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PP Module Overview

The flow from planning to execution, how production strategies differ, and where PP connects to MM, SD and CO.

Contents

PP (Production Planning) supports manufacturing: forecasting demand, calculating what materials are needed, instructing production and recording results.

From plan to execution

Stages of the production process
StageWhat happensCode
Demand managementSet the requirements that drive productionMD61
Master production schedulingFix quantities and dates for key materialsMD40
MRPExplode the BOM and propose production and purchasingMD01 / MD02
Convert planned ordersTurn proposals into production orders and requisitionsCO40 / MD04
Release the orderInstruct the shop floorCO02
Issue componentsPick materials to the orderMIGO / MB1A
ConfirmRecord time and quantity producedCO11N
Receive finished goodsTake the product into stockMIGO
Close the orderCalculate variance and settle costKKS1 / CO88

Production strategies

ApproachStock heldTypical industry
Make to stockFinished goodsConsumer goods, food, standard parts
Make to orderBuilt per orderIndustrial machinery, bespoke products
Assemble to orderComponents stocked, assembled per orderPCs, vehicles
Engineer to orderDesigned per orderPlant, shipbuilding

Make to stock builds ahead against a sales plan. Make to order starts only when an order arrives. The difference affects not just inventory but the unit cost is collected against.

Kinds of production order

KindCharacteristicSuited to
Production orderCost collected per order; uses a routingBatch and discrete production
Process orderFor chemicals and food; uses recipes and resourcesProcess industries
Repetitive manufacturingNo orders; results recorded per periodFlow and high-volume production
KANBANReplenishment triggered by consumption signalsJIT production

Repetitive manufacturing dispenses with orders entirely, recording input and output per line and period, which cuts administration considerably where the same product runs continuously.

Connections to other modules

ModuleInteraction
MMMRP generates requisitions; component issues reduce stock
SDSales orders become requirements; finished goods become sellable stock
COCost accumulates on orders and variance is calculated
FIIssues and receipts post inventory and cost entries
QMIn-process and receiving inspection
PMMaintenance of work centres and its effect on capacity

Check your understanding

Test what you just read.

Quiz 1

Which step follows the MRP Run in the PP process?

Quiz 2

The PP module integrates with MM for component procurement.

Quiz 3

Which best describes Make-to-Stock (MTS) production?

Quiz 4

PP integrates with CO (Controlling) to calculate manufacturing costs.

Quiz 5

Which best describes Make-to-Order (MTO) production?

Quiz 6

Arrange the PP core process steps in the correct order.

Click items in the correct order

Quiz 7

In process industries such as chemicals, food and pharmaceuticals, which order is used instead of a production order?

Quiz 8

In assemble-to-order, components are prepared in advance and final assembly happens once the sales order arrives.

Quiz 9

MRP plans not only in-house produced materials but also creates purchase requisitions for externally procured materials.

Quiz 10

Which is the clearest link between PP and SD?

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