SAP PP - Introduction

SAP Production Planning is one of the key modules in ERP and deals with planning processes, such as capacity planning, material planning, execution of production order, bill of material and goods movement. SAP PP module handles the master data required for Bill of Materials (BOMs) activity, work center and routing, and keeps it in a separate component.

SAP PP submodules vary as per industry type like discrete production, repetitive production, or production industries.

Discrete production is an industry where produce materials change with each lot and costs are calculated as per orders and lots.

In repetitive production, the product is not changed for a long period of time. Production takes place in total quantity and not in the form of individual lots.

For most of the industry types, above-mentioned planning and execution submodules are commonly used. Before the production execution, many steps are performed as a part of the planning process −

  • Material Requirement Planning (MRP) run (More details later in this tutorial).

  • Bill of material and routing master data is entered in a planned order automatically with MRP run.

  • Planning quantities are maintained in the system.

Key Steps in Production Execution

Following are the key steps in executing a production order. It starts with a planned order and ends with goods receipt against a Production order.

Convert Planned Order to Production Order

The first step is to convert a planned order to production order. When you create a production order, type is defined in SAP PP system.

Issue the Production Order

To start the production process, it is necessary to issue production order. Till a production order is released, execution of the production process cannot start.

Issue Goods for Production Order

To execute the production order, goods need to be issued. Once goods are issued, the document number can be updated in the system.

Production Order Confirmation

All the sub processes are executed in accordance with the required operations to confirm the production as per the production order.

Good Receipts w.r.t Production Order

Once the execution of production order is complete, goods produced w.r.t production order are received and placed in the storage area.