Production order variances due to missing usages of overheads

[former_member267531]

Hi Team

We have noticed production order variances due to missing usages of overheads (labour, personnel, consumables, scrap). Where do those kind of variances come from and how they can be prevented/corrected.

Br, Kiran Unde

[former_member184737]

Hi Kiran,

      Generally variance will occur due to excess/low consumption of component or excess/low value of activity. This is the difference between Plan Vs Actual.In your production order, ( for example  here consumable, scrap, labor OVH, personnel  ) are not registered but plan having value against these elements. You can add the field "tot. plan cost" by using change layout option and check, it will be helpful to compare.

In real time, variance may occur due to excess/low usage of component(for example) at shop floor, we need to do the variance calculation settle the amount by doing settlement.

Thanks.

[Former Member]

Hello Kiran,

Are you directly confirming these overhead costs (by CO11N) or are you using template allocation or some other method?

If you are using template allocation please be sure you have run CPTD (or CPTA for single order) for this order. Check if there are any errors for template allocation in these transactions.

For either of the methods please also check if activity prices are maintained (KP26) for all of the activity types for the confirmation periods.

Regards.

[former_member267531]

HI Canan

Confirmation happens via Background Job and job get successfulley finished we thought because of that job fails that the reason varience came.and one more thing there is no any template allocation.

Br, Kiran Unde

[former_member206498]

Hi Kiran,

This is because those Activity Types are not entered during Confirmations for Production Order. To correct those field, you need to perform Confirmation and enter the values for those Activities.

To prevent this in the future and to ensure those fields are entered during confirmation, you can do the following:

1. Make the system propose values for Activities automatically based on Standard Values.
   • Go to transaction OPK4
   • Select appropriate Order Type and Plant
   • Select tab "Individual Entry of Operation with Initial Screen"
   • In the "Services" section, tick "Propose"
2. Make the fields mandatory
   • Go to transaction CO86
   • Set related Activity to Confirm fields as mandatory by placing the radio button under "Req" column

Regards,

Julian

[former_member267531]

Thanks Julian

The Activity type already mantained, i checked another the successful order with same material the Total actual cost and total actul qty. appearing.

Br, Kiran Unde

[dejoy]

Hello Kiran,

Variances come from difference of Actual & Target Cost.You are getting variances because you did not enter activity quantities in CO11N(Because of this Actual qty is 0 and variance is coming).

To correct: reverse confirmation and re-post with activity quantities this time.

To prevent: Always specify activity qty's.

Regards,

[former_member206498]

Thanks for confirming. So we can conclude that it was because the user haven't entered the values for those Activities. To resolve this, you may need to post Confirmation for those Activities and take some steps as explained above to prevent this to happen in the future.

Regards,

Julian