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Understanding variations in Lot Size of One (LS1) E2E scenario
In many communications, there are terminologies that are frequently used, which may result in confusion in the essence of depiction and purpose of use. In this blog post, would like to clarify certain frequently used terminologies and its use cases, so that there is ‘One Voice‘ and commonness during discussions.
Lot Size-of-One (LS1), As the name suggests is an End-to-End scenario that adheres to result/deliver products with same Form-Fit and Function including customising as required by business (as per the Customer needs and specifications).
In Lot Size-of-One, there are 3 options for Order fulfillment,
- AtO – Assemble-to-Order.
- MtO – Make-to-Order.
- CtO – Configure-to-Order.
- There is a further option in CtO known as Advance CtO or what we commonly refer as CtO+. CtO+ is a lighter version of EtO (Engineer-to-Order)
A brief explanation about the above-mentioned variations is listed below,
- Assemble-to-Order (AtO): As the name suggests, in this scenario, user can observe the order fulfilment is accomplished by procurement of goods from external source (contracting/ sub-contracting). The procured material is then used for final assembly in the manufacturing belt (assembly line in shopfloor) and later is processed for quality inspection and then dispatch. In this process there are no in-house production taking place but is majorly focused on assembly of components to make a finish product. This End-to-End (E2E) scenario can be achieved with the basic SAP S/4HANA Public Cloud license.
- Make-to-Oder (MtO): In Make-to-Order scenario, user can observe, the order fulfilment mainly involves production of material in-house and may involve procurement for semi-finished / sub-assembly of products from external vendors. Usually in business that use these MtO scenario, Make-to-Stock scenarios are also run in conjunction, so that many of the planned components can be made use for Mt0 manufacturing to reduce the lead time. This End-to-End (E2E) scenario can be achieved with the basic SAP S/4HANA Public Cloud license.
- Configure-to-Order (CtO): In this scenario, the user can select variant for the product (characteristics of the product like colour, thickness, width, length and customising). Based on the opted selection the price of the material will be determined. This configuration is made available by using Advanced Variant Configuration (AVC). AVC product needs an additional license purchasing apart from the SAP S/4HANA Public Cloud license.
These above Lot Size-of-One End-to-End Scenarios would start only when a Customer’s Sale Order is received. Unlike repetitive manufacturers (Make-to-Stock and Sell from Stock scenario), the components and sub-components are not planned and made available in advance as each Customer’s customising would be different from other and no two Sale Order would be similar.
This is one of the reasons, why the Lead Time is high for customised order. Many times, the customising gets built over and above the existing Standard Product, which is produced as part of Make-to-Stock scenario. These finished products or the components used in the Standard products can be used to satisfy the demand and fulfill orders of Lot-Size-of-One. These arrangements enable the manufacturers to reduce the Lead Time.
There are scenarios where the Material Variants are also maintained in stock, which means the products are stocked at varied maturity levels. This enables the components to be in assembled in production line to result in faster manufacturing / assembly of product and reduces the lead time.
Picture#1: A glimpse to Configure-to-Order (CtO) scenario (MtO with Advance Variant Configuration)
To experience an End-to-End CtO scenario in your landscape with a pre-defined master data, The following steps need be followed,
- With the purchase of SAP S/4HANA Public License, a temporary license for Advanced Variant Configuration can be opted.
- Activate the base Scope Item 22T and later the E2E Scope Item 55E.
- On activation of 55E Scope Item relavent master data to execute E2E scenario is enabled.
In the picture below, you can notice, the different material types and the location where Serial# gets used. In Public Cloud Edition 2302, there was Stock Transfer Orders (STO) for intra-plants introduced, in the picture, you can notice that depiction too.
Picture#2: Bill of Material structure used for Material Master of Configure-to-Order End-to-End flow via 55E Scope Item
For further reference and detailing of Configure-to-Order scenario, kindly navigate to SCN blog – Working with E2E Lot Size of One (CTO scenario) with Advanced Variant Configuration | Scope Item ’55E’
E2E LS1 CtO scenario video:
SAP S/4HANA Cloud: Lot Size of One
Nice article, Thanks for sharing
Thanks Sunil
Looks really good and informative. I always thought Lot-size-one is same as MTO, I was not aware of AtO and CtO (lighter version of EtO) really informative. At the end you also mentioned what is required from license perspective and the scope items as well. This makes it a complete circle. Thanks for Sharing.
Thanks Anand
Mr Arvind Sharma
In the AVC environment, Will the 55E help me in obtaining tolerance values from the sales order specification to the inspection plan (MIC)? This is particularly important since the Inspection By configuration feature is currently unavailable in the public cloud.
Hello Suresh, 55E Scope Item is made available to create awareness and possibility of End-to-End scenario with CtO process (MtO+AVC). For check on the possibilities from 55E kindly refer to its test script Process Navigator - SAP for Me
thank you!
Feel free to refer to my other blog https://blogs.sap.com/2022/08/07/customer-engagement-for-lot-size-of-one-mto-scenario-with-advanced-variant-configuration-scope-item-55e/
Dear Arvind, Thanks for the great blog post. We are setting up the scope item and worried that the quality management is not working as per documentation. We have tried multiple ways, but the S/4HANA Cloud, Public looks like is missing a configuration to allow the quality management work for configurable products (MICs based on the variants).
If we go through the following blog, https://blogs.sap.com/2020/07/21/qm-with-variant-configuration/ we understand that we need to set the flag Inspection By configuration flag, but thats completely missing in S/4HANA Cloud. We have also reported the same here .
https://groups.community.sap.com/t5/manufacturing-q-a/qm-with-variant-configuration/qaq-p/305622
The scope 55E says that quality for configurable products should work, but it does not look like. Can you let us know how we can proceed further.
Hello Phani Kumar,
Thanks for the comments. The quality check, which is been carried out in 55E Scope Item, as you are aware only deals with a specific use-case of Quality Technician evaluation on smoothness of the surface postproduction process and recording the Usage decision and we don’t deal with inspection for each variant.
However, I understand your requirement and we in SAP are evaluating internally on the requirement and alternate possibilities but as per the current state, Variant Configuration in combination with QM is not supported for SAP S/4HANA Public Cloud.
By any chance, have you raised Improvement requests for this requirement, so that the Product Managers can have a look at it for the use-case and it would be easy for your tracking.
Follow the blog below, to raise a Continuous Influence Program
Submitting New Feature Requests: SAP Customer Influence | SAP Blogs