Outlining Supply Chain Planning at a Glance

Forecasting can be performed in different tools, for example, SAP Integrated Business Planning (IBP). The result of forecasting can be transferred to SAP S/4HANA as planned independent requirement.

For Sales and Operations planning tasks, SAP HANA itself offers the following planning tools:

1. Flexible Planning

2. Standard SOP

These planning tools are not longer strategic for SAP S/4HANA and will be enhanced/replaced by SAP IBP functionality.

Demand Management is the management of independent requirements. The behavior of independent requirements in Material Requirements Planning (MRP) (for example, whether they are effective, or consume other requirements) is controlled by the requirements type or the planning strategy.

Planned independent requirements are stock requirements that can be derived from a forecast of future demand. In make-to-stock production, you start procurement of the affected materials without waiting for specific sales orders. The goal of this procedure is the reduction of the overall delivery time. Moreover, you can use forecast planning to spread the burden evenly across your production resources.

You receive sales orders from the Sales and Distribution (SD). For example, while planning for specific customers, it's necessary that customer requirements are considered by requirements planning, depending on their requirement class. You can assign sales orders to planned independent requirements and calculate total requirements. Also a consumption of the planned independent requirement is possible.

Material Requirements Planning and Capacity Planning is the production planning in the plant.

Material Requirements Planning plans both internal and external procurement of materials, while the subsequent capacity planning schedules operations due to the predefined capacities of work centers.

Demand Management is the management of planned independent requirements and their interaction with real customer requirements. The demand program is the input for material requirements planning.

In a make-to-stock production, you want to start the production of materials without waiting for customer requirements (for example, sales orders). Therefore, you can use planned independent requirements as a temporary element.

On the other hand, it's also possible to include customer requirements in planning. To do so, the following procedures exist:

• Trigger producing for a specific sales order (item) is supported by various make-to-order planning strategies.

• Combining planned independent requirements and sales orders to a total requirement is supported by make-to-stock production.

• Replacing planned independent requirements by sales orders dynamically (consumption).

The main control parameter for this is planning strategies.

The coverage of the identified demand can be handled either via external procurement or internal production. For in-house produced products, the scheduling takes into account the data from the involved work centers and the routing. The duration of the individual operations are calculated using formulas based on standard values and planned quantities. In general the assemblies, given in the BOM of the finished product, must be available when production of the finished product is started. The order dates of the assemblies are determined in backward scheduling using the in-house production time or the planned delivery time.

You use MRP planning procedures to specify which planning action the system executes for each product. In a production planning run, you execute procurement planning in particular for products with or without planning file entries (net change planning).

MRP is a system for planning production. It identifies the required materials, estimates the quantities, determines when the materials are needed to comply with the production plan, and manages the delivery dates. The goal is to meet demand and improve overall productivity.

Master data management in SAP S/4HANA is crucial for effective production planning.

Here is the list of essential logistics master data you need for production planning processes:

1. Material Master Data: This includes all the necessary information related to materials such as item descriptions, specifications, and numbers.
2. Bill of Materials (BOM): The BOM represents the complete structure of a (finished) product, mentioning all its components and subcomponents along with their quantities.
3. Work Centers/Capacity Master: It contains details about the location where operations are conducted.
4. Routing/Recipe: This includes the sequence of operations required to produce a material. It can include details like work center, sequence, base quantity, and operation timing.

5. Production Version: This links the BOM and Routing/Recipe to create a specific production method.

6. Vendor Master Data: It includes information about the vendors or suppliers delivering raw materials.

7. Customer Master Data: This includes all details about the customers for whom the production is planned.

You can find detailed insights regarding master data in the production planning and manufacturing area in the training course S42100 Basics for Manufacturing and Product Management in SAP S/4HANA.

In addition, the system requires some transactional date to execute the planning, such as:

1. Production Orders: Production orders initiate and track the production process. They include information like materials to be produced, quantity, and required date.

2. Material Documents: These are created when goods are issued, received, or transferred, adjusting the inventory as needed.

3. Purchase Orders: These are used to order materials from external suppliers.

4. Sales Orders: Sales orders document customer orders, which can initiate production plans if make-to-order production is in place.

5. Planned Independent Requirements: Temporary demands representing future customer orders, which can be consumed by them.

6. Goods Receipts / Goods Issue: This records the movement of goods, impacting real-time inventory levels.

7. Confirmations: This transactional records the completion of operation or order.

8. Reservations and Stock Transfer Orders: These are used to reserve materials for specific orders or transfer stock between locations.

Proper maintenance and integration of these items are a prerequisite for effective, efficient, and smooth operations in production planning.