Make

to Order with VC

Kamalesh Yegneswaran

Cogent IBS Inc. 2008. All Rights reserved.

Session Summary
Make to order scenario with Variant Configuration (VC) describes a business , which is typically for companies which are manufacturer of products with variants. This session will walk through an overview of various aspects of VC with a simple example and how it is used in various industries to match a complete Make To Order Scenario

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What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
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Introduction
o Make to Order: Traditional production systems produce products

and stock them 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
o Variant Configuration (VC)

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What we will cover

Make to Order VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

VC for industries with configurable material

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VC for industries with configurable material

Why VC???
o o o o

If an industry manufactures complex products or multi variant products.. If an industry wants to provide a wide range of high level customization on what they are buying.. If an industry cant possibly keep all possible variants in stock If sales, engineering, planning and production are over whelmed with an enormous amount of data to create and maintain..

Cogent IBS Inc. 2008. All Rights reserved.

What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

Variant Production

Cogent IBS Inc. 2008. All Rights reserved.

What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

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Cross module integration

o Material Master: Classification, Purchasing o Production Planning: BOM, Routings, MRP o Sales and Distribution: Sales, Conditions o Costing

Configurable Object types: Materials, Standard Networks in PS, PM general maintenance task lists

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What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

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Variant Configuration Concept

understanding on this.. be based on the exact order

Why VC is used? Lets us all go to SUBWAY to have an Lets assume SUBWAY uses SAP and pricing and lead time must The options you will be asked for a Italian B.M.T are;

Number of variants: 2048

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Variant Configuration Concept

In this example the organization should maintain 2048 data sets

(assuming there are no other restrictions) 2600 data sets

Plus: one more introduction of a dressing will raise the number to Having so many material numbers and calling up in the time of

order is something scary

Introduction of new rules and regulation such as no toasting

allowed for herbs and cheese bread will make things worse

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Variant Configuration Concept

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Variant Configuration Concept

Overview of certain terms used in VC
Super BOM: all components to manufacture a product Super Routing: all tasks/operations to manufacture a product Classification: views in material master Characteristics and its Values Configuration Profiles: central settings for configurable objects Variant Conditions

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Variant Configuration Concept

Overview of certain terms used in VC (Contd)
Dependencies (Global and Local)
Describe the interdependencies between characteristics and characteristic values Control which components are selected from a bill of material (BOM) and which operations are selected from a task list Change the values of fields in BOM items and operations during configuration

Precondition: Can a characteristic (or value) be selected Selection Condition: Must a characteristic (or value) be selected Procedures: Infer values. Over write values in BOM etc. Constraints: Infer values and consistency checks. Defined only to configuration profiles Actions: Obsolete. Old type for procedures.
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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

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Variant Configuration Concept

Multi-Level Bills of Material
For more complex products, configuration can be done at any

BOM level

Characteristics values can be passed from any level to any level Purchase Orders for lower level materials can therefore be

configured

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What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

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Wrap Up
Sales Order Processing with VC The MTO - Sales Order Processing with Variant Configuration scenario demonstrates sales order processing with materials with pre-selected characteristic values (material variants) and components that are produced according to sales quantities planned for these variants. If the sales order configuration is not available as a material variant, then customer service can configure the material on the order by choosing the required characteristic values. A sales order cost estimate is created on saving the order which is subsequently used to valuate the cost of goods sold.

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Wrap up
PP and Costing The process is triggered when an order for a configurable material is received from the customer. The customer order is recognized in the MRP run resulting in planned order for production of the material. If insufficient warehouse stock is available, purchase requisitions are created for the raw materials required. When the production order is created, target costs are calculated for the order lot size (preliminary costing). During the production process, costs incurred are updated on the order, which enables you to keep track of and compare target costs and actual costs at any time.

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Wrap Up
VC in Project System VC can be used in PS to manufacture products. It can be used to explode WBS and Network activities

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Wrap up
Configuration Cockpit One of the difficulties in VC, when modelling, is to have all the information available at your finger tips. For this purpose a configuration cockpit is available that allows us to navigate thru all relevant objects such as characteristics, dependencies etc. Transaction code used for this cockpit is PMEVC

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What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

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References
http://help.sap.com

http://help.sap.com/saphelp_erp2005/helpdata/en/ 92/58d455417011d189ec0000e81ddfac/frameset.htm
SAP PLM145 course Variant Configuration: Modelingand

Integration
www.adelante.com (VC101 a beginners guide to variant

configuration)

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What we will cover

Introduction VC for industries with configurable material Variant Production Cross module Integration Variant Configuration Concepts Wrap-up References Session Takeaways
Cogent IBS Inc. 2008. All Rights reserved.

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Session Takeaways
You now understand an overview of SAP VC with a simple example

that you see around you.

.but you feel that you just touched the tip of the ice berg SAP VC is a powerful and flexible tool, and can be quite complex SAP VC spans the whole organization (sales, engineering,

production, etc.) module

It is obvious that a VC project is not just implementing another There are many ways to make VC work for any organization, but it

is essential to find the optimal way to achieve it (functionalities, performances and maintenance etc.

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Q&A

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About Cogent IBS, Inc. Cogent Integrated Business Solutions, Inc. is an SAP focused consulting services company based out of Troy, Michigan, USA. CogSAP08 is a Cogent IBS, Inc. professional development event conducted exclusively for its employees.

No part of this presentation may be published or transmitted in any form without the express permission of Cogent IBS, Inc.

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