SAP provides flexibility within Product Cost Planning that allows businesses to elevate how materials are costed with diverse functionality to fit business need.
However, a key to precise product costing is understanding and ensuring the accuracy of the Master Data that Product Cost Controlling relies on. In this session, we will take a more in-depth view of some of the key master data that is utilized across Production Cost Controlling and why ensuring the accuracy of this data elevates the reliability of the results and downstream functions.
In this live webcast with Tara Hushbeck, we will explore:
A high-level introduction to Product Cost Controlling o Review key upstream integration points of Product Cost Controlling with other modules and processes
An overview of the Master Data used most often by Product Cost Controlling for both Raw Material and Manufactured Materials
Q&A
Q: We discussed how important master data is to Product Cost Controlling, what have you seen as the biggest challenge for companies when trying to maintain Master Data?
A: I have seen two major ones over the course of my career - the first is data integrity and multiple sources of the truth. If there are disconnected systems that are maintaining master data, BOMs for example and each is being used by a different group/being maintained separately, those double touches often lead to different sources of truth and misinformed decisions. The 2nd is having enough people on the team understand the complexities of the Master Data usage and design. Master data can be utilized by many different stakeholders so understanding how the master data is used is across the organization is key to ensure one group doesn't "break" functionality for another.
Q: In your experience, what is the most underutilized piece of Master Data when it comes to Production Cost Controlling?
A: I think it's hard to pick just one as I have seen companies that are underutilizing something as simple as the Special Procurement Costing key which resulted in significant increase in effort for a single cost run but I think overall, I see the calculation of Activity Prices using SAP, which requires some master data elements is heavily underutilized within SAP as a lot of companies just use Excel and upload prices in KP26. That really limits the Standard vs Actual comparisons that are possible.
Q: Part of the presentation focused on planning and how increasing the complexity of your plan can benefit PCC but the challenge we see is that getting our plan into SAP can be time consuming - are there ways to make the planning process more efficient?
A: Yes, there are non-standard programs that can be utilized to upload a financial plan/budget via Excel. Similarly, if your company is using Integrated Planning there are integrations that can be made from other modules to make the process more efficient and effective.
Q: Is PCC configuration different for planning strategies like for MTO & MTS etc.?
A: As mentioned during the presentation, there are many upstream impacts to PCC, including planning and planning strategy. Your PCC design is bound to be different depending on the type of planning strategies, the types of orders used, purchasing strategies, etc. which drives the requirement for different configuration and/or master data set-up. The PCC design will drive what is required from a set-up/configuration/master data.
Q: Regarding inventory valuation and the material ledger obligatory within S4 HANA, if a company is using standard costing for inventory valuation, is it needed to run CKMLCP with the option to reevaluate materials at month end? Or can we remove that option without any issue?
A: The requirement to move to SAP S4HANA is the activation of Material Ledger but it does not require the activation of Actual Costing within Material Ledger. The activation of Actual Costing is what requires the running of CKMLCP. That said, there are many benefits to Actual Costing and I would recommend at least considering activating it when moving to Material Ledger/S4HANA. In either case, Actual Costing doesn’t replace Standard Costing and you would still create a Standard Cost.
Q: We heard with UPA (Universal Parallel Accounting) there is no need for KP26? Is this correct? If that’s the case, how is the rate for respective activity type and Cost center being calculated in S4?
A: Correct. With UPA, KP26 has been replaced with the Fiori App – “Manage Cost Rates – Plan” (ID F3162) which allows you to maintain the rates for separate Ledgers
