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What is Production Planning?
Production planning is the process of ensuring the required materials are available for the anticipated demand of a product or service. If the forecast requires 100,000 semiconductor chips, for example, the production plan accounts for those materials from the supplier. A production schedule is then created to plan the manufacture of the final product.
Criticality of Production Planning
How critical is production planning in the supply chain? Since the COVID-19 pandemic and rapid increase in e-commerce, supply and demand dynamics have been turned on their head. The extreme volatility of material availability and product shipments is now the new normal. The “market of one” has been replaced by personalization and individual requirements with the expectation of next-day or same-day delivery.
What is Production Planning?
Production planning is the process of ensuring the required materials are available for the anticipated demand of a product or service. If the forecast requires 100,000 semiconductor chips, for example, the production plan accounts for those materials from the supplier. A production schedule is then created to plan the manufacture of the final product.
Criticality of Production Planning
How critical is production planning in the supply chain? Since the COVID-19 pandemic and rapid increase in e-commerce, supply and demand dynamics have been turned on their head. The extreme volatility of material availability and product shipments is now the new normal. The “market of one” has been replaced by personalization and individual requirements with the expectation of next-day or same-day delivery.
According to SAPinsider, manufacturers need more efficient, more effective manufacturing processes that can offer short delivery times without holding too many components in their production cycle or too much inventory in their warehouses. These sorts of processes require planning — and a lot of it.
“This is why SAP brought advanced production planning and scheduling (PP/DS) functionality directly into SAP S/4HANA,” SAPinsider says. “This functionality goes well beyond the basic planning features that were present in classical ERP systems and allows manufacturers to build constraint-based production plans and harness data from across the organization to produce the right products at the right times with optimal efficiency — and work within an end-to-end logistics scenario.”
Vendor partners for production planning include SAP Integrated Business Planning, Blue Yonder, and Anaplan.
Additional production planning resources for SAPinsiders include:
- Efficient Production Planning Using SKU Groups with the SNP Optimizer. Read how to overcome the limitations of Supply Network Planning’s aggregate and block planning capabilities.
- Control Manufacturing Cost Even when Production Planning Runs in a Non-SAP System. Read how to configure your SAP system to use CO production order functionality and learn tips about completing processes and transactions.
- How to Avoid the “Domino Effect” in Production Planning. Read how to use APO Production Planning/Detailed Scheduling to avoid the domino effect of making changes in the short-term planning horizon that cause challenges for the mid-term horizon.
12 results
How Automation Can Set SAP Users for Continuous GrowthFeb 29, 2024 — Within the demands of the global economic competition, companies know how important it is to achieve efficiency and productivity while maintaining accuracy and consistency. With that goal in mind, many turn to solutions designed for SAP integration and development. Among them stands automation – a revolutionary concept that is already redesigning hundreds of companies’ functional […]
2 minute read
Tales from the Plant: AkzoNobel and Hemlock Semiconductors’ Journey to Connect Their Front Line Workers with their SAP BackofficeMay 25, 2022 — Digital technologies have revolutionized the way organizations operate, yet in many cases, frontline workers remain confined by manual, paper-based maintenance processes. With field technicians at the center of these businesses, organizations must ensure they are equipped with solutions that keep them as mobile and agile as possible. Join moderator Sri Karthik, Executive Vice President, Innovapptive, […]
1 minute read
Attain Faster Stabilization with SAP S/4HANA Production Execution ImplementationMay 2, 2022 — One of the most common reasons why SAP S/4HANA implementations take more time for stabilization is attributed to designs focused on technical aspects without consideration of after go-live data maintenance, people, and processes.
Such process- and people-related modifications that could be of value in Production Planning and Execution are summarized in this article by KPMG's Janev Veettil based on implementation by a medium-level engineering industry manufacturing company.
8 minute read
Using xP&A to Connect Enterprise-Wide Planning and AnalysisJan 6, 2022 — Give your organization a holistic view of planning processes to improve forecasts and budgeting accuracy as well as the bottom line. Link planning and operational systems, while uniting financial, human resources, demand, and supply plans, with SAP Analytics Cloud.
After attending this session, you will:
● Understand why SAC for Planning has unique planning capabilities covering requirements across very diverse lines of business
● Know why SAC Planning is a leading Planning solution in terms of numbers of customers
● Identify various available contents for Financial Planning, Human Resources planning, Sales Planning, and so on.
1 minute read
Streamline Your Company’s Production Rates with ATP Using SAP PPDec 29, 2017 — Learn about the processes involved in production using Available-to-Promise (ATP) functionality. Read about the master data to be maintained in the system along with the main customizing settings available for this solution. Key Concept In SAP Production Planning (PP) the Available-to-Promise (ATP) check is carried out for the components of the main material. SAP Production […]
19 minute read
Configure Packing Instruction Determination Strategies to Speed Up Product DeliveryDec 15, 2017 — Learn how to configure packing instruction determination and implement determination strategies to optimize a delivery process using packing instruction determination records. Key Concept Packing is one of the stages in the delivery process that has an impact on how long it takes to process a delivery. With packing instruction determination functionality, the delivery process is […]
27 minute read
Splitting Production Orders Optimally to Allocate Component ProcurementsNov 16, 2017 — Most organizations would like to have alternate components determined during the creation of the production order and not while creating planned orders if the procurement lead time in days is not too long. Learn about a custom solution to allocate the quantity of alternate components while creating production orders. Key Concept The development of a […]
15 minute read
Closing the Gap Between Shop Floor and SAP ERP with the Shop Floor Dispatching and Monitoring ToolOct 5, 2017 — Understand the new features introduced by the new Shop Floor Dispatching and Monitoring Tool and how this tool can improve the short-term capacity leveling and order monitoring in SAP ERP. Key Concept The Shop Floor Dispatching and Monitoring (SFDM) Tool improves the overall user experience of short-term capacity planning for production orders. It also provides […]
13 minute read
Production Planning for Today’s Supply ChainApr 21, 2017 —
Today’s customers expect a high degree of customization from manufacturers. To serve this “market of one,” manufacturers need efficient, effective processes that can operate nimbly, account for individual customer preferences, and offer short delivery times. Discover how the advanced production planning and scheduling functionality included in SAP S/4HANA can help you produce the right products at the right time with optimal efficiency using constraint-based planning functionality.
6 minute read