What is Work centre

[Former Member]

Can u let me know what is Cost Centre / Work Centre ?

What is the difference between production order / process order

Thanks in advance.

[Former Member · Accepted solution]

Work Center

An organizational unit that defines where and when an operation must be performed.

The work center has an available capacity. The activities performed at or by the work center are valuated by charge rates, that are determined by cost centers and activity types. Work centers can be:

Machines

People

Production lines

Groups of craftsmen

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Cost center

An organizational unit within a controlling area that represents a defined location of cost incurrence.

The definition can be based on:

Functional requirements

Allocation criteria

Physical location

Responsibility for costs

Reward if usefull

[former_member187310]

This message was moderated.

[Former Member]

This message was moderated.

[Former Member]

Thanks guys for your help

[Former Member]

Hi Raj,

If you want to understand easily (not F1 help of SAP fields) work center can be remembered as for example: a Machine, a person (a worker at a machine is required for processing an operation say turning on Lathe) etc. So, when these work centers are to be specified, you would also need to talk about their capacity, correct? Without which, you never know how much time you require for an operation completion, in the set of task lists for executing a production or process order. So, capacity now you understood easily related to work center. Cost center is simply comparable to a department. So, for a grinding department (if you compare with a big organization like BHEL each of these individual section in shop floor are costed indpendently). When you create cost centers, you will also assign associated work centers underneath ( this is part of CO module). The purpose of assigningn work centers to a cost center is to known how much cost has been incurred at a cost center via the associated work centers during these operations. Cost Centers are also linked to activity type through work centers. These activity types when selected and used in the operations of a process order or production order, derive the associated activity cost per hour for example multiples the actual time spent for completing operations in an ORDER. Thus, it calculates the actual cost. When an ORDER is created, it calculates the planned cost from planned operational times. So, at the end of the day, via controlling module, they will come to know what is the planned vs actual cost of manufacture of product in a particular ORDER. Further down the line, when SO process is completed, they come to know what is the actual revenue. From these, it calculates, profitability (CO/PA). This is how, I explain.

Now difference between process order and production order:

Process Orders can be used where it is a continuous process industry like chemical reactions take place inside a oven or rotary kiln in a cement plant...you just don't create a production order to start and stop an operation as you wish...Things go forward once you start, without your involvement unlike operations in production order where you can start as you wish after a two days break if you want.....Production order can be roughly remembered for mechanical parts assembly etc. Prod order uses BOM, Routing, Scheduling etc. Process Order uses Recipe instead. There are some technical differences but, once you understand one, the other one you will realize just a moulded stuff from the previous one.

hope, it helps

Regards

Message was edited by:

Gopala Turaga

[Former Member]

Hi

check info given BY sap to clear ur doubt

Definition

Operations are carried out at a work center. In the R/3 System work centers are business objects that can represent the following real work centers, for example:

Machines, machine groups

Production lines

Assembly work centers

Employees, groups of employees

Use

Together with bills of material and routings, work centers belong to the most important master data in the R/3 production planning and control system. Work centers are used in task list operations and work orders. Task lists are for example routings, maintenance task lists, inspection plans and standard networks. Work orders are created for production, quality assurance, plant maintenance and for the Project System as networks.

Data in work centers is used for

Scheduling

Operating times and formulas are entered in the work center, so that the duration of an operation can be calculated.

Costing

Formulas are entered in the work center, so that the costs of an operation can be calculated. A work center is also assigned to a cost center.

Capacity planning

The available capacity and formulas for calculating capacity requirements are entered in the work center.

Simplifying operation maintenance

Various default values for operations can be entered in the work center.

The following graphic illustrates the use of work center data.

Use of work center data

Structure

A work center is created for a plant and is identified by a key. The work center category, which you define in Customizing the work center, determines which data can be maintained in the work center.

The data is grouped thematically together in screens and screen groups. Examples of such screen or screen groups are:

Basic Data

Assignments (to cost centers, Human Resource Management System (HR))

Capacities

Scheduling

Default values

Hierarchy

Technical data

Integration

Task Lists

Work centers are assigned to operations in task lists. If you change default values in a work center, the changes are effective in the task list if a reference indicator has been set for the default value.

Work Center Hierarchies

Work centers can be arranged in hierarchies. These are important in capacity planning. You use hierarchies to cumulate available capacities and capacity requirements in a hierarchy work center.

Assignments to Objects in the Human Resource Management System

A Logistics work center can be assigned to either an organizational unit or a work center in the Human Resource Management System (HRMS). Assignments to other HR-objects, for example employees or qualifications, can be maintained via the HR work center.

Vishal...