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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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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Production Strategies

ImageWe can do SAP-PP with the following Strategies:

  •   Make-to-stock production for mass production,
  •    Make-to-order production or make-to-order production
  •   as well as Production by lot size.
Depending on the production type, various production strategies are necessary. For each production process, you can determine optimum planning strategies. These strategies can be freely chosen and can be combined with each other. You can define the appropriate strategies per material and plant.
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Processes in Production Planning and Control

ImageProcesses in production planning and production control comprise the following main areas:

  • Sales and operations planning for determining the quantities to be produced.
  • Material requirements planning   to calculate net requirements and component
    requirements, taking into account scrap and lot sizes.
  • Capacity requirements planning for detailed production planning, taking
    into account available capacities.
  • Production control to control and record the production process (create
    production documents, record confirmations)

ImageIn my case, I am more immersed in Production Control .

HOW IS AN EXTERNAL SERVICE TRIGERRED

ImageThe reasons we used External Services or Third Parties are:

  • Missing Qualification: A company’s own labor force is not always qualified to carry out every type of maintenance work.  It is often the case that certain types of work will need to be given to external companies who have focused on this area (for example, lift servicing, the maintenance of air conditioning systems, process control etc.)
  • Unavailable Capacity: External Services or Third Parties can be used to supplement the capacity of the internal labor force (for example during betterment projects, turnarounds, end of the year maintenance etc.)
  • Costs: The question of whether external labor is more cost-effective than internal labor is not simply a case of primary cost comparisons( that is, the amount on the invoice) but also of the secondary cost comparison. That is, the administrative costs associated with managing external companies such as order planning, purchasing, service acceptance, invoice checking etc.

In SAP Plant Maintenance, we can do this by using Control Keys:

ImagePM01: The external service is handheld, via an internal order, like internal work

PM02: the external service is processed with a purchase requisition and an individual standard purchase

PM03: the external service is processed on the basis service items or service specifications and, later on, by service measurements.

 

 

FEATURES OF A MAINTENANCE ORDER

ImageIn SAP Plant Maintenance, the features of a Maintenance Orders are the following:

  • Flexible order processing

Ideally, the maintenance order must be capable of being opened with a minimum data entry (for example, in the case of a malfunction).  On the other hand, there are some business processes in Maintenance, such as revisions, transfers or new constructions, for which the maintenance order should provide a wide range of functionality – working with external companies, network configuration, permit processes, cost statements, material reservations and others.

  •  Object Reference:

The Maintenance order either refers to one specific object or to a group of any number of objects which can be displayed in an object list in the maintenance order.

  • Period of Validity

An individual order is valid for a specific piece of maintenance work only.  In the case of standing order, however, you do not create a new order every time a new piece of work needs to be done.  The standing order is valid for a certain period of time.  It is created to cover minor repairs, and all times and materials are posted to it.

  •  Execution

Maintenance orders are performed by internal company employees or are outsourced to external companies.

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