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SCM Master Data - 2
Master Data for Distribution &
Production Processes
EGN 5346 Logistics Engineering
(MSEM, Professional)
Fall, 2013
SCM Master Data - 2
Theories & Concepts
Distribution Planning in SCM (review)
Time Horizons for Distribution and
Production Planning in SCM (review)
Level of Detail and Time Horizon
of Distribution and PP in APO
Modules (review)
Distribution Planning and Production Planning
Processes in APO Modules (review)
Distribution and PP Modules in APO System
Structure and Integration with ERP (review)
Master Data and Application in (DP)
distribution planning and PP (review)
Master Data and Application in
Distribution Planning and PP (overview)
•Master Data for Distribution Planning:
Location, Product, Resource, Transportation lane,
Quota arrangement, and Interchangeability group.
•Master data for Production Planning:
Location, Product, Resource, PPM/PDS , Quota
arrangement, Set up Group & matrix, and
Interchangeability group.
Master Data and Application in Distribution
Planning and PP (Overview)
•Transportation lanes:
•Transportation lanes are required from plant and
distribution center to the transportation zone and have to
be created manually.
•The allowed carriers have to be assigned per means of
transport and transportation lane explicitly.
•Quota arrangement (vendors’s quota):
•Quota arrangement must be used, if it is intended to
source from multiple locations on a regular basis.
•The concerned products are assigned to the quota
arrangement, and the ratio of the resources is defined
per product.
SCM Master Data - 2
Master Data for Distribution
Distribution (and Supply Chain)
Distribution planning between the manufacturing
plants and warehouses is important, as companies
reduce inventory by changing their logistics
processes to global inventory management, from
non-coordinated local inventory management.
Distribution (and supply chain) planning focuses on
make-to-stock production.
Distribution (& Supply Chain) Planning,
and Replenishment
Process Chain for Distribution and
Supply Chain Planning
Distribution and Supply Chain
1. Distribution planning is performed based on demand and
stock information with the result of planned stock
2. The most important issues are usually the netting of the
local stocks, safety stock levels, sourcing options,
transportation times and lot sizes for the planned stock
3. If required, restrictions are considered regarding storage
capacity and handling capacity for goods issue and
goods receipt.
Distribution and Supply Chain
Replenishment involves two processes:
1. Deployment
• Deployment is concerned with the fair share of
quantities to the requesting parties in case of
shortage or surplus. The constraints are available
2. Transport Load Building (TLB).
• Transport load building is one step closer to
execution and focuses on the creation of truck
loads, where the task is to adjust the planned
stock transports to the available trucks/transport
means and take their capacity restrictions into
Distribution and Supply Chain
SAP APO supports distribution and production planning,
with the following 4 applications:
For distribution:
• SNP heuristic
• PP/DS heuristics
For SCP (Supply Chain Planning)
• SNP optimizer
• CTM (with SNP or PP/DS master data)
Applications for Distribution and
Supply Chain Planning
Features of the Application for
Distribution and Supply Chain
Distribution planning with SNP heuristic is often used in the
environments where multiple sourcing is not an issue and
production is usually able to meet the demands, so that the
main task for SNP heuristic is to calculate the demands for
production planning based on local inventories, transportation
times, safety stocks and lot sizes.
SNP optimization allows a complete consideration of the supply
chain determinants (i.e., sources and cost, production capacity,
transport, storage and handling). The aim of SNP optimizer is
to find a global optimum for supply chain based on cost and
penalty cost.
CTM pursues a priority based simple rules such as FIFS.
Order Cycle for Stock Transfer
Order Cycle for Stock Transfers
The stock transfer order has two aspects – as a demand in the source
location and as a supply in the target location. The documents differ in SAP
The creation of the planned stock transfer, deployment
and transport load building (TLB) is performed in SAP
The execution part from the creation of the outbound
delivery in the source location until the goods receipt in
the target location is performed in SAP ERP, and the
information is displayed in SAP APO.
Order Cycle for Stock Transfers
Three stock transfer order types in SAP APO
1. Planned stock transfer,
2. Deployment confirmed stock transfer and
3. TLB-confirmed stock transfer
They are matched to:
1. the stock transfer requisition and
2. the stock transfer order in SAP ERP, according to the
setting for SNP transfer.
Order Flow for Stock Transfer on
SAP ERP side
Stock Transfer Order
Stock transfer order is first scheduled in SAP APO, then
transferred to SAP ERP and scheduled again in SAP ERP
according to the delivery date.
Stock transfers are executed according to the order dates in
SAP ERP, therefore it is important to keep the scheduling in
SAP APO and SAP ERP consistent.
The transport duration in SAP APO is calculated using the
entry from the transportation lane, whereas SAP ERP uses
the planned delivery time of the material master of the target
Stock Transfer Scheduling
for transportation
for transportation
Setting for Stock Transfer within and
across Company Codes in SAP ERP
Since SAP APO does not know any company codes, there is no
difference in SAP APO whether stock transfers are planned within
one company code or across company codes.
On SAP ERP side, cross-company stock transfers require the
additional settings. The assignment of the sales area and the
customer to the plant is made with maintenance view V_001W_IV.
Setting for Stock Transfer within and
across Company Codes in SAP ERP
Setting for Stock Transfer Across
Stock transfer across two SAP ERP systems is modelled by a
purchase order in the target plant and a sales order in the
source plant.
Setting for Stock Transfer Across
SCM Master Data - 2
Master Data for Production
Planning Process
Production Master Data Overview
The relevant master data for production planning:
•PPM and PDS
•Quota arrangement,
•Set up Group & matrix, and
•Interchangeability group.
Note on resources:
•SNP and PP/DS have a different view of the capacity.
•SNP – in buckets
•PP/DS – time-continuous capacity
Resources for SNP
The idea of SNP is to perform an aggregated planning.
Since SNP is an application for bucket-oriented planning,
the resources for SNP offer a certain capacity per time
bucket – usually per day. The bucket resources provide
the capacity – e.g. the amount of working hours per day
– of the resource which is used for the capacity
consumption of the orders.
For the scheduling of the production orders, the factory
calendar is assigned to the resources. The standard
capacity is defined in the resource master.
Figure 13.13 shows these setting for the bucket
resource. Another way to define the capacity is the use of
a reference resource to save time.
Resources for PP/DS
In PP/DS, scheduling and capacity consumption are not
separate steps, but the capacity is consumed by the
scheduled operation.
The basic resource property in PP/DS is the working
time, which depends on the standard working hours, the
break time, and factory calendar.
Usually the available working time is modelled per shift,
and the shifts are assigned to a shift sequence to model
Production Master Data Overview
The Production Process Model (PPM) defines the
detailed information required for manufacturing a
product. The PPM combines routing and the bill of
materials (BOM) into one master data object. Each PPM
includes one or more operations. Each operation, in
turn, includes one or more activities, for which materials,
relationships and resources are maintained. The
activities and resources defined in the PPM are assigned
to costs that are used by the SNP Optimizer and for finite
scheduling by Production Planning and Detailed
Scheduling (PP/DS).
Production Master Data Overview
Supply Network Planning (SNP) is a long term, rough cut planning tool.
SNP requires a PPM with less information than the one used for
production planning and detailed scheduling (PP/DS).
During a planning run, SNP can schedule resources down to the day. In
order to perform scheduling at the day level, the PPMs and resources
must be simplified. Additionally, when using optimization technologies, it is
important to limit the number of inputs (materials) to find a proper solution
in a reasonable runtime.
SAP SCM allows you to generate SNP production process models
(PPMs) based on existing PP/DS PPMs. Restriction to a specific lot size
is required to determine the exact production consumption or mode
Production Master Data Overview
PDS (production data structure)
SAP initially developed the Production Process Model
(PPM) to model manufacturing master data. It was
replaced in SCM 4.1 by PDS. However PPMs are still
In some industries modeling the production and evolution
of a certain product can be very complicated. When a
product has many variations due to customers choosing
a combination of features and options they typically used
the variant configuration solution in standard SAP ERP.
Production Master Data Overview
The main motivation to develop the PDS was to have an
integration of the Engineering Change Management (ECM)
and the Variant Configuration between SAP ERP and APO.
From SCM 4.1 on, the Production Data Structure (PDS) is
the key master data for all kinds of production planning
related processes. The PDS is supported by the applications
of PP/DS, SNP, CTM and DP.
Like the PPM, the PDS corresponds to the production
version on SAP ERP system. Though both PPM and PDS
are still available as alternatives, there is no further
development for the PPM since SCM 4.0.
Structure of PDS and PPM
Production Process Overview
Objectives for Production Planning:
• to meet the demand
• to consider the resource capacities and the
material availabilities
• to improve utilisation of the resources
• to low set up time
• to minimise the stock, and
• to minimise the work in process (WIP)
• to improve stability of the plan
Production Process Overview
1. The complexity of production planning increases with the
number of BOM-levels, number of operations, and finite
resources, the use of fixed, or minimized lot sizes and
sequence dependent set-up.
2. Though APS (Advanced planning and Scheduling) systems
allow theoretically a one-step approach, experience shows it
is better and more reliable to use a two step approach to
create a feasible plan (i.e. infinite production planning first and
finite scheduling on the key resources later), and keep the
constraints as less as possible in modeling and.
Order Cycle for Production
Order Cycle for Production
1. The result of production planning are planned orders which
contain the information about the dependent demand and the
capacity requirement in SAP APO.
2. The production orders are reduced by the order confirmation
and remain in SAP APO until it is technically completed.
Production Planning Applications
SAP APO offers different applications for production planning and
detailed scheduling. Production planning is supported by the SNP
and PP/DS modules with two different levels of details.
- rough-cut and bucket-oriented planning (SNP), and
- time-continuous planning (PP/DS).
Detailed scheduling with the purpose of creating a sequence for
order execution is only supported by PP/DS since SNP is limited
to bucket-oriented planning and there is no sequence within a
Applications for Production
Planning and Scheduling
Lot Size
Lot sizes have a significant impact on the production planning
result and challenges for scheduling. The fixed, minimum and
periodical lot sizes in material master data increase the
complexity of the planning problem.
Lot Size Methods
Lot Size
Though CTM supports minimum and fixed lot sizes, but CTM
performs a finite planning and does not split orders across
buckets which might lead to a very low utilisation.
SCM Master Data - 2
Master Data for Distribution &
Production Processes
SAP Implementation
Order Cycle for Stock Transfers
The outbound delivery for the stock transfer order is created
with transaction VL10B in SAP ERP, picking and posting of
goods issue is done with the transaction VL02N in the
Using the message type LAVA, the inbound delivery in source
location can be triggered with posting of the goods issue (or
manually with the transaction VL31N).
For the use of deliveries it is necessary that a vendor is
assigned to the source location and that an info record exists
The inbound delivery is transferred to SAP APO as a purchase
order memo of the stock transit.
Exercises: (Due date 11/23/2013)
1. Create integration model for plants in SAP ERP system and
verify them in SCM system
2. Create integration model for DCs in SAP ERP system and
verify them in SCM system
3. Create integration model for vendors in SAP ERP system and
verify them in SCM system
4. Create integration model for customers in SAP ERP system
and verify them in SCM system
5. Create integration model materials at plants in SAP ERP
system and verify them in SCM system
6. Create integration model materials at DCs in SAP ERP system
and verify them in SCM system
7. Create integration model work centers in SAP ERP system
and verify them in SCM system
8. Create integration model purchasing info records in SAP ERP
system and verify them in SCM system