In make-to-order production, a product is produced specifically for an individual sales order. This planning strategy is used when planning of the (parent) product is not required or not possible. Neither Demand Management is involved in this process, nor is there an allocation mechanism. Orders are taken as they come. This strategy represents a production procedure in which each product is only produced once, although over time the same or similar production processes are repeated. Each product is specifically produced for an individual customer so that the finished product is rarely placed in stock.
You have the following two options.
- Be able to do the following:
- Procure all necessary components within the total replenishment lead time
- Plan on component level
- Use consumption-based components or Kanban-based components
- Receive the sales orders at a very early stage with regard to the replenishment lead time.
You also must maintain the following master data settings for the finished product:
- Strategy group 20 on the MRP screen
- Item category group (such as NORM) on the Sales Organization screen
No specific product structure is required. This means it does not matter if the material has a BOM (internal production) or not (and is procured externally). The material is, however, usually produced in-house as in the subsequent sample scenario.
For a detailed example of the entire process, seeSample Scenario: Strategy 20.
- The sales order quantities are planned for production using the sales order number. The quantities produced for the individual sales orders cannot be changed. Each quantity is maintained specifically for the individual sales order. A separate segment is created in the MRP list for make-to-order production.
- Starting from the sales order, you can apply this type of planning to as many levels of the BOM as you want. Assemblies and components are produced or procured specifically for the pegged order and stock is managed separately for this sales order.
- The production and procurement costs are maintained for each sales order in either a settlement order or in a project at sales order item level. This ensures a detailed analysis of the planned and actual costs.
You can also use this production technique to create "assembly orders." The assembly order triggers the creation of a production order or of a planned order and provides you with a precise delivery schedule. The delivery schedule is based on availability and the production requirements of the relevant assemblies and components.
See Stockkeeping at Different BOM Levels for more information.
There are no major factors to consider when maintaining the material master of the finished product. See Availability Check.