Saturday, 25 June 2016

Configurable Sales Order

lets discuss,steps necessary to process a configurable sales order.  

The goal of a configurable sales order is to allow customers to tailor a product to their needs.  Configurable sales orders enable customers to choose the specific parts which are combined to form their customized product.  Configurable sales orders are commonly used for products which include numerous configurations, such as cars, bikes, a ski set and computers.  A configurable sales order for a computer, for example, would allow the customer to mix and match different memory, speed, size of screen, peripherals, etc.  Before a material can be configured in a sales document, the following prerequisites must be met by Materials Management (MM) and Production Planning (PP):

·         The material must be created and defined as configurable in the material master.

·         The material must be allocated to a class (ie. a product category) and assigned characteristics (the different pieces combined to form the material).  For example, if a PC was a configurable product, it would be allocated to a class (ie. computer equipment).  The product, PC, would then be assigned characteristics, such as memory, speed, and screen, etc., to identify the characteristics  necessary for completion of the line item product.  These characteristics can be assigned values.  Values can be assigned to the characteristic ‘memory’ to specify the desired amount of memory.


·         A bill-of-material (BOM) which can be configured in the sales document, must be created.  A configurable BOM describes the different assemblies that make up a configurable product.

·         A configuration profile with configuration parameters used to control sales document processing must be created for the material.  This profile controls how the BOM is exploded during processing (ie. production order, sales order, or order BOM). 


·         Dependencies are allocated to characteristics so that separate pieces of the final product are properly combined.  A particular ‘screen size’, for example, may not fit a certain type of laptop PC.  Dependencies, therefore, are assigned to ensure that product pieces are combined appropriately.

·         Finally, selection conditions must be created so that the system chooses the proper routing and items needed to create the end material.

For information on the Materials Management and Production Planning processes that must be carried out before a sales order can be configured, refer to Solution Define Materials with Characteristics.

It is important to note that sales orders are configured based on BOMs created within Materials Management.  A BOM is a list of the components that make up a product.  BOMs are exploded and configured in sales orders.  This explosion in the sales order opens the configurable BOM for the selected material, so that the components can be determined and listed.  Using this BOM, the user from Sales and Distribution configures the material from the choices provided in the BOM.  Configurable BOMs, therefore, are usually not created in a sales order; they are simply customized and processed.  There are four ways of processing configurable materials (or exploding BOMs) in sales orders.  They include:

·         Planned/Production Order: Single-Level: The configurable item appears as the header material in the sales order.  With this type of processing, the material characteristics and values are allocated to the header material and cannot be configured separately.

      The header material ‘bike’, for example, has the characteristic ‘tire’ which has predetermined value options.  ‘Tire’, however, cannot be configured separately.  A pre-defined value must be assigned to it within the configurable profile of the bike.  After this header item is configured in the sales order, a production order is created and the material is assembled.  This type of processing is used when the separate parts of the header material must still be assembled to form a configurable item.  If a sales order is created for a bike, for example, a production order must also be placed for the assembly of the unique parts of the bike.  The specific parts demanded by the customer are crucial to the proper assembly of the bike. 
      On the other hand, once each separate piece of a laptop has been put together (ie. Memory, speed, screen, etc.), no further assembly is necessary because the pieces can be easily combined to form the PC at the time of a sales order.  In single-level planned/production order processing, the individual pieces of the configurable product are already determined, however, they still must be properly selected and assembled to form a one-piece unit, like a bike.

·         Planned/Production Order: Multi-Level:  In this case, the characteristics of the header material can be configured separately.  Unlike single-level production order processing, configuration is not limited to the header material.  A car, for example, possesses characteristics (the parts which are combined to create it), such as the body, engine, and tires which can be configured individually.  If a car is the configurable header material, its characteristic tire can also be configured.  The configurable assemblies of the characteristic materials, however, are stored separately from the BOM item (header material).  Using a production order, the different characteristic items are produced and then, assembled to form a car.

·         Sales Order: Also referred to as SET processing, sales order processing allows the user to view the different items that are combined to create the configurable header material in the sales order.  Collectively, the materials that make up the configurable product are referred to as a SET.  Skis, poles, and ski boots, for example, form the SET that make up a ski set.  The items of the ski set, like other configurable items that utilize sales order processing, are predetermined and remain separate when delivered to the customer.  A production order, therefore,  is not created for the assembly of SET items.  SET items are simply combined in the sales order to create a configurable material whose pieces remain separate.  Only the header material (ie. that of the ski set) can be configured and displayed in the sales order, not the components of each individual item of the set.  The different characteristics of the material appear as separate order items.  This type of processing is effectively used for configurable products, like ski sets and stereos, whose parts require little or no internal configuration.  For example, there are few, if any, configurable assemblies for the item skis.  They can be easily pulled from inventory along with boots and poles and sent unassembled at the time of delivery.  

·         Order BOM: This type of processing is used when a customer wants a make-to-order product.  Make-to-order products are unique to a particular customer, and therefore, cannot be properly configured from any existing BOM.  Since customer demand cannot be predicted in the case of a make-to-order, SAP allows the user to make manual revisions to an existing BOM by creating an order BOM in the sales order.  From this BOM, the user is able to configure the various pieces of the end product by deleting, inserting, and changing the quantity of items.  The results are sent to MRP for assembly.   



Initiate Configurable Order Entry

Order type (any order type is possible), business partners, and sales hierarchy information are entered normally at this stage of the process.

This task is carried out in the same manner as a standard order.

Determine Order Items and Terms   

At this point, the user chooses the desired configurable material.  The appropriate BOM explosion indicator must be set in the configurable profile of the selected material for planned/production orders: single-level, planned/production orders: multi-level, sales order, or order BOMs.
 
Contracts, payment terms, and scheduling agreements are determined in the same manner as for a standard order.

Check Configurability of Material

To create a configurable sales order, the end user must first ensure that the material desired by the customer is configurable.  As stated previously, a configuration profile, indicating which type of BOM explosion (processing type) to use, must be set up for the configurable material.  In addition, the BOM for the ordered material must be configurable, meaning that it offers multiple options for each item that makes up the finished product. 

If the configurable BOM does not meet customer demands at sales order time, an SD order BOM can be created.  This BOM is created in the sales order so the user can make the necessary manual revisions to the pre-existing BOM of the chosen material.  The revisions made for the SD order BOM are not saved as a new BOM for later use, nor is the original BOM updated with the changes. 

Configure Material

At this point, the material is configured to customer specifications.  After the necessary configuration profile is set up, the user enters the customer's selections in the configurable sales order.  If the customer simply orders off the configurable BOM that is exploded in the sales order, SET or production order processing is utilized.  A make-to-order, in contrast, is utilized to meet customer demand for materials and combinations which are not options in the BOM.  In this case, manual changes are made to the existing BOM through order BOM processing.  This type of processing is effective for a configurable product that requires a large amount of internal configuration.  A car, for example, is one material with many internal configurations.  The customer, as a result, can be more particular about the component assemblies.  To execute this type of processing the order BOM indicator must be set in the configuration profile of the material.  This allows the user to revise the present BOM according to customer specifications.  A stereo or a ski set, on the other hand, is usually processed in a SET.  These materials consist of separate items which are already assembled and therefore, do not permit internal configuration.  The chosen items, which form a SET, are simply taken from inventory and delivered to the customer.  SETs consist of separate items that do not require assembly.  A material that utilizes production order processing, however, requires a production order for the assembly of its parts.



Determine Type of Payment Guarantee

Typically payment terms have been set up for the customer on the customer master, prior to creation of the sales order.  There are situations, though, where the payment terms may be either changed from what has been defaulted from the customer master into the order, and a different form of payment may be input. 

Determine Delivery and Transportation Guidelines 

This task is carried out in the same manner as a standard order.

Check Processing Type

The system checks material processing type for production purposes.  In single-level planned/production order processing, sales order configuration requirements for the different pieces of the line item material are sent to MRP (Material Requirements Planning) where components are determined and stored in a production order for assembly.  In multi-level planned/production processing, requirements for the header material are sent to MRP.  The characteristic values assigned determine the components of the header material.  In addition, if these components have been assigned values, they must also be sent to MRP so the proper materials can be determined.  Once all requirements are determined and the components are assembled, the material is assembled in a production order. 

In SET processing, the separate items of the configurable material are simply pulled from inventory.  In production terms, this is called stock material processing.  Since the items are already present in inventory and remain separate, a production order is not needed to assemble the SET.  A production order, however, is created to pull the appropriate items from inventory and therefore, also serves as a means of tracking inventory.  Only the header material can be configured and saved in SET processing.  Item characteristics must be configured separately from the header material. 

Order BOM processing allows changes to be made to a BOM which was previously configured in the sales order.  For this to occur, a separate order BOM is created for the material.  Once the revisions are made, assemblies are sent to MRP.  Once the components are determined, a production order is created for assembly.  From a production standpoint, an order BOM requires sales-order related production because the production of the material is reliant on the make-to-order product configured in the sales order.  Since the requirements of the product cannot be predicted, production must rely solely on the configuration in the sales order.

Perform Availability Check and Transfer of Requirements

An availability check only occurs for component of the SET order processing.  If the customer is ordering a ski set, for example, he or she can choose from three types of skis, two types of poles, and four types of boots which have been predetermined and stocked.  Since the separate items of the SET are part of the company's stock, an availability check is carried out. 

Planned/production order processing does not involve an availability check because the chosen parts of the material must be assembled to create the material.  Although the different pieces of a bike can be selected in the sales order, the finished product (bike) does not exist in the company's stock.  A production order must be placed for the bike and
its different components.  In addition, an availability check is not carried out for order BOM processing.  This type of processing involves the revision of a configurable BOM.  Since a new BOM is created to account for these changes, the company is not equipped with the inventory needed to fulfill this order.  The desired assemblies, therefore, must be sent to MRP so a production order can be placed.  Order BOM processing initiates a make-to-order situation where the company cannot anticipate customer demands because the desired goods are not available in stock.

Determine Pricing

In order to calculate pricing for a configurable material, SAP uses a method called variant pricing.  Variant pricing is controlled by conditions and variant configuration.  Variant configurations are simply different assemblies of the same material.  The material car, for example, may have two different configurations, one which utilizes a V6 engine and one that uses a V8.  Each of these configurations is a variant of the material car.  Pricing conditions are records which calculate the discounts, surcharges, and taxes that are added to the price and can be created at different levels of the variant configuration.  Dependencies tell the system to apply the relevant condition record to the variant material.  If a discount is being offered for a red two-door car with a V6 engine, for example, the system would use a dependency to locate the appropriate condition record.  If the car is red and has two doors and a V6 engine, use discount condition record "XXXX".  This discount condition record is set up at the finished good level (ie. for the car) to facilitate the pricing process.  If condition records were set up for each of the characteristic values (ie. V6 engine, two-door, red car), it would be extremely time consuming, not only to create all the conditions, but also for the system to roll the prices of the components up into the individual configurable items, and finally into the header material.   

Order BOM processing, however, is unique because production costing information must be calculated after the sales order is configured.  Since the material is make-to-order, no prior production costing information exists for the product.  The system, therefore, cannot derive a price for the configurable product until production costing is complete.

Check Customer Credit

A customer credit check is performed in the same manner for a standard order.

Release Configurable Sales Order

The release order process is carried out in the same manner in a standard order.