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hey guys welcome back to my channel except with ik hope you're all doing good so today's topic will be on the make to order scenario in terms of the production planning and this is going to be a live scenario in SAP with the transactions and also the scenarios that we'll have to run in the make to order process and we'll also discuss what are the prerequisites in order to enable the make to order for a product that we will be manufacturing and we'll also see how to control the consumption and the planning of raw materials underlying the bill of material in case of a make to order so let's get started [Music] so for today's topic we will be taking an example of a turbine which is considered as a finished product in sap and under this finished product uh you might you know that we'll use several semifinals to several Phantom items and also raw materials in order to manufacture the entire turbine right so there will be a huge list of components under the finished product but to simplify for the ease of understanding I've just created a simple structure which has a finished product and under that we have a semi finished and below the sfg we also have the components C1 C2 and C3 so these three are the components that will be used to manufacture the sfg and then this sfg will be converted into a finished product after performing few operations so here in the make to order scenario this would be uh you know the standard way half the planning of the raw materials of or the finished product will be taken place in sap in case we go with a make to order so the first thing is uh the finished product for which we are going to create a sales order in case of a make to order and please note that we'll have to assign this strategy group 20 into the material Master only for the finished product and not for the rest of the components under it right so once we assign this make to order then the FG will be put into a sales order right and once we have the sales order only then the production activity or the purchasing activity will be started so if we look at the stock statistics uh for this uh in this particular structure or maybe the scenario one the FG will always be posted into this special stock so which is uh also treated as the customer stock so the sales order uh when we created for the FG we do insert the ship to party and the soul to party which is nothing but our customer right so that particular customer will be assigned with this particular stock that will be Manufacturing in this scenario so whenever you create a sales order for the uh for the finished product the dependent requirements will be transferred to the down level items in the Bill of material so here under the Beloved material of the FG we have the semi finished or the sfg code so this will also be considered as a special stock so once we manufacture this product and do the goods receipt of the production order or the process order typically in case of a make to stock the the manufactured quantity will be posted into the unrestricted use right but in case of this scenario of a make to order the quantity will be posted into the special stock which is also called as a customer stock right so even though we have sufficient quantity available in the plant to meet the requirement against this particular finished product which is coming from the sales order so that will not be considered as the available stock right so let's say we create a sales order for 10 pieces of the FG material and you already have a stock of 20 pieces in the inventory so that will not be considered into the planning and again it creates a new planned order for the finished product against the sales order with the reference of an account assignment okay so once you convert this planned order into a production order or a process order the account assignment will be carried starting from the top level till the last level of the Bill of material so these semi-finished item will also have a planned order if it is in-house manufactured and again the account assignment of the same sales order coming from the FG will be transferred to the semi-finished item in the same way when we talk about the raw materials so the purchase requisitions and the purchase orders these replenishment elements will also be account assigned to the same sales order that has been assigned or created for the finished product so this is a standard we have this works in the make to order and we are going to consider it as a scenario one so now if we go into the second scenario where in which you might have a specific condition in the plan saying that for the raw materials I don't want to use this special stock category but I would like to consume these raw materials based on the available quantity in the inventory right so here uh the consumption or the availability of these components should be checked at the unrestricted stock level right and whereas the special stock will be treated for the other components and also the semi-finished item so this is another way we are going to discuss in today's session and see what settings we'll have to implement in order to achieve this particular scenario in consuming the components from the unrestricted stock coming to the third scenario so in this slide we can see that so starting from the finished product until the components until the last level of the components everything is being managed with the unrestricted stock so if it is understated stock it this wouldn't fall under the make to order itself right so this scenario three is actually ruled out I mean this is not how it works in case of a make to order Okay so just uh keep in mind that the special stock will always be considered for the finished product in in case of a make to order scenario so now let's get into sap and see what are the prerequisites in order to enable the make to order and have to manage the planning of the of the components in case of a MTO scenario so here I am in sap now let me go to md04 and look at the statistics of the material that we'll be using in today's example so am2 600 is my material or the finished product right so if we look at the statistics of this material so which is a finished product let's consider it as a finished product but it's a semi finished so you can just ignore the material type and we are going to treat it as a finished product and if we look at the Beloved material for this product going to cs03 and we could see that there is another component like component one and component two under the bill of material so now going back to mdo4 and if we look at the stock statistics we do have an availability of four pieces in the unrestricted use so if we look at the settings in the material master I have just assigned the strategy group 20 which is a make to order okay and the mode of manufacturing sorry the mode of procurement is in-house manufacturing for this material so now let me create a demand for this material through a sales order going to va01 so we'll assign a ship to party and a sold to party and also the material code am 2-600 and the order quantity I'm going to use now is just two pieces just to show you that we have a requirement that is less than the available stock in the inventory and the plant is one thousand okay now save the sales order please so here our sales order number is 19390 so let's go back to MD's o4 and refresh the list so we can see the requirement has been triggered in mdo4 so if we look at the net requirement calculation so here we have an available quantity of four but still it has been ignored by the sales order so we are not going to use the available stock so instead a system has generated a requirement for this particular sales order so there could be a few other scenarios uh you could say that I already have a sufficient inventory in the plant and my customer is uh you know forcing me to ship that particular item and we are into the make to order scenario so in that case you can do uh transfer posting from the unrestricted stock into the sales order stock through the transactions amigo so for now I'm going to run MRP for this material so MRP has been executed and we could see that we have one planned order and one purchase equation created and then the dependent requirements are two since we have two components in the Bill of material so if I refresh the mdo4 I expect to see a planned order that is actually created to fulfill the requirement coming from this particular sales order for two pieces so if I just do a drop down under this planned order and in the order progress report to see the dependent requirements under it so we could see those two components right and then it says that this particular material is being consumed from the unrestricted stock and whereas the first component am 200 that has got a purchase requisition so if we go into the details of the first component so here we have an available stock of 11. and then we have the dependent requirement which we just created through the planned order for the am2 600 material and that has been created uh so for this dependent requirement we have a purchase requisition generated as well and now if the same way if I go to the component material which is a raw material so we have a sufficient inventory uh in the plant to meet the requirement of this two pieces right so let's see what settings should we change in order to make it completely make to order so in the material Master of the raw material if we go to The mrp4 View so here we have the individual Collective indicators so if we choose this as the collective requirements only in that case the make to order scenario will be ignored and the available stock in the plant will be assigned to the requirements coming from the sales order even though in case of a make to order right so this is one way where you can actually control the consumption of components irrespective of your sales order so you don't want to procure these raw materials again whenever you have a sales order being created instead you would like to issue or maybe consume the components that are already available in the inventory but if it is like a purely make to order and where in which the raw materials might be provided by the customer in some scenarios right so there could be a few scenarios where the raw materials could be provided by the customer themselves and we'll just do the manufacturing or the assembly process and then give the finished product to the customer so in that cases you would like to plan these raw materials only if the stock has been provided by the customer so in that case you can assign the individual Collective indicator as one or maybe just leave it as blank so the blank value it basically supports for both individual and Collective requirements so now I'm going to close this and go back to the md04 right so we'll go to the finished product yeah and the next step is basically to convert this planned order into a production order so I'm doing it right from here so in the production order we can also see the account assignment of the sales order and also the ordering party right so here we I mean if we have this field uh updated with the sales order number then it means that this production order is a complete make to order scenario and we are just manufacturing this quantity only for this particular customer okay and now if we go into the components okay we do have missing parts and that is for the component am 200 which has a purchase requisition so we'll come to that so go to the components and we see these two items coming from the bomb and here in the production order you see this column uh for the special stock right so based on the material Master settings that we just discussed on The mrp4 View in the individual and Collective requirements so this special stock indicator will be transferred from the Metal Master into this production order so let's see the values that we have here in this special stock right so if it is blank it means that the consumption of the raw material will happen from the plant stock and whereas if the special stock indicator is one it means that this is going to be consumed from the customer stock in the same way if you have a requirement to to consume it from a project stock or maybe a consignment stock so you can certainly assign these special stock indicators ingly so for now we'll go with the consumption of the first item from the special stock and the consumption of the second item from the unrestricted stock so I'm going to release the production order so the order has been released and do a refresh so here we can see that the production has been updated with the status released and the elements under this particular sales order will always be tagged uh to the sales order number itself so the first one that you see here is the sales order stock and the second element is the sales order number along with the line item and also the schedule line so the last one zero zero zero one this is the schedule line number and below that we have the production order so since we have not yet manufactured the finished product and not yet process the production order we see the stock here in the sales order stock section as zero so once we post the goods receipt against the production order that is where the stock will be replenished at the customer stock level but not at the planned stock okay so in order to First manufacture the production order we'll have to go to the component right I mean we'll have to make sure that the components are ready for use so for that I'll go to the md04 for the component which is to be purchased so this is the first component so despite of the available quantity we are still going to purchase this item in order to meet the requirement so if you have noticed uh earlier before we converted the planned order into a production order for the finished product we saw this as a dependent requirement and since now we converted the planned order into a production order it has been converted into an order reservation Okay so we are going to convert this purchase requisition into a purchase order let me choose a Wonder okay now that the purchase order is going to be created I'll just show you the account assignment tab here so in the account assignment we could see that the account assignment category is e which is the customer order and we can see the sales order number under this section under this particular Tab and you here in the uh header level you could also see the account assignment field updated with the indicator e okay and let's do a check and save the purchase order so now if I refresh the md04 departure requisition is expected to be converted into this purchase order right so now we'll have to bring in the stock for the purchase order right so let's assume that the supplier has shipped the goods into our plant and we are ready to receive it into the plant or the warehouse so here I'm going to do a posting against the purchase order from the Migo go to see it and then choose the category as the purchase order foreign okay so now if you see that in a normal scenario whenever you do a Goods receipt we will see the movement type as 101 right but here in case in this particular case we will see the moment I pass 101 with the special stock category as e right why because the stock will be posted into the special stock or the sales order stock so let me do a check okay or maybe I'll just check this stock in which storage location it is available okay it is zero zero one good okay let's do another check and then post it yeah the document is good and now we are going to post the goods receipt against the purchase order so the document is posted now if we go back to the md04 and do a refresh so we could see that the stock of 2 received from the purchase order has been moved or posted to the special stock or the customer order but not to the understated stock so if we go into the stock overview on the MMB so here we could see the difference so this is the available stock in the plant of 11 and this is the sales order stock of two pieces so if you'd like to see the details of the sales order stock then click on the detailed display icon so here we could see the sales order document or the sales order number and as well as the item which has been assigned with this a special stock so this talk lies in the unrestricted use but assigned to this particular sales order so no other requirement can actually consume this sales order stock unless you move this stock from the sales order stock into the understudy uh use manually through micro okay so since we have the materials in I mean ready for use so let's go back to the production of the finished product so it is am2 600 so now let's do the goods issue so go to Goods issue order and then paste the production order so here we could see two items coming from the production order which is again carried on from the Beloved material so if you look at the first item which is a make to order I mean that we just procured so it has a special stock saying that it will be consumed from the sales order stock and whereas the second item which is a raw material we are consuming it from the unrestricted use right if we look at the details of this item level under the detailed data you could see in the way tab it will be consumed from 261 e moment type but whereas for the second item we can see that the moment type should is just 261 right we don't have any special stock category here so I'm going to check both of these so check and do a check here and then do the consumption so now if the components have been consumed into the production order so we'll just make sure that the consumption has been updated and for that we can actually go into the production order and look at the status so here you could see that this status has been updated as GMP gmps which means that the goods movement have been posted and also we can look at the documented Goods movements from the go to uh in the header menu and then we can see that these two are the components that have been consumed okay enough the next step is to pause the confirmation of the operations in the production order so for that we are going to co11n so in terms of the confirmation there wouldn't be any difference uh it could be a make to order or a make the stock but that doesn't make any difference because we are just confirming the activities so there are no stock moments involved in this unless you go with the the backflash or an auto gr scenario so I'm going to post this confirmation so now the confirmation has been posted and we can verify that in the production order again with the status go to the header screen and here we should see the status as CNF CNF means it has been finally confirmed and again if you go with the partial confirmation you would see the status as pcnf so pcnf basically stands for a partial confirmations so right now we have posted the goods issue and then we have posted the confirmation and the next step is to post the goods receipt against this production order so I'm going to copy this order and go to the transaction amigo cool so I choose the category as Goods receipt and the order as yeah choose it as a production order and then the delivery note if you mandatory things here and again the storage location to which the stock should be posted so item okay and then do the check okay these are a few prerequisites so I'm just uh giving some dummy data out there the goods recipient okay that should be here okay again do a check so now it is good to be posted so here the moment type if we go into the detailed data so here we could see that the moment type is 101 e right I E again stands for the special stock or the sales order stock and now this stock will be posted into this sales order stock right so I'm going to post it so before we post this Goods receipt let's take a look at the stock statistics one more time so we have four quantity available in the plant and zero in the uh sales order stock right so now I'm going to post it okay the document has been posted and if I do a refresh so here the stock has been updated in the customer stock but not in the available uh stock or the understated use so this talk uh it has been hard assigned or maybe hard picked or hard linked so we can use this terminologies while linking the stock to the sales order so this has been hard linked to this particular sales order or the customer and no other customer or maybe a different sales order or maybe a different requirement for this material cannot actually consume this particular quantity that has been allocated to the sales order so unless you do any manual transaction while I mean going into my go and do a transfer posting from the special stock to the understated stock but automatically system is not going to allocate this sales order stock right so the only way I mean in case of any urgencies or a special scenario where you would like to move the stock from one sales order to other sales order or maybe one customer to the other customer only then it would be possible through Migo and the movement types would be uh depending on what scenario are you trying to do so here uh there could be a different moment type while transferring the stock from one sales order to other sales order and there would be a different moment type when you are trying to post the stock from the understated uh sorry from the customers talk into the unrestited stock and again in the same way if you would like to move the stock from the unrestricted use or the available stock in the plant to the sales order stock so again there would be a different moment type again so unless you do any manual activity this talk will not be allocated to any other requirements coming into this material so that is of the make to order will work and please make sure that you just assign the strategy group only into the product that will be assigned into the sales order and the low level items or the items under the Beloved material are not required to be updated with this strategy group and then the other setting is for the raw materials if you would like to go with the consumption of this material from the plant stock or the special stock that would be controlled based on this individual and Collective indicators so let's say your master data has been set up with the individual requirements only right so in this case we will have the special stock indicator in the production order updated right so if I go into the production order so here in the production order if we go into the conference overview screen so we have this special stock indicator so maybe for this particular production order you don't want to consume this material from the special stock but you would like to consume it from the understated use so here itself you can remove the special stock indicator so you can just make it as blank right and you let's say if it is been consumed from the understated stock based on the middle Master setting and then you would like to make it to be consumed from the sales order stock then you can assign the special stock indicator here as well right so though you have those settings defined in the material Master but only for this production order you would like to do it in a different way you can actually play with these settings in the special stock assigned to the component overview screen so that is how the make to order scenario works and also uh the management of components and their consumption based on the stock availability can be controlled with the special stock indicators and uh the individual Collective indicators from the material master foreign