How to map business process requirement in SAP PP?

[Former Member]

Dear All,

I need help and guidelines from all SAP PP experts, to map below business process requirement in SAP PP,

Title of the requirement: "Record of material received for Sale on Conversion Basis"

My Company (X) is in receipt of excisable material for the purpose of Job Work  processing.  There are three parties involved for the transaction.

Step 1:

On Receipt of Raw Material  (for a job work) at X  :

• Consignor : A
• Consignee : X
• Payer/Buyer/Customer  : B

Here,

• Consignee (X) does the process on the Raw Material received and takes CENVAT credit.
• Consignee (X) is not a payer party, so normal GR/IR clearing is not to do for vendor payment.
• The said material is not to consider as normal purchase of material.
• Consignor (A) will send material to X site directly on behalf of customer (B).
• Only Job Work Stock Account and CENVAT (RG23II) Account to reflect in Accounting Records.

Step 2 :

Issue of Material for Processing

• Job Work Stock will issue for processing the goods, and converted to Semi Finished/Finished level with applicable  processing cost 

Step 3 :

Dispatch /sale of Material

• Consignee : A
• Consignor : X
• Buyer/Customer/Bill to : A

Here,

• Consignor (X)  is liable to issue an Excise Invoice  to Consignee/Customer (A) with CENVAT payable on Base Value considering total of Original Material Cost +  ‘Fixed’ Job Work Charges as per agreed terms of contract
• The said material is not to consider as normal sales of material. Only Job work charges are to consider as Revenue. It should be invoiced to customer (A) with a separate commercial invoice for ‘Job Work Charges’
• An Additional Debit note to be raised for differential Cenvat amount. (CENVAT Received  vs. Paid)

Kindly guide to best map above requirement in SAP PP.

Thanks,

Naresh

[Former Member]

Dear All,

I have to set the below business process in SAP PP,

My company gets the raw material from customer then my company process this raw material by applying 3 to 5 operations and convert it into semi-finish or finish material. Now we want that only process cost should be considered for the order and raw material cost should not considered because it is provided by customer.

The above business process is for doing the job work for the customer.

From SAP PP perspective, what need to do in the existing system?

Kindly guide if anybody has best suitable guideline to set this process in SAP PP.

Thanks,

Naresh

[Former Member]

Use strategy type to consider the activity cost and any material cost, if any GI is done.

You have to create appropriate Requirement type and assign ot requirement class. But this requirement type must be from SD side.

If you know how to do so, then go ahead. If not, take help of SD consultant \.

Tell him that final product must not be GR valuated.

Use strategy 20 as reference.

If your scenario is not MTO, then modify startegy 20 to consider PIR as well.

[sundaresan_velayudam]

1) Create a material with Non valuated for raw material.

2) create a FG material with material type FERT

3) Create a BOM for FG and assign the raw material

4) Create a routing and maintain the required activity type

5) Run a std cost estimate for FG, Only activity value cost will update in std cost of FG

and do the normal production steps.

If incase while inward if you want raw material cost, then create a raw material with material type ROH

while creating a BOM, for the item - Uncheck the costing relevancy. for that particula raw material.

[Former Member]

You can also create a BOM with Raw mnaterial from customer in BOM. Make sure that Costing relevency of Raw Material is removed.

Otherwise you can create Raw material as Non Valuated it self in Material master, if every time the raw material will be recived from customer and must not be valuated.

take your best pick.

[Former Member]

Thanks Animesh. Similarly, I have mapped the business process and now testing the same if any difficulty then will post for experts help.

Regards,

Naresh

[former_member209265]

Hi Naresh,

Hope you can get good solution if you post it in SD forum.

Regards,

Krish.

[Former Member]

Hi,

I am expecting guidelines that what is the Role/work/scope of PP consultant for this requirement?

What need to do in PP point of view?

Thanks,

Naresh