Production Order in SAP PP

In SAP PP (Production Planning), a production order is a document that instructs the production department to produce a specific quantity of materials by a certain date and time. It contains detailed information about the production process, such as the list of raw materials required, resources (machines, labor), and step-by-step instructions for production. Understand Production Order in SAP PP: Learn how to manage and control manufacturing processes efficiently with production orders in SAP Production Planning.

Detailed breakdown of the process is as follows:

 

1. Creation of Production Order

A production order can be generated in SAP manually or automatically based on various demand sources like sales orders or material requirement planning (MRP). It defines which material is to be manufactured, how much, and by when.

T-code: CO01 (Create production order)

Key inputs:

• Material: The finished product or semi-finished product.
• Plant: The plant where the manufacturing will take place.
• Quantity: The number of items to be manufactured.
• Dates: Start and finish dates of production.
• BOM (Bill of materials): Defines the raw materials or components required to produce finished products
• Routing: Defines the sequence of operations and work centers to carry out the production activities.

 

2. Release of Production Order

Once the production order is generated, it needs to be released so the shop floor can start manufacturing. Upon release, the system automatically checks for material and capacity availability.

T-code: CO02 (Change production order)

Key activities:

• Material availability check: We should ensure that the required raw materials are available for production.
• Capacity check: We must ensure that the production resources (machines, labor) have sufficient capacity to fulfill the production order.
• Order status changes to ‘REL’ (Released): The production can now start.

 

3. Material Staging and Goods Issue

After releasing the production order, the next step is staging the raw materials or components required for manufacturing, i.e., transferring them from the storage location to the shop floor.

T-code: MIGO (Goods issue for production order)

Key activities:

• Goods issue: The system generates a goods issue document to track the consumption of materials against the production order. This can reduce inventory levels for raw materials.

 

4. Execution of Production Order

With all the materials and resources (like work center, Labor etc.) In place, the actual production process starts. The work centers carry out the operations as defined in the routing.

Key activities:

• Work center operations: Each work center carries out specific tasks as per the routing.
• Confirmation of operations: Once an operation is finished, it is confirmed in the system, recording the time taken and the quantity produced.

T-code: CO11N (Single screen confirmation)

 

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5. Confirmation of Production Order

After the entire production process is finished, the production order needs to be confirmed. This notes down the quantity produced and consumed materials and updates the inventory.

T-code: CO15 (Confirm production order)

Key activities:

• Final confirmation: It can record the total production quantity.
• Automatic goods receipt: The system posts a goods receipt to increase the stock of finished products or semi-finished products.
• Actual cost calculation: The system updates the actual costs of production of finished goods based on the consumption of raw materials and resources.

 

6. Goods Receipt (GR)

Once the production order is confirmed, a goods receipt is posted to transfer the finished goods from the shop floor into inventory. This increases the stock of finished products and finally closes the production process.

T-code: MIGO (Goods movement)

Key activities:

• Goods receipt posting: The system posts the finished goods to the inventory of our organization.
• Stock update: Updates the quantity of finished goods in the storage locations.

 

7. Order Settlement

Finally, the production order should be settled, where the actual costs of production (materials, labor, overheads, etc.) are compared to the planned costs. Any variances are calculated and posted to the appropriate cost accounts of our company.

T-code: CO88 (Order settlement)

Key activities:

• Cost settlement: The actual costs are settled and any variances are calculated and posted to the financial accounts of our company.
• Closing the production order: The order is closed, which means the production process is complete.

 

8. Order Closure

Once all activities related to the production order are finished, the production order is closed to prevent further changes or postings.

T-code: CO02 (Change production order)

 

Conclusion

The production order process in SAP PP consists of several key steps from creation to closure, including release, material staging, production execution, confirmation, goods receipt, and settlement. Each of these steps consists of detailed tracking of materials, resources, costs, and progress, which helps ensure efficient production planning and control in our organization. 

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Author:-

Prahlad Pawar

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