Curtiss-Wright Santa Clarita - Training Planning

Curtiss-Wright Training (Santa Clarita)

Planning SessionJune 24-25-26, 2009

2

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

75

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

78

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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