A work center is a physical or logical production area used as a unit for scheduling and routing operations.
It is usually defined as being either labor or machine-constrained, and while it may contain multiple machines or personnel they are considered identical in terms of the capability to process products assigned to that center.
A work center may perform multiple operations, but capacity requirements are usually tracked only at the total work center level.
Its definitions can be flexible based on the process and reporting capabilities and requirements of the organization.
Uses of data in work center
Data in the work center is used for
- Scheduling: Formulas entered in the work center helps to calculate the duration of an operation
- Costing: The formulas entered in the work center allows you to calculate the costs of an operation
- Capacity planning: Formulas for calculating capacity requirements and availability of capacity are stored in the work center
Work center in SAP
The work center in SAP PP is used for routing operations and production orders. It is blended with SAP modules. They are human resource management(HRM), plant maintenance, and control.
Capacity calculation in SAP
- Available capacity: Basically, SAP work center capacity indicates machine or labor available hours. Here break hours are not included. For example, a machine is available for production in the production plant from 10 am to 5 pm, and break time is 1hr.
Then the available capacity is = Total available hours – break hours
Available capacity = 7 hrs – 1 hr
Available capacity = 6 hrs
- Required capacity: In the SAP work center, require capacity means the time required to produce a specified quantity of product. To calculate required capacity, SAP considers operation time and capacity formula.
For example, in a factory, the usage of a machine maintains things like labor time, machine time, and set up time. Let us assume the routing time and quantity.
- Labor time= 60 mins
- Machine time = 60 mins
- Machine set up time = 30 mins
- Base Quantity = 100
- Production order quantity = 200
Now the capacity calculation for that machine is
Required capacity = machine time X production order quantity / base quantity
Required capacity = 60 mins X 200/100
Required capacity = 60 mins X 2
Required capacity = 120 mins.
Structure of work center
The structure of the work center contains mainly three levels.
- Planning area
- Work center
Work centers can be internal or external. An example of an external work center is the contractor. In the olden days’ work center consists of electrical, mechanical, instrumental, etc.
Now in modern days, they are replaced by team 1, team 2, team 3, and so on.
Get more definitions about work center and other ERP-related terms here.