SAP Production Planning


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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 The “market of one” has been replaced by personalization and individual requirements with the expectation of next-day or same-day delivery.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 The “market of one” has been replaced by personalization and individual requirements with the expectation of next-day or same-day delivery.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.

9 results

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    Attain Faster Stabilization with SAP S/4HANA Production Execution Implementation

    Reading time: 8 mins

    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…
  2. Using xP&A to Connect Enterprise-Wide Planning and Analysis

    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…
  3. Streamline Your Company’s Production Rates with ATP Using SAP PP

    Reading time: 23 mins

    Joerg Boeke explains how to use SAP HANA calculation views and procedures as data providers for complex calculation views. This content is available to Premium Members. Sign In Learn more about Premium Access
  4. Configure Packing Instruction Determination Strategies to Speed Up Product Delivery

    Reading time: 27 mins

    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…...…
  5. Splitting Production Orders Optimally to Allocate Component Procurements

    Reading time: 15 mins

    Sergei Peleshuk provides an overview of SAP BW/4HANA and key considerations to think about when making the decision to migrate. This content is available to Premium Members. Sign In Learn more about Premium Access
  6. Closing the Gap Between Shop Floor and SAP ERP with the Shop Floor Dispatching and Monitoring Tool

    Reading time: 13 mins

    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…...…
  7. Production Planning for Today’s Supply Chain

    Reading time: 6 mins

    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…
  8. Live from SAPinsider Studio: GOJO Industries on Optimizing Production Planning and Knowledge Management

    John Hooker of GOJO Industries, producer of Purell, joins SAPinsider Studio at the SCM 2016 event in Las Vegas to discuss the company’s recent move from their home-grown legacy system to SAP ECC 6.0 and the successful SAP add-on and optimization projects that have streamlined production and knowledge management. Here is an edited transcript of…...…
  9. Case Study: How GOJO Industries achieved a 6-week ROI implementing production planning and operations with an SAP add-on

    This conference session video is hosted by SAPinsider and sponsored by itelligence.   View this session, presented at SAPinsider’s Logistics & SCM 2016 conference in Las Vegas, to hear how GOJO Industries, makers of Purell®, improved and streamlined production planning and scheduling processes, and reduced time and effort by 50% using an SAP add-on, GIB…...…