Learn SAP PP Like A Professional

What is Production Planning?

Production Planning is the method of aligning the name with manufacturing capacity to create production and procurement schedules for finished products and issue materials.

SAP PP is an essential module of SAP. It tracks and makes a report of the manufacturing method flows, for example, the planned and actual costs. Also, gadgets moved from the conversion of raw fabric to semi-finished gadgets.

It is sincerely protected with the alternative SAP modules: SD, MM, QM, FICO & PM.

Organization Structure in SAP PP

In any live PP module, locations of manufacturing plants and storage withinside the plants want to be available withinside the system.

Importance of Plant and storage locations in PP-

  • All Production draw-close data is created at the Plant level.
  • Planning sports activities are also finished at the Plant level.
  • The production Confirmation method and related gadgets movement get up at the plant and storage location level.

Master Data in SAP PP

Master statistics are generally static for any company and can be very not often changed depending on the requirement. There are 5 draws close statistics to be maintained in the PP module.

1. Material Master

The cloth draws close includes data on all the materials that a company procures, produces, stores, and sells. It is pretty a number of uniquely identify a material draw close record, and therefore a material.

Materials with the same easy attributes are grouped together and assigned to a material type which includes finished, raw cloth, etc.

It is used for the following purposes:

  • To purchase materials
  • For Goods Movement postings which include gadgets issues or receipts in inventory management and moreover for physical inventory postings
  • In invoice verification for posting invoices
  • In profits and distribution for profits order success system
  • In PP and manipulation for material requirements planning, scheduling, and production confirmation processes.

2. Bill of Material (BOM)

A bill of cloth is a complete, formally established list of the components together with the quantity required to deliver the product or assembly.

BOMs are applied in cloth requirement planning and product costing.

You can also create as a great deal as 99 possibility BOMs for a single product.

For Products having variants, you can create Super BOM, which has all possible kinds of components used to manufacture precise kinds of variants, and the proper component is selected based totally mostly on function decided on withinside the profits Order.

For example, the Product Cycle can include all kinds of frames (with precise colorations and sizes) and the preferred frame is selected in production order based totally mostly on shadeation and duration decided on withinside the profits order.

3. Work Center

A Work Center is a machine or organization of machines in which production operations are finished. Work centers are applied in venture list operations (Routings).

It includes the statistics for

  • Scheduling
  • Capacity
  • Costing

4. Routing

Routing isn’t something but a sequence of operations finished at the Work Center. It moreover specifies the machine time, hard work time, etc. for the execution of operations.

It is also used for scheduling operations and applied in standard charge calculation of the product.

5. Production Version

The production version is an aggregate of BOM and Routing statistics for production. It is a linkage between BOM & Routing and determines the manufacturing system.

There can be multiple production versions consistent with a precise manufacturing system to deliver the product.

Also Read: SAP PP Tutorials

Production Planning Cycle

SAP PP and Control embody 2 obvious methods of Planning and Execution.


PP is usually done from a budgeted profits plan. Planning is based absolutely on the Sales plan to satisfy the profits requirements as consistent with the producing cycle times. Demand for the Product is entered through the name for management withinside the form of planned independent requirement (PIR). These records from the name for management turn into the input to Material requirement planning (MRP).MRP tests for the delivery of numerous raw materials used for production at different tiers using the hold close records such as Bill of material (BOM) and available modern plant stocks.

In case of material shortage, Purchase requisitions are created for materials that may be externally procured, and planned orders are created for in-house produced materials.

These purchase requisitions and planned orders initiate the Procurement Cycle and the Execution Cycle of Production respectively.

As MRP works with limitless capacities, functionality leveling needs to be done as a way to avoid any functionality bottlenecks.


These Planned orders are converted to Production orders and are scheduled as consistent with the producing timings using hold-close records such as routings.

Production Orders are released with the resource of the use of the Production Supervisor on the shop floor, and material availability tests additionally may be done to check if there are any missing components.

Production is done based absolutely on the sports activities maintained withinside the Routing in which they hold close records like Work Center is stated in competition to each operation withinside the Routing.

Once the production is completed, the Confirmations of orders are done, and gadgets movement for fabric consumptions & gadgets receipts are posted in competition to the Order. Hence, the Order gets the Delivered (DLV) recognition, and the material is obtained into a favored storage location.

Usually, at the month surrender in advance than doing order settlement, the production order needs to be set to technically completed recognition as a way to calculate production variances with the resource of the use of the controlling personnel.

Demand Management

The function of Demand Management is to estimate requirement quantities and delivery dates for finished products and important assemblies. Demand Management uses PIR (planned independent requirements) and customer requirements.

Planning strategies need to be defined for a product. It represents the techniques of producing for planning and production. There are techniques with the resource of the use of which we’re capable of doing this.

Make to Stock: Production of merchandise whilst now no longer having profits orders, i.e., the stock is produced independently of orders.

Make to Order: This approach applies to the production of material for a specific person’s profits order or line item.

Material Requirement Planning (MRP)

MRP determines any shortages and creates the proper procurement elements. It does net requirement calculation and generates planned orders for in-house produced materials and purchase requisition for raw materials.

MRP does lead time scheduling and calculates production dates in planned orders.

It explodes the BOM and generates procurement proposals at each BOM tier.

Capacity Planning & Leveling

It is used to analyze the functionality overloads at the artwork center and shift the orders to avoid any functionality bottlenecks.

Capacity requirements are generated through MRP on Work Center and because of this reality, MRP works with limitless functionality and plans everything on the artwork center without considering any functionality constraints. It is wanted to level the functionality at the artwork center.

Capacity can be leveled at each artwork center through a planning table as a way to create a constrained production plan.

Production Orders

The output of MRP will be “Planned Orders”, which need to be converted to production orders for similar execution of the process.

The Production Order is firmed receipt element, which isn`t constantly tormented by MRP run, in evaluation to Planned Orders.

Production Order is a report which specifies what material needs to be produced and in what quantity. It moreover consists of the BOM components and routing operation records to be done at the artwork center.

Production Order is released for execution, and material availability tests can be done which determine if there are any missing components.

Production Order Confirmation

When gadgets are produced physically on the shop floor, the production order needs to be confirmed. During confirmation, components materials can be eaten up routinely through the back flush mechanism and Goods receipt of material can be done routinely through the operation Control key in Routing.

However, in the choice to vehicle mobile gadgets movement, manual Goods Issue and receipt can be done one after the alternative from confirmation.

Any failed gadgets movement due to a deficit of component stock can be reprocessed manually. Activity expenses such as machine, labor, etc. will also be updated withinside the producing order all through confirmation on an actual basis. The order gets CNF (Confirmed) and DLV (Delivered) recognition after final confirmation and final Goods receipt. If confirmation is posted wrongly, then we’re capable of canceling the confirmation and publishing it over again with the correct records.

Also Read: Is SAP all module training essential for career objectives?

Production Order Close

After the producing order virtually or if we don`t want to execute the order similarly then the Order needs technical completion.

After the Order gets TECO recognition, it deletes from the stock/requirement list and the material requirement planning run. All reservations moreover delete from the system

Next, we will examine each phase of SAP PP and learn how to carry out the SAP PP module.

How to learn SAP PP

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