Contents

1. Introduction
Introduction to client
Networks
Requirements of client
Client - customer relations
2. Literature survey
Introduction to ASAP methodologies

Definition of SAP R/3 system

ERP packages
Different modules involved in SAP
Application of SAP R/3 system
3. Introduction to project
Title of the project
Objective of the project
Aim and purpose of project
Study of shop floor maintenance

4. Introduction to production planning

Production planning concepts
Introduction to PP module
MRP
JIT
5. Implementation of SAP

INTRODUCTION OF CLIENT

Gandour Malaysia as established in 1857 as a manufacturing of hard

boiled candies and marzipan and has become leading producer of a coco
based product, baking, confectionary as well as food and beverage items
like fruit drinks, chocolate drinks, vegetable oils, and a variety of medium
and long grain rice.

HISTORY:
The Producer, with variety and various production sites in Lebanon,
Saudi Arabia, Egypt, Philippines, suizhon, shanghai etc spread around
the globe.

NETWORKS:
Gandour products are now available in more then 55 countries world wide
supplied from Gandour network of factories.
Gandour employs more then 25000 associates around the globe with in
the manufacturing stores and group of companies.

PROJECT SCOPE:
SAP-PP implementation in gandour group of companies.

ORGANISATIONAL ELEMENTS:
1. Client --Gandour group of companies.
2. Company codeGandour Malaysia SDN.BHD
3. Controlling areaGandour controlling area.

4. Purchase organizationGandour central purchase

organization.
5. Plants
1) M.O.GANDOUR & SONS S.A.L. LEBANON.
2) M.A.J.FOOD DISTRIBUTION SYSTEMS SAUDI
AREBIA.
3)

ADVANSED FOOD INDUSTRIES S.A.E. EGYPT.

4)

GANDOUR MALAYSIA SDN.BHD.

5)

GANDOUR PHILIPPINES INC PHILIPPINES.

6)

SUIZHON GANDOUR FOOD CO.LTD .SUIZHON.

7)

SUIZHON GANDOUR FOOD CO.LT D.

SHANGHAI.

REQUIREMENT OF CLIENT:
Implementation of SAP in gandour group of companies due to
globalization of organization for best results.

CLIENT CUSTOMER RELATIONSHIP:

Since 1857 our client gandour has been providing consumers with
ingredients for happiness to maintain good Client customer
relationship, so now our client is leading south East Asia in confectionary
industry.

INTRODUCTION TO SAP

SAP is defined in German language as Systeme, Andwendungen, and

Produkte in Der Datenverarbeitung, was translated to English as Systems,
Application and Products in data processing. SAP was founded by five
German engineers in 1972. Today, SAP is the worlds largest Enterprise
Resource Planning (ERP) ERP solution provider company and the fourth
largest software company overall.
SAP is an integrated system, which means that all the SAP modules are
designed to share informations and creates transactions based on various
business processes.
The full name of parent company is SAP AG (AG is a
Germany company).

EVOLUTION/HISTORY OF SAP:
In 1971, the first financial accounting software formed the basis for the
continuous development of other software components, which later after one
year I.e. in 1972; SAP AG R/1 was founded in Mannheium (Germany) by a
group of ex-IBM engineers.
After the end of decade,
In 1980 it leads to the birth of SAP R/2, which is designed to
handle different languages and currencies.
In 1990s SAP R/3 has been took birth that has unleashed in to
market as

The client-server concept.

Uniform appearance of graphical interfaces.
Consistent use of relational database and
The ability to run on computers from different vendors met with
an overwhelming approval.

The client-server architecture moved to a more flexible and scalable

architecture. Going by this technology, the processing of application could
be split between the server and workstation.
The server handling the centralized functionality, while the client
workstation maximized for users.

SUCCESS STORY OF SAP AG:

SAP R/3 is a success story like few others. Two or three figure
growth rate in the sales, turnover and profits for years demonstrate the
attractiveness of SAP R/3 in the Executive Resource Planning (ERP).
Businesses are finding that using an integrated business standard software
application such as SAP R/3 Enterprise Resource Planning (ERP) is an
answer to this demands in the several accepts.
SAP R/3 offers the necessary prerequisites for the support of
optimization of business processes, SAP R/3 is itself structured as process
oriented software program.
The SAP R/3 is business engineering tool that make it possible for business
to handle organizational and data processing projects in the integrated
environment, fully utilizing the potential of process optimization while
suffering as few communication losses as possible.
Today SAP AG regains as the undisputed market leader ion
enterprise application software. SAP is listed as the New York Stock
Exchange (NYSE) under the symbol SAP.SAP AG offers comprehensive
industry solution among,

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

SAP Aerospace and Defense.

SAP Automotive.
SAP Banking.
SAP Chemicals.
SAP Consumer Products.
SAP Engineering and Constructions.
SAP Health Care.
SAP High Tech.
SAP Insurance.
SAP Media.
SAP Oil and Gas.
SAP Pharmaceuticals.
SAP Public Sector.
SAP Retailer.
SAP Service Provider.

BASIC ENTITIES OF ORGANIZATIONAL STRUCTURE IN SAP R/3:

Organizational elements:

Client.
Company code.
Group Company.
Controlling area.
Purchase organization.
Plants.
Sales organization.
Distribution channel.
Division.
Sales organization.

CLIENT CHARACTERISTICS:
A highest hierarchical level in SAP (e.g. corporation).

 Used to differentiate between a development, quality assurance and

production system in R/3.
Common sets of rules
1. Common tables
2. Common master files.
3. Common databases.
Standard data across the client
A vendor number and name is common across the client.
A customer is common across the client.
A general ledger number and description is common
across the client.
A material number and description is common across the
client.

COMPANY CODE:
A company code represents an independent balancing and or legal
accounting entity for example a company within a company group.
Balance sheet and profit and loss statements, required by law can
be created at the company code level.

CONTROLLING AREA:
In the controlling area intensifies a self contained organizational element for
which the management of costs and profits can be performed.

PURCHASE ORGANIZATION:
Responsible for procurement for one or more plants.
Responsible for negotiating pricing and delivery terms with vendors.

 Purchasing organization is assigned to a company where inventory is

legally tracked or costs are legally incurred.

PLANT:
Usually manufacturing facility, ware house or a location that stocks
manages and valuates inventory.
Links to PP, MM and SD.
A plant is assigned to a company
Purchasing organization is assigned to plant.

Purchasing organization structure:

Sales organization:
Master data maintenance for customers, pricing at sales organization level. It
linked to SD and FI.

DISTRIBUTION CHANNEL:
Breakdown with in sales for different product distribution methods
such as wholesale vs. retail.
Sales orders belong to one distribution channel.
DC assigned to a sales organization.

DIVISION:

It is the way of grouping materials, products or services.

SALES AREA:
It is the combination of
Sales organization.

 Distribution channel.
Division.

ASAP METHDOLOGIES

ASAP-ACCELERATED SAP
Accelerated SAP is a long time tool used to help make this
transformation easier by assisting in the implementing of sap. Its purpose
is to help design your sap implementation in the most efficient manner
possible. Its goal is to effectively optimize time, people, quality, and other
resources, using a proven methodology to implementation. ASAP focus on
tools and training wrapped up in a five well known consecutive phases:
Phase 1: project preparation
Phase 2: business blueprint

Phase 3: realization
Phase 4: final preparation
Phase 5: go-live and support
It entails a reengineering of your current environment, structure,
systems, and process across both business and it organizations.

PHASE 1: PROJECT PREPARATION

Phase 1 means initiates with a retrieval of information and resources ,
it is an important time to assemble the necessary components for the
implementation .some important milestones that need to be accomplished
for phase 1 include
Obtaining senior level management /stake holder support
Identifying clear project objectives
Architecting an efficient decision making process
Creating an environment suitable for change and reengineering
Building a qualified and capable project team
Senior Level Management Support
One of the most important milestones with phase 1 of ASAP is
the full agreement and cooperation of the important company decision
makers key stakeholders and others. Their baking and support is crucial
for a successful implementation.
Clear Project Objectives
Be concise in defining what your objectives and expectation or
for this venture.
Unclear notations of what you hope to obtain with sap will handicap. The
implementation process .also Make sure that your expectations are
reasonable considering your companies resources. It is essential to have

clearly defined ideas, goals, and project plans devised before moving
forward.
An Efficient Decision-Making Process
One obstacle that often stalls implementations is a poorly
constructed decision- making process .before embarking on this venture,
individual need to be clearly identified. Decide now who is responsible for
different along the way. From day one, the implementation decision-makers
and project leaders from each area must be clearly defined, and they must
be aware of the onus placed on them to return good decision quickly.
Environment Suitable For Change and Re-Engineering
Your team must be willing to accept that along with the new sap
software, things are going to change the business will change, and the
information technology enabling the business will change as well. by
implementing sap, you will essentially redesign your current practice to
model more efficient or predefined best business practices as espoused by
sap. Resistance to this change will impede the progress of your
implementation
Building a Qualified Project
Probably the most important milestone early on is assembling a
project team for the implementation. your project team must be a
representative sample of the population of your company. If you are
implementing the materials management and plant maintenance modules in
etc.

PHASE 2: BUSINESS BLUEPRINT

SAP has defined a business blueprint phase to help extract
pertinent information about your company that is necessary for the
implementation. These blueprints are in the form of questionnaires that are
designed to probe for information that uncovers how your company does
business. As such, they also serve to document the implementation. Each
business process and business requirements. The kinds of questions asked

are germane to the particular business function, as seen in the following

sample questions:

What information do you capture on a purchase order?

What information is required to complete a purchase order?

Accelerated sap Question and Answer Database

The Question and Answer Database (QADB) is a simple although aging tool
designed to facilitate the creation and maintenance of your business
blueprint. This database stores the questions and the answers and serves as
the heart of your blueprint. Customers are provided with a customer input
Template for each application that collects the data. The question and answer
format is standard across applications to facilitate easier use by the Project
Team.
Issues Database
Another tool used in the blueprinting phase is the issues Database. This
database stores any open concern and ending issues that relate to the
implementation. Centrally storing this information assists in gathering and
then managing issues to resolution, so that important matters do not fall
through the cracks. You can then track issues in the database, assign them to
team members, and update the database accordingly.

PHASE 3: REALIZATION
With the completion of the business blueprint in Phase 2, functional
experts are now ready to begin configuring SAP. The realization phase is
broken into two parts:

1) SAP consulting team helps you configure your baseline system,

called the Baseline Configuration.
2) Your implementation project team fine-tunes that system to meet
all your business and process requirements as part of the fine
tuning configuration.
The initial configuration completed during the baseline configuration is based
on the information that youre provided in your blueprint document. The
remaining approximately 20% of your configuration that was not tackled
during the baseline configuration is completed during the fine tuning
configuration. Fine tuning usually deals with the exceptions that are not
covered in baseline configuration. This final bit of tweaking represents the
work necessary to fit your special needs.
Configuration testing
With the help of your sap consulting team, you segregate your business
process into cycles of related business flows. The cycles serve as independent
units that enabling you to test specific parts of the business process. You can
also work through configuring the sap implementation guide IMG), a tool
used to assist you in configuring your sap system in a step-by-step manner.
During this configuration and testing process, it becomes necessary to send
your project team to level 3 SAP training. This in-depth instruction provides
your team members with SAP component-specific expertise that they can
map to the business unique requirements.
Knowledge transfer
As the configuration phase comes to a close, it becomes necessary for the
project team to be self-sufficient in their knowledge of your SAP system.
Knowledge transfer to the configuration team tasked with system
maintenance needs to be completed at this time.

PHASE 4: FINAL PREPARATION

As phase 3 merges into phase 4, you should find yourselves not only in the
midst of SAP training, but also in the midst of rigorous functional and stress
testing. Phase 4 also concentrates on the fine tuning of your configuration

before go-live and more importantly, the migration of data from you old
system or system of SAP.
Workload testing (including peak volume, daily load, and other form of
stress testing), and integration or functional testing are conducted to ensure
the accuracy of your data and the stability of your SAP system. Because you
should have begun testing back in phase 2, you do not have too far to go until
go-live. Now is an important time to perform preventative maintenance
checks to ensure optimal performance of your SAP system.
At the conclusion of phase 4, take time to plan and document a go-live
strategy. Preparing for go-live means preparing for your end users questions
as they start actively working on the new SAP system.

PHASE 5: GO-LIVE AND SUPPORT

The go-live milestone itself is easy to achieve; a smooth and uneventful golive is another matter altogether. Preparation is the key, including attention to
what-if scenarios related not only to the individual business process deployed
but also to the functioning of the technology underpinning these business
process. And preparation for ongoing support, including maintenance
Contracts and documented processes and procedures, are essentials.
Fortunately, a wealth of information and additional resources are available.

ERP PACKAGES
1. SAP
2. Oracle
3. People soft
4. Baan
5. Ramco

SAP GLOBAL ERP CONSULTANT

ERP: - Entrepreneur resource planning
Who is an entrepreneur:Land, labor, capital & machinery are called factors of production.
Entrepreneur is a firm of business or industry, a manufacturing concern and
the like which combines the factors of production.
These productive
resources are combined to turnout goods and services for sale.
A person who combines the productive resources and undertakes an
enterprise is called an entrepreneur

As an entrepreneur he decides as to
-

How productive agents are combined?

What shall be produced?

How much shall be produced?

How many employees shall be tired?

How many to pay them?

Entrepreneur us a person who senses opportunity for economic gain in the

sicio-economic environment around him and initiate activity leading to
production, through interaction of men and materials
JB Says as:A person who shifts economic resources and out of an area of lower
productivity to an area of higher productivity.

TITLE OF THE PROJECT

A project report on implementation of ERP in confectionary firm.

OBJECTIVE OF PROJECT:
Implementation of SAP-PP in confectionary firm.

AIM AND PURPOSE OF PROJECT:

Due to globalization in competitive world of business,
implementation of SAP package makes better study of business process
around the globe, Optimum utilization of resources.
CASE STUDY ON SHOP FLOOR MAINTENANCE:

PLANT LAYOUT
Plant layout refers to the arrangement of the physical facilities including
work centre for the manufacturing of a product.
It is spatial arrangement of the physical resources used to produce a
product.

OBJECTIVES

The major objectives of plant layout are

To facilitate the production process.

To minimize the material handling.

To maintain the flexibility in the operations.

To provide optimum utilization of machine and equipment.

To cause better flow of product with least possible

production delays.

To reduce risk hazards.

To promote effective utilization of labour.

To assure safety and security of workers.

To bring about higher productivity.

PRINCIPLES OF LAYOUT:
Meether in his practical plant layout has suggested the
fallowing six principles
1.

principles of over all integration:

Integration of men, machine and material along with

supporting activities in the best possible way.
2.

Principles of minimum distances:

Other things being equal the layout is that which facilities

movement of men and machine through minimum distance between
operations.
3.

Principles of flow:

By using proper line balancing techniques, congestion points, flow

bottlenecks and back tracking should be avoided.
Following are the few flow patters suggested in view of minimum
distance.
a.
Line flow
b.
L-type flow
c.
Circular flow
d.
U-type flow
e.
Inverters
4.

Principles of cubic space:

The best layout is that in which all the availability space (vertically
and horizontally) is most effectively and economically utilized.
5.

Principles of safety and satisfaction:

The layout should ensure maximum safety and satisfaction to

workers by providing well ventilated work place free from fumes, dust
and abnormal noise.
6.

Principles of flexibility:

The layout should be flexible for future adjustment at the lest cost
disturbance. This is in view of changes in product design or production
process.

LAYOUT DECISIONS
Once site selection (plant location) is finalized, necessary data
pertaining to the desired product are collected. Then, depending on the
methods of manufacturing or processing fallowing layout decision are
taken.

TYPES OF LAYOUT
A.
B.
C.

Process layout
Product layout
Fixed position layout

D.

Combination layout

PROCESS LAYOUT
This type of layout is characterized by keeping similar
machines at one location.
For example, lathes placed in a separate place called lathe section
or subsection. Similarly drills, shapers, welding machines etc... Fixed
place exclusively in their respective section on functional basis.
Similarly, manufacturing layout could have process department
such as welding, heat treatment, painting etc,
This type of layout is also called Analytical layout.
APPLICATIONS:
Process layout is suitable for job order, nonrepetitive and
non-standardized production.
Distribution ware house, Hospitals, Medical clinics, Office
buildings etc, often designed in this manner.
Process oriented layout is appropriate for intermittent
operation such as automobile repair facilities.
ADVANTAGES:
-

Adaptable to produce verities of products.

Adaptable to changes in sequence of operation.
Adaptable to change in manufacturing schedule.
Higher degree of machine utilization.
Better supervision due to specialized process.
Less interruption to work flow.
Better control over production cost.
Higher level of individual operator performances.
Break down of any one machine does not effect production.
Better training facility to new workers.

DIADVANTAGES:
-

Material handling becomes extremely difficult.

Large floor space is required.
Production control is difficult time is more.

Routing and scheduling is difficult.

Work in process inventory is large.
It needs more inspection and efficient condition.

PRODUCT LAYOUT
In this type of layout machines are arranged along the product line.
All the machines required in the processing of a product are grouped
together in a department and one installed to sequence of operation.
All the components, sub assemblies etc, are started at right time
to be ready at the required time and are kept moving until the finished
product is available at the end of assembly line.
This is also know as synthetic layout
The product layout need not be a single straight one it may be
rectangular, Z-shaped, circular etc. with out back-tracking.

APPLICATIONS:
Continuous production.
Production of standardized parts.
Mass production.
Automotive industry and beverage bottling plants, for
instance, are excellent examples which use product layouts.

ADVANTAGES:
-

Reduced unit production time.

Reduced material handling cost.
Reduced work in process inventory.
Reduced floor area per unit of production.
Reduced record keeping.
Effective use of less skilled labour.
Reduced congestion.
Smooth flow of material.
Possibility of time and motion study to determine rate of

work.

DISADVANTAGES:

Prone to cause interruption of production due to machine

breakdown, material storage or operation absenteeism.
Machine utilization is less.
With change in model, layout also requires a change and
expansion is costly.
Specialized supervision is required.

COMBIMATION LAYOUT
A combination of both the process layout and product layout is the
rule rather than exemption. Combination layout combines the advantages
of the both the layout. As the matter of fact, each process is setup asa unit
or department, and these units are then arranged into a product layout.
A combination layout is possible where layout is possible where an
item is made in different types and sizes. It is suitable for JOB SHOPS
and semi mass production situations. A combination layout is also useful
when sequence is same; none of them is to produce in bulk.
For example files, hacksaw, circular metal saws, wooden saws etc...
Can be manufactured on a combination type of layout.
In factories, where first the products are manufacturing and then
assembled, this layout is generally used.
Example:

Refrigerators manufacturer uses a process layout to produced

various sub components.

Metal stamping may be consolidated into one department.

All types of welding in another and various heat treating

process grouped into a third work center.
At the same time, all these components are brought together in
assembly operations for final assembly of the product. The final assembly
operations are designed on a product-flow or product oriented layout.

FIXED POSITION LAYOUT

In this type of layout, men and machines tools and equipments are
moved to the products which remain at one place. The product is
completed at that place where material lies.

APPLICATIONS:
-

Ship building.
Locomotives.
Air craft manufacturing.
High pressure boilers and vessels fabrication.

ADVANTAGES:
-

Continuity of work.
Involves least movement of work.
Maximum flexibility for changes.
Variety of project can be undertaken.

DISADVANTAGES:
-

Involves low content of work-in-progress.

Low utilization of labour and equipment.
Involves high cost of equipment handling.

INTRODUCTION TO PRODUCTION PLANNING

MATERIAL MASTER RECORD:
Material master record contains
General data(basic data)
Plant data
Material requirement planning
Purchasing data
Sales data

 Accounting and costing data

Ware house data
Quantity management data
Material master is a companys main resource of material specific data. it
is used by all components in the R/3 logistic system.
The integration of all material data in a single data base object prevents
the problem of data redundancy every area such as purchasing, inventory
management, material planning and invoice verification can use the data
stored.

Organizational level in material master record:

1.

CLIENT :
General data

2.

Material number.
Description.

Units of measure.

Technical data.

PLANT:
Plant specific data
MRP data.
Work scheduling data.
Purchasing data.

3.

STORAGE LOCATION:
Storage location specific data
Storage quantities.

MATERIAL MASTER RECORD:

The material master is a central data object in the SAP system. It is
used to model raw materials, auxiliary materials, semi finished products,
products and product resources and tools.
Types of material master record:
1) According to industry sector.
2) Unit of measure.

BILL OF MATERIALS:
Definition:
A bill of materials is a complete, formally structured list of the
components of a product or assembly. A bill of material contains the
description of each component, the quantity, and unit of measure. A bill of
material creates the relationship between an assembly and all of its direct
components.

BOM INTEGRATION:
1. BASIC DATA:
Material
Equipment
Documents
BOMs
Routing
Classes
PRTs
Work centers

1. Sales and distribution

2. Production
MRP
Planned orders
Production orders

3. Controlling:
Product costing

4. Material management
Purchasing
Storage location

5. Plant maintenance
Preventive maintenance plan
Maintenance order

PUPROSES OF BOM:
1)
The data stored in bills of material serves as a basis for production
planning activities such as:

A design department (working with CAD) can base its work on bills of
material. You can also create a BOM in the R/3 System from your
CAD program, via the SAP-CAD interface.

A material requirements planning (MRP) department explodes bills of

material on a certain date to calculate cost-effective order quantities for
materials.

A work scheduling department uses bills of material as a basis for

operation planning and production control.

A production order management department uses bills of material to

plan the provision of materials.

1)
The data stored in bills of material is also used in other activities in
a company such as:

Sales orders

Reservation and goods issue

STRUCTURE OF A BOM:
BOM data is structured as follows in the R/3 System:
The BOM header contains data that applies to the entire BOM.
The BOM item contains data that only applies to a specific
component of the BOM.
Sub-items contain data on the different installation points for
partial quantities of an item.

BOM CATEGORIES:
1. Material BOMs:
A bill of material that you create for a material is known as a
material BOM
2. Equipment BOMs: BOM with Reference to Equipment
The system also allows you to maintain BOMs for equipment
(technical objects for plant maintenance).
Equipment BOMs are used to describe the structure of equipment
and to assign spare parts to equipment for maintenance purposes.

3. Functional location BOMs: BOM with Reference to a Functional

Location
Bills of material for functional locations group together the
elements of a technical structure, such as the functional unit of an entire
plant.
4. Document structures: BOM with Reference to a Document
A complex document may be made up of several documents,
such as a program, technical drawings, papers, and photographs. These
related information and documentation objects are grouped together as a
unit using a document structure
5. Order BOM: BOM with Reference to a Sales Order
You work with order BOMs when you specially tailor the make-toorder production of your products to the requirements of your customers.
In order to meet the customer requirements, sales order specific
modifications to various assemblies are often required. Furthermore,
assemblies are often specially constructed for a particular sales order.
6. Work breakdown structure (WBS) BOM: BOM with Reference to a
Production Lot.
Production lots for finished and semi-finished products can be
planned and manufactured using different BOMs. For example, a
substituted component can trigger a targeted cost calculation and
evaluation per production lot during the planning stage

Uses of BOM:
1. Production i.e. operation.
2. Engineering i.e. technical data.
3. Costing i.e. price.
4. Sales and distribution i.e. order quantity.

5. Plant maintenance i.e. location data.

Item categories:

Stock item (L).

Non stock item (N).

Variable size item e.g. cylinder (area, circumference).

Recursiveness.

TECHNICAL TYPE OF BOM:

A.

Simple BOM:

A simple BOM is defined as the product of components neither changed

nor replaced in of the condition, so it is called a simple BOM.

A.

Variant BOM:

The term "variant" refers to changes to the basic model of a

product. These changes occur when components are left out or added.

B.

Multiple BOM:

One product can be manufactured from alternative combinations of

materials depending on the quantity to be produced (lot size). The product
is represented by a number of alternative BOMs (alternatives).
The multiple BOM contains components, which are only used in
one of the alternatives, and one component, which is used in both
alternatives.
A multiple BOM cannot be converted to a variant BOM.

WORK CENTER:
Work centers are used to describe where and how each
manufacturing operation is performed.
Each work center contains distinct capacity, costing and scheduling
information.
Operations are carried out at a work center. In the R/3 System work
centers are business objects that can represent the following real work
centers, for example:

Machines, machine groups

Production lines

Assembly work centers

Employees, groups of employees

Data in work centers is used for:

Scheduling

Operating times and formulas are entered in the work center, so that the
duration of an operation can be calculated.

Costing

Formulas are entered in the work center, so that the costs of an operation
can be calculated. A work center is also assigned to a cost center.

Capacity planning

The available capacity and formulas for calculating capacity requirements

are entered in the work center.

Simplifying operation maintenance

Various default values for operations can be entered in the work center.
Default Values
You can enter default values for operation and sub-operations in work
centers. The default values are then copied when you assign the work
center to the operation or sub-operation.
Default values in work centers are for instance:

Wage type and wage group

Control key

Standard text key

Suitability

Setup type key

Activity type

Units for the standard values

Control Keys

A control key uses the following keys and indicators to determine how
an operation or a sub-operation is to be processed in a task list.
Examples of such keys and indictors are:

Scheduling:
If you set this indicator, the system carries out scheduling for an operation
or it determines the earliest or latest dates for a sub-operation. If you do
not set this indicator, the system does not schedule the operation or suboperation, the system automatically sets the duration to zero.
Capacity planning:
If you set this indicator, the system creates capacity requirement records
for the operation or sub-operation. If you set this indicator for a control
key, you must also set the scheduling indicator.

The system only creates capacity requirements if you have set the
capacity planning indicator and maintained the corresponding
formulas.

Costing indicator:
Use this indicator to specify whether the operation or the sub-operation
should be costed.
Confirmation: Use this indicator to specify whether and how the
operation or sub-operation should be confirmed.
Time tickets: Use this indicator to specify that time tickets is printed for
the operation or sub-operation.
Print operation: Use this indicator to specify that shop papers are printed
for the operation or sub-operation.

External processing: Use this indicator to specify that the operation or

sub-operation is to be performed by a third party. In this case, a purchase
requisition is generated during order creation.
The control key is defined in Customizing for the Work center or for the
Routing.

ROUTING
Routing describes the sequence of operations required to produce a
specific material, for each operation, the material component and the
production resources and tools required to produce the material are
maintained in the routing.

PURPOSE:
Routings enable you to plan the production of materials (products).
Therefore, routings are used as a template for production orders and run
schedules as well as as a basis for product costing.

FEATURES
In a routing you plan

The operations (work steps) to be carried out during production

The activities to be performed in the operations as a basis for
determining dates, capacity requirements, and costs
The use of materials during production
The use of work centers
The quality checks to be carried out during production

Assignment of material components to operations in routing:

If a Bill of material (BOM) has been assigned to a routing, you can

assign its components to the routing operations. In general the BOM
assigned to a routing is the material BOM for the material to be
produced by the routing (see Assignment of Materials graphic)You can
also assign BOMs to reference operation sets or reference rate
routings.

MATERIAL REQUIREMENTS PLANNING:

The main function of material requirements planning is to guarantee
material availability, that is, it is used to procure or produce the
requirement quantities on time both for internal purposes and for sales and
distribution.
Integration;
You must first create the master data to be able to work with the MRP
component. To do this, you require the following components:

Material master.
Bills of material.

When you use MRP for in-house production, you also need the following
components if you want to determine production dates:

Work center.
Routings.

You also need the following components:

Demand management.

You need the Demand Management component to define

requirement quantities and requirements dates for finished products and
important assemblies. Demand Management also determines the strategy
you are to use for planning, procuring, or producing a certain finished
product.

sales and distribution, if necessary

Reorder Point Planning Procedure

Process Flow
1.
The continuous monitoring of available warehouse stock within
reorder point planning is carried out in Inventory Management.
The system then calculates the net requirements. The system
compares the available stock at plant level (including safety stock) plus
the firmed receipts that have already been planned (purchase orders,
production orders, firmed purchase requisitions and so on) with the
reorder point. If the sum of the stock plus receipts is less than the reorder
point, a material shortage exists.

MASTER DATA:
Implementation Options:
The Master Data component forms the basis for MRP. You cannot
execute MRP without maintaining the master data.
Features:
The master data for MRP, which can be maintained over the MRP menu,
includes:

Planning calendar.
Quota arrangements.

BOM explosion number (fixed key date).

Further master data, which can only be maintained in Customizing

for MRP, includes:

MRP controller key

special procurement type

lot-sizing procedure

MRP type

MRP area

MRP AREA:
Definition
The MRP area represents an organizational unit for which material
requirements planning is carried out independently.
Basically, there are three types of MRP area:

Plant MRP Area

The plant MRP area initially contains the plant together with all its
storage locations and stock with subcontractors.
When you have defined MRP areas for storage locations and for
subcontractors and you have assigned the materials, the plant MRP area is
reduced by exactly this number of subcontractors and storage locations.
This is because they are now to be planned separately.

MRP Areas for Storage Locations

You can define an MRP area that consists of a particular storage location,
by creating an MRP area and assigning the storage location to it. Material
requirements for this storage location are then planned separately from the
rest of the plant.

REPETITIVE MANUFACTURING:
Purpose
This component can be used for production planning and control in a
repetitive manufacturing environment.
You can use repetitive manufacturing as either make-to-stock REM
or make-to-order REM such as in the automotive industry, for example.
The goals of repetitive manufacturing are the following:

Creation and revision of production quantities on a period and quantity

basis (reduction in individual lot and order-specific processing).

Reduction in the production control effort and simpler back flushing

tools (with the option of using the full scope of the PP functionality).

Implementation considerations:
You can implement Repetitive Manufacturing if the following is true
of your production process:

You produce the same or similar products over a lengthy period of

time.

You do not manufacture in individually defined lots. Instead, a total

quantity is produced over a certain period at a certain rate per partperiod.

Your products always follow the same sequence through the machines
and work centers in production.

Routings tend to be simple and do not vary much.

Integration
Within logistics, Demand Management precedes Repetitive
Manufacturing:
o

SD Sales Operations (receipt of sales orders)

PP Demand Management (creation of planned independent
requirements)

PP MRP

The following Logistics components are also relevant:

o

PP Work Centers
PP Routings

PP Bills of Materials

If required, Line Design for mapping complex production lines

Features
Master data
There is specific master data required for Repetitive Manufacturing.
This includes the repetitive manufacturing profile and the product cost
collector.
Planning table

Within the framework of repetitive manufacturing, planning and

control is carried out on the basis of time buckets. Starting from the
existing requirements situation, you can plan production quantities based
on periods. The scheduling data for products and product groups is thus
broken down into a series of time buckets, the user being presented with
period views for the purposes of checking and revision.

Sequencing
You can use Sequencing to carry out takt-based scheduling which
determines the sequence in which planned orders are produced on the
production line. Sequencing simplifies the dispatching process, especially
for high order volumes, and enables you to display them in a graphic.
Pull list
You can use the pull list to control in-house material flow, supplying
production with materials. The pull list checks the stock situation at the
production line, calculates the missing parts for the components and
triggers replenishment for these missing parts.
Back flushing
Production completion confirmations are simplified and are made with
reference to the material being produced. The completion confirmation
usually includes the back flushing of components and the posting of
production costs.
Cost Object Controlling
In repetitive manufacturing, you usually determine costs per material or
per production version via a product cost collector (product cost per
period).

Over view of Production Planning for Process Industries:

PP-PI integration with the R/3 system

i.

PP-SOP(sales and operational planning)

i.

PP-MPS(master production planning)

ii.

PP-CRP(capacity require planning)

iii.

PP-SFC(shop floor control)

iv.

PP-PI(process industries)

v.

PP-PC(product costing)

Application areas of PP-PI:

Process manufacturing.
Batch manufacturing.
Co-products/By products.
Fully and partially automated lines.
Lines with variable usages.
Variable production parameters.
Quality assurance.
Batch and production records.

Positioning of PP-PI in the enterprise model:

Company management level, includes Business application like SD,
FICO, AM.
Production management level, includes production planning process
industries like MM, PP,PP-PI, QM

 Process control level, includes process control systems (PCS).

DATA FLOW IN PP-PI:

Below, you will find an overview of the areas of functionality covered by

PP-PI.

PRODUCTION ORDER
A production order specifies which material is to be produced, where it is
to be produced, which operations are required to do this and on which
date production is to take place. It also defines how the order costs are to
be settled.

Order Release
A production order must be released, before it can be processed. You can
use the time period between creating and releasing a production order, for
example, to carry out company checks and preparations.