make to order

[Former Member]

Hi All,

Please throw some light on make to order.

Regards,

Neelam

[Former Member · Accepted solution]

Make-to-Order (MTO) Production

Purpose

The planning strategies explained in this section are designed for the production of a material for a specific individual sales order. In other words, you do not want to produce finished products until you receive a sales order. This means that make-to-order strategies always support a very close customer-vendor relationship, because your sales orders are closely linked to production.

The same relationship exists between the sales order and production that exists in a make-to-order environment. Make-to-order is also used in the following environments.

Production using variant configuration

Assemble-to-order

Prerequisites

Choose a make-to-order strategy, if:

The materials are segregated. In other words, they are uniquely assigned to specific sales orders.

Costs must be tracked at sales order level and not on material level.

Make-to-order strategies should always be combined with lot-size key EX (lot-for-lot. Rounding values should not be used. If you maintain rounding values, they have no effect due to the make-to-order properties of these strategies.

Process Flow

There are extensive options that enable you to procure components especially for specific sales order items.

You may, however, want to use a different planning strategy to procure components without sales orders. This allows you to keep your replenishment lead time to a minimum. You can do this by:

Planning on the basis of the finished product (see Planning Without Final Assembly (50) or Planning with a Planning Material (60))

Planning at component level (see Strategies for Planning Components)

Using consumption-based or Kanban-controlled components

Customer stock can exist on any BOM level. See Stockkeeping at Different BOM Levels for more information.

Because production is closely linked to sales orders, this results in a customer section in the stock/requirements list.

Unplanned goods receipts (such as returns) cannot, as a rule, be used for other sales orders, even if they are in working order, unless they are adapted to meet a customer's needs.

In the basic make-to-order strategy, Make-to-Order Production (20), no specific product structures are required. This means that it does not matter if the material has a BOM or not. The material can be produced in-house, or it can be procured externally. No planning is involved in this strategy.

Planning Without Final Assembly (50) and Planning with a Planning Material (60) do require a specific product structure (i.e. a BOM, which means materials are always produced in-house). These planning strategies assume that you want to plan procurement (production or purchasing) of your components by planning the finished products. This means that you need to have a fairly stable demand for your finished products. If, however, you can plan more easily at component level than at finished product level, see Strategies for Planning Components.

Hope this will be helpful.

regards

AK

Reward points if helpful

[Former Member]

Thanks all.

[Former Member]

HI REFER BELOW REWARD IF HELPS

http://www50.sap.com/businessmaps/092BF1DFEEB2456DADD0DD0284EBE8A2.htm

MAKE TO ORDER

http://help.sap.com/saphelp_ides/helpdata/en/51/95368ea1fa11d189ba0000e829fbbd/content.htm

http://help.sap.com/bestpractices/industry/indusmachinerycomp/v1470/IMC_DE/html/E71_MTOSalesOrdProc_...

Make-to-Order (Customer Requirements)

Creating a Sales Order

Checking Requirements Using MRP

Requirements Planning

Converting the Planned Order into a Production Order

Confirming the Production Order

Checking the Settlement of the Production Order

Creating a Delivery

Creating a Billing Document

Checking Costs and Revenues on the Sales Order

Make-To-Stock Production

Planning a Product

Creating a Sales Order

Executing Multi-Level Requirements Planning

Converting the Planned Order into a Production Order

Withdrawing the Material for the Production Order

Confirming the Production Order

Creating a Delivery

Creating a Billing Document

REFER BELOW

Make-to-order processing takes place when inventory is not generally stoked but instead the firm wants until an order hass been placed and then produces just what has been ordered.

Ex: In this case, a deluxe motorcycle gas tank that must be produced form an unpainted tank, paint and gas cap. These are two processes that must be completed in the production -

---

paint the tank and when tank is dry, attach the gas cap.

The BOM are needed to create a given product. The routing information gives what processes need to be carried out in what order and even how long each process should take. All this information together can be used to determine what the total cost of the product and determining the profitability of the product.

A—Creation of materials:---

T code: MM01

Ex; 1400-7—1xx

Enter material, ind. Sector and material type.

Select the org. levels plant, stor. Location, sales org, DC, Warehoused no, storage type.

Repeat the same process for all components.

B—Creation of BOM:--

T code: CS01

C—Set up routing:--

T code: CA02

D—pricing conditions:--

T code: VK11

E—purchasing materials:--

Create a purchasing order req. for components from vendor.

Create PO: ME21

F—Receiving materials:--

GR:- MIGO

Go through MMBE then u will get stock available or not.

Process:

1. creating a sales order for product not kept in the inventory. This will atomically generated the relevant production order.

2. we assume production is done ahead of \schedule. After production is completed you will confirm production order as fully completed .

3. Newly determine the availability of sales order.

4. shipment

5. TO for delivery

6. Billing

7. Payments

[Former Member]

hi,

Business procedures material based on MRP irrespective of the sales order ie Make to order

If the standard product is going to be change slightly according to the customer requirement then businss manufacturing that particular material for particular customer called as Make to order.

Inventory is going to be maintained in special stock indicator E order inhabd

Configuration

Create material master by maintaining general item category group- 0001(make to order)

Availability check - 02

Transportation Group - 0001

go to va01 and raise sales order

item category:TAk

Schedule line category : cp

Requirement type KE

Requirement class 040

Check TOR and avalability check

special stock : E

VOV7

of TAK

billing relivence : A

Pricing :X

go to mb1c

maintain stock with a special stock indicator E

mavement type 61

Special stock E

specify sales order number line item number and saveit

go to VL01N main data

Go to VF01

save it

note for make to order you cannot maintain availability check

pls reward points if the answer is helpful

Regards,

Murali

[Former Member]

hi,

make to order is a buisness scenario which triggers the production planning thru the customer requirments not on supply basis but on demand basis.

ex: u are into making of customised industrial doors, here

the door size, width etc are always customer specific for which no standard product exists.

the sales order becomes the basis for starting the production process,which is contrary to the concept of make to stock where this is purely driven on supply constraints,

the production is triggered irrespective of sales order. thte sales forecasts becomes the basis for the production planning.

reward points

sriram.