What is Discrete Manufacturing, REM and Demand Management?

1. What is Discrete Manufacturing?

2. What is REM?

3. What is Demand Management?

Here are difference between Discrete and REM and small explanation about discrete and repetative manf.:

- A typical characteristic of discrete manufacturing is the frequent switching from one manufactured product to another. The products are typically manufactured in individually defined lots, the sequence of work centers through production varying for each one of these. Costs are calculated on the basis of orders and individual lots.

- In Repetitive Manufacturing, products remain unchanged over a longer period and are not manufactured in individually defined lots. Instead, a total quantity is produced over a certain period at a certain rate.

- Discrete manufacturing typically involves varying the sequence of work centers through which the products can pass during production. The order of work centers is determined in routings, which can often be very complex. There can be waiting times between the individual work centers. Also, semi-finished products are frequently placed in interim storage prior to further processing.

- Repetitive Manufacturing, on the other hand, normally involves a relatively constant flow on production lines. Semi-finished products are usually processed further immediately without being put in interim storage. Routings tend to be relatively simple.

- In discrete manufacturing, component materials are staged with specific reference to the individual production lots. Completion confirmations for the various steps and processes document the work progress and enable fine-tune controlling.

- In Repetitive Manufacturing, components are often staged at the production line without reference to a particular order. Completion confirmations are less detailed, and the recording of actual data is simplified.

- The function of Demand Management is to determine requirement quantities and delivery dates for finished products assemblies. Customer requirements are created in sales order management. To create a demand program, Demand Management uses planned independent requirements and customer requirements.

To create the demand program, you must define the planning strategy for a product. Planning strategies represent the methods of production for planning and manufacturing or procuring a product.

Using these strategies, you can decide if production is triggered by sales orders (make-to-order production), or if it is not triggered by sales orders (make-to-stock production).You can have sales orders and stock orders in the demand program. If the production time is long in relation to the standard market delivery time, you can produce the product or certain assemblies before there are sales orders. In this case, sales quantities are planned, for example, with the aid of a sales forecast.

The Difference Between MRP And MPS  

I was recently asked to discuss the difference between MRP and MPS. After providing the explanation, I thought it would be helpful information to share in a blog:

MPS stands for Master Production Schedule. A Master Production Schedule is the virtually exact same thing as MRP (Material Requirements Planning), the calculations are exactly the same, but there is one distinction.

MPS plans items that have “direct” demand, called independent demand. Independent Demand means that its demand comes from Sales Orders, Service Orders, or forecasts. The demand is directly from the customer requirements (or forecasted requirements).

MRP plans items that have “dependent” demand, demand that is passed down because of the need to produce an item.

So, if I make a pen, it has a cap, a barrel, a spring. and a refill. Based on the definition above, the pen is an MPS item. The cap, barrel, spring and refill are MRP items.

I will use my previous life in planning as the example:

When producing pens, we would lay out an MPS production plan on a weekly basis. That finished good production plan would be based on the orders and forecast for that period. That would create a “Finished Good” plan which would not be changed (well, we tried not to change it). This plan was important because we needed to manage the production plan to group items together by color to minimize molding change over time. This level loaded our production plan for the week and created the demand required for the components to produce that finished good plan. MRP would be run daily to expedite any parts required to produce the plan.

So, why would a company run MPS separate from their MRP items? Many times the finished good plan is going to be laid out and not changed. So rather than run MPS items daily and deal with the change requests (every day, new orders come in and change the requirements; therefore, you get messages that need to be dealt with). This is particularly true of companies that need to plan like items together.

I can think of two companies I have worked with in my consulting time that I suggested MPS planning. Both had finished good planning requirements similar to what I described above. They had a need to minimize change over time from one item to another. They also needed to set a schedule and produce to it. By running MPS separately, the schedule could be run once a week, and then MRP could be run more frequently to get action messages required to produce and maintain the production schedule.

If you have any further questions about MRP, MPS, or other manufacturing topics, please contact the manufacturing experts at ArcherPoint.

SAP Consumption-based Planning (CBP)

SAP Consumption-based Planning (CBP)

As the name indicates, this planning would be carried out based on the consumption values. The consumption values are the past historical consumption data. This data would then be used to calculate future requirements with the help of a forecasting program. For example, the requirements could be triggered when the material stock level falls below a reorder point. The reorder point would be calculated based on the past historical consumption data. There is another stock known as safety stock level. The safety stock should be maintained for the respective material to plan for the requirements and also for any unplanned delivery or any unexpected delay in supply from vendors.

What is MTS and MTO and the difference between them?

The difference between MTO and MTS is
MTO--> Make to Order
Production is the process where the production order is triggered from a Sales Order. Ex: The Prod process will start only after receiving the sales order from the customer. In this case the product could be customer specific only (Variant)

MTS--> Make to Stock
MTS scenario can be accomplished by the following settings
Need to use strategy group 20 in material master MRP view-Stretgy group 20 is assigned to strategy 20
Strategy 20 is assigned to Requirement type KE (Individual customer requirement)
Requirement type KE is assigned to requirement class 040 (Indiv.cust.w/o cons.)
Requirement class has all the parameters where we can define Prodcution order type that will be used to create the prod order. The above link needs to be established.

Also the MTS can be achieved using Sales Order schedule line catagory which will be assigned to Requirement type/class. Item category is assigned to Reqtype/class and the Item category is maintained in the material master.

You can use any of the baove config settings.

For MTO --> you just need to have all PP cycle settings in place nothing special needed as it is a plain PP cycle.

1. Make-to-order production is a process in which a product is individually manufactured for a particular customer. In contrast to mass production for an unspecified market where a material is manufactured many times, in make-to-order production a material is created only once though the same or a similar production process might be repeated at a later time.

2. You can use make-to-order production in two scenarios -
(a) For branches of industry or products where a small quantity of products with a large number of different characteristics are manufactured (Variant Configuration).
(b) When a product has to be assembled particularly for a sales order (Individual Customer Requirement).

3. Stock keeping is not usually carried out for products that are made to order. In companies using make-to-order production, the demand program only determines the production area, in which various variant types are produced. Depending on how you track the costs associated with make-to-order production, there are two ways to process make-to-order items during sales order processing.
(a) Make to order using sales order
(b) Make to order using project system (not relevant for SD application)

4. For make to order production using the sales order, all costs and revenues involved for an order item are held collectively at that item. A particular rule is used that can be changed manually to transfer costs to profitability analysis.

5. Make to order production is largely a production planning configuration. It is also controlled by the requirements type, which is determined by three things
the strategy group (MRP 3) in MMR
the MRP group (MRP1) in MMR
the item category and MRP type (MRP 1)

6. Make-to-order production is controlled by the requirements type. The requirements type is determined on the basis of the MRP group (MRP1) and the strategy group (MRP3) in the material master record. In addition, a plant must be assigned for make-to-order items in the sales order.

MTO - Make to Order

Make-to-order production with capacity checking enables vendors to trigger production of a requested product as soon as a sales order reaches the system. An automatic process checks machine capacity, schedules production, and determines the requested product’s availability date. This enables vendors to make immediate, reliable offers and commitments to their customers for the requested quantities and delivery dates. While particularly well-suited to high-tech manufacturers and makers of industrial machinery and equipment, this method also addresses the requirements of other make-to-order manufacturers.

MTS - Make to Stock

Make-to-stock production is designed for manufacturers that usually operate on the make-to-order model – configuring their finished goods after sales order entry – but that nevertheless manufacture the components of the finished goods in a make-to-stock process. The SAP best practice definition describes how manufacturers can accurately predict the future demand for components, communicate with suppliers of critical parts, and plan the production and distribution of finished goods, all based on actual material and capacity restrictions.

Maintain the Exchange Rate Type for version 000 in 20XX?

How to maintain Maintain the exchange rate type for version 000 in 2009?

1. Goto T-code 'okeq'.

2. On this page, select the line with version '0'. Further, click on Controlling area settings >> Settings for Each Fiscal Year.

3. System will pop-up a window asking you for controlling area, provide the same and click Enter.

4. It'll show Change View "Settings for Each Fiscal Year" : Overview page, under which select any year and copy as..(F6), change the year mentioned under it to subsequent year till 2009 and 'Save'. Ex: if last year mentioned is 2006, change the year to 2007 and save. Then, copy and change to 2008 and save. Lastly, carry out same operation for 2009 and save.

5. The exchange rate has now been set for year 2009.

You can carry out confirmation of production order now.