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Discrete Manufacturing - The Made To Stock Cycle 

The Made To Stock Cycle 

The Made to stock scenario will start from Demand Management here we can create Planed independent requirements manually or by using data from SOP. After MRP run system will create planned orders which we can convert to Production order As the Stocks produced there off are not customer stock or the stock is not attached to any specific customer. Further confirmations are done and issues of material are carried out to the production order. Finally the production is put in to stock (GR). 

Here at any point of time a sales order might come in and delivery to the customer is done from the existing stock. 

Production Master Data 

The Production Master Data consists of Material Master, Bill of Material, Work Center, Route, and Production Line Design.  

The Material Master is created first for all components involved in making the Final product.   Then these components are put in a product relationship i.e. a list of materials required to make the final product are put in a hierarchy, this is called a Bill of Material. 

The next task is to identify the work centers required to produce the product; if the work centers are already created then they can be readily put in a sequence, which would be a sequence of work centers required to produce the product. This sequence of work centers one after the other (in the sequence of work to be done) is called a Route. 

The Cycle of Made to stock: Steps: MTS Scenario

1. Material Creation (Made to Stock Material with major changes of: Item Category: NORM) 2. Creation of BOM 3. Route Creation 4. Demand requirements 5. MRP Run 6. Creation/conversion of Production order (Made To stock), Scheduling, Costing, Release and Save 7. Production order Quantity confirmations for operations, Parallel task of material Issue to order or to reservations (261) 8. Fully Produced Production Quantities will be put into stock (GR) 9. Sales order Creation 

10. Delivery against sales order 11. Invoicing.                                                                

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Discrete Manufacturing - The Made To Order Cycle

In sap there is specific transaction flow for a particular Mfg. Process. It all depends upon the req. of client and process.

Here is the basic flow of transactions which is req. for creating master data, planning and order processing...

The Made TO Order Cycle:

The sale department passes on the Made to order-Sales Order to the Material department so that material requirement is analyzed. This is done in SAP by carrying on an MRP Run for all the levels of the product BOM. This MRP Run would create Planned Orders for the shortages. Here the planned orders for FERT sub assemblies, Components etc, are created. This planned orders for materials produced in house are converted in to Production order and planned orders for materials procured from outside are converted in to Purchase order. The creation of Production order through the planned orders will convert all the dependant requirements in to dependant reservations.

The dates of production or purchase are decided through the total replenishment time mentioned in the material master, if it is, in-house production, then the Route times precede over the total replenishment time entered in the material master. And the availability of all the components is ruled by the availability checking rules and by availability checking scopes. Thus whenever the system declares a product to be ready or available by a date it implies that the system has checked the availability of the material with respect to the Ware house stock, in coming stock   (Receipts) and all other planned orders already existing for the product or material. 

In the Made to order production, sales order produced for FERT and Sub assemblies are converted in to production order during MRP run. The production orders created have a specific quantity, specific Basic start date and a specific Basic Finish Date, a set of operations and a set of component attached from the BOM. In course of production the quantities produced in the operation for an order should be confirmed so that the current status of work is available in real time situation. The components required for production are issued to the production order through goods issue by a movement type 261 and the issue is always made to the reservations or to the order, thereby clearing the reservations. Issues of unplanned components are made as new items issue and not as order issue. The quantities, for an order which are produced completely are the put in to stock i.e. a Goods Receipt is done. 

Thus the made to order cycle starts with the sales orders and converting them to Production Orders through MRP Run and there off confirming produced quantities for an order and finally putting the order in to stock.  

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The Cycle of Made to order: Steps: MTO Scenario

1. Material Creation (Made To order Material with major changes of: Item Category: 0004-make to order/assem.,or 0001-make to order) 2. Route Creation 3. Creation of BOM 4. Sales order 5. Production order Scheduling, Costing, Release and Save 6. Production order Quantity confirmations for operations, Parallel task of material issue to order or to reservations (261)  7. Fully Produced Production Quantities will be put into stock (GR) 8. Delivery against sales order 9. Invoicing.                                                          

The difference between MTO and MTS is

MTO--> Make to Order Production is the process where the production order is triggered from a Sales Order. Ex: The Prod process will start only after receiving the sales order from the customer. In this case the product could be customer specific only (Variant)

MTS--> Make to Stock MTS scenario can be accomplished by the following settings: - Need to use strategy group 20 in material master MRP view-Strategy group 20 is assigned to strategy 20   Strategy 20 is assigned to Requirement type KE (Individual customer requirement) - Requirement type KE is assigned to requirement class 040 (Indiv.cust.w/o cons.) - Requirement class has all the parameters where we can define Production order type that will be used to create the prod order. The above link needs to be established.

Also the MTS can be achieved using Sales Order schedule line category which will be assigned to Requirement type/class. Item category is assigned to Req.type/class and the Item category is maintained in the material master.

You can use any of the above Config settings.

For MTO --> you just need to have all PP cycle settings in place nothing special needed as it is a plain PP cycle.

1. 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.

2. You can use make-to-order production in two scenarios - (a) For branches of industry or products where a small quantity of products with a large number

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of different characteristics are manufactured (Variant Configuration). (b) When a product has to be assembled particularly for a sales order (Individual Customer Requirement).

3. 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)

4. 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.

5. 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)

6. 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.