**Delivery-based production integration** in SAP involves coordinating production processes with

outbound deliveries, allowing for efficient planning and execution of manufacturing activities based
on delivery requirements. This integration is particularly useful in scenarios where products are
produced specifically to fulfil customer orders or where production is driven by demand from the
delivery process.

Here's a detailed explanation of how delivery-based production integration works in SAP, including
the key concepts, processes, and configuration steps:

### **1. Key Concepts**

- **Delivery-Based Production**:

- In this approach, production orders are created based on the requirements of outbound deliveries.
This ensures that products are manufactured in alignment with specific customer orders, improving
order fulfilment and reducing inventory levels.

- **Production Order**:

- A production order is a document that defines the manufacturing process for producing goods. In
delivery-based production, production orders are triggered by delivery requirements.

- **Outbound Delivery**:

- An outbound delivery is a document that represents the goods to be shipped to a customer. It

### **2. Processes Involved**

#### **2.1. Sales Order Creation**

1. **Create Sales Order**:

- A sales order is created in SAP Sales and Distribution (SD) module, specifying the products and
quantities required by the customer.

2. **Sales Order Availability Check**:

- SAP performs an availability check to determine if the required products are available in inventory
or if they need to be produced.
#### **2.2. Delivery Creation**

1. **Create Delivery**:

- An outbound delivery is created based on the sales order. This document includes details about
the products to be shipped and the quantities.

2. **Delivery Requirements**:

- The delivery document specifies the production requirements, including quantities and deadlines.

#### **2.3. Production Order Creation**

1. **Trigger Production Order**:

- Based on the delivery requirements, a production order is created. This can be done manually or
automatically, depending on the configuration and business rules.

2. **Production Order Execution**:

- The production order is executed to manufacture the required products. This includes all steps of
the production process, from material staging to production and quality checks.

3. **Production Order Confirmation**:

- Once the production order is completed, it is confirmed, and the finished goods are recorded in
inventory.

#### **2.4. Goods Issue and Delivery**

1. **Goods Issue Posting**:

- The finished goods are posted as a goods issue against the outbound delivery. This step ensures
that the inventory levels are updated and the products are reserved for shipment.

2. **Delivery Execution**:

- The outbound delivery is processed, and the products are shipped to the customer.
### **3. Configuration Steps**

#### **3.1. Configure Production Integration**

1. **Set Up Delivery-Based Production**:

- Use transaction **OVB6** to configure delivery-based production. This includes setting up the
necessary parameters for automatic production order creation based on delivery requirements.

2. **Define Production Scheduling Profile**:

- Configure production scheduling profiles to manage the planning and scheduling of production
orders based on delivery deadlines.

3. **Configure Automatic Order Creation**:

- Define rules and settings for automatic production order creation from outbound deliveries. This
can be done using transaction **CO02** (Change Production Order) or other relevant transactions.

#### **3.2. Master Data Configuration**

1. **Material Master**:

- Ensure that the material master data is correctly configured, including the production and sales-
related settings.

2. **Sales Order Configuration**:

- Configure sales order types and item categories to support delivery-based production.

#### **3.3. Integration with Other Modules**

1. **SD Integration**:

- Integrate with SAP Sales and Distribution (SD) to ensure that sales orders and deliveries are
properly linked with production orders.

2. **PP Integration**:
 - Integrate with SAP Production Planning (PP) to manage production orders and ensure seamless
execution of manufacturing processes.

### **4. Benefits of Delivery-Based Production Integration**

- **Improved Order Fulfillment**:

- Aligns production with customer orders, leading to more accurate and timely order fulfilment.

- **Reduced Inventory Levels**:

- Minimizes the need for excess inventory by producing goods based on actual delivery
requirements.

- **Enhanced Production Efficiency**:

- Streamlines production processes by synchronizing manufacturing activities with delivery

- **Better Planning and Scheduling**:

- Facilitates better planning and scheduling of production activities based on delivery deadlines.

### **Summary**

Delivery-based production integration in SAP involves creating production orders based on outbound
delivery requirements, ensuring that products are manufactured to meet specific customer orders.
This integration involves processes from sales order creation to production order execution and
delivery, and requires careful configuration of production integration, master data, and module
integration. By aligning production with delivery needs, organizations can improve order fulfilment,
reduce inventory levels, and enhance overall production efficiency.

Integrating delivery-based production with SAP Extended Warehouse Management (EWM) involves
several configuration steps across different SAP modules, including SAP EWM, SAP Production
Planning (PP), and SAP Sales and Distribution (SD). Below is a comprehensive list of configurations
required for delivery-based production integration:

### **1. Basic Configuration in SAP EWM**

- **Configure Warehouse Numbers: **

- Transaction: **/SCWM/IMG** > **Define Warehouse Number**

- **Create Storage Types and Bins: **

- Transaction: **/SCWM/IMG** > **Define Storage Type** and **Define Storage Bin**

#### **1.2. Configure Warehouse Management Settings**

- **Define Putaway and Removal Strategies: **

- Transaction: **/SCWM/IMG** > **Define Putaway Strategy** and **Define Removal Strategy**

- **Handling Units (HU) Management: **

- Transaction: **/SCWM/IMG** > **Define Handling Unit Management**

#### **1.3. Production Supply Area (PSA) Setup**

- **Define Production Supply Areas: **

- Transaction: **/SCWM/IMG** > **Define Production Supply Area**

### **2. Integration Configuration**

#### **2.1. Define Integration Settings**

- **Set Up Integration with SAP PP: **

- Transaction: **/SCWM/IMG** > **Define Integration with Production Planning**

- **Configure Core Interface (CIF): **

- **Integration of Sales and Distribution (SD) with EWM: **

- Transaction: **/SCWM/IMG** > **Define SD Integration Settings**

#### **2.2. Configure Automatic Production Order Creation**

- **Define Production Order Types: **

- Transaction: **CO02** (Change Production Order) or **CO01** (Create Production Order)

- **Configure Delivery-Based Production Scheduling: **

- Transaction: **/SCWM/IMG** > **Define Production Scheduling Profile**

- **Set Up Automatic Order Creation Rules: **

- Transaction: **/SCWM/IMG** > **Define Automatic Order Creation from Delivery**

### **3. Master Data Configuration**

#### **3.1. Material Master**

- **Maintain Material Master Data: **

- Transaction: **MM01** (Create Material) or **MM02** (Change Material)

- Ensure relevant views are maintained, including sales, production, and warehouse management
views.

#### **3.2. Sales Order and Delivery Configuration**

- **Configure Sales Order Types: **

- Transaction: **OVKO** (Maintain Sales Document Types)

- **Define Delivery Item Categories: **

#### **3.3. Production Master Data**

- **Configure Production Resources/Tools (PRT): **

- Transaction: **CR01** (Create PRT) or **CR02** (Change PRT)

### **4. Process Configuration**

#### **4.1. Define Delivery-Based Production Process**

- **Create and Manage Production Orders: **

- Transaction: **CO01** (Create Production Order) or **CO02** (Change Production Order)

- Ensure production orders are linked to deliveries.

- **Set Up Goods Issue for Production: **

- Transaction: **MB1A** (Goods Issue)

#### **4.2. Configure Delivery Integration**

- **Define Outbound Delivery Creation Settings: **

- Transaction: **/SCWM/IMG** > **Define Outbound Delivery Creation**

- **Configure Handling of Delivery Requirements: **

- Transaction: **/SCWM/IMG** > **Define Delivery Requirement Handling**

### **5. Reporting and Monitoring**

#### **5.1. Monitor Production and Delivery Integration**

- **Use Warehouse Management Monitor: **

- **Monitor Production Order Integration: **

- Transaction: **COHV** (Production Order Monitor)

#### **5.2. Reports**

- **Configure and Use Relevant Reports: **

- Transaction: **/SCWM/REPORT** (Warehouse Reports)

- Reports related to production orders and outbound deliveries.

### **6. Testing and Validation**

#### **6.1. Test Integration Scenarios**

- **Perform End-to-End Testing: **

- Validate the integration between sales orders, outbound deliveries, production orders, and
warehouse processes.

- **Verify Data Consistency: **

- Ensure data synchronization between SAP EWM, SAP MM, and SAP PP.

#### **6.2. User Training and Documentation**

- **Provide User Training: **

- Ensure that users understand the new processes and how to work with delivery-based production
integration.

- **Document Configuration and Processes: **

- Maintain comprehensive documentation for configurations and procedures.

### **Summary**
The configuration of delivery-based production integration in SAP EWM involves setting up
warehouse structures, defining integration settings with SAP PP and SD, configuring automatic
production order creation, and maintaining relevant master data. It requires coordination across
different SAP modules to ensure that production processes align with delivery requirements,
ultimately improving order fulfilment and inventory management.