Explaining Planning Strategies in SAP S/4HANA PP/DS for Make-to-Order

Objective

After completing this lesson, you will be able to explain planning strategies in SAP S/4HANA PP/DS for make-to-order

Strategy 20: Make-to-Order Production

Pure Make-to-Order Production

Sales orders trigger procurement and production.

Procurement or production is triggered by the sales order when using strategy 20. Pure make-to-order production (without planning of assemblies or components) is done in SAP S/4HANA using strategy 20.

Pure Make-to-Order Production – Master Data

The Individual/Collective indicators for the assemblies must be set accordingly in the corresponding master.

You make the settings for this strategy in the material master of the finished product (MRP 3 view). The Individual/Collective indicators for the assemblies must be set accordingly in the corresponding material master records.

Pure Make-to-Order Production: Example

Individual/Collective Indicator: Example

The graphic outlines an example of the Individual / Collective Indicator. The details are described in the text that follows.

The Individual/Collective Requirements indicator in the material master determines whether a component is procured for a specific customer requirement in an individual segment.

Options for the Individual/Collective Requirements Indicator:

The following are the options for the Individual/Collective Requirements indicator:

  • Indicator = 1:

    The indicator 1 for individual requirements means that the material is being specially manufactured or procured for a sales order. An individual segment is specially created for each requirement. An individual requirement is only created if the higher-level material does not generate a collective requirement.

  • Indicator = 2:

    The indicator 2 for collective requirements means that the material is produced or procured for various requirements. The requirements are contained in the net requirements segment.

  • Indicator = blank:

    The indicator left empty means that the component is planned in the same way as the higher-level assembly. If the indicator represents the finished product produced in make-to-order production and the indicator is blank, the constraint for make-to-order production replaces the entry with 1, which means individual requirements only.

In the example shown in the figure, two individual segments (for sales orders A and B) are created for the shaft.

If you want to control the material item for each BOM individually, use the Explosion type field in the component’s item data (General Data view). The setting in the BOM overrides the setting in the material master.

Individual / Collective Indicator – Pump P-100

The graphic outlines an example of the Individual/Collective indicator for pump P-100. The details are described in the text that follows.

All materials that appear under one material in collective requirements in the BOM are planned as collective requirements (inheritance) irrespective of the setting in the material master.

How to Execute Make-to-Order Production

DemoStart Demo

Execute Make-to-Order Production

ExerciseStart Exercise

Strategy 50: Planning without Final Assembly

The graphic outlines planning at finished production level using planned independent requirements.

As in make-to-order production, planning without final assembly (planning strategy 50) enables you to manufacture products specifically for a customer. However, with this planning strategy, certain assemblies should be produced or procured before the sales order for the finished product is received. At first, production does not extend to the finished product level. The material is produced up to the production stage before final assembly. The assemblies and components are stored until the sales order is received. Final assembly is only triggered upon receipt of the sales order. This strategy is useful if a large part of the value added process occurs at final assembly.

Planning, which is independent of the sales order, takes place with the help of planned independent requirements. These planned independent requirements are created for the finished product. In the planning run, the system first creates planned orders for the finished product to cover these requirements. You cannot convert these planned orders into production orders (planned orders without a conversion indicator and the order type VP). You can only convert planned orders into production orders after receiving the sales order. This process triggers final assembly. However, in case of material shortage, the system creates planned orders at assembly and component levels in the planning run. These planned orders can be converted into production orders or purchase requisitions since production and procurement should have already been triggered for the lower production levels before the sales order is received.

The planning without final assembly strategy enables you to reduce delivery times (since production can access existing assemblies and components without delay) without having to carry out final assembly for the product.

Planning Without Final Assembly (50): the Sales Order

Example

Consider a situation in which a planned independent requirement of 100 pieces exists and you receive a sales order for 40 pieces, which consumes the planned independent requirements. In this situation, the sales order for 40 pieces remains in the individual customer planning segment and a planned independent requirement for 60 pieces in the forecast segment. As soon as you plan the product again in the next planning run, the system creates a planned order for 40 pieces in the individual customer planning segment, which you can convert into a production order. At the same time, the system reduces the existing planned order in the planning segment from 100 to 60 pieces.

Planning Without Final Assembly (50): Master Data

Stocking Level

The graphic outlines stocking levels. The details are described in the text that follows.

If a large part of the value added process occurs at final assembly, use planning without final assembly (planning strategy 50). The final assembly is not triggered until a sales order is available. The storage level is always below the finished product level.

Flexible Determination of the Stocking Level (50)

If you do not wish to create IndR (that is, of VP status) planned orders in all BOMs for a particular material, you can assign the Planning off explosion control indicator in the Basic Data for the BOM item. You define this indicator under Define Explosion Types in Customizing for BOMs.

Planned Orders in the Planning Segment

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