This document outlines the necessary master data and process configuration for a Make-to-Order production scenario in the SAP PP Module. It describes setting up views for demand management and production planning, lot sizing procedures, procurement settings, and availability checks. Key steps in the process flow are creating a sales order, generating production orders, goods issue and confirmation, order settlement, and delivery and billing. Configuration of BOMs, routings, work centers, and activity types is also required to be set up correctly for this MTO process.

1. Process change Document SAP PP Module
MTO – Make To Order
In make-to-orderproduction,aproductisproducedspecificallyforanindividual salesorder.Thisplanningstrategyis
usedwhenplanningof the (parent) productisnotrequiredornotpossible.NeitherDemandManagementisinvolvedin
thisprocess,noris there an allocationmechanism.Ordersare takenastheycome.Thisstrategyrepresentsaproduction
procedure inwhicheachproductis onlyproducedonce,althoughovertime the same orsimilarproductionprocesses
are repeated.Eachproductisspecificallyproducedforanindividual customersothatthe finishedproductisrarely
placedinstock.
So that we needtosetright the masterdata to support“MTO – Make to order “scenario.
MaintainviewsinMM01  MRP Views
1. MRP1/MRP2/MRP3/MRP4 (Selectall fourviewsfordemandmanagementandProductionplanning)
2. Work schedulingview (Mandatorytocreate Productionorder)
3. Qualitymanagementview (MandatoryforQualityinspection)
4. Accountingviews
5. Costingviews
MRP Procedure:
MRP Type - PD MRP
MRP Controller -
Lot-sizingprocedure:
Lot size - EX Lot-for-lotorderquantity
Procurement
Procurementtype - E (In-house production)
Backflush - 1(Always Backflush)
Backflush Indicator: Determineswhetherthe Backflushindicatorissetinthe productionorder.
Here,a 3-level hierarchical logicisapplied:
1. In the routing,the Backflushindicatorissetinthe componentassignment.
2. In the material masterrecord,the Backflushindicatorhasthe characteristic"AlwaysBackflush".
3. In the material masterrecord,the Backflushindicatorhasthe characteristic"Workcenterdecides",the indicator
beingsetinthe work center.
Each material componentisassignedtoan operationin the production order.

2. If a material componentisback flushed,the systempoststhe withdrawalonlyupon confirmationof the operation.The
withdrawal isthenpostedautomatically.
SchedulingMarginKey for Floats
Keythat the systemusestodetermine the floatsrequiredforschedulinganorder.
1.In-house productiontime: Specifiesthe time inworkdaysneededtoproduce the material in-house,In-house
productiontime isindependentof the orderquantity.
2. Goods ReceiptProcessingTime inDays
3. SchedulingMarginKey
Planningstrategy group
The strategygroup groupsall the planningstrategiesthatcanbe usedfor a particularmaterial.The planningstrategy
representsthe procedure usedforplanninga material andis(technicallyspeaking)controlledbythe MRPtypes.
Strategygroup - 20(Make-to-orderproduction)
AvailabilityCheck
AvailabilityCheck - 02 Individual requirements forSFG/FG.
Work scheduling
Productionsupervisor - P72
Quality Management
Inspectiontype - Needtosetup.
Accounting1 View
Price Control - S (Standard) forSFG & FG & V (Movingaverage price forRaw materials)
Costing1 view
Material Is Costedwith Quantity Structure
If you alwayscostyour materials(includingrawmaterials) usingcostingwithquantitystructure,youshouldturnonthis
indicator.Thisimprovesperformance,because the systemdoesnotsearchunnecessarilyforexistingcostestimates
withouta quantity structure.
Regardlessof the setting,youcancost a single material withorwithoutquantitystructure.However,youshouldbearin
mindthat thissettingisalwaysusedinthe costingrunand inmixedcosting(creatingprocurementalternatives).
For everycostestimate,the systemsearchesforexistingcostestimatesthathave the materialsintheirstructure.If
withinthe periodacost estimate exists and hasbeenreleased,the systemcopiesit.
1. If thisindicatoris set,the material iscostedusingcostingwitha quantitystructure.
The systemsearchesforany existing costestimateswithquantitystructure forthe individualmaterials;itignores
existingcostestimateswithoutquantitystructure.If the systemdoesnotfindanyvalidcostingdataforthe materials, it
looksforan existingcostingbasedonthe entriesinthe transfercontrol,coststhe material,oraccessesthe price inthe
material master.
2. If thisindicatoris not set,the plannedcostsforthe material are calculated usingthe costestimate withoutquantity
structure.Inthis case,youuse unit costing to create the quantitystructure manuallybyenteringcostingitemsfor
materialsandactivitytypes,forexample.

3. The systemnowsearchesforany existingreleased costestimateswithoutquantitystructure.If acostestimate without
quantitystructure existsforamaterial,the resultsof thiscostestimate are includedinacostestimate withquantity
structure.If there isno cost estimate withoutquantitystructure,the costestimate withquantitystructure accessesthe
price inthe material masterrecord.The plannedcostsforthismaterial thengointothe cost estimate withquantity
structure as raw material costs.
Thisdoes not applyif the indicatorIgnore prod cost est w/o qty issetin the costingvariant.
Variance Key
Keythat controlsvariance calculation.
Variancescanonlybe calculatedforthe ordersforwhicha variance keyhas beenentered.Thiskeyisdefaultedthrough
the costingviewinthe material masterrecord.
If you have activatedvariance calculationinthe variance key,the valueof the scrapis calculatedattarget cost and
subtractedfromthe actual costs before the variancesare determined.
Material-related origin
If this indicatorisset,the material numberwillbe writtentothe costelementitemizationinthe Controllingmodule.
If you set thisindicator, the costs incurredwill be updated
•Under a primary cost element
•With reference tothe material number
NewMaster data – Decidedby ProductionDept (Kindlycheck with shareduser manuals)
1. Material (MM01 –No needif available)
2. BOM (CS01-Noneedif available)
3. Activitytypes – Will be plannedaccordingtothe Nomenclature &ActivityPrice.
4. Work center(CR01)
5. Routing(CA01)

5. Processflow is a Make to Order scenario (Strategy group - 20 MTO)
Internal order(KO01/KO02/KO03) Followingin Business
Create Quotation(VA21/VA22/VA23) FollowinginBusiness
1. Salesordercreationfor customer(VA01)
2. DemandManagementviaSalesorder(MD51)
3. Stock/RequirementsList(MD04)
4. ConvertcomponentplannedordertoPR(MD04) Purchase orderMIGOMIRO.
5. Convertfinishedmaterial plannedordertoproductionorder(MD04 / CO41)
6. Release of productionorder(CO02)
7. Goods issue tothe productionwithmovementtype 261(MB1A) makingby Back flush
8. Confirmationof Productionorder(CO11N-operation/CO15-ProductionOrder)
Kindlycheckthe ActivityPrice inTransactionKP26Wrt Period,Costcenter,Activitytype.
9. Goods receiptagainstProductionorderwithmovementtype 101(MIGO) (ProductionorderstatuschangedtoTECO –
Change inCO02)
10. OrdersettlementforProductionorder(KO88)
Standardcost estimation: CK11N & Simulation costinginCKUC.
Kindly checkthe Price of SFG / FG.
11. Deliveryof Finishedproductswithmovementtype 601(VL01N/VL02)
12. Billing/Invoice (VF01/VF02/VF03)
We needtosetupBOM/Routing/Workcenters,alsowe came toknow thatthe activitytypes needtobe decidedforall
above the operations
Note:Bill of materialsforSFG or FG must be maintainedbeforethe productonorderconfirmation.
Displayof multi –level BOM
CS12 - Multi-Level BOM
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