Production processes are procurement processes of the process category Production.

If you are using a given material in different manufacturing processes, production processes allow you to collect the quantities for each quantity structure (such as for each production version) and use those quantities for evaluation or analysis purposes.

Production processes are used:

• In the Product Cost by Period component
• When the Actual Costing / Material Ledger application component is active

The quantities updated by the production process are valuated and the resulting costs allocated to the cost object.

• Material P-105
• Production plant 1000
• Planning plant 1000
• Production version 0001

If no production process exists, the system automatically generates one when you create the product cost collector. (In some cases a production process will already exist, such as when a mixed cost estimate has been created for that material.) If the production process has not yet been created, you choose a Controlling level when you create the product cost collector. Then you enter the values of the characteristics of that Controlling level (such as planning plant 1000, production plant 1000, material P-105, and production version 0001). The Controlling level affects all application components.

The planning plant and the production plant are characteristics of the production process. If the planning plant is not the same as the production plant, the product cost collector is created in the production plant. Settlement is to the material in the planning plant.

If the Actual Costing/Material Ledger application component is active, the system automatically assigns a production process to each manufacturing order on the basis of the characteristic values.

The system checks whether a Controlling level has already been assigned to the material being manufactured.

1. If no Controlling level has been specified, the system automatically selects the most basic level of detail, Plant/Material.
2. The system finds a more detailed Controlling level, and all characteristic values for the Controlling level are in the manufacturing order.

The system searches for a production process for the material according to the characteristic values. If a production process exists, it is assigned to the manufacturing order. If no production process exists, the system creates a new production process according to the characteristics of the Controlling level and the new characteristic value.

3. The system finds a more detailed Controlling level, but one of the characteristics for the Controlling level is not in the manufacturing order.

If the Actual Costing/Material Ledger application component is not active, a production process with the characteristic values relevant for the manufacturing order can already exist if:

• A mixed cost estimate with procurement alternatives with the relevant characteristic values has been created
• A product cost collector with the relevant characteristic values has been created

• A production process with the relevant characteristic values was created because a cost object hierarchy requires that production process

In repetitive manufacturing, costs are always collected on product cost collectors. To achieve this, the production version is linked to the product cost collector through the production process.

If you want to create a cost object hierarchy, assign the material and plant (or the material, plant, and production process) to the lowest cost object nodes in the cost object hierarchy. You assign the material, plant, and production process only if assignment at the material level does not meet your requirements (such as when you are manufacturing different production versions on different production lines and you want to assign different setup costs to the different lines).