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PLM (Product Lifecycle Management)

SAP PLM Recipe Development – Product Cost Calculation


This blog belongs to a series of blogs regrouped on the SCN page “SAP PLM Recipe Development for Beginners”.

In today’s blog we talk about Cost Calculations in Recipe Development.

Product Developments do not only want to see the impact of nutrients and allergens if the replace one ingredient with another ingredient in their product formulation, they also want to understand the financial impact of this change.

In the recipe “Calculation Results”, there is a tab “Costs” available. Let’s now understand what we can do with this function – or shall we first start with what we cannot do with it:

  • We cannot do a comprehensive FI/CO product cost calculation
  • We can also not include overheads and costs related to people
  • A budgeting function is also not available

But that is actually also not this idea of this function. This function is meant to be a rather simple and straight forward function, which allows product developers to compare the impacts on raw material costs or estimated substance prices.

You can see that the system displays now the recipe formula with additional fields. Instead of scrap factors and total solids, you now have the following additional columns displayed:

  • Selected price
  • Material price – price
  • Material price – currency
  • Specification price – price
  • Specification price - currency

You now have the possibility to display the estimated specification price (for a particular rating and validity are) or the material price (either standard price or moving average price) in those fields per input material of your recipe formula.

In the last line, you see the total price of your for this recipe. You can therefore easily compare the total prices of two almost identical recipes, where only one ingredient has changed.

As displayed below, the system allows you to change the material price and either select the:

The price is selected as displayed in the material master (SAP GUI MM03 – Costing 2).

If you select the estimated specificaiton price, this price is read form the proeprty tree of the corresponding specification (Administration – Estimated Price).

As mentioned above, you have the possibility to maintain several “estimated prices” where each of them corresponds to a particular usage and validity area.

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