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SAP Production Order and Process Order Overview

 
 

What is a SAP Production order / Process order

 
What is a Production order / Process order

 

 

A Production order or a Process order is an object in SAP which identifies and evaluates the following:

 

a)       The quantity that is to be produced for a finish product

 

b)       The total planned time that would be consumed to manufacture the product at each operation, thus calculating the execution start time and the end time at each operation and in turn for the whole order. This is made possible by exploding the Routing/Recipes for the order quantity.

 

c)       The total planned raw material quantity that would be required for manufacturing the product, derived through exploding the bill of material for the order quantity.

 

d)       The total PRT consumption derived by exploding the PRT requirement for the order quantity

 

e)       The total cost required for manufacturing the order, derived through adding up the raw material cost, the operational activity costs and the PRT costs; additionally you can also add overheads as required to the order costs.

 

 

Demonstration

 

 

Assume that a production order or a process order in SAP is an “open box” (an hungry monster) which gulps up all the raw materials required for production, all the cost of these raw materials, which gulps up all the operational efforts or activities booked to produce a product, the cost associated with operational activities (& overheads), all the issued Production Resource tools (PRT) and the costs associated with it.

 

 

Production order/Process order

Qty = 10 Units – Material – M1

 

 

Issued Raw Materials

 

SF1 – 10 Units - $2/Unit

RM1 – 20 Units - $0.5/Unit

RM2 – 10 Units - $3/Unit

 

Total cost Booked on Order

= $(20+10+30) = $ 60

 

 

Booked Operational Activity

 

0010 – Time Reqd - 1HR/unit – Rate - $10/Unit –

 

0010 - Electricity Required – 0.5KWH/Unit (Rate - $20/KWH)

 

0020 – Time Reqd - 0.5 HR/unit – Rate

 - $3/Unit

 

Total Time required for order

= (10 + 5) HR

 

Total cost required for Activities

= $ (100 + 30) + $ [(0.5*10*20)] (Electricity Cost at Operation 0010)  = $ 240

 

 

Total Overheads

 

Overhead = $20

 

 

Issued PRT cost

 

PRT1 at Operation 0010 = Required for 10HR - $20/HR

 

Total PRT cost = $200

 

 

Total Order cost

 

= $60 + $240 + $20 + $200 =  $520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

What happens when a SAP Production order / Process order is created

 
What happens when a SAP Production order / Process order is created
 
 
When you create a production for the production of the header material, the following master data gets assigned to the Production order/Process order:

 

a)      Task lists - Material Routing/Material Recipes/Material Rate Routings/Reference Operations sets or Reference Rate Routings, get assigned to the order.

 

b)      Bill of Materials gets assigned to the order.

 

c)      Production Versions if maintained for the header material and the BOM selection is defined as – Selection by Production versions, in which case the production versions will pull in the Routings and/or the Bill of Materials master data instead of them getting pulled in, individually in the order. To allow production version perform pulling in the master data you have to choose option “2” or “3” in the MRP 4: BOM explosion selection field.