Analyzing the Master Data Relevant for Creating Process Orders

To illustrate the production processes in a company, we used the example of the Bike Company in the previous units. The company produces its own bicycles and maps the production processes in SAP S/4HANA Cloud Public Edition.

In addition to manufacturing bicycles, the Bike Company has another production line for paint. The company uses a part of the paint for their own bike production. Another part is filled into cans and sold to customers. To produce these paint cans, the Bike Company uses process manufacturing. Let's follow the different steps of paint production and learn more about process manufacturing!

In this unit you will learn about the prerequisites for master data and the integration of process orders with production planning. Then you will learn how to create process orders and finally how to execute them. Let's start and get an understanding of the master data!

In order to be able to create process orders, various master data must have been created beforehand. The main master data required are:

• Materials
• Bills of material
• Master recipes
• Resources
• Production versions

Let's get to know the master data in more detail.

Material master records must be created for the materials that are produced and procured in a company. In our bicycle company, for example, material master records were created for the product "bike paint in cans", for the required semi-finished materials that are produced in-house, such as "basic paint", and for raw materials to be procured via purchasing, such as "pigments" or "cans". In the material master record of each item, planning data, procurement data, execution-relevant data, and so on, are maintained.

In various sectors, especially in the process industry, it is necessary to work with homogeneous partial quantities of a material throughout the logistics chain. In SAP S/4HANA Cloud Public Edition, batch management is available for this purpose.

A batch is defined as a subset of the total quantity of a material held in stock. This subset is managed separately from other quantities of the same material. Quantities of a material belonging to one batch share the same physical and chemical properties, while another batch of the same material has different physical and chemical properties. Throughout the logistical chain, you can track individual batches of raw, semi-finished, and finished materials in a where-used list. For example, when using batches, you can track which raw material that was procured from a certain supplier is used in a batch of a finished product that was shipped to a certain customer.

We will return to batch management later in this unit.

The material components required for products are to be defined via bills of materials (BOMs). The bill of material for the bike paint manufactured in our bicycle company consists, for example, of the material components basic paint, pigment, and can. Semi-finished materials, such as the basic paint, themselves have a BOM, which results in multi-level BOM structures.

You furthermore define in a BOM what component quantities are required to produce a product. For example, the production of 1000 cans of bike paint requires 1000 l of basic paint, 100 kg pigment, and 1000 cans.

The previous figure shows the structure of a master recipe.

The master recipe header contains data that is valid for the whole recipe. Operations describe the different steps required during the production process. For a more detailed description of these steps, phases are assigned to the operations. For example, a master recipe for the production of bike paint could have two operations with the three phases each. The phases’ processing sequence in time is defined in relationships.

A resource is assigned to each operation to define the machine, the plant section, or the physical location where this operation is to be processed. Exactly one resource is assigned to an operation. This assignment of the resource is also valid for all phases that belong to the operation. By assigning a resource, you also specify costing- and planning-relevant parameters for the individual phases since the master record of a resource contains essential information that is used for capacity planning, scheduling, and costing of process orders.

The material list is made up of components representing the materials entering and leaving the production process and their planned quantities. The components in the material list correspond to the components of the BOM assigned to the recipe via the production version. The material list also defines the assignment of these material components to the phases of the recipe according to their planned appearance in the process. During order scheduling, the system calculates the start and end date of each phase in the process order. The date to which a material must be staged on the shop floor corresponds to the start date of the phase where the respective material is assigned to. Following this approach, you can ensure that materials are only staged on the shop floor once they are required by the production process.

A process order always created with reference to a production version of the corresponding material. A suitable production version is automatically selected when the order is created according to criteria such as production quantity and production time.

By using several different production versions, it is possible to define two different manufacturing scenarios for the same product. For example, our bicycle company might produce bike paint in two different lot size ranges. For small lot sizes (for example 1 .. 1000 pc), a small reaction vessel is used. For bigger lot sizes (1001 .. 9999 pc), a big reaction vessel is used. In the system, both reaction vessels are modeled as two different resources. As the resource is assigned to a production operation in the master recipe, there exist two master recipes in the system depicting the manufacturing process for small/big lot sizes, respectively. However, the BOM is the same in both cases. This business scenario would correspond to the situation that two production versions are defined for one finished product:

• The first production version which is defined for a small lot size (for example 1 … 1000 pc) links the material BOM with the master recipe for a small lot size (1 … 1000 pc).
• The second production version which is defined for a big lot size (for example 1001 … 9999 pc) links the material BOM with the master recipe for a bigger lot size (1000 … 9999 pc).

In some chemical reactions, the component quantity (for example a catalyst) depends on the size or surface of the used reaction vessel. Therefore, depending on the production resource, different quantities of the same component are required in order to execute the same chemical reaction in two different vessels. It is also possible to model this business case by using two different production versions. Opposite to the above example, the master recipe and the material BOM are different in the two production versions.