PP Business Blue Print

Document Tracking
Revision Version date Revised by Change Description

Document Information Project Name Key users

SAP IMPLEMENTATION

Document Version No

1.0

PP Business Blue Print

Reviewed By

Review Date

Document Tracking Revision 1.0 Version date 13.03.2008 Revised by Change Description First Release

Contents
1. Introduction..............................................................................3 2. Process Description.....................................................................4 3.Organization Structure..................................................................6 3.4 Planned Independent Requirements Planning.................................8 3.5 Production Planning...................................................................9 3.6 Shop Floor Execution................................................................ 10 4. Process Flow chart.....................................................................12 4.1 Production Planning & Control-To beOrganizational activities..............13 5. Master data in PP......................................................................15 6. Demand Management (Planned Indep. Requirements).......................... 22 7. MRP...................................................................................... 23 Back flushing in Repetitive Manufacturing............................................26 8. Key Points...............................................................................27 9. Number ranges:........................................................................28 10.Reports..................................................................................28 Business Blueprint PP Module .......................................................... 29 SVIL IMPLEMENTATION :................................................................29 Created by : A. Shankar...............................................................30 Date of creation : 13.03.2008.........................................................30 Date of the last changes : 25.03.2008.................................................30 Version : 1.0 ............................................................................30

PP Business Blue Print

Sign Off Date:......................................................................30 A. Shankar ...........................................................................30 PP Consultant Consultant ..............................................30 .........................................................................................30 .......................................................................................30 Mr. Mr. Mr..........................................................................30 Key User Module Owner IT Head .......30 Business Process Owner..................................................................30 ..............................................................................................30 Key User....................................................................................30 Mr. .....................................................................................30 Module Owner.............................................................................30 Mr. .....................................................................................30 IT Head.....................................................................................30 Mr. ..........................................................................................30 Date.........................................................................................30 Signature...................................................................................30 Role.........................................................................................30 Name........................................................................................30

1. Introduction
Purpose of the Document
This document is the AS IS Study by Yochana InfoTech for delivering SAP Implementation project at SVIL. It outlines the as is business processes of the SVIL.

Who should read this document

This document is meant for MIS Managers, MIS Team leads and Key User champions who will have a good understanding of system. This document explains all the specifications that are broadly captured for successfully delivering the project at SVIL. This is a controlled document and its circulation is left to the discretion of Yochana InfoTech and SVIL project sponsors.

OVERVIEW OF BLUE PRINT PHASE

PP Business Blue Print

This document summarizes the findings of the Yochana InfoTech consulting team, which conducted requirement analysis at SVIL for the ERP IN BOX. The information was gathered through interviews conducted at the SVIL plant with the manager, key users and personnel from Information Systems, as well as through reviews of business processes, business procedures, documentation and relevant reports. The immediate purpose of the analysis is to prepare to move forward rapidly with the implementation of ERP IN BOX in SVIL.At the conclusion of the blueprint, the Yochana InfoTech consultants will determine the SAP functionality required to run the SVIL business. The document present a summarized perspective of all functional business processes that is followed currently in SVIL. The information gathered and documented is sufficient for the team to go forward to next phase. However, it is critical that both the Yochana InfoTech and SVIL team agree on the scope of the project as presented in this document. Acceptance - by both teams - is required to move the project into the next phase.

2. Process Description
2.1 Objectives The objective of this Blueprint Process is to define Production Planning & Control in the system and ensure that planning & production complete process as per schedule. 2.2 Who created it? The Production Planning & Control team is responsible for creating these processes: Planning personnel Production personnel

PP Business Blue Print

2.3 Where is it used? Production Planning & Control is used in the following areas: Planning Production

2.4 Features required The system should meet all the requirements as per the following guidelines: Planned independent requirements (PIR) MRP BOM master creation modification & display. Work center creation & modification Routing creation, modification & display. Planned Order.

2.5 Responsibility The following Role (or function) will be directly responsible for executing the Production Planning: Planning / Production. Staffs from above Dept. To be decided by Head of Division To be decided by Head of Division

2.6 Impact on current business process Better inventory management Optimum utilization of resources Better production control measures Better integration with purchase & sales

PP Business Blue Print

3.Organization Structure
3.1 Financial Structure Each company code represents an independent Accounting unit. The balance sheet and the profit and loss statement, which are required by law, are prepared at company code level. Organization structure GER GROUP

SVIL

ERTL

Company Code Depicted from a tax law, commercial or other financial accounting standpoint Corresponds to a legally independent company Each company code has exactly one domestic currency, in which you create the balance sheet.

3.2 Logistics Structure-Definition Plant Location that Stocks, Manages, and Valuates Inventory

PP Business Blue Print

May be a Physical Site Manufacturing/Production Lines Can be a Physical Location (cost centers may or may not be associated to a plant i.e. administrative vs. manufacturing cost centers) A Plant is assigned to a Company.

Logistics Structure SVIL

Company Code

Plant

In SVIL, factories are defined as plants in SAP. 3.3 Production Planning & Control

Production Planning & Control Definition Production planning and control is the business process for planning the production of demand and / requirements and controlling the same so as to meet the desired schedules and costs.

Production Planning & ControlOrganizational activities The Planning business process can be divided into four sub processes as follows.

PP Business Blue Print

Planning Process
Input

Sales Plan

Production Plan

Material Planning

Production Execution

Feedback to planning

Costing

3.4 Planned Independent Requirements Planning AS IS Sales Plan is prepared for every year at LHO on a rolling basis. Monthly sales plan is released in the last week of the previous month by LHO to the plant. For export production low ash metlurgical coke is needed to meet the specification. (low phos.low sulpher contant) LAM coke costs 17% extra compared to Indian coke which is high in Phos and sulpher. Monthly Operation plan is directly proportional from Sales plan; there is no minimum Inventory level or Targeted stock level for the finished products. Production target is 4200 ton per month. Planned V/s actual is monitored on weekly basis. The shortfalls or spillovers may be carried forward to the next week operation plan based on decision taken by the plant management. Raw material is planned based on the MOP. Man power planning is not done as the production will be a standard of 140 ton per day and process is almost similar for both export & domestic sales. Raw material planning is done considering the stock on hand, the expected consumption and the minimum inventory once in a month. The capacity does not vary whenever there is change in the Recipe as the process is standard for any recipe. The priorities and the urgent orders (local & export) are communicated to Production by sales (LHO) department to change Production plan accordingly.

PP Business Blue Print

TO BE SAP Process:

REM profile have to configure. SOP configuration require. MTS strategy. Monthly production 4.2MT.

In SAP system Demand Management is used to determine requirement quantities and delivery dates for finished products. From Marketing Dept. Planned Independent Requirement is transfered to DM To create a demand program, Demand Management uses planned independent requirements and customer requirements.

Planning strategies represent the methods of raw material procurement, production basing on production plan and handling of product. SVIL stock finished product in different stocks as per orders to enable materials department to dispatch right material to the right customer. SVIL will continue production even when there is no immediate demand considering the domestic and export specs. To meet future dispatches. These strategies can support a very close customer-vendor relationship because STIS objective here is to meet customers requirement from available stock as quickly as possible. Planning strategies represent the methods of production for planning and manufacturing or procuring a product. If the production time is long in relation to the standard market delivery time, you can produce the product or certain assemblies before there are sales orders. In this case, sales quantities are planned, for example, with the aid of a sales forecast.

In SVIL demand program will be given by Sales & Distribution, transferred to Demand Management manually as per the requirement. Requirement quantities and delivery dates for finished products assemblies are used as a starting point for production planning. 3.5 Production Planning

PP Business Blue Print

DEMPIR PIRMRP RUN/BOM EXPL Planned order /Purchase Requ.

Once the FG demand is loaded into SAP as PIR, we have to run MRP to plan the down the level BOM items. Once the MRP run takes place system will create planned orders/purchase requisitions with specific order number for individual product as well as other BOM items automatically.

3.6 Shop Floor Execution AS IS Raw Material is unloaded in the yard once the material is received. The recipe is decided based on the purchase order. Purchase order is made according to the product specification. Dumpers and pay loaders are used for transportation of material to Ground Hopper. Using belt conveyer the material is sent to the screen house. There is a 6/10 mm screen by which material is screened. From Screen house +6/10 mm material will be sent to the day bins. There are 8 bins in total which are filled with different raw materials. Each bin capacity is 70 cubic meters. Below 6/10 mm chrome ore fines are sent to Briquette plant to make briquettes which are used 70% of total requirement of ore. And below 6/10 mm coke and coal fines are sent to the storage yard. By using weighing & batching system Ore blend (mixture of different raw materials with certain proportion) is made and sent to the furnace hopper with the help of skip & telfer car. The process by which a batch (blend of raw materials) is sent to the furnace hopper from day bins. Weighing & batching is controlled from control room by using PLC system.

PP Business Blue Print

Time to time the blend is discharged into the sub-merged electric arc furnace for smelting. Several chemical reactions are occurred inside the furnace to form metal and slag. Every two and half hour interval (after 25 Mwh power consumption.) molten slag and metal will be tapped out through tap hole.

Molten metal and slag are collected in C.I. circular pans and slag pots respectively. These are kept on ground for 4-5 hrs. to form cakes and buttons by natural cooling.

After cooling (4-5 hrs later) C.I. pans are relased and sent to the metal handling yard by dumper for breaking into required sizes. 24-hrs. later broken metal is offered for sale. Every 140 ton of production, there will be 4% remelt generation. The material is dispatched from the finished product Yard. Laborer works in shifts and the process will be continuous for 24 hours

Process Description Conveyor Belt Day Bin Weigh Hopper Skip Loading from Weigh Hopper Skip To Telfar Telfar car to furnace hopper Furnace to Tapping(1 shift per tapping) Metal cooling Max. time for F.G in finished product yard

Time(min) 5 5 6 3 6 2 120 240 600

1 tapping needs 14 batches. 1 batch = 2.5 tons. 3 shifts per day & 3 tapping per shift.

PP Business Blue Print

1 tapping metal collection ~ 8.0 MT.

Loss of raw materials for entire production:

Lumpy 0.20 %. Friable for every 100kg, there will be kg loss.( 0.5% ) There will be 0.2% losses during transportation of raw material from day bin to furnace hoppers. Out of which 0.50% will be fume losses and the remaining will be used for briquette plant. TO BE Once the production plan is finalized, production schedule is given to production department then as per the schedule, production process is carried out and the production is estimated at end of the each shift. As per the plan production is carried out. The necessary instructions are issued to the planned order. Some of the typical operations involved in manufacturing are: In SAP, each section is identified as a reporting point. Confirmed the total qty of planned order it will vanish from system. We can maintain confirmation for each Reporting point is mandatory.

4. Process Flow chart

Raw Material Yard Ground Hopper Conveyor Briquette Plant -6 mm Cr. Ore Fines Screen House Day Bins Weigh Hopper -6 mm Coke & Coal Fines Storage Yard

PP Business Blue Print

Skip

Telfar Car

Furnace Hopper

Flue Dust

GCP

Flue Gases

Submerged Electric Arc Furnace

Power

Metal

Slag

Finished Product Yard Dispatch

Slag Pit

TO BE 4.1 Production Planning & Control-To beOrganizational activities

Production Planning
Planned Independent Requirement MD61

Purchasing/Inventory Management

Controlling

PP Business Blue Print

MRP Run for FG MD01 & MD02

External Procurement

In-house Production
Planned Orders Created MD04, COOIS

Purchase Requisitions MD04

Customized screen for Merge and SET

Goods Issue of Components

Debit

Confirmation of Planned Order MFBF Goods Receipt of Finished Goods Material Document Created MF12

Product Cost Collector

Credit

4.2 Process Flow

Receiving the Demand from Sales through planned Independent Requirements Run MRP for FG

Creating Planned Independent Requirements for FG under one Work Schedule Number

System will create Planned Order for Finished Goods

PP Business Blue Print

Planned orders dates can be changed & reschedule dates

In MD04, You can see the Current Stock & Requirements situation of each material

Confirmation of each planned order in as per prepared Job Order at the end of each Shift.

5. Master data in PP
5.1Material Master The material master contains all the information on all the material that a company procures produces, stores and sells. The material master data is used by various business areas, for example: Purchasing Inventory management Production planning Production order execution and control

PP Business Blue Print

During integration, the data is stored without redundancies. Information is stored in the material master record in one of two forms: Data that is descriptive, such as name, size and dimension Data that controls system functions, such as MRP type

From production planning point view MRP1, MRP2, MRP3, MRP4, Work scheduling views of material master are important. These contain information like planning type, reorder point, lot size related details, MRP controller, availability check group, planned delivery time, GR processing time, in house production time, procurement type, special procurement key, safety stock, coverage profile, planning strategy etc. At STIS these details will be filled on material specific basis. At STIS, some finished, semi finished items are subcontracted. Special procurement key will be required in MRP-2 view of their material master data.

5.2 Bill of Materials As-Is Currently STIS is maintaining BOM of finished material in MS Excel. For intermediate materials no BOM is maintained and they are treated as WIP. SAP Process: The bill of material is a complete, formally structured list of components that make up a product. The list contains the item number of each component, together with the quantity and unit of measure. For SVIL, every finished good and semi finished material will have a BOM.

PP Business Blue Print

BOM will consist of each and every component that goes into product and for which SVIL wants to plan and account cost for. E.g. consumables can be added in BOM which can trigger the requirements of consumables. Use of BOM in Production planning: As the basis for design department For Material requirement planning In Shop floor to provide the material for production For Product costing For Reservation and goods issue. Bill of materials (BOM) contains essential master for integrated materials management, production control & product costing. The bill of material usage specifies the departments or functions within a company where the bill of material is used. BOMs are stored in the SAP system as single-level. A single-level BOM describes one or more assemblies by means of component quantities

PP Business Blue Print

The structure of the product determines whether the bill of material is simple or very complex. The large and complex product structures can be broken into a number of related units. Each unit can be represented by a BOM, known as a single-level BOM. A single-level BOM describes one or more assemblies by means of component quantities. In practice, a single-level BOM is often a collection of standardized assemblies. A single-level BOM can be either a complete machine or an individual part. BOM data is structured as follows in the SAP System: The BOM header contains data that applies to the entire BOM. The BOM item contains data that only applies to a specific component of the BOM The standard SAP System contains the following item categories: Stock Material Nonstock Material Intra Material Variable Size Item Document Items Class Items

PP Business Blue Print

In SVIL, generally stock material item category will be applicable. The data stored in bills of material serves as a basis for production planning activities such as: A material requirements planning (MRP) department explodes bills of material on a certain date to calculate cost-effective order quantities for materials. A work scheduling department uses bills of material as a basis for operation planning and production control. A production order management department uses bills of material to plan the provision of materials.

The data stored in bills of material is also used in other activities in a company such as: Reservation and goods issue: As an aid to data entry Product costing: To calculate the costs of materials required for a specific product.

5.3Work Centers As-Is: Currently in SVIL work center related data like capacity, efficiency, yield etc. are maintained in MS Excel and does not have any direct integration with other shop floor related function. SAP Process: Definition: A work center is where an operation or activity is carried out with in a plant.

PP Business Blue Print

Usage Work centers are used in routings, networks, inspection plans and maintenance routings. They can also be used as capacity collectors for statistical evaluations. Work center is assigned to a cost center. Work center carries in its definition the values which are used for evaluation of operation performed on that work center. For example setup time and processing time. Examples: Work Center Category Individual work center Individual person Example Slitting Line Operator

Work center carries in its definition the values which are used for evaluation of operation performed on that work center. For example, setup time, processing time. Moreover values maintained in Work center can be changed for operation in routing.

The standard value key and formula keys in the work center form the basis for scheduling, capacity planning and costing. The available capacity for the machine is maintained in work center capacity view. If one capacity is assigned to several work centers, it is considered a pooled capacity. The available capacity of a pooled capacity is maintained separately in the work center capacity menu.

PP Business Blue Print

The effectively of an available capacity can be interrupted by an interval of available capacity with a limited effectivity period. For SVIL intervals of available capacity will be maintained by defining the shift sequences and assigning the formulas to calculate the capacity loads. The capacity of work center will be maintained in work days only. In order to calculate the available capacity, a factory calendar will be maintained, in which the working days are defined. In shift sequences, you maintain the sequence of individual shift definitions for all shift sequences.

Some typical examples of work centers for SVIL are: Ground Hopper,Conveyor,Screen House,Telfar Car, Furnace Hopper, etc 5.4Rate Routing As-Is: Currently in SVIL, Routing related data is maintaining in form of flow charts with every stage of production process. SAP Process: In SVIL, routings are to be defined for every finished product, semi finished product that is to be processed in house . System will take all the Routing from Routing Master Data of respective STIS Plant. A routing contains the operations to be performed, their sequence and the various work centers involved to manufacture an item. A routing include the following: The standard values (times) for activities such as setup and processing Work centers where the operations are performed The material components assigned to the operations Inspection characteristics for operations where inspections are carried out Instructions of what to do at each operation Skills required to perform the operation

PP Business Blue Print

6. Demand Management (Planned Indep. Requirements)

AS IS In SVIL, Manufacturing department gets demand from the marketing department with the work schedule number. Each work schedule number contains different types of finished materials with required quantity. Based on this details production is carried out. TO BE In SAP, these requirements are loaded as Planned Independent Requirement for FG through Requirement Plan Number. Planned independent requirements are nothing but the anticipated demand from the market. These are passed onto MRP (Materials Requirement Planning).

PP Business Blue Print

7. MRP
As-Is: Presently in SVIL, the material requirement planning is carried out on the basis of historical data and the projection for next year. No planning tool is available currently. Accordingly SVIL is planned the raw material requirement and consumables, and compare available capacity with requirement. SAP Process: In SAP system the planning for finished products / Semi-Finished products and raw materials will be done by means of Material Requirements Planning on MRP run and the system is automatically updated the any changes occurred. In SAP System, MRP takes care of the following: To Guarantee material availability and at the same time avoid excessive Inventory. To determine situations of material shortage and to create appropriate Procurement elements in the Planning run.

MRP takes the requirement from the planned independent requirements, stock transfer orders into account. MRP analyses the demand from stock transfer orders. The difference between the demand and the supply of an item is the shortage. This shortage quantity must now be covered by one or more planned orders. If stock is needed then a planned order is created for a material produced in- house and a purchase requisition for external procurement.

PP Business Blue Print

MRP can create purchase requisitions directly, for purchased materials. If the purchased material is part of a scheduling agreement with a vendor, MRP can create schedule lines. The requirement elements for MRP are sales orders, stock transfer orders, material reservations and the planned dependent requirements produced by the BOM explosion, etc. For materials produced in-house, dependent requirements and external procurements (raw Materials) are determined during BOM explosion. For each component, the dependent requirements date (Semi Finished product, raw materials) is displaced by the in-house production time of the higher-level material (finished product). Also for in-house production, the lot sizes will be defined which will ensure minimum / maximum production run.

Illustration of BOM explosion:

PP Business Blue Print

The following example is illustrative for the purpose of understanding the process.

Finished Product

Planned Independent Requirements Planned Order

Semi Finished Product

Dependent Requirements Planned Order

Dependent Requirements Raw Material 1 Raw Material 2 Raw Material 3 Packing Materials

Purchase Requisition

BOM Explosion in MRP: Well look at the MRP from the point of view of a bill of material. MRP begins by calculating demand for the finished product. This consists of planned independent requirements. If we dont have enough supply to cover this demand, MRP will generate a planned order. The Bill of material of the planned order for the finished product is exploded. This creates dependent requirements for the semi-finished products. A dependent requirement is a demand that is derived from the Bill of Material Structure. At the next level of the BOM, MRP calculates the requirement for each semi-finished product. If we do not have enough supply, MRP will create a planned order.

PP Business Blue Print

The Bill of Material of the planned order for each semi-finished product is exploded. This creates dependent requirements for the raw material. At the lowest level of the BOM, MRP again calculates demand. If we do not have enough supply of raw material , MRP will create a planned order (or a Purchase Requisition)

Generation of planned orders In SVIL, after MRP run system creates planned order for Mattress and all semi-finished materials. The planned order number is unique to identify the exact planned order. This Planned order number is used to confirm in each section for each material after producing the material. If you get requirement more than once for the same material by using this planned order number we can identify and then confirm. Planned orders are created automatically for finished and Semi finished products for SVIL during MRP run. It is a procurement proposal for Finished and Semi finished Product in MRP for requirements coverage. The planned order consists of order data (quantities, dates, material data, procurement data and so on) and component overview.

Back flushing in Repetitive Manufacturing

In SAP, when you back flush in repetitive manufacturing, the system carries out the following activities: Posts the goods receipt for the assembly Posts the goods issues for the components Reduces the planned orders Posts the actual costs to the product cost collector

PP Business Blue Print

When back flushing, the system explodes the BOM valid for the material on the posting date or the fixed BOM from the planned order. When saving the data, the system posts the goods receipt for the assembly. Using the information from the BOM explosion, the system posts the goods issues for the components. At the same time, material documents and accounting documents are created. In repetitive manufacturing, you can create various reports for analyzing production costs.

In the repetitive manufacturing back flush, material costs and production activities are collected at the product cost collector. Overhead can be posted to the product cost collector using a separate transaction. The costs that are in the production cost collector may be viewed in a cost report.

8. Key Points
MRP controller. MRP controller is responsible for planning what the materials are created under his MRP Controller code. There will be different MRP controller defined for the different Materials & sections. REM Profile You use the repetitive manufacturing profile to control how you want to carry out planning and back flushing in repetitive manufacturing. It has been decided that the profile to be used is 0004 where the auto back flush and reporting points for the calculation of WIP is to be considered. Production Version In repetitive manufacturing, at least one production version must exist for a material to be produced using this method of production. The production version contains data relevant to repetitive manufacturing. This data is subdivided into three segments.

PP Business Blue Print

In the basic data section, the fields "Valid from" and Valid to" define the period of validity of the production version. The indicator "Repetitive mfg allowed" must also be selected. The "To location" is the proposed receiving storage location. The fields "BOM alternative" and "BOM usage" define which BOM is to be used in repetitive manufacturing. In the planning data section, you can determine task lists. You can define task lists for detailed, rate based and rough-cut planning. Usually, you enter a group and a group counter in the rate-based planning fields. The routing you enter is used for capacity planning.

9. Number ranges:
S/N 1 2 3 Description BOM Work centers Planned orders Remarks External number range External number range Internal number range

10.Reports
AS IS: The following table gives the information about the requirement of reports given By SVIL.

Report

Remark

PP Business Blue Print

No. 1. 2. 3. 4. 5. 6.

Monthly Operations Plan Monthly Materials Plan Production Recipes List of Materials Capacity Data for raw materials Capacity of machines & Manpower Planning

Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity Will be Discussed in detail during FIRE Activity

7. 8.

Machine Utilization Monthly material issued

TO BE: All the reports will be discussed in detail during FIRE (Forms, Interface, Reports, and Enhancements) Activity.

Business Blueprint PP Module SVIL IMPLEMENTATION :

PP Business Blue Print

Created by Date of creation Date of the last changes Version

: : : :

A. Shankar 13.03.2008 25.03.2008 1.0 Sign Off Date:

A. Shankar PP Consultant Consultant

Mr. Key User Business Process Owner Name Mr. Mr. Mr.

Mr. Module Owner

Mr. IT Head

Role IT Head Module Owner Key User

Signature

Date