Product rates based production

[Former Member]

Hi, I'm working on a project wherein the client uses production rates (ex: X number of EAs per month of Y end product = rate of Y) for medium to long term planning.

If for instance, the customer orders are more during a given year than their current throughput they just adjust the machine rates to match the expected outcome/ requirements and vice versa.

I know that rates (hours) per EA can be maintained in a routing but how do we manage medium to long term planning in such businesses where-in projected outcomes (expected throughput) can be adjusted based on rate adjustments.

[Caetano]

Hello

You can run your medium and long term planning without considering capacity restrictions, that means, without any influence of the production rates. You will only create PIRs for the total quantities and plan the raw material quantities using MRP.

After you already know the actual production rate, you can run capacity leveling and the order scheduling.

BR

Caetano

[Former Member]

Thanks for your response Caetano.

They get their production plans from their customers for the next 5 years in advance, all they do is adjust their production rates to match the given 5 year production plan. I think it's more of the customer dictating the throughput for you and based on the expected throughput you try and find the best possible rate to achieve that throughput over a period of time. Sometimes you may have to purchase another machine so be it but never decline the customer is their motto!

[Caetano]

Hello

If you want to run capacity leveling on the long term, I suggest you to use the rough-cut capacity planning on SOP. See the following WIKI for more details about RCCP:

Rough-Cut Capacity Planning on SOP - ERP Manufacturing (PP) - SCN Wiki

BR

Caetano

[Anupam1143]

Hi,

You can also go For Long term planning and Repetitive manufacturing , the rate which you are mentioning in rate routing will be your X pcs per day then you can define the LTP for your requirement and then evaluate capacity in CM38 and if feasible then you can firm the planned order and then transfer to Demand management.

Check this link of LTP:

SAP Best Practices Baseline Package

Regards,

Anupam Sharma