Planning and Processing of Semifinished Goods

1. Planning and Processing of Semifinished Goods SAP Best Practices

2. Purpose, Benefits, and Key Process Steps • Purpose • In this scenario the forecasting level is the semi-finished product. Planned independent requirements are generated for the semi-finished material. • The production scenario produces a semi-finished product in make-to-stock production (MTS). • The production of the finished product is triggered by customer orders (MTO) having the forecasted semi-finished product as one component in the bill of material. • Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing. • Benefits • Production triggered by a production plan • Batch management included • Forecast of semi-finished products • Make-to-order and Make-to-stock processes in one scenario • Key Process Steps • Creating Planned Independent Requirements • Material Requirements Planning at Plant Level • In-House Production (subassembly – Make-to-stock) • In-House final production (assembly –Make-to-order) • Confirming Assembly Activities • Sales Order processing

3. Required SAP Applications and Company Roles • Required SAP Applications • Enhancement package 5 for SAP ERP 6.0 • Company Roles • Sales Administrator • Production Planner • Shopfloor Controller • Warehouse Clerk • Plant Controller • Buyer

4. Detailed Process Description • Planning and Processing of Semifinished Goods • This scenario describes a business process, which is typical for companies with lot size oriented production. The production scenarios consist of both goods movements (goods issues and receipts) and confirmation of completion of the production order. • Furthermore, the scenario is supported by the main cost object controlling functions required, such as preliminary costing and period-end closing. • The typical planning process starts with sales quantity planning. In this scenario we imitate the sales data by generating independent requirements for semi-finished product, which are used in the subsequent Material Requirements Planning (MRP) run. • In material requirements planning, the bill of materials (BOM) for the semi-finished material demand gets exploded and production is planned right down to procured component level. MRP results in planned orders being generated for the material to be produced. • If insufficient warehouse stock is available, purchase requisitions are created for the raw materials required. When the order is created, target costs are calculated for the order lot size (preliminary costing). • During the production process, costs incurred are updated on the order, which enables you to keep track of and compare target costs and actual costs at any time. • The final assembly of finished product is initiated by a customer order. After production the material is posted to individual customer stock.

5. Yes No Process Flow Diagram Planning and Processing of Semifinished Goods Event Beginning of Planning Cycle Semi-finished Product Request for a finished product Customer Payment received SalesAdmin. Sales order for Finished product Sales billing Production Planner Material Requirements Planning at Plant Level & Evaluation of Stock / Requirement List Planned Independent Requirements Material Available? Release Production Order Convert Planned Order to Production Order Purchase Requisition Planned Orders Shopfloor Specialist Inventory @ Standard. Cost Material Staging for Production Orders Confirming Assembly Activities / Final Confirmation Semi-Finished Goods Receipt Goods Receipt Slip Inventory Consumption @ Standard. Cost Goods Issue/ Back flush Ware-house Clerk Delivery of Sales order Finished Goods Receipt Goods Receipt Slip Plant Controller Period End Closing “General” Plant (181) Buyer Procurement w/o QM (130) Purchasing with JIT Delivery schedules (230)

6. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision