Capacity Planning! Or Scheduling? ::: Leveling? Maybe Sequencing?

General SAP Knowledge, Blog article

Once your company has purchased SAP software, you have these great tools available which allow you to put a production program together in a very automated way. You could also check your long term plan for feasibility or play through some planning scenarios and 'what ifs'.

The problem, however, is.... You can't use any of it! Because it never was configured and nobody ever showed you how to do or use it. During the implementation it was simply not in the cards to do Capacity... (anything). It might have been that it was considered a stage 2 project, the implementation consultant didn't really know how it works, it was considered non-essential for the business or someone said: "we have ample capacity and therefore don't need to worry about it".

Whatever the case may be, without planning, sequencing, leveling and scheduling orders and capacity, you're going to end up with half a process. To great astonishment, capacity planning is rarely used. As we all know the MRP run generates supply orders without any consideration of available capacity. It also does not care about a sequence or a leveled, noise-less schedule. It simply says: "I see demand and here are the orders that fulfill that demand", all stacked up on top of each other to the latest possible delivery date.

This is in no way a production schedule... no matter how much available capacity you have. You need to take the MRP run's result and plan, sequence, level and schedule the orders before you can effectively produce product in the right quantity at the right time.

So how can you do that in SAP? Four easy steps:

1. Capacity Planning: use basic data like lot sizing procedure, task time and lead time scheduling to have the MRP run come up with an approximate plan. Check on you work center settings and shift schedule to make sure correct lead times are calculated.

2. Capacity Sequencing: use any one of the transactions CM21, CM25, LAS2 or MF50 (depending on whether you're process, discrete or repetitive) to employ a sequencing strategy like heijunka, first in - first out, priority, setup optimization or manual.

3. Capacity Leveling: ensure that the available capacity on the line is not exceeded. On a mixed model line or on a mixed strategy line (MTS and MTO) it is not good practice to schedule to 100% (or even above). Leave some room for variability.

4. Capacity Scheduling: now it's time to fix the schedule. But not before you check if the components are available. Very often orders are released to the line and then there are missing parts. This causes exorbitant lead times and blocking of capacity and material for other orders. Transaction MDVP is an excellent tool to check availability collectively (but do make sure you have the right rules in place). Then you can use COR8 to collectively convert planned orders into a feasible schedule that can be handed down to the shop floor. There is still a little wiggle room but at least you have a plan now.

And most importantly: you now have something that you can measure against. Isn't that the most frustrating part about not employing Capacity Planning? The fact that you never know what actually should happen? And you never know that you have either done a good job or not?

What’s hard to understand is that we all put dentist appointments into our calendar,  prioritize our social schedule, make sure we do not put more than 24 hours into a day and stick to promises we made before ... but only rarely do we do Capacity Planning, Sequencing, Leveling and Scheduling with SAP!

...and it's so much easier with SAP!

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