STEPS IN IMPLEMENTATION OF SAP PP/SAP PPPI

Step 1: Delivering a SAP PP Overview Presentation to the Client.

The first thing in an implementation is presenting SAP to the client team. It is expected that the
consulting team would give an overview of SAP and explain the same in a lay man way.

You would not be surprised to see a lot of big names in the room; keeping your cools and giving
your best is very important. This becomes the first interaction with the client. A good PPT and a
good presentation will convey a great message about the team and about you as an individual.

The first interaction with the client and the organization can be really horrifying if the you are
implementing SAP in a big manufacturing organization and you see the big chimneys touching
the sky and Silos standing llike monsters. This is where your mind would start playing on you
and you would all of a sudden feel as if God has nominated you to mess up SAP and distroy
yourself and your career. At this juncture I have just one advice and thought, that the bigger the
company, the easier it is and the more flexible they are to accept standard SAP and standard
processes. You would just be fine!!!

Step 2: Decide the organizational Structure for SAP PP - Plants and Storage
Locations :

Deciding facilities as Plants -

As a Consultant decide the manufacturing plants which needs to be separately identified in SAP
as Plants.

Plants are the place where the manufacturing or warehousing activities happen.

The Material is valuated at plant level and inventory is stored at plant level.

Also note that Manufacturing or Warehouse facilities which are far apart from each other are
nominated as Plants, though this is not a governing rule. For certain reasons Finance may wants
to set up, 2 manufacturing activities lying close to each other, as separate plants due to different
material price existing at the 2 places or because these 2 facilities may have different Legal
accounting procedures (and they may be coming under 2 different legal heads)

Note - You cannot assign a plant to more than one company code.
Deciding Storage Locations @ a Plant -

Once you decide the plants you have to decide the storage locations where the materials would
be stored or inventoried in the system. Storage Locations for example can - Raw material
Receiving Locations, Raw material Return to Vendor locations, Shop Floor issuing Location,
Finished Goods Storage Location etc.

You may create certain Storage Locations specially for storing certain materials or certain type
of materials which are important to the organization or their storage methods and MRP criteria
are different.

Illustration –
Company Code = Dew Steels Pvt Limited

Plant 1 = 0001
SLOC1 = RAW = 0001
SLOC2 = FGI = 0002
SLOC3 = SHOP = 0003
SLOC4 = SCRAP = 0004

Plant 2 = 0002
SLOC1 = RAW = 0001
SLOC2 = FGI = 0002
SLOC3 = SHOP = 0003
SLOC4 = SCRAP = 0004
SLOC5 = REWORK = 0005

Step 3 : Understanding the Manufacturing or Logistical Business Processes :

The following points and questions need to be answered:

• Production Strategy - Start with finding whether the Production process is Made-to-
Order or Made-to-Stock and are there certain products manufactured Made to order and
certain products manufacture made to stock.

• Manufacturing Locations and Supply Chain - Understand the manufacturing facilities

and warehousing facilities in the company & their geographical locations. This will help
you understand the supply chain of the company.
It also becomes significant to understand the supply chain, i.e., know the raw materials that go in
production, know their procurement methods, the storage locations from where the raw material
is stored and from where it is issued for production processes; know the vendors and the existing
tie-up with those vendors for procurement of raw materials. On the other hand understand the
warehousing of the raw materials as well as the finished products; know how they are delivered
for warehousing and how they are delivered to the final customer. It is wise to know the packing
and shipping processes of the products.
 • Products Manufactured - Make a list of the Products manufactured in various plants.
You can put them in a excel list and understand the products and product families
available. This can help you finding out the number of products manufactured at a a plant
and the whether there is any kind of existing concept of Material Master in the
organization. You can also drill down to know the material coding methods which would
help you design the SAP Material Master.

• Manufacturing Facility - Understand the Production process and the various Machines
the product goes through before it is manufactured. Make a note of the operations or
Machine where the production needs to be booked and/or costing needs to be booked.
These operations are potentially your work centers to be used in the production
Routing/Recipe. Other point which make you decide whether a certain operation or
Machine would become a part of your Routing/Recipe, is the amount of time consumed
in the production; appreciable time spent at a certain operation surely makes it a
candidate for Routing/Recipe.

Investigate the average production lead time per product. Thereby inquire whether there is
any kind of time study analysis already existing in the organization. This will help you set up the
operations, work centers, standard production time for producing a base quantity.

You have to understand you would be assigning Work centers to the operations and every
work center has scheduling, capacity and costing related information. For Scheduling you should
choose or make a formula with which the time is consumed at the work center, for example a
regular production would consume time as equal to - [Setup + {(Production order Qty X Std
Time consumed) / Base Quantity}] or a Work center which process many number at one given
time span can have a capacity/scheduling formula as - {Set Up Time + [{Volume of Base Qty /
Base Qty X (Production Order qty - 1)} / {Volume of Furnace + 1}] X Furnace Time}.

• MRP and Planning Strategies - Tabulate the Planning strategies and MRP Methods
for each and every component that is a part of the BOM. You have to understand whether
these raw materials would go through consumption based planning methods like reorder
point planning or whether they would go through more stringent planning processes like
Lot for lot MRP planning. Also note the planning strategies for the in-house
manufactured products, which off course should go through the stringent planning
processes like made-to-order, made-to-stock, final assembly processing etc. Other
parameter like lot sizing procedures, planning methods, scrapping policies, any quota
arrangements, procurement methods also hold equal importance.

• Preparations for Made-to-stock - If the production is made-to-stock understand the

existing forecasting methods and the forecasting rules. Know whether the forecasting is
for a product or for a group of products belonging to a family. Confirm whether
production is totally on the forecasted demand or there are any changes to the forecast
made before they are passed on to production. Identify the parameters that are used in
forecasting like the last periods sales figures for a city, country, region or a sales group or
any other factors.
• Design of BOM - Understand the raw materials that are consumed in production and
decide on which components should become a part of the Bill of Materials. While doing
this you need to know an important point that the prices of each of the components in the
BOM add up to make the total cost of the product thus involve the costing team too.
Involvement of the Product development team, Product designing team or the shop floor
managers to decide whether a certain component or a certain product drawing and
important production related texts are to be included in the BOM.

• Design of Routing/Recipes - Similarly before designing the Routing, it is important to

again involve the costing team to decide the operations which will become a part of the
Routing/Recipes. Again the time study team or the product development team or the
costing team can make corresponding contributions in adding the standard machine time,
setup time required for production of a base quantity.

• Study of Legacy System - Study the existing Legacy system and the various activities
they record on their computers and the various activities they do outside the computers
{if any}. Understanding the Legacy system will help you know how their existing
systems can be duplicated, removed or optimized in SAP. The Study of the legacy system
will help you read the organization and the work procedures in the organization. You can
also plan in making use of this legacy system and decide interface certain activities with
SAP and let them continue in the Legacy system. Legacy System can also help you
setting up the Master data in SAP like the BOM and Routing/Recipe.

• Shop Floor Recordings - Understand the shop floor and the product confirmations
processes at each and every operation also find out how the products are received in stock
and whether there are quality inspections carried out on the output.

• Quality Inspections - Know the quality inspections methods that are used and the
product passing and rejecting activities. Find out how important quality of the product is
important for the company and whether there is a need to implement SAP Quality
Management.

• Ask the management whether the product is reworked upon and what the scrapping
process is. Make a note whether the scrapped or reworked materials is sold in the market
or re-used in production.
Step 4 : Document the Business Processes in a Blueprint Document :

Blueprint - As-Is Versus To-Be Processes:

A Blueprint is a document that records all the existing processes and the to-be processes for these
existing processes. The best way to do this is to put each process one by one and put next to it the
SAP to-be processes. Also include the step by step activities that would be the part of a given to-
be process.

The Following Processes may become part of your Blueprint - This is just an example:

Process 1 : Raw Material Procurement

Process 2 : Raw Material Staging to the shop floor for Production

Process 3 : Master Data creation - BOM,

Process 3a : Master Data creation - Work center

Process 3b : Master Data creation - Routing/Recipe

Process 4 : Material Requirement Planning for the Raw Materials

Process 5 : Material Requirement Planning for the assemblies/subassemblies

Process 6 : Production order creation and Release

Process 7 : Shop Floor Execution

Process 8 : Production order Goods Receipt

Process 9 : Quality Inspections in Production

Process 10 : Product Costing and Order settlement

Process 11: Technical developments like interfaces, reports, Module Pools, user exits and
data conversion technical objects like LSMW and programs that are required to build the
various activities involved in the manufacturing activities.

Process 12: Gaps Analysis

Blueprint - Gap Analysis:

In an attempt to map the existing processes into SAP, there is always a risk that some of the
processes or activities in a process may not be map-able with the Standard process set ups in
SAP. Such activities or processes which become impossible to map in SAP are categorized as
Gaps. These gaps are documented properly under the Gaps section. At the end of the
blueprinting process, the implementing and the consulting team should discusses these Gaps and
then sign-off's the blueprint. They brainstorm on possible solutions to overcome such gaps, these
solutions are workarounds or technical developmental solutions to the Gaps. Most of the times
such gaps are met by technical developments in SAP as standard SAP do not provide the solution
for the activities/processes. Such technical developments are most of the times very complex.

It is also possible that the Gaps are never met and the team decides to carry out the activities or
processes outside of SAP.

Creation of Functional specifications for the ABAP developments:

The consultants would create functional specifications for the Technical ABAP developments.
Such Document is a descriptive document that explains in detail the logic that is to be used for
developing the ABAP technical object. This document would contain the fields and tables and
the link between them to help the ABAP'er design or develop the same.

The technical objects for which the Functional Specifications are created are:

a) Reports
b) Interfaces
c) Module Pool
d) Data Conversion Objects
e) User-Exits

Average Time required for Blue-printing:

2-3 Months.

Step 5: Data Load and Planning

The Consulting team, each module, should list down all the Master data objects and how the data
will be collected.

Creation of Data Collection Templates:

For SAP Production Planning and Control, the consultant should design the Master data and
decide the fields for which values are to be collected from the users so as to create the respective
master data in SAP. For example in the case of "BOM", the consultant plans on creating a BOM
and enter the value for the following fields -
Selection Data : Header Material, Plant, BOM Usage, Start date of validity,

Item Data : Component, Item Category, Material Code, Qty, UOM, Component Scrap, Whether
Recursive Indicator, whether a co-products.

Header Data : Base quantity, BOM Alternate text.

Then in this case the consultant should teach the user the meaning of each field and create a
excel layout with the above fields in it arranged one after the other, for the purpose of collection
of this data.

Educating the Data Collectors on the Data Collection Templates:

The consultants should educate the users or the super users about the Master data template they
are going to use for the collection of Master Data. It makes sense to organize such training since
data is the heart of any project and it should be collected very sincerely. As a consultant you
should explain each and every field in the excel template that you would make for the data
collection purpose. You should also educate the users on the values that you expect for the fields.
It may also happen that you may default certain values for certain fields and you should also
educate the data collectors about it. The template should be very clear and should contain the
definitions and particulars about each and every field as shown below:

Excel Row 1 - Field Descriptions

Excel Row 2 - SAP Field Names
Excel Row 3 - Definitions and points to note
All Row below - Data for Collection

Development of a ABAP program to Upload the data in the collected format:

An Upload program or an LSMW should be created in SAP to upload the data in the same
collection layout as decided.

Step 6: Configurations and Testing’s

Once the Blueprint is ready, you are expected to configure the SAP Production Planning
system. The following are the methods involved in a sequence of occurrence:

First -

Golden Client Configuration - This is a client where only configurations are done for all the
modules by the respective consultants.

Second -

Transfer (use SCC1 - Transaction code to transfer) configurations to the Development

Client where you would be carry out the initial Unit test on your Module. On a parallel stream,
when the functional team is configuring in the Golden Client, the development or the Technical
team starts developing the technical objects, for which they will use the Functional
specifications as prepared by the functional consultants. This is done by the consulting team
members.

Third -

Carry out Unit test in the Development Client. All the consultants from all the modules would
create a list of transaction codes or activities to test in SAP Development client so as to test that
their modules work in SAP. This Unit test plan has to be created in a word document or excel
document before you do any test. Before you do such test you need to create some master data
that would be used for the test. This is done within the consulting team members.

Fourth -

Carry out a String test in the development client. A String test is a small integration test which
is done between the modules to test SAP integration and flow of information between them,
though this is not marked as the Integration test. To test such strings successfully the consulting
teams should create common set of master data that is linked between the modules; and using
such representative data (representative data means a master data that well represents the
organization where you are implementing - Use real data only) the consulting team gets in to a
conference room and tests the strings from start to end. To do successfully it is mandatory that a
common flow document should be created beforehand and used for recording the Test results
and the status of the test. Once you are happy with the tests you can also demonstrate the same to
the client implementing team. A successful test allows the team to transport the configuration
to the Quality Assurance Client or the testing client.

Fifth -

The Functional team tests the Technical objects developed by the ABAP Consultants in the
development client. This activity goes in parallel with the unit test, string test. A Functional
testing document is prepared to record each and every test on the object. All the issues recorded
are fixed by the ABAP'er. A successful test allows the team to transport the configuration to
the Quality Assurance Client (QA) or the testing client. Once you are happy with the tests you
can also demonstrate the same to the respective module owners or super users from the client's
implementing team.
Note -
You should also note that the user role, access and security assignments are made before the
allocations before going in to the 6th Step as below. The integration tests are always carried out
using the final user ID with the right roles and accesses. Normally in big implementations there
is a separate team that does the security aspect of SAP.

Sixth -

Once the Objects are transferred to QA Client and once the Configurations are transported to the
QA Client, the implementing team carries out an Internal Integration test for the SAP Modules
and SAP Technical objects all arranged in the sequence of occurance. Before carrying out this
major integration test in the QA the Consulting team and the client side team sits together and
drafts all the scenarios and processes and activities in one document in a operational sequence to
form a end-to-end scenario cycle. The Client is totally involved in such activities. In most cases,
the client side super users or core users are the people driving such tests. In Many organizations
now-a-days there are 3 to 4 rounds of such integration tests carried out.

It is important to keep a track of the Issues and Gaps which are announced out of such test and
make sure that they are properly recorded in an issue-tracker and solved by the consulting team if
the issue is SAP related and if the issues are business process related they are solved also by the
client side team with some involvement of the SAP consultants.

Note -
The First 5 activities normally consume around 3 months in a project and the 6th activity
normally consumes around 1 month.

Step 7: Cutover Process and Go live

Definition:

In a SAP Cutover process, the consulting team and the individual consultants in the team plans
out a cutover process. A Cutover in SAP means the roll over from the existing legacy system to
the new SAP system. And to assure this roll over is fine or this movement to SAP is fine a good
cutover process or a good cutover plan is important. Cutover forms the following:

• Prepare the production client. This is the Final Go live Client.

• Load of all the Master Data in SAP Production Client.

• Identify the cutover Schedules. Make clear of these Dates to all and each in th
organization.

• Promote SAP in the organization and Create an Awareness of SAP.

 • Make sure you have a Black out period which would act as an window to change your
systems to SAP and get it going in a true real time sense. In this window there would be
no Sales, Purchasing and Production activities, such Window is required to make sure
that the transformation to SAP is smooth and the user community records all the
existing/open information in SAP and gets real time with SAP. Once the window is
finished both SAP and Shop floor Activities and organizational data is on the same page
and real time; thus SAP can gets a well settled real time platform to start with.

• Make a note of all the open documents which would be required to be entered in SAP
like the open Sales orders, open production/process orders, open purchase orders, on
hand inventory etc. All these open documents and stock needs to be uploaded in SAP in
this "Black Out Window".

• Make sure all the configuration and development transports have been moved to the
Production Client.

• After the Blackout period, you would be going live with SAP on a real time basis.

The cutover process for SAP PP can be:

a) Upload all the Assemblies/Subassemblies Stocks as SAP inventory using the 561 Movement
type. If certain stocks are in quality you can move it to Quality Inspection stocks too. Similarly if
they are in blocked stock you can also upload in blocked stock in SAP.

b) You can assume that whatever which was in production before the blackout is finished and is
in stock, thus you can create inventory for these expected receipts from these production orders
and once the SAP Go lives after the Blackout period you would avoid recording SAP
transactions for the production orders which were already assumed to be finished and were
already brought in to inventory or as an option number 2, you can assume the real time
production order status thus creating all the production orders in the blackout period and
confirming them till the operation they are produced before the blackout period, this second
strategy would be a true picture of your shop floor. The option number 1 is simpler and
avoids all the complexities and uploading of SAP open production orders.

Step 8: Post Go live

The consulting team normally supports the organization for a period of 45-60 days initially,
recording all the issues and solving them on the priority of the issue. The organization at this
stage has started using SAP for the designed scenarios and processes. At this stage they require
all the helping hand they can get from the super users and the consultants.

This stage is the most critical stage and decides the success of the project.