Charctics of a Projects Sap

7/25/2019 Charctics of a Projects Sap

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Projects have following characteristics:

Hierarchy of project parts Projects are given an appropriate structure

for better controlling and monitoring purposes.

Planning and controlling projects provide better control to plan and

control of costs, resources, budget, dates and payments. Cross department Many departments lie sales and distribution,

!ccounting, Purchasing and Production wor on a common project.

Comple" and uni#ue $ach Project is uni#ue in its own way for

e"ample, application, customer, design etc.

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'he project itself comprises several phases. (hile planning and coordinating

large and comple" projects, a high degree of precision is re#uired. )or

project flow planning, one will do the followings:

*chedule deadlines

*chedule dates

+esources availability

!llocation of funds.

P* module helps in all these phases of the projects

'he various phases depicted above represent an ideal project flow. n your own

specific project, you can omit certain phases, overlap phases with other

phases, or allow certain phases to run in parallel to each other.

-uring the initial phase of the project, objects must be specified and defined

lie, specific dates and defined resources and must be available and financingmust be provided.

! project is structured according to view points which are structure and process.

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Project Definition: 'he project definition contains information, such as project

name, project number, start and finish dates and organi/ational information, that

is binding for the entire project. ! project definition is re#uired for all projects.

Work Breakdown Structure Element (WBS Element): (0* elements describethe components1tass of the project to be accomplished. 'hey can be used for

basic scheduling, cost planning, cost budgeting, and cost collection.Project Planning: Project planning is performed from the 2bottom up3. Plannedcosts roll up from the lowest level (0* element. Project cost planning can beperformed at the cost element level or (0* element level.

Project Budgeting: 'he budget assures fiscal control and accountability for project

spending. 'he budget is distributed from the 2top down3. Project budgeting is

performed at the (0* element level.

Networks: 'he steps in project planning are determining what activities

are re#uired, their durations, their relationships, and resource availability.

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Milestones: Milestones are events of particular significance, and1or trigger pre4

defined functions, such as billing. Milestones are used to indicate, or mar, points

of transition from one phase of the project to the ne"t.

Standard Project: $". ! company may want to create a standard project for each

type of project they have.

Standard Project Definition: t is the framewor for all the components 5(0*

elements6 that are created within the standard project.

Standard Work Breakdown Structure: Planning, budgeting, and cost collection

cannot be performed on a standard wor breadown structure

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nvestment project e"ample: Projects which are e"ecuted by companies which does

not have revenue involved. Cost related aspects are more important as the project

is e"ecuted.

)ollowing important steps are carried out during the e"ecution:

Create (0* structure, plan 0asic dates and costs manually

0udget the (0* elements and enter actual dates 8 assign

various documents.

Calculate overhead head costs and carry out settlement as period

end closing procedure.

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'he Project *ystem offers various ways of planning dates.

1Set of Dates: )or planned dates, we can use 0asic -ates and )orecast dates

and !ctual dates are also shown in this.

!"#eck Dates: 'he dates in the project structure can be checed for their

consistency with1without taing activities into account.$ %n#erit: 'he dates in the (0* element can be inherited by child (0*.

&E'traolate: 'his function can be used to calculate the dates for higher level

(0* elements.

S#ift: !ll the planned dates or just the dates which come in the sub hierarchy can

be shifted.

*Planning Different "alendars: ! different factory calendar can be used for each

(0* element or !ctivity.

+ Sc#eduling: 'his function calculates the dates for etwors and !ctivities.

,Planning -orm: n the planning form, basic dates can be e"trapolated from lowerto higher level (0* element, or inherited from higher to lower level (0* element


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-ates can be manually planned in (0* hierarchy which does not have

networs. 'his can be done in project planning board by dragging the mouse for

the respective (0* element.

!lso, in structure planning, one can enter the dates in table.

'he 0asic dates flows in (0* hierarchy as top4down from higher levels tolower levels or e"trapolated from lower levels to superior (0* element.

'he basic dates consistency can be checed with in the (0* structure.

(hile e"ecuting the project, the actual dates can be set in project planning board

or information system structure by dragging the respective (0* element bar and

compare the actual dates with basic dates.

'here are several planning forms to plan basic dates on (0* element, lie 'op

down 5nherited from to top to down6, 0ottom up 5e"trapolated from bottom to

top level6, )ree planning and *trict bottom up.

)or assigning actual dates, which is !ssigned during e"ecution phase, by dragging

mouse in project planning date, and one can compare actual and plan basicdates.


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n the case of projects with assigned networs, networ scheduling functionality

automatically derives the dates for activities and (0* elements.

'his can be using project planning board where you can select (0* elements

and assigned networ activities.

*cheduling parameters determines the scheduling of networs i.e. forward orbacward scheduling 5forward scheduling determines earliest dates and bacward

scheduling determines latest dates6.

'he difference between two dates 5earliest and latest dates6 are called as )loat

which can be negative or /ero and signifies that the networ path is 5or activities

from start of networ to the end of the end of networ6 is critical.

'he scheduled dates of the (0* elements are the wrap4up dates of the

assigned activities which are displayed as thin time bars in project planning

board.

'hese scheduled dates can be copied in basic dates of the (0* elements

and e"trapolate them to the superior (0* elements in the project hierarchy.

*ettings of scheduling parameters:

ndicators =networ scheduling> and =adjust basic dates> set.

!ssignment of scheduling type in scheduling parameters.


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*cheduling can be used to derive dates for activities1(0*

elements. etwors are always scheduled forward and bacwards.

'he scheduling type determines the original direction in which scheduling

taes place. t can be carried out in two ways: 'op4-own and 0ottom4?p

scenarios.

'he dates schedule in (0* structure can be copied to the basic dates of the

(0* elements for the purpose of e"trapolating them up the project hierarchy.


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n the case of projects with assigned networs, networ scheduling functionality

automatically derives the dates for activities and (0* elements.

'his can be using project planning board where you can select (0* elements

and assigned networ activities.

*cheduling parameters determines the scheduling of networs i.e. forward orbacward scheduling 5forward scheduling determines earliest dates and bacward

scheduling determines latest dates6.

'he difference between two dates 5earliest and latest dates6 are called as )loat

which can be negative or /ero and signifies that the networ path is 5or activities

from start of networ to the end of the end of networ6 is critical.

'he scheduled dates of the (0* elements are the wrap4up dates of the

assigned activities which are displayed as thin time bars in project planning

board.

'hese scheduled dates can be copied in basic dates of the (0* elements

and e"trapolate them to the superior (0* elements in the project hierarchy.

*ettings of scheduling parameters:

ndicators =networ scheduling> and =adjust basic dates> set.

!ssignment of scheduling type in scheduling parameters.


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*cheduling can be used to derive dates for activities1(0*

elements. etwors are always scheduled forward and bacwards.

'he scheduling type determines the original direction in which scheduling

taes place. t can be carried out in two ways: 'op4-own and 0ottom4?p

scenarios.

'he dates schedule in (0* structure can be copied to the basic dates of the

(0* elements for the purpose of e"trapolating them up the project hierarchy.


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*cheduling uses the #uantity structure of networ activities to derive dates in an

automated way.

*ingle networ schedules all activities of the networ. f it is connected to other

networs by relationships, their dates are treated lie constraints.

n overall networ scheduling, the system schedules all networs connected byrelationships.

(0* scheduling schedules all activities which are assigned to selected

(0* elements.

etwor can be scheduled:

ndividually 5etwor *cheduling6

Bverall 5*cheduling of Bverall networ6

(0* scheduling

'he activity data, activity relationships and date restrictions form the basis for

determining the dates automatically.

n Projects with assigned networs, the dates of (0* $lements and !ctivities

can be derived by scheduling. Here, (0* $lement transfers the date to higher

level


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elements and $"trapolate it.

n (0* with assigned networs, the basic dates for the (0* element can be

planned in order to determine that certain part of the project has to be

completed within a fi"ed period of time.


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*cheduling parameter: 'hey determine scheduling. 'hese are created for

specific plants and networ types.

&. !djust basic dates: t determines that after the scheduling run, the

scheduled dates are copied to the basic dates of the networ header.

. *cheduling 'ype: t determines the type of scheduling being carried out. )or e.g.forward first and then bacward scheduling.

%. *tart in the past: t determines how much time bac was the start date. f

its more than the days mentioned, scheduling is done from current date.

7. !utomatic *cheduling: *cheduling is carried out when saving is carried out.

. Dog !utomatic: f log is generated, it is displayed automatically.

;. 0rea *pec. *cheduling: 'he e"act time at which a brea is scheduled.


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allocating wor in (or )orce planning5()P6


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*cheduling 'ype: -etermines type of scheduling being carried out.

&. *tart in the past: t determines how much time bac was the start date. f

its more than the days mentioned, scheduling is done from current date.

. *cheduling form: t specifies as in on what basis is the scheduling being

carried out (0* element or etwor header.%. !djust basic dates: t determines that after the scheduling run, the

scheduled dates are copied to the basic dates of the networ header.

7. Dog !utomatic: f log is generated, it is displayed automatically.

. *hift Brder: -uring scheduling, it determines how the system deals with partially

completed activities.

;. *chedule when saving: *cheduling is done on saving.


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&.

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7.

$very time a networ is scheduled, forward and bacward scheduling is

carried out by the systemE and if activated it determines float and capacity

re#uirements for activities, reduction level used to schedule the networ,

earliest and latest dates for the relationship.

)orward scheduling determines the earliest dates.

0acward scheduling determines the latest

dates.

)loat: f earliest dates are not same as latest

dates, then float occurs.'he *cheduling results are:

*cheduled start and finish for the networ.

$arliest start and finish dates 5earliest dates6 and the latest start and finish

dates 5latest dates6 for activities and earliest and latest dates for relationships.

+eduction levels used to reduce the networ and float times 5total and free float6

for activities. !nd capacity re#uirements for activities.


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Bther influencing factors in scheduling:

nternal processing: the normal -uration maintained in the activity is used by

the system for scheduling internally processed activity.

$"ternal processing: Planned delivery time or normal -uration 5e"plicitly to

be activated in control ey6 will be used by system for scheduling e"ternallyprocessed activity.

Feneral costs activity: -uration

+elationship: 'ime interval: )i"ed or as a percentage.

'he wor centers can be maintained in internally or e"ternally processed activity

and in relationships, and wor centers contains following informationGs:

&. )ormulas for calculating duration of activities

. )actory calendar and operating time for each worday.


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! networ must and always scheduled forwards and bacwards and scheduling type

specifies whether forward scheduling or bacward scheduling is carried out first.

)orward scheduling calculates the earliest start and finish dates for all activities, and

the scheduled finish date of the networ. ! start activity is an activity in a networ

that does not have a predecessor.

0acward scheduling calculates the latest start and finish dates for an activity 5latest

dates6 and the scheduled start date of the networ. ! target activity is an activity in

a networ that does not have a successor.

(hen forward scheduling is performed first, the date from which scheduling starts

is the basic start date in the networ header. (hen forward scheduling is

performed after bacwards scheduling the start date is calculated from bacward

scheduling.

(hen bacward scheduling is performed first, the base date from which

scheduling starts is the basic start date in the networ header. (hen bacwards

scheduling is performed after forward scheduling the finish date is calculated fromforward scheduling.

*tart dates are at the beginning of the day

5AA:AA6. )inish dates are at the end of the day

57:AA6.


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Sc#eduling .ssem/l0 Networks:

Bverall etwor *cheduling can be performed for a sales order item.

'his function schedules the networ assigned to the sales order item and all

other networs with relationships to it 5total networ scheduling6.

'he function leads to an update of all items in the sales order with assignmentsto the total networ.

2erall Network Sc#eduling wit# Selection tions:

'his function is used along with selection criteria to specify which networ1sub4

networ are to be taen into account as part of overall networ scheduling.

! prere#uisite for the use of the Bverall networ scheduling with selection options

function is that suitable levels are defined beforehand for the project system and

networ types and number intervals are assigned to it.


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.cti2it0 Element 3 P45 Dates

'he system calculates dates for activity elements with reference to the start or

finish dates of the activity. ou maintain a time interval for the start and a time

interval for the finish.

Material 4e6uirements Date

'he system calculates the re#uirements date for components with reference to the

start or the finish date of the activity. (ith the networ type you can control

whether the earliest or latest start date is used as the re#uirements date in the

networ.

f the re#uirements date is before or after the start date of the activity, you can enter

a corresponding lead time offset.

ou can set a manual re#uirements date for components.


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ou can maintain constraints for the start and finish of activities and 1 >or 5offsets

for6> activity elements.

Constraints can be relevant for both the earliest and the latest

dates. ou can maintain constraints for basic and forecast sets of

dates.


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Degend:

$* I earliest start

$) I earliest finish

D* I latest start

D) I latest finish

') I total float

)) I free float

)loats supply information about time reserves available for individual activities and

one can use floats calculated in scheduling, for e"ample in capacity leveling, to

shift activities between their earliest and latest dates or to e"tend their duration.

'otal float: 'he amount of time an activity can be shifted from its earliest dates into

the future without affecting the latest dates of its successor. 5'otal float: I D*4$*

or D)4$)6

)ree float: 'he amount of time an activity can be shifted from its earliest datesinto the future without affecting the earliest dates of its successor. 5)ree float I

$* successor $) activity6


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'he slide describes the calculation of total floats and free floats:

'he total float can be calculated as the difference between the earliest and

latest start of an activity.

n the above e"ample:

-ay ; 5A:AA6 4 -ay 5A:AA6 I & -ay.

'he free float of an activity can be calculated as the difference between the

earliest start of the successor and the earliest finish of the activity.

n the above e"ample:

-ay @ 5A:AA6 4 -ay < 57:AA6 I & -ay.


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+eduction:

+eduction can be used when the time period within which activities are scheduled

is not enough for processing all the activities.

'his reduces the scheduled duration of internally4processed activities and for

which reduction strategy has been maintained.?p to si" reduction levels can be defined for each reduction strategy. 'he

percentage reduction re#uired can be entered for each reduction level.


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ou can plan project costs in two different ways:

Manual cost planning in the (0*

Cost planning using activities 5networ costing6

Manual planning in the (0* involves:

&. Bverall planning is a structure4oriented planning and is the most basic form. n

this ind of cost planning you enter costs for each (0* element which will be

broen down by fiscal year if you want.

. Cost element planning is a detailed planning of primary costs and activity inputs

which is cost element based and period based.

%. n ?nit costing you use a profile to enter #uantities lie internal activities,

materials, variable items and e"ternal services etc. for each (0* element.

?nit costing is cost element based.

7. )rom 7.;C release, you can use $asy Cost Planning which offers you an easy4

to4use tool for planning costs by cost element in a #uantity structure. !nd further

one can use $"ecution *ervices to enter actual data and commitment for the

related planned costs.

'he plan costs can be determined manually as mentioned above and also by creating


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activities for (0* elements, and using these activities to plan costs.

(hen using networs and activities, planned costs are automatically

calculated based on the resource re#uirements identified for activities and

operations.

+esources provide a #uantity structure that can be dynamically valued by the system.

'his method has the following advantages:

a. resulting plan can be copied to new projects

b. cost planning is shifted automatically along with the activities, if parts of the

project are shifted.

c. Planning using networ activities is by cost element and period.


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ou can plan project costs simply by creating activities for (0* elements 5for e"ample, in the

project planning board or structure planning transactions6.

Planning in this case is by period and cost element.

'his process has significant advantages over manual planning of primary costs or activity

inputs:

Cost planning can be postponed easily, using a wor pacage.

ou can copy this type of cost planning to new projects.

Cost planning is integrated with time scheduling and resource

planning.


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(hen you plan dates and resources in networ activities, the system determines

the corresponding planned costs automatically.

Planned costs are determined for the following

objects: !ctivity inputs for internally4processed

activities

Primary costs for e"ternally4processed activities and services

Primary costs for general costs activities

Primary costs for material components

!ctivity elements are costed as if they were activities.

*ystem automatically calculates the planned cost based on planned dates and resources in

networ activities.

Cost elements should be identified by cost relevant items. dentification in internal activities,

e"ternal activities is as:

nternal activities1 services: -etermination is by means of secondary cost element assigned in

the networ type master data


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$"ternal activities1services :&6 on stoc4t is identified by F1l account 6 *toc4 t is

determined by automatic account determination

Cost planning is integrated with time scheduling and resource planning


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nternally processed activities are used for the wor which needs to be e"ecuted in own

company and assist in planning wor.

n the activity, you need to maintain the wor data and based on same system calculate costs

for these activities.

(or is an input for machine or person to e"ecute the activity. !nd wor center is place

where the wor is carried out and wor output is provided.

(or centers contains data such as scheduling and capacity, which assists in costing,

scheduling and capacity planning of activities.

'he costs can be distributed over the networ duration for internally processed activities 8cost activities and controlled via distribution ey.

'he distribution ey is determined from the activity or from wor center 5only in internally4

processed activities6, if not maintained in activity. f distribution ey is not maintained or

determined, costs are distributed evenly 5over the earliest dates6 in the activity.

$"ample: !n activity spread across periods A@ and &A, with a total wor time of A hours.

'he dates and the distribution ey used for the activity assign &AA hours to period A@ and

&A


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hours to period &A. f the rate is &AA $uros per hour for period A@ and 9A $uros per

hour for period &A and valuation per period has been stipulated, the costs are

&AAAA $uros for period A@ and &AAA $uros for period &A.

-uring e"ecution phase, when you confirm the activities, you consume the capacity

re#uired by the activity and enter the actual date and costs.

ou can distribute wor among the employees by assigning persons to the activities

from a project team which can be set up from H+ organi/ational units, persons or

positions.


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(hen procuring services e"ternally 5outsourcing6, you can create services or externally-

processed activities.

$"ample: ou commission a freelance engineer to design and build a machine.

(hen creating a e"ternally processed activity or service activity, a purchase re#uisition is

created based on the settings and further processed in purchasing and the data can be

accessed from purchasing for e"ternal processing e.g. purchasing info record, which

contains data for the pricing and delivery times.

E'ternall07rocessed acti2ities gi2e rise to lanned costs e6ui2alent to t#e rices fromt#e urc#asing info record or t#e rice in t#e acti2it0 5#e 2aluation 2ariant for t#e

network costing 2ariant determines w#ic# rice is used for t#e 2aluation W#en t#e

urc#ase re6uisition is acti2ated and con2erted to a urc#ase order8 t#e acti2it0 is

also s#own as a urc#ase re6uisition commitment or urc#ase order commitment

5#e account assignment categor0 in t#e urc#ase order determines w#et#er t#e

goods9in2oice receit is 2alued 7 t#at is8 w#et#er it gi2es rise to actual costs %f t#e

goods receit is 2aluated8 actual costs are osted to t#e acti2it0 and t#e commitment

is reduced /0 t#e amount of t#e urc#ase order 5#is means t#at t#e in2oice receit


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ma0 correct t#e actual costs

Service activities are maintained for t#e urc#ase of ser2ices

"reating suc# an acti2it0 esta/lis#es t#e link to MM Ser2ices (MM7S4) ;nlike

e'ternall07rocessed acti2ities8 ser2ice acti2ities contain a ser2ice

secification containing lanned acti2ities and 2alue limits for unlanned

acti2ities

5#is ser2ice secification is coied to t#e urc#ase order w#ere Purc#asing

can t#en modif0 it Ser2ice acti2ities also gi2e rise to lanned costs or

urc#ase re6uisition9order commitments %nstead of goods receits8 ser2ices

are later entered and acceted

'he service activities also initiates the purchasing process but contain the value limits

for the unplanned services and hierarchy of planned services to be procured. 'he

goods receipt process in *ervices activities involves following steps: service entry

and service acceptance.

'he e"ternally processed activity and service activities are differentiated by Control

eys.


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(e can assign a wor center and planned wor to an e"ternally processed activity.

'his allows to carry out capacity planning for vendors

Changes in networ dates1#uantity will trigger worflow for a PB change:

f changes are made in the networ to dates or #uantities for material

components or e"ternal activities for which PB has already been created .system

triggers a worflow automatically. 'he only prere#uisite is that this worflow has

been activated in the parameters for the networ type table

'he person responsible in purchasing will receive an information on the re#uired

changes.

f only P+ is created, changes in the networ to dates1#uantities will update the

change in P+ automatically


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'he nternal processed activity, e"ternal processed activity and service activities are

differentiated by Control eys.

(e can generate Purchase re#uisition 5P+6 for e"ternally processed activities

from Project *ystem. 'he P+ is converted to a Purchase order 5PB6 in

purchasing. ! goods receipt and invoice receipt can then be posted for thepurchase order

(e can assign a wor center and planned wor to an e"ternally processed activity.

'his allows to carry out capacity planning for vendors


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ou can use general costs activities to plan all other costs that cannot be mapped via

internally4processed activities or e"ternally4processed1service activities.

n the general costs activity, you can enter a description, the amount and currency, a cost

element, a duration and a distribution ey for distributing costs.

'he costs are distributed using the networ duration for general costs activities.

-istribution is controlled by means of the distribution ey for the activity. f no distribution

ey is maintained, the costs are distributed evenly over the earliest dates in the activity.

ou can create a unit cost plan for the general costs activity.

'his means that detailed costing is possible even at an early stage of the project

5for e"ample, for sales pricing6.

'he activities which cannot be traced though internal1e"ternat activities1services can be

traced through general cost activities to plan costs

$g travel e"pense for meeting.Fenral cost activity is assigned to cost object

Costs are distributed as per scheduled duration which is controlled by distribution ey


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.'here are cases where distributioney has not been maintained,in those cases

even distribution of cost is done based on the earliest dates in the activity

-etaled costing can be done lie during sales pricing phase that is at beggining

phase of project


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ou can create invoicing plans directly for networ activities 5e"ternal, service, or general

costs6 or components procured e"ternally.

'his means that it is possible to plan costs and outgoing payments on the basis of dates

entered in the invoicing plan. Costs are not simply distributed, but are calculated precisely

at the times specified in the invoicing plan.

ou can create an invoicing plan by copying a reference invoicing plan.

'he reference invoicing plan fi"es cost and payment times relative to a start date.

!lternatively, you can copy billing milestones as dates to the invoicing plan of the activity. f

you copy the milestones rather than creating them manually, they can be postponed

along with the dates in the invoicing plan if the activities are rescheduled.

ou cannot create invoicing plans in combination with unit costings 5for general costs

activities or material components6.

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Bn the basis of days, periods or fiscal years one can plan payment flows i.e. revenues

and e"penditure.

n (0* elements, manual planning of revenues and e"penditure is by period. !t

commitment item level 5Project Cash Management master data6 planning taes place.

'he #uantity structure in the networ and the billing plans in the (0* or *- document

are valuated in the automatic planning of financial data.

!utomatic planning will be done by day. Planned line items will be written.

0ased on assignment to F1D accounts commitment items will be determined. ?nlie

revenue and costs calculation, payment date calculation taes account of the

customer and vendor payment terms respectively.

ote: 'he credit side payment plan of the networ is determined using theasynchronous networ costing only.

'he dates and the payment terms are used in the P* billing plan for planning incoming

payments. *ales order items will also be used in assigning the billing plan data and

payment terms5of the dates or sales order item6.'he delivery date including the

payment conditions is used if there is no billing plan for the sales order item.

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n the case of activities processed e"ternally and e"ternally procured components,

invoicing plan including payment conditions are used or, the delivery dates including

payment conditions are used where there is no invoicing plan

f an invoicing plan has been maintained, payment data is only planned for

general costs activities


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Planned revenues and incoming payments is relevant in billing plan.

-ates for -own payments are relevant only for payments 5not revenues6.

Milestone billing dates appear as planned incoming payments and planned revenues. 'wo

things are important for dates and amounts i.e. payment terms and payment target

5e"ample: payment & wee after invoice issue, with J discount6

Bnce the project is e"ecuted, invoice billing will be generated and appear in the project as

actual revenues and customer payment obligations. (ith respect to dawn payment date,

down payment re#uests will be generated by the billing program which are recorded inthe payment data for the project.

0illing plan can be created for a sales order, a sales order item or for a billing element in the

(0*.

Planned costs and planned outgoing payments are relevant during the nvoicing plan.

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nvoicing planes can be created for e"ternally4processed activities, e"ternally4

procured material components, service activities and cost activities.


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-epending on the transaction, you can calculate costs for one networ 5e"ample: networ

maintenance6 or a range of networs 5e"ample: all networs for selected (0* elements

in structure planning or the project planning board6.

ou can calculate networ costs asynchronously. 'he advantage of this is that you can select

and cost broader ranges 5e"ample: ! to K6 and carry out costing in the bacground.

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Costing variant controls calculation of planned and actual cost. Costing variant

is assigned to order type. etwors are of order category A.

'he valuation procedure is defined by valuation variant which is a component of

costing variant. 0ased on valuation variant prices are determined by the system to

value componenets material, activity type, processes, subcontracting and e"ternal

activities. Laluation variant searches for prices in se#uence from the price sources.

Price entered first is selected first

Materials:Price is selected either from purchasing date or material master record

!ctivity type 8 Processes: Price is selected either from activity based costing or

cost center accounting

$"ternallly processed activity:price is selected either from the activity or from

purchasing information record

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(hen customi/ing the order value update, you stipulate, for each order category and

type, whether the order or networ is appended 4 that is, whether its planned costs are

added to the project cost plan for assigned (0* elements.

'here are two tables for the order type 5networ type6. 'he first is defined per order type,

the second 5parameters for networ6 per order type and plant.

! third important table is the networ profile, containing default values for the networ and

its activities.

'he costing variants for plan and actual costs are determined at networ header level.

'he costing sheet and overhead ey are determined at activity level. 'hey control processcost accounting or application of overhead. -epending on the creation process, these

eys are inherited from the networ header or the assigned (0* element.

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'he costing variant contains the basic control information needed to carry out

costing. 'he valuation variant contains all the information which controls the

valuation of:

Material components

nternal activities

$"ternal activities

'his information also

controls how

overheads areapplied.

Laluation can be

determined plant by plant.

'he 0y period indicator enables you to calculate costs for internally4processed

activities period by period.

'he costing type contains further detailed information for controlling costing.

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ou can classify the resources in broadly categories from the networs point of

view: nternal and e"ternal activities.

nternally processed activities: 'hese activities 1 wor are carried out by

machines and 1 or persons of own company. ou can schedule the activities as

per re#uirement, distribute the wor among persons.

$"ternally processed activities: these activities are e"ecuted 1 processed by other

companies. 'hese are carried out by purchasing department. 'he service

activities are also procured e"ternally however different from e"ternally

processed activity that you need to define service specification and the limit for

the unplanned activities which is provided by the service provider.

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Business scenario

'o e"ecute a project, materials are re#uired

which can be procured e"ternally 5purchasing6 or

manufactured in own company 5Production6. 'hese

materials are managed in project4specific stoc.

!s the project controller, you are interested in:

'he values in the project, at the different stages of purchasing or production

5project controlling6

*tocs of raw materials, semi4finished and finished products used for your project

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5stoc controlling6

Materials provide linage between many other *!P functional modules lie

Materials Management 5Purchasing and nventory Management6, *ales and

-istribution, plant maintenance and Production Planning and Control.

'he materials are assigned to activities which helps in material re#uirement and

planning in a project.

The product which is manufactured in your project is in turn made up ofa variety of material components.

The first step is to plan the procurement and consumption of the requiredcomponents in your project.

Projects are linked to Materials management, Sales and istri!ution and

Production Planning via materials.


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n order to plan the material re#uirements of a project, materials can be assigned to

activities. Bn the basis of stoc, the materials are classified as stoc or non4stoc items.

'he item category stoc items 5D6 are for such materials which are stored in stoc e.g. project

stoc, sales order stoc or warehouse stoc and reservations can be created for such

materials. 0ased on the #uantity re#uired in the project, the re#uirement planning can be

initiated. 'he procurement element for e"ternal procurement is a purchase re#uisition and for

re#uirement planning is planned order.

)or productions of assembled material, material 0BM is e"ploded and the

re#uirement planning is e"ecuted for all the materials mentioned in 0BM.

on4stoc items 56 are for materials which are to be procured directly for the networ which

is not using M+P 5i.e. not procured via project stoc, sales order stoc or warehouse stoc6.

)or non4stoc items, Purchase re#uisitions are created which are passed on directly to

Purchasing.

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'he item category stoc item 5D6 is used for materials ept in stoc. (hen you save

your data, the system creates a reservation for the re#uired material. ! purchase

re#uisition 4 which is passed on to Purchasing 4 can also be created for components

procured e"ternally.

'he main function of material re#uirements planning is to ensure material availability

5in other words, to procure the re#uired #uantities in time 4 both in4house and for sales

and distribution6. 'his includes monitoring stocs and, above all, creating procurement

proposals for purchasing and production.

ndependent re#uirements 4 that is, re#uirements for finished products, assemblies or raw

materials 4 trigger re#uirements planning. n order to cover the re#uirements, order#uantities and dates have to be determined, and the corresponding procurement elements

scheduled. 'he procurement element for re#uirements planning is a planned order and,

for e"ternal procurement, a purchase re#uisition. )urthermore, the dependent

re#uirements for materials produced in4house 5in other words, the #uantity of components

re#uired to manufacture a finished product or assembly6 are determined by e"ploding the

bill of material. Planned orders are created at each 0BM level to cover re#uirements

when a material shortage occurs.

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Bnce #uantities and dates have been planned in re#uirements planning, these

planned procurement elements are converted to e"act procurement elements: for

production, this is the production order and, for e"ternal procurement, the purchase

order. (hen the order or purchase order is being processed, the production order

is delivered or a goods receipt is posted to stoc 5plant stoc or project1sales order

stoc6.

'he goods issue that taes place as a result of this activity reduces the stoc

and posts actual costs to the consuming networ activity.

tem Category D 5stoc item6 is used for components ept in stoc .

$nsuring material availability is the main function of M+P which includes monitoring

stocs and creating procurement proposals for purchasing and production .

+e#uirement for finished products, saleable assemblies and spare parts

trigger re#uirement planning.

Brder #uantities and dates have to be determined in order to cover the

re#uirements .

)or re#uirement planning the procurement element is the planned order and

for e"ternal procurement it is purchase re#uisition .

Planned procurement elements are converted into e"act procurement elements

once the #uantities and dates are planned.

t is Production order for production and purchase order for e"ternal procurement.


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'he item category non4stoc item 56 is used for components that are not procured

by way of warehouse stoc or project1sales order stoc, but are procured directly by a

networ activity instead.

Purchase re#uisitions are created for these components. 'hese re#uisitions are passed

on directly to Purchasing. (hen the goods are received, they are not placed into stoc,

but posted to the activity.

on4stoc items cannot be managed as project stoc or sales order stoc.

on *toc tem 56 :'hese are the items which are procured directly by networ activity and not through

warehouse stoc, project stoc or sale order stoc .

Purchase re#uisitions are created first and then passed directly to purchasing.

(hen the goods are received they are directly posted to activity .

on stoc items cannot be managed as project stoc or sale order stoc .

'here are two procurement types for direct procurement with item category :

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Purchase +e#uisition for the networ

'hird party re#uisition for the

networ


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Changes in networ dates1#uantity will trigger worflow for a PB change:

f changes are made in the networ to dates or #uantities for material

components or e"ternal activities for which PB has already been created .system

triggers a worflow automatically. 'he only prere#uisite is that this worflow has

been activated in the parameters for the networ type table

'he person responsible in purchasing will receive an information on the re#uired

changes.

f only P+ is created, changes in the networ to dates1#uantities will update the

change in P+ automatically

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"or instance # $n this case the way in which the material can !e procureddepends on !oth item category and material attri!utes.

The material master stores the information of

the material attri!utes.-$t contains information like %

-&hether the material is purchased orinternally manufactured.

-&hether the requirements are individualor collective or !oth

-&hether the material can !e procured inadvance.

The control data of the project definitiondetermines whether stocks can !e !uilt or not

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The account assignment category of the salesorder determines whether sales order can !e!uilt up

' setting within the ()M can !e specified todetermine whether the components can !eprocured independently of the material mastersettings.


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The components can !e assigned to theactivity with the help of the procurementindicator.

The Procurement indicator contains thedefault values for determining the stock andthe procurement type.

' procurement indicator can !e specified inthe network profile. This gets defaulted in thecomponent assignment.

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'he 0BM transfer functionality in *!P P* helps you to assign the material from 0BM to

the networ activities based on the reference point field which is assigned to the material

and networ activities.

(0* 0BMs can be assigned to Project 0BMs using the 0BM 'ransfer transaction .

'he corresponding selection parameters must be chosen to perform the same.

!dvantage of 0BM transfer functionality is that the changes in the 0BM during the course

of the project will change in the activities 5you need to run 0BM4transfer again every time

you mae changes in 0BM6.

ou can also manually assign materials to networ activities without reference point fields.

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*eference point % This is the logical link !etween a ()M component and anetwork activity. $t ensures that the automatic assignment of the materialcomponent happens correctly.

&hile the assignments !y themselves are project specific, they can !e madesimultaneously for a large num!er of networks in the project.

$ndividual components, individual ()M assem!lies or a multi level ()M can!e assigned.

These assignments can happen manually without reference points as well.

Procedure )or 0BM 'ransfer:

"ield in the ()M and the network activity which needs to !e used asthe reference point needs to !e specified.

These fields must have the same structure in !oth the o!jects. "orinstance % +'*, eight digits .

Possi!le entries for the reference point can !e defined incustomi-ing.

*eference points in the ()M +omponents and the network activitiesmust !e defined.

The ()M PS $nterface must !e started after changing the ()M/

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()M +omponents are assigned to activities in this process.

Purchase requisitions and reservations are created for the assignedcomponents if *eservation0Purchase *eq. indicator is activated.


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! material that you allocate to activities in a networ can be ept in various stocs.-epending on your project, you can access different types of stoc for materials

planning:

*ales order stoc and project stoc are important for controlling purposes 5for monitoring

the stoc value in a sales order or project6 and from an M+P point of view 5the stocs

are reserved for the sales order item or (0* elementE other stoc elements cannot

access them6.

'he various stoc types are managed for each material component using the account

assignment category. ou define the account assignment category when you assign the

material to the networ activity 5popup in manual assignment, strategies in 0BM4P*

interface and standard networ6.

'he possible account assignment categories depend on the assignment of the networ

activity to a stoc object 5(0* element or sales order item6, on the item category for

the assignment 5direct procurement for non4stoc items6 on the material master, which

can e"clude collective or specialist stoc management.

!s of +elease 7.!, you can use M+P elements 5grouping6 to manage a joint project

stoc for an entire project or for several projects 5this is a rougher method than managing

stoc per individual (0* element6.

ou maintain the account assignment categories possible for networ purchase

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re#uisitions in customi/ing.


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nstead of managing the material either in a plant stoc or for each individual (0*

element and having no control at all over procurement or being fully responsible we

can go for re#uirement grouping. 'hrough re#uirement grouping we can determine

the degree of control ourselves.

Prere#uisites for using re#uirement grouping :

Laluated group stoc

Frouping (0* elements

M+P Froups that allow re#uirement grouping

!ssigned components should have periodic lot si/es.

'he most basic scenario involves grouping the re#uirement of all the (0*

elements in the project into one (0* element.

Br we can create projects which are only meant for grouping re#uirement of otherprojects.

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Laluated project stoc must be allowed in the project definition control data.

(ith the e"ception of automatic re#uirement grouping M+P element indicator

must be set for (0* elements.

M+P groups involved in re#uirement grouping must be determined in customi/ing

for the (0*.


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t is common in engineering projects for critical components with long and unreliable

delivery times to be purchased at an early stage in the project much before the

project activities in which the components will be used are specified. !dvance

procurement process is used in such situations.

!dvance procurement can only be used when you are using sales order or project

stoc .


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rder "ategories and order t0es

-ocuments are used to enter business transactions in the +1% *ystem. Brders are

one type of business transaction. Brders are determined by their order category.

'he networ is an order category. Brder types are prescribed by the system for the

relevant applications.

ou can define your own order types within an order category. 'he order type

describes how the order is controlled.

Customi/ing includes two tables, one for the order type and another for the

order type1plant combination.

'he order category is used to control:

&. umber assignment

. -efault value settings

%. ?ser4specific status management

7. ?ser4specific field controln the case of networs, order types1plants can be header4assigned or activity4

assigned. ormally, activity4assigned networs are used, where costs are gathered

in each activity. Header4assigned networs are only significant for the assignment of

networs to sales orders 5without (0*6.

Project < .ssignment of orders


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ou can assign various *!P orders to a projectE e"amples include internal orders,

production orders, and plant maintenance orders. ou can then use the project

hierarchy reports to evaluate these assigned orders with the (0* element.

$ach order is a cost object with its own costing parameters such as planned costingvariant, actual costing variant, and overhead sheet. 'he planned costs of assigned

orders are used to determine the planned costs of the project.

ou assign orders to the project either by assigning a (0* element to the order

header or by assigning the order to a networ and activity as a subnetwor. f the

assignment is re#uired only for cost control and analysis, you need to assign order to

the relevant (0* element. f the assignment is re#uired both for scheduling and

cost control, you need to assign the order as a subnetwor. 'he (0* element is

derived from the networ activity. ote that production orders cannot be assigned as

subnetwors.

-ocuments are used to enter business transactions in the +1%

*ystem. Brders are one type of business transaction.

Brders are determined by their order category.

'he networ is an order category. Brder types are prescribed by the system for the

relevant applications.

ou can define your own order types within an order category. 'he order type

describes how the order is controlled.

Customi/ing includes two tables, one for the order type and another for the

order type1plant combination.

'he order type is used to control:

umber assignment

-efault value settings

?ser4specific status management ?ser4

specific field control

Plant and order type parameters are used to control:

f the networ is activity4 or header4assigned

Planned and actual costing variants

'he settlement rule strategy


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ou can use the appended indicator to specify, per order category, whether an

order is appended 4 that is, whether the planned values for the order are included

in the planned value of the corresponding (0* element:

&. f the appended indicator is set, the order planned value increases the

(0* element planned value. 'he information system shows the total

as the project plan. (hen cost planning is taen over as the budget,

the values from appended orders also contribute to the budget.

. f the appended indicator is not set, the order planned value is not

added to the (0* planned value. n budgeting, the plan total for such

orders must be added manually so that these orders can use funds

later.


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ou can use the appended indicator to specify, per order category, whether an

order is appended 4 that is, whether the planned values for the order are included

in the planned value of the corresponding (0* element:

Bnce released, all orders are apportioned 4 this means that their plan, commitment,

and actual values are funds assignments against the funds in the project. 'he

order value table contains an indicator which you can use to mae orders

apportioned earlier, at the created stage.

ou can set appended and apportioned indicator based on the order category,order

type, and controlling area

!n e"ception to apportionment at release is in the case of networs for preliminary

planning.n Project *ystem customi/ing,you can specify networ types to be used

for preliminary planning.Preliminary planning networs are never apportioned.'heir

related plan values do no increase the assigned value for the relevant (0*element

n the case of networs 5order category A6, you can use the networ type

parameters to determine whether the networ is:

Header4assigned or activity4assigned 4 that is, whether costs are managed in

the networ activities or collected in the header


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! preliminary planning networ whose plan, commitment, and actual values

are not apportioned 4 meaning that they do not appear as assigned values

in the project.


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=eader7.ssigned Networks

n a Header4assigned networs all the costs 5activity and material6 are assigned at

networ header level

!fter assignment of networ header to a (0* element, !ll costs are transferred to

(0* element. !ssignment of activities to (0* elements is only to summari/e thedates

(e you have to use header4assigned networs to assign networs to sales order in

case sales order are not assigned to projects as no assignments can be made to a

sales order item in the networ activity.

.cti2it07.ssigned Networks

Costs are collected on activities in case activites are used as account assigned

objects.Plant1networ type parameters deines the condition if the networ header

or networ activities are to be used as cost objects.

!ctivity4 assigned networs are usually used when activities are assigned to various

(0* elements.Here every activity in the networ is an account assignment object.

(hich implies we can analy/e planned costs, commitments and actual costs

for each activity.

'he costs are aggregated and displayed for the (0* elements to which

the activities are assigned.


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!ctivity account assignment is a special feature of networs. !ll other order types are

header4assigned. !ctivity account assignment is controlled via the appropriate

indicator in the table Parameters for networ type.

Header assigned networs should be used when networs are assigned to salesorders without (0*.Header assigned networs can also be used when the

enitre networ is assigned to a single (0* element


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*- document item assignment is controlled via the account assignment category.

'he account assignment category is controlled via *- re#uirements type

determination.

mportant factors that affect account assignment are the strategy group, the M+P

type and item category group from the material master of the product as well as

the document type of the *- document.

'he system defaults the item category when you create an order. ou can accept

the default or overwrite it. Permitted item categories are defined in Customi/ing.

'he permitted planning strategies are assigned to the material using the planning

strategy group. 'his is necessary so that you can find the correct re#uirements type

in independent re#uirements management and sales order management.

'he default re#uirements type is the main strategy in the planning strategy group.

f no planning strategy group is defined in the material master, the system uses the

item category group 5sales and distribution screen in the material master6 and, if

necessary, the M+P characteristic to search for the re#uirements type for the salesorder.


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'he account assignment category determines the CB object to which document

#uantities and values are assigned. ou use it to determine the following:

?sing the special stoc indicator 5** above6, that goods movements in Dogistics use

plant stoc, sales order stoc or project stoc.

?sing the consumption posting indicator 5Cons. above6, the CB object to which the

values of a material document are assigned.

*ettings:

) I Collective stoc, consumption posting to the consumer 5order, activity6

'he account assignment category is important for procuring components directly.

$ I Nuantities and values managed in the sales order item

'his account assignment category is important for mae4to4order production without

(0*.

- I Nuantities managed using sales order item, values managed in projects

'his account assignment category is important for non4valuated project

stoc, with (0* and sales order item

N I Nuantities and values managed in projects

'his account assignment category is important for project stoc


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F I Plant stoc, values managed using project

'his account assignment category is important for sales order items sold

from plant stoc, with

value posting to the project. t differs from account assignment category ) in

the field control

of the account assignment bloc.


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!ctivity40ased Costing offers a facility for allocating and distributing the overhead to its cause.

!ctivity40ased Costing provides useful information on:

Bverheads reduction by process improvement

Profitability increase by highlighting unprofitable products or customers

!ctivity40ased Costing is advantageous for having:

O 'ransparent overheadsO Parallel #uantity and value flows

O Precise assignment of internal activities to consumer

=Peanut butter effect can be avoided through even distribution of overheads among all

the cost drivers.

;


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n !ctivity40ased Costing, processes are the controlling objects. Prices can be either

maintained manually or using activity and cost input planning in the case of cost

centers and activity types. 'hrough activity based costing, processes are debited to

cost objects or profitability segments.


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'emplates are created in 2Customi/ing3 and determined by controlling area, costing sheet,overhead ey and template environment 5for networs AA7E for (0* AA6 for the

function. n the Project *ystem, templates can be assigned to (0* elements, networs

5header assigned6, or networ activities. Process costs are allocated to cost objects or

profitability segments by assigning a process template. Process costs are calculated based

on the templates selected for the project.

!fter template selection, the calculation program

determines the following

Processes in the template relevant for the

project

O Nuantity of each process consumed by

the;


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project

Calculated value to be added to the

project at the start, end or continuously

'he price for the process and the allocation cost element are determined by

entering one process per line in the process template. Multi4level processes can be

mapped by referencing another process template in the woring template.

'he #uantity used by the cost object is determined using the cost driver. 'his enables

the allocation of the relevant values to all the levels in the process hierarchy as far

as cost objects or profitability segments.

Cost drivers can originate from many different sources in the +1% *ystem or e"ternal

systems. $"amples : weight 5material master6, number of components, activities of a

particular category, wor center 5networ6, number of sales orders for maret

segment 5D*6 etc. 'he #uantities determined by the cost driver are multiplied by the

price of the process. 'he resulting value is charged to the cost object 5in the

e"ample, the (0* or networ1activity6, and the process is credited.


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!ctual prices for activity types and business processes are calculated in Bverhead

cost controlling at the end of the period.

!ctual prices I !ctual costs 1 Nuantities consumed

'he possibility of revaluation at actual prices and its specification for each

activity type are controlled in Customi/ing in the parameters for the actual

version depending on the fiscal year.

'he difference between the actual price and the originally allocated price is

charged to the cost objects.

+evaluation at actual prices for activities and business processes can be done

in the Project *ystem and in the Cost Bbject Controlling.

+evaluation at actual prices using an activity type is illustrated in the e"ample given

in the slide

;


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Bverheads calculation is used to allocate overhead costs to cost objects such as activities

and (0* elements. Calculations are done based on the Costing sheet entered in

the cost object and the overhead ey entered on the (0* element,networ header or networ activity. Bverheads can be calculated for

planned, commitment and actual values. Bverhead calculations are

done using the #uantity based or percentage allocation rates.

'he following postings get generated through overheads allocation:

-ebits to cost object 5(0* element, etwor header oretwor activity 6

Credits to cost center 5 overhead order or process 6

;


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Bverhead costs are updated using the secondary cost elements

in the costing sheet credit rows and these can be simulated also.


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Costing sheet is derived by means of the costing variant from the Parameters for

etwor 'ype table, in the case of networs. 'he costing sheet and the overhead ey

can be changed in the networ header.

'he costing sheets to be used in the activities are made a default through this.

)or (0* elements, the costing sheet is derived directly from the project profile. n

the case of $asy Cost Planning and the unit costing for (0* elements, the cost

planning draws on a costing sheet for a costing variant which is assigned to the

project profile through the planning profile.

Bverhead eys for activities are inherited from their respective (0* elements.

;


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Bverheads are calculated using a costing sheet.

'he overhead surcharge can either be a percentage if it is value driven or an absolute value

of measure if it is #uantity driven. 'he overhead is calculated against a base which is defined

by the cost elements. Cost elements or cost element areas are collected in base lines.

)actors such as Controlling area, company code, plant, overhead group, networ type, time

period and plan versus actual determine the overhead rate applied. Bverhead ey assigned

to the cost object decides the determination of overhead group in customi/ing. 'hus a single

costing sheet with fle"ible rates can be made use of different organi/ational units or

individual activities.

;


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networs1activities.

$asy Cost Planning can also be used to enter plan data for later project e"ecution.

Having done this, you can later use $"ecution *ervices to enter commitment and

actual data relating to the planned costs. ?se customi/ing to stipulate in which

plan version values planned in $asy Cost Planning are stored.

!s part of the networ costing, the system automatically determines planned

costs when you plan dates and resources for the following objects:

a. )or internally processed activities: activity inputs

b. )or e"ternally processed activities 8 service activities: Primary costs

c. )or genreal costs activities: primary costs

d. Material componenets: primeary costs.

ou can use planning templates to create #uantity structures for $asy Cost

Planning.ou can enter #uantities and prices in the template, or regulate activation using

formulas or conditions.

ou can use characteristics assigned to the planning template as variables for the

formulas1conditions. 'he characteristics are valued by the user when the

planning templates are copied into $asy Cost Planning.


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?nit costing is done to calculate cost plan per (0* element. Here we use

planned #uantities instead of cost.

t is not period dependent

!t cost element level, plan values are displayed

nput information related to sources of supply, #uantities and prices mar the useof unit costing to generate cost plan per (0* element

;


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pacage schedule is changed

'his planning is adopted if precise information is available as it becomes sure not

to reschedule1postpone the project


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'he plan profile is used to control overall cost1revenue planning. t contains costing variants

for the unit costing or $asy Cost Planning.

t also contains indicators for updating revenue plan values via customer #uotations or sales

orders.

ou assign the plan profile to the project by way of the project profile. ou can change it in the

project definition.

Costs and revenues can be planned in different CB plan versions.

ou either specify the plan version during planning or, if you are using $asy Cost Planning,

you assign it to the controlling area.

Planning layouts are used to plan costs, revenues, payments, and statistical ey figures.

ou can use the +eport Painter to create the layouts and can assign them to planner profiles.

?sers can choose planner profiles and assign them to the user master record.

Planning profile: ?se transaction BP*0

'he Planning profile contains the settings related to planning. t control overall

cost1revenue planning. Planning profile is assigned to project using project profile. Costing

variant are

;


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relevant if we are using unit costing and easy cost planning

CB plan version is re#uired to be specified if we are using easy cost planning.

Planner profile and planning layouts are specific to use of detailing planning

using =cost element1activity input>


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Planning profile is contains the settings for overall planning, detailed planning

and unit costing

-etails for each field can be checed using

)& mportant field details are as:

'otal Lalue: -efines overall planning without any reference to fiscal year

!nnual Planning: -efines overall planning with reference to fiscal year

0ottom up Planning: Bverall planning values are e"trapolated after saving

$"change rate type: -etermines which e"change rate is to be used for currency

conversion of overall values


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'ransaction B' to edit costing and valuation variant

Costing variant is mostly used for unit costing ,easy cost planning and also used for

costing networs. 'he field costing type determines for which (0* element

5costing object6 costing is done

Laluation variant determines the prices and rates. n the above mentioned slide,system will first chec for =Planned price &> if it fails, system will chec for =standard

price> and again if it fails it will chec for =moving average price> from material

master. f system now fails, it will trigger an error message during cost determination


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Charctics of a Projects Sap

Documents

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