Production Planning and Execution

Production Planning

is the process of aligning demand with manufacturing capacity in creating production and procurement schedules for the finished products and component materials.

Client

an independent environment in the system.

Company Code

the smallest organizational unit where a legal set of books can be maintained.

Plant

the operating area or branch within the company, such as manufacturing, distribution, purchasing, or maintenance facility.

Storage Location

allows differentiation between the various stocks of material in a plant.

Work Center Locations

define where and when the operation is performed. These can be machines, people, production lines, or groups of tradespeople.

Master Data Types

Material, Bill of Materials (BOM), Routing, Work Center, and Product Group.

Material Master

This master data contains all the information a company needs to manage a material.

Bill of Materials

This master data lists the components that make up a product or assembly.

Single-level

lists the main components

Multi-level

lists the main components and their sub-components.

Variant Bill of Materials

displays several products with many identical parts.

Item Category

It is an object that defines the items in a BOM according to criteria, such as the object type of the component, for example, material master record or document information record.

Item Categories

Stock Item, Non-stock Item, Variable Material, Document Item, Text Item

Routing

It is the series of sequential steps or operations that must be carried out to produce a given product.

Control Key

specifies how an operation or a sub operation is processed in functions such as orders, costing, or capacity planning.

Activity Type

is a unit in a controlling area that classifies the activities performed in a cost center.

Work Center

It is the location within a plant where Value-added work (operations or activities) is performed.

Product Group

It is aggregate planning that groups materials or other product groups (Product Families). It can be a multilevel or single-level, wherein the lowest level must always consist of materials.

Production Planning & Execution process

Forecasting, Sales and Operations Planning , Demand Management, Master Production Scheduling, Material Requirement Planning

Strategic Planning

involves the CEO, COO, CIO, CFO, Controller, and Marketing Director.

Detailed Planning

involves the Line Managers, Production Scheduler, MRP Controller, and Capacity Planners.

Manufacturing Execution

involves Line Workers and Shop Floor Supervisors.

Forecasting

It is the foundation of a reliable Sales and Operations Planning (SOP).

Trend

uses market research and consumer data to predict future trends.

Seasonal

used for predicting short-term customer demand at different times of the year.

Constant

uses the actual value of each period to predict the next.

Forecasting Models

Trend, Seasonal, Constant, Trend and Seasonal

Sales and Operations Planning (SOP)

Sales, Marketing, Manufacturing, Accounting, Human Resources, and Purchasing information came from this planning utilizing Intra-firm Collaboration (Institutional Common Sense).

SOP layers

Sales Plan, Production Plan, Rough Cut Capacity Plan

Demand Management

It is the planning of requirement quantities and requirement dates for finished products and important assemblies.

Master Production Scheduling

It allows a company to distinguish planning methods between materials that strongly influence profit or use critical resources and those that do not.

Material Requirement Planning

the system calculates the net requirements while considering available warehouse stock and scheduled receipts from purchasing and production.

External Procurement

Purchase Requisition, Purchase Order, Schedule Line

Internal Procurement

Planned Order, Production Order, Process Order

Planned Order

A request created in the planning run for material in the future (converts to either a production or purchase order).

Production Order

A request or instruction internally to produce a specific product at a specific time

Purchase Order

A request or instruction to a vendor for a material or service at a specific time.

Production Order

It is another PP Process used to control production operations and associated costs and defines the material produced, quantity, location, timelines, work involved, resources used, and cost settlement.

Schedule and Release

calculates the production dates and capacity requirements for all operations within an order. It determines a routing concerning the operation-specific timelines and Material Consumption Points.

Header Level

Entire order and all operations are released for processing, order is given a REL status

Operational Level

Individual operations within an order are released.

Shop Floor Documents

These are printed upon release of the Production Order.

Goods Issue (Material Withdrawal)

When a production order is created, it references a BOM to determine the necessary components to produce the material. It then places a reservation on each of the components.

Goods Receipt

It is the acceptance of the confirmed quantity of output from the production order into stock.

Confirmations

These are used to monitor and track the progression of an order through its production cycle.

Order Settlement

It consists of settling the actual costs incurred in the order to one or more receiver cost objects.