Optimized Production Planning Process in Process Industries

Introduction

The Production Planning Process in Process Industries is a critical aspect of manufacturing that ensures efficient material flow, optimized resource utilization, and accurate order execution. In industries such as chemicals, pharmaceuticals, and food production, a well-structured process flow helps achieve operational efficiency and cost-effectiveness. This guide provides a detailed step-by-step process flow, covering MRP, order creation, goods issue, confirmation, variance calculation, and order settlement in SAP. Additionally, we will discuss the key master data and execution steps required to manage production orders successfully.

Process Flow of Production Planning in Process Industries

1. Create PIR or Requirement Flow from Sales Order

  • Use MD61 to create a Planned Independent Requirement (PIR), which is essential for demand forecasting.
  • Alternatively, demand can flow from a Sales Order directly.

2. Run MRP (Material Requirements Planning)

  • Execute MD02 (Single-Item Multi-Level Planning) or MD01 (Total Planning for the Plant).
  • MRP generates procurement proposals like planned orders or purchase requisitions.

3. Convert Planned Order to Process Order

  • Check the planned order in MD04 and convert it to a Process Order using COR7.

4. Goods Issue to Process Order

  • Issue materials using MIGO (Goods Issue - Order).
  • If automatic goods issue is enabled, it can be processed in COR6N.

5. Confirm Operations

  • Confirm production steps using COR6N, ensuring operations are recorded accurately.

6. Goods Receipt for Process Order

  • Receive finished products into inventory through MIGO (Goods Receipt - Order) or COR6N.

7. Calculate Overhead Costs

  • Overhead costs are calculated using KG12 or CO43 to determine indirect costs associated with production.

8. Variance Calculation

  • Determine production cost deviations by running KKS1 or KKS2.

9. Order Settlement

  • Finally, settle the production order in KO88 or CO88 to reflect actual costs.

Master Data Related to Process Industries

1. Material Master (MM01)

Defines the properties and classifications of raw materials and finished goods.

2. Resource (CR01)

Defines machines, labor, and production facilities used in process industries.

3. Master Recipe (C201)

Defines the sequence of operations required for manufacturing a product.

4. Process Instruction (O12C)

Contains details of the instructions that need to be followed during production.

5. Bill of Materials (BOM - CS01)

Lists all the raw materials and components required for manufacturing a product.

6. Inspection Plan (QP01)

Defines quality control parameters for process monitoring.

Execution of Process Orders in SAP

1. Process Order Creation

  • Use COR1 to create a new Process Order.

2. Order Confirmation

  • Confirm process steps using COR6 or COR6N.

3. Goods Issue

Use COR6N or MIGO to issue materials.

4. Goods Receipt

Use COR6N or MIGO to receive finished goods.

5. Quality Control Steps

  • Result Recording: Use QE51N for recording quality inspection results.
  • Inspection Lot Creation: Use QA01 or QA02 to create an inspection lot.
  • Usage Decision (UD): Use QA11 to make a final quality decision.

6. PI Sheet Management

CO53 → CO55 / CO60 → CO54 to manage Process Instruction (PI) Sheets.

Optional Steps for Enhanced Monitoring

1. Control Recipe Monitor (CO53)
  • Used to monitor control recipes associated with process orders.
2. PI Sheet Maintenance (CO55/CO60)
  • Used to maintain Process Instruction (PI) Sheets for execution.
3. Process Message Monitor (CO54)
  • Used to track messages related to production processes.

Standard Reports for Process Industries

1. Process Order Information System (COOISPI)
  • Provides insights into order progress, material consumption, and production status.

The Business Process Flow in Detail

1. Process Order and Control Recipe Generation
  • When a process order is created, a Control Recipe is automatically generated (if configured in CORN).
2. PI Sheet Processing
  • Use CO60 to find and complete the PI Sheet for a specific order.
3. Process Message Monitoring
  • Use CO54 to monitor and send messages related to the process order.

Frequently Asked Questions (FAQs)

1. What is the role of MRP in the production planning process?

MRP (Material Requirements Planning) ensures that materials are available for production by generating procurement proposals based on demand.

2. What is the difference between a planned order and a process order?

A planned order is a proposal generated by MRP, whereas a process order is a confirmed order used for execution in production.

3. What is the purpose of COR6N in SAP?

COR6N is used for order confirmation, goods issue, and goods receipt, making it essential for tracking production progress.

4. How does SAP handle quality control in process industries?

SAP manages quality control through Inspection Plans (QP01), Inspection Lots (QA01), and Result Recording (QE51N).

5. What is the significance of order settlement in KO88?

Order settlement in KO88 ensures that production costs are allocated to the appropriate cost centers, ensuring accurate financial tracking.

6. How can businesses monitor process orders effectively?

Businesses can use COOISPI (Process Order Information System) to track orders, material usage, and overall production performance.

Conclusion

The Production Planning Process in Process Industries is a structured workflow that integrates material management, production execution, and financial settlement. By leveraging SAP tools like MD61, MRP (MD01, MD02), COR6N, and KO88, businesses can optimize production efficiency, cost control, and quality management.

For seamless production planning and execution, ensuring accurate master data, order monitoring, and quality control measures is essential. Implementing these best practices will help process industries achieve higher productivity and reduced operational costs.

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