Repetitive Manufacturing

Purpose
This component can be used for production planning and control in a repetitive
manufacturing environment.

You can use repetitive manufacturing as either make-to-stock REM or make-to-

order REM such as in the automotive industry, for example.

The goals of repetitive manufacturing are the following:

 Creation and revision of production quantities on a period and quantity basis

(reduction in individual lot and order-specific processing).

 Reduction in the production control effort and simpler backflushing tools(with the
option of using the full scope of the PP functionality).

Implementation considerations
You can implement Repetitive Manufacturing if the following is true of your
production process:

 You produce the same or similar products over a lengthy period of time.

 You do not manufacture in individually defined lots. Instead, a total quantity is

produced over a certain period at a certain rate per part-period.

 Your products always follow the same sequence through the machines and work
centers in production.

 Routings tend to be simple and do not vary much.

 Integration
Within logistics, Demand Management precedes Repetitive Manufacturing:

 SD Sales Operations (receipt of sales orders)

 PP Demand Management (creation of planned independent requirements)

 PP MRP

The following Logistics components are also relevant:

 PP Work Centers

 PP Routings

 PP Bills of Materials

 If required, Line Design for mapping complex production lines

Features
 Master data

There is specific master data required for Repetitive Manufacturing. This includes
the repetitive manufacturing profile and the product cost collector.

 Planning table

Within the framework of repetitive manufacturing, planning and control is carried

out on the basis of time buckets. Starting from the existing requirements
situation, you can plan production quantities based on periods. The scheduling
data for products and product groups is thus broken down into a series of time
buckets, the user being presented with period views for the purposes of checking
and revision.
 Sequencing

You can use Sequencing to carry out takt-based scheduling which determines
the sequence in which planned orders are produced on the production line.
Sequencing simplifies the dispatching process, especially for high order volumes,
and enables you to display them in a graphic.

 Pull list

You can use the pull list to control in-house material flow, supplying production
with materials. The pull list checks the stock situation at the production line,
calculates the missing parts for the components and triggers replenishment for
these missing parts.

 Backflushing

Production completion confirmations are simplified and are made with reference
to the material being produced. The completion confirmation usually includes the
backflushing of components and the posting of production costs.

 Cost Object Controlling

In repetitive manufacturing, you usually determine costs per material or per

production version via a product cost collector (product cost per period).
 Make-to-Stock Repetitive Manufacturing
Purpose
You can use Repetitive Manufacturing as pure make-to-stock production. This
means that production is controlled without a direct reference to the sales order.
Run schedule quantities determine the production quantity and date. The
requirements are created in Demand Management or a similar component. Sales
orders are delivered from stock and offset against planned independent
requirements in Demand Management, according to the chosen planning
strategy.

Actual data is collected and costs are settled via a product cost collector. Entry of
actual data and settlement take place periodically, not for an individual product or
a sales or production order.

The following describes the process flow and the prerequisites for this type of
repetitive manufacturing.

Prerequisites
 You have created the following master data:

o You create a material with a production version.

Note
For the production version, you need a BOM and a work center. If you want to
represent several work processes (in line design, for example) you also need a
routing.

o In the material master, you set the Repetitive Manufacturing indicator and
choose a repetitive manufacturing profile that allows make-to-stock
production.
 You create a product cost collector (for make-to-stock production).

Process Flow
1. You execute an MRP run for the material to be produced.

If you have set an Alternative Selection indicator that selects according to the
production version in the material master, the MRP run directly assigns the
planned orders (order type PE) to the line. You can display this assignment in the
planning table.

2. With the aid of the pull list (material staging list), you have the short quantities of
the components on the line calculated and the corresponding replenishment
elements generated.

3. As soon as the product has been manufactured, you enter the "actual" data. This
includes the goods receipt for the product, the goods issue for the components,
and possibly entry of the actual times for production if these differ from the
planned times. In the process, the system posts the actual costs to the product
cost collector, reduces the planned orders, and updates the statistics.

4. At the end of a settlement period, you carry out a period-end closing within the
framework of periodic product controlling. Here, you can initially post
overhead to the product cost collector, revaluate activities according to actual
prices, calculate work in process (WIP), and carry out a variance calculation.

Then you settle the product cost collector by posting the difference between
debits and credits of the product cost collector to a price difference account.
Make-to-Order Repetitive Manufacturing
The recommended scenario for this production type is make-to-order repetitive
manufacturing with valuated stock. This is described in the section
entitled: Product Cost Collector for Make-to-Order Production .

However, you can also use make-to-order repetitive manufacturing (make-to-

order REM) if you work with non-valuated sales order stock.

Product Cost Collectors in Sales-Order-Related

Production
Use
You can use repetitive manufacturing as sales-order-oriented production. The
system generates one or more planned orders that have a direct link to the sales
order item. The material is manufactured on the basis of these planned orders.
The manufacturing process is therefore initiated by sales orders.

If you are using a valuated sales order stock in sales order-oriented repetitive
manufacturing, you create a product cost collector for the individual requirements
material (the material that is manufactured for the sales order stock). The costs
incurred in the production of the individual requirements material are collected on
this product cost collector. The costs can then be analyzed on the product cost
collector. You use the functions of Product Cost by Period.

In sales-order-oriented repetitive manufacturing, the sales order stocks are

usually valuated. This scenario is used in the automotive industry, for example.
The production of each vehicle is triggered by a sales order (or by a sales order
item). The costs incurred for each particular vehicle are only of secondary
 importance. Instead, the focus is on period-based analysis of the costs for all
vehicles manufactured during a particular period, whose costs are collected on
the same product cost collector. The costs are not collected and analyzed
separately for each sales order item.

For example, it may be appropriate to create a product cost collector for a

configurable material. The costs incurred for all variants (configured materials)
manufactured for the configurable material are collected on the product cost
collector for the configurable material. Another possibility is to collect the costs by
material / plant / production version.

Note
You only use a sales order item that carries costs and revenues when you want
to collect additional costs on the sales order item (such as special direct cost of
sales). If you want to use a sales order item that carries costs and revenues as
an additional cost object, you use the functions of Product Cost by Sales Order.
This will not normally be necessary.

If you are using a nonvaluated sales order stock, you cannot use product cost
collectors in sales-order-related production. However, in sales-order-oriented
repetitive manufacturing, SAP recommends that you use a valuated sales order
stock (and therefore product cost collectors).

Prerequisites
 You are in a repetitive manufacturing environment.

 Ensure that you are using a valuated sales order stock by determining a
requirements type for the sales order item that specifies a requirements class in
which it has been specified that you are using a valuated sales order stock (see
also: Control of Requirements Type Determination; Checking the Requirements
Type in the Sales Order).
 You are not using a material that does not have an accounting view (for detailed
information on this point, refer to the section Valuated Sales Order Stock).

 In this scenario you will not normally need a sales order item that carries costs
and revenues (i.e. you will not need to use the functions of Product Cost by
Sales Order). Make sure that the sales order item does not carry costs and
revenues by entering an account assignment category in the requirements class
that specifies that the sales order item does not carry costs and revenues.

You can also specify the settings for requirements type determination, the
requirements type, the requirements class, and the account assignment category
in Customizing for Product Cost by Sales Order under Control of Sales-
Order-Related Production.

 In the material master, select the Repetitive manufacturing indicator in the

MRP view.

 In the MRP view of the material master record, you specify a repetitive
manufacturing profile in which the settings described as follows were made.

 Make the following settings in Customizing for Product Cost by

Period under Simultaneous Costing Check Control Data for Repetitive
Manufacturing Profiles :

 Make sure that no reporting point backflushes are allowed.

 In sales-order-oriented repetitive manufacturing, you will normally backflush the

goods issue at the same time you enter the goods receipt. Specify in the
repetitive manufacturing profile that the goods issue should be entered at the
same time as the goods receipt.

 If you specify in the repetitive manufacturing profile that you want to post
activities, the system automatically performs an activity allocation at the time of
the goods receipt for the sales order. If you have specified in the repetitive
manufacturing profile that the activities are to be posted on the basis of the
standard cost estimate for the material, this cost estimate can be a standard cost
 estimate for the configurable material, for example. You can also specify in the
repetitive manufacturing profile that the activities are to be posted on the basis of
the preliminary cost estimate for the product cost collector.

 Since it's not possible to calculate work in process for product cost collectors for
materials manufactured for sales orders, you do not enter a results analysis key
in the product cost collector. You can specify this as a default value in the order
type. To do this, go into Customizing for Product Cost by Period under Product
Cost Collectors Define Default Values for Order Types .

You can also use one product cost collector on which the costs for a material are
collected that is manufactured both for the sales order and for the make-to-stock
inventory. A requirement is that the Repetitive manufacturing indicator in the
material master record is selected. In this case, work in process can arise on the
product cost collector for the material manufactured for the make-to-stock
inventory, and this work in process can be determined in the period-end closing
process of the Product Cost by Period component. In this case, you specify a
results analysis key in the product cost collector.

Note
If you want to use product cost collectors for different materials in make-to-stock
production and in sales-order-related production, you should define two separate
order types. This enables you to customize the order types in accordance with
the requirements at hand. To create order types for product cost collectors, go
into Customizing for Product Cost by Period under Product Cost
Collectors Check Order Types for Product Cost Collectors .

 Since you cannot calculate scrap for a product cost collector used for a material
manufactured for a sales order, you use a variance key for variance calculation in
which the Scrap indicator is not selected. You do this in Customizing
for Product Cost by Period under Period-End Closing Variance
Calculation Variance Calculation for Product Cost Collectors Define
Variance Keys.
 You create a material with a production version. You set the repetitive
manufacturing indicator in the production version.

Note
You need a BOM and a work center for the production version. If you want to
represent multiple operating sequences, such as in production line design, you
also need a routing.

Process
1. In Product Cost by Period, you create a product cost collector for a material
that you are manufacturing in repetitive manufacturing for a valuated sales order
stock.

2. You create a sales order and specify the material to be produced in the sales
order item. If applicable, you configure the material.

3. The system generates one or more planned orders for the material listed in the
sales order item. This planned order contains all material components necessary
to manufacture the material. The planned order can be created in the following
ways:

o In requirements planning

o When the sales order is saved

To have the planned order generated when the sales order is saved, you must
have entered assembly type 1 (planned order: static processing) or 4 (planned
order: dynamic processing) in the requirements class in Customizing.

4. Since the Repetitive manufacturing indicator is set in the master record of the
material to be manufactured, the planned order does not have a conversion
indicator. For this reason the planned order is not converted into a manufacturing
order or purchase requisition.
5. If you have chosen an alternative selection indicator in the material master that
selects according to the production version, the planned orders (order type KD)
are assigned in the planning table directly to the line.

6. If you have not set an alternative selection indicator, then in the planning table
you can assign the planned orders (order type KD) generated by the planning
run to the line(s).

7. You use sequencing to specify the sequence in which the orders are processed
on the line.

8. You use the pull list to calculate the missing parts at the line and generate
replenishment elements.

9. Once you have manufactured the material, you enter a goods receipt (delivery to
stock). To do this, access the menu of Repetitive Manufacturing and enter a
goods receipt for the sales order (see also: Goods Receipts for Sales
Orders, Entering Goods Receipts for Sales Orders).

With a product cost collector for an individual requirements material, an

automatic goods issue is usually generated for all withdrawn material
components when the goods receipt is entered. This means that the product cost
collector is debited and credited at the same time.

o Debit of the product cost collector with material costs:

The product cost collector is debited with the costs for the material components
listed in the planned order at the time of the goods issue. The quantities are
determined in accordance with the quantities in the planned order. Valuation is
performed in accordance with the price control of the material.

o Debit of product cost collector with costs for activities used:

Automatic debit of the product cost collector with the activities used only takes
place if you have specified in the repetitive manufacturing profile that activities
are to be posted. The product cost collector is debited with the costs for the
activities at the time of the goods receipt. The activity quantities are determined
 on the basis of the cost estimate selected in accordance with the repetitive
manufacturing profile. The valuation is performed on the basis of the valuation
variant for simultaneous costing (go into Customizing for Product Cost by
Period under Product Cost Collector Define Default Values for Order
Types).

You can manually change the proposed input quantities of materials and
activities.

You can also perform a direct internal activity allocation manually.

The system posts the actual costs to the product cost collector, reduces the
planned orders, and updates the statistics.

Credits of the product cost collector: The product cost collector is credited with
the quantity delivered to stock multiplied by the value selected in accordance with
the price control.

If the product cost collector is debited and credited at the same time, it will not
have any work in process. For this reason, the system does not support work in
process on product cost collectors for individual requirements materials.

You also cannot determine scrap variances for product cost collectors for
individual requirements materials. You therefore use a variance key in which
the Scrap indicator is not set.

10. You can calculate variances.

11. You perform settlement. Settlement dynamically distributes the values to

be settled to the different individual requirements stock segments according to
the delivery values of the delivered quantities. Dynamic distribution to different
individual requirements stock segments and to stock segments of make-to-stock
materials is possible (see also: Settlement in Product Cost by Order or
Period; Distribution Rules).

12. You can view the individual requirements stock segments. The individual
requirements stock segment list shows the following information:
o Material

o Sales document item

o Sales document item

o Total stock (quantity)

o Total Value

o Price control

o Moving average price

o Standard Price

See also: Displaying Valuated Special Stocks

Note
Reporting points are not supported in sales-order-related repetitive
manufacturing. Total requirements can only be used in sales-order-related
repetitive manufacturing.

See also:

Product Cost Collectors

Cost Analysis in Mass Production on the Basis of Sales Orders

For information on variants, see the documentation LO Variant Configuration

Guide.

Example
1. You create a product cost collector for a configurable material.
2. One material has a super BOM and a super task list. You create a sales order. In
a sales order item, you define the material to be delivered to the customer by
means of characteristics and characteristic values. The sales order item does not
carry costs and revenues.

3. You have specified assembly type 1 in the requirements class. The system
generates a planned order.

4. You create a sales order cost estimate. The sales order stock is to be valuated
on the basis of the sales order cost estimate.

5. Once you have produced the configured material, you enter a goods receipt. The
product cost collector is debited with the costs for the input materials at the time
of the goods receipt and credited with the value according to the sales order cost
estimate.

6. In the stock segment of the individual requirements material the total stock
(quantity), the total value, the standard price calculated in the sales order cost
estimate, and the moving price of the configured material are updated for the
material, sales document, and sales document item. This first goods receipt
updates the standard price of the configured material. In Financial
Accounting (FI), the inventory account is debited and the inventory change
account is credited. The accounts are determined by means of automatic
material account determination in MM in connection with the valuation class from
the accounting view of the material master record. If the Sales order stock
VC indicator is set, the valuation class specified there is used for account
determination. If the Sales order stock VC indicator is not set, the valuation
class specified in the Valuation class indicator is used for account
determination.

7. In the Product Cost by Period component, you perform the period-end closing
activities. You can allocate the period costs to the product cost collector and
calculate variances. Any difference between the debit and credit resulting from
changes in the material input quantities or activity input quantities, or from
substitution of input materials, is transferred to a price difference account in
Financial Accounting during period-end closing of the Product Cost by Period
component. The difference between the debit and the credit can also be
transferred to Profit Center Accounting (EC-PCA). When you settle, you can
transfer the variances to Profitability Analysis (CO-PA)