Chapter - 7 Manufacturing Planning and Execution Materials Requirements Planning (MRP) As part of the production planning process, generates replenishment schedules for all manufactured components, intermediates, purchased parts, and raw materials. Sets due dates for production orders and purchase requisitions through lead-time scheduling, depending on buffers, operation times, lot-sizing rules, and so on. The planning run is supported by optimization tools when resource situations can be taken into account simultaneously. Manufacturing Execution Supports the process of capturing actual production information from the shop floor to support production control and costing processes. Make-to-Order Supports customer-order-specific planning and production and is industry-specific. Supports assembly processes for (non-) configurable products in a repetitive manufacturing environment or the production of (non-) configured products with production orders. For both processes, the visibility of the customer order is key. This is achieved by using dynamic alerts and order pegging structures during planning and execution. Repetitive Manufacturing Is a rate-based, lean production control system. Based on production and assembly lines, the take times are used for scheduling. An optimizer and heuristics are available for model mix planning and line balancing. Continuous input and output are considered during scheduling. The production runs without any orders for run schedule quantities and production versions. Back flush of labor and material at reporting points support the lean execution process.

Flow Manufacturing The customer demand will be pulled through the production process. The key elements of the solution are line design and line balancing, demand management, line sequencing/model-mix planning, lean execution, backflush, and Kanban management. Shop Floor Manufacturing Tracks production orders and controls production. Real-time integration among sales, production planning, and execution improves the quality and speed of processes. The confirmation of labor and material activities takes place at the operation level. Milestones, back flushing, and automatic goods receipt can reduce the number of business transactions, and multilevel production processes can be controlled. The seamless integration to quality management enables quality inspections during production. Other characteristics are the control of rework, batch tracking, and serial number management. Lean Manufacturing Includes the key components of continuous improvement and elimination of waste across the organization. The key concepts in lean manufacturing are: Continuous Flow Material flows continuously from raw material through to finished product without “waiting” for large batches to be run. Lean manufacturing addresses the issue of wasting setup time by minimizing setup times, rather than minimizing the number of setups. Direct Production The production orders for a product are networked together to form a “collective order.” This ensures that the hierarchy of production orders can be managed as a whole, and this enables companies to simply pass interim products or components to the next work center for the following production order, instead of moving them into stock.

It also allows lean production execution while backflushing labor and material. Integrated Product and Process Engineering (iPPE) The integration of engineering design activities with those of manufacturing engineering avoids unnecessary iterations across functional boundaries and accelerates product development and time-to-market. SAP supports this process by providing a set of master data that is consistent across the design and manufacturing application areas. iPPE also allows for designing and balancing production lines. Process Manufacturing Supports the plant as a multi-process facility. Resource and recipe management forms the basis for planning and sequencing batches or production lots. The solver schedules the process order sequence to avoid costs such as cleanout or changeover. This can be achieved with production campaigns, block planning, or detailed scheduling with a focus on critical resources. Process orders are used for scheduling, execution, and costing. Process management coordinates the data exchange between the SAP execution system and connected process control systems. These processes can be documented and evaluated. The seamless integration with the quality management ensures process control and stability. Batch management fulfills the requirements of the pharmaceutical and chemical industry for managing and tracking batches or production lots across the whole production process. Batch Management In various industry sectors, particularly the process industry, you have to work with homogeneous partial quantities of a material or product throughout the entire quantity and value chain. In the SAP system, a batch is the quantity or partial quantity of a particular material or product that is manufactured according to the same recipe.

Sales and Operations Planning (SOP) The forecast values and/or requirements from customer order management, sales information system, and controlling are inputs to the sales and operations planning phase.The main steps in sales and operations planning are: • • • • • • • •

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Creating a sales and production plan Methods Manual entry Forecast of consumption Copying data from financial modules Copying data from the sales information system Transferring product group Disaggregating the planning values Transferring the planning values to demand management there are four ways to create a production plan in the system. Based on sales Based on target inventory Based on current days of sales supply Based on running down the inventory to zero (Just in Time or Kanban)

Demand Management Demand management links top-level requirements planning (SOP) with materials planning (MPS and MRP) • Demand Management determines the requirements dates and quantities for important assemblies and specifies the strategies for planning and producing or procuring finished products. • The result of Demand Management is the demand program • The demand program distinguishes planned independent requirements and customer independent requirements • The requirements can then be answered to MPS or directly to MRP depending on the MRP type selected in the material master of the material.

MPS Master Production Scheduling The independent requirements from. Demand Management initiate the master scheduling process for MPS designated items. The master production schedule is the anticipated build schedule (high level) the purpose of MPS and MRP is to guarantee availabli1ity. The MPS run results in planned orders for the master schedule items and dependent requirements for the level directly below the MPS items. MPS = Finished goods level only MRP Materials The uses of MRP are as follows: • MRP is used to plan the on time production or procurement of the required quantities for both internal consumption and customer demand. • This process involves monitoring stock levels and automatically creating order proposals for purchasing and production. • For materials produced in-house, the dependent requirements of the components are determined during BOM explosion. • BOM explosion is the process by which the system calculates the components or assemblies required to produce the material. • MRP requires exact requirement quantities, which allows you to work with particularly low safety stocks. • The output of MRP is a planned production order, a purchase requisition, or a planned purchase order. • A planned order can be converted to a production order (for materials produced in-house) or a purchase requisition for procured materials • Goods receipt (receiving the finished good back into inventory) •

Order settlement