In many communications, there are terminologies that are frequently used, which may result in confusion in the essence of depiction and purpose of use. In this blog post, would like to clarify certain frequently used terminologies and its use cases, so that there is 'One Voice' and commonness during discussions.
Lot Size-of-One (LS1), As the name suggests is an End-to-End scenario that adheres to result/deliver products with same Form-Fit and Function including customising as required by business (as per the Customer needs and specifications).
In Lot Size-of-One, there are 3 options for Order fulfillment,
- AtO - Assemble-to-Order
- MtO - Make-to-Order.
- CtO - Configure-to-Order.
There is a further option in CtO known as Advance CtO or what we commonly refer as CtO+. CtO+ is a lighter version of EtO (Engineer-to-Order)
A brief explanation about the above-mentioned variations is listed below,
- Assemble-to-Order (AtO): As the name suggests, in this scenario, user can observe the order fulfilment is accomplished by procurement of goods from external source (contracting/ sub-contracting). The procured material is then used for final assembly in the manufacturing belt (assembly line in shopfloor) and later is processed for quality inspection and then dispatch. In this process there are no in-house production taking place but is majorly focused on assembly of components to make a finish product. This End-to-End (E2E) scenario can be achieved with the basic SAP S/4HANA Public Cloud license.
- Make-to-Oder (MtO) In Make-to-Order scenario, user can observe, the order fulfilment mainly involves production of material in-house and may involve procurement for semi-finished / sub-assembly of products from external vendors. Usually in business that use these MtO scenario, Make-to-Stock scenarios are also run in conjunction, so that many of the planned components can be made use for Mt0 manufacturing to reduce the lead time. This End-to-End (E2E) scenario can be achieved with the basic SAP S/4HANA Public Cloud license.
- Configure-to-Order (CtO): In this scenario, the user can select variant for the product (characteristics of the product like colour, thickness, width, length and customising). Based on the opted selection the price of the material will be determined. This configuration is made available by using Advanced Variant Configuration (AVC). AVC product needs an additional license purchasing apart from the SAP S/4HANA Public Cloud license.
These above Lot Size-of-One End-to-End Scenarios would start only when a Customer's Sale Order is received. Unlike repetitive manufacturers (Make-to-Stock and Sell from Stock scenario), the components and sub-components are not planned and made available in advance as each Customer's customising would be different from other and no two Sale Order would be similar.
This is one of the reasons, why the Lead Time is high for customised order. Many times, the customising gets built over and above the existing Standard Product, which is produced as part of Make-to-Stock scenario. These finished products or the components used in the Standard products can be used to satisfy the demand and fulfill orders of Lot-Size-of-One. These arrangements enable the manufacturers to reduce the Lead Time.
There are scenarios where the Material Variants are also maintained in stock, which means the products are stocked at varied maturity levels. This enables the components to be in assembled in production line to result in faster manufacturing / assembly of product and reduces the lead time.
Picture#1: A glimpse to Configure-to-Order (CtO) scenario (MtO with Advance Variant Configuration)
To experience an End-to-End CtO scenario in your landscape with a pre-defined master data, The following steps need be followed,
- With the purchase of SAP S/4HANA Public License, a temporary license for Advanced Variant Configuration can be opted.
- Activate the base Scope Item 22T and later the E2E Scope Item 55E.
- On activation of 55E Scope Item relavent master data to execute E2E scenario is enabled.
In the picture below, you can notice, the different material types and the location where Serial# gets used. In Public Cloud Edition 2302, there was Stock Transfer Orders (STO) for intra-plants introduced, in the picture, you can notice that depiction too.
Picture#2: Bill of Material structure used for Material Master of Configure-to-Order End-to-End flow via 55E Scope Item
Picture#3: Flow of Configure-to-Order End-to-End flow as depicted in 55E Scope Item
For further reference and detailing of Configure-to-Order scenario, kindly navigate to SCN blog - Working with E2E Lot Size of One (CTO scenario) with Advanced Variant Configuration | Scope Item ’55...
E2E LS1 CtO scenario video:
SAP S/4HANA Cloud: Lot Size of One
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