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K V Kumar
May 11, 2014 3 minute read

Make to Order strategies – Strategy 20

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1 Like 10,437 Views 11 Comments

Hi,

Strategy 20 – Pure make to order is one of the strategies of Make to Order in Demand Management..In this 20
strategy product is speci cally manufactured for a sale order or customer order…There is no forecasting
involved. Sale order or customer order will be the trigger point for production…

This strategy is useful or applied in the following situations in the industries..

1. Product is very slow moving product in the market…

2. You cannot anticipate the future forecast of the product

3. Product is newly launched in the market

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4. Product is very costly product and you can not keep the inventory or stock in the plant…

The sales order quantities are planned for production using the sales order number. The quantities produced for the
individual sales orders cannot be changed. Each quantity is maintained specifically for the individual sales order. A
separate segment is created in the MRP list or Stock req. list (MD04) for make-to-order production.

Process ow of Strategy 20:

1. Creation of sale order  – VA01

2. MRP run – MD01/MD02

3. Planned order conversion to production order – MD04

4. Production Execution – CO02, MB1A, CO15, MB31

5. Sale order stock in plant- MD04

6. Delivery of the stock to customer against the sale order – VL01N

Settings Required for Make to order strategy 20 :

Maintain  planning strategy 20 in the material master in MRP 3 view in as shown below….

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Detailed Process ow…

Initial situation of material with 299.5 KG unrestricted use stock..this stock is kept make the understanding of
di erence between unrestricted stock and sale order stock…

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Now create sale order for the product with VA01

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Now save the order…

Now check in MD04…

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Now create one more sale order for qty 200 same as above with VA01…after the creation of second sale order
situation in MD04…

here you can observe that two sales orders managed in di erent segments independently…

Now carry out MRP run with MD02….

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Now check in MD04..You can observe that two separate planned orders are created for each sale order…even
though there is a stock of 299.5 KG it is not considered in the net requirement calculation..

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Now convert the rst planned order to production order and then release

here you can observe the sales order reference in the production order as shown below….

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Now release the order and save the order…after this situation in MD04…

Now convert the second planned order of second sale order to production order as shown in the above
procedure and release the order…now situation of MD04…

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Now after the completion of production activity complete the Goods issue, Con rmation and Goods receipt of
the two production orders….

Now you will sales order stocks as shown below in the MD04…these stocks are not unrestricted use stocks like
299.5 KG

Now make the delivery of the rst sale order

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Now complete Post goods issue…

Now after this delivery sale order and sale order stock both disappear from MD04 as shown below…

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Alert Moderator

Now complete the delivery for the second sale order also with VL01N as per the procedure shown above….
Assigned tags
Now nal situation of MD04….
MAN Production Planning (PP) | SD (Sales and Distribution) | make to order | sales order | sap |

View more...

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11 Comments
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ANIKET GAUTAM

May 12, 2014 at 9:41 am

Nice document keep sharing…thanx a lot

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Former Member

June 2, 2014 at 9:40 am

This Is Good to see for MTO. Can you share additionally settlement in MTO.

Thanks

KB

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Former Member

June 2, 2014 at 11:58 am

Very useful…thank you!

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K Kumar | Post author

June 10, 2014 at 4:54 am

Hi All,

Thanks for appreciation…

Thanks

Kumar

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ANIKET GAUTAM
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ANIKET GAUTAM

June 10, 2014 at 5:24 am

Hi thanx for doucment.

can plz tell in short what setting we require for that for pp or SD point of view for creating planned order from
sales order,

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Ameya Beri

October 25, 2014 at 7:27 am

Very good document, can you please share an assemble to order scenario too 🙂

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Former Member

February 15, 2015 at 1:17 am

good one thank u

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sushant katekar

June 3, 2016 at 8:04 pm

Fantastic document ..keep it up

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Former Member

November 26, 2016 at 9:41 am

good document…. can you post the step by step document for strategy group 25

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Sanjay Chavan

May 7, 2017 at 12:53 am

Very nice document

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Dharma Theja Kavuturu

October 9, 2018 at 9:18 am

Dear Kumar,

Great document for PP beginners.Request your valuable time to clarify below some of my doubts.

1)Is there any setting to be conformed by PP module @sales views (Sales org-2-item category group-001)  in
the Material master

2)If I have one RM component in the BOM, what is the startegy type I have to select ? [after I Run MD02 for
FERT, RM components also to be planned and I have to procure to manufacture this FG}.

Regards,

Theja

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