Friday, June 1, 2012

Planning Strategy 81... My favorite

Planning strategies represent the interface between demand and supply and are set in the material master's MRP3 screen in the field strategy group.

It's called the strategy group because it actually allows you to set a group of strategies which contains one main strategy and possible alternative strategies, which the sales rep might want to use instead of the main.

Strategy 81 belongs to the family of assembly strategies. These have a tight connection between the sales order and the supply element. In fact the assembly strategies create the respective supply element right out of the sales order and perform an availability check - not on the finished product, which is not available at this time, but - on the components necessary to assemble or finish up the final product. Hence this is an 'assemble to order' or 'finish to order' strategy.

Strategy 82 creates a production order (or process order if you use PP-PI) and strategy 81 creates a planned order out of the sales order. That makes it a great instrument, if you are using the tools of repetitive manufacturing! (yes I know... I can see some of you going "here he goes again... promoting REM")

So... :-) if you are a manufacturer of standard products and you make those products repeatedly... why not automating things? Your planners will thank you. Here is what could be done with 81 and REM:

Let's assume you make toasters; small toaster, bagel toasters and industrial toasters. Small and bagel toasters you sell to Target and you produce them to forecast and keep stock. The industrial toasters are made to order. All toasters are made on the same line and there is no doubt that this represents repetitive manufacturing, is there?

So naturally you employ takt or rate based scheduling to fill the line with transaction LAS2. Here I suggest to use strategy 40 for the small and bagel toasters. That would mean you'd have a forecast which creates run schedules (planned orders) for a long time to come, which may be used to fill the production line to, let's say, 80%. Here is your leveled load!

If you set up strategy 81 for the industrial toaster, which is MTO, every time a sales order is created, SAP generates a planned order (run schedule) and performs an availability check for all the components needed to make an industrial toaster. According to that availability, a committment date is determined for the customer and, if you fix the date, the assembly order is placed on the schedule - on that date within 20% of open capacity.

Should the production date change, the sales order will now be updated and vice versa.

Isn't this magic? Not really... Its just SAP...