The SAP S/4HANA Manufacturing Solution for Planning and Scheduling (SAP S/4HANA PP/DS) helps organisations to determine what, when and where to make or buy, considering equipment and production facilities. It is the new production planning part of SAP APO and is now fully integrated in SAP S/4HANA.
In order to have a better understanding of the new way of integrated production planning and detailed planning with PP/DS under SAP S/4HANA, we will first zoom in on how this has always worked under SAP ECC.
In SAP ECC (even in the newest version, SAP ECC 6.00 with EHP8), material requirements planning and capacity planning are strictly separated. This can certainly lead to difficulties with critical products: to get a coordinated plan, the Material Requirements Planning (MRP) must first be carried out under the assumption of infinite planning, i.e. unlimited capacity. Capacity planning can be carried out after that. This process makes appropriate changes to the MRP and takes capacity resources into consideration, and so creates a finite plan in connection with the MRP.
For critical products, this process may have to be repeated several times, as rearranging deadlines retroactively can have a direct impact on other materials. It was for this reason that SAP developed SAP SCM (Supply Chain Management) with the APO (Advanced Planning and Optimization) component.
Why SAP has integrated production planning functions in S/4HANA with PP/DS
With SAP S/4HANA, SAP has taken a step back to the concept of producing various functions in different systems which have been designed precisely for them. Since the end of the 90s, SAP has developed planning features in the production environment in APO, and has only refined them there. At the time, there was a good reason for this step. The live cache was developed in APO, and with it came the possibility of carrying out planning in the main memory.
A successor to the live cache has been developed in HANA, and SAP is now going the other way with S/4HANA. Successive planning features which run underneath APO are now being integrated into S/4HANA. The first feature to be reintegrated into S/4HANA is PP/DS (Production Planning / Detailed Scheduling).
In contrast with the requirement planning feature in SAP ECC, SAP S/4HANA PP/DS enables you to make plans which are accurate to the hour, not just to the day. As mentioned above, capacity planning and material requirement planning are separate under SAP ECC. Under S/4HANA PP/DS, planning for both can be considered at the same time – various planning algorithms are available for this purpose.
In addition, production planning can be done in a user-friendly, web-based graphic planning grid without having to switch between ECC and APO using the new Fiori apps.
When to use SAP S/4HANA PP/DS
S/4HANA PP/DS is primarily the tool of choice for planning critical products, e.g. products in short supply or products with long delivery times. Products which don’t have any capacity restrictions, or which are available from the supplier quickly, so classic C-list products, can and should not be planned using PP/DS.
Realistic and achievable production plans can be created using PP/DS – with the classic logistics aims of “the right quantity in the right place at the right time”. Or to put it another (slightly more detailed) way, using PP/DS helps reduce turnaround times while increasing adherence to delivery dates and reducing inventory costs at the same time.
The following graphic shows what the planning process looks like when using PP/DS:
To achieve this, S/4HANA PP/DS includes various features that are not available in SAP ECC:
- S/4HANA PP/DS provides the opportunity to plan quantities and capacities at the same time and supports planners by only allowing quantities to be included in production plans if sufficient capacity is available. The planning process is carried out with the help of so-called heuristics, which can also be very flexibly adjusted or extended in comparison with SAP ECC.
- Using so-called “pegging”, relationships can be created between product requirements and suitable product entries or stock, which can also consider every parts list level and component when requirements are changed. Similar (but much stricter) classification is available in SAP ECC, but only for individual stock items.
- You can also connect an optimisation server to S/4HANA PP/DS which can optimise production plans according to various criteria using optimisation algorithms. This way, you can gradually achieve an optimal approach.
As the functions in S/4HANA don’t really sound all that different to those in SCP-APO, there are a few things that still need to be clarified.
Under SAP S/4HANA, it can hardly be said that PP/DS is somehow a “system in a system”, as the data is exchanged via interfaces (CIF interfaces), meaning materials become products, factories and business partners become locations, workplaces become resources, and parts lists and work plans become product data structures (PDS). Integration has become a lot closer, though. A flag just needs to be placed in the material master record to start up the interface (CIF interface), and a flag just needs to be placed in the workplace to generate a resource from a workplace. In turn, factories must be distributed via the CIF interface (as is also the case when using an APO).
In addition, planning via S/4HANA PP/DS when using MRP Live is no longer completely disengaged from the classic MRP, rather it is integrated. This in turn poses the question: What is MRP Live, and what are the benefits?
How MRP Live speeds up the MRP planning run in SAP S/4HANA
For SAP HANA, SAP has developed a new form of Material Requirements Planning (MRP) which is known as “MRP Live” or “MRP Live on HANA”. In technical terms, you can think of MRP Live as follows: the request to carry out the material requirements planning is sent in one piece to the main memory where the calculation then takes place, and the result is then transferred back in one piece. You can save considerable amounts of time by using this in-memory technology. However, you’ll also notice that the time saved for a few materials cannot be measured or is very small. MRP Live therefore only shows its strengths once it comes to very large quantities of data. The planning process can be structured more flexibly with MRP Live. So you can, for example, make plans for a group of materials, make plans for one material across every factory, or make plans for every material for one planner. Conventional material requirement planning is still available.
MRP Live also has various features which are not immediately evident. For example, materials that MRP Live cannot plan for use is passed on to the conventional MRP and plans are made there (e.g. making plans for materials at the point of order). Secondly, MRP Live passes materials for which PP/DS is active on to the production planning process in PP/DS. The limitations MRP Live has is highly dependent on its release and patch level; to that end, SAP has created, and regularly updates, the document OSS Information 1914010.
MRP Live differs from the conventional MRP in the following ways:
- MRP Live doesn’t write any scheduling lists.
- Multi-level individual customer planning (transaction MD50) is not optimised for SAP HANA.
- Individual project planning (transaction MD51) is not optimised for SAP HANA.
- The creation indicator for purchase requisitions is unavailable in MRP Live. MRP Live always creates purchase requisitions if the material has been outsourced.
- The creation indicator for delivery schedules is unavailable in MRP Live. MRP Live always creates delivery schedules if a valid delivery plan is available.
Scheduling lists used to be a tool for the planners and a tool for circumventing performance problems. Firstly, performance problems are no longer an issue in SAP S/4HANA, and secondly newer tools have been created for planners so that they can now check and edit their scheduling via the SAP Fiori app.
The adjustment regarding the creation indicator is the biggest obvious change for purchase requisitions and delivery schedules. SAP justified this by saying that the way the company works has changed, and that the division between planners and purchasers no longer exists today. Even if that is only partly true, this certainly can’t be generalised. Here, users must either learn to live with the altered features or restore the old logic using BAdIS.
In summary, if can be said that in S/4HANA with PP/DS and MRP Live, SAP has developed a powerful tool for production and detailed planning which can also be used by smaller companies that can’t afford SAP SCM, but which have the same demand for simultaneous quantity and capacity planning as big companies do.
Are you about to make the switch to SAP S/4HANA? Get a first overview in the whitepaper: