Planning for Flexibility: A Look at Planning Strategy 70 in SAP PP

In the fast-paced world of production planning, agility is critical. SAP’s Production Planning (PP) module offers various planning strategies to cater to different manufacturing needs. Today, we’ll delve into Planning Strategy 70, a strategy designed for flexibility and responsiveness to changing customer demands.

What is Planning Strategy 70?

Planning strategy 70, or “planning at the assembly level,” focuses on planning for finished products (assemblies) rather than individual components. Here’s the core concept:

• Planned Independent Requirements (PIRs): Strategy 70 uses PIRs created at the assembly level instead of reacting directly to sales orders. These forecasts can originate from material forecasts, Sales & Operations Planning (SOP), or manual entries.

Benefits of Planning Strategy 70

• Flexibility: By planning at the assembly level, you can react quickly to changes in customer demand for finished products. Production orders for sub-assemblies are triggered by PIR consumption, allowing for adjustments without impacting existing sales orders.
• Improved Forecasting: Strategy 70 shines when you understand finished product demand well. Accurate forecasts for assemblies translate to efficient planning for sub-assemblies and components.
• Reduced Lead Times: Since PIRs can be created well in advance, assembly production planning can begin earlier. This can potentially lead to shorter lead times for finished products.

Who Should Use Planning Strategy 70?

This strategy is ideal for manufacturers who:

• Produce finished products with multiple variants using standard sub-assemblies.
• Can generate reliable forecasts for finished products.
• Prioritize responsiveness to customer demand over strict adherence to individual sales orders.

Prerequisites for Using Strategy 70

• Master Data Setup: The assembly master data must be configured with Strategy Group 70 and the “Mixed MRP” indicator set to 1. Additionally, consumption parameters must allow for PIR consumption.
• Make-to-Stock (MTS): Strategy 70 is typically used in MTS environments where finished products are built for stock based on forecasts.
• Availability Check: An accurate availability check using Available-To-Promise (ATP) logic is crucial during production order processing.

Planning Strategy 70 vs. Strategy 40

Another common strategy, Strategy 40 (planning at a single level), directly translates sales orders into planned independent requirements. While Strategy 40 offers tighter control over production based on confirmed sales orders, Strategy 70 provides more flexibility for reacting to market shifts.

In Conclusion

Planning Strategy 70 is valuable in the SAP PP toolbox, particularly for manufacturers who prioritize responsiveness and can generate reliable forecasts. Understanding its strengths and limitations lets you decide which strategy best suits your production environment.