How to Understand Recipe Management and Production Versions in Process Manufacturing

Executive Summary

  • A recipe is the process industry name for a bill of materials.
  • We cover recipes in SAP ERP, and how the recipe with the Production Version with SAP ERP works and how to create and copy Production Versions.

Introduction: Considering Recipes for Process Industry Manufacturing

Recipes are a central object in process industry manufacturing describing what makes up the finished product. You will learn the contrast between recipes, formulas and the bill of materials while explaining these items in SAP.

Background on Recipes

This article deals with a complex area of process industry manufacturing, recipe management. Recipes are unique to process manufacturing, and because discrete manufacturing tends to be a greater focus in literature and discussion than process manufacturing, recipes are in general much less well understood than similar master data objects in discrete manufacturing. Their management is a significant challenge for most process manufacturers.

The Recipe Versus the Bill of Material

While the bill of material (BOM) is often equated to the recipe in process manufacturing, as is pointed out by Wikipedia, there is more to the recipe than finished good, semi-finished good, and raw material. For instance, a recipe includes the steps to be executed and the resources required for the production of the finished good. The BOM, on the other hand, is composed of only the materials necessary to manufacture the finished good.

In this way, the recipe is much closer to the SAP APO PDS or PPM. These are master data objects inside of SAP APO that are used in both APO SNP (for supply planning) and PP/DS (for production planning). Both of these master data objects combine the resource with the BOM as well as the routing.

How a Formula Relates to a Recipe

While sometimes commingled with the term recipe (recipes are described in more detail further on in this article), a formula and recipe are not the same things. A formula is, in fact, a subcomponent of a recipe. Formulas can be completely separate objects, and a formula can be production scheduled all by itself.

That is it can stand separate from a recipe, but in most cases, it does not stand separately and is combined as part of a subordinate object to a larger recipe, which contains multiple formulas. It is common to have multiple formulas within a recipe because each formula relates to the manufacturing configuration of a semi-finished good.

It is also quite common for semi-finished goods to have complex formulas of their own that must be processed as part of the in-process manufacturing steps.

Recipes in SAP ERP

Recipes are part of a solution called SAP Recipe Management. (See SAP’s marketing PDF on this at this link.) And SAP’s help. Unfortunately, this solution is connected to the SAP PLM solution, which is one of the weakest solutions in SAP’s solution footprint, which I have previously discussed here.

  • Savvy companies will learn from SAP’s problems in this area and keep their expectations with regards to recipe management low. Instead, the only life-cycle or change management functionality that can be expected from SAP on the recipe is simply the ability to make copies of recipes. Recipes can be altered by copying them from older recipes and making even small changes to make new recipe variants.
  • The production version functionality then controls which recipe is activated and used for production planning. During one planning run, multiple production version (and therefore recipe combinations) would be used because different production versions are used per time of year that the planned production orders are created.
  • All recipes that are to be used for the next production planning run can be changed by simply activating a different production version. However, what is more, common is that some recipes would be the same (for some products) between different production versions, but for other products the recipes are different. There is a many to many relationships between recipes and production versions, and this does provide more flexibility in recipe selection.
  • Recipes can be quite complex and can be multi-leveled (just as with a BOM), they can include ingredients, intermediates, and other formulas. Production versions are created in SAP ERP and stay there if there is no external production planning system such as APO PP/DS.
  • If an external planning system is used the production version is exported to this system during the normal master data update process between the systems.

Selecting the Recipe with Production Versions in SAP

In SAP, the configuration object that determines which alternative BOM is used together with which master recipe to produce a material is called a production version. The production version functionality is part of the SAP PP module. That is it is set up in SAP PP, but can also be used by PP/DS.

For one material, several production versions frequently exist for various validity periods and lot size ranges. (In other areas of SAP these different versions would be called variants.) Production versions are used in both discrete manufacturing and process manufacturing. For this article, we will focus with a focus on process manufacturing.

Creating and Reading Production Versions

Production versions are created with the following transaction or pathway within SAP ERP.
Transaction code C223

Logistics -> Production Process -> Master Date -> Production Version

After you create a production version, the material components of the appropriate alternative BOM are available in the recipe as a master list or can be created from the recipe. Within the production version, you can assign a storage location to the material you want to produce. Production versions are made of the following data.

Conclusion

One of the most insightful statements about process manufacturing software is the following:

“Just like the products that they produce, discrete and processing manufacturing software have different focal points and solve different problems. For the same reason that the proverbial square peg does not fit in the round hole, software geared toward discrete, or even hybrid manufacturing will not work smoothly in a process manufacturing setting. Even process manufacturing software alone needs to be tailored to a particular business context. Critical aspects such as formulation, routing, ingredients, unit of measure, and pricing must be evaluated relative to the business.”Wikipedia

This quote above from Wikipedia emphasizes the point that I have repeatedly observed and often stated, that the most important part of the implementation is the software selection which should lead to a high match between the application and the needs of the business.

A basic rule is that enhancements should take place at the fringe of the application, not at its core. Adjustments for process manufacturing are at the core of production planning software. This is why so many companies are following a bad path when attempting to adjust discrete manufacturing planning software to handle process industry manufacturing.

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Reference

 

Process Industry Manufacturing Book

How Process Industry Manufacturing is Unique

From a distance, all process industry plants look the same. But under closer inspection, it is clear that every plant is very different. In fact, process industries have the widest variety of unique manufacturing requirements of all the manufacturing categories. As an example, this book shows examples that range from petroleum refining to power generation to cheese manufacturing. For this reason, no off-the-shelf planning application will meet all the requirements.

Through extensive graphics, screen shots—and links to videos available online—this book gives a thorough analysis of planning and the software solutions that meet the process industry’s unique and varied requirements.

The Only Book of Its Kind

This is the only book to cover ERP, planning, recipe management and manufacturing execution and scheduling (MES) as well as process control software all in one book.

By reading this book you will:

  • Understand the difference between process and discrete manufacturing and why software solutions designed for discrete manufacturing leave process industries with gaps in functionality.
  • Examine batch and continuous processing within process industries.
  • Lessen the confusion around terminology, such as recipes, formulas, bill of materials and more.
  • Learn about standard software functionality designed for process industries.
  • Know what to look for when selecting software to meet your business requirements for production planning.
  • Explore the software applications from PlanetTogether, Arena Solutions, Hamilton Grant, and AspenTech and how their solutions meet the complexities of process industries.
Chapters
  • Chapter 1: Introduction
  • Chapter 2: Continuous Versus Batch Processing
  • Chapter 3: The Discrete Manufacturing Focus of Most Manufacturing Software
  • Chapter 4: Co-Products and By-Products
  • Chapter 5: Recipe Management
  • Chapter 6: Overlapping and Leading and Lagging Operations
  • Chapter 7: Mixing/Blending/Pooling Operations
  • Chapter 8: Changeovers and Cleaning
  • Chapter 9: Constraint Planning and Process Control
  • Chapter 10: Manufacturing Execution Scheduling (MES)
  • Chapter 11: ERP for Process Industry Manufacturing
  • Chapter 12: Conclusion

Software Ratings: Production Planning

Software Ratings

Brightwork Research & Analysis offers the following free production planning & scheduling software analysis and ratings. See by clicking the image below:

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https://www.tgiltd.com/erp-software/formulas-and-recipes-software.html

https://en.wikipedia.org/wiki/Process_manufacturing