Production Order in SAP PP

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.
In this tutorial- you will learn

How to Create and release Production Order

How to Create Production Order by converting planned order

How to Change production Order

How to confirm production order

How to TECO (technically complete) production order

How to Create and release Production Order

Production Order creation is required to produce the material and consume the components
which are used, and it also specifies the sequence of operations to be performed at the work
center.
The release of order signifies that the order is ready to be executed at the shop floor. You
can do an automatic release of order also during creation mode by using relevant
production scheduling profile in the material master with auto release indicator set.
Step 1) From SAP Easy access screen open transaction CO01
1.

Enter the material code for which production order needs to be created.

2.

Enter Plant Code.

After filling in all the fields, click

or press Enter to go to the next screen.

Step 2) In this Screen

1.

Input the order quantity.

2.

Select the option"current date" in scheduling sub-screen.

After filling the entire fields press click

Routing data in the order.

to confirm, the system will then copy BOM and

Step 3) In the same screen,

1.

Click
corner:

2.

to release the order. The following message will appear in the bottom left
.

Click
to check material availability. The system will show the message
regarding the availability of components.

Note: You can also decide not to release the order if there are missing parts found in
availability checks.

Click button
corner:

to save, the following message will show in the bottom left

.

How to Create Production Order by converting Planned

Order
Planned orders are the result of MRP run and should be converted to production order for
further execution process.
You cannot directly declare production using planned orders and, therefore, it needs to be
converted to Production Order.
Once, planned order is converted to production order, planned order gets deleted from the
system and is no longer available to be considered in MRP (Material Requirement
Planning).
Step 1) From SAP Easy access screen open transaction MD16
1.

Select radio button "MRP controller" from the list, which is a group of materials.

2.

Press right mark sign on top or press enter from your keyboard.

The system will show the screen as below.

Step 2) In this screen, we will fetch the planned orders based on MRP controller and
selection dates.
1.

Enter plant code.

2.

Enter MRP controller

3.

Enter end selection date till all planned orders will be extracted.

Click right mark sign from the bottom or enter from the keyboard to move to the next
screen.
Step 3)In this screen,
1.

Select the grid for which you want to convert the planned orders

2.

Press "convert to production order" button for the conversion.

Production orders will be created after conversion of planned orders.

How to Change production Order

You might require to change production order incase if your business wants to change some
planning quantity or if BOM/Routing has been changed after the order has already been
created.
Step 1) From SAP Easy access screen open transaction CO02
1.

Enter production order number which you want to modify.

In the same window you can see "Display Overview" button is selected, it is selected by
default.
After filling in all the fields, click

to go to the next screen.

Step 2) In this screen, the order will be modified.

1.

Change the Order quantity to 9000 or whatever your requirement is as shown below.

After finishing all modifications, click button to save the order. The system will show a
message like Order number saved 6600000887 at the lower left corner.

How to confirm production order

Step 1) From SAP Easy access screen open transaction CO15, three activities occur at the
same time with confirmation.

1.

1.

Generate confirmation document

2.

Consume raw materials or semi-finished goods

3.

Good receipt of finished goods or semi-finished goods

Enter Production order number

After filling in all the fields, click

to go to the next screen

Step 2) In this screen, we will enter the actual yield quantity to be confirmed.
1.
2.

Enter the yield quantity which is the produced quantity you want to declare
Press Goods Movement button at the top to check the automatic goods movement
happening along with confirmation

Step 3) In this screen, you will see the goods receipt of parent material and goods issue of
components.
If the control key of the last operation in the order specifies automatic goods receipt, the
system automatically posts the produced material to unrestricted stock.
Automatic goods receipt can also be activated by the production scheduling profile in the
material masterwork scheduling view.

If you confirm an order with components that have the Backflushing indicator set in the
material master MRP1 view, the system automatically posts a goods issue (GI) for these
components.
1.

Auto Goods receipt (GR), production of material carried out using movement type
101.

2.

Auto Goods issue (GI), consumption of components carried out using movement
type 261.

Click button

to save.

The system will show a message like

at the
lower left corner, to hint how many goods movement are posted successfully or failure.
Failed goods movements due to a deficit of stock for consumption are reprocessed
manually.

How to TECO (technically complete) production order

Technical completion of the order is required when production order is either fully
delivered, or it is not to be processed further at shop floor.
After technical completion order status changes to TECO, no further goods movement can
be done against the order.
Order is no longer available in MRP run and gets deleted from stock/requirement list.
The controlling department can then carry out the variance calculation on the production
Order after TECO status.
Step 1) From SAP easy access, open transaction CO02
1.

Enter the order number which you want to TECO.

Click

to next screen after filling all fields,

Step 2) In this screen, we will see how to place production order to TECO status,
1.

Click in menu Function-> Restrict processing ->complete technically System will

show message in status- TECO

2.

System will show message in status- TECO

Troubleshooting

BOM and Routing must exist before creation of production order else it will not be
copied into the production order and can cause issues in planned costs updation and
consumption of components during confirmation process thereby impacting the
inventory of the components.
Production order must be released before doing order confirmation as the released
status of the order allows confirmation to happen.
If you receive any accounting error during goods movement in the confirmation
process, then ensure the right valuation class is set in the material master Accounting
view or contact Finance team.
Ensure that standard cost for the material is updated to avoid any costing related
errors such as activity price missing etc. during production order confirmation.
If some goods movement gets failed during confirmation process due to the stock
deficit, then you should process them separately once components are brought to stock