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Author's profile photo K V Kumar

Make to Order strategies – Strategy 20


Strategy 20 – Pure make to order is one of the strategies of Make to Order in Demand Management..In this 20 strategy product is specifically manufactured for a sale order or customer order…There is no forecasting involved. Sale order or customer order will be the trigger point for production…

This strategy is useful or applied in the following situations in the industries..

1. Product is very slow moving product in the market…

2. You cannot anticipate the future forecast of the product

3. Product is newly launched in the market

4. Product is very costly product and you can not keep the inventory or stock in the plant…

The sales order quantities are planned for production using the sales order number. The quantities produced for the individual sales orders cannot be changed. Each quantity is maintained specifically for the individual sales order. A separate segment is created in the MRP list or Stock req. list (MD04) for make-to-order production.

Process flow of Strategy 20:

1. Creation of sale order  – VA01

2. MRP run – MD01/MD02

3. Planned order conversion to production order – MD04

4. Production Execution – CO02, MB1A, CO15, MB31

5. Sale order stock in plant- MD04

6. Delivery of the stock to customer against the sale order – VL01N

Settings Required for Make to order strategy 20 :

Maintain  planning strategy 20 in the material master in MRP 3 view in as shown below….

Detailed Process flow…

Initial situation of material with 299.5 KG unrestricted use stock..this stock is kept make the understanding of difference between unrestricted stock and sale order stock…

Now create sale order for the product with VA01

Now save the order…

Now check in MD04…

Now create one more sale order for qty 200 same as above with VA01…after the creation of second sale order situation in MD04…

Now check in MD04..You can observe that two separate planned orders are created for each sale order…even though there is a stock of 299.5 KG it is not considered in the net requirement calculation..

Now convert the first planned order to production order and then release

here you can observe the sales order reference in the production order as shown below….

Now release the order and save the order…after this situation in MD04…

Now after the completion of production activity complete the Goods issue, Confirmation and Goods receipt of the two production orders….

Now you will sales order stocks as shown below in the MD04…these stocks are not unrestricted use stocks like 299.5 KG

Now make the delivery of the first sale order

Now complete Post goods issue…

Now complete the delivery for the second sale order also with VL01N as per the procedure shown above….

Now final situation of MD04….



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      Author's profile photo A Singh
      A Singh

      Nice document keep sharing...thanx a lot

      Author's profile photo Former Member
      Former Member

      This Is Good to see for MTO. Can you share additionally settlement in MTO.



      Author's profile photo Former Member
      Former Member

      Very useful...thank you!

      Author's profile photo K V Kumar
      K V Kumar
      Blog Post Author

      Hi All,

      Thanks for appreciation...



      Author's profile photo A Singh
      A Singh

      Hi thanx for doucment.

      can plz tell in short what setting we require for that for pp or SD point of view for creating planned order from sales order,

      Author's profile photo Ameya Beri
      Ameya Beri

      Very good document, can you please share an assemble to order scenario too 🙂

      Author's profile photo Former Member
      Former Member

      good one thank u

      Author's profile photo sushant katekar
      sushant katekar

      Fantastic document ..keep it up

      Author's profile photo Former Member
      Former Member

      good document.... can you post the step by step document for strategy group 25

      Author's profile photo Sanjay Chavan
      Sanjay Chavan

      Very nice document

      Author's profile photo Dharma Theja Kavuturu
      Dharma Theja Kavuturu

      Dear Kumar,

      Great document for PP beginners.Request your valuable time to clarify below some of my doubts.

      1)Is there any setting to be conformed by PP module @sales views (Sales org-2-item category group-001)  in the Material master

      2)If I have one RM component in the BOM, what is the startegy type I have to select ? [after I Run MD02 for FERT, RM components also to be planned and I have to procure to manufacture this FG}.



      Author's profile photo Graham Harrison
      Graham Harrison

      Great overview, thank you.

      Is there a similar way to configure MTO process for externally procured materials (proc type F)

      Is this achieved via planning strategy or the sales order type (TAB)?

      Sales order > MRP > Pur.Req > Purchase Order > Goods Receipt > Sales Order Stock > SO Delivery