Cost problem with Grouping WBS

[Former Member]

Hi All,

I have a case in which I am using valuated projects with grouping WBS elements.

Example - Lets say I have WBS 1, WBS 2, WBS 3 etc. defined in structure under which I add components and they are grouped under WBS G.

After procurement, stock of all components gets generated under WBS G.

Under the same WBS G, I add assembly material and generate production order for the same.

The BOM of assembly consists of all components procured under WBS G.

Then I have to issue all procured components to production order of assembly (mov type 261 Q)

Problem - At this stage, the consumption cost of all components come under WBS G. I want to bring this cost under WBS 1, WBS 2, WBS 3 where they were added initially. This is possible with consumption to network activity (mov type 281 Q) but then I cant follow the production process.

Is there any way out to issue goods to production order from grouping WBS and still get actual costs under WBS elements where demand was generated

Request you to please reply on this

BR / Parimal

[former_member230675]

please attach your Assemblies / Finished Goods on WBS 1, WBS 2, WBS 3 etc and Run MRP to explode BOM and get the requirements (PR / Planned Order). Please use the correct MRP strategy for FG.

[Former Member]

Hi Abdul,

Thanks for your reply.

I guess, I have not understood your reply well so can you please elaborate a little bit.

The requirement is puchase cost should go to WBS 1, 2, 3 etc. and production cost should go to another WBS.

So I am using grouping WBS to bring all components under one WBS (defined as grouping)

The problem is I cant assign purchased components and assembly to same WBS as they have different plan costs

Which strategy do you suggest and how does it work

Awaiting for your valuable inputs

Thanks and Regards,

Parimal

[Former Member]

Hello all,

Request you to please suggest on this.

This is very important for me to resolve as it is leading to vital decision in my project

Your valuable inputs are highly appreciated

BR / Parimal

[former_member230675]

if you are using budget then grouping will be very difficult.

Another thing you can not have purchase cost and production cost separate WBSE, Because you will be using purchased materials to produce the FG. Cost of Raw materials and Cost of Labour etc will be obtained in the reports through value category / cost elements settings.

Regarding your material planning do not plan any raw materials in the project. Attach your FG (Assembly) in the project and run MRP so the BOM will be exploded and PR will be genrated against the Grouping WBSE. Normally you can group all materials on the Level 1 WBSE.

Hope it is clear.

Thanks

[former_member230675]

I think a bit more details about your business process is required to give proper advise.

[Former Member]

Hi Abdul,

Thanks a lot for showing interest in my problem.

I agree to what you say but scenario is something like this -

My client is in crane business. They maintain BOM for crane in which sub-assemblies are maintained at level 1 like steel structure, E-room, girders and so on. Sub-assemblies may produce internally or procured externally.

For each sub-assembly, there is separate plan costs and cost tracking is required so currently they form WBS Element in one project for each sub-assembly under which they produce / procure.

After all sub-assemblies get ready under respective WBS elements, they start production order of crane.

If I dont use grouping WBS Elements, I cant issue components from different WBSE to production order of crane

Hence I used grouping WBSE so that even if i added components under different WBSE, I can group them under one WBSE and can issue to prouction order of crane which is also assigned to same grouping WBSE.

Showing production of crane is necessary because, they want to show crane in stock after production and further show delivery of the same.

Problem - If I issue them to production order of crane, mov type 261 Q called up and entire cost gets booked under grouping WBSE. So we loose track on plan v/s actual costs on individual WBSE

If you have any other suggestion to map the scenario, your ideas are welcome.

This problem gets solved with SO stock with assigment to project but it does not work with valuated project stock

This problem gets solved with non valuated project stock but we cant use it as we have valuated project stock only.

Thanks again to show interest in my problem.Waiting for your valuable reply

BR / Parimal

[former_member230675]

> 
> Problem - If I issue them to production order of crane, mov type 261 Q called up and entire cost gets booked under grouping WBSE. So we loose track on plan v/s actual costs on individual WBSE
> 
>
> BR / Parimal

If you make a proper structure and BOM you can get it.

[Former Member]

Hi Abdul,

Can you please elaborate your comment.

What exactly meaning proper structure / BOM.

We are not using WBS BOM in our scenario

BR / Parimal

[Former Member]

Hi Abdul,

If you can please give me one example explaining your comment would be of great help to me.

BR / Parimal

[former_member230675]

Please upload screen shot of your project structure (may be you can create one in IDES as an example you thought of) and BOM in any file sharing site and post the link here to analyze and provide feedback.

[Former Member]

Hi,

I understood the problem. We also faced same problem because of 'requirement grouping'. This is the disadvantage of using grouping as the costs incurred due to procurement and consumption of child parts(in production order) is only available at grouping WBS element.However when you consume parent or material linked to network, the actual costs is visible at individual WBS element. So you get the real picture only when the assembly is ready and consumed into network.

I would suggest you to study the advantage vs disadvantage of using grouping( business perspective) as grouping has the advantage of grouping all requirements and get less PR/PO and ability to use one stock across all WBS elements vis-a-vis the 'loosing the track of costs till the time assembly is ready'.

Another solution is to develop the ABAP report where you peg the requirements to the original WBS and show all the costs to the original WBS elements. There is one components of SAP-IS-Aerospace & Defence which do support this 'Pegging of Costs'.

Regards,

Mahendra dighe

[former_member230675]

actual cost will be recorded / posted only during the goods issue if you are using valuated project stock. so there is no issue with grouping wbs. its all depends on your project structure.

[Former Member]

Hi All,

In my case even if I consume parent material i.e. Crane Assembly (via Project delivery), I dont get cost of components posted on respective WBS Elements where components were added.

As per your suggestion, I have uploaded a document showing project structure and BOM on a link specified below

http://www.scribd.com/doc/58298897/Project-Structure

Request you to pl go through it and comment on the same

Awaiting your reply

Thanks and Regards,

Parimal

[Former Member]

Hi,

As it has been suggested, GPD should have the solution for your issue. Grouping, Pegging and Distribution can be used to group the requirements, distribute the parts to the original requesting WBS and distribution will help you to set move the costs from the grouping WBS to the network activitites. However you will have to set the break point as network activty.

The above soluition allows you to use production orders / purchase orders and service orders as the main replenishment objects.

Hope the above helps in some way. You might have to do some analysis on this.

[Former Member]

Hi All,

Thanks for reply to my querries.

I checked if GPD is activated in my system but currently its not activated.

I learned that its not a standard function and need to consult SAP for that.

Alternative solution is to develop report. But can anyone of you tell me in which table I can see pegged requirements.

In standard PR, PO tables (EBAN / EBKN / EKKN / EKPO), I can see only grouping WBS and not the source WBS.

In reservation table RESB, I can see only source WBS and not grouping WBS.

I need a table where I can see both source and grouping WBS for the requirement

BTW Abdul, as per your suggestion, I have uploaded the example structure (Project and BOM) on shared link.

Do you agree to problem I am facing currently or have any alternate suggestion for structure modification.

I am also open to that if it solves the problem because its the last hope for me

Thanks again for showing interest in my problem

BR / Parimal

[former_member230675]

Hi,

I have checked your structure..

You are maintaining all the raw materials required for the assembly, which is not required...

Only you need to maintain assembly on the second / third level WBSE and run MRP...

Since you are doing assembly of crane in house there is no point of creating separate WBSE for procurement. The client might be interested to see the material cost / labour cost etc. which you should provide from the report through cost element as well as value category and also value field in COPA.

Suppose you have an order for 5 Cranes and you structure should be as follows....

PD CRANE.11 Project Definition

Level 1 CRANE.11 Root Level WBSE - Link SO Here

Level 2 CRANE.11.01 Project Management

Level 2 CRANE.11.02 5 Cranes

Level 3 CRANE.11.02.01 Crane 01

Level 3 CRANE.11.02.02 Crane 02

Level 3 CRANE.11.02.03 Crane 03

Level 3 CRANE.11.02.04 Crane 04

Level 3 CRANE.11.02.05 Crane 05

Level 2 CRANE.11.03 Delivery and Installation

Create FG Material - CRANE-2011.xx.yy

Create BOM for CRANE-2011.xx.yy

Attach FG Under level 3 WBSEs (do not attach any raw materials in the project)

Run MRP

Settle Production order to 3rd Level WBSE

Run Result Analysis and Run Settlement for settling to COPA

Thanks

abdul.

[Former Member]

Hi Abdul,

Thanks again for quick response.

I had suggested the same thing to client at the beginning of the project.

But the problem is client currently has project structure based on sub-assemblies in their legacy system (Object Oriented Structure as per SAP terminology).

The BOM components I had showed are not raw materials rather they are sub-assemblies, they are very high cost items and have their individual BOMs.

Each sub-assembly have separate plan cost and budgets.

Each sub-assembly is procured / produced by separate departments, in different plants.

Thats why I am not able to use structure as suggested by you.

Initially, I had not used grouping WBSE and processed all sub-assemblies under individual WBSE. But further I want to show Assembled crane being build in client's location (which is further delivered to customer) for which I had to use production order. If production order is made for crane assembly, sub-assemblies need to be issued to this production order.

If the stock of sub-assemblies spread over several WBSE in the structure, I cant issue it to prod ord of crane assembly. Hence I had no option other than to use grouping WBSE.

Further if I dont maintain BOM for crane assy and consume all sub-assemblies to network by mov type (281 Q, GI to network) and still show prod ord of crane assy just to bring crane assy 1 qty in project, I loose track on serial numbers (serialized assembly of crane)

Dear Experts, request you to pl share your functional inputs if you have an exposure to similar kind of business.

BR / Parimal

[former_member230675]

I think if you create multilevel BOM (FG >> SFG >> Raw materials)..you can get separate production order for SFG and FG, from these you could analyse compare and control the cost of SFG.

First Create Multilevel BOM, then release standard cost, after that attach FG in the project structure. and also use network cost planning. you could see planned cost and actual cost from PP as well.

if your client is very particular about the details and also you are confident about GPD then better to contact SAP to activate it for your system..

Since client is more worried about cost try to convince them for non-valuated project stock, which will be easier to map the scenario.

May be you can also explore the collective PR indicator option in the ECC6 but for this any how they need to some additional transfer posting and also plan all the raw materials in the project structure.