In a recent blog, we discussed the benefits of archiving and the need for a clear reporting strategy. Building on that topic, efficient production order management is another important component to ensure seamless operations within any organization. One often overlooked aspect of this process is closing production orders completely. Properly managing these orders not only supports archiving efforts but also enhances data maintenance, cost control, and system performance. This blog explores the steps required to effectively close production orders and the benefits of doing so.
Key SAP production order statuses and their implications
When working within SAP systems, understanding production order statuses is essential. Below are three key statuses and their impact on processing production orders:
- TECO (Technically completed).
- Set once production activities have been completed.
- Setting this status ends production activities and closes open requirements such as material reservations or capacity demands related to the order.
- The order is no longer relevant for MRP planning.
- Material postings and confirmations can still be entered against the order.
- Changes are no longer allowed against the order, unless the TECO status is revoked/cancelled.
- TECO status must be set before costs are settled to the order.
- CLSD (Closed).
- No more costs can be posted to the order, meaning confirmations and goods movements are no longer permitted.
- The order can no longer be changed unless the CLSD status is revoked/cancelled.
- Note that the following can prevent the CLSD status from being set.
- Open purchase orders tied to the production order.
- Open inspection lots tied to the production order without a usage decision.
- Open WIP or unsettled costs.
- Failed goods movements or failed order confirmations.
- DLFL (Deletion flag).
- Ends all processing on the production order.
- Enables the archiving of the production order.
The performance perks of closing production orders
Leaving production orders in incomplete or unresolved statuses can strain system resources and complicate operational efficiency. Properly closing production orders offers several advantages, particularly during period-end close activities.
Improved Cost Object Control
- Orders without updated statuses can disrupt cost controlling efforts, making tracking and analysis less reliable.
- Performing regular updates, such as setting deletion flags (DLFL) for completed production orders, reduces system workload during period-end closing, as these orders are excluded from processing.
Boosted System Performance
- Orders stuck in TECO or CLSD without the deletion flag can reappear endlessly in subsequent processing cycles, unnecessarily consuming system resources.
- Implementing deletion flags and archiving orders ensures a leaner, more efficient system, leading to faster close activities and streamlined data management.
Restricting status modifications for better cost control
While SAP allows users to revoke TECO or CLSD statuses of production orders in certain scenarios, doing so without precaution may result in complications:
- Financial Variances: Reopening orders can introduce unexpected financial variances, impacting cost accuracy and reporting.
- Reporting Discrepancies: Revisions can alter prior analysis, causing confusion and undermining existing data integrity.
- Process Disruptions: Untimely changes can affect month-end or year-end closing activities.
Controlled access for status changes
Adding restrictions on who can revoke TECO or CLSD statuses is a valuable strategy. This approach supports:
- Clear documentation of when and why costs or changes occur.
- Enhanced visibility of variance sources.
- Opportunities for process improvement and training to minimize missed transactions.
- Awareness of root cause of inventory and availability issues if goods movements are not being recorded on a timely basis.
Such controls not only safeguard financial reporting but also reinforce confidence in operational data.
Closing orders for effective data maintenance
Closing production orders—including appropriately marking them with deletion flags—is a best practice for managing data effectively. Proper closure aligns with efficient cost reporting, streamlined period-end activities, and superior system performance.
By combining robust status controls and thoughtful archiving strategies, you can optimize your production order management and maintain a sustainable, high-performing system.
