Leverage SAP S/4HANA – PPDS Block Planning Functionality to Optimize Production Schedule Considering High Priority Customer Anticipated Demand

By Sharad Pandey, Director, TCS

Introduction

In a manufacturing environment, multiple products with different characteristics are produced on a production line. There could be customer-specific product or products sold to multiple customers which could be produced on the same production line. Also, change over from a group of products with certain characteristics to a product group with a different set of characteristics could be significant.

In the case of customer-specific products, there could be an agreement with the customer to meet their demand within a specified delivery date if it is received within a certain defined timeline. While the demand from the high-priority customer might be placed over a certain period (say throughout the week), there could be a requirement to block production capacity to plan and schedule in anticipation of high priority customer demand.

In case of significant change over time, the scheduler might decide to create pre-defined blocks on the production line to manufacture a group of products with similar characteristics, irrespective of demand. This will help manage production loss due to significant changeover.

While SAP S/4HANA PPDS can help build an optimized schedule based on setup optimization, lead time, and other factors like alternate work center consideration, tool availability, planned machine shutdowns, etc., Block Planning functionality helps in the pre-assignment of resource capacity to produce a group of products with similar characteristics. This advanced feature further enhances the optimization feature of SAP S/4HANA PPDS. Block Planning functionality can help business serve their customer better by prioritizing high-priority customer demand. Also, by reducing changeover time, the business can improve on production yield, thus improve production efficiencies.

Schedulers can create pre-defined blocks and assign them to production lines. For e.g., the scheduler can have two blocks, one which is defined from Sun-Wed of a week and the other block defined from Thurs – Sat (refer to figure below). Each Block has a group of products assigned. As demands come in for the products, production is scheduled based on the block assignment. This ensures production schedule is created considering block and product-block assignment. Within the block, PPDS generates an optimized schedule considering set up time, product characteristics, etc.

While Block Planning functionality can further optimize production schedule and reduce manual effort to move products around to build feasible schedule, following are some of the key consideration and building blocks which a scheduler should be aware of.

Key Consideration:

• Ensure block length can be pre-defined with a higher degree of accuracy; otherwise, the Planner/Scheduler will end up making significant manual adjustments to the schedule.
• Do consider the potential impact on customer service. In the above-mentioned business scenarios, while priority customer demand is being fulfilled on time, low priority customer demands are being pushed in the future, thus impacting low priority customer service.
• Also, to gain production efficiency (for e.g., reduced change over time), the product with similar characteristics might be scheduled together within pre-defined blocks, which could result in a certain group of products being produced later, impacting customer service levels due to delayed demand fulfillment.
• The scheduler needs to define stocking policies that ensure sufficient stock available to meet target customer service levels. Hence it’s a balancing act between production efficiencies and stock holding cost to meet desired customer service levels

Once the scheduler has defined the business use case for Block Planning functionality, the next step is to enable “Block Planning” functionality leveraging SAP S/4 HANA PPDS. Following are the building blocks to enable “Block Planning” functionality.

Details of building blocks as below

Production Line – Scheduler needs to identify for which production line does it makes sense to enable block planning functionality. Is there a need to block line capacity in anticipation of demand, or is there a requirement to block certain lengths to produce products with similar characteristics together due to significant change over time? If the length of the block needs to be continuously updated, maybe it’s not a potential candidate for block planning.

Block Definition: Define the block attributes (characteristic) and the length (duration)

Block Characteristics – Identify the block characteristics based on which products are assigned to a specific block. For example, should the products sold to high priority customers be scheduled together within a defined block to fulfill high priority customer demand, or should it be based on product characteristics, say color, to optimize change over time?

In SAP S/4HANA-PPDS enabled Block Planning functionality, Characteristic values representing different block type needs to be created. In the below example, the Characteristic representing Block Planning is “ZBLOCK_PLANNING” with block type as “Customer” and “No Block”. If block planning needs to be scheduled based on the product characteristic, say Color, values for the characteristic could be “Red”, “Blue” and/or “Others”.

Block Length – This is the critical criteria as making frequent changes to length (duration) would mean, is block planning functionality really needed? Define the length of the Block based on historical demand patterns, and any external knowledge scheduler might have. Have a weekly review process to make adjustments to length as required. The scheduler can create a block with a length as say 3 days to meet priority customer demand and another block of 4 days to schedule product for low priority customer. Other business scenarios could be to optimize or manage change over time, can have one block of length 4 weeks to schedule products with similar characteristics and another block of 2 weeks to schedule product with a different set of characteristics.

Block Assignment to Production Line – Once the type of Blocks and length is defined, the next step is to assign it to the production line on which block planning needs to run.

Blocks are assigned to resource master data in SAP S/4HANA PPDS. Duration for the blocks and timeline for which it needs to repeat can be maintained in the master data. If required reference cycle can be created, which can be used for Block data maintenance, thus reducing manual data maintenance.

Also, colors can be assigned to the blocks, which can help the scheduler quickly differentiate between blocks in the scheduling board. Please refer to the below screenshot for Block data in SAP S/4HANA PPDS.

Assignment of Products to the Blocks – In this step, Products are assigned to a block. Characteristic value (Block attribute) needs to be assigned in the Product Routing master data. All the products which need to run on a specific Block need to have same characteristic value For e.g.,  products sold to high priority customer needs to be assigned “high priority customer” characteristic value. Other products would need characteristic value to be assigned as “Other Customer”.

In the below screenshot, product (in routing master data) has been assigned to block planning characteristic with value “No Block” and other product has been assigned value as “Customer”

Once the data is transferred to PPDS, corresponding master data in PPDS (PDS – Production data version) is updated with block planning related values.

Once the data is set up, the next step is to update PPDS – Optimizer profile to enable “block planning” functionality

After the PPDS-Optimizer runs, results could look like below:

Ability to schedule considering high priority customer anticipated demand or group of products together based on certain characteristics to manage change over time improves planner’s efficiency. Block planning features reduce the manual effort of moving around orders in the scheduling board. Along with other PPDS features (set up optimization, priority, lead-time, etc.), block planning further enhances scheduling optimization features of SAP S/4HANA PPDS. Within the blocks, products are scheduled considering set up optimization, thus generating a feasible schedule within the Blocks too.

While Block Planning helps in generating a feasible schedule, the scheduler should ensure business scenarios are identified for which Block Planning adds value. Though the block length can be changed based on demand pattern, the scheduler should ensure block length is fairly constant and doesn’t require frequent changes. Also, evaluate the impact of advanced SAP S/4HANA PPDS features, ex – Work center Group, on Block Planning implementation. Ensure all the BADIs required for Block Planning functionality are activated. There are some good SAP Notes (528189) that provide details on Block Planning functionality that consultants should review the same if they plan to implement block planning functionality.

The above article covers block planning functionality for non-configurable product scenarios. Block Planning functionality can be activated for configurable products too.

Disclaimer – Please note, the document only provides guidance from Block Planning functionality, based on the author’s implementation experience. Individuals/Organizations should do thorough analysis and understand detailed configuration, the task required to activate the functionality. The author is not responsible for any loss sustained by any person or organization that relies on this publication.