Understanding the Main Settings for the Materials Used

In the master record of material S11-000 - Handlebar, you can find the settings for repetitive manufacturing in view MRP4. This is allowed for the semi-finished product, that is, you can confirm in repetitive manufacturing because this indicator is set.

Repetitive manufacturing profile Z001 is assigned to the master record of the material. It controls the system behavior during confirmation more precisely.

You can also see the production version 0001 in the view MRP4. The production version defines a unique combination of routing, BOM, and lot size. For products that have only one production method or line, the one routing and the only BOM are specified in the single production version.

Only one product cost collector is assigned to the product. The routing and BOM are made known to the material cost estimate by entering them in the production version in the material master.

In the Accounting 1 and Costing 2 views, valuation class 7900 - semi-finished Goods is assigned. They are used to control, among other things, which G/L accounts goods movements (that is, stock, consumption, and so on).

In these two views, you can also see the standard price of the semi-finished product Handlebar. In the scenario, it is EUR 97.20 per unit.

The determination of the standard price is also derived at the end of this unit.

The repetitive manufacturing profile is stored in the material master record. You can use the repetitive manufacturing profile to decide which variant of repetitive manufacturing is to be used for each material.

The repetitive manufacturing profile is a mandatory prerequisite for repetitive manufacturing. You use the control parameters to determine:

• Whether you want to confirm activities
• Whether you want to work with reporting points in make-to-stock repetitive manufacturing
• How errors that occurred during backflushing are to be postprocessed

The following outlines the meaning of the most important switches that influence the backflush procedure.

Backflush at GR posting: The checkbox is to be selected if a backflush is to be mapped. As a result, the goods issues are posted at the same time as the goods receipts.

Reporting point confirmation - Mandatory: Controls whether the reporting point backflushes can be entered when creating confirmations for make-to-stock repetitive manufacturing.

You can use reporting point backflushes to do the following:

• In the case of longer lead times, a component withdrawal is achieved promptly at the operation.
• Calculate the unfinished products (work in process).
• Post scrap quantities directly at the operation in question.

You can enter reporting point backflushes at any operation that you have marked as a milestone in the routing.

Automatic GR Posting at last RP when backflushing: Determines whether the system automatically posts the goods receipt for the assembly when backflushing the last reporting point.

Post activities: Controls whether the system also posts activities to the product cost collector as a CO object during confirmation.

Post Activities: Confirm with Data of Standard Cost Estimate for Material:

• You can create the cost estimate once within a period with reference to a routing.
• You can post the activities on the basis of this cost estimate if you produce a material within a period with only one production version.

In addition, the series profile specifies which movement types are used when posting goods issues, and so on.

This figure shows the most important settings in the master record of the three raw materials used to produce the semi-finished product Handlebar.

The three raw materials are procured exclusively from external sources. Valuation class 3000 - Raw materials is assigned to each of the three raw materials. This valuation class is used to select the material expense account in mm account determination and to post the costed material costs when executing the material cost estimate.

You can also see the standard prices of the three raw materials per unit in EUR.

The bill of material as a component list manages the quantities of input materials and thus specifies which quantity in which unit of measure is used by which raw material or semi-finished product for the production of a semi-finished product or finished product. The table in the figure above shows the component list to create the semi-finished product S11-000 - Handlebar.

In the header of the BOM, you specify the base quantity that describes which quantity of the semi-finished product or finished product results from the use of the specified components. In our scenario, the base quantity is 1, which means that exactly one semi-finished product, that is, the handlebar, can be created using the component quantities specified in the BOM, that is, the material quantities of the input materials.

The prices of the components are stored separately from the BOM in the individual material masters. For Product Cost by Period, each item in the BOM, that is, the material component, must be set to relevant to costing so that the item is included in the standard cost estimate.

The BOM is then used in costing to calculate the material costs.

Operations are performed at a work center. The data in the work center is used for costing, for example.

For this purpose, standard values and formulas for calculating the operation costs are defined in the work center.

Each standard value represents an activity type on a cost center. Accordingly, the work center is assigned to a cost center. A work center can only be linked to one cost center at a time.

However, a cost center can be used by several work centers.

By linking the work centers to cost centers and activity types, cost information is assigned to the products.

The standard value key SAP1 - Normal production in the work center definition specifies which standard values, that is, services can be provided by this work center.

The standard values of the key SAP1 - Normal Production and therefore the activities that are offered at this work center are setup time, machine, and labor.

The above representation shows that the table column Alternative Act. Text the standard values of the work center are linked to the activity types of the cost center.

In the case of the Bike Company, the standard values Setup, Machine, and Laboratory are stored in the work center T-R000 - Assembly and assigned to the corresponding activity types of the (work center) cost center 10101302 - Manufacturing 2 (DE).

The table in the following figure shows the fixed and variable plan prices that were planned for the combination of cost center/activity type in the handlebar production scenario of the Bike Company.

You can also see which account of category 43 is assigned to the relevant benefit type.

A routing is identified by the task list group and the group counter. You can use the group counter to manage variants of routings.

The work plan describes the individual stages, that is, the operations of production and thus the stations that a product runs through in the course of its production in the company.

The task list specifies at which location in the company, that is, at which work center, which type of activity, that is, which standard value (activity type on a cost center) takes and how long.

The routing therefore answers the question at which work center which activities in which quantity or time are required for production in order to produce the quantity X, which is in the base quantity column, for the material.

For example, operation 0010 Cropping and Forming consumes activities of work center T-R000. For the production of a handlebar (base quantity), 0 min of activity type SETUP, 3 min of activity type MACH and 2 min of activity type PERS must be used.

The routing has been created for the semi-finished material Handlebar, which is produced in the unit of measure PIECE. This is indicated by the Header-Unit fields for each operation.

The Header-Unit matches the base unit of measure. Therefore, the conversion takes place 1:1.

The indicator, Costing relevance, is assigned to each operation on the detail screen.

For the standard cost estimate and the calculation of the planned costs, the indicator determines whether the item is included in the cost estimate or not.

A control key can be selected for each operation. You use this to determine whether and how an operation is confirmed. In the example of the Bike Company, a reporting point confirmation has been set for both transactions.

Note: A task list must be released by setting the status in the header of the task list.

You can use the Allocation pushbutton in the routing to see which BOM is assigned to the routing for manufacturing the handlebar.

While the routing records which activity quantity is assigned to each operation, the BOM manages the quantities of material components.

By assigning the BOM in the routing, you can assign each material to an operation in the routing.

In the figure above, you can see that in the case of production of the S11-000 - Handlebar, the component (the material) R111-000 - Bar is required in operation 0010 - Cropping and Forming. The components R112-000 - Brake lever and R113-000 - Grip are used in operation 0020 - Assembly.

This results in the sequence in which the materials are processed in the operations.

Another important setting for the backflush procedure to be displayed is the Backflushing selection.

It indicates that the material component is backflushed.

As a result of the backflushing selection, the respective material component is backflushed, that is, the system posts the material withdrawal, that is, the goods issue from the warehouse only when the operation is confirmed and automatically.