Using Costing Runs in Product Cost Planning

Costing run is a tool used for mass processing in Product Cost Planning (PCP).

The following scenarios are some examples of using the costing run:

• Standard cost estimate of all the materials in one plant

• Standard cost estimate of all the materials in all plants

• Monthly modified standard cost estimate of all materials

• Current cost estimate of all materials of a product group

• Current cost estimate of a highly complex product structure

The costing run organizes the processing steps and checks the generated material cost estimates. After a costing run and its processing steps are successfully completed, the costing run can be deleted.

The administrative data in the costing run is also deleted, but the material cost estimates that a costing run generates remain and can be reorganized or archived.

Process Flow

After each processing activity, you can study the activity in the message log. If required, repeat the activity until costing is free of errors.

For example, if some materials are costed with errors, the costing activity is only repeated for these materials until the errors are rectified and before a price update is performed.

In the case of partial selection of assemblies for the costing run, the structure of the assemblies must be exploded again after the selection. If you repeat the selection activity, the structure explosion must also be repeated.

Some advantages of flexible material selection are as follows:

• Business value:

  Flexible selection of materials for costing enables more precise selection of materials in support of the cost estimator’s requirements.

• Realization:

  There is a separate transaction to maintain the parameters to select materials and generate the selection list.

  The selection of materials can be restricted through material number, plant, bill of material (BOM) usage, additional material master fields found in the accounting and costing views, criteria for existing cost estimates, and referencing materials from an existing costing run.

  After the initial material list is created, you can edit the selection list by adding or deleting materials from the selection list.

  You can use a selection list to select materials for a costing run by assigning the selection list to the selection step.

Creation and Use of Selection List

Materials can be selected using the following material master fields from the accounting and costing views:

• Profit center

• Valuation class

• Special procurement type

Materials can also be selected based on the following characteristics of previous cost estimates:

• Costing variant

• Costing dates

• Costing status

The materials selected can be manually edited using the transaction CKMATCON. The selection list can be used in future costing runs, if required.

Note

Guidelines on how many materials to include in a costing run … food for thought:

• The number of materials to include in a costing run depends on many factors such as the number of levels in the BOMs and so on. There is no predefined number of items per costing run. Ideally, each costing run takes less than two hours … again this is not a predefined limit.

• If the number of materials for all plants in over 50,000 for example, three costing runs can be set up that are broken down into the following three selections:

  • Raw material items for all plants

  • Semi finished items for all plants

  • Finished items for all plants

• Another consideration it perform the costing runs by region.

Note

You can also select materials in the costing run without a selection variant however the costing run selection has a limit on the length of the selection statement. The selection variant has no such limitation.

A costing run is identified by its name and the date. The recommendation is to use the long text to explain the purpose of costing (such as "Plan 04/2000, plant 0001").

The Create with reference option allows you to transfer all the parameters (the general data and process flow parameters) of an existing costing run.

As a rule, you should execute costing runs for the same plants on a monthly, quarterly, or yearly basis. If you use the Create with reference function all the necessary data and parameters are copied. All you need to do is alter the names and long text, and execute the process.

You have to make the following important entries in the General Data section before executing a costing run:

• Costing variant and version:

  The costing variant specifies the explosion and valuation strategies.

• Company code and controlling area:

  You need to enter only the company code if the costing run is limited to one company code, and cross-company costing has not been enabled in customizing.

• Server group:

  You need to enter a server group only if you use parallel processing. This is required only for extremely large quantities of data.

You must save the general data before you can initiate the costing run.

Costing Run Execution

The following activities take place during the execution of a costing run:

• Processing activities are offered according to the context. They are arranged and flow from left to right and top to bottom. You can execute the activities by either clicking icons (hotspots) or context menus.

• Processing activities are categorized as Change parameters and Execute. The functions of the Parameters column (Change parameters) enable you to check or maintain the options of the activity (for example, the material numbers for selection).

• Choosing Execute initiates or schedules the processing activity. Other columns that are used to execute a function are Authorization and Log. The symbol in the Authorization column indicates if marking or release is permitted (open or closed padlock) or if issuing authorization is not possible (red cross). Choosing the padlock takes you to the screen used to issue authorization. The Authorization column displays only for standard cost estimates. Choosing the Log column takes you to the log.

• The Background processing option enables you to specify if processing should take place in the foreground or in the background. When you choose Execute, the system either starts the activity or schedules it in the background.

• Statistics are generated for each activity.

You can analyze the results of the cost estimate in the Costing Results area. You can obtain an overview of the material selected or check the results of individual cost estimates.

The following reports are used to analyze the results of the cost estimate:

• Costing levels report:

  The costing levels report provides an overview of the number of materials selected and costing levels created. The lowest level contains the material components, purchased parts, and raw materials. If you select some specific costing levels and go to the material list, the system displays the materials of only the selected levels.

• Material list report:

  The material list report contains the list of selected materials. You can also check the status of the cost estimate for the material. There are several navigation options, such as the context menu, double-click, and the toolbar menu, which can be used to access more cost estimate screens and reports.

• Analysis report:

  The analysis report enables you to compare the costing results of one costing run with another or with the prices in the material master. This report is generated by the identical processing activity in the Analysis area. You can also access comparison reports.

The Analysis option is used to compare new standard cost estimates with the standard price. You can use it to check if any cost estimates are undergoing major changes. When there are large amounts of data, you can quickly display the analysis reports that were created in the background.

Costing Run Analysis

The standard system provides several variants of the analysis report for various analysis purposes. You can access these reports either in the costing run by choosing the Settings menu inside the costing run transaction or through Fiori reporting apps.

The following information is included in the analysis report:

• Results of costing run:

  The results of costing run report variant displays the results of a costing run.

• Price versus cost estimate:

  The price versus cost estimate report variant compares the selected cost estimates with one of the prices in the material master. You can simulate the revaluation of inventories to find out whether the selected cost estimates are released.

• Variances between costing runs:

  The variances between costing runs report compares the results of two costing runs.

To get an overview of all report options, use the All selections option.

You can go from the object list to detailed reports such as display cost estimate, multilevel bill of material (BOM), itemization, and cost component split.

Information System: Analyzing the Costing Run

The costing run permits only one analysis from within the transaction, but the information system permits the use of various reports to review a costing run.

The Analysis option in the costing run enables only one mass report for a single costing run. When analysis is performed again, the old result is overwritten.

The Analyze Costing Run report in the information system does not have this restriction. It can cover information contained in multiple costing runs. Time-consuming retrieval and formatting of mass data is performed in the background and an extract is generated. The extract is interactive and can be displayed quickly. The most important feature of the Analyze Costing Run report is the interplay between selection variants, display variants, and extracts.

To execute the Analyze Costing Run report, take the following steps:

1. Define and use appropriate display variants (including totals, sorting, and filters).

2. Define and use appropriate selection variants that are assigned to the display variants.

3. Specify the extracts in which the content should be saved.

4. Start background processing with the defined selection variants.

5. To call the report, specify the extract to be read. In the displayed extract, you can use the sorting, filtering, and totalling functions and go to the detailed reports.

You can selectively recost only those materials that had errors during the costing run.

In order to efficiently handle errors in the costing process, you use the following options:

• Costing by costing level:

  • When you do costing of mass data for the first time numerous errors usually occur due to poor master data quality. Therefore, it is recommended to execute costing by costing level first.

  • In the parameters for the costing activity, select the relevant costing levels and proceed with costing. Select the higher costing level where the material cost estimates of the lower levels are automatically included.

  • Process the errors and remove their causes. Perform costing again until the results are satisfactory.

  • Level 1 in a costing level is always procured components.

  • When fixed errors, start with level 1 and then proceed to level 2, and so on.

• Cost estimates with errors only:

  • For repeated cost estimates, set the Cost tests with errors only indicator in the parameters for the costing activity. Carry out cost estimates with cost tests with errors only when you do not expect many errors for one or more selected costing levels. The system will repeat the cost estimate generation only for those products where errors were observed.

  • When all the costing levels are costed, the error severity of message CK 318 should be set to Error in the user-defined error message, so that all cost estimates containing errors are flagged accordingly.

Costing Run: Managing Logs

If extremely large costing runs are executed, you can create a log for each costing level. This makes it easier to analyze the results.

The standard system contains display variants for error logs that enable you to summarize and group the data. You can define your own display variants for filters and sorting to access the required data quickly.

You can print the log at each stage of the costing run. This is not recommended for large costing runs because it increases the processing time and uses a considerable amount of system resources (spools). Save the log and analyze it later.

Note

Based on the size of a costing run, you may need to create a separate log for each costing level. This makes it easier to analyze the results.

The following are some the most common reasons for errors during costing runs.

• Issues with the costing variant during start-up

• Valuation variant price determination such as missing info records

• New product missing BOM / Routing data

When the selection and costing steps take a significant duration of time to execute, they can be scheduled. In this case each step would be set up to run in the background. The selection would kick off as of a point in time and then the costing step would be set to run after the first job.

The jobs can be monitored in transaction code SM37.

If the costing run is being run for next year's standards, choose a repeat values of Once. If the cost run is periodic, choose Monthly.

After costing, the log can be checked for messages.

Logs can be viewed for all levels or by level.

The variant attributes of the analysis step can be used to display the fields that are being used for analysis.

• Costing runs enable mass processing for product cost planning, providing standard, modified, and current cost estimates efficiently.
• Flexible material selection allows precise selection based on various criteria, enhancing cost estimation accuracy.
• Analyze costing results using reports to compare estimates, identify variances, and ensure data quality.
• Efficient error handling involves recosting materials with errors and using costing levels to manage data quality.
• Schedule costing runs for large data sets, using background processing to optimize execution time.