cost element for materials in network profile

[former_member341917]

Dear All,

Want to use material planning field in internal activity under assignment tab. But I have the following queries

1. What is the cost element that I have to mention in network profile under internal activity?
2. If I mention the cost element in network profile and plan my internal activity in initial stage and later on if I assign material to internal activity will the  Plan cost of that internal activity increases by the material added to that activity.

  3.  under OBYC materials have different cost elements based upon valuation class. so how the planned vs actuals will be show in the report.

Regards

Avinash

[former_member214674 · Accepted solution]

Use "Price" field in the External Activity to plan cost for the components. Ensure "Pur Req/ Res". should be Never.

Cost element you can configure in network profile and same will be used for planning only. Tcode OPUU

When you need to procure materials then procure them from the same external activity and cost element will be determined from OBYC.

Deselect "Planning" check box from OPSC(network type) - this will not aggregate material price to network activity and further up in the hierarchy.

[Former Member]

Hi,

1. If you maintain CE at network profile which will default always. Moreover, the derivation of CE would be decided material master data from valuation class.

Generally speaking leave the CE filed blank in network profile for internal activity.

2.1 - are you using internal activity for planned hours to derive plan cost of planned hours using work center and activity type?

2.2 - material costs are derived from material master data when you assign the components.

If you are using NWA- internal for both (2.1 & 2.2), then it is not advisable. You segregate the activities which are exclusively used for material procurement and internal planned hours costs derivations.

There is dependency to show both, if you select "Costing relevant check" on material component screen. which is not a best practice to follow.

Now it is your call what you wanted to do.

3. You will have both planned and actuals in various reports. Please check the forum to know about the reports.

Thanks,

Sudhakar

[former_member341917]

Hi Sudhakar,

Thanks for your reply and sorry for the delay in replying. anyway following in the process i am going to implement in PS.

1) client wants Activity based cost planning and the work to be performed in an activity for this i proposed the solution as following

    a) for internal activity i am assigning the work centre and work for example 1000 m3 with duration to complete the work for example 20 days without activity type only for scheduling.

    b) i am using internal activity elements for capturing the cost example Labour cost and equipment cost

2) for planning material cost i am having some problem.

      a) in the initial stage once contract has been awarded project is create and planning is done via activity based cost planning so at the initial stage user don't have the material codes to assign to the internal activity so i am thinking of using "Material Planning field in Internal activity.

      b) if i maintain cost in material planning field and later stage once the materials are created if i assign those materials to the internal activity will my cost will get doubled? or can i do direct goods issue to network activity so that planned cost will not get doubled.

     c) Different materials have different valuation classes and as i am using CE in network profile how the reports will get effected.

3) what is the impact of "cost relevant check"in material component could u explain it in brief.

Thanks

Avinash

[Former Member]

Hi Avinash,

See my replies below.

1 a & B: You are planning Qty on NWA and capturing costs - labor & Equipment on NWA elements.

When  you are having elaborated to NWA-Element level, split your total work on each NWA-element and post labor cost. Thus you will have planned Vs actual costs at one place.

coming to equipment cost - are you capturing using PO through GR?.

2.a : Option1- create a separate WBS elements for materials and plan cost at WBS level. That value would be your total planned cost of material procurement as estimated. Under this WBS elements create NWAs and assign the materials. With this set up you can assign material and procure so that will have actual costs coming from GR.

Option 2: Create a one General Cost activity and assign the total planned cost of material on this NWA.

When you assign the material components, diligently you have to reduce the equivalent amount from the general costs activity. Also note that on component screen, you have to check box "Cost relevant" so that material cost will add to Cost NWA. Let the different materials  have their own valuation class and have default CEs accordingly. that would not be big issue.

Please discuss with your MM team to get more information. Also my suggestion is to leave blank CE field in configuration.

The option2 is very cumbersome and high risk but one have to be very cautious to reduce the value from Cost NWA in order to sustain the planned material costs whenever they added.

3. I have answered the relevance of Cost relevance check box in above.

Hope above makes sense.

Thanks,

Sudhakar

[former_member341917]

HI Sudhakar,

Thanks for explaining me in brief. few more clarifications i required regarding this

1) when can we use Material cost element in Network profile.

2) if i give CE in network profile and plan material cost in internal Activity and check the tick box "cost relevant" what will be the impact when i assign material to that internal activity later in execution phase. will the cost get increased or not.

3) if it gets increased can i do the same way as u told for General Cost activity by reducing the amount in material planning field of Internal Activity.

4) what will be the impact on reports.

once again thanks for ur support on this.

Regards

Avinash

[Former Member]

Hi,

CE in profile when you have one static CE defined for material. but at the same time for clarity do not mix up rather use two network activities. for example A is for labor planning and B is material planning.

If you check the cost relevant it will add up cost to the NWA level thus aggregating. No impact on the report. You can check in DEV system and find out how the system is behaving.

Thanks,

Sudhakar

[former_member341917]

Hi Sudhakar,

Thanks for the reply, But in my case i dont have materials to assign it to the activity at the planning stage in that case how can i achieve my  plan cost of the project.

Regards

Avinash

[Former Member]

Hi,

That is what I told you to use General Cost activity for total planned cost material at the beginning. With this you will have your total project plan costs inclusive of Labor + Machinery + Material + other expenses which would derive expected profit figure at the time of releasing the project. Then you can take snap shot of those values and can be compared as data keep changes for review.

Thanks,

Sudhakar

[former_member341917]

Hi Sudhakar,

Thanks for the reply. but is there any other way to plan material cost other than general cost activity in my case as user has to be more cautious when executing the project.

Regards

Avinash