Hi ILAVARASAN,
are you creating production order manually through CO01 or converting planned order to Production order ???...maintaining 3 in collect conversion field only works during mass conversion of planned orders to production orders through CO41..
for manual creation of production order and single planned order conversion to Production order through MD04 even though materials are not available system will allow you to create Production Orders even though maintain 3..check the below thread..
no production order creation when materials are not available
Thanks
Kumar