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SAP PP/PPPI Overview

SAP PP/PPPI Modules, Made-to-Order Versus Made to Stock, Steps in Implementing SAP PP/PPPI - Blueprinting, Configuration, SAP Functional Specifications, SAP ABAP developments, SAP Unit, String and IntegrationTesting, SAP Clients and Servers, SAP Data Management, SAP Cutover process
 
Study Material Contributed by Ulhas Kavle - Senior SAP Consultant 
 
 

Manufacturing Module is SAP PP called as SAP Production Planning and Control

 

SAP PP Sub Modules:

 

SAP PP - Discrete Manufacturing - Discrete manufacturing forms an industry type where in the products which are manufactured can be easily assembled and dis-assembled. They can be reworked upon easily to a large extent. You can say making pumps, engines, cars, airplanes.

 

SAP PPPI - Process Manufacturing - I feel that Process manufacturing forms an industry type where in the products which are manufactured cannot be easily dis-assembled once they are manufactured. It is impossible to be reworked upon these products. You can say making chemicals, medicine, Towels, Paper, Steel etc.

 

SAP REM - Repetitive Manufacturing - I feel that Repetitive manufacturing form an industry type where in the products manufactured can be discrete manufactured or process industry type, produced repetitively or continuously in production lines. This forms the continuous production scenario.

 

 

Master Data used in SAP PP/SAP PPPI

 

Master Data used in SAP PP/SAP PPPI


BOM -

A BOM is a list of components which are required for production of an assembly or subassembly.

In SAP PP/REM – BOM

In SAP PPPI – BOM


Work Center / Resource

A Resource or a Work Center is a place where work is carried out. It is exactly the same except for the category of the work centers in SAP PPPI is different.

In SAP PP/REM – Work Center

In SAP PPPI – Resources


Routing / Recipes


Routing or a Recipe has operations with work centers placed in a sequence of production.

Routing in SAP PP/REM is very different than Recipe in SAP PPPI.

In SAP PP/REM – Routing

In SAP PPPI – Recipe

Recipes have Phases in place of operation which holds the work centers in a sequence of production. Nevertheless operations are there which have significance other than acting as header to the Phases. All the scheduling happens at the phase level.

Recipes also hold the Process instructions which are treated as information for the shop floor operators or the legacy shop floor system on what is to be produced and how it is to be produced and what qty is to be confirmed for production and how much is to be received against the production order.

Such process instructions in turn except a return message from the shop floor about order confirmations quantities at the phases, order Goods receipt quantities and other QM inspection results and usage decision related data; these messages come back to SAP as Process Messages and book confirmation, GR, QM activities in SAP Tables.

The Recipes also have one unique difference that they hold the BOM in them through the use of Production Versions which carry these Recipes and BOM together. Thus when you create a Recipe you need to create or enter a valid Production version for the Header Material.

Such Combination of Recipe and BOM together might have also been set up together because SAP PPPI has an inbuilt concept called Material Quantity Calculations, through which you can change the quantity of component required through changes in characteristics values of the header product & other production parameters.


Production Versions -

Production Versions in SAP PP/REM and SAP PPPI is the same.

A Production version holds the BOM and Routing/Recipe used for production for a lot size and/or for a Validity period.

In SAP PP/REM – Production Versions

In SAP PPPI – Production Versions

 

Made to Order Vs Made to Stock Production

 
Made to Order Vs Made to Stock Production
 
Process in a Sequence
Made to Order
Made to Stock
 
 
 
Definition

When you specially produce and deliver a product for a customer's order, it is called "Made to order" Production. For example Production of Designer Jewelry, Production of Areoplanes, production of Special type of steel, High end instruments and vechiles etc.,

When you produce according to a periodic forecasted demand and sell the product to any incoming customer who wants to buy them, it is called "Made to Stock" Production. Example Mass Steel Production,  
Demand Form
Customer Places a Sales order. A Sales order for the demand is created in SAP.

Sales order in some cases is referenced from a previous enquiry or quotation of sales created. 
When you produce against a Periodic forecasted demand it is called Made to stock production. 

You can enter this forecasted demand in a tool in SAP called Planned independent requirements in the system.

Planned independent requrirements can also be derived/copied from Sales & Operation Planning system which contains demand from previous periodic Sales figures from the sales areas or Sales organizations or sales area or sales offices or plants or various combination of this (as per your requriements). These previous period figure for a product or a product group can be extrapolated to create the demand for the future periods.   
 
SAP Production Strategy
Every Material that is ordered should have a strategy that is - Made to order Strategy = 20, set in the Material Master  MRP 3 View, Strategy Group Field.

Strategy 20 is used for Made to order scenario, in which case the production is tagged with the customer order.

You should also set the Individual and collective Indicator in MRP 4 to = "1" - Individual requriement which specifies that this is an individual requirement not to be clubbed and produced individually for a given customer order.
Every Material that is Produced with a forecasted demand should have a strategy that is - Made to stock Strategy = 10, set in the Material Master  MRP 3 View, Strategy Group Field.

Strategy 10 is used for Made to stock scenario, in which case the production is not tagged
with the customer order.

You should also set the Individual and collective Indicator in MRP 4 to = "2" - Collective requriement or an field value which "Blank" - Individual and collective.
 
 
 
Transfer of Demand to MRP
Demand is Pushed to SAP MRP Tool 
Periodic demand is pushed to SAP MRP Tool
 
 
 
MRP Net Requirement Planning for the header Materials
MRP For its planning calculates the Net requirement planning

MRP analyses and evaluates the Customer Demand for the Ordered Material and while doing this it does not
check for availability of the Materials in stock and considers it as not available at the time of creating procurement proposals in MRP.

MRP Creates a Planned order for the total quantity of the customer order.
MRP Evaluates the Planned Periodic Demand for the Material and while doing this it checks for availability of the Materials in stock and computes the shortage quantities.

MRP creates a Planned order for the shortage quantities of this periodic demand.

To get the Shortage Quantities
- The system thereby compares available warehouse stock or the scheduled receipts from Purchasing and Production with planned independent requirements, material reservations and incoming sales orders. In the case of a material shortage, that is, if the available stock (including firmed receipts) is smaller than the quantity required, the system creates procurement proposals.
MRP Net Requirement Planning for the Dependent Requirements
After creating planned orders for the header material, if a certain dependent requirement or component has a procurement type - "In-House", then:

MRP then explodes the Bill of materials
for the header Material and plans the dependent requirements by evaluating the shortage quantities (Requirement qty - Available qty) and dates of the components required in production as per the BOM.

While creating the Procurement Proposals for the components, it takes in to considerations the Lot sizing procedures, special procurements, Quota arrangements.
After creating planned orders for the header material, if a certain dependent requirement or component has a procurement type - "In-House", then:

MRP then explodes the Bill of materials
for the header Material and plans the dependent requirements by evaluating the shortage quantities (Requirement qty - Available qty) and dates of the components required in production as per the BOM.

While creating the Procurement Proposals for the components, it takes in to considerations the Lot sizing procedures, special procurements, Quota arrangements.

MRP Planned order for Externally procured demands
After creating planned orders for the header material, if a certain dependent requirement or component has a procurement type - "Externally Procured", then:

MRP Creates Planned orders or purchase requisitions for the externally procured dependent requirement, only for the shortage quantities (Requirement qty - Available qty).

While creating the Procurement Proposals for the components, it takes in to considerations the Lot sizing procedures, special procurements, Quota arrangements.

The procurement proposal is also scheduled which means that, for materials procured externally, the delivery and release dates are determined, and for materials produced in-house, the production dates are calculated.
After creating planned orders for the header material, if a certain dependent requirement or component has a procurement type - "Externally Procured", then:

MRP Creates Planned orders or purchase requisitions for the externally procured dependent requirement, only for the shortage quantities (Requirement qty - Available qty).

While creating the Procurement Proposals for the components, it takes in to considerations the Lot sizing procedures, special procurements, Quota arrangements.

The procurement proposal is also scheduled which means that, for materials procured externally, the delivery and release dates are determined, and for materials produced in-house, the production dates are calculated.

MRP Explosion of Routing or Receipes
After Calculating the Proposal quantities for Inhouse Procuded Materials, the System explodes the Routing or Recipes (if MRP is set at Lead time scheduling) which helps in correctly evaluating the basic order start date and basic order end date. MRP system calculates the operation execution dates and inturn the order execution time from a forward start date or from a backward end date provided (normally set at backward scheduling in Scheculing Parameters customizing). Material floats and operation floats (buffers) are taken into account while deriving the dates.

If MRP is set at Basic Scheduling - Then the basic start date and end date is calculated using the flat Material Master Lead times.

After Calculating the Proposal quantities for Inhouse Procuded Materials, the System explodes the Routing or Recipes (if MRP is set at Lead time scheduling) which helps in correctly evaluating the basic order start date and basic order end date. MRP system calculates the operation execution dates and inturn the order execution time from a forward start date or from a backward end date provided (normally set at backward scheduling in Scheculing Parameters customizing). Material floats and operation floats (buffers) are taken into account while deriving the dates.

If MRP is set at Basic Scheduling - Then the basic start date and end date is calculated using the flat Material Master Lead times.

Conversion of Planned orders
Once the Planned orders and Purchase requisitions are created, they are converted to Production orders or Process order/Purchase orders.  

Production Supervisors or Planners
convert the planned orders to Production orders or Process orders.

Purchasers
would convert the Planned orders or Purchase requisitions to Purchase orders.

Once the Planned orders and Purchase requisitions are created, they are converted to Production orders or Process order/Purchase orders.  

Production Supervisors or Planners
convert the planned orders to Production orders or Process orders.

Purchasers
would convert the Planned orders or Purchase requisitions to Purchase orders.

 
 
 
Production order creation
Production order adopts the planned order information such as Quantities, Basic Start Date, Basic Finish Dates, operation dates, component quantities.

Production Orders are created and released on the shop floor. Before saving and releasing the order, the production scheduler or planner can change the quantities, dates and component quantities, operation scheduling information.

The Production order which is created has a link to the customer order.

Production order adopts the planned order information such as Quantities, Basic Start Date, Basic Finish Dates, operation dates, component quantities.

Production Orders are created and released on the shop floor. Before saving and releasing the order, the production scheduler or planner can change the quantities, dates and component quantities, operation scheduling information.

The Production order has no link to any customer atall. 
Purchase order creation
Purchase orders which are created through the conversion process are released and sent to the Vendors. 
Purchase orders which are created through the conversion process are released and sent to the Vendors.

Production order Shop Floor Execution
Once the Production orders are Released, they are thrown on the shop floor for Production:

a) Every Operation confirms the production against each order once they produce the required quantities of that order.

b) Once all the operations are confirmed for all the quantities, the production order gets the status "CNF" - Completely confirmed.

 
Once the Production orders are Released, they are thrown on the shop floor for Production:

a) Every Operation confirms the production against each order once they produce the required quantities of that order.

b) Once all the operations are confirmed for all the quantities, the production order gets the status "CNF" - Completely confirmed.
 
Goods issue to the Production order 
At the time of confirmation or Parellel to the Confirmation process or after the confirmation process, the supervisor/respective operator issues the components to the production order.

The Operator or Supervisor gets a list of all the components that are required for production through a reservation list created in SAP (a reservation list is created for every order at the time of order creation).
At the time of confirmation or Parellel to the Confirmation process or after the confirmation process, the supervisor/respective operator issues the components to the production order.

The Operator or Supervisor gets a list of all the components that are required for production through a reservation list created in SAP (a reservation list is created for every order at the time of order creation).


Goods Receipt from the Production order
The Products which are fully manufactured against the order are received to the "Finished Goods Storage Location" through a SAP Material Movement called "Goods receipt against the Production order - Movement type 101".

The Received Materials in a MTO scenario have a tag of the customer order and customer against them and they cannot be issued or delivered to any other customer order.

The Products which are fully manufactured against the order are received to the "Finished Goods Storage Location" through a SAP Material Movement called "Goods receipt against the Production order - Movement type 101".
Order Settlement 
Orders which are received in to stock are settled by the finance team.
Orders which are received in to stock are settled by the finance team.