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SCM Master Data - 2
Master Data for Distribution &Production Processes
EGN 5623 Enterprise Systems Optimization(Professional MSEM)
Fall, 2011
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SCM Master Data - 2
Theories & Concepts
EGN 5623 Enterprise Systems Optimization(Professional MSEM)
Fall, 2011
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Distribution Planning in SCM (review)
THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal
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Time Horizons for Distribution andProduction Planning in SCM (review)
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Level of Detail and Time Horizonof Distribution and PP in APOModules (review)
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Distribution Planning and Production PlanningProcesses in APO Modules (review)
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Distribution and PP Modules in APO SystemStructure and Integration with ERP (review)
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Overview Master Data andApplication in DP and PP (review)
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Master Data and Application inDistribution Planning and PP (overview)
Master Data for Distribution Planning:
Location, Product, Resource, Transportation lane,
Quota arrangement, Interchangeability group.
Master data for Production Planning:Location, Product, Resource, PPM/PDS , Quota
arrangement, Set up Group & matrix, and
Interchangeability group.
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Master Data and Application in DistributionPlanning and PP (Overview)
Transportation lanes:
Transportation lanes are required from plant and
distribution center to the transportation zone and have to
be created manually. The allowed carriers have to be
assigned per means of transport and transportation laneexplicitly.
Quota arrangement (vendorss quota):
If it is intended to source from multiple locations on aregular basis, quota arrangement must be used. The
concerned products are assigned to the quota
arrangement, and the ratio of the resources is defined
per product.
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SCM Master Data - 2
Master Data for Distribution
Planning
EGN 5623 Enterprise Systems Optimization(Professional MSEM)
Fall, 2011
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Distribution and Supply ChainPlanning
Distribution planning between the manufacturing
plants and warehouses becomes important, as many
companies change their logistics processes from non-
coordinated local inventory management to a global
inventory management in order to reduce inventories.
The focus for distribution and supply chain planning is
on make-to-stock production.
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Distribution Planning, Supply ChainPlanning, and Replenishment
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Process Chain for Distribution andSupply Chain Planning
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Distribution and Supply ChainPlanning
1. Distribution planning is performed based on demand andstock information with the result of planned stock
transfers.
2. The most important issues are usually the netting of thelocal stocks, safety stock levels, sourcing options,
transportation times and lot sizes for the planned stock
transfers.
3. If required, restrictions are considered regarding storagecapacity and handling capacity for goods issue and
goods receipt.
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Distribution and Supply ChainPlanning
Two processes exist within replenishment:
1. Deployment, and
Deployment is concerned with the fair share of
quantities to the requesting parties in case of
shortage or surplus. The constraints areavailable quantities.
2. Transport load building.
Transport load building is one step closer to
execution and focuses on the creation of truckloads, where the task is to adjust the planned
stock transports to the available
trucks/transport means and take their capacity
restrictions into account.
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Distribution and Supply ChainPlanning
In SAP APO, there are four applications that support
distribution and production planning:
1. SNP heuristic
2. SNP optimizer3. CTM (with SNP or PP/DS master data)
4. PP/DS heuristics
li i f i ib i d
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Applications for Distribution andSupply Chain Planning
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Features of the Application forDistribution
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Distribution and Supply ChainPlanning
Distribution planning with SNP heuristic is often used in theenvironments where multiple sourcing is not an issue and
production is usually able to meet the demands, so that the
main task forSNP heuristic is to calculate the demands for
production planning based on local inventories, transportation
times, safety stocks and lot sizes.
SNP optimization allows a complete consideration of the supply
chain determinants (i.e., sources and cost, production capacity,
transport, storage and handling). The aim ofSNP optimizer is
to find a global optimum for supply chain based on cost andpenalty cost.
CTM pursues a priority based on approaches such as FIFS.
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Order Cycle for Stock Transfer
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Order Cycle for Stock Transfers
The stock transfer order has two aspects as a demand inthe source location and as a supply in the target location. The
documents differ in SAP ERP and SAP APO.
The creation of the planned stock transfer, deployment and
transport load building (TLB) is performed in SAP APO.
The execution part from the creation of the outbound delivery
in the source location until the goods receipt in the target
location is performed in SAP ERP, and the information is
displayed in SAP APO.
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Order Cycle for Stock Transfers
Three order types in SAP APO1. Planned stock transfer,
2. Deployment confirmed stock transfer and
3. TLB-confirmed stock transfer
They are matched to the stock transfer requisition and thestock transfer order in SAP ERP according to the setting for
SNP transfer (SAPAPO/SDP110).
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Order Flow for Stock Transfer onSAP ERP side
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Stock Transfer Order
Stock transfer order is first scheduled in SAP APO, thentransferred to SAP ERP and scheduled again in SAP ERP
according to the delivery date. The scheduled dates in SAP
ERP are not transferred back to SAP APO.
Stock transfers are executed according to the order dates inSAP ERP, therefore it is important to keep the scheduling in
SAP APO and SAP ERP consistent.
The transport duration in SAP APO is calculated using the
entry from the transportation lane, whereas SAP ERP uses
the planned delivery time of the material master of the target
location.
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Stock Transfer Scheduling
for transportation
for transportation
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Setting for Stock Transfer within andacross Company Codes in SAP ERP
Since SAP APO does not know any company codes, there isno difference in SAP APO whether stock transfers are planned
within one company code or across company codes. On SAP
ERP side, cross company stock transfers require the
additional settings. The assignment of the sales area and the
customer to the plant is made with maintenance viewV_001W_IV.
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Setting for Stock Transfer within andacross Company Codes in SAP ERP
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Setting for Stock Transfer AcrossSystems
Stock transfer across two SAP ERP systems is modelled by a
purchase order in the target plant and a sales order in the
source plant.
Setting for Stock Transfer Across
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Setting for Stock Transfer AcrossSystems
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SCM Master Data - 2
Master Data for Production
Planning Process
EGN 5623 Enterprise Systems Optimization(Professional MSEM)
Fall, 2011
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Production Master Data OverviewThe relevant master data for production planning:
LocationProduct
Resources
PPM and PDS
Quota arrangement,
Set up Group & matrix, andInterchangeability group.
Note on resources:SNP and PP/DS require a different view of the capacity.
SNP in bucketsPP/DS time-continuous capacity
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Resources for SNPThe idea of SNP is to perform an aggregated planning.
Since SNP is an application for bucket-oriented planning,the resources for SNP offer a certain capacity per time
bucket usually per day. The bucket resources provide
the capacity e.g. the amount of working hours per day
of the resource which is used for the capacity
consumption of the orders.
For the scheduling of the production orders, the factory
calendar is assigned to the resources. The standard
capacity is defined in the resource master.
Figure 13.13 shows these setting for the bucket
resource. Another way to define the capacity is the use of
a reference resource to save time.
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Settings for a Bucket Resource
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Resources for PP/DSIn PP/DS, scheduling and capacity consumption are not
separate steps, but the capacity is consumed by thescheduled operation.
The basic resource property in PP/DS is the working
time, which depends on the standard working hours, the
break time, and factory calendar.
Usually the available working time is modelled per shift,
and the shifts are assigned to a shift sequence to model
circumstances.
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Settings for PP/DS (single Resource)
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Production Master Data OverviewPPM
The Production Process Model (PPM) defines thedetailed information required for manufacturing a
product. The PPM combines routing and the bill of
materials (BOM) into one master data object. Each PPM
includes one or more operations. Each operation, inturn, includes one or more activities, for which materials,
relationships and resources are maintained. The
activities and resources defined in the PPM are assigned
to costs that are used by the SNP Optimizer and for finite
scheduling by Production Planning and DetailedScheduling (PP/DS).
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Production Master Data Overview
Supply Network Planning (SNP) is a long term, rough cut planning tool.
SNP requires a PPM with less information than the one used forproduction planning and detailed scheduling (PP/DS).
During a planning run, SNP can schedule resources down to the day. In
order to perform scheduling at the day level, the PPMs and resources
must be simplified. Additionally, when using optimization technologies, itis important to limit the number of inputs (materials) to find a proper
solution in a reasonable runtime.
Restriction to a specific lot size is required to determine the exact
production consumption or mode duration.SAP SCM allows you to generate SNP production process models
(PPMs) based on existing PP/DS PPMs.
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Production Master Data Overview
PDS (production data structure)SAP initially developed the Production Process Model
(PPM) to model manufacturing master data. It was
replaced in SCM 4.1 by PDS. However PPMs are still
supported.
In some industries modeling the production and evolution
of a certain product can be very complicated. When a
product has many variations due to customers choosing
a combination of features and options they typically usedthe variant configuration solution in standard SAP ERP.
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Production Master Data OverviewFrom SCM 4.1 on, the Production Data Structure (PDS)
is the key master data for all kinds of production planningrelated processes. The PDS is supported by the
applications of PP/DS, SNP, CTM and DP.
Like the PPM, the PDS corresponds to the production
version on SAP ERP system. Though both PPM and
PDS are still available as alternatives, there is no further
development for the PPM since SCM 4.0.
The main motivation to develop the PDS was to have anintegration of the Engineering Change Management
(ECM) and the Variant Configuration between SAP ERP
and APO.
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Structure of PDS and PPM
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Transfer of PPM and PDS
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Production Process Overview
Production Planning consists mainly ofcreation of plannedorder, purchase requisition for the demand, the detailed
scheduling to create a sequence for the orders which is
sufficiently capacity-feasible (usually in the short-term) and
execution of the production order. In many cases it is desired
to have at least a rough feasibility check of the production plan
in the mid-term as well.
The detailed scheduling is usually only performed for the short
term horizon.
Traditionally both production planning and scheduling are
limited to the plant level.
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Production Process Overview
If a supply chain contains alternative production plans(possibilities), the process becomes more complex. It often
requires an integrated distribution and production planning.
Depending on the business requirements it might be
favourable to create a rough-cut production plan for the mid-
term or even long-term before the more detailed production
plan. The approach represents the idea of a hierarchical
planning, i.e. to plan with less detail for the farther future and
has the benefits of avoiding unnecessary information andunnecessary system load and to have a tighter integration
with the distribution planning.
Process Chain for a Make to Stock
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Process Chain for a Make-to StockProduction
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Production Process Overview
Objectives for Production Planning: to meet the demand
to consider the resource capacities and the
material availabilities
to improve utilisation of the resources to low set up time
to minimise the stock, and
to minimise the work in process (WIP)
to improve stability of the plan
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Production Process Overview
1. Generally the complexity of a production planning taskincreases with the number of BOM-levels, number of
operations, and finite resources, the use of fixed, or
minimized lot sizes and sequence dependent set-up.
2. Though APS (Advanced planning and Scheduling)
systems allow theoreticallya one-step approach,
experience shows it is better and more reliable to keep the
constraints as less as possible in modeling and to use a
two step approach to create a feasible plan, i.e. infiniteproduction planning first and finite scheduling on the key
resources later.
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Order Cycle for Production
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Order Cycle for Production
The result of production planning are planned orders whichcontain the information about the dependent demand and the
capacity requirement in SAP APO.
The production orders are reduced by the order confirmation
and remain in SAP APO until it is technically completed.
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Production Planning Applications
SAP APO offers different applications for production planningand detailed scheduling. Production planning is supported by
the modules SNP and PP/DS with two different levels of
details.
- rough-cut and bucket-oriented planning (SNP), and
- time-continuous planning (PP/DS).
Detailed scheduling with the purpose of creating a sequence
for order execution is only supported by PP/DS since SNP is
limited to bucket-oriented planning and there is no sequencewithin a bucket.
Applications for Production
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Applications for ProductionPlanning and Scheduling
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Production Planning ApplicationsBased on the variety of the applications there are many
options for creating a feasible plan in SAP APO. Each has itsadvantages and disadvantages.
1. Distribution and medium-term production planning with
SNP heuristic, the SNP optimiser or CTM with SNP
master data, short-term production planning by
conversion of SNP orders to PP/DS orders anddetailed scheduling with the DS heuristics or PP/DS
optimiser.
2. Distribution planning with SNP heuristic, medium-term
production planning with SNP optimiser, short-term
production planning by conversion of SNP orders toPP/DS orders and detailed scheduling with DS
heuristic or PP/DS optimiser.
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Production Planning Applications3. Production planning for medium-term and short-term
horizon with higher level of detail in PP/DS using PPheuristics or TM and detailed scheduling with DS heuristic
or PP/DS optimiser.
4. Demand planning in SAP ERP especially when there is
already a sufficient solution using SOP or long-term
planning. Production planning is performed with PPheuristics, scheduling with DS heuristics or PP/DS
optimiser.
5. Demand planning and production in SAP ERP SAP APO
is used only for scheduling.
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Production Planning Applications6. Only medium-term production planning on rough-cut
level is performed in SAP APO either by SNPheuristic, SNP optimiser or CTM. The benefit is having
a capacity check and purchase requisitions for
components with long lead time. Planned orders are
transferred to SAP ERP, where production planning
and scheduling on detailed level are for the short-termhorizon.
7. Production planning is triggered by the sales order entry
either via CTP or multi-level ATP. Scheduling is
performed with scheduling heuristics or PP/DS
optimizer.
PP/DS optimiser is used only for scheduling, not for creation
of orders.
Scenarios for Production Planning
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gusing Different Applications
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Lot SizeLot sizes have a significant impact on the production planning
result and challenges for scheduling. The fixed, minimum andperiodical lot sizes in material master data increase the
complexity of the planning problem.
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Lot Size Methods
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Lot Size
Though CTM supports minimum and fixed lot sizes, but CTM
performs a finite planning and does not split orders across
buckets which might lead to a very low utilisation.
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SCMMaster Data - 2
Master Data for Distribution &Production Processes
SAP Implementation
EGN 5623 Enterprise Systems Optimization(Professional MSEM)
Fall, 2011
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PP/DS Module in SAP SCM
Note: Strategic network design issues
are not handled by SAP SCM
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Order Cycle for Stock TransfersThe outbound delivery for the stock transfer order is created
with transaction VL10B in SAP ERP, picking and the posting of
goods issue is done with the transaction VL02N in the
delivery.
Using the message type LAVA the inbound delivery in source
location can be triggered with the posting of the goods issue(or manually with the transaction VL31N).
For the use of deliveries it is necessary that a vendor is
assigned to the source location and that an info record exists
in SAP ERP.
The inbound delivery is transferred to SAP APO as a purchase
order memo with the significance of the stock transit.
i
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Exercises:1. Module 4 (Section 2)
Create a forecast for the finished products
Product groupCreate product group in SAP ERP system
Create SOP plan for product group
Create SOP plan
Transfer plan to demand management
Transfer plan
Check the transfer results in demand management
2. Module 5 (Section 2)Generation and activation of integration models
Integration models
Create integration model for plants in SAP ERP system
Activate integration model
Confirm data transfer in SCM system
Create integration model for DCs in SAP ERP system
Activate integration model for DCs in SAP ERP system
Confirm data transfer for DCs in SCM system
E i ( ti d)
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Exercises (- continued):
Create integration model for vendors in SAP ERP system
Activate integration model for vendors in SAP ERP system
Confirm data transfer for vendors in SCM system
Create integration model for customers in SAP ERP system
Activate integration model for customers in SAP ERP system
Confirm data transfer for customers in SCM system
Create integration model for materials at plant level in SAP ERP system
Activate integration model for materials in SAP ERP systemConfirm data transfer in SCM system
Create integration model for materials at DCs level in SAP ERP system
Activate integration model for DC materials in SAP ERP system
Confirm data transfer materials (DCs) in SCM system