SAP Production Planning Strategies

Planning Strategy 10

Purpose

This planning strategy is particularly useful for Mass production environments.

It is often combined with repetitive manufacturing. You should choose this strategy if

you want production to be determined by a production plan (Demand Management) and

if you do not want sales orders to influence production directly. One of the most

important features of this planning strategy is that it enables you to smooth the demand

program.

Examples from Industry

Strategy 10 is used in the customer packaged goods industry because it is

possible to plan the demand for ice cream very easily, for example, while a single

order should not affect production.

Strategy 10 is also used for products with seasonal demand where production

needs to be smoothed.

Prerequisites

You maintain the following master data for the finished product:

Change Material Master data in SAP Gui or Manage Product master app

under Plants MRP Data:

○  Select Strategy Group as 10.

○ Change Material app:

On the Sales: Sales Org. 2 screen, select a value in the General item

category group field, for example, NORM (Standard item).

○    On the MRP 3 screen in the Availability check field select ST (Consider

Only Stock) so that you perform an availability check without

replenishment lead times.Process Flow

1. 2. 3. 4. 5. 6. 7. Procurement quantities can be planned relatively effectively by means of planned

independent requirements(PIR). This means that production and procurement of

the required components is triggered before receipt of sales orders.

Procurement is determined by PIRs only. This lends itself to a smoothing of

production, which means you can create a smooth production plan that will not

be affected by irregular sales orders.

An accurate availability check is performed according to ATP logic during sales

order processing.

Sales orders can be displayed for information purposes only; they do not affect

production quantities. Goods are sold from stock in this strategy.

The PIRs are reduced at goods issue (GI) for the delivery. This means that you

can compare the PIRs situation with the actual customer requirements.

PIRs that are left unreduced increase the warehouse stock of the finished

product and cause procurement to be decreased or not to take place at all in the

next period, due to the netting.

If you want the system to reduce future planned independent requirements when

it makes withdrawals for unplanned sales orders, you must maintain the

appropriate consumption period.

Gross Requirements Planning (11)

Purpose

The make-to-stock strategy gross requirements planning is particularly useful in mass

production environments; it is often combined with repetitive manufacturing. This

strategy is particularly useful if you need to produce, regardless of whether you have

stock or not. For instance, steel or cement producers might want to use this strategy

because they cannot shut down production; a blast furnace or a cement factory must

continue to produce, even if this means having to produce to stock.

This strategy is also frequently used if there is a Material Requirements Planning

system in a legacy system that needs to be linked to an SAP system which serves as a

production execution system. The legacy system calculates a specific production plan,

which has to be executed, regardless of the stock situation in the SAP system.

Examples from Industry:

Heavy-duty industries such as steel manufacturing (blast furnace) and the cement

industry.

Prerequisites

You maintain the following master data for the finished product:

● Manage Product Master Data app or T code MM02 under Plants MRP Data:

○. Select Strategy Group 11.

Change Material app:

○.  On the MRP 3 screen in the Mixed MRP field, select 2 (Gross

requirements planning).○

○.  On the Sales: Sales Org. 2 screen, select a value in the General item

category group field, for example, NORM (Standard item). On the MRP 3 screen in the Availability check field select ST (Consider Only Stock) so that you perform an availability check without

replenishment lead times.

Gross requirements planning also has the following features in common with net

requirements planning (10):

● Production quantities can be planned relatively effectively by means of PIR. This

means that production and procurement of the required components is triggered

before the sales order stage. Individual sales orders, which can be somewhat irregular, do not affect

production.

● An accurate availability check is performed according to ATP logic during sales

order processing. It is possible to handle huge lot sizes during planning so that you always plan

convenient lot sizes in demand management or during the MRP run using lot size

and/or rounding keys.

Production by Lot Size

Planning with Final Assembly

What Students Will Learn / Be Able to Do After Completing This Topic

After completing this topic, students will be able to:

• Understand when and why Make-to-Order (Strategy 20) is used in real manufacturing scenarios

• Explain how sales orders directly trigger production and procurement in MTO

• Configure Strategy Group 20 in the material master (MRP 3 and Sales views)

• Understand the MRP behavior and separate MRP segments created for sales orders

• Distinguish MTO from Make-to-Stock and Planning with Final Assembly

• Understand sales-order-specific stock management

• Confidently discuss customized product scenarios in SAP PP interviews and projects