SAP PP

PP covers demand and materials planning (MRP), production execution (production/process orders), capacity planning, and confirmation of what was made. It uses bills of materials and routings to plan the components and steps needed, ensuring the right products are made at the right time.

• Bill of Materials (BOM): the components of a product.
• Routing / Work Centers: the steps and where they happen.
• MRP: planning material and production requirements.
• Production/Process Orders: executing manufacturing.
• Confirmation: recording what was produced.

Master data first, because production planning is unusually dependent on it. CS01 maintains a bill of materials, CA01 a routing, and CR01 a work centre. If any of the three is wrong, everything downstream is wrong in a way that looks like a planning problem.

Planning runs through MD01 for a full MRP run or MD02 for a single material, and MD04 is the stock requirements list, which is the single most useful screen in PP: every requirement and every receipt for one material and plant, in date order.

Execution uses CO01 to create a production order, CO02 to release it, CO11N to confirm operations and MIGO to receive the finished goods.

The tables are MAST and STPO for bills of materials, PLKO and PLPO for routings, AFKO and AFPO for production orders, and RESB for the component reservations an order creates.

Forty minutes, and it is the whole module in one pass.

1. Check MD04 for a finished material. Note what is already planned.
2. Create a demand, either a sales order or a planned independent requirement, and look at MD04 again. The requirement appears with no receipt against it.
3. Run MD02 for that material. MRP creates a planned order for the finished item and, through the bill of materials, requirements for its components.
4. Convert the planned order into a production order with CO01, and release it. The order now reserves components and carries operations from the routing.
5. Confirm the operations with CO11N and receive the finished goods. Components are consumed, stock of the finished item rises, and costs settle on the order.
6. Return to MD04. The requirement is covered.

Doing this once teaches why PP consultants talk about master data so much: every step above read the bill of materials or the routing, and neither was created by the planning run.

PP is tightly integrated: MRP reads demand (from SD/forecasts) and stock (MM), production consumes materials (MM goods issue) and produces stock (MM goods receipt), and costs flow to CO (product costing). It sits at the centre of the manufacturing supply chain.

The costing side is where PP meets controlling. Component issues and operation confirmations are what turn a standard cost estimate into actual cost, and the variance between them is analysed in CO. A confirmation entered carelessly, with the wrong quantity or the wrong hours, produces a variance that looks like a manufacturing problem and is a data entry problem. See SAP PP configuration for how the order types behind this are set up.

• Make to stock or make to order. Stock production plans against a forecast and holds inventory. Order production waits for a customer and holds none. The strategy group on the material decides it, and it changes the shape of everything downstream.
• Discrete, process or repetitive manufacturing. Discrete uses production orders, process uses process orders and recipes, repetitive uses run schedules with backflushing. Choosing by how the plant actually works, rather than by what the team knows, is the right instinct.
• How MRP is scheduled. A nightly full run is simple and slow. Net change planning is faster and needs the planning file to be trustworthy.
• Backflushing or explicit issues. Backflushing consumes components automatically on confirmation, which is far less work and hides errors until a stock count finds them.

MRP is the heart of PP and it is simpler than its reputation. It answers one question for every material: given what is required and what is coming, what should we order or make, and when.

It works through net requirements calculation. Take the demand, subtract the stock on hand and the receipts already scheduled, and whatever remains is a shortage. Then apply the lot size procedure to decide how much to propose: exactly the shortage, a fixed quantity, or everything needed for a period.

Then it looks at the material's procurement type. Bought materials produce a purchase requisition. Made materials produce a planned order, and the bill of materials explodes so that the components acquire requirements of their own. That explosion is what makes MRP a chain rather than a calculation.

Scheduling works backwards from the required date using lead times, so the proposal has a start date as well as a quantity. If that start date is in the past, MRP still proposes it, and the exception message telling you so is one people learn to ignore at their cost.

The MRP type on the material decides whether it is planned this way at all. Consumption-based planning reorders when stock falls below a point, without looking at demand, which is right for cheap consumables and wrong for anything with a real bill of materials.

Reading MD04 after a run, and understanding every line on it, is the single most useful PP skill. See SAP IBP for planning at the level above this one.

A material can be made in more than one way, and a production version is how the system holds each combination.

A version pairs one bill of materials with one routing, with a validity period and optionally a lot size range. A product assembled on two lines, with slightly different components or different operation times, has two versions, and planning chooses between them.

This matters more than it sounds. Without versions the system can only model one method, so a second line has to be represented by a separate material, which distorts stock, planning and reporting. With them, the same material is planned correctly whichever line it runs on.

Versions are also how a change is phased in. A new routing valid from a date, in a new version, lets orders before that date use the old method and orders after it use the new one, with no retrospective effect on what has already been planned.

Where a plant has one method per product, versions are still worth creating, because the day a second method appears the structure is already there.

Learn PP by following its end-to-end process, its master data, its configuration (in SPRO), and its integration points with finance and neighbouring modules. Hands-on practice in a training system is essential.

• Learning screens, not the end-to-end process.
• Ignoring the finance integration that every logistics module has.
• Skipping master-data setup that the process depends on.

• Blaming MRP for a bill of materials problem. MRP does exactly what the master data tells it. MD04 and the BOM explain almost every surprise.
• Lot sizing nobody chose. The lot size procedure on the material decides order quantities, and leaving it at a default produces either constant tiny orders or enormous ones.
• Leaving orders technically incomplete. Unconfirmed or unsettled orders carry cost that never reaches its destination. See SAP MDG for governing the master data this module depends on.

Running one order through is the easy half, and configuring order types, scheduling and backflushing for a real plant is the part you do in the course.