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 Collective Orders Without Automatic Goods Movements: Scenario

Prerequisites

You have specified the following in the order type:

  • That settlement is cumulative

  • That no goods movements are allowed to take place between the manufacturing levels

Process Flow

  1. You create a production order for a material. At least one of the semifinished products used in the finished product must have a special procurement key for "direct production/collective order" in the MRP view of its master record.

  2. The system creates a collective order with a leading order for the finished product and dependent orders for the semifinished products, which have a special procurement key in their master record.

  3. When you create production orders, the system automatically generates a settlement rule and a hierarchy number for each production order.

    The hierarchy number specifies the sequence in which the orders are settled.

    The settlement rules of the dependent orders assign the order costs to the respective higher-level order.

    The settlement rule of the leading order assigns the order costs to the following receivers:

    Make-to-stock production

    To the make-to-stock inventory

    Sales-order-related production with a valuated sales order stock

    To the valuated sales order stock

    Sales-order-related production with a nonvaluated sales order stock

    To the sales order item

    Engineer-to-order with a valuated project stock

    To the valuated project stock

    Engineer-to-order with a nonvaluated project stock

    To the WBS element

    In accordance with the default rule in the order type, all orders in the collective order have the settlement type FUL (full).

  4. You determine the planned costs for the individual orders using the preliminary costing functions. The planned costs of an order are credited to the order under a consumption cost element, and the higher-level 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.

  5. After the final confirmation of partial amounts of lower-level orders, the products manufactured in the order go directly into the higher-level order. The lower-level order is credited with the planned costs valid at this time point. The higher-level order is debited with the planned costs. If no preliminary cost estimate exists, the debit and the credit are in accordance with the price control defined in the material’s master record. No goods movement takes place.

Note Note

If you are using a nonvaluated sales order stock or a nonvaluated project stock, no valuation takes place upon final confirmation. Instead, all costs are passed to the higher-level orders when you settle.

End of the note.
  1. The leading order is partially delivered. The leading order delivers to the following inventories:

Make-to-stock production

To the make-to-stock inventory

The make-to-stock inventory is valuated in accordance with the price control defined for the material. The order is credited accordingly.

Sales-order-related production with a valuated sales order stock

To the valuated sales order stock

The valuated sales order stock is valuated in accordance with the price control defined for the material. The order is credited accordingly.

Engineer-to-order with a valuated project stock

To the valuated project stock

The valuated project stock is valuated in accordance with the price control defined for the material. The order is credited accordingly.

Sales-order-related production with a nonvaluated sales order stock

To the nonvaluated sales order stock

The production order is credited upon settlement (rather than upon delivery) The sales order item is debited upon settlement accordingly.

Engineer-to-order with a nonvaluated project stock

To the nonvaluated project stock

The production order is credited upon settlement (rather than upon delivery) The WBS element is debited upon settlement accordingly.

  1. At the end of the period, you first allocate the process costs, revaluate the activities at actual costs, and calculate the overhead.

  2. You execute the function Preliminary Settlement for Co-Products, Rework . The system then settles the subordinate orders to the respective higher-level orders.

  3. You calculate the work in process.

  4. You perform settlement. The leading order settles the difference between the debit and the credit in accordance with the settlement rule and the price control indicator. The work in process is transferred to Financial Accounting .

Note Note

If you are using collective orders, you can specify whether you want to view the costs for the order you entered, for a subtree of the collective order, or for the entire collective order, or whether you first want to see an overview of the structure of the collective order and from there go to the cost reports of the individual orders.

End of the note.

Example

Product A is the product being manufactured. The BOM for product A contains material components B, C, and D. The BOM for product B contains material components E and F. Material components B, D, and E are to be processed with separate production orders but not delivered to stock on completion of manufacturing. You therefore enter a special procurement key in the MRP view of components B, D, and E. The special procurement key indicates that direct production is carried out using a collective order.

Create a production order for product A (order 1). The system automatically creates dependent orders for product B (order 2), product D (order 3), and product E (order 4). The system generates settlement rules that assign the costs as follows:

  • The costs for order 4 are assigned to order 2

  • The costs for orders 2 and 3 are assigned to order 1

  • The costs for order 1 are assigned to stock (product A)

Levels of the Collective Order

Low-level code

Order number/ Product

Receiver

Hierarchy number

0

Order 1/product A

Product A

1

1

Order 2/product B

Order 1

2

1

Order 3/product D

Order 1

2

2

Order 4/product E

Order 2

3

In this example, settlement occurs as follows:

  1. The costs for order 4 are settled to order 2 with the function Preliminary Settlement for Co-Products, Rework .

  2. The costs for order 3 and order 2 are settled to order 1 with the function Preliminary Settlement for Co-Products, Rework .

  3. The costs for order 1 are settled to stock (material).

This has the following results:

  • The costs for the overall manufacturing process are assigned to product A.

  • The costs for products B, D, and E can be analyzed on the dependent orders.

See also:

Preliminary Settlement for Co-Products, Rework