Strategy ’10’ is one of the frequently used and frequently discussed MTS strategies.

In this document we
try to explore this strategy with the relevant configuration setttings.

Strategy ‘10’ is particularly useful for pure make-to-stock scenarios and the sales requirements have no
effect in the production. The production is based on production plans transferred via demand program/
manually entered PIR’s. Strategy ‘10’ is also referred as ‘Net Requirements Planning’ and few important
features of this strategy are:

 Sales Order requirements do not affect the production.

 No concept of PIR consumption through customer requirements, since customer requirement is
not relevant for pure make-to-stock production.
 PIR reduction happens with PGI’s for Sales Order delivery.
 It is often used in make-to-stock REM.

Important Master Data:

In this example we will consider a simple BOM structure, one FERT containing one ROH as the BOM
component. Strategy 10 is used for finished products exclusively, thus the important parameters
relevant to this strategy is set up for the FERT item as shown.

Item category group ‘NORM’ in the Sales Organization view:

Strategy Group ‘10’ and a suitable availability check group without RLT (in standard, availability check
group ‘02’):
Relevant configuration settings:
Strategy group ‘10’ contains only main strategy ‘10’ in the standard system, the same can be verified/
maintained in OPPT transaction (alternatively in SM30 transaction, view V_T461P) and this
configuration is stored in T461P database table. More about the requirement type, requirement class and
their connection to the planning strategy is discussed in this document when required.

Availability check group without RLT can be verified in OVZ9 transaction. The checking rule for make-
to-stock strategies is ‘A’, and for make-to-order it is ‘AE’. In OVZ9, we check for the ‘check without RLT’
indicator for checking rule ‘A’ and checking group ‘02’ (can be checked/ maintained at table level in
SE16N transaction T441V table; alternatively in SM30 transaction V_441V view – field name is T441V –
OWBZP).

We will discuss the relevance of Consumption mode, Backward Consumption period and Forward
Consumption period a little later when we discuss the consumption logic and strategies. According to
the requirements of the planning perspective, these fields need to be maintained.

In PP point of view, these are the relevant master data that we need to provide.

Standard Scenario Flow:

Demand Management:
The PIR’s are created in this step, which can be manually inserted or derived from Sales and Operations
planning. In this example we create the PIR’s manually through MD61 transaction.
In the initial screen of MD61, the user can change the format (Monthly, Daily etc.) in the Planning period
field (RM60X-ENTLU). In this example, we switch to the daily view and provide requirement quantities
on three different dates as shown (note the ‘Active’ indicator in MD61).

When working with multiple BOMs and production version wise BOM selection, use the menu
functionSettings -> Production Version in the schedule line tab in MD61/ MD62 to enable the production
version column, so that you can define PIR’s according to the production versions.
The system finds requirement type as ‘LSF’ derived from the configuration of the strategy 10. It is
defined in OPPS transaction (for a reference of assignment of Requirement Types to the planning
strategies, take a dump from T461S table). Check the entry for ‘requirement types for independent
requirements’ in OPPS configuration for strategy ‘10’. Since stock/requirements list or MD04 is a
dynamic report, we should be able to see the PIR’s entered (here in MD61) in MD04.

Procurement before Sales:

In this step, we need to procure (produce, ‘procurement’ is a generic and broad term) the FG so that we
can sell the same later against the customer orders.

We run MRP, get the procurement proposals from MRP (in this example planned orders), and convert
them to production orders (in case of REM, the production is based on planned orders and the planned
orders are non-convertible), and produce against the production orders and do the PGI against SO
delivery.

After running MRP, system generates planned orders to cater the requirements; lot size plays an
important factor for the planned receipt quantities.

In this example, I have converted the first planned order (you can perform partial conversion) fully.

Now we post confirmation for the production order (for simplicity, we have activated auto GR through
control key PP03 in routing of the FERT and auto GI through backflush indicator of the ROH material
master backflush indicator in MRP2 view), and get the stock of the FERT.
Sales Order:
We now create a sales order of 30 pieces in VA01 transaction.

In the procurement tab, we find the Requirement Type as ‘KSL’ and Schedule line category as ‘CP’ in
standard system. The system finds the item category as ‘TAN’ in standard system.

These are derived from the settings for planning strategy OPPS, and from the configurations in SD. As
discussed earlier, the requirement type for customer requirements is defined as KSL for strategy ‘10’ in
OPPS (table T461S).

The schedule line category and the item category are derived as discussed here. In SPRO -> Sales and
Distribution -> Sales -> Sales Documents -> Sales Document Item -> Assign Item Categories (SM30 transaction
view V_T184), we define that based on the Sales Document type and item category group the value for
the item category. The SD document type that I chose in this example is ‘ZDSE’, and the item category
group in Sales Organization view of the material master we have selected ‘NORM’.
In SPRO -> Sales and Distribution -> Sales -> Sales Documents ->Schedule Lines -> Assign Schedule Line
Categories (SM30 transaction view V_TVEPZ), it is defined that the proposed schedule line category for
item category TAN and MRP Type ‘PD’ combination will be ‘CP’:

We save the sales order and check the stock/requirements list. The sales order is displayed, but it does
not affect the available quantity.

Technically speaking, this depends on the value of VBBE – NODIS (No MRP) field value for the sales
order, line item and schedule line combination. For requirement type ‘KSL’, in standard it is ‘1’.
This is derived from the SD configuration as discussed in the following section. In OVZH configuration,
we maintain the requirement type to requirement class mapping; for KSL it is 030. In OVZG
configuration for requirement class 030, the No MRP field is maintained as ‘1’. If you want to switch off
the display of sales order in MD04, you can maintain this value as ‘2’. Please note, do not maintain this
as ‘blank’ for requirement class 030, the requirement transfer can generate serious consequences.

Also, it can be noted that the PIR quantities have not been consumed. For strategy ‘10’, no concept of
PIR consumption is there since the SO’s are not relevant to change the planned quantities.

Goods Issue for Delivery and PIR Reduction:

We create a delivery in VL01N and post the Goods Issue for Delivery on 08.12.2013. For strategy ’10’,
PIR’s are reduced by the 601 movement against the delivery.

We face an issue in this example, the PIR is not reduced:

The reason the PIR is not reduced is that the PIR lays in future 11.12.2013 than the PGI for delivery
08.12.2013 and we do not have any forward consumption period maintained in material master. As per
OSS note 772857 Question # 3, “the reduction occurs in the time scale up to the current date and the
oldest planned independent requirements are reduced first. By maintaining the consumption period
forwards, planned independent requirements are used for the reduction from the current date up to the
number of days in the future entered there. The used consumption mode is not effective.”  It is
recommended to go through OSS note 38687.
So we reverse the Goods Issue in VL09, change the consumption mode to 2 or 3 with a forward
consumption period of say 15 days, and post the Goods issue again and check.

The first PIR has been reduced now.

Considering OSS note 38687, the oldest PIR’s are reduced first up to the current date, then system
checks whether forward consumption is allowed for a certain period and can reduce the same. The
consumption mode, backward consumption period and forward consumption period can also be
maintained at an MRP group level in OMD1 or OPPR configuration, but the values entered in the
Material Master MRP3 view has the highest priority. We should also consider BAdI
MD_PIR_FLEX_CONS for flexible consumption/ reduction according to the MRP elements.

After reduction in the PIR’s, the old PIR quantities can be checked in MD63 Schedule line tab.
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…

here you can observe that two sales orders managed in different segments independently…

Now carry out MRP run with MD02….

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 convert the second planned order of second sale order to production order as shown in the above
procedure and release the order…now situation of 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 after this delivery sale order and sale order stock both disappear from MD04 as shown below…
Now complete the delivery for the second sale order also with VL01N as per the procedure shown
above….

Now final situation of MD04….

How Strategy 40 - Planning with Final Assembly Works

SAP Configuration ==> SAP Production Planning

Strategy 40 :-

1. Stocks on hand reduces the PIR during MRP run.  

e.g. if stock is 100 and PIR is 100, MRP run will not prompt 100 for procurement. if stock is 0 and PIR is
100, MRP run will prompt 100 for procurement.
2. Sales order creation reduces the PIR. 
e.g. if PIR is 100, sales order 90, PIR becomes 10(withdrawal 90).

3. Delivery reduces the Sales Order.

Planned independent requirements are consumed by incoming sales orders so that the master plan is
always adjusted to suit the current requirements situation.  
You must maintain the following master data for the finished product in the material master:

Strategy group 40 on the MRP screen.  

- Consumption parameters (Consumption mode, Bwd consumption, Fwd consumption) to allow
consumption of independent requirements. If no consumption parameters are maintained in the
material master, the system uses default values are taken from the MRP group.  
- To control consumption, you maintain a consumption mode as well as a consumption period. 

Item category group (for example, NORM) on the Sales Organization Data screen.

Four important points :-

1. Planned independent requirements are used to trigger the procurement and production of the
necessary assemblies and components before receipt of the sales orders. 

2. As soon as the sales order is received, it consumes the planned independent requirements. 

3. An ATP (available to promise) logic during sales order processing will checks whether sufficient
planned independent requirements have been planned to cover the sales order. 

4. Requirements from the sales orders are passed on to production and can lead to changes made to
procurement if the requirements from the sales orders exceed the planned independent requirement
quantities. If there is insufficient coverage of components (the sales order quantities exceed the planned
independent requirement quantities), the sales orders cannot be confirmed. The system therefore
automatically adjusts the master plan. Planned independent requirement quantities that are left
unconsumed increase the warehouse stock of the finished product

STRATEGY 40:

Purpose

This strategy is probably the most widely used make-to-stock strategy. It makes sense to use this
planning strategy if you can forecast production quantities for the final product.

Planned independent requirements are consumed by incoming sales orders so that the master plan is
always adjusted to suit the current requirements situation. This means that the important feature of this
planning strategy is that you can react quickly to customersu2019 requirements. The smoothing of the
master plan is less important.

Prerequisites

You must maintain the following master data for the finished product in the material master:

Strategy group 40 on the MRP screen.

Consumption parameters (Consumption mode, Bwd consumption, Fwd consumption) to allow
consumption of independent requirements. If no consumption parameters are maintained in the
material master, the system uses default values are taken from the MRP group.

To control consumption, you maintain a consumption mode as well as a consumption period. For more
information, see Consumption Strategies and Logic.

Item category group (for example, NORM) on the Sales Organization Data screen.

Planned independent requirements are entered at finished product level and trigger the procurement
and production of the necessary assemblies and components before receipt of the sales orders.

It is possible to use information from the sales forecast, the Sales Information System, or other planning
tools to plan production quantities.

As soon as the sales order is received, it consumes the planned independent requirements. You can then
compare the planned independent requirements situation with the actual customer requirements
situation.

An accurate availability check is performed according to ATP (available to promise) logic during sales
order processing. The system checks whether sufficient planned independent requirements have been
planned to cover the sales order.

Requirements from the sales orders are passed on to production and can lead to changes made to
procurement if the requirements from the sales orders exceed the planned independent requirement
quantities. If there is insufficient coverage of components (the sales order quantities exceed the planned
independent requirement quantities), the sales orders cannot be confirmed. The system therefore
automatically adjusts the master plan. For more information see Coping with Insufficient Coverage of
Components. Planned independent requirement quantities that are left unconsumed increase the
warehouse stock of the finished product.

STRATEGY 50:

Purpose

Use this planning strategy when the main value-added process is final assembly.

This strategy and Planning with a Planning Material (60) are probably the most widely-used strategies
in a make-to-order environment. Like all make-to-order strategies, you should use strategy 50 if
production is unique for each and every customer; in other words, it is not possible to change the stock
for different sales orders.

Prerequisites

You must maintain the following master data for the finished product:

Strategy group 50 on the MRP screen

Consumption parameters (Consumption mode, Bwd consumption, Fwd consumption) so that the
independent requirements can be found. If no independent requirements can be found, default values
are taken from the MRP group.

For more information, see Consumption Strategies and Logic.

Item category group (for example, NORM) on the Sales Organization screen
A BOM is required for the finished product. There are no major implications for the BOM components.
However, you must maintain the following settings:

Set the MRP type to P* (or M*) to plan the components in MRP.

You may want to consider setting the Individual/coll. indicator to 2 for a make-to-stock procurement of
components in a make-to-order environment.

Production quantities can be planned effectively. It is possible to use information from the Sales
Information System, SOP, or other planning tools to plan production quantities.

Procurement of the components is planned by means of planned independent requirements entered at

the finished product level. The system creates special planned orders at the finished product level for
these planned independent requirements. These orders are only relevant for production once a sales
order for the finished product exists.

Planned independent requirements that are planned using this particular strategy are listed in a
separate segment in the MRP list. The planned orders are created with the order type VP and are
unconvertible. The sales orders for this strategy are entered as individual customer requirements and
are maintained in a separate segment in the planning run.

The assemblies are, however, produced or procured before the sales order is entered. Production is
carried out up to one level before the finished product level, and the assemblies and components
required for producing the finished product are placed in stock to await the incoming sales order.

Final assembly is triggered once a sales order has been entered.

An availability check is performed on the basis of planned independent requirements. This means that
unplanned stock (such as returns) is not considered for sales. See Availability Check.

The incoming sales order consumes the planned independent requirements, and this in turn reduces the
unconvertible planned order quantity.

The system creates a new convertible planned order for the sales order quantity. If the unconvertible
planned order quantity is not completely used up by the sales order quantity, it remains in the system. If
the sales order quantity exceeds the planned independent requirements quantity, the unconvertible
planned order quantity is increased. See Coping with Insufficient Coverage of Components for more
information.

Planned independent requirement of the finished goods quantities that are left unconsumed increase the
warehouse stock of the components and cause procurement to be decreased or not to take place at all in
the next period. This process is called netting