con2012 jordan analyze_your_production_costs
DESCRIPTION
John Jordan will present guidance on how to “Analyze your production costs and variances with SAP® standard reports”. John created this session to help organizations better leverage one of the most useful features of standard reporting – drilldown functionality. Learn how from high-level summarized reports, you can drill down through detailed and line item reports to source documents. This functionality is one of the key tools at your disposal during variance analysis. This presentation will be presented at the Controlling 2012 Conference September 24-25, 2012 in San Diego, CA.TRANSCRIPT
© 2012 ERP Corp. All rights reserved.
Analyze Your Production Costs and Variances with SAP® Standard Reports
John Jordan
ERP Corp
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
Types of Controlling Reporting
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• Management Reporting• Drilldown Capability• Period-End Processing
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Management Reporting
• Controlling involves analyzing the costs of running a company• Internal (management) versus external (legal) reporting
• Allocate overhead costs to products• Allows detailed profitability comparisons between products
• Start process by budgeting for next fiscal year• Primary cost element planning• Activity quantity planning• Create cost estimates
• Period-end analysis between plan and actual• WIP• Variance analysis• Settlement
Drilldown Capability
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• Quickly drilldown to detailed level transactions• From high-level summarized to source documents• Provides assistance during variance analysis
• Plant manager views manufacturing variances• Expand plant summarization row to display next levels• Drilldown on any level to progressively display:
• Detailed reports• Line item reports• Source (originating) documents, for example:
• Material document for goods issue• Accounting document for journal entry
• Source documents show who created the transaction, and when
Period-End Processing
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• Controlling reporting generally involves processing data and analyzing information at period end
• Four typical processes are:• Overhead
• Primary overhead costs booked during a period to overhead cost centers are allocated to production cost centers
• Costing sheet configuration allows flexible allocation• Work in process (WIP)
• Production costs are temporarily tracked on P/L accounts• Incomplete production order costs are moved to B/S accounts
• Variance calculation• Analyze the cause of production order balance
• Settlement• WIP and variances are transferred to FI, PCA, and CO-PA
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
Types of Summarized Analysis Reports
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• Product drilldown reports• Configuration• Product groups• Data collection• Run reports
• Summarization hierarchy reports• Configuration• Selection status profile• Data collection• Run reports• Alternate summarization hierarchies
Product Drilldown Reports
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• Product Drilldown reports allow you to slice and dice data based on characteristics, such as:• Product group• Material• Plant• Cost component• Period
• You can easily navigate between characteristics and drilldown to lower-level characteristics
• Use predefined summarization levels• You don’t have to define summarization levels• Predefined summarization levels work for most companies
Product Drilldown Reports: Configuration
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• You can run Product Drilldown reports without configuration• It’s only purpose is to utilize one of the following groups:
• 1 Product Hierarchy• 2 Material Group• 3 CO Product Group
• Transaction OKY0 IMG Controlling Product Cost Controlling Cost Object Controlling Information System Control Parameters
Product Drilldown Reports: Product Groups
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• CO product groups allow you to define your own hierarchy• You can assign materials to your hierarchy• Easiest to use existing material groups and product
hierarchy• Transaction KKC7
Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Information System Tools Summarized Analysis: Preparation Product Group Create
Product Drilldown Reports: Data Collection
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• You populate the Product Drilldown dataset during data collection• Transaction KKRV
Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Information System Tools Data Collection For Product Drilldown
• You normally run data collection following period-end closing for the current and previous period,• Since data can change within open financial periods
Product Drilldown Reports: Run Reports
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• Following data collection you run Product Drilldown reports• Transaction S_ALR_87013139
Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Information System Reports for Product Cost by Period Summarized Analysis With Product Drilldown Variance Analysis Target, Actual, Production Variances
Product Drilldown Reports: Report Analysis
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• Each line represents a material• Variance column below is sorted in descending order• Provides visibility to materials with largest accumulated
variance• Drilldown on any line to find more details by:
• Period/year• Cost component
• You can analyze variance per material further by displaying details of the manufacturing order with Transaction KKBC_PKO
Summarization Hierarchy Report
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• Summarization hierarchies allow you flexibility to display data• A summarization hierarchy groups together manufacturing
orders at the lowest-level summarization nodes• The nodes are in turn grouped together at higher-level nodes• Creates a pyramid structure
• Each summarization level is set up manually in configuration• Hierarchy levels are expandable / collapsible rows in reports
• Example of hierarchy levels starting at top of pyramid• Controlling area• Profit center• Plant• Material group
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Summarization Report: Configuration — Object Types
• IMG Transaction KKR0• Controlling Product Cost Controlling Info System Cost
Object Controlling Settings for Summarized Analysis/Order Selection Maintain Summarization Hierarchy
• Select an existing hierarchy and double-click Data Scope
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Summarization Report: Configuration — Hierarchy Levels
• Specify which object types are summarized in the hierarchy• The Description in the selected row indicates object types
• Double-click Hierarchy levels to display hierarchy level details
• Controlling Area must be the top hierarchy level
Summarization Hierarchy Report: Selection Status Profile
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• IMG Transaction BS42• Controlling Product Cost Controlling Info System Cost
Object Controlling Settings for Summarized Analysis/Order Selection Define Status Selection Profiles
• This screen allows you to maintain selection profiles• You can select orders based on order status
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Summarization Report: Selection Status Profile
• Select an existing selection profile, and double-click on Selection conditions on the left to display profile details
• This example results in the selection of orders with a status of:• Confirmed• Delivered• Not technically completed
Summarization Hierarchy Report: Data Collection
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• You populate the summarization hierarchy dataset: data collection
• Transaction KKRC Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Information System Tools Data Collection For Summarization Hierarchy
• You normally run data collection following period-end closing for the current and previous period since data can change within open financial periods
Summarization Hierarchy Report: Run Report
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• Following data collection you run summarization reports• Transaction KKBC_HOE
Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Order Information System Reports for Product Cost by Order Summarized Analysis With Defined Summarization Hierarchy
• You can run the report with:• Cumulated period range to display all costs• Limited period range to improve performance
Summarization Hierarchy Report: Report Analysis
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• The hierarchy levels we defined in configuration are displayed:• Plant (0021), Order type (RM01 and ZP01)
• To display Target, Actual, and Variance columns, choose:• Settings Layout Choose
• Actual debit for all orders of order type is 3,317.24
Summarization Hierarchy Report: Single Objects
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• To see details of orders reporting to node RM01 click the node• Choose from the menu bar: Goto Single Objects
• Variance column is sorted in descending order• This provides visibility to orders with large variances
• An advantage of the single objects report is that it is presented in the user-friendly ALV (ABAP list viewer) format, which allows you to sort, sum, and filter values, as well as rearrange columns
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Alternate Summarization Hierarchies
• Summarization reporting allows you to create multiple hierarchies
• Previously, we chose plant and order type as hierarchy levels• You can create hierarchies with an additional level of order
and see the details directly in the results screen• Long runtimes can occur if order number is set as a hierarchy level
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
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Detailed Reports
• You often drilldown to detailed reports from summarized reports• You can also display detailed reports directly if you know the
material or production order to be analyzed• You typically run a detailed report directly if you identify a
material with large variances during variance analysis• You can’t drilldown to line item details from the variance
calculation results screen, instead:• Take note of the material or production order number and run this
report to drilldown to line items and source documents
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Detailed Reports — Use
• Detailed reports provide:• Cost element details by row• Target, actual, and variance by column for a production order
• Display costs for one or many periods, or for all periods• The cost element rows can be grouped together by similar
business transactions, such as confirmations and goods issues• This style of report is useful when analyzing order variance
• You search for the cost element with the largest variance and drilldown to line item details
• You then sort the line item list and double-click on the line item with the largest value to display the source document• Source documents contain all the information needed to find the
cause of the largest variances
Run Detailed Report
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• Transaction KKBC_PKO Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Information System Reports for Product Cost by Period Detailed Reports For Product Cost Collectors
• You can display costs for one period, a range of periods, or cumulated costs for all periods• Fill in the fields and click on the execute icon
• Run transaction KKBC_ORD for production or process orders
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Detailed Report Analysis
• You are presented with a detailed report• Rows are cost elements• Columns are total target and actual costs and variance
• Sort a column in descending order, and double-click on the row containing the largest value to:• Display line item details as shown on following slide
Drilldown to Line Items Report
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• Quantity column is sorted in descending order
• This provides visibility to confirmations with the largest time bookings
• By double-clicking on a line, you can drilldown to individual activity confirmations• Analyze the reasons for confirmations with the largest
quantity
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
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Line Item Reports
• You can drilldown to line item reports from summarized analysis and detailed reports• This is useful since there can be a large number of line items• Detailed reports group together line items for production and
management accounting reporting• Analyzing a detailed report for a production order and drilling
down on the cost element with the largest variance is a more efficient method of variance analysis than searching through many line items directly• However, if you are in a situation where you need to display
line items directly, let’s look at the procedure
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Run Line Item Report
• Transaction KRMI (product cost coll.), KOB1 (production order)• Accounting Controlling Product Cost Controlling Cost
Object Controlling Product Cost by Period Information System Reports for Product Cost by Period Line Items Product Cost Collectors Actual Costs
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Report Analysis
• When displaying line items directly, restrict the posting date range to avoid long runtimes since there can be many line items
• Restrict posting date range initially, then gradually increase• Fill in the fields, and click on the execute icon
• Sort line item lists by Value in reporting currency or quantity• Analyze lines by double-clicking to display source document
• For confirmation line items, activity confirmations• For goods receipts and goods issues, material documents
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
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Production Order Reports
• Order Information System• Display a simple list of production orders
• Order Selection• Display an order list with cost information displayed in
columns
Order Information System
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• A tool for shop floor control and process industries with reporting functions for production orders, planned orders, and process orders• You can, for example, display all production orders within a
time frame and group the information according to order or operation
• You can use this list to identify individual production orders, which may require separate variance analysis
Run Order Information System Report
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• Transaction COOIS (production orders), COOISPI (process orders) Logistics Production Shop Floor Control Information System Order Information System
• Selection tab provides many options, which allow you to display a list of objects:• Order headers, status, or area of responsibility
• MRP controller, production supervisor, etc.
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Run Order Information System Report — List
• The List field defaults to Order Headers, which you can change by clicking in the field and making a selection from the drop-down list• Scroll down the list of possible entries to view more objects• Create and save your own variant by clicking the save icon
Report Analysis
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• Click on an item in the Order or Material fields, and then click on either the pencil or glasses icon to navigate directly to the corresponding edit or display screens• You can display a full list of standard ALV icons such as sort,
total, and filter, by clicking the right-pointing arrow icon• Display production orders with deletion flag status by
selecting the With Deletion Flag/Indicator checkbox• Orders with status DLFL or DLT do not appear on the results screen
without this checkbox selected
Order Selection Report
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• Transaction S_ALR_87013127• Accounting Controlling Product Cost Controlling Cost
Object Controlling Product Cost by Order Information System Reports for Product Cost by Order Object List Order Selection
• Limiting the reporting time frame in the From and To Period fields specifies the periods from which key figures can be read• This does not affect the orders selected
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Order Selection Report — Order Category
• More selection fields are available than shown in the initial screen• Click the plus sign icon to display all selection fields
• Page down to display additional fields• Click in the Order category field
• Press F4 to display the list of order category possible entries as shown on the next slide
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Order Selection Report — Order Type
• You can further restrict the results screen by Order Type• After you choose an Order category, the possible entries for
Order Type are restricted to order type by order category• For example: Production Order
• You can then enter your order type in the first selection screen without expanding the selection list
Report Analysis
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• You can display the variance columns shown below by clicking the highlighted change layout icon third from right• Select the variance categories on the right of the change
layout dialog box, click the left-pointing icon, and press Enter• Values in this user-friendly ALV report can be sorted, totaled,
and filtered to highlight orders with the largest variance
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
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Cost Center Reports
• Standard cost center reports provide cost center managers and users with a quick and efficient method to analyze plan and actual cost center costs and variance
• Costs are posted in real-time and reported at the cost element level
• You can drilldown directly to line items and source documents
Run Cost Center Reports
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• Transaction S_ALR_87013611 Accounting Controlling Cost Center Accounting Information System Reports for Cost Center
Accounting Plan/Actual Comparisons Cost Centers: Actual/Plan/Variance
• Run the report within Controlling Area, Fiscal Year, and Plan Version• Select a Cost Center Group or value(s), and click the execute
icon to display the report
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Run Cost Center Reports — Group
• Enter the standard hierarchy in the Cost Center Group field to display the standard hierarchy structure on the left as shown in the next slide• You determine the standard hierarchy with transaction
OKENN
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Report Analysis
• You can expand and click on any of the nodes on the left and display the corresponding cost information on the right
• Double-click on a cost in either the Act Costs or Plan Costs columns on the right to display the corresponding line item report
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Report Analysis — Line Items
• This example line item report corresponds to the actual costs of 158,035.00 for cost element 405000 in the previous slide
• You can double-click on any line item below to drilldown to the original source document
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Topics
• Overview of Controlling Reporting• Utilizing Summarized Analysis Reports• Evaluating What Detailed Reports Provide• Drilling Down to Line Item Reports• Getting the Most Out of Production Order Reports• Analyzing Plan vs. Actual Costs Using Cost Center Reports• Summary
Resources: Books
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• John Jordan, Production Variance Analysis in SAP Controlling (2nd Edition) (SAP PRESS, 2011)• ISBN-10: 1-59229-381-0 (978-1-59229-381-0)• www.sap-press.com/products/Production-Variance-Analysis-in-
SAP-Controlling-%282nd-Edition%29.html• John Jordan, 100 Things You Should Know About Controlling with
SAP (SAP PRESS, 2010)• ISBN-10: 1-59229-341-4 (978-1-59229-341-4)• www.sap-press.com/products/100-Things-You-Should-Know-
About-Controlling-with-SAP• John Jordan, Product Cost Controlling with SAP (SAP
PRESS, 2008)• ISBN-10: 1-59229-167-0 (978-1-59229-167-0)• www.sappress.com/product.cfm?account=&product=H2932
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Resources: Online Documentation
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• http://help.sap.com• SAP ERP SAP ERP Central Component (select version)
SAP ERP Central Component Financials Controlling (CO) Product Cost Controlling (CO-PC) Cost Object Controlling (CO-PC-OBJ) Product Cost by Order Cost Object Controlling: Information System Information System for Product Cost by Order
• http://help.sap.com• SAP ERP SAP ERP Central Component (select version)
SAP ERP Central Component Financials Controlling (CO) Product Cost Controlling (CO-PC) Cost Object Controlling (CO-PC-OBJ) Product Cost by Period Cost Object Controlling: Information System Information System for Product Cost by Period
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Seven Key Points
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• Controlling involves analyzing the costs of running a company• Product Drilldown reports use predefined hierarchies• Summarization hierarchies allow you to define your own
alternate hierarchies• Detailed reports are useful for variance analysis; they provide:
• Cost element details by row• Target, actual, and variance by column for production orders
• Drilldown to line items from summarized and detailed reports• Use the production order information system to identify
individual production orders that may require variance analysis• Standard cost center reports provide you with a quick and
efficient method to analyze plan and actual cost center costs
Disclaimer
SAP®, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP® products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. ERP Corp is neither owned nor controlled by SAP.
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