SAP Production Planning (PP) — Complete Guide

In this tutorial, you'll learn about SAP Production Planning (PP). We cover key concepts, practical examples, and best practices.

SAP Production Planning (PP) manages manufacturing from demand forecasting through material requirements planning and production execution, ensuring the right materials arrive at the right work center at the right time.

What You'll Learn

You will learn how PP plans production, creates BOMs and routings, runs MRP to calculate material shortages, and executes production orders on the shop floor.

Why It Matters

Without PP, factories run out of raw materials, machines sit idle, and customer orders ship late. PP ensures every component is available when needed and production capacity is fully utilized.

Real-World Use

An electronics manufacturer receives an order for 5000 laptops. PP checks available stock, calculates how many circuit boards, screens, and batteries are needed, generates a production order, and reserves machine time on the assembly line — all automatically.

Learning Path

flowchart LR
  A["SAP Overview"] --> B["SAP MM"]
  B --> C["SAP PP
You are here"]
  C --> D["SAP SD"]
  D --> E["SAP FICO"]
  style C fill:#f90,color:#fff

Key Master Data in PP

Bill of Materials (BOM)

A BOM lists every component and quantity needed to make a finished product. Think of it as a recipe — to bake one cake you need 2 eggs, 1 cup of flour, and so on.

Material: LAPTOP-PRO (Finished Product)
BOM Usage: 1 (Production)
Quantity: 1 Unit
Components:
  - SCREEN-15     Qty: 1
  - BATTERY-LI    Qty: 1
  - MAINBOARD-X   Qty: 1
  - KEYBOARD-US   Qty: 1
  - CHASSIS-SLV   Qty: 1

Routing

A routing defines the steps to make the product — which work center, how much setup time, how much processing time.

Material: LAPTOP-PRO
Routing Group: R-LAPTOP
Sequence: 0010 Work Center: ASSEMBLY-L1 Setup: 5 min Machine: 15 min
Sequence: 0020 Work Center: TESTING-QC   Setup: 2 min Machine: 10 min
Sequence: 0030 Work Center: PACKAGING    Setup: 3 min Machine: 5 min

Work Center

A work center is a machine, production line, or group of workers where operations happen.

MRP — Material Requirements Planning

MRP is the engine of PP. It calculates what to order, how much, and when.

flowchart LR
  A["Sales Order
or Forecast"] --> B["MRP Run"]
  B --> C["Check Stock"]
  C --> D["Calculate
Requirements"]
  D --> E["Create
Purchase Requisitions"]
  D --> F["Create
Production Orders"]
  E --> G["Procurement MM"]
  F --> H["Production Execution"]

MRP Logic

1. Gross Requirement — total demand (sales orders + forecasts)
2. Receipts — stock on hand + open purchase orders + planned production
3. Net Requirement = Gross Requirement - Receipts
4. Planned Order — generated if net requirement is positive

MRP Types

Production Order Execution

Process Flow

* Create production order
CALL FUNCTION 'BAPI_PRODORD_CREATE'
  EXPORTING
    orderdata = ls_order
  IMPORTING
    number    = lv_order_number.

* Release the order
CALL FUNCTION 'BAPI_PRODORD_RELEASE'
  EXPORTING
    order_number = lv_order_number.

* Post goods issue for components
CALL FUNCTION 'BAPI_PRODORD_CONFIRM'
  EXPORTING
    order_number   = lv_order_number
    goods_movement = 'X'.

Production orders go through these statuses:

CRTD (Created) -> PREL (Partially Released) -> REL (Released)
-> PCNF (Partially Confirmed) -> CNF (Confirmed)
-> DLFL (Deleted) or TECO (Technically Completed)

Confirmation and Goods Movement

When production finishes, the operator confirms the order. PP then:

1. Posts goods receipt of the finished product to inventory (MM)
2. Issues raw materials from stock (MM)
3. Credits the production cost center with actual costs (CO)
4. Updates the order status to CNF or TECO

Capacity Planning

Capacity planning checks whether enough machine hours and labor exist to execute planned production.

flowchart LR
  A["Available Capacity"] --> C["Capacity
Evaluation"]
  B["Required Capacity"] --> C
  C --> D{"Available >=
Required?"}
  D -->|Yes| E["Production OK"]
  D -->|No| F["Reschedule or
Overtime"]

Loading a finite capacity scenario means scheduling production only if machines are available. Infinite loading creates orders regardless of capacity, and the dispatcher later adjusts.

PP Integration with Other Modules

PP + MM

PP creates purchase requisitions from MRP runs. MM converts them to purchase orders. When production consumes materials, MM posts goods issues.

PP + SD

SD sales orders flow into PP as independent requirements. The delivery schedule from SD determines the production priority.

PP + CO

CO collects actual costs from production orders — material costs, labor costs, machine costs. Variances between planned and actual costs feed profitability analysis.

PP + QM

Inspection lots are created automatically when production order confirmation posts. QM inspects the finished product before it reaches the customer.

Real-World Scenario: Laptop Manufacturing

1. SD enters sales order VA01 for 1000 laptops
2. PP runs MRP (MD01) — 1000 laptops needed, 200 in stock, need 800
3. PP generates planned orders for 800 laptops
4. PP converts planned orders to production orders (MD04)
5. MM issues goods to the production order (MIGO)
6. Production confirms the order (CO11N)
7. PP posts goods receipt of finished laptops (MIGO)
8. SD ships the laptops to the customer (VL01N)

Common Errors

1. BOM Not Maintained

MRP cannot explode requirements. Ensure the BOM is complete with usage probability 100%.

2. Routing Missing

A production order cannot be scheduled without a routing. Maintain routing group and sequence for every material.

3. Work Center Not Available

Capacity planning blocks production if no work center is available. Check work center capacity and shift schedules.

4. MRP Run Takes Too Long

Large BOMs or too many materials in one MRP run slow the system. Use background processing (MD01) for full runs.

5. Negative Stock After Goods Issue

If components are over-issued during production, stock goes negative. Use movement type 261 within the allowed quantity.

6. TECO Before Complete Confirmation

Setting TECO forces the order to technically complete even if some quantities remain unconfirmed.

Practice Questions

1. What does a BOM contain? A list of components and quantities needed to manufacture a finished product.

2. What is the difference between PD and VB MRP types? PD uses a reorder point. VB consumes forecast-demand based with automatic planning.

3. What transaction runs MRP for a single material? MD02 — it calculates net requirements for one material with full horizon.

4. What is a work center in SAP PP? A machine, production line, or labor group where manufacturing operations are performed.

5. How does PP integrate with CO? CO collects actual production costs from orders and calculates variances against planned costs.

Challenge: An automotive supplier receives a rush order for 200 brake assemblies. The BOM has 12 components, one of which (brake pad PN-BP100) shows zero stock and a 4-week lead time. Describe the MRP outcome and propose two alternative actions.

FAQ

What's Next

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