Make to Order

[Former Member]

Hi Friends,

In make to order scenario I understand that the requirement type determined in the sales order if linked to a 'make to order requirement class' then the sales order would become a make to order sales order.

Do we have to determine the req type using the strategy group or through transaction ( using Item category and MRP type) - which one is preferable?

And which strategy group is to be used ? When I am using strategy group ' 20 ' in sales orde,r system is asking for a G/L account.

I would like to have clarity on the whole process and the configuration involved.

Could someone help me on this ?

Regards

Mahesh.

[Former Member]

Hi Mahesh,

One impartent point i would like to tell you is,if we are doing the make to order Scenario please ensure that, in item category we have to maintain the Stock Indicator - Should be

E - Orders on hand.

Thanks and Regards,

Sateesh.Kandula

[javed_ihsan]

For make-to-order production with cost management using a sales order, all costs and revenues involved for an order item are assigned collectively to the item. The costs are allocated to profitability analysis using a particular settlement rule which the system automatically proposes. You can change the proposal manually

If you want to settle costs to a general ledger account rather than to a profitability segment, you can change the settlement rule manually and enter the relevant general ledger account number in the account assignment screen for the item

Settlement Rule

The settlement rule consists of the sender and the settlement distribution rule which includes the settlement receiving accounts, distribution factor, settlement type, and validity period. You can change the settlement rule manually.

There are two possibilities for settling sales orders. You can either:

Settle to a business segment

In this case, the settlement rule is determined automatically. You can only use this method of settlement if CO-PA is activated.

Settle to a general ledger account

In this case, you enter the settlement rule and the general ledger account number manually in the sales order.

To change the settlement rule, choose Edit ® Settlement rule.

For more detailed information about settlements and especially about processing settlement rules, see the CO Cost Object Controlling documentation

For the sequence of Settlement strategy and Settlement rule you can check at the following path:

Sales & Distribution --> Basic Functions --> Account Assignment/Costing --> Automatic generation of Settlement rule

But my suggestion is to consult your CO/PA consultant in configuring above.

[javed_ihsan]

Requirement type determination is based on the "Origin of requirement type in requirement type determination"

In this field you can select an alternative search strategy (source):

Source 0 = Material master strategy, then item category and MRP type

Source 1 = Item type and MRP type strategy

Source 2 = Item type and MRP type strategy (as for source 1) with additional check of the allowed requirements type

e.g. If you set value "0" system will first strategy group in material master based on that it will determine requirement type and no value found then it will determine requirement type based on item category and Mrp type.

Above settings can be found at SD --> Basic Functions --> Availability Check and transfer of requirement --> Transfer of Requirement --> Determination of Requirement type using Transaction

For make to order std strategy group 20 is used to which req type KE is assigned.

Check

Check in tcode OVZH, what requirement class is assigned to your requirement type

Check in tcode OVZG, what value is assigned to field "Consumption" in requirement class because that determines consumption posting.

[Former Member]

Hi Javed,

Thanks for the information, that is very useful. Could you please clarify me on what the 'consumption' field does ?

Regards

Mahesh.

[Former Member]

Hello Mahesh,

<b>Make to order production</b>

1. Make-to-order production is a process in which a product is individually manufactured for a particular customer. In contrast to mass production for an unspecified market where a material is manufactured many times, in make-to-order production a material is created only once though the same or a similar production process might be repeated at a later time.

2. You can use make-to-order production: (a) For branches of industry or products where a small quantity of products with a large number of different characteristics are manufactured (b) When a product has to be assembled particularly for a sales order.

3. Stock keeping is not usually carried out for products that are made to order. In companies using make-to-order production, the demand program only determines the production area, in which various variant types are produced. Depending on how you track the costs associated with make-to-order production, there are two ways to process make-to-order items during sales order processing.

(a) Make to order using sales order

(b) Make to order using project system (not relevant for SD application)

4. for make to order production using the sales order, all costs and revenues involved for an order item are held collectively at that item. A particular rule is used that can be changed manually to transfer costs to profitability analysis.

5. make to order production is largely a production planning configuration. It is also controlled by the requirements type, which is determined by three things

the strategy group (MRP 3) in MMR

the MRP group (MRP1) in MMR

the item category and MRP type (MRP 1)

6. Make-to-order production is controlled by the requirements type. The requirements type is determined on the basis of the MRP group (MRP1) and the strategy group (MRP3) in the material master record. In addition, a plant must be assigned for make-to-order items in the sales order.

7. Make to order production means that the materials (finished products) are not stored in the warehouse but produced especially for a particular sales order or a sales order item. An individual customer requirement is generated from the sales order item and transferred to materials planning (MM/PP). You can use materials planning to plan requirements. Once this has been done, production is carried out. After the product has been manufactured, you post it by goods receipt to sales orders stock specifically for this sales order item. As soon as the delivery is due, you can enter the delivery in SD and post goods issue which reduces the sales order stock and then a billing document can be entered.

8. The item category in the sales document is found using the sale document type and the item category group from the material master found on the tab page sales org 2 i.e.

a. sales document type – OR

b. item category group – 0001

c. item category - TAK

9. <b>MTO without assembly processing</b> – the requirement quantity (planned independent requirements), delivery date and configuration specifications are transferred from the sales order to materials planning as an individual customer requirement. A planned order is generated using a planning run where the bills of material are exploded and dependant requirements (i.e. multi-level BOM) for the assemblies and components are generated. As soon as the production starts, a production order is created from the planned order. The system returns the confirmed quantity and delivery date from the production order to the sales order.

10. <b>MTO with assembly processing</b> – in this case the individual components for the final product have already been produced. You only need to assemble the components according to the customer’s wishes. In this process, you only need a one level BOM and generation of dependent requirements is not necessary. In this case no planning run is generated and a production order is created directly from the sales order. The system returns the confirmed quantity and the delivery date from the production order to the schedule lines in the sales order. Any changes made to the confirmed schedule lines or the delivery date is immediately visible in the sales order and/or in the production order.

11. After production department has finished making the material, goods receipt is posted in the sales order stock i.e. special stock which can only be used for a specific sales order. After posting goods issue for outbound delivery, the sales order stock is reduced accordingly.

<b>Reward if helps</b>

Regards

Sai