BOM Scenario: Header Level Inventory-Item Level Pricing

[Former Member]

Hello SD Gurus,

Need your expert advice in the following issue:

XYZ is a LPG sold in Metric Tonnes (MT) and is composed of components like A, B, C etc. The Customer nominates (Sales order) for say 30,000 MT of XYZ Gas (no one knows the proportion of components at this level) and then the lifting is done from the terminal (Delivery) followed by Invoice ( billing). Only at the time of Valuation (pricing) users knows the proportion of components from the Certificate of Quality/Quantity and then calculates the price of XYZ based on the components as shown in the attachment.

1) We have used the BOM concept. (See the BOM material in attachment). This is a header level BOM with Item level pricing (Main Item is relevant for inventory, PGI and Sub items are relevant for pricing. For this we configured the relevant item categories and assignments properly. Since the components are not required at Sales Order level we have chosen to display only main items in the sales document configuration.

2) At the Sales order level since you have only Main Item (XYZ) a basic price (Condition Type ZBAS) is configured at the sales order level for Main Item which will not reflect in Billing as the Main Item is not relevant for billing

3) At the Delivery level we have nothing much to do expect picking the main item but making sure if the main item quantity is changed for picking then the sub items quantity is also changed since they are used for pricing.

4) Now at the Billing level you will see only the Sub Items each with whole quantity (30000 MTO). But since this components are in percentages we have used another condition type ZZAV to calculate the net value of each sub items in percentages.

Could you please tell me if this is the right procedure to handle this scenario ?? If not, is there any other way to handle this scenario??

[Former Member]

Hello and ,

Thanks for your time and observations. This is a rare scenario and nothing came to my mind except this solution.

Mahendra,

Yes the Main item should be displayed in the Invoice which can be displayed using information from database tables of sales orders or delivery. All the outputs/reports are Z so I hope there would be no issues provided the logic is there.

Moazzam,

Yes I will make sure to contact the FI consultants to check with the material and the accounting documents before implementing the solution.

Regards,

Nitin

[moazzam_ali]

Hi

just check test and after finalizing update here that whether this solution is acceptable and workable or not. Please make this habit to update with solution so that it can be helpful for others in future and close the thread after giving your solution.

Thank$

[Former Member]

Sure I will update accordingly.

Nitin

[moazzam_ali]

Hi Nitin Kumar

Your XYZ material is header level material and it doesn't contain any stock. Right? A,B,C are compnents and these are issued from your stock. This is what my understanding is from your question. Correct me if I am wrong. In PGI you issue component material A,B,C etc not XYZ.

If this is the case then why are you taking compnents in billing? You realize your price at the time of billing then why don't you cumulate the price and enter it in XYZ?

Are you want to enter prices of components material wise? Is it because of profitability analyses?

Thank$

[Former Member]

Hello Mr. Moazzam,

I will try and explain it more clearly now:

1) XYZ is the main item (header) and is relevant for inventory (Stock) and Delivery/PGI.

2) A, B, C are the sub items (text) and are relevant only for pricing depending upon the % of their components in main item. (This information is provided to them after PGI when they have the certificate of quality from the sample main item).

3) Since pricing is only done at Billing Level the users don't want to see the sub items in sales order and delivery. We can hide the sub items in sales order but not in delivery.

4) The scenario is you have a Letter of Credit (financial document) at the time of Sales Order, We have made the main item relevant for pricing and not for billing there by maintaining a condition type ZBAS (Basic Price) for main item and not sub items.

5) We have configured a Header Level BOM with main item as delivery/pgi relevant and sub items (text) as Billing relevant.

You can see more information in the above mail. I would like to know if this solution is correct or need any changes.??

[mahendra_jani3]

Hi Nitin,

As you mentioned, I agree that document which i have suggested does not contain similar nature of issue.

After looking at complete scenario, as per my understanding this seems to be well thought mapping.

No other way came in my mind to cover this.

Only point is If main Item is not in Invoice and Sub Item is not in Sales order, what shall you do if client want linkage of the same for any reporting or printing.

Also Customer will get Invoice printed with Sub Components from Billing document so would not he ask to show Main item for which he had given order in addition to sub items on Invoice print?

Regards,

MJ.

[moazzam_ali]

Hi

Your business scenario is strange and I never came across such business requirement. I have gone through your posts and whole scenario. Although there are many questions in my mind and some them are asked by Mahendra but I wont go for questions because this is your company's scenario only not the best practice of SAP so I would say if your business process is ok and there is no issue in this process then its ok and go for it. We can modify SAP and its processes as per our own requirement. Just check the financial impacts of PGI accounting document and Billing accounting document with your FICO guys. If they are ok, business is ok and everything is working fine then your process is ok.

Thank$

[mahendra_jani3]

Dear Nitin,

Try below link where has given complete information about different Business screnarios related to BOM.

I am hoping that it will give you answer of your query.

Still if you have doubts then let us know.

http://scn.sap.com/community/erp/sd/blog/2013/09/06/different-business-scenarios-and-sales-bom-techn...

Regards,

MJ.

[Former Member]

Mr. Jani,

Thanks for you reply and interest. But the link you have send doesn't constitute much information about the current issue or any similar one by nature.

I want to know if the solution I have listed above would suit my requirement or not. If it doesn't suit the requirement then i would like you to send me an appropriate solution.

Thanks in Advance.

Regards,

Nitin