Planning Strategy 40 in SAP PP: Flexibility for Make-to-Stock Production

In the fast-paced manufacturing world, reacting quickly to customer demands is crucial. SAP PP (Production Planning) offers various planning strategies to optimize production processes. Today, we’ll delve into Planning Strategy 40, a popular choice for make-to-stock scenarios prioritizing flexibility.

What is Planning Strategy 40?

Planning Strategy 40, also known as “Planning with Final Assembly,” is a make-to-stock strategy focused on adaptability. Production is triggered by planned independent requirements (PIRs) you forecast in Demand Management, even before firm sales orders arrive. This proactive approach allows you to anticipate demand and have finished products readily available.

Key Features of Planning Strategy 40:

• Focus on Flexibility: Respond swiftly to customer needs by building stock based on forecasts.
• Consumption of PIRs by Sales Orders: Incoming sales orders “consume” existing PIRs, ensuring the master plan reflects actual demand.
• Prioritizes Reaction over Smoothing: Focuses on fulfilling customer requirements rather than strictly adhering to a pre-defined production schedule.

Who Should Use Planning Strategy 40?

This strategy is ideal for manufacturers of:

• Products with predictable demand fluctuations.
• Items with relatively stable bills of materials (BOMs).
• Situations where finished product forecasts are reliable.

Benefits of Planning Strategy 40:

• Improved Customer Satisfaction: Faster response times to customer orders.
• Reduced Lead Times: Pre-built stock allows for quicker delivery.
• Lower Inventory Carrying Costs: Optimized inventory levels based on actual demand.

Things to Consider with Planning Strategy 40:

• Forecast Accuracy: The success of this strategy hinges on accurate demand forecasting.
• Safety Stock Management: Maintaining appropriate safety stock levels is crucial to avoid stockouts.
• Consumption Mode: Define how sales orders consume PIRs (backward, forward, or combined) for optimal planning.

In Conclusion

Planning Strategy 40 in SAP PP is a powerful tool for manufacturers seeking agility in make-to-stock production. By leveraging forecasts and prioritizing responsiveness to customer demands, you can streamline production processes and enhance customer satisfaction.