Cost planning method

[former_member679976]

Hi Experts,

I hope you all are doing well.

My client is involve in roads construction business. they use multiple materials and services for that.

for a single WBS they use cement, Steel, stones, labours etc. they want only two cost element one is for material and other is for Services.

In this case i am confuse which cost planning we should use, through which they can see all costing details for a single WBS.

Please suggest me ..

thanks in advance..

Regards

[Former Member · Accepted solution]

Hi Sonal,

Try with Easy Cost Planning (ECP).

In easy cost planning, you can plan everything under 1 WBS or Many as long as WBS is marked as 'Planning' (In case they need to arrange some category then use 'cost node' option. )

Use only 2 item category in ECP while planning M Material and N Service.

Discuss with your MM consultant and assign proper Valuation class to your Material and Service, so that while they enter the material or service the cost element will come default ( and I think they can configure such that user cannot change). Your MM team can help to define 1 GL for all material etc.

If the qty of material or service is common for certain processes; go for cost model in which you define the material and service (Say Grade 1 Road require X Metal, Y Cement, Z service  per each KM)

Reg/ Tony

[former_member679976 · Accepted solution]

Hi Jacob,

Thanks for answer.

I have one doubt that can we do monthly cost planning in ECP? if yes then how?

Please suggest.

[Former Member · Accepted solution]

You mean Plan X qty for material A like X1 for June, X2 for August, X3 for September etc..Not Possible I think

[Former Member]

Hi Sonal,

Since you are using only 1 WBS, hierarchy based cost planning will allow you to plan only for that 1 WBS. Further if you choose network based costing, you can plan for 2 cost elements which you have. Easy cost planning is altogether a different topic and you need to see if it suits your requirement.

Hence you can have detailed cost planning only if -

1. You breakdown your WBS further into different heads and used hierarchy planning

2. You create more cost elements and use network costing

3. Combination of 1 & 2

Hope this helps

Regards

Shrikant

[former_member679976]

Hi Srikant,

Thanks for your reply.

my doubts are as below

1.client do not want to break WBS in further heads.

2. I tried Unit costing but not able to find any report where i can see cost plan. (please suggest any report)

3. I am thinking about CJR2 but having one doubt that is it right way to create different cost elements for materials. although at PO creation time all materials will hit a single GL.

4. we can not use network costing because we want project stock.

please throw some light on my doubts.

thanks in advance.

[Former Member]

Hi Sonal,

You need not create different cost elements for different materials, if client doesnt want to see material wise cost seperately.

You can use project stock with network costing. In network costing, you will assign materials to activity and system will calculate project cost automatically from material master cost. While assigning material you can choose 'Reservation for WBS' to manage it in project stock.

Regards

Shrikant

[former_member679976]

Hello Srikant,

Can we do monthly plan in unit costing? if yes then how?

can we do monthly planning in ECP? if yes then please suggest steps..

Thanks