What is the difference between a production order and a process order in SAP PP?

In SAP Production Planning (SAP PP), both production orders and process orders are used to execute manufacturing processes, but they have some key differences:

Production Order

• A production order is used for discrete manufacturing, where individual products are produced separately. It is used for make-to-stock or make-to-order production.
• It includes components, quantities, operations, and resources required for production.
• Costs are settled at the production order level.

Process Order

• A process order is used for process manufacturing, where materials are mixed together or transformed in a continuous flow. It is used for industries like chemical, pharmaceutical, and food processing.
• It includes process parameters, phases, and sequence of operations required for production.
• Costs are settled at the order level or can be allocated to individual materials.

Understanding the differences between production orders and process orders in SAP PP is essential for effectively managing manufacturing processes and optimizing production efficiency.