The plan-to-produce chain

Contoso Motor Co. builds the CMC-ALT-100 alternator in plant 1710 Detroit. Fleet customers such as Great Lakes Fleet Services expect alternators off the shelf, so Contoso builds to a forecast and ships from stock. Plan-to-produce is the chain of documents that turns that forecast into finished alternators on the shelf, with the right components bought, the right work done and the right costs recorded.

This course walks the chain once, end to end, with one product. Later courses in the track go deep on master data, planning strategies and MRP. Here the goal is a map: which document comes from which, who touches it, and what you check at each step.

The documents, one by one

Planned independent requirements (PIRs) are forecast demand for a material in a plant. They come from a forecast, from a planning tool, or are entered by hand. SAP Learning describes them as stock requirements that can trigger procurement or production without waiting for sales orders. That is exactly what make-to-stock needs.

MRP (material requirements planning) reads the PIRs, sales orders and other requirements, subtracts available stock and firm receipts, and creates procurement proposals for the shortfall. For a material made in-house it creates a planned order; for a purchased material it creates a purchase requisition (or a delivery schedule line where a scheduling agreement exists). A planned order is only a proposal: you cannot produce against it.

The planner converts the planned order into a production order. The production order copies the components from the bill of material (BOM) and the operations from the routing, using the production version that ties the two together. It is the document the shop floor works to and the cost object that collects actual costs.

On the shop floor the order is released, components are staged and issued, operators confirm each operation (yield, scrap, time), and the warehouse posts the goods receipt of the finished product. At period end, controlling settles the order and reports variances between actual and standard cost.

Where quality fits

Every step in the chain is a place where something can go quietly wrong. A PIR in the wrong plant plans nothing. A BOM with an expired component plans the wrong part. A production order without a valid production version cannot be created at all. A confirmation with the wrong activity quantity misstates cost. Because the documents link to each other, you can test the chain the same way you read it: check each document against what the previous one should have produced.