Production Planning and Procurement Planning  

Definition

The Production Planning and Procurement Planning enterprise process area includes the business processes for sales quantity planning and demand management planning. It is positioned infront of the business areas Production and Procurement and provides these areas with the necessary information about quantities and scheduling for the products to be produced or procured.

The entire planning process is run within this area, starting from the medium to long-term sales and production operation planning, across demand management and MPS right up to detailed MRP. Finally the result of this planning process is planned orders, which determine which material has to be produced/procured in which quantity and on which date, so as to cover the customer and stock requirements that occur. These planned orders are then converted into concrete production orders, process orders or run schedule quantities in Production. In Procurement the planned orders are changed into purchase requisitions.

In the areas of Production and Procurement processes for evaluating and processing the capacity situation are also used.

Use

Production planning and procurement planning is used in all industry areas and supports numerous planning strategies. Strategies ranging from Market-orientated planning through Consumption-based planning to Sales order-orientated planning mean that all planning strategies are established.