Understanding Strategy 74 in SAP PP: Planning for Subassemblies Without Final Assembly

In SAP Production Planning (PP), the proper planning strategy is crucial for efficient material management. Strategy 74 is a unique option that caters to specific production scenarios where subassemblies are planned and procured independently of the final assembly process.

What is Strategy 74?

Strategy 74, also known as “planning without final assembly at the assembly level,” is used for materials that represent subassemblies. Unlike traditional planning strategies, it focuses on independent planning of the subassembly, regardless of confirmed demand for the final assembled product.

Key Characteristics:

• Planning at Subassembly Level: Demand for the subassembly is managed through a Planned Independent Requirement (PIR), which drives the generation of planned orders for the subassembly components.
• Non-Convertible Planned Orders: Planned orders generated for the subassembly are not directly convertible to production orders. This signifies that the subassembly can be planned and procured even when the final assembly isn’t confirmed.
• Focus on Procurement: The primary purpose of Strategy 74 is to ensure the timely availability of subassemblies, irrespective of final assembly needs.

When to Use Strategy 74?

This strategy is ideal for scenarios where:

• Subassemblies have Independent Demand: The subassembly might be used in various finished products or sold independently.
• Lead Time Management: Long lead times for subassembly components necessitate independent planning to avoid stockouts.
• Production Flexibility: The ability to procure subassemblies beforehand allows for quicker final assembly.

Benefits of Strategy 74:

• Improved Procurement Efficiency: Ensures subassembly components are readily available, reducing production delays.
• Enhanced Planning Control: Provides independent control over subassembly planning, preventing disruptions from final assembly fluctuations.
• Reduced Risk of Stockouts: Proactive procurement of subassemblies minimizes the risk of running out of critical components.

Things to Consider:

• Increased Inventory: Independent planning can lead to higher subassembly inventory levels.
• Production Order Conversion: When final assembly is confirmed, manual intervention might be required to convert planned orders to production orders.

Conclusion:

Strategy 74 offers a valuable tool in SAP PP for managing subassemblies with independent demand or long lead times. By understanding its characteristics and applications, you can leverage this strategy to optimize your production planning process and ensure a steady flow of materials.