SAP for Mill Products

Variant Configuration and MTS Production

A wish or reality?

Stefan Soeller, SAP

Solution Management - IBU Mill Products & Mining
Configuration basics

Configuring a sales order line item results in

- Production: Make-to-Order
- Inventory: Customer specific stock

Configuring a production order always requires a

relation to sales order stock / copy characteristics

2011 SAP AG. All rights reserved. 2

Further Solution Discussion is part of DIMP

SAP ECC 6.0 Industry Extension DIMP

Mill Products
Industry & Enterprise Extensions Mill Products

Automotive
EE EE EE IE IE IE
Automotive
Aerospace & Defense

SAP ECC Core Engineering & Construction

High Tech

Former add-on has Industry Extension DIMP Processes running in one

become Industry used across several industry segment
Extension industries supported
Functionality still available Functionality originally Processes across different
created with background DIMP industries not
Shipped as part of the ERP
of only one of the DIMP allowed
Core Component
industries
Individual check by SAP
Only one IE can be active
Custom Development
possible
DIMP : Discrete Industry / Mill Products IE: industry Extension
2011 SAP AG. All rights reserved. 3
Configuration in MTS possible in three different scenarios

Sales Order Production Order

Different behavior in Possible with external planning

ERP tool e.g. APO

ERP & external planning tool

2011 SAP AG. All rights reserved. 4

Configuration in MTS

Sales Order Production Order

Material Variant (MTS variant) Any variant configuration
material

Different behavior in
ERP Only possible with external
planning tool e.g. APO
ERP & external planning tool

Pre-requisite:
Pre-requisite:
Material is batch managed
Material is batch managed
Customizing requirement class
Active integration model / MRP
type external planning

2011 SAP AG. All rights reserved. 5

Changing Characteristic Values of configured MTS Material Variants
Change in sales order ERP only

Business Background

Direct sales (e.g. metal service center, lumber, .) utilizes MTS material

Customer request is different from what is available in stock :

Available material / inventory: 10 feet tube
Customer request: 9 feet tube

Sales rep needs to change material master data in sales order from 10 to 9

No MTO segment / NO individual customer requirement should be created

No production order should / can be involved in cutting tube to length

Execution based e.g. on delivery documents (no capturing of cutting cost). See
transaction MILL_CUT

2011 SAP AG. All rights reserved. 6

Changing Characteristic Values of configured MTS Material Variants
Change in sales order ERP only

Restrictions
Changed values are only considered during batch determination,
pricing, quantity conversion, and in sales documents
ERP MRP does not consider changed characteristic values.
In case of insufficient material in stock, MRP will create replenishment
order for 10 feet length

2011 SAP AG. All rights reserved. 7

Changing Characteristic Values of configured MTS Material Variants Example

Sales Order
Material Master
Tube 123
Grade 1b
Core Diam. 150
Width 200 Specified in Sales Order
Length 8 10 feet

Batch Determination
Tube 123 Tube 123
also used for:
Batch 1 Batch 2 Pricing
Length 8 feet Length 9.5 feet
Print Sales Doc
Quantity conversion
Weight ... Weight ...

Only production relevant with

external planning system

2011 SAP AG. All rights reserved. 8

Changing Characteristic Values of configured MTS Material Variants
(ERP&APO) -1-
Change in sales order ERP & APO

Business Background

Same as before

Behavior of external planning tool e.g. APO

APO planning run is able to plan on characteristic level (while ERP can only plan
on material level), and thus transfers changed sales order characteristics to APO
planned order
APO pegging connects sales order with planned order based on characteristics
APO orders transferred to ERP as a MTS production order with configuration of
sales order

2011 SAP AG. All rights reserved. 9

Changing Characteristic Values of configured MTS Material Variants
(ERP&APO) -2-
Change in Sales order ERP & APO

Motivation
Classical Make-to-Order has limitations in planning
Planning run cannot access stock from other sales orders
Inability to increase quantity of planned orders to e.g. utilize its quantity lot
size optimization not possible
Sales order stock could only be moved into make-to-stock segment with material
master price (not considering sales order configuration)

Use Make-to-Stock production with configurable materials

Provide additional flexibility for supply chain planner in APO
by modeling sales order driven make-to-stock
(Best Practice Primary Steel concept)

2011 SAP AG. All rights reserved. 10

Make-to-stock production with configurable materials (APO)

Support configuration for MTS item in sales order and production

Sales Order Planned Order Production Order Goods

Configure MTS-item APO ERP Receipt
MTS-item with own MTS-item with own of MTS item
configuration configuration (batch)

Customizing of APO ensures that Characteristic values

requirement class; characteristic values are passed on to
batch managed are passed to planned production order in ERP
order without sales order
reference

APO pegging connects sales order with planned order based on characteristics
2011 SAP AG. All rights reserved. 11
Configuration in MTS

Sales Order Production Order

Fully Configured Material Any variant configuration
Variant (MTS variant) material

Different behavior in Possible with external planning

ERP tool e.g. APO

ERP & external planning tool

Pre-requisite:

Pre-requisite: Material is batch managed

Material is batch managed Active integration model / MRP

Type external planning
Customizing requirement class

2011 SAP AG. All rights reserved. 12

Configuration in MTS Production Orders

Enable the production planner to generate a MTS production order with the header
material configured to his needs

Use Cases
The production planner has knowledge of future incoming demand and needs to be
prepared with e.g. semi-finished or finished goods in inventory to quickly satisfy the
demand
Material produced is a trial version for internal or external usage
Excess inventory (e.g. cancelled SO) / damaged / doesnt meet original quality
requirements / needs to be processed to be sold at a later time

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Create Production Order DIMP specific

1 2

1 Characteristic values can be edited

2 No sales order assignment required

2011 SAP AG. All rights reserved. 14

Thank You!

Contact information:

Stefan Soeller, SAP Canada

Solution Management IBU Mill Products & Mining
Email: stefan.soeller@sap.com
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