PP BBP

BUSINESS BLUEPRINT DOCUMENT
AREA: PRODUCTION PLANNING

PROJECT: e-KAMAL
FUNCTIONAL
PRODUCTION PLANNING (PP)
PROJECT e-Kamal
CREATED BY
PROJECT
DATE OF DOCUMENTATION
VERSION
:
:
:
:
CHANGED BY
CHANGED ON
:
:
BIGTEC CONSULTING SERVICES
e-Kamal
14.06.2008
1.0
SIGNOFF:
KJSA
BIGTEC
CONSULTING SERVICES
MR. S.K. DAS

PROJECT MGR
MR. CHINMOY K. PATNAIK

PROJECT MGR
MR. B.N.KAR (SPONGE

IRON)
MR. Y.MEHTA (BILLET)
MR. BUIYA (MINES)
BUSINESS PROCESS
OWNERS
MR.SUSHANT KUMAR
PRADHAN
MR.SUMANTA KUMAR GIR
MR.CHANDRA MOHAN
NAIK
MR.ATISH KUMAR
MOHANTY
MR.BIJAY KUMAR BARIK
CORE TEAM
MR. SHANKAR T.S.

SAP CONSULTANT - PP
Version: 1.0
Prepared By: Bigtec Consulting Services
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PROJECT: e-KAMAL
FUNCTIONAL
Table of Contents
1.1 SAP Functional Descriptions 3
1.1.1
Master Data.......... 3
1.1.2
Planning. 5
1.2 KJSA Mining Process... 7
1.3
1.2.1
Business Scenario 1.. 7
1.2.2
Business Scenario 2. . 8
KJSA Sponge Iron Process... 11

1.3.1
Business Scenario 1. 11
1.3.2
1.3.3
1.3.4
1.4 KJSA Billet Process. 19
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PROJECT: e-KAMAL
FUNCTIONAL
SAP Functional Descriptions

Master Data
Material Master
Definition
Material Master contains all data required to define and manage

materials.
Material Master integrates data from engineering, manufacturing,

Sales and Distribution, Purchasing, accounting and other departments.
It contains info about materials an enterprise buys, produces, stores

and sells.
Bill Of Materials (BOM)

Definition
A formally structured list of the components that make up a product or
assembly. The list contains the object number of each component,

together with the quantity and unit of measure.
BoMs are used in their different forms in various situations where a
finished product is assembled from several component parts or materials.
They contain important basic data for numerous areas of a company,
for example:
MRP
Material provisions for production
Product Costing
Plant Maintenance
Work Center
Definition
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FUNCTIONAL
Operations are carried out at a work center. In the R/3 System work
centers are business objects that can represent the following real work
centers, for example:
Machines
Assembly Work Centers
Work centers are used in task list operations and work orders.
Task Lists are for example routings, maintenance task lists.
Data in work centers is used for
Scheduling
Operating times and formulas are entered in the work center,
so that the duration of an operation can be calculated.
Costing
Formulas are entered in the work center, so that the costs of
an operation can be calculated. A Work Center is also assigned to a

cost center.
Routings
Definition
Routing is a sequence of operations necessary to be performed in

order to produce the required product.
In a Routing it is possible to plan
The operations (process steps) to be carried out during
production.
The activities to be performed in the operations as a basis
for determining dates.
The use of materials during production.
The use of Work Centers.
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PROJECT: e-KAMAL
FUNCTIONAL
PLANNING
Demand Management
The function of Demand Management is to determine requirement

quantities and delivery dates for finished product assemblies.
To create a demand program, Demand Management uses Planned

Independent Requirements (PIRs).
Material Requirements Planning (MRP)

The main function of MRP is to guarantee material availability, that is, it is
used to procure or produce the requirement quantities on time both for
internal purposes and for sales and distribution. This process involves the
monitoring of stocks and, in particular, the automatic creation of
procurement proposals for purchasing and production.
Process Flow:
In Demand Management, sales are planned in advance via planned
independent requirements. The result is the independent requirement,

that is, the requirement for the finished product. This result triggers
material requirements planning.
In order to cover these requirements, MRP calculates procurement
quantities and dates as well as plans the corresponding procurement

elements. The procurement element in the planning run is the planned
order or, for external procurement, the purchase requisition. Both
procurement elements are internal planning elements that can be
changed, rescheduled or deleted at any time.
If the material is produced in-house, the system also calculates the
dependent requirements, that is, the quantity of components required to

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PROJECT: e-KAMAL
FUNCTIONAL
produce the finished product or the assembly, by exploding the BOM. If a

material shortage exists, planned orders are created at every BOM level
to cover requirements.
The system then converts these planned procurement elements
into exact procurement elements: production orders for in-house

production and purchase orders for external procurement.
The progress of the order for materials produced in-house is
controlled by using the production order. Cost accounting is also carried

out via the individual production order.
Materials that are procured externally trigger the purchasing
procedure. In this case, it is required to chose suitable vendors or draw up

outline agreements.
The quantities made available by production or by external
procurement are placed in stock and are managed by Inventory

Management.
Production Orders
Production Orders are a fundamental part of Production Planning
and Control (PP). PP is fully integrated in the Logistics (LO) component
and has, among others, interfaces to 1) Sales and Distribution (SD), 2)
Materials Management (MM), 3) Controlling (CO).
The work processes within a company are executed using orders.
A Production Order defines which material is to be processed, at
which location, at what time and how much work is required. It also
defines which resources are to be used and how the order costs are to
be settled.
As soon as a planned order or a company-internal requirement is
generated from previous planning levels (material requirements
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PROJECT: e-KAMAL
FUNCTIONAL
planning) shop floor control takes over the information available and
adds the order-relevant data to it to guarantee complete order
processing.
Production Orders are used to control production within a company and
also to control cost accounting.
Production Orders are used to specify what is to be produced, when
production is to take place, How much production costs.
1. KJSA MINING PROCESS

Business Scenario 1: Excavation, Screening, Raising and Crushing of Iron
Ore by contractors.
As-Is Process (Current Process):
1. Ore raising is done through contractors. Contractors belong to different
categories:
Special Contractors i.e. Triveni.
Monopoly Contractors i.e. Core Minerals, Monnet
Petty Contractors.
2. In case of Special Contractors (like Triveni), Blasting, raising, screening,

crushing is done by the contractor. Sales happen through KJSA and a
certain percentage of the realization excluding taxes is paid to Triveni.
3. In case of Monopoly Contractors, blasting, raising, screening, crushing is
done by the contractor. Material produced by the contractor is sold entirely
to the contractor which he sells to the customers. Charges for all the
activities are paid to the contractor by KJSA.
4. In case of Petty Contractors, blasting is done by KJSA. Post blasting
scenario is different in different locations:
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In some cases screening is done by the petty contractor. The product

i.e. 10-30 mm and Fines are sold from the Quarry itself and Lumps
sent to Katasahi for crushing purposes.
Screening and crushing done by the contractor as in Gangaigoda. The

product is sold from the quarry itself.
In some cases after blasting, the raising (separation of lumps) is done

by the petty contractors. The residue is screened for Fines and 10-30
mm size ore. Screening can be done through contractors. Lumps are
sent to Katasahi for crushing and other sized materials like 10-30 mm
and Fines are sold directly from the quarry.
5. In general, Lumps produced in mines can be sold directly or can be sent

to Katasahi for further crushing activities whereas 10-30 mm and Fines
can be sold directly from quarry itself.
To-Be Process (SAP Process):
1. All contractors can be considered as vendors.
2. The quantity of materials produced at each pit by these vendors can be
recorded in SAP. This can be done using Goods Receipt without any
reference to Production Orders since internal Production Orders are not
required.
Gaps: Not applicable.
Business Scenario 2: Crushing of Iron Ore by contractors at Katasahi.
As-Is Process (Current Process):
1. Currently two crushers are operated by the contractors at Katasahi during
crushing. In the first crusher (50 TPH) feeding is done through a conveyor.
In the second crusher (150 TPH) feeding is done directly to the crusher.
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2. There is no quantity measurement procedure followed as of now. Earlier

quantity was measured through number of trips fed to the crusher
(approximate weight). When feeding is done by the loader, the procedure
is not followed. Shortage of manpower restricts the activities.
3. Crushing activity gives rise to production of sized ore 5-18 mm as well as
Fines which can be sold to customers or used for internal production
purposes at Barpada Plant (Sponge Iron Plant).
To-Be Process (SAP Process):
1. Regarding the activities at Katasahi crushing unit, any of the following can
be carried out to record the production:
i.
It is possible to create and execute the production orders if KJSA is

able to record the approximate quantity of Lumps being fed into the
crusher. The same applies to Goods Receipt of 5-18 mm and Fines
after crushing. However costing for this scenario will also be an
approximate figure OR
ii.
It is possible to record approximate quantity of raw materials

(Lumps) being consumed by posting them against the cost center
though Standard costing will not be possible and Goods Receipt of
5-18 mm and Fines can be recorded without reference to any
Production Order only at the time of weighing at Katasahi Weigh
Bridge. Here also the standard costing will not be possible.
Gaps:
1. It is not possible to record exact quantity of material being crushed and
costing will not be recorded appropriately since the exact quantity being
crushed as well as the exact cost is not being recorded as of now, by
KJSA.
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Alternate Solution:
1. The approximate method of quantity recording can be carried out through
Production Orders where the posting for Goods Issue as well as Goods
Receipt will be shown as approximate quantities.
Process Flow (Katasahi Crushing Process)
Create Production
Order for 5-18 mm
Goods Issue (GI)

to be done for
Lumps
Activity Confirmation
for Order
GR (Goods Receipt) to be
done for 5-18 mm and
Fines
Preliminary Settlement for

Co-Products
Final Settlement of
Production Order
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PROJECT: e-KAMAL
FUNCTIONAL
2. Sponge Iron Process
Business Scenario 1: Planning for Sponge Iron Production

AsIs Process:
1. Production starts before a sale order from customer is received.
2. Annual Target is fixed for the production of sponge iron.
3. Annual Target is broken down into monthly or daily targets.
4. Annual Target is based upon the capacity of the Kilns.
5. Sized Iron Ore is procured from KJSA Mines.
6. Coal and Dolomite are procured from external suppliers.
7. Sponge Iron sizes produced as of now, are Graded Sponge Iron Lumps
(above 4mm) and Graded Sponge Iron Fines (below 4mm).
To-Be Process:
1. Annual Target is broken down into monthly or daily targets and fed to the
planning table in SAP.
2. Since Production happens before a sale order is received, it is a Make to
Stock production.
3. For planning of raw materials MRP is run for Graded Sponge Iron.
4. Monthly Targets fed in the planning table for graded sponge iron will be an
input to MRP.
5. MRP is run for graded Sponge Iron.
6. MRP creates planned orders for graded Sponge Iron.
7. For Raw Materials i.e. Sized Iron Ore, Coal and Dolomite, Purchase
Requisitions are generated.
8. For Graded Sponge Iron which can be either Grade A, Grade B, Special
Grade (both Sponge Iron Lumps and Fines are taken as co-products),
Planned Orders are converted into Production Orders.
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FUNCTIONAL
Gaps: Not Applicable.

Process Flow
Create PIR (Planned
Ind. Requirements) for
Graded Sponge Iron
Run MRP for Graded

Sponge Iron
MRP creates Planned

Order for Graded Sponge
Iron
Planned Order for Graded

Sponge Iron creates
dependent requirements and
Planned Orders for
Purchase Requisitions
Created for Dolomite
Planned Order created

for 15-25 mm Coal
Purchase Requisitions
created for Coal
(Unscreened)
Version: 1.0
Planned Order (if

required) created
for screening 5-18
mm Sized Iron Ore
Purchase
Requisition created
for Unscreened
Iron Ore
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PROJECT: e-KAMAL
FUNCTIONAL
Business Scenario 2: Screening and Crushing of Coal

As-Is Process:
1. Coal is screened initially to separate 0-200 mm size which is fed to the
crusher. Those having size more than 200 mm are broken down manually.
2. Coal of size 0-200 mm are broken down and screened to finally get
following sizes: 1) 0-4 mm (Fines) 2) 4-10 mm 3) 10-15 mm 4) 15-25 mm.
3. All the crushed sized coal is then stored or fed through a feeder before
finally mixing with iron ore and dolomite.
To-Be Process:
1. Production Order for a month or day can be created for finally screened
coal.
2. The quantity of coal produced and stored can be recorded through Goods
Receipt against Production Order for each size of coal.
3. All the screened coal sizes except Coal Fines can be taken as coproducts. Coal Fines will be considered as a by-product.
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PROJECT: e-KAMAL
FUNCTIONAL
Process Flow
Create Production
Order for 15-25
mm sized coal
GI to be done for
Unscreened Coal
Confirm activities
screening, crushing
GR is done for Screened

Products i.e. 15-25 mm,
10-15 mm, 4-10 mm and
0-4 mm (Fines)
Preliminary
settlement of CoProducts
Final Settlement of
Production Order
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PROJECT: e-KAMAL
FUNCTIONAL
Business Scenario 3: Screening of Sized Iron Ore to separate Fines.

As-Is Process:
1. 5-18 mm sized Iron Ore procured from KJSA Mines are occasionally
screened (i.e. when size below 5 mm is more than a certain percentage
during quality check) to separate Fines.
2. This process is being followed only when the quality check fails
To-Be Process:
1. Production Order for sized Iron Ore (5-18 mm size) is created for a month
or a day.
2. Production for both fines (< 5 mm Size) as well as sized Iron ore is booked
against this Order.
3. 5-18 mm sized Iron Ore can be taken as main product and Fines will be
considered as a by-product.
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PROJECT: e-KAMAL
FUNCTIONAL
Process Flow
Create Production
Order for 5-18 mm
Sized Ore
GI for Unscreened
5-18 mm Ore
Confirm activity
Screening
GR for 5-18 mm
and < 5 mm (byproduct)
Production Order
Settlement
Business Scenario 4: Sponge Iron Production

As-Is Process:
1. Raw Materials sized Iron Ore, Coal and Dolomite are fed through one side
of the Kiln.
2. Ore gets reduced as it passes through the Kiln.
3. Coal Fines are passed through the discharge side of the Kiln.
4. Quantity of Sponge Iron produced is booked under different grades
(Grade A, Grade B, Special Grade, Waste Sponge Iron)
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5. All graded sponge iron materials produced is then sold directly to

customers or can be used for captive consumption.
To-Be Process:
1. Raw materials sized Iron ore, Sized Coal and Dolomite consumed are to
be known.
2. Operation Cost for the manufacture is to be captured.
3. Graded Sponge Iron can be created as either a semi finished or finished
product.
4. Planned Orders that were created by MRP Run are converted to
Production Orders. The planned order quantity can be converted partially
for each Kiln into a Production Order.
5. At the time of Order conversion, the routing which contains the appropriate
Kiln is selected.
6. Production Order to be created for each Kiln since Production Cost has to
be captured for each Kiln.
7. Goods Issue to be done against the Production Order.
8. Operation confirmation for capturing activity cost to be done against the
Production Order.
9. Charcoal can be taken as co-product in these Orders. Sponge Iron waste
can be considered as co-product or by-product. Other different grades
produced in Lumps and Fines can be considered as co-products.
10. Different Graded Sponge Iron produced can be as follows:
Sponge Iron Grade A, Grade B Lumps (size above 4 mm)
Sponge Iron Grade A , Grade B Fines (size 3-4 mm)
Sponge Iron waste (size below 3 mm), wherever costing for

separation of Sponge Iron from non-magnetic is more than the
value of the Sponge Iron so produced.
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Sponge Iron Special Grade Lumps and Fines.
11. Goods Receipt for Sponge Iron is done based on the produced quantity.
Gaps: Not Applicable
Process Flow
Convert Planned Orders
into Production Orders
for Sponge Iron
Release Production Order

for Graded Sponge Iron
GI for raw materials Sized Ore

5-18 mm, Dolomite and 0-4 mm,
4-10 mm, 10-15 mm and 15-25
mm sizes of Screened Coal.
Confirm Activities i.e.

Ore Reduction
GR for Graded Sponge

Iron Lumps and Fines
(co-products)
Production Order
Settlement
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PROJECT: e-KAMAL
FUNCTIONAL
3. Billet (M.S. Ingot) Process

Business Scenario 1: Billet Production
As-Is Process:
1. Raw Materials Sponge Iron and / or Pig Iron, Scrap is cut to furnace size
and fed into the Induction furnace.
2. Once Oxygen is removed from the Iron materials, binding takes place
subsequently. Manganese is also added in required proportions. All these
take place during Melting process.
3. Then the melted material is poured into moulds to carry out casting.
4. Then Finished materials in form of Billets, Slabs, Stainless Steel are
produced in required shapes.
To-Be Process:
1. Production Order is created for a month or a day.
2. Raw materials Sponge Iron, Pig Iron, Scrap will be consumed against this
production Order for Goods Issue.
3. Confirmation of activities i.e. Melting and Casting gives the Production
cost for this order.
4. Goods Receipt against Production Order for Billets or any other product of
required shape like Slabs, Stainless Steel is posted.
5. BOMs (Bill of Materials) and Routings will be created for different shapes
as required, by KJSA themselves.
Gaps: In case of scenario where BOM and Routings are not required to be
shown(Business Secret) by KJSA in SAP, then the Goods Issue can be posted to
a cost center and total Finished product quantity can be posted without reference
to any Production Order as per Daily or Monthly basis. Standard Costing will not
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PROJECT: e-KAMAL
FUNCTIONAL
be calculated automatically for finished material in this case. Hence manual

costing will have to be carried out.
Process Flow
Create Production
Order for Billet (or
any other Product)
GI for Sponge
Iron, Pig Iron and /
or Scrap
Confirm Activities
Melting and
Casting
GR for Finished
Product Billet or
any other Product
Production Order
Settlement
Version: 1.0
Page 20 of 20

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BUSINESS BLUEPRINT DOCUMENT

AREA: PRODUCTION PLANNING

PRODUCTION PLANNING (PP)

BIGTEC CONSULTING SERVICES

MR. S.K. DAS

MR. CHINMOY K. PATNAIK

MR. B.N.KAR (SPONGE

MR. SHANKAR T.S.

Prepared By: Bigtec Consulting Services

BUSINESS BLUEPRINT DOCUMENT

1.2 KJSA Mining Process... 7

Business Scenario 1.. 7

KJSA Sponge Iron Process... 11

1.4 KJSA Billet Process. 19

Prepared By: Bigtec Consulting Services

BUSINESS BLUEPRINT DOCUMENT

SAP Functional Descriptions

Material Master contains all data required to define and manage

Material Master integrates data from engineering, manufacturing,

It contains info about materials an enterprise buys, produces, stores

Bill Of Materials (BOM)

A formally structured list of the components that make up a product or

assembly. The list contains the object number of each component,

BoMs are used in their different forms in various situations where a

finished product is assembled from several component parts or materials.

They contain important basic data for numerous areas of a company,

Material provisions for production

Prepared By: Bigtec Consulting Services

BUSINESS BLUEPRINT DOCUMENT

Assembly Work Centers

Task Lists are for example routings, maintenance task lists.

Data in work centers is used for

Operating times and formulas are entered in the work center,

so that the duration of an operation can be calculated.

Formulas are entered in the work center, so that the costs of

an operation can be calculated. A Work Center is also assigned to a

Routing is a sequence of operations necessary to be performed in

In a Routing it is possible to plan

The operations (process steps) to be carried out during

The activities to be performed in the operations as a basis

for determining dates.

The use of materials during production.

The use of Work Centers.

Prepared By: Bigtec Consulting Services

BUSINESS BLUEPRINT DOCUMENT

The function of Demand Management is to determine requirement

To create a demand program, Demand Management uses Planned

Material Requirements Planning (MRP)

In Demand Management, sales are planned in advance via planned

independent requirements. The result is the independent requirement,

In order to cover these requirements, MRP calculates procurement

quantities and dates as well as plans the corresponding procurement

If the material is produced in-house, the system also calculates the

dependent requirements, that is, the quantity of components required to

Prepared By: Bigtec Consulting Services

BUSINESS BLUEPRINT DOCUMENT

produce the finished product or the assembly, by exploding the BOM. If a

The system then converts these planned procurement elements

into exact procurement elements: production orders for in-house

The progress of the order for materials produced in-house is

controlled by using the production order. Cost accounting is also carried

Materials that are procured externally trigger the purchasing