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Understanding SAP ERP Production Planning

SAP’s enterprise resource planning solutions (ERP) are made up of modules that deliver specific functionality and combine to provide an end-to-end backend solution for businesses of all types. One of the core modules that significantly benefits manufacturers is the Production Planning module.

The SAP Production Planning module focuses on the management and control of manufacturing and production processes. The module provides comprehensive functionality for planning, execution, and control of production activities within a business for manufacturing operations both large and small. Learn more about strategies for success with manufacturing resource planning

Through the Production Planning module, manufacturers can develop production plans and schedules based on sales, operations, and inventory plans. As part of a larger ERP system, the Production Planning module also can take advantage of a real-time feedback loop from manufacturing and logistic execution.

Production planning is baked into all of SAP’s ERP offerings and additional planning functionality can be added through the SAP Business Technology Platform. But SAP’s ERP for fast-growing and midsized businesses, SAP S/4HANA Cloud Public Edition, comes embedded with advanced planning and scheduling functionality out of the box.

With S/4HANA Cloud Public Edition, businesses can move beyond classic material requirements planning (MRP) for more sophisticated planning that incorporates capacity and material constraints and exception-based planning.


The Manufacturing Benefits of Production Planning Software

Centralized, context-aware production planning that leverages automation and machine-learning-based analytics benefits manufacturers in a number of ways.

Enables master operational planning. With sophisticated production planning, manufacturers can optimize supply chain operations for service, cost and capital along both short- and medium-term planning horizons.

Opens the door to real-time planning adjustments. Operational plans can be adjusted in real-time with an ongoing feedback loop across a manufacturer’s ERP, business plan and manufacturing execution system.
Allows the use of planning automation. Manufacturers can leverage constraint modeling for discrete or process manufacturing, and also apply advanced algorithms for greater planning insights. 

Boosts orchestration. Operations can be dispatched and sequenced more finely for shorter manufacturing lifecycles, and performance can be tracked in real-time.

Improves efficiency. Manufactures can accelerate cycle and task time through streamlined manufacturing processes, and add additional capacity without extra overhead by better balancing production resources.

Adds safety. Manufacturers can boost workplace safety compliance with automated, predictive hazard identification and risk mitigation processes.

Increases agility. Extra visibility with demand and configuration requirements help manufacturers choose the best production mode and make adjustments as market conditions change. Built-in intelligence assists with minimizing risk through the monitoring of all manufacturing processes for speed and resource utilization.

Boosts manufacturing visibility. Analytics and KPIs for a single facility or across operational locations help manufacturers fine-tune and de-risk operations on an ongoing basis.

Learn more about manufacturing erp software.


Why SAP for Production Planning

SAP literally invented the enterprise resource planning software space for the needs of manufacturing. So the Production Planning functionality within SAP ERP solutions has been refined over decades to meet the specific and evolving needs of manufacturers.

Some of the key features that come with SAP Production Planning include:

Master Data Management. Businesses can manage master data elements such as material master, bill of materials (BOM), routing and work center. These data elements serve as the foundation for production planning and control.

Demand Management. With the Production Planning module, manufacturers can develop and manage demand forecasts using historical data, sales orders, and real-time customer requirements. From this, manufacturers can determine the needed quantities and timings for production.

Capacity Planning. For manufacturers that leverage SAP S/4HANA Cloud Public Edition, they can manage capacity for work centers and machines, and define work center capacities, schedule production orders and balance workloads for maximum utilization.

Sales and Operations Planning. Sales planning and production can be aligned for supply and demand through the end-to-end comprehensiveness of SAP ERP. This alignment enables manufacturers to synchronize production plans with sales forecasts, inventory levels and capacity constraints.

Material Requirements Planning. SAP ERP can calculate material requirements based on the production plan, and automatically decide when and how much of each material is needed. The Production Planning module looks at factors such as lead times, stock, safety and dependency requirements.

Production Orders. Manufacturers can create and manage production orders, and define order details and required materials and resources. They also can track order progress throughout the entire production cycle.

Shop Floor Controls. Production activities on the shop floor can be controlled or monitored in real-time with the SAP ERP. Production data, quality inspections, and actual resource utilization can additionally be recorded within the system.

Reporting and Analytics. Automated reporting and sophisticated analytics help manufacturers track key performance indicators and generate reports based on these indicators. Firms can track production costs, analyze production variances, and generate performance reports for more efficient and accountable operations.

Learn more about the inventory management guide for manufacturers.


Learn More About How SAP ERP Can Help Manufacturing

Whether for a small manufacturer or a large enterprise, SAP’s production planning functionality can improve planning and operations.

Learn more about SAP ERP for manufacturing, or contact one of our experienced ERP consultants for specific questions at (801) 642-0123 or by writing us at info@nbs-us.com.

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