Once your company has purchased SAP software, you have these great tools available which allow you to put a production program together in a very automated way. You could also check your long term plan for feasibility or play through some planning scenarios and ‘what if’s’.

The problem, however, is…. You can’t use any of it! Because it never was configured and nobody ever showed you how to do or use it.

During the implementation it was simply not in the cards to do Capacity… (anything). It might have been that it was considered a stage 2 project, the implementation consultant didn’t really know how it works, it was considered non-essential for the business or someone said: “we have ample capacity and therefore don’t need to worry about it”.

Whatever the case may be, without planning, sequencing, leveling and scheduling orders and capacity, you’re going to end up with half a process. It’s like trying to milk a cow but never even thinking about when there might be a good time to grab those…. you know what I mean.

To my great astonishment capacity planning is rarely used. As we all know the MRP run generates supply orders without any consideration of available capacity. It also does not care about a sequence or a leveled, noise-less schedule. It simply says:”I see demand and here are the orders that fulfill that demand”, all stacked up on top of each other to the latest possible delivery date.

This is in no way a production schedule… no matter how much available capacity you have.

You need to take the MRP run’s result and plan, sequence, level and schedule the orders before you can effectively produce product in the right quantity at the right time.

So how can you do that in SAP? Four easy steps:

1. capacity planning: use basic data like lot sizing procedure, takt time and lead time scheduling to have the MRP run come up with an approximate plan. Check on you work center settings and shift schedule to make sure correct lead times are calculated.

2. capacity sequencing: use any one of the transactions CM21, CM25, LAS2 or MF50 (depending on whether you’re process, discrete or repetitive) to employ a sequencing strategy like heijunka, first in – first out, priority, setup optimization or manual.

3. capacity leveling: ensure that the available capacity on the line is not exceeded. On a mixed model line or on a mixed strategy line (MTS and MTO) it is not good practice to schedule to 100% (or even above). Leave some room for variability.

4. capacity scheduling: now it’s time to fix the schedule. But not before you check if the components are available. Very often orders are released to the line and then there are missing parts. This causes exorbitant lead times and blocking of capacity and material for other orders. Transaction MDVP is an excellent tool to check availability collectively (but do make sure you have the right rules in place). Then you can use COR8 to collectively convert plasnned orders into a feasible schedule that can be handed down to the shop floor. athere is still whiggle room but at least you have a plan now.

And most importantly: you now have something that you can measure against. Isn’t that the most frustrating part about not employing Capacity Planning? The fact that you never know what actually should happen? and you never know that you have either done a good job or not?

what I don’t understand is that we all put dentist appointments into our calendar,  prioritize our social schedule, make sure we do not put more than 24 hours into a day and stick to promises we made before … but only rarely do we do Capacity Planning, Sequencing, Leveling and Scheduling with SAP!

…and it’s so much easier with SAP!

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9 Comments

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  1. Julian Sukmana Putra

    Hi Uwe,

    Thanks for pointing this out. During my early years in SAP consulting, my senior told me that capacity planning in SAP PP was rarely used and wasn’t that useful compared to product costing.

    I am lucky now that I am involved in a project for a company which really monitors the capacity of their work centers and schedule the orders accordingly. So, we utilize the capacity planning, evaluation and leveling in SAP to enable that.

    Regards,

    Julian

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  2. Katiku J

    Mr. Uwe,

    This is quite informative. I however am quite new in SAP as we just rolled out SAP in PP. The Main Question, is we are relatively a Small Venture in Pharmaceutical Manufacturing. We Re-Use most of our machines and for various processes.

    –  How do we leverage this process in our environment.

    –  Is there a case study(White Paper) on Pharmaceutical Manufacturing on this?

    My enquiries advise that This is not possible in Pharmaceutical Manufacturing at all without using Advanced Planning & Optimization.

    Any Help would be greatly appreciated.

    Katiku J.

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  3. Deep D

    Yes it was informative, but can you explain much in detail regarding how one can actually use CM21,CM25, MF50 ??

    Regards,

    Deep D.

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  4. P. M. Consultants

    Hello Mr Uwe,

    Good day.

    We are having an enhancement where in we are going to apply a Capacity Scheduling Sequence. To implement all SAP standard.

    To Do:

    SAP
    Configuration/Master Data:

        

    • Creation of Setup Group, Setup Group Key, and Setup Matrix
    • Assign SG and SGK to SAP routings
    • Assign Setup formula in the workcenter

    To update:

    1. SAP Work Center – SHIFTS: availability time of
      the production line
    2. SAP Work Center – FORMULAS: formulas that
      determine planned/production order duration and cost of the SKU
    3. SAP Routings: Group + Group Counter
    4. SAP Setup Matrix
    5. Others: Std Value Key, User specific fields
      (GC), Profiles CM25

    Can you provide a step by step process on how to apply this implementation. What to config first. transaction needed. etc.

    Hiping for you response. Any help will be very much appreaciated.

    Regards,

    Cris

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  5. Shekar Suman

    I always had difficulty Implementing capacity planning and leveling and convincing the business to use it on a daily routine. Users always felt it as a nightmare to manage.

    My experiences- changing shifts, split work between labor groups, re-leveling capacity to include expedites, setting up a sort sequence, handling breakdowns (if it’s frequent)  – these tasks can turn very tedious and time consuming. Also, assigning Production priority is extremely painful, manual and useless.

    I felt that- The capacity leveling might be suitable for repetitive/continuous production where there are few orders/day or simple product mix. But for a heavy equipment/semi conductor industry with highly Engineered parts, complex BOM structures, long lead times- capacity leveling is not really efficient.

    Please let me know what you think. What I can do to make things better?

    Thank you,

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    1. Uwe Goehring Post author

      Dear Shekar

      I hear you loud and clear. Capacity Management is time consuming and complex. However, the complexity comes from the process and the business – not the tool we are using, Sequencing, re-planning and leveling are complex tasks when the business is complex. There is nothing that SAPs capacity planning module can do about it other than providing transactions with which one can analyze and execute. Most schedulers so not want to learn those transactions but rather develop their own solutions in MS Excel. That kind of behavior doesn’t support the need for standardization and effective monitoring of exceptional situation and variability. That is why I suggest to take a closer look to whats available in SAP

      There is no silver bullet but consider the alternative…

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      1. Uten Charoenchaidet

        Hello Uwe,

        I agreed with your comment.  I am the user and work in production planning for the past 15 years.  I have been always using MS EXCEL to create the daily schedule leveling. It would be best that if we would be able to standardize it to the SAP.

        I still do not understand your explanation on COR8.  I cannot get the display of the daily schedule.  In our company, we are already using the work center to determine the available time.  Does this work with PlOrd or PrdOrd? Our current process is to convert all PlOrd to PrdOrd then release them for production. Can you help to clarify?

        Background: the products in our company will be high mix/ low volume.  So, for 1 working shift, we can produce/plan the production for more than 1 product.  That would be mean that we would require the feature to prioritize the different PrdOrd. We can use workcenter to determine available capacity. The problem that I have is how to get SAP to display the sequential daily schedule leveling in a graphic format. I think you called it “hijunka Board”.

        Thank you. Uten

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