Direct Production or Collective order:

If subassemblies are produced directly for superior orders within a

production process, without physically entering the warehouse, then it is
useful to have direct production via collective orders.
Direct Production:
Direct production is the special type of production where components are
directly produced for the higherlevel assembly, without Stocked @
warehouse as normal and no goods receipt or goods issue postings are
made for components that are produced directly.
The system flags a direct production segment for the components to be
produced directly in the MRP list and the stock/requirements list. When the
planned order for the finished product is converted into a production order,
the system also converts all planned orders for lowerlevel components to
be produced directly into production orders.
The system adapts planned orders for direct production to changes in date
and quantity in the
higherlevel assembly, even if they are firmed, so that the collective order
remains consistent.
Sap Process Flow of Collective order:
Configuration:
Order Type:
IMG path:Production >Shop Floor control >Master data >order >Define
order Types
Tcode: OPJH

If this indicator is set, then it means there are automatic goods movements
between the production orders in a collective order. When the goods
movement is posted, costs are credited from the subordinate order& costs
are debited to the superior order.
Special Procurement Key:
IMG path: Production > Material requirement planning > Master data >
Define special procurement type

Case Study:
Let us take manufacturing of Ball Pen.
Product structure:
1 Ball Pen (Finished Product) - ZBP01 (Work Center ZBP003 Routing Group
50001303)
1.1 Pen casing ( Halb)- ZPC01 (Work Center ZBP001 Routing Group
50001301)
1.1.1 Refill for Pen casing (ROH)- Z_REFILL
1.2 Pen Cap (Halb)- ZPCAP01 (Work Center ZBP002 Routing Group
50001302)
1.2.1 Slug for Pen cap (ROH)- Z_PENCAP
Material Master:
Header Material MRP View:
TCODE: MM03

Child Material MRP View:

Multi level BOM for Ball Pen:

T-CODE: CS12

Production planning & Control Cycle :

Collective order can be created by below 3 methods
1. Directly Production order with Header Material using Tcode : CO01
2. Create Planned order ( Tcode : MD11) for Header & Convert into
Production order (Tcode
:CO40)
3. PIR > MRP > Planned order to Production order.
Here illustrated the Point No. 3

Create PIR :
T-Code: MD61

MRP RUN:
T-CODE: MD02

Stock Requirement List:

T-CODE (MD04)
Header Material Requirement List:

Child Material requirement List:

Notice the Direct Production in description field.

Order Report:
If we execute order report, we can see linkage of planned order as a network in
below screen shot.

Planned order :
Here is the advantage of collective order concept. Subordinate planned orders
are linked to
superior header order which can be seen in assignment tab of below screen shot
of child planned
orders.
TCODE: MD13
Header Material Planned Order:

Child Material Planned Order:

Planned Order to Production order Conversion:

T-Code CO40
Or
Double click on Planned Order and then Click on the Production Order

Here is the benefit of Collective Order scenario. Only Header Material Planned
Order is converting to Production Order but child material planned order is also
converted to production order automatically.
Now Release the production order and save it.

We can also change the quantity of the production order using the T-Code CO02.
Display Production Order T-CODE CO03

Confirmation of collective production order (CO15 or CO11n) :

Confirmation of child order @ order level or operation level will result in direct
Good issue to
header order. Stock of subordinate order will not be available in warehouse
.Instead; child
component is directly produced for Header order.
Note that leading order will get below status when there is confirmation or goods
movement in
network.
1.1. CFCO Confirmation in collective order
1.2. GMCO Goods movements in collective order

Check warehouse stock for the direct components which is nil. TCODE: MB52

Check Material document for the direct components which shows GI for order
(261) TCODE:
MB51

Child material directly consumed to header material order.

Final confirmation of header order :
T-Code CO15/ CO11N

GR of collective production order (MB31) :

Now check the details of order.

As per the report all the orders have been released and material is delivered.
Now check the header material document & stock overview.

This concludes the complete cycle of direct production via collective

order
Limitations:
We have limitation to create collective order if components are belongs to below
set
1) Co Product or By product
2) Either Discontinued or Follow up or Intra Material
3) Collective order cannot be created Via SAP APO.
Conclusion:
In general , Direct production is aimed at doing Major sap business functions
such as
Creation ,Release ,scheduling ,costing for Finished product ,assembly &
components within a BOM
structure jointly or collectively.
Even though direct production or collective order has its unique benefits, it has a
negative impact
of Material flow & stock inventory indirectly.
Collective order will not consider below points
1) Plant warehouse stock of direct components.
2) Anonymous Dependent requirements are not considered.