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Leo Gomez
Leo Gomez

SAP ERP PP: A Complete Reference for Sales and Operations Planning, Material Requirements Planning, SAP Demand Management, and More


# Production Planning and Control with SAP ERP (2nd Edition) 64 ## Introduction - What is production planning and control (PPC) and why it is important for manufacturing companies - What is SAP ERP and how it supports PPC processes - What are the main features and benefits of the second edition of the book "Production Planning and Control with SAP ERP" by Jawad Akhtar ## Discrete, Process, and Repetitive Manufacturing - What are the differences and similarities between discrete, process, and repetitive manufacturing types - How to configure SAP ERP Production Planning for each manufacturing type - How to use master data, such as bills of materials (BOMs), work centers, routings, and production versions ## Sales and Operations Planning (S&OP) - What is S&OP and how it helps align demand and supply - How to use SAP ERP S&OP tools, such as flexible planning, standard planning, and long-term planning - How to create and execute S&OP scenarios and monitor the results ## Material Requirements Planning (MRP) - What is MRP and how it calculates the net requirements for materials - How to configure and run MRP in SAP ERP - How to use MRP strategies, special procurement types, lot-sizing procedures, and availability checks ## SAP Demand Management - What is SAP Demand Management and how it integrates with S&OP and MRP - How to use planned independent requirements (PIRs) and customer independent requirements (CIRs) to represent demand - How to use consumption modes, consumption indicators, and planning strategies to control demand consumption ## Long-Term Planning (LTP) - What is LTP and how it supports strategic planning and simulation - How to configure and run LTP in SAP ERP - How to use planning scenarios, planning versions, transfer profiles, and pegging ## Capacity Requirements Planning (CRP) - What is CRP and how it evaluates the capacity situation of work centers - How to configure and run CRP in SAP ERP - How to use capacity categories, evaluation methods, leveling strategies, and rescheduling methods ## Production Order Management - What are production orders and how they represent the execution of PPC processes - How to create, release, confirm, settle, and archive production orders in SAP ERP - How to use order types, scheduling types, confirmation parameters, variance keys, and archiving objects ## Process Management - What is Process Management and how it supports shop floor operations - How to configure and use Process Management in SAP ERP - How to use process instructions, process messages, control recipes, process data documents (PDDs), and process management cockpit ## Reporting and Monitoring - What are the reporting and monitoring tools available in SAP ERP for PPC processes - How to use standard reports, such as stock/requirements list, MRP list, capacity load report, order progress report, etc. - How to use the Early Warning System (EWS) to identify and resolve issues in PPC processes Now I'm going to write the article based on this outline. Please wait for a few minutes while I generate the content. Thank you for your patience. ? OK, I'm continuing to write the article. Here is the first part of the article: # Production Planning and Control with SAP ERP (2nd Edition) 64 ## Introduction Production planning and control (PPC) is a vital function for any manufacturing company. It involves planning, scheduling, executing, and monitoring the production processes to ensure that the right products are delivered to the customers at the right time and quality. PPC also helps optimize the utilization of resources, such as materials, machines, labor, and capacity. SAP ERP is a comprehensive enterprise resource planning (ERP) system that supports all the business processes of a company, including PPC. SAP ERP Production Planning (PP) is a module that covers all the aspects of PPC, from demand management to production order management. SAP ERP PP integrates with other modules, such as Sales and Distribution (SD), Materials Management (MM), Quality Management (QM), and Controlling (CO), to provide a seamless and efficient PPC solution. The second edition of the book "Production Planning and Control with SAP ERP" by Jawad Akhtar is a comprehensive guide for anyone who wants to learn how to configure and use SAP ERP PP for discrete, process, and repetitive manufacturing. The book covers all the topics related to PPC, such as sales and operations planning (S&OP), material requirements planning (MRP), SAP Demand Management, long-term planning (LTP), capacity requirements planning (CRP), production order management, process management, reporting and monitoring, and more. The book also provides practical examples, tips, and best practices to help readers master SAP ERP PP. In this article, we will summarize the main features and benefits of the book and provide an overview of each chapter. We will also show you how to get a copy of the book and access additional resources. ## Discrete, Process, and Repetitive Manufacturing Manufacturing companies can be classified into three types based on their production methods: discrete, process, and repetitive. Discrete manufacturing involves producing distinct products that can be counted, such as cars, computers, or furniture. Process manufacturing involves producing products that are continuous or batch-oriented, such as chemicals, food, or pharmaceuticals. Repetitive manufacturing involves producing products that are standardized and mass-produced, such as screws, nails, or pencils. Each manufacturing type has its own characteristics and challenges that require different PPC approaches. For example, discrete manufacturing requires more flexibility and customization, process manufacturing requires more quality and compliance control, and repetitive manufacturing requires more efficiency and cost reduction. SAP ERP PP allows you to configure and use different PPC scenarios for each manufacturing type. You can define different master data elements, such as bills of materials (BOMs), work centers, routings, and production versions, to represent the production structure and operations of each product. You can also use different planning strategies, such as make-to-stock (MTS), make-to-order (MTO), or assemble-to-order (ATO), to control how the demand is transferred to production. The book explains how to configure SAP ERP PP for each manufacturing type in detail. It also shows you how to use different tools and techniques to optimize your PPC processes for each manufacturing type. OK, I'm continuing to write the article. Here is the second part of the article: ## Sales and Operations Planning (S&OP) Sales and operations planning (S&OP) is a process that helps align the demand and supply of a company. It involves creating and executing a plan that balances the sales forecast, production capacity, inventory levels, and customer service levels. S&OP helps improve the profitability, efficiency, and customer satisfaction of a company. SAP ERP PP provides various tools and methods to support S&OP. You can use flexible planning, standard planning, or long-term planning to create and execute S&OP scenarios. Flexible planning allows you to create your own planning structures and key figures to model your S&OP requirements. Standard planning allows you to use predefined planning structures and key figures to perform S&OP based on product groups. Long-term planning allows you to simulate the long-term effects of your S&OP decisions on your production resources and capacities. The book shows you how to use SAP ERP PP S&OP tools in detail. It also explains how to integrate S&OP with other PPC processes, such as MRP, SAP Demand Management, and LTP. It also provides tips and best practices to improve your S&OP performance and accuracy. ## Material Requirements Planning (MRP) Material requirements planning (MRP) is a process that calculates the net requirements for materials based on the demand and supply situation. It generates planned orders or purchase requisitions for materials that are needed for production or procurement. MRP helps optimize the inventory levels, reduce the stock-outs, and increase the production efficiency of a company. SAP ERP PP allows you to configure and run MRP in various ways. You can use different MRP strategies, such as MTS, MTO, ATO, or planning without final assembly, to control how the demand is transferred from sales orders or PIRs to production orders or planned orders. You can use different special procurement types, such as subcontracting, stock transfer, or phantom assembly, to control how the materials are procured from external or internal sources. You can use different lot-sizing procedures, such as static, dynamic, or periodic, to control how the quantities of materials are calculated. You can also use availability checks to ensure that the materials are available for production or delivery. The book explains how to configure and run MRP in SAP ERP PP in detail. It also shows you how to use various tools and techniques to monitor and optimize your MRP results, such as stock/requirements list, MRP list, exception messages, rescheduling checks, and more. ## SAP Demand Management SAP Demand Management is a process that integrates the demand from various sources into a single plan that drives the production planning. It uses planned independent requirements (PIRs) or customer independent requirements (CIRs) to represent the demand for finished products or product groups. PIRs are generated from S&OP or entered manually, while CIRs are generated from sales orders or deliveries. SAP ERP PP allows you to configure and use SAP Demand Management in various ways. You can use different consumption modes, such as forward, backward, or exact consumption, to control how the PIRs or CIRs are consumed by production orders or planned orders. You can use different consumption indicators, such as 1:1 consumption or collective consumption, to control how the PIRs or CIRs are assigned to production orders or planned orders. You can also use different planning strategies, such as strategy 10 (PIR), strategy 20 (MTO), or strategy 40 (planning with final assembly), to control how the PIRs or CIRs are used in MRP. The book shows you how to configure and use SAP Demand Management in SAP ERP PP in detail. It also explains how to integrate SAP Demand Management with other PPC processes, such as S&OP, MRP, and CRP. OK, I'm continuing to write the article. Here is the third part of the article: ## Long-Term Planning (LTP) Long-term planning (LTP) is a process that supports strategic planning and simulation of PPC scenarios. It allows you to evaluate the feasibility and impact of your S&OP decisions on your production resources and capacities in the long term. LTP helps you identify and resolve potential bottlenecks, shortages, or surpluses in your production system. SAP ERP PP allows you to configure and run LTP in various ways. You can use different planning scenarios, such as simulation, rough-cut, or multi-level planning, to control the scope and depth of LTP. You can use different planning versions, such as active, inactive, or simulation versions, to store and compare the LTP results. You can use different transfer profiles, such as standard or custom profiles, to control how the data is transferred from the active version to the LTP version. You can also use pegging to link the LTP requirements and receipts. The book explains how to configure and run LTP in SAP ERP PP in detail. It also shows you how to use various tools and techniques to analyze and optimize your LTP results, such as planning table, capacity load report, pegging report, and more. ## Capacity Requirements Planning (CRP) Capacity requirements planning (CRP) is a process that evaluates the capacity situation of work centers based on the production requirements. It compares the available capacity with the required capacity and identifies any overloads or underloads. CRP helps you balance the workload of work centers and optimize the production efficiency and throughput. SAP ERP PP allows you to configure and run CRP in various ways. You can use different capacity categories, such as machine, labor, or power, to define the capacity of work centers. You can use different evaluation methods, such as overall profile, individual capacity profile, or available capacity profile, to display the capacity situation of work centers. You can use different leveling strategies, such as lead time-oriented leveling or capacity-oriented leveling, to adjust the production dates and quantities according to the capacity situation. You can also use different rescheduling methods, such as dispatching or finite scheduling, to optimize the sequence and timing of production orders. The book shows you how to configure and run CRP in SAP ERP PP in detail. It also explains how to integrate CRP with other PPC processes, such as MRP, production order management, and process management. ## Production Order Management Production order management is a process that represents the execution of PPC processes in SAP ERP PP. It involves creating, releasing, confirming, settling, and archiving production orders for finished products or semi-finished products. Production orders contain all the information and data related to production operations, such as materials, operations, work centers, costs, confirmations, variances, etc. SAP ERP PP allows you to configure and use production order management in various ways. You can use different order types, such as standard order type PP01 or custom order types Z001-Z999 OK, I'm continuing to write the article. Here is the fourth and final part of the article: ## Production Order Management (cont.) to control the characteristics and behavior of production orders. You can use different scheduling types, such as basic date scheduling, lead time scheduling, or capacity scheduling, to calculate the production dates and durations. You can use different confirmation parameters, such as backflushing, goods movement, or automatic goods receipt, to control how the material and activity confirmations are posted. You can use different variance keys, such as variance key 000001 or custom variance keys 000002-000999, to control how the variances are calculated and settled. You can also use different archiving objects, such as PP_ORDER or PP_ORDER_SETTLEMENT, to control how the production orders are archived. The book explains how to configure and use production order management in SAP ERP PP in detail. It also shows you how to use various tools and techniques to monitor and optimize your production order performance, such as order progress report, order information system, actual costing, and more. ## Process Management Process management is a process that supports shop floor operations in SAP ERP PP. It involves creating and sending process instructions and process messages between the SAP ERP system and the process control system (PCS). Process instructions contain the data and commands for executing production operations, such as setpoints, formulas, or recipes. Process messages contain the feedback and results from the PCS, such as actual values, statuses, or errors. SAP ERP PP allows you to configure and use process management in various ways. You can use different process instruction categories, such as general process instruction (PI_GEN), material staging (PI_MAT), or resource selection (PI_RES), to define the types and formats of process instructions. You can use different process message characteristics, such as characteristic 001 (process message number) or custom characteristics 002-999 OK, I'm continuing to write the article. Here is the rest of the article: ## Process Management (cont.) to define the types and formats of process messages. You can also use control recipes, process data documents (PDDs), and process management cockpit to manage and monitor the communication and execution of process instructions and process messages. The book shows you how to configure and use process management in SAP ERP PP in detail. It also explains how to integrate process management with other PPC processes, such as production order management, CRP, and QM. ## Reporting and Monitoring Reporting and monitoring is a process that helps you evaluate and improve your PPC performance and efficiency in SAP ERP PP. It involves using various reports and tools to display and analyze the data and information related to PPC processes, such as demand, supply, capacity, production, quality, costs, etc. SAP ERP PP provides various reporting and monitoring tools for PPC processes. You can use standard reports, such as stock/requirements list (MD04), MRP list (MD05), capacity load report (CM01), order progress report (COOIS), etc., to display the current situation and status of PPC processes. You can also use the Early Warning System (EWS) to identify and resolve any issues or exceptions in PPC processes, such as missing parts, capacity overloads, scheduling errors, etc. The book explains how to use SAP ERP PP reporting and monitoring tools in detail. It also shows you how to customize and enhance the reports and tools to suit your specific needs and preferences. ## Conclusion In this article, we have summarized the main features and benefits of the book "Production Planning and Control with SAP ERP" by Jawad Akhtar. The book is a comprehensive guide for anyone who wants to learn how to configure and use SAP ERP PP for discrete, process, and repetitive manufacturing. The book covers all the topics related to PPC, such as S&OP, MRP, SAP Demand Management, LTP, CRP, production order management, process management, reporting and monitoring, and more. The book also provides practical examples, tips, and best practices to help readers master SAP ERP PP. If you are interested in getting a copy of the book or accessing additional resources, you can visit the following links: - [SAP PRESS website](https://www.sap-press.com/production-planning-and-control-with-sap-erp_4191/) - [Amazon website](https://www.amazon.com/Production-Planning-Control-SAP-ERP/dp/1493214316) - [SAP Help Portal](https://help.sap.com/viewer/product/SAP_ERP/6.0) We hope you have enjoyed this article and learned something new about SAP ERP PP. Thank you for reading! ## FAQs Q: What are the prerequisites for reading this book? A: The book assumes that you have a basic understanding of SAP ERP system and PPC concepts. It also helps if you have some experience in working with SAP ERP PP or other PPC systems. Q: What are the differences between the first edition and the second edition of this book? A: The second edition of this book is updated and revised to reflect the latest changes and enhancements in SAP ERP PP. It also covers some new topics, such as digital signatures, subcontracting without source location in PP/DS scenario, real-time integration of SAP IBP with DSC system, etc. Q: How can I get access to a SAP ERP system for practicing the configuration and usage of SAP ERP PP? A: You can get access to a SAP ERP system by using one of the following options: - [SAP Learning Hub](https://learninghub.sap.com/): You can subscribe to SAP Learning Hub and get access to various SAP training courses and systems. - [SAP Live Access](https://training.sap.com/content/sap-live-access): You can purchase SAP Live Access and get access to various SAP systems for hands-on practice. - [IDES system](https://idesaccess.com/): You can rent an IDES system from a third-party provider and get access to a pre-configured SAP system for learning purposes. Q: How can I get more help or support for learning SAP ERP PP? A: You can get more help or support for learning SAP ERP PP by using one of the following options: - [SAP Community](https://community.sap.com/): You can join the SAP Community and ask questions, share knowledge, or participate in discussions with other SAP experts and users. - [SAP Suppo


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