Current Process Step
As already described in the previous unit, planned orders are created by material requirements planning as planned material receipts to cover requirements. In the case of in-house production, planned orders are then converted into production orders close to the time of production. In this unit, we will discuss which methods the Bike Company can use to convert planned orders to production orders.
Planned Order Conversion Options
There are 2 options to convert planned orders into production orders: The collective conversion and the individual conversion. Let's take a closer look at these 2 options:
In most cases, multiple planned orders are converted into production orders at the same time. Based on the Bike Company's business requirements, they can convert planned orders into production orders using collective conversion. During conversion, the system converts each planned order into exactly one production order (resulting in n production orders for n planned orders). To select planned orders to be converted, you can specify various selection criteria, for example plant, MRP controller, opening date, material, and so on.
Alternatively, the MRP controller from the Bike Company can manually convert one planned order into one production order using individual conversion or even create several production orders from one planned order by means of partial conversion (for example, if the manufacturing resources are not available due to unplanned events or if there is a component shortage). When converting one planned order, it is deleted and replaced by the production order.
On component level, dependent requirements are replaced by reservations once the planned order was converted into a production order.
You can, at any time, also manually create production orders, for example in the case of urgent, unplanned orders such as repairs or customer order. In this case, material, quantity, and date must be entered manually when creating the order.
Time-Oriented Collective Conversion
When converting planned orders to production orders, you usually convert the planned orders that are due for production in the near future to production orders. This process is called time-oriented collective conversion.
Watch the following video for more details:
Convert a Planned Order into a Production Order
For the sake of simplicity, we will show how you convert an individual planned order in the SAP S/4HANA system and the effect of order conversion.