SAP PP What is Production Order

The production order represents the information such as which material is processed, location, time and how much work is needed. It also defines the resources that are used and how the order costs are to be settled.

After the planned order or other request is generated from material requirements planning, the information is send to shop floor control; the order-relevant data is also added to ensure complete order processing.

These are used to control production in a company and also to control cost accounting.

Uses of Production Order –

A production orders provides with the information required for the production process such as quantity, basic date, information of BOM and routing and segment values.

The use of production order without material is that it is widely used for capturing the rework activities both for final rework and in-process rework activities.

In other words a production order document specifies –

  • What product required to be produced?
  • When the production take place?
  • Which capacity can process the order?
  • How much production costs will be caused?

Creation of Production Order –

The production order is created as follows –

  • Using the customer requirement generated in requirements planning that is by converting a planned order to a production order.
  • Using an assembly order.
  • Without any previous requirement that means by creating it manually by Production Planning users.

Background Process in Production Order –

While creating a production order, the following actions are carried by the system in background –

  • A routing is selected, its operations and sequences are transferred to the production order.
  • The BOM will be exploded and the items of BOM are transferred to the order.
  • The reservations are generated for BOM items held in stock.
  • The planned costs for the order are generated.
  • The capacity requirements are generated for the work centers.
  • The purchase requisitions are generated for non-stock items and externally-processed operations.

Features of Production order –

A production order for a material is created with segment values in SAP standard application. In the production order for a segmentation related material, maintain the quantity need to produce at the segment level. The information can be find from both the segmentation BOM and routing.

Deviation of the segment quantity in the production order from the bundle quantity –

There are the following cases –

  • There is a sales order or there are planned independent requirements. The quantity shortage of one or more dimensions occurs.
    A new planned order is initiated for missing quantity after a new MRP run. The MRP temporarily assigns it to the planned independent requirement.
  • There is a planned independent requirement. There is a quantity excess of one or more dimensions.
    The excess quantities become freely available stock. They are consumed by a subsequent planned independent requirement if the dates allow. The MRP temporarily assigns this freely available stock to the PIR.
  • There is no planned independent requirement. There is a quantity excess of one or more dimensions.
    A production order can be changed accordingly.