Overview of SAP Planning Strategy

Abstract:- Aim of this document is to explains about different manufacturing scenarios supported by

Keyword :- Planning Strategy

Significance of Planning Strategy: – In SAP R/3, Planning Strategy represents the method of planning
procedure to plan a material and hence determine the production quantities and dates for this material. This
material may belong to different manufacturing procedures like make to stock (MTS), Make to order
(MTO), Assemble to order (ATO) and engineering to order (ETO). Hence in SAP R/3, these different
manufacturing environment are represented by different planning strategies.

Planning Strategies are combination of requirement type for planned independent requirement and
requirement type for customer requirement. Planning strategies are assigned to a strategy group in
configuration and then this strategy group assigned to a material master in the MRP 3 view in SAP R/3.
This material can be a finished good or an important assembly in Bill of materials structure. You have one
main planning strategy and seven other alternative strategies. The main planning strategy can be
overwritten by the alternative strategies in a planning process. Planning strategy can also be assigned to
strategy group and further to MRP group. This will assign planning strategy to a material as well as
provide other additional control parameters for MRP.

Structure of Planning Strategy:- In SAP R/3, a planning strategy consists of four sections in which
control parameters needs to be configured as per business requirements like Make to stock, Make to order,
assemble to order and engineering to order. Below are the sections in a planning strategy.

 Requirements type of independent requirements

Below is the screen shot for a planning strategy showing the different sections in it and control
parameters fields.
 Business importance of these different fields is explained below:-

1)   Requirement type for independent requirements is a textual key which combines the requirement class with
a planning strategy and thus determines the planning strategy to be used for a particular material as
planning strategy which presents in MRP 3 view of material master. Below screen shot shows the different
requirement types present in the SAP system.
      

2)  Requirement Class is assigned to requirement type in the configuration. It plays an important role to control
for different manufacturing scenario (MTS, MTO, ATO, and ETO).

2a) Consumption Indicator: – This indicator determines up to what extent planning will get consumed by a
sales order. E.g. sales order is not consuming planning in case of strategy 10 and 11 as consumption
indicator field value is blank and having value 1 in case of strategy 40 which makes sales order to consume
planning.

2b) Planning Indicator: – In a requirement class, planning indicator has different values which determines
how material needs to be planned when material requirement planning (MRP) run is executed. The feasible
ways of material planning are as Net requirement planning, as gross requirement planning and as
individual requirement planning based on the planning indicator value.

              3)  Requirement type of customer requirement is a textual key to which requirement class of customer
independent requirement gets assigned.

      4)  Requirement class for customer independent requirement has various control fields and this will be
linked to requirement type of customer requirement type. These control fields will gets configured as per
business requirement.

4a)  Allocation Indicator plays an important role when there is need to implement product allocation   concept
in sales and distribution. This allocation indicator behaves in similar manner as explained in point 2a. This
indicator determines whether sales order consume planning or not and if it consume then up to what level.

4b) This field controls about the planning for sales order requirement while execution of material requirement
planning run. It determines whether sales order will be planned and visible in stock/requirement list or not.

4c) Account assignment category is used to record business transactions for a particular material, like customer
price against a sales order and post it to a general ledger account.

4d) Settlement profile is used for the settlement of actual cost or cost of sales/procurement.

4e) Result analysis key is defined for product cost controlling where product cost can be calculated by order or
by period.
4f) This indicator controls the availability check while creating a sales order.

4g) This indicator controls the transfer of requirement for the supply of goods to production while creating a
sales order.

4h) This indicator controls the reduction of planned independent requirement reduction by sales order.

   5)  Assembly order deals with assemble to order manufacturing environment. In this, procurement elements
(planned order, production order, process order, network, service order) get created once sales order is
created. In standard SAP, strategy 82 triggers the creation of production/process order while creating a
sales order. There is no need to run separate MRP for those materials which have planning strategy 82.
Assembly type can be static or dynamic. In case of static assembly there is 1:1 relation between a sales
order and an assembly order where as in case of dynamic assembly type there is many to one relation
between assembly orders and a sales order.

     Any changes in sales orders reflects in planned order immediately whereas these changes will effective to
production/process order if it’s status allow this.

5a) online assembly gives the option to check missing parts while creating a sales order as procurement
elements automatically at that time. This check can be carried out either according to ATP logic or against
planned independent requirements at assembly level.

5b) order type defines the assembly order type which you will first configure in production order
types/process order type and will define here.

5c) component availability check at assembly order level.

5d) Capacity check gives the option of lead time scheduling and capacity check while creating a sales
order which triggers the assembly order.

4)            6) Configuration: – This field determines whether a configuration using a variant configuration is
allowed for a configurable material.

6a) Configuration consumption determines whether sales order for configurable material consume planned
independent requirements for variants or planned independent requirements for characteristics.