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help me with simple PP process

Hi,

My expertise is in MM and I could use some help being steered in the right direction of PP when it comes to mapping system to this process:

1) Raw material is procured and brought into inventory

2) It goes through a standard process of several stages: for example, quality inspection, cataloging, and photography

3) At the end of this process, material gets scrapped. It never goes through manufacturing.

The exact same process stages are applied to hundreds of materials each year (regardless of material). I’d like to get reporting out of system to know when material has completed process A, process B, process C, etc. (An end-user would transact in system to indicate his completion of process)

And I’d like to collect costs on entire process. For example, it’s $100 for process A, $100 for process B, and $100 for process C. A material that goes through entire process collects $300 of cost. But if material gets scrapped after only first process, it’s $100 of cost.

While procurement and inventory is focused on 'raw material', I'm open to managing a finished good and BOM....or forgetting raw material altogether and just managing at FG level (since FG is one-to-one with RM)

Can somebody suggest the transaction flow for above process?

Thanks, Vlad

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2 Answers

  • Posted on Nov 07, 2015 at 05:19 AM

    Hello Vlad,

    The process looks like a quality management process to me, rather than PP as there is no manufacturing which is involved.

    You should have a inspection lot created on GR of the raw material, do a quality inspection, in case of any problems open a quality notification and capture costs of quality against the notification.

    Check if below thread, helps you in mapping the overall process,

    Rework In Manufacturing

    Best Regards,

    Ameya B.

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    • Thanks for the feedback.

      How familiar are you with PM? I've been wondering if a PM work order might not be a good fit as well. I could use sub orders or sub operations for the different phases. Order confirmations would allow me to track the work. And costs could still be collected. I don't know anything about QM, but in PM there is sufficient reporting to monitor the planning activity and what has been completed.

  • Posted on Nov 07, 2015 at 05:31 AM

    hi

    if you have implemented please follow the below process and and then check in co reports like KOB3/KOB1N

    IMG - Controlling - Product Cost Controlling - Cost Object Controlling à

    Product Cost by Order - Period-End Closingà Variance Calculation -

    Check Variance Variants

    Variance variants determine what variance categories are calculated.

    The following variance categories can be calculated:

    Variances on the input side:

    · Scrap variances

    You specify whether scrap variances are calculated in the step Define

    Variance Keys. This enables you to control the display of scrap or the

    deduction of the scrap from the actual costs separately for each1

    variance variant; you can also control this separately for each variance

    variant by assigning the variance variant to a target cost version.

    · Input price variances

    Input price variances are the differences between the planned prices

    and the actual prices of the resources used

    · Input quantity variances

    Input quantity variances are differences between the planned and

    actual input quantities of the resources.

    · Resource-usage variances

    A resource-usage variance arises when a different resource is used

    than was planned.

    · Remaining input variances

    Remaining input variances are differences on the input side that cannot

    be assigned to any other variance category on the input side (such as

    overhead).

    Variances on the output side:

    · Lot size variances

    Lot size variances are differences between the planned fixed costs and

    the charged fixed actual costs. Lot size variances can only be

    calculated for target cost version 0.

    · Output price variances

    Output price variances are differences between the target credit (at the

    standard price) and the actual credit (for example at the moving

    average price).

    · If a particular variance category is not selected, the variances of that

    category will be assigned to the remaining variances. Scrap variances

    are an exception to this: if you don't want to see scrap variances, these

    variances can enter all other variance categories on the input side.

    · If no variance categories are selected, only remaining variances will be

    calculated.

    The Minor differences field enables us to have small amounts charged and

    settled as remaining variances, although they are still assigned to the relevant

    variance category in the detail screen of variance calculation.

    Define Valuation Variant for WIP and Scrap (Target

    Costs)

    IMG - Controlling à Product Cost Controlling - Cost Object Controlling -

    Product Cost by Order - Period-End Closingà Variance Calculation -

    Define Valuation Variant for WIP and Scrap (Target Costs)

    We are not configuring any valuation variant, since we are valuing WIP

    at actual cost. This is more


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