Planning Strategies for CTO/ETO in SAP

I have been asked by one of my friends regarding planning strategies for CTO/ETO scenarios and thought I would share my knowledge regarding CTO/ETO planning strategies in SAP. Scenarios discussed here involve usage of Variant Configuration functionality in SAP. Below are possible planning strategies in SAP for ETO/CTO business processes.

Strategy 56: Characteristic Planning W/Dependent Requirements:

With this strategy, planned independent requirements are created for configurable materials. This strategy involves creation of usage probabilities for combination value keys for configuration supporting points. Requirements for components are calculated by multiplying the component quantity by the usage probability. Dependencies between characteristics are also taken into account for this calculation.

Requirements:

Item Category Group: 0002

Strategy Group: 56

Consumption Parameters

Components:

Individual/Collective: 2

Components should not be configured with strategy group 70 or 59

Flag Characteristics that have usage probabilities as relevant for planning

Master Data Setup for characteristic planning:

Create Planning Table (MDP1)

Enter characteristics relevant for planning in planning table

Maintain planning table by providing characteristic values (MDP4)

Create planning profile for VC material (MDPH)

Enter Planned Independent Requirements and enter usage probabilities

Pros: Easier to handle, especially if you cannot plan precisely or if you only want to plan capacity on header level

Cons: Consumption at component level does not take place, however requirements for components are indirectly reduced for all components after consumption at header level

Strategy 89: Assembly Processing w/Characteristic Planning

This strategy creates Planned Independent Requirements for components of a configurable material. Component quantities are calculated based on quantities of planned independent requirements of configurable materials and the usage probabilities of corresponding characteristics. In this scenario allocation takes place at component level rather than at the configurable material. PIR can be entered manually or via Long Term Processing.

Requirements:

Item Category Group: 0002

Strategy Group: 89

Availability Check: 01 (with replenishment lead time)

Components:

Individual/Collective Requirements: 2

Components strategy group: 70 or 59 (in order to get dependent requirements from the planning of configurable material)

Mixed Indicator: 1

Consumption parameters on material master

Mark characteristics as relevant for planning which will have usage probabilities in demand management

Pros:

More precise planning of components

Planning of demand management done in LTP

Better overview of component situation

Only components that are used in actual configuration are reduced

Cons: Long Term Planning involved

Strategy for Material Variants:

26 (Make to order production for material variant)

55 (Planning for material variants without final assembly)

65 (planning for material variants with planning material)

Strategy 25: Make to Order Production W/Configuration

This strategy is used for configurable materials and configuration is required. One configuration can be defaulted per configurable material using the defaults in characteristics

Note: Refer to SAP OSS notes 68033, 772859 and 777098 for information on restrictions for characteristic planning, FAQs on characteristic planning and characteristic planning performance with respect to MRP