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1. Introduction to the
Production Planning
Process with SAP
Jean Marc Prigent
Consultant LO-PP-MM-WM
July 2011

2. Table of Contents
Table of Contents 2
Introduction Error! Bookmark not defined.
Objectives of the Production Planning process Error! Bookmark not defined.
Definition of a few concepts Error! Bookmark not defined.
The planning horizon Error! Bookmark not defined.
The planning bucket Error! Bookmark not defined.
The bottleneck Error! Bookmark not defined.
The Materials Requirements Planning (MRP) Error! Bookmark not defined.
Planned order versus Production orders Error! Bookmark not defined.
Steps to implement the Production Planning process in an Information System Error! Bookmark not
defined.
Definition of the structure of the Products, Routings and Bill Of Materials data 3
Customizing of the materials Error! Bookmark not defined.
Prerequisites for the Production Planning Error! Bookmark not defined.
The Production Planning Process in SAP Error! Bookmark not defined.
The Procurement Process Error! Bookmark not defined.

3. Definition of the structure of the Products, Routings and Bill Of Materials data
It is a sensitive and important step. It is sensitive as the same data can sometimes be used for several
different objectives (Calculation of the Cost Of Goods Sold, declaration of production, valuation of the
work in process). It is important because the definition of these data will impact how easy it will be to
plan the production.
For instance you can define or not a safety stock, define some operations in parallel or not, divide an
operation between work centers, have simultaneously the control on the work centers before or after in
the process,…
As a consequence of this step, there will be Bill Of Materials with more or less levels, and the resulting
routings.
1st case: metal, chemical, pharmaceutical processes
The phase or operation linked to the process is the strategic one which requires some planning attention
(cast, lamination, tank to produce the active principles or tank for liquids in the food industry). It can be
a phase among others, or a level of the Bill Of Materials.
Once the planning is done on these strategic operations, it has to be transmitted to the upper and lower
levels of production. For the lower levels, it can be done via a MRP. For the upper level the case is
detailed later on.
An interesting technique to simplify the problem of synchronization of the different levels of the Bill Of
Materials consists in having a safety stock corresponding to the imprecision in the synchronization of the
semi finished products.
2nd case: production by manufacturing unit with final assembly
In this case there is not a level of the Bill Of Materials or a work center more strategic than the others.

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ExpertPlug is an SAP marketplace for training materials and an online community of experts. We
offer a simple way for the global SAP workforce, consulting companies and industry to market their
skills and find quality information.
As an SAP Expert, you can also market your SAP skills and make extra revenue by publishing SAP
documents on http://expertplug.com/.