19 Creation of Production Order Results in several outcomes, includingschedule,availability checks,materials reservation,preliminary costing, andnecessary purchase requisitions.But it creates no FI or CO documents; there is no any financial impact.There is no movement of materials.
29 Production Order– Preliminary Cost A production order includes preliminary estimates for various cost components, such as material and overhead.Material costs are based on the costs of the components assigned to the production order. These costs are maintained in master data of each component.Production costs are based on data in work center, such as activity types and formulas that identify which activities (e. g. lab and setup) are required and in what quantity.
30 Production Order– Preliminary Cost The costs are associated with appropriate accounts in general ledger, such as material consumption accounts.As production is executed, actual costs are assigned in the production order along with the preliminary cost estimates.After a production order has been completed, the cost accumulated in the production order must be settled.During settlement, the actual costs incurred are allocated to cost objects based on specified settlement rules.
32 Production Order– Schedule SAP calculates the production dates and capacity requirements for all operations within an orderScheduling function uses data from production order (quantity and dates) and work centers.Determines a RoutingOperation specific time linesMaterial Consumption PointsLinks to Material MasterScheduling Margin Key (Floats)Links to Work CenterFormulasStandard Inter-operation Times
36 Production Order (Document Link ) A production order may contain reference to various documents.A BOM for example, may include a document item.Production order often includes links to documents in the document management system (DMS).DMS is used to ensure the most current version of documents is employed during production.
37 Production Order (Availability Check) Automatic check to determine whether the components, production resources tools, and capacities in an order are availableIt can be automatic or manually executedIt determines availability on the required dateUnlike scheduling, availability checks are not repeated automatically if the production order is changed.It generates an availability log which displays:Results of the checkMissing parts listReservations that could not be verified
38 Production Order Release The time between scheduling and releasing an order is used for preparation needed for the processing of the orderOnce an order is released, it is ready for execution. At this time, the user can:print shop floor documentsexecute goods movementsaccept confirmations against the order
39 Goods Issue for production Order Note:That when a production order is being created, it references a BOM that determines the necessary components to produce the goods, it also places a reservation on each of the componentsUpon release of the order (or operation) the reserved materials can be issued from inventory; and the system (SAP):Updates the reservationUpdates the inventoryAssigns costs to the order as actual costsYou can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.
40 Goods Issue for production Order Effects of the Goods Issueupdates stock quantityupdates stock valueUpdates production order statusThree documents are created:material documentaccounting documentcontrolling documentYou can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.
44 Confirmation of Production Order Completion Confirmations are used to monitor and track the progression of an order through its production cycleconfirmation can be done at the operation or order levelExact confirmation shortly after completion of an operation is essential for realistic production planning and control
49 Confirmation of Production Order Completion (Labor cost is added)
50 Goods Receipt for Production Order Acceptance of the confirmed quantity of output from the production order into stockEffects of the Goods Receiptupdate stock quantityupdate stock valueupdate production order (status)store price for future valuation changesThree documents are createdmaterial documentaccounting documentcontrolling document
56 Production Order Settlement Settling a Production Order to Stockpostings are made to the materials & labor and production order accounts with the value of the material and labor and received finished goods.difference between the debt posting and credit posting is posted to a price difference accountMaterial & LaborProd. OrderPrice Diff.Since production costs were higher than planned, the additional expenditure negatively affects the operating profit. This means that the profit decreases by the amount by which the actual costs charged to the production order exceed the standard price.The actual costs charged to the production order affect net income just as the posting of the inventory change at the time of the goods receipt. Since the actual expense was 20 higher than expected, the operating profit is 200 lower than it would have been if production had been at standard cost.84.2312035.77**Material Price determined by the quantity produced times the Standard Price in the Material Master.
57 Production Order Settlement Costs analyzedPrimaryMaterialsExternal ProcessingSecondaryProduction, Administrative Overhead, andLaborCost Analysis ReportingCalculate and analyze planned costs, target costs, and actual costs of the production order.Calculate and analyze variancesCalculate and analyze planned costs, target costs, and actual costs of production orders and process ordersCalculate or update the work-in-process inventory and the finished goods inventoryCalculate and analyze variancesTransfer data to Financial Accounting (FI)Transfer data to Profitability Analysis (CO-PA)Transfer data to Profit Center Accounting (EC-PCA)Transfer data to Actual Costing / Material Ledger (CO-PC-ACT)
67 Exercises: 259. Create purchase order 260. Create goods receipt 262. Post invoice receipt from vendor263. Display vendors invoice (gross) document264. Post payment to vendor276. Create a production plan277. Display stock/requirements list278. Transfer planning data to demand management279. Review demand management280. Display stock/requirements list281. Run master production schedule282. Display stock/requirement list283. Convert planned order to production order284. Issue goods to production order285. Confirm production completion
68 Exercises: 286. Receipt of goods from production order 287. Settle costs of production order287A. Display stock/requirements list