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Last year I traveled to Poland for an american manufacturing company. There, they had a production facility which has been using SAP for a while. Finance, Sales, Human Resources, Material Management and Production Planning were long implemented but only used to various degrees.


One of the functiones they did not use was capacity planning. To my question: why not? I received the reply : “SAP ERP can not do capacity planning!” whoa! So I dug a little deeper and to make a really long story very short: back in 2002, their implementation consultant obviously did not know SAPs capacity planning (in a previous blog I claim that your SAP gets functionality-filtered down: first by time and budget constraints, then by what your consultant knows).


Back then it was concluded that the place to maintain available capacity ( in capacity planning you need to compare available capacity – from the work center – to required capacity – from the order) is the MRP Controller !? In the material masters MRP1 screen. Well, that didn’t work that well and the team came to the conclusion: Capacity Planning is something SAP can’t do!


Nothing is further from the truth (we have done capacity planning at Dornier in Germany with R/2 back in the 80’s) but in this specific case a horde of external ABAP programmers developed a ‘capacity planning module’ for lots of money (in a previous blog post I asked the question: how is it possible that a consultant can program better software in SAP, than SAP can?). It is of no importance that the same company which suggested that SAP can not do capacity planning, also programmed the “missing” SAP capacity module at this plant.


Now that we had that settled, I wanted to see how the planners level capacity. The supervisor very proudly presented their “own” excel spreadsheet solution. “It does not have the current availability and the orders are batch-downloaded only on a weekly basis but at least we can estimate the cost of production – if the plan matches what is actually produced”


So let me sum this up: you buy an SAP system, you pay for the implementation, you pay to develop a work around, you then develop a spreadsheet solution on your own – and you end up with nothing! Not a very good business case.


Capacity Planning in SAP is very real! It is extremely flexible and works for everything from discrete to process manufacturing. it is perfectly integrated with all your planning and execution and costing functions in SAP and does not require any modification or work-around.


I bet you the cost of a work-around to make it work at your company to your fullest satisfaction with all the bells and whistles you ever need. In the standard!

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14 Comments

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  1. Pascal Renet

    First of all congratulations on becoming a SAPMentor – I cannot believe I had to wait for that to discover your incredible series of blog posting – they are fantastic.

    I agree Capacity Planning in SAP (ERP) is very good. I was one of the first to install it for a customer in France (and spent many hours reporting bugs to SAP), but as usual with SAP it has now matured into a fantastic product.

    Looking forward to our next blogs.

    Cheers, Pascal.

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  2. Dorota Mieczkowska

    Dear Uwe,

    Looking for help on the forums for SAP planning I found this blog.

    We use SAP in my company from 3 years, but only for production documentation, material and storage maintenance. We have had planning in MS Project Server. One day we realize that number of activities has reached huge proportions, we decided to plan in SAP.

    The problem is that we don’t have experience of working in this environment…

    That’s why I’m looking for some clues, publications, informations or helpful transactions in planning. I just wanted to add, that we only use standard SAP, we don’t have APO.

    Our another problem is fact, that our work centers are overloaded.

    I don’t know the transactions or report which could shows me or visualize the situation on each project or sales order which are already postponed. My knowledge is very meager in such area.

    Could you help me somehow? May I count on any help from your side?

    Best regards,

    Dorota

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    1. Uwe Goehring Post author

      Dear Dorota

      that seems to be an all-too-common problem: companies buy SAP software and then use it to a lot lesser extend than what it actually could do for them. MS Excel or MS Project, third party solutions or other work-arounds are then employed, which aren’t as effective as SAP and cost you a lot of money… not even talking about what you already spent on SAP.

      And once it’s not working out, SAP consultants resort to APO and tell you that it will solve all your problems… this is not so in my opinion. I am currently helping 11 active clients with their SAP supply chain issues and not one of them was using capacity planning the right way or beyond the most basic reporting functions.

      You say that you don’t know the transactions to report or visualize your capacity situation. There are many such reports in standard SAP-ERP, but they won’t work before you have the basic data and process in place to support such reports and your capacity planning, sequencing and leveling.

      I do a lot of work on the subject and help lots of clients to set-up their capacity planning in SAP. I also frequently speak on the subject and you will find my speech from this years SAPPHIRE / ASUG here http://www.youtube.com/watch?v=TnbxeezYMKk or on our website at http://bigbytesoftware.com/interactive/

      Please contact me at uwe@bigbytesoftware.com and I am more than happy to keep the conversation going

      thanks for reading my blog

      Uwe

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  3. Eric Peterson

    Wow!  That is just bizarre.  I worked at a company with the same mindset, only they didn’t go so far as to pay for their own workaround.  Instead, they created the position of “Zone Controller” and took a half dozen old-timers who knew the operations flow really well and had them keep track of everything in their head.  These men were smart but they weren’t jedi, so there were unbalanced work loads everywhere.  Six years later SAP is still a cuss word at that plant (as is MRP, Inventory Control, etc.).

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    1. Uwe Goehring Post author

      Hi Eric

      isn’t it a shame how companies come up with a huge investment for SAP and then it lingers around unused and people don’t even want to talk about it anymore. It becomes a cuss word too often because people can’t figure out how to work it and then deem it complicated, not user friendly and impossible to understand

      But like Ernest Rutherford said: “All of physics is either impossible or trivial. It is impossible until you understand it and then it becomes trivial.”

      we need more people who try to understand SAP!

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  4. Dorota Mieczkowska

    Hi,

    You’re right everybody, but how could we fix it?

    I would like to know much more then at the moment, but how?

    I dont’t want to expose the company to additional costs for SAP training. I would like to learn myself, but where to find such knowledge?

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    1. Uwe Goehring Post author

      Hi Dorota

      I commend you for trying to save your company money and to learn about how to fix SAP for them.

      However, that is a big task. To know what I know today about SAP, it took me 25 years of visiting countless customer sites, reading mountains of documentation, spending airfare on 1.7 million miles of traveling, spending – I don’t know how many – weekends working, wasting an enormous amount of free time and all of that to advance my SAP knowledge whereas I could have learned a lot of other things that might be more fun

      You might be a lot brighter than me, and achieve the same fate in a much shorter time, but I had to go through this and it is now pretty much the only way that I can make a kiving with.

      I am giving away a lot of stuff in my blogs and videos on YouTube, but, and I am sure my fellow consultants agree, we also have to make a living. Unfortunately, a lot of companies spend a lot of money on consultants who can’t really help – and this might be the frustration you are finding yourself in right now – but that doesn’t mean that you can now fix it quickly by yourself.

      SAP is complex… It is hard to customize and requires lots of experience but also quite some ‘smarts’ and intuition to pick the riight options… And I am not saying that you couldn’t do it… But to get the best results and the least cost, best performance out of it, you should get help from people that have done it before and know what they’re doing.

      Please don’t view this a a solicitation to get consulting work out of you or your company… I do not have the abiliity to take on another client at this time anyway. I was also looking to refer some literature to you but besides a ‘so so’ pdf on capacity leveling, I can’t really find anything good.

      Sorty for not helping much but my advice is to find a good, solid consultant and work with her/him

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      1. MAHEEDHAR DEGAPATI

        Dear Uwe,

        First fall big fan of your blogs and let me ask you a question as i am trying to implemant capacity planning in one of our clients.

        Need information on capacity planning. lets say i have a plant x and having the workcenter A and having an overlaod percentage of 150 and I am having an another plant Y with a similar workcenterB and overload percentage is only 70 can the overload of workcenter A in plant X be allocated to Plant Y of workcenter B if so how and where we need to do it.

        1)can capacity leveling at shop floor control be carried out between two plants.

        2)Can Capacity Planning at shop floor control be carried out between company code.

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  5. Botros Jerome

    I totally agree with you. I’m a consultant and one of my client once told me “We’re trying to find an external solution to plan our production because SAP is not able to do it.”

    We put in place in few weeks the planning table (CM25), and customized ATP in SD so planners needed to fix planned orders in the planning table before customer services could confirm the date.

    It was a matter of weeks because the PP solution was already well designed for costing. But previous consultant didn’t do the job until the end. Maybe he didn’t knew. Maybe he was trying to sell APO. Anyway, they were searching for an alternate, much more expensive way to do it.

    cheers,

    Jérôme.

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    1. MAHEEDHAR DEGAPATI

      Hi Jerome,

      I have a question?

      Can Capacity Planning is done between two plants if so how.

      I mean between two work centers of similar capacities  in two different plants.

      if it is done tell me the procedure.

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  6. Eric Sun

    Hi Uwe,

    This is nice posting on subject. What I found in my system SAP does not consider capcity when we do equal distribution in process order qty. I have already posted issue in below thread, I would really appreciate if you can suggest solution of my question.

    http://scn.sap.com/thread/3393378

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