Configuration for Discrete

Manufacturing
DISCRETE MANUFACTURING CONFIGURATION DURING SAP IMPLEMENTATION

JD Software Pvt Ltd, Chennai 600063, India www.jdsfot.in

Configuration Basics of manufacturing. Next, we follow up a step-by-step
process to create a new production order type
Discrete Manufacturing PP10, including assigning it a new number range.
All of the subsequent configuration steps covered
for this order type and in this chapter are
sufficient to enable you to run end-to-end

D
business process in SAP ERP. In Chapter 6, we
cover the business process side of the
configuration undertaken in this chapter.
URING AN SAP ERP
IMPLEMENTATION project, when it's If, as an SAP ERP system consultant or as a
established that discrete manufacturing will most business owner, this is the first time you're
closely serve the business needs of the company, configuring and implementing the Production
the next logical step is to have sensitive Planning (PP) component, then we suggest that
discussions and several workshops to agree on you follow the step-by-step approach that we use
the configuration objects of discrete in this chapter. Because the PP component
manufacturing. Configuration of the specific integrates with several other components such as
production type (which in this case is discrete Materials Management, Quality Management, and
manufacturing) forms the basis on which the most importantly with Controlling-Production
business process of the company will run. For Costing (CO-PC), we suggest that you maintain
example, how should the system behave when it close coordination all along by consulting the
comes across a material or capacity shortage resources of these components.
during production order creation or release?
How should it behave when the actual 1.1 Material Master
production exceeds the defined under-delivery
or over-delivery of the material? What should the The configuration of the material master is
system do if it's unable to schedule production primarily managed within the Materials
within the defined basic dates? For each of these Management (MM) component of the SAP ERP
(and many more) questions, you can set the system. During an SAP ERP system
controls on the degree of freedom or flexibility implementation, the MM team coordinates with
(or strictness) that you want the system to allow the client to discuss and agree on a larger number
you to perform business functions. For example, of MM-specific configuration objects, which also
you can configure the system to allow you to includes material types. A material type is a unique
create a production order despite a component identification to distinguish materials in various
shortage, but to stop you from releasing it until business processes. Some examples of material
the requisite components for production are types are raw materials, semi-finished goods,
available in stock. trading materials, packing materials, non-valuated
materials, spare parts, and consumables.
In this chapter, we cover the configuration basics However, the importance and involvement of
needed to set up the master data used in discrete production planning can't be overemphasized

PAGE 1
here, as the material requirements planning materials procured directly from vendors or
(MRP) and work scheduling views of the material subassemblies produced in-house.
master are very important to PP, both from a
planning and execution perspective. The BOM has a large number of functions. You
can have a BOM that is specific to
engineering/design only, whereas you can have
another BOM of the same material that you can
use for costing purposes. You can have a
production BOM and also a sales BOM. In a sales
BOM, the system explodes the components and
makes them an integral part of sales processing.
For example, when a company sells a new car, it
also includes the accessories such as a spare tire,
the tire changing tool-kit, and the owner's
manual, among other things. These accessories
are, in fact, components in a sales BOM.

Apart from the option for quantity and value A material BOM is a central component in MRP.
updates, you can also control the views that the When the system runs the MRP on a material, it
system makes available to the end user during looks for its BOM to plan not just at the finished
material master creation. For example, normally goods level but also at the components' and raw
the purchasing view isn't available for finished materials' levels. The material BOM is always
goods because the company doesn't purchase single-level, and you can explode and display the
finished goods. Similarly, for raw materials, the cascade of BOMs as a multilevel structure. The
sales views aren't available because the company system displays a single-level BOM by showing its
normally doesn't sell its raw materials. immediate next component or assembly. It's in a
multilevel BOM that the system reflects
To set up the attributes of material types, follow comprehensive details of all the assemblies,
the configuration (Transaction SPRO) menu path components, the associated quantities of
LOGISTICS – GENERAL – MATERIAL MASTER assemblies and components, and their logical
– BASIC SETTINGS – MATERIAL TYPES – relationship to each other.
DEFINE ATTRIBUTES OF MATERIAL TYPES.

1.2.1 Define BOM Usages

1.2 Bill of Materials (BOM) A BOM usage controls the activities and functions
that the system can perform in business
Similar to the material master, a material's BOM processes. To create a new BOM usage, follow
is used extensively in various areas of the supply the (Transaction SPRO menu path
chain, including planning and costing. A BOM is a PRODUCTION – BASIC DATA – GENERAL
formally structured list of components that you DATA – BOM USAGE – DEFINE BOM USAGES,
need to use to produce a material. These or use transaction OS20.
components may be raw materials or packing

PAGE 2
can also set the status in which all functions are
possible.

Here you'll find several standard BOM usages.

You can create a new BO usage by choosing 1.2.3 BOM Status
NEW ENTIRES, and selecting the control
functions to allow or disallow the business You can control the different applications of a
processes in which the BOM usage is applicable. material BOM from its status. For example,
during new product development, a material has
1.2.2. Allowed Material Types in the BOM BOM status as Engineering/design or Costing, it
Header isn't available in production order creation. You
can also set the status in which all functions are
You can control the material types that the possible.
system allows for creation of a material BOM.
For example, you normally don't create a 1.2.4 BOM with History Requirement
material BOM for spare parts or consumable
material types. This control on material types for You can control whether changes made to the
BOM creation also helps prevent the creation of material BOM are with reference to a change
unnecessary configuration for all of the material number or Engineering Change Management
types that will have any BOM usage. (ECM). With a history requirement or change
number, the system requires you to enter the
change number before it allows you to makes the
desired changes, which adds a level of security.

To create or set the BOM status, follow the

configuration (Transaction SPRO) menu path
PRODUCTION – BASIC DATA – GENERAL
DATA – DEFINE BOM STATUS, or use
Transaction OS23.
1.2.3 BOM Status

1.2.5 Item Category in BOM

You can control the different applications of a
material BOM from its status. For example,
The item category provides further divisions to
during new product development, a material has
the different BOM classes. While some item
BOM status as Engineering/design or Costing, it
categories are relevant for production or for
isn't available in production order creation. You

PAGE 3
planning, others are merely to provide The material input parameter (MatInpt) indicates
information. whether a material reference to the item exists.
This isn't the case with document items or
Following are some of the most important nonstock items. The inventory-management
predefined item categories: parameter (InvMg) allows you to set that you can
only use those materials whose quantities are
 L: stock item - Stock items contain managed in inventory management.
components that you store in your
warehouse and include as a part of To maintain a new item category or make
Inventory Management. changes to the existing ones, follow the
configuration (Transaction SPRO) menu path
 N: nonstock item - A nonstock item is a Production _ Basic Data _ ItemData _ Define
material that isn't available in stock but Material Types Allowed for BOM Header, or use
is procured directly for the given Transaction OS24. Select or deselect the
production order. A nonstock item has checkboxes to meet your business needs.
direct relation to the procurement
process. There is also no need to have a 1.2.6 Variable Size Item Formulas
material master (item code) for
nonstock material. If you use nonstock In the fabrication industry, it's common that
material, you also have to fill in the component issuance to produce an assembly is
procurement details, such as cost often based on a formula. For example, to
element, purchasing group, material produce the fuel tank of a motorcycle, the
group, and price. warehouse issues the steel sheet based on the
formula, which calculates the requirement. When
 R: variable-size item - In this item you assign the variable-size item in the BOM of
category, you can use the formula and the material, and with item category R, the
also define the variables' sizes to enable system enables you to enter the variable-size
the system to perform calculations and details in the relevant area of the BOM's item
suggest the component's quantity. details area.

 T: text item - The text item has a

descriptive character.

 M: intra material - This item category is

commonly used in master recipes
(process industry). Materials that are Notes
temporarily used in process engineering Before you proceed to create a formula for a
are recorded as components with this variable size item, you can also self-define a
item category. unique unit of measure to denote the formula via
Transaction CUNI.

PAGE 4
with one unique ID. Then you define the
To create a variable size item formula, follow the selection priority of each BOM and finally assign
SAP ERP system configuration (Transaction the BOM usage, such as production or universal.
SPRO) menu path Production _ Basic Data _
Item Data _ DefineVariable-Size Item Formula, or 1.3 Work Center
use Transaction OS15.
A work center is a machine or a group of machines,
1.2.7 BOM Explosion Types a person or a group of persons, or a group of
person(s) and machine(s) that adds value to the
You can control how the system takes a specific manufacturing process. During an SAP ERP
component's explosion into account in the Basic system implementation, the production and the
Data view of the BOM creation screen. You can product costing teams discuss and mutually agree
control whether direct production, a phantom on the number of work centers that needs to be
assembly or even Long-Term Planning (LTP) is available. The decision is primarily focused on
deactivated. For example, if you don't want the ensuring that the production department is able
system to plan a particular component in LTP, to schedule and plan work centers and machines
you can set its explosion type status in the Basic capacities, whereas the product costing team
Data view of the material's component. If you ensures that the activities-wise and cost centers-
don't find the desired configuration settings, then wise reporting is available. For example, if
you can configure using the configuration Packaging as a work center entails significant cost
(Transaction SPRO) menu path Production _ that the product costing team needs to monitor
Basic Data _ Item Data _ Define Explosion Types. its cost and activities, then it makes sense to
create a work center and assign a separate cost
1.2.8 BOM Selection (Order of Priority) center and associated activities to it. If it doesn't
require monitoring, then the production line cost
You can control how the system makes an center is sufficient.
automatic selection of a BOM to incorporate it;
for example, in a planned order during an MRP
run. For example, during the MRP run, if the
system is unable to find a material's BOM for
production, then you can define the next BOM JD Software Pvt Ltd.,
selection priority as universal. 23, Melandai 1st Cross Street,
West Tambaram,
To configure the BOM selection and its order of Chennai 600045
selection priority, follow the configuration India
(Transaction SPRO) menu path Production _ Tel: +91 44 22265767
Basic Data _ Bill of Material _ Alternative Mobile: +91 9840902654
Determination _ Define Order of Priority for www.jdsoft.in
BOM Usages, or use Transaction OS31. Here
you define the selection ID to combine all BOMs

PAGE 5