Production Planning

SAP Production Planning Module – SAP PP

The SAP Production Planning SAP PP module is another important module that includes software specially developed for production planning and management. This module also includes baseline data, system configuration and transactions to complete the production plan procedure. The SAP PP module collaborates with basic data, sales,Operations Planning, Distribution Resource Planning, Hardware Requirements Planning, Kanban, Product Cost Planning, and so on in relation to the management of production in enterprises.

SAP Production Planning Module
  • Production planning is about aligning demand with manufacturing capacity to create production and supply schedules for finished products and components.
  • SAP PP is a major component of SAP. It tracks and record production process flows, such as expected and actual costs. Moreover, goods movements from the processing of raw materials into semi-finished products.
  • It is fully integrated with other SAP modules such as SD, MM, QM, FICO and PM.

Organizational structure within SAP PP

In any production planning module, the locations of the manufacturing and storage plants in the factories should be available in the system.

Importance of storage facilities/sites in production planning

  • All production baseline data are created at the establishment level.
  • Planning activities are also carried out at the institution level.
  • The production confirmation process and the movement of related goods takes place at the establishment and the storage site level.

SAP Production Planning Process Cycle


Production planning and control includes two clearly defined plan and execution processes.

Production Planning cycle


Sap Production Planning


Production planning is usually carried out using a budgeted sales plan. The planning is based on the sales plan to meet the sales demands according to the production cycle times. Demand for the Product is captured by Demand Management in the form of a planned independent requirement (PIR). This demand management, data become input into Materiel Requirements Planning (MPR).

The MRP checks the availability of various raw materials used for production at different stages using baseline data such as nomenclature and available plant stocks. In case of material shortages, purchase requests are created form externally purchased materials and planned orders are created for internally produced materials.These purchase requests and planned orders, respectively, start the procurement cycle and the production execution cycle.Since MRP operates with infinite capacities, it is necessary to level the capacities in order to avoid any bottleneck.


SAP Production Planning Execution


These planned orders are converted into production orders and are scheduled based on production schedules using basic data, such as routes.Production orders are issued by the shop production supervisor, and material availability checks can also be performed to verify if there are missing components.

The production is carried out on the basis of the activities maintained in the Routing where the basic data such as the Work Centre are mentioned with regard to each operation in the Routing.When production is complete, order confirmations are executed, and the movement of goods for material consumption and receipt of goods are displayed against the order. Therefore, the order obtains the status Delivered (DLV), and the hardware is received in the desired storage location.Normally, at the end of the month preceding the payment of the order, the production order must be set to the finished technical status in order to calculate the production differences by the control staff.

Integration of Sap ERP Modules:

Production Planning

  • Sales and Production Planning
  • Demand Management
  • Material Requirement Planning
  • Capacity Requirement Planning
  • Bills of material
  • Production Orders
  • Routing
  • Work Center
  • Shop floor control

SAP Production Planning – SAP PP Implementation Steps

SAP Production Planning – SAP PP Implementation