The Overall Flow of SAP PP – with Real-World Examples

What Are the Stages in SAP PP?

Let’s walk through the SAP PP process flow step-by-step, with real-world examples to illustrate each stage.

SAP PP Process Flow – Step-by-Step with Real-World Scenarios

1. Demand Management – Forecasting Production Needs

• Customer Sales Orders (Firm Demand) – Orders already placed by customers
• Planned Orders (Forecast Demand) – Based on sales trends and historical data

2. Material Requirements Planning (MRP) – Checking Availability

• If materials are available, production proceeds as planned.
• If materials are not available, SAP automatically generates: 
• Planned Orders – For in-house production of required components
• Purchase Requisitions – For ordering materials from external vendors

• MRP checks stock availability in the warehouse.
• If processors are unavailable, a purchase requisition is created to procure them from suppliers like Qualcomm.
• If batteries are running low, a planned order is created for in-house battery production.

3. Converting Planned Orders & Purchase Requisitions

• Planned Orders → Production Orders (Handled by the Production Planner)
• Purchase Requisitions → Purchase Orders (Handled by the Procurement Team)
• Example: A furniture manufacturer (e.g., IKEA) needs wood panels, screws, and adhesives for making tables.
• MRP generates a planned order for assembling the tables in their own factory.
• MRP also generates a purchase requisition for screws, which must be ordered from a supplier.
• The production planner converts the planned order into a production order, while the procurement team converts the purchase requisition into a purchase order for the screws.

4. Production Execution – Manufacturing Process

• The order is released for production.
• Routing operations define the sequence of tasks for making the product.
• Work centers (machines, labor stations) are assigned to each step in the process.
• Example: A bicycle manufacturer (e.g., Trek Bicycles) begins production of 500 mountain bikes:
1. The frame is cut and welded in Work Center A.
2. Painting and finishing are done in Work Center B.
3. Tires and brakes are installed in Work Center C.
4. The final product undergoes quality checks before moving to the warehouse.

5. Production Confirmation & Goods Movement

• Production Confirmation – The system records that the manufacturing is complete.
• Goods Movement – Finished products are moved to storage or directly prepared for shipment.
• Example: A pharmaceutical company (e.g., Pfizer) produces 100,000 vaccine doses:
• Once the production line confirms the completion of vaccine batches, SAP updates inventory records.
• The vaccines are transferred to cold storage and prepared for distribution to hospitals.

6. Capacity Planning & Master Production Scheduling (MPS)

• Capacity Planning ensures that machines, labor, and resources are available to meet production targets.
• Master Production Scheduling (MPS) helps manage key products that drive demand.
• Example: An airplane manufacturer (e.g., Boeing) must schedule production for commercial jets.
• Boeing runs MPS to plan the production of its key model, the 787 Dreamliner.
• The output from MPS is fed into MRP, which then calculates how many materials (e.g., aluminum, avionics) are required.

Frequently Asked Questions (FAQs) About SAP PP

1. What is SAP PP used for?

2. How does SAP PP integrate with other SAP modules?

• SAP MM (Material Management): For raw material procurement
• SAP SD (Sales & Distribution): For demand management and sales order processing
• SAP QM (Quality Management): For quality checks in production
• SAP WM (Warehouse Management): For inventory and warehouse operations

3. What is the difference between MRP and MPS in SAP PP?

• MRP (Material Requirements Planning) is used to calculate the raw materials and components required for production.
• MPS (Master Production Scheduling) focuses on planning the production of key finished goods (e.g., a car model) before running MRP.

4. What is a Work Center in SAP PP?

5. How does SAP PP help in reducing production delays?

✅ Automating material planning – Avoids shortages
✅ Scheduling production efficiently – Ensures optimal resource usage
✅ Tracking work-in-progress (WIP) – Reduces delays and bottlenecks
✅ Ensuring real-time updates – Keeps the entire supply chain informed

6. What industries use SAP PP?

• Automotive (e.g., Toyota, Ford)
• Electronics (e.g., Samsung, Apple)
• Pharmaceuticals (e.g., Pfizer, Johnson & Johnson)
• Aerospace (e.g., Boeing, Airbus)
• Food & Beverage (e.g., Nestlé, Coca-Cola)

Conclusion: Why SAP PP is Essential for Modern Manufacturing

✅ Reduce bottlenecks in manufacturing
✅ Optimize resources and minimize waste
✅ Improve on-time delivery and customer satisfaction

PP Frequently Asked Questions
Production Planning and Control FAQ

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