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Component documentation Grouping, Pegging, Distribution 

Purpose

The functions in the component Grouping, Pegging, Distribution (GPD) are an enhancement to the standard functions in the project-based production environment.

Users can combine material requirements from different WBS elements (across several projects or plants) in one or more grouping WBS elements for the purpose of common inventory management and material requirements planning. In this way, the users can achieve greater efficiency and cost savings in the area of material procurement. The option of being able to group and plan material requirements across different projects, however, should not be at the expense of good financial monitoring and allocation. It is for this reason that the component Grouping, Pegging and Distribution also contains functions allowing you to allocate the individual cost types from grouped stock to the original requirements and thereby also to the WBS elements that caused the requirements. You can use the advantages of optimized lot sizes and, at the same time, implement resource-related billing and in this way keep complete control of the costs of a project.

Implementation Considerations

This graphic is explained in the accompanying text

The transactions for pegging and cost distribution are not in the SAP menu. The function can only be released after agreement with SAP. Due to the complexity of the grouping, pegging and distribution (GPD) process, you should discuss your relevant business processes with a consultant from the SAP Industry Unit Aerospace and Defense.

Integration

The functions in the GPD component are based on the standard functions for project-based production processes available in the Project System, MRP, and Production components of production processes available in the Project System, MRP, and Production components of the Enterprise Release 4.7.

Project-based production processes integrate the components planning, procurement and production. In the planning phase, you assign the required material components for the goods to be produced to the network activities in a project hierarchy. For warehouse materials, the system uses this assignment to generate material requirements in the form of planning-relevant network reservations. Planning uses these in the procurement phase and, if there is not enough material in stock to cover requirements, generates suitably scheduled planned orders which must then be converted into production orders or purchase orders so that the required material component can actually be procured.

Features

The Grouping, Pegging, Distribution (GPD) component contains the following functions:

·  Combined Requirements (Grouping)

·  Pegging

·  Cost Distribution (Distribution)

Grouping in Individual Project Planning

In the standard system, you can plan planning-relevant materials either on plant level or in individual WBS elements only:

·  Plant stock (planning collective requirements in warehouse material).

Materials at subordinate BOM levels which are required in all projects can be planned and procured in the warehouse, independently of WBS elements. In requirements planning, all the requirements for a material are determined in one plant. Such procurement is made jointly, with no reference to a WBS element.

The material is managed in general stock. It is not assigned to any particular project or sales order.

·  Project stock (individual project planning)

In individual project planning, only individual requirements are planned - that is, materials which are required for a WBS element, are planned for that purpose, and procured with reference to the WBS element.

This procedure is used to plan the finished product and important components.

The material stock is assigned to a single WBS element in the project and is, as far as planning is concerned, available only for that WBS element. Stock is managed separately for each WBS element in a project definition.

Unlike general stock, you must specify the relevant WBS element, as well as the plant and storage location, in all goods movements involving project stock.

Requirements grouping as part of the component Grouping, Pegging, Distribution enhances the standard delivery with an additional planning process within the framework of requirements planning for projects. Requirements grouping allows you to plan and procure material requirements that are caused by WBS elements within a project or across different projects collectively. To this end, you combine requirements from individual WBS elements in a grouping WBS element, and plan them there.

The grouping WBS element is the organizational unit which produces the goods and to which the material belongs. Requirements planning creates the replenishment elements (planned orders, purchase requisitions) which are assigned to the grouping WBS element. A separate planning section is managed for each grouping WBS element in the evaluations in inventory/requirements planning.

This means that the system manages project stock for each grouping WBS element. This stock contains all the materials procured for the WBS elements assigned to the grouping WBS element. The materials in the project stock for the grouping WBS element are available to all the WBS elements assigned to the grouping WBS element. If a goods issue follows on a reservation, the material is taken from the stock in the grouping WBS element.

Requirements Grouping Within Projects: Real Project Stock

The system includes an automatic requirements grouping tool which you can use to combine the requirements in the single grouping WBS element for the project. This procedure combines all the requirements in the single grouping WBS element for the project. This means that you have just one stock, called the “project definition stock” for your project.

Grouping Across Projects

Requirements grouping across projects occurs when you assign the WBS elements from various projects to one or more grouping WBS element.

So, for example, you can combine all the WBS elements from projects of private ordering parties in one grouping WBS element, and all the WBS elements from public ordering parties in another.

Pegging

When you group requirements into one grouping WBS element and produce the replenishments, those resulting replenishments are assigned to the combined requirements under the grouping WBS element. Those resulting replenishments are not assigned to the original requirements (from the individual WBS elements) that caused them.

Thus, all the costs of production and procurement are assigned to the grouping WBS elements, and not the original projects (individual WBS elements) that required them.

You execute pegging in order to establish the relationship between the grouped replenishments and the individual WBS elements that hold the original requirements. This relationship is needed to appropriately distribute the costs and further value types from the grouping WBS elements to the requiring individual WBS elements.

Pegging assigns the replenishment elements (planned orders, purchase requisitions, production orders, purchase orders) back to the original cause of the requirement (reservations, planned independent requirements).

Cost Distribution (Distribution)

Distribution components incorporate the distribution of the individual costs and other value types from the grouping WBS elements (that hold the grouped replenishments and their costs) back to the individual WBS elements (that hold the original requirements). The distribution results are based on the assignments made during pegging.

 

This graphic is explained in the accompanying text

For a complete, up-to-date list of GPD-related issues and solutions, refer to CSN Notes under primary component: IS-ADEC-GPD.

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