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SAPMM

The document discusses the Make-to-Order (MTO) process in SAP, which integrates Sales (SD), Production (PP), and Procurement (MM) to manufacture products only after receiving customer orders. It outlines the steps from customer order creation to production execution and delivery, highlighting the benefits of reduced inventory costs and enhanced customization. The integration ensures real-time collaboration across modules, improving transparency and efficiency in the supply chain.

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Parag Mishra
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3 views3 pages

SAPMM

The document discusses the Make-to-Order (MTO) process in SAP, which integrates Sales (SD), Production (PP), and Procurement (MM) to manufacture products only after receiving customer orders. It outlines the steps from customer order creation to production execution and delivery, highlighting the benefits of reduced inventory costs and enhanced customization. The integration ensures real-time collaboration across modules, improving transparency and efficiency in the supply chain.

Uploaded by

Parag Mishra
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Many of us know the modules of SAP individually, but the real magic lies in their integration.

👉Make-to-Order (MTO) is combined with full Cycle Integration in SAP

In this post, I'm sharing the Make-to-Order (MTO) scenario is widely used in industries where
products are manufactured only after receiving a customer order. Unlike Make-to-Stock (MTS), in
MTO the production process is triggered by sales demand, ensuring customization.

This cycle demonstrates a strong integration between Sales (SD), Production (PP), and Procurement
(MM).

🔑 Process Overview:

1 Customer Order (SD):

The cycle begins when a Sales Order (SO) is created in SD with an MTO strategy (strategy group 20 or
50, etc.). The requirement from the sales order flows into MRP (Material Requirements Planning).

2 Material Requirement Planning (PP + MM):

The system checks availability.

If the material is not available, an MRP run triggers:

🔸Planned Orders for in-house production (PP).

🔸Purchase Requisitions created for external procurement (MM), If needed.

3 Production Order (PP):

Planned orders are converted into Production Orders. BOM (Bill of Materials) and Routing are
exploded. Capacity planning and scheduling are executed. Material components are reserved
(integration with MM).

4 Procurement (MM):

Procurement (MM):

For raw materials/sub-components not available,

🔸Purchase Requisitions

created. Purchase Orders are

🔸Vendors supply goods

in MM. Goods Receipt (GR) done


Inventory updated and available for production.

5 Production Execution (PP):

Issue raw materials via Goods Issue (GI). Execute operations (confirmation of activities). On
completion, finished goods are posted to stock (special stock linked to the Sales Order).

6 Delivery & Billing (SD)

After production, Delivery is created in SD. Post Goods Issue (PGI) reduces inventory. Finally, a Billing
Document is created recognized. revenue is

📌Integration Touchpoints

SD PP: Sales order requirement triggers MRP.

PP MM: Planned orders generate purchase requisitions for raw materials.

MM

PP: GR of raw materials enables production

execution.

PP SD: Finished goods availability enables delivery. FI/CO Integration: Each goods movement and
billing updates accounting automatically.

✅Key Benefits of MTO in SAP

Reduced inventory holding costs. Customer-specific customization possible. End-to-end transparency


across SD, MM, and PP. Seamless FI/CO integration for revenue and cost tracking.
🔴Why MTO Matters in SAP S/4HANA

👉Customer Focus - Products are made only after receiving orders → supports customization.

👉Lower Inventory - No need to stock finished goods → reduces costs.

👉-End-to-End Integration - SD, PP, MM, FI work together in real time.

✅Follow me for more SAP insights and Business case scenarios!

hashtag#SAP hashtag#SAPS4HANA hashtag#Make ToOrder hashtag#SAPIntegration


hashtag#OrderToCash hashtag#ERP

hashtag#DigitalTransformation

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