The necessity to continuously upgrade products and reduce costs, means that in, for example, the mechanical engineering and electronics industries, production lots are created in order to plan finished products and important semi-finished parts. Production lot planning enables you to determine the costs for a product in relation to a certain change status in the preliminary planning stage, that is, before the sales order has been received. This is very important due to the increasingly shorter product life cycles.

Up to now, separate cost determination in relation to changes to a product, that were managed with Engineering Change Management, was not possible for anonymous material requirements planning, that is, without production lots.

Production lots can vary due to, for example, the use of another component or another manufacturing process. In this case, the component changes have to be implemented with reference to the production lot of the finished product or of the important assembly in order to ensure that all changes are synchronous and that the components can be distinguished according to the production lot of the assembly.

Costs can be determined using both valuated and non-valuated individual stock.

You can achieve this by defining production lots. During this process, every production lot is given a number with which all receipt and issue elements of the pegged requirements are linked, or in other words, all receipt and issue elements are assigned to the account of the production lot. It is also possible to create a bill of material and a routing with reference to a production lot. The planning, production and cost evaluation are carried out in relation to this number. This process enables you to evaluate the costs of the different production lots and compare them in the planning stage (before receipt of the sales order). You can thus, for example, check whether the measures you introduced to reduce costs for a product were successful.

It is also practical to use production lots for a finished product or for an important assembly if you, for example, have to procure special components only for particular production lot or if numerous expensive components are to be built into a product that are usually not used very often. In this case, you can procure components specifically for a particular production lot and thus avoid high inventories and storage costs.

Incoming sales orders and networks that are created for a sales order cause stock reservations or reservations for work-in-process of the production lot. Without using a production lot, the system would initiate individual production processes for each sales order or network.

This type of planning is known as Pre-Planned SEIBAN in Japan.

Up to now, separate planning and cost evaluation has only been possible for make-to-order and engineer-to-order production, or in other words, after the receipt of concrete customer requirements. For this reason, production lot planning is being introduced with Release 4.5A.

The planning process flow is clearly depicted in the following diagram:

The system creates a WBS element for the production lot. The maintenance of the master data, in addition to the planning, production and cost determination are executed with reference to the WBS element. The WBS element is an object from Project System. The management of changes is also supported by means of Engineering Change Management.