Understanding Strategy Group 52 in SAP PP: Make-to-Stock with a Twist

In SAP Production Planning (PP), choosing the right planning strategy is crucial for efficient inventory management and production scheduling. Strategy Group 52 offers a unique approach combining make-to-stock and make-to-order production elements. Let’s explore what this strategy entails and how it can benefit your business.

What is Strategy Group 52?

Strategy Group 52 falls under “Planning without final assembly.” Production planning relies on Planned Independent Requirements (PIRs) for finished goods rather than direct sales orders. Here’s the breakdown:

1. PIR Creation: You forecast demand for finished products and create PIRs accordingly. These PIRs drive the production plan.
2. Production Based on PIRs: MRP (Material Requirements Planning) uses the PIRs to generate planned orders for finished goods and sub-assemblies. These planned orders are for stock, not specific sales orders.
3. Sales Order Fulfillment: When a sales order arrives, the system checks the stock of existing finished goods. If sufficient stock exists, the sales order is fulfilled from inventory.
4. PIR Consumption: The PIRs are reduced based on the quantity delivered to the customer.
5. Production Order Conversion (Optional): The planned orders for finished goods can be converted to production orders to replenish stock levels after fulfilling sales orders.

Key Points to Remember:

• Strategy Group 52 suits products with predictable demand and stable stock levels.
• Production is decoupled from sales orders, allowing for proactive manufacturing based on forecasts.
• This strategy offers better inventory control and faster order fulfillment for readily available finished goods.
• However, accurate forecasting is required to avoid over- or under-production.

Benefits of Strategy Group 52:

• Improved Efficiency: Streamlined production planning based on forecasts.
• Reduced Lead Times: Faster order fulfillment for stocked finished goods.
• Lower Inventory Costs: Optimized stock levels through proactive production.

Drawbacks to Consider:

• Forecast Dependence: Relies on accurate demand forecasts to avoid stock issues.
• Limited Sales Order Visibility: The production plan may not directly reflect customer demand.

Who Should Use Strategy Group 52?

This strategy is ideal for companies that:

• Manufacture standard products with steady demand.
• Maintain safety stock levels for finished goods.
• Want to decouple production from sales order fluctuations?

In Conclusion

Strategy Group 52 offers a valuable approach for make-to-stock production with a touch of make-to-order flexibility. You can determine if this strategy aligns with your business goals by carefully evaluating your production needs and forecasting capabilities.