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Make to order document
1.
SAP COMMUNITY NETWORK
SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 1 Make to Order in SAP ERP Applies to: SAP ECC 6.0. For more information, visit the Enterprise Resource Planning homepage. Summary This document shall help consultants in the cross functional areas like Sales and Distribution, Production planning and Materials Management. It is prepared to suits for Indian Make to Order Business Scenario. It explains the various activities like Sales, Planning, External procurement, Subcontracting, Production & Distribution. Author: Appala Raju P Company: Larsen & Toubro Infotech Ltd., Created on: 01 October 2009 Author Bio P. AppalaRaju is now an employee of Larsen & Toubro Infotech Ltd. He has total 10 years of experience, out of which near about 2 years experience in the area of SAP Consulting in Procure to Pay process. He has worked various business segments like Procurement, Design & Drawing and Plant maintenance in Engineering and Process sectors as part of Domain experience.
2.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 2 Table of Contents Introduction .........................................................................................................................................................3 Make-to-Order.................................................................................................................................................3 Make-to-Stock.................................................................................................................................................3 MTO Business Scenario - Diagrammatical Representation ...........................................................................3 Major Steps.....................................................................................................................................................4 Bill of Materials................................................................................................................................................4 Steps in SAP.......................................................................................................................................................5 Create Materials..............................................................................................................................................6 CIN Master data..............................................................................................................................................7 Create Bill of Material (BOM) ..........................................................................................................................8 Create Routing to Finished material ...............................................................................................................9 Create Sale Order.........................................................................................................................................10 Run MRP for Sale Order...............................................................................................................................10 View the Planned Orders Created ................................................................................................................11 Convert “Component” Planned Order to PR.................................................................................................12 Convert Semi Finished Planned Order to PR ...............................................................................................13 Convert “Component” PR into PO ................................................................................................................14 Goods Receipt for Components....................................................................................................................15 View the Stock (sale order stock) .................................................................................................................16 Create Subcontract PO with Reference to Semi Finished PR......................................................................17 Maintain Storage Location to the Subcontractor...........................................................................................17 Transfer Goods/Components to Subcontractor (Subcontractor Storage Location)......................................18 Stock Overview .............................................................................................................................................19 Create Challan ..............................................................................................................................................20 Receive Goods (semi finished) from Subcontractor .....................................................................................21 View the Stock of Components after Goods Receipt....................................................................................21 View the Stock of Semi-Finished after Goods Receipt.................................................................................22 Reconciliation of Challan...............................................................................................................................23 Complete Challan..........................................................................................................................................23 Convert Finished Material Planned Order to Production Order....................................................................24 Goods Issue to the Production......................................................................................................................25 Confirmation of Production Order .................................................................................................................26 Goods Receipt Against Production Order.....................................................................................................27 Order Settlement for Production Order.........................................................................................................28 Delivery of Finished Products .......................................................................................................................29 Related Content................................................................................................................................................30 Disclaimer and Liability Notice..........................................................................................................................31
3.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 3 Introduction Traditional production systems produce products and stock those as inventory until they are sold (make to stock). In order to reduce inventory and increase the level of customization, some firms have designed their production systems to produce a product only after it is ordered. Such systems are referred to as make-to- order. Make-to-order systems are not appropriate for all types of products, and the make-to-order versus make-to-stock decision must be weighted carefully. Make-to-Order Make-to-order production is a process in which a product is individually manufactured for a particular customer. Stock keeping is not usually carried out for products that are made to order. The primary benefits of this process are the ability to track the progress for the sales order and the flexibility to offer to the customer the products to meet their specific requirements. The benefit also lies in tracking the costs incurred in the servicing of the sales order in the manufacturing of the goods and the ability of arrive at a profitability of the sales order. This Business Scenario Map shows how enterprises work together to complete a make to order scenario. The planning and manufacturing process is initiated after receiving the sales orders from the customer.. There is a constant link between the sales order and the production order. This leads to the tracking of the progress on the customer order. The material stock is seen as customer stock. Make-to-Stock In make-to-stock production scenario stock is produced independently of orders because you want to provide your customers immediately with goods from that stock later on. You might even want to produce goods without having sales orders, if you expect that there might be customer demand in the future. This means that make-to-stock strategies can support a very close customer-vendor relationship because your objective here is to provide your customers with goods from your stock as quickly as possible. MTO Business Scenario - Diagrammatical Representation S1, S2 & S3: Storage location for Raw material, Semi finished material & final products respectively SL: Storage Location for Subcontracting Vendor Sale Order Final Prod Customer SL Production Vendor Subcontractor PLANT PO Components S1 Semi Finished S2 S3 MRP1 2 6 4 5 3 Components
4.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 4 Major Steps 1 - Sales activity: Sales order is created with reference to customer order (customer PO) 2 - Planning activity: Planned orders are generated as output of Material Requirement Planning (MRP) With reference to Sales order 3 - Ext. procurement: Required components procured externally using purchase order (PO) 4 - Subcontracting: Procured components send to the subcontracting vendor & received semi finished product 5 - Production: Semi finished product processed internally and gives output as final product/Assembly 6 - Delivery activity: Delivers final product/Assembly to the customer against Sale order. Bill of Materials Sales Subcontracting External Proc - Components (comp.1 & comp. 2) procured externally. - Semi finished material received from subcontracting vendor by providing components - Assembly will be available for sales after processing semi finished material internally in production department. Assembly Semi finished Comp. 1 Comp. 2
5.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 5 Steps in SAP Create materials with required views - MM01 Maintain CIN master data - J1ID Create Bill of Materials (BOM) - CS01 Create Routing to Finished material - CA01 Create sale order - VA01 Run MRP - MD50 View the planned orders created - MD04 Convert component planned order to PR (PR will show a/c assgn cat as M) – MD04 Convert semi finished planned order to PR (PR will show a/c assgt cat “M” & item cat. “L”) – MD04 Convert component PR into PO for external procurement - ME21N Goods receipt with reference to sale order - MIGO View the stock (sale order stock) - MMBE Create subcontract PO with reference to semi finished PR - ME21N Maintain storage location to the subcontractor - SPRO Transfer goods to Subcontractor (movement type 311 +E) - MB1B / MIGO Stock will be updated Subcontract storage location under Sale order stock - MMBE Create challan - J1IFQ Receive goods from Subcontractor with movt type 101 (543 will be taken to the component & subcontractor storage location to be entered) - MIGO Reconciliation of challan – J1IFQ Complete challan – J1IF13 Convert finished material planned order to production order - MD04 Goods issue to the production with movement type 261 - MB1A / MIGO Confirmation of Production order - CO15 Goods receipt against Production order with movement type 101 - MB31/MIGO Order settlement for Production order - KO88 Delivery of Finished products - VL01N
6.
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in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 6 Create Materials Required views & important fields mentioned for each view VALVE100 - Finished material, material type ZHAW (for sale order) Views: Basic data1(div & mat gr), Sales, MRP1, MRP2 (proc type E), MRP3 (Strategy group 20), MRP4 (individual/collec _ ), Work scheduling, General Plant data/storage, Accounting , Costing Key Point: Maintain Strategy Group as “20” in MRP3 view Note: No purchasing view available for material type FERT/ZHAW VALVESEMI100 - Semi finished material, material type HALB (for subcontracting) Views: Basic dta1 (mat gr), Purchasing, MRP1, MRP2 (Sp. procurement as 30 & proc type X) MRP3 (consumption mode 2, availability check 02), MRP4 (individual/collec. _), Work scheduling, Plant data/storage, Accounting, Costing & No sales views Key Point: Maintain Special procurement as “30” in MRP2 view
7.
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in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 7 VALVECOMP - Raw material/component (material type ROH) Views: Basic dta1 (material group), Purchasing, MRP1, MRP2 (proc type F) MRP3 (consumption mode 2, availability check 02), MRP4 (individual/colle _), Plant data/stor, Accounting, Costing & No sales views VALVECOMP1 - Raw material/component (material type ROH) Views: Basic dta1 (mat gr), Purchasing, MRP1, MRP2 (proc type F) MRP3 (consumption mode 2, availability check 02), MRP4 (individual/colle _), Plant data/stor, Accounting, Costing & No sales views CIN Master data Use transaction code: J1ID Maintain material chapter ID combination to the component & semi finished material. Select Subcontract check box to the components Maintain assessable value to the components Components: - VALVECOMP & VALVECOMP1
8.
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in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 8 Semi finished material: - VALVESEMI100 Finished material: - VALVE100 Components: VALVECOMP & VALVECOMP1 Create Bill of Material (BOM) Use transaction code CS01 BOM1: VALVE100 – VALVESEMI100, BOM2: VALVESEMI100 – VALVECOMP, VALVECOMP1 Key Point: Maintain item category as “L”
9.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 9 Create Routing to Finished material Use transaction code CA01
10.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 10 Create Sale Order Use transaction code VA01 Run MRP for Sale Order Use transaction code MD50
11.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 11 View the Planned Orders Created Use transaction code MD04
12.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 12 Note: Total number of planned orders created = 4 Planned order 1 for VALVECOMP (component) Planned order 2 for VALVECOMP1 (component) Planned order 3 for VALVESEMI100 (semifinished/subcontacting material) Planned order 4 for VALVE100 (assembly/final product) Convert “Component” Planned Order to PR Use transaction code MD04 (Created PR contains a/c assignment category as M)
13.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 13 Convert Semi Finished Planned Order to PR Use transaction code MD04 (Created PR contains a/c assignment cat as M & item cat as L)
14.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 14 Convert “Component” PR into PO Use transaction code ME21N for external procurement. PO for material VALVECOMP PO for material VALVECOMP1
15.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 15 Goods Receipt for Components Use transaction code MIGO Note the sale order number in item details in “where” tab
16.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 16 View the Stock (sale order stock) Use transaction code MMBE
17.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 17 Create Subcontract PO with Reference to Semi Finished PR Maintain Storage Location to the Subcontractor Use transaction code SPRO
18.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 18 Transfer Goods/Components to Subcontractor (Subcontractor Storage Location) Use transaction code MB1B with movement type 311 +E
19.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 19 Stock Overview Stock will be updated at subcontractor storage location under sale order stock. Transaction code MMBE
20.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 20 Create Challan Use transaction code J1IF01
21.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 21 Receive Goods (semi finished) from Subcontractor Use transaction code MIGO, with movement type 101 (543 will be taken to components), Subcontractor storage location to be entered. View the Stock of Components after Goods Receipt Stock of componets will be consumed at subcontracting storage location when semifinished goods received from subcontracting vendor.
22.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 22 View the Stock of Semi-Finished after Goods Receipt
23.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 23 Reconciliation of Challan Use transaction code J1IFQ Complete Challan Use transaction code J1IF13
24.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 24 Convert Finished Material Planned Order to Production Order From planned order to Production order, transaction code MD04
25.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 25 Note that planned order (000011696) converted as production order (00000100591) Goods Issue to the Production Use Transaction code MB1A
26.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 26 Confirmation of Production Order Use Transaction code CO15
27.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 27 Goods Receipt Against Production Order Use Transaction code MB31 / MIGO with movement type 101
28.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 28 Order Settlement for Production Order Use Transaction code KO88
29.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 29 Delivery of Finished Products Use Transaction code VL01N
30.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 30 Related Content For more information, visit the Enterprise Resource Planning homepage. https://forums.sdn.sap.com/thread.jspa?messageID=7729276 https://forums.sdn.sap.com/thread.jspa?messageID=7742000 https://forums.sdn.sap.com/thread.jspa?messageID=7742915
31.
Make to Order
in SAP ERP SAP COMMUNITY NETWORK SDN - sdn.sap.com | BPX - bpx.sap.com | BOC - boc.sap.com © 2009 SAP AG 31 Disclaimer and Liability Notice This document may discuss sample coding or other information that does not include SAP official interfaces and therefore is not supported by SAP. Changes made based on this information are not supported and can be overwritten during an upgrade. SAP will not be held liable for any damages caused by using or misusing the information, code or methods suggested in this document, and anyone using these methods does so at his/her own risk. SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content of this technical article or code sample, including any liability resulting from incompatibility between the content within this document and the materials and services offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of this document.
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