Explaining Planning Strategies in SAP S/4HANA PP/DS for Make-to-Stock

Objective

After completing this lesson, you will be able to explain planning strategies in SAP S/4HANA PP/DS for make-to-stock

Strategy 40: Planning with Final Assembly

Sales orders are filled by warehouse stock. Planning (planned independent requirements) is possible to allow for procurement qualities to be planned before sales orders are received.

The basic principle of this planning strategy (make-to-stock) is the following:

  • Sales orders are filled by warehouse stock
  • Planning (planned independent requirements) is possible, to allow for procurement quantities to be planned before sales orders are received

Areas of use: Make-to-stock production strategies are designed for planning the procurement of components (production or purchasing) by planning the finished product. If it is easier for you to plan at component level, you can use planning at assembly level. Choose a make-to-stock production strategy in either of the following situations:

  • The materials do not have to be stored separately or are assigned to a specific sales order.

  • The costs have to be visible at material level (that is, not at sales order level).

You use make-to-stock production when you produce stock independently of an order, because you want to supply your customers with goods from this stock later. You may want to produce goods without a sales order if you expect a demand for them in the future. Make-to-stock strategies thus support very close customer-supplier relationships, since their purpose is to supply the customer with goods from stock as quickly as possible. Returns that have been through a quality check as well as other unplanned goods receipts can be used for other sales orders. You can avoid increased warehouse stock in a make-to-stock environment by creating planned independent requirements in advance to plan your stock. If you do this, you can also decide whether sales orders that exceed your plan can influence production. In addition, sales orders should be available at a relatively early stage (for example, using scheduling agreements). Make-to-stock production strategies generally consist of four phases:

  • Generation of planned independent requirements

  • Procurement

  • Receipt of sales order

  • Goods issue for delivery and reduction of planned independent requirements

Planning with Final Assembly (40)

The graphic gives an overview of planning with final assembly (planning strategy 40). The details are described in the text that follows.

Planning with final assembly (planning strategy 40) allows you to focus on flexible and fast reaction to customer demand, while also aiming for a production process that is as smooth as possible.

The procurement and production of all components and assemblies including their final assembly should be triggered by planned independent requirements before sales orders arrive.

You set the planned independent requirements for the finished product in Demand Management. Incoming sales orders consume these planned independent requirements.

Planned independent requirements that have not been consumed can – periodically, for example – be set to zero (transaction MD74).

If customer requirements exceed planned independent requirements, the system automatically creates a planned order for the sales order, including the unplanned quantity, in the next MRP run (sales orders that affect requirements).

The availability check can be executed from the sales order.

The consumption of planned independent requirements by customer requirements depends on the consumption mode and the consumption periods.

Planning with Final Assembly (40): Master Data

Maintain the strategy group 40 in the material master (MRP 3) for the finished product.

Maintain the strategy group 40 in the material master (MRP 3) for the finished product.

The settings for the consumption of sales orders and planned independent requirements from the material master are included in this strategy.

In the material master, an MRP group can also be used to assign the consumption to the material. If consumption values are found both directly using the strategy group and indirectly using the MRP group, the values from the strategy group are taken.

Consumption

The consumption modes are as follows: backward consumption, forward consumption, and backward/forward consumption.

You can use consumption mode to determine the direction on the time axis in which incoming sales orders are to consume planned independent requirements.

In backward consumption (consumption mode 1), the sales order consumes planned independent requirements from before the customer requirement.

In forward consumption (consumption mode 3), the sales order consumes planned independent requirements from after the customer requirement.

You can combine backward and forward consumption provided that you take the consumption periods into account (consumption modes 2 or 4).

You can define the consumption mode and the consumption periods either in the material master or for each plant and MRP group. If no values have been entered, the system uses the default setting with backward consumption for 999 days.

Hint

If you use mode 1 and do not maintain the backward consumption interval, this means that only the requirements on the current day are consumed.

Execute Planning with Final Assembly

Strategy 70: Planning on Sub-Assembly Level

The graphic gives an overview of Planning at Assembly Level (70). The details are described in the text that follows.

It makes sense to plan at assembly level (strategy 70 + set Mixed MRP indicator) when you are processing variants if it is easier to specify a requirements forecast for certain assemblies than it is for the variant diversity of the finished product.

With this planning strategy, planning for an assembly is considered separately. The planned independent requirement is entered at assembly level and triggers the production of the assembly.

If sales orders are received for the finished product, the BOM is exploded for the finished product. Dependent requirements or reservations are also created for the assembly as a result of planned orders or production orders for the finished product. These consume the planned independent requirements of the assembly.

If, due to sales orders, planned orders, or production orders at finished product level, the dependent requirements or reservations exceed the assembly's planned independent requirements, a planned order is created for the assembly during the next planning run.

In Sales and Distribution, the system does not perform a check of the assembly planning quantities.

In the strategy group of the material master record, you must enter strategy 70 and the Mixed MRP indicator must be set for assembly planning.

The consumption indicator in the item screen of the planned independent requirements must allow consumption with reservations and dependent requirements.

Planning at Assembly Level (70): Master Data

Maintain the planning strategy 70 together with the set Mixed MRP indicator in the SAP S/4HANA material master (MRP 3) for the assembly or assemblies.

You make the strategy setting in the material master for the assembly or assemblies. Maintain the planning strategy 70 together with the set Mixed MRP indicator in the SAP S/4HANA material master (MRP 3) for the assembly or assemblies. In principle, the finished product can show any strategy.

Maintain the consumption parameters (consumption mode, forward and backward consumption periods) in the material master.

The Consumption indicator in the item screen for the planned independent requirements must allow consumption with reservations and dependent requirements.

If you map this strategy together with a final assembly that takes place in make-to-order production, you must also set the Individual / Collective indicator to Collective in the material master of the assemblies.

Consumption in Sub-assembly Planning (70)

The three steps outlined for Consumption in Sub-assembly Planning (70) are described in the text that follows.

In the first step, you create the requirement quantities expected in the future for the assembly. You do this in Demand Management.

Sales orders at the finished product level are created and planned or production orders generated.

The resulting dependent requirements or reservations (for the assembly) consume the planned independent requirements of the assembly.

Sub-assembly Planning (70): Consumption Periods

The graphic highlights that consumption logic is determined by the consumption mode and the backward and forward consumption periods.

Similar to SAP S/4HANA strategy 40, the consumption logic is determined by the consumption mode and the backward and forward consumption periods. These are defined in the material master for the assembly, or per plant and MRP group.

With this strategy, the consumption periods are calculated on the basis of the dependent requirements or reservations.

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