Sales Order Processing with Engineer-to-Order Production 

Example: Turbine

In this example, the sales order processing for complex products in the engineer-to-order production, such as a turbine, is presented. This is an example of a process, the elements of which are combined with elements from other processes.

Purpose

As a manufacturer of turbines you produce your products for large, capital-intensive projects. Since you specially tailor each turbine to the requirements of your customers, each sales order involves you spending a great deal of time on design and development.

You can pre- plan one part of your assembly. In your SAP system, you have created material BOMs for all of the assemblies that you produce in either an identical or slightly modified form.

For each sales order, you modify pre-planned assemblies and, when necessary, design new assemblies from scratch. The design takes place in a bottom-up-process, in other words you design assemblies on the lower levels of a multi-level BOM and later insert them into the higher levels.

Design and production take place partly parallel to each other: Some assemblies have a long replenishment lead-time . You start the production of these assemblies at a time when you are still designing other assemblies.

Prerequisites

Master data

You have created a material BOM for your T-20000 turbine, which contains, among other things, the following components:

T-20100

Turbine ca sing

T-20200

Running gear

T-20300

Generator

T-20400

Control unit (rack)

Some of these components are themselves assemblies.

Process Flow

In the course of the sales meeting you realize that the T-20000 turbine, for which you have already created a material BOM, is the closest match to the requirements of the customer. However , sales-order-specific modifications are necessary for several assemblies.

Furthermore, the customer requires an extra coolant pump due to the climatic conditions at the usage site. Due to the high density of sand and dust particles at the usage site, the casing of the coolant pump has to be especially protected to avoid the penetration of such particles.

Until now, you have not produced a coolant pump that matches these criteria. Therefore, you also do not have a material BOM for it. You have to design this coolant pump especially for this customer.

  1. You create a sales order.

In the sales order item 10 you enter the material T-20000.
  1. You create a project with the number T-22223.

You create a network. You maintain the reference points in the network operations.

  1. You want to carry out sales-order-specific modifications to the turbine casing and the running gear. To do this, you fix the corresponding BOM in the order browser.

The system then creates order BOMs as copies of material BOMs. You carry out the necessary changes to these order BOMs so that the product matches the customer requirements. The changes that you make to an order BOM do not affect the material BOM with the same material number.

  1. You design the extra coolant pump especially for this sales order. You do not yet know at which point you are going to integrate the coolant pump into the multi-level BOM. You create the following data in the SAP system:
    1. You create a new material with the material number P-110 for the coolant pump.
    2. You manually create an order BOM for the material P-110.

You see a detached order assembly. The detached order assembly is linked to the sales order item but not, however, to the multi-level BOM.

  1. Once you have designed the coolant pump P-110, you want to start the production immediately so that it is available on time. Therefore it is not essential that the design for the entire turbine is completed.

See also:

Assemblies with a Long Replenishment Lead Time
    1. You create a network operation for the assembly of the coolant pump P-110.
    2. You maintain the reference points in the network operation and in the BOM items.
    3. You transfer the order BOM for the coolant pump P-110 to Project System.

If you trigger a multi-level BOM transfer for the T-20000 turbine, the coolant pump P-110 is not transferred with it because it has no relation to the header material for the T-20000 multi-level BOM. Therefore you have to trigger a BOM transfer especially for P-110.

To ensure that the requirements are later correctly allocated in the final BOM transfer, you first generate preliminary requirements.

The system assigns the BOM items to network operations with identical reference points. The components of the coolant pumps P-111 and P-112 are therefore assigned to the network operation 3000.

  1. Now you want to generate planned orders in MRP for the coolant pump components. To do this, you carry out the following steps:
    1. You determine that the network operation 3000 (advance procurement) is relevant to requirements.
    2. You execute a planning run.

The system generates planned orders for P-111 and P-112, which you can convert into production orders.

  1. At a later date you finish the design for the entire product.
    1. You include the coolant pump P-110 in the BOM for the T-20000 turbine.
    2. You determine that all network operations are relevant to requirements.
  1. You trigger a BOM transfer for the T-20000 turbine again.

The system settles the preliminary requirements generated by the first BOM transfer against the newly generated requirements.