pp-tscm40 1 unit 1-2

TSCM40_IPlanning / Manufacturing I

SAP ERP - Production

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Instructor HandbookCourse Version: 95Course Duration: 10 Day(s)Material Number: 50099842Owner: Frank Layer (D036000)

An SAP Compass course - use it to learn, reference it for work

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Acerca de este manualEste manual tiene por objeto complementar la presentación dirigida por un instructor de este curso, y servir como una fuente de referencia. No es adecuado para el autoestudio.

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About This Handbook TSCM40_I

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iv © 2010 SAP AG. All rights reserved. 2010

ContentsCourse Overview ......................................................... vii

Course Goals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

Unit 1: Course Overview ................................................. 1Academy Overview ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Unit 2: Overview of Master Data for Product Management andManufacturing .............................................................. 9

Types of Data in SAP ERP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Use of Organizational Data and Master Data in Production... . . 20

Unit 3: Organizational Data in Supply Chain Management..... 37Plants .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Storage Locations... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45MRP Areas... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Unit 4: Material Masters ................................................ 61Overview of the Material Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Creating a Material Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Classification of the Material Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .102Managing the Material Master.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122

Unit 5: Bills of Material ................................................ 151Overview of the Bill of Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152Managing Bills of Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167BOM Reporting... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .195

Unit 6: Modeling the Manufacturing Process .................... 215Modeling Manufacturing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217Basic Work Center Data and Defaults .. . . . . . . . . . . . . . . . . . . . . . . . . . .224Capacities in the Work Center .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245Integrating Costing with the Work Center.. . . . . . . . . . . . . . . . . . . . . . . .257

Unit 7: Task Lists........................................................ 263Overview of the Task List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .265Creating a Routing and Material Assignment .. . . . . . . . . . . . . . . . . . .280Suboperations and User-Defined Fields .. . . . . . . . . . . . . . . . . . . . . . . . .291Reporting and Mass Changes... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .302

2010 © 2010 SAP AG. All rights reserved. v

Contents TSCM40_I

Unit 8: Advanced Bill of Material Functions ...................... 321Phantom Assemblies .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .323Co-Products and By-Products.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .328Discontinuation and Substitute Parts in the Bill of Material. . . . .336Multiple and Variant BOMS .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .352Mass Changes and the Product Structure Browser .. . . . . . . . . . . .376

Unit 9: Advanced Routing Functions .............................. 387Modeling Complex and Flexible Manufacturing Processes ... .389Modeling Alternative Manufacturing Processes... . . . . . . . . . . . . . . .400Reference Operation Sets .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .412Lead Time Scheduling and Material Master Updates ... . . . . . . . .423Time Components, Reduction Possibilities in the Routing ... . .432Trigger Points in the Routing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .448Scrap and Its Effects .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .456Production Resources/Tools.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .472

Unit 10: Alternative User Interfaces ................................ 485Structure of the Engineering Workbench ... . . . . . . . . . . . . . . . . . . . . . .487Navigating in the Engineering Workbench ... . . . . . . . . . . . . . . . . . . . .494Engineering Workbench Work Areas... . . . . . . . . . . . . . . . . . . . . . . . . . . .512Introduction to the PLM Web User Interface ... . . . . . . . . . . . . . . . . . .526

Unit 11: Appendix ....................................................... 549Configuration of the Material Master .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .551Configuration of the Bill of Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .574Configuring the Work Center .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .590Configuring the Routing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .622

Index ....................................................................... 635

vi © 2010 SAP AG. All rights reserved. 2010

Course OverviewThe course TSCM40 teaches you how to work with master data (course week 1)and production planning (course week 2) in SAP ECC.

The course material therefore consists of two course books: TSCM40_I andTSCM40_II.

This course book TSCM40_I only deals with the content of the first week ofTSCM40. The second week is covered by the course book TSCM40_II.

Target AudienceThis course is intended for the following audiences:

• Application consultants responsible for the implementation of planning aspart of the SAP Business Suite in SAP ERP.

Course PrerequisitesRequired Knowledge

• SAP125 – SAP Navigation 2005 (e-learning)• TERP01 – SAP ERP: Introduction (e-learning)• TERP02 – SAP ERP: Introduction to SAP NetWeaver (e-learning)• TERP51 – SAP ERP: Introduction to Processes in Material Planning

(e-learning)• TERP52 – SAP ERP: Introduction to Processes in Manufacturing Execution

(e-learning)

Recommended Knowledge

• No additional knowledge required

Course Duration DetailsUnit 1: Course OverviewAcademy Overview 10 Minutes

Unit 2: Overview of Master Data for Product Management andManufacturingTypes of Data in SAP ERP 30 MinutesUse of Organizational Data and Master Data inProduction 45 Minutes

Unit 3: Organizational Data in Supply Chain ManagementPlants 20 Minutes

2010 © 2010 SAP AG. All rights reserved. vii

Course Overview TSCM40_I

Storage Locations 20 MinutesMRP Areas 15 Minutes

Unit 4: Material MastersOverview of the Material Master 30 MinutesCreating a Material Master 45 MinutesExercise 1: Creating Material Masters 40 MinutesClassification of the Material Master 30 MinutesExercise 2: Material Classification 15 MinutesManaging the Material Master 45 MinutesExercise 3: Managing Material Masters 20 Minutes

Unit 5: Bills of MaterialOverview of the Bill of Material 45 MinutesExercise 4: BOM Basics 20 MinutesManaging Bills of Material 45 MinutesExercise 5: Changing Bills of Material 40 MinutesBOM Reporting 20 MinutesExercise 6: Multilevel BOM Reporting 15 Minutes

Unit 6: Modeling the Manufacturing ProcessModeling Manufacturing 30 MinutesBasic Work Center Data and Defaults 30 MinutesExercise 7: Create a Work Center 15 MinutesCapacities in the Work Center 45 MinutesExercise 8: Capacities in the Work Center 15 MinutesIntegrating Costing with the Work Center 20 Minutes

Unit 7: Task ListsOverview of the Task List 20 MinutesExercise 9: Create a Simple Routing 20 MinutesCreating a Routing and Material Assignment 30 MinutesExercise 10: Material Assignment and ComponentAllocation 15 Minutes

Suboperations and User-Defined Fields 25 MinutesExercise 11: Suboperations for Material-SpecificCapacity Constraints 10 Minutes

Reporting and Mass Changes 15 MinutesExercise 12: Task List Changes with ECM 20 Minutes

Unit 8: Advanced Bill of Material FunctionsPhantom Assemblies 30 MinutesCo-Products and By-Products 15 MinutesExercise 13: Co-Products in Production Orders 20 MinutesDiscontinuation and Substitute Parts in the Bill ofMaterial 30 MinutesExercise 14: Substitute Items in Production Orders 20 MinutesMultiple and Variant BOMS 40 Minutes

viii © 2010 SAP AG. All rights reserved. 2010

TSCM40_I Course Overview

Exercise 15: Multiple/Alternative Bills of Material 15 MinutesExercise 16: Variant BOMs 20 MinutesMass Changes and the Product Structure Browser 20 MinutesExercise 17: Mass Changes and the ProductStructure Browser 10 Minutes

Unit 9: Advanced Routing FunctionsModeling Complex and Flexible ManufacturingProcesses 20 MinutesExercise 18: Creating Alternative and ParallelSequences 20 Minutes

Modeling Alternative Manufacturing Processes 20 MinutesExercise 19: Creating Alternative Routings andProduction Versions 30 Minutes

Reference Operation Sets 20 MinutesExercise 20: Reference Operation Sets 20 MinutesLead Time Scheduling and Material Master Updates 30 MinutesExercise 21: Scheduling 20 MinutesTime Components, Reduction Possibilities in theRouting 30 MinutesExercise 22: Time Elements of the Operation inScheduling 30 Minutes

Trigger Points in the Routing 30 MinutesScrap and Its Effects 25 MinutesExercise 23: Scrap in Production 20 MinutesProduction Resources/Tools 20 MinutesExercise 24: Creating and Assigning PRTs 10 Minutes

Unit 10: Alternative User InterfacesStructure of the Engineering Workbench 40 MinutesNavigating in the Engineering Workbench 45 MinutesExercise 25: Navigating in the EWB 30 MinutesExercise 26: Navigating in the EWB II 35 MinutesEngineering Workbench Work Areas 20 MinutesExercise 27: Create a Work Area 20 MinutesIntroduction to the PLM Web User Interface 30 MinutesExercise 28: Using the PLM Web User Interface 20 Minutes

Unit 11: AppendixConfiguration of the Material Master 60 MinutesExercise 29: Material Types, Field Control andMaterial Status 30 Minutes

Configuration of the Bill of Material 30 MinutesExercise 30: Bill of Material Configuration 15 MinutesConfiguring the Work Center 45 MinutesExercise 31: Work Center Category and FieldSelection Control, Default Work Center (Optional) 20 Minutes

Exercise 32: Optional: Work Center Formulas 30 Minutes

2010 © 2010 SAP AG. All rights reserved. ix

Course Overview TSCM40_I

Configuring the Routing 45 Minutes

Course GoalsThis course will prepare you to:

• Understand the general handling of logistics master data in SAP ECC• Understand and describe the positioning, integration, and functions of the

planning area within the SAP ERP application

Course ObjectivesAfter completing this course, you will be able to:

• Use the relevant master data elements for the modelling of planning andproduction processes

• Evaluate, describe, and implement the options provided by SAP-ERP-basedplanning

SAP Software Component InformationThe information in this course pertains to the following SAP Software Componentsand releases:

• SAP ERP Central Component 5.0• SAP ERP Central Component 6.05

Important Information

It is strongly recommended to check necessary information publishedon the SAP Service Market Place. All information essential for coursepreparation like instructor guides, system setup guides, trouble shootingguides, logon information, and so on, you will find under the alias /curr-info(http://service.sap.com/curr-info).

In case you cannot access this site please ask the responsible education coordinator(the sender of this document) to make the relevant information available to you.

x © 2010 SAP AG. All rights reserved. 2010

http://service.sap.com/curr-info

Unit 11 Course Overview

Welcome the participants to the first week of the course and introduce yourself andbriefly the overall course content and objectives. Familiarize the participants withthe course schedule. Ask the participants to introduce themselves.

Unit OverviewThe academy course TSCM40 operates exclusively within SAP ECC as far ascontent, demonstrations, and exercises are concerned, dealing with the master databackground and production planning process in the system. The course builds onthe basics contained in the according e-learning sessions.

As an introduction, the course contents are outlined.

Unit ObjectivesAfter completing this unit, you will be able to:

• Give an overview of the scope of the training

Unit ContentsLesson: Academy Overview... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

2010 © 2010 SAP AG. All rights reserved. 1

Unit 1: Course Overview TSCM40_I

Lesson:2

Academy OverviewLesson Duration: 10 Minutes

Lesson OverviewThis lesson provides an overview of the training required for the ApplicationAssociate Planning & Manufacturing with SAP ERP 6.0.

Lesson ObjectivesAfter completing this lesson, you will be able to:

• Give an overview of the scope of the training

Provide the participants with a brief overview of the academy course. Refer to thee-learning courses that the participants should already have attended.

Business Example

Basic TrainingThe training courses TSCM40 (Planning/Manufacturing I) and TSCM42(Planning/Manufacturing II (including case study)) provide the participants withknowledge of the business processes of planning and manufacturing in a basictraining geared towards manufacturing companies.

In the training course TSCM40 (Planning/Manufacturing I), you learn aboutthe master data required for production (material masters, bills of material, workcenters, routings, etc.), including master data management, as well as about theconcepts and business processes of selected planning areas. The course dealswith the processes of production planning using material requirements planning(ERP-PP-MRP module), as well as the different planning strategies for creating amaster plan. The course also demonstrates evaluation methods for evaluating theplanning results.

The follow-up training course TSCM42 (Planning/Manufacturing II (includingcase study)) teaches you the different options for controlling production. Thisincludes order-based production with production orders or process orders,repetitive manufacturing, and Kanban. These options provide effective supportfor the complete manufacturing process including the process steps of materialstaging, sequencing, creation of shop floor papers, confirmation, goods receipt,and settlement of production activities. The focus is set on production ordermanagement. An overview is provided of the other options named above.


TSCM40_I Lesson: Academy Overview

Moreover, the training course also contains a summary of capacity planning aswell as a case study. The latter allows you to apply the knowledge you haveacquired by configuring specified integrated business processes. The trainingcourse ends with an exam (certification C_TSCM42_65).

The following diagram provides an overview of the scope of the training.

Figure 1: Consultant Profile Application Associate - Planning &Manufacturing with SAP ERP 6.0: Basic Training

Alternative project team training

The training materials for the Solution Academy are predominantly based on thecorresponding standard training course, but are supplemented by topics that arerelevant for consultants. The following table shows the topics that were takenfrom the standard training course and the topics that are dealt with in addition:

Note that the e-learning courses are not included in this overview.



Solution Academy Training Course Content

TSCM40 (Planning/ManufacturingI)

5 days PLM114 (Basic Data)

5 days SCM240 (Production Planning(ERP))

TSCM42 (Planning/ManufacturingII (incl. Case Study))

4.5 days SCM310 (Production Orders)

0.5 days KANBAN from SCM300(Production Overview)

1 day from SCM365 (CapacityPlanning (ERP))

1 day Repetitive Manufacturing andProcess Manufacturing from SCM300(Production Overview)

2.5 days Integrated Case Study(academy only!)

3 hours Certification ExamC_TSCM42_65


TSCM40_I Lesson: Academy Overview

Facilitated DiscussionOptional

Discussion QuestionsUse the following questions to engage the participants in the discussion. Feel freeto use your own additional questions.

Ask the customers who is intending to take the Certification Exam.



Lesson Summary

You should now be able to:• Give an overview of the scope of the training


TSCM40_I Unit Summary

Unit SummaryYou should now be able to:• Give an overview of the scope of the training


Unit Summary TSCM40_I


Unit 27 Overview of Master Data for Product

Management and Manufacturing

This unit is designed as an introduction to the use of master data inproduction planning and execution in SAP ERP. Participants might have takenSCM100/SCM300 or SCM130 to have a more detailed overview of the Planningand execution functions in SAP ERP. This section is designed as a refresher forthose participants and enlighten participants who have not taken the necessaryprerequisites.

Unit OverviewThis unit introduces you to how master data will be used in supporting the SAPERP production planning and execution process. The different master data andorganizational data are discused at a summary level. Each object will be coveredin more detail in following lessons.

Unit ObjectivesAfter completing this unit, you will be able to:

• Describe the types of data used in modeling and executing manufacturingin SAP ERP

• Identify the production planning organizational units (configuration)• Identify the procurement organizational units• Identify the Sales and Distribution organizational units• Identify the production planning master data objects

Unit ContentsLesson: Types of Data in SAP ERP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Demonstration: Configuration in SAP ERP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Procedure: Configuring SAP ERP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Demonstration: Production Planning Master Data ... . . . . . . . . . . . . . . . . . . . 15Demonstration: Transactional Data ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


Unit 2: Overview of Master Data for Product Management and Manufacturing TSCM40_I

Lesson: Use of Organizational Data and Master Data in Production ... . . 20Demonstration: Organizational Structures in SAP ERP... . . . . . . . . . . . . . 25Demonstration: Views and Fields in the Material Master .. . . . . . . . . . . . . 28Demonstration: BOMs ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Demonstration: Work Centers .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Demonstration: Routings ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32


TSCM40_I Lesson: Types of Data in SAP ERP

Lesson:8

Types of Data in SAP ERPLesson Duration: 30 Minutes

Lesson OverviewIn this lesson we will discuss the different types of data that users and project teammembers will deal with during an implementation and after go live.


• Describe the types of data used in modeling and executing manufacturingin SAP ERP

This section is designed for true beginners. If you have an experienced class, glossover the material at high level. This will be an introduction to configuration.

Business ExampleYour company, Precision Pumps, has just purchased SAP ERP to efficiently runyour business. As a member of the project team in a company that manufacturespumps, you are responsible for the introduction of basic data for manufacturing.The defined basic data will be used in the procurement, scheduling, manufacturing,and costing of all components and products necessary for the manufacturing ofpumps. You must introduce the basic concepts of configuration in SAP ERP, aswell as master data and organization data.

Data Types in SAP ERPWhen dealing with a software system as robust as SAP ERP, you need to haveperspective on how your business will be modeled in a software environment. InSAP ERP, users will have essentially three types of data:

• Configuration data• Master data• Transactional data

Configuration DataConfiguration data is often referred to as one-time data. This means that the datashould not change, but if it does it will be tracked or controlled.



Figure 2: Configuration in SAP ERP

During an implementation, the SAP ERP landscape will typically consist of threeservers: DEV (development), QA (quality assurance), and PROD (production).Each server may have several clients. The DEV server is where a sandbox clientwill exist, as well as the golden client, where the final configuration resides.

During the project, team members will try different iterations of configurationin the sandbox client and test the results. If the results meet the organizationsrequirements, they are configured again in the golden client. From there, the Basisteam moves it to the QA server for further evaluation. The Basis team will us atool called the Change and Transport System (CTS). This allows them to track theconfiguration changes from DEV to QA, and QA to PROD.

Once the configuration changes are moved to the QA server, integration testingwill take place within the PP module and within the other applications in SAPERP, such as materials management (MM) and Sales and Distribution (SD), forexample. Once fully tested in the QA system, the configuration will be transferredto PROD, or the production server/client.

Demonstration: Configuration in SAP ERP

PurposeShow New Project Team members how to Access IMG



System DataSystem:Client:User ID:Password:Set up instructions:1. Show students Transaction code SPRO. Do not bother to show menu path as

it seems to change for every new release.

2. Select Reference IMG

3. follow menu path : Production → Basic Data → Bill of Material → ControlData for Bill of Material → Define Default Parameters

4. Explain Configuration



10Configuring SAP ERP

1. Enter transaction code SPRO.2. Select Reference IMG.

3. Choose Production → Basic Data → Bill of Material → Control Data forBill of Material → Define Default Parameters.

Master Data in SAP ERPConfiguration will be the foundation upon which most master data will be built.Master data is often referred to as “slowly changing” data. This means the data ofa particular object does not change all the time, but often several times a year.

Figure 3: Master Data

Master data in SAP ERP is a centralized function. This means that the data is beintended to be stored once and replication is to be avoided. The master data thatwill be used for production planning in SAP ERP is as follows:

• Material masters• Bills of material• Work centers• Task lists/routings• Cost centers



Business users will be limited to creating, changing, or displaying data based ontheir role within the organization. During implementations, each business mustdetermine how the Product Lifecycle Management (PLM) process within SAPERP will integrate with their specific business processes.

As organizations change, so must the master data to support the business; thisneeds to be modeled properly within the SAP ERP environment.

Demonstration: Production Planning Master Data

Purpose

System DataSystem:Client:User ID:Password:Set up instructions:1. Show users the menu paths they will be using over the next several days.

2. Follow Menu path : Logistics → Production → Master Data

3. Point out the folders for the material master, Bill of material, Work Centerand Routing.

Transactional DataEvery day, businesses perform tens of thousands of transactions that make thebusiness function. Some transactions are directly related to outside events withcustomers or suppliers. Other events are internal to the business and affect theinteraction between departments within a business or division.



Figure 4: Transactional Data

Within SAP ERP, all transactional data is related to some form of master data orconfiguration data. In the world of production planning, you will be executingplanning runs that will be generating replenishment suggestions, generatingproduction execution directions, or executing production confirmations. In SAPERP production planning, all transactional data typically revolves around thematerial master, bill of material, or routing.

In this class you will learn how master data works; however you may be askedto analyze how it works in conjunction with day-to-day business events ortransactions, such as a production order.

Demonstration: Transactional Data

PurposeDemonstrate creating a production order and the need for master data

System DataSystem:Client:User ID:Password:Set up instructions:1. Follow menu path: Logistics → Production → Production Control → Order

→ Create → With Material



2. Enter material T-F200, plant 1000, order type PP01. Select Enter

3. Enter 10 pcs and enter a finish date of on month from today. Select Enter

4. Show customers the Material master , Bill of Material, Routing and workcenters.



Facilitated Discussion




Lesson Summary

You should now be able to:• Describe the types of data used in modeling and executing manufacturing

in SAP ERP



Lesson:13

Use of Organizational Data and Master Data inProductionLesson Duration: 45 Minutes

Lesson OverviewIn this lesson you will be exposed to organizational data and its potential impacton production planning in SAP ERP.


• Identify the production planning organizational units (configuration)• Identify the procurement organizational units• Identify the Sales and Distribution organizational units• Identify the production planning master data objects

This lesson is designed for new customers that have never worked SAP ERP orproduction planning. If class participants are knowledgeable in SAP ERP use thisas an overview and move through the material quickly.

Note: We have included information about other applicationorganizational levels as students will come across the objects within thePP master data. It is collateral information only. If they wish to knowmore about SD organizational structures suggest SCM600. If they wish toknow more about MM organizational Structures suggest SCM500.

Business ExampleAs a member of the project team, you must understand how organizationalstructures, production planning, and master data are used to develop anorganizational plan to support existing and future business.

Organizational Objects in Production PlanningThe foundation of the SAP ERP system is the organizational structure that will beconfigured at the early stages of your company’s implementation of the software.All other configuration or master data will be built on top of the organizationalstructures.


TSCM40_I Lesson: Use of Organizational Data and Master Data in Production

Figure 5: Organizational Structure

To better understand the structure, you must familiarize your self with severaldefinitions:

ClientThe client is a unit within an SAP ERP system that is self-contained bothin legal and organizational terms, and in terms of data, with separate masterrecords and an independent set of tables. From a business viewpoint, theclient represents a corporate group, for example.The client is the highest hierarchical level in the SAP ERP system.Specifications or data that you make and enter at this level apply to allcompany codes and all other organizational units. Therefor, you do not haveto enter the specifications and data in the system at client level more thanonce. This ensures a uniform data status.Access authorization is assigned on a client-specific basis. A user masterrecord must be created for every user in the client in which he or she wishesto work. If the Client field has not been prepopulated, each user mustspecify a client key when logging on to an SAP ERP client. The client keyis uniquely defined in the system and is a three-digit number. In this way,the user specifies the client in which he or she wishes to work. All userinput is stored and separated by client.The processing and evaluation of data is likewise carried out on aclient-specific basis.



Company codeA company code is the smallest organizational unit of external accountingfor which a complete, self-contained bookkeeping system can be replicated.This includes the entry of all events that require posting to the accounts andthe creation of a complete audit trail for balance sheets and profit-and-lossstatements. A company code represents an independent unit producing itsown balance sheet, for example, a company within a corporate group (client).You can set up several company codes in one client in order to keep separatesets of financial books. You can use a special Customizing function to copy acompany code. In the process, company-code-dependent specifications areadopted for your new company code.A company code is defined in the system by means of a four-characteralphanumeric key that is unique in the client.

PlantThe plant is an organizational unit within logistics that subdivides anenterprise from the viewpoints of production, procurement, and materialsplanning.

Storage LocationThe storage location is an organizational unit that facilitates thedifferentiation of stocks of materials within a plant. Inventory managementon a quantity basis is carried out in the plant at storage-location level. Thephysical inventory is also carried out at this level.A storage location is defined by means of a four-character alphanumeric keythat is unique in the plant.

Organizational units are tightly linked to each other to quickly process the relevantdata for a business area. For example:

Plant 1000 is assigned to company code 1000

Company code 1000 is assigned to controlling area 1000

Therefore, whenever a transaction involving cost occurs in plant 1000, the relevantrecords in controlling area 1000 are automatically updated. The valuation area isthe organizational level at which material quantities and values are managed. It isessential for product costing that a valuation area exists for each plant.

Within each valuation level, you can differentiate between values and quantitiesfor valuation (in-house production and external procurement) by using differentvaluation types. In Customizing for materials management (define valuation type),balance sheet valuation is set up at company-code or valuation-area level.

Selection of valuation-area level automatically causes the creation of a valuationarea for each plant. To use product costing and order costing, inventory must bevaluated at plant level.



Purchasing OrganizationOutside of production planning, other areas of the SAP ERP system needadditional configuration to support their specific functional needs. In addition tothe client and company code requirements, purchasing requires an additionalorganizational structure.

Figure 6: Purchase Organization

A purchasing group is a key for a buyer or a group of buyers who are responsiblefor certain purchasing activities. Internally, the purchasing group is responsible forthe procurement of a material or class of materials. Externally, it is the principalchannel for an enterprise’s dealings with its vendors.

Note: The purchasing group is not assigned to other units of the enterprisestructure in SAP ERP.

Purchasing groups are not defined in Customizing for the enterprise structure, butin Customizing by choosing Materials Management → Purchasing → CreatePurchasing Groups.

The purchasing organization is an organizational unit within logistics thatsubdivides the enterprise according to the purchasing requirements. A purchasingorganization procures materials or services, negotiates conditions of purchase withvendors, and assumes responsibility for these transactions.



You can incorporate purchasing into the company structure by assigning thepurchasing organization to a company code and to plants. This means thatyou can take into account whether purchasing is organized on a centralized ordecentralized basis in your company. You can have a combination of these twoorganizational forms.

You can assign several purchasing organizations to one company code.However, a certain purchasing organization can only belong to one companycode. You can decide not to assign the purchasing organization to a companycode (cross-company-code purchasing). There is an m:n relationship betweenpurchasing organizations and plants. In other words, you can assign several plantsto one purchasing organization, and one plant to several purchasing organizations.

Sales OrganizationSimilar to the purchasing side of an organization, the group responsible for saleshas additional unique business requirements.

Figure 7: Sales Organization

The sales organization is responsible for selling and distributing goods andservices. It is liable for the products sold and responsible for a customer’s rights ofrecourse. The sales organization can be used to represent a regional, national, orinternational subdivision of a marketplace in which products are sold.

A sales organization is uniquely assigned to a company code, however a companycode may have more than one sales organization assigned to it. If the Sales andDistribution module is used, at least one sales organization must be defined.

The sales organization is the highest summation level in sales statistics. Customermaster data will be created for each sales organization. Documents createdthroughout the Sales and Distribution process (order, delivery, and billingdocument) will belong to a sales organization.



A distribution channel is a means through which saleable materials or servicesreach the customer. A distribution channel is assigned to a sales organization. Asales organization may have more than one distribution channel assigned to it. Ifthe Sales and Distribution module is used, at least one distribution channel mustbe defined and assigned to a sales organization.

A distribution channel allows customers to be treated differently depending on thechannel they are assigned to. For example, a customer assigned to a wholesaledistribution channel may receive preferred pricing compared to a retail distributionchannel customer.

A sales organization can have several divisions assigned to it, but must have atleast one division. A division is used to group materials and services. A divisioncan represent a product group or product line, which allows:

• Restricted price agreements to a certain division• Statistical analysis by division

A sales area is a unique and allowable combination of a sales organization,distribution channel, and division. Each Sales and Distribution document isassigned to exactly one sales area. This assignment cannot be changed. A salesarea can belong to only one company code. This relationship is created by theassignment of the sales organization to the company code in Customizing.

The shipping point is the organizational element that manages your shippingactivities. Each outbound delivery is processed at a shipping point.

A shipping point can be a physical location, for example, a loading dock, a mailroom, or a railroad depot. It can also be a logical location, for example, a group ofemployees responsible for processing next-day deliveries or less-than-truckloadorders.

Shipping points are assigned to plants. A shipping point should have physicalproximity to the plant to which it is assigned. More than one shipping point canbe assigned to a plant. Several plants can also have a shared shipping pointassigned to them, for example, several plants in same physical proximity sharingthe same railroad depot.

Demonstration: Organizational Structures in SAP ERP

PurposeShow participants how org structures are assigned.

System DataSystem:Client:User ID:



Password:Set up instructions:1. Follow Menu Path: SPRO → Enterprise Structure → Assignment →

Logistics-General → Assign Plant to Company Code →

2. Assign Business Area to Plant/Valuation Area...

3. SPRO → Enterprise Structure → Assignment → Sales and Distribution →Assign Sales Org to Company Code...

4. SPRO → Enterprise Structure → Assignment → Materials Management →Assign Purchasing Org to Company Code...

Master Data Objects in Production PlanningOnce your company has established an organization structure, the differentbusiness areas can proceed with developing the application-specific master datato activate the necessary functionality required to run the day-to-day activitiesof your business.

Figure 8: Master Data for Production Planning



Within the PP application, several pieces of master data are required to carryout planning and execution functionality. The following master data objects arerequired to initiate planning and execution functions in SAP ERP:

• Material master• Bill of material• Work center• Routing/task list

Material MastersMaterial Master Record: Definition

The material master contains information on the materials that a companyconstructs, procures, manufactures, stores, and sells. The information is stored ina database that is a central source of data on materials. The material master recordintegrates data from different areas of a company.

Figure 9: Material Masters in SAP ERP

For the company, the material master record represents the central source for dataon materials. The material master is used by various SAP logistics applications.The material can be a finished product (product or article), a semi-finished product(subassembly), or a raw material (purchased part).



Demonstration: Views and Fields in the MaterialMaster

Purpose

Demonstrate the material master

System DataSystem:Client: 8##User ID:Password:Set up instructions: P-100 in plant 10001. Show material P-100 in plant 1000. Follow menu Path: Logistics →

Production → Master Data → Material Master → Material → Change→ Immediately

Bills of MaterialA bill of material (BOM) is a complete, formally structured list of the componentsthat make up a product or assembly. The list contains a description and objectnumber for each component, together with the quantity and unit of measure. Billsof material can exist at the plant and/or client level. The header and components allcontain validity dates that can be affected using Engineering Change Management.



Figure 10: Bills of Material In SAP ERP

Bills of material will be integrated with the material master and can be used inconjunction with routing to schedule a more precise usage point. These BOMsare used in material requirements planning, production, procurement, and productcosting.

A BOM consists of header material and BOM items (components). The basequantity in the header material specifies the finished production quantity on whichthe component quantities are based. BOM items indicate individual parts andassemblies, which are identified by their material numbers.

BOMs are single level. A BOM item can also contain components, so thatmulti-level production can be described by the single-level BOMs from thefinished product, assemblies, or assemblies of the assemblies (and so on). Inaddition to stock items, which flow into the finished product, a BOM can alsocontain documents or text items.

Demonstration: BOMs

PurposeIn the BOM P-100 show the BOM header and the components with their itemcategories.

System DataSystem:Client: 8xxUser ID:



Password:Set up instructions:1. In the BOM P-100 show the BOM header and the components with their

item categories.

Show material P-100 in plant 1000. Follow menu Path: Logistics →Production → Master Data → Bills of Material → Bill of Material →Material BOM → Change

Work CentersA work center is a location that defines when and where production resources arerequired according to order requirements. In different companies, work centersare also called machine, labor, or capacity centers.

Figure 11: Work Centers in SAP ERP

Work centers can be defined as individual or multiple machines, people, tools, andso on. Work centers are used in routings (routings, standard networks, inspectionplans, maintenance task lists, and rough-cut planning profiles) and in orders.



Demonstration: Work Centers

PurposeWhere to find work centers.

System DataSystem:Client: 8##User ID:Password:Set up instructions:1. Show Work Center 1310 in plant 1000. Follow menu Path: Logistics →

Production → Master Data → Work Center → Work Center → Change

Task Lists and RoutingsA routing defines operations and the sequence in which they are carried out. Thefollowing is also defined in the routing:

• Where the work is to be done• How long the work should take• What materials are needed for each operation• What tools and fixtures are required



Figure 12: Routings in SAP ERP

A routing shows operations in a sequence and acts as a template for productionorders. Each step defines the work center in which specific work will beaccomplished. The planned time for each operation is stored in the routing asa standard value.

These standard values are the basis for:

• Lead time scheduling• Product costing• Capacity planning

Demonstration: Routings

Purpose

System DataSystem:Client:User ID:Password:Set up instructions:



1. Show Routing P-100 in plant 1000. Follow menu Path: Logistics →Production → Master Data → Routings → Routings→ Standard Routing →Change



Facilitated DiscussionPerform overview of lesson.


• What are the PP-relevant organizational elements?• Describe how master data objects are dependant on one another.



Lesson Summary

You should now be able to:• Identify the production planning organizational units (configuration)• Identify the procurement organizational units• Identify the Sales and Distribution organizational units• Identify the production planning master data objects


Unit Summary TSCM40_I

Unit SummaryYou should now be able to:• Describe the types of data used in modeling and executing manufacturing

in SAP ERP• Identify the production planning organizational units (configuration)• Identify the procurement organizational units• Identify the Sales and Distribution organizational units• Identify the production planning master data objects
