planning run for those specific materials. You maintain the non-vendor-specific planned delivery time in the material master (view “MRP 2”). You enter a vendor-specific planned delivery time in the purchasing info record or in the outline agreement. It is used in the planning run if the indicator “Scheduling info record/agreement” is maintained as a plant parameter or the MRP group parameter in Customizing and a vendor can be assigned in automatic source determination. This will be discussed in another lesson.

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Exercise 13: Basic DateScheduling in the Planning Run Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Describe the functions of scheduling • Monitor the order dates in multilevel production

Business Example Based on material R-F1## in plant 1000, the project team examines the possibilities for staging the assemblies and components are different times in multilevel production planning.

System Data System: Client: User ID: Password: Set up instructions:

Task 1: Understanding Basic Dates Scheduling As a production planner, your responsibility is to keep customer service high and inventories as low as possible. In order to do this, it is important that you understand the details of how the planning run performs scheduling, for both in-house production and external production. Execute a multi-level planning run with basic dates scheduling and interpret the results. 1.

Call the Stock/requirements list for material R-F1## in the plant 1000. From the S/R list execute a single-iteml multi-level planning run. Make sure to set the planning mode to 3 - Delete and Re-create planning data, and the scheduling indicator to 1 - Basic dates will be determined for planning. Once complete refresh the Stock/Requirements list.

2.

Select any planned order, which is not firmed and which does not show any exception message. Make a note of the number of the planned order. _______

3.

Select the planned order and run the order report. Review all lines of the report. Fill out the details of the chart below by looking at the details of each element. Continued on next page

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R-F1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time:

R-B1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: R-B4## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: 4.

What relationship do the dates have with one another? _________________________________________________ _________________________________________________ _________________________________________________

5.

Why are there no production dates? _______________________________ _______________________________ _______________________________

Task 2: Lead Time Offsets The assembly electronic turbo drive R-B4## cannot be installed until assemblies R-B1##, R-B2##, and R-B3## are assembled. Therefore, the electronic turbo drive should be made available later in the basic-date scheduling. 1.

Change the BOM for material R-F1## in the plant 1000, with a usage 1 production. Update the BOM so that material R-B4## will be delivered 5 days in advance of the start of the order.

Continued on next page

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2.

From the Stock/Requirements list execute a single-item, multi-level MRP runfor material R-F1## in plant 1000. Make sure to set the planning mode to 3 - Delete and Re-create planning data, and the scheduling indicator to 1 - Basic dates will be determined for planning

3.

From the Stock/Requirements list select the first planned order in the list. Review the detail of the planned order by looking at the component list.

4.

What are the requirements dates of the different components: Component

Requirement

R-B1## R-B2## R-B3## R-B4##

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Solution 13: Basic DateScheduling in the Planning Run Task 1: Understanding Basic Dates Scheduling As a production planner, your responsibility is to keep customer service high and inventories as low as possible. In order to do this, it is important that you understand the details of how the planning run performs scheduling, for both in-house production and external production. Execute a multi-level planning run with basic dates scheduling and interpret the results. 1.

2.

Call the Stock/requirements list for material R-F1## in the plant 1000. From the S/R list execute a single-iteml multi-level planning run. Make sure to set the planning mode to 3 - Delete and Re-create planning data, and the scheduling indicator to 1 - Basic dates will be determined for planning. Once complete refresh the Stock/Requirements list. a)

Follow menu path Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Enter your material R-F1## and plant 1000 and press Enter

c)

Select Single-item, Multi-level to execute your planning run

d)

Set the planning mode to 3 - Delete and Re-create planning data, and the scheduling indicator to 1 - Basic dates will be determined for planning

e)

Press ENTER twice

f)

Return to the S/R list and select

Select any planned order, which is not firmed and which does not show any exception message. Make a note of the number of the planned order. _______ a)

3.

Refresh.

Number of selected planned orders: Varies

Select the planned order and run the order report. Review all lines of the report. Fill out the details of the chart below by looking at the details of each element.

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R-F1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time:

R-B1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: R-B4## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: a)

Select the planned order by placing your cursor in the MRP element section of the planned order. Then select bottom-left of the screen.

Order report at the

Open all lines.

b)

In the next screen select

c)

In the order report, select the date of the relevant MRP element (planned order/purchase requisition) and select Copy the dates into the subsequent table

Display element.

d)

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R-F1##Basic dates Production dates End:Varies End:Not available Start:Varies Start:Not available Goods receipt processing time: 1 day

R-B1##Basic dates Production dates End:Varies End: Not available Start:Varies Start: Not available Goods receipt processing time: 1 day R-B4##Basic dates Production dates End:Varies End: Not available Start:Varies Start: Not available Goods receipt processing time: 1 day 4.

What relationship do the dates have with one another? _________________________________________________ _________________________________________________ _________________________________________________ a)

5.

The order start date of the finished product coincides with the order finish dates of the assemblies plus the goods receipt processing times of the assemblies.

Why are there no production dates? _______________________________ _______________________________ _______________________________ a)

There are no production dates because material requirements planning was executed with scheduling indicator 1 (basic-date scheduling).

Continued on next page

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Lesson: Basic Dates Scheduling in the Planning Run

Task 2: Lead Time Offsets The assembly electronic turbo drive R-B4## cannot be installed until assemblies R-B1##, R-B2##, and R-B3## are assembled. Therefore, the electronic turbo drive should be made available later in the basic-date scheduling. 1.

2.

Change the BOM for material R-F1## in the plant 1000, with a usage 1 production. Update the BOM so that material R-B4## will be delivered 5 days in advance of the start of the order. a)

Menu path: Logistics → Production → Master Data → Bills of Material → Bill of Material → Material BOM → Change (CS02)

b)

Select the item for the assembly R-B4## and select

c)

On the Basic data tab page, define a positive Lead-time offset of 5 workdays.

d)

Select

Item.

Save.

From the Stock/Requirements list execute a single-item, multi-level MRP runfor material R-F1## in plant 1000. Make sure to set the planning mode to 3 - Delete and Re-create planning data, and the scheduling indicator to 1 - Basic dates will be determined for planning a)

3.

4.

From the Stock/Requirements list select the first planned order in the list. Review the detail of the planned order by looking at the component list. Details of Element.

a)

Select the first planned order and select

b)

Select

c)

At the top of the planned order select component overview.

Display Element

What are the requirements dates of the different components: Component

Requirement

R-B1##

Varies

R-B2##

Varies

R-B3##

Varies

R-B4##

Varies from the other three

Due to the positive lead time of 5 days, which is set in assembly R-B4##, the order finish date of this assembly is 5 days after the order finish date of assembly R-B1##. The requirements for R-B4## are pushed back 5 working days.

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Lesson Summary You should now be able to: • Demonstrate how Basic Scheduling works in the Planning run • Demonstrate how scheduling works for Externally Procured materials.

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Lesson: 351

Lesson: Lead Time Scheduling in the Planning Run

Lead Time Scheduling in the Planning Run Lesson Duration: 40 Minutes

Lesson Overview In this lesson, you will learn about lead time scheduling in the planning run. In addition you will learn how lead time scheduling impacts the capacity planning process.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate how Lead Time Scheduling works in the Planning run Demonstrate knowledge of configuring lead time scheduling.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Due to high utilization on several resources, you must evaluate the capacity requirements in order to level the production plan or make adjustments to the demand plan. In sure the as a result of the planning run, you have exact production times and locations in addition to capacity requirements being generated.

Lead Time Scheduling Often times planning to the day is not detailed enough for some planners. Either the component scheduling is to rough or they need capacity requirements generated to perform capacity evaluation and leveling. In order to accomplish these goals planners need make use of the task list during the planning run.

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Figure 131: Lead-Time Scheduling

Prior to initiating the planning run, planners can decide if they want to use the material master for scheduling or the task list. You can trigger lead-time scheduling for the planning run by using the scheduling indicator 2 - (lead-time scheduling and capacity planning). During the planning run with the scheduling indicator 2, two sets of dates are calculated, Order start/finish and Production star/finish. The order start and finish dates are determined for each order using basic scheduling. This is followed by the actual lead-time scheduling, which will be used to calculate the production start and stop dates. Alternatively, the production dates can also be executed manually for individual planned orders (Planned order → Change → Edit → Scheduling). In lead-time scheduling, the precise production times, that is, production start and finish dates, are defined for materials produced in-house and at the same time the capacity requirements are created. The material staging dates for the components are also determined. Lead-time scheduling is carried out using the times from the routing. This takes place as backward or forward scheduling according to the setting in the Customizing Production → MRP → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders.

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Figure 132: Segments in Lead Time Scheduling

The following items are taken into account during lead time scheduling: • • • • • •

Safety time - Material Master Float After Production - Scheduling Margin key (mat. mstr) Processing time - fixed/variable (routing) Setup time - fixed/variable (routing) Operation floats: Waiting time, Move time, Queue time - Work Center/Routing Float Before Production - Scheduling Margin key (mat. mstr)

In backward scheduling, the system subtracts the float after production from the order finish date to calculate the production finish date. The individual operations of the routing are scheduled backward starting from the production finish date. The start date of the first operation becomes the production start date.

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Figure 133: Operation Segments in Scheduling

During the definition of master data, planners or engineers have the opportunity to detail exactly how a product will move through each step of production. To properly model the production process, planners should model any idle time that a product might experience during the production process. The following inter-operation times can be modeled for each operation: •

•

•

Queue time: The time a product will sit idle prior to any setup activities being performed. This time can be used with capacity leveling functionality. Defined in each operation of a routing. Wait time:The time a product will sit idle after a production operation, in anticipation of being moved to the next work center. Defined in each operation of the routing Move time:The time a product will spend being moved from one work center to another. Defined in the work center using a “move time matrix” or each operation in the routing.

Demonstration: Lead-Time Scheduling Purpose To demonstrate lead-time scheduling

System Data System: Client: User ID: Password: Set up instructions:

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Tie this with previous demonstrations or call up the details for a planned order and “Change element” in MD04. 1.

From the stock requirements, edit one of the planned orders by going into change mode.

2.

SelectEdit → Scheduling Review the Header tab page. Production dates for this one planned order are displayed.

3.

Execute a planning run for material R-F1##, plant 1000, using the planning mode 3 and the scheduling indicator 2.

4.

Stock/requirements list of material R-F1##, plant 1000. Double-click another planned order as above and “Change element”. The planned order is scheduled using detailed scheduling and contains production dates.

5.

Compare the order start dates and the production dates using the floats from the scheduling margin key.

Influencing Scheduling Through Configuration Through the use of customizing parameters, planners can control the scheduling process of planned orders via the planning run or manually. Production → MRP → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders. The scheduling parameters are controlled at the Planner/Production Scheduler/Order type. This table must be populated to perform lead time scheduling and capacity planning.

Figure 134: Planned Order Scheduling Configuration (1)

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The figure about display some of the configuration parameters that can be set. First, planners must select at what level they will schedule. Typically with planned orders you will be using detailed planning, except in the case of repetitive manufacturing where order type PE is used. By selecting the Scheduling indicator, and if a valid routing exists, lead time scheduling is carried out. The production dates are calculated from the floats in the scheduling margin key of the material master and the individual operation times in the routing. if the Capacity Requirements indicator is selected, capacity requirements are generated for the operations. The dates for the capacity requirements are the operation dates. Note: For performance reasons it is advisable to use the scheduling horizon (detailed planning) to limit the period for which lead time scheduling and capacity planning should be carried out. The scheduling horizon is a time period that is in working days. If a planned order has its basic start date within this period in the future, lead time scheduling is carried out using the selected routing. If a planned order has its basic start date further in the future than this scheduling horizon, the basic dates are calculated from the in-house production times in the material master and are transferred to the production times.

Figure 135: Reduction and Adjustment

To ensure smooth interplay between basic-date scheduling and lead-time scheduling, the in-house production time in the material master must match the lead-time scheduling through the routing. It is essential to schedule the routing and to update the scheduling result in the material master. If basic scheduling differs from lead-time scheduling, the basic-dates can be adjusted to the production dates after the production dates are redetermined.

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Lesson: Lead Time Scheduling in the Planning Run

If the production start date of the planned order is before the order start date, the system can determine new production dates using reduction. Reduction can take place at two points: 1.

2.

To reduce the float before and after production. You can control this on a percentage basis. You can define 6 different levels of percent reduction. The system will reduce one level at a time trying to improve the order dates. To reduce the operation times, you must assign a reduction strategy to the operation in the routing. Here you can define the use of splitting (multiple capacities), overlapping operations versus sequential operations, reducing the wait time and the queue time.

Figure 136: Planned Order Scheduling Configuration (2)

In the Customizing IMG activity, “Define Scheduling Parameters for Planned Orders” in the Adjust scheduling section. You can define whether and how the basic dates are to be adjusted to the production dates. If there are scheduling problems, the basis for calculating basic dates switches from backward to forward scheduling. Depending on these dates if detailed scheduling occurs backward and the times in the routing are shorter than those in the material master, the following situation may arise: The calculated production start date is further in the future than is necessary and may still be able to produced on schedule. To exclude this kind of situation, the system overrides the Customizing settings. Forward scheduling takes place and the end date is adjusted, although the end date is on the requirements date at the earliest. The proposed order start date remains the same.

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Figure 137: Order Dates for Lead-Time Scheduling

With lead-time scheduling using the routing, the dependent requirements dates can be placed on the dates of the assigned operations. This enables the staging of materials to take place with relation to the operation. The standard system assumes staging of materials in accordance with the component assignment of the Bills of Material (BOM) to the routing. The dependent requirements date of the BOM components is placed on the production start date of the operations to which they are assigned. If BOM components are assigned to the first operation of the routing in the default settings or component assignment maintenance, their dependent requirements date is set to the production start date of the first operation. With pure basic scheduling, their dependent requirements date is the order start date of the planned order that caused the requirements. In Customizing for MRP under the section Adjust scheduling of the IMG activity Define Scheduling Parameters for Planned Orders, you can define that the dependent requirements date is also to be placed on the order start date with lead-time scheduling. For example, if capacity requirements have to be created using lead-time scheduling.

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Lesson: Lead Time Scheduling in the Planning Run

Figure 138: Changing Dependent Requirement Dates

In the BOM explosion, the required components or assemblies are determined for the relevant BOM. The dependent requirement date of a particular component can be moved using the negative lead time or positive lead time using the operational lead time offset in the bill of material. Lead-time offset for operation is the time that the component lead-time offset states with reference to the start date of the allocated operation. With positive value, the component can be available after the operation start date Lead time. Using a negative value, the component must be available before the operation start date.

Demonstration: Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Explain the corresponding Customizing settings: Customizing: Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders

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Pay attention to: • • • •

Detailed scheduling Adjusting dates and defining the dependent requirement dates Scheduling control for detailed scheduling Reduction

Detailed Scheduling Horizon: A new planned order that was generated in the planning run and whose order start date lies outside the detailed scheduling horizon does not undergo lead-time scheduling irrespective of scheduling indicator 2. If the order start date of the planned order lies within the detailed scheduling horizon during a later planning run with the scheduling indicator 2 and planning mode 1, the planned order undergoes lead-time scheduling.

Demonstration: Reduction and Adjustment Purpose To ensure smooth interplay between basic-date scheduling and lead-time scheduling.

System Data System: Client: User ID: Password: Set up instructions: 1. If the production start date is before the order start date, the system can determine new production dates using reduction. Demo example: In the material master: Reduce the processing time by 10 days Create requirements: 100 pieces for today + 5 months, planning run with scheduling indicator 2, analyze generated planned order: no reduction, basic start date was adjusted, the original order start date is still visible as explosion date

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Lesson: Lead Time Scheduling in the Planning Run

In the scheduling and capacity parameters in the section “Reduction”Maximum reduction level 4, %Red. Float before production/float after production: 50 60 70 80 90 100% Execute planning run again with planning mode 3 and scheduling indicator 2: New planned order: Reduced to specified level 4; the order start date was adjusted to the production start date that resulted from the reduction, and the original order start date is still visible as the explosion date. 2.

Reduction for Forward Scheduling: Demo example: In the material master, enter the original processing time again manually, or schedule the routing and update the material master, In the scheduling and capacity parameters in the section “Reduction”: Reset maximum reduction level to 0, Create requirements: 100 pieces for today + 1 week; planning run with scheduling indicator 2; analyze generated planned order: Forward scheduling, no reductions. Set maximum reduction level back to 4; execute planning run again with planning mode 3 and scheduling indicator 2: New planned order: Reduced to the specified level 4, the order start was adjusted to the production end date that resulted from the reduction.

Demonstration: Order Dates with Lead-Time Scheduling and Postponing the Dependent Requirement Dates Purpose To demonstrate Order Dates with Lead-Time Scheduling and Postponing the Dependent Requirement Dates.

System Data System: Client: User ID: Password:

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Set up instructions: 1. Explain the function of the negative/positive lead time and the component assignment in both scheduling types as far as the sequencing of the dependent requirements of the assemblies or components is concerned. Instead of using the order report, the assembly requirements dates can also be displayed in the component overview of the planned order. You can also use the new order tree.

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359

Lesson: Lead Time Scheduling in the Planning Run

Exercise 14: Lead Time Scheduling in the Planning Run Exercise Duration: 15 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate lead time scheduling in the planning run • Demonstrate the affect on lead time scheduling using component allocation in the task list

Business Example Due to lengthy production times, planners require more accurate scheduling of the raw materials and sub-assemblies. Execute lead time scheduling and review the differences between basic dates scheduling and lead time scheduling. In addition, the turbo drive R-B4##, is not used until the fifth operation. Allocate the component in the routing and execute a planning run deleting the old orders and creating new ones with lead time scheduling, and review the results.

System Data System: Client: User ID: Password: Set up instructions:

Task 1: Lead Time Scheduling in the Planning Run Demand for your pump products is at an all time high. With a recent increase in demand, you are worried that you will be stretching your capacity beyond your capabilities. In order to make intelligent decisions, you need the most detailed data available. In order to see more exact scheduling, you need to perform lead time scheduling for your pump R-F1##. In addition, you are concerned about the supply situation of some of the components for your turbo drive R-B4##. In order to give your vendor more accurate information, you want the turbo drives to be produced as close to the actual consumption dates as possible. Update your routing for R-F1## to show the point of consumption for your R-B4##. 1.

From the Stock/Requirements list execute Single-item, multilevel planning for material R-F1## in plant 1000. Select planning mode 2 (re-explode BOM and routing) and scheduling type 2 (lead-time scheduling). Continued on next page

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2.

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Refresh the Stock/Requirements list for material R-F1## in plant 1000. Using the order report, analyze the new scheduling situation for the planned order you selected previously. R-F1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time:

R-B1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: R-B4## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: 3.

Do production dates exist now? _____________

Task 2: Component Allocation in Lead Time Scheduling To achieve timely staging of assemblies or components in lead-time scheduling, you must make a component or operation assignment for the affected assemblies or components. 1.

Call the BOM for the material R-F1## in the plant 1000 with usage 1 once more. From the Bill of Material Assign R-B4## to operation 50.

2.

From the Stock/Requirements list execute a Single-item, multilevel planning for material R-F1## in plant 1000. Select planning mode 2 (re-explode BOM and routing) and scheduling 2 (lead-time scheduling). Continued on next page

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Lesson: Lead Time Scheduling in the Planning Run

3.

From the Stock/Requirements list of R-F1## at plant 1000, select the first planned order in the list. Review the detail of the planned order by looking at the component list.

4.

Navigate to theDet. scheduling tab of the planned order you selected. What is the start date of operation 0050?

5.

What are the requirements dates of the different components: Component

Requirement

R-B1## R-B2## R-B3## R-B4##

6.

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Compare the result with the results from the basic dates scheduling exercise. Will the assembly R-B4## also be staged at a later date in lead-time scheduling?

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Solution 14: Lead Time Scheduling in the Planning Run Task 1: Lead Time Scheduling in the Planning Run Demand for your pump products is at an all time high. With a recent increase in demand, you are worried that you will be stretching your capacity beyond your capabilities. In order to make intelligent decisions, you need the most detailed data available. In order to see more exact scheduling, you need to perform lead time scheduling for your pump R-F1##. In addition, you are concerned about the supply situation of some of the components for your turbo drive R-B4##. In order to give your vendor more accurate information, you want the turbo drives to be produced as close to the actual consumption dates as possible. Update your routing for R-F1## to show the point of consumption for your R-B4##. 1.

2.

From the Stock/Requirements list execute Single-item, multilevel planning for material R-F1## in plant 1000. Select planning mode 2 (re-explode BOM and routing) and scheduling type 2 (lead-time scheduling). a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level planning, and select planning mode 2 (re-explode BOM and routing) and scheduling 2 (lead-time scheduling).

Refresh the Stock/Requirements list for material R-F1## in plant 1000. Using the order report, analyze the new scheduling situation for the planned order you selected previously.

Continued on next page

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Lesson: Lead Time Scheduling in the Planning Run

R-F1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time:

R-B1## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: R-B4## Basic dates Production dates End: ____________ End: _________ Start: ____________ Start: ________ Goods receipt processing time: a) 3.

Do production dates exist now? _____________ Answer: Production dates available: Yes, because requirements planning was executed with scheduling indicator 2 (lead-time scheduling).

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Task 2: Component Allocation in Lead Time Scheduling To achieve timely staging of assemblies or components in lead-time scheduling, you must make a component or operation assignment for the affected assemblies or components. 1.

2.

3.

4.

Call the BOM for the material R-F1## in the plant 1000 with usage 1 once more. From the Bill of Material Assign R-B4## to operation 50. a)

Menu path: Logistics → Production → Master Data → Bills of Material → Bill of Material → Material BOM → Change

b)

Select item R-B4## in the item overview. Select Extras → Operation allocation .

c)

Select operation 50 (install electronic turbo pump) in the operation overview and follow the menu path Edit → New assignment.

d)

Select

Save

From the Stock/Requirements list execute a Single-item, multilevel planning for material R-F1## in plant 1000. Select planning mode 2 (re-explode BOM and routing) and scheduling 2 (lead-time scheduling). a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level planning, and select planning mode 2 (re-explode BOM and routing) and scheduling type 2 (lead-time scheduling).

c)

Return to the stock requirements list and refresh it.

From the Stock/Requirements list of R-F1## at plant 1000, select the first planned order in the list. Review the detail of the planned order by looking at the component list. Details of Element.

a)

Select the first planned order and select

b)

Select

c)

At the top of the planned order select component overview.

Display Element

Navigate to theDet. scheduling tab of the planned order you selected. What is the start date of operation 0050? Answer: Varies

5.

What are the requirements dates of the different components:

Continued on next page

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Component

Requirement

R-B1##

Varies

R-B2##

Varies

R-B3##

Varies

R-B4##

Varies from the other three

As a result of the positive 5 day off set for R-B4##, the requirements are pushed back 5 working days. 6.

Compare the result with the results from the basic dates scheduling exercise. Will the assembly R-B4## also be staged at a later date in lead-time scheduling? a)

Yes, the assembly R-B4## will now be staged at a later date, that is, on the start date of operation 50 of the finished product, which is assigned to the assembly. Hint: The staging date, for the assembly R-B4##, determined using component assignment, in lead-time scheduling does not necessarily correspond to the staging date determined in basic-date scheduling because the positive lead time is independent of lot size.

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Lesson Summary You should now be able to: • Demonstrate how Lead Time Scheduling works in the Planning run • Demonstrate knowledge of configuring lead time scheduling.

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Lesson: 367

Lesson: Master Data Selection during the Planning Run

Master Data Selection during the Planning Run Lesson Duration: 20 Minutes

Lesson Overview In this lesson, you will learn about Bill of material (BOM) explosion and its uses. In addition, you will learn to select alternative BOM and material according to production version. In addition, you will learn how to change the BOM status in the BOM structure. In this lesson, you will learn about the process of routing selection.

Lesson Objectives After completing this lesson, you will be able to: • • • •

Demonstrate how a bill of material will be chosen during the planning run if multiple BOMs exist Demonstrate how a task list will be chosen during the planning run if multiple routings exist. Demonstrate how a production version will be chosen during the planning run if multiple versions exist. Identify how configuration can influence master data determination

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example At your plant you have a very flexible group of resources. Because of this you can assemble a pump using various component structures (BOMs) and you can manufacture them on different work centers/resources(Rtgs). You need to be aware of how SAP ERP will allow you to model this type of environment and allow the planning run to perform most of the sourcing decisions.

An Overview of BOM Explosion During the planning run the net requirements calculation takes place, along with the lot-size calculation, and the scheduling for a final assembly. For materials that are manufactured in-house, each planned order must determine the required quantities for assemblies produced in-house and the materials staging date for the required components and assemblies. In order for the system to generate

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dependent requirements for each planned order, the bill of material must be accessible. During the creation of each planned order, the system determines and explodes the valid BOM for assembly in the planning run.

Figure 139: BOM Explosion

The detailed data for the BOM explosions is displayed in the master data of a planned order. The production-relevant BOM items are copied as components to the planned order, regardless of the MRP type. The BOM status is crucial as a validity criterion, in addition to the BOM selection ID/usage, alternative selection indicator/alternative, and change status/explosion date. The BOM, or all of the materials and BOMs, in the complete structure must be maintained in the corresponding plant.

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Lesson: Master Data Selection during the Planning Run

During the planning run, the system explodes the BOM for every new planned order of an assembly. The following steps are carried out to determine the valid BOM: •

• • •

•

In the planning run, the system first checks which BOM usage has the highest priority. Then, it checks if this usage has a valid BOM on the explosion date. If this is not the case, the system creates an exception message. If there are various BOM alternatives, the system checks which alternative corresponds to the prerequisites of the alternative selection. If necessary, the change status on the explosion date is determined for the selected BOM alternative. The BOM items relevant to production are copied to the planned order for the valid BOM. The dependent requirements quantity is determined by the quantity factor of the BOM item. The dependent requirements date is based on the scheduling of the superior assembly. This date is either determined on the basis of the basic start date or based on the production start date of the planned order operations for the high-level assembly.

The BOM must be maintained in the appropriate plant to carry out the planning run. In addition, the validity of a BOM is determined by the BOM status. To use the BOM in MRP, you must set the BOM status in the BOM header so that it is active for MRP.

BOM Updates to Existing Orders In the case of existing procurement proposals, Depending upon the settings in the planning run or the planning file entry the BOM explosion might be treated differently. The BOM is only re-exploded if the quantity or the date of the procurement proposal or the BOM structure has been changed. If the BOM structure has changed, the system creates a planning file entry with the “new BOM explosion” indicator. If you want a new BOM explosion during the production run, you can trigger this on the initial screen through the planning mode, such as 2 or 3. When manual changes to the date or quantity of the planned order occur, the BOM in the affected planned order and the dependent requirements are adjusted without a new planning run. In this case, the NETCH/NETPL indicators are set in the planning file of the affected material and components. If the BOM structure changes, the BOM explosion indicator sets in the planning file. You can view the detailed data for the BOM explosion in the planned order on the “Master data” screen.

BOM Selection When a planned order is created the first step that must be completed in order to find an applicable BOM is to determine the correct BOM usage.

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Figure 140: Selection of BOM Usage

With the BOM usage, it is possible to manage separate BOMs for the different business areas, such as Engineering/Design, Production, and Costing. The main differences in the BOM structures result from the different tasks of the various areas that process different item data. Note: When creating a BOM the usage is one of the required fields that must be defined first. You have to define which BOM usage is to be used in the planning run. You determine the priority of the usage for the planning run using the selection ID in the Customizing for MRP, Production → MRP → Planning → BOM Explosion/Routing Determination → Define BOM and Routing Selection. You can define a sequence for the selection of a valid BOM through the “usage” criterion. If the system does not find a valid BOM in the selected usage, it selects the usage with the next lowest priority and carries out the check for valid BOMs. You define the order of priority for the BOM usage, that is, the selection ID, in the Customizing for production basic data, in the IMG activity “Define Order of Priority for BOM Usages”.

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Lesson: Master Data Selection during the Planning Run

Figure 141: Selection of Alternative BOM

In the case of multiple BOMs, you have to define which alternative BOM is to be selected during the planning run. You can define which procedure is to be used to select the BOM for an assembly in the material master record in the Selection method field of the MRP data (MRP 4). Three options are available: • •

•

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BOM selection using the order quantity (lot size): The order quantity is based on the lot size according to the selected lot-size procedure. Selection according to explosion date: The system uses the explosion date to determine the valid BOM or the valid routing for a planned order. In Customizing, you can define whether the order start date, order finish date, or fixed key date of the BOM explosion number is selected. Selection according to production version: The production version determines the different production methods that can be used to produce a material. Therefore, the production version contains a routing and a BOM. The alternative BOM to be selected, the BOM usage, the lot-size range, and the effectivity period of a BOM can be defined for the alternative selection. With alternative selection indicator 3, the selection is always made according to production version. With indicator 2, the selection is made according to production version when this is possible. If this is not possible, the selection is done according to lot size.

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Demonstration: BOM Selection ID/BOM Usage Purpose To demonstrate the usage and selection of BOM

System Data System: Client: User ID: Password: Set up instructions: 1. The BOM selection ID for MRP is defined for each plant. Customizing: Production → Material Requirements Planning → Planning → BOM Explosion/Routing Determination → Define BOM and Routing Selection. Important: Point out that you do not define the routing selection in this Customizing activity, as the title suggests! 2.

BOM usage: Customizing: Production → Basic Data → Bill of Material → General Data → BOM Usage → Define BOM Usages Customizing: Production → Basic Data → Bill of Material → Alternative Determination → Define Order of Priority for BOM usages The system determines the first valid usage according to the selection ID. Valid means valid on the explosion date and having the BOM status active. Note: For long-term planning, you can use a deviating BOM selection ID by assignment in the long-term planning scenario.

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3.

From the S/R list of material R-F2## at plant 1000, display the details of any planned order

4.

Select the master data tab, and point out the BOM usage field

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Lesson: Master Data Selection during the Planning Run

BOM Explosion Based on Lot Size

Figure 142: Selection by Order Quantity (Lot Size)

During the planning run, the system checks whether a valid alternative BOM exists for the order quantity (lot size). The lot-size range of the alternatives of a multiple BOM is determined in the BOM header. If the system does not find a valid or suitable alternative for the order quantity, it creates an exception message. Note: The lot size fields only appear in the header of the BOM if there is more than one BOM for a given material. If only one BOM exists it is valid for all lot sizes. The valid alternative is exploded and dependent requirements are created for the corresponding components based on the BOM quantities

Demonstration: Lot Size Selection Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Change the strategy group to 40.

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2.

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Create two planned independent requirements for R-F130 at plant 1000. Month 3

90 pcs

Month 6

150 pcs.

Save the results 3.

Create a second BOM for R-F130 at plant 1000 (alternative 2), using the original (Alt . 1) as template.

4.

Before saving change the quantity of the R-B230 from 1 pc to 2 pcs. In addition, in the BOM header set the lot size from 101 - 999,999 and Save.

5.

Change the Alt 1 BOM for R-F130 at plant 1000, so that the lot size is from 1 - 100, and save the results.

6.

From the S/R list execute a single-item, multi-level planning run.

7.

Review the results of each planned order, paying special attention to the lot size and the BOM Alternative.

8.

The Planned order for 90 pcs should have Alt BOM 1 and the order for 150 should have Alt BOM 2

9.

From the Material Master point out the Selection Method indicator that is set to Blank - Order Quantity

BOM Explosion Based on Order Date In certain situations where multiple BOMs overlap or you are using Engineering Change Management (ECM), a planner may want the BOM to explode on a particular date. Hint: For example, you make the same chocolate year round. However you have several BOMs that support seasonal packaging based on the foil color, but the are valid in the same time interval. Since your customers mark down off season merchandise, they want to make sure you are sending them the right packaging mateiral for the correct holiday. There for based on timing of a production run is very important.

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Lesson: Master Data Selection during the Planning Run

Figure 143: Defining the Explosion Date

In Customizing for MRP, Production - Material Requirements Planning - BOM Explosion/Routing Determination - Define BOM Explosion Control. , you can define the explosion date for the BOM and routings selection at the plant or the MRP group level. The explosion date determines which BOM or routing is to be used for the explosion in the planning run and for the determination of dependent requirements. This means, the BOM that is valid on the explosion date is selected and dependent requirements are created for the components entered there. Note: If a mateiral has multiple BOMs and more than one is valid for the same lot-size and date, the system will use the Alternative BOM field as a priority field. Caution: By default, when creating BOMs unless specified, the system will create the first BOM as alternative 1. This is the highest priority when choosing between multiple BOMs. The first time you create a BOM for each material you may want to create the BOM using a character and a alpha combination such as A1. The following options are available for the explosion date: • • •

Order start date Order finish date BOM explosion date (gross date) Note: Point out that if the order start date is adjusted to the production start date, the BOM is still exploded in the original order start date. This means that the explosion date and the final order start date differ from one another.

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Figure 144: Explosion Using Order Start Date

In order to use the explosion date for BOM determination, you must first set the Selection Method indicatorin the Material master to 1- selection by order date. If more then one assembly exists, assembly-specific periods are defined, within which certain alternative BOMs are to be used. Then, the system checks the defined period for the assembly during the planning run. The system checks in which period the explosion date lies and selects the corresponding alternative BOM. The default setting is that the order start date is set as the BOM explosion date. The suitable alternative is exploded and dependent requirements are created for the corresponding components. If more than one BOM is valid for a period of time, or the validity periods overlap, using a master data table, users can specify which alternative is valid during a specific period.Logistics → Production → MRP → Master Data → BOM by date To define the alternative selection using dates, enter the following parameters in the table: Material number, plant, BOM usage, and the valid-from date, from which the alternative BOM is to be used in the planning run, and the BOM alternative. Note: This table allows you to define user defined validity period for MRP. This does not interface with ECM. To assign several alternative BOMs with different effectivity periods to a material, you define the beginning of the effectivity period for each alternative in the “Valid from” field. The beginning of the validity period of the next alternative on the time axis marks the end of the effectivity period of the previous alternative.

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Lesson: Master Data Selection during the Planning Run

The system selects the BOM and explodes it as soon as the basic dates have been determined in the scheduling. This is applicable in the case of lead-time scheduling even before the scheduling is carried out through the routing. If the basic date is to be adjusted to the production date, such as if the deadline is missed, the BOM is still exploded on the original basic date. The BOM explosion date and the final basic date are different in this special case.

Figure 145: Explosion Using Order Finish Date

Here, you can see the BOM explosion situation if you define in Customizing that the BOM explosion date is to be set as the planned order finish date. The system selects and explodes the BOM as soon as the order finish date has been determined in the scheduling. If in the case of lead-time scheduling the order start date is to be adjusted to the production dates, this does not change the order finish date. This means that the BOM explosion date and the final basic date do not differ in this case. If the system does not find a valid or suitable alternative, the BOM with the suitable lot size is used.

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Figure 146: Change Status According to Order Start Date

The BOM or alternative BOM can have different validity periods on the time axis due to changes that have been made, such as in the BOM composition. The BOM can have different compositions or statuses at different times. Different validity for the same BOM indicates that an organization is using a form of Engineering Change Management (ECM). Every change status has a valid-from date and a valid-to date, defined by the valid-from date of the next change. The BOM status at the time of the explosion date is exploded. Whether this is the order start or finish date or the gross date of the BOM explosion number, depends on the settings made in Customizing (Customizing IMG activity “Define BOM Explosion Control”.

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Lesson: Master Data Selection during the Planning Run

Figure 147: Change Status According to Order Finish Date

Demonstration: BOM Dates in MRP Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Follow Menu path: Logistics → Production → MRP → Master Data → BOM by date

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2.

Select New Entries

3.

Make the following two entries Material

Plant

BOM Usage

Valid From

Alt BOM

R-F130

1000

1

15th of current month

2

R-F130

1000

1

1st of Month 1 4

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4.

Select Save

5.

From the S/R list of R-F130 at plant 1000, Environment → Change Material , Set the selection method to 1 - Selection by explosion date, and Save the material

6.

Remind the students that in the previous demo it was by lot size.

7.

From the S/R list, execute a single-item multii-level planning run, use planning mode 3. Refresh the S/R list

8.

Drill into the details of each planned order. The order quantity of 90 pcs should now have Alt 2, and the 150 pcs order should have alt 1

BOM Explosion Using Fixed Dates In certain situations planners need a specific BOM exploded for a particular production run. By selecting BOMs by explosion date, and using a fixed date, planners can tie into a specific BOM. In order to do this, you must define a BOM explosion number (user defined) and attach it to a specific or fixed date. You will then attach the BOM explosion number to the appropriate MRP element.

Figure 148: Explosion Using the BOM Explosion Number

If the order start date of the planned order is set as the explosion date for the BOM explosion, there could be large intervals between the explosion dates of the individual BOM structures under certain circumstances in the case of multiple

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Lesson: Master Data Selection during the Planning Run

BOMs. If BOMs (alternatives) change over time due to various requirements, the situation could occur that an assembly used several times is produced using different BOM compositions. You define BOM explosion numbers by entering the fixed key date in material requirements planning. Using the BOM explosion number, you can define a standard explosion date for all BOM levels. This “gross date” is contained in the BOM explosion number. The BOM is exploded for all level with this gross date. You maintain a BOM explosion number in the MRP master data. You can define the gross date for an alphanumeric BOM explosion number. Logistics → Production → MRP → Master Data → BOM Explosion Number → Edit. You can assign the BOM explosion number (fixed date) in the following places: 1. 2. 3. 4.

Planned independent requirement Customer requirement (item screen) Sales order (item detail screen sales A) Planned order (header screen)

To assign a BOM explosion number to a planned independent requirement (PIR) you must edit the PIR. From Schedule lines view, select Settings → BOM Explosion number. The column BOMexpNo, will now be changeable. Here is where you enter the fixed date/BOM explosion number. During the planning run the BOM explosion number will be copied to the planned order header and change the explosion date to the fixed date in the explosion number. Another option will be to edit and existing planned order and enter the BOM explosion number in the header of the order. This will cause the explosion date to change

Demonstration: BOM Explosion Numbers Purpose

System Data System: Client: User ID: Password: Set up instructions: to work!

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Must perform the previous demo for this demo

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1.

Remind the students that you are now using BOM explosion dates and thus your the BOMs for your orders are sensitive to the BOM by Date table entries.

2.

Create two BOM explosion numbers with the following data: Logistics → Production → MRP → Master Data → BOM Explosion Number → Edit. BOM Exp No.

Fixed Key Date

Plant

Description

Alt 1

15th of Month 5

1000

Alternative 1

Alt2

15th of

1000

Alternative 2

Current Month

3.

Save the results.

4.

Access the S/R list for R-F130 at plant 1000

5.

Select the first PIR and select Change Element

6.

In the schedule line tab Settings → BOM explosion number .

7.

Set the first requirement to BOM Explosion number Alt 1, and Save

8.

Refresh the S/R list and point out the new BOM Explosion number column.

9.

Execute a multi-level planning run, Refresh the results, and review the header of the Planned order with the Alt 1, BOM explosion number. Note the number in the header.

10. Select the master data view, and point out the BOM explosion date is the same as the fixed date.

BOM Explosion Based on Production Version Often times planners are forced due to the manufacturing process to tie a specific BOM to a routing or need to prioritize which BOMs or Routings are selected during the planning run. Production versions allow planners to perform both tasks if necessary.

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Lesson: Master Data Selection during the Planning Run

Figure 149: Selection by Production Version

There may be different BOMs according to which a material is produced. The production of a material can also be processed through various routings. This means the material can be produced on identical but different production lines, such as work centers, or use a different sequence of work centers. The data on the different methods according to which a material can be produced, can be combined in the production version and assigned as such to the material. The production version defines the following data: • • • • • •

Alternative BOMs and BOM usages for the BOM explosion Task list type, task list group, and group counter of the routing Validity period of the production version (fields “Valid from” and “valid to”) Lot-size range of the production version (fields “Lot size from” and “Lot size to”) Distribution of receipts Identify bottle neck work centers

If the value “2” is entered for the selection method indicator in the material master, the BOM is selected by production version, as long as valid data is available. If the system does not find a production version or does not find a production version which is suitable as far as usage, lot size and validity period is concerned, the selection occurs according to lot size. This is the way it happens when the selection method indicator were set to “blank”. If the indicator is set to “3”, the

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selection occurs according to production version, which means that if the system does not find any selection version or does not find any appropriate selection version, it cannot create a production order and issues an exception message. Note: If both the lot-size and validity date of more than one production version is the same, the system uses the production version number as a means of prioritization. Caution: Production version 0001 is the highest priority. It is suggested that if you frequently create alternative BOMs to handle component changes, use a version number starting with a character, such as A001.

BOM selection Summary

Figure 150: Summary: BOM Selection

The BOM selection in the MRP run has three steps: 1. 2.

3.

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The BOM usage is defined by the BOM selection ID, which you assign on a plant basis in the Customizing activity “Define BOM and Routing Selection”. The alternative BOM is determined according to the setting for the BOM selection indicator in the material master. If the selection is to be made according to the explosion date, you should enter which date is to be used in the Customizing activity “Define BOM Explosion Control”. The change status of the BOM is determined using the explosion date. The same Customizing setting as in step 2 is the basis for the choice of date.

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Lesson: Master Data Selection during the Planning Run

Process of Routing Selection

Figure 151: Routing Selection

If you start the planning run with the scheduling indicator 2 (lead-time scheduling and capacity planning), the system selects the routing for each planned order. The system calculates the dates, the staging of materials and the capacity requirements using the routing. The “selection method” indicator in the material master (MRP 4) is also crucial for selecting the routing: •

•

If selection method indicator has been set to value 2 or 3 (selection by production version), the routing is also selected according to the selected production version. Else, the selection ID of the routing selection, which is defined in the Customizing for MRP at the detailed scheduling level in the activity “Define scheduling parameters for planned orders” decides which routing is selected.

You define the selection ID of the routing selection in the Customizing for Production, basic data. Customizing: Production → Basic Data → Routing → Routing Selection → Select automatically. In this activity you define in which order a routing will be selected using task list type and the routing status. In the configuration of scheduling of the order type, Customizing → Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders, planners attach by Planned order type/Plant/Production scheduler, the selection ID. This selection ID will be used during the planning run when expecting lead time scheduling.

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The explosion dates of the BOM and the routing are identical. If the planned order is managed using Engineering Change Management, the system uses the routing with the change status at the time of the BOM explosion date. The task list group and the group counter for the routing as well as the corresponding scheduling and capacity requirements can be seen on the screen “Detailed scheduling” for the order.

Demonstration: Routing Selection Purpose To select routing for each planned order

System Data System: Client: User ID: Password: Set up instructions: 1. The selection method indicator in the material master is also responsible for the routing selection like the following two settings in Customizing: Customizing → Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders. Set the selection ID Detailed scheduling for each plant, order type, and production control. Customizing: Production → Basic Data → Routing → Routing Selection → Select automatically: and there using the selection ID: Priority sequence for task list type, usage, and status With selection according to production version (with selection method indicator 2 or 3) if the system cannot select a routing according to production version, it determines the routing using the standard logic, as if the selection method indicator were set to“ blank”. Note: For indicator 2, this is clear and identical to the BOM selection. This is not the case for indicator 3. This can lead to problems with indicator 3 when you convert the planned order to a production order because the production order with standard settings requires a routing according to production version and does not use the routing selected in the planned order.

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Lesson: Master Data Selection during the Planning Run

Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. Discuss the steps involved in BOM selection in the MRP run. Discuss why is the selection method indicator crucial for selecting the routing.

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Lesson Summary You should now be able to: • Demonstrate how a bill of material will be chosen during the planning run if multiple BOMs exist • Demonstrate how a task list will be chosen during the planning run if multiple routings exist. • Demonstrate how a production version will be chosen during the planning run if multiple versions exist. • Identify how configuration can influence master data determination

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Unit Summary

Unit Summary You should now be able to: • Demonstrate how Basic Scheduling works in the Planning run • Demonstrate how scheduling works for Externally Procured materials. • Demonstrate how Lead Time Scheduling works in the Planning run • Demonstrate knowledge of configuring lead time scheduling. • Demonstrate how a bill of material will be chosen during the planning run if multiple BOMs exist • Demonstrate how a task list will be chosen during the planning run if multiple routings exist. • Demonstrate how a production version will be chosen during the planning run if multiple versions exist. • Identify how configuration can influence master data determination

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Unit Summary

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Test Your Knowledge

385

Test Your Knowledge 1.

If the procurement type allows both in-house production and external procurement, the MRP is always based on external procurement. Determine whether this statement is true or false.

□ □

True False

2.

What is the difference between scheduling for in-house production and external procurement?

3.

In basic scheduling, you can trigger lead-time scheduling for the planning . run by using the scheduling indicator Fill in the blanks to complete the sentence.

4.

Lead Time scheduling is used when planned orders should generate Fill in the blanks to complete the sentence.

5.

Planned orders always generate production dates? Determine whether this statement is true or false.

□ □ 6.

True False

If a material had to cure for a specific time period before it could be passed to the next operation, what time would be most appropriate to model this in SAP ERP? Choose the correct answer(s).

□ □ □ □ □

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A B C D E

Curing time Drying time Wait time Sit around time Queue time

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Test Your Knowledge

7.

SCM240

For BOM explosion in MRP, you must set the BOM status in the BOM header so that it is active for MRP. Determine whether this statement is true or false.

□ □ 8.

True False

For selecting an alternate BOM, you can define the procedure to be used for field of the selecting the BOM in the MRP data. Fill in the blanks to complete the sentence.

9.

System can create a production order even if it does not find any selection version or does not find any appropriate selection version. Determine whether this statement is true or false.

□ □

True False

10. While changing BOM status, you can define an explosion date for a BOM structure by entering a Fill in the blanks to complete the sentence.

11. The explosion dates of the BOM and the routing are identical. Determine whether this statement is true or false.

□ □

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True False

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Test Your Knowledge

387

Answers 1.

If the procurement type allows both in-house production and external procurement, the MRP is always based on external procurement. Answer: False The MRP is always based on in-house production if the procurement type allows both inhouse-production and external procurement.

2.

What is the difference between scheduling for in-house production and external procurement? Answer: Scheduling for both is similar except that the in-house production time is replaced by the sum of purchasing processing time and planned delivery time in external procurement.

3.

In basic scheduling, you can trigger lead-time scheduling for the planning run by using the scheduling indicator 2. Answer: 2

4.

Lead Time scheduling is used when planned orders should generate Capacity requirements. Answer: Capacity requirements.

5.

Planned orders always generate production dates? Answer: False Production dates are only generated in planned orders when MRP is run using scheduling mode "2" or is scheduled manually.

6.

If a material had to cure for a specific time period before it could be passed to the next operation, what time would be most appropriate to model this in SAP ERP? Answer: C Wait time would be most appropriate. Curing, drying and sit around time don’t ecplicitally exist in SAP ERP.

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Test Your Knowledge

7.

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For BOM explosion in MRP, you must set the BOM status in the BOM header so that it is active for MRP. Answer: True To use the BOM in MRP, you must have set the BOM status in the BOM header so that it is active for MRP.

8.

For selecting an alternate BOM, you can define the procedure to be used for selecting the BOM in the Selection method field of the MRP data. Answer: Selection method

9.

System can create a production order even if it does not find any selection version or does not find any appropriate selection version. Answer: False If the system does not find any selection version or does not find any appropriate selection version, it cannot create a production order and issues an exception message.

10. While changing BOM status, you can define an explosion date for a BOM structure by entering a BOM explosion number. Answer: BOM explosion number. 11. The explosion dates of the BOM and the routing are identical. Answer: True The explosion dates of the BOM and the routing are identical.

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Unit 8 389

Multiple Sources of Supply in Planning

Unit Overview This unit will inform you how the system will react or can be controlled in situations were replenishment orders can be sourced from multiple plants, vendors, or resources.

Unit Objectives After completing this unit, you will be able to: • • • • •

Explain what happens if multiple sources of supply exist. Demonstrate how to set up the system to choose the correct method of manufacturing when several exist. Demonstrate how to split demand between multiple sources Describe how to initiate the purchasing process as a result of the planning run Demonstrate how to split demand between multiple sources

Unit Contents Lesson: Source Determination Overview....................................463 Lesson: Source Determination in Manufacturing ...........................468 Demonstration: Source Determination in Mfg ..........................471 Exercise 15: Source Determination in Manufacturing .................473 Lesson: Quota Arrangements .................................................481 Demonstration: Quota Arrangement .....................................483 Demonstration: Quota Arrangement .....................................485 Demonstration: Quota Arrangement .....................................494 Exercise 16: Production Versions and Quota Arrangements .........497 Lesson: Source Determination in Procurement.............................502

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Exercise 17: Source Determination in Procurement ...................513

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Lesson: 390

Lesson: Source Determination Overview

Source Determination Overview Lesson Duration: 30 Minutes

Lesson Overview In this lesson you will discuss at a high level, what happens if multiple sources of supply exist for replenishment element.

Lesson Objectives After completing this lesson, you will be able to: •

Explain what happens if multiple sources of supply exist.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Not all of your materials are single sourced. You have some materials that have more than one BOM, and can run on more than one machine. In addition you have some materials that can be purchased from more than one vendor. Examine how you can use the planning run to initiate some of these scenarios your business deals with.

Source Determination: Overview Over time companies will typically have to make such decisions as to which production line to run a production, or which vendor to purchase particular materials. In addition you have you might have the option to make or buy the product.

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Figure 152: Source Determination

In the mateiral master, planners will be able to decide what type of replenishment element will be created as a result of the planning run. The following options are available: • • • •

F - Buy (External procurement) E - Make (In-house Production) X - Both Make or Buy) ’ ’ - (blank) No procurement

External procurement is defined as replenishing supply from “any” outside source. The idea of external procurement can cover many different options. Here are a few options: • • • •

Standard Purchase from Vendor Stock Transfer from a company facility Purchase Consignment stock from vendor Sub-contracting (service purchase order)

As a result of using these options, the planning run will create some from of purchasing document to initiate the replenishment process. In house manufacturing will typically take place within the plant itself. It can take the form of several replenishment or execution methods. Here a some options: • • •

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Production Orders (Discrete Mfg) Process Orders (Process Mfg) Planned Orders (Repetitive Mfg)

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Lesson: Source Determination Overview

Caution: If the procurement type is set to X - Both, the planning run will assume in-house production. This means during the planning run all scheduling will be based off of manufacturing master data. Any decisions to procure form outside sources will have to be done manually. Once the general type of procurement has been decided, planners might want the sourcing details to get more specific. The purpose of the source determination process is to automatically assign a source of supply to replenishment element whether it be a planned order or purchase requisition. In a manufacturing/distribution environment, planners have to choose between the following: • • • • •

Multiple bills of material for one material number Multiple routings or recipes for one materials Multiple production versions for one material Multiple plants suppling one/more distribution centers Multiple vendors supplying one material.

As it relates to purchasing, more than one vendor may be able to supply your company with a purchased item. No matter what the scenario is, as it relates to planning, more often than not, companies would like these types of decisions to happen automatically. When dealing with multiple sources of supply, planners have the following options to help determine the source of supply: • • • • •

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Effectivity date Lot size Priority Quota Arrangement Source List

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain what happens if multiple sources of supply exist.

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Source Determination in Manufacturing Lesson Duration: 30 Minutes

Lesson Overview This lesson will instruct users how to set up the system to select the correct source of supply for in-house production if more than one option exists for a material.

Lesson Objectives After completing this lesson, you will be able to: •

Demonstrate how to set up the system to choose the correct method of manufacturing when several exist.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example For those materials that are made in-house, planners may have to choose between multiple options for production. Your pump R-F2## can be made using one of two active BOMs. Using production versions you will alter the material master so that it will choose the newest BOM as the default during a planning run.

Source Determination in Manufacturing/Distribution As mentioned earlier, when modeling the manufacturing environment, planners maybe faced with certain dilemmas as it relates to sourcing. The following are some of problems planners come across: • • • •

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Multiple bills of material for one material number Multiple routings or recipes for one materials Multiple production versions for one material Multiple plants suppling one/more distribution centers

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Lesson: Source Determination in Manufacturing

Figure 153: Source Determination for Multiple Bills of Material

When dealing with multiple bills of materials (alternates) for one product planners have four options: • • • •

Lot size Explosion Date Alternative BOM field Production Versions

When dealing with multiple BOMs, planners need to make sure that the planning run chooses the correct BOM. In an earlier lesson you learned about how to configure the BOM selection, using the selection indicator in the material master. This allowed the planning run to choose by lot size (default), explosion date, and production version. Using the explosion date can be very cumbersome do to the fact users have to maintain a separate table. However, what happens if you need all BOMs valid during the same period of time? The solution to this is using either the Alternate BOM field on the BOM header or the Production Version Number. Both of these fields act as a priority. If all factors are equal, when it is time to choose a BOM the Alt. BOM field and the Production version number both act as a priority. In regards to the Alt BOM field, the highest priority value is 01. This field is alpha numeric, so by entering an alpha character when creating the BOM will allow planners to create other BOMs at a later date that have a higher priority. Note: When creating the first BOM for a material, the system will start with Alt BOM value 01.

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Figure 154: Source Determination for Multiple Routings

When dealing with multiple routings/task lists, planners need to make sure that the planning run chooses the correct routing. During the planning run the system can choose by lot size (default), and production version. Unlike the BOM the routing does not use explosion date. However, what happens if you need all routings valid during the same period of time? The solution to this is using either the Group counter field on the routing header or the Production Version Number. Both of these fields act as a priority. If all factors are equal, when it is time to choose a routing the Group Counter field and the Production version number both act as a priority. In regards to the Group Counter field, the highest priority value is 1. This field is alpha numeric, so by entering an alpha character when creating the routing will allow planners to create other routings at a later date that have a higher priority. Note: When creating the first routing for a material or group of materials, the system will start with Group counter value 1.

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Figure 155: Source Determination for Multiple Production Versions

When dealing with multiple production versions, planners need to make sure that the planning run chooses the correct production version. Production versions are used in the following ways: • • • •

Prioritize BOMs Prioritize Routings Define a Master Recipe Join a specific BOM and Routing combination

During the planning run the system can choose a production version by lot size, effectivity data, production version number and a quota arrangement. However, what happens if you need all production versions valid during the same period of time? The solution to this is using the Production Version Number. This field acts as a priority. If all factors are equal, when it is time to choose a production version the Version number field acts as a priority. This field is alpha numeric, so by entering an alpha character when creating the production version, this will allow planners to create other production versions at a later date that have a higher priority.

Demonstration: Source Determination in Mfg Purpose Demonstrate the different ways of source determination.

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System Data System: Client: User ID: Password: Set up instructions: 1. Create a new BOM R-F1## at plant 1000, using the R-F1##, alt BOM 1 as a template Logistics → Production → Master Data →Bills of Material → Bill of Material → Material BOM → Create (CS01) 2.

Enter your material number R-F1## at plant 1000, alt A1, and select Copy As. Note: Pay attention to the message at bottom WARNING that an alternative BOM is being created.

3.

In template BOM choose

4.

Select

5.

Go to your Material master and create two production versions A001 and A002 for your material R-F1## at plant 1000Logistics → Production → Master Data → Material Master → Material → Change Immediately (MM02)

6.

In the MRP 4 view select the Production versions button. Create two new production version A001 for alt BOM A1 and version A002 for Alt BOM 01 Effective till end of next year and an unlimited lot size.

7.

Go to the MRP 4 view and select the drop down on the Selection Method and choose 2. - production version.

8.

Review the routing group counter and lot size fields in the routing header Logistics → Production → Master Data → Routings → Routings → Standard Routing → Change (CA02)

9.

Enter R-F1## at plant 1000, and select

Select all and the select

Copy As.

Header, and point out the new lot size fields. Save the new BOM

Header

10. From the S/R list , execute and MRP run for R-F1## at plant 1000 with planning mode three . 11. review the details of the S/R list. Due to the selection method and production versions, you should see production versions A001 being selected. Review the details of the planned order, note the master data tab and the BOM that was chosen.

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Exercise 15: Source Determination in Manufacturing Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how using productional versions you can select different BOMs

Business Example Engineering has just come to you with a change to the R-F2## pump in plant 1000. This new change will allow for the casing to made directly as part of the pump assembly order. This will entail creating a new BOM for R-F2## at plant 1000 and setting the R-B1## to a phantom material. Both BOMs will be active at the same time since the previous method is still available if inventory needs to be build ahead of time due to capacity constraints. Once these two methods of manufacturing exist, you will need to prioritize the new BOM as the one selected during the planning. Create a new production version that will prioritize the new BOM over the old.

System Data System: Client: User ID: Password: CATT: Set up instructions:

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Data Material Plant Usage Alternative BOM

Date Value R-F2## 1000 1 - Production A1

Data Production Version Description 01 Date Effectivity Detailed Planning Task List type

Date Value A001 Continuous output BOM Now - 12/31/2010 Routing

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Group Number /Counter search by material Alt BOM BOM usage Distribution key

use drop down and

Data Production Version Description Machine Casing Date Effectivity Detailed Planning Task List type Group Number /Counter search by material Alt BOM BOM usage Distribution key

Date Value 5000 Pump Assembly and

01 1 Delete/leave Blank

Now - 12/31/2010 Routing use drop down and A1 1 Delete/leave Blank

Task 1: Setup Alternative Production Master Data You have just convince Engineering that manufacturing the casing R-B1## during the assembly of the R-F2## pump will save time and carrying cost. This will entail creating a new BOM for R-F2## at plant 1000, and setting the R-B1## to a phantom material. Both BOMs will be active at the same time since the previous method is still available if inventory needs to be build ahead of time due to capacity constraints. 1.

Create a new BOM R-F2## , alternative A1, at plant 1000, using the R-F2##, Alternative BOM 1 as a template. Select all materials during the copy process. In the new BOM for the R-F2## , set the R-B1## to become phantom material.

Task 2: Source Determination in Manufacturing You now you have two active BOMs for the R-F2## at plant 1000. However, if we were to execute a planning run the system would choose alternative 01 as the priority BOM. The production manager insists that as long as capacity is available you will make the casing R-B1## at the time of assembling the R-F2##. There fore you need to create a new production versions that will allow the alternative BOM A1, to be chosen over 01 during the planning runs. 1.

Review the stock requirements list for your R-F2## at plant 1000.

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2.

How is the current master data being chosen?

3.

From the stock requirements list for R-F2## at plant 1000, create a production version to specify your original BOM using the data below: Hint: If you performed the continuous output exercise , remove the Distribution key from A001 and move to the next step.

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4.

From the stock requirements list for R-F2## at plant 1000, create a production version to specify your new BOM using the data below. If you have not yet done so, set the selection method to 2 - selection by production version.

5.

From the Stock/Requirements list for you material R-F2## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 - Lead time scheduling.

6.

Refresh the stock requirements list again for your R-F2## at plant 1000. Which production version is being chosen and why?

7.

Review the details of the planned order. What BOM was copied into the planned order?

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Solution 15: Source Determination in Manufacturing Task 1: Setup Alternative Production Master Data You have just convince Engineering that manufacturing the casing R-B1## during the assembly of the R-F2## pump will save time and carrying cost. This will entail creating a new BOM for R-F2## at plant 1000, and setting the R-B1## to a phantom material. Both BOMs will be active at the same time since the previous method is still available if inventory needs to be build ahead of time due to capacity constraints. 1.

Create a new BOM R-F2## , alternative A1, at plant 1000, using the R-F2##, Alternative BOM 1 as a template. Select all materials during the copy process. In the new BOM for the R-F2## , set the R-B1## to become phantom material. a)

Follow Menu Path: Logistics → Production → Master Data →Bills of Material → Bill of Material → Material BOM → Create (CS01)

b)

Enter your data and select

c)

enter through the warning that your are creating a alternative BOM

d)

Enter Alternative 1 as your template

e)

Select

Select all

f)

Select

Copy

g)

Select item 0010 and then select

h)

In the Basic Data tab, enter a special procurement key 50 - Phantom Assembly

i)

Select

Copy as

Item.

Save

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Task 2: Source Determination in Manufacturing You now you have two active BOMs for the R-F2## at plant 1000. However, if we were to execute a planning run the system would choose alternative 01 as the priority BOM. The production manager insists that as long as capacity is available you will make the casing R-B1## at the time of assembling the R-F2##. There fore you need to create a new production versions that will allow the alternative BOM A1, to be chosen over 01 during the planning runs. 1.

Review the stock requirements list for your R-F2## at plant 1000. a)

2.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

How is the current master data being chosen? Answer: From the stock/requirements list, you can see the production version A001 to the right side of the chart. If you performed the continuous input/output exercise, this was done by creating a production version and setting the selection method indicator on the MRP 4 view to 2- selection by production version.

3.

From the stock requirements list for R-F2## at plant 1000, create a production version to specify your original BOM using the data below: Hint: If you performed the continuous output exercise , remove the Distribution key from A001 and move to the next step. a)

From the S/R list select Environment → Change material, and proceed to the MRP 4 View

b)

Select Production Version button

c)

Enter version A001, with descriptionContinuous Output BOM 01, and enter today’s date and the date for end of next year, then select Continue.

d)

In the Planning Data section, under Detailed Planning, select a Task list type Routing, then using the search functionality, search for your Group No./Counter, by using your material R-F2## at plant 1000.

e)

Enter Alternative BOM 1, and Usage 1.

f)

select Continue twice and

continue through any messages.

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4.

5.

6.

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From the stock requirements list for R-F2## at plant 1000, create a production version to specify your new BOM using the data below. If you have not yet done so, set the selection method to 2 - selection by production version. a)

From the S/R list select Environment → Change material, and proceed to the MRP 4 View

b)

Select Production Version button

c)

Enter version 5000 , with descriptionPump Assembly and Machine Casing, and enter today’s date and the date for end of next year, then select Continue.

d)

In the Planning Data section, under Detailed Planning, select a Task list type Routing, then using the search functionality, search for your Group No./Counter, by using your material R-F2## at plant 1000.

e)

Enter Alternative BOM A1, and Usage 1.

f)

select Continue twice and

g)

Set the selection method in the MRP 4 view to 2 - Selection by Production version

h)

Select

continue through any messages.

Save

From the Stock/Requirements list for you material R-F2## at plant 1000, execute Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 - Lead time scheduling. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-Level, setting the planning mode to 3 - Delete and Recreate planning data., and the scheduling indicator to 2 - Lead time scheduling, and then refresh the S/R list

Refresh the stock requirements list again for your R-F2## at plant 1000. Which production version is being chosen and why? Answer: From the stock/requirements list, you can see the production version 5000 to the right side of the chart. This was done by creating a production version and setting the selection method indicator on the MRP 4 view to 2- selection by production version. In addition it selected production version 5000 because numbers have “higher priority” then letters in determining the source.

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7.

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Review the details of the planned order. What BOM was copied into the planned order? a)

For the first planned order select

b)

Select

c)

Select the master data tab

d)

In the Bill of Material section Alt BOM A1 copied into the planned order. This was the alternative BOM that was assigned to production version 5000.

Details of Elements.

Display Element

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Lesson Summary You should now be able to: • Demonstrate how to set up the system to choose the correct method of manufacturing when several exist.

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Lesson: 407

Lesson: Quota Arrangements

Quota Arrangements Lesson Duration: 30 Minutes

Lesson Overview A quota arrangement represents an additional source assignment option in the process of automatic source determination. If a quota arrangement exists for a material, it has the highest priority during source determination. This lesson describes how a quota arrangement can be used when you create a purchase requisition, or during the requirements planning run.

Lesson Objectives After completing this lesson, you will be able to: •

Demonstrate how to split demand between multiple sources

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Not all of your materials are single sourced. At the time of planning planners still need to determine a source of supply for some manufactured items. Currently your R-F2## is using only one bill of material and this is causing capacity issues. Your production manager figures if you plan a 50/50 split, he will be able to manage the production better. Set up a quota arrangement to make this happen.

Determine sources with Quota Arrangements The quota arrangement facilitates the administration of sources of supply at plant level. If you procure a certain material from a number of different sources, you can assign a quota to each individual source. The quota indicates which share of the requirements arising for the material over a certain period is to be procured from which source. If a quota arrangement exists for a material, it is taken into account during source determination. A quota arrangement is valid for a specific period of time. A quota arrangement item is created for each source during that period. Caution: If a quota arrangement applies, this does not mean that the quantity of a single manually created replenishment is automatically apportioned among different sources. In such case, the entire requested quantity of the replenishment is assigned to one source - the source that is

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next in line to receive the relevant order - in accordance with the quota arrangement. The breakdown of requirements according to the specified quotas can only take place if material requirements planning is used. It can only be carried out with regard to aggregate, not individual, requirements.

Figure 156: Quota Arrangement

To define a quota allocation procedure for the procurement of a material, proceed as follows: After having entered the material and plant numbers on the initial screen, specify, in the header overview, the date until which the quota arrangement is valid. The start date is always the current date or the follow-on date from the end of the previous quota arrangement. Enter a quota arrangement item for each source that you wish to define in the arrangement, as follows: 1. 2. 3. 4.

482

Specify the procurement type for each source (in-house production or external procurement). Where appropriate, specify the special procurement type (for example, stock transfer). Enter the vendor, supplying plant or production version. Specify the quota ratios on the basis of which requirements arising over the period are to be apportioned.

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The system calculates the percentage distribution of the requirements on the basis of the quotas and updates the quota-allocated quantity following each assignment of requirements effected on the basis of the quota arrangement. In Customizing for quota arrangements, you define the number range for the quota arrangement and specify whether the number is to be assigned internally (by the system) or externally (through user input). Hint: Before you can maintain a quota arrangement item with the procurement type external procurement, a source of supply (info record and/or outline agreement) must exist. Create quota arrangement: SAP Menu → Logistics → Production → MRP → Master Data → Quota Maintenance

Demonstration: Quota Arrangement Purpose System Data System: Client: User ID: Password: Set up instructions: To activate quota arrangement, you need to fulfil the following prerequisites: 1.

From the S/R list, change the material master for R-F2## at plant 1000, so the quota arrangement is active for MRP. Quota Arrangement usage to 4. Save

Setting up the Quota Arrangement Before a quota arrangement can be maintained for a material, you must specify the business applications for which the quota arrangement is to be used (for example, in materials planning or in purchase requisitions). You make this specification in the Quota Arrangement Usage field, which is to be found in the plant-specific purchasing/materials planning data of the material master record. Set quota arrangement usage indicator: R/3 Customizing → Implementation Guide → Materials Management → Purchasing → Quota Arrangement → Define Quota Arrangement Usage.

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Figure 157: Quota Arrangement Usage

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Lesson: Quota Arrangements

An entry in this field determines the areas in which the source determination facility finds the appropriate source on the basis of the quota arrangement. The quota-allocated quantity of the relevant quota arrangement item is updated from the areas specified via this indicator. The following areas can be taken into consideration: •

Purchase orders The quantity of the material ordered to date goes into the quota-allocated quantity, provided that a source from the quota arrangement was used.

•

Purchase requisitions The source determination process is controlled via the quota arrangement and the thus-assigned requested quantity of all purchase requisitions for this material goes into the quota-allocated quantity.

•

Scheduling agreement The total quantity of the scheduling agreement delivery schedule lines for this material goes into the quota-allocated quantity.

•

Planned orders The total quantity of all relevant assigned planned orders for this material goes into the quota-allocated quantity.

•

Materials planning Source determination on the basis of quota arrangements can also be used in material requirements planning (MRP). Planned orders and purchase requisitions generated via MRP have a source assigned on a quota basis, and the requirement goes into the quota-allocated quantity.

•

Production order The total quantity from all production orders for this material goes into the quota-allocated quantity of a relevant quota arrangement item for in-house production.

Permissible combinations of the areas listed are stipulated in Customizing and combined to form keys for quota arrangement usage. In the case of sources for which you have specified a quota in the current validity period, the system calculates which source is next in line for a certain requirement. This calculation is carried out by the system during the source determination process for a requested material.

Demonstration: Quota Arrangement Purpose To know the usage of Quota Arrangement

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System Data System: Client: User ID: Password: Set up instructions: To activate quota arrangement, you need to fulfil the following prerequisites: 1.

You maintain the quota arrangement usage indicator in Customizing for purchasing: Customizing: Material Management → Purchasing → Quota Arrangement → Define Quota Arrangement Usage.

Calculation the Quota Splits

Figure 158: Source Determination

The system assigns a quota rating to each of the sources. The quota rating is calculated as follows: Quota rating = (quota-allocated quantity + quota base quantity / quota

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The individual values are as follows: •

Quota-allocated quantity Total quantity of all requirements included in the quota-allocated quantity according to the quota arrangement usage indicator in the material master record. The quota-allocated quantity is updated automatically.

•

Quota base quantity Quantity used for manual control of the quota arrangement (for example, when new sources are included).

•

Quota Number that determines how requirements are apportioned among the various sources.

In the automatic source determination process, the source with the lowest quota rating is assigned. The formula yields the following truism: The higher the quota, the lower the quota rating and the greater the probability that the relevant source will be determined as the valid source. The quota base quantity can be used on the one hand when a new source is included in an already existing quota arrangement and on the other to remedy a disproportion between quota and quota-allocated quantity. You can use the quota base quantity to prevent the new source from being assigned all requirements (for example, in the form of requisitions or purchase orders) until such time as its quota-allocated quantity exceeds that of one of the existing sources. This is achieved due to the fact that the quota base quantity acts as an additional quota-allocated quantity in the calculation of the quota rating. Use of the quota base quantity - example: You include a new vendor in an already existing quota arrangement. The existing quota arrangement consists of two vendors, who are each assigned 50% of the material requirements that arise. Each of these vendors has a high quota-allocated quantity because your company has already ordered a lot of material from them during the validity period of the quota arrangement. The new vendor is to be assigned the same share of forthcoming requirements as the other two. However, according to the formula for calculating the quota rating, all requirements will be allocated to the new vendor until such time as his quota rating exceeds that of one of the other two vendors. If the purchase requisitions are to be assigned evenly, as if the new vendor had always been a party to the quota arrangement, you must define the quota base quantity for the new vendor appropriately, or have it determined by the system.

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The system provides the following procedures for determining the quota base quantity: •

Individual calculation Calculates the quota base quantity for the selected quota arrangement items. Select the items whose quota base quantity is to be recalculated and choose Edit → Base Quantities → Individual Calculation.

•

Collective calculation Calculates the quota base quantity for all quota arrangement items. Use this procedure if the allocation of requirements that arise for a material under a quota arrangement is to be based on the starting situation again, in which all sources have the same quota rating. Choose Edit → Base Quantities → Collective Calculation.

Calculation of quota rating - example: You create a purchase requisition for a material (100 pc) for which the source determination process in the requisition is regulated on the basis of a quota arrangement. The following table shows the current situation with regard to the quota arrangement at the time of source determination: Vendor

Quota

Quota-allocated quantity

Quota base quantity

A

3

780

0

B

2

380

0

C

1

0

260

According to the specified formula, the quota ratings for vendors A, B, and C are as follows: Vendor

Quota rating

A

(780 + 0) / 3 = 260

B

(380 + 0) / 2 = 190

C

(0 + 260) / 1 = 260

This means that the source representing vendor B is will be assigned to the requisition item because this vendor has the lowest quota rating. After the requisition has been saved, the situation regarding the quota arrangement is as follows:

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Vendor

Quota

Quota-allocated quantity

Quota base quantity

A

3

780

0

B

2

480

0

C

1

0

260

Quota Arrangement in Material Requirements Planning In contrast to source assignment via quota arrangement in the manual creation of a replenishment, in the planning run it is possible to split up the requirement as per the specified quotas among the various sources in the quota arrangement. For the quota arrangement to be taken into account during the source determination process in material requirements planning, the quota arrangement usage indicator must have previously been set to the appropriate value in the material master record. Furthermore, each source in the quota arrangement (apart from info records) must have been entered in the source list with the appropriate MRP indicator.

Figure 159: Quotas in Manufacturing

In source determination for manufacturing, the only option planners have is to choose the production version. BOMs and Routings can not be selected using a quota arrangements. Note: However, a production version can contain only a BOM or only a routing. Both are not mandatory.

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Figure 160: Requirement Splitting

Whether or not a requirement is split is determined via the lot-sizing procedure that has been assigned. The indicator for the splitting quota must have been assigned to the lot-sizing procedure with which the material is planned (in Customizing). In the case of the lot size ES (exact lot size calculation with splitting), for example, the Splitting indicator is set. Example of requirement splitting in materials planning: The starting situation is as follows: There is a requirement for 1000 pc of a certain material in whose master record the lot size ES (exact lot size calculation with splitting) has been set. Each vendor has been assigned the quota shown in the following table: Vendor

Quota

Quota-allocated quantity

A

4

420

B

3

310

C

2

190

D

1

100

In requirements planning, four purchase requisitions are generated, the requirement of 1000 pc being apportioned among the four sources in the proportion 4:3:2:1. In the case of a quota arrangement with splitting, the quota-allocated quantity and quota rating are both irrelevant. The following distribution thus applies with respect to the quota arrangement:

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Vendor

Quota

Quota-allocated quantity

A

4

820

B

3

610

C

2

390

D

1

200

To prevent the system from splitting up a requirement that is too small in the course of a planning run, you can specify a minimum quantity for splitting. The minimum quantity defines the lowest quantity that a lot must have before it can be split up among several sources during the requirements planning run. If the lot is smaller than or equal to the minimum quantity, the usual quota arrangement logic applies. Example of requirement splitting with minimum splitting quantity: During the maintenance of a quota arrangement for a material with the number R-T100, a minimum splitting quantity of 1200 is set. Suppose there is a requirement of 1000 pc. In the course of a planning run for material R-T100, this requirement will be converted into a single purchase requisition. Since the requirement falls below the minimum quantity for splitting, no splitting takes place and the vendor with the highest quota is determined by the system as the source for the requisition. Define lot-sizing procedure: R/3 Customizing → Implementation Guide → Materials Management → Consumption-Based Planning → Planning → Lot-Size Calculation → Define Lot-Sizing Procedure. When maintaining a quota arrangement, you can also specify a minimum or maximum lot size for each item of the arrangement. However, the specified lot sizes are only taken into account in the case of requisitions and planned orders that are generated automatically (that is, via the MRP system). The lot size specified in the quota arrangement item overrides the settings in the material master record.

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Figure 161: Lot Sizes

•

Maximum lot size per quota arrangement item A maximum lot size is defined as the maximum PO quantity that may be assigned per order proposal to a source in the requirements planning run. If the requirement quantity exceeds the maximum lot size, another quota-allocation process takes place for the residual quantity. It may now happen that, due to a low quota rating, the same source is reselected and a second order proposal generated for it. To prevent this, you can set the 1x indicator. If this indicator is set, a source is not taken into account for more than one lot with a quantity equal to the maximum lot size per planning run. The remaining quantity is then allocated to the next sources.

•

Minimum lot size per quota arrangement item A minimum lot size is defined as the minimum PO quantity that may be assigned per order proposal to a source in the requirements planning run. If the requirement quantity is less than the minimum lot size, the lot is assigned to the source with a quantity equal to the minimum lot size.

Example of maximum lot size with 1x indicator: There is a requirement for 500 pc of a certain material. The starting situation is as shown in the following table:

492

Vendor

Quota

Quota-allocated quantity

Max. lot size

1x

A

3

100

250

x

B

1

200

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Due to the fact that the 1x indicator has been set, a planning run will result in the generation of one requisition for 250 pc with vendor A as the source and one requisition for 250 pc with vendor B as the source. Without the 1x indicator, the planning run would generate two requisitions for 250 pc with vendor A as the source. In addition to a minimum and/or maximum lot size, you can also specify a maximum quantity in a quota arrangement item. The maximum quantity is taken into account in both the manual creation of purchase requisitions and the automatic generation of requisitions within the framework of material requirements planning. The maximum quantity acts as a limit value for the quota-allocated quantity for a source. A quota arrangement item is not suggested as the source if the quota-allocated quantity is - or would become - greater than or equal to the maximum quantity.

Figure 162: Maximum Quantity

Example of maximum quantity There is a requirement for 800 pc of material R-T100. The quota arrangement has been maintained in the system according to the following table:

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Vendor

Quota

Quota-allocated quantity

Max. quantity

A

1

1500

2000

B

2

3800

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With this starting situation, a planning run would result in the generation of one requisition for 800 pc with vendor B as the source. Although vendor A has a lower quota rating than vendor B, due to the already quota-allocated quantity of 1500 pc, the maximum quantity would be exceeded if the former were to be assigned to the requisition as the source. If the maximum quantity were not 2000 but 2500 pc, the system would assign vendor A as the source.

Demonstration: Quota Arrangement Purpose To know the usage of Quota Arrangement

System Data System: Client: User ID: Password: Set up instructions: To activate quota arrangement, you need to fulfil the following prerequisites: 1.

Create a quota arrangement for the R-F2## at plant 1000 Logistics → Production → MRP → Master Data → Quota Maintenance

2.

Set a validity date till end of next year.

3.

Select your validity period and select Item Overview

4.

Enter the following: Quota

Proc. Type

SP key

Plng Plant Prod. Version

Quota

1

E

E

1000

A001

50

2

E

E

1000

A002

50

Save

494

5.

Execute and MRP run for R-F2## at plant 1000, using planning mode 3.

6.

Review the S/R list and note the production version alternating.

7.

A source list entry must exist for external procurement, including “MRP-Relevant” indicator.

8.

The quota arrangement usage indicator must be set in the material master.

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9.

You maintain the quota arrangement usage indicator in Customizing for purchasing: Customizing: Material Management → Purchasing → Quota Arrangement → Define Quota Arrangement Usage.

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Exercise 16: Production Versions and Quota Arrangements Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how Quota Arrangements are used in manufacturing

Business Example Not all of your materials are single sourced. At the time of planning planners still need to determine a source of supply for some manufactured items. Currently your R-F2## is using only one bill of material and this is causing capacity issues. Your production manager figures if you plan a 50/50 split, he will be able to manage the production better. Set up a quota arrangement to make this happen.

System Data System: Client: User ID: Password: CATT: Set up instructions:

Task: Quota Arrangements in Manufacturing Currently your R-F2## is using only one bill of material and this is causing capacity issues. Your production manager figures if you plan a 50/50 split, he will be able to manage the production better. Set up a quota arrangement to make this happen. 1.

Create a quota arrangement for the R-F2## at plant 1000 that specifies a 50/50 split between your production version A001 and 5000. make it valid from now till the end of next year.

2.

From the Stock/Requirements list, execute a Single-item, Multi-level MRP run for R-F2## at plant 1000, using planning mode 3.

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3.

Prior to refreshing the Stock/Requirements list, how can you tell replenishment is being driven by a Quota Arrangement

4.

Refresh the Stock/Requirements list, what is the result of the MRP run.

5.

What is the split between the two production versions: Production Version

Allocated Qty

5000 A001

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Solution 16: Production Versions and Quota Arrangements Task: Quota Arrangements in Manufacturing Currently your R-F2## is using only one bill of material and this is causing capacity issues. Your production manager figures if you plan a 50/50 split, he will be able to manage the production better. Set up a quota arrangement to make this happen. 1.

Create a quota arrangement for the R-F2## at plant 1000 that specifies a 50/50 split between your production version A001 and 5000. make it valid from now till the end of next year. a)

Follow menu path:Radiologists → Production → MRP → Master Data → Quota Maintenance

b)

Enter your mateiral R-F2## and plant 1000 and press ENTER

c)

Set a validity date till end of next year.

d)

Select your validity period and select Item Overview

e)

Enter the following:

f) 2.

3.

Quota

Proc. Type

SP key

Plng Plant

Prod. Version

Quota

1

E

E

1000

A001

50

2

E

E

1000

A002

50

Select

Save

From the Stock/Requirements list, execute a Single-item, Multi-level MRP run for R-F2## at plant 1000, using planning mode 3. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

b)

Select Single-item, Multi-level MRP

Prior to refreshing the Stock/Requirements list, how can you tell replenishment is being driven by a Quota Arrangement Answer: A new icon at the top appears labeled Quota Arrangement

4.

Refresh the Stock/Requirements list, what is the result of the MRP run. Answer: Making sure to look at the production version column you can see that planning run seems to be “almost ” alternating between production versions Continued on next page

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5.

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What is the split between the two production versions: Production Version

Allocated Qty

5000 A001 a)

From the Stock/Requirements list, Select Quota Arrangement icon

b)

Enter Through the warning

c)

Select the valid period of time and select Item overview

d)

500

Production Version

Allocated Qty

5000

Varies

A001

Varies

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Lesson Summary You should now be able to: • Demonstrate how to split demand between multiple sources

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Source Determination in Procurement Lesson Duration: 30 Minutes

Lesson Overview This lesson shows you how the source list is used in purchasing and in material requirements planning. It provides an overview of how you can use the source list to influence the process of automatic source determination that takes place when a purchase requisition is created and during the requirements planning run.

Lesson Objectives After completing this lesson, you will be able to: • •

Describe how to initiate the purchasing process as a result of the planning run Demonstrate how to split demand between multiple sources

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Not all of your materials are made in house. You are still required to purchase your raw materials from external suppliers. Some vendors will store material at your location till its use, other suppliers act as sub-contractors. Examine how you can use the planning run to initiate some of these scenarios your business deals with.

Source Determination in Purchasing Prior to initiating the planning run, planners can have purchasing related replenishment created as a result of a short. Items that are purchased frequently will typically have purchasing master data stored: • • • • •

Purchasing Information Records Scheduling Agreements Purchasing Contracts Source lists. Quota Arrangements

If the requester has set the Source Determination indicator in the requisition header, the system searches for possible sources of supply for all the items of the requisition. If the system finds several valid sources for an item, the decision process can be supported by a price simulation or by reference to data from the vendor evaluation facility.

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Figure 163: Source Determination: Overview

To have the system assign a single unique source during the automatic source determination process, you can make use of a source list and/or a quota arrangement.

Figure 164: Master Data in Purchasing

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In the source list, you specify which source of supply is valid for a certain period of time. You can specify a preferred source as fixed for a certain period in the source list. In automatic source determination, the system will then suggest just this source, even if other potential sources exist. With the aid of a quota arrangement, you can have material requirements arising over a certain period divided up among different sources on the basis of quotas. Quota arrangements determine which source of supply (maybe from among several possible ones) is automatically assigned to a purchase requisition.

Functions of the Source List You use the source list to administer your sources of supply. The source list contains the allowed and prohibited sources of a material in a certain plant over a certain period. Each source is defined by a source list record. The source list has the following purposes: • •

Restriction of the selection of sources during the automatic source determination process Definition of a source as fixed, meaning that the relevant source counts as preferred for a stipulated period during automatic source determination (For example, the preferred vendor for material 1 is Miller Corp. in the first quarter and Myers & Co. in the second quarter.)

•

Definition of a source as blocked (This means, for example, that no release orders can be issued against, say, contract 4712 for a certain period.)

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Figure 165: Source List

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Each source list record consists of the following data: •

Validity period Period within which the settings made in the source list are valid.

•

Key source data Number of the vendor and the responsible purchasing organization (info records) or number and item of the outline agreement (scheduling agreement or contract) representing the source of supply for the material.

•

Fixed source Select the Fixed field to define a source as preferred for the purposes of automatic source determination. Within a validity period, not more than one source should be flagged as Fixed, since otherwise the automatic source determination would not produce a unique result.

•

Procurement plant If the material can be procured from a plant or another point within your firm, enter the plant number in the field and leave the field for the vendor number and/or contract number empty.

•

Blocked source Select the Blocked field to define a source of supply as blocked. The info record or outline agreement is not suggested in the course of the source determination process and no PO can be created for the source in question. Hint: If you set the Blocked indicator and enter only one validity period, the material is excluded from external procurement; that is, it cannot be ordered during this period.

•

MRP You use the MRP indicator to determine whether an automatic source determination process is carried out during the requirements planning run. The appropriate source is then automatically assigned to a purchase requisition, or scheduling agreement delivery schedule lines can be generated directly via the planning run.

If you wish to prevent a material from being ordered from a vendor for whom no corresponding source has been entered in the source list, define the material as subject to a source list requirement in the material master record.

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Figure 166: Source List Requirement (Material-Related)

Hint: If an attempt is made to order a material subject to a source list requirement from a source that is not included in the source list, the standard system issues an error message with the text: “Source not included in list despite source list requirement”. This error message (no. 06 722) can be changed to a warning message in Customizing for purchasing. In Customizing, you can specify that all materials for a certain plant are to be subject to a source list requirement. If a source list requirement has been defined for a plant, you must maintain the source list for every material in the plant before a material can be procured for the plant.

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Figure 167: Source List Requirement (Plant-Related)

Hint: With the source list analysis, you can find out whether source list records exist for materials of a plant within a certain period. In this way, you can identify the materials for which source list records are missing for a plant with a source list requirement. Analyze source list: SAP Menu → Logistics → Materials Management → Purchasing → Master Data → Source List → Follow-On Functions → Analyze. Define source list requirement at plant level: R/3 Customizing → Implementation Guide → Materials Management → Purchasing → Source List → Define Source List Requirement at Plant Level.

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Creation of Source List Records

Figure 168: Create Source List Records

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You can create source list records for individual sources of a material as follows: •

Manually This method is recommended if you have to make numerous changes to, or new entries in, a source list.

•

Creation from within an outline agreement With this procedure, you can adopt an item from an outline agreement in a source list when creating or changing the agreement. On the outline agreement overview screen, select an item for which you wish to enter source list records and choose Item → Maintain Source List. If you have not entered a plant in the outline agreement item, you must enter the plant for each source list record.

•

Creation from within an info record With this procedure, you can enter a vendor in the source list when creating or changing a purchasing info record. In the info record, choose Extras → Source List. If the info record is valid for an entire purchasing organization, you can create the source list for all plants of the organization in question. Choose the plant via Goto → Plant.

•

Automatically You can have source list records generated automatically by the system. The source list records can be generated for several materials (collective procedure) or for a single material (individual procedure). The system thus enables you to create or update all the records for a certain source list very quickly. With this procedure, you can generate a source list record for every info record and/or every outline agreement item for a material or several materials. Caution: This functionality is not suitable for updating your source lists because source list records cannot be automatically generated just for the new sources. Before generating source list records, you should answer the following questions: – – – –

510

For which materials or plants are source list records to be generated? Are only outline agreement items, only info records, or both to be taken into account? For which period are the source list records that are to be generated to be valid? Do source list records already exist for the materials for which you wish to generate source list records? If so, you must decide how the system is to treat the old records (for example, delete or leave unchanged)?.

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Create source list manually: SAP Menu → Logistics → Materials Management → Purchasing → Master Data → Source List → Maintain/Display. Generate source list automatically: SAP Menu → Logistics → Materials Management → Purchasing → Master Data → Source List → Follow-On Functions → Generate.

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Lesson: Source Determination in Procurement

Exercise 17: Source Determination in Procurement Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate using a source list in the planning run • Demonstrate using a quota arrangement in purchasing

Business Example All of your raw materials are procured externally. Your flat gasket R-T2## is used in the production of the casing R-B1##. This material is procured from several venders. Examine the details of the purchasing master data. Vendor 1002 (SKF Kugelmeier KGaA) is currently your primary vendor. Four months from now your are going to split the demand between vendors 1000, 1001, and 1002. Set up a quota arrangement to make sure the split is 25/60/15 respectively

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

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[Enter all instructions necessary for the maintenance of this exercise.] Data Material Plant Purch Org Scope of list

Date Value R-T2## 1000 1000 RAHM

Data Vendor 1000: Vendor 1001: Vendor 1002:

Date Value 25 60 15

Data

Date Value

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Create Purch Req.: Delivery Schedules: Planning Mode:

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1 3 3

Task 1: Procurement via the Planning run 1.

Review the scheduling agreement for flat gasket R-T2##. Use scheduling agreement 5500000124.. What is the cost per part?

2.

How many scheduling agreements are currently active for your flat gasket R-T2##?

3.

Review your source list for R-T2## at plant 1000. Which vendor/scheduling agreement is the priority during planning.

4.

How many vendors are in your source list?

5.

Which Vendor is the preferred vendor and how do you know this?

6.

Will a schedule line or purchase requisition be created for the R-T2## ?

7.

From the Stock/Requirements list for R-F2## at plant 1000, execute a Single-item, multi-level MRP run. Be sure to set the Delivery schedule indicator to 3 - Schedule lines and the planning mode to 3.

8.

Review the Stock/Requirements list for your flat gasket R-T2## at plant 1000.

Continued on next page

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9.

What Does the MRP Element data refer to?

Task 2: Purchasing Quota Arrangements in MRP (Time Permitting) Your other two vendors have provided you with competitive bids for the flat gasket R-T2##. However, you are not sure if they can handle the volumes. As test, you are going to split some of the demand between all three vendors still giving vendor 1001 the bulk of the demand. Four months from now your are going to split the demand between vendors 1000, 1001, and 1002. Set up a quota arrangement to make sure the split is 25/60/15 respectively 1.

Create a quota arrangement for R-T2## at plant 1000, starting four months from now till the end of next year, that reflects the following:

2.

From the Stock/Requirements list for your flat gasket R-T2## at plant 1000, change the material master to activate your quota arrangement (MRP 2 view)

3.

From the Stock/Requirements list for your flat gasket R-T2## at plant 1000, execute Single-item, Multi-level MRP, making sure to set the following indicators in the planning run:

4.

Refresh the stock requirements, and what is the result?

5.

At the bottom of the Stock/Requirements list select Vendor. What happens as a result?

6.

What is the split between the three vendors ?:

Continued on next page

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Production Version

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Allocated Qty

1000 1001 1002

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Solution 17: Source Determination in Procurement Task 1: Procurement via the Planning run 1.

2.

Review the scheduling agreement for flat gasket R-T2##. Use scheduling agreement 5500000124.. What is the cost per part? a)

Follow menu path:Logistics → Materials Management → Purchasing → Outline Agreement → Scheduling Agreement → Display (ME33L)

b)

Net price is $0.10 per piece.

How many scheduling agreements are currently active for your flat gasket R-T2##? a)

Follow menu path:Logistics → Materials Management → Purchasing → Outline Agreement → List Displays→ By Material (ME3M)

b)

Enter the data parameters and select

c)

Answer: Three scheduling agreements:

Execute.

5500000123 5500000124 5500000125 3.

4.

Review your source list for R-T2## at plant 1000. Which vendor/scheduling agreement is the priority during planning. a)

Follow menu path:Logistics → Materials Management → Purchasing → Master Data→ Source List → Display (ME03)

b)

Enter your material R-T2## at plant 1000 and select

Enter

How many vendors are in your source list? Answer: Three. Vendors 1000, 10001, and 10002

5.

Which Vendor is the preferred vendor and how do you know this? Answer: Vendor 1001 is the preferred vendor, since the fixed source of supply indicator is set.

6.

Will a schedule line or purchase requisition be created for the R-T2## ? Answer: Due to the Source list usage in MRP indicator vendor 1001 is set to generate schedule lines if, the Delivery Schedule indicator in the planning run or MRP group will allow it.

Continued on next page

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7.

8.

9.

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From the Stock/Requirements list for R-F2## at plant 1000, execute a Single-item, multi-level MRP run. Be sure to set the Delivery schedule indicator to 3 - Schedule lines and the planning mode to 3. a)

Follow menu path: Logistics → Production → MRP → Evaluations→ Stock/Requirements list (MD04)

b)

Select Single-item, multi-level and set the Delivery schedule indicator to 3 - Schedule lines and the planning mode to 3 - Delete and recreate planning data

Review the Stock/Requirements list for your flat gasket R-T2## at plant 1000. a)

Follow menu path: Logistics → Production → MRP → Evaluations→ Stock/Requirements list (MD04)

b)

Select

c)

You should now see planned orders or purchase reqs being replaced by schedule lines.

Refresh

What Does the MRP Element data refer to? Answer: The MRP element data is referring to the Scheduling agreement number and the item number for the R-T2## on that scheduling agreement.

Continued on next page

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Task 2: Purchasing Quota Arrangements in MRP (Time Permitting) Your other two vendors have provided you with competitive bids for the flat gasket R-T2##. However, you are not sure if they can handle the volumes. As test, you are going to split some of the demand between all three vendors still giving vendor 1001 the bulk of the demand. Four months from now your are going to split the demand between vendors 1000, 1001, and 1002. Set up a quota arrangement to make sure the split is 25/60/15 respectively 1.

Create a quota arrangement for R-T2## at plant 1000, starting four months from now till the end of next year, that reflects the following: a)

Follow menu path: Logistics → Production → MRP → Master Data → Quota Maintenance (MEQ1)

b)

Enter mateiral R-T2## at plant 1000 and select

c)

In the overview screen, enter a valid to date that is End of next Month

d)

Enter a second valid to date that is End on month + four months from the previous validity periods end date. (add three months to the previous end period)

e)

Select the second validity period and then select theItem overview

f)

Enter the following:

g) 2.

Enter

Proc. Type

Vendor

Quota Percent.

F

1000

25

F

1001

60

F

1002

15

Select

Save.

From the Stock/Requirements list for your flat gasket R-T2## at plant 1000, change the material master to activate your quota arrangement (MRP 2 view) a)

Follow menu path: Logistics → Production → MRP → Evaluations→ Stock/Requirements list (MD04)

b)

Follow menu path: Environment → Change Material

c)

In the MRP 2 view set the Quota Arrangement usage to 4.

d)

Select

Save.

Continued on next page

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3.

From the Stock/Requirements list for your flat gasket R-T2## at plant 1000, execute Single-item, Multi-level MRP, making sure to set the following indicators in the planning run: a)

4.

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From the S/R list select Single-item, Multi-levelfrom you icon bar set the indicators as instructed

Refresh the stock requirements, and what is the result? Answer: After running the MRP run you can know see schedule lines for the priority vendor, and purchase requisitions or planned orders/ExtP for the other two vendors. Note: Purchase req versus planned order was controlled by the MRP group/planning run setting for purchase reqs. in addition if the MRP usages was set to 2 - Scheduling agreement in the Source list, scheduling agreements would have been created for all replenishment elements.

5.

At the bottom of the Stock/Requirements list select Vendor. What happens as a result? Answer: Upon select the vendor button, two new columns appear to the right identifying the vendor number and the vendor name. In addition if you drill into the details of the planned orders/purchase reqs you will see the vendor was assigned. Note: the quota arrangement takes priority over the source list!

6.

What is the split between the three vendors ?:

Continued on next page

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Production Version

Allocated Qty

1000 1001 1002 a)

From the Stock/Requirements list, Select Quota Arrangement icon

b)

Enter Through the warning

c)

Select the valid period of time and select Item overview

d)

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Production Version

Allocated Qty

1000

Varies

1001

Varies

1002

Varies

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Lesson Summary You should now be able to: • Describe how to initiate the purchasing process as a result of the planning run • Demonstrate how to split demand between multiple sources

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Unit Summary

Unit Summary You should now be able to: • Explain what happens if multiple sources of supply exist. • Demonstrate how to set up the system to choose the correct method of manufacturing when several exist. • Demonstrate how to split demand between multiple sources • Describe how to initiate the purchasing process as a result of the planning run • Demonstrate how to split demand between multiple sources

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Test Your Knowledge

449

Test Your Knowledge 1.

What are the two general categories that define a source?

2.

A material may be both In House Production and Procured Externally. Determine whether this statement is true or false.

□ □

True False

3.

If a material is assigned procurement type = “X” what type of planned order will be generated by MRP (assuming no quota arrangements exist).

4.

Why might multiple in-house production sources exist?

5.

What criteria might planning use to determine a BOM for a material produced in-house? Choose the correct answer(s).

□ □ □ □ □

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A B C D E

Lot Size Explosion Date Alternative BOM Production Version All of the above

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6.

If multiple production versions exist (A001 & A002) and there is no difference in the lot size or validity period; which will planning choose? Why?

7.

What does quota rating define?

8.

Quota arrangements may be used to split procurement elements between what types of sources? Choose the correct answer(s).

□ □ □ □ □ 9.

A B C D E

External vendors Other Plants In house Manufacturing Safety Stock All of the above

What prerequisite field in the material master must be set for planning to use quotas?

10. If a new vendor is certified, how would you prevent the new vedor from getting disproportionate share of the requirements?

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11. Quotas always determine a source using the cumulative quantities and not split strictly based on percentages. Determine whether this statement is true or false.

□ □

True False

12. One of two possible items must exist for planning to aotomatically a purchased source. What are they.

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Answers 1.

What are the two general categories that define a source? Answer: Produced In House (manufactured) or Procured Externally (purchased)

2.

A material may be both In House Production and Procured Externally. Answer: True Procurement Type = "X"

3.

If a material is assigned procurement type = “X” what type of planned order will be generated by MRP (assuming no quota arrangements exist). Answer: In House Production

4.

Why might multiple in-house production sources exist? Answer: There may be more than one BOM or Routing.

5.

What criteria might planning use to determine a BOM for a material produced in-house? Answer: E All of the above are valid determining factors.

6.

If multiple production versions exist (A001 & A002) and there is no difference in the lot size or validity period; which will planning choose? Why? Answer: A001, the version number becomes the determining factor.

7.

What does quota rating define? Answer: Quota rating defines which source of material supply is next in line.

8.

Quota arrangements may be used to split procurement elements between what types of sources? Answer: A, B, C All are valid EXCEPT safety stock.

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9.

What prerequisite field in the material master must be set for planning to use quotas? Answer: The quota arrangement usage field must be set.

10. If a new vendor is certified, how would you prevent the new vedor from getting disproportionate share of the requirements? Answer: Adjust the quota base quantities. 11. Quotas always determine a source using the cumulative quantities and not split strictly based on percentages. Answer: True Source decisions are based on the cumulative quantities. However splitting may be permitted. 12. One of two possible items must exist for planning to aotomatically a purchased source. What are they. Answer: A source list or quota arrangement must exist.

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455

Unit Overview This unit will introduce you to the functionality of product replacement or discontinuation. You will learn of the functionality that will properly allow you phase an existing component out and introduce its replacement while considering inventory.

Unit Objectives After completing this unit, you will be able to: • • •

Demonstrate how to phase in a product using Simple Discontinuation Demonstrate how to phase in a product using Parallel Discontinuation Explain how Engineering Change Management works With Discontinuation.

Unit Contents Lesson: Discontinuation in Production Planning............................532 Demonstration: .............................................................535 Demonstration: .............................................................539 Exercise 18: Discontinuation in production planning ..................541

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Lesson: 456

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Discontinuation in Production Planning Lesson Duration: 45 Minutes

Lesson Overview In this lesson will you will learn how to model then end of a life cycle for a certain product by using the Discontinued Parts Functionality in SAP ERP.

Lesson Objectives After completing this lesson, you will be able to: • • •

Demonstrate how to phase in a product using Simple Discontinuation Demonstrate how to phase in a product using Parallel Discontinuation Explain how Engineering Change Management works With Discontinuation.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example Due to constant improvements in technology, your engineering department is constant upgrading your pump based on new components, changes in part specification, and other design related changes. In stead of creating new finished mateiral numbers you will continue to use the same part number but update the bill of material to reflect any changes. Since these changes are inventory and time dependent you will explore your options of modeling this process in SAP ERP.

Simple Discontinuation In engineering/design, it may be decided that a material is to be replaced by another material on a particular date. These changes may be necessary for the following reasons, for example: •

•

Other safety regulations are to apply from a particular date. A certain component must therefore be exchanged as it is no longer in accordance with safety regulations A cost-intensive part is replaced by a more favorably priced part

When a material on a BOM is being replaced by another material users will need to select a specific data in the BOM that the change will be effective. Often times these dates do not coincide with the level of inventory on the part be replaced or obsoleted. Through the use of the discontinued parts functionality, planners can

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identify a follow up material and plan a start date for the run out of material. Once inventory falls to zero, the planning run will substitute the follow up material in the planned order.

Figure 169: Simple/Single Discontinuation

When the situation arises that one mateiral will be replaced by another material, planners can use the simple discontinuation functionality. Simple discontinuation occurs when a discontinued component is replaced by a follow-up material from a particular date as soon as the available stock for planning of the discontinued component is zero. This means that when the available stock for planning of the discontinued material reaches zero, the dependent requirements of the discontinued material are diverted to the follow-up material. If the available stock of the follow-up material is not adequate, the follow-up material (instead of the discontinued material) is procured. Caution: The safety stock of the discontinued material is not touched by MRP. If this part is to become obsolete, the safety stock should be removed. If the available stock for planning of the discontinued material becomes larger than zero again, for example due to a repeat order, this material is used again.

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Prerequisites • • •

Both materials are planned using MRP The base unit of measure of the follow-up material is the same as the base unit of measure of the discontinued material You can define discontinuation data for the following item categories: – –

Stock item Variable-size item Note: Discontinuation will not work in the following instances • •

You can only define discontinuation data for a stock item or variable-size item that is not assigned to an alternative item group. Discontinuation is not supported for co-products

To make this work , you have to set the discontinued parts indicator 1 Single/Parallel discontinued part/material in the material master record of the discontinued component. In addition you, must enter a follow-up material. By defining an effective-out date, you decide the date from which the stocks of the current material are to be used up. When the available balance reached zero, the dependent requirements will created for the follow-up material. Caution: The follow-up material can be maintained in the bill of material as the follow-up material for information purposes. This functionality will over ride the BOM effectivity dates! Note: Discontinued parts functions in the same way in long-term planning, master production scheduling and material requirements planning. Caution: You cannot use a serial change of discontinuation. The system will only allow one “planned ” change.

Note: Reservations for a part to be discontinued are not redirected to the follow-up material. In the discontinued parts procedure, the system only automatically redirects the dependent requirements in materials planning. As of Release 3.0D, existing reservations after the effective-out date are marked with exception message 58 "Uncovered requirements after the effective-out date" on the MRP list.

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Demonstration: Purpose Demo simple discontinuation

System Data System: Client: User ID: Password: Set up instructions: Focus on end item R-F1##. You will replace the component R-B2## with component R-B22##. 1. Display Stock/Requirements list for the R-B2## at plant 1000. You should have a balance of 20 piece in inventory. 2.

From the Stock/Requirements list, change the material R-B2## at plant 1000 so that it will be replaced by the R-B22## immediately. Save the material.

3.

In demand management create a PIR for next month for 40 pcs and split the requirement into weekly or daily buckets.

4.

Execute a single-item, Multi-level planning run with planning mode 3, for the R-F1## at plant 1000.

5.

Check the Stock/Requirements list for the R-B2## and the R-B22## at plant 1000 did discontinuation occur?

Dependent Parallel Discontinuation In certain situations, when one material is being replace, other materials may be affected by the change. Hint: Example: marketing is changing the graphics on the front label on bottle of water. These changes will affect the back label as well. Therefore when you run out of inventory of one label you must replace the other. Example: Engineering found a cheaper, but sturdier material to make your shaft from, which allows the m to shrink the diameter of the shaft. By changing the diameter of the shaft you have to change the diameter in the gears the get welded to the shaft.

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Figure 170: Material Group (Dependent Parallel) Discontinuation

In this situation a group of materials is being replaced by another group of materials. If a component is to be discontinued (main discontinued part) and its available stock is zero, another component (dependent discontinued part) also has to be discontinued. If, for example, a particular nut is to be discontinued, the corresponding bolt also has to be discontinued.

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Steps for using parallel discontinuation • •

Choose the material that will become the main or lead material. This may be based on volume of inventory or the cost of inventory. (Planner decision) Material master record: in the “Lead material”, you must set the discontinued part indicator “1” in the material master record and define the effective out date and follow up materials. In the dependent material master, set the discontinued part indicator “3” in the material master record of the dependent discontinued part. Note: No follow up materials will be considered with type 3.

•

• •

BOM: In the extras for the BOM item, you define a discontinuation group in the “Discontinuation data”. You can define the name of this character string, which then combines BOM items that belong together and are to be discontinued. The main and the dependent discontinued parts are identified using the same discontinuation group. Add the new items to the BOM You also set the follow-up item indicator for the follow-up component or components. The follow-up group combines all follow-up items of a BOM that belong together. This group determines which discontinued parts are to be replaced by the follow-up items. The character string of the follow-up group must be identical to that of the discontinuation group. Caution: You cannot use a serial change of discontinuation groups. The system will only allow one “planned ” change.

Note: Planned independent requirements and forecast requirements are not redirected. Explanation: Planned independent requirements after the effective-out date are not redirected but are provided with an exception message in the MRP list stating that they cannot be included in the availability check. Planned independent requirements and forecast requirements are therefore displayed in the MRP list and in the stock/requirements list. However, they do not influence planning. As of Release 3. 0F, the system also sets the exception message 58. As of Release 3,0D, sales orders and other definite requirements after the effective-out date are provided with the exception message 58. Note: No redirection of material staging requirements for subcontracting Material staging requirements are not redirected to the follow-up material. Requirements after the effective-out date that are not

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covered are marked with exception message 58 "Uncovered requirements outside the effective-out date" in the MRP list. The requirements are not covered by new order proposals. Note: The distribution key is ignored for parts to be discontinued. Reason: The distribution key cannot be taken into consideration by parts to be discontinued. Up to and including Release 3.0F, this situation has led to errors. As of Release 3.1G, the distribution key is ignored by parts to be discontinued (see Note 73467). Note: Safety stock not consumed after the effective-out date The system assumes that even after the effective-out date, it should keep the safety stock (for unplanned consumption by replacement parts requirements, for example). Therefore, the dependent requirements are switched to the follow-up material even if safety stock is still available. If the stock level falls below the safety stock level, the system also creates an order proposal after the effective-out date. If you want the system to consume the safety stock, we recommend that you set the safety stock in the material master record to zero for the effective-out date. Note: Receipts (purchase orders, production orders, QM lots, etc.) after the effective-out date are not taken into account for discontinued parts. Firm receipts after the effective-out date include the exception message, "Cancel process". Note: Different single or collective indicators for parts to be discontinued and follow-up material If individual requirements (" or "1") is set for parts to be discontinued, dependent requirements in single segment planning are displayed. If the total requirements ("2") is set for the follow-up material, the dependent requirements are displayed in individual sections as technically only one transfer of dependent requirements from the parts to be discontinued to the follow-up material can be carried out at any one time. With simple discontinuation a main feature is the interchangeability of both components. As a result there are no significant differences. In this instance, the problem can be solved by using parallel discontinuation, that is inclusion of follow-up components in the bill of material, entry of discontinued group for the discontinued components and follow-up groups for the follow-up components. Additional key words Note: Creation of a planned order: During the creation of a planned order, the BOM explosion always makes sure that all requirements end up on the discontinued materials. This is regardless of whether you are working with simple or parallel discontinuation. For simple

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discontinuation, only the discontinued material is displayed in the component list of the planned order with the full requirement quantity. At this point, the follow-up material is not yet an item under the components of the planned order. For parallel discontinuation, all discontinuation and follow-up materials are copied from the BOM as planned order components. The main and parallel parts to be discontinued have the full requirement quantity. The requirement quantities of the follow-up materials are 0. Note: See SAP note: 51374 Discontinued part in the planned order (explanatory note): For issues relating to : • • •

Changing a planned order, with active discontinuation Planned order backflush in the repetitive manufacturing Response to master data changes

Demonstration: Purpose Demo Dependent Parallel discontinuation

System Data System: Client: User ID: Password: Set up instructions: Focus on end item R-F1##. You will replace the component R-B3## with component R-B33##. 1. Display Stock/Requirements list for the R-B3## at plant 1000. You should have a balance of 50 pieces in inventory. Set the discontinuation indicator in the material master record for R-B3##. 2. 3.

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Change the BOM for R-F1## at plant 1000. Set the discontinuation group for R-B2## and R-B3## to 01

4.

Add R-B22## and R-B33## to the BOM

5.

Set the follow-up group for R-B22## and R-B33## to 01.

6.

Execute a single-item, Multi-level planning run with planning mode 3, for the R-F1## at plant 1000.

7.

Check the Stock/Requirements list for the R-B2## and the R-B22## at plant 1000 did discontinuation occur?

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8.

540

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Check the Stock/Requirements list for the R-B3## and the R-B33## at plant 1000 did discontinuation occur?

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Lesson: Discontinuation in Production Planning

Exercise 18: Discontinuation in production planning Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate simple discontinuation • Demonstrate parallel discontinuation

Business Example Engineering has made a specification change to the R-B2## fly wheel that is used in the production of the R-F1## pump. Engineering wants the change to take place as soon as possible with the R-B22##. However, the fly wheel is an expensive part, so you would like to change the part over when the inventory of the R-B2## has been exhausted. Review you inventory for R-B2## at plant 1000 and initiate a parts change as soon as inventory has been exhausted. In addition to changing the fly wheel, engineering has decided that the shaft, R-B3##, will need to be changed out as well. Since the fly wheel, R-B2##, is the more expensive component, set the system up so that the shaft R-B3##, will be changed out simultaneously with the fly wheel R-B2##.

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

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Task 1: Simple Discontinuation Engineering has made a specification change in the R-B2## fly wheel that is used in the production of the R-F1## pump. Engineering wants the change to take place as soon as possible with the R-B22##. However, the fly wheel is an expensive part, so you would like to change the part over when the inventory of the R-B2## has been exhausted. Review the inventory of R-B2## at plant 1000 and initiate a part change as soon as inventory has been exhausted. 1.

Use the Stock/Requirments list to review the inventory situation for R-B2## at plant 1000.

2.

How much inventory do you currently have for the R-B2## at plant 1000?

3.

From the Stock/Requirments list, change the material R-B2## at plant 1000 so that it will be replaced by the R-B22## immediately. Save the material.

4.

Execute a single-item, Multi-level planning run with planning mode 3 Delete and recreate planning data, for the R-F1## at plant 1000.

Continued on next page

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5.

Review view the S/R list for R-B2## at plant 1000. On what date do the dependent requirements end?

6.

On what date do the dependent requirements begin for R-B22## as it relates to the R-F1## demand?

Task 2: Parallel Discontinuation Engineering has just realized that by changing the fly wheel, R-B2##, you will need to change out the hollow shaft, R-B3##. R-B3## will be replaced by R-B33##. Since the fly wheel is the more expensive part, make it the primary for the discontinuation. However, it is important that they be changed out at exactly the same time or there will be problems in production. 1.

Use the Stock/Requirments list to review the inventory situation for R-B3## at plant 1000.

2.

What is the current on hand inventory for R-B3##?

3.

From the Stock/Requirments list, change the material R-B3## at plant 1000 so that it will be replaced by the R-B33## when the inventory runs out on the R-B2##. Save the material.

4.

In another session, change the bill of material for the R-F1## at plant 1000. Adjust the BOM by adding the two new components, R-B22## and R-B33## (use same item info as other parts). Use the discontinuation functionality in the BOM, to phase out R-B2## and R-B3## by the new components you added to the BOM. Use discontinuation/follow groups 01. Save the BOM changes

5.

Execute a single-item, Multi-level planning run with planning mode 3 Delete and recreate planning data, for the R-F1## at plant 1000. Make sure to select also plan unchanged components indicator !

Continued on next page

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6.

Review view the S/R list for R-B2## at plant 1000. On which date do the dependent requirements end?

7.

On which date do the dependent requirements begin for R-B22## as it relates to the R-F1## demand?

8.

Review view the S/R list for R-B3## at plant 1000. On which date do the dependent requirements end?

9.

On which date do the dependent requirements begin for R-B33## as it relates to the R-F1## demand?

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Solution 18: Discontinuation in production planning Task 1: Simple Discontinuation Engineering has made a specification change in the R-B2## fly wheel that is used in the production of the R-F1## pump. Engineering wants the change to take place as soon as possible with the R-B22##. However, the fly wheel is an expensive part, so you would like to change the part over when the inventory of the R-B2## has been exhausted. Review the inventory of R-B2## at plant 1000 and initiate a part change as soon as inventory has been exhausted. 1.

Use the Stock/Requirments list to review the inventory situation for R-B2## at plant 1000. a)

2.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirments list (MD04)

How much inventory do you currently have for the R-B2## at plant 1000? Answer: 20 pieces

3.

From the Stock/Requirments list, change the material R-B2## at plant 1000 so that it will be replaced by the R-B22## immediately. Save the material. a)

Menu Path: Environment → Change material, select the MRP 4 view

b)

Enter the following values:

c) 4.

Field

Value

Discontinued Indicator

1 - Simple/Parallel discontinued part/material

Eff. out

Leave Blank

Follow up Material

R-B22##

Select

Save.

Execute a single-item, Multi-level planning run with planning mode 3 Delete and recreate planning data, for the R-F1## at plant 1000. a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirments list (MD04)

b)

Once in the S/R list select, Single-item, Multi-level MRP

c)

Return to the S/R list and select

Refresh (update) Continued on next page

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5.

SCM240

Review view the S/R list for R-B2## at plant 1000. On what date do the dependent requirements end? Answer: Varies, but it is the date that the available balance goes to zero.

6.

On what date do the dependent requirements begin for R-B22## as it relates to the R-F1## demand? Answer: Varies, but it is the day after the inventory balance hit zero for the R-B2##.

Task 2: Parallel Discontinuation Engineering has just realized that by changing the fly wheel, R-B2##, you will need to change out the hollow shaft, R-B3##. R-B3## will be replaced by R-B33##. Since the fly wheel is the more expensive part, make it the primary for the discontinuation. However, it is important that they be changed out at exactly the same time or there will be problems in production. 1.

Use the Stock/Requirments list to review the inventory situation for R-B3## at plant 1000. a)

2.

What is the current on hand inventory for R-B3##? a)

3.

50 pcs

From the Stock/Requirments list, change the material R-B3## at plant 1000 so that it will be replaced by the R-B33## when the inventory runs out on the R-B2##. Save the material. a)

Menu Path: Environment → Change material, select the MRP 4 view

b)

Enter the following values:

c) 4.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirments list (MD04)

Field

Value

Discontinued Indicator

3 - Dependent Parallel discontinued part/material

Eff. out

Leave Blank

Follow up Material

Leave Blank

Select

Save.

In another session, change the bill of material for the R-F1## at plant 1000. Adjust the BOM by adding the two new components, R-B22## and R-B33## (use same item info as other parts). Use the discontinuation functionality in Continued on next page

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the BOM, to phase out R-B2## and R-B3## by the new components you added to the BOM. Use discontinuation/follow groups 01. Save the BOM changes a)

Follow Menu Path: Logistics → Production → Master Data → Bills of Material → Bill of Material → Material BOM → Change (CS02)

b)

Enter R-F1## at plant 1000, BOM usage 1.

c)

Select the rows for R-B2## and R-B3## and select

d)

In the Basic Data view, select the Discontin. data button

e)

Enter in the Discontin. group 01, and select back

f)

Select

g)

In the Basic Data view, select the Discontin. data button

h)

Enter in the Discontin. group 01, and select back

i)

Select

j)

From the item overview screen, add the following

Item

Next item

Back to return to the item overview screen

Item No.

Item Cat.

Component

Qty

Uom

0060

L - Stock

R-B22##

1

pc

0070

L- Stock

R-B33##

1

pc

k)

Now select the rows for R-B22## and R-B33## and select

l)

In the Basic Data view, select the Discontin. data button

m)

Enter in the Follow-up group 01, and select back

n)

Select

o)

In the Basic Data view, select the Discontin. data button

p)

Enter in the Follow-up group 01, and select back

q)

Select

Item

Next item

Save.

Continued on next page

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5.

6.

SCM240

Execute a single-item, Multi-level planning run with planning mode 3 Delete and recreate planning data, for the R-F1## at plant 1000. Make sure to select also plan unchanged components indicator ! a)

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirments list (MD04)

b)

Once in the S/R list select, Single-item, Multi-level MRP

c)

Return to the S/R list and select

Refresh (update)

Review view the S/R list for R-B2## at plant 1000. On which date do the dependent requirements end? Answer: Varies, but it is the date that the available balance goes to zero.

7.

On which date do the dependent requirements begin for R-B22## as it relates to the R-F1## demand? Answer: Varies, but it is the day after the inventory balance hit zero for the R-B2##.

8.

Review view the S/R list for R-B3## at plant 1000. On which date do the dependent requirements end? Answer: Varies, but it is the date that R-B2##, even though there is inventory left

9.

On which date do the dependent requirements begin for R-B33## as it relates to the R-F1## demand? Answer: Varies, but it is the day after the inventory balance hit zero for the R-B2## and the R-B3##.

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Lesson Summary You should now be able to: • Demonstrate how to phase in a product using Simple Discontinuation • Demonstrate how to phase in a product using Parallel Discontinuation • Explain how Engineering Change Management works With Discontinuation.

Related Information Related OSS notes: • • • • • • •

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510291 MD02 in the simulation mode: Discontinued part 132623 Discontinuation after consumption:missng rqmts divrsion 121360 MRP: Discontinued parts vs. alternative item 77408 Discontinued parts and safety stock 73467 Discontinued parts with distribution key 71482 Discontinued parts and make-to-order production 68341 Discontinued parts and SLoc planned separately

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Unit Summary You should now be able to: • Demonstrate how to phase in a product using Simple Discontinuation • Demonstrate how to phase in a product using Parallel Discontinuation • Explain how Engineering Change Management works With Discontinuation.

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Test Your Knowledge 1.

Discontinuation replaces materials when the demands are from sales orders. Determine whether this statement is true or false.

□ □ 2.

True False

In dependent/parallel discontinuation all materials are replaced when their inventory levels reah zero. Determine whether this statement is true or false.

□ □ 3.

True False

What are two types of discontinuation? Choose the correct answer(s).

□ □ □ □ □

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A B C D E

Aggregate Parallel Partial Simple Disaggregate

4.

Would you use discontinuation functionality if you were discontinuing the use of a material but not replacing it with another material?

5.

What must be set in the material master of a material to be discontinued through simple discontinuation ?

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Answers 1.

Discontinuation replaces materials when the demands are from sales orders. Answer: False Demand from sales orders will not automatically be repositioned. Exception messages may be generated.

2.

In dependent/parallel discontinuation all materials are replaced when their inventory levels reah zero. Answer: False When the inventory of the "lead" material reaches zero, all materials will be replaced. Although some may still have inventory, everything in the group must be replaced at the same time.

3.

What are two types of discontinuation? Answer: B, D Simple and parallel discontinuation are available

4.

Would you use discontinuation functionality if you were discontinuing the use of a material but not replacing it with another material? Answer: No. Discontinuation would not be appropriate.

5.

What must be set in the material master of a material to be discontinued through simple discontinuation ? Answer: The discontinued parts indicator must be set to “1” You must enter a follow-up material. define an effective out date.

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Unit 10 Effects of Inventory in the Planning Run

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Unit Overview In this unit, you will be introduced on how inventory can affect the planning run. Based on how your organization handles a quality inspection process in SAP ERP may dramatically affect the outcome of the planning run.

Unit Objectives After completing this unit, you will be able to: • • • • •

Explain the concept of stock types in SAP ERP Explain how in transit stock types are used in production planning Explain how configuration of stock types can influence the planning run. Demonstrate modeling Quality inspection stock and its affect on MRP Demonstrate modeling the use of QM lots and its affect on production.

Unit Contents Lesson: Stock Types in Production Planning ...............................554 Demonstration: Quality Inspection Stock................................557 Demonstration: In-Transit Stock in the Planning Run .................559 Demonstration: Blocked Stock in the Planning Run ...................561 Lesson: Modeling Quality Inspection in Production planning .............565 Demonstration: Usage Decision .........................................569 Exercise 19: QM lots in Production Planning ...........................571

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Stock Types in Production Planning Lesson Duration: 30 Minutes

Lesson Overview This lesson covers the goods receipt of ordered goods into the warehouse and the effects that this goods receipt has on Inventory Management and Production Panning .

Lesson Objectives After completing this lesson, you will be able to: • • •

Explain the concept of stock types in SAP ERP Explain how in transit stock types are used in production planning Explain how configuration of stock types can influence the planning run.

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example During the manufacturing or procurement of materials, when received into inventory a product may go through various stages. Stages such as quality inspection, hold, restricted , scrapped or available for use. Examine you can use the SAP ERP system to visualize the different scenarios respective to production planning.

Overview of Stock types in SAP ERP Once material has been received into inventory, planners still need to consider its impact on planning for any down stream process. One has to consider how the receipt of a raw material or sub assembly will impact production, or how the receipt of a finished good in production will affect the delivery process for a sales order or stock transfer. After material request was generated via the planning run, the replenishment is posted in to inventory by performing a goods receipt. Some of the delivered goods are posted to the quality inspection stock. The checked quantity is later released with a transfer posting to the unrestricted-use stock.

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Figure 171: Goods Receipt Sources

Goods receipts can happen through man different means. No matter what the method of receipt, one must always consider how it will affect the next business event. Often times stocks can consist of different “statuses”. This will tell a company that a particular block of inventory can be used anywhere, quality is suspect, material is on hold for further disposition. Instead of using different material numbers or creating different stock locations, companies can take advantage of stock types in SAP ERP.

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Figure 172: Valuated Goods Receipts

For goods receipts, you decide which stock type a quantity is posted to. The stock type is relevant for determining the stock available in Materials Planning and is used for withdrawals in Inventory Management. You can post a goods receipt for the warehouse into three stock types: • • •

Unrestricted-use stock (no usage restrictions) Quality inspection stock (available from an MRP perspective, but no withdrawals are possible for consumption) Blocked stock (not usually available from an MRP perspective and no withdrawals are possible for consumption) Caution: Do not confuse the valuated stock type blocked stockwith the non-valuated goods receipt blocked stock (otherwise known as GR blocked stock).

In the purchase order and material master, you can plan whether the material is to be posted to the quality inspection stock. When the goods are received, you decide the stock type to which the material is posted. You always use movement type 101 to post goods receipts for a purchase order to valuated stock. You can enter a stock indicator, such as the movement type, at item level for the goods receipt, enabling you to differentiate between different stock types. You can post withdrawals for consumption only from unrestricted-use stock. From quality inspection stock and blocked stock, you can withdraw only one sample, scrap a quantity, or post an inventory difference.

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Figure 173: Transfer Postings

If you want to withdraw goods from blocked stock or quality inspection stock for consumption, you first have to carry out a transfer posting to unrestricted-use stock. You use the movement type to control the stock types involved in the transfer. When you carry out a transfer posting, the stock type, batch number, or material number is changed. A transfer posting can also involve an actual physical stock transfer. As for all goods movements, the system also creates a material document during transfer postings to show the transaction in the system. The system generates accounting documents only if a change in valuation is involved (for example, stock transfer from plant to plant).

Demonstration: Quality Inspection Stock Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Goto the material R-F1## in plant 1000.

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2.

Identify this is a Finished good that requires mfg. Go to the Work Scheduling view and point out the Inspection Stock indicator.

3.

Select the Inspection stock indicator and save.

Cross-Plant Stock in Planning Transfer In the case of a plant-to-plant stock transfer, the plants between which material is transferred can belong either to the same company code or to different ones. As a general rule, cross-plant stock transfers can only be booked out of unrestricted-use stock.

Figure 174: Stock Transfer Plant to Plant

In the case of the one-step procedure, the goods issue and goods receipt are posted in a single material document. You must therefore enter all relevant data, such as the material, issuing plant, issuing storage location, receiving plant, and receiving storage location in this one step. The movement type (in the standard system) is 301. In the case of the two-step procedure, when removing the material from storage (movement type 303), you must specify the receiving plant in addition to the material and the issuing organizational levels. This is necessary because valuation of the stock transfer takes place when the material is removed from storage and posted to stock in transfer at the receiving plant. You can either enter the put away (placement in storage, movement type 305) with reference to the material document of the stock removal or enter all data manually. As a result of the put away, the quantity is booked out of stock in transfer and into unrestricted-use

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stock at the receiving plant. Valuation of the put away is not necessary, since the stock in transfer and the unrestricted-use stock at the receiving storage location belong to the same plant. In the case of Stock Transport Order Without Delivery, his type of stock transfer involves not only Inventory Management but also purchasing at the receiving plant. The process begins in the receiving plant with the entry of a stock transport order in the purchasing department. A goods issue referencing this stock transport order is then entered in the issuing plant. The quantity booked out is initially managed as stock in transit at the receiving plant. The process is ended by the posting of the goods receipt against the stock transport order at the receiving plant. The stock in transit is shown in the material master record in the plant stock view for the receiving plant. A special report for the analysis of transit stocks is available in the Inventory Management menu under Environment → Stock → Stock in Transit (MB5T). With this report, you can select transit stocks for the receiving or issuing plant, for example. Stock in transit is also displayed in the Stock Overview (MMBE) and the Warehouse Stocks of Material report. In the Warehouse Stocks of Material report, stocks in transit and stocks in transfer are summarized at plant level in a stock line without a storage location.

Demonstration: In-Transit Stock in the Planning Run Purpose Demonstrate how in transit stock is used in the calculation of MRP.

System Data System: Client: User ID: Password: Set up instructions: 1. Using Tcode MB1C, receive into inventory 30 pcs of the R-F1## in plant 1000 storage location 0001. Use Movement type 501 - receive into unrestricted stock

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Access the S/R list for R-F1## plant 1000. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element.

3.

Access the S/R list for R-F1## plant 2400. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element.

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4.

Using Tcode MB1B, Transfer 20 pcs of inventory of the R-F1## in plant 1000 to the receiving plant 2400. Use Movement type 303 - Transfer Posting Plant to Plant remove from storage

5.

Access the S/R list for R-F1## plant 2400. Review the on-hand inventory notice the increase and review the details of it by double clicking on the Stock MRP element.

6.

Point out that it is currently being used to calculate your on-hand inventory.

7.

Production → Material Requirements Planning → Planning → MRP Calculation → Stocks → Define Availability Stock in Transfer/Blocked Stock/Unrestricted Stock

8.

Remove the Stock in Transfer indicator for plant 2400, and save.

9.

Exit and re-enter the S/R list for R-F1## at plant 2400. and notice the change to the On-hand balance.

10. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element. Note the 20 pcs are still in transfer. 11. Using your icon access the stock overview report. 12. Using Tcode MB1B, Transfer 20 pcs of inventory of the R-F1## in plant 2400. Use Movement type 305 - Transfer Posting Plant to Plant receive into storage 13. Refresh S/R list for R-F1## at plant 2400. and notice the change to the On-hand balance is now 20 pcs due to the receipt. 14. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element. Note the 20 pcs are still in inventory

Stock Types in MRP During the net requirements calculation process, on-hand stock is one of the input values. This is determining the starting point of the net requirements calculation

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Figure 175: MRP Relevant Stock

The stock available for planning combines the following stock from all the storage locations that belong to this plant or MRP area and are not excluded from MRP or planned separately: Stock that is usable without restrictions, quality inspection stock, consignment store stock that is usable without restriction, and consignment store stock in quality inspection. These will be included in the planning run calculation. In the Customizing a company can decide wether certain stock types are relevant for planning. In the IMG,Production → MRP → Planning → MRP Calculation → Stocks → Define Availability Stock in Transfer/Blocked Stock/Unrestricted Stock, you can define for each plant whether or not the stock in transfer from plant-to-plant stock transfers is included in the plant stock, whether the blocked stock or restricted stock for batches is included in plant stock. If the quantity available for planning is less than zero, a material shortage exists. MRP reacts to material shortages by creating new procurement proposals, that is, by creating purchase requisitions or planned orders, independent of the procurement type. The suggested procurement quantity results from the lot-sizing procedure that is set in the material master.

Demonstration: Blocked Stock in the Planning Run Purpose Demonstrate how blocked stock is used in the calculation of MRP.

System Data System: Client:

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User ID: Password: Set up instructions: 1. Using Tcode MB1C, receive into inventory 2 pcs of the R-F1##. Use Movement type 505 - receive into blocked stock

562

2.

Access the S/R list for R-F1## plant 1000. Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element.

3.

Point out that it is currently being used to calculate your on-hand inventory.

4.

Production → Material Requirements Planning → Planning → MRP Calculation → Stocks → Define Availability Stock in Transfer/Blocked Stock/Unrestricted Stock

5.

Remove the Block Stock indicator for plant 1000, and save.

6.

Exit and re-enter the S/R list for R-F1## at plant 1000. Notice the change to the On-hand balance.

7.

Review the on-hand inventory and review the details of it by double clicking on the Stock MRP element. Note the 2 pcs are still in blocked stock inventory.

8.

Using your icon access the stock overview report.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain the concept of stock types in SAP ERP • Explain how in transit stock types are used in production planning • Explain how configuration of stock types can influence the planning run.

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Lesson: Modeling Quality Inspection in Production planning

Modeling Quality Inspection in Production planning Lesson Duration: 30 Minutes

Lesson Overview Your company wants to use a process for quality assurance in both production and procurement. How your company models the quality assurance can directly affect the accuracy of production planning and execution. In this lesson you will learn several “general” concepts on modeling the quality assurance process.

Lesson Objectives After completing this lesson, you will be able to: • •

Demonstrate modeling Quality inspection stock and its affect on MRP Demonstrate modeling the use of QM lots and its affect on production.

This is lesson is not to discuss QM in detail, but how QM can help companies model the exact process of Quality assurance as it relates to planning and executing replenishment. If customers wish to know more details direct them to the following classes: • • • •

PLM 400 - Quality Mgmt (5 days) PLM415 - QM in Procurement (3 days) PLM420 - QM in Discrete Mfg (2 days) PLM421 - QM in the Process Industry (3 days)

Business Example During the receipt of manufactured or procured materials into inventory, a product may go through various stages. Stages such as quality inspection, hold, restricted , scrapped or available for use. Examine you can use the SAP ERP system to visually this process and show it’s affect on the inventory and planning situation.

Overview of QM in Logistics QM processes can be triggered by different events. Standard processes (for example, inspections during production, goods receipt inspections) are planned in advance and are triggered regularly. Event-controlled processes occur spontaneously ( such as defects in production, damaged goods at goods receipt ) ; the problems that occur can be recorded and processed in a quality notification. In addition, you can monitor critical values using the information system and if necessary, trigger tasks via the Workflow. The data collected in planned and event-controlled processes (such as, the number of complaints) is evaluated in the information system.

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Figure 176: Planned Processes

An inspection can be triggered at different stages in the logistics supply chain. This leads to the creation of an inspection lot. Triggers can include: • • • •

Goods movements (goods receipt, stock transfer, goods issue) Orders (production orders, maintenance orders, delivery) Deadline monitoring (batch monitoring) Source inspections

The inspection lot forms the basis for inspection processing. It contains all the data for the inspection (such as material, order, inspection specifications, inspection lot size, quantity to be inspected or if required QM order). You record inspection results for this inspection lot. The usage decision specifies whether the goods are accepted or rejected, based on the results of the inspection. Caution: When receiving production into quality inspection stock without a QM lot, planners have no idea when the inventory will actually be available. For net requirements calculation purposes quality inspection stock is available immediately for planning. The only way to over come this short fall is to use the Available to Promise (ATP) functionality. Within ATP companies can decided if they would like to consider quality inspection stock for use in a particular business event.

Quality Management in Procurement QM is integrated in different stages of the procurement chain (when procuring required materials).

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You define automatic decision-making criteria to ensure that your company receives high-quality goods (for example, vendor evaluation, goods receipt inspection). If, for example, vendors’ goods are blocked as a result of poor quality, the system does not propose these vendors and marks them as blocked. In addition, the inspection scope can be controlled using dynamic modification, based on the quality of the delivered goods. The quality information record procurement contains data relating to the vendor release, certificate control, certification and quality assurance agreements. You can use a vendor/manufacturer release to ensure that a vendor only delivers goods from a specific manufacturer. You define a certificate requirement for a material, by using an indicator in the material master. QM at goods receipt controls, for example, whether: • • •

The goods are posted to inspection stock Inspection lots are created at goods receipt The delivery or invoice is to be blocked as a result of a complaint (such as a missing certificate)

Figure 177: Processing Inspections at Goods Receipt

When goods are received, an inspection lot ( inspection type 01 or 05 ) is created for the goods based on the available information (such as quality info record procurement, inspection specifications, current quality level, and so on).

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If QM in procurement is active for a material, the system checks whether the QM system entered for the vendor in the vendor master record or quality information record procurement is certified and whether this system complies with the QM system requirements that are defined in the material master. If this is the case, no inspection lot is created and the goods are posted directly to the warehouse (skip for certified vendor). The goods are posted to inspection stock and are released for use or blocked, depending on the inspection results and the usage decision. The transfer posting of the stock occurs automatically when the usage decision is saved.

Quality Management in Manufacturing In production, the QM component provides you with important information about the current quality of the manufactured goods (statistical process control) and if necessary, you can intervene with quality notifications (Workflow link) to implement corrective actions. QM inspection planning is integrated in the production planning functions. Inspection operations are included in the routing (production planning in discrete manufacturing) or in the master recipe (production planning in the process industry). Inspections during production are controlled using the inspection operations that are contained in the routing or the master recipe. When an order is completed, corresponding goods movements are triggered.

Figure 178: QM at Goods Receipt of Production

•

•

568

Goods receipt from production into the warehouse. When the goods are received at the warehouse, they become stock-relevant and are posted to inspection stock. Once the quality inspection has been completed and the goods have been accepted with the usage decision, they can be posted to unrestricted-use stock. Delivery

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When a production or process order is released, an early goods receipt inspection lot (inspection lot origin 04) can be generated. This inspection lot is created independently of whether an inspection lot with origin 03 exists for the relevant order. The immediate inspection lot at goods receipt represents a new combination for inspection lots: One inspection lot is created for each combination of order, batch and storage location. Once the goods have been received, the inspection lot becomes stock-relevant and can be used to manage stock. When defining the inspection type in the material master, planners can include an Average Inspection Duration. This will be used to plan the actual delivery into “un-restricted ” stock which can then be used in down stream process. Note: This situation is very important to sub-assemblies and finished goods. When ATP is preformed your company can choose to include quality inspection stock during the ATP check. Inspection stock can be allowed during the ATP check, however is not available during the actual goods issue. Often times companies will include the quality inspection time into the Goods Receipt (GR) processing time in the material master or include it in the floats before and after production (scheduling margin key). Again these values of are no value to down stream processes, since once the receipt has been completed, it is available for planning or use if not using quality inspection stock.

Demonstration: Usage Decision Purpose Demonstrate how usage decisions can affect QM lots

System Data System: Client: User ID: Password: Set up instructions: 1. Perform either the procurement exercise or the production exercise 2.

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Make the usage decision for your inspection lot. Use the selected sets available in the system for usage decisions, and choose UD code A2. For the amount that is being inspected, transfer the inventory to various stock types/accounts:

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3.

Logistics → Quality Management → Quality Inspection → Inspection Lot → Usage Decision → Record (QA11)

4.

Enter the inspection lot number on the initial screen

5.

Since this is an inspection lot without planned inspection characteristics, the screen Record Usage Decision: Defect Overview appears. Make the usage decision with UD code A2. Select this UD code using the field-related input help. Drill down under 01 - Goods receipt , and select A2 Accept, Stock in Background.

6.

Select the Inspection lot tab and enter the total amount but divide it amoungst the different categories. Note the quantities on the board. Save the results.

7.

Review the S/R list and note the inspection lot is gone. Review the stock statistics if you put any inventory in Blocked stock.

8.

if necessary Logistics → Quality Management → Quality Inspection → Inspection Lot → Processing → Display (QA03)

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Exercise 19: QM lots in Production Planning Exercise Duration: Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate how quality inspection stock is used in the planning run • Demonstrate how QM lots in procurement can impact the planning run • Demonstrate how QM lots in production can impact the planning run

Business Example Your company has decided to model in the SAP ERP quality assurance process that your manufactured and procured items go through. However, as a planner you need to see the impact of various methods of modeling quality assurance to ensure that planning will not be impacted negatively pending the outcome of certain methods.

System Data System: Client: User ID: Password: CATT: Set up instructions: 1.

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Data Insp w/ mat spec Insp. w/ task list Automatic Assgn. Check Chars

Date Value Deselect Deselect Deselect Deselect

Data Insp w/ mat spec Insp. w/ task list Automatic Assgn. Check Chars

Date Value Deselect Deselect Deselect Deselect

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Task 1: Quality Inspection Stock in Planning Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed, for days at a time, by the lab. Set up your material R-F1## so that any replenishment receipt will be processed as quality inspection stock. Investigate what affect this will have on the planning run. 1.

From the Stock/Requirements list, change the material R-F1## at plant 1000 so that all receipts will go into quality inspection stock. Save the material.

2.

From the Stock/Requirements list for R-F1## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number.

3.

Perform a final confirmation, at the order level for the production of R-F1##.

4.

Use the Stock/Requirements list to review the inventory situation for R-F1## at plant 1000. .

5.

What is the current inventory situation?

6.

What stock type is represented by on-hand inventory ?

Task 2: QM Lots in Procurement (Time Permitting ) Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed for no longer than three days at a time by the lab. Set up your procured material R-T2## so that any replenishment receipt will be processed as a QM lot. Investigate what affect this will have on the planning run. 1.

Use the Stock/Requirements list to review the inventory situation for R-T2## at plant 1000.

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2.

What is the current inventory situation ?

3.

From the Stock/Requirements list, change the material master for R-T2## at plant 1000. In the Quality Management view, create an inspection type 05 - Inspection for other Goods receipts. Make sure you set an average inspection duration of 3 days.

4.

In another session, enter an Other Goods receipt for 500 pcs of R-T2## at plant 1000, storage location 0001. Use movement type 501.

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5.

Return to the Stock/Requirements list (refresh will not work), for R-T2## at plant 1000. Do you see an increase in inventory?

6.

Check the stock statistics, does it show the 500 pcs in quality inspection stock?

7.

Why doesn’t the inventory show up?

Task 3: QM Lots in Production ( Time Permitting ) Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed for no longer than 5 days at a time by the lab. Set up your manufactured material R-F2## so that any replenishment receipt will be processed as a QM lot. Investigate what affect this will have on the planning run. 1.

Use the Stock/Requirements list to review the inventory situation for R-F2## at plant 1000.

Continued on next page

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2.

What is your current inventory situation ?

3.

From the Stock/Requirements list, change the material master for R-T2## at plant 1000. In the Quality Management view, create an inspection type 04 Final Inspection at GR from Production. Make sure you set an average inspection duration of 5 days.

4.

From the Stock/Requirements lists for R-F2## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number.

5.

Perform a final confirmation at the order level for the Confirm production of the R-F2## you just created.

6.

Return to the Stock/Requirements list (refresh will not work), for R-F2## at plant 1000. Do you see an increase in inventory?

7.

Check the stock statistics, does it show any pieces in quality inspection stock?

8.

Why doesn’t inventory show up?

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Solution 19: QM lots in Production Planning Task 1: Quality Inspection Stock in Planning Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed, for days at a time, by the lab. Set up your material R-F1## so that any replenishment receipt will be processed as quality inspection stock. Investigate what affect this will have on the planning run. 1.

2.

From the Stock/Requirements list, change the material R-F1## at plant 1000 so that all receipts will go into quality inspection stock. Save the material. a)

Menu Path: Environment → Change material, select the Work Scheduling view

b)

In the Work Scheduling view select the Insp. stock indicator

c)

Select

Save.

From the Stock/Requirements list for R-F1## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number. a)

Double click on the first planned order.

b)

Select Select

c)

to convert to a production order. Release Order.

Save and note the production order number as it appears in Select the message bar at the bottom of the screen. Production Order: _______________________

3.

4.

Perform a final confirmation, at the order level for the production of R-F1##. a)

Logistics → Production → Production Control → Confirmation → Enter → For Order (CO15).

b)

Enter the production order number and select

c)

Select the final confirmation radio button and select

. Save.

Use the Stock/Requirements list to review the inventory situation for R-F1## at plant 1000. Continued on next page

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. a) 5.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

What is the current inventory situation? Answer: Inventory has been increased by the amount of production received.

6.

What stock type is represented by on-hand inventory ? a)

From the Stock/Requirements list, double click on the Stock MRP element.

b)

Answer: By setting the Inspection Stock indicator all receipts are placed into quality inspection stock. QI stock is MRP relevant.

Task 2: QM Lots in Procurement (Time Permitting ) Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed for no longer than three days at a time by the lab. Set up your procured material R-T2## so that any replenishment receipt will be processed as a QM lot. Investigate what affect this will have on the planning run. 1.

Use the Stock/Requirements list to review the inventory situation for R-T2## at plant 1000. a)

2.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

What is the current inventory situation ? Answer: On-hand Inventory is 1000 pcs.

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3.

4.

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From the Stock/Requirements list, change the material master for R-T2## at plant 1000. In the Quality Management view, create an inspection type 05 - Inspection for other Goods receipts. Make sure you set an average inspection duration of 3 days. a)

Menu Path: Environment → Change material, select the Quality management view

b)

In the Quality managment view, select the Insp. setup button.

c)

Select Create inspection types

d)

Select inspection type 05 - Inspection for other Goods Receipt

e)

Select the Active indicator and then select

f)

Enter and Average Inspection Duration of 3 days, and deselect the Parameters listed above.

g)

Select

Continue. Enter through any warning messages.

h)

Select

Save.

Details

In another session, enter an Other Goods receipt for 500 pcs of R-T2## at plant 1000, storage location 0001. Use movement type 501. a)

Follow menu path: Logistics → Materials Management → Inventory Management → Goods Movement → Goods Receipt → Other (MB1C)

b)

Enter Movement type 501, plant 1000, and storage location 0001, and press ENTER

c)

Enter your material R-T2## and a quantity of 500 pcs

d)

Press Enter and select

Save

Enter through any messages about missing parts. 5.

Return to the Stock/Requirements list (refresh will not work), for R-T2## at plant 1000. Do you see an increase in inventory? Answer: No, the on hand balance has not increased.

6.

Check the stock statistics, does it show the 500 pcs in quality inspection stock? Answer: Double click on the stock statistics. Yes 500 pcs are in QI stock.

Continued on next page

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7.

Why doesn’t the inventory show up? Answer: If you look at the details of the Stock/Requirements list you will see a new MRP element 3 days from the current date. This is due to the inspection type 05 creating a QM inspection lot. The Average inspection duration allows planners to account for when the material will be available for use.

Task 3: QM Lots in Production ( Time Permitting ) Since your quality management process is currently handled in a separate Laboratory Information System, you want to explore limited functionality in SAP ERP. In doing so, you want to separate the inventory that will be processed for no longer than 5 days at a time by the lab. Set up your manufactured material R-F2## so that any replenishment receipt will be processed as a QM lot. Investigate what affect this will have on the planning run. 1.

Use the Stock/Requirements list to review the inventory situation for R-F2## at plant 1000. a)

2.

Follow menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

What is your current inventory situation ? Answer: On-hand Inventory is 0 pcs.

3.

From the Stock/Requirements list, change the material master for R-T2## at plant 1000. In the Quality Management view, create an inspection type 04 Final Inspection at GR from Production. Make sure you set an average inspection duration of 5 days. a)

Menu Path: Environment → Change material, select the Quanlity managment view.

b)

In the Quality management view select the Insp. setup button.

c)

Select Create inspection types

d)

Select inspection type 04 - Final Inspection at GR from Production

e)

Select the Active indicator and then select

f)

Enter and Average Inspection Duration of 5 days and deselect the Parameters listed above.

g)

Select

Continue

h)

Select

Save.

Details

Continued on next page

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4.

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From the Stock/Requirements lists for R-F2## at plant 1000, convert the first planned order to a production order and release. Refresh the S/R list and note the production order number. a)

Double click on the first planned order.

b)

Select Select

c)

to convert to a production order. Release Order.

Save and note the production order number as it appears in Select the message bar at the bottom of the screen. Production Order: _______________________

5.

6.

Perform a final confirmation at the order level for the Confirm production of the R-F2## you just created. a)

Logistics → Production → Production Control → Confirmation → Enter → For Order (CO15).

b)

Enter the production order number and select

c)

Select the final confirmation radio button and select

. Save

Return to the Stock/Requirements list (refresh will not work), for R-F2## at plant 1000. Do you see an increase in inventory? Answer: No, the on hand balance has not increased.

7.

Check the stock statistics, does it show any pieces in quality inspection stock? Answer: Double click on the stock statistics. Yes, these is inventory in QI stock that is equivalent to the quantity that you confirmed.

8.

Why doesn’t inventory show up? Answer: If you look at the details of the Stock/Requirements list you will see a new MRP element 5 days from the current date. This is due to the inspection type 04 creating a QM inspection lot. The Average inspection duration allows planners to account for when the material will be available for use.

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Lesson: Modeling Quality Inspection in Production planning

Lesson Summary You should now be able to: • Demonstrate modeling Quality inspection stock and its affect on MRP • Demonstrate modeling the use of QM lots and its affect on production.

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Unit Summary You should now be able to: • Explain the concept of stock types in SAP ERP • Explain how in transit stock types are used in production planning • Explain how configuration of stock types can influence the planning run. • Demonstrate modeling Quality inspection stock and its affect on MRP • Demonstrate modeling the use of QM lots and its affect on production.

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Test Your Knowledge

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Test Your Knowledge 1.

Unrestricted use stoock is the only stock considered in the planning run. Determine whether this statement is true or false.

□ □ 2.

True False

When a quality check is performed, the results are recorded for a specific Fill in the blanks to complete the sentence.

3.

When a goods receipt is done for a product requiring inspection it is put into what inventory status?

4.

Inventory in the quality inspection stock is available for planning. Determine whether this statement is true or false.

□ □

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True False

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Answers 1.

Unrestricted use stoock is the only stock considered in the planning run. Answer: False Unrestricted is always considered. However any of the three statuses below may also be configured for consideration in the planning run. Stock in Transfer, Blocked Stock, restricted use stock

2.

When a quality check is performed, the results are recorded for a specific Inspection Lot. Answer: Inspection Lot.

3.

When a goods receipt is done for a product requiring inspection it is put into what inventory status? Answer: Quality Inspection Stock

4.

Inventory in the quality inspection stock is available for planning. Answer: True Quality inspection stock is included in the net requirements calculation.

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Unit 11 Component Availability

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Unit Overview The unit will introduce you to the concept of Available-to-Promise (ATP) in SAP ERP. Here you will learn how to look at planning from a multi-level perspective, versus the single-level approach that the planning run takes.

Unit Objectives After completing this unit, you will be able to: • • • • • • •

Explain the purpose of Available to Promise (ATP) in planned orders. Demonstrate how to execute (ATP) Explain the steps to configure ATP in the planned order Demonstrate the configuration of the checking group Demonstrate the configuration of the check rule Demonstrate the configuration of the check control Demonstrate the configuration of the scope of check.

Unit Contents Lesson: ATP in the Planned order............................................587 Demonstration: Interactive ATP ..........................................590 Demonstration: Planned order ATP ......................................591 Demonstration: Availability Overview ....................................593 Demonstration: Collective availability check ............................598 Demonstration: Availability Check .......................................599 Exercise 20: Availability Checking in the Planned order ..............601 Lesson: Configuration of ATP .................................................608

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Demonstration: Demonstration: Demonstration: Demonstration:

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Demo Check Group ....................................612 Demonstrate the Check Rule Table...................613 MRP Check Control Settings ..........................614 Demo scope of check...................................617

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Lesson: 502

Lesson: ATP in the Planned order

ATP in the Planned order Lesson Duration: 45 Minutes

Lesson Overview In order for planners to perform to a high level of efficiency, planners need to have some type of check mechanism to review their production plan in the short term. In this section you will learn how ATP works and execute a collective ATP check and an interactive ATP check.

Lesson Objectives After completing this lesson, you will be able to: • •

Explain the purpose of Available to Promise (ATP) in planned orders. Demonstrate how to execute (ATP)

[Enter a description of what the instructor should discuss with the participants about the context of the lesson. ]

Business Example During the course of planning, several assumptions will be made. One of those assumptions that will happen in the planning run is that components will always be available. Since planning runs will typically be executed in background jobs, you need to ensure that the components will be available against the requirement dates set by the parent orders. Execute available to promise on planned orders to see how this may improve the planning process for your pump product lines.

Available to Promise Overview High customer service is one goal that most companies share. While some look to outside customers, other parts of the business must consider serving internal customers. Using Available-to-Promise (ATP) companies try to acknowledge the need of product, prior to it’s actual consumption. The goal of ATP is to provide a confirmation to both internal and external customers as to whether or not they can support the requirement being placed on the organization. • • • •

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Sales and Distribution: Sales orders and Deliveries Production Planning: MRP - Planned orders Production Execution: Production/Process Orders Materials Management: Inventory Mgmt - Goods movements

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During the material availability check, the system makes sure that requirements are covered by stock or by planned receipts. You can therefore recognize at an early date, for example, when creating the sales order, whether a material will be available for the requirements date or whether you have to make extra planning arrangements to guarantee material availability. Using the material availability check contributes towards increasing the accuracy of planning and the service level for creating sales orders as well as for the internal production process. The availability check using ATP logic is a cross-application component. It can be accessed from the business application areas listed below: •

•

•

•

Sales and distribution: You can check whether the material is available on the desired delivery date when creating sales orders and also when creating delivery notes. Planned order: You can execute the availability check for the components of a planned order. This may be necessary when converting the planned order into a production order or beforehand, if you want to make sure that the necessary material components are available for the production of the finished product. Production/Process orders : When processing production orders, you can check whether the necessary material components are available for production of the finished product. Inventory management : When creating or changing reservations as well as at goods issue, you can use the availability check to ensure that a goods movement will not jeopardize the availability situation of other issue elements already created and checked in the system. A missing parts check can be run at goods receipt.

Figure 179: Availability Check

The Available-to-Promise (ATP) check has several applications. Among others, you can use it in sales orders, production orders, or during goods movements. As a result, when you create a sales order, the system checks, within the framework of the ATP check, whether or not there is enough stock available in the warehouse for the required material. It can also check if receipts, such as production orders or planned orders, are scheduled before the desired date. If the reply is positive, the sales order can be confirmed.

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Lesson: ATP in the Planned order

Along with the availability check according to ATP, forecast planning exists as an alternative (choose in the customer requirements class).

Figure 180: Availability Check Using ATP Logic

When performing an availability check using ATP logic, the system checks whether or not all issues are covered by existing receipts and if open quantities from the receipts are available to cover newly received issues. These quantities, which have not yet been assigned, are added to obtain the ATP quantity. In the availability check using ATP logic, the system checks whether or not the requirement quantities are covered by specially defined receipt and goods elements or by a specific stock. If you can confirm a quantity for the requirement date, this quantity is flagged as confirmed in the requirement and the ATP quantity of the component’s stock or receipt is correspondingly reduced. In the next availability check, you can only confirm requirements for the amount of the remaining ATP quantity. The system copies the result of the component check to the planned order header as the confirmed quantity and the order confirmation date. Note: The ATP quantities are not calculated across planning segments and do not take any periods into account. The values displayed in the two transactions stated (MD04 , MMBE) cannot be used for understanding and for controlling the results of an availability check. Instead, you must use Transaction CO09 (Availability Overview). This transaction shows the development of the available quantities exactly the same way as it is taken into account in the availability check, that is, according to the ATP logic.

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In contrast to this, Transaction MD04 interprets the data found according to the MRP logic and Transaction MMBE displays only the currently available stocks. In general, both can and will cause (depending on the settings in the scope of inspection) differing values. So that the information in Transaction CO09 also corresponds to the information during a check, you must enter the exact checking rule which is also used within the availability check on the selection screen of the transaction. It is relatively simple to determine the availability check at least in the production order by selecting the respective component on the component overview and call in the menu entry ’Settings -> Availability’. In the dialog box generated, in addition to the scope of inspection set also the checking rule is displayed in the header. Alternatively, a check can only be initiated (also in the other order types named) for the component considered. In this case, the system displays a dialog box ’Date overview’ from which you can display, among other things, the scope of inspection.

Demonstration: Interactive ATP Purpose Goal of this demo is to show how ATP works for a sales order, which is the simplest to explain.

System Data System: Client: User ID: Password: Set up instructions: 1. From the Stock/Requirements list select R-F2## at plant 1000. 2.

590

In another session, execute VA01 - Create sales order Field

Value

Order type

OR

Sales Organization

1000

Distribution Channel

10

Division

00

Sold-to

1000

Ship-to

1000

Po Number

##

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Lesson: ATP in the Planned order

Rqd Deliv. Date

One month from today (press Enter)

Material

R-F2##

Order Qty

150 pcs

3.

When all information is entered, press the enter key.

4.

The result will be a delivery proposal. This is using the production plan to “confirm ”the sales order.

5.

To review the details of the ATP situation, select ATP Quantities

6.

Compare this report to the stock requirements list/production plan.

7.

Select the delivery proposal button.

8.

Optional upon returning to the sales order overview, enter another line item for same product, line item date one week earlier, qty of 50.

9.

From the delivery proposal select ATP Quantities.

10. Point out the previous line item. 11. Accept the proposal. 12. If students need to see the confirmations select the line item and the select Schedule lines for items. 13. To see the SD dates due to float select the line and then select Shipping details.

Demonstration: Planned order ATP Purpose Demonstrate the interactive planned order component ATP

System Data System: Client: User ID: Password: Set up instructions: 1. Review the stock requirements list for R-F2## at plant 1000.

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2.

Select the first planned order on the list and go into change mode.

3.

From the planned order header screen select Check Component Availability.

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4.

All materials should be available.

5.

Return the header screen, but notice the Firming indicators are set.

6.

Select Save

7.

Select another planned order and execute a similar ATP check.

8.

Notice the yellow lines since not all components will be available.

9.

Select one of the yellow line items and then select run a component ATP.

Check Availability to

10. Note the proposal date, and select ATP Quantities. 11. Note the planned order’s, that you previously checked, dependent requirement have consumed the 10 pcs of inventory. 12. Exit order without saving.

Availability Overview The availability overview enables you to see the ATP situation for a particular material in a defined plant. The availability check is run using a selected checking rule. You cannot change the displayed data.

Figure 181: Availability Overview

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Lesson: ATP in the Planned order

You can call up the availability overview using the transaction CO09 or from the relevant application component. Logistics → Production → MRP → Environment → Availability overview or can be accessed from the MRP or Stock/Requirements list Environment → ATP Quantities. When entering the transaction you will specify the material (which has the check group) the plant and the check rule. The check rule can be entered manually or it will be picked up from the MRP group or the Plant parameters. The Availability Overview screen is divided into three sections: • •

•

n the upper section, the system displays information about the check. In the middle section, there is an aggregated display of product availability on a plant level. By using this, you can determine quickly whether there is a material shortage. In the lower section, the system displays the daily availability situation of the selected material in a plant according to the scope of check. For each date and MRP element, the system displays a totals requirement with a receipt quantity (for stocks and receipts) or a requirement quantity, a committed quantity (only for requirements) and a cumulated ATP quantity. The system uses negative indicators to display the requirements. The data is sorted chronologically and starts with the plant section (if no special stocks are displayed). If necessary, the storage location section, batch section and batch storage location section follow.

By selecting Scope of check, users can see what MRP elements when into determining the ATP quantities.

Demonstration: Availability Overview Purpose Demonstrate to users the current status of the ATP quantity

System Data System: Client: User ID: Password: Set up instructions: 1. Logistics → Production → MRP → Environment → Availability Overview 2.

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Enter your material R-F2# at plant 1000. Leave the check rule blank.

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3.

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Explain the results of your previous check. Note the ATP is Zero until new production occurs well into the future, due to the sales orders entered in the last demonstration.

Collective Availability Check In the collective availability check you can check whether the components required are available for several planned orders simultaneously. This is particularly useful if you want to convert several planned orders simultaneously, for example, and you want to check beforehand if and by when the components are available. Logistics → Production → MRP → Planned Orders → Collective Availability Check (MDVP)

Figure 182: Collective ATP

To be able to carry out the collective availability check, you need a profile order view. In the standard system the profile order view 000001 is used. The profile controls the formatting of the overview list with the planned orders selected (field selection, field sequence). You can create your own profile in Customizing for MRP, under Production → MRP → Planning → Procurement Proposals → Planned Orders → Carry out collective availability check, or you can copy and change the profile 000001. Note: One of the configuration settings for the profile is sorting criteria. This may have an impact on the results of the ATP check.

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Lesson: ATP in the Planned order

You can carry out the collective availability check in two ways: • •

in the foreground in the background

The system checks all orders which are selected on the list. The check is carried out in the order in which they are displayed. During the background check, the system automatically selects all orders before the check. When entering the overview screen, the system will display various information about the orders. Users need to pay particular attention to the following fields: • • •

CFc - Confirmation factor DDf - Difference in days between order finish date and overall confirmation date RC - Result of Availability Check

The CFc and DDf will be calculated for all existing orders that haven been check, and the RC will be populated as a result of the check. The Confirmation factor ( CFc The) = confirmed order quantity / order quantity. The component with the greatest difference between the open quantity (requirements quantity - quantity withdrawn) and the component quantity confirmed by the availability check determines the confirmed order quantity. The Confirmed order quantity = (confirmed component quantity / open quantity) * order quantity The DDf is the Difference between the planned basic finish date and finish date confirmed by the availability check. The confirmed finish date is calculated using the component with the largest difference (in factory calendar days) between requirements date and confirmed date: confirmed finish date = basic finish date + confirmed date component - rqmts. date component The RC is the result of the availability check for each order: • • • • • •

01 - the order can be fully confirmed 02 - the order cannot be fully confirmed 06 - the order has no material components 07 - availability check not allowed with current order status 08 - order was locked at the time of the check by another user and was not checked 09 - order could not be checked

When executing the collective availability check users will have two options: • •

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Reset availability data Execute availability check

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When resetting the availability data has the effect that the following data is deleted: • • • •

The confirmed quantity in the material components the missing parts indicator (only production order) the overall confirmation date in the order header the confirmed quantity in the order header

Also, the system status "FMAT" (missing material availability) in the production order is reset. When using the execute availability check indicator, you use to specify that an availability check is carried out, for the type of check individual is defined; that is, the availability check for each material is carried out depending on the check group. If you want to carry out another type of availability check then you must change to the checking mode. You can define for planned orders whether these are fixed or not.

Figure 183: Collective ATP Check Mode

The selection controls how the availability check is to be carried out for a material. You have three options: •

•

•

Individually: If selected individually then the availability check is carried out for each material depending on the settings in the checking group. If it is specified in the checking group for example that the material is always checked against planning then a check is always carried out against planning. All materials with ATP check: If you select ATP check all then the availability check is carried out for all materials as an ATP independently of the settings in the checking group. All materials with planning check: If you select Planning check all then the availability check is carried out for all materials as a check against planning. The check against planning cannot be carried out if the checking group has the indicator No checking against planning.

Firm planned orders: If this selection is active, planned orders for which components are available according to the availability check are firmed. This means that the planned orders are firmed for the planning run and will not be

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Lesson: ATP in the Planned order

changed automatically. The components are also firmed which means that the BOM is not re-exploded in the next planning run. If this selection is not active, the planned orders are not firmed after the availability check. Check availability (Note: 123848 Internal documentation collective availability check Release 3.0D - 3.0E: Only ATP check Release 3.0F - 4.70: ATP and planning check (the planning check is not used by customers) Release 3.1G - 3.1I: Memory check (during ATP check). The memory check can also be activated in Release 3.0F via Note 84185 (however, in this case it is always checked with memory, the choice as it is given in Release 3.1G does not exist). -> The memory check was also activated once by Bosco Weisin a 3.0D System for Tulip. However, this is very work-intensive. Therefore, no note exists for this. During memory check, the stock/requirements situation (table ’MDPSX’ in program ’SAPLM61X’) is read only once from the database for every material and then stored in the memory for following checks (’READ_MEMORY’ and ’FILL_MEMORY’ in the LM61XF52). The confirmed quantities generated during the check are inserted into ’MDPSX’. This inserting (’FORM INSERT_SORTED_MDPSX_MEMORY’ in ’LM61VF62’) is carried out cumulated on the requirements date with ’DELKZ’ ’KM’. As of Release 4.0A, the memory check described above is no longer available in this form, but the ATP server which has been introduced in this release offers similar functions. The ATP server has been realized as a separate process on one of the application servers of an R/3 system. There, aggregated versions of Tables RESB (material requirements/reservations from planned and production orders) and VBBE (schedule lines for the customer order item) are permanently kept in the main memory and updated by the corresponding applications in case of changes. Since this saves many database accesses in corresponding scenarios, a high degree of performance is gained. For more information regarding the use and setup of the ATP server please refer to Note 99999. Error: Many customer messages for the collective availability check are either consulting questions or refer to errors which also occur in an individual check. You should search for notes with key word ’collective availability check’. In the collective check, the same modules are used which are also used during an individual check via Transaction CO02 (CO_ZA_AVAILABILITY_CHECK) or Transaction MD12 (MD_CHECK_KOMP_VERFUEGBARKEIT).Therefore, you first should always check whether the error also occurs during the individual check. If yes, the error can, in general, not be within function module (CO_ZA_AVAIL_CHK_ORDER_MULTI).The exception is the incorrect calling

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up of the modules. Therefore, the call of ’CO_ZA_AVAILABILITY_CHECK’ for production orders as well as ’MD_CHECK_KOMP_VERFUEGBARKEIT’ for planned orders should be compared during the individual and collective check.

Demonstration: Collective availability check Purpose Demonstrate collective availability check for planned orders.

System Data System: Client: User ID: Password: Set up instructions: 1. Logistics → Production → MRP → Planned Order → Collective Availability Check (MDVP) 2.

Enter your part R-F2## at plant 1000 use profile 000001, and Execute

3.

Notice that your planned order from the first demonstration is confirmed at 100%.

4.

Select all the orders and select Check availability.

5.

Return to the stock requirements and review your results.

Availability Checks During Independent Requirement Calculation For made-to-order planning strategies it is not possible to check against inventory since their will be none. However when using strategies 50, ( 52 - MTS ), 60, and some others, you created independent requirements to trigger production planning. This type situation makes it possible to check against some time of planned receipt in make-to-order production.

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Lesson: ATP in the Planned order

Figure 184: Availability Check with Planned Independent Requirements Allocation

In the check against planned independent requirements, the system only checks against the unconsumed planned independent requirements quantities. This means that no ATP quantities, receipts or stocks are included in the availability check. The check by planned independent requirements allocation determines whether or not sufficient planned independent requirements have been planned to cover a customer requirement. In this check, the system uses the consumption mode, such as backward consumption in the above example and the corresponding consumption periods. You can define the type of availability check to be carried out using the requirements class in the strategy. For technical reasons, when using SAP R/3 strategy 50 (planning without final assembly), you can only carry out the availability check against planned independent requirements. When processing the sales order using SAP R/3 strategy 60 (planning with planning material), you can check against the planned independent requirements of the planning material.

Demonstration: Availability Check Purpose Set the availability check

System Data System:

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Client: User ID: Password: Set up instructions: 1. Note: You can find settings for the availability check in Customizing and in this case refer to SAP R/3 Enterprise. First, show the various types of availability checks SAP R/3 strategy 50 (check against planned independent requirements): Customizing: Production → Production Planning → Demand Management → Planned Independent Requirements → Planning Strategy → Define Strategy Select Strategy 40 then select Details - Availability check selected ( → ATP)Exit out of Strategy 40 and select Strategy 50 Availability check deselected and assignment indicator active ( → check against planned independent requirements) 2.

600

Demonstrate where the availability check for sales orders is set: Customizing: Sales and Distribution → Basic Functions → Availability Check and Transfer of Requirements → Availability Check → Availability Check with ATP Logic or Against Planning

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Lesson: ATP in the Planned order

Exercise 20: Availability Checking in the Planned order Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Demonstrate and interpret the results of a sales order ATP check • Demonstrate the impact of an interactive ATP check on a planned order • Demonstrate how to perform a collective ATP check

Business Example [Enter a business example that helps the learner understand the practical business use of this exercise.]

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Data Order type Sales Org Dist. Chnl Division Data Sold-to Ship-to PO No. Rqd Deliv. Date (press Enter) Data Material Order Qty

Date Value OR 1000 10 00 Date Value 1000 1000 ## One month from today

Data Profile: Order view Profile: Component view: Basic Order Start Date (Relative) to

Date Value 000001 000001 25

Date Value R-F2## 150 pcs

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Task 1: ATP in the Sales Order Your organization has determine that several of your pumps will be placed in inventory at plant 1000 in anticipation of a large volume of local sales. You have received a forecast via the S&OP Process, which was used to initiate a MRP run. Enter a sales order to see how your production plan will be used to influence ATP. 1.

Review the Stock/Requirements list for R-F2## at plant 1000.

2.

In another session, Create sales order with the following data. Don’t save until told to do so.

3.

Did your order quantity get confirmed?

4.

Accept the delivery proposal and enter an additional line item for R-F2## for 50 pcs and change the date to one week earlier.

5.

Did the new line item that was a week earlier get confirmed. Select the ATP Quantities for more details.

6.

Accept the delivery proposal and SAVE the order.

Task 2: ATP in the Planned Order As you get closer to developing a production schedule you need to insure that the components are available for some of your finished good and sub-assembly production plans. Execute several interactive ATP checks on individual planned orders and interpret the results. 1.

Review the Stock/Requirements list for R-F2## at plant 1000.

2.

From the Stock/Requirements list for R-F2## at plant 1000, select the first planned order in the list and perform a component ATP check. Do not save the order until told to do so.

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Lesson: ATP in the Planned order

3.

What was the result of the check?

4.

Return the header of the planned order, has anything changed ?

5.

Save the planned order.

Task 3: Collective ATP for the Planned Order As you get closer to developing a production schedule you need to insure that the components are available for some your finished good and sub-assembly production plans. Due to the amount of materials you are responsible for planning, you need to execute a collective ATP check for all orders five weeks out. 1.

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Execute a “interactive” collective ATP check for R-F2## at plant 1000. Limit the check to orders whose “order start” date is approximately five weeks out.

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Solution 20: Availability Checking in the Planned order Task 1: ATP in the Sales Order Your organization has determine that several of your pumps will be placed in inventory at plant 1000 in anticipation of a large volume of local sales. You have received a forecast via the S&OP Process, which was used to initiate a MRP run. Enter a sales order to see how your production plan will be used to influence ATP. 1.

Review the Stock/Requirements list for R-F2## at plant 1000. a)

2.

3.

Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

In another session, Create sales order with the following data. Don’t save until told to do so. a)

Follow menu path: Logistics → Sales and Distribution → Sales → Order Create (VA01)

b)

After entering you material and quantity press the enter key.

Did your order quantity get confirmed? Answer: No, due to a lack of inventory the system proposed a delivery schedule based on future receipts.

4.

5.

Accept the delivery proposal and enter an additional line item for R-F2## for 50 pcs and change the date to one week earlier. a)

Select Delivery proposal.

b)

In line item 0020 enter the R-F2## and a quantity of 50, tab over to the First date and enter a date a week earlier. Press Enter.

Did the new line item that was a week earlier get confirmed. Select the ATP Quantities for more details. Answer: Yes, but it was delayed. This is due to the previous line item blocking the inventory.

6.

Accept the delivery proposal and SAVE the order. a)

Select Delivery Proposal

b)

Select

Save.

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Lesson: ATP in the Planned order

Task 2: ATP in the Planned Order As you get closer to developing a production schedule you need to insure that the components are available for some of your finished good and sub-assembly production plans. Execute several interactive ATP checks on individual planned orders and interpret the results. 1.

Review the Stock/Requirements list for R-F2## at plant 1000. a)

2.

3.

Logistics → Production → MRP → Evaluations → Stock/Requirements list (MD04)

From the Stock/Requirements list for R-F2## at plant 1000, select the first planned order in the list and perform a component ATP check. Do not save the order until told to do so. Details of Element

a)

Select the first planned order in the list and select

b)

Select

c)

From the header of the planned order, select Check Component Availability

Change

What was the result of the check? Answer: Varies. If you received all green lines then all components were available. If any yellow lines appeared, then your materials are not available until a later date. If you received a red line, can not confirm the order at all since no supply is currently expected.

4.

Return the header of the planned order, has anything changed ? Answer: Yes, due to a successful availability check the planned order header and all components (BOM) were firmed. This means that the next planning run can not delete or change the planned order.

5.

Save the planned order. a)

Select

Save.

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Task 3: Collective ATP for the Planned Order As you get closer to developing a production schedule you need to insure that the components are available for some your finished good and sub-assembly production plans. Due to the amount of materials you are responsible for planning, you need to execute a collective ATP check for all orders five weeks out. 1.

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Execute a “interactive” collective ATP check for R-F2## at plant 1000. Limit the check to orders whose “order start” date is approximately five weeks out. a)

Logistics → Production → MRP → Planned Order → Collective Availability Check (MDVP)

b)

Enter the parameters indicated and select

c)

Select

d)

In the pop up window select

e)

Exit the transaction.

Execute.

Select all, and then select Check Availability. Check availability.

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Lesson: ATP in the Planned order

Lesson Summary You should now be able to: • Explain the purpose of Available to Promise (ATP) in planned orders. • Demonstrate how to execute (ATP)

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Configuration of ATP Lesson Duration: 30 Minutes

Lesson Overview In this lesson you will focus on understanding the concept of how configuration of ATP is setup in SAP ERP in regards to Planned orders.

Lesson Objectives After completing this lesson, you will be able to: • • • • •

Explain the steps to configure ATP in the planned order Demonstrate the configuration of the checking group Demonstrate the configuration of the check rule Demonstrate the configuration of the check control Demonstrate the configuration of the scope of check.

This section will be up to the instruction to determine length of delivery due to its complexity. Based on the previous units it would be beneficial to at least show students the Scope of check in order to better understand ATP.

Business Example In order for your planners to effectively use ATP, they must understand how the configuration is structured in order to take advantage of the flexible functionality. Review the configuration of ATP in order to use it to your planners advantage.

Configuration of ATP Overview The setup of the availability check is the same for all applications. The ATP functionality consists of : • • • •

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Checking (ATP) Group Check rule Check Control Scope of Check

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Lesson: Configuration of ATP

Figure 185: Settings for the SAP R/3 Availability Check

These settings are controlled via configuration, however several will be applied as master date.

Checking Group The checking group that is entered in the SAP R/3 material master (MRP 3 view) enables you to group materials according to checking properties. Users need to keep in mind that if checking results are specific to a group of materials, the check group will allow you to control what types of receipts are relevant for ATP. While this is a configuration setting the check group will be combined with the check rule to define a very specific type of check.

Figure 186: Checking Group Configuration

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The following options exist for the checking group: No check Material whose material master has a checking group entered in which this indicator is set (checking group KP is delivered this way in the R/3 standard system) is never included in a material availability check. This setting makes sense, for example, for materials that are planned via a KANBAN process. Since in this situation the KANBAN control makes sure that enough material is always available, it does not make sense to carry out a material availability check for these materials. You can also use this setting, for example, for low-value materials that for performance reasons should not be included in the availability check. Note: However, bear in mind that with this setting, they will never be included in the availability check, neither for the created order nor for the released order (nor for an availability check from another application, for example, the sales order). Blocking the confirmed quantities If this indicator has been set, the quantities confirmed during an availability check are blocked by special entries in the enqueue server so that availability checks taking place at the same time do not assign these quantities again. If this indicator is set, the availability check runs a little slower since the enqueue server has to be queried additionally for every component and accepted confirmations have to be written to the enqueue server, however on the other hand this prevents any problems with checks that are carried out simultaneously. Accumulation You can enter four different values in the Accumulation field: Initial (blank), 1, 2 or 3. These four different values are used to control two different functions independently of each other. These two functions are the accumulation and also the ’Online-vs-Batch’ check. This function is controlled via the low-order bit so that the values initial and 1 define via this function. Value 2 then acts as initial, and value 3 acts as value 1 in respect of this function. Whether the system checks with (1) or without (initial) accumulation makes a difference if the total of the confirmed quantities is greater than the quantity of the receipts (including stocks). If the check is carried out without accumulation, the system displays the value 0 (zero) as the accumulated ATP quantity, for example, in Transaction CO09. With accumulation, the invoice is still used even if negative accumulated ATP quantities are created. If the Accumulation field is set to value 3, then the check with accumulation is activated on the one hand (see preceding section). On the other hand, the availability check calculates differently, depending on whether the check is called from a transaction creating an order (for example, Transaction CO01)

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Lesson: Configuration of ATP

or from a transaction changing an order (for example, Transaction CO02). If the check is called from a change transaction, it runs as normal, only the confirmed quantity of the requirements is used for the reduction of the accumulated ATP quantity. If, however, you call the check from a creation transaction, the actual requirement quantities are used for the reduction of the accumulated ATP quantity regardless of any available confirmed quantities. This normally means that in this scenario less material is available for the confirmation. Therefore, an availability check in this mode delivers very ’pessimistic’ results which see all other available requirements as completely confirmed. A confirmation is carried out for the reservation being checked only if material is nevertheless available. It is essential here to make sure that the setting for the scope of the check is made correctly. If, for example, the secondary requirements (that is, the material requirements of the planned orders) are taken into account in the scope of check, even though a material availability check is never carried out in the planned order, the secondary requirements have no effect on the accumulated available quantity (since the confirmed quantities are zero) during a check from a change transaction. If, however, you call the check from a creation transaction, the accumulated available quantity is reduced by the requirement quantities of the secondary requirements. In this context, the transactions for the planned order conversion (Transactions CO40, CO41, COR7, COR8 ...) are regarded as change transactions because the requirements were already created by the planned order. This logic was implemented by Note 107895 to prevent confirmed quantities that were already determined in the planned order from being cancelled again during the planned order conversion on account of cumulation type 3. However, if you nevertheless prefer to check in ’create’ mode also during the planned order conversion, you must implement the modification specified in Note 338051. If you do not want to use cumulation type 3 at all for the production control without being able to adjust the checking group correspondingly (for example, because this control is required for the sales order processing for this material), you can deactivate this function completely by using the modification described in Note 338075. These modifications, however, impact on production orders as well as process orders, networks and maintenance orders. Note that the described logic represents the currently implemented system status for deciding when the system should check against the requirement quantities and the confirmed quantities (Transactions CO01/CO02/CO40). However, there may be the need in the future to change this logic in order to align business processes.

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Demonstration: Demo Check Group Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. From the S/R list review the MRP 3 screen and point out the checking group. Remind users that it is on a Plant specific view. In addition it also sits on several other views but they all populate the same field/table in the data base. 2.

Demo the check group configuration: IMG → Production → Shop Floor Control → Operations → Availability Check → Define Checking Group.

Checking Rule

Figure 187: Check Rule

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The check rule is a key for a specific business process. There are no values that pertain to the check rule. However, when you combine the checking group and checking rule you can define a specific check for availability of inventory or production. The usage of he check rule is defined in the check control tables.

Demonstration: Demonstrate the Check Rule Table Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. IMG menu path: Production → Material Requirements Planning → Procurement Proposals → Planned Orders → Define Availability Check for Components 2.

Select the checking rulle option.

3.

Point out to users there are no control parameters associated with the check rule.

Check Control The checking control allows you primarily to determine application-specific, which scope of check should be used. The specification of the checking rule is used for this and no ATP availability check can be carried out if it is missing. The check control is handled differently for each application: • • • • •

Sales and Distribution (Hard Coded) Materials Mgmt - Stock Transport Order (Configurable; Document/Order type) PP - Planned Orders (Configuration; assigned to MRP group or Plant) PP - Production/Process orders (Configuration; assigned Plant/Order Type/Business Event) MM - Material Movements (Configuration; assigned Transaction code)

The check rule can be defined in the IMG via the following menu paths:

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MM/Inv - Material Management → Inventory Management → Goods issue/transfer postings → Setup Dynamic Availability check MM/Stck Transfer -Material Management → Purchasing → Purchase Orders→ Setup Stock Transfer Order → Assign Delivery type and Check rule SD - Hard coded by SAP! PP/MRP - Production → MRP → Procurement Proposals → Planned orders → Define Availability check for components PP-Prod. Order - IMG → Production → Shop Floor control → Operations → Availability check → Define Checking Control Note: For MRP the check rule can be define at the plant or the MRP group level. MRP group has a higher priority than the plant.

Demonstration: MRP Check Control Settings Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. Follow the IMG menu path: Production → MRP → Procurement Proposals → Planned Orders → Define Availability Check for Components 2.

Demonstrate the plant and MRP group settings.

Scope of Check The connection between the checking group and the checking rules is made by entering this into the scope of check (Customizing application). Here you define for which stocks, issues and receipts the combination is valid as check instructions.

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Figure 188: Scope of Check Configuration

Through the use of the checking group which is assigned to the material master, and the checking rule that can be assigned via configuration (SD exception), planners can dictate the specific input into the ATP check. The check rule is modeling the business event or activity. Note: With different combinations planners can get very specific with the ATP checks. In regards to MRP related checks for materials who have very durations between production runs, they may not want to include planned orders. Materials with long Durations between runs may need to consider planned orders. Through the use of a different check rule or checking group this can be accomplished, since each combination can point to a different scope of check. The scope of check is used to set which stock types as well as which dynamic receipt and issue types are to be taken into account in the availability check (= requirements). In particular you must take into consideration here the following fields from the point of view of the production order, process order, network and maintenance order: •

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With dependent reservations : The dependent reservations are the material requirements for production orders (or process orders ...), however they are not the material requirements for planned orders. As a rule it makes no sense to check reservations for production orders but at the same time not to take the requirements of other production orders into account. Hence, you should not set this field to ’Do not check’ until you have carefully checked the requirements and the resulting consequences. The setting ’Only include

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•

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withdrawable reservations’ normally only makes sense for checking released orders (a reservation is withdrawable if the assigned operation is released) but there can also be exceptions. Check without replenishment lead time : If the check with replenishment lead time is activated (caution: The field must not be set in this case!), the availability check may run more efficiently in some cases. This is particularly true if the requirements date of a reservation lies after the end of the replenishment lead time (defined in material master). In this case, the availability check can instantly report complete availability of the material without actually checking the ATP calculation. This behavior is based on the definition of the replenishment lead time: up to the end of the replenishment lead time, every required quantity can in theory be procured by the respective material. However, note that you must create a corresponding receipt (for example, through an MRP run) despite confirmation of the material requirements using the replenishment lead time. The availability check itself does not trigger any procurement! Though the check taking into account the replenishment lead time is in certain cases significantly faster than the regular check (in particular if there are very many receipts and issues to be taken into account, and/or if the requirements date of the component is very far in the future), the results are not as accurate as for the regular check. In certain circumstances, there might be no planned receipt to cover the confirmed quantity, and only the assumption that the material can be procured by this certain date. Whether this inaccuracy can be accepted or not (or, for example, only for created orders but not for released orders) needs to be clarified with the customer in cooperation with the consultants with understanding of the implemented process.

•

616

No storage location check : You can use this to prevent the check at the level of the storage location (if it exists in this reservation). There are performance advantages to this since otherwise the system carries out the check both at the level of the storage location and at the level of the plant. For example, it makes sense to omit checking at storage location level if, scattered over the entire plant, there is a separate storage location at every work center from which the required materials are to be taken. However, these storage locations always are refilled only shortly before the actual start of manufacturing from a central storage in the plant so that normally they have no excess stocks which can be used for confirmation. Instead, the availability check should only check whether the required quantities are available ’anywhere in the plant’ (that is, in general in the central storage). In this situation, it would make sense to deactivate the storage location check (that is, set the switch).

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Lesson: Configuration of ATP

Demonstration: Demo scope of check Purpose

System Data System: Client: User ID: Password: Set up instructions: 1. From the S/R list for T-B1## at plant 1000, change a planned order

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2.

Execute a component availability check.

3.

From the ATP results screen select one item and preform a component check again.

4.

From the “component ”results screen select the Scope of check to review what MRP elements were considered during the ATP check.

5.

Since your T-T2## is in QI stock, change the scope of check so QI stock is not included.

6.

Rerun the check and see if the results are different.

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Facilitated Discussion

Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

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Lesson Summary You should now be able to: • Explain the steps to configure ATP in the planned order • Demonstrate the configuration of the checking group • Demonstrate the configuration of the check rule • Demonstrate the configuration of the check control • Demonstrate the configuration of the scope of check.

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Unit Summary

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Unit Summary You should now be able to: • Explain the purpose of Available to Promise (ATP) in planned orders. • Demonstrate how to execute (ATP) • Explain the steps to configure ATP in the planned order • Demonstrate the configuration of the checking group • Demonstrate the configuration of the check rule • Demonstrate the configuration of the check control • Demonstrate the configuration of the scope of check.

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Test Your Knowledge

527

Test Your Knowledge 1.

What is the purpose of available to promise checking?

2.

The available to promise check is not limited to sales requirements. Determine whether this statement is true or false.

□ □

True False

3.

In what scenario will ATP not check against existing supplies and inventories.

4.

The control setting of what supply and demand elements are considered in the ATP check are configured in the Fill in the blanks to complete the sentence.

5.

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Determining which scope of check is used is dependent on a combination of two things. What are they?

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Answers 1.

What is the purpose of available to promise checking? Answer: Available to promise check comfirms that the required materials will be available when requested. If the materials are not available it will confirm an appropriate date when the material is to be available.

2.

The available to promise check is not limited to sales requirements. Answer: True Available to promise check can also be done for components of manufacturing orders (planned or converted). Or for certain inventory movements.

3.

In what scenario will ATP not check against existing supplies and inventories. Answer: By nature checking existing inventory and supplies wouldn’t make sense in certain planning strategies. For example: In strategies 50, 52 & 60 the ATP check is done against planned independent requirements.

4.

The control setting of what supply and demand elements are considered in the ATP check are configured in the Scope of Check. Answer: Scope of Check.

5.

Determining which scope of check is used is dependent on a combination of two things. What are they? Answer: Which Scope of check that is used is dependent on the availablility check field in the material master and the checking rule.

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Unit 12 Simulating the Production Plan

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Unit Overview This unit discusses the process of simulating a demand program, create long-term planning scenarios, and executing long-term planning. The unit also explains the relationship between long-term planning and operative MRP.

Unit Objectives After completing this unit, you will be able to: • •

Discuss the usage of long-term planning Execute long-term planning

Unit Contents Lesson: Long-term planning requirements ..................................624 Demonstration: Transfer Firm Planned Orders .........................643 Exercise 21: MRP Run ....................................................645

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Long-term planning requirements Lesson Duration: 50 Minutes

Lesson Overview In this lesson, you will learn about the usage of long-term planning. You will also learn how to execute and evaluate long-term planning using different planning scenarios.

Lesson Objectives After completing this lesson, you will be able to: • •

Discuss the usage of long-term planning Execute long-term planning

Discuss the need for long-term planning. Next, explain the various planning scenarios. Then, discuss the process of executing and evaluating long-term planning.

Business Example The Precision Pump company constitutes a number of independent business units for manufacturing pumps. As the planning manager, you need to calculate capacity requirements and the requirement of purchased parts based on various different projection scenarios.

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Overview of Long-term Planning Simulative Planning Areas Position in the Functional Environment You can define deviating routings or BOMs for long-term planning. •

Routing: You can define deviating settings for a particular scenario in the Customizing activity “Define scheduling parameters for planned orders”. Customizing → Production → Material Requirements Planning → Planning → Scheduling and Capacity Parameters → Define scheduling parameters for planned orders. For each plant, order type, production control, and scenario: Individual selection-ID and scheduling parameters for long-term planning/simulation

•

BOM: When you define the scenario, you can enter a deviating BOM selection ID, which controls a BOM with a specific usage for long-term planning.

•

Simulating the impact of a future demand program throughout all BOM level codes Leveling capacity Planning costs Preview for Purchasing Preview for Inventory Management

• • • •

In long-term planning, future demand programs are simulated within a planning run. This allows you to calculate of capacity requirements, activity type requirement of the cost centers, and of the requirement of purchased parts. The demand programs that can be simulated may include planned independent requirements and/or sales orders. You can evaluate the simulation with regard to material requirements planning, capacity planning, order volumes, purchasing budget, cost center planning, and inventory controlling. Following the evaluation of the simulative planning results, you can replace the current demand program with the preferred version in long-term planning and can continue it there. You can transfer the data for external procurement to the purchasing information system using a special report and evaluate it there. Future stock is derived from the predefined requirements and future receipts. You can transfer the data determined for the requirements/stock situation by long-term planning to Inventory Controlling and evaluate it there using standard analyses.

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The data determined in long-term planning for the activity requirements may be passed onto the Cost Center Accounting as planning data. This allows you to determine the production costs for each cost center and the products. The activity requirements that are determined in long-term planning can be passed onto Cost Center Accounting using an individual report after completion of long-term planning. The planning data of the cost centers is updated whereby the requirements activity is determined from the routing data. Cost Center Accounting displays how many activities the production has planned.

Figure 189: Simulative Planning Areas

The principle of long-term planning is to simulate different versions of the demand program. The simulation can take into account operative data (for example, master data, sales orders, purchase orders, production orders). The simulation can be used to optimize the demand program and the production and procurement data with regard to material requirements planning, capacity planning, order volumes, purchasing budget, cost center planning, and inventory controlling. In long-term planning, you set up independent “planning areas”, which you can subsequently integrate into operative planning. Within these planning areas, separate simulation stock data is calculated and maintained which can be used to carry out planning in scenarios. An individual simulative planning area exists for each scenario in the system. Operative data can be copied to or referenced (taken into account) by one or more simulative planning areas. You can execute simulative planning for the long or short term. There is no time restriction for the execution of long-term planning. The planning periods for long-term planning and operative planning should correspond so that business inconsistencies can be avoided.

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Figure 190: Position in the Functional Environment

Long-term planning can be executed on the basis of operative master data: BOMs, routings, work centers, and material masters. This means you do not have to create any new operative data. If you want to simulate situations that use differing master data, you can also create special master data for long-term planning: •

•

You can create special long-term planning routings and run simulations with regard to lead-time scheduling and capacity planning. To do this, you must maintain a routing selection ID that controls the long-term routing in Customizing. This selection ID is assigned to a scenario, that is, a simulative planning area, in the Customizing IMG activity “Define scheduling parameters for planned orders”. In addition, you can use special long-term planning BOMs. To do this, you define a special usage for long-term planning in the Customizing IMG activity “Define BOM usages” and define the allowed material types for the BOM header and BOM item for this usage. In the Customizing IMG activity “Define order of priorities for BOM usages”, you then maintain a BOM selection ID that calls up the long-term BOM. This selection ID is assigned to a simulative planning area when creating the scenario in the field “BOM selection ID”.

The tools available for long-term planning are used in the same way as are the tools in operative planning. Thus, very little additional training is required for these tools. You can exclude BOM items from long-term planning using the explosion control indicator in the individual items.

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Planned Independent Requirements

Figure 191: Simulative Planned Independent Requirements

Several planned independent requirements versions can be created for one material. Planned independent requirements versions can be created using the following: • • • • • •

The sales and operations plan of a material or a product group The results of flexible planning from sales and operations planning Forecasting Planned independent requirements of other materials Planned independent requirements versions of the same materials Manually

A planned independent requirements version can be set as active or inactive. Inactive versions are created for simulation purposes. Only active planned independent requirements versions are taken into account in operative planning. If, according to the settings in the scenario, sales orders are included in the simulative planning area along with planned independent requirements, then MRP plans in the simulative planning area using the same logic as in operative planning.

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Planning Scenarios Planning Scenario (1) Consumption-Based Materials Planning Scenario (2) If the indicator “Include firm receipts” is set, the following elements are included in the simulation: QM inspection lots, purchase orders (incl. shipping notification), scheduling agreement schedule lines (incl. shipping notification), production orders (including capacity requirements), dependent and independent reservations, transport calls for stock transport orders and for stock transfer reservations. If the indicator “consider sales orders” is set, the following elements are included in the simulation: Sales orders, customer inquiries, customer quotations, SD scheduling agreement (also external service providers), contracts, deliveries, external sales orders. You maintain quota arrangements in operative planning and set them up using the quota arrangement usage in the material master for operative and long-term planning. You administer separate data for the quota-allocated quantity and quota rating in operative planning and for each scenario in long-term planning.

Figure 192: Planning Scenario (1)

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When creating a planning scenario, you can set defaults for certain settings for the scenario by selecting one of the default setting choices on the Create Planning Scenario screen. Options include“ Long-term planning”, “Gross long-term planning”, and“ Short-term simulation”. You can change these defaults at any time. You can also copy the settings from another scenario. If you have selected the indicator “Gross long-term planning”, the system suggests control parameters with which you plan requirements quantities for cost evaluation and budgeting purposes without taking into account operative available stocks, material-specific lot sizes, or scrap. The settings and items you define in the planning scenario include: • • • • • •

The plants for which the simulation is to be carried out, The planned independent requirements versions (active or inactive) to be used in the simulation, What opening balance (stock) the simulation is to assume (zero stock, safety stock, plant stock at the time of planning, average plant stock), Whether to include firm receipts (purchase orders, production orders and reservations) in the net requirements calculation, Whether dependent requirements for consumption-based materials, KANBAN materials and bulk materials are created, Which version of the available capacity is used in the simulation.

Figure 193: Consumption-Based Materials

Consumption-based materials are not planned in MRP because no dependent requirements are created for these materials. In consumption-based planning, materials are not replenished during the MRP run until stock falls below the reorder point or in forecast-based planning, until the forecasts for future consumption requirements are not covered.

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In long-term planning, dependent requirements can be created for consumption-based materials, bulk material, and KANBAN materials, that is, the material is planned in the scenario as though it were a material planned using MRP. You are thus provided with a preview of the procurement quantities that are necessary to satisfy the simulated independent requirements. You can analyze the forecast more closely in the Purchasing Information System in the long-term planning evaluations.

Figure 194: Planning Scenario (2)

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In the planning scenario you also set : •

•

• •

• • •

Whether the system should work with direct production, that is, whether during planning it should create a collective order for materials that are to be produced directly. When using direct production in long-term planning, only the header order can be changed and not the subordinate orders in the collective order. Whether the long-term planning should be executed as gross requirements planning and whether the calculation of scrap in the long-term planning run is to be deactivated. Whether long-term planning BOMs should be used. Whether firm planned orders from operative MRP should be copied to the long-term planning (firm planned orders can be changed) and whether firm purchase requisitions for operative planning (these cannot be changed) should be taken into account in the simulative planning area. Whether the planning time fence is also to be effective in long-term planning for materials that are affected by a planning time fence in MRP. Whether sales orders are taken into account in long-term planning. (These cannot be changed from long-term planning.) Whether make-to-order production or individual project planning is to be executed for the materials of the corresponding strategy. Make-to-order planning presupposes that sales orders with a requirements type for make-to-order planning are taken into account. If the indicator “Make-to-order and project planning” is not set, the sales orders with a make-to-order planning requirements type are ignored in the scenario.

Executing and Evaluating Long-term Planning Transfer Firm Planned Orders All firmed planned orders are always transferred, which means that a transfer period cannot be defined; the temporary end of the transfer period is the latest order end date of the operative planned order. Only the planned order headers are transferred (copied). Any changes to components or capacity requirements that exist in operative planning are not copied. Long-term and Operative Planning Using a figure, explain the difference between activating a planned independent requirement from the scenario and activating the corresponding planned independent requirements in the planned independent requirement maintenance. Use the following numerical example: The transfer period is to be from June to September.

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Lesson: Long-term planning requirements

Version 00 (current operative production schedule, active): July 100 pieces Aug. 100 pieces Sep. 100 pieces Simulative version 20 (assigned to scenario 020, not active): July 80 pieces Aug. 110 pieces Sep. 130 pieces Result of activating the scenario: Version 00 is replaced by the figures from version 20 within the transfer period: Version 00 (operative production schedule, active): July 80 pieces Aug. 110 pieces Sep. 130 pieces Version 20 remains unchanged and inactive. Result of setting version 20 to active in the planned independent requirement maintenance: The master production schedule is the sum of all active planned independent requirements, and is now the result of: Version 00 + version 20 (both active): July 180 pieces Aug. 210 pieces Sep. 230 pieces Transfer Firm Planned Orders (1) Transfer Firm Planned Orders (2) When you transfer firm planned orders (from long-term planning to operative planning), you must define a transfer period (in contrast to transferring firm planned orders to long-term planning). Long-Term Planning: Start Data Long-Term Planning: Resulting Data These are repetitive in nature and summarize the opportunities for transferring data to long-term planning and transferring resulting data to operative planning.

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Figure 195: Executing Long-Term Planning

A planning scenario must be released before long-term MRP can executed. Once the planning scenario is released, planning file entries for all materials of the plants that are assigned to the planning scenario are created in the background. Each scenario thus has its own planning file entries for long-term planning. Depending on the settings in the scenario, external requirements and fixed receipts are included in the long-term planning along with the assigned planned independent requirements. The indicator “Include sales orders” establishes that sales orders, scheduling agreements, contracts, and deliveries are taken into account. The indicator “Include firm receipts” refers to the inclusion of production orders, purchase orders, schedule lines, reservations, transport releases, and QM inspection lots. Operative data that flows into long-term planning cannot be changed in the simulative planning area. This does not include firmed operative planned orders: The order headers for firmed planned orders (that is, basic dates and order quantity) are copied to the simulative area. (You control the transfer of firm planned orders in the initial screen of the planning run.) Only (simulative) planned orders are created in long-term planning. You can execute long-term planning as total planning, single-item planning, single-item planning in simulative mode, or using the planning table from repetitive manufacturing.

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Lesson: Long-term planning requirements

After evaluating and checking the simulative planning results, the planned independent requirements version can be activated in the planning scenario and can be given a new version number. Once activated, the planned independent requirements version is effective for operative planning. You can also transfer simulative planned orders from long-term planning to operative planning.

Integration with operational planning data Note: Many of the slides have been made “print only“.”” This is due to the overlap between Long term planning and many of the other sections previously covered. However it is good reference material for the students. Transfer Firm Planned Orders All firmed planned orders are always transferred, which means that a transfer period cannot be defined; the temporary end of the transfer period is the latest order end date of the operative planned order. Only the planned order headers are transferred (copied). Any changes to components or capacity requirements that exist in operative planning are not copied. Long-term and Operative Planning Using a figure, explain the difference between activating a planned independent requirement from the scenario and activating the corresponding planned independent requirements in the planned independent requirement maintenance. Use the following numerical example: The transfer period is to be from June to September. Version 00 (current operative production schedule, active): July 100 pieces Aug. 100 pieces Sep. 100 pieces Simulative version 20 (assigned to scenario 020, not active): July 80 pieces Aug. 110 pieces Sep. 130 pieces Result of activating the scenario: Version 00 is replaced by the figures from version 20 within the transfer period: Version 00 (operative production schedule, active): July 80 pieces Aug. 110 pieces Sep. 130 pieces Version 20 remains unchanged and inactive. Result of setting version 20 to active in the planned independent requirement maintenance: The master production schedule is the sum of all active planned independent requirements, and is now the result of:

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Version 00 + version 20 (both active): July 180 pieces Aug. 210 pieces Sep. 230 pieces Transfer Firm Planned Orders (1) Transfer Firm Planned Orders (2) When you transfer firm planned orders (from long-term planning to operative planning), you must define a transfer period (in contrast to transferring firm planned orders to long-term planning). Long-Term Planning: Start Data Long-Term Planning: Resulting Data These are repetitive in nature and summarize the opportunities for transferring data to long-term planning and transferring resulting data to operative planning.

Figure 196: Long-Term Planning: Start Data

The following can flow into the simulative planning area: • • • • • •

636

Active or inactive planned independent requirements version Sales orders Operative, firmed planned orders Firmed purchase requisitions Production orders Purchase orders

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Lesson: Long-term planning requirements

Figure 197: Long-Term Planning: Resulting Data

The following can be copied from the simulative planning area to the operative planning area: • •

Activated planned independent requirements versions Firmed simulative planned orders for materials procured externally even as purchase requisitions or schedule lines.

Figure 198: Transfer Firm Planned Orders

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You can copy firmed planned orders from operative MRP to the simulative planning area. Only the planned order headers are copied during the copying process. Changes to components of planned orders that have been made in operative planning are not copied. With simulative planning, the planned order components are created again according to the BOM selected in the simulative planning run. The firmed planned orders are copied per material by the simulative planning run in the simulative planning area. During this process, all firmed planned orders are selected for each material of a BOM structure and are adopted (copied to the simulative planning area). These are also firmed in long-term planning but can be changed manually there. The order finish date of the planned order that was selected and copied last is saved as the temporary end of the copying period for each material. The copying period is determined by the firmed operative planned order that is furthest in the future. When copying a firmed planned order from operative planning, all firmed and unfirmed simulative planned orders in the simulative planning area with order finish dates within the copying period are deleted.

Figure 199: Planning Levels for Capacity Data

Capacity data can be calculated on different levels: • • •

638

In the operative MRP at detailed scheduling level In the long-term planning at detailed scheduling level, whereby the data is separate for each scenario In the sales and operations planning at rough-cut planning level

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SCM240

Lesson: Long-term planning requirements

The capacity evaluations for operative MRP and long-term planning are executed separately. Only capacity requirements which arise from production orders considered as final receipts in long-term planning are included in the capacity evaluation of the corresponding scenario.

Figure 200: Capacity Check with Overload Display

The same functions for capacity planning are available in long-term planning as in material requirements planning. Capacity planning can be called from planned order processing, the planning result of single-item planning, or from the stock/requirements list. In the capacity check of the stock/requirements list, the available capacity, the total capacity requirements independent of materials and the capacity requirements of this material are displayed in periods for each work center and capacity category. Overload situations are highlighted in color. The overload function calculates the maximum load for each work center and capacity category and the overload is highlighted in color. A planning run with the scheduling indicator 2 “lead-time scheduling and capacity planning” is a prerequisite for the capacity check. The planning run with scheduling indicator “1” (basic-date scheduling) does not reduce capacity requirements.

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Figure 201: Long-Term and Operative Planning

The operative demand program results from the total of all active planned independent requirement versions. A planned independent requirements version can be activated in two different ways: By setting the active indicator of the planned independent requirements version: The operative planning is the total of all active planned independent requirements versions. Therefore, this procedure is the equivalent of an addition to the plan up to now. By “activating” in the scenario: The source planned independent requirements version is copied to the target planned independent requirements version. During the activation, if an already active version has been selected as the destination version for the transfer and the periods overlap in which the source and destination versions of planned independent requirements exist, the independent requirements of the destination version in the overlapping periods are overwritten by the independent requirements of the source version.

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Lesson: Long-term planning requirements

Figure 202: Transfer Firm Planned Orders (1)

Following the simulation, you can adopt firmed simulative planned orders of a simulative planning area in the operative planning (copied to the operative planning area). In the operative area, you can create purchase requisitions or schedule lines for materials procured externally. This type of copying is carried out for a material in the transaction “interactive single-item planning” of operative MRP. In the subsequent screen of the planning result, the copying function is started using the function “Edit → Copy simulative planned orders”. You explicitly define the start and finish of the copying period for this process. All firmed planned orders with order finish dates within the selected period are copied from the simulative planning area to the operative planning area. In the operative planning area, all firmed and unfirmed planned orders, with an order finish date within the copying period are deleted, so that only the copied planned orders in the operative planning remain in this period. If operative planned orders were converted into production orders before the transfer, the production orders still remain after the transfer of the planning results and the copied firm planned orders are added to them which would therefore result in doubling the replenishment. You can avoid unnecessary double procurement if you convert the planned orders into production orders before the start of the simulative planning and have defined in the planning scenario that all firmed receipts are taken into account in the long-term planning.

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Figure 203: Transfer Firm Planned Orders (2)

Following the simulation, you can adopt firmed simulative planned orders of a simulative planning area in the operative planning. For materials procured externally during the transfer into the operative area, you can create firmed purchase requisitions or firmed schedule lines for simulative planned orders of the order type “NB”. To do this, you enter the respective creation indicator in the initial screen of interactive single-item planning in the MRP menu in the fields “Create purchase requisition” and “Schedule lines” (purchase requisitions or schedule lines, schedule lines in the opening period or purchase requisitions in the opening period). The creation of schedule lines requires that the scheduling agreement item is already entered in the firmed simulative planned order before the transfer. This is achieved by maintaining the scheduling agreement item as MRP-relevant before the long-term planning run in the simulative area. After the transfer, the firmed planned orders, purchase requisitions, and schedule lines are displayed in the planning result. Once you save the planning result, the transfer to operative planning is closed. If there were non-firmed purchase requisitions and schedule lines in the copying period in operative planning, these are deleted during the transfer of the planning result, and the purchase requisitions and schedule lines that were created during the transfer are used in the operative planning. If the purchase requisitions and schedule lines were firmed in the operative planning, they are still used after the transfer of the planning result. You can avoid unnecessary double purchase requisitions and schedule lines, if you have defined in the planning scenario beforehand that all firmed receipts are taken into account in the long-term planning.

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Lesson: Long-term planning requirements

Demonstration: Transfer Firm Planned Orders Purpose To demonstrate the transfer of firm planned orders

System Data System: Client: User ID: Password: Set up instructions: 1. Complete the exercise first! The Exercise steps must be completed before you can proceed with following demo steps. 2.

Call stock/requirements list for material R-F1## that is to be planned in scenario ##. Firm planned orders: Set the manual firming date to the last day of the current month + 11.

3.

Display and explain the transaction for transferring firm planned orders to operative planning (transaction “Single-item, Interactive” for material R-F1##, Edit → Copy Simulative LT planned orders). Execute function: Material R-F1##, source scenario 0##, interval to copy = 1st of current month +6 to last day of current month + 11.

4.

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Display the result: Firmed planned orders were copied from long-term planning to the operative planning; purchase requisitions are generated in the opening period for the planned order depending on the requisition creation indicator in the ‘interactive single-item planning’.

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Lesson: Long-term planning requirements

Exercise 21: MRP Run Exercise Duration: 25 Minutes

Exercise Objectives After completing this exercise, you will be able to: • Create a scenario for long-term planning • Execute and evaluate a long-term planning run

Business Example A future demand program needs to be simulated for pump R-F1## in plant 1000, and a capacity consideration should also be made. Dependent requirements for consumption-based materials should also be calculated in order to check the existing framework agreement with the vendor.

Task: Create and evaluate a “what-if” planning scenario. You will need to create simulated demand to proceed with planning a specific “what-if” scenario. Once the demand is entered, a planning scenario will be created. You will then run long term planning and evaluate the results. 1.

Create inactive planned independent requirements for material R-F1## in plant 1000 (version ##) using data from the table below. Use the long-term planning menu. Set the planning period to monthly. Current month +

Current month +

Current month +

Current month +

Current month +

Current month +

7

8

9

10

11

12

350

350

350

350

300

450

Hint: Make sure that the active indicator is not set. 2.

Create a planning scenario in order to simulate the planning of the inactive planned independent requirements (version ##). Assign this scenario to plant 1000. Release and save the scenario. Number of the scenario: 0## (## = group number) Text of scenario: Long-term scenario ## Use the settings indicated below: Continued on next page

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3.

SCM240

Planning Period (From)

Current month +7

Planning Period (To)

Last day of month + 12

Opening stock

1 - Safety Stock

Dep. rqmts for reorder point

Select

Consider sales orders

Do not select

Switch off planning time fence

Select

Use direct production

Do not select

Use make- to-order and project planning

Do not select

Include firm recepts

Do not select

Include firm purchase requisitions

Do not select

Include firm planned orders

Do not select

Review the stock/requirements situation of material number R-F1##, plant 1000, and scenario 0##. Hint: It is a good idea to call the stock/requirements list for the scenario in a separate session, because you will use it to constantly monitor the planning progress.

4.

Does the system display the planned independent requirements for the version ## that flow into scenario 0## in the list? _________

5.

Do the planned independent requirements that flow into scenario 0## appear in the operative stock/requirements list that you call from the MRP menu? _________ Why (not)? ________________________________________

6.

Execute long-term planning for material R-F1## in plant 1000 and scenario 0##. Later, you want to look at the capacity situation in scenario 0##, which is relevant for the production of material R-F1##, therefore the capacity requirements should be created in long-term planning. Field

Value

Processing Key

NETCH

Create MRP list

MRP List

Continued on next page

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Lesson: Long-term planning requirements

Field

Value

Planning Mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components.

Select

7.

Did the system create procurement elements to cover your planned independent requirements? ____________

8.

Switch to material R-T3## in the stock/requirements list for scenario 0##. What is the MRP type of the material and what significance does this have? ____________________________________________ Did long-term planning create dependent requirements? ________

9.

Activate the planned independent requirements version ##. These requirements will now be available for operative planning. Use the transaction Change planning scenario to activate the planned independent requirements. Starting from the long-term planning menu, you Choose Activate Independent Requirements. In the dialog screen that follows, select planned independent requirement version ## and as the target version enter the planned independent requirement version number 00. For the transfer period, the system suggests the period that you had entered as the planning period in the scenario. Delete the indicator for Test mode, select the indicator Create list and then the button Activate.

10. Call the operative stock/requirements list. Are the LSF requirements that you created in long-term planning displayed? _____________ In which planned independent requirement version are these requirements Display the element from the list in order to answer the question? _________

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Solution 21: MRP Run Task: Create and evaluate a “what-if” planning scenario. You will need to create simulated demand to proceed with planning a specific “what-if” scenario. Once the demand is entered, a planning scenario will be created. You will then run long term planning and evaluate the results. 1.

Create inactive planned independent requirements for material R-F1## in plant 1000 (version ##) using data from the table below. Use the long-term planning menu. Set the planning period to monthly. Current month +

Current month +

Current month +

Current month +

Current month +

Current month +

7

8

9

10

11

12

350

350

350

350

300

450

Hint: Make sure that the active indicator is not set. a)

Menu path: Logistics → Production → Production Planning → Long-Term Planning → Planned Independent Requirements → Create

b)

Enter data on the initial screen as follows:

c)

Material

R-F1##

Plant

1000

Version

##

Planning Period

M

Select enter. On the Plnd.Ind Reqmts Create: Planning table enter the monthly projections per the table. Hint: Make sure that the active indicator is not set. Save the planned independent requirements.

2.

Create a planning scenario in order to simulate the planning of the inactive planned independent requirements (version ##). Assign this scenario to plant 1000. Release and save the scenario. Number of the scenario: 0## (## = group number) Continued on next page

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Lesson: Long-term planning requirements

Text of scenario: Long-term scenario ## Use the settings indicated below: Planning Period (From)

Current month +7

Planning Period (To)

Last day of month + 12

Opening stock

1 - Safety Stock

Dep. rqmts for reorder point

Select

Consider sales orders

Do not select

Switch off planning time fence

Select

Use direct production

Do not select

Use make- to-order and project planning

Do not select

Include firm recepts

Do not select

Include firm purchase requisitions

Do not select

Include firm planned orders

Do not select

a)

Menu path: Logistics → Production → Production Planning → Long-Term Planning → Planning Scenario → Create

b)

Enter the scenario and description. Confirm your entries with Enter and make the following settings:

c)

Enter the settings required above.

d)

Assign plant 1000 to the scenario, by choosing plants followed by new entry

e)

. Make the respective entry and Confirm.

Assign your Planned independent requirements (version ##)to the scenario by choosing Planned Independent , followed by new

Requirements entry f)

,

. Make the respective entry and Confirm.

Release and save the scenario using . Confirm that you wish to release the scenario and create the planning file entries immediately.

Continued on next page

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Review the stock/requirements situation of material number R-F1##, plant 1000, and scenario 0##. Hint: It is a good idea to call the stock/requirements list for the scenario in a separate session, because you will use it to constantly monitor the planning progress. a)

4.

Does the system display the planned independent requirements for the version ## that flow into scenario 0## in the list? _________ a)

5.

Menu path: Logistics → Production→ Production Planning → Long-Term planning → Evaluations → Stock/Requirements List

Planned independent requirements of version ## displayed: Yes

Do the planned independent requirements that flow into scenario 0## appear in the operative stock/requirements list that you call from the MRP menu? _________ Why (not)? ________________________________________ a)

Independent requirements also in operative stock/requirements list: No Reason: Only active planned independent requirement versions are taken into account and displayed in operative planning. The independent requirement version ## is, however, not active.

6.

Execute long-term planning for material R-F1## in plant 1000 and scenario 0##. Later, you want to look at the capacity situation in scenario 0##, which is relevant for the production of material R-F1##, therefore the capacity requirements should be created in long-term planning. Field

Value

Processing Key

NETCH

Create MRP list

MRP List

Planning Mode

1 - Adapt Planning Data

Scheduling

2 - Lead time scheduling

Also plan unchanged components.

Select

a)

SAP ERP menu path: Logistics → Production → Production Planning → Long-Term Planning → Long-Term Planning→ Single-Item, Multi-Level Planning (MS02)

b)

Select

c)

Select

Enter twice to execute the run. Back twice to return to the main menu. Continued on next page

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Lesson: Long-term planning requirements

7.

Did the system create procurement elements to cover your planned independent requirements? ____________ a)

Review the stock/requirements list for material R-F1##, scenario ##. Menu path: Logistics → Production→ Production Planning → Long-Term planning → Evaluations → Stock/Requirements List

b) 8.

Procurement elements created: Yes

Switch to material R-T3## in the stock/requirements list for scenario 0##. What is the MRP type of the material and what significance does this have? ____________________________________________ Did long-term planning create dependent requirements? ________ a)

MRP type of material R-T3## can be seen directly in the header data of the S/R List: VB: Reorder point planning Dependent requirements created: Yes Dependent requirements were created, for this material, because in the planning scenario, we selected the indicator to create dependent requirements for reorder point materials.

9.

Activate the planned independent requirements version ##. These requirements will now be available for operative planning. Use the transaction Change planning scenario to activate the planned independent requirements. Starting from the long-term planning menu, you Choose Activate Independent Requirements. In the dialog screen that follows, select planned independent requirement version ## and as the target version enter the planned independent requirement version number 00. For the transfer period,

Continued on next page

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the system suggests the period that you had entered as the planning period in the scenario. Delete the indicator for Test mode, select the indicator Create list and then the button Activate. a)

Menu path: Logistics → Production → Production Planning → Long-term planning → Planning scenario → Change (MS32)

b)

Access your planning scenario 0##.

c)

Select Activate Independent Requirements .

d)

Enter data per the table below and select Activate. Check box - Version

Select

Target Version

00

From

Month+7

To

Month+12 (last day)

Test Mode

Do not select

Create List

Do not select

10. Call the operative stock/requirements list. Are the LSF requirements that you created in long-term planning displayed? _____________ In which planned independent requirement version are these requirements Display the element from the list in order to answer the question? _________ a)

LSF requirements displayed: Yes Planned independent requirements version: 00

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Lesson: Long-term planning requirements

Lesson Summary You should now be able to: • Discuss the usage of long-term planning • Execute long-term planning

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Unit Summary

SCM240

Unit Summary You should now be able to: • Discuss the usage of long-term planning • Execute long-term planning

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Test Your Knowledge

555

Test Your Knowledge 1.

Where are the settings for long-term planning defined?

2.

Identify the true statements: Choose the correct answer(s).

3.

□ □ □

A B C

□ □

D E

Sales orders must be included in the simulated plan. The PTF can be deactivated for the long term plan. Dependant requirements for Kanban and bulk materials can be created in the planning scenario. Using the current stock level is optional Planned Independent requirements can be transferred to the operative plan

The principle of long-term planning is to simulate different versions of the demand program. Determine whether this statement is true or false.

□ □

True False

4.

On which level are the capacity data calculated while executing long term planning?

5.

Operative data that is used in the long-term plan (ex. sales orders, Production orders, firm purchase requisitions and firm planned orders) can be changed in the simulative planning area. Determine whether this statement is true or false.

□ □

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True False

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Answers 1.

Where are the settings for long-term planning defined? Answer: Settings are made in the planning scenario.

2.

Identify the true statements: Answer: B, C, D, E Sales orders do not have to be included. Setting in the planning scenario.

3.

The principle of long-term planning is to simulate different versions of the demand program. Answer: True The principle of long-term planning is to simulate different versions of the demand program. It can optimize the demand program.

4.

On which level are the capacity data calculated while executing long term planning? Answer: Capacity data is calculated on detailed scheduling level while executing long term planning.

5.

Operative data that is used in the long-term plan (ex. sales orders, Production orders, firm purchase requisitions and firm planned orders) can be changed in the simulative planning area. Answer: False Only firmed planned orders can be changed in the simulation.

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Course Summary

Course Summary You should now be able to: • • • • •

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Gain an overview of the basic principals of SAP ERP Production Planning Demonstrate the tools that a production planner would use on a daily basis Demonstrate how Planning strategies are used to control the planning and inventory process Gain detailed working knowledge of MRP/MPS in SAP ERP Demonstrate how to configure MRP in SAP ERP

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Course Summary

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Index A

M

Assembly level planning, 196 ATP check, 588 Available to Promise ATP, 587

Material master record, 196 maximum quantity, 493 MPS items, 261 MPS schedule, 263 MRP elements, 47 MRP group, 116 MRP list, 51

B Backward scheduling, 397 Basic scheduling, 400 Bill of material, 133 BOM explosion, 401, 421 BOM explosion date, 441 BOM Explosion number, 446

C Capacity leveling, 263 Company-code clearing account, 357 Consumption, 193 Control parameters, 146

Net requirements calculation, 284

O Order Report, 42

P

Final assembly, 214 Firming period, 263 Forward scheduling, 399

Pegged requirements, 43 Phantom assembly, 197 Planned independent requirements, 218 Planning file, 148 Planning horizon, 150 Planning run, 127, 218 Planning segments, 34 Planning without final assembly, 212 Procurement proposal, 395 Procurement type, 352, 396 Production version, 437

I

Q

D Dynamic safety stock, 291

E Exception messages, 69

F

Item category stock transfer, 357

L Lead-time scheduling, 414 lot size, 491 Lot-size, 433 Low-level code, 126

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N

quota arrangement, 481 quota arrangement usage, 483 quota base quantity, 487 quota-allocated quantity, 487

R Receipt days’ supply, 79 Reduction, 419 requirement splitting, 490

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Index

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Requirements class, 244 Requirements/stock overview, 357 Rescheduling horizon, 286 Routing, 441

S Safety stock, 291 Safety time, 309 Sales order, 196 Selection rules, 45 source determination, 465 source list, 504

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source list requirement, 506 Special procurement key, 352 Stock in transit, 357 Stock transfer, 345, 353 Stock transport order, 353, 357 Stock transport scheduling agreement, 357 Supplying plant, 352

T Transfer posting, 345

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Feedback SAP AG has made every effort in the preparation of this course to ensure the accuracy and completeness of the materials. If you have any corrections or suggestions for improvement, please record them in the appropriate place in the course evaluation.

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