What is SAP PP Module | Production & Planning | SAP PP Overview

• Availability check during order processing.
• MTO (Make-to-Order) scenario: MRP Run with requirement types.
• Variant configuration for BOM selection and operations.

• Goods movements like backflush and automatic goods receipt.

• Creation of purchase requisitions and purchase orders from MRP.
• Info record usage for subcontracting and vendor selection.

• In-process inspection (Inspection Type 03).

• Goods receipt inspection (Inspection Type 04).

• Price updates in the material master.

• Assigning cost to activity types within cost centers.
• Linking work centers with cost centers and activity types.
• Order type configurations (settlement profile, costing variant, valuation variant).
• Product cost collectors, standard cost estimates.
• WIP (Work in Progress) and variance calculation.
• Costing sheets for overhead absorption.

• Sales and Operations Planning is the foundation for demand planning in SAP PP.
• It serves as the starting point for production and procurement processes.
• Sources of planning data
  • Sales Plan
  • Production Plan
  • Forecast
  • Original Plan

• Demand Management translates planned requirements into actual demand.
• Types of planned demand
  • Manual Planned Independent Requirements (PIRs)
  • Sales Order demand (Make-to-Order)
• Forms the input for MRP/MPS (Material Requirement Planning / Master Production Scheduling)

• Planned Independent Requirements (PIR) created for Make-to-Stock (MTS)
• MRP run at plant level or Sales Order level (for MTO)
• Procurement steps:
  • Convert purchase requisitions to purchase orders
  • Post Goods Receipt
• Production steps:
  • Convert planned orders to production orders
  • Release production orders
  • Issue goods for production
  • Confirm production activities
  • Post goods receipt for finished product

• MRP is a production Planning and inventory control system used to manage manufacturing Process
• The main purpose of MRP is to make right material available at right time and at right place
• MRP is total planning of all the components taking into consideration the existing requirement and stocks
• After executing MRP all the planning related data can be seen in (Stock/Requirement list)

Discrete Manufacturing in SAP refers to a type of production process where distinct items (units or pieces) are manufactured individually or in batches. These items are countable, identifiable, and often assembled from components using Bills of Materials (BOMs) and Routings.

This production method is commonly used in industries such as:

• Automotive
• Electronics
• Machinery
• Aerospace
• Appliances

Repetitive Manufacturing in SAP is used for mass production of identical or similar products in a continuous flow. Unlike discrete manufacturing, it doesn’t rely on individual production orders but uses planned orders and rate-based production.

It’s ideal for industries like:

• Pharmaceuticals
• Food & Beverage
• Consumer Electronics

Key Highlights:

• Uses production versions, not detailed routings.
• Simplified confirmations without tracking each operation.
• Supports backflushing for automatic goods issue.
• Suited for Make-to-Stock and high-volume manufacturing.

The Manufacturing Cycle in SAP outlines the complete end-to-end production process—from demand planning to product delivery. It includes planning, procurement, order creation, execution, confirmation, and order settlement. The cycle ensures timely material availability and smooth production flow across departments.

Manufacturing Planning and Execution in SAP PP bridges the gap between strategic planning and real-time production. It involves creating feasible production schedules, managing capacities, and tracking execution on the shop floor to ensure that production aligns with demand and resource availability.

The Production Order Cycle manages all steps of the actual production process—starting with order creation, followed by release, material staging (goods issue), execution (confirmation), product posting (goods receipt), and finally, cost settlement. It enables complete control over production performance and cost tracking.

The Production Planning Life Cycle in SAP includes all phases from forecasting demand to completing production. It starts with sales and operations planning, followed by demand management, material requirement planning (MRP), order processing, production execution, and finally, performance analysis and cost control.

Production Order Creation is the process of generating a detailed instruction document to start manufacturing. It includes material requirements, operations, routing, and component lists. Orders can be created from planned orders, material master data, or directly entered manually, depending on the production scenario.

Production Order Confirmation in SAP records the actual work performed during manufacturing.

Actual work is recorded by confirming operations.

Confirmation data includes:

• Operation number
• Work center
• Actual time
• Yield/scrap quantity
• Personnel involved

Goods Movement in the context of a Production Order refers to:

• Goods Issue (GI): Raw materials/components issued to production.
• Goods Receipt (GR): Finished goods received into stock after production.

These movements update inventory and trigger accounting entries in SAP.

📌 T-Codes:

• MB1A or automatic for Goods Issue
• MB31 or MIGO for Goods Receipt

Production Order Costs track all costs incurred during manufacturing, including:

• Material Costs: Based on components issued (from BOM)
• Labor & Machine Costs: Captured via activity confirmations
• Overhead Costs: Calculated using costing sheets

These are used for cost analysis, variance calculation, and settlement.

📌 Related Concepts:

• Cost Center
• Work Center
• Activity Types
• Standard Cost Estimate