SAP recommends the use of collective orders with automatic goods movements because collective orders without automatic goods movements have the following drawbacks:
You specify that no goods movements are to take place between the manufacturing levels in Customizing for Cost Object Controlling under Product Cost by Order ® Manufacturing Orders ®
This indicator is transferred into the order header (master data) of the orders. If there are differing order types within the collective order, the setting of the indicator of the order type of the leading order takes precedence. This indicator is transferred to all lower-level orders and overrides their original indicators.
You specify full settlement in Customizing for Cost Object Controlling under Product Cost by Order ® Preliminary Costing ® Production Orders or Manufacturing Orders ®
Processing of collective orders without automatic goods movements has the following special requirements:
When the system creates the production orders of a collective order, it generates the following:
The orders in a collective order without automatic goods movements have settlement type FUL (full settlement).
Collective orders without automatic goods movements are precosted according to the bottom-up principle. The entire planned costs of an order in the collective order are credited to the order under a consumption cost element, and the next-highest order is debited with these costs under the same cost element. In the planning data, the leading order is credited in accordance with the price control of the material.
In your actuals, the planned costs calculated in the preliminary cost estimate are the basis on which the credit of an order is based when a partial amount of the order is confirmed. The higher-level order is debited with these costs at the same time. The lower-level order is credited and the higher-level order debited under the consumption cost element.
Relationships exist between the operations of the orders in a collective order. As soon as you enter a final confirmation for the last operation in the lower-level order, you can process the material in the higher-level order. The confirmation results in the lower-level order being credited with the planned costs. The higher-level order is debited with the planned costs.
If you have not created a preliminary cost estimate for the order, the orders in a collective order without automatic goods movements are confirmed using the material prices defined by the price control in the material master record.
No goods movements take place between manufacturing levels. Co-products are not delivered to stock. The leading order delivers to the following inventories:
To the make-to-stock inventory (receiver = material)
Sales-order-related production with a valuated sales order stock
To the valuated sales order stock (receiver = material)
Engineer-to-order with a valuated project stock
To the valuated project stock (receiver = material)
Sales-order-related production with a nonvaluated sales order stock
To the nonvaluated sales order stock
Engineer-to-order with a nonvaluated project stock
To the nonvaluated project stock
When the material is delivered to stock, the order is credited in accordance with the price control defined in the material’s master record. If the price control indicator is set to S, the standard price is used. If the price control indicator is set to V, the system finds the price through the valuation variant defined in Customizing for Product Cost by Order under Define Goods Received Valuation for Order Delivery.
The difference between the credit at the time of confirmation and the actual costs for the semifinished products that have already been produced is passed to the higher-level order when you settle.
Collective orders without automatic goods movements roll up the actual costs during the settlement process. Since the work in process is calculated before settlement in the period-end closing process of Cost Object Controlling, you must make sure that the dependent orders are settled to the higher-level orders before the WIP is calculated. Therefore, you use the function
The costs for the leading production order are normally assigned to the material (inventory). They can also be settled to a sales order item or WBS element.
In collective order 1111, production order 3333 is below production order 2222 in the hierarchy. The lower-level order 3333 has the status DLV (delivered), while the higher-level order 2222 is still being processed. Because the actual costs for order 3333 are higher than the planned costs, there is still a difference remaining on order 3333. However, because order 3333 has been delivered, it would have to have a balance of zero dollars. The difference between the actual debit and the target debit must be included in the value of the work in process of order 2222. But this cannot be done until order 3333 has been settled.
You use the function Preliminary Settlement for Co-Products, Rework to settle order 3333. In WIP calculation, order 2222 has all relevant costs. Order 3333 now has a balance of zero dollars. Settlement passes the work in process of order 2222 to Financial Accounting.
It is possible to create a manufacturing order for a configured material; configurable materials can be included in the BOM of the configured material.
The following functions are not available when you are using collective orders without automatic goods movements:
Because no goods movements take place between the manufacturing levels, it is not possible to calculate target costs and therefore no variances can be calculated.
If you are using collective orders without goods movements, the status is not verified when you confirm. This means that you can confirm a lower-level manufacturing order when a higher-level manufacturing order does not have the status REL (released). Consequently, actual costs can be charged to the higher-level manufacturing order even if it has not been released.
If you are using collective orders without goods movements, the status is not verified for the settlement rule "to order". This means that an order can be settled even before it has received the status DLV (delivered). (You settle the dependent orders with the function Preliminary Settlement for Co-Products, Rework.)
Multiple valuation views are not supported by collective orders without automatic goods movements.
If you are using collective orders without automatic goods movements, no materials management documents (MM documents) or financial accounting documents (FI documents) are generated for any of the lower-level manufacturing levels. This means that no data are updated for the Special Purpose Ledger (SL) or for the Actual Costing/Material Ledger component.
Collective orders are not supported in repetitive manufacturing.
Co-products are only allowed in the leading order in a collective order.
Make the required settings in Customizing in the order type.
Make sure that you use the function Preliminary Settlement for Co-Products, Rework to settle the dependent orders.