Make-to-order production is a process in which a product is individually manufactured for a particular customer. In contrast to mass production for an unspecified market where a material is manufactured many times, in make-to-order production a material is created only once though the same or a similar production process might be repeated at a later time.
You can use make-to-order production:
For branches of industry or products where a small quantity of products with a large number of different characteristics are manufactured
When a product has to be assembled particularly for a sales order
Stockkeeping is not usually carried out for products that are made to order. In companies using make-to-order production, the demand program only determines the production area, in which various variant types are produced. Depending on how you track the costs associated with make-to-order production, there are two ways to process make-to-order items during sales order processing:
Using Assembly Orders
You can also use a sales order to create an assembly order for a make-to-order item. The assembly order triggers the automatic creation of a production order, planned order, or network and provides you with an accurate delivery schedule. The schedule is based on the availability and the manufacturing requirements of the relevant components and assemblies. For more information, see the LO Assembly Processing Guide.
For more information about allocating the costs of order items made to order, see CO Cost Object Controlling .
For more information about profitability analysis, see CO Profitability Analysis .
For more information about inventory management, see the MM Inventory Management documentation.
For more information about the Project System, see PS Project System .
For more information about Customizing for Sales, see the online Implementation Guide .