Let’s start this tutorial with understanding what is SAP Work Centers. A Work Center can be a place or a machine or a labor where production operations/activities are performed. In SAP PP, Work Center is used in routing operations and production orders. Work centers also used in other applications (SAP modules) like Plant Maintenance, Project System, and Quality Management.
The goal of this tutorial is to explain basics of work centers in SAP PP. First, it is necessary to understand what are the functions of work centers in SAP and why do we need them.
Functions of SAP Work Сenters in PP
In production planning, data in work center is used for the following operations:
- Capacity Calculation
- Scheduling of an Operations/Orders
- Calculate Operation Costs
Integration with Other SAP Modules
Work center is integrated with the following business functions (or SAP modules):
Work Center Capacity
In general, capacity of SAP Work Centers means ‘available hours’ of a machine or labor resource. These available hours exclude break or halt hours. For example, assume that a lathe machine is available in a production plant from 9 AM to 9 PM and there will be a break time of 2 hours for lunch and evening snacks. Now, the capacity of the lathe machine is calculated as follows:
- Available Capacity = 12 Hours (total hours) – 2 Hours (break)
- Available Capacity = 10 Hours
Required capacity of SAP Work Centers is hours required for a work center to produce a particular quantity of an assembly. The SAP system uses the following information to calculate required capacity for a work center:
- Capacity formula. Capacity formula uses standard value key parameters (maintained on the Basic data screen of SAP Work Centers transaction).
- Operation time in a production order. This uses time defined in routing operation for base quantity.
Let’s consider an example:
A process in steel cutting unit uses a machine called “Plasma cutting” in which the following standard value parameters are maintained:
- Setup time
- Machine time
- Labor time
Let’s say in routing we have maintained the following times for the above parameters:
- Base Quantity: 120 PC
- Setup time: 30 minutes
- Machine time: 90 minutes
- Labor time: 90 minutes
Capacity formula defined for this machine is as follows:
- Machine time * Quantity to be produced / Base quantity
When a production order for the quantity of 300 PC is created, the capacity is calculated as follows:
- Required Capacity = 90 mins * 300 PC / 120 PC
- Required Capacity = 225 mins
There is also a concept of the number of individual capacities. This is the number of individual machines available with similar capacity. When the SAP system calculates required capacity it divides the number individual capacities in a formula and when calculates available capacity it multiplies the number of individual capacities.
Capacity formula defined for the machine is as follows:
- Machine time * Quantity to be produced / Base quantity * No of splits
When a production order for the quantity of 300 PC is created, the capacity is calculated as follows (if there are two machines available):
- Required capacity = 90 mins * 300 PC / 120 PC * 2
- Required capacity = 112.5 mins
Scheduling in SAP Work Centers
In general, scheduling means calculation of start date/start time and end date/end time of an operation performed in a work center based on a requirement date. The SAP system uses the following details for scheduling an operation/machine:
- Formula for scheduling in work center scheduling view.
- Requirement date/time from an order.
- Operation time from routing.
- Inter-operation times (i.e. queue time, wait time, move time, etc.) from routing.
The SAP system do backward scheduling starting from the requirement date/time in order to schedule the order.
Here queue time, wait time and move time are known as “inter-operation times”.
Time raw material/components need to wait before processing in a machine.
Time material must wait after processing in a work center.
Time required for material move to next work center for further processing.
Costing in SAP Work Centers
The SAP system calculate activity cost based on the following master data’s information:
- Costing formula in a work center.
- Operation time in a routing and an order.
- Activity rate defined for the cost center which is assigned to the work center.
How to Create SAP Work Centers?
SAP work centers can be created by any of the following methods:
- By directly starting the transaction CR01.
- By accessing the following menu path:
The system will show you the initial screen of the create work center transaction.
Here, it is important to specify work center category that controls screen sequence of the work center data. In general, the following standard screens are available for creation of a work center:
- Basic data
- Default values
- Capacity data
- Cost center assignment
Let’s discuss these screens in more details.
- Location in which the work center is assigned.
- This is used for Plant Maintenance purpose.
- Area in which raw material need to be moved for operation.
- Work center usage field control application or function area where it is used.
- Backflush in SAP is automatic posting of raw materials/components when production activity is confirmed.
- When we confirm an operation/work center for an order, BOM components that are assigned with that particular operation/work centers (in routing) will be posted automatically.
- In SAP there are three places where we can set a backflush indicator:
- Routing (components assignment) screen
- Material master (MRP2 screen)
- Work center (Basic data screen)
Standard Value Key
- Standard value key may have a maximum of 6 parameters that are used to calculate:
- SAP calculates capacity, scheduling and costing using these parameters defined in the formulas.
Let’s say, I have defined the following standard value key and its parameters.
Standard value key: ZSAP1
- Machine time (Hours) Z0001
- Labor time (Hours) Z0002
A capacity formula can be defined as follows:
- Z0001 * Operation quantity / Base quantity
Operation quantity is defined in an order and base quantity is defined in a routing.
Let’s say for the material “Wheel” the following settings are maintained in the routing:
- Base quantity 10 PC
- Machine time 30 Mins
- Labor time 30 Mins
When a user creates a production order for 100 PC the SAP system calculates required capacity as follows:
Capacity required (in Mins) = 30 mins (Z0001) * 100 (Operation quantity) / 10 (Base quantity)
= 300 mins.
Fields appearing in this screen are used as default values in routing which reduces the time required to enter values in routing. When a user enters machine time for this work center in routing as 100, the unit of measure will come automatically as MIN (copied from work center data).
Similarly, when you enter this work center in routing for a particular operation, the SAP system will automatically copy the control key from the work center.
Furthermore, if Reference Indicator is activated, values from the work center will be copied and cannot be changed in routing. If we don’t want these default values to be copied to routing, no need to enter any values on this screen.
For example, let’s consider the control key field:
- For the work center Lathe we have maintained control key PP01.
- Let’s say this work center is used in different products.
- If you don’t want to use PP01 for all the products, do not activate Reference Indicator.
Capacity screen in the work center transaction contains the following information:
- Available capacity
- Formula to calculate required capacity
- Shift sequences
This will be explained in details in our next tutorial.
Scheduling screen of SAP work centers contains the following information:
- Formula to calculate scheduling time
- Inter-operation times like move time, wait time, etc.
In the costing screen, SAP work center will be assigned to a cost center. Each cost center will have activity types and formulas to calculate cost of activities. This will be explained in more details in one of the next tutorials of SAP PP Training Course.
Assignment of a work center and a cost center can be N to 1. It means that several work centers can be assigned to the same cost center but only one cost center can be assigned to a work center.
Did you like this tutorial? Have any questions or comments? We would love to hear your feedback in the comments section below. It’d be a big help for us, and hopefully it’s something we can address for you in improvement of our free SAP PP tutorials.