C_TS422_2022 SAP Certified Application Associate - SAP S/4HANA Production Planning and Manufacturing Questions and Answers

 To set up a make-to-order planning scenario for a finished material, you need to choose planning strategy 20 (Make-to-Order) and select the corresponding Individual/Collective indicator for the components in the bill of material. This way, you can control whether the components are procured individually or collectively for the sales orders. The following steps explain how to achieve this:

• In the material master record of the finished material, you need to select the MRP type PD (MRP) and the strategy group 20 (Make-to-Order) in the MRP 1 view. This means that the finished material is planned based on the sales order requirements and not on the forecast12.
• In the bill of material of the finished material, you need to select the Individual/Collective indicator for each component. This indicator determines whether the component is procured individually for each sales order or collectively for all independent requirements. For the component that should be procured for each sales order individually, you need to select the indicator 2 (Individual requirements only). For the component that should be procured jointly for all independent requirements, you need to select the indicator 1 (Collective requirements only)3 .
• When you create a sales order for the finished material, the system generates a sales order item and a planned independent requirement for the finished material. The planned independent requirement is used as a planning element in MRP and triggers the procurement of the components according to the Individual/Collective indicator. For the component with indicator 2, the system creates a dependent requirement that is linked to the sales order item. For the component with indicator 1, the system creates an independent requirement that is not linked to the sales order item .

References:

• 1: SAP Help Portal: Make-to-Order Production
• 2: SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 2: Demand Management
• 3: SAP Help Portal: Individual/Collective Requirements
• : SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 3: Material Requirements Planning
• : SAP Help Portal: Requirements Planning
• : SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 4: Advanced Planning

Pegging is a term used in Advanced Planning to describe the relationship between the receipt and the issue elements of a product within a location. Receipt elements are planning elements that increase the stock of a product, such as production orders, purchase orders, or stock transfers. Issue elements are planning elements that reduce thestock of a product, such as sales orders, planned independent requirements, or reservations. Pegging links the receipt and issue elements according to the bill-of-material structure of all related products and represents the material flow through all levels of production. Pegging enables the system to identify and display quantity and date/time problems, such as shortages or delays, and to forward scheduling changes to other dependent elements. Pegging also forms the basis for the availability check and the capacity check in Advanced Planning12.

References:

• 1: SAP Help Portal: Pegging
• 2: SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 4: Advanced Planning

 Dependent requirements are the requirements for components that are derived from the requirements for the finished product or assembly. They are created when an independent requirement is created for the finished product or assembly, such as a planned independent requirement, a sales order, or a stock transport order. They are also created on assembly level during the planning run, when the system explodes the bill of material (BOM) of the finished product or assembly and calculates the requirements for the components based on the BOM structure and quantity. Dependent requirements can be created for multilevel or single-level BOM structures, depending on the planning strategy and the BOM explosion level. References: Dependent Requirements | SAP Help Portal, Material Requirements Planning (PP-MRP) | SAP Help Portal.

 Planned independent requirements (PIRs) are demand elements that represent the sales or production program for a material. They are used to plan the production or procurement of finished products or assemblies in advance, based on the expected demand from customers or internal sources. Some benefits of planning with PIRs are:

• Reduced delivery times: By planning with PIRs, you can ensure that the required materials and capacities are available when the actual sales orders arrive. This reduces the lead time for fulfilling the customer orders and improves the delivery performance.
• Option to forecast planning for production resources: By planning with PIRs, you can use forecasting methods to estimate the future demand for a material based on historical data and trends. This allows you to adjust the production or procurement plan accordingly and optimize the utilization of production resources, such as machines, labor, and materials. References: [Production Planning with SAP S/4HANA], page 144; [SAP Help Portal: Planned Independent Requirements].

The difference between order-related and product-related COC is mainly in the level of cost object that is used to collect and analyze the costs of production. In order-related COC, each production order is a cost object that carries its own plan, target, and actual costs. In product-related COC, a product cost collector is a cost object that aggregates the costs of multiple production orders for the same product or product variant. The advantages and disadvantages of each approach depend on the production scenario and the reporting requirements. Some of the factors to consider are:

• In product-related COC, all costs are debited and credited to a product cost collector. This means that the production orders linked to the product cost collector do not have any cost segments and do not show any variances. The product cost collector is used for variance calculation and settlement. This simplifies the cost accounting process and reduces the number of cost objects to be managed. However, this also means that the cost details of individual production orders are not available for analysis. Product-related COC is suitable for mass production of standard products with low variance and high volume12.
• Order-related COC is beneficial in a flexible production environment where each production order has different characteristics, such as lot size, routing, material components, or quality specifications. Order-related COC allows for a detailed analysis of the cost and performance of each production order and enables a more accurate allocation of overhead costs. However, order-related COC also requires more effort and resources to maintain and process the cost segments and variances of each production order. Order-related COC is suitable for make-to-order or engineer-to-order scenarios where each production order is unique and customized12.
• Product-related COC is used in manufacturing for co-products, which are products that are produced simultaneously from the same production process and have a relatively high sales value. Co-products share the joint costs of the production process based on a predefined apportionment structure. Product-related COC allows for a consistent and transparent allocation of the joint costs to the co-products and avoids the problem of negative variances that may occur in order-related COC. Product-related COC is suitable for process industries where co-products are common, such as chemical, pharmaceutical, or food industries34.

References:

• 1: SAP Help Portal: Production Orders in Cost Object Controlling
• 2: SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 6: Product Cost by Order
• 3: SAP Help Portal: Product Cost by Period
• 4: SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 7: Product Cost by Period

A material availability check can be triggered automatically for a production order by the following methods:

• By mass processing: You can use the mass processing function to execute material availability checks for multiple production orders at once. You can use the Manage Production Orders app or the transaction COHV to perform mass processing. You can define the selection criteria and the scope of check for the orders to be checked. The system updates the availability status and the committed quantities for the checked orders.
• By order release: You can configure the system to trigger a material availability check automatically when a production order is released. You can use the Customizing activity Define Checking Control to define the checking rule and the scope of check for the order release. The system updates the availability status and the committed quantities for the released order. References: Executing Material Availability Checks; [SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 83.

A reduction strategy is a method of shortening the lead time of an order by reducingcertain time elements in the order scheduling1. The time elements that can be reduced by a reduction strategy are move time, wait time, and queue time2. Move time is the time required to move a material from one operation to another. Wait time is the time between the end of an operation and the start of the next operation. Queue time is the time before an operation can start at a work center due to the work center’s capacity utilization3. These time elements can be reduced by a percentage or a fixed value in the reduction strategy. References: 1: Reduction Strategy | SAP Help Portal(https://blog.sap-press.com/4-strategies-for-make-to-stock-production-with-sap-s4hana) 2: 4 Strategies for Make-to-Stock Production with SAP S/4HANA(https://blogs.sap.com/2022/03/22/highlights-for-manufacturing-in-sap-s-4hana-2021-part-2-production-planning-engineering-operations/) 3: Scheduling | SAP Help Portal(https://blogs.sap.com/2022/04/26/manufacturing-in-sap-s-4hana-cloud-planning-strategies/).

You can limit the validity of a BOM by plant and by period. The plant determines the organizational area of validity for the BOM, and you can assign the same BOM to different or further plants if the prerequisites are met. The period of validity for a BOM is restricted by the valid-from date and the valid-to date in the BOM header and item, which determine when the BOM becomes effective and when it ends. References: Validity of Bills of Material, BOM Item Validity

You can exclude a material from the MRP run by using a specific material status or a specific MRP type. A material status is a user-defined indicator that can be assigned to a material master record to control the procurement and planning activities for the material. For example, you can define a material status that blocks the material from being planned by MRP. An MRP type is a parameter that defines how a material is planned by MRP. For example, you can use the MRP type ND (No Planning) to exclude the material from the MRP run.

References: [SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 87; [SAP Help Portal: Material Status] and [SAP Help Portal: MRP Type].

Consumption-based planning is a planning procedure that uses past consumption data to calculate the future requirements of materials. It does not consider the dependent requirements of higher-level materials, but only the independent requirements from sales orders, forecasts, or stock transfers. Consumption-based planning is suitable for B and C materials, which have low value, low demand variability, and high availability. Consumption-based planning reduces the planning efforts for these materials, as it does not require the maintenance of BOMs, routings, or production versions. Consumption-based planning can be further divided into reorder point planning, forecast-based planning, and time-phased planning, depending on the method of determining the reorder point and the lot size12 References:

• Consumption-Based Planning - SAP Help Portal
• SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 3: Material Requirements Planning, Section 3.1: Planning Procedures, Page 67

The graphical planning table is a tool for capacity planning and scheduling that displays the operations and the work centers in a time-oriented view. You can use the graphical planning table to create, change, or dispatch operations manually or automatically. The planning direction determines whether the operations are scheduled from the start date or the finish date of the order. If the planning direction is forward, the operations are scheduled from the start date of the order1.

If you want to insert an operation at a certain time on a work center in the graphical planning table, and the planning direction is forward, and the desired dispatching time coincides with an operation that has previously been dispatched, the insertion takes place as follows:

• The new operation is inserted at the desired time; the previously dispatched operation is moved backward (B): This is the correct answer. The system inserts the new operation at the specified time and shifts the previously dispatched operation to a later time, so that the sequence and the capacity requirements of the operations are maintained. The system also adjusts the start and finish dates of the order and the subsequent operations accordingly2.

The other options are not correct for the following reasons:

• The new operation is inserted at the desired time; the previous dispatched operation is moved forward (A): This is not correct. The system does not move the previously dispatched operation to an earlier time, as this would violate the planning direction and the capacity constraints of the work center. The system only moves the previously dispatched operation to a later time, as explained in option B.
• The previously dispatched operation stays as is; the new operation is inserted after the dispatched operation ©: This is not correct. The system does not insert the new operation after the previously dispatched operation, as this would not match the desired dispatching time specified by the user. The system inserts the new operation at the desired time and moves the previously dispatched operation backward, as explained in option B.
• The previously dispatched operation stays as is; the new operation is inserted before the dispatched operation (D): This is not correct. The system does not insert the new operation before the previously dispatched operation, as this would violate the planning direction and the capacity constraints of the work center. The system inserts the new operation at the desired time and moves the previously dispatched operation backward, as explained in option B.

References: 

 A work center hierarchy is a business object in PP/DS that defines the structure and sequence of resources that are used for a production process. You use this object to represent the logical and physical dependencies of the resources and to control the scheduling and sequencing of the operations or orders. A work center hierarchy allows you to modelthe production flow and capacity more realistically and ensure the technical feasibility of the production plan1

A work center hierarchy can also be used to cumulate the available capacity and capacity requirements of the resources in capacity planning. You can cumulate the available capacities from subordinate work centers to a superior work center level in order to determine the total available capacity for the superior work center. This way, you can use a work center hierarchy as a group of alternative work centers that provide a cumulative available capacity for production23

References:

• Work center hierarchy | SAP Help Portal
• Work Center Hierarchy - SAP Help Portal
• Highlights for Manufacturing in SAP S/4HANA 2021 – Part 2: Production Planning, Engineering, Operations | SAP Blogs

You can achieve planning only for specific resources in Advanced Planning (PP/DS) by using a resource group. A resource group is a collection of resources that share the same characteristics and can be used interchangeably for production. You can assign a resource group to a product or a production version, and then use the resource group as a selection criterion in the planning board or the product view. This way, you can restrict the planning to only those resources that belong to the resource group. References: SAP S/4HANA Manufacturing for Planning & Scheduling - Implementation Guide, page 25; [SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 79.

The duration of an operation for production is determined by the combination of data maintained in the routing and the work center. The routing defines the sequence of operations, the work centers, and the standard values for each operation, such as setup time, processing time, and teardown time. The work center defines the capacity, the formulas, and the scheduling parameters for each operation, such as base quantity, operation rate, and queue time. The system calculates the duration of an operation by multiplying the standard values from the routing by the factors from the work center formulas and adding the scheduling parameters from the work center. For example, if the routing specifies a processing time of 10 minutes per unit and the work center formula is processing time = (processing time / base quantity) * operation quantity, and the base quantity is 100 units, then the duration of the operation for 50 units is (10 / 100) * 50 = 5 minutes.

The bill of material (BOM) © and the material master (D) are not data objects that determine the duration of an operation for production. The BOM defines the components and the quantities that are required for producing a material. The material master defines the general and specific attributes of a material, such as the material type, the unit of measure,the MRP data, and the production data. These data objects are relevant for planning the material requirements and the production costs, but not the operation duration. References:

https://help.sap.com/docs/SAP_S4HANA_ON-PREMISE/c00ad2cac7be4ef29a4461ba114e4f91/051ebf53d25ab64ce10000000a174cb4.html

https://learning.sap.com/learning-journeys/manage-production-orders-in-sap-s-4hana-manufacturing/scheduling-production-orders_cc390d5f-b87c-4c4d-9472-8bb10ea4f476

The consumption of planned independent requirements by other requirements, such as sales orders or stock transport orders, depends on the planning strategy and the requirements type of the materials involved. The planning strategy defines the basic procedure for planning a material and determines whether the consumption is relevant for planning. The requirements type controls the consumption parameters, such as the consumption mode (forward, backward, or bidirectional), the consumption interval (period of time in which the consumption can take place), and the consumption indicator (whetherthe consumption reduces the planned independent requirements or not). References: Consumption of Planned Independent Requirements | SAP Help Portal, Planning Strategy | SAP Help Portal, Requirements Type | SAP Help Portal.

A routing operation is a step in the production process that defines the work center, the duration, and the sequence of the operation. A routing operation consists of several time elements that are used to calculate the operation start and finish dates, as well as the capacity requirements. The time elements that are part of a routing operation are:

• Move time: The time required to move the material from one work center to another, or from the storage location to the work center.
• Setup time: The time required to prepare the work center for the operation, such as changing tools, adjusting machines, or cleaning the work area.
• Processing time: The time required to perform the operation, such as machining, assembling, or testing the product.
• Teardown time: The time required to restore the work center to its original state after the operation, such as removing tools, resetting machines, or disposing of waste.
• Queue time: The time that the material waits at the work center before the operation starts, due to the work center being occupied by another operation or having a fixed start date.

The pick/pack time and the float before production are not part of a routing operation. The pick/pack time is the time required to pick the material from the storage location and pack it for delivery, which is usually part of the outbound logistics process. The float before production is the time buffer before the scheduled start date of the production order, which can be used to compensate for delays or changes in the production plan.

References: [Production Planning with SAP S/4HANA], pages 177-179; [SAP Help Portal: Routing Operation].

Planning with final assembly (40) is a planning strategy that supports the consumption of planned independent requirements for the semi-finished material. This strategy is usedwhen the production of the finished product is triggered by the sales order, but the production of the semi-finished product is not. The semi-finished product is produced in advance based on the forecast and stored in stock. When the sales order is received, the planned independent requirements for the finished product are reduced by the sales order quantity, and the planned independent requirements for the semi-finished product are reduced by the corresponding component quantity. This way, the semi-finished product is consumed by the sales order and the production order for the finished product only requires the assembly of the components. This strategy allows for a shorter lead time and a higher flexibility for the finished product, while reducing the risk of excess stock for the semi-finished product. References: Planning with Final Assembly | SAP Help Portal, Planning Strategies | SAP Help Portal, SAP S/4HANA Production Planning and Manufacturing Certification Guide, page 53-54

A scheduling agreement is a long-term agreement with a vendor for the supply of materials or services at predefined dates and quantities. To enable classic MRP to automatically create schedule lines in case of material shortage, you must do the following:

• Add the agreement to the source list and mark it for MRP relevance. The source list is a list of possible sources of supply for a material, such as vendors, contracts, or scheduling agreements. By adding the agreement to the source list and setting the MRP indicator, you specify that the agreement is a valid and preferred source of supply for the material.
• Set the creation indicator for delivery schedule lines on the initial screen of the MRP run. The creation indicator determines whether the MRP run creates procurement proposals, such as purchase requisitions, planned orders, or delivery schedule lines. By setting the creation indicator for delivery schedule lines, you instruct the MRP run to create schedule lines for the scheduling agreement, based on the material requirements and the agreement conditions.

Adding the agreement to the quota arrangement and marking it for MRP relevance is not necessary, as the quota arrangement is used to distribute the total requirements of a material among several sources of supply. Setting the creation indicator for purchase requisition on the initial screen of the MRP run is not correct, as the purchase requisition is a different type of procurement proposal than the delivery schedule line. References: Scheduling Agreement | SAP Help Portal, Source List | SAP Help Portal, MRP Run | SAP Help Portal.

The order-type-dependent parameters are configuration settings that control various aspects of production order processing, such as number range, scheduling type, availability check, costing variant, confirmation parameters, and so on. These parameters are assigned to a production order type, which is a key that defines the characteristics and business rules of a production order. The order-type-dependent parameters affect the following business processes:

• Check material availability: The availability check determines whether the required materials and capacities are available for the production order. The availability check is controlled by the checking rule and the checking group, which are defined in the order-type-dependent parameters. The checking rule specifies which stocks, receipts, and issues are considered in the availability check. The checking group determines how the system responds to the availability situation, such as issuing a warning or an error message, or rescheduling the order.
• Schedule production orders: The scheduling of production orders calculates the planned dates and times for the operations and the order. The scheduling is controlled by thescheduling type and the scheduling parameters, which are defined in the order-type-dependent parameters. The scheduling type determines whether the system performs forward or backward scheduling, and whether it considers the basic dates or the production dates. The scheduling parameters determine how the system calculates the operation durations, interoperation times, and floats. References: [SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 123; [SAP Help Portal: Order-Type-Dependent Parameters].

Forecasting is the process of predicting future demand for products or services based on historical data, market trends, and other factors. Forecasting is an essential component of supply chain planning, which aims to optimize the flow of materials, information, andmoney across the supply chain network. SAP offers various applications that can be used for forecasting in supply chain planning, such as:

• Integration Business Planning (IBP): IBP is a cloud-based solution that provides end-to-end visibility and integration of planning processes across different business functions, such as sales, finance, operations, and logistics. IBP enables collaborative and real-time forecasting, scenario analysis, and decision making based on advanced analytics and machine learning. IBP supports various forecasting methods, such as statistical, causal, and demand sensing, and allows users to adjust and refine forecasts based on changing market conditions and business priorities12.
• Supply Chain Management (SCM): SCM is an on-premise solution that covers the entire supply chain process, from demand planning to delivery and invoicing. SCM includes various modules, such as Advanced Planning and Optimization (APO), Extended Warehouse Management (EWM), and Transportation Management ™, that enable efficient and flexible planning and execution of supply chain activities. SCM supports various forecasting techniques, such as exponential smoothing, trend analysis, and seasonal adjustment, and allows users to monitor and control forecast accuracy and performance34.

The other two options are not SAP applications, but rather concepts or processes related to supply chain planning:

• Capacity Requirement Planning (CRP): CRP is the process of determining the available and required capacity of resources, such as machines, labor, and materials, to meet the production plan. CRP helps to identify and resolve capacity bottlenecks, optimize resource utilization, and balance supply and demand. CRP can be performed using various SAP applications, such as MRP, Production Planning and Detailed Scheduling (PP/DS), or IBP5 .
• Material Requirement Planning (MRP): MRP is the process of calculating the quantity and timing of materials needed to fulfill the production plan. MRP helps to optimize inventory levels, reduce costs, and improve customer service. MRP can be performed using various SAP applications, such as ERP, SCM, or IBP . References: SAP Integrated Business Planning | SAP, Forecasting | SAP Help Portal, SAP Supply Chain Management | SAP, Forecasting | SAP Help Portal, Capacity Requirements Planning (PP-CRP) | SAP Help Portal, [Capacity Planning | SAP Help Portal], [Material Requirements Planning (PP-MRP) | SAP Help Portal], [Material Requirements Planning | SAP Help Portal]

Alternative item strategies are used to define how the system selects the alternative items in a BOM during the planning run or the order creation. The following alternative item strategies are available in SAP S/4HANA:

• Manual maintenance: The system does not select any alternative item automatically. You have to manually select the alternative item in the BOM or the order. This strategy is useful when you want to have full control over the alternative item selection and when the selection depends on factors that are not known to the system1
• 100% check: The system checks the availability of all alternative items and selects the one with the highest priority and sufficient stock. If none of the alternative items has enough stock, the system selects the one with the highest priority and the smallest shortage quantity. This strategy is useful when you want to optimize the material availability and reduce the procurement costs2
• First in First out (FIFO): The system selects the alternative item with the highest priority and the earliest availability date. If several alternative items have the same availability date, the system selects the one with the highest priority. This strategy is useful when you want to use the oldest stock first and avoid obsolescence3
• Simultaneous: The system selects all alternative items simultaneously and distributes the requirement quantity among them according to the usage probability. The usage probability is a percentage value that indicates how often an alternative item is used. This strategy is useful when you want to balance the demand and supply of multiple alternative items and when the usage probability is known.

References:

• Alternative Item Group - SAP Help Portal
• Alternative Item Group - SAP Help Portal
• Alternative Item Group - SAP Help Portal
• [Alternative Item Group - SAP Help Portal]