The process flow of Make-to-order

Hi.

In product costing we have 3 scenarios

1) Product cost by period

2) Product cost by order

3) Product cost by sale order

In product costing Make to order scenario means Product cost by sale order.

Product Cost by Sales Order:

In the application component Product Cost by Sales Order, the sales document items (items in inquires, quotations, or sales orders) function as the cost objects for which you can determine costs and revenues in both planned and actual data.

In sales-order-related production, you use the functions of Product Cost by Sales Order to collect and analyze the costs in complex make-to-order production on the sales order item.

Cost management directly through the sales order item (make-to-order):

You would be using a valuated sales order stock in conjunction with sales order items that carry costs and revenues.

The Product Cost by Sales Order component enables you to do the following:

Calculate and analyze planned costs and actual costs by sales document item

Calculate and analyze planned revenues and actual revenues by sales document item

Calculate the value of goods that have been delivered to your customer but not invoiced

In product cost by sale order again we have 2 scanarios.valuated and non valueated.

Thank u

Srinivas

Edited by: srinu putty on Mar 26, 2009 3:29 PM

Hi Mr.Rao,

Make-to-Order Production with Valuated Stock for which the process flow is as follows, as I am assuming it as a generic scenario.However depending on the clients requirement changes can be made:

a) Costs are posted to the cost centers.

b)As a sales order is created, the options chosen using variant configuration are used to determine the components that will be required to build the customer-specific product. A cost estimate is saved and marked automatically for the sales order item, using the particular options specified by the customer.

c) MRP is run.

Based on the sales order, a planned production order is created to manage the manufacturing process for the MTO product.

d) The planned order is converted to a production order.

e) Resources are provided from the production cost center to the production order.

f) The month-end process is executed for production orders (Vaiance calculation & Settlement) and cost centers.

g) Deliver Product to the Customer

h) Invoice the Customer