SAP-for-Manufacturing
In the highly competitive and customer-focused manufacturing environment, businesses strive to deliver personalized products without compromising efficiency. The Make-to-Order (MTO) production strategy enables manufacturers to produce goods only after receiving a customer order, aligning production closely with demand and reducing inventory costs. Within the SAP-for-Manufacturing ecosystem, MTO is supported by advanced planning and execution tools that streamline this tailored production approach.
Make-to-Order is a production approach where manufacturing starts only after a confirmed customer order is received. Unlike Make-to-Stock (MTS), where products are produced for inventory in anticipation of demand, MTO minimizes finished goods inventory by synchronizing production with actual orders.
MTO is ideal for industries where products are highly customized or demand is unpredictable, such as aerospace, machinery, automotive components, or specialized electronics.
SAP’s Manufacturing and Sales & Distribution modules provide robust support for MTO processes:
In MTO, production is triggered directly by a sales order. SAP links the sales order to production planning, enabling:
SAP’s Production Planning (PP) and Sales and Operations Planning (S&OP) components synchronize customer orders with production scheduling, ensuring resources and materials are allocated efficiently.
SAP’s Material Requirements Planning (MRP) runs based on the sales order’s requirements, pulling in components and raw materials only as needed. Capacity planning ensures that production resources are available to meet order deadlines.
For highly customized products, SAP offers Variant Configuration (VC) tools that allow dynamic product specification during sales order entry. This ensures production precisely matches customer needs without creating numerous static product codes.
SAP’s Sales and Distribution (SD) module manages order fulfillment, shipping, and invoicing seamlessly linked to production, improving customer satisfaction and financial accuracy.
SAP’s integrated platform mitigates these challenges by providing real-time insights, process automation, and collaboration tools.
Make-to-Order production represents a strategic approach for manufacturers aiming to deliver customized products while controlling inventory and costs. SAP-for-Manufacturing equips businesses with the tools needed to implement efficient MTO processes, linking sales orders directly to production and ensuring timely, accurate fulfillment.
As customer demands continue to evolve, mastering MTO production with SAP will remain a competitive advantage for manufacturers focused on flexibility, quality, and customer satisfaction.