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

In the Production Planning (PP) world within SAP, having the right strategy is critical to ensuring efficiency and responsiveness. Strategy 70, or “planning at the assembly level,” is a powerful tool for businesses with a specific production setup. This blog post will delve into the details of Strategy 70, exploring its benefits, prerequisites, and how it compares to other planning strategies.

What is Strategy 70?

Strategy 70 focuses on planning and managing production at the assembly level rather than the finished product. This approach is ideal for companies manufacturing finished products with multiple variants, often sharing standard sub-assemblies. Strategy 70 allows for greater flexibility in responding to customer demands by planning at the assembly level.

Here’s how it works:

• Planned Independent Requirements (PIRs): Instead of creating PIRs for the finished product, Strategy 70 uses PIRs for the assemblies. These PIRs can be generated through various methods, including forecasting or Sales & Operations Planning (SOP).
• Production Planning: Based on the PIRs, the system generates planned orders for the assemblies. These planned orders can be firmed up and converted into production orders.
• Assembly and Procurement: When a production order is created for the finished product, the system checks for available assemblies. If there’s a shortage, it triggers procurement proposals for the required components.

Benefits of Strategy 70

• Flexibility: Responds quickly to changes in customer demand by leveraging pre-planned assemblies.
• Improved Forecasting: Allows for more accurate forecasting at the assembly level, potentially leading to better overall material planning.
• Procurement Smoothing: Enables smoother procurement processes by generating proposals based on production needs.

Prerequisites for Using Strategy 70

• Master Data Setup: The assemblies must be configured with Strategy Group 70 and the “Mixed MRP” indicator set to 1. Additionally, consumption parameters and the “Individual/Coll.” indicator must be defined appropriately.
• Assembly Planning: The system needs to be set up for assembly planning, ensuring proper recognition of assemblies within the production process.

When to Consider Strategy 70

Strategy 70 is well-suited for companies that:

• Manufacture finished products with multiple variants using standard sub-assemblies.
• Have a good handle on assembly forecasting.
• Prioritize flexibility in production planning.

Strategy 70 vs. Other Planning Strategies

• Strategy 40 (Single-level Planning): In Strategy 40, PIRs are created for the finished product, with dependent demand automatically generated for components. This offers a more straightforward approach but less flexibility compared to Strategy 70.
• Strategy 74 (Planning without Final Assembly): Similar to Strategy 70, it focuses on assembly-level planning. However, planned orders for assemblies in Strategy 74 aren’t directly convertible to production orders. This strategy is proper when final assembly happens based on specific customer requirements.

Conclusion

Strategy 70 provides a valuable option for production planning in SAP PP, particularly for businesses with a make-to-stock environment and flexible production needs. By understanding its advantages and prerequisites, you can determine if Strategy 70 fits your organization’s production processes.