
This lecture guides you through creating a controlling area in SAP S/4HANA, configuring its ledger, currency, and chart of accounts, and linking it to financial accounting.
Explore PPP1 and PPP2 costing variants for preliminary and simultaneous cost calculation, showing how preliminary cost uses planned quantity times standard cost, and simultaneous cost uses actual production data.
Master variance calculation and settlement configuration in SAP CO product costing for steel manufacturing, including allocation structures, settlement profiles, and cost elements for production orders.
Design profit centers and cost centers based on the steel manufacturing process, mapping revenue generating units to profit centers and expenses to cost centers, and align work centers for production.
Explain prerequisites for activity type calculation, distinguish dependent from independent activity types, and show how to split plan costs into activity type rates using plan vs actual cost data.
Configure the material ledger and ledger configuration, set currency types and price determination, and activate actual costing for a three-plant production startup (center, coke, steel).
A). For Sinter (material) Mfg Process , Input materials are Iron Ore and Lime stone materials creation
B). For Coke(material) Mfg Process, Input material is Coal material creation
A). For Sinter (material) Mfg Process , BOM , Work center and Routing creation
B). For Coke(material) Mfg Process, BOM , Work center and Routing creation
A). Standard Cost estimation, Marking and Release for initial manufacturing material "SINTER" in Sintering Plant.
B). Standard Cost estimation, Marking and Release for initial manufacturing material-"COKE" in coke plant.
a). Business partner creation with BP role vendor
b). Purchase order, Goods Receipt done for the input materials
For Sinter (material) Mfg Process , Input materials are Iron Ore and Lime stone
For Coke(material) Mfg Process, Input material is Coal
Create a hot metal standard cost estimate from routing and work centers, integrate bill of material and material master data, and apply production cost calculations across digital plants.
Demonstrate standard cost estimation and production planning for steel in SAP CO costing on S/4 HANA, using iron ore, coal, and a bill of materials.
Learn primary steel material costing in SAP CO product costing, including co-products and byproducts, mixing ratios for BOF and EAF, and cost estimation with BOM and routing.
Explore SAP co-product costing in steel manufacturing by modeling slabs, blooms, and billets as co-productions, using a single production order to allocate costs to outputs.
Demonstrates make-to-order steel plates production in SAP S/4HANA using sales costing, linking production orders to customer requirements and a three-material bill of materials.
Explore SAP CO product costing using SKF data to allocate expenses from common cost centers to production cost centers, establishing an assessment cycle and production-based cost allocation.
Create assessment cost elements and an assessment cycle to allocate common expenses to production cost centers, using category 42 primary cost elements and sender-receiver key figures.
Steel manufacturing involves a plethora of steps, and product costing for this industry is intricate. SAP CO provides the necessary tools and functionalities to enable accurate product costing, aiding steel manufacturing enterprises in efficient costing processes.
Let's elaborate on the SAP CO implementation for product costing in the steel manufacturing sector:
1. SAP Implementation in Steel Industry: Implementing SAP in the steel industry requires an in-depth understanding of industry-specific processes. The complexity of the steel manufacturing processes requires a tailored SAP solution to ensure that the processes are efficiently mapped and executed in the system.
2. Course Structure: This course, beneficial for consultants aiming to implement SAP in the steel sector, should be structured with practical live scenarios, taking into account industry best practices and the specific nuances of steel manufacturing.
3. Manufacturing Processes in Steel Industry:
Iron Making:
Iron ore, limestone, and coke are processed in a blast furnace to produce sinter.
Sintering is a vital process as it provides a rich raw material for iron making while reducing waste.
Coke, produced from different grades of coal, acts as a reducing agent in the blast furnace.
Primary Steel Making:
The produced hot metal is then combined with scrap steel.
Two primary processes are:
Basic Oxygen Furnace (BOF): Uses hot metal from the blast furnace and steel scrap. This is a widespread method.
Electric Arc Furnace (EAF): Uses Direct Reduced Iron (DRI) and scrap metal. This method is increasingly becoming popular due to its environmental benefits.
Depending on the client's requirements, mixed costing processes might be utilized, combining both BOF and EAF methods.
Secondary Steel Making:
This process forms SLABS, BILLETS, and BLOOMS, which are fundamental materials used in various applications.
4. Month-end Closing in Costing:
F-02: Book all the financial expenses to a common cost center. This captures all costs, ensuring they are allocated in subsequent steps.
KB31N: Enter statistical key figures (SKF) data for production cost centers, which aids in accurate overhead allocation based on actual production data.
KSU1: Create assessment cycles. These cycles define how internal costs are distributed among various cost objects.
CPTD: Allocate actual overheads using templates. This ensures overheads are distributed based on predefined standards or patterns.
KSU5: Run the assessment cycle. This step allocates the costs from sender cost centers to receiver cost objects based on the rules defined in the assessment cycle.
KSS2: Split costs based on activities. This distributes costs based on actual activity consumption.
KSII: Calculate actual activity rates. This updates the plan rates with actual rates, providing more accurate costing.
CON2: Revaluate orders based on the updated rates. This ensures that order costs are aligned with the most recent costing data.
CO8B: Settle the costs of co-products. Co-products often share production costs, and this step ensures that costs are distributed fairly based on predefined rules.
KKS1: Calculate variances. This step identifies any differences between planned and actual costs.
CO88: Finally, settle production orders. This moves costs from production orders to finished goods, closing the loop on the production costing process.
Overall, implementing SAP CO for product costing in the steel industry provides an integrated approach to capturing, allocating, and analyzing production costs. When correctly configured and utilized, SAP CO enables steel manufacturers to get insights into their costs, thereby aiding in cost optimization and better decision-making.