How to Implement MRP and PPC Systems

Making SAP PP Work in FMCG – From Planning to Costing 1. PP Basic Data – Build the Foundation Before production can run, your master data must be bulletproof: ⚙️ Material Master – What you’re making & how it behaves (Tcode: MM01/MM02) 🧾 BOM (Bill of Materials) – Recipe for your product (Tcode: CS01) 🛠️ Routing – The step-by-step process (Tcode: CA01) 🏭 Work Center – Machine or labor resource (Tcode: CR01) 🔁 Production Version – Links BOM + Routing (Tcode: C223) FMCG Example: For a 500ml shampoo bottle: BOM = Water, surfactants, fragrance, bottle Routing = Mix → Fill → Label Work Center = Mixing Unit, Filling Line 2. Capacity Planning – Can We Meet the Demand? ⏱️ This is about checking if your resources can handle the plan. Formula: Required Capacity = (Operation Time × Order Qty) ÷ Base Qty Example: To make 10,000 bottles at 1,000/hr = 10 hrs needed. Only have 8 hrs available? Time to reschedule or adjust shifts. Config Tcodes: CR01/CR02 – Define capacity in Work Center CM01 – Capacity Evaluation CM21 – Capacity Leveling 3. Planning – What Needs to Be Made or Bought? 📦 SAP’s MRP engine checks demand vs. supply. Formula: Net Requirement = PIR + Sales Orders – Stock – Receipts Example: Forecast: 50,000 units Available: 15,000 (stock + open POs) → Net requirement: 35,000 units Config Tcodes: MD61 – Maintain PIR MD01 – MRP Run MD04 – Stock/Requirements List OPPR – Planning strategy configuration 4. Procurement – Don’t Let Materials Run Dry 🛒 MRP creates Purchase Requisitions for missing raw materials, which become POs. Example: MRP finds fragrance is short → PR is raised → Buyer sends PO → Stock is updated. Config Tcodes: ME51N – Create Purchase Requisition ME21N – Create Purchase Order OMI4 – Define PR doc types OMD9 – MRP Controllers 5. Production Orders – It’s Go Time ✔️ Convert planned order → Release → Issue materials → Confirm operations → Goods receipt FMCG Example: Production order for 10,000 shampoo bottles is executed: Materials issued Operators confirm each stage Finished goods posted to stock Tcodes: CO01 – Create Production Order CO02 – Change Order CO11N – Confirm Operation MB1A – Goods Issue MIGO – Goods Receipt OPK4 – Order type parameters 6. Product Costing – Know the Real Cost 💸 Standard cost vs Actual cost—SAP helps you track it. Formula: Cost = Material + Activities + Overheads Example: Material: ₹25 Activity (Machine/Labor): ₹5 Overhead: ₹3 → ₹33/unit Config Tcodes: CK11N – Cost Estimate CK40N – Mass Costing CO88 – Order Settlement OKKN – Costing Variants KKBC_ORD – Order Cost Analysis Final Takeaway: Whether you're producing shampoo or snacks, SAP PP in FMCG is about aligning planning, capacity, and cost control. #SAPPP #FMCG #SAPConsulting #ProductionPlanning #ProductCosting #DigitalSupplyChain #CapacityPlanning #MRP #ERPStrategy #SAPTips #ManufacturingExcellence #SAPLead #FunctionalConsultant #PPConfiguration

SAP MRP The Material Requirements Planning (MRP) process in SAP is a critical component for managing production planning and inventory control. It ensures that materials and products are available for production and delivery to customers, while maintaining the lowest possible inventory levels. Here’s an overview of how the SAP MRP process works: Key Objectives • Ensure material availability: Meet customer demands and production schedules by having the right materials in the right quantity. • Optimize inventory levels: Avoid excess inventory while preventing stockouts. • Plan production schedules: Align production activities with material availability and demand forecasts. Core Elements of SAP MRP 1. Master Data: • Material Master: Contains information on all materials within the company, including procurement type, MRP type, lot sizing, and lead times. • Bill of Materials (BOM): Defines the components and quantities required to produce a finished product. • Work Centers: Locations where production operations are carried out. • Routing: Sequence of operations needed to produce a product. 2. MRP Types: • Consumption-Based Planning: Based on historical consumption data. • Reorder Point Planning: Triggers procurement when stock falls below a certain level. • Forecast-Based Planning: Utilizes demand forecasts to anticipate material needs. 3. MRP Process Steps: • Net Requirements Calculation: Determines the quantities needed by comparing available stock and scheduled receipts against the required quantities. • Lot-Sizing: Determines the order quantity based on the lot-sizing procedure (e.g., fixed lot size, lot-for-lot, economic order quantity). • Procurement Proposal Generation: Creates purchase requisitions or planned orders based on net requirements and lot-sizing results. • Scheduling: Plans the start and end dates for production orders and purchase orders. 4. MRP Execution: • MRP Run: Executed using transaction code MD01, MD02, or MD03, depending on the scope (total planning, single-item planning, etc.). It can be run in regenerative or net change mode. 5. MRP Evaluation: • Stock/Requirements List (MD04): Provides an overview of current stock levels, planned orders, purchase requisitions, and sales orders. • MRP List: Shows the results of the last MRP run, allowing users to analyze planning results. Benefits • Improved Efficiency: Streamlines production planning and procurement processes. • Cost Savings: Reduces excess inventory and associated carrying costs. • Enhanced Customer Service: Ensures timely product availability to meet customer demands. Challenges • Data Accuracy: Relies on accurate master data and demand forecasts. • Complexity: Requires careful configuration and management to meet specific business needs. SAP MRP is a powerful tool that helps organizations balance demand and supply effectively, ensuring smooth production operations and optimal inventory management.

Embarking on Precision: SAP Production Planning Configuration In the intricate tapestry of SAP, Production Planning (PP) Configuration stands as the linchpin for organizations seeking to optimize manufacturing processes. This vital facet empowers businesses to tailor production planning based on their unique requirements, seamlessly integrating technology with operational strategies. Unlocking SAP PP Configuration's Essence: Master Data Tailoring: In PP Configuration, configuring master data is pivotal. This involves defining elements like materials, work centers, and bills of materials (BOM). Material Master Configuration: Defines material characteristics and procurement details. Work Center Configuration: Specifies work center details for efficient planning. BOM Configuration: Outlines the structure and components for precise planning. Routing Precision: Routing is a critical element in production planning. Configuration involves defining the sequence of operations, involved work centers, and necessary resources. Operations can be configured with details like work center assignments, machine times, and setup times. Linking resources to operations ensures comprehensive planning. Production Versions Mastery: Configuring production versions is crucial for managing different production scenarios. Involves defining parameters like lot size, production quantity, and alternative BOMs or routings. MRP Excellence (Material Requirements Planning): Configuration involves defining planning parameters to ensure material availability for production. Setting up MRP groups, planning types, and execution parameters ensures a systematic material planning process. Configuring Success: Transaction SPRO Start: Access the SAP IMG (Implementation Guide) via transaction code SPRO—the gateway to PP configuration. Step-by-Step Configuration: Navigate through the IMG structure to the Production Planning node for various configuration steps. Execute each step, customizing settings based on organizational needs. Rigorous Testing and Validation: Rigorous testing is essential to validate the effectiveness of configured settings. Conduct end-to-end testing scenarios to ensure seamless integration with other SAP modules. Benefits of SAP PP Configuration: Tailored Planning: Customize production planning to meet specific business requirements and industry nuances. Resource Optimization: Optimize resource utilization by configuring work centers, routing, and production versions. Streamlined Operations: Enhance operational efficiency by configuring MRP parameters for accurate material planning. In essence, SAP PP Configuration is the architectural foundation empowering organizations to sculpt a production planning strategy aligned with their unique needs. As businesses navigate the dynamic manufacturing landscape, mastering the art of PP Configuration becomes a strategic imperative for achieving operational excellence and staying ahead in the competitive realm.