Demystifying Planning Strategies in SAP PP

In the fast-paced world of production planning, efficiency is critical. SAP PP offers a powerful tool to streamline this process: Planning Strategies. But what exactly are they, and how can you leverage them for optimal production control?

What are Planning Strategies?

Planning strategies define how your production system reacts to demand. They dictate how Planned Independent Requirements (forecasts) and Sales Orders (customer demand) interact with your planning processes like MPS (Master Production Scheduling) and MRP (Material Requirements Planning).

Think of it this way: Planning strategies are the rules that govern how SAP translates demand signals into production plans. These rules determine factors like:

• Production Trigger: Do you produce based on forecasts (Make-to-Stock) or actual customer orders (Make-to-Order)?
• Inventory Management: How much safety stock do you carry?
• Availability Checks: When are these checks performed, and how do they impact the production schedule?

Why are Planning Strategies Important?

Choosing the right planning strategy directly impacts your ability to:

• Balance Customer Service: Can you fulfill orders on time?
• Optimize Inventory Levels: Do you have enough stock to meet demand without excessive carrying costs?
• Minimize Production Lead Times: How quickly can you react to changes in demand?

Common Planning Strategies in SAP PP

SAP offers a variety of planning strategies to cater to different production scenarios. Here are a few famous examples:

• Strategy 11 (Make-to-Stock): Ideal for stable demand items. Forecasts drive production, and customer orders don’t directly affect planned production orders.
• Strategy VS (Variant Planning): Useful for products with multiple variants that share standard components. The specific sales order variant triggers final assembly.
• Strategy MTO (Make-to-Order): Production begins only after a confirmed sales order is received—suitable for low-volume, customized products.

Selecting the Right Planning Strategy

The optimal planning strategy depends on your specific product characteristics, demand patterns, and business goals. Here are some key factors to consider:

• Demand predictability
• Production lead times
• Product customization level
• Inventory carrying costs

Remember: There’s no one-size-fits-all solution. Carefully analyze your production environment to select the strategy that best balances your need for efficiency, responsiveness, and cost control.