From a process view, sales-order-related production (MTO scenario) can be divided into twelve steps, which can be further grouped into five sections as follows:
- Sales Order Creation
- Production Order Creation
- Production
- Delivery
- Billing
The process starts with creating a sales quotation for the customer and ends with billing of the sales order.
The following twelve process steps need to be performed in order to produce and sell bikes in sales-order-related production in The Bike Company.
- The first step is to create a sales quotation for the customer.
Once the customer has accepted the quotation, the second step is to create a sales order with reference to the sales quotation for the offered product or products.
This sales order may be comprised of several sales order items when several products are ordered.
Note
If the customer orders without asking for a quotation first, it is also possible to create a sales order without reference to a sales quotation. In this case, the first process step is omitted.
The third step is to carry out Material Requirements Planning (MRP) for the sales order to create one (or several) planning order(s).
Note
Purchase requisitions may also be created, but this is not included in our scenario.The fourth step is to convert the planning order into a production order.
The fifth step is to release the production order.
The production order references the related sales order.
Note
If the product ordered in a sales order item has a multilevel BOM, other materials may have to be manufactured with reference to the sales order item if the materials are controlled by individual requirements.
Then, during MRP for the finished good, several planning orders may be created for these dependent requirements and subsequently converted into production orders.
- The sixth step is to pick components, which are listed in the product’s BOM.
The seventh step is to confirm assembly activities to a production order.
Once the ordered product is finished, it is then transferred to the sales order stock.
- The eighth step is then to post the goods receipt for the production order.
- The ninth step is to create delivery with reference to the sales order.
- The tenth step is to execute picking.
- The eleventh step is to post the goods issue.
- The process ends with the twelfth step, which is billing.
The twelve steps are discussed in more detail from a management accounting perspective in the following units. The focus of the content is on the mechanisms and parameters that are relevant for management accounting, especially for the logistic process steps.
In this context, please note that, from an accounting perspective, the production-related process steps are described using the Event-Based Production Cost Posting solution. For more information on this solution, see the SAP S/4HANA scope item 3F0.
Note
The resulting financial accounting postings from scope item 3F0 are described in detail in the following course: Evaluating Production Accounting in Make-to-Stock Scenarios in SAP S/4HANA.
In this course, it is assumed that the Event-Based Production Cost Posting solution, as well as the resulting financial accounting postings, are known by the learner and are therefore not discussed in detail again.