Configure To Order fulfillment along with material varaint configuration and Pricing

Most of the Manufacturer’s offer new variants for their products so as to achieve below advantages

• Reduces the time to react with the exact customer requirement and try to offer options and help them to get the best configuration
• System can configure the new products automatically including all the changes such as cost of production, pricing etc

Configure to Order:
To meet such order fulfillment we need to have multiple variant of the finished good. Such orders are classified as Configure to Order and the stock is known as Make to order.




Example:
A customer buying a laptop can choose the components as per requirements. Providing the configuration option to the customer helps to get the exact specification and produce the same.

The entire document will be based on one such example of a Laptop, which is Configurable, configuration from MM side to achieve variant configuration, configurations from SD to fulfill a configure to order requirement, steps to have a variable pricing setup as different components may have different price’s

1. Variant Configuration:

Below is the hierarchy of that will be followed to make and material configurable.

Consider a scenario where customer is offered to configure their own laptop by selecting RAM & Processors

Material Information & Description

Sr No	Material No	Description	Material Type
1	4328	Laptop	FERT-Finished Good
2	4329	RAM-4GB	ROH-Raw Material
3	4330	RAM-8GB	ROH-Raw Material
4	4331	Processor-I-3GHz	ROH-Raw Material
5	4332	Processor- I-5GHz	ROH-Raw Material

Here laptop is the finished product, whereas the remaining are components that will be used to build the laptop


We shall begin the configuration from bottom by defining characteristics


1.1 Create Characteristics:
Components to be used to configure the Laptop will be the Characteristics
T-code:CT04




1.2 Create Class: LAPTOPP200
Class Type: 300
Note: Class type 300 supports variant configuration
T-code: CL02
Add the characteristics created in the above step

• Create a Configurable material
  Material: 4328
  Material Type: Finished Good

1.In basic View 2 the material configurable field is set

2.Class LAPTOPP200 defined above is assigned in the classification View
3. As the material is Configure to order (MTO) , Strategy group = 25 in MRP 3 view



Other components with material type ROH i.e. raw material are created


1.3 Configuration Profile:

• Every Configurable object must have a configuration profile.
• It helps to control configuration process in Sales Order

1. Create Configuration profile for the end Product (T-code:CU41)
2. Under Configuration Parameter , process is selected as Sales Order and BOM explosion is Single level and the application is selected as SD01 ie Sales & Distribution.




BOM with Dependency :

Bill of material is defined where all the components are added that can be used during to build the finished product .
Here we are using dependency functionality which will link the characteristic values that we have defined for components with the components itself.

1. Create BOM: CS01
    Note BOM usage is set as ‘5’ ie Sales & Distribution



Now for example the component 4329 ie RAM 4 GB is assigned to char value 4 using object dependency


Similarly,

Component	Characteristic	Characteristic Value	Syntax
4330	MRAM	8	MRAM=’8’
4331	MPROCESSOR	3	MPROCESSOR=’3’
4332	MPROCESSOR	5	MPROCESSOR=’5’

Now the Configration and Master data Set-up is completed for Material Varaint.
We can check the same by simulating the same as below.


The above setup for variant configuration can be simulated using CU50


For finished good 4328, configuration screen appears, one selecting the variants the respective components are picked up.


2. Configure to Order:
Configure to order as the word indicates that the product/ material has to be produced/assembled only when there is a customer demand.


Once SO is created , Purchase requisition is created which can be found in the schedule line . This PR is then converted to PO and thus the required material is build as per requirement.








Below are the Configuration Steps to achive the same.

• Sales  Order item category & Schedule line category configuration

SPRO–>Sales & Distribution–>Sales–>Sales Document–>Sales  document Item


Define Item categories:
Item Category helps to control the processing of the respective material in the Sales Order



Note:

• Customized Item Cat ‘MTAB’
• Special Stock ‘E’ is maintained ie Orders on Hand
• Bill of Material/Configuration is also maintained

Assign Schedule Line categories:




Schedule line determination = Item cat + MRP Type
Where,
MRP type is maintained in the MM


Master Data setup :
1. Item Cat group & MRP type maintained in Material Master
2. Source List maintained
    Supplying  Vendor is defaulted in the PR which will be created in the schedule line of Sales order

3. Pricing:
When the finished product is a configurable one , the pricing should also vary as per the componets selected.
Example :

Component	Characteristic Value	Sales Price (Rs)
4329	4GB  ( RAM)	250
4330	8GB (RAM)	400
4331	3Ghz ( Intel I-3 Processor)	750
4332	5Ghz ( Intel I-5 Processor)	1000

  Based on the component selected the final price of the product varies.


3.1 Create a Characteristic ZPRICEP200 to represent price of all variant’s
T-code:CT04Under additional Tab maintain
Table: SDCOM & field: VKOND


3.2 Add this characteristic in the Class: LAPTPOP200 defined earlier





3.3 Creating Dependency’s for Characteristics:
Creating dependency between the Characteristic ZPRICEP200 and the individual characteristic value of components.



3.4 Condition Records:
T-code:VK11


End to End Cycle to  for Configure to Order fulfillment
















(Due to limitation of screenshots i had to take a capture multiple SAP screens in single screenshot in the End to End flow, please click on the images to have a better view)

The above end to end cycle captures all the steps
1. Variant configuration which helps to offer options to customer
2. PR creation in schedule line which is converted to PO having customer specific product and based on this demand the product is assembled 
3. Variable pricing so that customer is charged for the components selected.


Source: https://blogs.sap.com/2014/09/30/configure-to-order-fulfillment-along-with-material-varaint-configuration-and-pricing/