Planning Stratgies in PP

[Former Member]

Dear Experts,

There are two planning strategies used in PP :

1. Make-to-Stock

2. Make-to-Order

I want to know that how these will make impact on PP implemenation?

What is the basic difference between these two?Which areas are affected in PP area for these types?

Best Regards,

waqas

[rupesh_brahmankar3 · Accepted solution]

Dear,

Please refer the below discussion, also do the basic search in this forum you will get lot of discussions on same topic.

http://scn.sap.com/thread/1024215

Regards,

R.Brahmankar

[Former Member · Accepted solution]

Dear Waqas,

Make to Stock Strategy is used when to fulfill customer requirements as soon as possible. Finished Goods are keep stored at warehouses to fulfill requirements when requirments come. Planned Independant Requirements are generated in case of Make to Stock.

Make to Order Strategy is used when production is carried out on Sales Order. Manufacturing processes only carried out when sales order come. Dependant requirements are generated in case of Make to Order Strategy.

Regards

Engr. Qazi Raheel Ahmed

[Former Member]

Hi Waqas,

Planning strategies represent the business procedures for the planning of production quantities and dates. A wide range of production planning strategies are available in the SAP R/3 System, offering a large number of different options ranging from pure make-to-order production to make-to-stock production. Depending on the strategy you choose, you can:

Use sales orders and/or sales forecast values to create the demand program

Move the stocking level down to the assembly level so that final assembly is triggered by the incoming sales order

Carry out Demand Management specifically for the assembly

You can also combine planning strategies. This means that you could select the planning strategy Planning with Final Assembly (40) for a finished product, but you can still select a different strategy, such as Planning at Assembly Level (70) for an important assembly in the BOM of this finished product.

The planning strategies available for a material are listed in Customizing. You can assign a planning strategy to a material in the material master record, by means of a strategy group. Different requirements types are defined for each of the strategies and each requirements type contains important control parameters.

Planning strategy to be defined in R3 under MRP3 view. WHile ciffing this will get transferred to APO

In APO you can see this strategy in product master under Demand / Requirement stratgy tab

10   Make-to-stock production

Choose this strategy if sales orders do not influence production; for example, in a mass production environment where individual orders do not affect the amount produced. There is no consumption of the forecast by incoming sales orders.

20   Planning with final assembly

Choose this strategy if you can accurately forecast production quantities for the final product. With this make-to-stock strategy, production quantities take into account actual sales orders as well as forecasted demand: incoming sales orders consume the forecast, and production quantities result from the net demand. The advantage of this strategy is that you can react quickly to customer demand.

30   Planning w/o final assembly

Choose this strategy if the main value-added process is final assembly; that is, the amount of the sales order is fixed and production is unique for every customer. With this make-to-order strategy, only the product's component parts are produced prior to the taking of the sales order. The sales order consumes the forecast for the finished product and triggers production of the finished product.

40   Planning product

Choose this strategy to plan non-variable parts for similar finished products and reserve the capacities that are required to produce them.

This strategy ensures a rapid response to customer demand and is particularly useful for products that have a long manufacturing lead time. The value-adding process is not carried out until the customer has

Hope you are clear with the above.

Regards,
Srini

[former_member208199]

Hi waqas,

You can have some idea once you go through the below information:

Made to Order  

In sap there is specific transaction flow for a particular Manufacturing Process. It all depends upon the requirement of client and process.

Here is the basic flow of transactions which is req. for creating master data, planning and order processing…

The Made TO Order Cycle:

The sale department passes on the Made to order-Sales Order to the Material department so that material requirement is analyzed. This is done in SAP by carrying on an MRP Run for all the levels of the product BOM. This MRP Run would create Planned Orders for the shortages. Here the planned orders for fert sub assemblies, Components etc, are created. This planned orders for materials produced in house are converted in to Production order and planned orders for materials procured from outside are converted in to Purchase order. The creation of Production order through the planned orders will convert all the dependant requirements in to dependant reservations.

The dates of production or purchase are decided through the total replenishment time mentioned in the material master, If it is, in-house production, then the Route times precede over the total replenishment time entered in the material master. And the availability of all the components is ruled by the availability checking rules and by availability checking scopes. Thus whenever the system declares a product to be ready or available by a date it implies that the system has checked the availability of the material with respect to the Ware house stock, in coming stock   (Receipts) and all other planned orders already existing for the product or material.

In the Made to order production, sales order produced for Fert and Sub assemblies are converted in to production order during MRP run. The production orders created have a specific quantity, specific Basic start date and a specific Basic Finish Date, a set of operations and a set of component attached from the BOM. In course of production the quantities produced in the operation for an order should be confirmed so that the current status of work is available in real time situation. The components required for production are issued to the production order through goods issue by a movement type 261 and the issue is always made to the reservations or to the order, thereby clearing the reservations. Issues of unplanned components are made as new items issue and not as order issue. The quantities, for an order which are produced completely are the put in to stock i.e. a Goods Receipt is done.

Thus the made to order cycle starts with the sales orders and converting them to Production Orders through MRP Run and there off confirming produced quantities for an order and finally putting the order in to stock.

The Cycle of Made to order: Steps: MTO Scenario

1. Material Creation (Made To order Material with major changes of: Item Category: 0004-make to order/assem.,or 0001-make to order)
2. Routing Creation
3. Creation of BOM
4. Sales order
5. Production order Scheduling, Costing, Release and Save
6. Production order Quantity confirmations for operations, Parallel task of material issue to order or to reservations (261)
7. Fully Produced Production Quantities will be put into stock (GR)
8. Delivery against sales order
9. Invoicing.

The Made To Stock Cycle

The Made to stock scenario will start from Demand Management here we can create Planed independent requirements manually or by using data from SOP. After MRP run system will create planned orders which we can convert to Production order As the Stocks produced there off are not customer stock or the stock is not attached to any specific customer. Further confirmations are done and issues of material are carried out to the production order. Finally the production is put in to stock (GR).

Here at any point of time a sales order might come in and delivery to the customer is done from the existing stock.

Production Master Data

The Production Master Data consists of Material Master, Bill of Material, Work Center, Route, and Production Line Design.

The Material Master is created first for all components involved in making the Final product.   Then these components are put in a product relationship i.e. a list of materials required to make the final product are put in a hierarchy, this is called a Bill of Material.

The next task is to identify the work centers required to produce the product; if the work centers are already created then they can be readily put in a sequence, which would be a sequence of work centers required to produce the product. This sequence of work centers one after the other (in the sequence of work to be done) is called a Route

The Cycle of Made to stock: Steps: MTS Scenario

1. Material Creation (Made To Stock Material with major changes of: Item Category: NORM )
2. Creation of BOM
3. Route Creation
4. Demand requirements
5. MRP Run
6. Creation/conversion of Production order (Made To stock), Scheduling, Costing, Release and Save
7. Production order Quantity confirmations for operations, Parallel task of material Issue to order or to reservations (261)
8. Fully Produced Production Quantities will be put into stock (GR)
9. Sales order Creation
10. Delivery against sales order
11. Invoicing.

Example:-

MTO: Make to Order

The production and Procurement will only happen with reference to Sales Orders. Until unless there is no Sales Order there will not be any Procurement/production.

Planning strateguy used is 20. with littlevariation in the Business requirement Planning Strategy 50 can also termed as MTO.
In material master in MRP3 view mainatin the MTO Strategy group like 20,50 etc

MTO: Make to Stock
With this Business Process, the main aim is to supply to the customer immediately there is a demand and this can be done by supplying from the Stock.

You will keep the products as stock..

Planning Strategy : 10 & 11.
Both these strategies will not consider Sales Orders.
But strategy 40 can also be termed as MTS, here with this Sales Orders will also be taken into account to smoothen the production.

Credits goes to R Brahmankar

Thank you

[former_member184655]

Dear Ahmed,

There are multiple threads regarding this topic,you can use the search option to explore more.

Only based on the business requirement and business requirement study we can conclude whether

the scenario or the planning strategy to be used falls under a Make to Stock or a Make to Order

Category.

If the sales order drive the entire procurement and production process till inventory management and

if the stock is to be managed specific to sales order ,then a Make to Order Planning strategy is to be

chosen.(For example Planning strategy 20 is one of the pure Make to order planning strategy

available in standard SAP).

If the demand is derived either manually(as Planned Independent Requirements) or through forecast

or means of SOP and if the stock is not to be managed as customer specific(Sales Order specific)

and if the procurement and production is based on such requirements then a Make to Stock Planning

strategy will be more suitable.

Planning strategy 10,11,40 are Make to Stock planning strategy which are available in standard SAP.

Check help.sap.com to explore more.

Regards

Mangalraj.S

[biplob_chowdhury15]

Hi Waqas,

Sorry its a big topic, I cannot write over here. You have through the link and study all the planning strategies related to

Make to Stock

and

Make to Order

1.http://help.sap.com/saphelp_40b/helpdata/en/cb/7f93cc43b711d189410000e829fbbd/content.htm

2.http://scn.sap.com/thread/1980245

3.http://help.sap.com/saphelp_erp60_sp/helpdata/en/cb/7f941a43b711d189410000e829fbbd/content.htm

Thanks,

Biplob