SAP PP Training Material

CONFIDENTIAL

Version 2009
Production Planning
Manufacturing Methods

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CONFIDENTIAL
Introduction

Contents
• Discrete Manufacturing Process

• Repetitive Manufacturing Process

• Process Manufacturing (PP-PI)

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CONFIDENTIAL
Types Of Manufacturing Methods

– Discrete Manufacturing

– Repetitive Manufacturing (REM)

– Process Manufacturing (PP-PI )

– KANBAN

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CONFIDENTIAL
Discrete Manufacturing

• Order based production using production

order
• Production is in lot size

• Status maintenance per order

• Order backflush , operation backflush

• Cost monitoring per order

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Discrete Manufacturing
• In Discrete Manufacturing, a production order defines which material is to be
produced, where it is to be produced, using which activities and on which date. The
production order also defines the resources to be used and the way in which order
costs are to be settled.

• As soon as a planned order or internal requirement is created by higher-level planning

(MRP), production control transfers the information and adds all the necessary order-
relevant data, hereby enabling an order-based procedure.

• When a production order is created, the following actions take place:

– A routing is selected and its operations and sequences copied to the order.
– The BOM items are copied to the order.
– Reservations are created for BOM items kept in stock.
– Planned costs are determined for the order.
– Capacity requirements are created for the work centers.
– Purchase requisitions are created for non-stock components and externally
processed operations.

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Repetitive Manufacturing
Material A Material B Material C

Raw Material

Finished goods

Manufacturing Line

• Period & quantity based production

•Continuous flow over the production line for same material

• No production order required. Planned orders authorized production.

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Repetitive Manufacturing
• In repetitive/flow manufacturing, products are generally produced repeatedly over a
longer period of time. However, this does not necessarily mean that large quantities are
produced.

• Products generally pass through production in a steady flow and several products can
be manufactured on one production line.

• The necessary components are staged anonymously at the production line.

• At the end of the shift or at the end of a day, you can backflush all the quantities
produced together.

• The aims of using Repetitive Manufacturing are the following:

– Creating and processing production plans based on periods (rather than individual
lots and orders)

– Reducing the administration costs for production control and simplification of

completion confirmation via backflushing, while at the same time still being able to
use the full range of PPC functions.

– Reducing controlling costs

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Discrete V/s Repetitive Mfg.

Production Type Discrete Manufacturing Repetitive Manufacturing

Order based . Limited production Production plan . Quantity period

Characteristic
lots based

Products Frequently changing products The same / similar products

Different sequences of different Line based , continuous flow over the

Work Center
work centers. production line.

Routing Complex Simple , often only one operation.

Complex order processing . Status

Control Simplified process.
maintenance.

Object Prodction order Planned order.

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Process Manufacturing

• The component Production Planning for Process Industries (PP-PI) provides

an integrated planning tool for batch-oriented process manufacturing.

• It is primarily designed for the chemical, pharmaceutical, food and beverage

industries as well as the batch-oriented electronics industry. PP-PI supports:

• Production execution remain same as Discrete Manufacturing only.

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KANBAN and its Significance

• Kan-ban stands for Kan- card, Ban- signal. Kan-ban is Pull production
system, driven by actual usage not by forecast.
• A method of Just-in-Time inventory replenishment that originated in Japan
• Produce only what is needed, at the time when it is needed and the amount
needed.

• WHY KANBAN?
Lower inventory investment
Better control in the process
Reduced administrative costs
Minimize Waste (Idle M/C run, Waiting for Parts, M/C Breakdown, Over
Production etc.)
Better capacity Utilization

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KANBAN Is Suitable For…

– Parts Manufactured in-house with established lead time

– Procured items with short lead times

– Items with frequent usage

– Items with “reliable” suppliers

– Procured items where there is no value addition in-house ( Ex:

Bushings which are used directly for assembly of Transformer)

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CONFIDENTIAL