SAP PP Make To Stock (MTS)

What is Make to Stock (MTS) in SAP PP?

Make-to-Stock (MTS) is a production/inventory strategy where products are manufactured in advance, based on forecasted demand — not based on actual customer orders.

In SAP PP, under MTS the system uses “forecast” or “planned independent requirements (PIR)” to drive production, not individual sales orders.

Finished goods produced via MTS go into general (anonymous) stock — they are not tied to any particular sales order. Later, when a customer order comes, the product is delivered from this stock.

Why Companies Use MTS?

MTS is chosen when customers expect fast delivery and when demand patterns are stable. It helps companies:

Deliver products immediately from stock
Avoid customer waiting time
Maintain stable production schedules
Reduce planning complexity
Take advantage of economies of scale in manufacturing

Key Features of MTS

Forecast-Based Planning - MTS depends heavily on forecasting. Better forecast = better stock levels.
Sales Orders Do Not Trigger Production - Sales orders only reduce stock. Production is driven by PIR and MRP.
Safety Stock and Reorder Points - Companies can maintain a minimum stock level to avoid shortages.
ATP (Available to Promise) - SAP checks if enough stock is available to confirm a sales order.

How MTS Works — What needs to be setup / Prerequisites

To run MTS in SAP PP — certain master-data and configuration must be done correctly:

The material master for products must have appropriate planning strategy (for example strategy = “net requirements / MTS” in MRP settings) so SAP knows this material will be produced to stock.
You must create Planned Independent Requirements (PIRs) for the material — representing forecast demand for a given period. This acts as the “demand source” for MRP.
Run MRP (Material Requirements Planning) — SAP will examine PIRs + current stock + BOM/routing and generate planned orders or purchase requisitions as needed. Then those planned orders may be converted to production orders or purchase orders.
Maintain BOM (Bill of Materials), routing/work centers, component materials — same as with any production.

Advantages

Fast delivery to customers
Stable and predictable production
Lower unit cost due to bulk manufacturing
Better machine utilization
Ideal for high-volume products

Disadvantages

Risk of overstock if demand is overestimated
Higher inventory cost
Higher storage space needed

Process Flow –

The make-to-stock strategies consist of up to five stages. The following table explains the stages involved in every strategy.

	Stage	40	30	10	11	52	32
1	Demand Management (creation of Planned Independent Requirements)	Yes	No	Yes	Yes	Yes	Yes
2	Procurement before Sales	Yes	No	Yes	Yes²	Yes	Yes
3	Sales Order	Yes¹	Yes	Yes	Yes	Yes¹	Yes¹
4	Procurement after Sales	No	Yes	No	No	Yes	Yes
5	Goods Issue for Delivery and Reduction of Planned Independent Requirements	Yes	Yes	Yes	Yes³	Yes	Yes

Here key –

¹ = + Allocation

² = + Reduction of planned independent requirements

³ = No Reduction of planned independent requirements