Difference Between MTS and MTO in SAP: Process Overview and Configurations

This document provides an overview of the differences between make-to-stock (MTS) and make-to-order (MTO) production strategies. It outlines the purposes, processes, and configuration considerations for each approach. The key tradeoffs between maintaining stock inventory versus producing on demand are discussed.

Key sections of the document are:

  • Introduction explaining MTS and MTO at a high level
  • Details on MTS including uses, process flow, and SAP configuration
  • Details on MTO including uses, process flow, and SAP configuration
  • Comparison of challenges between MTS and MTO
  • Step-by-step overview of executing MTS and MTO in SAP using transaction codes
  • Summary of key transactions for MTS and MTO

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5 Steps Configuration Guide to Product Allocation in SAP S/4 HANA

SAP S4HANA has built a product allocation mechanism process for manufacturers to keep an accurate record of product availability and planning as per end customer requirements. Product allocation is a function provided for carrying out control options intended to help an extensive organization avoid critical requirement and procurement situations. In simple words, product allocations represent an ordered allocation of production for certain periods. Product allocations can be created according to various criteria such as customer-wise or region-wise. Product allocation allows you to set buying limits on customers or groups of customers, which is sometimes required by companies that have new releases in high demand in the market. The goal is usually to allow for proportional supply across different regions, thus enabling a broad but solid market presence and high customer satisfaction regardless of region.
Following configuration steps are covered in this guide with screenshots;

  • Step 1: Activate Product Allocation
  • Step 2: Configure Product Allocation Object
  • Step 3: Manage Product Allocation Planning Data
  • Step 4: Manage Product Allocation Sequence
  • Step 5: Assign Product to Product Allocation

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