Manually Reduce Commitment on WBS Element

[Former Member]

Dear Experts,

I belong to construction industry that deals in large scale projects. It is a common practice in business that the scope of work reduces as per actual work done.

We have PO in system with original scope of work and reductions to scope are treated through purchase requisitions with negative nature (a separate document type). Each PR/PO is assigned to a WBS and results in commitment to the project, however, the negative variations PR is also having the same effect as any PR i.e. increasing the commitment where as according to the definition provided above, it should reduce the commitment.

Far as I know, commitments created through PR/PO can only be reduced by short closing the line items but my requirement is to manually reduce the commitment on WBS. I'd like to know if that's possible at all in standard/customized SAP to post "negative" commitment?

[Former Member]

Dear All,

I appreciate your input so far and I'd like to share my findings with you.

Looks like it is possible to stop a PR from updating the commitment values. It requires use of this BADI ME_COMMTMNT_REQ_RE_C - Check for Commitment Relevance of Purchase Requisitions

Next target is to reduce the commitment and for that I am looking in to possibilities of using returns process with PR, some how. Not sure whether it will work, but the BADI ME_COMMITMENT_RETURN - Commitment for Returns Items may be helpful.

Has anyone ever used these BADIs before?

[Former Member]

Hi

There is transaction FMZ1 to create commitments manually.  You can enter a positive or negative amount for these commitments

Regards

Andrew

[Former Member]

Hi

There is transaction FMZ1 to create commitments manually.  You can enter a positive or negative amount for these commitments

Regards

Andrew

[srinivasan_desingh]

Hi Andrew,

Transaction FMZ1 is for commitments in funds management. This may not be useful for PR /PO commitments. If there is funds management implemented, then they can use these transactions.

Thanks

Regards

Srinivasan Desingh

[srinivasan_desingh]

Hi Saifff Safe,

I don't know my suggestion is helpful or not.

You have mentioned that each PR/PO for each WBS. You can have a user status in the WBS element which is similar to TECO so that you can remove the commitments from PR. But still you can do all the transactions like in REL status.

Thanks

Regards

Srinivasan Desingh

[Former Member]

Hi Srini,

Relationship between PR and WBS is not one to, in fact it is one to many. Example, a WBS for finishing works is used as account assignment in different PRs/POs because all finishing works can't be performed by one vendor.

A control through status may stop adding to the commitments, where as I am looking at way/s  to actually reduce it.

[Former Member]

Hi,

The requirement you mentioned in the OP is a valid case with the Construction industry (mostly). However, based on the knowledge and the information that i have, i dont think it is possible to reduce the commitments manually.

Like Manosij mentioned in his post above, you can either short close the PO or modify the existing PO.

Regards,

Gokul

[Former Member]

Deleting the PO/PR line or short closing it will reduce your commitment. Adding a PR line, assuming the system will treat it as negative is absurd, how will it know this is a negative PR?

Negative PR makes no sense business-wise either. Why does the client does not want to modify the PO/PR?

[Former Member]

It makes sense for the same reason mentioned earlier that the scope of work needs to be reduced. However, keeping the original PO price and tracking the variations is a complicated process. It is also required to print variation related documents, have them  released through system and to keep track of every stage of a contract. For these reasons, changing/reducing the PR will not help.

My question remains, "I'd like to know if that's possible at all in standard/customized SAP to post "negative" commitment?"

[sanjeevc]

HI,

as far as i know, logically yes it is possible to negative commitment posting in sap standard system for that you have to changes posting key only as define your organization it may be 40 CR or 50 DR.

test this scenario and let me know

Regards,
Sanjeev

[Former Member]

Hi Sanjeev,

Thanks for the reply.

Can you please let me know the transaction code along with any other factors I should be aware of to test this scenario.

[Former Member]

hi,

Please check the below link, might be helpful.

Return Purchase Order-Negative delivery costs n... | SCN

I am no MM expert, but following option can be checked. If the qty received is less than the qty in the PO and no further receipts are expected. you can check the check box 'Delivery completed'. this will show the PO as closed and also not show up the additional qty as commitments.

Please check and let know if it works.

Ideally creating another set of PO's to negate the commitment is additional burden to the process and we should try to reduce the number of steps just to make the process easy.

thanks

[Former Member]

This is called short closing a PO, and what the OP wants to avoid somehow. This is however the SAP and Industry best practice. I don't think what the OP is suggesting is feasible in standard SAP

[Former Member]

Hi mos lan

It is indeed a burden that we are carrying trying to utilize standard SAP system for specialized construction industry needs. First, a returns PO for services - have my own doubts about being able to return a service to vendor. Second, the delivery complete indicator is an option only at the end  of contract/work where as I want to reduce the commitment any time during the work. Can't wait till the end of projects because of their lengthy duration.

[Former Member]

Second point in my reply to mos lan answers the reason for avoiding the short closure.

[Former Member]

Here is my understanding of the engineering and construction industry (having implemented in one myself):

1) Scope of work is defined before start of project and accordingly PR is raised.

2) PR is converted to PO. This causes a commitment in the WBS.

3) The scope may have to expanded (in most cases)/ or reduced (in your case) based on how the project progresses.

4) The PO is modified accordingly. For example, in the case of expansion, if you do not modify the PO, you cannot receive additional goods/ services in SAP.

This will automatically reduce the commitment in WBS.

The simple logic is this: If you want to show a reduced commitment somehow, you will have to modify/close the PO. You cannot have an open PO and no commitment at the same time.

If this can be confirmed only at the end of the project, then you will need to wait till the end of the project to reduce the commitment. That is my read, and is how standard SAP PS-MM integration will behave.

Check this help.sap link for reducing commitments manually (i'm not a PS expert, not sure if this will work):

Reducing Funds Commitments - Manual Actual Postings (CO-OM-CCA) - SAP Library

[Former Member]

Hi Manosij,

Your understanding of E&C industry is correct and I guess you were lucky not to come across the scenario that I am dealing with. It is not simple logic and which is exactly the reason why I am here. The link that you provided is related to funds management and doesn't help with purchasing commitments.