Curtiss-Wright Training (Santa Clarita)
Planning SessionJune 24-25-26, 2009
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Introduction
Presentation introduction� Vincent Malépart� 7 years of SAP experience, 3.5 as a consultant� Modules PP & MM
Who are the participants?
What do you expect from this course?
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Training Objectives
Better comprehend planning process, master data used, MRP concepts and
exception messages management.
… and more specifically, to: • Manage Material Master for planning.
• Understand MRP Concepts.
• Understand planning process and run MRP.
• Manage exception messages (MRP results).
At the end of this class, you will be able to:
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Agenda for the Planning Session
8:00 a.m. – 9:30 a.m.� Master Data: Material, BOM, Routing
9:30 a.m. – 10:00 a.m.� MRP Concepts
Break10:15 a.m. – 12:00 p.m.� Planning process, MRP Execution & MRP tools – Exercise #1
Lunch12:45 p.m. – 2:15 p.m.� MRP tools & exception messages
Break2:30 p.m. – 4:00 p.m.� MRP tools & exceptions messages (cont’d) – Exercise #2
4:00 p.m. – 5:00 p.m.� Various, questions & answers
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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Master Data
Material Master (MM01-02-03)� Basic Views� Sales Views� Purchasing View� MRP Views (Planning)� Forecast View� Work Scheduling View� General Plant Data / Storage
Views� Warehouse Management
Views� Accounting / Costing Views
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Master Data
Material Master � Purchasing View� 4 MRP Views� Forecast View
Plant dependent views
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Master Data
Material Master – MRP 1
Key that determines whether and how the material is planned
Key containing special control parameters for the total planning run
The PTF specifies a period within which no automaticchanges are to be made to the master plan
Lot size parameters
Responsible for material planning for the material (group)
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Master Data
Material Master – MRP 1� Lot Size
• Method/procedure used to determine the quantities of the procurement proposals
• You can define minimum and maximum lot sizes, as well as rounding procedure (multiple of …)
• 3 types of procedures:1. Static: lot for lot (EX), fixed (FX), …2. Periodic: daily, weekly, monthly, planning calendar3. Optimum: delivery costs vs. storage costs
Best Practices for MRP “nervousness”minimization through BOM levels:Finish products: Fix lot sizeSemi finished: Fix/Periodic lot sizeRaw: Periodic lot size
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Master Data
Material Master – MRP 2
Define how material is procured Default value in
planning and production (GR)
Define more precisely the procurement:Subcont.., STO, Phantom assembly, etc.
Specifies the quantity whose purpose is to satisfy unexpectedly highdemand in the coverage period.
Acts as a requirement for MRP.
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Master Data
Material Master – MRP 2� In-house Production Time (days)
• Number of workdays to produced the material in-house.
� Planned Delivery Time (days)• Number of calendar days needed to obtain the material or service if
it is procured externally. • The planned delivery time is used to calculate the delivery date
and the release date
� GR Processing Time (days)• Number of workdays required after receiving the material for
inspection and placement into storage.
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Master Data
Material Master – MRP 2� Scheduling Margin Key
• Opening periods for Planned Order conversion– Number of workdays subtracted from the order start date to determine
the creation date– It flags the date at which the Planned Order should be converted into a
Production Order
• Float time before and after production (floats are not taken into account when running MRP with basic dates (only with lead-time scheduling)
• Release period– Number of workdays between the planned start date and the date for
releasing the order (program in background)
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Master Data
Material Master – MRP 2� Safety Stock
• Fix quantity (requirement)• Can be defined in terms of time coverage (consumption-based
planning)– Consumption-based planning procedures use past consumption data
(historical data) to calculate future requirements with the help of the material forecast or static planning procedures. Service level is then used in the calculation.
– The net requirements calculation is triggered when stock levels fall below a reorder point or by forecast requirements calculated from past consumption data.
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Master Data
Material Master – MRP 3
Planned Independent Requirement parameters (PIR)
Checking Group for ATPChecking Group (Material) + Checking Rule (Functional) = Scope of check , which indicates which MRP elements are included in the ATP.
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Master Data
Material Master – MRP 3� Strategy Group
• The strategy group gathers all the planning strategies that can be used for a particular material.
• The planning strategy represents the procedure used for planning a material and is (technically speaking) controlled by the MRP types, for example: MTO, MTS, etc.
� Demand Management• The consumption mode determines whether consumption is to be
carried out as backward or forward consumption, or whether both consumption types are allowed.
• The consumption period (either forward or backward) is specified in workdays and is valid from the current date. Sales orders, material reservations, dependent requirements then consume the PIR quantities that lie within the consumption period: before (for backward consumption) or after (for forward consumption) the requirements date.
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Master Data
Material Master – MRP 3
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Master Data
Material Master – MRP 4
Percentage of scrap that occurs during production of the material, if the material is a component.
Usually maintained at the component level in the BOM.
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Master Data
Bill of Materials / Single level (CS01-02-03)� Structured list of the components that make up a product or
assembly. � External procurement: subcontracting
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Master Data
Bill of Materials : Alternative item (CS01-02)� Alternative item group is
used to group together alternative items in a BOM.
� Any of the materials in the alternative item group could be included in the assembly.
� These items are known as alternative items in the BOM.
Priority (ranking order)StrategyUsage probability
Alternative Item Group
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Master Data
Bill of Materials : Alternative item (CS01-02)� Priority (ranking order)
• The priority of an item within an alternative item group determines the sequence in which material components are reserved in the production order.
� Strategy (only relevant in the production order)• 1- According to usage probability (manual changes possible)
– The first material in the ranking order that is supplied 100% on the requirement date is reserved in the required quantity (material B).
• 2- Withdrawal if 100% availability– The first material in the ranking order that is supplied 100% on the
requirement date is reserved in the required quantity (material B).– E.g.
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Master Data
Bill of Materials : Alternative item� Usage probability
• Material requirements planning (MRP) plans the alternative itemsaccording to usage probability.
• If you use the usage probability to determine the withdrawal posting (strategy 1), the quantities are proposed according to the usageprobability (at least 1%). You can change the proposed quantities.
• E.g.
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Master Data
Bill of Materials : Phantom item� Definition
• The phantom assembly represents a logical grouping of materials . These materials are grouped together from the construction point of view and are all maintained together. From the production point of view, however, these materials are normally not assembled . The phantom assembly is also used as an entry aid.
� Prerequisites
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Master Data
Bill of Materials : Phantom item� BOM Explosion with Phantom Assemblies
• Master Data: Create BOM for phantom material
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Master Data
Bill of Materials : Phantom item� BOM Explosion with Phantom Assemblies
• Master Data: Insert phantom material as a component in a produced material
Phantom item indicator
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Master Data
Bill of Materials : Phantom item� BOM Explosion with Phantom Assemblies
• Production order component list & reservations
Phantom item indicator
Phantom components
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Master Data
Multi-level BOM (CS11-12-13)
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Master Data
Work Center (CR01-02-03)� Operations are carried out at a work center. In the SAP system work
centers are business objects that can represent the following real workcenters, for example:
• Machines, machine groups• Production lines• Assembly work centers• Employees, groups of employees
� Work centers are used for:• Scheduling : Operating times and formulas are entered in the work center,
so that the duration of an operation can be calculated. • Costing : Formulas are entered in the work center, so that the costs of an
operation can be calculated. A work center is also assigned to a cost center.
• Capacity planning : The available capacity and formulas for calculating capacity requirements are entered in the work center.
• Simplifying operation maintenance : Various default values for operations can be entered in the work center.
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Master Data
Routing (CA01-02-03)� A routing is a description of what operations (process steps)
have to be carried out and in which order to produce a material(product).
� Each operation contains:
• Work center
• Time to produce
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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MRP Concepts
What is MRP?� “The main function of material requirements planning is to
guarantee material availability , that is, it is used to procure or produce the requirement quantities on time, both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.’’
- SAPAnswer to 4 fundamental questions:
• What to order?• Quantity to order?• When to order?• When to schedule delivery?
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MRP Concepts
The planning processes need to be aligned and integ rated to bring value to the enterprise.
MRP
MPS
S&OP
Sales & Operation Planning
Master Production Scheduling
Material Requirement Planning
Valid plan?
♦ Rough-Cut Capacity Planning (bottleneck)♦ Level Plan (3-12 months)♦ Action Plan medium/long term
♦ Detailed Capacity Analysis (work center)♦ Finite Capacity Scheduling (1-12 weeks)♦ Action Plan short/medium tem
♦ Material Availability Check
Deliverables
♦ Sales Plan (family, SKU) – statistic♦ Sales Plan - management♦ Production Plan (0-24 months)
♦ Master Production Plan (Finished Good)♦ Master Production Plan (Semi-finished)
♦ Procurement Plan (raw material)
Monthly
Weekly
Master Planner
Production Planner
Buyer Planner
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MRP Concepts
MRP
Purchase Requisition
MRP generates planned orders and/or purchase requisitions when the required quantity of material exceeds the quantity on hand and on order.
Planned Orders
Production Order
Purchase Order
converted to
For all materials that need to be
procured
For all materials
that need to be produced
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MRP Concepts
Planned Order� Procurement proposal (supply)� Created by MRP, but can also be created manually� Link to a BOM, and possibly a Routing (Lead Time Scheduling)� Can be manually modified or deleted at any time� Once manually modified, a planned order is automatically firmed
(can be manually un-firmed)• Firming at header and component levels• MRP will not change a firmed planned order• The firming indicator can be changed manually
� Create dependant requirement on components� To be converted into a Production Order
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MRP Concepts
Purchase Requisition� Procurement proposal (supply)� Created by MRP, but can also be created manually� Can be manually modified or deleted at any time� Once manually modified, a Purchase Requisition is automatically
firmed (can be manually un-firmed)� Vendor can already be assigned (Source List)� To be released, possibly approved and assigned to a vendor� To be converted into a Purchase Order
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MRP Concepts
Planning at Plant Level� The system adds
together stocks from all of the individual storage locations, with the exception of individual customer stock, to determine total plant stock.
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MRP Concepts
Planning with MRP Areas� Only the stocks from
the storage locations or subcontractor assigned to the respective MRP area are taken into account.
� Procurement elements are created by MRP Area.
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MRP Concepts
Prerequisites� Reduction of MRP « turbulences »
• Accurate Master Data• Accurate Planning parameters (Lot size, LT, etc.)• Accurate Inventory• Plan all requirements• Safety stock for unexpected requirements• Efficient Vendor relationship (lead time)• …
Garbage IN = Garbage OUT!!
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MRP Concepts
To run a “Class A” MRP you will need:
� 98% + precision on BOM item
� 95% + precision on Routing operations
� 95% + precision on MRP parameters
� 98% + precision on inventory level
E.g. 95%*70%*90%*75% = MRP is accurate at most 45%!
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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Planning Process
1. Check the Planning File
1. Check the Planning File
2. Net Requirements Calculation
2. Net Requirements Calculation
3. Procurement Quantities3. Procurement Quantities
4. Scheduling4. Scheduling
5. Procurement Proposal
5. Procurement Proposal
6. BOM explosion and Dependent requirements Determination
6. BOM explosion and Dependent requirements Determination
7. Exception Messages Creation
7. Exception Messages Creation MRP
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Planning Process
1. Planning File (MD20-21)� The planning file contains a list of
all materials relevant to the planning run.
� If MRP Type <> ‘ND’ => Material/Plant automatically in Planning File.
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Planning Process
2. Net Requirement Calculation� The system checks whether it is possible to cover requirements
with the plant stock and fixed receipts already planned. In the case of a shortage, the system creates a procurement proposal.
� During the net requirements calculation, the system determines the shortage quantities and material shortage dates.
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Planning Process
3. Procurement Quantities
� If material shortages have been determined for requirement dates during Net Requirement Calculation, the system calculates the receipt quantity in the lot-size calculation.
� Lot-size relevant data (from Material Master) are taken into account:
• Minimum lot size & Maximum lot size
• Rounding value
• Scrap factor, etc.
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Planning Process
4. Scheduling� During scheduling, the system determines start and finish dates
for the procurement elements of materials that are produced in-house and for materials that are procured externally.
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Planning Process
5. Procurement Proposals
� Procurement proposals are used to procure the shortage quantity.
� Procurement proposals are internal planning elements that can be changed, rescheduled or deleted at any time:
• purchase requisition• planned order• delivery schedule lines are fixed elements, which must be
followed, and are only part of the procurement proposals in a broader sense
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Planning Process
6. BOM Explosion and Dependent Requirement Determination
� The bill of material is exploded for every new procurement proposal for an assembly during the planning run. Dependent requirements, which mean the required quantities, are determined for all the assemblies and components needed to produce the product.
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Planning Process
7. Exception Messages Creation
� Exception messages are meant to inform you of an important or critical event (for example, start date lies in the past, safety stock has been exceeded).
� By means of the exception messages, you can easily sort out any materials that you need to reprocess manually . Special search and selection functions are available for this in the evaluations for MRP (see section 4: Evaluation of the Planning Run)
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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MRP Execution
Planning Run (MD01-02-03)
The total planning run can be limited to
materials that fulfill certain predefined criteria
Settings
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MRP Execution
Processing key: NEUPL
� The system plans all the materials that are contained in the planning file – Usually NOT USED on a daily basis!!
Processing key: NETCH
� The system only plans materials that have undergone a change relevant to MRP since the last planning run such as : New requirement, PP Master data, change of stock, etc.
Strongly recommended
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MRP Execution
Recommendations
� Usually, MRP (full plant) is run daily or twice a day in Background: NETCH mode.
� For specific requirements, Single-Item Planning Run is used (MD02-03).
� Sequence of planning:• Finished products (MPS); e.g. on Monday• Semi-finished products; e.g. on Tuesday• Raw products; e.g. on Wednesday
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MRP Execution
Exercise #1
� Run MRP and check planned orders and purchase requisitions : dates, quantity, etc.�Change Scheduling Margin Key (MM02)�Run MRP and check again planned orders.
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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Evaluation of MRP Results
MRP Elements� Demand / Requirements
• Forecasts / Planned Independent Requirements (PIR)• Sales Orders• Dependent Requirements• Reservations, etc.
� Procurement proposals• Planned Orders• Purchase Requisitions• Schedule Lines, etc.
� Firm elements• Production Orders• Purchase Orders
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Evaluation of MRP Results
MRP Elements
IndReqIndReq Sales forecastSales forecast
MRP Elements Description
CusOrdCusOrd Customer orderCustomer order
PurRqsPurRqs Purchase requisitionPurchase requisition
POitemPOitem Purchase orderPurchase order
OrdResOrdRes Reservation for production orderReservation for production order
PrdOrdPrdOrd Production OrderProduction Order
SubReqSubReq Requisition for subcontractorRequisition for subcontractor
ShpgNtShpgNt Shipping notificationShipping notification
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Evaluation of MRP Results
MRP Elements
DepReqDepReq Dependent requirement from displayDependent requirement from display
MRP Elements Description
DelvryDelvry Customer deliveryCustomer delivery
SchLneSchLne Schedule lineSchedule line
PldOrdPldOrd Planned orderPlanned order
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Dependent Requirement (B)
Evaluation of MRP Results
MRP Elements� Dependant Requirement vs. Reservation
• BOM : Material A made of material B
Planned Order (A)
Dependent Requirement (B)
Production Order (A)
Conversion
Reservation (B)
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Evaluation of MRP Results
Once the Planning Run, the results need to be evaluated…� 2 main activities:
1) Identify the materials that require attention (and possibly manual interventions)
2) Understand the planning situation of a material
Tools for these activities are:
� Stock Requirement List
� MRP List
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Evaluation of MRP Results
Stock Requirement List (MD04)� The most up-to-date stock and
requirements situation is displayed.
� Changes made after the planning date are displayed directly, so the list is therefore DYNAMIC.
MRP List (MD05)� Displays the
stock/requirements list situation at the time of the last planning run.
� Changes that are made after the planning date are nottaken into consideration, so the list is STATIC.
� More messages could be determined.
Screen layout is basically the same
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Evaluation of MRP Results
MD06MD05MRP List
MD07MD04Stock Requirement
List
Collective Display(Displays multiple lists according to selection parameters)
Individual display(Displays one list at a time)
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Evaluation of MRP Results
SAP Menu
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Evaluation of MRP Results
Settings
Materials to analyse
Planning situation
Navigation
Individual access (MD04 / MD05)
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Evaluation of MRP Results
Functionalities� MRP Date� Exception message(s) and rescheduling date proposal� Access to MRP Element directly � Pegged requirement� Display requirements individually/grouped� Display at goods receipt date� Show End of replenishment lead time
• if Available qty < 0 before end of LT = Potential PROBLEM!!
� Additional information on Vendor and Customer
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Evaluation of MRP Results
Functionalities� Material Master� ATP Quantities (CO09)� Processing indicator (sort criteria)� Stock overview (MMBE)� Filter� Material memo � Alternative unit of measure� Expand header details� Settings
• Display, dates, default values, ATP, Navigation Profile
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Evaluation of MRP Results
Objectives
� Use of MD06 to analyse materials with important exception messages
� Use of MD06 to review « Days of coverage » of stock
� Use of processing indicator
Proactive planning / KPI tool for PP/MM
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Evaluation of MRP Results
Collective access (MD06 / MD07)
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Evaluation of MRP Results
Exception message per group
Days of supply / Range of coverage
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Evaluation of MRP Results
Important Exception groups: 3, 7 & 8 (SAP std)Important Exception messages� Priority 1
• 10 & 30 - Reschedule in (Lateness in planning)• 98 - Error with MRP
� Priority 2• 04 & 07 - Finish date in the past (lateness in GR)
� Priority 3• 15 & 20 - Reschedule out / Cancellation• 02 / 05 & 03 / 06 - Opening/Start date in the past• 52 - No BOM selected / 62 - Problem with scheduling
� Priority 4• 96 - Stock level below Safety stock• 64 - Production finish after order finish• Others
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Evaluation of MRP Results
Range of coverage (working days)� Days' supply without receipts
• The days' supply displays the number of days that a material will cover if only current plant stock is taken into account.
� First receipt days' supply• The receipt days' supply indicates how many days a material will
last if the system takes current plant stock and specific, predefined receipts into account.
– Prod. Order, Firm Planned orders, Assign planned order to production version (REM), QM Lot
� 2nd receipt days' supply : id.
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Evaluation of MRP Results
Range of coverage (working days)� If negative value…
…there is a requirement in the past not replenished
� If days of supply = 999.9 ???
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Evaluation of MRP Results
Traffic Light
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Evaluation of MRP Results
Functionalities� Sort : Menu Edit > Sort…
� Individual analysis: TO TAKE ACTION on MRP Elements:• Update production order date• Delete production w/o sales order• Inform sales for production delay• Backorder• Etc.
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Evaluation of MRP Results
Individual analysis� Select list in sequence of priority
• Different selection criteria:
� Click on
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Evaluation of MRP Results
Recommendations
� Periodic check of important targeted exception messages
� Periodic check of « Days of coverage »
� Check is improved if done closer to MRP run (first thing in the morning)
� Actions have to be taken by planners/buyers
� Other departments have to be aware of planning changes
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Evaluation of MRP Results
Conclusion� Master Data is very important!!� Exception management � KPI tool for PP/MM� Periodic checks: Once a week to start…more often as required� Help to keep supply processes in control and as close as
possible to reality!!
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Evaluation of MRP Results
Exercise #2
� Setup settings for MRP List �Analyze exception messages
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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Demand Management
Planned Independent Requirements (MD61-62-63)
Enter individual Material or Product Group (list of material)
Select Planning Horizon
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Demand Management
Planned Independent Requirements (MD61-62-63)
� When saved in the Active version, PIR become MRP relevant.
Save
Periodic Requirements
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Demand Management
Planned Independent Requirements � MD04 (before MRP)
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Demand Management
Planned Independent Requirements� MD04 (after MRP)
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Sections
3- Planning Process
4- MRP Execution
1- Master Data
2- MRP Concepts
5- Evaluation of MRP Results
6- Demand Management
7- Important Transactions
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Important Transactions
CA01-02-03Routing
ME51N-52N-53NPurchase Requisition
MD11-12-13Planned Order
MD61-62-63Planned Independent Requirements
ME21N-22N-23N, ME57Purchase Order
MD05-06MRP List / Collective
MD04-07Stock Requirement List / Collective
MD01-02-03MRP Planning Run
CR01-02-03Work Center
CS01-02-03, CS11-12-13BOM
MM01-02-03Material Master
SAP TransactionsSAP Terminology
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