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Business Blueprint

Production Planning

of

Rockman Cycle Industries Ltd

Created by: Manu Khanna, Swapnil Kr. Baishya

Date of creation: 11/07/2003

Changed by: Manu Khanna, Swapnil Kr. Baishya

Date of the last changes: 28/07/2004

Version: 4.7 ENTERPRISE

_______________ ______________________ ______________________

Sign Off Date Signature Customer Signature Consulting

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Table of Contents

1. INTRODUCTION............................................................................................................................................................................5

1.1. PURPOSE...................................................................................................................................................................................5

1.2. SCOPE........................................................................................................................................................................................5

1.3. KEY BUSINESS BENEFITS.....................................................................................................................................................5

2. ORGANIZATION............................................................................................................................................................................6

2.1. GENERAL EXPLANATION.............................................................................................................................................................6

2.2. NAMING CONVENTION.................................................................................................................................................................7

2.3. DEFINITIONOF ORGANIZATIONAL UNITS....................................................................................................................................7

2.4. CROSS-APPLICATION/CENTRAL ORGANIZATIONAL UNITS.....................................................................................11

3. MATERIAL GROUPING - FINISHED PRODUCT AND SEMI-FINISHED PRODUCTS.................................................13

3.1 CODING LOGICFORFINISHED PRODUCTS:-................................................................................................................................13

GROUP..............................................................................................................................................................................................13

AUTO CHAIN...................................................................................................................................................................................13

GROUP..............................................................................................................................................................................................13

3.1. SEMI FINISHED PRODUCT:.................................................................................................................................................13

GROUP..............................................................................................................................................................................................14

AUTO CHAIN...................................................................................................................................................................................14

GROUP..............................................................................................................................................................................................14

ALL THE FINISHED PRODUCTS AND WIP ARE TO BE ASSIGNED TO ONE OF THESE MATERIAL GROUPS. IN

FUTURE MORE MATERIAL GROUPS CAN BE ADDED OR DELETED THROUGH CUSTOMIZING FOLLOWING

THIS SEQUENCE.............................................................................................................................................................................15

4. MATERIAL CODING SYSTEM.................................................................................................................................................15

4.1. CODING LOGIC FOR AUTO CHAIN FINISHED GOODS:................................................................................................15

CODING LOGIC FOR CYCLE CHAIN FINISHED GOODS:....................................................................................................17

CODING LOGIC FOR CYCLE HUB FINISHED GOODS:.........................................................................................................18

CODING LOGIC FOR AUTO HUB FINISHED GOODS:...........................................................................................................18

4.2. CODING LOGIC FOR AUTO CHAIN WIP PARTS:.............................................................................................................19

4.3. CODING LOGIC FOR CYCLE CHAIN WIP PARTS:...........................................................................................................20

4.4. CODING LOGIC FOR AUTO HUB WIP PARTS:.................................................................................................................20

4.5. CODING LOGIC FOR CYCLE HUB WIP PARTS:..............................................................................................................21

5. MATERIAL BOM.........................................................................................................................................................................21

5.1. MULTIPLE BOM........................................................................................................................................................................215.2. VARIANT BOM..........................................................................................................................................................................22

5.3. SELECTION OF ALTERNATE BOM....................................................................................................................................225.4. ESSENTIAL PRODUCTION SCRAP.....................................................................................................................................23

5.5. QUESTIONS MATERIAL BOM :..................................................................................................................................................24

6. WORK CENTER...........................................................................................................................................................................28

6.1. PERSON RESPONSIBLE FOR THE WORK CENTER.........................................................................................................29

6.2. CAPACITY...............................................................................................................................................................................30

6.3. SHIFT AND SHIFT SEQUENCE............................................................................................................................................30

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6.4. QUESTIONS: WORKCENTERS.....................................................................................................................................................31

6.5. QUESTIONS: SHIFT SEQUENCE...................................................................................................................................................34

6.6. QUESTIONS: PRODUCT DATA MANAGEMENT..................................................................................................................34

6.7. QUESTIONS: ECR/ECO.............................................................................................................................................................34

6.8. QUESTIONS: CAPACITY..............................................................................................................................................................35

6.9. CAPP FORMULA........................................................................................................................................................................35

7. ROUTING......................................................................................................................................................................................35

7.1. QUESTIONS: ROUTINGS..............................................................................................................................................................37

7.2. REPETITIVE MANUFACTURING PRODUCT COST COLLECTORS..................................................................................................39

8. DEMAND MANAGEMENT.........................................................................................................................................................41

8.1. QUESTIONS: SALESAND OPERATIONS PLANNING.....................................................................................................................43

8.2. DEMAND MANAGEMENT...........................................................................................................................................................44

8.3. QUESTIONS: MASTERPRODUCTION SCHEDULING.....................................................................................................................45

9. PRODUCTION PLANNING AND PROCUREMENT PLANNING- MRP............................................................................48

9.1. MRP CONTROLLER....................................................................................................................................................................48

9.2. PRODUCTION PLANNING AND PROCUREMENT PLANNING......................................................................................49

10. PLANNED ORDERS PROCESSING........................................................................................................................................50

11. PRODUCTION ORDER CREATION......................................................................................................................................51

11.1. CONVERSION OF PLANNED ORDER...............................................................................................................................52

11.2. EVALUATIONS: LOGISTICS INFORMATION SYSTEM.................................................................................................................53

12. RELEASE OF PRODUCTION ORDER...................................................................................................................................53

13. CAPACITY REQUIREMENTS PLANNING..........................................................................................................................54

14. REPETITIVE MANUFACTURING.........................................................................................................................................57

14.1. QUESTIONS: CONVERSIONOF PLANNED ORDER.....................................................................................................................59

14.2. QUESTIONS: CREATING/PROCESSING PRODUCTION ORDER....................................................................................................5914.3. QUESTIONS: PRINTOUTOF PRODUCTION ORDER....................................................................................................................60

14.4. QUESTIONS: MATERIAL STAGING............................................................................................................................................60

14.5. QUESTIONS: CAPACITY REQUIREMENTS PLANNING................................................................................................................60

14.6. CAPACITY DISPATCHINGAND LEVELING................................................................................................................................61

14.7. PRODUCTION ORDEREXECUTION...........................................................................................................................................6114.8. GOODS ISSUE PROCESSINGFORPRODUCTION ORDERS..........................................................................................................61

14.9. PRODUCTION ORDEREXECUTION...........................................................................................................................................62

14.10. QUESTIONS: CAPACITY REQUIREMENTS PLANNING..............................................................................................................62

14.11. CAPACITY DISPATCHINGAND LEVELING..............................................................................................................................63

14.12. PRODUCTION ORDEREXECUTION.........................................................................................................................................63

14.13. PRODUCTION ORDEREXECUTION.........................................................................................................................................64

14.14. PRODUCTION ORDERCONFIRMATION...................................................................................................................................65

14.15. PROCESSINGOF GOODS RECEIPTSFROM PRODUCTION.........................................................................................................65

15. QUESTIONS: REPETITIVE MANUFACTURING................................................................................................................66

15.1. PROCESSINGOF MASTERPRODUCTION SCHEDULE.................................................................................................................66

15.2. MATERIAL STAGING................................................................................................................................................................67

15.3. PROCESSINGTHE PULL LIST....................................................................................................................................................67

16. REPORTS.....................................................................................................................................................................................68

17. ANNEXURE I...............................................................................................................................................................................70

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18. ANNEXURE II.............................................................................................................................................................................72

19. ANNEXURE III...........................................................................................................................................................................73

20. ANNEXURE IV................ .............. .............. .............. .............. ............... .............. .............. .............. .............. .............. .......... .75

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1. Introduction

1.1. PURPOSE

The purpose of the Business Blueprint is to document the detailed System and BusinessProcess Requirements, and to implement the SAP R/3 System based on those by RockmanCycle Industries Limited (RCIL). This document summarizes the proposed decisions associatedwith implementation as they relate to the configuration of SAP.

1.2. SCOPE

The Implementation Scope includes the following SAP R/3 Sub-Modules in ProductionPlanning:

1.2.1. MASTER DATA

Material master

Bill of material

Work center

Routing

1.2.2. PRODUCTION PLANNING

Demand management

1.2.3. MATERIAL REQUIREMENT PLANNING

1.2.4. PRODUCTION CONTROL

Order

Control

Goods movement

Confirmation

1.2.5. CAPACITY PLANNING & SCHEDULING

1.3. KEY BUSINESS BENEFITS

The SAP System will provide the following Key Business Benefits:

1.3.1. General

SAP will provide Access to Real-Time, On-Line Information with timely processing.

SAP will offer stronger, more robust Reporting Tools.

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Saps Integrated Database eliminates the need for data replication and stand-alone

systems, while decreasing the chance for human errors. This will reduce non-value-addedwork while improving overall data integrity and give broader information access.

SAP is Packaged Software, which is readily scalable. As such, the SAP software will

serve as a facilitator of future growth.

1.3.2. PP-Related

Entire Production Planning and Control process will be captured for the first time in a

computerized SAP R/3 system.

Part numbers for semi finished product defined, so that stock valuation at various WIP

stages can be done through SAP.

Material requirement planning will be performed through a much accurate MRP run

process in SAP. Material will be planned from the finished products till the raw materialstage.

For the Material Type Production resources, consumables and tools, consumption based

planning will be undertaken. Planned Scrap outcome of the production process will be accounted through the SAP

system automatically and back-flushed to Scrap store.

Capacity planning, Production scheduling with the Rockman Shift sequence will be

performed through SAP.

Product Costing to be obtained through SAP.

Standard SAP reports will be generated for all production processes.

All the Work Centers in PP are assigned to Cost center. All the production costs will

automatically get accumulated in the cost centers.

All the PP master data will be loaded on to the system resulting in generation of the

planned costs of the production processes. Actual production can be confirmed in thesystem, which will generate the actual costs. Variance in the planned and actual costscan be identified and the desired improvements can be effected in order to improve andfurther control the production process. This is only possible through the integration of thevarious modules.

2. ORGANIZATION

2.1. General ExplanationIn SAP an organizational structure consists of the following units: -

Client

Company code

Plant

Storage location

Purchasing organization

Sales organization

The client is the top level. Several company codes can be assigned to it. In turn, severalplants can be assigned to a company code, and several storage locations assigned to a

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plant.

2.2. Naming Convention

Proposed Organization structure for Rockman is as follows:

Client 300

Company Code RCIL

PlantsCycle Hub and Chain C000

Auto Components and Chain A000

Storage LocationsIncoming A100, C100Raw material A200, C200WIP Store AC00, AC10, AH00, CC00, CC10, CH00, CH10Finished Goods A300, C300Rejection A400, C400Rework A500, C500Scrap A600, C600Hero store C700

2.3. Definition of Organizational Units

ClientIn commercial, organizational, and technical terms, self-contained units in an R/3 Systemwith separate master records and its own set of tables. A client can, for example, be acorporate group.

Company CodeThe smallest organizational unit for which a complete self-contained set of accounts can bedrawn up for purposes of external reporting. This involves recording all relevant transactionsand generating all supporting documents for financial statements such as balance sheets andprofit and loss statements. A company code can, for example, be a company or subsidiary

PlantAn organizational unit serving to subdivide an enterprise according to production, procurement,maintenance, and material planning aspects. It is a place where either materials are producedor goods and services provided.

Storage LocationAn organizational unit allowing differentiation between the various stocks of a material in aplant.

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Organization Structure- Production Planning, Rockman Cycle IndustriesLimited:

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Company code RCILCompany code RCIL

Client 300Client 300

Auto Business

AreaCycle

Cycle Hub

Profit

Center

Auto chain

Profit Center

Auto ProfitCentre

Group

Cycle ProfitCentre

Group

Purchase OrgPurchase Org Sales Org

Sales Org

Auto Hub

Profit Center

Auto Plant

A000 (Excise)

Cycle Plant

C000 ( Non

Gen

Store

Raw

Mat.

Rejectin

Rewor

k

Scrap

A600

Fin.Good

s

WIP

HubWIP

Chain

WIP

Chain

Gen

Store

Raw

Mat.

Rejecti Re

k

Scrap

C600

WIP

Chain

WIP

HubB

ef Plat

WIP

Chain

WIP

Hub

Aft

Hero Store

Fin.Good

s

C300

Cycle ChainProfit Center

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2.3.1. Company

Questions:

Q: 1) Do you want to structure the company into one or more separate legal entities?

A: No

Q: 2) Do you have foreign companies?

A: No

Q: 3) Which companies are going to work with which chart of account?

A: Rockman Cycle with RCIL chart of account

Q: 4) In which currencies are the transactions posted in the companies?

A: Indian Rupee

2.3.2. COMPANY CODE

Questions:

Q: 1) Which legal entities (company codes) will you have and in which countries?

A: Rockman Cycle in India

Q: 2) Which companies are required to use a statutory chart of accounts for reportingpurposes?

A: Rockman Cycle India Limited.

Q: 3) Will a different chart of accounts be used for consolidation purposes?

A: No

Q: 4) Specify the different levels of consolidation (for example, by country, by region).

A:By Country and Plant

2.3.3.Controlling Area

Questions:

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Q: 1) Are you using one centralized controlling system or do you follow a decentralizedapproach with several independent-controlling systems

A: One Controlling Area

Q: 2) Provided that company codes use the same chart of accounts and fiscal year variant:

Which company code(s) do you want to assign to your controlling area(s)?

A: RCIL

Q: 5) If you wish to have unified Controlling, which currency or currencies are you planning touse?

A: The Controlling area currency shall be INR

Q: 6) On which currencies should your Controlling be based?

A: INR

Q: 7) Which companies are going to work with which chart of account?

A: Rockman Cycle with RCIL chart of account

2.3.4. Plant

Questions:

Q: 1) Are all plants in the same country? List the plants and countries.

A: Yes .The plants are located in India, city Ludhiana. There are two plants Auto plant andCycle plant.

Q: 2) Will negative Stocks be allowed in any plants? If yes, specify the plants.

A: No Negative stocks will not be allowed in any plant.

Q: 3) Do you need special plants for your maintenance work apart from the common logisticsplants?

A: No

Q: 4) Which enterprise entities carry out production and what do they produce?

A: The production is carried out by the following plants:-Auto Plant manufactures wheel hub, crank case, and chain for motorcycles.Cycle plant manufactures hub and chain for Cycle.

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Q: 5) How does material move between plants (for example, using purchase orders or not)?What are the requirements you have to fulfill concerning reporting, transport papers, etc.?

A: There is no movement of raw material between the plants.

Q: 6) outline all facilities/locations that create, distribute, or store inventory.

A: There are two facilities where inventory is created Auto and Cycle plants. Each of theseplants will have finished goods store, Raw material store, WIP store, Rejection store, Reworkstore and Scrap yard.

Q: 7) Does the manufacturing/distribution process for a product differ such that theinventoryvalue/cost structure is different at each facility/plant? If so, please explain how.

A: Yes. Because of different product mix differ from .the manufacturing/distribution process

2.4. CROSS-APPLICATION/CENTRAL ORGANIZATIONALUNITS

General Explanation

An organizational unit serving to subdivide an enterprise according to production, procurement,maintenance, and material planning aspects. It is a place where either material is produced orgoods and services provided.

All data that is valid for a particular plant, as well as for the storage locations belonging to it, isstored at plant level. This includes, for example, MRP data and forecast data.

Naming Convention

It is being proposed that the following number of plants will be created1. Auto Plant Code-A0002. Cycle Plant Code-C000

Definition of Organizational Units

An organizational unit serving to subdivide an enterprise according to production, procurement,

maintenance, and material planning aspects. It is a place where either material is produced orgoods and services provided.

Assignment of Organizational Units

All data that is valid for a particular company code, as well as for the plants and storagelocations assigned to it, is stored at company code level. This includes, for example, accountingdata and costing data if valuation is at company code level.

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Changes to existing OrganizationIt had been proposed that two plants be created (A000, C000) and assigned to the companycode RCIL. Various storage locations for finished goods, raw material, WIP, scrap, rework willbe created and assigned to each plant.

2.4.1. CALENDAR

Requirements/Expectations

Factory calendar needs to be maintained in the system. In this the working days are to bedefined and the holidays. This information is used in various modules. Country wise calendarsare already maintained in the system.

The Rockman factory calendar is being created with the Id RK. The following holidays arebeing maintained specific to Rockman Cycle Industries Limited:

Birthday of Guru Govind Singh

Republic Day

Holi

Baisakhi

Independence day

Janmastam

Gandhi jayanti

Vijaya dashmi

Diwali

Vishwakarma Puja

Birthday of Sri Guru Nanak dev

The Factory Calendar needs to be updated each year based on the decided holidays. TheFactory Calendar acts as the basis for Capacity Planning as it defines the working days in ayear. In SAP there are two type of holidays. Holidays are to be created and then assigned tothe factory calendar.

2.4.2. UNITS OF MEASUREMENT


Units of measure are required to facilitate the procurement and management of various items inmultiple order units.

General ExplanationsThe unit of measure is utilized to describe the unit in which items are procured or stored. Thereare over 220 different units of measure provided by SAP.

System Configuration ConsiderationsUnits of measure to be used must be entered in the Purchase Requisition and Purchase Order

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in SAP.

Special ConsiderationsUnits of measure that have been used in the past will be configured in SAP if they do not existalready.

3. MATERIAL GROUPING - FINISHED PRODUCT AND SEMI-FINISHED PRODUCTSThe following material grouping has been defined for the finished and semi-finished products atRockman Cycle Industries Limited in the SAP. The Material Grouping is for the Reportingpurpose.

3.1 Coding Logic for Finished Products:-

GROUPING LOGIC:FA-FINISHED PRODUCT, AUTO PLANTFC- FINISHED PRODUCT, CYCLE PLANT

NUMBER RANGE:AUTO CHAIN FA01-FA20AUTO COMP FA21- FA40

CYCLE HUB FC01-FC20

CYCLE CHAIN FC 21-FC40

FINISHED PRODUCT:

AUTOCOMP

GROUP CYCLE HUB GROUP CYCLE CHAINGROUP

AUTOCHAIN

GROUP

P17 model FA21 THIN FRONT FC01 X 1/8 NORMAL FC21 DRIVE FA01

P21 model FA22 THIN REAR FC02 X 1/8 HD FC22 CAM FA02

P40 model FA23 OVAL FRONT FC03 X 3/32 BUSHLESS FC23

P60 model FA24 OVAL REAR FC04 X 3/32 WITHBUSH

FC24

P70 model FA25 THICK FRONT FC05 1/2X 1/8 BUSHLESS FC25

THICK REAR FC06

PARALLAL FRONT FC07

PARALLAX REAR FC08

WHEEL CHAIR FC09

CART WHEEL FC10

PAIRED HUB FC11

3.1. SEMI FINISHED PRODUCT:

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GROUPING LOGIC:SA- SEMIFINISHED PRODUCT, AUTO PLANTSC- SEMI FINISHED PRODUCT, CYCLE PLANT

NUMBER RANGE:

AUTO CHAIN : WA01-WA20AUTO COMP : WA21- WA40CYCLE HUB : WC01-WC20

CYCLE CHAIN : WC 21-WC40

AUTOCOMP

GROUP CYCLE HUB GROUP CYCLE CHAINGROUP

AUTO CHAIN GROUP

CASTED WA21 BLANK WC01 SOFTCOMPONENTS

WC21 SOFTCOMPONENTS

WA01

MACHINED WA22 TUBE WC02 HARDENEDCOMPONENTS

WC22 HARDENEDCOMPONENTS

WA02

PAINTED WA23 SSHELLWITHOUTPLATING

WC03

MOLTENMETAL

WA24 PLATED SHELL WC04

PAINTED SHELL WC05

HUB CUP PLAIN WC06

DUST WASHER WC07

HUB CONE WC08

AXLE WC09

LOCKNUT WC10OUTER NUT WC11

DOME NUT WC12

WASHER WC13

HUB SPACER WC14

REDUCEDBARREL

WC15

DUST WASHERWITHOUTCOATINGZP/CWH

WC16

SHEET NUTSPL.TYPE

WC17

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All the Finished products and WIP are to be assigned to one of these material groups. In futuremore material groups can be added or deleted through customizing following this sequence.

4. MATERIAL CODING SYSTEMThe following material coding system is defined for all finished products and WIP at RockmanCycle Industries Limited: Total number of digits will be 8 for all material types

4.1. CODING LOGIC FOR AUTO CHAIN FINISHED GOODS:

Number Range for finished goods Auto Chain: - 71000001 to 71999999

X X XX XXXX

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NUMBER OF LINKS

1 FOR SECTION AUTO CHAIN

01 OE DRIVE CHAIN02 OE CAM CHAIN

11 RM DRIVE CAHIN12 RM CAM CHAIN

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CODING LOGIC FOR CYCLE CHAIN FINISHED GOODS:Number Range for finished goods Cycle Chain: - 73000001 to 73999999

X X X X XXXX

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3 FOR SECTION CYCLE CHAIN

MATERIAL GROUP1 FOR 1/8 NORMAL2 FOR 1/8 HEAVY DUTY3 FOR 3/32 BUSH LESS4 FOR 3/32 WITH BUSH

PACKING

0 LOOSE SINGLE PIECE1 PACK SINGLE PIECE2 LOOSE FOUR PIECE3 20 PIECE LOOSE SINGLE4 25 PIECE LOOSE FOUR PIECE5 50 PIECE LOOSE SINGLE PIECE6 50 PIECE PACK SINGLE PIECE7 100 PIECE LOOSE SINGLE PIECE

REPRESENTS NO OF LINKS 0001 to 9999

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CODING LOGIC FOR CYCLE HUB FINISHED GOODS:

Number Range for finished goods Cycle Hub: - 74000001 to 74999999

X X XX XXXX

CODING LOGIC FOR AUTO HUB FINISHED GOODS:

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4 FOR SECTION CYCLE HUB

MATERIAL GROUP01 THIN FRONT02 THIN REAR03 OVAL FRONT04 OVAL REAR05 THICK FRONT06 THICK REAR07 PARALLAX FRONT08 PARALLAX REAR09 WHEEL CHAIR10 CART WHEEL

RUNNING NUMBERS 0001.TO

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Number Range for finished goods Auto Hub: - 72000001 to 72999999

X X XX XXXX

CODING LOGIC FOR WIP COMPONENTS:-

4.2. CODING LOGIC FOR AUTO CHAIN WIP PARTS:

Number Range for Semi finished goods Auto Chain: - 51000001 to 51999999

X X X X XXXX

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MATERIAL GROUP21 FOR P1722 FOR P2123 FOR P4024 FOR P60

2 FOR AUTO HUB

RUNNING NUMBERS 0001 TO

1 HEAT TREATED2 SOFT

1 HEAT TREATED2 SOFT

5 FOR WIP5 FOR WIP

1 FOR SECTION AUTO CHAIN1 FOR SECTION AUTO CHAIN

1 DRIVE CHAIN2 CAM CHAIN

1 DRIVE CHAIN2 CAM CHAIN

RUNNING NUMBERS 0001 TO 9999RUNNING NUMBERS 0001 TO 9999

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4.3. CODING LOGIC FOR CYCLE CHAIN WIP PARTS:

Number Range for Semi finished goods Cycle Chain: - 53000001 to 53999999

X X XX XXXX

4.4. CODING LOGIC FOR AUTO HUB WIP PARTS:

Number Range for Semi finished goods Auto Hub: - 52000001 to 52999999

X X XX XXXX

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5 FOR WIP GOODS5 FOR WIP GOODS

3 FOR SECTION CYCLE CHAIN3 FOR SECTION CYCLE CHAIN

MATERIAL GROUP01 FOR SOFT COMPONENTS

02 FOR HARDENEDCOMPONENTS

MATERIAL GROUP01 FOR SOFT COMPONENTS

02 FOR HARDENEDCOMPONENTS

RUNNINGNUMBERS 0001 to 9999RUNNINGNUMBERS 0001 to 9999


2 FOR SECTION AUTO HUB2 FOR SECTION AUTO HUB

MATERIAL GROUP21 FOR CASTED COMPONEN22 FOR MACHINED COMPONENT23 FOR PAINTED COMPONENT24 FOR MOLTEN METAL

MATERIAL GROUP21 FOR CASTED COMPONEN22 FOR MACHINED COMPONENT23 FOR PAINTED COMPONENT24 FOR MOLTEN METAL

REPRESENTS RUNNING 0001 TO 9999REPRESENTS RUNNING 0001 TO 9999

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4.5. CODING LOGIC FOR CYCLE HUB WIP PARTS:

Number Range for Semi finished goods Cycle Hub: - 54000001 to 54999999

X X XX XXXX

5. MATERIAL BOMA formally structured list of the components that make up a product or assembly. The listcontains the object number of each component, together with the quantity and unit of measure.

You can create the following BOMs in the SAP system:Material BOMs

Equipment BOMsFunctional location BOMsDocument structuresOrder BOM

5.1. Multiple BOM

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4 FOR SECTION CYCLE HUB4 FOR SECTION CYCLE HUB

MATERIAL GROUP01 FOR BLANK

02 FOR TUBE03 FOR SHELL WITHOUT PLATING04 FOR PLATED SHELL05 FOR PAINTED SHELL06 FOR HUB CUP PLAIN07 FOR DUST WASHER THIN/THICK08 FOR HUB CONE09 FOR AXLE10 FOR LOCKNUT11 OUTER NUT12 FOR DOME NUT13 FOR WASHER14 FOR HUB SPACER15 FOR REDUCED BARREL16 FOR DUST WASHEWITHOUTCOATINCWH/ZP.17 SHEET NUT SPECIAL TYPE

MATERIAL GROUP01 FOR BLANK02 FOR TUBE03 FOR SHELL WITHOUT PLATING04 FOR PLATED SHELL05 FOR PAINTED SHELL06 FOR HUB CUP PLAIN07 FOR DUST WASHER THIN/THICK08 FOR HUB CONE09 FOR AXLE10 FOR LOCKNUT11 OUTER NUT12 FOR DOME NUT13 FOR WASHER14 FOR HUB SPACER15 FOR REDUCED BARREL16 FOR DUST WASHEWITHOUTCOATINCWH/ZP.17 SHEET NUT SPECIAL TYPE

REPRESENTRUNNING NUMBERS. 0001 TO 9999REPRESENTRUNNING NUMBERS. 0001 TO 9999

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One product can be manufactured from alternative combinations of materials depending on thequantity to be produced (lot size). The product is represented by a number of alternative BOMs(alternatives). The differences between the alternative BOMs are only small. Usually the onlydifference is in the quantity of individual components. In SAP R/3 configuration we will be usingMultiple BOM for Outer plate in Cycle Chain as it is being produced through 3 various strips of

different widths while the end product is the same. A multiple BOM groups together severalBOMs that describe oneobject (for example, a product) with different combinations of materialsfor different processing methods

5.2. Variant BOM

The term "variant" refers to changes to the basic model of a product. These changes occurwhen components are left out or added.If you are producing several similar products that have a lot of common parts, you can describethese products using a variant BOM. This is the case, for example, if you replace one materialcomponent with another to make a different product. Variants can also differ by containing

different quantities of a component. You create the new BOM as a variant of an existing BOM.

Variant BOMIn M/s Rockman variant BOM can be created in case of Cycle chain and Auto chain as thefinal products vary with only the number of links getting changed.

5.3. SELECTION OF ALTERNATE BOM

During MRP run the alternate BOM will be selected automatically based on lotsize/productionversion. Planned orders get created .In the planned order ATP check to be carried out for

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material. In case material is not available, alternate BOM maintained under a different versionis selected manually and ATP check is performed.The planned order is converted to production order.The above-mentioned procedure to be confirmed during testing with data.

5.4. ESSENTIAL PRODUCTION SCRAP

The essential scrap generated in the production process will be included as by-products in theBill of material. The same will be back flushed to the scrap storage location when the order isconfirmed. For inclusion in the bill of material, part numbers have been defined for the differenttypes of scrap generated in production for both the plants.The coding logic defined for the scrap part number is as below:

X X X XXXX

Running Numbers

Section (10 Auto Chain, 20 Auto Hubs, 30 Cycle Chain, and 40 Cycle Hub)

0 Production/1 General Auto Scrap/ 2 General Cycle Scrap

8 Denoting Scrap

Example: 80100001 or 80200001 or 80300001 or 80400001; 81000000, 82000000

Requirements/ExpectationsTo define a uniform BOM applicable to both Production, Costing and inventory management

functionality of the organization.The same BOM will be used in various functionality's of Production say for exampleBOM explosion during Production planning MRP run.BOM explosion during production confirmation while back flushing.

General ExplanationsA BOM is a formally structured list of the components that make up a product or assembly. Thelist contains the object number of each component, together with the quantity and unit ofmeasure.BOMs are used in their different forms in various situations where a finished product isassembled from several component parts or materials In the case of BOM, simple BOM, variant

BOM, multiple BOM will be used as applicable.Multi-level BOMs will be created for various products manufactured in plants A000 andC000.The first level will contain all the finished products, which are dispatched to the customerand then the second level and so on.The last level down the line will have raw materials procured from outside for the purpose ofmanufacturing finished or semi-finished components.

Naming/Numbering ConventionsEach BOM for a finished product will have the finished product code as the header.

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Each BOM for a WIP will have the WIP code as the header.

Description of ImprovementsCreation of consistent and uniform master data, for example bill of material, and activitiesacross the organization for the purpose of Costing, Production and Inventory Management

purpose.Putting the same data say for example the methods of production, time required for productionetc for each and every material at one place.

Description of Functional DeficitsIn some cases both Variant and multiple BOM are required for production. For example certainproduct will be a variant BOM with reference to a BOM which represent the most standardBOM of that product.

As in SAP it is not possible to have both variant and multiple BOM for the same header materialit is required to decide which functionality (Variant/ Multiple) is required to greater extent andthen accordingly choose one of them and manage without other functionality.

Approaches to covering Functional DeficitsTo make up for the limitation mentioned above it will be required to decide which is a moresuitable and required functionality to decide on the BOM type to be created.

Authorization and User RolesThe functions of BOM creation, Change, Deletion will be available only with the designatedperson/group of person within each plant. Similarly display mode to available for end-usersworking on the functionality.

5.5. Questions Material BOM :Q: 1) In which context do you use bills of material?

A: [X] Material Requirements Planning[X] Execute Production[X] Goods Movements (to Help Data Entry)[X] Product Costing[X] Development/Engineering/Design[X] Documentation[X] Others

Q: 2) Do you need to use different BOMs for different applications, such as Production,Engineering, Plant Maintenance, and Costing (BOM usage)?

A: Yes BOM's used will differ based on its applications.

Q: 3) Do you use group BOMs for engineering/design and copy or assign them to plants atimplementation?

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A: Group BOMs for engineering / design need to be implemented and on final approval by thecustomer assigned / copied at plant level. In the product Development stage Engineering BOMto be created and used, and after approval from the customer it has to be copied and convertedto a Production BOM.

Q: 4) What change management functions do you require? How do you want to define thevalidity of BOMs (based on date/freely definable parameters)? Must existing change historiesbe transferred to the R/3 System?

A: BOM's validity to be confirmed based on Engineering Change Management.

Q: 5) Do you use other validity types (such as serial number, time period, or customer) inaddition to the "Valid from" date to control the validity of your BOM changes?

A: No. Presently other methods for validity confirmation are not being used.

Q: 6) Describe the change process for material BOMs.

A: In the BOM changes to be made based on the customer requirement. Presently changesare not recorded.

Q: 7)For what reasons you need a complete history of your BOM changes? (documentation,different technical states in operational areas, other)? What types of BOMs? From what point intime (initial released status, other)?

A: Yes , Record all the changes that effecting the BOM. This to be implemented for all MaterialBOM's from the initial release.

Q: 8) Describe the process for creating and adding to material BOMs. Include releaseprocedure/status, notifications, responsibilities, authorizations, involved systems, EngineeringChange Management, and so on.

A: On receiving the new drawing from the customer Engineering/Design BOM to be created.On approval of that customer Engineering / Design BOM to be copied to Production BOM.Engineering Change Management to be implemented for release and validity control.Responsibilities and authorizations to be finalized by the respected department heads.

Q: 9) Describe the change process for material BOMs. Include release procedure/status,notifications, responsibilities, authorizations, involved systems, engineering changemanagement, revision levels, synchronization with current production orders, other.

A: BOM to be changed and validity to be based on date or lot size. Also the EngineeringChange Management to be used for recording changes and allocating revision levels andresponsibilities and authorizations to be finalized by the respected department heads.

Q: 10) Do you want to use BOM to represent several similar materials (closed variant, BOM)?

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A: Yes. This can be used for Cycle chain, Cycle hub and Auto chain. Similar type of materialcan be represented by a variant BOM.

Q: 11) Do you have several alternative BOMs for a material, depending on the manufacturingprocedure or lot size, for example (multiple BOM)?

A: Yes. There are alternative BOM for a material depending on manufacturing procedure.

Q: 12) Do you have products with a large number of variants? Do you need VariantConfiguration?

A: No. Variant configuration will not be required.

Q: 13) Which BOM maintenance functions do you require (copy functions, mass changes, andso on)?

A: Copy functions and Mass change functions will be required for BOM maintenance.

Q: 14) What structure do your BOMs have? How many levels are there? How manycomponents are there on each level?

A: Structure of BOM is multi-level. The levels vary depending on the material. The numbers ofcomponents also vary depending on the material.

Q: 15) Do your single-level BOMs represent production levels and do you keep your BOMheader materials in stock? If not, do you produce non-stock items, or are some assemblies justused as structural elements in a BOM?

A: Yes, Single-level BOMs represent production levels. Header material are kept in stockdepending on the components.

Q: 16) Do you have different BOMs for a material in different plants?A: No. In different plants different kinds of materials are manufactured.Q: 17) Which item categories (stock items, non-stock items, documents, texts) do you use?

A: Mainly Stock item categories will be used.

Q: 18) Do you use sub-items?

A: No

Q: 19) Do you have recursive BOMs (the product contains a component with the samematerial number as the superior assembly)?

A: No. Recursive BOMs are not needed.

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Q: 21) Is an integration to external systems such as CAD systems or local PDM systemsneeded to transfer BOM data to the R/3 System? Please define your requirements forintegration (online, batch, controlled redundancy, post-processing in R/3, other).

A: No

Q: 22) If you use alternative items (one component can be replaced by another one), how doyou want one of several alternatives to be determined automatically?

A: If alternatives exist then the selection to be done based on most economical processdepending on machine and tooling.

Q: 23) Do you require mass changes for BOM maintenance? Please explain.

A: Mass changes are not preferred. BOMs to be changed manually one at a time.

Q: 24) If you use alternative BOMs (several BOM structures exist parallel for the same productat the same time), how do you want one of several alternatives to be determined automatically(by production version, lot size, or time)?

A: BOM alternative to be selected based on the time and lot size.

Q: 25) Do you produce co-products?

A: Yes. Co-products are used in case of Cycle Hub blanking operation and Cycle chain formanufacturing inner plates.In blanking operation for hub, three blanks and two nuts are produced in the same stroke of the

press machine.Similarly, for inner plate, four standards and three chamfered are produced in the same strokeof the press machine.

Q: 26) Approximately how many finished products and assemblies (header materials withBOMs) do you have?

A: C Hub C Chain A Chain A HubFinished Goods 492 134 7 48 = 682

Assemblies 400 49 24 59 = 532This list may change as it is in process.

Q: 27) Explain for what purposes you use phantom assemblies.

A: Phantom assemblies are not used.

Q: 28) Do you plan and cost the scrap expected in production? Please explain.

A: Yes. Scrap is planned and costed in production.In the operations (blanking & piercing), planned scrap is generated.

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6. WORK CENTER


Processing of the work centers involves the maintenance of the following data:Basic DataCapacity dataScheduling dataCosting data

General ExplanationsThe work centers represent the different processing centers or production line responsible forthe production of the finished product.The work center master data is divided into different screens like, basic data, capacityoverview, capacity header, scheduling, cost center, defaults etc.

The different screens are controlled by the work center category, whereas the capacity data isdifferentiated according to the capacity category.The basic data view includes the description of the work center, the task list usage and thestandard value key. The usage describes the usability of the work center in routings or othertask lists.The standard value key supports the parameters which represent the individual operationalsegments like machining and labor etc.The capacity view contains all the data for the availability of the capacity and the differentformulas for the capacity requirement calculation.The scheduling view contains the scheduling data.The cost center view contains the costing data.

Naming/Numbering ConventionsEach work center/production line would be identified by their alphanumeric codes.The first two letters denotes the location of the work center/production line (plant wise), the nexttwo alphabets will denote the abbreviated type of the machine, and the last three runningnumbers denote the number of the work center/production line.

Special Organizational ConsiderationsAll the work centers in Rockman Cycle are in two plants A000 and C000.The work centers that will be created as production lines (work center category) are forelectroplating operation, Paint shop, assembly etc. and as individual machines for all other

operations like machining, pressure die casting etcEach of these work centers will have capacity data, scheduling data and a cost center attachedto it.

Changes to existing Organization

After implementation of SAP the plants has to adopt to the new work enter codes/productionlines codes as proposed to be used in the system, and capacity evaluation, productionscheduling and routing to be based on the defined work centers/lines.

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Description of ImprovementsMaintaining the work center master data is critical for routing and scheduling production.However, this data can also be used for different analyses including capacity evaluation, rough-cut capacity planning etc. Because of the central availability of the data, different businessapplications can access this data and redundant data maintenance is avoided.

Authorization and User RolesAuthorization of Work center creation edition or deletion will be as per the authorization matrixin Annexure.

6.1. PERSON RESPONSIBLE FOR THE WORK CENTER

General ExplanationThe person or a group of people who are responsible for maintenance of master files workcenter.

Naming ConventionWithin each of the four manufacturing divisions there will be separate persons responsiblebased on the section. In Cycle chain and Auto chain there are Soft component, Hardcomponent, Assembly sections and Packing section. One person will be made responsible foreach of these areas. In Auto components there are Pressure Die casting, Machining, Painting,and Assembly section. In Cycle Hub there are unplated component, Plating section, Assembly/Packing section. There will be separate persons responsible for each of these sections with inthe four manufacturing divisions.

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Definition of Organizational UnitsRockman Cycle has four manufacturing divisions. They are Cycle chain, Cycle Hub, Auto Chainand Auto components. In each of these manufacturing divisions will have separate personsresponsible for each Work Center.

6.2. CAPACITY

Capacity planning comprises the following partial components:

Capacity evaluationIn the capacity evaluation, available capacity and capacity requirements are determined and

compared with each other in lists or graphics.

Capacity leveling

The objectives of capacity leveling are:

Optimal capacity commitment

Selection of appropriate resources

In most applications, you can use two types of planning table (graphical and tabular

versions) to display the capacity situation and to carry out capacity leveling.

6.3. SHIFT AND SHIFT SEQUENCE

The available capacity of a shift is defined by the following data:

Shift start, shift end, break times

Capacity utilization rate

Number of individual capacities

Shift start, shift end and break times can be manually maintained in capacity. You can however

also use shift

Shift definition

In a shift definition you define the start, finish, break times, and validity period of a

shift.

Shift sequence

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In a shift sequence, you define how shifts follow another on a daily basis for the

duration of a Cycle. You use shift definitions to do this.

If you change the working times, you only have to change the shift definition, not the available

capacity in all the work centers affected. The system changes the available capacityautomatically. Changes to the shift sequence only serve as an aid to entering intervals in

capacity, and do not affect existing available capacity.

The following graphic illustrates the principle of shift definitions and shift sequences :

6.4. Questions: work centers

Q: 1) Do you have different types of work centers and what are the differences between them(e.g. labor work centers, machine work centers, production line)?

A: Yes. Mainly two types of work centers will be used Machine and Labor.

Q: 2) To what other master data are your work centers linked (cost center etc.)?

A: Each work center will be linked to a cost center.

Q: 3) To determine the execution time, the capacity requirement and the costs you requirestandard values. Which ones (labor time, machine time, set-up time etc.)?

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Q: 13) Will you be doing cost planning on networks? (If yes, you will need work centers.)

A: Not Applicable.

Q: 14) Do you tend to plan labor resources at a department or individual level? (For both,

consider the work center capacity and HR assignment configuration requirements).

A: Not Applicable.

Q: 15) It is possible to have a work center that includes both people and machines. Do youhave multiple uses for your work centers?

A: No. Either the work center is machine or labor.

Q: 16) The work center controls the formula for controlling scheduling. Do you have specialwork center scheduling requirements?

A: Special scheduling requirements for work center are applicable in case of welding operationin case of cart wheel. In all other cases there are no special scheduling requirements.

Q: 17) Work centers provide the basis for capacity planning. Do you want to managecapacities for your projects?

A: No.

Q: 18) Will you be using PP and PS functionality? (If yes, carefully consider the integration andprocesses between the PP and PS work centers for capacity planning.)

A: Only PP functionality will be used. PS functionality will not be used. Therefore no integrationwill be required.

Q: 19) To determine the execution time, the capacity requirement and the costs yourequire standard values. Which ones (labor time, machine time, set-up time etc.)?

A: Standard values that will be used are set-up time, machine time, labor time, change overtime and inter-operation time.Q: 20) Should default values be maintained in the work center, which can be transferred intoroutings?

A: Yes. Control Key and standard value unit to be transferred from work center to routings.

Q: 21) Do you use a human resources management system? In what way is it used?

A: Yes. In case of Cycle Hub piece rate and salaried systems both are used.In case of Auto chain salaried system is used. HR module will not be implemented during SAPimplementation.

Q: 22) Will you require capacity planning for your work centers/resources?

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A: Yes. Capacity planning is required for work center and routings.

Q: 23) Does every work center have a standard capacity or do you maintain shift intervals?

A: Shift intervals are maintained for each work center. Shift intervals vary for the work canterand will have to be defined accordingly.

6.5. Questions: Shift Sequence

Q: 1) Will you require in addition to the standard capacity a more precise capacity? If yes,define your shifts and intervals.

A: In the case of three shifts the shift timings are as follows:

Shift Start Shift End Break*

1st Shift 6 am 14 p.m 1 hr 2nd Shift 14 p.m. 22 p.m. 1 hr 3rd Shift 22 p.m 6 a.m. 1 hr

For machines which are automatic no breaks are scheduled. 1 hr break time includes 30minutes lunch, 2 tea breaks of 10 minutes each and cleaning

6.6. Questions: PRODUCT DATA MANAGEMENT

Engineering Change Management

Q: 1) Do you use engineering change requests (ECRs) and engineering change orders(ECOs) to change master data objects?

A: No. Presently in the company Engineering Change requests and Engineering changeorders are not being used to change master data.

Q: 2) Do you want to extend the standard features of Engineering Change Management?A: No.

Q: 3) Which objects (such as material master records, BOMs, task lists, and documents) doyou want to change using engineering change management?

A: Engineering Change Management to be used for changing BOMs.

6.7. Questions: ECR/ECO

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Q: 1) Do you use engineering change requests (ECRs) and engineering change orders(ECOs) to change master data objects?

A: Presently ECRs and ECOs are not being used for changing master data records.

6.8. Questions: Capacity

Q: 1) Which capacity categories will you require (for example, labor, machine, process unit)?

A: Labor and Machine.

Q: 2) Will you use pooled capacities (for example, energy, flexible labor groups)?

A: No.

6.9. CAPP Formula

Questions:Q: 1) Will you want to calculate your standard values with given formulas and methods?

A: formulae are included in the annexure. Yes. Standard SAP formulas will be used for Setup, processing and Labor. The

7. ROUTING

Requirements/ExpectationsRoutings are used as a method of identifying tracking and controlling changes to routings.Creation and editing of routings for all the materials produced in-house using discretemanufacturing.

General ExplanationsA routing is assigned to a specific plant, which is defined in the routing header. However, youcan assign individual operations of a routing to a different plant, if one or several operations areto be carried out in another plant. The plants specified in the individual operations and the one

specified in the routing header must belong to the same company code.Naming/Numbering ConventionsEach routing will be maintained for the Finished good/WIP, as the header material.

Special Organizational ConsiderationsRouting are created and maintained by the Manufacturing Engineering group within eachcompany. Current routings are very basic and do not capture material or time costs. AtRockman routings per product would be created.

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Changes to existing OrganizationNone at present

Description of Improvements

Online and close monitoring of the production, scheduling, capacity requirement calculation andcosting will be done for which at present there is no system.

Description of Functional DeficitsNeed to be able to use a standard routing for an entire class of items.

Approaches to covering Functional DeficitsTest system to see if functionality exists.

Notes on further Improvements

Online and close monitoring of the production, scheduling, capacity requirement calculation andcosting will be done for which at present there is no system.

Authorization and User RolesAuthorization of Routing creation edition or deletion will be as per the authorization matrix to bedefined.Components are assigned to operations in routing from the Bill of Material of the Headermaterial.

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ROUTING MATERIAL ASSIGNMENT

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ROUTING AT ROCKMAN CYLE INDUSTRIES LIMITED(RCIL)

As the production scenario in RCIL is mainly discrete manufacturing so the components willmove from one operation to another only in lots. So there will be sequential operations only andno overlap. However in repetitive manufacturing, where there is a single piece flow, continuous

flow of material to take place between operations.

7.1. Questions: Routings

Q: 1) For which business processes do you require routings?

A: [X] For production control[X] For Costing[ ] For documentation

[X] For quality inspection

Q: 2) Do you have different production methods for the same material (e.g. dependent on thelot size)? Are there several routing alternatives for one material?

A: Yes. Several routings are available for one material in Cycle chain.

Q: 3) Do you require parallel or alternative sequences of operations within a routing?

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A: No. Standard routings will be used.

Q: 4) Do you want to schedule the routings in order to determine the dates for all operations?

A: Yes.

Q: 5) Do you have operations for which you envisage external processing, that are that yourvendor will process?

A: [ ] Only internal processing possible[ ] Only external processing possible[X] Internal and external processing possible


A: Labor time, machine time, set-up time and material change over time to be considered asthe standard values for capacity requirement and cost calculation.

Q: 7) Which objects do you want to allocate to the operations?

A: [X] Components[X] Production resources and tools[ ] Trigger points[ ] Inspection characteristics

Q: 8) Do you want inspection operations in your routings?

A: Yes, Inspection operations to be provided at important stages only.

Q: 9) Will you require special user-defined fields in your routing for information and printingpurposes?

A: No.

Q: 10) What requirements do you have regarding routing management (copy functions, masschanges etc.)?

A: Only copy functions to be used for routing management.

Q: 11) Will you be measuring quality during the production process?A: Yes

7.1.1. Reference Operation Set

Questions:Q: 1) Are sequences of operations used that remain constant, and which should be used astemplates (reference operation sets)?

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A: No.

7.1.2. Production Resources and Tools

Questions:

Q: 1) Will you maintain production resources/tools that are used during the processing of yourmaterials?

A: Yes. All major production resources/tolls used for material processing to be maintained.

Q: 2) What kind of production resources/tools do you require?

A: [X] Material[ ] Document

[X] Equipment[ ] Others

Q: 3) Do you require inventory management for your production resources/tools?

A: Yes.

7.2. Repetitive Manufacturing Product Cost Collectors

Questions:

Q: 1) If you are working with period-based controlling, do you want to have one cost collectorfor each production method or for each material?

A: One Product cost collector for each material.

7.2.1. Rate Routing

Questions:Q: 1) For which business processes do you require routings?

A: [X] For production control[X] For Costing[ ] For documentation[X] For quality inspection

Q: 2) Do you have different production methods for the same material (e.g. dependent on thelot size)? Are there several routing alternatives for one material?

A: No.

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Q: 3) Do you require parallel or alternative sequences of operations within a routing?

A: Rate routing will be used.

Q: 4) Do you want to schedule the routings in order to determine the dates for all operations?

A: Yes.

Q: 5) Should capacity requirements be created for the operations?

A: Yes, capacity requirements to be created for the operations based on the routings

Q: 6) Do you have operations for which you envisage external processing, that are that yourvendor will process?

A: [ ] Only internal processing possible[ ] Only external processing possible[X] Internal and external processing possible


A: Labor time, machine time, set-up time and material change over time to be considered asthe standard values for capacity requirement and cost calculation.

Q: 8) Which objects do you want to allocate to the operations?

A: [X] Components[X] Production resources and tools[ ] Trigger points[X] Inspection characteristics

Q: 9) Do you want inspection operations in your routings?

A: Yes. Only major inspection operations will be considered as a part of routing.

Q: 10) What requirements do you have regarding routing management (copy functions, masschanges etc.)?

A: Copy Functions only will be used.

Q: 11) Will you be measuring quality during the production process?

A: Yes

7.2.2. Reference Rate Routing

Questions:

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Q: 1) Are sequences of operations used that remain constant, and which should be used astemplates (reference operation sets)?

A: No.

8. DEMAND MANAGEMENT

General ExplanationsThe function of demand management is to determine requirement quantities and delivery datesfor finished products and important assemblies. The result of demand management is the so-called demand program.

In order to create the demand program, you first have to define the planning strategy to beused for planning a certain product. The planning strategies represent the various methods ofproduction for planning and manufacturing or procuring a product.Using these strategies, you can decide whether production is to be triggered by sales orders

only (make-to-order production) or whether it is to be triggered irrespective of sales orders(make-to-stock production). Or, you may want both sales orders and stock orders in thedemand program. If the production time is relatively long in relation to the standard marketdelivery time, you may want to produce the product or, at least, certain assemblies before anysales orders exist. In this case, the sales quantities are preplanned (for example, with the aid ofthe sales forecast).

The demand program is created in the form of planned independent requirements. Demandmanagement uses planned independent requirements and customer requirements. Customerrequirements are created in sales order management.Explanations of Functions and Events

Information is transferred into demand management from several sources (i.e. plannedindependent requirements, planning scenario, etc). Demand management can be carried outbased on any one of several inputs; the product group, planning material, predefined variant,characteristics, planned independent requirements or direct transfer. It is necessary to specifyany or all of the following; the material, product group, plant, data, requirements plan andrequirement parameters. After the origin of the requirements data has been selected it may beprocessed by either; standard SOP, flexible planning or forecast and can be either totalplanning or single item planning. After the requirements data is processed the requirements

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PRODUCTION PROCESS FLOW AS WILL BE IN SAPPRODUCTION PROCESS FLOW AS WILL BE IN SAP

Sales and operations

planning for MaterialMC87

Demand Management

Planned Independent

Requirement MD61

Material Requirements

Planning MD02

Planned Order

Convert

IndividualCollective

Production

Order

Purchaserequisition

Schedule Lines

Purchase order

Dep.Requirement

Reservations

Order Release

Confirmation

Goods MovementTo FG Store

Transfer Reqm to

Demand

ManagementMC74

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and the planned independent requirements are saved. Demand management is then carriedout by either one or several of; total planning, single item planning, interactive planning andplanning scenario.

Changes to existing OrganizationSince this is not presently done at Rockman Cycle (in the form of Demand Management) therewill, presumably, be changes in job functions, specifically with regards to the MasterScheduling.

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EXPORT ORDERS EXECUTION PLANNING

Create Sales Order

VA01

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Print Production Order

8.1. Questions: Sales and Operations PlanningStandard SOP

Q: 1) Do you want to carry out medium to long-term planning of sales and productionquantities for your finished products?

A: Yes. Medium to long-term planning for finished goods to be carried out based on thecustomer requirement/ schedules.

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Convert Planned Order

to Production Order for

WIP and FG Individual /

Collective

CO40 / CO41

MRP Made to Order

Planning Multi LevelMD50 on order

receiving

Convert Planned Order

for Raw material to

Purchase Req. MD14 /

MD15

Release Production Order

for Execution CO02

Material Availability Check

Capacity Check

Print Production OrderCO04N

Confirm Production Order

CO15

Purchase Requisition to

Purchase Order convert

Or Schedule lines

Goods Movement

Finished Goods to FG Store

Scrap to Scrap Store

Automatic by Backflushing

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Q: 2) At what level do you want to carry out sales and operations planning?

A: [X] Material[ ] Product group

Q: 3) At what intervals do you want to carry out sales and operations planning?

A: SOP to be carried out at yearly, monthly and daily basis based on the requirement.

Q: 4) Which sources are used in determining sales quantities?

A: [X] Sales information system[X] Profitability analysis (CO/PA)[X] Forecast[ ] Sales plan of a product group

[ ] Sales and Operations planning of a product group

Q: 5) Is capacity availability checked at this planning level?

A: Capacity availability check will not be done at this planning level.

8.2. Demand Management

Questions:Q: 1) Which planning strategies do you use to plan production quantities and dates?

A: [X] Make-to-stock production[X] Make-to-order production[ ] Planning with final assembly[X] Planning without final assembly[ ] Planning on assembly level[ ] Planning with planning material[X] Assembly orders[ ] Characteristics planning[X] Other

Q: 2) How do you create your planned independent requirements?

A: [X] Manual entry of quantities and dates[ ] Transfer of material forecasts[X] Transfer SOP results[ ] Transfer long-term planning results

Q: 3) At which level do you want to maintain planned independent requirements?

A: [X] Material

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[ ] Product group

Q: 4) Do you also want to create customer requirements in demand management transactions(in case, for example, the SD module is not used)?

A: Yes.

8.3. Questions: Master Production Scheduling

8.3.1. MRP Planning File Entry

Q: 1) In what time intervals do you want to divide your planning horizon?

A: Backward 30 days and forward 30 days.

8.3.2. Master Production Scheduling - Total Planning

Questions:

Q: 1) Should materials that affect the value added, or that use up critical resources, beplanned separately and not include planning of the dependent components?

A: Critical resources and its dependent requirements should be included in the planning runMulti-level planning to be carried out.

Q: 2) Should enterprise areas/organizational units (storage location, for example) within aplant be planned separately (MRP area)?

A: No.

Q: 3) In which time intervals are planning runs carried out?

A: Planning runs to be carried out on weekly basis as a standard.Q: 4) Should planning runs be carried out online or as background jobs?

A: Planning runs to be carried out online.

Q: 5) Which MRP procedure is used to plan the material requirements (MRP type)?

A: [X] Material requirements planning for BOM items[X] Manual reorder point planning for tooling and spares.[X] Automatic reorder point planning for production consumables based on consumption

pattern[ ] Forecast-based planning[ ] Time-phased materials planning

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Q: 6) Which scope should the planning run have, that is, which type of planning run isrequired?

A: [X] Net change planning

[X] Net change planning in the planning horizon

Q: 7) How is the demand for externally procured materials met?

A: [ ] Planned orders[X] Purchase requisitions[X] Scheduling agreements

Q: 8) Should only the basic dates be determined for the newly created planned orders orshould an additional lead time scheduling be carried out, which also determines the capacityrequirements.

A: [X] Basic scheduling for planned orders[X] Lead time scheduling and capacity planning

Q: 9) Which procedure are you using for lot-size calculation?

A: [ ] Statistic lot-sizing procedure[ ] Periodic lot-sizing procedure[X] Optimizing lot-sizing procedure

Q: 10) Is it necessary to represent planned orders as collective orders for the purpose of

common scheduling?

A: No.

Q: 11) Are MRP lists required?

A: Stock requirement list will be used instead of MRP list.

8.3.3. Questions: Material Requirements Planning

Material Requirements Planning - Individual

Q: 1) Should the planning run be single or multi-level?

A: Planning run to be Multi-level.

Q: 2) Which scope should the planning run have, that is, which type of planning run isrequired?

A: [X] Net change planning

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[X] Net change planning in the planning horizon

Q: 3) How is the demand for externally procured materials met?

A: [ ] Planned orders

[X] Purchase requisitions[X] Scheduling agreements

Q: 4) How is the scheduling carried out?

A: [ ] Basic scheduling for planned orders[X] Lead time scheduling and capacity planning

Q: 5) Which procedure is used to calculate lot sizes?

A: [ ] Statistic lot-sizing procedure

[ ] Periodic lot-sizing procedure[X] Optimizing lot-sizing procedure

Q: 6) Are MRP lists required?

A: The MRP list always displays the stock/requirements situation at the time of the lastplanning run and it will be required as it provides a work basis for the MRP controller.

Q: 7) Will the planning result be processed further after the planning run?

A: Yes.

8.3.4. Material requirements planning - evaluation

Questions:Q: 1) Who is responsible for checking the results of requirements planning at your company?

A: MRP controller. It is proposed that in each section of the two plants viz. Cycle Hub, Cyclechain, Auto Hub, Auto Chain each will have one MRP controller.Questions:

Conversion of Planned Order

Q: 1) Which procurement objects do you want to be created during the conversion?

A: [X] Production order[ ] Process order[X] Purchase requisition

Q: 2) How do you want the planned orders to be converted?

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A: [X] Individual conversion[X] Collective conversion (online or in background)[X] Partial conversion

Q: 3) which criteria do you want to be taken into account during conversion (for example, MRP

controller, release date, material, sales order)?

A: For the conversion of planned orders into account we will be mainly taking MRP controllerand material into account.

9. PRODUCTION PLANNING AND PROCUREMENT PLANNING- MRP

General ExplanationMaterial requirements planning take current and future sales as its reference points. Theplanned and, depending on planning strategy, actual requirements trigger the MRP calculation.In MRP the requirements include sales orders, planned independent requirements, material

reservations, the dependent requirements created by exploding the BOM and so on.

In case of in-house production the system creates planned orders for planning of productionquantities. When planning is complete planned orders can be converted into production orders.In case of external procurement the system creates either a planned order or directly creates apurchase requisition or a schedule line for a pre-existing scheduling agreement for planning theexternal purchase order quantity.

MRP RUN AT ROCKMAN CYCLE INDUSTRIES LIMITED:

At Rockman Cycle, for regular products MRP will be run once a week, based on the

requirement by the customers. Based on this requirement for all the finished products and theDependent requirements will get generated using transaction code MD02. In case there arechanges to this requirement then MRP to be run on weekly basis. But for export orders, MRPwill be only run based on the Sales orders, using the transaction code- MD50.

For Regular Orders: MD02, Once a weekFor Export Orders: MD50, only on receipt of sales orders.

CONSUMPTION BASED PLANNING:Consumption based planning is based on consumption values and uses forecasts or statisticalprocedures to determine future requirements. Consumption based planning is characterized by

its simplicity and is mainly used for low value items. Manual reorder point planning is a typicalprocess in consumption based planning.

For Production consumables consumption based planning is to be carried out based on thedecided levels in M/s Rockman.

9.1. MRP Controller

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General ExplanationThe MRP component assists the MRP controller in his area of responsibility and relieves thecontroller of routine material monitoring.

General Explanation

MRP Controller is the person responsible for a group of components in Material RequirementPlanning in a plant or company. Material that takes part in MRP must be assigned to a MRPcontroller. The field for MRP Controller is located in the MRP 1 view of the Material Master.

The MRP controller is responsible for all activities, for specifying the type, quantity and time ofthe requirements and he must also calculate when and for what quantity an order proposal hasto be created to cover these requirements. He needs all the information on stocks, stockreservation and stock on order to calculate quantities and he needs all the information on leadtimes and procurement times to calculate dates. The MRP controller determines a suitableMRP and lot-sizing procedure by material to determine procurement proposals.The most common lot-sizing procedures are available in the system and can easily integrate

user-defined formulas.

Naming ConventionFor MRP controlling, it is proposed that there be one MRP controller in each section viz. AutoHub, Auto Chain, Cycle Hub, Cycle Chain, within the two plants A000 and C000 respectivelyThe proposed codes to be used in SAP are as below:

Section: MRP Controller Auto Hub 500Auto Chain 600Cycle Hub 700

Cycle Chain 800

Definition of Organizational Unitshe MRP controller is the person responsible for a group of materials in MRP in a plant orcompany. A material that takes part in material requirement planning must be assigned to aMRP Controller

Rockman Cycle has four manufacturing divisions based on the products. They are Cycle chain,Cycle hub, Auto chain and Auto components. Each of these areas will have a separate MRPcontroller. MRP to be run separately in the four areas independently.

9.2. PRODUCTION PLANNING AND PROCUREMENTPLANNING

9.2.1. SALES AND OPERATIONS PLANNING

PRODUCT GROUP

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Q: 1) Do you have products to be grouped into product groups for planning (for example, dueto similar procurement methods or because they are manufactured on the same bottleneckmachine)?

A: No. SOP to be carried out for Material.

Questions: Rough-cut Planning Profile

Q: 1) In medium to long-term planning do you use a rough-cut planning profile for resourceleveling?

A: No. Monthly plans are used for planning of resources.

9.2.2. Planning Type

Questions:

Q: 1) Do you require self-defined planning table views?

A: Standard Planning table for SOP to be used for Sales and Operations Planning

9.2.3. Questions: QUOTA ARRANGEMENT

Q: 1) Will you maintain specific vendor quotas (for example 70 % from vendor A, 30% fromvendor B) for your materials? If yes, how many quota arrangements are you currentlymaintaining?

A: Yes.

Questions: Production Lot

Q: 1) Do you have various manufacturing processes for an assembly and do you want tocalculate the costs of the various manufacturing processes separately and compare them witheach other?

A: Yes. In case of Cycle Chain for the manufacturing of Inner plate 3 manufacturing processesexist such that the assemblies are costed differently.

10. PLANNED ORDERS PROCESSING

Requirements/ExpectationsSAP will be able to process a planned order into a Purchase Requisition or, in the case of thisprocess, a Production Order.When processed, RCIL expects that there will be a link between the original requirement andthe newly created purchase requisition or production order.

General Explanations

Manually:

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The MRP controller enters a planned order manually. He determines which material is to beprocured, the required quantity, the date required, and whether the material is to be procuredexternally or internally.

Automatically:

During the planning run, the system automatically determines the materials to be procured as

well as the required quantity and the required date.

Explanations of Functions and EventsAfter the planned order is created either manually or automatically a planned order profile isallocated and data is processed. The data would include: material, plant, order quantity andbasic order dates. This will trigger the processing of material components, schedule theplanned order, edit account assignment and process the source of supply. The system willcheck component and capacity availability and if needed, capacity leveling can be carried out.Saving the planned order creates a purchase requisition, planned load, creates dependentrequirements and allows the processing of the planned order.

Special Organizational ConsiderationsPlanned orders for production items will be processed as production orders with externalprocurement (for subcontract) and as standard production orders

Changes to existing OrganizationPresently planned orders are being converted to purchase requisitions and/or production ordersmanually (in most cases). SAP will facilitate the performance of this task by allowing thePlanner to convert the planned order to a purchase order or production order instead ofcreating the order manually.

Authorization and User Roles

Authorizations will be defined as per Annexure.

11. PRODUCTION ORDER CREATION

Requirements/ExpectationsThis function supports the production of goods in-house using the production order or workorder concept. The different functions involved are:

Order creation

Order release

Inspection lot processing

Goods issues

Order confirmation

Goods receipt

Order settlement

General ExplanationsFor creation of a production order, the data that is to be entered includes the material numberof the finished good to be produced, the plant, the WO/production order number and the ordertype to start with. The properties and the control parameters are to be customized for the order

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type for that product's manufacturing. Here, among the other things it will be decided whetherthe WO will have external no. or internal number.Then subsequently the order quantity and the planned start or the finish dates depending onwhether it is forward or backward scheduling is to be entered. At the time of order creation, thesystem copies the BOM and the Routing of the finished good to be produced and schedules the

order. At this point of time, the system performs the availability check for the raw materials andPRTs, checks the capacity creates the inspection lot and does the preliminary costing andcreates the order.

Explanations of Functions and EventsDuring the course of the production order processing, we can track down the different datarelated to the scheduling, capacity utilisation, material availability, inspection lot processing,preliminary costing, goods issues, order progress confirmations, tools receipt and ordersettlement.

Special Organizational Considerations

For the implementation of the production of finished goods, a special order type has to becreated and customized for different control parameters.

All the necessary organizational units like plants and storage locations responsible for in-housemanufacture of finished goods.

Description of ImprovementsAll the data that is related to processing of one particular finished good lot is systematicallyavailable. This data can be subjected to different kind of high level analyses for decisionmaking. Lot of redundant data entry at various levels and manual maintenance of severalreports is eliminated.

11.1. CONVERSION OF PLANNED ORDER

Requirements/ExpectationsRCIL expects that planned orders will be automatically generated as a result of the MRP run.RCIL also expects that the RCIL MRP Controllers can manually create planned order.The ability for RCIL MRP Controller to choose whether or not to FIRM the order at the time ofthe order conversion (Y/N).

Ability to automatically "pull in" routing data specific to where item is to be produced.

General Explanations

If material requirements planning have already created a planned order for the production ofthe material, the system takes over the basic dates of the planned order into the productionorder. It then determines the scheduled start and finish of the production order in a newscheduling run. If necessary, the system carries out reduction measures.

Explanations of Functions and EventsPlanning is carried out.Planned Order is created.Category of Planned order is determined.

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Select Planned Orders to be converted.Planned Orders are converted into Production Orders either Collectively or Manually.Purchase Requisitions are created, where necessary.

Questions: Conversion of Pl

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