Analyzing Master Data for Discrete Manufacturing

To illustrate the production processes in a company, we use the example of the Bike Company. The company produces its own bicycles and maps the production processes in SAP S/4HANA.

The Bike Company has designed a new bicycle model for the upcoming season. It's a special model with a newly designed aerodynamic bike frame and light components for fast rides in the city. The tests of the prototypes went well, so that the model can now be produced.

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

Before production can start, the Bike Company must first create master data in the SAP S/4HANA system. This includes:

• Materials
• Bills of material
• Routings
• Work centers
• Production resources/tools (PRT)
• 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 finished bicycles for the required assemblies that are produced in-house, such as frames or wheels, and for raw materials to be procured via purchasing, such as chains or metal tubes. In the material master record of each item, planning data, procurement data, production execution-relevant data, and so on, are maintained.

The material components required for finished products and assemblies are to be defined via bills of materials (BOMs). The bill of material for a bicycle manufactured in our bicycle company can, for example, consist of the material components frame, wheel, chain, and further components. Assemblies, such as the frame of a bicycle themselves have a BOM, which results in multi-level BOM structures.

You furthermore define, in a BOM, how many components are required to assemble a product. For example, one bike requires the assembly of two wheels, front and rear wheel, respectively.

The BOM is used in production planning to determine, for example, how many items of a purchased raw material are required in a certain time frame. The system then compares the amount of on-stock items to the required quantity and creates, if necessary, a purchase requisition. In production execution, the SAP S/4HANA system uses the BOM in a production order to determine how many items of a raw material are required to produce the requested quantity. In our example, the production of 100 bicycles would require 200 wheels, 100 frames, and 100 chains.

Routings define, in detail, which operations are to be carried out to manufacture a finished product or an assembly. The master data specialist also defines the sequence in which the individual operations must be executed. For example, a routing for the production of a bicycle can consist of the operations: Pre-assembly, Assembly, and Quality Inspection that must be executed in the sequence shown in the above figure.

A work center is assigned to each operation to define the physical location where this operation is to be processed. By assigning a work center, you also specify costing- and planning-relevant parameters for the individual operations since the master record of a work center contains essential information that is used for capacity planning, scheduling, and costing of production orders. In our example, the "pre-assembly" of the bike is executed at work center assembly I, the operation "assembly" is executed at work center assembly II, and so on.

Furthermore, production resources/tools (PRTs) can be assigned to an operation. A production resource/tool assigned in the operation "assembly" can be, for example, a document with detailed instructions illustrating the main assembly steps to the worker.

A production order for a finished product or an assembly is always created with reference to a production version of the corresponding material. A production version defines which routing in combination with which bill of material is to be used for the production order. A suitable production version is automatically selected when the order is created according to criteria such as production quantity and production time.

Why do you need production versions in SAP S/4HANA? Let's consider the following example: Depending on the number of bikes to be manufactured, the Bike Company has two options to execute the manufacturing process. They can either use an automated assembly line for high production quantities or a sequence of work centers where operators manually execute the assembly process for smaller lot sizes. In the latter case, it does not make sense to use the automated assembly line due to high setup times. However, the BOM is identical for both production scenarios. To model this scenario in SAP S/4HANA, you can define two production versions:

• Production version A combines the BOM for the bike with a routing where all operations are executed on the work center 'Automated Assembly Line'. This production version is used for lot sizes bigger than, for example, 1000 pc.
• Production version B combines the BOM for the bike with a routing where all operations are executed on the manually operated work centers 'Pre-assembly', 'Assembly', and 'Quality Inspection'. This production version is used for lot sizes smaller than, for example, 1000 pc.

Now that you're familiar with the essential master data needed for production orders, let's move on to the next step: Learning how to see or display this data. In the following system demonstration, you will get to know how to display a BOM, a production version, and a multilevel BOM.

You are almost finished with displaying the relevant master data for production orders. Finally, you will learn how to display the remaining master data, routing, and work center.