Planning with Final Assembly: Mastering Production Flexibility with SAP PP Strategy 40

In the fast-paced manufacturing world, reacting quickly to customer demands is crucial. That’s where SAP PP (Production Planning) Strategy 40 comes in. This widely used strategy prioritizes flexibility, making it ideal for companies forecasting final product quantities.

What is SAP PP Strategy 40?

Strategy 40, also known as “Planning with Final Assembly,” is a make-to-stock strategy that leverages Planned Independent Requirements (PIRs) to anticipate production needs. Here’s the core concept:

• Demand Management: You forecast final product demand using PIRs in the Demand Management module.
• Production Planning: Based on these forecasts, production plans are created, including final assembly processes.
• Sales Orders Arrive: Incoming sales orders consume the planned independent requirements. This ensures the master plan reflects actual customer needs.

Benefits of Strategy 40

• Flexibility: Respond swiftly to customer demands by adjusting production based on sales orders.
• Inventory Optimization: Maintain optimal stock levels by aligning production with forecasts.
• Simplified Planning: Focus on final product forecasts rather than managing dependent requirements for every component.

Who Should Use Strategy 40?

This strategy is ideal for companies that:

• Manufacture final products with predictable demand.
• Maintain a buffer stock of components to handle fluctuations.
• Prioritize responsiveness to customer orders over precise production smoothing.

Things to Consider with Strategy 40

• Forecasting Accuracy: The success of Strategy 40 hinges on accurate final product forecasts. Inaccurate forecasts can lead to over or understocking.
• Consumption Mode: Define how sales orders consume PIRs (backward, forward, or combined) to ensure proper master plan adjustments.
• Safety Stock: Maintain adequate safety stock to buffer against unexpected demand fluctuations.

Conclusion

SAP PP Strategy 40 offers a powerful tool for manufacturers seeking agility in production planning. By leveraging forecasts and prioritizing customer needs, companies can achieve a responsive and efficient production process. For a deeper dive, consider exploring SAP documentation and consulting resources to ensure optimal implementation.