SAP Production Order

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SAP Production OrderSAP Production Order is a transactional data object that belongs to the production and planning module. Production orders are used to capture the quantities and cost-related to production.

How to Create SAP Production Orders

If the production planning process is MRP-driven, once the MRP run is executed, planned orders will be created. For the items that are produced in-house, it is possible to convert these planned orders into production orders.

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SAP Production Order creation can be done after evaluating the stock requirement list in SAP. Transaction to view the stock requirement list is MD04. From this interface, we can view the planned orders created and we can convert the planned orders into production orders. Other than the above transaction code, there are many options and transaction codes available to create production orders in SAP. Some of these are CO01, CO08, CO41, and MD16. Any of these transactions can be used depending on the requirement.

When a production order is created, the following actions are carried out:

  • A routing is selected. Its operations and sequences are transferred to the order.
  • The bill of materials is exploded and the items in the bill of materials are transferred to the order.
  • Reservations are generated for stock items in the bill of material.
  • The planned costs for the order are generated.
  • Availability check for the components.
  • Purchase requisitions are generated for items procured externally and externally processed operations.
  • Generation of Settlement Rule.

The MRP will no longer make automatic adjustments to production orders.

How to Release SAP Production Order

The release production order process is an important business process, which confirms that the order is ready to be worked on the shop floor. In this process, the production supervisor releases the production orders (shop floor orders) for execution.

During the release the following functionalities will be taken place:

  • If the produced material is a batch-managed Item, it will be goods receipt-based batch number.
  • Availability check for the components will be done. This depends on the configuration settings.
  • Batch determination for the components – If the backflush is enabled for the components.
  • In-process inspection lot creation – If the In-Process Inspection has been activated.
  • Printing shop floor papers.
  • Confirmation.
  • Consumption recording.

How to Execute and Close SAP Production Order

During production order execution, the below activities take place:

  • Material Request from Store – The production order will have a list of components that are required to carry out the production. There, the materials can be semi-finished goods or raw materials.
  • Consumption of Components – Once the components are received from the stores, those will be issued against the production order. This can be done manually or automatically.
  • Confirmation of Production Activities – Production order is confirmed when the production activities are completed. This will create inventory in the system. This process will also capture the activity costs based on the routing given for the produced component.
  • Delivery Tolerances – tolerances can be maintained in the production order so that excess quantities produced can be captured.
  • QM Integration – If the produced material is quality-related, confirmation of the production order will create an inspection lot in the system. This will then be used by the quality department to record the quality results.
  • Technical Completion – Once the production order is complete, we need to set the technical complete status for the order. This makes the production order available for settlement and variance calculations.

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