Why standard SAP PP is your best friend ?
SAP conceptualized and developed the most amazing Production Planning (SAP PP) product in the market. The product offers wide range of solutions for functions from Production Planning to Order Execution. Not to mention the incredible integration with other business functions like Sales & Distribution, Material Management, Finance & Controlling, Plant Maintenance, Quality Management etc. However it is quite common to see:
- Excel tools for Planning/Reporting etc
- External tools integrated with SAP for various purposes
- Users struggling to make best use of SAP PP standard product
- Non-optimal Inventory levels
Its probably a good idea to revisit the SAP PP solution you’re using. SAP PP is much more than order execution or backflush. In this blog I would highlight the main sub modules of SAP PP and how you can make the best use of these modules:
- Sales & Operation Planning (SOP): As the name suggests SOP can be used for Sales forecast and Production Planning. Historical, existing or estimated future data can be used to predict Sales, Production and thus components for medium to long term planning. Rough-cut planning can also be carried out to determine the amounts of the capacities and other resources required to meet these targets.
- Material Requirement Planning (MRP) : The importance of MRP cannot be emphasized enough. Do I need to mention ERP evolved from MRP with a motive of optimizing manufacturing process & inventory levels and integration with other business functions. It is of utmost importance to use correct MRP parameters & settings to achieve optimal Inventory levels, high customer satisfaction etc.
- Capacity Requirements Planning: This is another area which is extremely underutilized and underestimated. SAP’s Capacity Planning looks bit complex and chaotic at first. SAP has offered tons of transactions in this area however most of them doesn’t look good or even useful to the business. However I strongly vouch for CM25 for capacity planning. Start using CM25 for planning capacities or you can also consider other capacity planning tools from SAP offered as Consulting solutions.
- Order Execution: This is unarguably the most popular sub-module of SAP PP. A range of solutions like Discrete Manufacturing, Repetitive Manufacturing and Process Industry can be used as per business needs to control and monitor end-to-end production processes.
- Kanban : Based on Pull principle, Kanban can be used to replenish materials only when components or semi-finished assemblies are needed for production of higher level assemblies. Kanban can be used to replenish materials in small batches with low lead time. This results in optimized inventory levels and avoid overflow of components on the shop floor.
I would like to reiterate that SAP PP products are best of the breed and many of the sub modules are mostly underutilized. It is better to use SAP standard products instead of using external tools be it excel tools or other software integrated with SAP. Using Standard SAP PP offers additional benefits like
- Reduced/optimized Inventory levels leading to cost saving
- Saving on maintenance cost for other software
- Simplified architecture/Landscape due to less integration with external system
If you are looking for a solution which is not delivered in standard SAP PP then you might want to check SAP Consulting Solutions. SAP also delivers a wide range of Add-on tools which operate in Plug & Play mode and work seamlessly with your existing implementation.
Lastly, SAP does realize the vacuums in standard ERP products and is constantly releasing new products and tools with every release of S/4HANA suite to fill existing voids and also launching new and innovative products including new UX with Fiori Apps.
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