Lesson 1 of 5
The make-to-order flow end to end
10 min
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In make-to-order (MTO), nothing is built until a customer orders it. The sales order item becomes the demand that MRP plans, the production order builds for that item, the finished goods are held in stock that belongs to that item, and the delivery and billing close the loop. SAP Learning sums up the core rule: goods produced for one sales order cannot be used for another.
Contoso Motor Co. builds most alternators to stock. One product is different: CMC-ALT-240, a heavy-duty 24-volt alternator for fleet trucks, is built only against firm orders because each customer specifies mounting and output options. Great Lakes Fleet Services orders 50 of them in sales area 1710 / 10 / 00 for delivery from plant 1710 Detroit.
- Sales orderMaria enters 50 pc CMC-ALT-240 for Great Lakes Fleet Services; the item creates a customer-individual requirement
- MRPPlans the sales order item in its own planning segment; creates a planned order assigned to the item
- Production orderConverted planned order, account-assigned to the sales order item; components issued from anonymous stock
- Goods receipt50 pc received into sales order stock for that item (special stock E)
- DeliveryOutbound delivery picks from the sales order stock; goods issue reduces it
- BillingInvoice to Great Lakes Fleet Services; revenue and cost of sales recorded for the item
What makes an item make-to-order
Several settings work together. The material's strategy group in its MRP view points to a planning strategy; for pure make-to-order SAP Learning names strategy 20. The sales order item category and schedule line category (in a standard setup, item category TAK for make-to-order) tell sales that the item needs its own production. The requirement type and class behind the item decide how MRP plans it and how the resulting stock is valued.
| MTO strategy (SAP Learning) | What it does |
|---|---|
| 20 Make-to-order production | No planned independent requirements; each sales order planned separately, lot-for-lot, with no netting against other orders or warehouse stock |
| 50 Planning without final assembly | Components and subassemblies produced or bought ahead; final assembly waits for the sales order |
| 60 Planning with planning material | Planning at the level of a planning material that several similar products share |
| 82 Assembly processing | The sales order directly creates the production order, so order dates and quantities can be confirmed |
Make-to-order strategies shown by SAP Learning. Your system may use copies.
Following the chain with document flow
The sales order's document flow shows deliveries, goods issues and invoices that follow it. For the production side, start from the sales order item in the stock/requirements list (MD04), which shows the item's planning segment: requirement, planned or production order, and receipts. The production order header shows the sales order and item as its account assignment, which is the quickest way to prove the link.
- Day 1Order enteredRequirement for 50 pc in the sales order segment; no stock is promised from the warehouse
- Day 1 nightMRP runPlanned order for 50 pc assigned to the sales order item; dependent requirements for rotors and housings
- Day 2Conversion and releaseProduction order created and released; components staged
- Days 3–5ProductionConfirmations, then goods receipt of 50 pc into sales order stock
- Day 6Ship and billDelivery, goods issue from sales order stock, invoice
What would you do?
Maria enters an order for 50 CMC-ALT-240. The next morning MD04 shows no planned order for it, while orders for CMC-ALT-100 planned normally. What should she check first?
MTO and MRP Live
Single-level make-to-order items are planned by MRP Live (MD01N, or the Schedule MRP Runs app) like any other material. Some MTO functions are not optimized for MRP Live: multi-level, sales-order-specific planning (MD50) and project planning (MD51) run with classic MRP logic, and MRP Live hands materials it cannot plan to classic MRP within the same run. SAP Note 1914010 lists the current restrictions for your release. For testing, record which run planned the item, and check the MRP Live log for materials passed to classic MRP.
Walkthrough: following one MTO order
- Maria creates the order for 50 CMC-ALT-240 in sales area 1710 / 10 / 00 (
VA01or Manage Sales Orders). Note the order and item number (illustrative: order 1000502, item 10). - Planning runs (overnight MRP Live job for MRP controller 101, or
MD50for this order only). InMD04(or Monitor Material Coverage), the item has its own segment with a planned order for 50. - The planner converts the planned order to a production order; the order header's account assignment shows sales order 1000502 / 10.
- Release, component issue and confirmation follow the normal production order flow (sap-pp-204).
- Goods receipt posts 50 pieces with movement 101 and special stock indicator E;
MMBEshows them under the sales order item, not in plant stock. - Delivery and goods issue (601 E) consume exactly that stock; billing closes the loop.
- In MTO the sales order item is the demand, and the stock produced belongs to that item.
- Strategy 20 plans each sales order separately, lot-for-lot, without netting against other demand.
- The production order is account-assigned to the sales order item; components usually stay anonymous.
- Use document flow, MD04 and the order header to follow the chain.
Check your understanding · not graded
Lesson check
1. What does strategy 20 do with each sales order?
2. Where do you see the production order's link to the sales order?
3. Where are MTO finished goods received?
4. Which planning function runs with classic MRP logic rather than being optimized for MRP Live?