Skip to Content
Author's profile photo Former Member

Detailed difference btw 40& 50 Planning Strategies

  • Planning with Final Assembly (40):
  • In strategy 40, the main focus is on flexibility in reacting to customers’ demands.
  • Production, including final assembly, is triggered by the planned independent requirements before the sales order is received.
  • You plan the planned independent requirements for the finished product in Demand Management. Incoming sales orders consume these planned independent requirements.
  • Planned independent requirements left unconsumed increase the warehouse stock – as long as they are not adjusted to customer requirements (“Adjust Requirements“ is a function to be run periodically to ensure that old, unconsumed planned independent requirements no longer have an effect on planning).
  • If the customer requirement exceeds planned independent requirements, the system automatically creates a planned order for the unplanned quantity in the next MRP run.
  • You can check availability using the ATP logic.
  • The consumption of planned independent requirements by customer requirements depends on the settings defined for the consumption mode and the consumption periods.
  • Consumption Mode of  Planning with Final Assembly (40):
  • You can use the consumption mode to define in which direction incoming sales orders are to consume planned independent requirements on the time axis.
  • In backward consumption (consumption mode 1), the sales order consumes planned independent requirements that lie before the customer requirement.
  • In forward consumption (consumption mode 3), the sales order consumes planned independent requirements that lie after the customer requirement.
  • You can combine backward and forward consumption provided that you take the consumption periods into account (consumption mode 2 or 4).
  • You can define the consumption mode and the consumption periods either in the material master or for each plant and MRP group. If no values have been entered, the system uses the default setting with backward consumption for 999 days (note: if you do not maintain mode 1 and the backward consumption interval, this means that only the requirements on the current day can be consumed).

  • Planning w/o Final Assembly (50): Plnd Ind.Reqmts
  • As make-to-order production, planning without final assembly (strategy 50) enables you to manufacture products specifically for a customer. However, with this planning strategy, certain assemblies should be produced or procured before the sales order for the finished product is received. The material is produced up to the production level below final assembly. That is, the assemblies and components are stocked in the warehouse until the sales order is received. Final assembly is only triggered upon receipt of the sales order. It makes sense to use this strategy if a large part of the value added process occurs at final assembly.
  • Planning which is independent of the sales order is organized using planned independent requirements. These planned independent requirements are created for the finished product. In the MRP run, the system first creates planned orders for the finished product to cover these requirements. These planned orders cannot be converted into production orders (order type VP). When sales orders are entered and MRP is next run, the system creates planned orders to offset the sales orders; these planned orders can be converted to production orders or purchase requisitions. Also in the MRP run, the planned orders of type VP are adjusted to offset the remaining, unconsumed planned independent requirements.
  • Using the strategy, “planning without final assembly”, you can reduce delivery times since production and procurement should have already been triggered for the lower production levels before the sales order is received.

Planning w/o Final Assembly: Sales Order:

  • Final assembly is only triggered upon receipt of the sales order. The sales order appears in an individual customer planning segment in the current stock/requirements list where it is planned separately. In the next MRP run, the system creates a planned order for the newly created sales order. This planned order can be converted into a production order. This then allows final assembly. In the planning segment, the planned order quantity of the “VP” planned order is reduced corresponding to the new requirements situation.
  • In this strategy, the sales order is managed in the individual customer planning segment. If this is not desired, you can also manage the sales order in the net requirements segment (strategy 52), although should you choose this procedure, you have to work with the lot-sizing procedure “lot-for-lot order quantity”. You also need to make sure that neither rounding values/rounding profiles nor minimum or maximum lot sizes are maintained. Otherwise, the assignment logic is not compatible with an availability check which could lead to excess planning or incorrect results in the availability check.
  • You can only carry out the availability check for planned independent requirements. That is, the check of planned independent requirements at finished product level.
  • Quantities for Final Assembly :

Example: If a planned independent requirement of 100 pieces exists and you receive a sales order for 40 pieces which consumes the planned independent requirements then the sales order for 40 pieces remains in the individual customer planning segment and a planned independent requirement for 60 pieces remains in the net requirements segment. As soon as the product is planned again in the next MRP run, the system creates a planned order for 40 pieces in the individual customer planning segment which you can convert into a production order. At the same time, the system reduces the existing planned order of type VP from 100 pieces to 60 pieces.

Planning w/o Final Assembly: Master Data:

  • If you want to use the “Planning without final assembly” strategy for the finished product, you must make the following settings in the material master record (“MRP” view)
  • Strategy group 50 (“Planning without final assembly”) for the finished product.
  • Indiv. / Collective indicator = 2 (collective requirements only) for the assembly, which is to be procured and stored (supplied for storage) before the sales order is received.

Stocking Level:

  • If a large part of the value added process occurs at final assembly it makes sense to use strategy 50 (“Planning without final assembly”). Here, final assembly is not triggered until a sales order has been received.

Flexible Determination of Stocking Level :

  • The stocking level is the level in the product structure up to which the material is produced to stock. You can shift the stocking level for certain materials: If, for example, you should set the indiv. / Collective indicator to “1” (individual requirements only) or enter “blank” (individual and collective requirements) for the material “shaft” in the material master record (MRP view), then this material will not be produced until a sales order exists for it or the pump; it will not be produced to stock in advance. Only the components for the material “spiral casing” are procured and placed in stock before the sales order is received. For this example, therefore, you must set the indiv. / Collective indicator to “2” (collective requirements only) for both the assembly “spiral casing” and for the components of the shaft. However, you only have to enter the strategy group for the pump.
  • If you do not wish to create VP planned orders in all BOMs of a particular material, you can assign the “No VP planned orders” explosion control indicator in the “Basic data” for the BOM item. You define this indicator in the work step “Defining Explosion Control” in Customizing for BOMs.

Assigned Tags

      1 Comment
      You must be Logged on to comment or reply to a post.
      Author's profile photo mahesh kumar komatineni
      mahesh kumar komatineni

      Hi Muthu kumar,

      very good document, thanks for sharing.


      mahesh Kumar.