SIA Prefi
Production Planning - is the process of aligning demand with manufacturing capacity in creating production and procurement schedules for the finished products and component materials.
The PP organizational structure shares some organizational units with the previous modules. This includes:
• 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. The activities performed in this unit are evaluated by charge rates, which cost centers and activity types determine.
PP Master Data:
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.
There are three (3) different kinds of BOM:
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.
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 multi- level or single-level, wherein the lowest level must always consist of materials.
PP Process:
These processes are divided into three (3) layers:
Strategic Planning (Forecasting and SOP) - which involves the CEO, COO, CIO, CFO, Controller, and Marketing Director.
The Detailed Planning (MPS and MRP) - involves the Line Managers, Production Scheduler, MRP Controller, and Capacity Planners.
The Manufacturing Execution - involves Line Workers and Shop Floor Supervisors.
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 – uses market research and consumer data to predict future trends.
o Seasonal – used for predicting short-term customer demand at different times of the year.
o 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).
Demand Management - It serves as the link between the Strategic Planning and Detailed Planning layers in Production Planning and Execution.
Demand Management can also be done manually or based on previous planning results such as sales planning, forecast, and SOP. The result of this process is called the Demand Program
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) - In MRP, the system calculates the net requirements while considering available warehouse stock and scheduled receipts from purchasing and production.
Lot Size Calculations:
Static – based on fixed values in the Material Master.
Periodic – groups net requirements together from multiple periods.
Optimized – calculates the optimum lot size for several periods of net requirements.
The output of MRP is a detailed production and/or purchasing plan.
o Planned Order: A request created in the planning run for material in the future (converts to either a production or purchase order).
o Production Order: A request or instruction internally to produce a specific product at a specific time
o 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.
Manufacturing Execution Process:
Schedule and Release - Scheduling 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.
The release operation has two (2) processes:
• 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.
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:
o Settlement Profile: Specifies the receivers and distributions rule and method.
o Settlement Structure: Determines how the debit cost elements are assigned to the settlement cost elements.
Financial Accounting (FI) Module - designed to collect transactional data that provides a foundation for preparing the standard portfolio of reports.
The internal group - includes the executives, senior management, administrative staff, and employees.
The external group - comprises legal authorities, banks, auditors, shareholders, insurance, taxing authorities, media, and financial analysts.
Financial Accounting Organizational Structure
Chart of Accounts – a classification scheme consisting of a group of general ledger (G/L) accounts used by one or more company codes. It also provides a framework for recording values to ensure an orderly rendering of accounting data.
Credit Control Area – an organizational entity that grants and monitors a credit limit for customers. It can also include one or more company codes.
Business Area – represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated. Financial statements can be created for business areas for various internal reporting purposes.
Financial Accounting Master Data:
General Ledger (G/L) Accounts - This master data is the data storage area created by the unique combination of Company Code and Chart of Account. G/L lists the transactions affecting each account in the Chart of Accounts and the respective account balance.
Customer and Vendor Accounts - Customer and vendor account balances are maintained in FI through fully integrated accounts receivable and accounts payable sub-ledgers.
Accounts Receivable Sub-ledger (FI-AR) - It is the information concerning customers who purchase the enterprise’s goods and services, such as sales and payments made. Billings in Sales and Distribution (SD) generates FI journal entries for sales activity.
Accounts Payable Sub-ledger (FI-AP) - It is the information concerning vendors from whom the enterprise purchases goods and services, such as purchases and payments. Purchase and goods receipt activities in Materials Management (MM) generate FI journal entries.
Financial Accounting Reporting:
Balance Sheet - It is the presentation of an organization’s assets, liabilities, and equity at a point in time.
Assets - define what the company owns.
Liabilities - define what the company owes.
Equity - defines the difference between assets and liabilities. It is the market value of a company’s assets after all debts have been paid off.
Statement of Cashflows - These are considered the associated changes, both inflows and outflows, that have occurred in cash, which can be viewed as the most important of all assets – over a given period such as monthly, quarterly, or annually.
Audit Trails - These allow an auditor to begin with an account balance on a financial statement and trace through the accounting records up to the transactions that support the account balance. These also enable an auditor to trace individual transactions to the affected account balance(s) on a financial statement.
SAP Document Principle - It provides a solid and important framework for a strong internal control system, a law requirement for companies that operate in most countries.
A financial document - (one impacting the financial position of the company) can not be deleted from the database once written to the SAP database. However, it can be changed to some degree.