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SAP module for allocating supply chain in-directs and logistics cost

Former Member
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Can we use Co-PC for allocation of supply chain indirect and logistics cost to SKUs? What challenges you see in using this module?

What is the best practices in companies?

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Kunal,

Yes, you can use production/process orders to capitalise supply chain costs.

To comment on whether it's best practice we would need to know more details:

- are you using ML

- what type of industry are you in

- what's the nature of the indirect supply chain costs

Regards,

Szymon

Former Member
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Yes we use material ledger

We are in consumer packaged goods industry

Our indirect costs include business waste, procurement, etc. Logistics cost consists of primary and secondary transport.

We wish to allocate these costs for the purpose of standard costs estimation

Our volume of transactions is very high

Former Member
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Kunal,

My understanding is that your main objective is to include supply chain costs in inventory value (not standard cost estimate) as you use ML anyway.

As far as I'm aware there are 3 ways you can capitalise "delivery" costs into inventory:

1. Shipment Costing - it's part of TSW module. Using shipment costing you can capitalise "delivery" costs for externally purchased materials, inter and intra company transfers. Works especially well when you transportation costs directly depend on the volume of transported material.

Limitation: it works only for externally provided transportation services, not for internal.

2. Capitalisation via production/process order. You collect transportation costs on cost centre and allocate them to process/production order. Works both for internal and external transportation.

Limitation: how to correctly apportion costs to different products

3. Delivery costs in Purchase Order: works only for externally purchased materials

Regards,

Szymon

Former Member
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Hi Szymon,

I am trying to thing out the mechanizm of assigning 4 different shipment cost categories (purchase side) to externally purchased materials. This is something what you wrote in point 1. The cost categories are:

1. Sea transport (eg. from China to port in Europe);

2. Road transport (from port to the warehouse)

3. Duty cost (% based on material price + transport from point 1 and 2)

4. Quality cost (as a clasic overhead).

These costs should be reflected in standard cost estimate (each of category in different cost component) and in actual in Material Ledger (in different soct components as in costing).

The problem in purchasing is that you cannot have more than one fright condition from fright cost document in purchasing info record. Then costs cannot be divided into cost components.

I have tried to do that through templates in business processes. There are separate subtemplates assigned under one template assigned to standard costing. Each subtemplate has different cost element assigned to different cost component. The pure transport costs are calculated based on number of PCS in one container, based on alternative UoM from material master. The business process price is standard container freight rate. And it works perfect.

More difficult is duty value, which is percentage based. In a template there is no formula for calculating the value from subtemplate rows. Do you have any idea how to do that? Maybe it should be done by costing sheet rather than template in business process?

The next are actual costs. My idea is to assign all the costs to appropriate business processes through shipment cost documents. These costs are not divided into indexies. At the month end SAP calculates values to be assignedo to particular materials based on LIS statistics. The costs are then allocated to CO production order for each material based on LIS number of materials received to stock. This is made through template allocation to CO production order, settlement to material let SAP to assign each part of costs to cost components, based on cost elements values.

Do you have any idea if it can be done in a simplier way? I will be very

happy if you manage to share your knowledge with me.

Regards,

Dawid

Former Member
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Hi Dawid,

I would need more details about your business scenario.

Can you please provide me with your private email?

I believe that if you start following me on SCN I'd be able to see your

private email (if you entered one).

Please use 'Szymon Maslowski' not 'Szymon FIN Maslowski'.

Cheers,

Szymon

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