- [Instructor] Let's look
at the SAP Production Planning module,
often abbreviated as SAP PP.
This module is used to help plan the manufacturing
for sales and distribution of products.
SAP PP has the ability to handle businesses
that have both repetitive manufacturing models
where the manufactured products stays the same
over a long period of time and discreet production models.
Businesses using discrete production models
tend to use order based production
where the product is customized or change frequently.
Four of the major aspects of SAP production planning are:
the bill of materials, routings, capacity planning,
and materials requirement planning.
Let's take a look first at the bill of materials.
The bill of materials is often referred to
as the BOM in SAP.
It is a complete list of the materials, assemblies,
and other components needed to manufacture a product.
Essentially, a bill of materials is the ingredients list
part of a recipe.
Let's take a look at a BOM in the system.
This is a bill of materials for a metal picture frame.
We see that there are three line items
in our material grid below.
This means there are three components to make
up our metal picture frame.
Each of these components has a different quantity needed
to make up the product.
Our first line item shows that we need four pieces.
The second, eight pieces,
and the third row we see we need 32 pieces.
Routings are up next.
They are description of which operations
and in which sequence these operations need to occur
for something to be produced.
Routings are used for scheduling the production
of semi-finished and finished products.
They are also used to help calculate the operation cost
for a finished product.
We talked about the bill of materials
acting like the ingredients list of a recipe.
In our example the routings act
as the step-by-step instructions of the same recipe.
In this case to make a product.
Let's look at a routing in SAP.
We'll look at the same product as in the bill of materials.
Our metal picture frame.
This is a simple routing where there's only one operation
and it's called assembly.
This routing tells a lot of information.
We have a base quantity of 100 pieces
and it's going to take 30 minutes to set up the machine,
and 10 minutes of labor to complete the assembly operation.
Next up is capacity planning.
Capacity planning is done to balance the production load
across different work areas
which called work centers in SAP.
Over in our test system, we're looking at a report
that displays that capacity evaluation
of the assembly work center at plant 1710
over a specified date range.
For each weekday date, we can see that
there is a 480 minutes of available capacity.
If we look at our last column,
which is remaining available capacity,
we can see that all of our capacity is remaining.
This means we can start booking production
to this assembly work center right now.
Materials requirement planning called MRP is used
to ensure every material we need
is available for production.
The key feature of MRP is that when it is run,
it will create procurement proposals.
It ensures production can happen to meet our demand
and it minimizes the cost
of holding too much unnecessary inventory.
Let's look at MRP in the system.
Back in our test system we're looking
at an MRP list for our metal picture frame.
It shows us that we have an available quantity
of zero in our stock, but we have a quantity
of six of this material in storage location 171D
that is sitting there because of a production order
from July 12th, 2018.
The production planning module enables businesses
to efficiently produce the goods needed
to meet customer demand.