enterprise system




Production Planning


This material is an introduction to SAP S/4HANA Production Planning functionality. It is aimed at students at universities and other educational institutions with limited experience with procurement

It can be used in the classroom or for self-study.

On completion of the course, students will be able to understand the production process

The material also serves as a reference for occasional users of SAP systems.


The learning method used is “guided learning.” The benefit of this method is that knowledge is imparted quickly. Students also acquire practical skills and competencies. As with an exercise, this method explains a process or procedure in detail using the GBI case study

Exercises at the end enable students to put their knowledge into practice.






ERP Systems- Production Planning


Dr. Paul Hawking Dr. Susan Foster

Stephen Paull

Reviewed by

Urooj R. Khan

Version 1.2019

Table of Contents

Introduction 3

Scenario 3

Organisational Units 3

Process Overview 4

Material Master 4

Task 1: Creating Material Master records 5

Task 2: Changing Material Master records. 10

Task 3: Creating Bill of Materials (BOM) 12

Task 4: Displaying Sub Assembly BOM 15

Task 5: Create Work Centers 16

Task 6: Create Routings 18

Task 7: Display Routing 20

Task 8: Add Intial Stock 21



Global Bikes Inc (GBI) was founded in 2001 following the merger of two bicycle manufacturers, one based in the US and the other in Germany. GBI has three lines of business: deluxe and professional touring bikes, men’s and women’s off-road bikes, and bike accessories. GBI sells its bikes to a network of specialized dealers throughout the world, and it procures its raw materials from a variety of suppliers globally.

GBI has two manufacturing facilities, one in the US and one in Germany. It also has three additional warehouses, two in the US and one in Germany.

GBI has more than 100 employees globally. The organization uses SAP ERP to support its processes. The company has a new bicycle for sale- Mongoose Mountain Bike. This bicycle (material ) needs to be created in the system. As part of this process a Bill of Material needs to be created to assist in the material requiremnts in the prouction of the bicycle.

Organisational Units

During the implementation of SAP R/3 once the business processes to be implemented are determined the next stage is to define the organisational units. Organisational units are areas of the company where various business processes are implemented. Different processes can use different organisational units. The organisational units used in Production Planning are Client, Company Code, Plant and Storage Location.

Company Code

A company code is an independent accounting unit. Balance sheet and profit and loss statements that are required by law are created at the company code level. In our scenario the company code will be US00.


A plant produces goods, renders services or makes goods available for distribution. It has attributes such as:

· Address

· Language

· Country

· Workday calendar

In our scenario the plant will be identified by DL00.

Storage Location

A storage location defines where materials are stored. A plant could have more than one storage location. The storage locations in our scenario is FG00.

A summary of the organisational units used in our scenario are illustrated below.

E:\Art_Final JPGS and PDFS\ch01_JPG\c01f011.jpg





Process Overview

Material Master

The Material Master contains all the information on all the material that a company procures, produces, stores and sells. It is used by all of the Logistics components in the R/3 System such as purchasing, inventory management, materials planning, invoice verification, and so on.

Information stored in the Material Master can describe the component as well as how it should be treated in the business processes. Materials with similar basic attributes are grouped together by material type. This means you can manage your materials according to their business requirements.

Task 1: Creating Material Master records

You are going to define a new Finished Product, The Mongoose Mountain Bike with item code ORMG1### (Where ### your SAP user id.). It is made from the following list of subassemblies (semi-finished products) and raw materials (These materials already exist in S/4HANA):

Item Code

Material Description

Material Type


Wheel Assembly

Semi-Finished Product



Semi-Finished Product


Gear Assembly

Semi Finished Product



Raw Material



Raw Material


Aluminium Wheel

Raw Material


Hex Nut

Raw Material


Lock Washer

Raw Material


Socket Head Bolt

Raw Material

You need to create the Material Master record for the Mongoose bike.

1. Click on the Group Selection toolbar to display the apps.

2. Click Fiori tile to open this App.

3. Type ORMG1### (where ### is your logon) in the Material field.

4. Select Mechanical Engineering in the Industry Sector field.

5. Select Finished Product in the Material Type field

You now need to edit (maintain) the functional Views. the information stored in the Material Master record is divided into different Views so that a user can request to look at only the information that is of interest to him/her. Each user department has its own View of a Material Master record. For example, data that relates to the accounting department is stored in the Accounting View and data that relates to material planning is stored in the MRP View.

6. Click to display the various Views of the Material Master.

The Views which need to be created are:

· Basic Data 1

· Sales: Sales Org Data 1

· Sales: Sales Org Data 2

· Sales: General / Plant Data

· General Plant Data / Storage 1

· Accounting 1

7. Click next to Basic Data 1 to select this View.

8. Repeat the process for the Views above to select them. Click on “Create Views Selected”

9. Click to create the Views.

The “Organizational Levels” window is displayed.

The Basic data View of this Material is applicable to all organisational units where this Bicycle is sold. However sales data may vary from unit to unit therefore data to be maintained is organisational specific. You need to specify which organizational units you are referring to.

10. Select DL00 (Dallas) in the Plant: field.

11. Select FG00 (Finished Goods) in the Storage location field

12. Select UE00 (US East) in the Sales Org: field.

13. Select WH (Wholesale) in the Distr. Channel field.

14. Click .

The following screen appears. Notice that the Basic Data 1 View is displayed.

15. Type Mongoose Mountain Bike ### (where ### is your logon) in the Descr: field.

16. Type EA (Each) in the *Base Unit of Measure: field.

17. Select Bikes (Finished Bicycles) in the Material Group: field.

18. Select BI (Bicycles) in the Division: field.

19. Select 001 (Laboratory 1) in the Lab/Office: field.

20. Type 8000 in the Gross Weight: field.

21. Type 8000 in the Net Weight: field.

22. Select G (Grams) in the *Weight unit field.

You have now entered all the data required for the Basic data 1 View. The next View to be maintained is the Sales: sales org 1.

23. Click to move to this View.

Note that the additional fields which are organizational unit specific appear on the screen.

24. Select 0 (Exempt) in the (Tax Classification) field for EACH of the Tax Categories.

You now need to maintain the Sales: General Plant View.

25. Click to display this View.

Notice that the organizational unit (Plant Dallas) now appears on the screen as we specified this previously.

26. Select 02 (Individ requirements) in the Availability check: field.

27. Select 0001 (On palettes) in the Trans. Grp: field.

28. Select 0002 (Hand lift) in the Loading grp: field.

The final View you are going to maintain at the moment is the Accounting 1. You will notice that it does not appear on the View toolbar. You can display all Views by clicking .

29. Click to display the Views.

30. Click Accounting 1 to select this View. You may have to click .

31. Select 7920 (Finished Product) in the Valuation Class: field.

32. Type 1500 in the Standard Price: field.

33. Select S (Standard) in the *Prc Ctrl: field.

You have now entered required data. You now need to save the Material Master.

34. Click .

A screen appears confirming the creation of your new material.

Record the Material Number

35. Click to return to the Launchpad.

Task 2: Changing Material Master records.

You need to make a change to one of the existing Semi-Finished Products, the Off Road Wheel Assembly (ORWA1###).

36. Click on the Group Selection toolbar to display the apps.

37. Click Fiori tile to open this App.

38. Type ORWA1### (where ### is your logon) in the *Material field.

39. Click .

The Select Views dialog screen appears.

40. Click associated with the following views to select them:

· Basic Data 1

· MRP 1

· General Plant Data/Storage 1

41. Click to display these Views.

The Organisation Level dialog screen appears:

42. Type DL00 (Dallas) in the Plant field.

43. Click “MRP1” on the View toolbar to display this view.

You are going to change the ABC Indicator field. The ABC Indicator classifies a material as an A, B, or C part according to its consumption value. This classification process is known as the ABC analysis. Based on this indicator different planning activities can be performed.

The three indicators have the following meanings:

· A - important part, high consumption value

· B - less important part, medium consumption value

· C - relatively unimportant part, low consumption value

44. Type B in the ABC Indicator field.

45. Click .

46. Click to return to the Launchpad.

Task 3: Creating Bill of Materials (BOM)

The BOM is a complete formally structured list of components that make up a product or assembly. The list contains the item number of each component together with the quantity and unit of measure. It creates the relationships between an assembly and all of its direct components

The structure of the bicycle can be represented using a Bill-of-Material.

The BOM for the Mongoose Mountain Bike can be represented as follows:

Finished Product


Raw Materials

This BOM shows how the bicycle is assembled from different materials. For example, The Mongoose Mountain Bike (ORMG1###) requires 2 Wheel Assembly (ORWA1###) sub-assemblies. Each Wheel Assembly (ORWA1###) is made up of 6 different raw materials -Tire, Tube, Aluminium Frame, Hex Nut, Lock Washer, Socket Head Bolt. Each component has its own material master.

To create the Bill of Materials for your Mongoose Mountain Bike you will define the BOM for the finished product. The BOMs for the subassemblies have already been defined.

46. Click in the Enterprise Asset Management Group to open this App.

47. Type ORMG1### (where ### is your logon) in the *Material: field.

A material can different BOMs depending on what the BOM is going to be used for. For example the BOM for Production could be different for that Plant Manaintenace or Sales. Also BOMs can vary between Plants. You need to specify the BOM usage and Plant for the BOM you are creating.

48. Type DL00 (Dallas) in the Plant field.

49. Type 1 (production) in the *BOM Usage: field.

50. Press <ENTER> to display the Create material BOM screen.

You are going to create the following BOM:

51. Type The following data:

Item Category (ICt)



L (Stock item)

ORWA1### (where ### is your logon)


L (Stock item)

OFFR1### (where ### is your logon)


L (Stock item)

DGAM1### (where ### is your logon)


52. Press <ENTER> to display the component description, unit of measure and other data.

Your screen should appear similar to below:

53. Click .

A message appears confirming the creation of the BOM.

54. Click to return to the Launchpad.

You have created the BOM for the Mongoose Mountain Bike. Why didn’t you have to create a BOM for the Wheel Assembly? How would Production know what makes up the Wheel Assembly?

Task 4: Displaying Sub Assembly BOM

The answer to the above question is that the BOM for the Wheel Assembly had already been created. The system know that when a Wheel Assembly is required then the BOM for the Wheel Assembly is automatically applied. Therefore, a BOM can be made up of many other BOMs. To display a BOM:

55. Click in the Contolling Group.

56. Type ORMG1### (where ### is your logon) in the *Material: field.

57. Type DL00 (Dallas) in the Plant field.

58. Type 1 (production) in the *BOM Usage: field.

59. Press <ENTER> to display the Display material BOM screen.

Your BOM appears on screen. From this screen you can view the BOM of a sub assembly if it exists.

60. Click of the Off Road Aluminum Wheel Assembly item to select it.

61. Click to display the menu.

62. Choose Extras Display Assembly to display a dialog screen.

63. Click .

The BOM for the Off Road Aluminum Wheel Assembly now appears on screen. As mentioned this BOM had been created previously as it might be used in the BOMs of other bikes.

64. Click to return to the Launchpad.

Task 5: Create Work Centers

Now that you have defined the materials (BOM) to be used in making the Mongoose Mountain Bike, you need to define the location in the plant in which the manufacturing processes take place. Work Centers are the master data which represent real machines, Production Lines, Assembly Work Center, etc. Manufacturing activity or Operations are carried out at Work Center. In the case study there are 4 Work Centers involved in the production of your bike. These are Assembly, Turning, Painting and Testing. To create a work center:

65. Click in the Production Planning and Execution Group.

66. Type DL00 (Dallas) in the *Plant field.

67. Type WC1-### (where ### is your logon) in the Work Center: field.

68. Select 0001 (Machine) in the Work Center Category: field.

69. Click

The Create Work Center: Basic Data screen appears:

70. Type Assembly as the work center description (where cursor is flashing).

71. Type 000 (Steve Barton) in the Person Responsible: field.

72. Type 001 (only routings) in the *Usage: field.

73. Type SAP1 (Normal production) in the Standard value key: field.

74. Click to move to this screen.

75. Type NAPR1000 in the *Cost Centre: field.

Notice on this screen you can specify the costs associated with setup, Machine amd labour for this Work Center. You could also specify the capacity of each Work Center. This assists the system to plan the production of the material.

76. Click .

A dialog screen appears to confirm the Work Center creation.

Record your Work Center number.

You now need to create the remaining Work Centers.

77. Repeat this process for the remaining three work centres. In all cases use the same data as for WC1 and the following descriptions:

Work Centre








78. Click to return to the Launchpad.

You have now created the Work Centers for the production of the Mongoose Mountain Bike. As mentioned previously this is where the different work activities take place in a Plant. You now need to specify the sequence in which the Work Centers are utilisied. This is referred to as Routings.

Task 6: Create Routings

A routing is a description of which operations or list of activities has to be carried out during the production and planning process. It also tells what order or sequence the activities/operations needs to be carried out at work centers or machines. There may be several alternative routings for a product.

79. Click in the Production Planning and Execution Group.

The create Routing screen appears:

80. Type ORMG1### (where ### is your logon) (Mongoose Mountain Bike) in the Material: field.

81. Type DL00 (Dallas) in the Plant: field.

82. Click to display the Header screen.

83. Type 1 (Production) in the Usage: field.

84. Type 3 (Released for Costing) in the Status: field.

You now need to specify the oder of operations.

85. Click to display this screen.

86. Type the following details for each operation:



Work Center






Assemble Raw Materials




Final Assembly








Final Test

88. Click .

Task 7: Display Routing

You can display the routing and associated dependencies.

89. Click to return to the Launchpad.

90. Click .

91. Type ORMG1### in the Materials: field

92. Type DL00 (Dallas) in the Plant: field.

93. Click .

Your Routing appears on screen:

From this screen you can view the required materials.

94. Click for Oper… 0010 to select this item.

95. Click to view the required materials.

How did the system know to display this information?

Task 8: Add Intial Stock

Normally once the Materail design and BOm had been finalised materials would be procured to produce the bike. At the moment the production execution process is outside the scope of this tutorial. However we will assume the production process has been completed and the completed bicycles need to be added to stock to be available for sales. To add stock to inventory:

96. Click to return to the Launchpad.

97. Click in the Materials Management – Warehouse Processing Group

A screen similair to below appears:

98. Select Other in the reference document field

99. Type 561 (Receipt per entry of stock balances for unresticted use) in Receipt w/o PO field.

100. Click to enter the materail details.

101. Type ORMG1### (where ### is your logon) in the Material field.

102. Click to move to this screen.

103. Type 10 in the Qty in Unit of Entry field.

104. Click to indicate where the stock will be stored.

105. Check that the Goods Movement field is 501 (Receipt w/o PO).

106. Type DL00 (Plant Dallas) in the Plant field.

107. Type FG00 (finished goods) in the storage Location: field.

108. Click to add the stock to inventory.

A dialog screen appears to indicate that the Material Document has been successfully created.

Check the stock levels. What are the different types of stock and the associated stock levels?

You have completed the exercise on master data in Production Planning and Execution. You should be able to explaining the difference between:

· Material

· Finished Product

· Sub-assembly

· Raw Material

· Bill of Materials (BOM)

· Work Center

· Routing

Once the details have been entered for these master data items then a planner, based on the demand for a bike, can determine how long it take to manufacture, when manufacturing can start, what materials are required, where the operations will take place, and the cost of manufacturing.

Create Finished Material

Create Bill of Material (BOM)

Create Routings

Create Work Centres

Display Materials List Report

Mongoose Mountain Bike (ORMG1###) (1)

Wheel Assembly (ORWA1###)


Tire (ORTR1###)


Tube (ORTB1###)


Aluminium Frame (ORWH1###)


Hex Nut (HXNT1###)


Lock Washer (LWSH1###)


Socket Head Bolt (BOLT1###)


Off Road Frame (OFFR1###)


Gear Assembly (DGAM1###)


Mongoose Mountain Bike (ORMG1###) (1)

Off Road Aluminiun Wheel Assembly (ORWA1###)


Mens Off Road Frame (OFFR1###)


Derailour Gear Assembly (DGAM1###)


Intro to SAP (V1001) Page 1

Workshop 3 and 4 S4HANA Production Planning 1