variant configuration and make-to-stock production - a wish or reality

SAP for Mill Products

Stefan Soeller, SAPSolution Management - IBU Mill Products & Mining

Variant Configuration and MTS Production A wish or reality?

© 2011 SAP AG. All rights reserved. 2

Configuration basics

Configuring a sales order line item results in- Production: Make-to-Order- Inventory: Customer specific stock

Configuring a production order always requires a relation to sales order stock / copy characteristics


Further Solution Discussion is part of DIMP

Automotive

Mill Products

SAP ECC Core

SAP ECC 6.0

EE EE EE IE IEIndustry & Enterprise Extensions

IE

Industry Extension DIMP

Automotive

Aerospace & Defense

Mill Products

High Tech

Engineering & Construction

Former add-on has become Industry Extension

Functionality still available

Shipped as part of the ERP Core Component

Only one IE can be active

Industry Extension DIMP used across several industries

Functionality originally created with background of only one of the DIMP industries

Processes running in oneindustry segment supported

Processes across differentDIMP industries not allowed

Individual check by SAP Custom Development possible

DIMP : Discrete Industry / Mill Products IE: industry Extension


Configuration in MTS – possible in three different scenarios

Sales Order

Different behavior inERP

ERP & external planning tool

Production Order

Possible with external planning tool e.g. APO


Configuration in MTS

Sales OrderMaterial Variant (MTS variant)



Pre-requisite:Material is batch managed

Customizing requirement class

Production OrderAny variant configuration material

Only possible with external planning tool e.g. APO


Active integration model / MRP type external planning


Changing Characteristic Values of configured MTS Material Variants

Change in sales order – ERP only

Business Background

Direct sales (e.g. metal service center, lumber, ….) utilizes MTS material

Customer request is different from what is available in stock :Available material / inventory: 10 feet tubeCustomer request: 9 feet tube

Sales rep needs to change material master data in sales order from 10’ to 9’

No MTO segment / NO individual customer requirement should be createdNo production order should / can be involved in cutting tube to length

Execution based e.g. on delivery documents (no capturing of cutting cost). See transaction MILL_CUT


Changing Characteristic Values of configured MTS Material Variants

Change in sales order – ERP only

Restrictions

Changed values are only considered during batch determination, pricing, quantity conversion, and in sales documents

ERP MRP does not consider changed characteristic values. In case of insufficient material in stock, MRP will create replenishment order for 10 feet length


Grade 1bCore Diam. 150Width 200Length 8 – 10 feet

Material Master Tube 123

Length 8 feetWeight ...

Tube 123Batch 1

Length 9.5 feetWeight ...

Tube 123Batch 2

Sales Order

Batch Determinationalso used for:

PricingPrint Sales DocQuantity conversion

Only production relevant with external planning system

Specified in Sales Order

Changing Characteristic Values of configured MTS Material Variants Example


Changing Characteristic Values of configured MTS Material Variants (ERP&APO) -1- Change in sales order – ERP & APO

Business Background

Same as before

Behavior of external planning tool e.g. APO

APO planning run is able to plan on characteristic level (while ERP can only plan on material level), and thus transfers changed sales order characteristics to APO planned order

APO pegging connects sales order with planned order based on characteristics

APO orders transferred to ERP as a MTS production order with configuration of sales order


Changing Characteristic Values of configured MTS Material Variants (ERP&APO) -2-

Change in Sales order – ERP & APO

MotivationClassical Make-to-Order has limitations in planning

Planning run cannot access stock from other sales orders

Inability to increase quantity of planned orders to e.g. utilize its quantity lot size optimization not possible

Sales order stock could only be moved into make-to-stock segment with material master price (not considering sales order configuration)

Use Make-to-Stock production with configurable materials

Provide additional flexibility for supply chain planner in APO by modeling sales order driven make-to-stock (Best Practice Primary Steel concept)


Make-to-stock production with configurable materials (APO)

Sales OrderConfigure MTS-item

Planned Order APOMTS-item with own configuration

Production Order ERPMTS-item with own configuration

Support configuration for MTS item in sales order and production

Customizing of requirement class;batch managed

APO ensures that characteristic values are passed to planned order

Characteristic values are passed on to production order in ERP without sales order reference

APO pegging connects sales order with planned order based on characteristics

Goods Receiptof MTS item (batch)


Configuration in MTS

Sales OrderFully Configured Material Variant (MTS variant)




Customizing requirement class

Production OrderAny variant configuration material

Possible with external planning tool e.g. APO


Active integration model / MRP Type external planning


Configuration in MTS Production Orders

Enable the production planner to generate a MTS production order with the header material configured to his needs

Use Cases

The production planner has knowledge of future incoming demand and needs to be prepared with e.g. semi-finished or finished goods in inventory to quickly satisfy the demand

Material produced is a trial version for internal or external usage

Excess inventory (e.g. cancelled SO) / damaged / doesn’t meet original quality requirements / … needs to be processed to be sold at a later time

…


Create Production Order – DIMP specific

1 2

Characteristic values can be edited

No sales order assignment required

1

2

Thank You!

Contact information:

Stefan Soeller, SAP CanadaSolution Management – IBU Mill Products & MiningEmail: [email protected]


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variant configuration and make-to-stock production - a wish or reality

Documents

sap ag

order inventory

replenishment order

createdno production

sales documents erp

mts production

sales order line item

mts possible