Make to order

While manufacturing customers quote and sell standard or configurable products, they also create make-to-order (MTO) products. To do this, they start with dummy material or a dummy product to capture requirements. From there, they can develop a quote-specific sale Bill of Materials (BOM) with costing.

A quote may combine existing ERP materials with dummy material to make up a finished product. The dummy material can be thought of as a finished product that is eventually quoted. The sub-line items in the quote are part of its assembly.

The quote might be accepted or rejected. For that reason, not all dummy assemblies (finished goods) are created in ERP because the rejected quote would remain with no further action. Creating and maintaining dummy quotes in the ERP can be expensive and create extra work for the customer.

Ziliant CPQ facilitates the ideal process for creating and managing dummy quotes with assemblies. If a quote is accepted, CPQ supports the follow-on process of moving it from CPQ to ERP.

The general process of creating a quote from dummy material is:

1. Decide where the new material for a quote will be created: CPQ or ERP. This decision depends on your business use case. As described in this topic, material creation is in ERP.
2. Generate a production BOM for the dummy material created in ERP. The BOM contains all sub-line item materials from the CPQ quote. These sub-line materials exist in ERP as standard materials.
3. Create material routing in ERP (optional). Material routing represents the time and resources needed for an assembly. This includes physical labor, machinery, and time spent building or assembling the material. CPQ provides steps in its Internal Price Engine to compute this material routing during the quotation process. This is because the material routing figures into the costing of the assembly.
4. Create a sales order. In this step, an order is created with the same sales-specific data as the quote, with an option to include only the finished product in the order. This finished product is the one created in Step 1.

Create material in SAP

A quote in CPQ can start with the dummy product. When the quote is accepted, the dummy product in CPQ can be created as material in ERP.

To start this process:

1. Sign in to CPQ.
2. In the left navigation area, select Quotes.
3. From the list of quotes, select the quote to which you want to add a dummy product.
4. At the bottom right of the quote page, select ERP Helpers, then select Material from the list.
5. Select the material.

The logic that determines which materials you can create is based on a product flag in CPQ. Each product in ERP has a product type. Product types with the isMaterialCreationRelevant flag set to TRUE are included in the materials list.

All data points related to material creation—such as industry sector, plant, unit of measure, material group and item category—must exist in the ERP as master data before creating the material. Also, the master data related to material creation must exist in the CPQ system before material creation.

The ERP ID of newly created material is saved as the ERP ID of the sales item in CPQ as a token of material creation. This signifies that the item has been moved to ERP.

The process uses the following BAPI's:

• BAPI_MATERIAL_GETINTNUMBER
• BAPI_MATERIAL_SAVEDATA
• BAPI_MATINSPCTRL_SAVEREPLICA

The following images show the various steps that are part of material creation:

Create bill of materials in SAP

The next series of steps outline BOM creation for the new material in SAP ERP. The ERP supports several BOM types; however, CPQ supports the creation of only the production BOM in the ERP system.

CPQ supports another flag on the product type: isBOMCreationRelevant. This flag enables CPQ to find materials in sub-line items that need to be part of BOM.

The process determines whether the BOM has already been created to prevent duplicate BOMs. It also verifies that all the materials included in the BOM exist in ERP.

The BOM usage type is production BOM (1) and the BOM is created in active status. The plant is a mandatory parameter for BOM creation. Only those sales items whose product type is marked as isBOMCreationRelevant are considered.

The process uses the following BAPI's:

• BAPI_MAT_BOM_EXISTENCE_CHECK
• BAPI_MATERIAL_EXISTENCECHECK
• BAPI_MATERIAL_BOM_GROUP_CREATE

The following images show examples of BOM creation in CPQ and SAP:

Create material routing in SAP

Material routing describes the operations or list of activities that are required during the production process of that material. Routing also lists the sequence of the operations to be carried out by work centers or machines.

Sales items with products marked as isMaterialCreationRelevant are eligible to create a routing in ERP.

A work center is an organizational unit that defines where and when a manufacturing operation can be performed. Work centers should be maintained as master data in CPQ.

Routing calculations can work with an internal price engine by adding a routing-related pricing step. The pricing step can calculate the required time in each work center. Read Internal Pricing for more information.

The process uses the following BAPI's:

• BAPI_ROUTING_CREATE
• BAPI_TRANSACTION_COMMIT

The following images show steps in the material routing process:

Create a sales document in SAP

A sales document is created after a quote is accepted in CPQ. To support this:

• The account of the quote must be available in SAP ERP
• The object ERP ID must exist in CPQ

For prospect accounts imported from Cloud for Customer (C4C) or that exist directly in CPQ, sales document creation is not supported. CPQ does not trigger the creation of an account in ERP because there are several checks and balances that must happen before an account or prospect is created in ERP.

When document creation is complete, sync the account from SAP C4C so that the ERP ID is available for the prospect.

Zilliant suggests triggering the ERP customer creation through C4C because CPQ uses only the customer data that is coming from C4C. When the ERP ID is available in C4C, the sales rep can sync the account again to CPQ.
:::
When the account's ERP ID is available in CPQ, trigger the sales order. Other details should be present, including:

• Sales area information
• Business partners

When the sales order is created in SAP ERP, the quote is locked in CPQ to prevent changes. From that point, SAP is the owner of the sales document which, depending on the BAPI used, could be a quote or order in ERP.

In sales order creation, the following filters are also applied to products going into the ERP order:

1. Sales item product type should be marked as isOrderCreationRelevant.
2. The product should be allowed to be exported back to ERP.
3. The product should have an ERP ID maintained.

The following required data from this process includes:

• Account ERP ID that comes from SAP C4C
• Material ERP ID
• Sales Document Type, to control the type of sales order in ERP based on user selection
• Purchase order number and requested date
• Sales area information maintained on a quote level and taken from SAP C4C. This includes Sales Org, Distribution Channel, and Division.
• Pricing Date and Requested Date maintained in a CPQ quote

CPQ can pass variant configuration to the SAP ERP system if the use case employs SAP SSC in the configuration.

CPQ uses the following standard BAPIs:

• BAPI_SALESORDER_CREATEFROMDAT2
• BAPI_TRANSACTION_COMMIT

To generate a sales order, complete the following steps:

1. Sign in to CPQ.
2. From the left navigation area, select Quotes.
3. From the list of quotes, select the quote for which you want to generate a sales order.
4. At the bottom of the page, select ERP Helpers, then select ERP Sales Doc from the list.
5. On the ERP Sales Doc page, select Generate Sales Orders.

CPQ supports sales quote split and creation of multiple orders. At this point CPQ determines how many sales orders need to be generated and in which order each line item should be placed with split-header price conditions.

The following image shows a generated sales order:

The user can then select the new order and select Create to send the order into ERP, as shown in the following image:

Determining pricing procedure

To determine which pricing procedure will be selected in the ERP for a given combination of sales area data, create a sales order (VA01) and select sales area data. That action displays the sales document header data and finds a pricing procedure that is active in ERP.

The following images show where to find the pricing procedure for the current sales order in ERP.

Reference distribution channel for conditional lookup

Price condition lookup in ERP is performed through the sales organization and distribution channel keys. Maintained conditions can be expanded to multiple distribution channels by defining a reference distribution channel.

1. In the ERP, go to Customizing (SPRO).
2. Select Sales and Distribution, then select Master Data.
3. Define Common Distribution Channels and maintain a reference distribution channel for the condition.