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Make to stock/Planning with final assembly

Former Member
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Colleague,

Can anybody explain what is the difference between the make to stock strategy and planning with final assembly and how do they differ in terms of sales order consumption.

Thanks

Sandeep

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Make to stock Planning strategy means you make stock irrespective of the demand you get. That means always there is enough stock at the DC so that there is no supply shortage.This is based on the forecast and there is no room for sales orders for consumption

Make to order is purely based on the sales orderrs. Upon receiving the sales orders you plan the product. There is no existence of forecast in this scenario. Since there is no forecast there is no consumption

Planning with final assembly is the combination of both forecast and sales orders. For example, products are planned based on the forecast but upon receiving the sales orders only they will assemble to make it as a kit and will be shipped. Here Sales orders consumes the forecast. Here comes the concept of backward and forward consumption scenarios

Answers (1)

Answers (1)

Former Member
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Hi,

Planning strategy: There are Make to Stcok and Make to Order Planning strategies.

If you want to produce the planned product and keep in stock before a sales order is entered?

· If u201CYes,u201D use a make-to-stock strategy (for example, 10, 11, 40).

· If u201CNo,u201D use either a make-to-order strategy.(20, 52, 63, 20, 25).

Choose a MTS strategy

1.if material is not assigned to specific sales order.

2.Costs need to be tracked at sales order level.

Choose a MTO strategy

1.If material is assigned to specific sales orders.

2.Costs need to be tracked at sales order level.

Planning with Final assemly ( 40 in ECC will be 20 in APO) is a MTS strategy.

In this strategy your sales orders will consume the Forecasts( PIR) depending on the Consumption mode and Consumption period.

Thanks,

nandha