MAKE TO ORDER

STRATEGY
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Consultants at SAPTOPJ OBS

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Make to order

Make to Order strategy is used in industries where the
products are produced only against order.

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.

Make-to-order is also used in the following environments.

Production using variant configuration
Assemble-to-order
If the materials are segregated. I.e. they are uniquely
assigned to specific sales orders.
If costs must be tracked at sales order level and not on
material level.

Planning strategy in the material master data (MRP 3 view)
determines the type of strategy (whether MTO or MTS) to be
adapted to a specific material.

Planning strategies related to MTO are

25 / 26 Production using variant configuration

81 With planned order (Assemble to order)
82 With production order (assemble to order)

20 Make To Order

Note:-

There are other MTO strategies like 50,60,56,89.




Production using variant configuration:-

This method will be employed to a products which are
produced in different variances from different set of input
components.

E.g. Car, computer

Assemble to Order:-

When the sale order is created and saved, immediately
production order or planned order will be created.

Strategies used with Assemble to order are

81 with planned order
82 with production order.


Make To Order:-

No planning or production will take place until any sales order
received to those products.


Important Note: -
Lot size key EX should be used with MTO strategies.
Rounding values NOT to be used.
Strategies: -

Planning strategy is the combination of customer requirement
type and independent requirement type.

Each requirement type contains the requirement class and
requirement class contains the related configuration settings
for costing, transfer of requirements and assembly processing.

Requirement type will be the link to the requirement class and
it is used in SD also to establish the link with item category
and schedule line category.


Friends, we discuss the topics in the following sequence


1. Discuss MTO Strategies 20, 25, 26, 81, 82 and 50
with screen shot.

2. Recollect the requirement class settings for SD
which has got the important configuration settings
for transfer of requirement and costing.

3. Discuss the costing related settings for requirement
class.





MTO Strategies:-

Strategy 20

Follow the Menu Path: IMGProductionProduction
Planning Demand management Planned Independent
Requirements Planning strategy Define strategy

Click

Select strategy 20

Click






Guys, as explained here, follow the same menu path and look
at the below explained strategies.
Strategy 25






Strategy 26

Strategy 81





Strategy 82



Strategy 50




All right, let us now recollect the requirement class settings
before we go ahead with costing related requirement class
settings.

Requirement Class in SD (Recap)

BACKGROUND

This configuration setting enables to define the requirement
class from Sales and Distribution (SD) module point of view.

There are two requirement class defined.

One for Independent Requirement class (PP Module)

Another for Customer Requirement class (SD Module)

This requirement class (from SD) defines

Availability check

Transfer requirement to production

MRP related

Configuration related to variant configuration

Costing related controls like costing method, costing
variant etc

SCENARIO

Most of the cases, it is sufficient to use the SAP standard
Requirement class. A detailed setting about standard
requirement class is discussed.

INSTRUCTIONS

Follow the Menu Path: IMGSales and Distribution Basic
function Availability check and Transfer of requirements
Transfer of requirements Define Requirement classes

Click



Click (only to create new entries)




Update the following fields
Field Description
Availability Check box
confirms the Availability check

Req.Transfer check box
confirms that the
requirements are transferred
to PP module.
Allocation Indicator , specifies
how the Planned Independent
requirements are consumed.

Maintain 1 consume with final
assembly.
Leave this blank
Indicates to reduce the
Planned independent
requirement with customer
requirement.

Leave it blank, then the
requirements will be planned.

Other option in this box is


Indicates configuration is
optional or mandatory.
Relevant only with strategy
25,26 and 89.

Indicates the consumption of
configurable material by sales
order. Relevant with strategy
25,26,89 and 56

Indicates the assembly
processing type along with the
sales order.

I.e. Whether to create planned
order or production order on
saving sales order.
It is used with strategy type
81 and 82.
Indicate costing at order level.

This indicator triggers the
single item multi level
planning run automatically in
the background on saving the
sales order.
Indicates the type of
production order type. Used in
assembly type strategies.

Availability check at
component level. It is used in
assembly processing
strategies 81 and 82.

This indicates the type of
Availability check. It goes with
the above setting of
avail.components.

It is used with strategies 81
and 82.
Indicator here will displays
the missing parts while
processing planned or
production order. Used with
assembly processing.

System will create the lead
time scheduling and creates
capacity requirements.

Indicator to update the
changes to the assembly order
to the sales order.

Indicates the relevancy for
order change Management.
Leave it blank.

Indicates the account
assignment category.
Normally used in MTO
strategies.






Above explained settings are very important from PP and SD
point of view for strategy 40. I.e. make to stock with final
assembly.

Impact of this configuration in Master Data /
Transaction

This requirement class is linked with the Customer
requirement type. Steps to create the link between this
requirement class and Customer requirement type is same as
explained.

The combination of this requirement type and requirement
class may have to be assigned to the planning strategy. Please
refer Define planning strategy screenshot shown below for
your ready reference.


We have discussed the important configuration settings
related to requirement class 050 which will be assigned to the
requirement type KSV.

Since the many of the fields explained above are used with
strategy 81, 82, 25 and 26, lets have a look at requirement
class screen for assembly order strategy (200 customer
requirement class).




Requirement class 201 for assemble to order with production
order.




Costing Related requirement class settings

This configuration setting enables to define the costing
parameter for make to order scenario.

Menu Path:- IMG Controlling Product cost controlling
Cost Object controlling Product cost by sales order
Control of Sales-Order-Related production Check
Requirement classes

Click



Update the following fields
Field Description
Costing This indicator controls the
requirement of costing in the
sales order.
E.g. A simulation costing
B costing is optional
X Costing is must in the
Sales order.
Blank costing permitted.
Costing ID On saving Sales order, system
automatically costs the sales
order item or cost and mark
the sales order item.
Costing Method This is to indicate the method
of costing in the sales order.
Costing Variant Costing variant to be used
while costing in the sales
order.
Costing sheet Costing sheet to be used while
costing the sales order item.
Copy costing sheet To indicate the system to copy
the same costing sheet to the
related production order.
Condition type line item The result of the sales order
costing is printed in the
pricing screen with the use of
this.
Use Condition type EK01 for
display and to use in the
calculation.
Use EK02 for only display
purpose.
Condition type line item fix This is to display the fixed
part of the result of the sales
order costing.
Use condition type EK03 to
this purpose.
Copy cost estimate This controls the copying of
the preliminary cost estimate
from production order to the
sales order condition type.
This indicator is relevant only
with assembly type 2 (make to
order with production order)
Account assignment category Indicates the type of account
assignment category.
Valuation This indicator determines
whether the sales order stock
is managed as a valuated
sales order stock or not.
If it is valuated, the stock
along with the value will be
displayed through a separate
transaction code MBBS.
If it is a non-valuated, only
the quantity will be reserved
against the sales order and
the inventory will be reported
along with the other items.
Without valuation strategy This is to indicate the system
to valuate the valuated sales
order stock using the
standard cost estimate of the
non-allocated (non-sales order
relevant) stock of the same
material.

This is useful when the same
product is produced some
time as a non-allocated stock
and some time as for sales
order related production.
Settlement profile This settlement profile will be
used to settle the order.
Result analysis key Result analysis key to define
the valuation of the order at
the period end closing.

Guys, I am sure, as a pp/SD consultant this much level of
knowledge of product costing with related to Sales order
should be of great help and sufficient to handle the situation.
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