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I am a SAP Plant Maintenance Consultant. Aside from Project Implementations, I also provide refresher courses in SAP Plant Maintenance. =) If you enjoy reading from my page and if you like to send a donation, then please do so =), below is my wallet address and the URL below. Again, Thank You and Happy Reading!! 3CHdCnLJDvd1Qo3CDp7va6xqXh2n2BVbFU

Rental Equipment via SAP Plant Maintenance with Service Notification

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Scenario:

You are a Manufacturing company and you have Plant Maintenance equipment(s) like Freezers, and other types Refrigeration units that are assigned or rented by Mini-Marts, Malls, and the like to store all the goods that you produced as part of your service to your customers.

You want to monitor all the activities,services,parts incurred by your equipment and of course, to where it is assigned.

This can be done through SAP Plant Maintenance. Of course, we will not use the Maintenance Orders in Plant Maintenance but another part of SAP Plant Maintenance which is Customer Service. Here, we can avail of the Service Notifications , and Service Orders that can be integrated using the core modules of SAP, like Sales & Distribution ( SD ).

In order to do so, aside from doing the standard configuration in SAP, we must also build the Plant Maintenance Master Data. Like Functional Locations, aside from making the Functional Locations for your Plant, you will also need to design a Functional Location for your Customers ( i.e. FLOC for Maint Plant 1110 and the sub levels are customers ), Work Centers , Task Lists , etc.

The Plant Maintenance Process is the same but with a slight tweak, we will create a Sales Order first before creating  a Service Notification and the Settlement should be to the Sales order unlike in Maintenance Orders, they are settled directly to Cost Center:

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 Below is a sample of a Service Notification:

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Here, we can assign the Sales order, Equipment ( which automatically gets the Functional Location, Customer, the items used and tasks prior to the conversion to Service Order.

 

 

 

 

 

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PM Asset Acquisition for Constructed Assets

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Assets under construction (AUC) are a special form of tangible assets. They are usually displayed as a separate balance sheet item and therefore require a separate account determination and their own asset classes. During the construction phase of an asset, all actual postings are assigned to the AUC. Once the asset is completed, a transfer is made to the final fixed asset.

In SAP Plant Maintenance, we can create a project order or investment order to capture the costs of the asset under construction. During the period and month-end processing will settle the costs from the project order/investment order to the asset under construction. This is done so that budget information can be entered for the AUC and tracking of the actual-to-budget can be performed. Once the project is completed, the final asset is created in the appropriate asset class, and the project order is set to technical completion(TECO) so that the next settlement will transfer the AUC asset value to the completed asset.

So, with the work order cycle in Plant Maintenance in mind, we can define a process wherein we can create a project order with asset under construction, then we can create a budget for the new asset; release the project order;post the invoice(s) and materials to project order;monitor project order execution;If the Project is already done, we technically complete the project order;come month end, we will settle all charges to the asset and then we can close the project order.

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Breakdown Maintenance

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Scenario:

Sometimes, the maintenance work centers need to take immediate action, due to unexpected machine breakdowns, accidents or other malfunctions, even though neither the type nor the scope of the activities required are known.  Maintenance of this nature is referred to as Breakdown Maintenance.

In SAP Plant Maintenance, we can have a process where a production manager or requester will fill out a manual work order form ( ideally the manual form should be identical to the system generated form in SAP ). The technician(s)(mechanic or groups of mechanics) will now execute the job indicated in the maintenance work order form and his findings if any.After all the work is being done, the requester will acknowledge the repairs/work done by the technician. On the next day,the maintenance planner will encode all findings and transactions (like spare parts used, actual duration of the work) in SAP with date based on the Manual Work Order form and performs the technical completion of the maintenance order(TECO). Finance department will run a periodic settlement in which it will post the proper charges to the cost center. After all items are being settled, they fill perform the business completion of the maintenance work order(BUCO) to close the maintenance work order.

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Condition Based Maintenance

ImageScenario:

In the course of an inspection, a system is seen to be in a condition that will require repair in the foreseeable future,  then these findings can be entered as a maintenance notification and passed on to the planning group responsible.

In SAP Plant Maintenance, we can implement a condition-based process where a requester will create a notification in SAP and prints the notification for approval. The engineering manager will then approves the maintenance request made. The maintenance planner will encode the all approved request and prepare for maintenance work order creation. The maintenance planner will now plan,schedule,release(also print) the maintenance work order for corrective maintenance. The technician(s)(mechanic or groups of mechanics) will now execute the job indicated in the maintenance work order form and his findings if any.After all the work is being done, the requester will acknowledge the repairs/work done by the technician. Then, the maintenance planner will encode all findings in SAP and performs the technical completion of the maintenance order(TECO). Finance department will run a periodic settlement in which it will post the proper charges to the cost center. After all items are being settled, they fill perform the business completion of the maintenance work order(BUCO) to close the maintenance work order.

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Material Types

ImageIn SAP MM, there are standard material types;and each type has its own views .

ImageThe standard R/3 System comes with the following material types. The ID used to identify the material type internally appears in parentheses. It is sometimes necessary to know this ID, for example, when defining the attributes of material types in Customizing for the Material Master.

The following Material types found in SAP MM are the following:

  • Additionals (VKHM) are assigned to a material to be sold to ensure its effective presentation to customers. EX : Clothes hangers, Care labels,         Services such as pressing clothing for display or arranging it on hangers.
  •  Advertising media (WERB) are means of presentation used in advertising, grouping together advertising messages about a number of materials.For instance,Printed mail-order catalogs,Computer catalogs on CD-ROM,Promotional fliers.
  • Apparel, seasonal (MODE)
  • Beverages (FGTR)
  •  Competitive products (WETT) are Observing and evaluating the activities of your competitors is essential for optimum market analysis. You can enter basic data on the products of your competitors in material  master records of this material type. By specifying a competitor number, you can assign the product to a particular competitor.
  •  Configurable materials (KMAT)  are materials that can have different variants. For example, an automobile can have different types of paintwork, trim, and engine. The Material is  configurable indicator is already set for this material type in Customizing for the Material Master in Define Attributes of Material Types [Ext.].
  • Empties (industry LEER, retail LGUT) are a type of returnable transport packaging generally subject to a deposit. They can consist of several components grouped together in a bill of material (BOM) that are assigned to a full product. For example, an empty crate and the empty bottles are assigned to the full product beer. Each of the components in the BOM has a separate  material master record.
  •  Finished products (FERT) are produced in-house. Since they cannot be ordered by Purchasing,  a material master record of this material type does not contain purchasing data.
  • Full products (VOLL) are the counterpart to empties. For example, with a crate of lemonade, the  full product is the lemonade itself, while the empties are the individual bottles and the crate.
  • Intra materials (INTR) exist only temporarily between two processing steps. A material master record of this material type contains neither purchasing nor sales data.
  • KANBAN containers (CONT) .This material type is recommended for creating KANBAN containers as a material. In the  standard R/3 System, only the Basic Data view is offered. Using this material type makes  it easy to search for KANBAN containers.
  • Maintenance assemblies (IBAU) are not individual objects, but logical elements to separate technical objects into more clearly defined units in plant maintenance. For example, an  automobile can be a technical object, and the engine, gearbox, chassis, and so on the maintenance assemblies. A material master record of this material type can contain  basic data and classification data.
  • Manufacturer parts (HERS)  parts are materials that can be supplied by different manufacturers and/or vendors who use different manufacturer part numbers to identify the materials.
  • Nonfoods (NOF1) are items sold in grocery stores, other than food.

    Ex: Paper products , MAGAZINES

  • Non stock materials (NLAG) are not held in stock because they are consumed immediately.
  • Non valuated materials (UNBW) are managed on a quantity basis, but not by value.
  • Operating supplies (HIBE) are procured externally and required for the manufacture of other products. A material master record of this material type can contain purchasing data, but not sales data.
  • Packaging materials (VERP) are used to transport goods and come with the goods free
     of charge. A material master record of this material type is managed on both a quantity basis and value basis.
  • Packaging materials (VERP) are used to transport goods and come with the goods free of charge. A material master record of this material type is managed on both a quantity basis and value basis.
  • Perishables (FRIP) are Goods that are perishable in an assortment. For example, Fruit and vegetables,Dairy Prodicts, and Meat
  • Pipeline materials (PIPE) are materials such as oil, power, or water that flow into the production process directly from a pipeline, line, or other type of conduit. Since pipeline materials are always available, they  are not planned.
  • Process materials (PROC) materials are used in the manufacture of co-products. They are not physical entities, but represent production processes. They are useful if production is initiated by the availability of input materials and capacities, and not by material requirements planning.
  • Product groups (PROD) aggregate materials according to certain freely definable criteria. For example, the products may be similar to each other in some way, or they may be finished products that were produced on the same machine.
  • Production resources/tools (FHMI)  procured externally and used in production or plant  maintenance. A material master record of this material type can contain purchasing data,  but not sales data. It is managed on a quantity basis. EX: Jigs and fixtures , Measuring & Test Equipment
  • Raw materials (ROH) are always procured externally and then processed. A material master record of this type contains purchasing data, but not sales data since they cannot be sold.
  • Semi finished products (HALB) be procured externally and manufactured in-house. They are then processed by the company. A material master record of this material type can contain both purchasing and work scheduling data.
  • Services (DIEN)  can be performed internally or procured externally (outsourced). They cannot be stored or transported.I.E, Construction work,  Janitorial/cleaning services,Legal services.
  • Spare parts (ERSA) are used to replace defective parts. They may be kept in stock. A material  master record of this material type can contain purchasing data, but not sales data.
  • Trading goods (HAWA) are always procured externally and then sold. A material master record of this material type can contain purchasing data and sales data.
  • Value-only articles (WERT) represents a group of articles whose inventory is not managed on an article basis. All goods movements for this group of articles are posted to the value-only article.

Enough said. =)

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PM Outline Agreement

ImageIn Plant Maintenance, in every maintenance order process,we do a lot of external services, for instance, Painting Services,Fabrication, even Carpentry; This can be covered by making Outline Agreements.

The outline purchase agreement is often referred to as a blanket or umbrella purchase order. It is basically a long-term agreement between the purchasing department and vendor for material or services for a defined period of time. The purchasing department negotiates with the vendor a set of terms and conditions that are fixed for the period of agreement. A longer-term agreement between a purchasing organization and a vendor regarding the supply of materials or the performance of services within a certain period according to predefined terms and conditions.

There are two types of Outline Agreements:

  • Contract is a type of outline purchase agreement against which release orders (releases) can be issued for agreed materials or services as and when required during a certain overall time-frame.
  • Scheduling Agreement is a form of outline purchase agreement under which materials are procured on predetermined dates within a certain time period.

The Outline Agreement has the following Characteristics :

  • Document header: contains information relating to the entire agreement. For example, the vendor information and header conditions are in the document header.
  • Items: containing the information specific to the relevant material or service. For example:
  • Statistics on ordering activities for the item
    • Quantity or price of the item
    • Conditions, such as quantity discounts and surcharges

    ImageIn a Maintenance Work Order Process, we create Maintenance Order with a Purchase Requisition ( with DIEN material ),create a Contract Based on PR, then Third Party Services will execute the job specified in the order, the Maintenance Planner will inspect the job and Completes the Maintenance Order, Store Clerk will perform Goods Receipt for the Finance department to process the payment.

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Work Clearance / Work Permits

ImageThe Work Clearance or Work Permit is an operational safety barrier to protect against undesired incidents. It is a written document that authorizes specified persons to carry out specified work at a specified time and also describes both the work to be carried out and the requirements, that must be fulfilled.

Work permits are categorized in different levels, depending on risk considerations and the need for coordination and it can be created for a Work Clearance Management relevant order or for one or more operations.

We need Work Permits / Work Clearance for the following:

  •  For the Maintenance Crews who are working in hazardous environments ( i.e high voltage  or radiation exposure )
  •  On Maintenance measures that need to be performed while systems are operational.
  •  On Operation of a technical system that must not be affected in any circumstances.
  •  For Work related illnesses which require special health and safety measures ( i.e LOCKOUT/TAGOUT, fire protection, radiation protection, etc )

With SAP- PM WCM , it will enable us to monitor and control these activities thus ensuring  a safe working conditions for the maintenance technicians.

Below is a sample wherein we can include Work Clearance / Work Permits in Maintenance Order Processing coming from Notification or Maintenance Plan :

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Material Number & Industry Sector

ImageIn SAP-MM, We can define a Material Number uniquely identifying a material master record. We can assign mnemonic keys or nonmnemonic keys as material numbers, depending on the method your company prefers. For this reason, we can  have the following types of number assignment in SAP:

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    External Number Assignment : If your company uses mnemonic keys (normally alphanumeric), you enter the character string you want to use as the material number when you create the material master record.
  • Internal Number Assignment :If your company uses nonmnemonic keys, you do not enter a material number when creating a material master record. Instead, the system assigns a consecutive number to the material. This number is visible when you maintain the material master record.

For Industry Sectors ,when we create a material master record, we are required to classify the material according to industry sector and material type. Like material types, industry sectors have control functions in the R/3 System. For example, it is a factor determining the screen sequence and field selection in a material master record. Once you have assigned an industry sector to a material, you cannot change the industry sector again afterwards.

The standard R/3 System contains the following industry sectors. The ID used to identify the industry sector internally appears in parentheses.

  • •Plant engineering and construction (A) Image
  • • Chemical industry (C)
  • • Mechanical engineering (M)
  • Pharmaceuticals (P)

The other sectors are for retail

 

 

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Product Costing & Material Master Data

ImageThe material master record contains all information needed for managing a material. This data is structured by views. The views correspond to the individual areas within the company in which the material is used.

Product Costing are relevant to the views of the Material Master defined in SAP:

  • assignment of material to a plant
  • Costing view
  • Accounting view

For the Costing View for Raw Materials , in the material master, the Quantity Structure should not be selected and Variance Key indicator.  For Semi Finished and Finished Products, there are also things to consider in the Material Master:

  • Base unit of measure, unit of measure in which stocks are recorded
  • “With Quantity Structure” indicator ,determines whether the material is generally costed using product costing or not.
  • “Material Origin” indicator,determines whether the material number is updated in the cost element itemization
  • Alternative BOM , determines which BOM alternative is used as basis for product costing with quantity structure
  • Group counter,determines which routing within the routing group is used in product costing
  • Special Procurement Type for costing, Used to indicate that the material is “sub-contracted;” if left blank, the special procurement type in the MRP view will apply.
  • ImageCosting Lot Size , indicates the quantity used as basis for costing; used to manipulate the SAP limitation on decimal places (maximum of 2).
  • Variance Key, indicates the control parameters for calculating variances.
  • Profit Center, indicates to which profit center the inventory valuation or material usage cost  be posted.
  • Co-Product Indicator, indicates if the material can also be used as a co-product in a joint production BOM.
  • Joint Production, contains the dialog box that allows the indication of the source-structure that determines how the order costs are distributed to co-products

For Accounting View of the Material Master, the following data should be also taken into consideration :

  • Material price based on the price control
  • Valuation class to determine what cost element/inventory account be assigned to material cost/inventory
  • the Currency and Price unit of the cost estimate

 

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Planning Strategies

Image Production must be planned either completely or partially especially for finished products with a lot of variants so that as many variants as possible can be delivered at the shortest notice possible. However, we must be careful  not to tie up unnecessary capital in current assets.

In SAP-PP, we can do different demand management so that various planning targets can be persued :

  • Planning at finished product or without assembly
  • Planning using Planning Bills of Material
  • Planning at assembly
It is important that planning is effective and effortlessly  as possible by the planner. Moreover, it is also important that planning is integrated in sales order processing. This means that planning must be checked with the independent requirements as soon as the sales order arrives. This ensures that the parts required for the sales order are either in production or are already in the warehouse.
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