Production Planning and Execution (PP)

Production Planning

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

PP Organizational Structure

Client

Company Code

Plant

Storage Location

Work Center Locations

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.

PP Master Data

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

Master data

contains all the information a company needs to manage a material. It includes the General Data of the material, Material Requirement Procedure (MRP), Lot Size Data, and MRP Areas.

Bill of Materials (BOM)

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

three (3) different kinds of BOM

Single level

Multi Level

Variant Bill of Materials

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

The Item Categories include the following:

o Stock Item

o Non-stock Item

o Variable Material

o Document Item

o Text Item

Routing

It is the series of sequential steps or operations that must be carried out to produce a given product. It contains each step's what, where, when, and how.

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. It can represent people or groups of people, machines or groups of machines, and assembly lines.

Product Group

It is aggregate planning that groups materials or other product groups (Product Families

processes are divided into three (3) layers

• Strategic Planning

• Detailed Planning

• Manufacturing Execution

Strategic Planning (Forecasting and SOP),

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

Detailed Planning (MPS and MRP)

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

Forecasting

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

Forecasting Models include the following, which can be selected automatically or manually:

o Trend

o Seasonal

o Constant

o Trend and Seasonal

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.

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 consists of three (3) layers

• Sales Plan,

• Production Plan, and

• Rough Cut Capacity Plan

Demand Management

It serves as the link between the Strategic Planning and Detailed Planning layers in Production Planning and Execution. It is the planning of requirement quantities and requirement dates for finished products and important assemblies.

Demand Program

The result of this process is called the

Master Production Scheduling (MPS)

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 (MRP)

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

Lot Size Calculations

• Static

• Periodic

• Optimized

Static

based on fixed values in the Material Master

Periodic

groups net requirements together from multiple periods.

External Procurement

(Purchase Requisition, Purchase Order, Schedule Line)

Internal Procurement

(Planned Order, Production Order, Process Order).

The output of MRP is a detailed production and/or purchasing plan:

o Planned Order

o Production Order

o Purchase Order

Planned Orde

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.

The Manufacturing Execution Process includes the following operations:

• Production Proposal

• Capacity Planning

• Schedule and Release

• Shop Floor Documents

• Goods Issue

• Completion Confirmation

• Goods Receipt

• Order Settlement

Schedule and Release

Scheduling calculates the production dates and capacity requirements for all operations within an order

he release operation has two (2) processes:

• Header Level: Entire

• Operational Level

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. A REL status is given to the order if the last operation is released. Until then, the order is given a PREL status.

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.

Confirmations

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

Goods Receipt

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

A goods receipt will also do the following:

o Updating the stock quantity

o Updating the stock value

o Updating the production order

o Changing the price stored for future valuation

Order Settlement

It consists of settling the actual costs incurred in the order to one or more receiver cost objects. The parameters for Order Settlement include