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Production Order in SAP

A production order defines materials, locations, quantities, and costs for planned production runs. It is created from MRP planned orders and converts shortages to production orders which can then have BOMs, routings, and costs assigned. Production orders can be checked for availability, printed for the shop floor, and confirmed through order confirmation, backflushing, and goods receipt which updates costs and inventory.

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83 views

Production Order in SAP

A production order defines materials, locations, quantities, and costs for planned production runs. It is created from MRP planned orders and converts shortages to production orders which can then have BOMs, routings, and costs assigned. Production orders can be checked for availability, printed for the shop floor, and confirmed through order confirmation, backflushing, and goods receipt which updates costs and inventory.

Uploaded by

Rangabashyam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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A production order defines which material is to be processed, at which location, and at what

time and how much quantity is required. It also defines which components and sequence of
operations are to be used and how the order costs are to be settled.

Planned orders are results of running MRP. Shortages of materials that are set to internal
procurement will create planned orders, which can be converted into production orders.
Production orders are "hard copies"; they cannot be adjusted by an MRP run anymore.

BOM and routing data of the materials are copied into the production order which
determines the list of components and operational data in the order.

Planned Costs also gets updated in the production order via component price and routing
activity price.

You can run an availability check on production orders which determines any missing
components in the order so that you can bring that missing component for the order
execution at shop floor.

You can print the production order for shop floor which indicates the list of components to
be consumed and what kind of operations to be performed in sequence at the work center.

After you have physically produced the material, you can declare the production through
order confirmation which updates the activities cost such as machine running price, labor
price on the order.

You can decide to automatically do the backflush (consumption) of components during


order confirmation according to the BOM. The consumption will reduce the inventory of
components and it is carried out with movement type 261 in SAP.

You can also post goods receipt of the material automatically during order confirmation.
Goods receipt would increase the inventory of the material, and it is carried out with
movement type 101 in SAP.

After Order Confirmation, all the cost such as the cost of components and activity cost will
be debited on the order, and once you post goods receipt, costs will be credited on the order.

Once, production order is fully confirmed and delivered, or business has decided not to
execute that order, then it needs to be technically closed which means order will no longer
be considered in MRP run and will be deleted from stock/requirement list. Order reservation
on components will also be deleted.

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