high-level op planning and demand management egn 5622 enterprise systems integration spring, 2013...

High-Level OP Planning and High-Level OP Planning and Demand Management Demand Management

EGN 5622 Enterprise Systems Integration EGN 5622 Enterprise Systems Integration Spring, 2013Spring, 2013

Production Planning & ExecutionProduction Planning & Execution

January 2007 (v1.0)January 2007 (v1.0)

© 2007 by SAP AG. All rights © 2007 by SAP AG. All rights reserved. SAP University Alliance. reserved. SAP University Alliance. The Rushmore Group, LLCThe Rushmore Group, LLC 22

DemandManagement

Forecasting

Sales & OperationsPlanning

Sales Inf. System CO/PA

MPS

MRP/CRP

ManufacturingExecution/SFC

OrderSettlement

ProcurementProcess

Tactical Planning

Detailed Planning

Manufacturing Execution

January 2008January 2008

© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All The Rushmore Group, LLC 2007. All rights reserved.rights reserved. 33

High-Level OP PlanningHigh-Level OP PlanningPlanning activities:

1. CO/PA2. Forecasting3. Sales and Operations Planning

◦ Planning strategy for a product

4. Demand Management

Demand management feeds to MPS and in turn MRP/CRP

Operations Planning & ExecutionOperations Planning & Execution

Major Players:

◦ Tactical Planning (at corporate level) COO, CFO, Controller, Sales &

Marketing, Product Line mangers, Production Planner

◦ Detailed Planning (at plant level) Production Planner/Scheduler, MRP

Controller, Capacity Planners

◦ Execution (at shop floor level) Production Line Workers, Shop

Floor Supervisors

January 2007 (v1.0)January 2007 (v1.0)© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLCGroup, LLC 44

DemandManagement

Forecasting

Sales OP Planning

Sales Info CO/PA

MPS

MRP/CRP

ManufacturingExecution/SFC

OrderSettlement

ProcurementProcess

Tactical Planning

Detailed Planning

Execution

Costing-Based CO-PACosting-Based CO-PA

Costing-Based CO-PACosting-Based CO-PACO-PA is profitability analysis, based on cost-of-

sales accounting.

CO-PA can be viewed as a cube of 3 dimensions (representing product, country, and customer)

CO-PA data are collected from various areas, such as ◦sales orders or billing data from SD, ◦production costs and variance from PP, and ◦values of overhead cost controlling from controlling.

Pricing and Costing for mfg. goodsPricing and Costing for mfg. goodsCost components

◦Materials Costs◦Labor costs◦Equipment costs

Strategies to reduce costs◦Lean manufacturing◦Systems approach

Sales and Operations Planning Sales and Operations Planning (SOP)(SOP) Information

Origination◦ Sales◦ Marketing◦ Manufacturing◦ Accounting◦ Human Resources◦ Purchasing

Intra-firm Collaboration◦ Institutional Common

Sense


Master Data - Product GroupsMaster Data - Product GroupsAggregate planning that group together materials or

other product groups (Product Families)Multi- or Single- Level Product Groups

◦ the lowest level must always consist of materials



Bikes

TouringMountain

24 Speed18 Speed 18 Speed 24 Speed

Red 24T Blue 24TRed 24M Blue 24M

Planning LevelsPlanning Levels



Bikes

55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T50%

Blue 24T40%

Red 24M60%

Blue 24M

Planning at Product Group Level

Planning at Material Level

Demand ManagementDemand Management Link between Strategic Planning (SOP) & Detailed Planning

(MPS/MRP) The results of Demand Mgmt is called the Demand Program, it is

generated from our independent requirements – PIR (Planned IR) and CIR (Customer IR)



Bikes

55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T50%

Blue 24T40%

Red 24M60%

Blue 24M

Disa

gg

rega

tion

Product Groups

Material

Demand ManagementDemand Management



PlannedIndependentRequirements

CustomerIndependentRequirements

SalesForecast

DemandProgram

MPS / MRP

Transfer from High Level to Detailed PlanningTransfer from High Level to Detailed Planning



Bikes

55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T50%

Blue 24T40%

Red 24M60%

Blue 24M

Demand Planning Data

Planning at Material Level

Disa

ggregation

Planned Independent Requirements

At Material and Plant Level

Transfer

Operative PlanningData

Planning at Group Level

January 2008January 2008

© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All The Rushmore Group, LLC 2007. All rights reserved.rights reserved. 1414

Creation of The Demand Creation of The Demand ProgramProgramStart with sales operation plan (SOP) after

forecast inputConvert SOP into (rough cut) production plan,

which consists of the following data elements.◦Time Buckets ◦Sales◦Production◦Stock levels◦Days supply

Translate production plan into demand program, via disaggregation

Enterprise Strategic Enterprise Strategic PlanningPlanning

SAP Implementation SAP Implementation

EGN 5622 Enterprise Systems Integration EGN 5622 Enterprise Systems IntegrationSpring, 2013Spring, 2013

Planning StrategiesPlanning Strategies

Planning strategies represent the business procedures for◦The planning of production quantities ◦Dates

SAP offers a range of PP strategies◦From those for MTS◦To those for MTO



Planning StrategiesPlanning Strategies

• Multiple types of planning strategies based upon environment– Make-To-Stock (MTS)– Make-To-order (MTO)

• Driven by sales orders

– Configurable materials• Mass customization of one

– Assembly orders



Planning Strategy for Make-to-StockPlanning Strategy for Make-to-Stock

Planning takes place using Independent Requirements◦Sales are covered by make-to-stock inventory

Strategies◦10 – Net Requirements Planning◦11 – Gross Requirements Planning◦30 – Production by Lot Size◦40 – Planning with Final Assembly



Planning Strategy for Make-to-OrderPlanning Strategy for Make-to-Order

Planning takes place using Customer Orders◦Sales are covered by make-to-order production

Strategies◦20 – Make to Order Production◦50 – Planning without Final Assembly◦60 – Planning with Planning Material



Forecasting set up in SAPForecasting set up in SAP

Forecasting Models◦ Trend◦ Seasonal◦ Trend and Seasonal◦ Constant

Selecting a Model◦ Automatically◦ Manually


Sales and Operations Planning (SOP)Sales and Operations Planning (SOP)

Flexible forecasting and planning tool

Usually consists of three steps:◦ Sales Plan◦ Production Plan◦ Rough Cut Capacity Plan

Planned at an aggregate level in time buckets


Statistics GraphicsStatistics Graphics


Exercises:Exercises: (Due date: 1/28/2013)(Due date: 1/28/2013)1. Review material status for finished products2. Review bill of materials for executive pen set3. Display multi-level bill of materials for ESET4. Review routing for assembly EPEN5. Review routing/BOM in the engineering workbench6. Review work center and assigned capacity7. Create consumption values for finished products8. Create material master for finished products9. Create bill of material10. Create finished products routing11. Create material master for product group12. Assign members for production group13. Create sales and operations plan14. Transfer SOP to demand management15. Review demand management16. Run MPS with MRP17. Review stock/requirement list

high-level op planning and demand management egn 5622 enterprise systems integration spring, 2013...

Documents

sap university alliance

rushmore group

product line mangers

customer copa data

demand program

demand management egn

production costs

billing data