MTO &MTS

[Former Member]

hi,

CAN ANY ONE PL HELP ME REG MAKE TO ORDER AND MAKE TO STOCK & THE CONFIGURAION OF THE ABOVE . WHERE EXCATLY IT COMES INTO SD SCENARIO.

[Former Member]

Hi refer below

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.

Make to order production

1. 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.

2. 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

3. MTO without assembly processing – 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.

4. MTO with assembly processing – 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.

5. 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.

6. 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.

7. 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.

8. 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)

9. 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.

10. 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)

11. 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.

[Former Member]

Hi Jerry,

Make To Order:

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

Configuration Settings:

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

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.

Refer to the following links:

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

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

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

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.

Make-to-Order (MTO) process characteristics include configurable end products, minor engineering effort during production of end product, subassemblies and components procured to forecast and the manufacture of end products driven by customer order.

Business Goals & Objectives

1) Improving Customer Service

Collaborate with business partners

Reduce order lead-time

2) Increasing Revenue

Improve capacity utilization

Improve customer retention and loyalty

Improve RFQ/RFP processes

Outsource excess capacity

3)Lowering Working Capital

Improve capacity utilization

Increase inventory turns

Lower cost procured goods and services

Lower work-in-process inventory

4) Reduce inventory carrying costs

Shorten order-to-cash cycle

Visibility to vendor/supplier inventory

Reducing Operating Costs & Increasing Efficiency

also please check this link on MTO :

Make to order

Make To Stock:

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

http://help.sap.com/saphelp_ides/helpdata/en/51/9532c0a1fa11d189ba0000e829fbbd/content.htm

Make To Stock :

Characteristics of a Make-to-Stock (MTS) process are commodity based end products, production prior to sales order based on forecast, end products sold from inventory, controlling of inventory is critical and distribution and warehousing of end product is the norm.

Business Goals & Objectives

1)Improving Customer Service

Better service levels

Collaborate with business partners

Reduce late orders

Reduce order lead-time

2)Increasing Revenue

Improve capacity utilization

Outsource excess capacity

3)Lowering Working Capital

Improve capacity utilization

Increase inventory turns

Lower work-in-process inventory

Reduce inventory carrying costs

Visibility to vendor/supplier inventory

4)Reducing Operating Costs & Increasing Efficiency

Improve procurement processes

Lower logistics costs

Reduce administration, improve business processes

Reduce inventory levels

Reduce transaction costs

MTS in discrete industry

MTS Business scenario

Hope this will help you to solve your answer.

Reward Pts .

Thx & Regards,

Pankaj

[Former Member]

if you get the document pls send me to this mail

greetlakshman@yahoo.co.in

regards

lakshman

[Former Member]

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