Definition

SAP Production Planning

SAP Production Planning (SAP PP) is the component of ERP Central Component (ECC) that helps businesses plan the manufacturing, sale and distribution of goods. A part of SAP ECC's logistics function, SAP PP plays a vital role in a manufacturer's supply chain and integrates with other ECC components, including Materials Management (MM), Sales and Distribution (SD), Plant Maintenance (PM), Quality Management (QM), Finance (FI), Controlling (CO) and Human Resources (HR).

SAP PP activities include material requirements planning, bill of material, routings and capacity planning. Everything in SAP PP revolves around master data that is stored and manipulated in centralized master data tables. Master data types include materials master, work center, BOM and routing. The master data is used to create transactional data in SAP ECC, such as creating a production order in PP, a sales order in SD, or a purchase order in MM. For example, when a production order is created in SAP PP, it uses master data from SAP MM about the raw materials needed to produce the finished product, which will subsequently be used to create a sales order in SAP SD.

SAP PP sub-modules include sales and operations planning (S&OP), long-term planning (LTP), data management (DM), master production schedule/material requirements planning (MPS/MRP), capacity requirements planning (CRP), shop floor control and information systems.

SAP PP can be configured to meet various industry requirements and includes a number of modules that support specific manufacturing industry types, including discrete manufacturing, repetitive manufacturing, and process manufacturing. In discrete manufacturing the numbers of goods produced change by lot, and costs are calculated by orders and lots. In repetitive manufacturing, products remain unchanged over long periods of time and production occurs in total quantities, not individual lots. In process manufacturing, products are manufactured in batch-sized lots using a process described in a master recipe that can be adjusted for individual batches. Process manufacturing is used primarily in the chemical, pharmaceutical, and food and beverage industries.

This was last updated in March 2017

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