Enterprise Resource Planning

Saturday, December 20, 2025

Production Planning & Control

✅ What is PPC (Production Planning & Control)

✅ Objectives of PPC

✅ PPC in SAP (PP Module)

✅ End-to-end PPC Process Flow

✅ Master Data (Material, BOM, Work Center, Routing)

✅ Planning, Execution & Control phases

✅ Practical Example (Bicycle manufacturing)

✅ Business benefits of SAP PPC

Below is a clear, presentation-ready explanation of PPC in SAP covering all the points you listed, with simple language + practical example. You can directly use this for slides, viva, interview, or training.

✅ What is PPC (Production Planning & Control)

Production Planning & Control (PPC) is a process that plans, schedules, executes, and controls manufacturing activities to ensure that products are produced:

in the right quantity
at the right time
with minimum cost
using optimal resources

👉 In SAP, PPC is mainly handled through the SAP PP (Production Planning) module.

✅ Objectives of PPC

Main objectives of PPC are:

Efficient use of resources (machines, labor, materials)
Smooth production flow without delays
Meeting customer demand on time
Reducing inventory and wastage
Cost control and productivity improvement
Monitoring and controlling production activities

✅ PPC in SAP (PP Module)

In SAP, PPC is implemented through the SAP PP module, which integrates with:

MM (Materials Management)
SD (Sales & Distribution)
FI/CO (Finance & Controlling)

SAP PP supports:

Demand planning
Material requirement planning (MRP)
Production order processing
Shop floor control
Production cost control

✅ End-to-End PPC Process Flow in SAP

Step-by-step PPC flow:

Sales Forecast / Customer Demand
Sales & Operations Planning (SOP)
Demand Management
MRP (Material Requirement Planning)
Production Order Creation
Material Issue to Production
Production Execution
Confirmation of Production
Goods Receipt of Finished Goods
Production Monitoring & Cost Analysis

✅ Master Data in PPC (SAP PP)

Master data is the foundation of PPC.

1️⃣ Material Master

Contains:

Material type
Procurement type
MRP data
Valuation & storage details

👉 Example: Bicycle, Frame, Wheel

2️⃣ BOM (Bill of Materials)

List of raw materials required to produce a finished product.

👉 Example BOM for Bicycle:

Frame – 1
Wheel – 2
Seat – 1
Handle – 1

3️⃣ Work Center

Defines where production happens.
Includes:

Machines
Labor
Capacity
Cost rates

👉 Example: Assembly Line, Welding Station

4️⃣ Routing

Defines how production happens.
Includes:

Operations sequence
Time required
Work centers used

👉 Example:

Frame Assembly → Wheel Fitting → Final Inspection

✅ Planning, Execution & Control Phases

🔹 Planning Phase

Sales Forecast
SOP
Demand Management
MRP run (calculates material & capacity needs)

👉 Output: Planned Orders / Purchase Requisitions

🔹 Execution Phase

Convert planned order to Production Order
Issue raw materials
Perform manufacturing activities
Confirm production (labor & machine time)

🔹 Control Phase

Monitor production status
Check delays & shortages
Analyze production costs & variances
Improve future planning

✅ Practical Example – Bicycle Manufacturing

🔹 Scenario

A company manufactures Bicycles

Monthly demand: 100 bicycles

🔹 Planning

BOM explodes for 100 bicycles
MRP calculates required materials:
- Frame – 100
- Wheel – 200
- Seat – 100

🔹 Production Order

Production order created for 100 bicycles
Raw materials reserved automatically

🔹 Execution

Materials issued from store
Production carried out on shop floor
Labor & machine time confirmed

🔹 Goods Receipt

100 bicycles received into warehouse
Finished goods stock updated
Accounting entries posted automatically

✅ Business Benefits of SAP PPC

✔ Better demand forecasting
✔ Reduced production delays
✔ Optimized inventory levels
✔ Real-time production tracking
✔ Improved cost control
✔ Higher customer satisfaction

Monday, December 1, 2025

UAT, TRAINING & GO-LIVE PREPARATION

This phase ensures the ERP works as expected and users are ready before it becomes the official system.

1️⃣ UAT – USER ACCEPTANCE TESTING

Purpose: Validate that ERP processes match business requirements.

Steps

✔ Create real business test scenarios
✔ Test every transaction end-to-end
✔ Record issues, assign to vendor, retest
✔ Get user sign-off

Examples of UAT test scenarios

Module	Scenario
Sales	Create SO → Delivery → Invoice → GST report
Purchase	PO → GRN → Bill → Payment
Finance	JV → Ledger → Trial Balance
HR	Attendance → Payroll Run → Payslip
Inventory	Material receipt, issue, stock valuation

📄 Output: UAT Sign-Off Document
(Without this, do NOT go live)

2️⃣ TRAINING & CHANGE MANAGEMENT

Why important?

ERP success = 30% technology + 70% user adoption

Activities

✔ Conduct department-wise training
✔ Share user manuals & short videos
✔ Explain dos & don'ts
✔ Create ERP champions (power users)

📌 Pro Tip
Reward users who follow new digital processes — avoids resistance.

3️⃣ GO-LIVE CHECKLIST PREPARATION

Mandatory checks before go-live

☑ Master data validated
☑ Opening balances loaded
☑ Inventory stock matched physically
☑ Approval hierarchy tested
☑ Roles & permissions assigned
☑ Critical reports verified
☑ Backup & rollback plan ready
☑ Support team deployed for 30–90 days

Rule

No pending open issues in critical modules when going live.

4️⃣ GO-LIVE EXECUTION

Day-1 activities:

🔸 Freeze legacy system
🔸 Switch all transactions to ERP
🔸 Monitor performance hour-wise
🔸 Track issues in helpdesk
🔸 Provide on-floor support

Within 1 month:

✔ Monitor KPIs
✔ Close high-impact issues
✔ Stabilize operations

5️⃣ POST-GO-LIVE IMPROVEMENTS

After stabilization:

🔁 Automate repetitive tasks
📊 Add dashboards & analytics
🤖 Enable AI forecasting / RPA
🏷 Introduce mobile apps, scanning, vendor/customer portal

ERP is a journey, not a destination.

ERP IMPLEMENTATION PROGRESS SO FAR

Phase	Status
Phase-1	Readiness & Kickoff ✔
Phase-2	TO-BE Design & Configuration ✔
Phase-3	UAT + Training + Go-Live (You are here)
Phase-4	Continuous Improvement (Next)

TO-BE PROCESS DESIGN & ERP CONFIGURATION

This is where the real ERP implementation starts. You convert business requirements into automated workflows.

1️⃣ TO-BE Process Design (Future State Mapping)

For every department:

✔ Define ideal workflow inside ERP
✔ Fix approval hierarchy
✔ Decide mandatory fields
✔ Identify business rules (credit limit, pricing, tax rules, tolerances)

Example – Sales TO-BE Flow

Lead → Quotation → Sales Order → Delivery → Invoice → Receipt → Reports

Output:
📄 TO-BE Process Document (signed by process owners)

2️⃣ Master Data Structure Finalization

Decide how your data will be coded and structured:

Master	Must Decide
Item Master	Item Code format, UOM, HSN, Category, Batch/Serial
Customer	Territory, Payment terms, GST
Vendor	Approval, Rating
Chart of Accounts	Ledger groups, Sub-ledgers

Rule:

Bad master data = failed ERP

3️⃣ ERP Configuration

Vendor configures modules according to TO-BE design:

✔ Chart of Accounts
✔ GST, TDS, tax rules
✔ Inventory & warehouse structure
✔ BOM & Routing (Manufacturing)
✔ Payroll structure (HR)
✔ Security roles & permissions

⚠ Tip: Configure first, customize later.

4️⃣ Identify Customizations (Only If Needed)

For gaps not covered by standard ERP:

Custom screens
Additional fields
Special approval rules
Unique reports

Create a Change Request (CR) for each customization with cost + timeline.

5️⃣ Integration Design

Define how ERP will connect with:

CRM
E-commerce portal
Payment gateway
External BI tools (Power BI/Tableau)
Barcode / RFID / IoT machines

Prepare API / Integration diagram.

6️⃣ Data Migration Strategy

Plan migration of:

Item master
Customer master
Vendor master
Opening inventory
Open purchase orders
Open sales orders
Ledgers & trial balance

Decisions Required

✔ Who prepares data?
✔ Source system? (Tally, Excel, Legacy App)
✔ Validation rules?

7️⃣ Testing Planning

Define test scenarios for each module:

✔ Sales order booking
✔ Purchase & GRN
✔ Payroll run
✔ Production plan & costing
✔ Tax reports

Output: UAT (User Acceptance Test) plan

ERP Readiness & Kickoff

NEXT STEP: Phase-1 – ERP Readiness & Kickoff

This phase transforms intention into a real project. Here’s what you should do immediately:

1️⃣ Form the ERP Project Team

Role	Responsibility
Project Sponsor (MD / CEO)	Final authority, budget approval
Project Manager (Internal)	Coordinates between departments & vendor
Process Owners	Finance, Sales, Purchase, Production, HR heads
IT Lead	Infrastructure, software integration
Vendor Team	ERP configuration & support

Output: ERP Governance Structure

2️⃣ Create a Detailed Project Charter

Include:

✔ Project Objective (Why ERP?)
✔ Scope (Departments + Modules)
✔ Budget Estimate
✔ Timeline with milestone dates
✔ Risk assumptions (e.g., data quality, user resistance)

Output: Signed Project Charter — authorizes the ERP project

3️⃣ Conduct AS-IS Process Study (1–3 Weeks)

For each department, collect:

Current workflows
Pain points
Reports generated
Key data used (items, customers, vendors, employees)

Output: AS-IS Process Document

4️⃣ Identify ERP Requirements (Business + Technical)

Make a list of:

✔ Master data fields needed
✔ Mandatory reports
✔ Approval workflows
✔ Integration requirements (Tally/SAP/CRM/eCommerce/etc.)
✔ Security roles & access control

Output: Functional Requirement Specification (FRS)

5️⃣ Vendor Shortlisting (Now Practical Step)

Prepare comparison sheet with:

Parameter	Vendor A	Vendor B	Vendor C
Cost
Modules
Customization
Support Team

Output: Final vendor selection based on capability + TCO (Total Cost of Ownership)

🔜 After This Phase

Once these steps are completed, the next milestone is:

➡ Phase-2: TO-BE Process Design & ERP Configuration

ERP Implementation Roadmap

1. Requirement Identification & Planning

✔ Understand why ERP is needed
✔ Define pain points (manual work, duplicate data, no MIS, etc.)
✔ Form an internal ERP core team (IT + Finance + Operations + HR + Sales heads)

Deliverables

Business case & expected ROI
Project scope
Budget approval
Timeline & milestones

2. Process Mapping (AS-IS Analysis)

✔ Document current workflows of each department
✔ Identify redundant steps and missing controls
✔ Note data sources, reports, and integration requirements

Output

AS-IS Process Document
Gap analysis (manual vs required automation)

3. ERP Selection

Choose between Cloud / On-Prem and finalize vendor.

Evaluation Criteria

Modules available (Finance, Inventory, CRM, HR, Production, SCM, etc.)
Customization capability
Integration with existing apps (Tally, SAP, CRM, BI, etc.)
Scalability, licensing model, support

Examples: SAP, Oracle NetSuite, Microsoft Dynamics, Odoo, Tally Prime, Ramco

4. TO-BE Process Design

Design how processes will run in ERP.

✔ Workflow approvals
✔ Master data structure
✔ User roles & permission matrix
✔ Automated reports and dashboards

Output

TO-BE Process Document
Functional Requirement Specification (FRS)

5. Data Preparation & Cleansing

ERP is only as good as the data you feed.

✔ Remove duplicates
✔ Standardize Item Codes, Customer Codes, GST, HSN, UOM
✔ Classify products & accounts properly

Deliverables

Master data templates
Migration strategy

6. ERP Configuration & Customization

Vendor team configures modules as per requirements.

✔ Chart of Accounts setup
✔ Inventory structure (warehouse, bin, batch, serial)
✔ BOM, Routing, Production rules
✔ HR policies, payroll structure
✔ Tax rules (GST, TDS, etc.)

Note: Avoid unnecessary customization — use standard ERP features wherever possible.

7. Integration

Connect ERP with external systems:

CRM
E-commerce portal / Vendor portal
Barcode / IoT machines
Payment gateway
BI tools (Power BI, Tableau)

8. User Acceptance Testing (UAT)

Users test all modules with dummy/live scenarios.

✔ Sales order to dispatch
✔ Purchase to GRN & invoice
✔ Production planning to costing
✔ Payroll run

Users approve once everything works per process.

9. Training & Change Management

ERP fails not because of software, but user resistance.

✔ Conduct hands-on training
✔ Prepare user manuals & video tutorials
✔ Setup helpdesk for first 3 months
✔ Communicate benefits regularly

10. Go-Live

✔ Freeze production database
✔ Migrate master & opening balances
✔ Enable user logins
✔ Start transactions in ERP

Go-Live Support

Vendor support for 4–12 weeks
Issue tracking & resolution

11. Post-Go-Live Optimization

✔ Monitor performance
✔ Improve slow processes
✔ Add dashboards, MIS, alerts
✔ Conduct audit after 90 days

12. Continuous Improvement

ERP is not a one-time project — it’s an evolving digital ecosystem.

✔ Add automation (RPA)
✔ Introduce AI-based forecasting
✔ Mobile apps and analytics
✔ Version upgrades

ERP Modules (Standard)

Area	Modules
Core	Finance, Inventory, Purchase, Sales
Operations	Production, Planning (MRP), SCM
HR	Payroll, Attendance, Recruitment, Appraisal
Others	CRM, Projects, Quality, Asset Mgmt

Success Formula

Right ERP + Clean Data + Trained Users + Strong Management Support = Successful Implementation

Introduction to Enterprise Resource Planning

ERP Overview

Enterprise Resource Planning (ERP) stands for integrated software that manages core business processes like finance, HR, manufacturing, and supply chain in real time using a shared database. ERP systems centralize data to eliminate silos, enable seamless information flow across departments, and support decision-making with a single source of truth.

Key Components

ERP includes modules for financial accounting (general ledger, payables, receivables), human resources (payroll, recruiting), manufacturing (scheduling, quality control), supply chain (inventory, procurement), and CRM. These components automate tasks, provide real-time insights, and integrate with technologies like AI and IoT for enhanced efficiency.

Benefits

ERP boosts productivity by standardizing workflows, reduces costs through automation, improves data security, and enhances collaboration across teams. It offers scalability for growth, real-time reporting, and better customer service via unified data views.

Implementation Process

ERP implementation follows phases: discovery and planning (team assembly, requirements), design and configuration, data migration, testing, deployment, and ongoing support. Projects typically take 14 months for large enterprises, involving GAP analysis, customization, and change management to align processes