Make To Order With SAP ERP

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Make to Order in SAP ERPApplies to:SAP ECC 6.0. For more information, visit the Enterprise Resource Planning homepage.SummaryThis document shall help consultants in the cross functional areas like Sales and Distribution, Productionplanning and Materials Management. It is prepared to suits for Indian Make to Order Business Scenario. Itexplains the various activities like Sales, Planning, External procurement, Subcontracting, Production &Distribution.Author:Appala Raju PCompany: Larsen & Toubro Infotech Ltd.,Created on: 01 October 2009Author BioP. AppalaRaju is now an employee of Larsen & Toubro Infotech Ltd. He has total 10 yearsof experience, out of which near about 2 years experience in the area of SAP Consulting inProcure to Pay process. He has worked various business segments like Procurement,Design & Drawing and Plant maintenance in Engineering and Process sectors as part ofDomain experience.SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com1

Make to Order in SAP ERPTable of ContentsIntroduction . 3Make-to-Order . 3Make-to-Stock . 3MTO Business Scenario - Diagrammatical Representation . 3Major Steps . 4Bill of Materials . 4Steps in SAP . 5Create Materials . 6CIN Master data . 7Create Bill of Material (BOM) . 8Create Routing to Finished material . 9Create Sale Order . 10Run MRP for Sale Order . 10View the Planned Orders Created . 11Convert “Component” Planned Order to PR . 12Convert Semi Finished Planned Order to PR . 13Convert “Component” PR into PO . 14Goods Receipt for Components . 15View the Stock (sale order stock) . 16Create Subcontract PO with Reference to Semi Finished PR . 17Maintain Storage Location to the Subcontractor . 17Transfer Goods/Components to Subcontractor (Subcontractor Storage Location) . 18Stock Overview . 19Create Challan . 20Receive Goods (semi finished) from Subcontractor . 21View the Stock of Components after Goods Receipt. 21View the Stock of Semi-Finished after Goods Receipt . 22Reconciliation of Challan. 23Complete Challan. 23Convert Finished Material Planned Order to Production Order . 24Goods Issue to the Production . 25Confirmation of Production Order . 26Goods Receipt Against Production Order . 27Order Settlement for Production Order . 28Delivery of Finished Products . 29Related Content . 30Disclaimer and Liability Notice . 31SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com2

Make to Order in SAP ERPIntroductionTraditional production systems produce products and stock those as inventory until they are sold (make tostock). In order to reduce inventory and increase the level of customization, some firms have designed theirproduction systems to produce a product only after it is ordered. Such systems are referred to as make-toorder. Make-to-order systems are not appropriate for all types of products, and the make-to-order versusmake-to-stock decision must be weighted carefully.Make-to-OrderMake-to-order production is a process in which a product is individually manufactured for a particularcustomer. Stock keeping is not usually carried out for products that are made to order. The primary benefitsof this process are the ability to track the progress for the sales order and the flexibility to offer to thecustomer the products to meet their specific requirements. The benefit also lies in tracking the costs incurredin the servicing of the sales order in the manufacturing of the goods and the ability of arrive at a profitabilityof 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 theprogress on the customer order. The material stock is seen as customer stock.Make-to-StockIn make-to-stock production scenario stock is produced independently of orders because you want to provideyour customers immediately with goods from that stock later on. You might even want to produce goodswithout having sales orders, if you expect that there might be customer demand in the future. This meansthat make-to-stock strategies can support a very close customer-vendor relationship because your objectivehere is to provide your customers with goods from your stock as quickly as possible.MTO Business Scenario - Diagrammatical RepresentationPLANTCustomer1MRPSale nal ProdSubcontractorSL4S36Semi FinishedS2S1, S2 & S3: Storage location for Raw material, Semi finished material & final products respectivelySL: Storage Location for Subcontracting VendorSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com3

Make to Order in SAP ERPMajor Steps1 - 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 order3 - Ext. procurement:Required components procured externally using purchase order (PO)4 - Subcontracting:Procured components send to the subcontracting vendor & received semi finishedproduct5 - Production:Semi finished product processed internally and gives output as finalproduct/Assembly6 - Delivery activity:Delivers final product/Assembly to the customer against Sale order.Bill of MaterialsAssemblySalesSemi finishedSubcontractingExternal ProcComp. 1Comp. 2-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 inproduction department.SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com4

Make to Order in SAP ERPSteps in SAPCreate materials with required views - MM01Maintain CIN master data - J1IDCreate Bill of Materials (BOM) - CS01Create Routing to Finished material - CA01Create sale order - VA01Run MRP - MD50View the planned orders created - MD04Convert component planned order to PR (PR will show a/c assgn cat as M) – MD04Convert semi finished planned order to PR (PR will show a/c assgt cat “M” & item cat. “L”) – MD04Convert component PR into PO for external procurement - ME21NGoods receipt with reference to sale order - MIGOView the stock (sale order stock) - MMBECreate subcontract PO with reference to semi finished PR - ME21NMaintain storage location to the subcontractor - SPROTransfer goods to Subcontractor (movement type 311 E) - MB1B / MIGOStock will be updated Subcontract storage location under Sale order stock - MMBECreate challan - J1IFQReceive goods from Subcontractor with movt type 101 (543 will be taken to the component &subcontractor storage location to be entered) - MIGOReconciliation of challan – J1IFQComplete challan – J1IF13Convert finished material planned order to production order - MD04Goods issue to the production with movement type 261 - MB1A / MIGOConfirmation of Production order - CO15Goods receipt against Production order with movement type 101 - MB31/MIGOOrder settlement for Production order - KO88Delivery of Finished products - VL01NSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com5

Make to Order in SAP ERPCreate MaterialsRequired views & important fields mentioned for each viewVALVE100 - 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 , CostingKey Point: Maintain Strategy Group as “20” in MRP3 viewNote: No purchasing view available for material type FERT/ZHAWVALVESEMI100 - 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, Plantdata/storage, Accounting, Costing & No sales viewsKey Point: Maintain Special procurement as “30” in MRP2 viewSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com6

Make to Order in SAP ERPVALVECOMP - 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 viewsVALVECOMP1 - Raw material/component (material type ROH)Views: Basic dta1 (mat gr), Purchasing, MRP1, MRP2 (proc type F) MRP3 (consumption mode 2, availabilitycheck 02), MRP4 (individual/colle ), Plant data/stor, Accounting, Costing & No sales viewsCIN Master dataUse transaction code: J1IDMaintain material chapter ID combination to the component & semi finished material.Select Subcontract check box to the componentsMaintain assessable value to the componentsComponents: - VALVECOMP & VALVECOMP1SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com7

Make to Order in SAP ERPSemi finished material: - VALVESEMI100Finished material: - VALVE100Components: VALVECOMP & VALVECOMP1Create Bill of Material (BOM)Use transaction code CS01BOM1: VALVE100 – VALVESEMI100,BOM2: VALVESEMI100 – VALVECOMP, VALVECOMP1Key Point: Maintain item category as “L”SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com8

Make to Order in SAP ERPCreate Routing to Finished materialUse transaction code CA01SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com9

Make to Order in SAP ERPCreate Sale OrderUse transaction code VA01Run MRP for Sale OrderUse transaction code MD50SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com10

Make to Order in SAP ERPView the Planned Orders CreatedUse transaction code MD04SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com11

Make to Order in SAP ERPNote:Total number of planned orders created 4Planned 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 PRUse transaction code MD04 (Created PR contains a/c assignment category as M)SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com12

Make to Order in SAP ERPConvert Semi Finished Planned Order to PRUse transaction code MD04 (Created PR contains a/c assignment cat as M & item cat as L)SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com13

Make to Order in SAP ERPConvert “Component” PR into POUse transaction code ME21N for external procurement.PO for material VALVECOMPPO for material VALVECOMP1SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com14

Make to Order in SAP ERPGoods Receipt for ComponentsUse transaction code MIGONote the sale order number in item details in “where” tabSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com15

Make to Order in SAP ERPView the Stock (sale order stock)Use transaction code MMBESAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com16

Make to Order in SAP ERPCreate Subcontract PO with Reference to Semi Finished PRMaintain Storage Location to the SubcontractorUse transaction code SPROSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com17

Make to Order in SAP ERPTransfer Goods/Components to Subcontractor (Subcontractor Storage Location)Use transaction code MB1B with movement type 311 ESAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com18

Make to Order in SAP ERPStock OverviewStock will be updated at subcontractor storage location under sale order stock.Transaction code MMBESAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com19

Make to Order in SAP ERPCreate ChallanUse transaction code J1IF01SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com20

Make to Order in SAP ERPReceive Goods (semi finished) from SubcontractorUse transaction code MIGO, with movement type 101 (543 will be taken to components), Subcontractorstorage location to be entered.View the Stock of Components after Goods ReceiptStock of componets will be consumed at subcontracting storage location when semifinished goods receivedfrom subcontracting vendor.SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com21

Make to Order in SAP ERPView the Stock of Semi-Finished after Goods ReceiptSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com22

Make to Order in SAP ERPReconciliation of ChallanUse transaction code J1IFQComplete ChallanUse transaction code J1IF13SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com23

Make to Order in SAP ERPConvert Finished Material Planned Order to Production OrderFrom planned order to Production order, transaction code MD04SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com24

Make to Order in SAP ERPNote that planned order (000011696) converted as production order (00000100591)Goods Issue to the ProductionUse Transaction code MB1ASAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com25

Make to Order in SAP ERPConfirmation of Production OrderUse Transaction code CO15SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com26

Make to Order in SAP ERPGoods Receipt Against Production OrderUse Transaction code MB31 / MIGO with movement type 101SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com27

Make to Order in SAP ERPOrder Settlement for Production OrderUse Transaction code KO88SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com28

Make to Order in SAP ERPDelivery of Finished ProductsUse Transaction code VL01NSAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com29

Make to Order in SAP ERPRelated ContentFor more information, visit the Enterprise Resource Planning ssageID ageID ageID 7742915SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com30

Make to Order in SAP ERPDisclaimer and Liability NoticeThis document may discuss sample coding or other information that does not include SAP official interfaces and therefore is notsupported 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 orcode sample, including any liability resulting from incompatibility between the content within this document and the materials andservices offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of thisdocument.SAP COMMUNITY NETWORK 2009 SAP AGSDN - sdn.sap.com BPX - bpx.sap.com BOC - boc.sap.com31

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.File Size: 696KBPage Count: 31Explore furtherSAP Make to Order Process Tutorial - Free SAP SD Trainingerproof.comMake to Order (MTO) and Make to Stock (MTS) - SAPwiki.scn.sap.comMake to Order (MTO) and Make to Stock (MTS)www.technosap.comMake to order document - SlideSharewww.slideshare.netRecommended to you based on what's popular Feedback

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