Strategic Planning

with SAP

The Production Planning Cockpit "PPC" supports long-term strategic planning with SAP, through a number of functionalities such as reserving capacities for planned independent requirements and the ability to save different planning session versions in long-term planning scenarios.

What does strategic planning mean?

Strategic planning brings together business activities in order to ensure the long-term success of the company. An important tool for this is to run through different scenarios so as to make their results visible. It is often useful to work at aggregated levels, i.e. not always looking at individual products and resources, but at appropriate groups of products and resources.

Due to the large number of possibilities and combinations as well as the volume of data, efficient software planning is essential.

That is why strategic planning deals intensely with topics such as: forecasting, aggregation and simulation. As in the operational area, strategic plans should also be feasible, i.e. the consideration of material availability and restrictions are essential factors.

How does the Production Planning Cockpit "PPC" in SAP support strategic planning?

The Production Planning Cockpit "PPC" by ITeanova contains many functions that are very helpful for strategic planning. The most important features for strategic planning are:

Grouping resources into resource groups and planning at group level (in the subsequent planning cycle then distribution to individual resources)
Grouping materials into product groups (planning materials) and planning at aggregated product level.
Integration of different versions of the forecast (or planned independent requirements) and generation of receipts for further planning:

Planning only on forecast requirement level (simulated requirements)
Mixing simulated requirements into the operational planning situation with existing requirements and receipts in order to obtain strategically important information

Long-term capacity reservations to take into account future sales orders (e.g. for important customers) in order to be better prepared for these incoming orders.

Flexible consumption of reservations by incoming orders:

for individual bottleneck operations
for complete orders

Finite planning (planning against limited capacity) on individual and aggregated level, especially bucket planning on weekly or monthly level makes sense
Multi-level planning across the entire supply chain
Planning at characteristic level (variant configuration, classification, etc.)
Simulating planning scenarios with saving and post-processing options in the PPC cockpit
Planning with simulations of changed available capacities simulation of new resources or machines for production

Capacity reservations, block building, simulation of strategic planning in SAP

Actual situation in medium or long-term horizon:

In the long-term horizon, e.g. more than 3 months into the future, there are no sales orders yet. Therefore, the MRP run does not generate any planning elements → no planning options with regards to capacities and components.
If make-to-order production is set for the materials, no forecast can be taken into account.
Planning for individual products would be too time-consuming and unrealistic.
No possibility of reserving capacities for sales orders that are expected but not yet in the system.

General solution approach

Planning requirements medium-/long-term horizon

Creation and consideration during planning of substitute/planning materials (grouping similar products)
Basis for planning: forecast data for planning materials (planned independent requirements) transform into capacity requirements
Generate capacity requirements on forecast basis capacity reservations
Finite planning of capacity reservations → long-term indicator of whether capacity problems may occur
Production, set-up and buffer time should be included in planning

Use of forecast for planning materials as a basic planning.
"Non-ERP planning elements" for long-term capacity planning, campaign planning and capacity reservation: PPC-specific objects, called "CBRs" (campaigns, blocks, reservations)
CBRs for production, set-up and buffer times with suitable planning and scheduling strategies (finite, taking borders into account)

CBR (constraints, blocks, reservations)

Interface between strategic and operational planning

Impact in short- and medium-term planning: consumption CBRs by operational orders

Operational orders arrive:

Finding and consuming CBRs at operation/resource level

Scheduling with finite capacity (machine, personnel):

Machine on a time-continuous basis (slot planning)
Outlook: personnel on period basis (day, shift)

Planning horizons

The following diagram shows an example of how strategic long-term planning can be integrated between various planning methods provided by the PPC in different horizons.

An overview of the different steps in capacity reservation in the strategic environment and consumption of capacity reservation in the operational environment.

Dispatching CBRs in PPC

Consumption of CBRs by operational planned orders

Creation CBRs on basis of forecast requirements in CBR cockpit

Creation forecast requirements in SAP Standard

Benefits S&OP with CBRs

Planning options in the long-term horizon, without the existence of concrete sales orders
- In terms of quantities (integration forecast)
- In terms of capacity
- Possibility to run simulations (best-case/worst-case)
Quantity planning based on forecasts
- On level of appropriate aggregation
- In terms of capacity
Conversion of quantity planning into capacity planning
- What do production/sales quantities mean for capacity utilisation
- Early detection of capacity bottlenecks
- Early planning/simulation of alternative resources

Reserving capacities for important customers
- CBRs can block capacity for other customers
- Appropriate quantity volumes for reservations on basis of long-term planning
Transparency of the production situation
- In terms of capacities/quantities
- Indicator in the event of changes to the forecast (update required)
Better preparation of bucket planning/detailed scheduling
- Orders are already in the right period

Creation and post-processing of forecast requirements in the Production Planning Cockpit "PPC“

Forecast requirements (planned independent requirements) are not only clearly displayed in ITeanova’s MRP Cockpit, but consumption values can be changed and new forecasts can be triggered in simulation mode. The effects on stock levels and machine loads are immediately visible.

Changing consumption values:

Triggering a new forecast:

Simulations with different planning scenarios

The operational planning situation can be copied from the PPC cockpit to any number of SAP long-term planning scenarios:

With a selected planning scenario, the planner then enters "PPC" and can run through various alternative production plans with different parameters and then save them in this planning scenario.

Different planning scenarios can be compared using several key figures:

Products - PPC

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