pp blueprint

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CONTENT 1. OVERVIEW.............................................................4 2. MASTER DATA..........................................................5 2.1 FACTORY CALENDAR.....................................................5 2.1.1 overview........................................................5 2.1.2 BUSINESS REQUIREMENT............................................5 2.1.3 BLUEPRINT.......................................................5 2.2 BILLS OF MATERIALS...................................................6 2.2.1 Overview........................................................6 2.2.2 Business Requirement............................................6 2.2.3 Blueprint......................................................14 2.3 Material Master PP Related Fields...................................14 2.3.1 Overview.......................................................14 2.3.2 Business requirement...........................................14 2.4 WORK CENTRES........................................................15 2.4.1 Overview.......................................................15 2.4.2 Business Requirement...........................................16 2.4.3 Blueprint......................................................16 2.5 ROUTINGS............................................................16 2.5.1 Overview.......................................................16 2.5.2 Business Requirement...........................................16 2.5.3 Blueprint......................................................17 2.6 ENGINEERING CHANGE NUMBER (ECN).....................................17 2.6.1 Overview.......................................................17 2.6.2 Business Requirement...........................................17 2.6.3 Blueprint......................................................17 3. PRODUCTION PLANNING.................................................18 3.1 DEMAND MANAGEMENT...................................................18 3.1.1 Overview.......................................................18 3.1.2 Business Requirement...........................................18 3.1.3 Blueprint......................................................18 3.2 LONG TERM PLANNING..................................................18 3.2.1 Overview.......................................................18 3.2.2 Business Requirement...........................................19 3.2.3 Blueprint......................................................19 3.3 MATERIAL REQUIREMENTS PLANNING (MRP)................................19 3.3.1 Overview.......................................................19 3.3.2 Business Requirements..........................................19 3.3.3 Blueprint......................................................20 3.4 PRODUCTION CONTROL..................................................21 3.4.1 Overview.......................................................21 3.4.2 Business Requirement...........................................22 3.4.3 Blueprint......................................................24 3.5 ORDER INFORMATION SYSTEM............................................25 3.5.1 Overview.......................................................25 3.5.2 Business Requirement...........................................25 3.5.3 Blueprint......................................................25

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Page 1: PP Blueprint

CONTENT

1. OVERVIEW..................................................................................................................................4

2. MASTER DATA...........................................................................................................................5

2.1 FACTORY CALENDAR...............................................................................................................52.1.1 overview.............................................................................................................................52.1.2 BUSINESS REQUIREMENT..............................................................................................52.1.3 BLUEPRINT.......................................................................................................................5

2.2 BILLS OF MATERIALS................................................................................................................62.2.1 Overview............................................................................................................................62.2.2 Business Requirement.......................................................................................................62.2.3 Blueprint...........................................................................................................................14

2.3 Material Master PP Related Fields............................................................................................142.3.1 Overview..........................................................................................................................142.3.2 Business requirement.......................................................................................................14

2.4 WORK CENTRES......................................................................................................................152.4.1 Overview..........................................................................................................................152.4.2 Business Requirement.....................................................................................................162.4.3 Blueprint...........................................................................................................................16

2.5 ROUTINGS................................................................................................................................162.5.1 Overview..........................................................................................................................162.5.2 Business Requirement.....................................................................................................162.5.3 Blueprint...........................................................................................................................17

2.6 ENGINEERING CHANGE NUMBER (ECN)..............................................................................172.6.1 Overview..........................................................................................................................172.6.2 Business Requirement.....................................................................................................172.6.3 Blueprint...........................................................................................................................17

3. PRODUCTION PLANNING.......................................................................................................18

3.1 DEMAND MANAGEMENT.........................................................................................................183.1.1 Overview..........................................................................................................................183.1.2 Business Requirement.....................................................................................................183.1.3 Blueprint...........................................................................................................................18

3.2 LONG TERM PLANNING..........................................................................................................183.2.1 Overview..........................................................................................................................183.2.2 Business Requirement.....................................................................................................193.2.3 Blueprint...........................................................................................................................19

3.3 MATERIAL REQUIREMENTS PLANNING (MRP)....................................................................193.3.1 Overview..........................................................................................................................193.3.2 Business Requirements...................................................................................................193.3.3 Blueprint...........................................................................................................................20

3.4 PRODUCTION CONTROL........................................................................................................213.4.1 Overview..........................................................................................................................213.4.2 Business Requirement.....................................................................................................223.4.3 Blueprint...........................................................................................................................24

3.5 ORDER INFORMATION SYSTEM............................................................................................253.5.1 Overview..........................................................................................................................253.5.2 Business Requirement.....................................................................................................253.5.3 Blueprint...........................................................................................................................25

4. BUSINESS PROCESSES.........................................................................................................26

4.1 Master Data Maintenance Process............................................................................................264.1.1 BOM Maintenance............................................................................................................264.1.2 Work Centre Maintenance................................................................................................264.1.3 Routing Maintenance.......................................................................................................27

4.2 Demand Planning Process........................................................................................................274.3 Weekly MRP Process................................................................................................................27

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4.4 Process SMD Production Plan...................................................................................................284.5 Long Term Planning Process.....................................................................................................294.6 Creation of Costing BOMs.........................................................................................................29

5. Customised Reports & Interfaces..............................................................................................31

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1. OVERVIEW

ABC Egypt is the pilot market for the Symphony+ implementation in-line with the AME ERP Convergence Project.

The business requirements are based on a two company code organisation structure being adopted to reflect the business scenarios of ABC Egypt (ABCE - Legal entity) and Eastern Corporation (EC - External entity – Sub-contract manufacturer).

From the production planning perspective, ABCE will be primarily facilitating the materials planning and procurement for ABC SKUs (Rothmans & Kent) and filter components for EC products; and subcontracting activities with EC. In the near future, a subcontract manufacturing process will be required for the new and fully imported SKU, Vogue, which will be added to the ABCE family of SKUs. ABCE does not have production activities. All SMD production activities are subcontracted to EC. ABCE will be reflected on the SAP system as a Legal entity.

EC will facilitate the materials planning for own use (Viceroy) and planning for the manufacturing of ABCE SKUs and filters. This will enable ABCE to monitor details of production that cannot be captured currently i.e. production cost; production variances; material wastage; etc. EC will be reflected on the SAP system as a dummy entity.

The Production Planning module will be used for the Shopfloor operation.The following functions of Production Planning will be implemented and detailed

Master datao Bills of materials (BOM) with Engineering Change Number (ECN).

o Work Centres

o Routings

Production Planningo Demand Planning

o Long Term Planning

Materials Requirement Planning Production Control

o Create, Change & Cancel production orders

o Stock/Requirements List

o Mass Processing of production orders

o Collective Availability Checks

o Collective Release of production orders

o Goods Issue to production orders

o Goods Receipt to production orders

o Individual confirmation of production order

o Collective confirmation of production orders

o Reprocessing of errors in goods movement

o Period end closing

Variance calculation Order Settlement

Order Information System Customised Reports Interface

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2. MASTER DATA

2.1 FACTORY CALENDAR

2.1.1 OVERVIEW

The factory calendar is defined on the basis of a public holiday calendar. The validity period of a factory calendar must be within the validity period of the public holiday calendar. The public holiday and factory calendar is a central module in the SAP System. It is assigned to a specific plant during the initial system setup and therefore used in many areas (e.g. in Logistics and in Human Resources) in the system. The weekdays that are working days must also be specified in this calendar.ExampleMonday through Friday is working days.Saturday, Sunday, and public holidays are non-working days.The calendar system consists of the following components:

Public holidaysDefinitions for public holidays: Calculation rule for date, religious denomination etc.

Public holiday calendarA composition of public holiday rules.Factory calendarDefinition of workdays including special regulations, under the assignment of a particular public holiday calendar.

2.1.2 BUSINESS REQUIREMENT

ABCE requires that the factory calendar to be define without any holidays i.e. all days in the year will be considered working days.

ABCE and EC works from Saturday to Thursday. Validity of the Factory Calendar to be set to more than 10 years to facilitate the Long Term

Planning for 10 years.

2.1.3 BLUEPRINT

Settings for factory calendar will be configured in the system as per below

Setting Values Remarks

Define public holidays None

Define public holiday calendar

ID: EGDesc: Holiday calendar - Egypt

Define factory calendar ID: EGDesc: Factory calendar - Egypr

Assignment to Plant Plant EG01Factory calendar EG

Plant EG90Factory calendar EG

Linking of factory calendar to plant.

2.2 BILLS OF MATERIALS

2.2.1 OVERVIEW

Bill of Materials or commonly called BOM is a formally structured list of components that make up a product or assembly. The list contains the material number of the component together with the quantity and unit of measure.BOMs are used in their different forms in various situation where a finished product is assembled from several component parts or materials. Depending on the industry sector, they can also be called recipes or lists of ingredient and so on.BOMS contain important basic data for numerous areas of a company, for example :

Page 5: PP Blueprint

o MRP

o Material provision for production

o Product costing

o Plant maintenance – ABCE and EC is not using Plant Maintenance

2.2.2 BUSINESS REQUIREMENT

BOMs are required to be created for the following :o Finished goods

o Filters – This will be created as Sub-contracting BOM

o Cigarettes – This will be created as a phantom BOM

Item type in material master for finished goods will be set as ZERT (Finished goods) Item type in material master for semi-finished ie cigarettes, filter rods and cutrag will be set as

ZALB (Semi-finished) For finished goods and filter rod BOMs, backflush indicator will be set for all components. Scrap factors will be set for all components to facilitate planning. Scrap factor % will be

discussed with SMD Manager before implementing. Shorts will be included in finished goods BOM at a quantity of 0.01 for the convenience of the

user during production reporting and subcontract order issuing.. Quantity of shorts used will be adjusted together with cutrag quantity at the point of production reporting and subcontract order issuing.

Engineering Change Number (ECN) will be used to manage BOM creation and changes. Production BOM for SKU will have material(s) for inserts attached with an ECN. Costing

BOMs will not include inserts The differences will be reflected as production variance. Custodian for BOM maintenance will be :

o Product Development Mgr (currently Supply Chain Mgr)

ABC Egypt SKUso Rothmans King Size (RKS) – GD

o Rothmans King Size (RKS) – Focke / Protos (FP)

o Rothmans Lights (RLS) – GD

o Rothmans Lights (RLS) – FP

o Kent (K1)

o Kent (K3)

o Kent (K6)

o Kent (K9)

o Vogue (To be introduced in the near future)

Eastern Corporation SKUso Viceroy (VFF) – GD

o Viceroy (VFF) – FP

o Viceroy (VLS) – GD

o Viceroy (VLS) – FP

o Viceroy (VML) – GD

o Viceroy (VML) – FP

ABCE BOMs: ABCE SKU: Rothmans

o BOM for Filters are created for Sub-contracting process. Plug wrap and Filter Tow are required in the BOM for materials planning as they are purchased from ABCUKE. (Refer Example1)

ABCE will purchase the Plug Wrap and Filter Tow from ABCUKE. ABCE will raise a Sub-con PO for to EC (NOT EG90) for Filter Rods by

providing them the Plug Wrap and Filter Tow as Material Provided to Vendor. ABCE will Goods Receipt Filter Rods and consume the Plug Wrap and Filter

Tow automatically.

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o Phantom BOM is required for the Cigs which consists of the Filter Rods, Cut Rag and other component that make up of the Cigs.

o ABCE will raised a Sub-Con PO for Finished Goods and supplied them with Filter Rods and the rest of the components that make up of the finished goods. (Refer Example 2)

o Production BOM for SKUs Finished Goods: Components will consist of all cigarette raw materials and wrapping materials to enable planning for supply to EC. Cutrag quantity will be based on 100% usage (perfect usage). At the point of FG subcontract goods receipt, the user will adjust the quantities accordingly based on actual usage of cutrag only.

o The same SKU is able to be produced at 2 different machines, i.e. GD and Focke & Protos (FP), and thus the component used in any of the machine could be different from the others.

o The approach is to create two alternative BOM to represent the actual component used for the different machine at the time of production. Each alternative BOM is represented as a Production Version.

o PIR will be uploaded based on Production Version and each upload for different Production Version has to be differentiated by ONE day difference. This is because for the same material uploaded for the same day, even though for different production version, the system will combined the two PIR into one Planned Order and apply the first Production Version. Therefore in order to overcome the above issue mentioned, PIR for different versions of the same materials were to be uploaded with ONE day of difference between the two versions. Refer the below example to further explained:

Material Plant Prod Version D01072005 D02072005 D08072005 D0907200510001 EG90 001 100 20010001 EG90 002 250 300

o EG01: Production BOM for Filters, Phantom BOM for Cigs and Production BOM for FG (EXCLUDE of SHORTS)

o EG90: Phantom BOM for Cigs and Production BOM for FG (INCLUDE of SHORTS).

ABCE SKU: Kento There is not a need for BOM for Kent’s Filter Rods as those are directly imported from

ABCUKE to ABCE. Normal PO is raised for this purchase. o Phantom BOM is required for the Cigs which consists of the Filter Rods, Cut Rag and

other component that make up of the Cigs.o ABCE will raised a Sub-Con PO for Finished Goods and supplied them with Filter Rods

and the rest of the components that make up of the finished goods. (Refer Example 2)o Production BOM for SKUs Finished Goods: Components will consist of all cigarette raw

materials and wrapping materials to enable planning for supply to EC. Cutrag quantity will be based on 100% usage (perfect usage). At the point of FG subcontract goods receipt, the user will adjust the quantities accordingly based on actual usage of cutrag only.

o The same SKU is able to be produced at 2 different machines, i.e. GD and Focke & Protos (FP), and thus the component used in any of the machine could be different from the others.

o The approach is to create two alternative BOM to represent the actual component used for the different machine at the time of production. Each alternative BOM is represented as a Production Version.

o PIR will be uploaded based on Production Version and each upload for different Production Version has to be differentiated by ONE day difference. This is because for the same material uploaded for the same day, even though for different production version, the system will combined the two PIR into one Planned Order and apply the first Production Version. Therefore in order to overcome the above issue mentioned, PIR for different versions of the same materials were to be uploaded with ONE day of difference between the two versions. Refer the below example to further explained:

Material Plant Prod Version D01072005 D02072005 D08072005 D0907200510001 EG90 001 100 20010001 EG90 002 250 300

o EG01: Phantom BOM for Cigs and Production BOM for FG (EXCLUDE of SHORTS).

o EG90: Phantom BOM for Cigs and Production BOM for FG (INCLUDE of SHORTS).

ABCE Sampling BOM: SAMPLE Finished Goodso Change the Sampling BOM to reflect the actual component for the specific sampling run.

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o ABCE will raised a PO to purchase the raw and semi-finished goods for Sampling FG, if needed.

o ABCE will do a Goods Receipt against this PO for the raw and semi-finished purchased.

o ABCE will then raised a Sub-con PO to EC (EG90)for SAMPLE Finished Goods and supplied them with the raw and semi-finished materials required as Materials Provided to Vendor.

o Production BOM for SKUs Finished Goods: Components will consist of all cigarette raw materials and wrapping materials to enable planning for supply to EC. (Refer to Example 3)

o EC(EG90) will run the production as per normal.

o When ABCE do a Goods Receipt for the SAMPLE Finished Goods against the Sub-Con PO, the materials in Materials Provided to Vendor will be consumed automatically.

o EG01: Production COM for Filter Rods, Phantom BOM for Cigs, Production BOM for FG

o EG90: Phantom BOM for Cigs, Production BOM for FG

ABCE Imported SKU: Vogueo ABCE will raised a PO to the customs to purchase the Banderole.

o ABCE will do a Goods Receipt of Banderole against this PO.

o ABCE will then raised a Sub-con PO to ABCUKE for Finished Goods Vogue and supplied them with the Banderole as Materials Provided to Vendor. (Refer Example 4)

o When ABCE do a Goods Receipt for the Finished Goods Vogue against the Sub-Con PO, the Banderole will be consumed automatically. Tax will be paid for the Finished Goods.

o EG01: Sub-Con BOM for FG

Page 8: PP Blueprint

Example 1: EG01-ABCE SKU: Rothmans ONLY - Sub-Contracting BOM for Filter Rods

Example 2: EG01-ABCE SKU: Rothmans & Kent - Production BOM for Finished Goods

Filter Rods

Plug Wrap Filter Tow

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Filter Rods

Plug Wrap Filter Tow

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Filter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsRothmans

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper CutragFilter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsRothmans

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper Cutrag

Page 9: PP Blueprint

Example 3: EG01-ABCE SKU: SAMPLE Finished Goods - Production BOM for Finished Goods

Example 4: EG01-ABCE Imported SKU: Vogue – Sub-contracting BOM for Finished Goods

EC BOMs: EC SKU: Viceroy

o No BOMs is required to be created at EG01 as EG01 will purchase Viceroy as a whole from EC.

o However, ABCE will do the planning of materials and production for Viceroy in EG90.

o Production BOM for Filter will be created in EG90 for planning of materials such as Plug Wrap and Filter Tow. (Refer to Example 5)

Finished Goods

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Banderole

Finished Goods

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Banderole

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

Page 10: PP Blueprint

o Production BOM for Finished Goods (Viceroy) will be created in EG90 for planning of materials and production. MRP to be run to plan for the Materials. Cutrag quantity will be based on 100% usage (perfect usage) and shorts quantity will be 0.01 units. At the point of production backflush, the user will adjust the quantities accordingly based on actual usage of cutrag AND shorts.

o Costing BOM to be created the same as production BOM in EG90 for standard cost estimate run.

o The same SKU is able to be produced at 2 different machines, i.e. GD and Focke & Protos (FP), and thus the component used in any of the machine could be different from the others.

o The approach is to create two alternative BOM to represent the actual component used for the different machine at the time of production. Each alternative BOM is represented as a Production Version.

o PIR will be uploaded based on Production Version and each upload for different Production Version has to be differentiated by ONE day difference. This is because for the same material uploaded for the same day, even though for different production version, the system will combined the two PIR into one Planned Order and apply the first Production Version. Therefore in order to overcome the above issue mentioned, PIR for different versions of the same materials were to be uploaded with ONE day of difference between the two versions. Refer the below example to further explained:

Material Plant Prod Version D01072005 D02072005 D08072005 D0907200510001 EG90 001 100 20010001 EG90 002 250 300

o EG01: No BOMs needed

o EG90: Production BOM for Filters, Phantom BOM for Cigs, Production BOM for FG

Page 11: PP Blueprint

Example 5: EG90-EC SKU: Viceroy – Production BOM for Finished Goods

ABCE SKU: Rothmans and Kento Phantom BOM for Cigs will be created in EG90.

o Production BOM for ABCE SKU (Rothmans and Kent): System will plan for the production of Finished Goods and the components are not planned as it will be provided/supplied by EG01. (Refer to Example 6)

o Costing BOM will be the same as production BOM except that there will not be any Shorts.

o The same SKU is able to be produced at 2 different machines, i.e. GD and Focke & Protos (FP), and thus the component used in any of the machine could be different from the others.

o The approach is to create two alternative BOM to represent the actual component used for the different machine at the time of production. Each alternative BOM is represented as a Production Version.

o PIR will be uploaded based on Production Version and each upload for different Production Version has to be differentiated by ONE day difference. This is because for the same material uploaded for the same day, even though for different production version, the system will combined the two PIR into one Planned Order and apply the first Production Version. Therefore in order to overcome the above issue mentioned, PIR for different versions of the same materials were to be uploaded with ONE day of difference between the two versions. Refer the below example to further explained:

Material Plant Prod Version D01072005 D02072005 D08072005 D0907200510001 EG90 001 100 20010001 EG90 002 250 300

o EG90: Phantom BOM for Cigs, Production BOM for FG (INCLUDE of SHORTS)

Filter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsViceroy

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper Cutrag

Plug Wrap Filter Tow

Shorts

Filter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsViceroy

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper Cutrag

Plug Wrap Filter Tow

Shorts

Page 12: PP Blueprint

Example 6: EG90-ABCE SKU: Rothmans and Kent Production BOM

ABCE SKU: SAMPLE Finished Goodso Phantom BOM for Cigs will be created in EG90.

o Production BOM for ABCE SKU (SAMPLE Finished Goods): System will plan for the production of Finished Goods and the components are not planned as it will be provided/supplied by EG01. (Refer to Example 7)

o Costing BOM will be the same as production BOM except that there will not be any Shorts.

o The same SKU is able to be produced at 2 different machines, i.e. GD and Focke & Protos (FP), and thus the component used in any of the machine could be different from the others.

o The approach is to create two alternative BOM to represent the actual component used for the different machine at the time of production. Each alternative BOM is represented as a Production Version.

o PIR will be uploaded based on Production Version and each upload for different Production Version has to be differentiated by ONE day difference. This is because for the same material uploaded for the same day, even though for different production version, the system will combined the two PIR into one Planned Order and apply the first Production Version. Therefore in order to overcome the above issue mentioned, PIR for different versions of the same materials were to be uploaded with ONE day of difference between the two versions. Refer the below example to further explained:

Material Plant Prod Version D01072005 D02072005 D08072005 D0907200510001 EG90 001 100 20010001 EG90 002 250 300

o EG90: Phantom BOM for Cigs, Production BOM for FG (INCLUDE of SHORTS)

Filter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsRothmans/Kent

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper Cutrag

Shorts

Filter Rods

Display Carton Final Case

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsRothmans/Kent

PolyInner FrameAlum. FoilBlanksCigs

Cig Paper Tipping paper Cutrag

Shorts

Page 13: PP Blueprint

Example 7: EG90-ABCE SKU: SAMPLE Finished Goods Production BOM

Recommendations to consider for procurement of filter rod materials: Plasticiser, Glue and Anchorage.

However this process will stick to As-Is for now. Currently, filter rod materials: Plasticiser, Glue and Anchorage, are collectively purchased and supplied by EC for all ABCE and EC SKUs. On a monthly basis, EC will bill ABCE for the usage of the said items. This invoice sent from EC will be settled against the Sub-Con PO raised by ABCE to EC for the production of Filter Rods. Manufacturing Fees for Filter Rods are lumped together at the Finished Goods Manufacturing Fees.

To meet product costing requirements and to simplify and facilitate the the logistics process, the below proposed process is recommended:

1) ABCE will raise a monthly purchase requisition / purchase order to EC for the purchase of the said items based on ABCE SKU production plan.

2) EC will raise a collective pruchase requisition / purchase order to external vendor for the collective purchase of the said items based on ABCE and EC SKU production plan.

3) For Inventory Management for ABCE SKUs (Rothmans and Kent): When ABCE raised the Sub-Con PO to the EC for Finished Goods (ONLY

ABCE SKUs, Rothmans and Kent), the Subcontracting BOM will explode and all the raw materials and semi-finished will be supplied to EC thru Material Provided to Vendor.

At the same time, the EG90 will do a GR without PO (Movement Type 501) into the EG90 for those raw materials and semi-finished provided.

Once the production is finished in EG90, EG90 will receipt the Finished Goods into the WH and consumed the raw materials and semi-finished.

Then EG90 will perform a Goods Issue out from the Warehouse for the Finished Goods.

At the same time, EG01 will perform a Goods Receipt against the Sub-con PO and then consumed the raw materials and semi-finished that was under Materials Provided to Vendor.

4) However for EC SKU (Viceroy), EG90 will raised PO for the raw materials and semi-finished materials. Upon the receipt of the raw materials and semi-finished goods, EG90 will perform a GR agianst PO (Movement Type 101).

5) EC will invoice ABCE accordingly on a monthly basis for:

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

Shorts

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

Shorts

Page 14: PP Blueprint

Manufacturing Fee for Filter Rods and SMD

Plasticizer, Glue and Anchorage

Benefit:1) Production costing – Will be able to capture actual cost of the items for each order.2) Logistics – Will be able to support the subcontract purchasing process for finished

goods and allow for stock visibility.3) Finance – Allow for proper control of the invoice process.

2.2.3 BLUEPRINT

The following unique configuration setups should be done prior to performing business transaction for Bills of Materials (BOM). Other than the below configuration, the rest will be standard SAP configuration setting.

Setting Values Remarks

Define modification parameter

BOM validity m’tce - √ EC m’gmt active - √History requirement - √

This is required to be set to ensure BOM changes can only be changed using ECN

BOM Status Base quantity - 1,000 BOM Status - 1

2.3 MATERIAL MASTER PP RELATED FIELDS

2.3.1 OVERVIEW

In SAP, generally the material master fields for PP application are found in the following material master views:

MRP 1 (To control what MRP type and Lot Sizing to use) MRP 2 (To control special procurement procedure and lead time scheduling) MRP 3 (To control the production strategy use e.g. make-to-stock etc.) MRP 4 (To control procurement of new materials on exhaustion of old materials) Work Scheduling (To control certain aspect of production scheduling and define under and

over-delivery tolerances of semi-finished goods or finished goods)

2.3.2 BUSINESS REQUIREMENT

MRP 1 view: Generally all PP related materials i.e. Finished Goods (FG), Semi-finished goods, Raw materials will be set to “PD” (i.e. PD = dependent requirement trigger from higher level BOM item).On lot sizing, there will be options to use parameters like “EX” (Lot-for-lot order quantity), or periodic lot size such as “WB” (Weekly lot size), or “MB” (Monthly lot size).The MRP group is recommended to be used for assigning special control parameters for the total planning run. These control parameters include, for example, the strategy group, the consumption mode, and the planning horizon.

MRP 2 view:The following are the recommended parameters to be maintained:

Procurement type “E” (In-house production) for all FG and Semi-finished goods. Procurement type “F” (External procurement) for all raw materials. Procurement type “X” (Both procurement types) for some finished goods that are procured from

external party as well as manufactured in-house. Special procurement type

o “50” (Phantom assembly) will be set for phantom BOM item.

o “30” (Subcontracting) will be set for Subcontracting Finished Goods

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“In-house production time” and “GR processing time” parameters will be maintained for FG and Semi-finished goods in order to define production lead time.

“Planned delivery time” and “GR processing time” parameters will be maintained for raw materials in order to define procurement lead time.

MRP 3 view:For SKUs, the followings are the recommended parameters to be maintained:Strategy group “10” (Make-to-stock production) will be set for Finished Goods (FG).Note: Not required to be set if MRP group is to be used in MRP1 view.

Work Scheduling view:If under-delivery and over-delivery parameters need to be defined, the followings are the recommended parameters to be maintained:

“Under delivery tolerance” needs to be defined “Over delivery tolerance” needs to be defined Or for both the above.

2.4 WORK CENTRES

2.4.1 OVERVIEW

Operations are carried out at work centre. In R/3 system, work centres are business objects that can represent the following real work centres, for example :

o Machines, machine group

o Production Line

o Assembly work centres

o Employee, groups of employees

Together with the bills of materials and routings, work centres belong to the most important master data in the R/3 production planning and control system. Work centres are used in task list operations and work orders.

Data in work centres, where applicable, is used for o Scheduling - where operation times and formulas are entered in the work centres, so

that the duration of an operation can be calculatedo Costing – Formulas are entered in the work centres, so that the cost of an operation

can be calculated. A work centre is also assigned to a cost centre.o Capacity Planning – The available capacity and formulas for calculating capacity

requirements are entered in the work centre.**Capacity Planning is not being introduced since there is only one workcenter to be created for the production of SMD. Therefore there is no need in introducing capacity planning/levelling.

2.4.2 BUSINESS REQUIREMENT

Work centres in ABC context will be represented as a group of related machines. No capacity and scheduling information will be maintained for work centres as it will be

used solely for reporting production orders only. Work centres will be created for the following :

o SMD only

2.4.3 BLUEPRINT

SAP configuration settings below for work centre will be used.

Setting Values Remarks

Work centre category Machine - 0001 This is required during creation of routings to define where operations will take place.

Standard value key SAP0 – AME No Std valuesSAP1 – AME Normal productionSAP2 – AME Variable production

This is required during the creation of work centers. The system uses standard values as parameters to calculate execution time, capacity requirements and costs.

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Control key PP01 - Routing/Ref. op. set - internal proc.

This is required during the creation of work centers. It specifies how an operation is processed in functions such as orders and costing. It determines whether an operation should have functions like external processing (subcontract), confirmation enablement, printing capability, scheduling, costing relevant and/or automatic GR.

2.5 ROUTINGS

2.5.1 OVERVIEW

Routings enable you to plan production of materials (products). Therefore, routings are used as a template for production orders as well as a basis for product costing

In a routing you plano The operation (work steps) to be carried out during production

o The use of materials during production

o The use of work centres

2.5.2 BUSINESS REQUIREMENT

For ease of production, there will be only 1 operation step per routing. No activity will be captured during production order confirmation, thus no utilisation of activity types

has been identified during business requirement sessions.

2.5.3 BLUEPRINT

SAP configuration settings below for routings will be used.

Setting Value Remarks

Number range for Routing 50000000 - 99999999

Control key for operations PP01 - Routing/Ref. op. set

2.6 ENGINEERING CHANGE NUMBER (ECN)

2.6.1 OVERVIEW

Engineering Change Number (ECN) is a component of Engineering Change Management. This is a master record that contains information necessary for the management and control of changes. The following benefits can be derived with the use of ECN

o Control for BOM changes

o Ability to make change to BOM in advance with the use of effectivity date so that MRP will be able to plan purchases of new materials on exhaustion of the old material.

o Ability to have history of changes to BOM, ie able to see past BOMs and future BOMs.

2.6.2 BUSINESS REQUIREMENT

For this implementation ECN will be used to manage changes to BOM. Numbering for ECN can either be internal or external. External numbering will be used for

tracking changes to BOM. Recommendation for external numbering is as follows :

ECN Description

EG050801 External number is adopted whereby:EG denotes Egypt050801 denotes yy/mm/dd which would be the date of change of BOM

Description of ECN A generic naming of the ECN is recommended as the ECN represents an effective date

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e.g. “Change effective 01/08/2005”

Custodian for ECN maintenance will be :o Product Development (currently Supply Chain)

2.6.3 BLUEPRINT

SAP configuration settings below for ECN will be used.

Setting Value Remarks

Number range for ECN External numbering based on recommendation (above)

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3. PRODUCTION PLANNING

3.1 DEMAND MANAGEMENT

3.1.1 OVERVIEW

The function of Demand Management is to determine requirement quantities and delivery dates for finished goods. To create a demand program, Demand Management uses planned independent requirement.To create the demand program, you must define the planning strategy for a product. Planning strategy represent the methods of production for planning and manufacturing or procuring a product.The demand for products has been found to be not triggered or affected by sales orders. Therefore, the planning strategy for ABC Egypt will be defined based on a make-to-stock scenario.

3.1.2 BUSINESS REQUIREMENT

Make-to-stock production planning strategy will be used for demand planning of finished goods. Production plan generated by the Production Planner on EXCEL spread sheet will be converted to

SAP format and uploaded into Demand Management as planned independent requirement in weekly format for 78 weeks.

The identical production plan will be uploaded into two entity; EG01 and EG90. In the ABCE system, the production plan will be used for materials planning and subcontract order

proposals to EC. In the EC system, the production plan will be used for the purpose of materials planning(for EC

SKUs) and production order proposals.

3.1.3 BLUEPRINT

The following configuration settings will be used for ABC Egypt

Setting Values Remarks

Planning Strategy 10– Make to stock productionLSF - Requirement type of independent requirement

Maintain MRP Group Plant - EG01MRP group – 0000

Plant - EG90MRP group – 0010

MRP Group:0000 – External procurement0010 – Make-to-Stock production

3.2 LONG TERM PLANNING

3.2.1 OVERVIEW

This component provides support for long-term production planning and for carrying out simulations in short and mid-term planning.

To carry out an annual or a rolling quarterly planning run you require information on the future stock and requirements situation. This means you need to know how sales and operations planning influence resources.

The purchasing department can use the results of long-term planning. They use the information on the future requirements quantities to estimate future orders. This provides them with a basis for negotiating delivery schedules and contracts with vendors. Vendors also gain from long-term planning as they are sent a preview of future purchase orders.

3.2.2 BUSINESS REQUIREMENT

The following features of long-term planning will be implemented for ABC Egypto Creating and releasing a planning scenario

o Executing MRP for Long-term Planning

o Evaluating Long-term Planning

o Capacity Planning in Long term planning

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o Copying/Evaluating Extrnal Procurement Data to Purchasing Info System

o Copying Stock/Requirements Data to Inventory Controlling

3.2.3 BLUEPRINT

All current standard SAP configuration settings for Demand Mangement and MRP will be used for long-term planning.

Company plan forecast for 3 years Planned price 1, 2 and 3 to be maintained for each of the 3 years Generate projected material cost year to year based on the planned price.

3.3 MATERIAL REQUIREMENTS PLANNING (MRP)

3.3.1 OVERVIEW

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.

In doing so, MRP tries to strike the best balance possible betweeno Optimising the service level and

o Minimising cost and capital lockup.

The MRP component assists and relieve the MRP controllers in their area of responsiblily. The MRP controller is responsible for all activities related to specifying the type, quantity, and time of the requirements, in addition to calculating when and for what quantity and order proposal has to be be created to cover these requirements. The MRP controller needs all the information on stocks, stock reservations, and stock on order to calculate quantities, and also needs information on lead times and procurement time to calculate dates. The MRP controller defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals.

3.3.2 BUSINESS REQUIREMENTS

MRP controllers will be created for the following roles in ABCE and EC systemo SMD Controller - responsible for FG & filter materials

o WMS Controller - responsible for all wrapping materials

Dynamic safety stocks or coverage profiles will be used to determine safety stocks levels for the following material types. A list of coverage profiles will be configured based on users requirement.

o Finished goods

o Wrapping materials

o Cutrag

MRP will plan for finished goods, WMS and cutrag by looking at stocks in the respective storage locations.

o MRP results for ABCE will consist of:

Purchase Requisitions for Finished Goods of ABCE SKUs (which is to be converted to Sub-con PO)

Purchase Requisitions for Finished Goods of EC SKUs (which is to be converted to a normal PO)

Purchase Orders for Raw Materials and WMS materials of ABCE SKUs.o MRP results for EC will consist of:

Purchase Orders for Raw Materials and WMS materials for EC SKUs. Planned Orders for Finished Goods of ABCE SKUs and EC SKUs (which is to be

converted to Production Orders).o All materials relevant to the production of ABCE SKUs (e.g. Rothmans; Kent; Vogue) will

be planned and purchased by ABCE.o All the materials relevant to the production of EC SKUs (e.g. Viceroy) will be planned and

purchased by EC. As a starting point the user will define the coverage profiles to be used by MRP for planning.

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A range of coverage profiles will be created to cater different coverages. As a starting point the following range of coverage will be configured. Addition coverage profile will be created as and when necessary

o 2 days coverage

o 5 days coverage

o 7 days coverage

o 14 days coverage

o 21 days coverage

o 30 days coverage

o 45 days coverage

o 60days coverage

o 90 days coverage

o 99 days of coverage

3.3.3 BLUEPRINT

The following key configuration will be set in addition to current SAP standard settings.

Settings Values Remarks

Carry out overall maintenance of MRP group

Plant - EG01MRP group - 0000

Plant - EG90MRP group - 0010

Define number range for planning runPlanned ordersDependent requirementPurchase requisitionMRP listTotal requirement

Planned ordersDependent requirementPurchase requisitionMRP listTotal requirement

Plant Start number End numberEG01 0000000001 0099999999EG01 0000000001 0099999999EG01 1000000001 1099999999EG01 0000000001 9999999999EG01 0000000001 0099999999

EG90 9000000001 9099999999EG90 0000000001 0099999999EG90 9000000000 9001999999EG90 0000000001 9999999999EG90 0000000001 0099999999

Define MRP Controller Plant MRP cont DescEG01 001 SMD controller-ABCEG01 002 WMS controller-ABCEG01 901 SMD Controller-ECEG01 902 WMS Controller-EC

EG90 001 SMD controller-ABCEG90 002 WMS controller-ABC EG90 901 SMD Controller-ECEG90 902 WMS Controller-EC

Define special procurement type

Plant SP type DescriptionEG01 10 ConsignmentEG01 30 Sub-contractingEG01 40 Stock transferEG01 50 Phantom assemblyEG01 52 Direct prod/coll ordersEG01 60 Phantom in planningEG01 70 Withdrawal from alt plantEG01 80 Prodn in alt plant

Procurement from alt plant

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EG90 10 ConsignmentEG90 30 Sub-contractingEG90 40 Stock transferEG90 50 Phantom assemblyEG90 52 Direct prod/coll ordersEG90 60 Phantom in planningEG90 70 Withdrawal from alt plantEG90 80 Prodn in alt plant

Define range of coverage profile

100 - 4 months of req’mt, 2 days coverage101 - 4 months of req’mt, 5 days coverage102 - 4 months of req’mt, 7 days coverage103 - 4 months of req’mt, 14 days coverage104 - 4 months of req’mt, 21 days coverage105 - 4 months of req’mt, 30 days coverage106 - 4 months of req’mt, 45 days coverage107 - 4 months of req’mt, 60 days coverage108 - 4 months of req’mt, 90 days coverage109 – 4 months of req’mt, 99 days coverage120 – 6 Months of Reqmt, 2 Days of Coverage.121 – 6 Months of Reqmt, 5 Days of Coverage.122 – 6 Months of Reqmt, 7 Days of Coverage.123 – 6 Months of Reqmt, 14 Days of Coverage.124 – 6 Months of Reqmt, 21 Days of Coverage.125 – 6 Months of Reqmt, 30 Days of Coverage.126 – 6 Months of Reqmt, 45 Days of Coverage.127 – 6 Months of Reqmt, 60 Days of Coverage.128 – 6 Months of Reqmt, 90 Days of Coverage.129 – 6 Months of Reqmt, 99 Days of Coverage.

3.4 PRODUCTION CONTROL

3.4.1 OVERVIEW

Production orders are a fundamental part of Production Planning and Control (PP). PP is fully integrated in Logistics and has among others, interfaces to

o Sales and Distribution (SD)

o Materials Management (MM)

o Controlling (CO)

A production order defines which material is to be processed, at which location, at what time and how much work is required. It also defines which resources are to be used and how the order costs are to be settled.

Production orders are used to control production within a company and also to control cost accounting.

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3.4.2 BUSINESS REQUIREMENT

The following feature of Production orders will be implemented :o Creation, Changing and Deletion of production orders

o Mass processing of production orders

o Collective availability checks

o Collective release of production ordrs

o Viewing Stock/Requirements List

o Goods issue to production orders

o Goods receipt to production orders

o Individual confirmation of production orders

o Collective confirmation of production orders

o Reprocessing errors in goods movement

o Period end closing

o Variance calculation

o Order settlement

Requirements for FG subcontract manufacturing process in ABCE system is as follows :o Finished goods will be managed in ABCches and will have daily ABCches assigned to

them.o Facility to upload production plan on EXCEL spreadsheet in weekly buckets for 78 weeks

to SAP.o Custom duties are incurred for the import of cutrag at a rate of LE9 per MIL. This cost will

be captured in purchase order pricing as a pricing condition. – Refer to MM business blueprint for further information.

o Planned orders or purchase requisitions generated from MRP will be converted to subcontract purchase orders on a weekly basis for finished goods.

o Pick list will be generated for cutrag and wrapping materials to be transfered to the EC store.

o All Cutrag and WMS materials for finished goods and filters based on the BOM structure are required to be consumed upon receipt of finished goods via subcontract purchase orders.

o There will be no open subcontract purchase orders across the month. All subcontract purchase orders will be closed by month end.

o Shorts will NOT be traced in ABCE. Therefore Production BOM and Sub-contracting BOM will have NOT include shorts on ABCE.

o Note: For further details of the subcontract purchasing process, please refer to MM business blueprint.

Requirements for SMD production in EC is as follows :o Finished goods will be managed in ABCches and will have daily ABCches assigned to

them.o Facility to upload production plan on EXCEL spreadsheet in weekly buckets for 78 weeks

to SAP.o Work centres will only be used for reporting purposes.

o 1 work centre called SMD will be created to report production for finished goods

o Routings with 1 operation step will be create for every finished goods produced in SMD.

o Planned orders generated from MRP will be converted to production orders on a weekly basis for finished goods in line with the ABCE MPS plan.

o Pick list will be generated for wrapping materials to transfer stocks to the One-day store.

o All raw materials for finished goods and filters based on the BOM structure are required to be backflushed.

o During the confirmation of Production Orders, Operation users to adjust the Proposed Quantity of Cutrag and Shorts to the Actual Quantity of Cutrag and Shorts.

o There will be no open production orders across the month. All production orders will be closed by month end and TECO.

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Requirements for Shorts (Ripping process) – Refer to MM business blueprint for further information.o Ripping process exist.

o Shorts are non-valuated.

o Production orders are not required

o Receipt of shorts will be via Inventory management – Receipt without reference to Production Order (Movt. type 521/522)

o Shorts are only received into EG90 and issue out during production confirmation in EG90.

o Issues of shorts (addbacks) will occur during partial or final confirmation of production orders by adjusting actual usage quantities of shorts and cutrag.

Requirements for Sampling o General Materials will be created for sampling. These Materials created for sampling will

have the prefix of “SAMPLE” + Material Description. (Refer to Example 8)o Cases where sampling is done for new cut rag but using the rest of the raw materials and

semi-finished, then the BOM will consists of the Finished Goods sampling materials and Cutrag as the sampling materials and the rest of the raw and semi-finished are the current stocked material number.

o Only ONE sampling BOM will be created and ONE sampling routing to be created. As in when they have new sampling, users can change the BOM component or create an alternative BOM before the production orders are created.

o Purchase Orders will be raised by ABCE to buy the necessary sampling raw materials or semi-finished and transfer to the EC for production in the normal Sub-Contracting process.

Example 8:EG01-Sampling of New SKUs – Production BOM for New Sampling

3.4.3 BLUEPRINT

The following additional configuration setting will be created for production orders. The rest will be standard SAP configuration.

Setting Values Remark

Define order type Order type AM01 ABC Standard Production Order TypEG90 ABCE (EC) Standard Production

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

ShortsSampling

Filter RodsSampling

Display CartonSampling

Final CaseSampling

Semi-Finished

Raw Materials

Phantom Assm.

Finished Goods

Legend:

Finished GoodsSampling Mat

PolySampling

Inner FrameSampling

Alum. FoilSampling

BlanksSampling

CigsSampling

Cig PaperSampling

Tipping paperSampling

CutragSampling

ShortsSampling

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Order Typ

Define order type dependent parameter

Plant Ordtype DescriptionEG01 AM01 ABC Standard Production Order TypEG90 EG90 ABCE (EC) Standard Production Order Typ

Define number range for order AM01 001100000000 – 001199999999 EG90 009100000000 – 009199999999

Define production scheduling profile

Plant - EG90Production Sched Prof - 000001

To control the automatic release of production order

Define production scheduler 001 - SMD 002 - FMD

To assign the production scheduling profile to production scheduler for control of auto release

Define confirmation parameter Plant - EG01 Cnf Parameter AM01Plant – EG90 Cnf Parameter EG90

Valuation variant for order costing

Plant - EG90Variant - 007 (Prod Order –act) (TBD)

3.5 ORDER INFORMATION SYSTEM

3.5.1 OVERVIEW

The order information system is a tool for shop floor control with a reporting function for production orders and planned orders.

All production orders to be found in the system, including orders with deletion flag or deletion indicators, can be taken into account. Archived orders are not taken into account.

3.5.2 BUSINESS REQUIREMENT

The Order Information System will be used by the SMD to monitor production on a day to day basis.It will also be used as a reporting tool.

3.5.3 BLUEPRINT

This reporting tool does not require configuration.

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4. BUSINESS PROCESSES

The following business processes will be implemented in ABCE and EC where applicable. Master Data Maintenance Process

o BOM Maintenance

o Work Centre Maintenance

o Routing Maintenance

Demand Planning process MRP Process Process SMD Production

o Goods Issue to SMD Production – Filter rods

o Process Finished goods

o Goods receipt from SMD production – finished goods

Long Term Planning Creation of Costing BOM

4.1 MASTER DATA MAINTENANCE PROCESS

4.1.1 BOM MAINTENANCE

ECN is mandatory for the creation and maintenance of BOM The following steps are required for the creation and maintenance of BOM A change request form is required before any changes can be made to a BOM For SMD, if there is a spec change on the production floor, a change form is raised by the shopfloor

executive stating what was changed and when the change took place. This change form is then given to Product Development who will then create an ECN. This ECN is then used to change the BOM accordingly. For new BOMs, Product Development will create an ECN and use it to create a new BOM. Important notes :

o Before any new BOMs can be used for production, a costing BOM need to be created and cost estimate run and released to material master.

o If a BOM change has become effective on a day when a production order has already been created, that the production order has to be final confirmed for all production quantities that has taken place using the old BOM and a new production order raised to capture the new BOM.

4.1.2 WORK CENTRE MAINTENANCE

Work centres require very little maintenance. Possible changes that can occur is that o Work centre rated output have changed

o Utilisation factors have changed

o New machines added to work centre thus increasing work centre rated output.

Maintenance of work centres will be the responsibility of the super user in SMD. The business process steps are as follows

o If changes are required to be made to work centres, a change request form need to be raise specifying what change is to be made and the date of the change.

o SMD executive will than use this change request form to make the necessary change to the work centre.

Important note :o If a work centre change has become effective on a day when a production order has

already been created, that the production order has to be final confirmed for all production quantities that has taken place using the old work centre and a new production order raised to capture the new work centre.

4.1.3 ROUTING MAINTENANCE

Routing maintenance will be the responsibility of the super user in SMD. Routing changes will occur if an SKU has been assigned to a different work centre.

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The business process steps are as follows :o If changes are required to be made to a routing, a change request form need to be raise

specifying what change is to be made and the date of the change.o SMD super user will than use this change request form to make the necessary change to

the routing.

Important note :o If a routing change has become effective on a day when a production order has already

been created, that the production order has to be final confirmed for all production quantities that has taken place using the old routing and a new production order raised to capture the new routing.

o Ensure that for all new BOMs, a routing MUST be created before a cost estimate is run and released to material master.

4.2 DEMAND PLANNING PROCESS

Sales forecast from Marketing is used to update the manufacturing forecast spreadsheet. The forecast are the adjusted to meet recommended stock levels within the available production

capacity to derive a production plan. Weekly production schedule is then generated for 78 weeks. This schedule is then discussed at the production planning meeting and subsequently at the pre-

SOP meeting. Once the plan has been approved it will then be uploaded to SAP via an upload program in planned

independent requirement (PIR) in the Demand Planning module. Changes to specific SKU will be done via the Change PIR transaction.

4.3 WEEKLY MRP PROCESS

Every beginning of the next working day (between Sunday and Thursday), all active production orders will be reported for production volume of the previous day.

Every Friday morning, all production orders for Thursday will be reported and completed in SAP. Physical inventory will be carried out on Friday in the shopfloor for all materials. A physical inventory document will be generated from SAP. Counts will be entered into the count document. A variance report will be generated to show the difference between physical count and book value. This variance report will be sent to Logistics Mgr who is answerable for the variances. Once the variance has been authorised as Ok, the SMD Mgr will then inform Ops Finance to post

the difference. In the mean time, the production planner will upload the production plan from spreadsheet to SAP’s

Demand Management module as Planned Independent Requirement (PIR). After the upload he needs to verify that the upload is correct.

The MRP will be run manually on a weekly basis until a time is determined for regular automatic scheduled runs.

MRP run will cover all materials relavant for MRP – Net Change Planning (NETCH) which will only plan for materials which have undergone changes.

MRP will then use the Bills of Materials, inventory balance, safety stocks and open orders to generate subsequent procurement plans: ABCE(EG01):

o FG Subcontract procurement plan where planned orders or purchase requisitions are generated and later converted to Subcontract purchase orders for the procurement of FG from EC.

o Procurement proposals for wrapping materials, casing and flavouring, where purchase requisitions are generated if the release date of the requisition falls inside the buying lead time. Planned orders are generated if the release date is outside the buying lead time. Purchase requisition are then converted to purchase orders to procure the raw materials by the Procurement dept.

o Procurement proposal for cutrag where purchase requisitions are generated if the release date of the requisition falls inside the buying lead time. Planned orders are generated if the release date is outside the buying lead time. Purchase requisition are then converted to purchase orders to procure the cutrag by Product Development.

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EC(EG90):o SMD production plan where planned orders are generated and later converted to

production orders by SMD to produce the required semi-finished and finished goods. o Procurement proposals for wrapping materials, casing and flavouring, where purchase

requisitions are generated if the release date of the requisition falls inside the buying lead time. Planned orders are generated if the release date is outside the buying lead time. Purchase requisition are then converted to purchase orders to procure the raw materials by the Procurement dept.

o Procurement proposal for cutrag where purchase requisitions are generated if the release date of the requisition falls inside the buying lead time. Planned orders are generated if the release date is outside the buying lead time. Purchase requisition are then converted to purchase orders to procure the cutrag by Product Development.

Each MRP controller will be responsible for analysing their own MRP list and acting accordingly to ensure no stock shortage situation.

4.4 PROCESS SMD PRODUCTION PLAN

SMD production consist of Filter rod making and Finished Goods. During the SMD production process, loose tobacco is derived in the form of shorts from the ripping process or from collection at the shopfloor.

Process Finished Goods production Convert plan orders to weekly production orders every Thursday or Sunday morning for the next

week’s production.. Orders will be released by respective authorized personnel and availability check performed. Pick list is generated for materials to be transfered to SMD. Partial confirmation will be carried out daily to the production order until the end of the week where

it will be final confirmed A partial confirmation of the quantity produced for the day will result in the following actions in SAP:

o Backflush of will be initiated which automatically issued materials to the production order based on standard usage. This step includes adjustments to the issuance of shorts as addbacks and actual cutrag usage.

o An automatic goods receipt of finished goods to stock in factory store.

Process Rejects Receipt (Ripping Process) Perform weekly receipts without purchase order via MM for shorts of the previous week’s

production.o Rejects will be sent to Ripping room for ripping process.

o Add-backs will be sent to SMD shopfloor.

o Goods receipt for Add-backs & casing will be manually posted against the SMD production order via “Receipt without reference to Production Order – movement type 521/522.

o Goods issue to Production Order (Add-back process) will occur when the items are consumed.

o Note that shorts are only tracked in EG90 and will only be maintained as a component in EG90 BOMs.

Process Add-backs An add-back process occurs at every beginning of the SMD process where-by a percentage of

shorts are added to the cutrag a the feeder. The cutrag and shorts quantities are recorded for the purpose of production reporting input at a later stage.

4.5 LONG TERM PLANNING PROCESS

Based on the 10 years sales forecast, a production plan is created for budgetting purposes. A scenario is created using the 10 years production plan. This is dependent on the Validity of the Factory Calendar. Therefore in order for the users to plan

for 10 years, the Factory Calendar has to have a validity period of at least more than 10 years.

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The planning scenario is then used to run long term planning. After the long term planning run is completed, you can review and modify the result of the planning

run. Once everything is finalised, you can run an extraction for the purchasing information system and

inventory information system to extract the data. Reports will be run to look at your plan purchases and cost for the next 3 years using planned

prices to compute year on year material cost. Reports will also be run to look at inventory situations.

4.6 CREATION OF COSTING BOMS

A costing BOM has to be created for every new production BOM. A costing BOM captures the planned cost estimate of a product. This is to ensure that during production, costing of the production order can take place.

The following are the business process steps for the creation of Costing BOMso Creation of costing BOM is the responsibility of Operations Finance.

o Product Development will advise Operations Finance once a new production BOM is created.

o Operations Finance will create a ECN for creation of the costing BOM.

o They will then use the BOM creation function and copy the production BOM (usage 1) to a Costing BOM (usage 6).

o Once the costing BOM is created, Ops Finance will then perform a cost estimate on the costing BOM.

o After reviewing the cost estimate and making any changes if required, Ops Finance will then release the cost estimate to Material Master.

o Once this step is completed, Ops Finance will then inform Product Development, Supply Chain, and SMD.

Important note :o Production orders can only be created after Cost estimate and been released to Material

Master.o Costing BOM for SKUs will not include material for inserts.

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5. Customised Reports & Interfaces

The following customised reports will be developed for Production Planning :Reports WMS Material Wastage Report Wastage report by brand Consolidated Pick List – SMD Production Performance Report MRP Exception Report

Interfaces MPS Upload Program