Making to Order with a Twist: Unveiling Strategy 50 in SAP PP

In SAP Production Planning (PP), efficiency is king. But how do you ensure that efficiency translates to responsiveness when dealing with customer-specific demands? That’s where Strategy 50, also known as “Planning without final assembly,” comes in.

Understanding Make-to-Order (MTO) with Strategy 50

Traditional Make-to-Stock (MTS) production involves churning out finished products based on forecasts. Strategy 50, on the other hand, thrives in a true Make-to-Order (MTO) environment. Here’s the gist:

• Sub-assemblies in Stock: You pre-produce and stock lower-level assemblies that comprise the finished product. This allows for faster final assembly when a customer order arrives.
• Final Assembly on Demand: The final assembly process is triggered only after a confirmed sales order. This ensures you’re building exactly what the customer needs.

Why Choose Strategy 50?

Here are some scenarios where Strategy 50 shines:

• High-Value Final Assembly: If a significant portion of the value addition happens during final assembly (think customization), holding pre-built assemblies makes sense.
• Unique Customer Needs: Strategy 50 eliminates unnecessary finished product stock when each customer order has unique specifications.
• Reduced Lead Times: Having sub-assemblies ready can significantly reduce lead times for finished products.

Setting Up Strategy 50

• Material Master Magic: Configure the finished product in the material master with planning strategy “50.”
• Independent Demand Planning: Use Planned Independent Requirements (PIRs) to forecast demand at the finished product level. MRP will then plan for the required sub-assemblies.
• Sales Order Triggers Production: When a sales order for the finished product arrives, the system converts the planned order into a production order, triggering final assembly.

Things to Consider with Strategy 50

• Accurate Forecasting: Since finished products aren’t pre-built, accurate forecasting of sub-assembly requirements is crucial.
• Safety Stock Management: Maintaining sufficient safety stock of sub-assemblies helps avoid production delays due to unexpected demand.

Strategy 50: A Powerful Tool for MTO Success

By understanding the nuances of Strategy 50, you can leverage its capabilities to optimize your MTO production processes in SAP PP. Remember, successful implementation requires careful planning and configuration. With the right approach, Strategy 50 can be your key to delivering customer-specific products efficiently and promptly.