MTO ANALYTIC

The purpose of the “MRP MTO Analytic” module is to support the overall Make to Order process management from sales to purchase for both analytic accounting and logistics perspectives also.

This is achieved by implementing a strong integration between the logistics modules (sales, mrp, purchase and inventory), and the analytic accounting and planning backwards, based on a working calendar, of all the supply chain replenishment proposal elements, i.e. manufacturing orders and purchase quotations.

Accounting view

An analytic account has to be assigned a MTO sale order for collecting all the revenues and the costs related to an MTO process; therefore, it is possible to monitor in real time all accounting figures related to a MTO process and its margin.

Starting from a sales order, the analytic account is required (system check issuing an error message) when an MTO item has been included in the items; therefore, MTO sale order item is the starting point for triggering the MTO process.

A tool is provided to support the automatic creation of analytic account in sales order.

The analytic account is propagated from the sale order to the MTO overall supply chain, as shown in the picture below.

The analytic account is propagated in some business cases in the sale delivery for posting cost of sales in analytic accounting, as shown in the picture below:

The following business cases are managed:

·       MTO Finished Product (storable product internally produced)

·       MTO Commercial Part (storable product purchased on demand and sold)

·       MTS Spare Part (storable product on stock)

·       MTO Consumable (consumable product purchase on demand and sold)

·       MTS Consumable (consumable product available on the premises)

·       Purchased Service (Services purchased on demand from a third party and sold)

·       Internal Service (Service internally provided)

MTO Finished Product

The analytic account in the sales order is propagated to the all manufacturing orders along the supply chain.

Through the “MRP Product Costing” module, all direct costs are collected in the analytic account.

The Cost of Sales and Revenues are posted also on the analytic account.

MTO Commercial

MTS Spare Part

MTO Consumable

MTS Consumable

This business case does not make sense in the MTO process scenario. Therefore, a check has been implemented to avoid to enter a sales item with an MTS consumable item with price different to zero. That means MTS consumable can be included in MTO sales order as free goods only.

Purchased Service

For a Service purchased from a third party (purchase automatically indicator set on master data) the analytic account is propagated from the sales order to the purchase order at item level. The analytic accounting posting for both costs and revenues are performed at invoices posting.

Internal Service

The revenues are collected on the analytic account when posting the customer invoice.

All internal costs are to be collected on the same analytic account, e.g. in timesheets for internal personnel costs.

Logistics view

All the proposal elements along the MTO supply chain are planned in backwards mode, as shown in the picture below:

Therefore, planned pivot dates (implemented in the MRP Shop Floor Control) in MTO manufacturing orders and purchase order dates and receipt dates in MTO purchase orders are determined by planning backwards in working days (based on the working calendar assigned to the warehouse in sale order) starting from sale order delivery date and taking into account all safety times.

In detail, we have as follows:

·       The schedule date in the sale delivery document is determined starting from the sale delivery date in backwards mode by taking into account the sales safety time; the schedule date is the pivot end date for the all the supply chain replenishment proposal elements created by confirming the sale order.

·       The manufacturing order pivot start date is determined in backwards mode in working day starting from the pivot start date of its demand element in MTO supply chain, i.e. the sales order item delivery date or the manufacturing order start pivot date either; the manufacturing lead time and the manufacturing safety time are both taken into account in working days according the working calendar defined at warehouse level.

·       The purchase order planned receipt date is determined from the pivot start date of its demand element in MTO supply chain, i.e. the sales order item delivery date or the manufacturing order start pivot date either; it is planned backwards in calendar days by the purchase safety time; the purchase order date is determined in backwards scheduling from the planned receipt date by taking away the delivery lead time in calendar days defined at vendor level and the days to purchase lead time. A purchase order is created for each requirement.

MTO Supply Chain Report

A custom report is available to list for a sales order all the related procurement MTO elements, i.e. MTO manufacturing orders and MTO purchase order items, with their dates and quantities. Therefore, in only one report a recap of all necessary figures is provided to monitor the overall MTO supply chain and to fulfill the customer expected delivery date.