As expected, there are no changes in the Production Planning process flow with the introduction of S/4 HANA.
PLANNING
The whole process starts either with the forecast of what is going to be sold, or directly with the receipt of Sales Orders which require some kind of Manufacturing.
There will be then a coordination between the Sales/Planning and the Production departments.
Of course, this is totally different depending in the type of business. But frequently this Production Plan is agreed in a weekly meeting.
For the creation of this Production Plan, it must be taken into account the available capacity.
There are different tools in SAP for smoothing this plan so it can cover the sales requirements without forgetting the manufacturing constraints.
It is also possible to simulate different scenarios with the Long-term Planning functionality for assessing the requirement of new resources in the future.
Once the Production Plan is agreed, the MRP can be run.
Again, this can be done in different ways depending on the characteristics of each organization (daily, weekly, …).
The MRP (Materials Requirements Planning) will explode the finished foods requirements to the lower levels, indicating through different configurable logics, when we should start the different production orders and when we should start the procurement of the raw materials and components.
Once this is run, a more detailed scheduling is usually done before the actual manufacturing starts.
PRODUCTION EXECUTION
Till now, only the planning has been done. But the S/4 HANA PP module includes also the production execution.
The MRP will create two types of objects:
- Purchase requisitions
- Planned orders
Purchase requisitions will indicate when and for which quantity the purchase orders for the raw materials and components should be sent to the vendors.
Planned orders will indicate when the manufacturing process should start in order to deliver on time the production plan.
Once the planned orders created by MRP are converted into production orders, they can be released for starting the physical process.
In case shopfloor papers are required, they will be printed at this stage, so operators have all the required information.
First steps in the production execution process will be the consumption of the raw materials and components.
Through the confirmations, it will be possible also to declare the time and additional resources consumed during the process.
Finally, once the semi-finished or finished good is complete, it will be declared as an entry in the warehouse.
As in real life, incurred costs might differ from the planned ones, some differences might remain in the production order.
These differences will be settled in a controlling process against the finished good inventory account (or a different object if required).
And once the balance in the production order is zero, the production order can be definitively closed.
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