Production Planning Master Data EGS 5620 Enterprise Systems Configuration Spring, 2016

Business Module for Selling Finished Goods by Production ECC 6.0 January 2008 Business Module for Selling Finished Goods by Production Pre-Sales Activity Sales Order Delivery Billing Planned Order Production Order Completion Confirmation In Inventory Plant or Warehouse Availability Check NO YES Goods Issued to Delivery Goods from Production Order General Ledger Accounts Inventory Postings Accounts Receivable Issue Goods to Production Order Purchase Requisition Purchase Order Goods Receipt Invoice Receipt Accounts Payable NO Can start out with a pre-sales activity Ended up in Order processing Became an order Make Plan execute production order Issue goods Complete to inventory Cost Assign to sales order Send to customer Bill customer Account for all activities Or January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

Production and Planning Master Data SAP Implementation

Business Process Integration ECC 6.0 January 2008 Business Process Integration FI MM PP SD Transactions Master Data MM PP SD Org Data Rules MM PP SD FI FI FI MM In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup. The legs are typically configured during the implementation process. During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution. PP SD © SAP AG and The Rushmore Group, LLC 2008

Business Process Integration ECC 6.0 Business Process Integration January 2008 PP Org Data Rules PP Master Data PP PP © SAP AG and The Rushmore Group, LLC 2008

PP Organizational Data Client An independent environment in the system Company Code Smallest org unit for which you can maintain a legal set of books Plant Operating area or branch within a company Manufacturing, distribution, purchasing or maintenance facility Storage Location An organizational unit allowing differentiation between the various stocks of a material in a plant Work Center An organizational unit that defines where and when an operation is performed Has an available capacity Activities performed are valuated by charge rates, which are determined by cost centers and activity types. Can be machine, groups of machines, people, production lines or groups of craftsmen

Global Bike Germany GmbH GBI Structure for PP Global Bike Client Global Bike Inc. Global Bike Germany GmbH Company Code Dallas Heidelberg Plant Raw Materials Raw Materials Semi-fin. Goods Semi-fin. Goods Storage Location Finished Goods Finished Goods Miscellaneous Miscellaneous Assembly Assembly Packaging Packaging (Work Center Location) Inspection Inspection

Organization Data Plant-specific organizational units ECC 6.0 Organization Data January 2008 Plant-specific organizational units MRP controller Production controller Production scheduler Planner group Person responsible (financially) Non-plant specific organizational units Capacity planner © SAP AG and The Rushmore Group, LLC 2008

BPI PP master data PP Master Data PP PP PP ECC 6.0 January 2008 © SAP AG and The Rushmore Group, LLC 2008

Master Data for Production Planning ECC 6.0 January 2008 Master Data for Production Planning Material Bill of Materials (BOM) Work Center Routing © SAP AG and The Rushmore Group, LLC 2008

Material Data (Review) Definition Physical objects to buy, transform into, sell, maintain other resources, or use in support for business activities. Generic classification(material types) : Trading goods Raw materials Semi-finished products (WIPs) Finished products Consumables (e.g., stationery, production tools) Spare parts (for maintenance)

ECC 6.0 January 2008 Bill of Materials BOM is a hierarchical structure of the materials needed to produce a finished goods or semi-finished goods. BOMs in SAP are defined as single-level, but can be constructed multi-level by nesting several single-level BOMs. Nesting refers to a hierarchy in which a bill of materials contains its own bills of materials. © SAP AG and The Rushmore Group, LLC 2008

Bill of Material Master Data ECC 6.0 Bill of Material Master Data January 2008 BOM in SAP consists of a header section and an item section. Header section includes data that apply to entire BOM, such as finished material number, plant, usage, validity, status, and base quantity. Usage identifies the purpose for which the BOM can be used. For example, 1 is for production. The BOM is valid from the date specified in the header. January 2008 © SAP AG and The Rushmore Group, LLC 2008

Bill of Materials Master Data ECC 6.0 Bill of Materials Master Data January 2008 Items section identifies all materials needed to make finished goods or semi-finished goods identified in the header. Data for each item are: item category, material number, description, & Quantity Item category Tell how material is used in the BOM. © SAP AG and The Rushmore Group, LLC 2008

ECC 6.0 January 2008 BOM MM Item Category L: Stock item N: Non-stock item R: Variable –size item T: Text item used to include notes and comments within the BOM. Notes may explain how to use the material or identify any unusual assembly requirement. D: Document item used to include document such as engineering drawings, assembly instructions, and photographs. © SAP AG and The Rushmore Group, LLC 2008

ECC 6.0 BOM MM Item Category January 2008 K: Class item used in variant BOMs to identify a class or group of items. A variant BOM is used to create multiple versions. M: Intra material, or phantom items used as a logical grouped set of materials that could collectively be considered as a single material. Phantom material is not an actual material and is mostly temporarily used during production planning. © SAP AG and The Rushmore Group, LLC 2008

Where to use BOM? MRP uses BOM to determine dependent requirements ECC 6.0 January 2008 Where to use BOM? MRP uses BOM to determine dependent requirements Controlling uses BOM to calculate product costs Production uses BOM to issue the proper quantities of components and raw materials to the shop floor © SAP AG and The Rushmore Group, LLC 2008

Bill of Materials – An Example 4. Seat Kit 5. Handle Bar 6. Pedal Assembly 7. Chain 8. Brake Kit 9. Warranty Document 10. Packaging BOM for a Bicycle 1. Wheel Assembly 1.1 Tire 1.2 Tube 1.3 Wheel 1.4 Hex nut 1.5 Lock Washer 1.6 Socket Head Bolt 2. Frame 3. Derailleur Gear Assembly Forecasting should be done primarily for end-item demand. In manufacturing situations, this means there is no real need for forecasting component parts which make up the final item. When production quantities for the end item have been determined, component demand can be computed based on the production plan of the end item and knowledge of the bill of materials (BOM).

Bill of Materials: Single-level Finished Bike Wheel Assembly Pedal Assembly Frame Chain Derailleur Gear Assembly Brake Kit Seat Kit Warranty Doc. Handle Bar Packaging

Single Level vs. Multi-Level BOM Finished Bike Single-Level Wheel Frame Derailleur Seat Handle Bar Pedal Chain Brake Doc. Pack. Tire Tube Wheel Hex nut Lock Bolt Multi-level

Variant Bill of Materials Several products with a large proportion of identical parts. Single-Level Deluxe Bike (red) Single-Level Professional Bike (black) Aluminum Wheel Pedal Assembly Carbon Wheel Pedal Assembly Frame red Chain Frame black Chain Derailleur Gear Assembly Brake Kit Derailleur Gear Assembly Brake Kit Seat Kit Warranty Doc. Similar products: small variations e.g. bike with a different color If you are producing several similar products that have a lot of common parts, you can describe these products using a variant BOM. This is the case, for example, if you replace one material component with another to make a different product. Variants can also differ by containing different quantities of a component. You create the new BOM as a variant of an existing BOM. Seat Kit Warranty Doc. Handle Bar Packaging Handle Bar Packaging

ECC 6.0 Work Center January 2008 Work center is a location where value-added work for producing a finished or semi-finished product is carried out. A work center can be a machine, a group of machines, an entire production line, a work area, or a person or group of people who are responsible for completing operations. A work center is a resource that can be used for a variety of purposes and for multiple processes. © SAP AG and The Rushmore Group, LLC 2008

Work Center - Capacities ECC 6.0 Work Center - Capacities January 2008 Work center used to define capacities Labor Machine Output Emissions Capacities used in Capacity requirements planning (CRP) Detailed scheduling Costing © SAP AG and The Rushmore Group, LLC 2008

Work Center – Where used ECC 6.0 Work Center – Where used January 2008 Work Center is used: To be assigned as cost center To be allocated with Human Resources (HR) Positions with requirements People with qualifications © SAP AG and The Rushmore Group, LLC 2008

Work Center Views Work Centers have multiple views of: Basic data ECC 6.0 Work Center Views January 2008 Work Centers have multiple views of: Basic data Default values Capacity overview Scheduling Cost center assignment Technical data © SAP AG and The Rushmore Group, LLC 2008

Work Center – Basic data section ECC 6.0 Work Center – Basic data section January 2008 Name, and description of the work center Person or group of people who are responsible for completing operations Task list: a list of operations that are required to accomplish a task. Operations are the specific tasks that must be completed, such as drilling, cutting, assembling. In production, a task list takes the form of a product routing or a master recipe. Standard value key: used to assign standard or planned values for operations, such as setup and execution times. Companies use these values to calculate costs, execution times, and capacity requirements. © SAP AG and The Rushmore Group, LLC 2008

Work Center – Basic data ECC 6.0 Work Center – Basic data January 2008 January 2008 © SAP AG and The Rushmore Group, LLC 2008

Work Center – Default Values ECC 6.0 Work Center – Default Values January 2008 Default Values: for operations performed at the work center. Control Keys: specify how an operation or a sub-operation is scheduling, how costs will be calculated, and how operations will confirmed once they are completed in the work center. Wage data: used by processes in human capital management, such as payroll. Standard value keys: identify the normal time elements – the activities that consume time associated with the work center. Typical time elements are setup time, machine time, labor time, and teardown time. © SAP AG and The Rushmore Group, LLC 2008

Work Center – Default Values ECC 6.0 Work Center – Default Values January 2008 January 2008 © SAP AG and The Rushmore Group, LLC 2008

Work Center – Capacities/Scheduling ECC 6.0 January 2008 Available capacity defines how much work can be performed at the work center. A work center can include more than one resource or capacity, such as labor and machine. Scheduling basis determines the specific capacity to be utilized for production. © SAP AG and The Rushmore Group, LLC 2008

Work Center - Capacities/Scheduling ECC 6.0 Work Center - Capacities/Scheduling January 2008 January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

ECC 6.0 Work Center - Costing January 2008 A work center is associated with a cost center which is a container for accumulation of costs. Costs associated with operations completed in a work center are calculated using formulas that utilize the costs and standard values associated with each activity type, for example, setup, labor, and machine. © SAP AG and The Rushmore Group, LLC 2008

Work Center - Costing ECC 6.0 January 2008 © SAP AG and The Rushmore Group, LLC 2008

ECC 6.0 Product Routing January 2008 A list of tasks or operations that must be performed to convert a material to a part, component, or product. Routing is a sequence of operations which detail the manufacture of a product Routings are used as a template for production orders and run schedules as well as a basis for product costing. © SAP AG and The Rushmore Group, LLC 2008

Routing Routing are used to determine: Operations Work centers ECC 6.0 Routing January 2008 Routing are used to determine: Operations Work centers Material components Production resources and tools Quality Checks © SAP AG and The Rushmore Group, LLC 2008

Time and Unit of Measure Routing – an Example Routing for Finished Bike Operation Plant Description Activity Type Work Center Control Key Time and Unit of Measure

Routing Use Routings will be used in Scheduling (dates, times) Costing ECC 6.0 Routing Use January 2008 Routings will be used in Scheduling (dates, times) Costing Capacity planning Production orders © SAP AG and The Rushmore Group, LLC 2008

Routing Standard Sequence Alternate Sequence Parallel Sequence ECC 6.0 January 2008 Routing Standard Sequence Alternate Sequence Parallel Sequence Operation 10 Operation 20 Operation 30 Operation 40 Operation 10 Operation 20 Operation 30 Operation 40 Operation 25 Operation 20 Operation 10 Operation 30 Operation 40 Operation 25 January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

Material Types Allowed in Production ECC 6.0 Material Types Allowed in Production January 2008 Multiple material types may be used in a routing/BOM Raw materials Semi-finished product Trading goods are allowed but not standard Text or Reference materials common © SAP AG and The Rushmore Group, LLC 2008

Controlling Activities for Production ECC 6.0 Controlling Activities for Production January 2008 Used to perform internal cost allocation, where activities by a cost center are measured Labor time Machine hours Output activities are valued Allocation of an activity type is always made with the allocation cost element created in activity type planning © SAP AG and The Rushmore Group, LLC 2008

Activity Prices Prices (costs) for planned activities ECC 6.0 Activity Prices January 2008 Prices (costs) for planned activities Fixed or Variable Labor = $$/hour Machine = $/hour Overhead = % © SAP AG and The Rushmore Group, LLC 2008

Activity Type/Price Planning ECC 6.0 Activity Type/Price Planning January 2008 © SAP AG and The Rushmore Group, LLC 2008

Product Group Aggregate planning that group together materials or other product groups (Product Families) Manufacturing procedure Product design Market niche, etc. Proportional Factors (Percentages for components) Aggregate forecasts of a group of similar products are generally more accurate than individual forecasts of the individual products that make up the group.

Product Groups Multi-level or single-level ECC 6.0 Product Groups January 2008 Multi-level or single-level A product group is multi-level if it contains other product groups Lowest level in a product group hierarchy always consists of materials. A product group is single-level if its members are materials only A material or product group can be a member of more than one owner product group © SAP AG and The Rushmore Group, LLC 2008

Production Group ECC 6.0 January 2008 © SAP AG and The Rushmore Group, LLC 2008

PP PP Rules Rules PP PP PP ECC 6.0 January 2008 © SAP AG and The Rushmore Group, LLC 2008

MRP Control Parameters ECC 6.0 January 2008 MRP Control Parameters Environment Number range Master Data MRP controllers Float times Planned Orders Conversion order type Dependant requirement availability © SAP AG and The Rushmore Group, LLC 2008

MRP Control Parameters ECC 6.0 January 2008 MRP Control Parameters Planning run Bill of Material (BOM) selection External procurement Planning horizon Availability Check Material Production Resource/Tool (PRT ) Capacity Scheduling Control Parameters January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

General Planning Parameters ECC 6.0 January 2008 General Planning Parameters Order Type Control Parameters Types of routings, BOM’s per order type: manually or automatically Availability checking Create Confirmation Parameters Reservations Status Updates Define Valuation of Goods Received Moving Average Price Control evaluation © SAP AG and The Rushmore Group, LLC 2008

MM Planning Parameters ECC 6.0 January 2008 MM Planning Parameters Materials Requirements Planning views for materials Work Scheduling views for manufactured products January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

Production and Planning GBI, Inc. Production and Planning Master Data

GBI. Organizational Structures Plant (DL## /MI##/SD## _) Client (250) Chart of Accounts (GL##) Company Code (US##) Fiscal Year Variant (K1) Credit Control Area (GL##) Purchasing Organization (US##) Group (N##) Controlling Area (NA##) RM## FG## Work Center ASSM10## INSP10## PACK10## SF## TG## MI## Work center (ASSY/INSP/PACK/MANT/SERV) Shipping Point (DL##/MI##/SD##)

BOM - Example ECC 6.0 January 2008 © SAP AG and The Rushmore Group, LLC 2008

ECC 6.0 Routing January 2008 © SAP AG and The Rushmore Group, LLC 2008

PPP Orders Planned Order (planning) Production Order (execution) A request created in the planning run for a material in the future (converts to either a production or purchase order) Production Order (execution) A request or instruction internally to produce a specific product at a specific time Purchase Order (execution) A request or instruction to a vendor for a material or service at a specific time A request or instruction from a purchasing organization to a vendor (external supplier) or a plant to deliver a quantity of material or to perform services at a certain point in time.

Exercises: (Due Date – 4/4/2016) 1. Determine work center location 2. Create activity type 3. Change activity output/prices 4. Determine person responsible 5. Create capacity 6. Create work centers 7. Create MRP views for raw materials 8. Create semi-finished goods 9. Create finished goods 10. Create bill of materials 11. Create product routings 12. Create product groups