When it comes to aligning consumer demand with manufacturing capacity, having a solution that allows you to keep all your important production data in the same place and gives you the resources needed to optimize production through every step of the supply chain is crucial.
The solution? SAP Production Planning.
Read on to learn more about SAP’s Production Planning module, as well as where our senior-level SAP consultants can fit in your organization to help you get the most out of your enterprise resource planning (ERP) solutions, like SAP.
What is Production Planning?
Production planning (PP) is a process that identifies and defines a company’s planning strategies, including the raw material, equipment, personnel, capacity, training, and routing methods required to produce quality goods on time and within budget.
And, with optimized production planning software capabilities, your project teams can accurately map the production process for turning raw materials into tangible goods, specify production type and settings for the manufacturing process, and optimize production operations across all areas of the organization.
How Does SAP Production Planning Help?
The SAP Production Planning (SAP PP) module is one of the main components of the SAP ERP Central Component (ECC), and it’s designed to outline, manage, monitor, and optimize manufacturing process flows throughout the entire supply chain.
SAP’s Production Planning module helps companies maximize their SAP investment by including planning, management, and maintenance functions for Material Requirement Planning (MRP), Supply Chain Planning (SCP), Bill of Materials (BOM), and Capacity Planning (CP) within the SAP ERP system.
With the SAP PP module, companies are enabled to…
- Monitor the movement of materials and goods in real time
- Leverage demand management functionality to estimate goods requirements and predict delivery dates for finished products
- Compare planned and actual costs of production across the supply chain
- Optimize demand and inventory management to ensure customer needs are met
- Release production order more efficiently to indicate the end of production
Main Components of the SAP PP Module
Processing Industry (PP-PI)
The PP-PI process is typically used to optimize process manufacturing functions in areas of an organization that use batch management to differentiate each item produced.
Repetitive manufacturing is leveraged when production occurs in total quantity rather than lots, and the same product is produced in the same way over time.
Discrete Manufacturing (PP)
Discrete manufacturing processes in SAP involve using order-based production to manufacture products whose quantity and demand change according to customer and industry needs and requirements.
The Big Five Master Data Sources in SAP
1) Work Center
A work center in SAP is a business object that can represent actual work centers, including production lines, machine groups, employees, assembly centers, and more.
Work centers are used in routing and production order processing within SAP PP, and they give users the functionality needed to calculate production capacity, schedule and route orders, track production orders, and determine total costs of operation.
Work center data is used in task list operations like Routing, and it contains the information needed to manage and optimize scheduling, costing, and capacity planning operations throughout the organization.
Routing data is used to schedule operations across the manufacturing floor, calculate standard costs of production, specify machine and labor time for each step of the production process, and provide a sequence of operations performed in SAP work centers.
3) Bill of Materials
A bill of materials (BOM) is designed to simplify material requirement planning and product costing processes, and it gives companies a comprehensive view of the raw materials and other product components needed to manufacture or repair a certain product.
There are two main types of BOMs…
- Manufacturing BOMs
- Engineering BOMs
BOMs are often shown in a hierarchical way with the finished product at the top and individual materials and components further down the list. And, by providing improved material visibility across the supply chain, bills of materials enable companies to ensure correct and efficient product manufacturing processes across the board.
4) Material Master
This kind of data contains important information about all of the materials a company produces, sells, and stores as inventory throughout their supply chain. The data for materials with similar attributes are grouped together, and each group is assigned to a specific material type, such as raw or finished, in the SAP system.
Material master data can be used to verify and post invoices, purchase materials, manage sales order fulfillment, track goods receipt and issuance processes for the movement of goods, and monitor business processes involved in production scheduling, planning, and confirmation.
5) Production Version
Product version data combines both routing data and BOMs to determine the necessary steps for the manufacturing process. A production version outlines the specific links between BOMs and routing data and determines which alternative BOMs are used with specific tasks to create a master production schedule or produce certain materials in the supply chain.
Key Integrations with Other SAP Modules
To perform and optimize production planning and control activities within your SAP ERP system, the SAP PP module contains built-in integration capabilities with other SAP applications, including…
SAP Material Management
Integrations with the Material Management (MM) module involves tracking the movement of goods, producing automated goods receipts, and creating reservations for production order and planning processes.
With integrations between SAP PP and SAP MM, users are further enabled to leverage material requirement planning run (MRP Run) to raise purchase orders and optimize vendor and quote selection across the board.
SAP Financial Accounting & Controlling
SAP PP integrates with the SAP Financial Accounting and Controlling (FICO) module to more efficiently define activity types in the cost center, update pricing information in material master data, and estimate costs across the supply chain.
SAP PP and FICO integrations allow customers to take advantage of improved visibility and accessibility to master data to enhance production cost controlling processes and manage accounting activities (i.e., material requests, goods movement, etc.) more effectively.
SAP Sales & Distribution
Integration with the Sales and Distribution (SD) module gives SAP users the functionality needed to accurately and efficiently check the availability and status of materials for a production order.
SAP PP works with SAP SD to perform MRP Run and keep better track of BOM components to optimize sales, manufacturing, and distribution processes and make the most of their SAP investment in the process.
How Can We Help?
Whether you need a high-level SAP PP overview to help your staff understand how the system operates, additional support configuring integrations between SAP Production Planning and other SAP modules, an extra hand building a master production schedule to optimize supply chain planning processes, or anything else SAP-related, Surety Systems is here to help.
Our team of senior-level SAP consultants has the technical skills, functional expertise, and real-world experience needed to guide you to success, regardless of the size, scope, and scale of your SAP system or individual project needs.
Getting Started with Us
Interested in learning more about our SAP consulting services? Need someone on your team to handle SAP PP training for your internal employees? Ready to get started on a project with our team at Surety?
Contact us today to get connected with one of our experienced SAP consultants!