Category Archives: PS

GPD – Grouping Pegging and Distribution

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GPD Capabilities

  • Grouping allows manufacturers to group requirements originating from different WBS elements or projects.
  • Pegging makes it possible to keep track of the origin of the demand
  • Distribution distributes the actual costs and commitments back to the original project

This means that GPD enables you to utilize the advantages of larger lot sizes while still being able to apply resource-related billing and project-specific cost controlling.

Transfer/Borrow-Loan-Payback (TBLP)

During the realization of projects in a complex manufacturing environment, requirements frequently undergo a number of unplanned changes. TBLP provides an easy way to transfer or loan material items to another project. With respect to loans, borrowed material items can be repaid either fully or partially.

Resource-Related Billing

Prices for services performed for individual customers are not always stored as fixed prices in a contract or are determined using a standard pricing procedure. For example, the work performed may be completely new. This function enables orders for such work to be billed on a resource-related basis. The billing document provides detailed information, for example on individual materials, internal activities, costs, and so on.

Project Earned Value

Because of unplanned changes to costs and schedules the actual project becomes increasingly different than the project plan. This application allows you to monitor and control your projects effectively, as well as easily access information about project status and progress at any time.

Project-Related Incoming Orders

This function enables the system to determine key figures from sales orders assigned to projects for incoming and open order values. This provides you with a report on the expected results for customer projects at an early stage.

Setting Up GPD

For the Plant and MRP Group that you plan to perform GPD for, the Grouping Requirement Flag must be checked

Material Management

Any material that will be used for GPD must be in an MRP Group that is GPD relevant

Under the MRP4 Tab in MM01, the requirements must be set to “Individual Requirements” (1) as opposed to “Collective Requirements”

Project Setup

Grouping WBS elements must be defined as Grouping WBS elements for all materials (1) or for selected MRP groups (2) when they are created in the system

For those interested in learning more about the WBS element see this link…

http://www.scmfocus.com/sapplanning/2009/05/03/work-breakdown-structure/

Work Breakdown Structure

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Why Understand Work Breakdown Structures?

Work Breakdown Structures were created by the US defense establishment for actual costing. However within SAP they are the critical elements within the SAP PS system. Understanding the WBS is important to understanding GPD (Grouping, Pegging and Distribution) which is a manufacturing solution for research and development, make-to-order and engineering-to-order environments.

For those interested in learning more about grouping, pegging and distribution see this link…

http://www.scmfocus.com/sapplanning/2009/05/06/gpd-grouping-pegging-and-distribution/

wbs-definition-graphic.png
What is a Work Breakdown Structure?

Simply put, Work Breakdown Structures are “buckets” to which cost centers are assigned , allowing Lockheed to track the costs of its PBL contracts. Below is a sample of a simple WBS structure for the creation of a bicycle. “A WBS is not a project plan, project schedule or a chronological listing. It is considered poor practice to construct a project schedule (e.g. using project management software) before designing a proper WBS. This would be similar to scheduling the activities of home construction before completing the house design. It is not possible to recover from an improperly defined WBS without starting over[citation needed], so it is worthwhile to finish the WBS design before starting a project plan or project schedule parts is not.

Simple WBS Structure for Building a Bicycle

500px-wbsconstruction.png

WBS Capabilities

wbs_exp.gif “In a product-oriented WBS, functional categories of work may form “cost accounts” within a WBS element. Cost account managers are responsible for a functional area’s contribution to a WBS element. Cost accounts from several departments or functions may combine into one WBS element. Internal department planning for a cost account will be made up of individual work packages. A work package will typically have its own budget and schedule. Work packages should be small enough to be executed by individuals or small groups in a single department, and they should be of relatively short schedule duration. A small project might define a maximum work package size as two weeks of effort. Larger projects will assemble larger work packages that can be appropriately managed and controlled.” – SAP Help WBSs allow you to map the structure of a project in SAP. The WBS is made up of WBS elements, which can be broken down further. Structuring the WBS is primarily answered by considering what you want to report on. Dependent Configuration Dependent configuration relates how a configuration one system affects another system. Here it involves other areas in SAP that are affected by WBS creation and use. One of the most important features of WBS usage is distinguishing between Plant Stock and Project Stock. Each material can be coded as several stock types. Typically Plant Stock is the more common, however in a project environment it becomes necessary to code at least some of the materials as Project Stock. Plant Stock vs. Project stock is broken down in the matrix below.

Plant Stock

Project Stock

For: planning collective requirements in warehouse material

For: individual project planning

Usage: Materials at subordinate BOM levels which are required in all projects can be planned and procured in the warehouse, independently of WBS elements. In requirements planning, all the requirements for a material are determined in one plant. Such procurement is made jointly, with no reference to a WBS element.

New Demand to A Location

Usage: In individual project planning, only individual requirements are planned – that is, materials which are required for a WBS element, are planned for that purpose, and procured with reference to the WBS element.

System

Assignment: The material is managed in general stock. It is not assigned to any particular project or sales order.

Assignment: In individual project planning, only individual requirements are planned – that is, materials which are required for a WBS element, are planned for that purpose, and procured with reference to the WBS element.

This procedure is used to plan the finished product and important components.

The material stock is assigned to a single WBS element in the project and is, as far as planning is concerned, available only for that WBS element. Stock is managed separately for each WBS element in a project definition.

Unlike general stock, you must specify the relevant WBS element, as well as the plant and storage location, in all goods movements involving project stock.

From: http://help.sap.com/saphelp_dimp50/helpdata/EN/49/7db835295f962de10000009b38f839/content.htm

Question: What costs will be allocated to a SAP PS Project?

Answer: We will want to allocate the costs of Purchase Orders, Stock Transport Orders and Service Orders to specific projects.

New Demand to A Location

Not New Demand to the Overall System

1. If there is sufficient inventory to cover the STO, a new demand is created at a location, however, this is not a new demand for the system. If one considers this a new demand then it is true to stay that an STO creates a new demand.

2. If there is insufficient inventory to cover the STO, a demand is created both at the location, and for the overall system.

What is Necessary to Tie Back to the PS PBL Project A Network in SAP PS is a parallel hierarchy of the operations of a project rather than the financial areas of the project. The necessity is to tie the operational transactions (and their costs) back to the project. The transactions necessary to map to the PBL projects are: 265678f3b532ed14adc46ca9269a8cf3 “The grouping WBS element is the organizational unit which produces the goods and to which the material belongs. Requirements planning creates the replenishment elements (planned orders, purchase requisitions) which are assigned to the grouping WBS element. A separate planning section is managed for each grouping WBS element in the evaluationsin inventory/requirements planning.”

A sample of WBS Elements in a project

From Project Management Academy:

Notice how the Project is the top of the hierarchy. A Work Package contains a WBS code along with costs. A Work Package is “..is a quantitative and qualitative description of an activity to be carried out in the project – for example, the work to be done and the result to be achieved for a clearly defined task within the project.” Other Important Features of the WBS:

WBS Connections to Other SAP Transactions

WBS Links to Activities

1. The STO is tied in with MRP

1. If there is insufficient inventory to cover the STO, a demand is created both at the location, and for the overall system.

2. The procedure of converting purchase requisitions to Work Breakdown Structures can be monitored using PO history.

New Demand to A Location

2. A goods receipt can be planned in the receiving plant.

System

3. The system can run an availability check for the stock transfer.

3. The goods receipt (GR) can be posted directly to consumption.

WBS elements tie to project stock. To understand more about project stock see this link…

http://www.scmfocus.com/sapplanning/2009/05/03/plant-stock-vs-project-stock/

Summary

The STO is both a type of Stock Transfer and a Purchase Order which has characteristics that closely map to the Transshipment in MCA, most notably its calculation of inventory movement based upon lead times. The STO is used to move materials between two Plants in SAP.


Plant Stock vs. Project Stock

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What is It?

Some industries like aerospace and defense and other industries with substantial government contracts work off of a concept called project stock, which is quite different from the concept of plant stock which is used outside of these specific industries. Plant Stock vs. Project Stock SAP provides different options for material stock management. One possibility is the usage of the collective stock or anonymous plant stock. All projects and orders requiring a material managed in a collective stock can take this material from the plant stock. Another option is the usage of individual stock. In this case material stocks are managed with a reference to a sales order or a WBS element. Project stock is a form of individual stock management where material stocks with reference to WBS elements can be managed as individual stock segments. Using the options Non-valuated stock, Valuated stock or No project stock in the basic data of the project definition, you specify for a project whether a non-valuated or a valuated project stock management or material will be possible or whether individual project stocks can not be used. When non-valuated project stock is used, every WBS element of the project represents a separate stock segment from the logistics point of view.

Valuated and Non-Valuated Project Stock

Material movements with reference to non-valuated project stock take place with out being valuated. For example, when a material managed in a project stock is consumed by a network activity (goods issue for reservation), this does not cause actual costs for the activity and no postings are made in financial accounting. The calculation of MRP networks determines that no planned costs for material components will be managed in the non-valuated project stock. The stock holding WBS element is debited with the actual costs for the external procurement only when the goods or invoice receipt for purchased parts is posted to the project stock. Non-valuated project stock does not completely disclose the costs for the network activities or the assigned production orders. If you implement the non-valuated project stock, a meaningful cost object controlling is possible only on the level of the stockholding WBS elements or the entire project after period end closing. Due to the disadvantages of the non-valuated project stock, the valuated project stock was provided as of SAP R/3 4.0. Network costing can determine planned costs for material components to be managed in the valuated project stock. Normally it is recommended that you implement the valuated project stock if this is permitted by the business process. You can specify the procurement type of a material component either manually or you can use a procurement indicator. Procurement indicators are defined in the Customizing of SAP PS using transaction OPS8.

Requirements Grouping

Stock management per the WBS has disadvantages from the logistics point of view. Because individual stock segments are managed separately from an MRP point of view, an MRP process creates separate PRs of planned orders for every stock segment irrespective of whether there is enough material available in another stock segment. To avoid the logistics disadvantages of individual stock management, requirements grouping can be performed in PS. This is called grouping, pegging and distribution, or GPD, and we go into more depth on it in this post…

http://www.scmfocus.com/sapplanning/2009/05/06/gpd-grouping-pegging-and-distribution/

The top WBS element is then automatically identified in the Basic data as a grouping WBS element. Automatic grouping causes all requirements and stocks of the project referencing the project stock to be managed exclusively on the level of this grouping WBS element. In MRP only one WBS element is used as an individual stock segment, and all PRs, orders, production orders referencing the project stock are assigned to this WBS element. You can read more about the work breakdown structure here..

http://www.scmfocus.com/sapplanning/2009/05/03/work-breakdown-structure/

WBS BOMs This is a bill of material that in addition to the material number of the header material, is identified via a WBS element number. To understand more about BOMs see this link..

http://www.scmfocus.com/sapplanning/2008/01/05/bom/