Direct Production

Use
If you do 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 (with the exception of make-to-order
production - here you 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
regard scheduling and costing procedures for finished products,
assemblies and components within a BOM structure.
The components that are produced directly are connected with each other in a
multi-level collective order by 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 (see Costs in Collective Orders ).
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 production does not take into account available plant stock.

Prerequisites
 If you want to use direct production for a particular component all the
time, you have entered the special procurement key for direct production in
the material master for the component ( MRP 2 view).
 If you want to use direct procurement for a particular BOM only, you have
entered the special procurement key for direct procurement in the
corresponding BOM item in the MRP data area. This entry overwrites the
entry in the material master.
Note
If you have activated direct production in the material master, you can switch
off direct production for a particular BOM, if you deactivate direct production in
the MRP data area of the corresponding BOM item under Explosion 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 for dependent requirements of 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 corresponding planned orders for direct
production for these dependent requirements. The system displays
dependent requirements and planned orders for direct production in a
separate direct 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.
When firmed purchase requisitions for direct production are changed ,
the system automatically sends the MRP controller a mail with the data for the
change (see Message Transmission in Direct Production ).
You can find further information on the direct production in the SAP
document Collective Orders .
 Direct Procurement

Use
Using the direct procurement procedure, you 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 are two alternative processes :
 using the special procurement key Direct procurement
This process is like the direct production process.
 using the item category Non-stock item.
We recommend the process using the special procurement key.

Prerequisites
 For the plant and/or for an MRP group, you have defined when the direct
procurement is to be triggered. In Customizing for MRP, you have set the
indicator in the Direct procurement field of the IMG activity Settings for
direct procurement as follows:
 Indicator 1 or 3 (these are identical), if direct procurement is to be triggered
during MRP
 Indicator 2 or blank (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
 You have set the item type stock item for the components in the BOM,
which are to be procured directly.
 If you want to use direct procurement for a particular component all the
time, you have entered the special procurement key for direct procurement
in the material master for the component ( MRP 2 view).
 If you want to use direct procurement for a particular BOM only, you have
entered the special procurement key for direct procurement in the
 corresponding BOM item in the MRP data area. This entry overwrites the
entry in the material master.
Note
If you have activated direct procurement in the material master, you can
switch off direct procurement for a particular BOM, if you deactivate direct
procurement in the MRP data area of the corresponding BOM item
under Explosion type . This entry overwrites the entry in the material master.
Process Using the Item Category for Non-Stock Item.
 You have set the item type non-stock item for the components in the BOM
that are to be procured directly. You 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
for materials 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
You set the copying of the long text for the BOM item in Customizing for
Purchasing in the IMG activity Define text types and copying rules.
 For materials 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 separate direct procurement
segment in 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.
When firmed purchase requisitions for direct procurement are changed ,
the system automatically sends the buyer amail with the data for the change
(see Message Transmission in Direct Production ).
Caution
You can only make restricted changes to purchase requisitions for direct
procurement. Changes to quantities and dates are not possible.
 Multi-Plant/Site Planning

Use
Using multi-plant planning, you can carry out material requirements
planning for various plants centrally . This planning procedure facilitates the
production of a product in another plant and it also guarantees a smooth flow
of materials between different plants.

Integration
 In MRP, multi-plant planning is carried out by means of special
procurement keys . You assign the special procurement key to the
material in the material master.
 In Customizing for MRP, you define the special procurement key in the IMG
activity Define special procurement type (see also Procurement Type and
Special Procurement Type ). You define the special procurement key at
thematerial level according to plant, procurement type and special
procurement
If required, you can also use the indicators Phantom item, Direct production,
Direct procurement and Withdrawal from alternative plant to control the
treatment of the material as a component during the BOM explosion .
Example
A material appears in several BOMs as a component because it is installed
in finished products in in-house production. As such, it is procured from an
alternative plant.
The same material, on the other hand, is also sold from stock to
customers , who need the material as, for example, a replacement part . In
this case, the material cannot be procured by withdrawing it from an
alternative plant. If a material shortage occurs after you have entered a
customer requirement, a stock transfer purchase requisition is created in the
planning run.
 You can do this in the SAP system by creating a special procurement key for
a withdrawal from an alternative plant and by entering a U for stock transfer in
the Special procurement key and by entering the plant from which the material
is to be transferred (see also Customizing Settings for Multi-Plant/Site
Planning ).
 Materials that are included in multi-plant planning must have a material
master in all plants concerned .
Note
When carrying out the planning run you must pay attention to the
chronological planning sequence of the various plants: plan the receiving
plants first and then the supplying or production plants.
If special procurement keys for stock transfer that refer to each other have
been created for a material at two plants, after having carried out the planning
run for both plants, you must carry it out again for the first plant.

Features
You can use the following multi-plant procedures:
 Stock transfer from plant to plant or from plant to MRP area
 Production in alternative plant
 Withdrawal from alternative plant
 Requirements Grouping for Individual
Project Planning

Use
Requirements grouping is a planning procedure for projects within
material requirements planning .
Requirements grouping for individual project planning enables you to group
material requirements that are caused by WBS elements within a project or
also cross-project , and plan and procure them together. This enables you to
save costs.
Note
Requirements grouping is possible only for operative WBS elements.

Prerequisites
You are using the component Project system for the processing of projects.

Integration
Basically, there are three procedures for planning material requirements in
projects in the SAP System:
 Individual project planning
The system only plans individual requirements. Materials that are required for
a project (WBS element) are specifically planned for the project and are
procured with reference to the WBS element. The materials in the individual
project stock of the WBS element are managed and settled separately from
the normal stock. Goods issue only takes place with reference to the WBS
element.
This procedure is used to plan finished products and important assemblies.
 Requirements grouping for individual project planning using grouping
WBS elements
The material requirements for different WBS elements are combined and
jointly planned and procured. If you combine the WBS elements within a
 project to one grouping WBS element, you will have real individual project
stock.
If you use cross-project requirements grouping, the ordering parties must give
their consent that the assemblies and components are planned and procured
using this procedure.
 Planning collective requirements (Make-to-stock production)
You can plan and procure materials at subordinate BOM levels that are
required in all projects, independently of WBS elements, using make-to-stock
production. During the planning run, the system calculates the total
requirements of a material in a plant. The material is procured without
reference to a WBS element.
These materials are managed in the plant stock and are available for all
projects.

Features
The requirements grouping for the materials of different WBS elements are
carried out by using one or more grouping WBS elements .
 If you would like to group requirements of WBS elements within a
project , the Automatic Requirements Groupingfunction is available. With
this procedure, all requirements are combined into one grouping WBS
element of the project. This has the advantage that you have "real"
individual project stock, or project definition stock , for the whole project.
 In cross-project requirements grouping you assign the WBS element to
one or more grouping WBS elements . The grouping WBS elements
thereby have a grouping function.
Example
You group all WBS elements of projects from the private sector into one
grouping WBS element and combine all WBS elements from the public sector
into another grouping WBS element and plan each together.
Requirements grouping in individual project planning has the following
features:
 It combines several WBS elements into one grouping WBS element for the
planning.
 It plans material requirements that have been caused by WBS elements,
together on the basis of the grouping WBS element.
 Material requirements planning creates procurement elements (planned
orders, purchase requisitions) that are assigned to the account of the
grouping WBS element.
 In MRP evaluations, an individual MRP segment is managed for each
grouping WBS element.
 You manage individual project stock for each grouping WBS element. All
materials that are required by the WBS elements belonging to the grouping
WBS element are included in this stock.
 The materials in the project stock of the grouping WBS element are
available for every WBS element that is assigned to the grouping WBS
element.
 The complete procurement costs are incurred by the grouping WBS
element. The costs are posted to the network activity with the withdrawal of
the procured material for production. During the procurement phase, no
costs are visible for the WBS elements, which have caused the
requirements. It is not until the withdrawal, that the procurement costs are
assigned to the appropriate WBS element.