Tag Archives: Grouping – Aggregation

GPD – Grouping Pegging and Distribution

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GPD Capabilities

  • Grouping allows manufacturers to group requirements originating from different WBS elements or projects.
  • Pegging makes it possible to keep track of the origin of the demand
  • Distribution distributes the actual costs and commitments back to the original project

This means that GPD enables you to utilize the advantages of larger lot sizes while still being able to apply resource-related billing and project-specific cost controlling.

Transfer/Borrow-Loan-Payback (TBLP)

During the realization of projects in a complex manufacturing environment, requirements frequently undergo a number of unplanned changes. TBLP provides an easy way to transfer or loan material items to another project. With respect to loans, borrowed material items can be repaid either fully or partially.

Resource-Related Billing

Prices for services performed for individual customers are not always stored as fixed prices in a contract or are determined using a standard pricing procedure. For example, the work performed may be completely new. This function enables orders for such work to be billed on a resource-related basis. The billing document provides detailed information, for example on individual materials, internal activities, costs, and so on.

Project Earned Value

Because of unplanned changes to costs and schedules the actual project becomes increasingly different than the project plan. This application allows you to monitor and control your projects effectively, as well as easily access information about project status and progress at any time.

Project-Related Incoming Orders

This function enables the system to determine key figures from sales orders assigned to projects for incoming and open order values. This provides you with a report on the expected results for customer projects at an early stage.

Setting Up GPD

For the Plant and MRP Group that you plan to perform GPD for, the Grouping Requirement Flag must be checked

Material Management

Any material that will be used for GPD must be in an MRP Group that is GPD relevant

Under the MRP4 Tab in MM01, the requirements must be set to “Individual Requirements” (1) as opposed to “Collective Requirements”

Project Setup

Grouping WBS elements must be defined as Grouping WBS elements for all materials (1) or for selected MRP groups (2) when they are created in the system

For those interested in learning more about the WBS element see this link…

http://www.scmfocus.com/sapplanning/2009/05/03/work-breakdown-structure/

Plant Stock vs. Project Stock

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What is It?

Some industries like aerospace and defense and other industries with substantial government contracts work off of a concept called project stock, which is quite different from the concept of plant stock which is used outside of these specific industries. Plant Stock vs. Project Stock SAP provides different options for material stock management. One possibility is the usage of the collective stock or anonymous plant stock. All projects and orders requiring a material managed in a collective stock can take this material from the plant stock. Another option is the usage of individual stock. In this case material stocks are managed with a reference to a sales order or a WBS element. Project stock is a form of individual stock management where material stocks with reference to WBS elements can be managed as individual stock segments. Using the options Non-valuated stock, Valuated stock or No project stock in the basic data of the project definition, you specify for a project whether a non-valuated or a valuated project stock management or material will be possible or whether individual project stocks can not be used. When non-valuated project stock is used, every WBS element of the project represents a separate stock segment from the logistics point of view.

Valuated and Non-Valuated Project Stock

Material movements with reference to non-valuated project stock take place with out being valuated. For example, when a material managed in a project stock is consumed by a network activity (goods issue for reservation), this does not cause actual costs for the activity and no postings are made in financial accounting. The calculation of MRP networks determines that no planned costs for material components will be managed in the non-valuated project stock. The stock holding WBS element is debited with the actual costs for the external procurement only when the goods or invoice receipt for purchased parts is posted to the project stock. Non-valuated project stock does not completely disclose the costs for the network activities or the assigned production orders. If you implement the non-valuated project stock, a meaningful cost object controlling is possible only on the level of the stockholding WBS elements or the entire project after period end closing. Due to the disadvantages of the non-valuated project stock, the valuated project stock was provided as of SAP R/3 4.0. Network costing can determine planned costs for material components to be managed in the valuated project stock. Normally it is recommended that you implement the valuated project stock if this is permitted by the business process. You can specify the procurement type of a material component either manually or you can use a procurement indicator. Procurement indicators are defined in the Customizing of SAP PS using transaction OPS8.

Requirements Grouping

Stock management per the WBS has disadvantages from the logistics point of view. Because individual stock segments are managed separately from an MRP point of view, an MRP process creates separate PRs of planned orders for every stock segment irrespective of whether there is enough material available in another stock segment. To avoid the logistics disadvantages of individual stock management, requirements grouping can be performed in PS. This is called grouping, pegging and distribution, or GPD, and we go into more depth on it in this post…

http://www.scmfocus.com/sapplanning/2009/05/06/gpd-grouping-pegging-and-distribution/

The top WBS element is then automatically identified in the Basic data as a grouping WBS element. Automatic grouping causes all requirements and stocks of the project referencing the project stock to be managed exclusively on the level of this grouping WBS element. In MRP only one WBS element is used as an individual stock segment, and all PRs, orders, production orders referencing the project stock are assigned to this WBS element. You can read more about the work breakdown structure here..

http://www.scmfocus.com/sapplanning/2009/05/03/work-breakdown-structure/

WBS BOMs This is a bill of material that in addition to the material number of the header material, is identified via a WBS element number. To understand more about BOMs see this link..

http://www.scmfocus.com/sapplanning/2008/01/05/bom/


SCM and Project vs Plant Stock

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Plant Stock vs. Project Stock

SAP provides different options for material stock management. One possibility is the usage of the collective stock or anonymous plant stock. All projects and orders requiring a material managed in a collective stock can take this material from the plant stock. Another option is the usage of individual stock. In this case material stocks are managed with a reference to a sales order or a WBS element. Project stock is a form of individual stock management where material stocks with reference to WBS elements can be managed as individual stock segments. Using the options Non-valuated stock, Valuated stock or No project stock in the basic data of the project definition, you specify for a project whether a non-valuated or a valuated project stock management or material will be possible or whether individual project stocks cannnot be used. When non-valuated project stock is used, every WBS element of the project represents a separate stock segment from the logistics point of view.

Valuated and Non-Valuated Project Stock

Material movements with reference to non-valuated project stock take place with out being valuated. For example, when a material managed in a project stock is consumed by a network activity (goods issue for reservation), this does not cause actual costs for the activity and no postings are made in financial accounting. The calculation of MRP networks determines that no planned costs for material components will be managed in the non-valuated project stock. The stock holding WBS element is debited with the actual costs for the external procurement only when the goods or invoice receipt for purchased parts is posted to the project stock. Non-valuated project stock does not completely disclose the costs for the network activities or the assigned production orders. If you implement the non-valuated project stock, a meaningful cost object controlling is possible only on the level of the stock holding WBS elements or the entire project after period end closing. Due to the disadvantages of the non-valuated project stock, the valuated project stock was provided as of SAP R/3 4.0. Network costing can determine planned costs for material components to be managed in the valuated project stock. Normally it is recommended that you implement the valuated project stock if this is permitted by the business process.

You can specify the procurement type of a material component either manually or you can use a procurement indicator. Procurement indicators are defined in the Customizing of SAP PS using transaction OPS8.

Requirements Grouping

Stock management per the WBS has disadvantages from the logistics point of view. Because individual stock segments are managed separately from an MRP point of view, an MRP process creates separate PRs of planned orders for every stock segment irrespective of whether there is enough material available in another stock segment. To avoid the logistics disadvantages of individual stock management, requirements grouping can be performed in PS. The top WBS element is then automatically identified in the Basic data as a grouping WBS element. Automatic grouping causes all requirements and stocks of the project referencing the project stock to be managed exclusively on the level of this grouping WBS element. In MRP only one WBS element is used as an individual stock segment, and all PRs, orders, production orders referencing the project stock are assigned to this WBS element.

WBS BOMs

This is a bill of material that in addition to the material number of the header material, is identified via a WBS element number.


Product Location Master Tabs for PP/DS and SNP

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What to Focus On

The focus of this post is on the Product Location Master is on the following tabs that relate to SNP and PP/DS.

  1. Lot Size
  2. PP/DS
  3. Demand
  4. SNP 1
  5. SNP 2
  6. Procurement

Lot Size Tab


There is a lot to go over here, so we will just focus on a few of the settings. First you can chose Lot for Lot (the exact shortage amount is ordered), Fixed Lot Size or by Period (a preset amount is used). Next to this field allows you to enter the lot size. By period groups together lots from different periods. If you select by period you can choose from the following:


You can also chose Reorder Point. If you chose the Reorder Point, you have the following options.


As you can see each of these selections has further qualifications that you can add.

In the lower portion of the tab you can hard code safety stock, reorder point, max stock level, service level, demand forecast error. Some of these form the inputs to creating a safety stock, others allow a full hard coding of safety stock.

The PP/DS Tab


The first options is the planning procedure. Defines for each planning relevant event that can occur for a location product, which action is executed by Production Planning and Detailed Scheduling (PP/DS) in SAP APO if this event occurs.


The planning package is an optional selection. In the case of a planning package for a supersession chain, this corresponds to the condition that the products in a supersession chain always have to be planned together in procurement planning.

The next selection is the planning Heuristic or PP/DS Heuristic which is to be used. There are many many heuristics to chose from, each with their specific benefits. We will discuss these benefits in a separate post on PPDS heuristics.


The planning group is simply a grouping of the product. It is also optional. However, a planning group can serve as an aggregation device. The planning group is also available for the propagation range as a selection criteria.

The lower portion of the tab is concerned with horizons. Essentially how far out the product should be planned. These horizons affect different modules such that a single product, can have different horizons for different planning purposes. Most of these are values that you enter rather than selections. The exception being the SNP horizon.

Demand Tab


Requirements Strategies are setup in the IMG. See this post for details.

http://www.scmfocus.com/sapplanning/2009/08/29/requirements-strategies-in-sap-erm-and-scm/

Requirements Strategy 8
The first sub-tab has to do with Dependent Requirements. If you select “Always coll requirements,” the system creates dependent and stock transfer requirements for the product in the make-to-stock segment.

And then whether the consumption should be forward or backwards. Backward consumption simply means that sales orders, dependent requirements or material reservations consume forecasted demand that lies within the consumption period and before the requirements date. Forward consumption does not allow this.

The consumptive group is in conjunction with descriptive characteristics to enable the forecast to be consumed by sales orders and related orders, at a more detailed level than the location product.


Now we go to the pegging sub tab. The most critical setting is the Fixed Pegging option.


This determines whether the product has fixed pegging and thus whether the pegging from a production planning run is permanent. The next selection supposed to be set if you want to used dynamic pegging, that is the capacity and inventory is available for pegging during every MRP run. The right side have to do with variances and are not used all that frequently. Below and towards the right you can set if you want to use total receipts.


If you set this indicator, the system assigns a receipt element to just one requirement element for the product during dynamic pegging. (The requirement element must thus completely consume the receipt element.)

Use total stock. If you set this indicator, the system may assign a receipt element to just one requirement element for the product during dynamic pegging. (The requirement element must thus completely consume the receipt element.)


The final sub-tab shows the stock types which should be considered available. That is you set which of the types of stock you want taken into account.


SNP 1

(Gives the penalty cost rate per day that is used by the SNP Optimizer to weight the delayed delivery of a product with regard to the planned delivery date. The penalty for delayed delivery of the requirement quantities is measured per base unit of quantity.) - SAP Help

Product Location Master 1
SNP 2

Product Location Master 2
Procurement

  • Procurement Type: The options are external procurement, in house production, external production or inhouse production, external procurement planning.
  • Planned Delivery Time: Procurement Lead Time
  • Cost Function: Used in optimzation
  • Procurement Costs: Also used in optimization
  • Product Storage Costs: The cost to store per day
  • Safety Stock Penalty:

Product Location Master 3
Conclusion

Basically, these tabs are very powerful in controlling SNP and PPDS. Some controls, such as safety stock have levers in both the Product Master as well as within the heuristic (if the right heuristic is selected). Some of these settings will be CIFed over from ECC, but no all of them. Therefore, after the CIF is complete, its important to go through the product master with your client and make sure your settings are doing what you want them to in terms of output to the plan.


EWM Organizational Setup

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Org Units

In this post we will begin at the high level in terms of organizational units and move down to more detail. We will start at the Supply Chain Unit and end at the Bin. We will show how to setup and configure each.

Setup:

In order to implement EWM you need to setup the physical structure of the warehouse.

  • Supply Chain Unit – (a supply chain unit is the SCM term for a Plant, Distribution Center, Customer or Vendor). This holds information like country, region and time zone. the The first step is to create the location, then add to it with the Maintain Supply Chain Unit transaction.

 

Then this screen.


Once the location is created, it will show up in the Maintain Supply Chain Unit transaction, however a few things must be done to it before it can have a warehouse number assigned to it.

SPRO


 

Next

This will take us into the SCU main tabs.

 

Note: If you want to add warehouse numbers you must add on the business attribute of warehouse to the Supply Chain Unit.

 

This allows any SCU type to have a warehouse allocated to it.

 

The next step is to create warehouse numbers. Be careful, They must have a “unit of weight, or they won’t interoperate with storage bin creation.”

  • Warehouse Number (an entire complex can be managed with one number) a warehouse number must be created inside of WM to represent the EWM warehouse. (however warehouses must be managed by either WM or EWM, but never both – and acts as a bridge between the ERP system and the EWM warehouse.) This is the highest level organizational unit in EWM. They are created and then assigned to a Supply Chain Unit. (we will not show that process here).
  • In SAP ERP, the plant, storage location and storage type are combined to determine the EWM warehouse.
  • You can only assign one warehouse number to a Supply Chain Unit. Now we will assign SNA1 to SNAPP SC UNIT2. There is a very strange error that one can get which is that the Supply Chain Unit must have “business characteristics”

SPRO

 


 

Define Warehouse Number Control.

 

Next it will take you to this screen.


However, You need to double click on the warehouse number control in order to go into it to assign units of measure.


Now you will want to assign the warehouse number to the SCU.


Select the SCU and a Custodian, and then select save.


Assignment to a Supply Chain Unit

After the numbers are created its time to assign to a Supply Chain Unit. Warehouse numbers can be assigned and be unassigned to a Supply Chain Unit.

Storage type (defines physical storage areas – one of the more misnamed of the EWM org units.) These are defined per warehouse number. They are used to indicate the relative size of bin and or actual bin dimensions. Storage types include the following. Each of these types can be further modified.

  • High Rack
  • Fixed Bin
  • Bulk Storage Type

You must first define a Storage Type before you define a Storage Bin. The Storage Type is used to represent a physical storage area within the warehouse that has certain physical and spacial characteristics.

  • Storage Section is the physical subdivision of a storage type. (each storage type is divided into storage section) This joins together storage bins, such as heavy parts, or bulky parts. It is the essential subdivision of a storage type.

This takes you to the next area. We have created one Warehouse type, but applied it to our 4 different warehouse numbers.


  • Storage bin (Each storage type and section consists of storage compartments called bins) bins in more than one storage type can exist. A bin is in a way the lowest level of the organizational hierarchy, its also the smallest spacial unit in the warehouse. It is the exact position of the stored product. A bin has a coordinate. 05-06-10 would be storage bin aisle 5, stack 6, level 10. Storage bins are not actually organizational units.

 

Next you will be taken to this screen:

Now that the units have been assigned to the storage bin, the next step is shown below:


Next you will be taken to this screen.

 

Here you can do things like set the maximum weight.


This takes you to this screen.


 

This allows you to allocate both a Storage Type and and a Storage Section to the Bin. The Storage Type and Storage Section are assigned to the bin. They are also higher level org structures in EWM. That is they must be defined by prior to the definition of Storage Bin.

  • Quant (Used for inventory management of a product in a storage bin – represents a quantity of a product assigned to a storage bin..i.e a quantity.) Negative quants are deleted during a goods receipt posting. Quant (i.e. a quantity of material…Used for inventory management of a product in a storage bin – represents a quantity of a product assigned to a storage bin). In essence the Quant is what is required for a bin.
  • Activity area (A logical grouping of storage bins. It can refer to a storage bin.)
  • Bins. However a Storage Bin is not an organizational unit. Bins also have a bin access type which controls how the bin is accessed by resources.
  • Resources. This represents a person or equipment that can do work in a warehouse. Resources are assigned to warehouse numbers. Below we have the resources created and assigned to resources groups (which we also created earlier)

This takes you in here. Notice how the resources are created per warehouse number.

A resource group is used to group resources for queue assignment purposes.

The next step is to add users for the resources:


Which takes you to this screen.

 

 

Here you can see we have added a user for every resource in warehouse number 1 (aka SNA1). There is an issue however with configuring this area. The error “Specify a key within the Work Area” is common. This does not allow Resources to be assigned to Warehouse Numbers. Basically changing resources is a complete mess.

Currently, SNA1 and SNA4 are fine, but SNA2 and SNA3 get this message. This is an open issue, and we will have to move on.

A resource type is a grouping of resources with similar technical or physical qualifications.

  • Packing specifications (used to define the packing requirements for products to be put away or transported). A big part of the packing specification is whether item is palletized and the palletized quantity. A pallet size of 50 means that an order of 100 units would require two pallets. Packing specs are used in EWM, SNC and SPP. The packaging specs use the iPPE database engine to store the specs. In EWM its used in:

You have to select the green check box to bring up the current packing specs.

 

Now we want to add a new line item and then double-click it to be taken into the detail.


Now we select the main packaging material to open more data fields.

 

Now we want to add detail around the product. You can add a product by using the drop down or by right mouse clicking on the content folder.

 

 


  1. Automatic packing in inbound delivery and in goods receipt processing
  2. Packaging material determination during warehouse order creation
  3. Packaging material determination during de-consolidation
  4. Slotting
  5. Internal warehouse processes (parallelization, UOM)
  • Handling units, resident in the warehouse product master. The process of creating a handling unit is called packing.

This takes your into the main screen


We are setting up packing materials for bottles.

Shared Areas Between WM and EWM

Many items between WM and EWM are shared. For instance, the handling unit is treated identically between the systems. It does the following:

  1. Describes what is packed
  2. Has a history
  3. Has physical properties (volume, weight, quantities)
  4. Simplifies the supply chain
  5. Are known to all logistics operations
  6. Can be scanned
  7. Is on the Inbound Delivery/ASN (connects to the Transfer Order Putaway and thus the Goods Receipt Confirmation)

Problem

Even after all of this was accomplished we still received the following error when we try to create an order for the product-location of SNA-RE for SNA4.


 

 

However, when we go out to check the Product Master for this location, we show that it exists.


 

 

 

So the question is why is it doing that? What else needs to be setup in order to get the product location to exist for orders? It may come down to seeing what is different. This is because the product location SNA2 and SNA-GA exists. However the other product locations that we created do not exist.

Steps in the Analysis of this Problem

  1. First we went to see if the planning version 000 was assigned to each location (it was).
  2. We checked each location to see how it was different from SNA2. There were some differences, such as the ATP tab was filled in on SNA2, where it was not on SNA4. However, the differences were minor. When we went to check SNA4 again after making the changes, it still did not fix the problem. However another problem surfaces. Why does the product location exist for SNA-GA and SNA2, but not SNA-RE (the other material) and SNA2. Next we went to go and check the materials. The differences were (material SNA-GA had been changed by a different user. It belonged to a material group, whereas SNA-RE did not. There was a check horizon of “1″ on SNA-GA and not one on SNA-RE, there was a consumptive mode on SNA-GA and not on SNA-RE, there was a procurement type of “F” on SNA-GA, but “R” on SNA-RE.) Everything was normalized to SNA-GA. This did not yield anything and did not make SNA-RE and SNA2 valid. We also checked the global settings between the two materials, also to no avail.
  3. We then went into SPRO into the master data area under APO and EWM.

However, the actual problem is one of confusion. It is not that the product location does not exist, but that there is no inventory in that location for when an order can be placed. Inventory only exists in SNA2, so it is only showing as valid to pull inventory from this location.

Quicknotes

An organizational unit is the Supply Chain Unit for a EWM Warehouse Number The organizational unit that represents the subdivision of a storage type is a storage section Goods arrive and leave the warehouse through doors A work center in EWM is represented by a storage type. It is a resource where you can perform

  1. Packing
  2. De-consolidation
  3. Counting
  4. Quality Inspection

The work center is assigned in the packaging specification. Every work center is assigned to a warehouse number.

A work center is represented in EWM as a storage type.

To provide for efficient putaway and picking the warehouse, EWM provides a slotting and rearrangement process in which putaway storage bins can be assigned based on demand and forecast data related to the products stored in the warehouse. Inbound shipments can be managed using the yard management function,

EWM supports packaging and repackaging in the goods receipt process as well as the goods issue process.

 

 

An activity area defines storage bins. They are logical groups of bins that can be used in different activities like picking, put-away and physical inventory. They enable sorting sequences for bins and they influence queue determination.

An activity area consists of one or more storage bins. You can define the assigned storage bins using the following:

  1. Aisle
  2. Stack
  3. Level
  4. Bin subdivision
  5. Depth
  6. Information about the storage type
  7. Any assigned de-consolidation groups

There is little to setup in this area of SPRO. However, after the area is defined, it needs to be assigned to storage bins.


 

 

References

EWM 100 Training Manual