Combined sales and production plan - SAP ERP Tutorial

- [Matthew] Welcome back to SAP MRP Strategies course, I'm your instructor Matthew Hunt and in our last video I showed you, in a live SAP environment, I showed you how strategy 70 was used, assembly at a component level. I'm sorry, planning at a component level. These next two strategies I'm going to show you are called multi use strategies and the reason we call them that is because they're typically used when a part is both used in production as well as sold as a spare part or a service part. I have a kind of a flow chart here for each one of the two options, the difference between the two options are whether you do a combined plan at the component level for both the sale of the spare part and the production, or whether you only do a demand plan for the sales of the component part and the production is driven at the final, the planning for the production is driven at the final assembly level. So that's the main difference. This line coming into the box from the right this says, one combined demand plan for both production and spare parts and the one below it says one demand plan for only the sale of a spare part. So you'll see the first one is actually a hybrid of two strategies, it's a hybrid of both strategy group 40 and strategy 70. So for this particular strategy we will actually have to go in and do some IMG configuration, we'll have to create our own strategy group. For the second one, you could use the SAP pre-configured strategy group 40 for that one. So the first one combining the sales and production into one demand plan and I said it's a hybrid of strategy 40 and 70. The purpose of this one is if you want to create one plan for both production and the sale of spare parts. Like I said, you need to go into the IMG and create a new hybrid strategy that uses the requirements type for strategy 40 and the customer requirements type for strategy 70. Prerequisites then, you need to go to the MRP 3 View and under the strategy group, you need to enter the new IMG activity, I'm sorry the new strategy group that we create in the IMG. In my example, I'm going to create Z3 because Z3 was an available strategy group. You can really create whatever you want, you probably want to keep the SAP nomenclature of using a Z but that's up to you. You want to enter the consumption parameters as well as the mixed MRP value of one. On the MRP 4 View, you want to enter individual collective indicator of two. So we'll go into the IMG and I'll show you how to create this, you'll have to create both the strategy itself and then the strategy group but as I said, we're doing a mix of strategy 70 and 40 so what I did is I really copied 70 and then I created, or I added the 40 to it by entering the requirements type for customer requirements as KSV. Material master setup for our strategy Z3, you're going to enter the strategy under the MRP 3 View as Z3 and the mixed MRP indicator of one as well as your consumption mode and forwards and backwards, periods. Then on the MRP 4, you're going to set up the individual collection field as a two. Getting into our example of strategy Z3, I'm going to do a live demo of this in the next video but I'll tell you sort of what's going to happen, I'll give you some screenshots so you know what to look for. We will start at the component level entering demand at the component level. Remember this is a combined plan for both production and sales, so your MD61 quantities need to take into consideration both what I'm going to consume of this component from a production standpoint as well as how many I'm going to sell as spare parts. So I created a plan with three months, each month has 1,000 units in it and it automatically defaults my requirements type to VSFB because of my strategy group Z3. Then stage two procurement before use in production. This works exactly like in strategy 70 where I will run MRP, it'll create purchase requisitions, I will turn the purchase requisition into a purchase order, do a goods received on the purchase order and it increases my stock so you see my purchase requisition on 12/3 went away, my stock ended up increasing by 1,000 units. Stage three then is going to be the sales order so I'm going to create a sales order for the component. This is a sales order where I'm selling this component as a spare part to somebody and just like with strategy group 40, the sales order, it comes in and it consumes the independent requirement so if you remember on 12/3 I had independent requirements for 1,000 units, I now had a sales order come in on 12/4, the backwards consumption mode consumes 100 units from my independent requirements so my independent requirements go down to 900, my sales order there is for the other 100. When I fulfill that sales order because keep in mind I have stock of 1,000 units already on hand for this, you'll see in the bottom picture, the bottom left hand side, when I post a goods issue for that sales order, it removed the sales order MRP element and it also consumed my stock by 100 units so my available stock on hand is only 900 units now. Coming over to the right hand side stages four and five production and goods issue of the component. So now I'm doing production on it so previously in stage three, I was selling the part as a spare part, now I'm doing production on it so I have a dependent requirement, my final assembly is prod 04 so you see I have a dependent requirement on December 3rd for 200 units. The dependent requirements are consuming the independent requirements, so my independent requirements on 12/3 are now down to 700 because 200 units are being consumed by the production order at the final assembly level. When I do produce that order and do a goods receipt and then I go in to transaction CO11, and I do a confirmation of the goods issue, that will decrease my on hand stock by 200 units so you see my available stock goes down to 700 units and that dependent requirement also goes away when I do the confirmation on it. So that is how strategy Z3 works. Some highlights for this particular multi use strategy. Number one, it combines the planning side of strategy 70 and the customer requirement of strategy 40 so it's a hybrid of those strategies that we have previously talked about. Use this strategy if you combine your planning for the components with both production and spare parts. So that covers the overview of it, I'm now in the next video going to jump into the demo of Z3 so when you're ready to see that demo in a live SAP system, I will see you in that video.