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SAP PP: Production Planning for Small and Large Businesses

Systems Applications and Products in Data Processing – Production Planning also known as SAP PP is one of several development modules under Enterprise Resource Planning (ERP). The module focuses on how business managers can plan processes to align demand with manufacturing capacity and create production schedules for finished products and procurement schedules for component materials. Through the use of SAP PP, organisations can also create an automated workflow process and track costs and materials. 

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In this article, we explain the benefits of SAP PP, the master data in SAP PP and the process flow. 

Benefits of SAP PP

  • Control over the entire production process

With the SAP PP tool, organizations have a better oversight on consumers demands, their ability to meet the demands and also plan for the necessary resources needed to meet the demand. The tool also helps management make projections which makes it easier for them to plan thereby leaving little to no room for unexpected surprises.

  • Monitoring the shop floor jobs

The SAP PP tool also acts as an automated workflow system in which floor managers can have a look at planned jobs and compare to actual work in progress jobs.

  • Material requirement planning

Before you purchase materials for further production, you can make use of the SAP PP tool to know the amount needed to prevent buying in excess or lower than needed.

  • Capacity requirement planning

As a manufacturing outlet, you would want to know the maximum quota the resources you have can produce. The SAP PP makes it possible to do so.

  • Chance for integration with other modules

SAP PP is just one out of  other modules some of which include: SAP FI, SAP CO, SAP CD, SAP MM and, SAP QM among others. Having one of the SAP modules  makes it easier to integrate others.

Master Data in SAP Production Planning

SAP PP requires core data before it can be fully operational. They include:

  • Routing

A sequence of operations performed at the Work Center e.g. labour and machine hours.

  • Work Center

It represents the equipment or machinery used for production operations.

  • Material Master

This contains information on all materials a company procures, stores, produces or sells.Unique identifier numbers are used to differentiate materials based on their type e.g. raw material, work in progress etc.

  • Product Version

It is a combination of routing data and bill of material for production.

  • Bill of Material

This is a structured list of the type and quantity of materials needed to assemble or create a product.

When the above data is made available on the SAP PP, then the process flow can commence.

SAP Production Planning Process Flow

After providing the necessary data on routing, work center, material master and bill of material, the production planning module can be deployed as follows:

  • Planning Independent Requirement

At this stage, operations managers get to see an estimate of total goods required to complete an order, the estimated completion date for finished goods and also delivery dates. With this, companies can create a strategy on whether to produce to stock or produce based on orders received.

  • MPS (Master Production Scheduling) / MRP (Material Requirement Planning) Running

The MPS can be used to calculate the amount of materials needed to fulfil an order. With this managers can generate requisition notes to purchase raw materials. It also calculates production completion dates of planned orders and lead time scheduling.

  • Production Planning

To prevent bottlenecks in the operations process, the SAP PP leverages information to analyze possible capacity overloads and rearranges such orders. A maximum cap can be placed on production centers so as to create a constraint production plan.

  • Receive raw materials

The output of the MRP will determine the raw materials needed for production. After a raw material purchase requisition note is generated, managers need to wait for delivery before commencing production.

  • Production confirmation

As goods are being produced, a production order needs to be confirmed. You can choose between auto flush where the system automatically recognises the quantity of material used to create an order or you can choose manual confirmation of materials used and goods produced.

  • Production order close & settled

Once production has been concluded, and the order has been delivered, then it gets a completion status and is deleted from the stock list.

Conclusion

Planning and forecasting are key to efficient business operations. The SAP PP tool is one that offers managers the avenue to properly plan out their processes and map out resources to meet business demand.

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