Multilevel Unit

Costing – Can SAP

support Target
Costing
Stefan Mueller
SAP AG

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000

Georgia Worl d Congress Center • Atlanta Georgia

A M E R I C A S ’ S A P U S E R S ’ G R O U P© Copyright 20002000
©Copyright
Roadmap

• Overview
• Cost Estimates - Essentials
• Multilevel Unit Costing
• Conclusion

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Commited Cost

100 %

development
prototype production
product idea construction

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Phases
BOM tools
routing
ABC detail of
material
quantity
costing
structure
BOM
routing

multilevel unit
costing
BOM

? product idea base planning

object
phases

target costs development

prototype production
set construction

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Top-Down & Bottom-Up
Life cycle period 1 period 2 ...
Sales price : 125,- 120,- Product Cost
Planning through
Profit margin: 25 % 25% all phases
Target costs: 100,- 96,-

100,-

60,- 20,-

20,- 15,- 15,-

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Roadmap

• Overview
• Cost Estimates - Essentials
• Multilevel Unit Costing
• Conclusion

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Itemization

Qty Unit Value

Pump P-100 1 Ea 215 $

Labor Sheet Metal 20 Min 30 $

% Surcharge 5$

Activities 1 Ea 10 $

Sheet Metal 0,6 m2 20 $

- Fly Wheel 1 Ea 150 $

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Costed BOM
Qty Unit Value

Pump P-100 1 Ea 215 $

Labor Sheet Metal 20 Min 30 $

% Surcharge 5$

Proc. Prod. Plan 1 Ea 10 $

Sheet Metal 0,6 m2 20 $

- Fly Wheel 1 Ea 150 $

Labor Cutting 10 Min 20 $

Labor Others 5 Min 30 $

% Surcharge 10 $

Proc. Prod. Plan 1 Ea 10 $

Slug 100-310 1 Ea 80 $

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Cost Component Split
Qty Unit Value Material Labor Surcharge Process

Pump P-100 1 Ea 215 $ 100 80 15 20

Labor Sheet Metal 20 Min 30 $ 30

% Surcharge 5$ 5

Proc. Prod. Plan 1 Ea 10 $ 10

Sheet Metal 0,6 m2 20 $ 20

- Fly Wheel 1 Ea 150 $ 80 50 10 10

Labor Cutting 10 Min 20 $ 20

Labor Others 5 Min 30 $ 30

% Surcharge 10 $ 10

Proc. Prod. Plan 1 Ea 10 $ 10

Slug 100-310 1 Ea 80 $ 80

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Methods, Objects, Results
Costing Method Material Base Planning Object

Unit Costing

Multilevel
Unit Costing

Material Costing
with Qty Structure
X
Costing Run
X
Cost Component Split Itemization Costed BOM

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Item Categories – Editable
Item Category... ...enter... ... System derives...
Qty, Price,
V (Variable Item) Value
Description, Cost Element*

T (Text) Description

Cost Center, Act Type, Price, Unit of Measure, Text,

E (Internal Activity)
Qty Cost Element, Value
Business Process, Price, Unit of Measure, Text,
P (Proces manual)
Qty Cost Element, Value

Price, Unit of Measure, Text,

B (Base planning object) Base Planning Object, Qty
Cost Element, Value
Price, Unit of Measure, Text,
M (Material) Material, Plant, Qty
Cost Element, Value
Service, Plant, Price, Unit of Measure, Text,
N (Service)
Qty Cost Element, Value
Inforecord, Purchase Org, Price, Unit of Measure, Text,
F (External Activity)
Plant, Cost Element, Qty , Value
Inforecord, Price, Unit of Measure, Text,
L (Subcontracting)
Purchase Org, Qty Cost Element, Value

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Item Categories - Special
Item Category... … is defined by... …and derives ...

G (Surcharge) Costing Sheet Text, Cost Element, Value

Process, Qty, Unit of Measure, Text

X (Process Cost) Template*
Cost Element, Value
Price, Unit of Measure, Text,
I (purchased part costing) Inforecord**
Cost Element, Value

Item Category... …is defined by... ... and derives ...

S (Summary Line) Formula, Text Summary Line

O (Formula) Formula, Text, Cost Element Formula Result

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Costing Items – How to Edit
Pump 1 Ea
• Costing Items
Item-
Ressource Qty Value
Cat – Ressource, Description,
E Labor Sheet Metal 20 Min 30 $
Qty, Price
P Process Cost 1 Ea 5$ • Listscreen
M Sheet Metal 100-700 0,6 m2 5$ – Rapid Editing
X M Fly Wheel 100-300 1 Ea 5$ – Mark, Copy, Delete, Filter

Item Cat.: Material

Material 100-300 • Detailed Screen
Plant 1000

Qty Price fix / var

Description
Cost Elemnt Origin Group

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Screen Shot: Display Material Cost Estimate

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Roadmap

• Overview
• Cost Estimates - Essentials
• Multilevel Unit Costing
• Conclusion

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Basic Scenarios
Scenario 1: Scenario 2: Scenario 3:
New Similar Product Product Changes
Product

Pumpe A Pumpe B Pumpe A Pumpe A

Neue Pumpe

Blech Blech Blech Blech Blech

Welle
Welle Welle Welle Welle
Rohling

Rohling A Rohling B Rohling A Rohling B

Copy full
Top-Down Copy Subordinate Costing Costing Structure and make
Editing Structure and make changes Changes

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Aims of Multilevel Unit Costing

• Simulation Costing
– What-if analysis
– Changes to prices, quantities,
structures
• Costing New Products
– Supplementing missing
quantity structure data
– Creating new quantity
structure data
• Costing Cockpit
– Very easy to use
– Graphical interface
– Multilevel changes

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Screen Shot: Multilevel Unit Costing

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Multilevel Unit Costing - Layout
Quick-
Costing Structure on/off Worklist on/off List on/off ?
Info

Costing Structure Unit Costing / Header

Ressource Qty Value

Drag
&
Drop

Worklist/ Detailed List

Context
Menu
(rechte Maustaste)

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Costing Structure I
Rapid Column
adjustment
Costing Structure
• Material Cost Estimate w/o Qty
Structure
– Create, Change, Display
– Copy
• Base Planning Object
Context
Menu
– Create, Change, Display
(rechte Maustaste)
Create
• Material Cost Estimate with Qty
Change
Display
Structure
--------------------
Substructure – Display
...
– Copy
• Change Hierarchy Display

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Costing Structure II
Copy Insert

Costing Structure before before

Orginal
or
Copy?

Costing variant;
Version

after
after
2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Costing Structure III
Status & Revaluation

Context
Menu
(rechte Maustaste) • Changes Status
--------------------
Teilstruktur
... • Error Status
– Error = red
– Warning = yellow
– Information = green

Changed Error

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Cut & Paste

Copy into buffer

Insert from buffer

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Filtering

Filter setzen

Context
Menu X
(rechte Maustaste)

--------------------
Filter
use
...

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Worklists

Worklist

Material Cost Estimate

Personal/ Common
Buckets

Base planning Object Change buckket to worklist

Internal Activity Brnach to master data
Processes
Search help

My Worklists

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Examples of Layouts
Basic layout Edit Layout

Reporting / Edit Reporting / Details

Header

Report

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Basic Layout

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
BOM + List Screen

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Roadmap

• Overview
• Cost Estimates - Essentials
• Multilevel Unit Costing
• Conclusion

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
Can SAP support Target Costing?

• High flexiblity
– Simulation and integration
– Different tools during the life
cycle
• No costing surprises:
– based on same costing rules

yes – same costing structures

– Uses existing master data
(where available)
• Full comparison of cost estimates
during the life cycle
• Valuation of targeted sales qty‘s
in CO-PA possible

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
What to do?

• No or just additional customizing

in CO-PC-PCP
– New costing variants and
valuation variants

Not (hing) • Learn to use the tool

– 2 days to learn basic
navigation

much – Designed for the power user

(cost estimator)
• Multilevel Unit Costing available
within the R/3 4.6B standard
delivery.

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000
 Thank you for attending!
Please remember to complete and return
your evaluation form following this session.

2000 ASUG Annual Conference & Vendor Fa i r • May 7-10, 2000 ©Copyright 2000