SAP Make to Order Process

8/13/2019 SAP Make to Order Process

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Table of Contents

Introduction .........................................................................................................................................................2

Make-to-Order

.................................................................................................................................................2Make-to-Stock.................................................................................................................................................2

MTO Business Scenario - Diagrammatical Representation...........................................................................2

Major Steps.....................................................................................................................................................

Bill of Materials................................................................................................................................................

Steps inS!P......................................................................................................................................................."

#reate Materials..............................................................................................................................................$

#I% Master data..............................................................................................................................................&

#reate Bill of Material 'BOM(..........................................................................................................................)

#reate Routing to *inis+ed material...............................................................................................................,

#reate Sale Order.........................................................................................................................................

Run MRP for Sale Order...............................................................................................................................

ie/ t+e Planned Orders #reated................................................................................................................01

#onert 3#omponent4 Planned Order to PR.................................................................................................00

#onert Semi *inis+ed Planned Order to PR...............................................................................................02

#onert 3#omponent4 PR into PO................................................................................................................0

5oods Receipt for#omponents....................................................................................................................0"

ie/ t+e Stock 'sale order stock(.................................................................................................................0$

#reate Su6contract PO /it+ Reference to Semi *inis+edPR......................................................................0&

Maintain Storage 7ocation to t+eSu6contractor...........................................................................................0&

Transfer 5oods8#omponents to Su6contractor 'Su6contractor Storage7ocation(......................................0)

Stock Oerie/.............................................................................................................................................0,

#reate #+allan..............................................................................................................................................0

Receie 5oods 'semi finis+ed( from Su6contractor.....................................................................................21



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ie/ t+e Stock of #omponents after 5oodsReceipt....................................................................................21

ie/ t+e Stock of Semi-*inis+ed after 5oods Receipt.................................................................................20

Reconciliation of#+allan...............................................................................................................................22

#omplete#+allan..........................................................................................................................................22

#onert *inis+ed Material Planned Order to Production Order....................................................................2

5oods Issue to t+eProduction......................................................................................................................2"

#onfirmation of Production Order.................................................................................................................2$

5oods Receipt !gainst ProductionOrder.....................................................................................................2&

Order Settlement for Production Order.........................................................................................................2)

Delier9 of *inis+ed Products

.......................................................................................................................2,

Related #ontent................................................................................................................................................2

Disclaimer and 7ia6ilit9%otice..........................................................................................................................1

Introduction

Traditional production systems produce products and stock those as inventory until they are sold (make tostock). In order to reduce inventory and increase the level of customization, some firms have designed theirproduction systems to produce a product only after it is ordered. Such systems are referred to as make-to-order. Make-to-order systems are not appropriate for all types of products, and the make-to-order versusmake-to-stock decision must e !eighted carefully.

Make-to-Order

Make-to-order production is a process in !hich a product is individually manufactured for a particularcustomer. Stock keeping is not usually carried out for products that are made to order. The primary enefitsof this process are the aility to track the progress for the sales order and the fle"iility to offer to thecustomer the products to meet their specific re#uirements. The enefit also lies in tracking the costs incurredin the servicing of the sales order in the manufacturing of the goods and the aility of arrive at a profitailityof the sales order.

This $usiness Scenario Map sho!s ho! enterprises !ork together to complete a make to order scenario.The planning and manufacturing process is initiated after receiving the sales orders from the customer..There is a constant link et!een the sales order and the production order. This leads to the tracking of theprogress on the customer order. The material stock is seen as customer stock.

Make-to-Stock

In make-to-stock production scenario stock is produced independently of orders ecause you !ant to provideyour customers immediately !ith goods from that stock later on. %ou might even !ant to produce goods



&endor

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!ithout having sales orders, if you e"pect that there might e customer demand in the future. This meansthat make-to-stock strategies can support a very close customer-vendor relationship ecause your o'ectivehere is to provide your customers !ith goods from your stock as #uickly as possile.

MTO Business Scenario - Diagrammatical Representation

*+T

M/

0ustomer Sale rder 1 0omponents

S

0omponents Sucontractor

2inal rod 3S/

4 Semi 2inished

S1

S, S1 5 S/6 Storage location for a! material, Semi finished material 5 final products respectively

S6 Storage ocation for Sucontracting &endor



Major Steps

- Sales activity6 Sales order is created !ith reference to customer order (customer )

1 - lanning activity6 lanned orders are generated as output of Material e#uirement lanning (M)

7ith reference to Sales order

/ - 8"t. procurement6 e#uired components procured e"ternally using purchase order ()

3 - Sucontracting6 rocured components send to the sucontracting vendor 5 received semi finishedproduct

9 - roduction6 Semi finished product processed internally and gives output as finalproduct:*ssemly

4 - ;elivery activity6 ;elivers final product:*ssemly to the customer against Sale order.

Bill of Materials

Sales

Sucontracting

8"ternal roc

*ssemly

Semi finished

0omp. 0omp. 1

- 0omponents (comp. 5 comp. 1) procured e"ternally.

- Semi finished material received from sucontracting vendor y providing components

- *ssemly !ill e availale for sales after processing semi finished material internally inproduction department.



Steps in SAP

0reate materials !ith re#uired vie!s - MM<

Maintain 0I+ master data - =I;

0reate $ill of Materials ($M) - 0S<

0reate outing to 2inished material - 0*<

0reate sale order - &*<

un M - M;9<

&ie! the planned orders created - M;<3

0onvert component planned order to ( !ill sho! a:c assgn cat as M) > M;<3

0onvert semi finished planned order to ( !ill sho! a:c assgt cat ?M@ 5 item cat. ?@) > M;<3

0onvert component into for e"ternal procurement - M81+

Aoods receipt !ith reference to sale order - MIA

&ie! the stock (sale order stock) - MM$8

0reate sucontract !ith reference to semi finished - M81+

Maintain storage location to the sucontractor - S

Transfer goods to Sucontractor (movement type / B8) - M$$ : MIA

Stock !ill e updated Sucontract storage location under Sale order stock - MM$8

0reate challan - =I2C

eceive goods from Sucontractor !ith movt type < (93/ !ill e taken to the component 5sucontractor storage location to e entered) - MIA

econciliation of challan > =I2C

0omplete challan > =I2/

0onvert finished material planned order to production order - M;<3

Aoods issue to the production !ith movement type 14 - M$* : MIA

0onfirmation of roduction order - 09

Aoods receipt against roduction order !ith movement type < - M$/:MIA

rder settlement for roduction order - DEE

;elivery of 2inished products - &<+



Create Materials

e#uired vie!s 5 important fields mentioned for each vie!

& * & 8 << - 2inished material, material type FG*7 (for sale order)

&ie!s6 $asic data(div 5 mat gr), Sales, M, M1 (proc type 8), M/ (Strategy group 1<), M3(individual:collec H ), 7ork scheduling, Aeneral lant data:storage, *ccounting , 0osting

Dey oint6 Maintain Strategy Aroup as ?1<@ in M/ vie!

ote! +o purchasing vie! availale for material type 28T:FG*7

& * & 8 S8M I << - Semi finished material, material type G*$ (for sucontracting)

&ie!s6 $asic dta (mat gr), urchasing, M, M1 (Sp. procurement as /< 5 proc type ) M/(consumption mode 1, availaility check <1), M3 (individual:collec. H), 7ork scheduling, lantdata:storage, *ccounting, 0osting 5 +o sales vie!s

Dey oint6 Maintain Special procurement as ?/<@ in M1 vie!



& * & 8 0 M - a! material:component (material type G)

&ie!s6 $asic dta (material group), urchasing, M, M1 (proc type 2) M/ (consumption mode 1,availaility check <1), M3 (individual:colle H), lant data:stor, *ccounting, 0osting 5 +o sales vie!s

& * & 8 0 M - a! material:component (material type G)

&ie!s6 $asic dta (mat gr), urchasing, M, M1 (proc type 2) M/ (consumption mode 1, availaility

check <1), M3 (individual:colle H), lant data:stor, *ccounting, 0osting 5 +o sales vie!s

CI Master data

Jse transaction code6 =I;Maintain material chapter I; comination to the component 5 semi finished material.Select Sucontract check o" to the componentsMaintain assessale value to the components

0omponents6 - &*&80M 5 &*&80M



Semi finished material6 - &*&8S8MI<<

2inished material6 - &*&8<<

0omponents6 &*&80M 5 &*&80M

Create Bill of Material "BOM#

Jse transaction code 0S<

$M6 &*&8<< > &*&8S8MI<<,

$M16 &*&8S8MI<< > &*&80M, &*&80M

Dey oint6 Maintain item category as ?@



Create Routing to $inis%ed material

Jse transaction code 0*<



Create Sale Order

Jse transaction code &*<

Run MRP for Sale Order

Jse transaction code M;9<



&ie' t%e Planned Orders Created

Jse transaction code M;<3



+ote6Total numer of planned orders created K 3lanned order for &*&80M (component)lanned order 1 for &*&80M (component)lanned order / for &*&8S8MI<< (semifinished:sucontacting material)lanned order 3 for &*&8<< (assemly:final product)

Con(ert )Component* Planned Order to PR

Jse transaction code M;<3 (0reated contains a:c assignment category as M)



Con(ert Semi $inis%ed Planned Order to PR

Jse transaction code M;<3 (0reated contains a:c assignment cat as M 5 item cat as )



Con(ert )Component* PR into PO

Jse transaction code M81+ for e"ternal procurement.

for material &*&80M

for material &*&80M



+oods Receipt for Components

Jse transaction code MIA

+ote the sale order numer in item details in ?!here@ ta



&ie' t%e Stock "sale order stock#

Jse transaction code MM$8



Create Su,contract PO 'it% Reference to Semi $inis%ed PR

Maintain Storage ocation to t%e Su,contractor

Jse transaction code S



Transfer +oods.Components to Su,contractor "Su,contractor Storage ocation#

Jse transaction code M$$ !ith movement type / B8



Stock O(er(ie'

Stock !ill e updated at sucontractor storage location under sale order stock.

Transaction code MM$8



Create C%allan

Jse transaction code =I2<



Recei(e +oods "semi finis%ed# from Su,contractor

Jse transaction code MIA, !ith movement type < (93/ !ill e taken to components), Sucontractorstorage location to e entered.

&ie' t%e Stock of Components after +oods Receipt

Stock of componets !ill e consumed at sucontracting storage location !hen semifinished goods receivedfrom sucontracting vendor.



&ie' t%e Stock of Semi-$inis%ed after +oods Receipt



Reconciliation of C%allan

Jse transaction code =I2C

Complete C%allan

Jse transaction code =I2/



Con(ert $inis%ed Material Planned Order to Production Order

2rom planned order to roduction order, transaction code M;<3



+ote that planned order (<<<<4L4) converted as production order (<<<<<<<9L)

+oods Issue to t%e Production

Jse Transaction code M$*



Confirmation of Production Order

Jse Transaction code 09



+oods Receipt Against Production Order

Jse Transaction code M$/ : MIA !ith movement type <



Order Settlement for Production Order

Jse Transaction code DEE



Deli(er/ of $inis%ed Products

Jse Transaction code &<+



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SAP Make to Order Process