MTO & MTS in SAP_Product Costing

MTO & MTS in SAP Make-to-Order

Make-to-order production is a process in which a product is individually manufactured for a  particular customer. Stock keeping is not usually carried out for products that are made to order. The primary benefits of this process are the ability to track the progress for the sales order and the flexibility to offer to the customer the products to meet their specific requirements. The  benefit also lies in tracking the costs incurred in the servicing servicing of the sales order in the manufacturing of the goods and the ability of arrive at a profitability of the sales order. Make-to-Stock 

In make-to-stock production scenario stock is produced independ ently of orders because you want to provide your customers immediately with goods from that stock later on. ou might even want to produce goods without having sales orders! if you expect that there might be customer demand in the future. This This means that make-to-stock make-to-stock strategies can support a very close customer-vendor relationship because your ob"ective here is to provide you r customers with goods from your stock as quickly as possible p ossible Major Steps: •

Sales activity # Sales order is created with reference to customer order $customer %&'

•

Planning activity # %lanned orders are generated as output of Material (equirement %lanning $M(%' )ith reference to Sales order 

•

Ext. procureent # (equired components procured externally using purchase order $%&'

•

Su!contracting # %rocured components send to the subcontracting vendor * received semi finished product

•

•

Production # Semi finished product processed internally and gives output as final  product+,ssembly "elivery activity # elivers final product+,ssembly to the customer against Sale order.

Steps in SAP:

reate materials with required views / MM01 Maintain I2 master data / 31I reate 4ill of Materials $4&M' / S01

reate (outing to 5inished material / ,01 reate sale order / 6,01 (un M(% / M70 6iew the planned orders created / M08 onvert component planned order to %( $%( will show a+c assgn cat as M' / M08 onvert semi finished planned order to %( $%( will show a+c assgt cat 9M: * item cat. 9;:' / M08 onvert component %( into %& for external procurement / Moods receipt with reference to sale order / MI>& 6iew the stock $sale order stock' / MM4< reate subcontract %& with reference to semi finished %( / M& (econciliation of challan / 31I5A omplete challan / 31I51? onvert finished material planned order to production order / M08 >oods issue to the production with movement t ype =B1 / M41, + MI>& onfirmation of %roduction order / &17 >oods receipt against %roduction order with movement type 101 / M4?1+MI>& &rder settlement for %roduction order / C&DD elivery of 5inished products / 6;012 MTS in S,%