C_TS422_2023 questions and answers

Pegging is a term used in Advanced Planning to describe the relationship between the receipt and the issue elements of a product within a location. Receipt elements are planning elements that increase the stock of a product, such as production orders, purchase orders, or stock transfers. Issue elements are planning elements that reduce the stock of a product, such as sales orders, planned independent requirements, or reservations. Pegging links the receipt and issue elements according to the bill-of-material structure of all related products and represents the material flow through all levels of production.
Pegging enables thesystem to identify and display quantity and date/time problems, such as shortages or delays, and to forward scheduling changes to other dependent elements.Pegging also forms the basis for the availability check and the capacity check in Advanced Planning12.

References:
1: SAP Help Portal: Pegging
2: SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter
4: Advanced Planning

Alternative item strategies are used to define how the system selects the alternative items in a BOM during the planning run or the order creation. The following alternative item strategies are available in SAP
S/4HANA:
Manual maintenance: The system does not select any alternative item automatically. You have to manually select the alternative item in the BOM or the order.This strategy is useful when you want to have full control over the alternative item selection and when the selection depends on factors that are not known to the system 100% check: The system checks the availability of all alternative items and selects the one with the highest priority and sufficient stock. If none of the alternative items has enough stock, the system selects the one with the highest priority and the smallest shortage quantity.This strategy is useful when you want to optimize the material availability and reduce the procurement costs First in First out (FIFO): The system selects the alternative item with the highest priority and the earliest availability date. If several alternative items have the same availability date, the system selects the one with the highest priority.This strategy is useful when you want to use the oldest stock first and avoid obsolescence Simultaneous: The system selects all alternative items simultaneously and distributes the requirement quantity among them according to the usage probability. The usage probability is a percentage value that indicates how often an alternative item is used. This strategy is useful when you want to balance the demand and supply of multiple alternative items and when the usage probability is known.

References:
Alternative Item Group - SAP Help Portal Alternative Item Group - SAP Help Portal
Alternative Item Group - SAP Help Portal
[Alternative Item Group - SAP Help Portal]

The planning strategy settings in the Capacity Scheduling Table determine how the system schedules the operations or orders on the resources. You can select the following settings: Finiteness level: This setting defines how strictly the system considers the capacity availability of the resources when scheduling. You can choose between infinite, finite, and optimized scheduling. Infinite scheduling ignores the capacity availability and schedules the operations or orders as early as possible.
Finite scheduling respects the capacity availability and schedules the operations or orders only in the free slots of the resources.Optimized scheduling tries to find the best compromise between infinite and finite scheduling by minimizing the delays and overloads Scheduling control: This setting defines how the system handles the scheduling conflicts that may arise when scheduling the operations or orders. You can choose between rescheduling, shifting, and splitting.
Rescheduling means that the system moves the conflicting operations or orders to a later date. Shifting means that the system moves the conflicting operations or orders to another resource within the same resource network.Splitting means that the system splits the conflicting operations or orders into smaller parts and schedules them on different resources or dates Direction: This setting defines the direction of the scheduling. You can choose between forward and backward scheduling. Forward scheduling means that the system schedules the operations or orders from the start date to the end date.Backward scheduling means that the system schedules the operations or orders from the end date to the start date

References:
Planning Strategy Settings - SAP Help Portal Finiteness Level - SAP Help Portal Scheduling
Control - SAP Help Portal Direction - SAP Help Portal

Pick parts staging ensures components are transferred to the PSA when the production order is released.
Kanban is pull-based and not tied to order release. Line loading is for repetitive manufacturing. aATP
ensures availability, not staging.

Bulk materials are consumed in large quantities and not issued per order; therefore no reservations are
created.
Availability checks and scrap settings still apply. Backflushing is optional unless defined elsewhere.

Consumption-based planning is a planning procedure that uses past consumption data to calculate the future requirements of materials. It does not consider the dependent requirements of higher-level materials, but only the independent requirements from sales orders, forecasts, or stock transfers.
Consumption-based planning is suitable for B and C materials, which have low value, low demand variability, and high availability. Consumption-based planning reduces the planning efforts for these materials, as it does not require the maintenance of BOMs, routings, or production versions.Consumption-based planning can be further divided into reorder point planning, forecast-based planning, and time-phased planning, depending on the method of determining the reorder point and the lot size 12.

References:
Consumption-Based Planning - SAP Help Portal
SAP S/4HANA Production Planning and Manufacturing Certification Guide, Chapter 3: Material Requirements Planning, Section 3.1: Planning Procedures, Page 67

A reduction strategy is a method of shortening the lead time of an order by reducing certain time elements in the order scheduling1.The time elements that can be reduced by a reduction strategy are move time, wait time, and queue time 2. Move time is the time required to move a material from one operation to another. Wait time is the time between the end of an operation and the start of the next operation.Queue time is the time before an operation can start at a work center due to the work center's capacity utilization3.These time elements can be reduced by a percentage or a fixed value in the reduction strategy.
References:
1: Reduction Strategy | SAP Help Portal (https://blog.sap-press.com/4-strategies-for-make-to-stock-)
production-with-sap-s4hana) 2: 4 Strategies for Make-to-Stock Production with SAP S/4HANA (https://blogs.sap.com/2022/03/22/)
highlights-for-manufacturing-in-sap-s-4hana-2021-part-2-production-planning-engineering-operations/) 3: Scheduling | SAP Help Portal (https://blogs.sap.com/2022/04/26/manufacturing-in-sap-s-4hana-cloud-planning-strategies/)
.

Lead time scheduling is a method of scheduling production orders that calculates the start and finish dates of each operation based on the operation duration, interoperation time, and other time elements. The time elements that are relevant for lead time scheduling of a production order are: Setup time: The time required to prepare the work center for the operation, such as changing tools, adjusting machines, or cleaning the work area.
Processing time: The time required to perform the operation, such as machining, assembling, or testing the product.
Teardown time: The time required to restore the work center to its original state after the operation, such as removing tools, resetting machines, or disposing of waste.
Interoperation time: The time between two consecutive operations, such as transportation, waiting, or inspection time.
Float before production: The time buffer before the scheduled start date of the production order, which can be used to compensate for delays or changes in the production plan.
Float after production: The time buffer after the scheduled finish date of the production order, which can be used to compensate for delays or changes in the production plan.
The opening period and the total replenishment lead time are not relevant for lead time scheduling of a production order. The opening period is a parameter that defines the earliest possible start date of a production order, based on the material availability date and the planning time fence. The total replenishment lead time is a parameter that defines the total time required to procure or produce a material, from the time the requirement is identified until the time the material is available for use.

References:
[Production Planning with SAP S/4HANA], pages 177-179
[SAP Help Portal: Lead Time
Scheduling].

A production planning run in Advanced Planning (PP/DS) is a process that optimizes the supply and demand situation for a set of materials and locations within a given planning horizon. The possible results of a production planning run are: Planned Order: A planned order is a proposal for internal production or external procurement of a material.
A planned order can be converted into a production order or a purchase order, depending on the source of supply. A planned order can also be firmed, which means that it is not changed or deleted by subsequent planning runs. Production Order: A production order is a document that defines the operations, materials, resources, and costs required to produce a material. A production order is created from a planned order or directly by the user. A production order can be released, confirmed, and settled as part of the production process.

References:
[SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 181
[SAP
Help Portal: Production Planning Run].

The subitems of a bill of material (BOM) are the components that make up the product or assembly. You can maintain the following data for each subitem: Quantity: This is the number of units of the component that are required for one unit of the product or assembly. You can specify the quantity in different units of measure, such as base unit, order unit, or alternative unit. You can also use variable quantities, such as percentages or formulas, to calculate the quantity dynamically based on the product or assembly characteristics. Scrap percentage: This is the percentage of the component that is expected to be wasted or lost during the production or assembly process. You can specify the scrap percentage for each component to adjust the quantity accordingly. For example, if the quantity of a component is 10 and the scrap percentage is 5%, the system will increase the quantity by 0.5 to account for the scrap. The installation point (A) and the item type (B) are not data that you can maintain in the subitems of a BOM. The installation point is a field in the equipment master record that indicates where the equipment is installed. The item type is a field in the sales document item that determines the processing and pricing of the item. These fields are not relevant for the BOM subitems.

References:
https://sapstack.com/pp/bom-in-sap-bill-of-material/
https://skillstek.com/bill-of-material-in-sap/

If the operation of a production order is dispatched, the DSPT Dispatched status is set for the operation.
This means that the operation has been assigned to a resource and scheduled with a start and end date and time. The options to reschedule the operation are as follows: You can reschedule the operation using finite scheduling in a planning table. Finite scheduling considers the capacity availability of the resources and the dependencies between the operations. You can use the planning table to manually drag and drop the operation to a different time slot or resource, or use the automatic dispatching function to optimize the scheduling of the operation. Finite scheduling updates the DSPT status and the dates and times of the operation. You can reschedule the operation in the Manage Production Operations app. This app allows you to view and edit the production orders and operations in SAP S/4HANA. You can change the start and end date and time of the operation, as well as the resource, in the app. However, the app does not check the capacity availability of the resources or the dependencies between the operations. Therefore, you need to ensure that the changes are feasible and consistent. The app updates the DSPT status and the dates and times of the operation.
References:
Identifying the Basic Principles and Tools of Capacity Planning;.SAP Help Portal

MRP (Material Requirements Planning) is a process that calculates the quantity and timing of material requirements based on the demand and supply situation. MRP performs a net requirement calculation for each material, which compares the available stock and the planned receipts with the requirements and the planned issues. MRP takes into account the following elements during net requirement calculation: Safety stock: The minimum quantity of material that should be maintained at all times to avoid stockout situations due to unforeseen fluctuations in demand or supply. MRP considers the safety stock as a requirement and tries to replenish it whenever it falls below the defined level.
Purchase orders: The confirmed orders from external vendors that are expected to be delivered within a certain time frame. MRP considers the purchase orders as planned receipts and reduces the net requirement by the quantity and date of the purchase orders.
MRP does not take into account the following elements during net requirement calculation: Forecast key figures: The projected demand for a material based on historical data, trends, and other factors. MRP does not consider the forecast key figures as requirements, but as a basis for creating planned independent requirements, which are then considered as requirements. Maximum stock level: The maximum quantity of material that should be maintained at any time to avoid overstocking and excess inventory costs. MRP does not consider themaximum stock level as a constraint, but as a target value for the lot-sizing procedure, which determines the optimal quantity and frequency of replenishment orders.

References:
[SAP S/4HANA Production Planning and Manufacturing Certification Guide], page 86
[SAP
Help Portal: Net Requirements Calculation].

Phantom assemblies are assemblies that have their own product structure, but whose assembly does not actually physically exist. The components of the phantom assembly are incorporated directly in the superordinate product. The product structure of the superordinate product contains a reference to the phantom assembly. You can use phantom assemblies for the following purposes: To simplify the structure of bills of material: Phantom assemblies allow you to group components that belong together logically or functionally, without creating an additional level in the product structure. This can make the product structure easier to maintain and understand.
To reduce the number of material masters: Phantom assemblies do not require a material master record in SAP S/4HANA, as they are not physically produced or stored. This can save storage space and reduce the effort of creating and updating material masters.
To reduce the number of changes required in bills of material: Phantom assemblies can be used to represent common subassemblies that are used in multiple products. This way, you only need to maintain the product structure of the phantom assembly once, and any changes will be reflected in all the products that reference it. Phantom assemblies do not increase the number of planning levels, as they are not considered as separate planning objects. They also do not make the assignment of components easier, as the components are assigned to the superordinate product, not to the phantom assembly.
References:
Phantom Assembly | SAP Help Portal. Phantom Assembly | SAP Help Portal. Planning
Phantom Assemblies | SAP Help Portal.

Forecasting is the process of predicting future demand for products or services based on historical data, market trends, and other factors. Forecasting is an essential component of supply chain planning, which aims to optimize the flow of materials, information, and money across the supply chain network. SAP offers various applications that can be used for forecasting in supply chain planning, such as: Integration Business Planning (IBP): IBP is a cloud-based solution that provides end-to-end visibility and integration of planning processes across different business functions, such as sales, finance, operations, and logistics. IBP enables collaborative and real-time forecasting, scenario analysis, and decision making based on advanced analytics and machine learning.IBP supports various forecasting methods, such as statistical, causal, and demand sensing, and allows users to adjust and refine forecasts based on changing market conditions and business priorities 12.
Supply Chain Management (SCM): SCM is an on-premise solution that covers the entire supply chain process, from demand planning to delivery and invoicing. SCM includes various modules, such as Advanced Planning and Optimization (APO), Extended Warehouse Management (EWM), and Transportation Management ., that enable efficient and flexible planning and execution of supply chain activities.SCM supports various forecasting techniques, such as exponential smoothing, trend analysis, and seasonal adjustment, and allows users to monitor and control forecast accuracy and performance 34.
The other two options are not SAP applications, but rather concepts or processes related to supply chain planning: Capacity Requirement Planning (CRP): CRP is the process of determining the available and required capacity of resources, such as machines, labor, and materials, to meet the production plan. CRP helps to identify and resolve capacity bottlenecks, optimize resource utilization, and balance supply and demand.CRP can be performed using various SAP applications, such as MRP, Production Planning and Detailed Scheduling (PP/DS), or IBP5. Material Requirement Planning (MRP): MRP is the process of calculating the quantity and timing of materials needed to fulfill the production plan. MRP helps to optimize inventory levels, reduce costs, and improve customer service. MRP can be performed using various SAP applications, such as ERP, SCM, or IBP .
References:
SAP Integrated Business Planning | SAP.
Forecasting | SAP Help Portal. SAP Supply Chain Management | SAP. Forecasting | SAP Help Portal.
Capacity Requirements Planning (PP-CRP) | SAP Help Portal, [Capacity Planning | SAP Help Portal], [Material Requirements Planning (PP-MRP) | SAP Help Portal], [Material Requirements Planning | SAP
Help Portal]

Strategy 50 allows planning semifinished materials independently using forecasts while finished goods are assembled only after sales orders arrive.
Strategy 40 consumes independent requirements with sales orders. Strategy 20 is pure MTO and does not forecast semifinished goods.