Introduction to Production Planning (PP) module in SAP ERP system

Overview of Production Planning (PP) Module in SAP ERP System

Production planning (PP) is a module in SAP ERP system that helps businesses plan and execute manufacturing operations efficiently. It allows companies to define and manage production processes, track production orders, and monitor inventory levels, among other functions.

The PP module integrates with other modules, such as Materials Management (MM), Sales and Distribution (SD), and Financial Accounting (FI), to ensure that the production planning and execution processes are seamlessly integrated with other business operations.

Some of the key features of the PP module include:

  1. Master data management: PP module enables businesses to manage master data, such as bills of materials (BOMs), work centers, and routing information.

  2. Capacity planning: The module provides tools to help organizations plan and manage production capacity, ensuring that production is aligned with available resources.

  3. Material requirements planning: PP module allows companies to calculate material requirements based on production schedules and inventory levels, helping to ensure that materials are available when needed.

  4. Production execution: The module provides tools to manage production orders and track progress against production schedules.

  5. Shop floor control: PP module enables businesses to manage and monitor production activities on the shop floor, such as recording production data and managing quality control processes.

  6. Reporting and analytics: The module provides a range of reports and analytics to help businesses monitor and analyze production performance, identify areas for improvement, and optimize production processes.

By using the PP module, businesses can streamline production planning and execution processes, reduce costs, and improve operational efficiency.

Overview of Production Planning Process in SAP ERP System

Production planning is a critical function of any manufacturing organization. It involves the development of a plan that outlines the production schedule, materials required, and resources needed to meet the production goals of the organization. The goal of production planning is to ensure that products are produced efficiently, on time, and within budget.

The production planning process typically involves the following steps:

  1. Forecasting demand: This involves estimating the demand for the product over a specific period, based on historical data and market trends.

  2. Creating a production plan: The production plan outlines the production schedule, materials required, and resources needed to meet the forecasted demand. It also considers factors such as lead times, production capacity, and inventory levels.

  3. Creating a bill of materials (BOM): The BOM lists all the materials and components required to manufacture the product.

  4. Creating a routing: The routing specifies the sequence of operations required to manufacture the product, including the work centers, operations, and resources needed at each stage.

  5. Scheduling production: The production schedule specifies the start and end times for each operation, based on the availability of materials, resources, and production capacity.

  6. Monitoring and controlling production: This involves tracking the progress of production against the production plan, identifying any variances, and making adjustments as needed.

  7. Closing production orders: Once the production is complete, the production orders are closed, and inventory is updated.

Effective production planning can help organizations improve efficiency, reduce costs, and increase customer satisfaction. It requires close collaboration between different departments, such as production, procurement, and sales, as well as the use of technology tools, such as Enterprise Resource Planning (ERP) systems.

Overview of Key Business Processes in SAP Production Planning (PP) Module

The Production Planning (PP) module in SAP ERP system supports various business processes related to production planning and control. Some of the key business processes in PP include:

  1. Sales and Operations Planning (S&OP): S&OP is a process that involves balancing the demand and supply of products over a specific period, typically six to twelve months. The S&OP process in SAP PP involves forecasting demand, creating a production plan, and reviewing the plan with different departments, such as sales, production, and procurement.

  2. Master Production Scheduling (MPS): MPS is a process that involves creating a detailed plan for production over a specific period, typically three to six months. The MPS process in SAP PP involves creating a master production schedule based on the sales forecast, determining the production capacity, and adjusting the schedule based on resource availability and inventory levels.

  3. Material Requirements Planning (MRP): MRP is a process that involves planning the materials required for production based on the production schedule. The MRP process in SAP PP involves creating a bill of materials, determining the net requirements for each material, and generating purchase requisitions or production orders based on the requirements.

  4. Production Order Management: Production order management is a process that involves creating and managing production orders for individual products. The production order management process in SAP PP involves creating production orders, releasing them for production, tracking their progress, and closing them once production is complete.

  5. Capacity Planning: Capacity planning is a process that involves determining the production capacity required to meet the production schedule. The capacity planning process in SAP PP involves determining the available capacity for each work center, planning the capacity required for each production order, and leveling the capacity to avoid overloading work centers.

  6. Shop Floor Control: Shop floor control is a process that involves monitoring and controlling the production process on the shop floor. The shop floor control process in SAP PP involves tracking the progress of production orders, updating the status of operations, and identifying any issues that may impact production.

Effective implementation of these business processes can help organizations improve production efficiency, reduce costs, and enhance customer satisfaction. The SAP PP module provides various tools and features to support these processes, such as demand management, capacity planning, material planning, and production order management.


An Overview of Production Order Process in SAP Production Planning (PP) Module

In SAP Production Planning (PP) module, a production order is created to produce a specific quantity of a product on a specific date. It contains all the information needed to produce the product, such as the materials required, the work center where the production will take place, and the routing that describes the sequence of operations required to produce the product.

The production order can be created based on the sales order or the forecasted demand. Once the production order is created, it goes through various stages of production, such as release, confirmation, and goods receipt. Here is an overview of the key steps involved in a production order:

  1. Creation: The production order is created in SAP PP module. The order specifies the material to be produced, the quantity to be produced, and the production date.

  2. Release: The production order is released to begin the production process. Once the order is released, the material components are issued to the production line.

  3. Scheduling: The production order is scheduled to determine the start and finish dates of each operation required to produce the material. This includes determining the availability of resources such as labor, machines, and materials.

  4. Execution: The actual production of the material takes place in this stage. The work centers perform the operations specified in the routing, and the material components are assembled to produce the finished product.

  5. Confirmation: After the production is complete, the production order is confirmed to verify that the production was carried out according to the plan. The confirmation also updates the inventory and production data in the system.

  6. Goods receipt: The finished product is received into inventory, and the production order is closed.

Overall, the production order in SAP PP module helps to streamline the production process by providing a detailed plan for production, optimizing resource utilization, and tracking the progress of production.

Creating Planned Independent Requirements in SAP Production Planning (PP) Module

Planned Independent Requirements (PIR) are a type of demand in the SAP Production Planning (PP) module that can be used to plan the production of materials based on future sales forecasts. Creating PIRs is an important step in production planning as it allows the company to forecast demand and plan for production accordingly.

Here are the steps to create planned independent requirements in SAP PP module:

  1. Create a Material Master: Before creating a PIR, the material master record for the product needs to be created in SAP MM module. The material master record contains information about the product, such as the material type, unit of measure, and plant.

  2. Access the Planning Table: In SAP PP module, the planning table is used to create and maintain planned independent requirements. The planning table is accessed via transaction code MD61.

  3. Create a PIR: In the planning table, select the material and enter the forecasted demand for each period. This demand can be entered manually or generated using statistical forecasting techniques. You can also enter the validity period for the PIR.

  4. Save the PIR: Once the PIR has been created, save the changes in the planning table. The system will automatically generate a planned order for the material based on the PIR.

  5. Monitor the PIR: You can monitor the planned independent requirements using various reports in the SAP PP module. The reports allow you to view the forecasted demand for each period and compare it to the actual demand.

By creating planned independent requirements in SAP PP module, companies can optimize their production planning processes by forecasting demand and planning for production accordingly. This helps to avoid stockouts, excess inventory, and other issues that can negatively impact the supply chain.

Executing the MRP live planning run

The Material Requirements Planning (MRP) process in SAP Production Planning (PP) module is used to ensure that materials are available for production and that production is carried out according to the production plan. The MRP live planning run is an important step in the MRP process as it generates procurement proposals and production orders based on current demand.

Here are the steps to execute the MRP live planning run in SAP PP module:

  1. Define the Planning Parameters: Before running MRP, you need to define the planning parameters such as the planning horizon, planning type, and MRP group. These parameters are defined in the material master record for the product.

  2. Run the MRP Live Planning Run: The MRP live planning run can be executed via transaction code MD01. In this transaction, select the material and the plant for which you want to run MRP, as well as the planning horizon and other parameters. The system will generate procurement proposals and production orders based on the current demand.

  3. Review the MRP Results: Once the MRP run is complete, you can review the results using transaction code MD04. This transaction displays the planned orders and purchase requisitions generated by MRP, as well as the current stock levels and the planned receipts and issues.

  4. Process the Procurement Proposals: The procurement proposals generated by MRP need to be processed in order to convert them into purchase orders or production orders. This can be done using transaction codes such as ME21N for purchase orders and CO01 for production orders.

  5. Monitor the Production Process: After the procurement proposals have been processed, the production process can begin. You can monitor the production process using various reports in the SAP PP module, which allow you to view the status of production orders and the availability of materials.

By executing the MRP live planning run in SAP PP module, companies can ensure that materials are available for production and that production is carried out according to the production plan. This helps to optimize the production process and avoid stockouts and other issues that can negatively impact the supply chain.

Executing a Discrete Production in SAP PP

Discrete production is a type of manufacturing process that involves the production of distinct or separate items. This type of production can be executed in SAP using the Production Planning (PP) module. Here are the steps involved in executing a discrete production in SAP:

  1. Create a Material Master: Before executing a production order, you need to create a material master record for the finished product that you want to produce. In the material master record, you specify the basic information about the product, such as its description, unit of measure, base unit of measure, and so on.

  2. Create a Bill of Materials (BOM): A BOM is a list of all the components and their quantities required to produce the finished product. To create a BOM, you need to specify the materials required and their respective quantities.

  3. Create a Routing: A routing is a list of operations required to produce the finished product. To create a routing, you need to specify the sequence of operations required to produce the finished product.

  4. Create a Production Order: Once you have created the material master record, BOM, and routing, you can create a production order. In the production order, you specify the quantity of the finished product to be produced, the plant where the production will take place, the order type, and the dates for the start and completion of the production.

  5. Release the Production Order: After you have created the production order, you need to release it so that the production can begin. The production order is released by setting its status to "Released."

  6. Issue Materials: Once the production order is released, the materials required for production are issued to the production department. This involves transferring the materials from the warehouse to the production department.

  7. Execute Production: With the materials issued and the production order released, the production department executes the production by following the operations specified in the routing.

  8. Confirm Production: Once the production is complete, the production department confirms the production by recording the actual quantities produced and the time taken for each operation.

  9. Post Goods Receipt: After the production is confirmed, the finished products are moved to the warehouse, and a goods receipt is posted to update the inventory.

  10. Settle Production Order: The final step is to settle the production order by calculating the actual costs incurred for the production and comparing them with the planned costs.

These are the steps involved in executing a discrete production in SAP.

SAP Transaction Codes in PP Module

Here are some commonly used SAP transaction codes in PP module:

  1. MD02 - MRP
  2. CO01 - Create production order
  3. CO02 - Change production order
  4. CO03 - Display production order
  5. MF50 - Planning table for production orders
  6. MF60 - Execute planned order
  7. MD04 - Display stock requirements
  8. MD03 - MRP for single item
  9. MM01 - Create material master
  10. MM02 - Change material master
  11. MM03 - Display material master
  12. CS01 - Create BOM (Bill of Materials)
  13. CS02 - Change BOM
  14. CS03 - Display BOM
  15. CA01 - Create Routing
  16. CA02 - Change Routing
  17. CA03 - Display Routing.

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