Strategy 10 in SAP Production Planning is know as Make-to-stock Production. It is used for products that are manufactured and stocked before receiving customer orders. This strategy is commonly applied in industries where demand can be forecasted with reasonable accuracy and where having products readily available is crucial.
Characteristics of Make-to-stock(Strategy 10)
Forecast-Based Production:
Production planning is driven by forecasted demand rather than actual customer orders.
Inventory is built up based on anticipated needs, and stock is kept on hand.
Inventory Management:
Finished goods are produced and stored in inventory.
The focus is on maintaining optimal inventory levels to meet customer demands promptly.
Planning:
The planning process involves creating production orders based on forecasted requirements.
Planning is generally done using Material Requirements Planning (MRP) runs.
Order Fulfillment:
Orders are fulfilled from the available stock in inventory.
This strategy aims to reduce lead times since products are already produced and stored.
Cost Implications:
There might be higher inventory carrying costs.
However, it can lead to improved customer service levels as products are readily available
Production Control:
Production quantities and timings are based on forecast demand rather than actual orders.
This can sometimes lead to overproduction or underproduction if forecasts are inaccurate.
Sales Order Processing:
When a sales order is received, the system checks the inventory and, if available, the product is shipped directly from stock.
Key features of strategy 10:
Make to stock
Planning not impacted with sales order/customer order
Stock is considered in planning
PIR(Planned Independent Requirements=Forecast) is consumed with consumption of stock
Oldest PIR is consumed first unless consumption fields are maintained
When we want production to be determined by production plan (Demand management) And if do not want sales orders to influence production directly.
Example: Foods Industry, Consumer Goods Industry.
Illustration with sap screenshot: Prerequisites:
Material has to be created with all relevant MRP data
BOM to be created (For buy & sell scenario not required)
Work center to be created(For buy & sell scenario not required)
Production versions to be created (For buy & sell scenario not required)
Demand should be uploaded/PIR.
Material Master MRP views.
MRP 1 view helps determine how materials are planned and managed in the system.
MRP Type: PD is typically used for strategy 10.
Reorder Point: If applicable. This field is generally used in continuous planning strategies.
Lot size: Set according to your requirements. For Strategy 10, EX (Lot-for-Lot) is often used, meaning the order quantity is determined by the specific order demand.
MRP 2 view settings are crucial for defining procurement processes and planning behavior.
Procurement Type: Here maintained 'E' based on requirement you can maintain X/F.
Based on requirement you can mention number of inhouse production/GR processing time and can be filled other fields if applicable.
Special Procurement: here it blank it can be
20 (Subcontracting)
30 (Stock Transfer)
40 (Consignment)
Storage location: Assign a storage location if necessary. This setting helps in managing where the material is stored within the plant.
MRP 3 view is especially relevant for determining planning parameters related to procurement and stock management.
Strategy group: 10 (Make-to-Stock). This field defines which planning strategy is used for the material.
Consumption parameter can be filled which will be suitable for your scenario.
Availability check: Can be used standard/customized which is suitable for your scenario.
MRP 4 view give details about BOM explosion and REM settings(if applicable).
Production version also can be created from this view.
MD04 screen before MRP run:
Even though SO created of 50 quantity it does not affect the planning. It considered the stock of 30 quantity and planned for only 70 as demand was of (30+70) =100 quantity.
Convert Planned order to production order.
Perform GR against production order and stock increased from 30 to 70.
Complete the delivery against sales order. PIR of 50 quantity consumed with stock of 50 quantity.
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