3.make To Order & Make To Stock

Reimagine everything
Make-to-order & Make-to-stock

Make-to-order (MTO) – main characteristics
Make to order process is characterized by the fact that materials are manufactured based on customer-specific order /
requirement. E.g., high-end vehicles, motorcycles, other luxury cars. The products are tailored to customers’ individual needs.
▪ Production begins only after a customer order has been confirmed
▪ The sales order generates either a planned order or directly a production order (SD integration with PP module)
▪ The stock of the produced material is seen at sales order level
▪ Costs are tracked at the sales order level and not at material level
Copyright © 2021 Deloitte Tehnologie SRL. All rights reserved. Reimagine everything 2
Make-to-order process flow
Once the sales order has been received, the material can be produced and the goods receipt that corresponds to the specific sales order
stock can than be posted. As soon as the delivery is due, the material can be delivered, and the goods issue can be posted (reducing the
sales order stock).
Material Mgmt. /
Production
integration
Process flow
Make-to-order – Production order
Within the make to order process, the relevant quantity and

the material availability date are transferred form the sales
order to materials planning as an individual customer
requirement.
A material requirements planning (MRP) run will automatically

generate a planned order for the material and determine the
corresponding dependent requirements.
When you are ready to start production, you create a

production order for the final product by converting the
planned order. The system then transfers the confirmed
quantity and material availability date from the production
order to the sales order.
Make-to-order – variations
Variations of the process:

• With assembly order (the components to be assembled are already available)
• the sales order generates a production order
• Does not send requirements to MRP
• The system returns the confirmed quantity and delivery date from the production order to the sales order
• Without assembly order (the components are not available)
• the sales order generates a planned order which needs to be converted into a production order
• It sends requirements to MRP
• The system returns the confirmed quantity and delivery date from the production order to the sales order
Make-to-stock (MTS) – main characteristics
Make to stock process, in contrast to the make to order process, is characterized by the fact that materials are produced and
stocked in advance. Safety inventory protects against stockouts due to variability of arrival time and processing time. Inventory also
permits economies of scale.
▪ The product will be manufacture based on forecast of customer demand
▪ The stock of the produced material is seen as unrestricted stock and can be used further in stock sales process
▪ Costs are tracked for the material, and not at the sales order level
▪ Involves a production plan for building stock
▪ SD integration with PP and MM modules
Make-to-Stock process flow
The materials will be produced in advance by determining a production planning based on the forecast of the customer demand. Once the
materials are produced, they are held in stock until a sales order from the customer is received. After the sales order is received. As soon
as the sales order is received, the materials can be delivered, and the goods issue can be posted (reducing the stock).
Process flow
Make-to-order versus Make-to-stock process
Make-to-order
Receive customer Item manufactured from Finished Shipped to

order raw material inventory product customer
Make-to-stock
Item manufactured
Finished Finished product held Receive customer Shipped to
from raw material
product in stock order customer
inventory
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related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide
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regulations of public accounting.
Copyright © 2021 Deloitte Tehnologie SRL. All rights reserved.

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3.make To Order & Make To Stock

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Reimagine everything

Make-to-order & Make-to-stock

▪ Production begins only after a customer order has been conﬁrmed

▪ The stock of the produced material is seen at sales order level

Within the make to order process, the relevant quantity and

A material requirements planning (MRP) run will automatically

When you are ready to start production, you create a

Variations of the process:

▪ The product will be manufacture based on forecast of customer demand

▪ Involves a production plan for building stock

▪ SD integration with PP and MM modules

Receive customer Item manufactured from Finished Shipped to

Copyright © 2021 Deloitte Tehnologie SRL. All rights reserved.

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