Introduction

Trainer name: Chaitanya A

Module : SAP Production planning
Education background:
•Masters in Business Administration (Supply chain management, Manufacturing and
Marketing)
•Bachelors in Technology (Computer science)
Languages known: Telugu, English and Hindi
Awards & Certifications:
•SAP PP (2013) SAP
•SAP QM (2014)
•SAP MM (2019 PRODUCTION PLANNING
•SAP PM (2016)
•SAP PP S/4 HANA (2019)
Training experience: Corporate trainings & Workshops (Wipro, TCS etc), Full time
faculty for SAP PP in my current organization, certification guidance to applicants
(holding 100+ experience in tens of batches with )

Experience:
•Having 9+ Years of Industry experience
•2+ Years of super user experience
•6 Implementation projects in SAP PP/QM
•15 Roll-out projects and transition projects
Certification details
Number of questions : 80
Time allotted : 180 Minutes
Cost : Nearly 580 USD
12 Month access to certification hub
15 days free learning hub access
Mode of exam: Online (Cloud-based)
Number of attempts : Three
Number of exams : Six

Criteria:
1 year of experience in SAP Implementation
1 Year of continuous experience in same company
Weightage:
Material and capacity requirements 12%
MRP 12%
Production orders advanced 12%
Lean manufacturing 8%
Master data 8%
Production orders Basics 8%
Application overview and background 8%
Basics on SAP Business process 5%
Process orders 8%-10%
Tricky scenario questions

Real-time business scenarios

Basics and advanced configuration questions

Pre-implementation, WIP, Post-Implementation questions

Warm-start questions – Business analysis, fit-gap etc

No True or false questions – Very important

No memory or dumps will work at 100% - It’s the knowledge and details you get
 Topics

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SAP OVERVIEW
 WHAT IS ERP
Enterprise-wide system which integrates the business functions and
processes of an organization
Integration of business functions into one application
 Replaces Departmental Systems with a single system across the
organization
 WHAT IS SAP
SAP was founded in 1972 in Walldorf, Germany.

It is the market leader in providing software-related services to enterprises

according to their business requirements, and also in terms of profits.

SAP stands for Systems, Applications and Products in Data Processing.

SAP ERP incorporates the key business functions of an organization and have
a very high level of integration among its individual applications which
guarantee consistency of data throughout the system and the company itself.
 SAP R/3

SAP R/3 is a client server model, using 3-tiered architecture. The three layers
are:
 Presentation Layer- Presentation Layer allows user to interact with the
system. eg.- SAP GUI
 Application Layer-In this layer business logic is executed. The application
layer can be installed on one machine, or it can be distributed among
more than one system.
 Database layer- The database layer holds the data.SAP supports any
RDBMS. The database layer must be installed on one machine or system.
 SAP MODULES
SAP FI Module-
SAP CO Module
SAP PS Module
SAP HR Module
SAP PM Module
SAP MM Module
SAP QM Module
SAP PP Module
SAP SD Module
SAP BW Module Warehouse
SAP EC Module Controlling
SAP TR Module
SAP IM Module
SAP QM Module
SAP – IS
SAP – Cross Application Components
SAP – CRM
SAP – SCM
SAP – PLM
All SAP modules are deeply integrated
SAP – SRM
SAP – CS
with each other
SAP – SEM
SAP – RE
 SAP PP

• SAP PP (Production Planning) module

is one of the biggest module in SAP
functional list.

• The SAP PP module is being used

mainly in the manufacturing industry.

• SAP PP module is tightly integrated

with all the other modules in Logistics.

• So the main advantage of PP is you can

plan, control and monitor the whole
production at any point of time.

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 SAP PP Benefits

• Extensive range of business function

• High level of modularity along side

close integration of individual
modules

• Support for international

requirements in the form of country
specific functions

• Multi lingualism

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SAP PP INTEGRATION

HR FICO

MM SAP PP PS

QM PM
 Organizational Structure overview

Client

Valuation Area

Company Code

Purchasing Organization

Plant

Shipping Point

Storage Location

Sales Area
Sales Organization
Distribution Channel
Division

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 Organizational Structure overview
Client

Controlling Area Controlling Area

1000 1200

Company Code 1000 Company Code 0001 Company Code 0002

Valuation Valuation Valuation Valuation

Area 1000 Area 1100 Area 1200 Area 0001

Plant 1000 Plant 1100 Plant 1200 Plant 0001

Storage Location Storage Location Storage Location

 Organizational Structure overview

Client – Highest level of organizational structure in the ERP System

Controlling Area– Profitability analysis of the company is performed in

controlling area level

Company code – A company consist of several legal entities, each including a

separate, individual financial statements that must be prepared at the end of
the financial year. This is reflected as a separate company code for each
legal entity.
Company code attains the highest level in SAP PP
Within each company code there can be one or multiple plants.
Within one plant there can be one or more storage locations.

Valuation Area – Level at which the company values its material stock
continuously.
One to one relationship exists between Valuation area and plant.
 Company Code

Central organizational element of

Financial Accounting.
An independent accounting unit
within a client.

Eg:
TATA is a company
TCS,Tata Power,Tata Steel, is a
company code under a company
TATA

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 Plant

In Production Planning and Control, the

Plant is the central organizational unit. Company Code
A plant is an organization unit within a
company Plant
A plant is a place where valued goods
and services are : Storage
- Produced Location
- Stored
- Consumed
- Distribute
A plant can be used to define a:
- Manufacturing facility
- Warehouse
- Sales office

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 Storage Location

Company Code

The storage location is an organizational

unit that makes it possible to distinguish Plant
between material stocks within a plant.
Storage
Location

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 Purchasing Organization

Responsible for Procurement for One or

More Plants. COMPANY
CODE
Responsible for Negotiating Pricing and
Delivery Terms with Vendors.

Purchasing Organization is Assigned to a PURCHASING

ORGANIZATION
Company code where Inventory is Legally
Tracked or Costs are Legally Incurred.

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 Learning Goal

Understand various manufacturing methods

Understand the difference between various manufacturing methods
Examples

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 Manufacturing Methods

Production Type characterize the frequency, complexity, or stability with

which a product is produced in the production process.
Very first decision that a company makes when implementing SAP ERP PP.

Terms we use from now:

Raw material : A material we procure from outside (typically

vendors)

Semi finished materials: A material which we produce inhouse

or subcontract or procure from outside.

Finished materials: A material which is produced or bought from

outside and sell to customers with current company label.

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 Manufacturing Methods

 Discrete Manufacturing
 Repetitive Manufacturing
 Process Manufacturing

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 Discrete Manufacturing

• An industry term for the manufacturing of

finished products that are distinct items capable
of being easily counted, touched or seen.

• In theory, a discrete product can be broken down

at the end of its life cycle so its basic components
can be recycled.

• An automobile is a product of discrete

manufacturing.

• Typical of order-based production is the

frequent switching from one product to another.

• Each product is manufactured in individually

defined lots. Costs are calculated per order.
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 Discrete Manufacturing

Completion Order Creation

Scheduling
Order
Settlement
Avlblty Check
Goods Receipt
Capacity
Requirement
Confirmation
Planning

Material
Withdrawal Order Release

Shop Paper
printing 24
 Repetitive Manufacturing

• In repetitive manufacturing, the same product

is produced on a certain production line over
a longer period of time.

• In production, a total quantity is produced

according to a certain production rate over a
certain period of time.

• Costs are collected periodically at a product

cost collector.

• Repetitive manufacturing usually involves a

relatively constant flow through production
lines. The routings of the individual products
are very similar.

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 Repetitive Manufacturing
Sales and
Material Forecast Distribution

Planned independent
Demand Program Sales orders
requirement

MRP Sales orders

Repetitive manufacturing Planned Orders

Production

Blackflush
GI
Confirmation
GR

Cost Collector Settlement

Discrete and Repetitive Manufacturing

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Discrete and Repetitive Manufacturing

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 Process Manufacturing

• Process manufacturing is the production of goods

that are typically produced in bulk quantities, as
opposed to discrete and countable units.

• Process manufacturing industries include

chemicals, food and beverage, gasoline, paint and
pharmaceutical.

• The production of process goods usually requires

inputs for thermal or chemical conversion, such
as heat, time and pressure.

• The product typically cannot be disassembled to

its constituent parts. For example, once it is
produced, a soft drink cannot be broken down
into its ingredients.

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Process Manufacturing

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 Planning Strategies

• Make To Stock (Planning strategy 10)

• Make To Order (Planning strategy 20)
• Planning With Final Assembly (Planning strategy 40)

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 Make To Stock

•The make-to-stock production strategies plan production or procurement using

planned independent requirements, which can be created from sales or forecast
figures.

•Make-to-stock production strategies are used in industries where demand and

sales fluctuate but where production may be kept at full capacity.

• Fluctuations in demand and sales are smoothed by warehouse stock

•The demand program is defined without reference to sales orders.

•Sales orders are not relevant to MRP.

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 Make To Order

• In make-to-order production, a product is produced

specifically for an individual sales order.
• This planning strategy is used when planning of the
(parent) product is not required or not possible.
• . Neither Demand Management is involved in this
process, nor is there an allocation mechanism.
• Orders are taken as they come.

• Each product is specifically produced for an

individual customer so that the finished product is
rarely placed in stock

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 Planning with final assembly
• In planning with final assembly (strategy 40),
the main focus is on flexibility in reacting to
customers' demands.

• Production, including final assembly, is

triggered by the planned independent
requirements before the sales order is received.

• You plan the planned independent requirements

for the finished product in Demand
Management.

• Incoming sales orders consume these planned

independent requirements.

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MASTER DATA

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 Learning Goal

Understand the master data required for SAP PP

Understand each master data
Understand the usage of each master data

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Master data

Material Master
Bill Of Material
Work Center
Routing
Resource
Master Recipe

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Material Master

• Finished products (FERT): Produced in-

house.

• Raw materials (ROH): Procured externally

and then processed.

• Semi finished products (HALB): Products

can be procured externally or manufactured
in-house

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 Bill Of Material (BOM)

• A formally structured list of the components that make up a product or assembly.

• The list contains the item number of each component, together with the quantity
and unit of measure.

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Work Center

• Work Center is a place where a certain operation is performed in a plant.

• In discrete manufacturing or in a process industry a work center can be a

machine or a group of machines, employees or a group of employees

• In a repetitive manufacturing it is typically a production line or group of

lines.

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Resource

• Means of production and persons in

the production process that have
capacities assigned to them

• Resources are subdivided into

Resource Categories, e.g. Labor
and Production Resource

• In PP-PI, resources perform the

same function as work centers do in
PP.

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Routing

• A routing is a description of which operations (process steps) have to be

carried out and in which order to produce a material (product).

• Routings define the production activities and sequence in which these

production activities are to be carried out in order to produce a certain
material.

• It defines the order in which the operations need to be processed so as to

produce a material.

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Master Recipe

• Defines the manufacturing of products in one production run at Plant level

• Defines e.g. the required Resources and Material Components for the manufacturing
process
• Forms the basis for the creation of Process Orders

Process Planning Process Control

Steps in the Control

Production Information
Process Master
Recipe

Resources Materials

Process Order Control Recipe

 SAP PP Process Overview
Sales and Operation Sales and
Sales History
Planning Distribution

Operations
Planning
Sales Order
Demand management

Long Term
PIR
Planning

MRP

Planned orders

Production Order
Capacity Requirement Planning
Creation

Production
Goods issue Components Execution Goods Receipt

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 Sales and Operation planning

SOP for determining the quantities to be produced

Sales Planning plans future requirements without considering

stocks and available capacities. The sales history often serves as
a basis for sales planning.

Operation planning uses the results of sales planning process to

plan production quantities, and takes initial stocks and
capacities into account on a general level

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 Demand Management

Demand management aligns the sales planning with the customer

requirements in accordance with planning strategy, and thus
calculates the independent requirements for production

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 MRP

1. MRP to calculate net requirements and components

requirements, taking into account scrap and lot sizes
2. MRP is the central function of production planning. It
calculates the requirement coverage element for all MRP
levels, based on demand program, and taking into account the
lead times, lot sizes and scrap quantities.

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 Long Term Planning

Long term planning is basically a simulation of MRP. It can

examine how a change in PIR would affect capacity utilization,
stocks, and external procurement. Long term planning also
suitable for short term simulations.

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 Production Order

The central factor in controlling and recording the production

process is the production order.
Production order creation describes how the production order is
created whether by converting a planned order or by means of
interactive order creation and the functions that are executed in
this process such as master data selection scheduling and
availability checking

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 Capacity Requirements Planning

Schedules the in detail the work list which usually consists of the
processes for created or released production orders. The result
of the capacity requirement planning is a production sequence
that is feasible from the capacity overview

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 Production Execution

Production Execution is concerned with how the actual production

as specified in the production order is recorded and controlled,
from material withdrawal to order confirmation to storage and
invoicing.

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Important T-code List

MM01 Create Material Master

CS01  Create BOM
CR01  Create Work Center
CA01  Create Routing
MD40  Run MPS Online
MD41  Run MPS Single Item - Multi Level
MD42  Run MPS Single Item- Single Level
CM25  Dispatch
MD11  Create planned order
CO01  Create Production Order
MD04  Stock / Requirement list
COHV  Mass Process Production Order
CO15   Production Order Confirmation
COGI   Check goods movement
MD01   Run MRP Online
MD02   Run MRP Single Item - Multi Level
MD03   Run MRP Single Item- Single Level
Sample Scenario 1

Microsoft Excel
97-2003 Worksheet
Sample Scenario 1
Sample Scenario 2

Microsoft Excel
97-2003 Worksheet
Sample Scenario 2
Agenda

 TCS Overview and Airline Offerings

 PSS Migration Approach and TCS Offerings

 Service Integration and TCS Offerings

 TPF Capabilities Overview and Delivery Model

 Discussions of Follow-up Plans

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