Direct Production or Collective order:If subassemblies are produced directly for superior orders within a production process, without physically entering the warehouse, then it is useful to have direct production via collective orders.

Direct Production:Direct production is the special type of production where components are directly produced for the higher level assembly, without Stocked @ warehouse as normal and no goods receipt‐ or goods issue postings are made for components that are produced directly.The system flags a direct production segment for the components to be produced directly in the MRP list and the stock/requirements list. When the planned order for the finished product is converted into a production order, the system also converts all planned orders for lower‐level components to be produced directly into production orders.The system adapts planned orders for direct production to changes in date and quantity in thehigher level assembly, even if they are firmed, so that the collective order remains consistent.‐

Sap Process Flow of Collective order:

Configuration:

Order Type:

IMG path:Production >Shop Floor control >Master data >order >Define order Types

Tcode: OPJH

If this indicator is set, then it means there are automatic goods movements between the production orders in a collective order. When the goods movement is posted, costs are credited from the subordinate order& costs are debited to the superior order.

Special Procurement Key:

IMG path: Production > Material requirement planning > Master data > Define special procurement type

Case Study:

Let us take manufacturing of Ball Pen.

Product structure:1 Ball Pen (Finished Product) - ZBP01 (Work Center ZBP003 Routing Group 50001303)

1.1 Pen casing ( Halb)- ZPC01 (Work Center ZBP001 Routing Group 50001301)1.1.1 Refill for Pen casing (ROH)- Z_REFILL

1.2 Pen Cap (Halb)- ZPCAP01 (Work Center ZBP002 Routing Group 50001302)1.2.1 Slug for Pen cap (ROH)- Z_PENCAP

Material Master:

Header Material MRP View:

TCODE: MM03

Child Material MRP View:

Multi level BOM for Ball Pen:

T-CODE: CS12

Production planning & Control Cycle :Collective order can be created by below 3 methods1. Directly Production order with Header Material using Tcode : CO012. Create Planned order ( Tcode : MD11) for Header & Convert into Production order (Tcode:CO40)3. PIR > MRP > Planned order to Production order.‐‐‐‐‐‐‐ ‐‐‐‐‐

Here illustrated the Point No. 3

Create PIR :T-Code: MD61

MRP RUN:T-CODE: MD02

Stock Requirement List:T-CODE (MD04)Header Material Requirement List:

Child Material requirement List:

Notice the “Direct Production” in description field.

Order Report:If we execute order report, we can see linkage of planned order as a network in below screen shot.

Planned order :Here is the advantage of collective order concept. Subordinate planned orders are linked tosuperior header order which can be seen in assignment tab of below screen shot of child plannedorders.

TCODE: MD13

Header Material Planned Order:

Child Material Planned Order:

Planned Order to Production order Conversion:

T-Code CO40OrDouble click on Planned Order and then Click on the Production Order

Here is the benefit of Collective Order scenario. Only Header Material Planned Order is converting to Production Order but child material planned order is also converted to production order automatically.

Now Release the production order and save it.

We can also change the quantity of the production order using the T-Code CO02.Display Production Order T-CODE CO03

Confirmation of collective production order (CO15 or CO11n) :

Confirmation of child order @ order level or operation level will result in direct Good issue toheader order. Stock of subordinate order will not be available in warehouse .Instead; childcomponent is directly produced for Header order.Note that leading order will get below status when there is confirmation or goods movement innetwork.1.1. CFCO Confirmation in collective order1.2. GMCO Goods movements in collective order

Check warehouse stock for the direct components which is nil. TCODE: MB52

Check Material document for the direct components which shows GI for order (261) TCODE:‐‐MB51

Child material directly consumed to header material order.

Final confirmation of header order : T-Code CO15/ CO11N

GR of collective production order (MB31) :

Now check the details of order.

As per the report all the orders have been released and material is delivered.

Now check the header material document & stock overview.

This concludes the complete cycle of direct production via collective order

Limitations:We have limitation to create collective order if components are belongs to below set1) Co Product or By product2) Either Discontinued or Follow up or Intra Material3) Collective order cannot be created Via SAP APO.

Conclusion:In general , Direct production is aimed at doing Major sap business functions such asCreation ,Release ,scheduling ,costing for Finished product ,assembly & components within a BOMstructure jointly or collectively.

Even though direct production or collective order has its unique benefits, it has a negative impactof Material flow & stock inventory indirectly. Collective order will not consider below points1) Plant warehouse stock of direct components.

2) Anonymous Dependent requirements are not considered.∙