Operational quantity planning

SAP PP offers digitized, fully integrated production planning as standard, which is used by the vast majority of manufacturing companies (if they rely on SAP). Nevertheless, there are still companies today that plan their production on the basis of Excel.

The basis for a functioning PP is well-maintained master data, such as correctly stored TE, setup and distribution times or parts lists. Every delta here impairs the quality of production planning. If the master data is clean, SAP PP offers, for example, solid capacity planning overviews, order reports that also show individual parts, and production orders can be planned effectively.

Compared to Excel planning, for example, this can be quite a lot. In addition, further expansion stages can be realized on this basis (and the master data maintained in this context) as required, e.g. in the area of detailed planning with MP&S (formerly PP/DS or extended planning in SAP S/4HANA) or planning based on real-time feedback with the All for One Smart Factory.

Once sales orders have been converted into production orders, the classic MRP run generates a clear picture of which stocks of finished products are available and which materials are in stock, and indicates shortages. Depending on the settings, purchase orders (or production orders) can be suggested or created automatically. The efficiency gains associated with this functionality were the key driver for the development and widespread adoption of enterprise software in the 1960s.

Today, MRP is one of the core functions in SAP ERP and is available in every version. Thanks to direct integration in the HANA database, planning runs can be carried out much more efficiently and several times a day.

On basis of PP, SAP DDMRP (Demand-Driven Material Requirement Planning) can be used to implement efficient materials planning. DDMRP has also been license-free in all S/4HANA releases since 2022.

DDMRP is an intelligent replenishment planning system that automates many issues. Planning takes place in five steps:

• Positioning: Where does buffer stock make sense?
• Buffers: How should the buffer levels be defined?
• Buffer adjustment: Individual adjustments to buffer levels are possible.
• Procurement: Prioritized replenishment orders are suggested in real time.
• Tracking: Prioritized list of procurement proposals realized in the system for tracking.

Each of these steps runs with automatically calculated parameters, which can be made available to the planner for verification via defined workflows.

By reacting more quickly to fluctuations in demand, shorter throughput times in the supply chain and a reduction in stock levels can be achieved without compromising delivery capability.