For manufacturing customers, there is a need to quote and sell standard or configurable products. However, they also do made-to-order products. In this process, they start with a dummy material/product that is used to capture the requirements, and from there on developed into a quote specific sale BOM with costing.
The other items in the quote could be existing ERP materials that make up the finished product that the customer is trying to quote using the dummy material. That is the dummy material can be thought of as a finished product that is eventually quoted, its subline items in the quote are part of its assembly and hence the finished good can also be called an assembly.
The quote might get accepted or rejected and because of this not all such dummy assemblies/finished goods are created in ERP. Because the rejected ones will just sit there with no further action on them plus it is a bit more expensive to do this in ERP from time and money point of view. The customer would need to undertake a custom programming initiative to keep clear of what is custom and what is not. That’s why the MX platform is an ideal option to create such quotes with assemblies. MX is built to have such capability to manage the dummy products, quotes with assemblies, and if the quote gets accepted the follow-on process of moving this quote from MX to ERP.
As the quote contains an assembly comprising of dummy and actual products. The first part of this process is to create the dummy material as an actual material in ERP. Here also there are two cases and a brief mention of this is necessary. The new material that the user wants to create from a Quote could be created within MX or ERP, this is a process choice and depends on the business case. However, for the purpose of this guide, we stick with material creation in ERP.
The second step in the MTO process is to create a production bill of material for the dummy material that was created in ERP in step one. This bill of material contains all the sub-line items materials from the MX quote. These sub-line materials already exist in ERP as standard materials.
The next optional step is to also create material routing in ERP. Material routing is the time and resources taken to assemble this assembly. That is physical labor, machine, and time spent on really building (or assembling) the material. MX provides steps in Internal Price Engine to compute this material routing during the quotation process because the material routing adds up into the costing of the assembly.
The last step of the MTO process is order creation. Here the order is created with the same sales-specific data as the quote has plus with an option to only include the finished product into the order. This finished product is the one that was created in step one.
Material Creation in SAP
Quotation in MX can start with the dummy product. Once the quotation is accepted, the dummy product in MX can be created in ERP as new material.
To launch this module, go to Quote→ ERP Helpers→ Material and click on the listed material, the logic that which materials will be allowed to be created is based on the flag on the product in MX. Each product in ERP has a product type and the product types with flag isMaterialCreationRelevant true are shown in the above view. In addition, the product should not have an ERP id assigned else it is considered already created in ERP.
All the data points related to material creation such as industry sector, plant, unit of measure, material group, item category, and so on need to be maintained in ERP system as master data in advance. Moreover, these master data related to material creation must be maintained in the MX system before material creation. The mandatory data points can be different and are case by case basis to individual ERP.
ERP ID of newly created material is saved as ERP ID of the sales item in the MX system as a token of material creation, listing that the item is moved to ERP.
The below screenshot shows the various data points required in material creation.
Material BOM Creation in SAP
The next step for the MTO process is to create a bill of materials for the newly created material in SAP ERP. ERP supports several BOM types, however, MX supports only the creation of Production BOM in the ERP system. For this purpose, MX supports another flag on product type: isBOMCreationRelevant this flag enables MX to find those materials in a sub-line item that needs to be part of BOM of the material created in the first step.
The process also checks if the BOM is already created or not and in the case created it does not allow the BOM to be created again. Secondly, it checks whether all the materials included in BOM are existing in the ERP system.
The BOM usage type is production BOM (1) and BOM is created in status active. The plant is a mandatory parameter for BOM creation. To assert again only those sales items whose product type is marked as isBOMCreationRelevant are considered.
Routing Creation in SAP
Material Routing is a description of which operations or list of activities that need to be carried out during the production process of that material. It also lists the order or sequence of the activities/operations which need to be carried out at work centers or machines. Sales Item whose product type which is marked as isMaterialCreationRelevant are eligible to create a routing in ERP.
For this purpose, the work centers need to be maintained as master data in the MX system. A work center is an organizational unit that defines where and when a manufacturing operation can be performed. Routing calculations can be made to work together with an internal price engine, a pricing step can be put that is routing relevant and it can calculate the required time taken in each work center. Check the internal price engine guide for more details. The plant is the mandatory parameter in routing creation.
Sales Document Creation in SAP
Sales Document creation happens after a quote is accepted in MX. To support this the Account of the quote must be available in SAP ERP and should have the Object ERP ID maintained in the MX. Anyhow, for prospect accounts, that are imported from Cloud for Customer or directly in MX, sales document creation is not supported.
Note that from a process definition point of view MX will not trigger the creation of Account in ERP. This is because there are several checks and balances (finance approval etc) that are usually taken before an account/prospect is created in ERP.
Once this is done the account needs to be synced from SAP Cloud for Customer so that the ERP Id is available for the prospect or manually added directly in MX. As a process, In Mind suggests triggering the ERP customer creation via C4C as MX only uses the customer data that is coming from C4C. Once the ERP ID is available in Cloud for Customer, the sales rep can trigger sync the Account again to MX.
Once the Account ERP ID is available in MX, Sales Order creation can be triggered, in addition out details need to be present as well and this includes Sales Area information, Business partners, etc. Once the Sales Order is created in SAP ERP, the quotation is locked in MX for any changes. From that point onwards, SAP is the owner of the sales document which depending on BAPI used could be a Quote or Order in ERP.
In sales order creation filters are also applied to products going into ERP Oder:
- Sales item product type should be marked as isOrderCreationRelevant.
- The product should be allowed to be exported back to ERP
- The product should have an ERP ID maintained
- Account ERP ID (Coming for SAP CFC).
- Material ERP ID.
- Sales Document Type (needed to control the type of sales order in ERP based on user selection).
- Purchase order number and requested date.
- Sales Area information: maintained on quote level and taken from SAP CFC. This includes Sales Org, Distribution Channel, and Division.
- Pricing Date and Requested Date: Maintained on MX Quote.
MX can pass variant configuration to the SAP ERP system if the use case uses SAP SSC in the configuration.
MX uses the standard BAPI:
The first step is to go to Actions→ ERP Helpers→ ERP Sales Doc
And click on Generate Sales orders.
As MX supports Sales Quote Split and creation of multiple orders the system at this point determines how many sales orders need to be generated and in which order which line item needs to be put. Together with split in header price conditions.
On the sales, the order is generated it looks as shown below.
The user can next select the new order and click on the create button to send the order into ERP.
For the MTO process, the newly created order can take only the material created in ERP because the rest of the information about that material is already in ERP.
Pricing Procedure Determination
To determine which pricing procedure will be picked in ERP for a given combination of sales area data in the sales documents. Create Sales Order (VA01) and select sales area data. That displays sales document header data and find a pricing procedure that is active in ERP.
The following figure shows where to find the pricing procedure for the current sales order.
Modify pricing procedure determination via ERP customizing V/07.
Reference Distribution Channel for Conditional Lookup
Price condition lookup in ERP is done via keys ‘Sales Organization and ‘Distribution Channel’. Maintained conditions can be expanded to multiple Distribution Channels by defining a reference Distribution Channel.
Go to ‘Customizing (SPRO) –> Sales and Distribution –> Master Data –> Define Common Distribution Channels’ and maintain a reference distribution channel for the condition.