Integration of SAP ECC Material Ledger.ppt
- 1. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 1 A Actual ctual C Costing osting W With ith M Material aterial L Ledger edger Integration of Material Ledger in R/3 Integration of Material Ledger in R/3
- 2. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 2 Product Cost Controlling: Components BOM Routing Routing Material prices Activity prices Process prices Overhead Product Cost Planning Value structure Quantity Structure: PP Master Data Standard price Material Internal OH Process •Planned costs •Actual costs Work in process Scrap variances Variances Settlement Order Material $ Internal $ OH $ Process $ Total ... Final costing Period-end closing Preliminary Costing, Simultaneous Costing Cost Object Controlling Price diff. Standard price Material movements Price Determination: Periodic Unite Price Value structure Actual Costing/ Material Ledger Quantity Structure: Material Movements Material Ledger Process Process Material Internal OH Process
- 3. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 3 Actual Costing Actual Costing Multi-level Multi-level Periodic Material Prices Periodic Material Prices Parallel Currencies Parallel Currencies Valuation with Historic Valuation with Historic Exchange Rates Exchange Rates Parallel Valuation Parallel Valuation Transfer prices Transfer prices Group Legal Profit Center Transparency Transparency of Value Chain of Value Chain Actual Costing Actual Costing Multi-level Multi-level Periodic Material Prices Periodic Material Prices Material Material Ledger Ledger Inventory Valuation Inventory Valuation Environment of Material Ledger
- 4. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 4 External Procurement External Procurement Production Production Multi-Level Actual Costing Multi-Level Actual Costing allows Multi-Level Actual Costing allows Inventory valuation with Inventory valuation with actual periodic material price actual periodic material price Roll-up Roll-up of price differences of price differences from raw materials to from raw materials to finished materials finished materials
- 5. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 5 Integration of Integration of Multi-Level Multi-Level Actual Costing Actual Costing Integration of Actual Costing Profitability Profitability Analysis Analysis Contribution Margins Release 4.6c! Release 4.6c!
- 6. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 6 Actual values in Profitability Analysis Actual values in Profitability Analysis Contribution Margin Accounting Contribution Margin Accounting Cost of sales Cost of sales split into split into cost components cost components Plan/Actual Plan/Actual Variance analysis Variance analysis Actual Costing and Profitability Analysis Plan Plan Actual Actual Var. % Var. % Var. Abs. Var. Abs. Revenues Revenues: : 100,000 US$ 100,000 US$ Sales Quantity: Sales Quantity: 1,000 pc 1,000 pc 50,000 50,000 45,000 45,000 5,000 5,000 10 % 10 % Raw Materials Raw Materials 4,000 4,000 5,000 5,000 -1,000 -1,000 - 25 % - 25 % Labor variable Labor variable 4,000 4,000 4,500 4,500 - 500 - 500 - 13 % - 13 % Machine variable Machine variable 10,000 10,000 7,000 7,000 3,000 3,000 30% 30% Logistic Processes Logistic Processes 5,000 5,000 5,500 5,500 - 500 - 500 - 10 % - 10 % Material Overheads Material Overheads 6,000 6,000 27,000 27,000 33,000 33,000 22 % 22 % Contribution Margin I Contribution Margin I 10,000 10,000 10,000 10,000 0 0 0 % 0 % Labor fix Labor fix 7,000 7,000 7,000 7,000 0 0 0 % 0 % Machine fix Machine fix 10,000 10,000 16,000 16,000 6,000 6,000 60 % 60 % Contribution Margin II Contribution Margin II Release 4.6c! Release 4.6c!
- 7. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 7 Integration of Integration of Multi-Level Multi-Level Actual Costing Actual Costing Integration of Actual Costing Product Cost Product Cost Planning Planning Standard Prices & Cost Component Split Profitability Profitability Analysis Analysis Contribution Margins Release 4.6c! Release 4.6c!
- 8. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 8 Actual Costing and Product Cost Planning Variance Analysis Variance Analysis Actual Costing with Actual Costing with Cost Components Cost Components BOM Routing PP Master Data Mat Proc OH Lab Standard Price Standard Price with with Cost Component Split Cost Component Split Product Cost Product Cost Planning Planning Cost Estimate Material Movements Mat Proc OH Lab Periodic Unit Price Periodic Unit Price with with Cost Component Split Cost Component Split Multi-Level Multi-Level Actual Costing Actual Costing Price Determination Actual Quantity Structure Same cost component Same cost component structure as in planning structure as in planning No Cost Estimates No Cost Estimates necessary for Actual necessary for Actual Costing Costing Optional: Primary cost Optional: Primary cost component split component split Release 4.6c! Release 4.6c!
- 9. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 9 Integration of Integration of Multi-Level Multi-Level Actual Costing Actual Costing Integration of Actual Costing Product Cost Product Cost Planning Planning Standard Prices & Cost Component Split Profitability Profitability Analysis Analysis Contribution Margins Cost Center Cost Center Accounting Accounting Actual Prices of Activities and Business Processes Release 4.6c! Release 4.6c!
- 10. SAP AG 2000 (Jan-G. Groeneveld, Product Management R/3 Cost Management) / 10 Actual Costing and Cost Center Accounting /ABC Production Material Cost Center Activities Business Processes Actual ./. Plan Actual ./. Plan Actual ./. Plan Actual ./. Plan Plan Plan StandardPrice StandardPrice Settlement Settlement Direct settlement to materials: Direct settlement to materials: Actual Actual activity prices activity prices Actual costs of Actual costs of business processes business processes
Editor's Notes
- #2: Product Cost Planning is an area of Product Cost Controlling in which non-order-related cost planning and price setting for materials are carried out. It accesses the master data of other R/3 applications, that is BOMs, routings and work centers from Production Planning, and cost centers, activity types and business processes from Overhead Cost Controlling. The goal of Product Cost Planning is to update the standard price and create a cost component split to supply basic information for other R/3 applications such as Cost Object Controlling, Profitability Analysis, and Sales and Distribution. Cost Object Controlling offers a constant and time-based controlling for the cost of goods manufactured. You can carry out lot-based or periodic cost object controlling. Standard costing is the basis of Cost Object Controlling in the R/3 system. With this, the actual quantity produced is multiplied by the standard costs per unit in order to calculate the target costs. This value is compared with the actual costs during cost analysis. If you have set price control S (standard price) in the material master record for semi-finished and finished products, this means that, in Cost Object Controlling, all materials produced are valuated with the standard price when they are delivered to stock. During settlement of the cost object, variances to this standard price are posted to Financial Accounting (price difference) and Profitability Analysis (variance categories). The component Actual Costing / Material Ledger makes it possible to calculate a period price of the previous period. You can calculate this period price statistically, and have the option of using it to revaluate the stocks.
- #3: The material ledger is a tool that collects data for materials whose master data is stored in the material master. On the basis of this data, the material ledger calculates prices for the valuation of these materials. The material ledger creates the basis for actual costing and makes stock valuation in up to three currencies and/or valuations possible. In its function as a subledger for materials, the material ledger is the prerequisite for the staging of parallel value records for material stocks. While the stock values of materials are, as a rule, only updated in one currency (the currency of the company code), the material ledger makes it possible to carry the material stock values in two additional currencies in the R/3 System. Therefore, all goods movements in the Material Ledger are carried out in up to 3 currencies/valuations. The values are translated into other currencies using historical exchange rates (the translation occurs at the time of the posting).As a result, the material ledger makes an additional display of material stocks in a hard currency possible; this is particularly useful for companies in countries with high rates of inflation. The influence of inflation on the material stock values becomes transparent. During actual costing, the system automatically calculates new valuation prices and new inventory values independent of each other in the different currencies/valuations from the values collected during the period.
- #4: In Material Ledger/Actual costing, the terms “single-level” and “multi-level” are introduced and frequently used. The Material Ledger focuses on material and their procurement process. The procurement process of a material is not restricted to external procurement but also refers to internal procurement (production, company transfer,…). The term single-level always refers to one material and its procurement process; that means that all values and quantities that arise during a procurement for said material are stored “single-level”. In the above example, three single levels are displayed: one for external procurement and two for internal production. All single levels that belong to a whole production process are grouped and sorted into a Multi-Level structure.
- #8: In Financial Accounting, goods movements are valued with a standard price during the period. In Profitability Analysis, invoices are valued with the standard cost component split. Multilevel Actual Costing is used to calculate actual product costs at period close. These costs include the follow-up costs for materials used in lower production levels and any production variances. When you have calculated the actual costs, you can transfer the actual cost component split to Profitability Analysis and make a posting to the financial accounts to adjust the material valuation for the period closed. The actual cost component split includes variances for all production levels. You no longer need to settle the single-level variances on the production order to Profitability Analysis.
- #10: In Material Ledger/Actual costing, the terms “single-level” and “multi-level” are introduced and frequently used. The Material Ledger focuses on material and their procurement process. The procurement process of a material is not restricted to external procurement but also refers to internal procurement (production, company transfer,…). The term single-level always refers to one material and its procurement process; that means that all values and quantities that arise during a procurement for said material are stored “single-level”. In the above example, three single levels are displayed: one for external procurement and two for internal production. All single levels that belong to a whole production process are grouped and sorted into a Multi-Level structure.