ETO and MTS

[Former Member]

<b>What is ETO(Engineer to Order) and MTS(Make to Stock)?</b>

[Former Member]

HI Sunil,

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

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

ETO: Engineer to Order

Normally in Projects and Complicated business process, engineer to Order process will be followed.

Reward points pls.

Regards,

Govind.

[Former Member]

Can anybody please let me know what is the difference between ETO, MTO & MTS?

[Former Member]

HI Sunil,

Make-To-Stock Production

Purpose

We describe the planning of a product for make-to-stock production. After requirements planning, you analyze the stock situation and convert a planned order into a production order. You also enter a sales order that is not relevant to the planning. The production order is then released and saved. After the material withdrawals and confirmation of the operations, you analyze the production variances. The sales order is delivered and settled.

Process Flow

1. Planning a Product

T.code: MD61

Demand&#61614; Production Planning &#61614; Production &#61614;Logistics Create&#61614; Planned Independent Requirements &#61614;Management

2. Creating a Sales Order

T.code: VA01

&#61614; Order &#61614; Sales &#61614; Sales and Distribution &#61614;Logistics Create

3. Executing Multi-Level Requirements Planning

T.code: MD02

Single Item - Multi-Level&#61614;From the MRP node, choose Planning

4. Converting the Planned Order into a Production Order

Tcode: MD04

From the MRP node, choose

Stock/Reqmts list&#61614;Evaluations

5. Withdrawing the Material for the Production Order

T.code: MB1A

Materials&#61614;Logistics Goods Issue&#61614; Goods Movement &#61614; Inventory Management &#61614;Management

6. Confirming the Production Order

T.code: CO11N

&#61614; Production &#61614;Logistics Time Ticket&#61614; For Operation &#61614; Enter &#61614; Confirmation &#61614;Production Control

7. Creating a Delivery

T.code: VL01N

&#61614; Sales and Distribution &#61614;Logistics &#61614; Single Document &#61614; Create &#61614; Outbound Delivery &#61614;Shipping and Transportation With Reference to Sales Order

8. Creating a Billing Document

T.code: VF01

Create&#61614; Billing document &#61614; Billing &#61614; Sales &#61614;Logistics

Reward points if u helpful.

Cheers

Govind.

[Former Member]

Hi

Make-to-Stock (MTS)

The scenario Make-to-Stock (MTS) Production with Serial Numbers, QM and WM focuses on: Sales-order-independent production by MTS (make-to-stock) combined with a variety of logistic functions, such as bulk material, scrap processing, missing parts management with workflow integration, rework processing, Handling Unit Management with serial numbers, batch management, warehouse / lean WM management with FIFO material consumption and QM in procurement.

Process Flow

This scenario involves the following processes:

• Costing run

• Sales order processing with availability check

• Material requirements planning (MRP)

• Procurement of components with purchase orders and scheduling agreements

• QM on procurement and quality inspection

• Make-to-stock production / Production order processing for finished good and subassembly

o Order creation and release

o Printing of shop floor papers with barcodes (optional)

o Picking according FIFO strategy with/without WM (Full WM/Lean WM) integration

o Scrap processing

o Rework order process (for subassembly)

o Order Confirmations

o Workflow for missing parts

o Bulk-material processing

o Serial number assignment for finished goods

o Goods receipt with Handling Unit Management integration (HUM only in DIMP)

• Batch management for finished goods and components

• Delivery with serial numbers and handling units (HUM only in DIMP)

• Overhead- / WIP- / variance calculation / order settlement

Key Points

• Material requirements planning (MRP)

• Procurement

• Quality management in procurement

• Production order processing

• Handling Unit Management (HUM only in DIMP)

• Serial number management

• FIFO processing with warehouse management (full WM / Lean WM)

• Batch management

• Scrap processing

• Rework order process

• Workflow integration

• Cost Object Controlling

http://help.sap.com/bestpractices/industry/indusmachinerycomp/v1470/IMC_DE/html/E79_MTSSerNo_EN_DE.h...

Engineer-to Order (ETO)

One of your company’s main tasks is the production of high-quality and technically complex turbines, which you manufacture on behalf of power plant construction companies, and so on. You purchase some of the turbine components from suppliers, the rest you manufacture yourself. Each process, from component assembly, to plant acceptance and delivery to the customer, is extremely time-consuming. Delays may lead to severe contractual penalties, and therefore, should be avoided at all costs, or possible delays should be recognized as such long before they arise.

You manage the manufacture of turbines as project business. This allows you to plan and monitor dates, costs, and revenue on a project-basis. Because of your long years of experience in this area, you already have standard project structures, such as project plans, and networks, as well as standard production data, such as task lists, prices, duration, and so on. You can use these templates at the start of a new project, and tailor them to the individual needs of each project.

Process Flow

1. On the basis of an inquiry, you create an operational project. Because you are experienced in designing and manufacturing turbines, you can make reference to an existing standard work breakdown structure (WBS) and standard networks in the system. First, you check the feasibility of the project dates. So that you can quote a sales price, you perform sales pricing on the basis of the project planning data.

Inquiry and Quotation Processing

2. On acceptance you create a sales order and release the project. You plan revenue using a billing plan in the sales order. You control the different billing dates using project milestones. In accordance with the contractual negotiations with the customer, a down payment is made on conclusion of the contract.

Order Entry Processing

3. You procure one of the turbine components externally from a supplier, and run through purchase order handling for that part. You manufacture one of the components yourself. The decision on which components are to be externally procured, and which are to be manufactured in-house has already been made.

You place orders for long-lead items early to avoid delays to project progress. Your project controls the requirement for particular components in the manufacture of the turbine. As soon as all components are available, you assemble the turbine.

Project Processing

4. You deliver the finished product to your customer. Using confirmation, you create the customer acceptance and generate the final invoice.

Turbine Assembly

5. During project processing, you constantly control project earned value using confirmations and the cost/revenue situation, so that you can take any corrective action that may be required. You run several period-end closings, however only one is run as an example. On completion of the project you create the final invoice and close the project technically.

Period-End Closing with the Schedule Manager

http://help.sap.com/saphelp_46c/helpdata/en/95/aba1376695d703e10000009b38f8cf/content.htm

[Former Member]

<b>Can you please do let me know what is ETO(Engineer to Order), MTO (Make to Order) & MTS (Make to Stock)?</b>