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Best Practice for Product Costing in Automotive Industry

Dear All,

Hope you are doing well.

In the middle of configuring SAP ERP (S4/HANA version 1809) for a project, we are faced with an issue and we hope we can use your help.

They have an Automotive Manufacturing company with Make-to-order (MTO) production strategy, and we want to implement the Controlling within SAP ERP. However, we are not sure about the appropriate solution for product costing. For more clarity, suppose we have the following products:

1) Automobile 1 (with type A and B and etc.)

2) Automobile 2 (with type C and D and etc.)

Features are:

Color=X1, X2, X3, X4, X5, …

Motor=Y1, Y2, Y3, Y4, Y5, …

Automobile 1, type A includes: X1 and Y4

Automobile 1, type B includes: X3 and Y3

Automobile 2, type C includes: X4 and Y1

Automobile 2, type D includes: X1 and Y3

The features can be their color, type of motor and many other things. Therefore, for sure their manufacturing costs are different with respect to their features (and the supplier for the components = raw materials costs).

Note that the combination of the features for each product are a lot, so we cannot define a material number for each and do standard cost estimate for them, besides, some of them are ordered repeatedly.

We tend to run Material Ledger in period-end-closing.

Could you please inform us about the Best Practice for this type of industry in product costing?

And how this process is done functionally in SAP?

Is it possible to do Standard Costing (with Mark and Release capability) for each type of product in SAP?

We are waiting to hear your suggestions…

Thank you in advance,

Bita

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1 Answer

  • Best Answer
    Posted on Feb 14, 2019 at 01:09 PM

    Hi Bita,

    As i understood from you example as mentioned, you should go with production variant which would fulfill your requirement.

    Please fallow the below link for details, hope this will solve your query.

    https://archive.sap.com/documents/docs/DOC-25224

    Thank you,

    Ravinder

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