Item &2 of scheduling agreement &1 is not suitable for JIT calls

What causes this issue?

The production supply indicator has not been set to value 'Z' (=
scheduling agreement for summarized JIT calls) in scheduling agreement
&v1&, item &v2&, for material &v3&.

System Response

Further processing is possible, but no goods receipts can be posted for
the calls in this scheduling agreement.

How to fix this error?

Change the production supply indicator for the scheduling agreement via
the <DS:TRAN.ME32L>Change Scheduling Agreement</> function.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.