Hitting inventory while creating Shipment Cost

[Former Member]

Hello SD Champs,

I've got a query regarding Shipment Cost.

While creating DRI (Direct Reduced Iron) Shipment, Nitrogen gas is consumed for purging (to make DRI stable). Nitrogen gas is part of customer'sinventory and we have a condition record for price in MM module.

Nitrogen quantity needs to be consumed for DRI shipment and the cost to be posted to finance and be part of shipment cost. As of now, user is directly keying in the cost in condition tab. Customer requirement is that the quantity should be provided by users and the rate should come from vendor info record while creating Shipment Cost document. The inventory should be reduced once the shipment cost workflow is completed.

Request your help to achieve the solution.

Many thanks in advance!

Zeel Sharma

[Former Member]

Hi Zeel,

It is little difficult to understand the business process you are following to what you have written.

Can it specific like who is sending the product?It seems that you are using an STO process to transfer the product (price maintained in MM).

Or is it something like you are selling the product as a BOM material (DRI and nitrogen). However the while shipment the vendor will take in the cost of shipment.

How is the vendor planning to take up the cost (price basis) ?

Inputs will be helpful.

regards,

Sayantan

[Former Member]

Thanks Sayantan for your reply.

Here is the clarification on couple of points,

-> Nitrogen gas is part of our inventory and is procured from third party vendor. We have condition record for the price in MM module.

-> Nitrogen gas is not part of delivery, the delivery is created with only DRI material as item. Nitrogen is used in shipment in order to make the DRI stable. Hence, its part of shipment costing process.

-> The current process is taking care of the nitrogen cost where user enters the cost during shipment costing. The expectation is that user should enter the quantity used instead of cost, which in turn should be multiplied by the rate (available in MM module) to arrive at the total cost. Here is how I am thinking to achieve it...

While creating shipment cost document, create a new Item Category for Nitrogen Qty and maintain a condition type accordingly. We can create a condition record and maintain the price (similar to vendor record). User should be able to key in the Quantity on the Condition tab and price would be fetched from condition record. The condition value should be the total nitrogen purging cost. Request your guidance (and important config changes) if this is achievable.

-> The second aspect of the requirement is that inventory should be reduced as we have utilized the nitrogen. However, they would not like to hit the accounts on inventory reduction as nitrogen cost is already considered in shipment cost accounting.

Hoping for your valuable advice to achieve the solution on time.

Thanks and Regards,

Zeel Sharma

[Former Member]

Hi Zeel,

To me the best possible way for this seems to make NItriogen as a packaging material. While you pack it you can give the weight of the product. This activity is to be done at delivery while you pack the product.

After this you can use standard shipment costing based on item. to calculate the cost.

In fact you can't include a material in the shipment cost document.

There is another SAP note. Please check it.

Note 700512 - Information: Allocation of shipment costs to delivery items

Hope this helps.

regards,

Sayantan