master data for scm 2

7/27/2019 Master Data for SCM 2

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SCM Master Data - 2

Master Data for Distribution &Production Processes

EGN 5623 Enterprise Systems Optimization(Professional MSEM)

Fall, 2011


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SCM Master Data - 2

Theories & Concepts


Fall, 2011


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Distribution Planning in SCM (review)

THEORY AND PRACTICE OF ADVANCED PLANNER AND OPTIMIZER IN SUPPLY CHAIN DOMAIN by Sam Bansal


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Time Horizons for Distribution andProduction Planning in SCM (review)


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Level of Detail and Time Horizonof Distribution and PP in APOModules (review)


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Distribution Planning and Production PlanningProcesses in APO Modules (review)


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Distribution and PP Modules in APO SystemStructure and Integration with ERP (review)


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Overview Master Data andApplication in DP and PP (review)


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Master Data and Application inDistribution Planning and PP (overview)

Master Data for Distribution Planning:

Location, Product, Resource, Transportation lane,

Quota arrangement, Interchangeability group.

Master data for Production Planning:Location, Product, Resource, PPM/PDS , Quota

arrangement, Set up Group & matrix, and

Interchangeability group.


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Master Data and Application in DistributionPlanning and PP (Overview)

Transportation lanes:

Transportation lanes are required from plant and

distribution center to the transportation zone and have to

be created manually. The allowed carriers have to be

assigned per means of transport and transportation laneexplicitly.

Quota arrangement (vendorss quota):

If it is intended to source from multiple locations on aregular basis, quota arrangement must be used. The

concerned products are assigned to the quota

arrangement, and the ratio of the resources is defined

per product.


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SCM Master Data - 2

Master Data for Distribution

Planning


Fall, 2011


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Distribution and Supply ChainPlanning

Distribution planning between the manufacturing

plants and warehouses becomes important, as many

companies change their logistics processes from non-

coordinated local inventory management to a global

inventory management in order to reduce inventories.

The focus for distribution and supply chain planning is

on make-to-stock production.


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Distribution Planning, Supply ChainPlanning, and Replenishment


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Process Chain for Distribution andSupply Chain Planning


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1. Distribution planning is performed based on demand andstock information with the result of planned stock

transfers.

2. The most important issues are usually the netting of thelocal stocks, safety stock levels, sourcing options,

transportation times and lot sizes for the planned stock

transfers.

3. If required, restrictions are considered regarding storagecapacity and handling capacity for goods issue and

goods receipt.


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Two processes exist within replenishment:

1. Deployment, and

Deployment is concerned with the fair share of

quantities to the requesting parties in case of

shortage or surplus. The constraints areavailable quantities.

2. Transport load building.

Transport load building is one step closer to

execution and focuses on the creation of truckloads, where the task is to adjust the planned

stock transports to the available

trucks/transport means and take their capacity

restrictions into account.


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In SAP APO, there are four applications that support

distribution and production planning:

1. SNP heuristic

2. SNP optimizer3. CTM (with SNP or PP/DS master data)

4. PP/DS heuristics

li i f i ib i d


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Applications for Distribution andSupply Chain Planning


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Features of the Application forDistribution


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Distribution planning with SNP heuristic is often used in theenvironments where multiple sourcing is not an issue and

production is usually able to meet the demands, so that the

main task forSNP heuristic is to calculate the demands for

production planning based on local inventories, transportation

times, safety stocks and lot sizes.

SNP optimization allows a complete consideration of the supply

chain determinants (i.e., sources and cost, production capacity,

transport, storage and handling). The aim ofSNP optimizer is

to find a global optimum for supply chain based on cost andpenalty cost.

CTM pursues a priority based on approaches such as FIFS.


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Order Cycle for Stock Transfer


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Order Cycle for Stock Transfers

The stock transfer order has two aspects as a demand inthe source location and as a supply in the target location. The

documents differ in SAP ERP and SAP APO.

The creation of the planned stock transfer, deployment and

transport load building (TLB) is performed in SAP APO.

The execution part from the creation of the outbound delivery

in the source location until the goods receipt in the target

location is performed in SAP ERP, and the information is

displayed in SAP APO.


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Order Cycle for Stock Transfers

Three order types in SAP APO1. Planned stock transfer,

2. Deployment confirmed stock transfer and

3. TLB-confirmed stock transfer

They are matched to the stock transfer requisition and thestock transfer order in SAP ERP according to the setting for

SNP transfer (SAPAPO/SDP110).


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Order Flow for Stock Transfer onSAP ERP side


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Stock Transfer Order

Stock transfer order is first scheduled in SAP APO, thentransferred to SAP ERP and scheduled again in SAP ERP

according to the delivery date. The scheduled dates in SAP

ERP are not transferred back to SAP APO.

Stock transfers are executed according to the order dates inSAP ERP, therefore it is important to keep the scheduling in

SAP APO and SAP ERP consistent.

The transport duration in SAP APO is calculated using the

entry from the transportation lane, whereas SAP ERP uses

the planned delivery time of the material master of the target

location.


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Stock Transfer Scheduling

for transportation

for transportation


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Setting for Stock Transfer within andacross Company Codes in SAP ERP

Since SAP APO does not know any company codes, there isno difference in SAP APO whether stock transfers are planned

within one company code or across company codes. On SAP

ERP side, cross company stock transfers require the

additional settings. The assignment of the sales area and the

customer to the plant is made with maintenance viewV_001W_IV.


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Setting for Stock Transfer within andacross Company Codes in SAP ERP


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Setting for Stock Transfer AcrossSystems

Stock transfer across two SAP ERP systems is modelled by a

purchase order in the target plant and a sales order in the

source plant.

Setting for Stock Transfer Across


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Setting for Stock Transfer AcrossSystems


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SCM Master Data - 2

Master Data for Production

Planning Process


Fall, 2011


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Production Master Data OverviewThe relevant master data for production planning:

LocationProduct

Resources

PPM and PDS

Quota arrangement,

Set up Group & matrix, andInterchangeability group.

Note on resources:SNP and PP/DS require a different view of the capacity.

SNP in bucketsPP/DS time-continuous capacity


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Resources for SNPThe idea of SNP is to perform an aggregated planning.

Since SNP is an application for bucket-oriented planning,the resources for SNP offer a certain capacity per time

bucket usually per day. The bucket resources provide

the capacity e.g. the amount of working hours per day

of the resource which is used for the capacity

consumption of the orders.

For the scheduling of the production orders, the factory

calendar is assigned to the resources. The standard

capacity is defined in the resource master.

Figure 13.13 shows these setting for the bucket

resource. Another way to define the capacity is the use of

a reference resource to save time.


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Settings for a Bucket Resource


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Resources for PP/DSIn PP/DS, scheduling and capacity consumption are not

separate steps, but the capacity is consumed by thescheduled operation.

The basic resource property in PP/DS is the working

time, which depends on the standard working hours, the

break time, and factory calendar.

Usually the available working time is modelled per shift,

and the shifts are assigned to a shift sequence to model

circumstances.


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Settings for PP/DS (single Resource)


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Production Master Data OverviewPPM

The Production Process Model (PPM) defines thedetailed information required for manufacturing a

product. The PPM combines routing and the bill of

materials (BOM) into one master data object. Each PPM

includes one or more operations. Each operation, inturn, includes one or more activities, for which materials,

relationships and resources are maintained. The

activities and resources defined in the PPM are assigned

to costs that are used by the SNP Optimizer and for finite

scheduling by Production Planning and DetailedScheduling (PP/DS).


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Production Master Data Overview

Supply Network Planning (SNP) is a long term, rough cut planning tool.

SNP requires a PPM with less information than the one used forproduction planning and detailed scheduling (PP/DS).

During a planning run, SNP can schedule resources down to the day. In

order to perform scheduling at the day level, the PPMs and resources

must be simplified. Additionally, when using optimization technologies, itis important to limit the number of inputs (materials) to find a proper

solution in a reasonable runtime.

Restriction to a specific lot size is required to determine the exact

production consumption or mode duration.SAP SCM allows you to generate SNP production process models

(PPMs) based on existing PP/DS PPMs.


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Production Master Data Overview

PDS (production data structure)SAP initially developed the Production Process Model

(PPM) to model manufacturing master data. It was

replaced in SCM 4.1 by PDS. However PPMs are still

supported.

In some industries modeling the production and evolution

of a certain product can be very complicated. When a

product has many variations due to customers choosing

a combination of features and options they typically usedthe variant configuration solution in standard SAP ERP.


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Production Master Data OverviewFrom SCM 4.1 on, the Production Data Structure (PDS)

is the key master data for all kinds of production planningrelated processes. The PDS is supported by the

applications of PP/DS, SNP, CTM and DP.

Like the PPM, the PDS corresponds to the production

version on SAP ERP system. Though both PPM and

PDS are still available as alternatives, there is no further

development for the PPM since SCM 4.0.

The main motivation to develop the PDS was to have anintegration of the Engineering Change Management

(ECM) and the Variant Configuration between SAP ERP

and APO.


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Structure of PDS and PPM


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Transfer of PPM and PDS


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Production Process Overview

Production Planning consists mainly ofcreation of plannedorder, purchase requisition for the demand, the detailed

scheduling to create a sequence for the orders which is

sufficiently capacity-feasible (usually in the short-term) and

execution of the production order. In many cases it is desired

to have at least a rough feasibility check of the production plan

in the mid-term as well.

The detailed scheduling is usually only performed for the short

term horizon.

Traditionally both production planning and scheduling are

limited to the plant level.


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If a supply chain contains alternative production plans(possibilities), the process becomes more complex. It often

requires an integrated distribution and production planning.

Depending on the business requirements it might be

favourable to create a rough-cut production plan for the mid-

term or even long-term before the more detailed production

plan. The approach represents the idea of a hierarchical

planning, i.e. to plan with less detail for the farther future and

has the benefits of avoiding unnecessary information andunnecessary system load and to have a tighter integration

with the distribution planning.

Process Chain for a Make to Stock


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Process Chain for a Make-to StockProduction


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Objectives for Production Planning: to meet the demand

to consider the resource capacities and the

material availabilities

to improve utilisation of the resources to low set up time

to minimise the stock, and

to minimise the work in process (WIP)

to improve stability of the plan


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1. Generally the complexity of a production planning taskincreases with the number of BOM-levels, number of

operations, and finite resources, the use of fixed, or

minimized lot sizes and sequence dependent set-up.

2. Though APS (Advanced planning and Scheduling)

systems allow theoreticallya one-step approach,

experience shows it is better and more reliable to keep the

constraints as less as possible in modeling and to use a

two step approach to create a feasible plan, i.e. infiniteproduction planning first and finite scheduling on the key

resources later.


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Order Cycle for Production


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Order Cycle for Production

The result of production planning are planned orders whichcontain the information about the dependent demand and the

capacity requirement in SAP APO.

The production orders are reduced by the order confirmation

and remain in SAP APO until it is technically completed.


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Production Planning Applications

SAP APO offers different applications for production planningand detailed scheduling. Production planning is supported by

the modules SNP and PP/DS with two different levels of

details.

- rough-cut and bucket-oriented planning (SNP), and

- time-continuous planning (PP/DS).

Detailed scheduling with the purpose of creating a sequence

for order execution is only supported by PP/DS since SNP is

limited to bucket-oriented planning and there is no sequencewithin a bucket.

Applications for Production


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Applications for ProductionPlanning and Scheduling


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Production Planning ApplicationsBased on the variety of the applications there are many

options for creating a feasible plan in SAP APO. Each has itsadvantages and disadvantages.

1. Distribution and medium-term production planning with

SNP heuristic, the SNP optimiser or CTM with SNP

master data, short-term production planning by

conversion of SNP orders to PP/DS orders anddetailed scheduling with the DS heuristics or PP/DS

optimiser.

2. Distribution planning with SNP heuristic, medium-term

production planning with SNP optimiser, short-term

production planning by conversion of SNP orders toPP/DS orders and detailed scheduling with DS

heuristic or PP/DS optimiser.


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Production Planning Applications3. Production planning for medium-term and short-term

horizon with higher level of detail in PP/DS using PPheuristics or TM and detailed scheduling with DS heuristic

or PP/DS optimiser.

4. Demand planning in SAP ERP especially when there is

already a sufficient solution using SOP or long-term

planning. Production planning is performed with PPheuristics, scheduling with DS heuristics or PP/DS

optimiser.

5. Demand planning and production in SAP ERP SAP APO

is used only for scheduling.


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Production Planning Applications6. Only medium-term production planning on rough-cut

level is performed in SAP APO either by SNPheuristic, SNP optimiser or CTM. The benefit is having

a capacity check and purchase requisitions for

components with long lead time. Planned orders are

transferred to SAP ERP, where production planning

and scheduling on detailed level are for the short-termhorizon.

7. Production planning is triggered by the sales order entry

either via CTP or multi-level ATP. Scheduling is

performed with scheduling heuristics or PP/DS

optimizer.

PP/DS optimiser is used only for scheduling, not for creation

of orders.

Scenarios for Production Planning


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gusing Different Applications


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Lot SizeLot sizes have a significant impact on the production planning

result and challenges for scheduling. The fixed, minimum andperiodical lot sizes in material master data increase the

complexity of the planning problem.


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Lot Size Methods


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Lot Size

Though CTM supports minimum and fixed lot sizes, but CTM

performs a finite planning and does not split orders across

buckets which might lead to a very low utilisation.


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SCMMaster Data - 2

Master Data for Distribution &Production Processes

SAP Implementation


Fall, 2011


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PP/DS Module in SAP SCM

Note: Strategic network design issues

are not handled by SAP SCM


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Order Cycle for Stock TransfersThe outbound delivery for the stock transfer order is created

with transaction VL10B in SAP ERP, picking and the posting of

goods issue is done with the transaction VL02N in the

delivery.

Using the message type LAVA the inbound delivery in source

location can be triggered with the posting of the goods issue(or manually with the transaction VL31N).

For the use of deliveries it is necessary that a vendor is

assigned to the source location and that an info record exists

in SAP ERP.

The inbound delivery is transferred to SAP APO as a purchase

order memo with the significance of the stock transit.

i


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Exercises:1. Module 4 (Section 2)

Create a forecast for the finished products

Product groupCreate product group in SAP ERP system

Create SOP plan for product group

Create SOP plan

Transfer plan to demand management

Transfer plan

Check the transfer results in demand management

2. Module 5 (Section 2)Generation and activation of integration models

Integration models

Create integration model for plants in SAP ERP system

Activate integration model

Confirm data transfer in SCM system

Create integration model for DCs in SAP ERP system

Activate integration model for DCs in SAP ERP system

Confirm data transfer for DCs in SCM system

E i ( ti d)


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Exercises (- continued):

Create integration model for vendors in SAP ERP system

Activate integration model for vendors in SAP ERP system

Confirm data transfer for vendors in SCM system

Create integration model for customers in SAP ERP system

Activate integration model for customers in SAP ERP system

Confirm data transfer for customers in SCM system

Create integration model for materials at plant level in SAP ERP system

Activate integration model for materials in SAP ERP systemConfirm data transfer in SCM system

Create integration model for materials at DCs level in SAP ERP system

Activate integration model for DC materials in SAP ERP system

Confirm data transfer materials (DCs) in SCM system

master data for scm 2

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