EGN_5620_Enterprise_Production Planning Processes - Copy

Production PlanningProcesses

EGN 5620 Enterprise Systems Configuration (Professional MSEM)

Fall, 2012

Production PlanningProcesses

SAP Implementation


Fall, 2012

Business Process IntegrationJanuary 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. *MMPPSDFISDMMFIFIFIPP

SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.

January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Transaction Data (Review)Unlike master data, transactional data is dynamic - it constantly changes, usually many times per day Transactions data include organizational structure, master data, rules, as well as business activities


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order ReleaseGoods ReceiptOrder SettlementGoodsIssueProductionOrder RequestConfirmation ofProduction Order CompletionProduction order creation (Capacity Planning)Production Order Process (Make-to-Stock)


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order Request Regardless of the source of the trigger, the outcome of this step is a planned order.Planned order is a formal request for production.Planned order is a transaction document. In a planned order, the following information is defined:What products are neededHow many units of the products are neededWhen they are neededIn this step, no FI or CO documents are created, so there is no financial impact. There is no movement of materials.


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production OrderA production order is typically created by converting a planned order, but it can also be generated directly without using a planned order.Planned orders can be converted individually, collectively, or partially.A production order includes reference to PP master data, such as a BOM, routing, and work centers. BOM identifies materials to be used in production.Routing identifies operations needed for the order.Work centers are the working locations where operations are to be performed and work centers define the capacity requirement for the order.


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order (Creation)While creating a production order, the following actions are carried out:Select a routing: operations and sequences.Transfer the bill of materials from database for master data.Reserve items in stock, according to the bill of materialsGenerate the planned costsGenerate the capacity requirements for the work centersGenerate purchase requisitions for non-stock items and externally-processed operations


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order (structure)Production Order StructureHeaderOperationsCapacityComponentsCostsSchedulingSettlement RulesDocument LinkConfirmation


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order (data elements)Order headerOrder numberMaterial to be producedPlantQuantityScheduler (Dates)StatusPRT (Production Resource Tool)ToolingEquipmentOperationsTasks Work centersTimes, DatesStandard valueControl keysComponentsMaterial componentsQuantityRequired date


Production Order (Header) Time LineComponents (BOM)How (Routing)What (Finished good)How many

Production Order Preliminary CostA production order includes preliminary estimates for various cost components, such as material and overhead.Material costs are based on the costs of the components assigned to the production order. These costs are maintained in master data of each component. Production costs are based on data in work center, such as activity types and formulas that identify which activities (e. g. lab and setup) are required and in what quantity.

Production Order Preliminary CostThe costs are associated with appropriate accounts in general ledger, such as material consumption accounts.As production is executed, actual costs are assigned in the production order along with the preliminary cost estimates.After a production order has been completed, the cost accumulated in the production order must be settled. During settlement, the actual costs incurred are allocated to cost objects based on specified settlement rules.

Production Order ScheduleSAP calculates the production dates and capacity requirements for all operations within an orderScheduling function uses data from production order (quantity and dates) and work centers. Determines a RoutingOperation specific time linesMaterial Consumption PointsLinks to Material MasterScheduling Margin Key (Floats)Links to Work CenterFormulasStandard Inter-operation Times

Production Order (Document Link ) A production order may contain reference to various documents.A BOM for example, may include a document item. Production order often includes links to documents in the document management system (DMS).DMS is used to ensure the most current version of documents is employed during production.

Production Order (Availability Check)Automatic check to determine whether the components, production resources tools, and capacities in an order are availableIt can be automatic or manually executedIt determines availability on the required dateUnlike scheduling, availability checks are not repeated automatically if the production order is changed. It generates an availability log which displays:Results of the checkMissing parts listReservations that could not be verified

Production Order Release The time between scheduling and releasing an order is used for preparation needed for the processing of the order

Once an order is released, it is ready for execution. At this time, the user can:print shop floor documentsexecute goods movementsaccept confirmations against the order

Goods Issue for production Order Note:That when a production order is being created, it references a BOM that determines the necessary components to produce the goods, it also places a reservation on each of the components Upon release of the order (or operation) the reserved materials can be issued from inventory; and the system (SAP):Updates the reservationUpdates the inventoryAssigns costs to the order as actual costs

Goods Issue for production Order Effects of the Goods Issueupdates stock quantityupdates stock valueUpdates production order statusThree documents are created:material documentaccounting documentcontrolling document

Goods Issue for Production Order

Good Issue for Production Order

Confirmation of Production Order Completion Confirmations are used to monitor and track the progression of an order through its production cycleconfirmation can be done at the operation or order levelExact confirmation shortly after completion of an operation is essential for realistic production planning and control

January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Confirmation of Production Order CompletionCompletion confirmation Quantities of material usedOperations completedTimePersonnelCosts Planned costs and actual costsSettlement rule for the order for accounts/cost centersSettlement profileSettlement receiver


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Confirmation of Production Order CompletionCompletion confirmation:Confirms both the yield and scrap quantitiesCan do product receipt if automatic Goods Receipt (G/R) setGenerates labor cost based on activity costs


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Confirmation of Production Order Completion (Cost updated)Planned costsPrimary CostsMaterial Costs (BOM)Based on material master price for each componentUpdated when goods are issued to order, or when purchased materials are receivedCost for External ProcessingSecondary CostProduction Costs (Routing)Time cards from operationsMaterial Overhead CostsProduction Overhead CostsGets updated at completion confirmation


Confirmation of Production Order Completion

Confirmation of Production Order Completion (Labor cost is added)

Goods Receipt for Production OrderAcceptance of the confirmed quantity of output from the production order into stockEffects of the Goods Receiptupdate stock quantityupdate stock valueupdate production order (status)store price for future valuation changesThree documents are createdmaterial documentaccounting documentcontrolling document

Goods Receipt for Production Order

Goods Receipt for Production Order (Cost Target/Actual Comparison)

January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order Settlement Settlement RuleAutomatically assigned to order according to settlement rules defined in production orderDistribution rule (cost receiver, settlement share and type)


January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.*Production Order Settlement (Production Order Status)REL: ReleasedCRTD: CreatedPRT:PrintedPCNF:Partially ConfirmedCNF:ConfirmedPDLV:Partially ConfirmedDLV: DeliveredPRC:Pre-costed

GMPS:Goods movement postedMACM:Material CommittedMANC:Mat. Availability not checkedNTUP:Dates are not updatedSETC:Settlement rule created


Production Order SettlementSettling a Production Order to Stockpostings are made to the materials & labor and production order accounts with the value of the material and labor and received finished goods.difference between the debt posting and credit posting is posted to a price difference account**Material Price determined by the quantity produced times the Standard Price in the Material Master.

Production Order SettlementCosts analyzedPrimaryMaterialsExternal ProcessingSecondaryProduction, Administrative Overhead, andLaborCost Analysis ReportingCalculate and analyze planned costs, target costs, and actual costs of the production order.Calculate and analyze variances

Production Order Settlement

PEN, Inc.


Fall, 2012

Production Planning Processes

Actual Material Cost Line Items for Order

Actual Labor Cost Line Items for Order

Good Issue Material Document for Order

Confirmation Document for Order

Goods Receipt Material Document for Order

Exercises:

259. Create purchase order260. Create goods receipt262. Post invoice receipt from vendor263. Display vendors invoice (gross) document264. Post payment to vendor 276. Create a production plan277. Display stock/requirements list278. Transfer planning data to demand management279. Review demand management280. Display stock/requirements list281. Run master production schedule282. Display stock/requirement list283. Convert planned order to production order284. Issue goods to production order285. Confirm production completion

Exercises:

286. Receipt of goods from production order287. Settle costs of production order287A. Display stock/requirements list

**ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*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.

ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*You can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.You can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 2008*Since production costs were higher than planned, the additional expenditure negatively affects the operating profit. This means that the profit decreases by the amount by which the actual costs charged to the production order exceed the standard price.The actual costs charged to the production order affect net income just as the posting of the inventory change at the time of the goods receipt. Since the actual expense was 20 higher than expected, the operating profit is 200 lower than it would have been if production had been at standard cost.Calculate and analyze planned costs, target costs, and actual costs of production orders and process ordersCalculate or update the work-in-process inventory and the finished goods inventory Calculate and analyze variancesTransfer data to Financial Accounting (FI)Transfer data to Profitability Analysis (CO-PA)Transfer data to Profit Center Accounting (EC-PCA)Transfer data to Actual Costing / Material Ledger (CO-PC-ACT)

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EGN_5620_Enterprise_Production Planning Processes - Copy