Outlining Networks

Objectives

After completing this lesson, you will be able to:

  • List the structure elements of networks

Structure of Networks

James, Manuel and Linda Talk About the Structure of the Logistics Project

After having made himself familiar with the project structure and network activities, James has now defined the template for the logistics projects at Hybrid Machinery, as well using a work breakdown structure (WBS) and a network with activities. He creates a logistics project using this template, and discusses the project and network structure with Linda, who works as a controller at Hybrid Machinery, and with Manuel, his colleague responsible for material planning and procurement.

Note
See the following video to follow their conversation:

Structuring Networks

SAP Project System supports the following activity categories:

  • Internal processing: for capacities to be staged in your own company

  • External processing: for tasks to be assigned externally

  • Service: for procuring external services

  • Costs: for planning additional primary costs

A network always includes a network header that contains the control data and default values for the entire network. By assigning milestones to activities, you can document events that are particularly important for the progress of the project. For example: you can reference activity dates in billing or invoicing plans.

Networks map the flow of a project. The focus is on describing, planning, controlling, and analyzing costs, scheduled dates, resources, and material requirements. Activities are linked to each other by means of relationships. This results in a causal and temporal activity sequence.

Networks form a quantity-based structure for planning the following elements:

  • Dates (automatically via scheduling)
  • Costs (automatically via costing)
  • Resources (internal activities and external services)
  • Material requirements (by means of assigned components)

Planned dates, costs, resources, and material requirements are related to each other. They can influence each other in the following ways:

  • Planned dates have an impact on planned costs.
  • Planned resources may influence planned dates.
  • Planned material requirements change planned costs.

During the project execution phase, commitments and actual costs are posted to network activities. Various business transactions, such as confirmations, goods issues, and incoming invoices are account assigned to activities.

The following is a list of the typical steps that are carried out for a logistics project:

  1. Create a suitable Work Breakdown Structure (WBS) and network directly from the sales order including all milestones and material components.
  2. Plan dates automatically using scheduling.
  3. Plan internal and external resources.
  4. Calculate costs using network costing.
  5. Confirm internal activities and process purchasing documents for external activities and material components.
  6. Realize revenues using milestone billing.
  7. Calculate overheads, carry out results analysis and settle the results analysis values to the profitability segment.

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