Difference between MTO/MTS vs Consumption Based Planning?

Hi,
What is the Difference between MTO/MTS vs Consumption Based Planning?.
In what scenario we used these types?? could you please explain me with examples...
Regards,
Raj

Hi,
MTS = Make to stock, you are simply wanting to build up stock and so this will generate requirements even if there are no Sales orders or demand of any kind. This is the most common option
MTO = make to order, you only want these items when there is a specific
But consumption based planning is not completely different, you are still using MTS / i.e. you are creating requirements based on the settings in MRP instead of any demand (but the same applies to MTS)
So MTS and consumption based planning are more or less the same thing.
You would use MTO if you produce items only when you have an order.
So if you have warehouse space and sell a lot of an item, you can use MTS or consumption based planning because you know that you will always be likely to be able to sell the stock.
If you make things for specific orders (such as special sizes or specifications to match the customer's requirements. Or if you don't sell many of an item and the lead times for production are very short (or you don't have much warehouse space) then you would wait for an order before making the item (MTO
Steve B

Similar Messages

DIFFERENCE BETWEEN ----MTO & MTS PROCESS

HI,
CAN ANYBODY EXPLAIN THE DIFFERENCE BETWEEN MTS AND MTO.I WANT TO CONFIGURE MRP RELATED CUSTOMIZATION.BASICALLY I AM AN MM CONSULTANT.SO KINDLY GIVE YOUR SUGGESTIONS.
FLEMMINGS

Hi,
In make to order process, u plan ur production on the basis of the orders u get. So, its like if u get some 10 orders, u'll plan ur production in a way that u can fulfill those 10 orders.
While in make to stock, u produce to stock ur materials, its like u plan ur production on the basis of ur production capacity and after production u stock that material. Now when the orders come u service them from the materials which u have already produced and is stocked....
Reward, if helpful
Noopur

Consumption-based Planning Question

Dears,
I am working on a presentation for a client in order to help them to decide which SAP Planning Tool should be implemented.
Since it is not a production company and it can be considered closer to a wholesale or retail one my question are related to CBP and SCM:
-Is necessary to customize and run the Consumption-based Planning tool in ERP before implementing a SCM tool (either APO or F&R)? Are they independent? Could it be advisable?
-I read in several website that is not possible in MRP to generate Stock Transfer Orders between Storage Location within the same plant. Has CBP the same constraint?
Thank you very much for your help.
L.C.

L.C.,
-Is necessary to customize and run the Consumption-based Planning tool in ERP before implementing a SCM tool (either APO or F&R)?
Not exactly. You will have to do some customization in ERP regardless of whether you additionally implement SCM planning, because all of the execution is done in the OLTP (ERP).
Are they independent?
If you mean are ERP and SCM independent, the answer is yes, they are independent. You can run SCM without ERP, and you can run ERP without SCM.
Could it be advisable?
Good question. Depends on your point of view. Establishing a new implementation of CBP is a substantial project. Adding on an implementation of SCM means additional complexity. The payoff is more features. The client has to choose.
-I read in several website that is not possible in MRP to generate Stock Transfer Orders between Storage Location within the same plant.
Neither MRP nor CBP planning can create stock transport orders, they create stock transport requisitions. CBP does not have any more or less restrictions than MRP as far as the creation of stock transport orders or stock transport requisitions are concerned. STR/STOs between storage locations became possible starting, I believe, in ECC 5.0. R/3 4.7 did not support this feature.
Sounds like you are going to need a bit of help with your presentations. The following site contains quite a few high level presentations about SCM planning you might want to incorporate into your presentation:
http://service.sap.com/~form/sapnet?_SHORTKEY=01100035870000187811&
Best Regards & Good Luck!
DB49

Scheduling agreement with Consumption based planning

Dear Experts,
I Have a Scenario,
I need to Bulit a Laptop which is a Finished Material, and the Components like Hardisk, Processor, Ram, Casing, Monitor are my Rawmaterials. By using these rawmaterials we are building the parent material.
My Client requirement is 1) Plan and schedule the requirement
2) Replenish the stock based on consumption based planning.
My query is
1) How should i proceed for mm based procurement ?
2) Does i need to create scheduling agreement for rawmaterials and and maintain schedule lines ?
3) For which materials i need to run the MRP ? weather its parent material or Component material ?
4) What are the sequence of process need to be carried out ?
Required ur valuable inputs on this.
Best Regards
SAP LEARNER
Edited by: JAVEED AHAMED on Feb 12, 2010 8:34 AM

Hi
Consumption based planning and Scheduling agreement are two different functions.
Consumption-based planning is based on past consumption values and uses the forecast or other statistical procedures to determine future requirements. The procedures in consumption-based planning do not refer to the master production schedule. That is, the net requirements calculation is not triggered either by planned independent requirements or dependent requirement. Instead, it is triggered when stock levels fall below a predefined reorder point or by forecast requirements calculated using past consumption values.
A form of outline purchase agreement under which materials are procured on predetermined dates within a certain time period.
With release documentation (in the standard system, document type LPA)
The schedule lines in the system have internal character. This means that you can change them in any way you wish. The schedule lines stored in the system are not transmitted to the vendor until you explicitly create a scheduling agreement release (which may take one of two forms: a forecast delivery schedule or a JIT delivery schedule).
The release documentation allows you to display the releases transmitted to a vendor over a certain period in order to establish exactly when you transmitted which information to the vendor.
Without release documentation (in the standard system, document type LP)
The schedule lines immediately have official character, i.e. they are immediately transmitted to the vendor the moment you save them (transmission time-spot 4 for messages). There is no release documentation in this case.
It cannot be explained in few lines. You need to study the below link.
http://help.sap.com/saphelp_erp60_sp/helpdata/en/75/ee1fa755c811d189900000e8322d00/frameset.htm
http://help.sap.com/saphelp_erp60_sp/helpdata/en/7d/c2821c454011d182b40000e829fbfe/frameset.htm

Consumption based planning

Hi,
I need to configure the CBP based on Past consuption data of 3 months and also it should give me future forecast values for 3 months. also I want to use safety stock and Reorder level.
Which MRP type should be used and what are configuration setting required for the same.
Also pl.guide me on What will happen if there is sedden rise in the requirement is any month?
Thx

Hi,
MRP supports and helps the MRP controller in the task areas. These tasks include
determining type, quantity and time of the requirement, and scheduling corresponding
procurement elements. The automatic planning run for MRP determines shortage situations and generates the corresponding procurement elements. Possible
procurement elements of MRP are planned orders, purchase requisitions and
scheduling agreement schedule lines. The planned order and purchase requisition are
internal planning elements that can be changed, rescheduled or deleted at almost
any time.
In in-house production, the system creates planned orders for planning production
quantities. When planning has finished, the system converts the planned orders into
production orders. The system then converts the dependent requirements in the
planned order into reservations in the production order.
In external procurement, the system either creates a planned order or a purchase
requisition for direct planning of external procurement quantities. Whether purchase
requisitions are created for direct planning, or planned orders are created first, you
can use the creation indicator for purchase requisitions/MRP groups in the material
master record on the initial screen of the planning run. When planning has finished,
the planned order must be converted to a purchase requisition, which is subsequently
converted to a purchase order. The advantage of creating a planned order first is
the additional procurement proposal check that is executed by the MRP controllers.
Purchasing can only order the material when the MRP controller has checked the
planned order and converted it into a purchase requisition. Otherwise, the procurement proposal is immediately available for Purchasing.
Planning Levels of Consumption-Based Planning
Requirements planning takes place at plant level. In other words, the entire stock that
exists in the plant is considered in planning. However, the stocks of individual storage
locations can be excluded from MRP or planned independently. These stocks are then
not included in MRP at plant level. You can also execute requirements planning
for individual MRP areas. You can define the MRP areas yourself. This means
that several storage locations can be grouped together for one MRP area and that
requirements planning can be executed separately from the plant for these MRP areas.
MRP areas enable a differentiation of material requirements planning within a plant.
(MRP areas include the function of storage locations that are planned separately for
materials requirements.)
Planning Levels for Materials Planning is either
1. The Plant with Storage locations planned separately.
2. MRP areas
Basically, MRP areas are optional. You can plan all material requirements without referring to MRP areas.
There are three different types of MRP areas:
1. Plant MRP areas (obligatory) that are automatically created by activating
planning with MRP areas. Their numbers match the number of the plant. If no
more MRP areas are defined, the plant MRP area covers the entire plant.
2. Storage location MRP areas that are defined by the storage locations assigned
to them.
3. Subcontractor MRP areas that provide planning of the requirement of the
material provided for a subcontractor and are defined by the assignment of
this subcontractor.
Prerequisites for Consumption-Based Planning
The following prerequisites must have been fulfilled in order to carry out requirements
planning for a plant:
Requirements planning for the corresponding plant must be activated in
Customizing for Materials Management under Consumption-Based Planning u2192
Planning u2192 Activate Material Requirements Planning.
T-code - OMDU
The plant parameters for the corresponding plant must be activated in
Customizing for Materials Management under Consumption-Based Planning u2192
Plant Parametersu2192 Carry Out Overall Maintenance of Plant Parameters.
T-code - OMI8
In the material master record, you have to maintain the MRP data of the materials
that are subject to automatic planning.
I hope this may help u !

What setup is require to run a consumption-based planning

Dear all,
I know there is a two way to run Consumption-Based Planning in standard SAP:
1 - Forecast-based Planning, and
2 - Re-order point Planning.
My question is what is the configuration setup and material master value maintenance require for the above two procedures?
Thanks
Tuffy

In Material Master
MRP 1 view choose the
MRP type
VB - Manual reorder point or
VM - automatic reorder point
Reorder point
Regards

To start consumption based planning

Hello experts,
Can you please explain the step by step process for starting the consumption based planing.
What configuration will be required (like activating MRP for respective plant) & what master data needs to be maintained in the system.
What Tcode will used to run individual materials (BOM is not there) & what t code will used to run for materials of entire plant for which MRP views are maintained.
Thanks in advance.
Abhishek

Hi,
In Consumption based planning when the stock falls below reorder point, system will create Procurement proposal automatically when MRP run.
Maintain MRP type VB - manual reorder point planning & Reorder point for each consumption based material in material master and all the MRP views to be maintain.
Maintain MRP parameter for Plant, for this use tcode OPPQ.
Run MRP for single material by tcode MD03, for all materials in the plant use tcode MD02. After MRP run, the materials which are having stock below reorder point, system will create P.R.
Regards,
Dharma

Consumption based planning in implementation ??

hi
Can some body explain me about the configuration setting in consumption based planning for manufacturing company ??
FOr manufacturing industry, they have production , and plant maintaienance, and depot plant.
For above business , what setting we have to in Consumplanning and MRP???
Thanks

Dear
Configurations for CBP as explained before.
a) Plant Parameters - t.Code : OMI8, when you execute this t.Code you will get several tabs like for ex.Number ranges, MRP Controllers etc... you need to maintain those are relevant
MRP Controllers, Number ranges, Available stock most of these tabs are mandatory configurations.
MRP Controllers - Defined and assigned to the plants, MRP Controllers are the planners who are responsible when it comes to the materials.
Number ranges : Planned orders, Purchase requesitions
Available Stock : whether stocks in transit, Blocked stock, Restricted stock are to be considered or not.
Planning Horizon - 100 days.. during MRP run those materials for which planning file entry is created and within the next 100days will be calculated for MRP.
b) MRP Group is not a mandatory config.
In case you need have configured new document type this can be entered in the "External Procurement per MRP Group" tab and this MRP group can be assigned to the material mster, based on this assignment the document type is picked up.
Each tab has its own significance, Please go through the configuration notes in SPRO you will get a better idea. let me know if you have futher clarifications.
Jade
Edited by: Jade on Mar 27, 2010 3:05 PM

Automatic PR from Consumption based Planning

Dear all
While creating automatic PR from Consumption based planning, only quantity has to come,the price should be updated manually,How to do it,Kindly reply to this query

Hi,
Price in purchase requisition
Shows the price of the requested material per price unit.
Use
The price and quantity set out in the purchase requisition determine the value of the purchase requisition item or purchase requisition. In turn, this value is applied in determining the release strategy for the requisition.
In Customizing for Purchasing under Purchase Requisition -> Define Screen Layout at Document Level, you can set price and price unit. The Valuation price field can be set as a mandatory or optional input field.
Procedure
Input mandatory:
If a material master record exists for the requested material, the price is automatically taken from the valuation price field.
If no material master record exists, you must enter a price when creating the purchase requisition.
Input optional:
In this case you need not enter a price.
Note
Please note that the value of the purchase requisition item or purchase requisition will be taken into account in the release strategy.
Also, the value of purchase requisition commitments are determined for items that are assigned toan account from the price (Valuation price field).
Thanks
suresh

Long Term Planning : Requirements from "Consumption based planning" missing

Hello,
I'm trying to use long term planning ( MSBT,MS01..) for simulation. In the scenario I've set up I want to have all actual requrements and orders as well as fixed orders.
The problem is that requirements(=forecast) for materials with consumption based planning ( MRP type =VV ) are not transferred from the operative planning. How can this be achieved ?
Best Regards
Bernt

Hi,
Hard to say... have you looked in the details of the VV MRP setting, your LTP scenario, or your copy transaction in case there is some parameter about this?
In case you are looking for information about this process, here is a good document with a detailed description of the Long-Term Planning Process in SAP (with detailed T-codes as well): http://expertplug.com/materials/training/long-term-planning-in-sap
You have a preview and a detailed description to see if it suits your needs.
Cheers
Matthieu

Difference between MTO and CTO

Hello All,
What is the difference between Make-to-Order (MTO) and Configure-to-order (CTO) conceptually and technically in terms of planning strategy, item category and master data setup.
Thanks in advance
George

George,
??? You can't see any differences? I just re-read through the configuration guides within the links that I previously cited, and I must say that, to me anyway, there are substantial differences.
At any rate, if you have gone through Best practices docs, and you feel that you now have a good understanding of MTO vs CTO, and you still don't see any differences, then I guess that is what you should be putting in your presentation.
माया (Maya)
Sages have written that we live within a dream, and the existence that we know is actually our personal interpretation of a Universe that is, in the end, unknowable. Perhaps in your reality, MTO and CTO have no differences. I hope your audience shares that reality.
Best Regards,
DB49

What is the difference between Azure RemoteApp Basic vs Standard Plans in terms of compute cores and memory?

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only specifies user storage and vaguely compares its basic vs. standard plans in terms of "task worker" vs. "information worker"
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In case i am misunderstanding the basic difference between AWS workspace and Azure RemoteApp, i'd appreciate some help in understanding it as well.
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What's the difference between Material : A/cs, Consumptions A/cs & Adjust

Hello Experts,
could you please help to know the Meaning & difference between :
1. Material Accounts - G006
2. Material Consumption Accounts - G003
3. Material Adjustments Accounts - G014

Hi Hussein,
I believe you are enquiring about the Field status groups (FSG).
SAP has delivered certain standard FSGs which we can use for our business purposes. As you may be aware that an FSG is used to control the various fields that appear on the document screen. Each GL account can control the document screen in which they are used.
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Usage of MRP Procedures in Consumption Based Planning during Implementation

We have following procedures in CBP:
1. Reorder Point Planning- Manual and Automatic
2. Forecast based Planning
3. Time phased Planning.
In SAP implementations, which of these procedure is mostly used in companies in real time.
Though the CBP planning node is in MM SPRO and MM study material also contains CBP. During implementations, for CBP the responsibility rests with MM consultant or PP Consultant or both.
Please share your views on this.

Dear ,
Let me share my views on this as we are runing CBP-Forcast base planning in our trading business .
Decision on CBP-Forecast base planning method are based on the following criteria
1.Stockable and low value material
2.Fast Moving with good sales pattern ( Trend Analysis , Historical Trend analysis on Product Group , Statistical Sales analysis )
3.Inventory turn around based on the monthly physical inventory and sales
4.Good service level percentage over an period .
5.Consumption pattern .
Decision on CBP-Re-order point planning method are based on the following criteria
1. Material which are higher valu and Non Stockable
2. Customer oriented traded goods
3. Strategic vendor with good Sales pattern .
4.Re-order Level based on Sales Forecast (Manual or Automatic )
In SAP implementations, which of these procedure is mostly used in companies in real time : It is based on the business requirement (Trading /Manufacturing ) .Mostly Trading business goes for CBP-Forecast Base planning method (MRP Type -VV) IF THE MATERIALS HAS GOOD CONSUMPTION PATTERN OVER A PERIOD OF TIME .
MRP is both the part of Supply Chain Planning and Manufactruing . Material master parameters are maintained by MM .CBP is one kind of MRP where Demand Management comes into PP whereas after MRP run , procurement proposal handeled by MM.So there is no hard and fast rule that it is only part of PP.It is the combination of MM and PP.
Hope this will help you to analysise your requirement .
Regards
JH

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Last edited by cfr (2013-10-31 23:30:15)

Difference between MTO/MTS vs Consumption Based Planning?

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