Creating Process Orders

As already described in the previous unit, planned orders are created by material requirements planning as planned material receipts to cover requirements. In the case of in-house production, planned orders are then converted into production orders close to the time of production. In this unit, we will discuss various methods for converting planned orders.

In most cases, multiple planned orders are converted into process orders at the same time. Based on your business requirements, you can convert planned orders into process orders using collective conversion in the foreground or in the background. During conversion, the system converts each planned order into exactly one process order. To select planned orders to be converted, you can specify various selection criteria, for example plant, MRP controller, opening date, material, and so on.

Alternatively, a MRP controller can manually convert a planned order into a production order using individual conversion or even create several production orders from one planned order by means of partial conversion. In the former case, the planned order is deleted and replaced by the production order. In the latter case, the planned order is fixed and kept, and finally deleted once it is fully converted.

If a process order is created by means of planned order conversion, the production version of the planned order determined by the MRP run is copied to the process order. The dependent requirements of the planned order that are defined by the material components of the BOM are converted into reservations for the process order. If a process order is created without reference to a planned order, for example when you manually create a process order, the system selects the production version according to various selection criteria which we will discuss in this lesson.

As displayed in the figure, a production version has a validity period and a lot size range. A planned order or process order has a production quantity and basic dates. For a production version to be selected for a planned order or process order, the production quantity and the basic start date of the order must lie within the validity period and the lot-size range, respectively, of the production version. If several valid production versions exist in the system, the alphanumerically first production version is selected by default. In the displayed example, three valid production versions (0001, 0002, and 0003) are available and the system automatically assigns production version 0001. Please note that you always have the option to manually change the selected production version.

When you create or maintain a production version when maintaining the master data, you must ensure that all three master data objects, that is, the production version, the master recipe, and the BOM, are consistent. To be consistent, the lot-size range of a production version must lie within the lot-size range of the assigned master recipe as well as of the assigned BOM. Furthermore, the master recipe and BOM must be valid during the whole validity period of the production version. SAP S/4HANA Cloud Public Edition, offers a consistency check function in the Manage Production Versions app.

Consider the following example: You manufacture a finished product in small lot sizes (for example 1...100 L) and in big lot sizes (101 … 10.000 L). Since the manufacturing process is executed on two different machines, you must define two different master recipes which have different resources assigned to the manufacturing operations. However, the BOM is defined for the entire lot size range from 1 to 10.000 L as the required components do not depend on the machine. To implement this scenario in the system, you define two production versions, for small and big lot sizes, respectively:

• To the first production version, you assign the first master recipe and the BOM.

• To the second production version, you assign the second master recipe and the BOM.

When executing a consistency check, both production versions are valid since the lot sizes of both production versions lie within the lot size range of the BOM.

In the context of production planning, the following scheduling methods are available:

• Determination of basic dates
• Lead time scheduling

The determination of basic dates is only available for planned orders. Alternatively, you can use lead time scheduling. For process orders, only lead time scheduling is available.

When using the determination of basic dates, the system calculates the start and end day of the order based on data maintained in the material master (in-house production time). However, no phase times are calculated.

When using lead time scheduling, the system calculates exact start/end dates and times (including seconds) on order level based on phase duration data maintained in the master recipe. Furthermore, the system also creates capacity requirements on phase level which you can use for capacity planning. Since lead time scheduling is based on the master recipe (which contains exact information about phase duration), this approach leads to reliable planning data.

Depending on your business requirements, you can schedule orders either forwards or backwards in time: In forward scheduling, a process order is scheduled forwards in time starting from the basic start date (for example, manually entered or copied from the planned order); in backward scheduling, a process order is scheduled backwards in time starting from the basic finish date (for example, manually entered or copied from the planned order).

The above graphic shows all the possible elements contributing to the total lead time of a process order: The total lead time of a production order lies between the basic start date (BS) and the basic finish date (BF). The float before production lies between the basic start date (BS) and the scheduled start date of the first operation (SS), and the float after production lies between the scheduled finish date of the last operation (SF) and the basic finish date (BF). By specifying sufficient buffer times, you obtain better production stability as you can react to any unforeseen events that may occur in the production process. However, if your buffer times are too high, your production resource utilization might decrease. If necessary, for example in case of delays of other orders or a machine breakdown, the buffer times can be automatically reduced by the system.

The duration of an operation is defined by the duration of the individual phases. Each phase is scheduled using the scheduling formula stored in the resource data and the default values of phases in the master recipe. When a phase network is scheduled, the phase relationships are taken into account and the phase dates are carried over to the operation. The start time of the first phase plus the finish time of the last phase is the start and finish of the operation. In contrast to production routings, no inter-operation times can be maintained in the master recipe.

If a process order is being used to perform production for a sales order, then further time elements of the sales order will be taken into account to determine the final date of the process order.

As discussed in the previous section, the system schedules each phase of the order (provided that the respective control key of a phase is set up accordingly). However, we have not discussed yet how the system calculates the duration of each phase. As shown in the figure, the durations of phases are calculated based on formulas which are assigned in the resource.

Let us consider the following example: For phase 12, a processing time of 60 minutes is required based on a phase quantity of 1000 L. This information is maintained as standard value and base quantity in the phase. These values are used together with the resource formula and the phase quantity to calculate the phase duration. In our example, the formula is defined as follows:

The phase duration scales linearly with the phase quantity.

In our example, we produce 10000 L paint (phase quantity). Using the formula and the standard value, we obtain the following duration:

Phase duration: 10 hours (10000 L x 60 min / 1000 L)

When using, for example, forward scheduling, the system adds this duration to the specified phase start time (PhS) to calculate the phase end date (PhF).