Dear SAP Friends,
In this blog will try to Explore different Planning Process used for Full filling Business Needs.
We use special planning processes, for below reasons
- if we do not want to plan on a plant level, but eitheron a multi-plant levelor only for a part of a plant
- if we want to work withspecial procurement types.
Special planning processes include
- Subcontracting
- Direct production
- Direct procurement
- Storage location MRP
- Planning with MRP areas
- Multi-plant/site planning
- Requirements grouping for individual project planning
As the Content is vast will split in to 2 Parts in First part will cover
Subcontracting
Direct Production
Direct Procurement
Storage Location MRP
In subcontracting, the vendor is provided with materials (components), which he uses to produce the finished product.
Integration
- From the point of view of materials planning, subcontracting is initiated by the special procurement keySubcontracting. The special procurement key is allocated to the finished product or the assembly in the material master (MRP 2view) In order to plan specific material requirements for each individual subcontractor, we can use MRP areas. We can thereby create an individual MRP area for every subcontractor.
If an assembly is produced bydifferent subcontractorsor produced in-house withdifferent BOMs, the system is to take this into account during the BOM explosion in the planning run.
Prerequisites
- We have entered the special procurement keySubcontractingin the material master (MRP 2view) of the assembly.
- We have created aproduction versionin the material master (MRP 4view) of the assembly, in which we have entered thealternative BOMrelevant to the subcontractor/vendor.
- We have entered thisproduction versionin thepurchasing info recordfor the subcontractor.
- We have entered thesubcontractorin thesource listor in thequota arrangementfor this assembly.If we do not use quota arrangements, we have to set theRecord relevant to MRPindicator in the MRP column of thesource list.
- We have set theScheduling info record/agreementindicator in Customizing for MRP in the IMG activityDefine external procurement.
Integration
We can find the transactions for maintaininginfo recordsand thesource listin thePurchasingmenu, underMaster data.
Features
- Material requirements planning adopts theproduction version from the subcontractor’s purchasing info recordand explodes the correspondingalternative BOMthat is defined in the production version. This also applies to planned orders and purchase requisitions.
Caution
The production version from the subcontractor purchasing record has a higher priority than the production version from the quota arrangement.
- In Purchasing, when assigning the source of supply, the production version is copied from the subcontractor info record into the purchase requisition or purchase order and is used for selection in the BOM.
- Production versions that we have entered in the quota arrangement are considered in MRP and Purchasing.
Use
If wedo not use direct production, no link exists between the planned orders/production orders within the BOM structure. This means that the production order is scheduled individually, and costs are dealt with individually for every assembly and component (except for make-to-order production – here we can jointly consider the costs for several production levels). Once production is finished, the goods receipt for these components is posted in the warehouse so that goods issue of the components can be carried out for the production order of the superior assembly.
In contrast, the aim of direct production is to jointly regardschedulingandcosting proceduresfor finished products, assemblies and components within a BOM structure.
The components that are produced directly relate to each other in a multi-levelcollective orderby entering the respective superior and leading planned order or production order. The collective order can be scheduled together and the costs incurred for the collective order can also be dealt with together
A further advantage of direct production is the simplified process: Components that are produced directly are not placed in stock and are consumed directly by the superior production order. No manual goods receipt/issue postings are necessary. These postings are increasingly executed automatically during the confirmation of an operation in a production order.
Caution
Direct productiondoes notconsider available plant stock.
Prerequisites
- If we want to use direct productionfor a componentall the time, we have entered the special procurement key for direct production in the material master for the component (MRP 2view).
- If we want to use direct procurementfor a BOMonly, we have entered the special procurement key for direct procurement in the corresponding BOM item in theMRP data This entry overwrites the entry in the material master.
Note
If we have activated direct production in the material master, we can switch off direct production for a BOM, if we deactivate direct production in theMRP dataarea of the corresponding BOM item underExplosion type. This entry overwrites the entry in the material master.
Features
Direct production is always triggered in the planning run.
- A special indicator is set internally fordependent requirementsof the components that are produced directly. This passes on the relevant information for direct production to MRP. During the planning of these components, the system creates correspondingplanned orders for direct productionfor these dependent requirements. The system displays dependent requirements and planned orders for direct production in a separatedirect production segmentin the MRP list and the stock/requirements list.
- When the planned order for the finished product is converted into a production order, all planned orders for subordinate components that are to be produced directly are automatically converted into production orders.
- The system adapts planned orders for direct production to changes in date and quantity of the superior assembly, even if they are firmed, so that the consistency of the collective order is kept. Manual changes are reversed.
Whenfirmed purchase requisitions for direct production are changed, the system automatically sends the MRP controller amailwith the data for the change
Using thedirect procurementprocedure, we can order BOM components for a planned order directly instead of via the warehouse.
Note
Direct procurement is also possible in connection with make-to-order production and engineer-to-order production.
There aretwo alternative processes:
- using thespecial procurement keyDirect procurement
This process is like the direct production process.
- using theitem categoryNon-stock item.
We recommend the process using the special procurement key.
Prerequisites
- For the plant and/or for an MRP group, we have definedwhenthe direct procurement is to be triggered. In Customizing for MRP, we have set the indicator in theDirect procurementfield of the IMG activitySettings for direct procurementas follows:
- Indicator1or3(these are identical), if direct procurement is to be triggered during MRP
- Indicator2orblank(these are identical), if direct procurement is only to be triggered after the conversion or creation of a production order.
Process Using the Special Procurement Key for Direct Procurement
- We have set the item typestock itemfor the components in the BOM, which are to be procured directly.
- If we want to use direct procurementfor a particular componentall the time, we have entered the special procurement key for direct procurement in the material master for the component (MRP 2view).
- If we want to use direct procurementfor a particular BOMonly, we have entered the special procurement key for direct procurement in the corresponding BOM item in theMRP data This entry overwrites the entry in the material master.
Note
If we have activated direct procurement in the material master, we can switch off direct procurement for a particular BOM, if we deactivate direct procurement in theMRP dataarea of the corresponding BOM item underExplosion type. This entry overwrites the entry in the material master.
Process Using the Item Category for Non-Stock Item.
- We have set the item typenon-stock itemfor the components in the BOM that are to be procured directly. We have also entered an item number and a detailed long text for the BOM item.
This is the only possible process for materials without a material master.
Features
The system automatically triggers direct procurement at the selected time.
- In the planning run, the system does not create dependent requirements formaterials without a material master, but does create purchase requisitions directly for them. The system thereby copies the BOM long text into the purchase requisition. The system does not display the materials in the MRP list or stock/requirement list, because they do not have a material number and the system can only display materials with material numbers in these lists.
Note
We set the copying of the long text for the BOM item in Customizing for Purchasing in the IMG activityDefine text types and copying rules.
- Formaterials with a material master, MRP creates dependent requirements and (according to the creation indicator for the planning run) planned orders for direct procurement or purchase requisitions for direct procurement. The system displays these in a separatedirect procurement segmentin the MRP list and the stock/requirements list.
- When the planned order for the finished product is converted into a production order, all planned orders for subordinate components that are to be procured directly are automatically converted into purchase requisitions.
- The system adapts planned orders for direct procurement and purchase requisitions for direct procurement to changes in date and quantity of the superior assembly, even if they are firmed, so that inconsistencies in planning are avoided. Manual changes are reversed.
Whenfirmed purchase requisitions for direct procurement are changed, the system automatically sends the buyer amailwith the data for the change
Caution
We can only make restricted changes to purchase requisitions for direct procurement. Changes to quantities and dates are not possible.
Material requirements planning is usually carried out at plant level. This means that the system calculates the plant stock (except for individual sales order stocks) as the total of the stocks at the individual storage locations. It may be necessary to exclude storage location stock from the plant’s MRP run, or we may want to plan certain stocks separately.
Example
- A warehouse is geographically too far away from the production location that is planned with the storage location MRP.
- The stock of a storage location is only available for service and not for production.
Integration
If we plan several storage locations together or also want to plan storage locations using MRP, we can plan with MRP Area
Key Features
The following options are available:
- The storage location is to beplanned separately. Fundamentally, separate storage location MRP is carried out using consumption-based planning . In this case, we must also define areorder leveland areplenishment quantity(fixed lot size) at storage location level. In so doing, it is possible to monitor this storage location’s stock automatically, and if the stock level should fall below the reorder level the storage location is also replenished automatically.
In the planning run, stock that lies in this storage location, and which is planned separately, is not contained in the available stock at plant level.
If a receipt element (planned order, purchase requisition, purchase order, production order, and so on) or an issue element (reservation, sales order) refers to either a storage location that is excluded from the planning run or one that is planned separately these elements are not taken into account at plant level.
Reservations and sales orders, which are planned in a storage location for which MRP is carried out separately, are not included when calculating plant stock. The net requirements calculation for these requirements is restricted to this storage location.
- The storage location isexcluded from the planning run. In this case, the storage location’s stock is not contained in the available stock at plant level, nor is it included in the planning run. The exclusion of storage location stock is only relevant to the planning run. We can, however, still make withdrawals from this stock.
in second Part will talk about
Planning with MRP areas
Multi-plant/site planning
Requirements grouping for individual project planning
Please share, Like and Comment anything else you want to share or add points.
Thanks & Regards
Ruthvik Chowdary
SME – S/4 HANA Manufacturing & Procurement
SAP Ariba P2P
