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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION

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SAP Implementation

Business BlueprintControlling

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONDOCUMENT APPROVALS

Mr.Mahapatra. KCore Team Member- BEL

Mr. Venkataramana.KFunctional Consultant-1

Date

MrRamesh Babu MFunctional Consultant-2 Date

Mr. Venkata Swamy. VFunctional Consultant-3

Date

Mr. Yogesh KulkarniProject Manager - Wipro

Date

SriR.P. S.Gahlaut Date

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DOCUMENT CONTROL SHEETGENERAL INFORMATION

Project name Document name Document locationBEL SAP Implementation

DOCUMENT INFORMATIONVersion Filename Date Author Reviewed Changes from previous version

byV 1.0 Controlling

REFERENCE DOCUMENTS

Document ReferenceVersion

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List of Business process covered in this Document:

Contents:SLNO Process Code Process Description Status Remarks01 B01- CO- 010 Cost Element Master02 B01- CO- 011 Cost Element GroUI203 B01- CO- 012 Cost Center Master04 B01- CO- 013 Cost Center GroUI205 B01- CO- 014 Activity TYl2es06 B01- CO- 015 Activity TYl2eGroUI207 B01- CO- 016 Statistical Key Figures08 B01- CO- 017 Statistical Key Figure GroUI209 B01- CO- 018 Cost Center Planning10 B01- CO- 019 Internal Order11 B01- CO- 020 Internal Order GroUI212 B01- CO- 021 Profit Center Accounting13 B01- CO- 022 Profit Center Standard Hierarchy /GroUI2.14 B01- CO- 023 Planning & Budgeting - Prel2areInitial Plan15 B01- CO- 024 Review Draft I2lan16 B01- CO- 025 Set-UI2 Plan Costs for PlanOverheads17 B01- CO- 026 Allocate Plan Overhead Cost18 B01- CO- 027 Calculate Planned Activity TYl2ePrices19 B01- CO- 028 Review Preliminary Plan20 B01- CO- 029 Finalize Plan & Budget21 B01- CO- 030 Set-UI2 Cost Allocation for Actual

Overhead Costs.22 B01- CO- 031 Allocation of Actual Overhead Costs.23 B01- CO- 032 Product Costing.

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ORGANIZATION STRUCTUREConsidering the modules to be implemented for BEL, the following Controlling organizationalstructureControlling areaThe controlling area is the highest organizational unit in Controlling. BEL Controlling Area shallbe 1000. There shall be only one Controlling Area across all company codesAll company codes of BEL shall be attached to Controlling Area - 1000 with single Chart ofAccounts - 1000 with single Fiscal Year Variant Z1Company Code: A company code is the smallest organizational unit for which complete,independent accounting can be carried out. This includes the entry of all transactions subject toposting and the creation of all items for legal individual financial statements, such as thebalance sheet and the profit and loss statement.As for BEL's organization, it is proposed that the assignment of company code to be carried outas follows:Company Name Company CodeCorporate 1000Bangalore 1100Chennai 1200Ghaziabad 1300Hyderabad 1400Kotdwara 1500Machilipatnam 1600Navi Mumbai 1700Panchakula 1800Pune 1900

All the company codes will be using INR as the Controlling Area and Company Code currency ..Inter-company automatic posting function will be activated for BEL as all companies willmaintain their full set of accounts in the same client.

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Chart of AccountsA chart of accounts is a placeholder where all the required GIL accounts can be defined. In thefirst place, the chart of accounts needs to be indexed so that it is possible to proceed with theGIL account management.As for BEL Organization, it is proposed that a single chart of accounts to be used for all thecompanies within the scope of implementation, as follows:

Chart of accounts for BEL group 1000Chart of Accounts Description Chart of Accounts

Table: - Charts of Accounts

Fiscal YearFiscal year definition is configured to ensure any posting or transactions to be captured in thecorresponding accounting period. Additionally, a fiscal year definition is the basis fordetermining posting periods as well as audit adjustment periods.A fiscal year variant is used to define the fiscal year. In short, the definition of a fiscal yearIt is recommended for BEL requirements to use the following fiscal year variant.Fiscal Year Variant

Fiscal Year, 4 special periodsDescription

Z1Table: - Fiscal Year

Cost Center! Profit Center Standard Hierarchy shall be 1000.Standard Hierarchy means a tree structure representing all cost centers belonging to acontrolling area from a Controlling perspective.You can combine cost centers into cost center groups. You can then create cost centerhierarchies from these groups by combining the groups according to decision-making area, areaof responsibility, or management area.A cost center hierarchy comprises all cost centers for a given period and therefore representsthe whole enterprise. This hierarchy is known as the standard hierarchy.To create cost centers, you need to define a hierarchical cost center structure (cost centergroup). In Cost Center Accounting, this structure is known as the standard hierarchyYou can display and edit organizational units in your standard hierarchy assignment and therelated master data.

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Data Migration ConsiderationsThis section summarizes the type of data, within this module, that is envisaged to be convertedfrom the legacy systems to SAP R/3 and the envisaged method of conversion. This section isnot intended to detail or document the data conversion strategy.Data to Master I Estimated Conversion MethodConvert Transaction Volume(active)GL Master Master To be SAP Standard program.Record ConsideredGL Balances Transaction To be SAP Standard program.(BS & P+L) Considered

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Broad Processes covered in Controlling Module are:1. Cost and Revenue Element Accounting2. Cost Center Accounting3. Internal Orders4. Profit Center Accounting5. Planning & Budgeting6. Product Costing

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONReports and FormsThis section summarizes the inventory of reports and forms identified within this module asbeing required and the envisaged method of report generation. It should be noted that standardSAP R/3 reports should be used wherever possible.No Report I Form Name Frequency Method RemarksCurrent Reports / Forms1. KA23 - Cost Elements: Adhoc Standard reportMaster Data Report2. KS13 - Cost Centers: Adhoc Standard reportMaster Data Report3. KOK5 - Internal Adhoc Standard reportOrders: Master DataReport4. KAL7 - Overview of Adhoc Standard reportCost Flows5. KALR - Reconciliation Adhoc Standard reportl.edqer: CO Line Items6. Plan/Actual cost Adhoc Standard reportComparisons7. TargeUActual cost Adhoc Standard reportComparisons8. Planning Reports Adhoc Standard report9. Profit Center Adhoc Standard reportComparison: Returnon Investment10. Profit Center: Adhoc Standard reportStatistical Key Figures11. KE31 - Create Adhoc Standard reportProfitability Report12. KE91 - Create Report Adhoc Standard reportBased on Line Items13. KE94 - Define Forms Adhoc Standard reportfor Reports Based onLine Items14. Analyze Costing Run Adhoc Standard report15. Detailed Reports For Adhoc Standard reportMaterial16. Material Cost Estimate Adhoc Standard reportvs. Preliminary OrderCost Estimation17. Reports for Product Adhoc Standard reportCost by Period18. Reports for Product Adhoc Standard reportCost by Order19. Cash Flow Adhoc Standard report20. Actual Costing/Material Adhocl.edqer

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONCost and Revenue Element Accounting:Cost elements classify an organization's valuated consumption of production factors within aControlling area. A cost element corresponds to a cost-relevant item in the chart of accounts.We distinguish between primary cost and revenue elements and secondary cost elements.Primary CosURevenue Elements:A primary cost or revenue element is a cost or revenue-relevant item in the chart of accounts,for which a corresponding general ledger (GIL) account exists in Financial Accounting (FI). Youcan only create the cost or revenue element if you have first defined it as a GIL account in thechart of accounts and created it as an account in Financial Accounting. The SAP Systemchecks whether a corresponding account exists in Financial Accounting.Secondary Cost Elements:Secondary cost elements can only be created and administrated in cost accounting (CO). Theyportray internal value flows, such as those found in internal activity allocation, overheadcalculations and settlement transactions.When you create a secondary cost element, the SAP System checks whether a correspondingaccount already exists in Financial Accounting. If one exists, you can not create the secondarycost element in cost accounting.Cost Element Categories:The cost element category has a technical control function. It determines whether you canpost to a cost element directly or indirectly.Direct posting means: You post a fixed amount to an account by specifying the accountnumber. You can post directly to all primary cost elements.Indirect posting means: The R /3 System determines the account automatically at the time ofposting You can not enter the account number with the posting transaction. You can only postindirectly to secondary cost elements.

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 010Sub-Process: Cost Element Master

Current Scenario I AS IS:SRNO Activity Input Output

CO-01-01 Presently GL account is treated as Cost GL Account Cost ElementsElements. Ref: - GIL master Creation.

SAP Scenario I TO BE Process:Step Ref Procedures T.Code Input Output

1. CO-01-01 Creation of Primary Costl KA01 Validity period, PrimaryRevenue Element Cost element Cost!name, revenueCost element Elementcategory will becreated2. Creation of secondary cost KA06 Validity period, Secondaryelement Cost element Cost!name, revenueCost element Elementcategory will becreated

BenefitsNew functionality for BELGap Analysis

NIL

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801- CO- 011Sub-Process: Cost Element Group


CO-02-01 Cost element are grouped the labourand OverheadsCO-02-02 Major Groups are1. Labour and Overheads.2. Material Overheads3. Non-Manufacturing Overheads.4. Development & EnqineerinqCO-02-03 This grouping is done by Finance Dept.

SAP Scenario I TO BE Process:Organizational unit storing a group of cost elements. Cost elements with similar characteristicsmay be grouped together in cost element group. You can define any number of cost elementgroups for valuation, planning and allocation purposes as part of master data maintenance.You can also arrange cost element groups in further cost element groups, creating a costelement hierarchy.Request for a Cost Element Grouping: These groups could be used for consistency and ease ofuse in reporting, planning, allocations, etcChanging of Cost Element Group: This process is for changing a Cost Element Group. Thisallows for values to be added or deleted from the group, or for other groups to be added ordeleted from the cost element group (when the group is a hierarchy).Display a Cost Element Group: This process is for displaying a Cost Element Group. Thiswould apply to a Standard Hierarchy or an Alternative Hierarchy. This allows for various costelement groups to be viewed along with their values.

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Step Ref Procedures T- Input OutputcodeCO-02- Cost Cost01& Creation of Cost Element KAH1 Element ElementCO-02- Group Group Group is02& Name, createdCO-02- Controllin03 g AreaChanging of Cost Element Cost CostGroup KAH2 Element elementGroup group isName changedControlling AreaDisplay a Cost Element Group Cost CostKAH3 Element elementGroup group is

Name displayeControllin dg Area

Gap Analysis

No Gaps

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COST CENTER ACCOUNTINGYou use Cost Center Accounting for controlling purposes within your organization. Cost CenterAccounting lets you analyze the overhead costs according to where they were incurred withinthe organization.Cost Centers enables you to valuate semi-finished and finished products in Product CostControlling (CO-PC), and to calculate contribution margins in Profitability Analysis (CO-PA). The"activities" of cost centers represent "internal resources" for business processes in Activity-Based Costing.The costs of each cost-accounting-relevant business transaction portrayed in the R/3 Systemcan be assigned through Cost and Revenue Element Accounting to an account assignmentobject in the Controlling component (CO).For overhead costs this can be cost centers, internal orders, business processes, or overheadprojects.Recording and assigning overhead costs allows you to control costs and prepare information forthe subsequent areas of Cost Accounting.You can use the methods of activity allocation, assessment or distribution to further allocateCosts.

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801- CO- 012Sub-Process: Cost Center Master


CO-03-01 Cost Centers are created based on the Fabrication, Cost Centersfunction e.g.: - Fabrication, Assembly, Assembly,Testing, Finance, and HRD.Etc. Testing,Finance, andHRD ... Etc.Details &approval fromFinance dept

SAP Scenario I TO BE Process:Cost Center master Creation: A cost center is an organizational unit within a controlling areathat represents a clearly delimited location where costs occur. You can make organizationaldivisions on the basis of functional, settlement-related, activity-related, spatial, and/orresponsibility-related standpoints.You use cost centers for differentiated assignment of overhead costs to organizational activities,based on utilization of the relevant areas and for differentiated controlling of costs arising in anorganizationMaster data determines the structure of the given application component in the SAP Systemand remains essentially unchanged in a live system, that is, in the current settlement periods.The system displays the master data fields on different tab pages on the basic screen. Afterinitial entry, the system displays the basic data tab page, which is ready for input. On this tabpage, the system generally displays all fields that need to be edited.You can edit more fields by selecting the appropriate tab page. You can use push buttons on thetab pages to go from one maintenance transaction or display transaction to another

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Step Ref Procedures T.Cod Input Outpute1 CO-03-01 Cost Center Master Creation, KS01 Cost Center, Desiredchange, display, delete, display Valid From/To, Costchanges Name, CenterCost Center Master isCategory, createdPersonResponsible,

Company Code,HierarchyArea,

Gap Analysis

No Gaps

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801- CO- 013

Sub-Process: Cost Center GroupCurrent Scenario I AS IS:

SRNO Activity Input OutputCO-04-01 Cost centers are majourly grouped as Cost centers, Cost centersProduction, Material, Sales ... Etc Grouping Groupeddetails,

Approval fromFinance dept.CO-04-02 Under this major groups further subgroups are there like under production

Fabrication, Assembly, Testing ... etcSAP Scenario / TO BE Process:You can collect cost centers according to various criteria into groups. This enables you to usecost centers to depict the structure of the organization in the SAP System.You can use the groups to build cost center hierarchies, which summarize the decision-making,responsibility, and control areas according to the particular requirements of the organization.The individual cost centers form the lowest hierarchical level.There must be at least one group that contains all cost centers and represents the entirebusiness organization. This cost center group is described as the standard hierarchy. You canassign more cost center groups to the standard hierarchy.Cost Center Group Creation: A Cost Center Group is an organizational unit storing a group ofcost centers. Cost Centers with similar characteristics may be grouped together in cost centergroup. You can define any number of cost center groups for valuation, planning and allocationpurposes as part of master data maintenance. You can also arrange cost center groups infurther cost center groups, creating a cost center hierarchy.Request for a Cost Center Group: - These groups could be used for consistency and ease ofuse in reporting, planning, allocations, etcYou can also create any number of alternative groups. You can structure these, for example,according to organizational and/or functional viewpoints. Cost center groups enable you toperform evaluations for each decision-making, responsibility, or control area. They also supportthe processes during planning and internal allocations

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Step Ref Procedures Code Input Output1 CO-04-01 & KSH1 Cost Center CostCO-04-02 Creation of Cost Center Groups Group, CenterControlling Group is

Area created

Gap Analysis

No Gaps

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ACTIVITY TYPESActivity types classify the activities produced in the cost centers within a controlling area.To plan and allocate the activities, the system records quantities that are measured in activityunits. Activity quantities are valuated using a price (allocation price).In Overhead Cost Controlling, costs based on the activity quantity of an activity type are postedseparately in fixed and variable portions. When you divide the activities of a cost center intoactivity types, you should consider whether the costs can be allocated effectively to the activitytypes.The prices of the activity types of a cost center can be either entered manually, or calculated bythe system based on the costs allocated to the activities. Prices can be calculated either usingplan costs or actual costs.

You can plan, allocate, and control costs either at the activity type level of a cost center, or atthe cost center level. You can enter actual costs at the cost center level. Costs entered at thecost center level are assigned using splittingYou can also assign the activity type of a cost center directly. This use was designed for certainapplication areas (such as personnel costs and depreciation postings).When the activities produced by a cost center are used by other cost centers, orders,processes, and so on, this means that the resources of the sending cost center are being usedby the other objects.Typical examples of activity types for cost centers are machine hours, administrator hours, CPUminutes or units produced.

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONReviewing changes made to activity type: - Activity types created in the system may requirechanges to correct errors made at the time of recording the master data or to update the datawith additional information. The following screens provide an internal audit trail to verify whatchanges were made, when, and by whom. To review changes made to activity type masterdata as a step in investigating other than expected results of activity type allocations

Step Ref Procedures T.Code Input Output1 CO-05-01 Creation of Activity types KL01 Controlling Area, Create& Activity Type Activity TypeCO-05-02 Beginning Basic Screenand endingdates.2 Change Activity Types KL02 Controlling Area Activity TypesActivity Type changed3 KL03 Controlling Area DisplayDisplay Activity Types Activity Type Activity TypeBasic Screen4 Deleting an activity types in total or KL04 Controlling Area Delete Activityfor a given period of time. Activity Type Type BasicScreen5 Reviewing changes made to KL05 Controlling Area Reviewactivity types Activity Type changes toactivity type

Gap Analysis-- NIL --

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801- CO- 015Sub-Process: Activity Type Group


CO-06-01 New Process in SAP

SAP Scenario I TO BE Process:You can gather activity types with similar characteristics into activity type groups.You can use activity type groups to process multiple activity types in one business transactionwithin Cost Center Accounting. This is true for planning or assessment. During planning, forexample, you can display and plan multiple activity types in one transaction. You can also useactivity type groups during assessment (for example, assessment to specified activity typegroups).As with cost elements and cost centers, the SAP System enables you to create andadministrate activity type groups in parallel. For example, you can create separate activity typegroups for planning and allocation purposes. You can also define additional activity type groups,for purposes such as price analysis.Create Activity Type Groups: Use this transaction to create Activity Type groups. Activitytype groups are flexible structures and can be used in collective master data processing,reporting, allocations, and authorization objects. Each sub group represents a level ofsummarization. An Activity Type group is unique within a controlling area.There is a business need or desire to group activity types for processing and reportingrequirementsChange An Activity Type Group: - Use this transaction to change an Activity Type Group.When Activity Type Groups are changed both activity types and other activity type groups maybe added, revoked or re-assigned to the Activity Type Group being maintained. Activity typegroups are flexible structures and can be used in other activity type groups, collective masterdata processing, reporting, allocations, and authorization objects.Each sub group represents a level of summarization.Groups are unique within a controlling area. When deleting a group, notice that it is not deletedfrom the controlling area, its relationship to the next superior node is revoked

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONStep Ref Procedures T.Code Input Output

1 Creation of Activity Type Groups KLH1 Activity type Newdetails groupcreated2 Changing of An Activity Type KLH2 Activity type StructureGroup group, changed.Controlling area

3 Transaction to view an existing KLH3 Activity type group, None -Activity Type Group Key Data Displayonly

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 016Sub-Process: Statistical Key Figures

Current Scenario I AS IS:SRNO Activity Input OutputCO-07-01 New process in SAP

SAP Scenario I TO BE Process:You can define statistical key figures as either:

Fixed values -Key figures defined, as fixed values are valid as of the posting period, and in allSubsequent posting periods of the fiscal year. Totals valuesKey figures defined as Totals values are valid only in the posting period in which theyare entered.

Key figures defined as fixed values are valid as of the posting period, and in all subsequentposting periods of the fiscal year.You can create, change and display statistical key figures individually or collectively. Individualprocessing lets you process only one statistical key figure. Collective processing lets youprocess multiple statistical key figures simultaneously.

Change Statistical Key Figure: - The purpose of this script is to demonstrate how to change astatistical key figure. When you make changes to key figures of the category Fixed values, youmust enter a new fixed value. This new value is valid for all subsequent periods, until you enteranother new value. When you make changes to statistical key figures of the category Totalsvalues, you can first reset the values using reversed +/- signs, and then enter the new values.

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Step Ref Procedures T. Codel Input Output1 Creation of Statistical Key Figure KK01 Statistical key Newfigure, statisticalControlling key figure

area2 Change Statistical Key Figure KK02 Statistical key Statisticalfigure key figureControlling Changedarea3 Display Statistical Key Figure KK03 Statistical Statisticalkey figure key figure

displayed

Gap Analysis

-- NIL --

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801- CO- 017Sub-Process: Statistical Key Figure Group


CO-08-01 New Process in SAP

SAP Scenario I TO BE Process:You can gather statistical key figures into statistical key figure groups. You can use statisticalkey figures, or parts of them, when you need to process multiple statistical key figures in onebusiness transaction.Creation of statistical key figure Group: - When several statistical key figures have beencreated, a statistical key figure group may be necessary for reporting and monitoring thecontents of the group. For example, a statistical key figure (SKF) type group could becreated for all SKFs managed by Business Systems, all SKFs managed by HumanResources, etc. This will help assign responsibility for large numbers of SKFs.To create an organized way of monitoring statistical key figures by creating groups for skf's withuser defined similar characteristicsChanges To Statistical Key Figure Group: - To make changes to a previously createdstatistical key figure group. Enter the statistical key figure group name or click on downfacing area which opens a statistical key figure group selection box. Leave the radio buttonhighlighted to all nodes and click on the green check mark. Make your selectionfrom the drop down list for the statistical key figure group you wish to make changes to and clickon the green check mark to continueDisplay Statistical Key Figure Group: - To display a previously created statistical keyfigure group, enter the statistical key figure group name or click on down facing areawhich Opens a statistical key figure group selection box. Make your selectionfrom the drop down list for the statistical key figure group you wish to display and click on thegreen check mark to continue.

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONStep Ref Procedures T-code Input Output

1 Creation of statistical key figure Statistical SKFGroup KBH1 Key groupFigure, createdControllingarea

2 Changes To Statistical Key Figure KBH2 SKF Group SKFGroup details Changed3 Display Statistical Key Figure KBH3 SKF Group SKFGroup. details displayed

Gap Analysis

-- NIL --

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801- CO- 018Sub-Process: Cost Center Planning


CO-09-01 Only in proction cost centers the Production Resultstandard man-hour availability is Cost center analysis ofplanned. This is not in other cost centers details Cost centersCO-09-02 These details for standard hours areavailable in MRP II and maintainedIndustrial EnggDept.

SAP Scenario I TO BE Process:Cost center planning involves entering plan figures for costs, activities, prices orstatistical key figures for a particular cost center and a particular planning period. You can thendetermine the variances from these figures when you come to compare these plan values withthe costs actually incurred. These variances serve as a signal to make the necessary changesto your business processes.Cost center planning forms part of the overall business planning process, and is a prerequisitefor standard costing. The main characteristic of standard costing is that values and quantitiesare planned for specified timeframes, independently of the actual values from previous periods.You can take plan costs and plan activity quantities to determine the (activity) prices. Theseprices can be used to valuate internal activities during the ongoing period, that is, before theactual costs are known.Cost center planning has the following objectives:

To plan the structure of the organization's future operations for a clearly defined timeperiod. You should define performance targets and target achievement grades. Youmust consider the internal and external (market) factors affecting your organization. To control business methods within the current settlement period.This ensures that you keep as closely as possible to the plan. Iterative planning lets youadapt the target performance to reflect any changes in the organizational environment. To monitor efficiency after completion of the settlement period using plan/actual ortarget/actual comparisons. To provide a basis for the valuation of organizational activities, independent ofrandom fluctuations

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Cost Center PlanCost center planning consists of the following areas:

Planning of activity quantities and/or prices Planning of costs expected to be incurred Planning statistical key figures, which are used as the basis for the allocation of costs

Together with sales planning, cost planning is the starting point for sales and profit planning.Activity-Independent and Activity-Dependent Cost PlanningActivity-independent cost planning covers both primary and secondary costs, but does not referto a specific activity type. The opposite to this is activity-dependent planning.Activity-dependent planning of primary and secondary costs enables you to plan both fixed andvariable costs. You may require this functionality if your costing system uses flexible standardcosting based on marginal costs. It is also possible to carry out flexible standard costing basedon full costs or marginal costs.You can assign plan activity-independent costs to activity types using various rules, forexample, using equivalence numbers or your own splitting rules.

Step Ref ProceduresRef: Process: BOI-CO-023 for details

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 019Sub-Process: Internal Orders


CO-10-01 Here Internal Orders are called as work Work orderOrders. Types of Work orders are typesProduction, Capital, Standing, Tooling,Procurement, Development&Eng ineering.CO-10-02 This work orders are created by Request from WorklED/Planning dept at the request from the concern dept ordersconcerned and authorized by finance. with approval createdfrom finance

dept.CO-10-03 The work Orders are closed as per advice Work order Workof the lED (Industrial EnggDept) closing details ordersclosed

SAP Scenario I TO BE Process:Creation of Internal Orders: The Enterprise needs to collect and analyze actual and plannedcosts related to a specific project or event. The project/event will span several accountingperiods and all costs will be settled in the period they were incurred.Internal orders are objects in CO that collect actual and plan revenues and cost, statisticaland activity data. Data is collected in the order at the transaction level. Based on the order'spurpose, the values can be settled (periodically or all at once) to a final receiver such as acost center, general ledger account, work breakdown structure, asset, real estate object,another internal order, profitability segment, etc. The order's inflows as well as outflows canbe reported in the Internal Orders Information System. In the delivered reports, the user candrill down through the original documents to the line item.The order's purpose is defined in Customizing in the Order Type. An Internal Order masterrecord is created on the functional side and includes the attributes established in the order type.Use a statistical order to mange statistical detail with value detail posted to a cost center.Change Internal Order: - Internal orders are objects in CO that collect actual and planrevenues and cost, statistical and activity data. Data is collected in the order at thetransaction level. Based on the order's purpose, the values can be settled (periodically or allat once) to a final receiver such as a cost center, general ledger account, work breakdownstructure, asset, real estate object, another internal order, profitability segment, etc. Theorder's inflows as well as outflows can be reported in the Internal Orders InformationSystem. In the delivered reports, the user can drill down through the original documents tothe line item. The order's purpose is defined in Customizing in the Order Type. An InternalOrder master record is created on the functional side and includes the attributes establishedin the order type. Use a statistical order to mange statistical detail with value detail posted to

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONa cost center. This example demonstrates an internal order used to accumulate transactionsin real time and settle transactions to a cost center periodically

Step Ref Procedures Code Input Output1 CO-10-01 & Creation of Internal Orders: KOO1 Order Type, Short Text, InternalCO-10-02 & Company Code, OrderCO-10-03 Object Class, Currency, createdPlan-integrated order,Cat - Receiver type,

Receiver SettlementtypeL. Change Internal Order: KOO2 Internal Order Details Internal

Orderschanged2 To change the same field on Internal Order Details Internalseveral order master records: - Orders1. Using of Manual Collective KOK2 changedProcessing2. Automatic Collective KOK4Processing4 Display Internal Order: KOO3 Internal Order Details InternalOrders

Displayed

Gap Analysis

-- NIL --

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801- CO- 020Sub-Process: Internal Order Group

Current Scenario I AS IS:SRNO Activity Input OutputCO-11-01 Internal Orders are grouped based on Work Order Work Ordersthe nature of the orders. details createdLike Main equipment, Spares, Standingwork orders, Service, plant Work Orders.

SAP Scenario I TO BE Process:Internal order groups need to be created for use in collective processing and reportingInternal Order Groups can be created either by (a) specifying specific internal order numbers tobe included within a group, (b) a range of numbers that defines the group, or (c) a combonationof the two.Internal Order Creation: Internal order groups are very flexible structures and can be used incollective processing (master data and transaction), reporting, allocations, and authorizationobjects. Each sub group represents a level of summarization.Groups are unique within a controlling area.Change 10 Group: - Order groups as well as orders can be added, revoked or re-assigned here.Order groups are very flexible structures and can be used in other order groups, collectiveprocessing (master data and transaction), reporting, allocations, and authorization objects.Each sub group represents a level of summarization.When deleting a group, notice that it is not deleted from the controlling area, its relationship tothe next superior node is revoked. Delete a group by revoking its relationships to each superiornode

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1 CO-11-01 KOH1 Order group New10 Group Creation: Set ID groupcreated2 Change 10 Group: KOH2 Order group StructureSet ID changed.3 View 10 Group: KOH3 Order group DisplayKey-date

Gap Analysis

-- NIL --

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801- CO- 021Sub-Process: Profit Center Accounting

Current Scenario I AS IS:SRNO Activity lnnut OutnutCO-12-01 Production Divisions in a unit are treated Production PCA Creationas profit centers. Division details

CO-12-02 Profit center accounting is done Cost Ledger, PCAmanually by compiling data from cost GI Ncs, Calculationledger, GL and NMOH statement. NMOH details

SAP Scenario I TO BE Process:Creation of Profit Center: The master data in Profit Center Accounting is the structuralconcepts according to which data can be posted and analyzed in Profit Center Accounting.This master data includes any number of profit centers, a standard profit center hierarchy, adummy profit center for non-assigned postings, and, if desired, a number of alternative profitcenter hierarchies.The Enterprise contains Profit Centers at the lowest organizational unit that requires a fullIncome Statement. All actual and plan revenues are managed at the Profit Center level. Actualand plan costs are managed at the Cost Center level, and, through the assignment of one ormany Cost Centers to a Profit Center, an income statement can be produced.Use Profit Center assessments or distributions to allocate actual and plan revenues betweenProfit Centers. Costs may be allocated between Profit Centers; however, this may beconsidered a "top side" adjustment because an allocation between Profit Centers will not bereflected in the assigned Cost Centers.Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center isassigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to aControlling AreaChange of Profit Center: - The Enterprise contains Profit Centers at the lowest organizationalunit that requires a full Income Statement. All actual and plan revenues are managed at theProfit Center level. Actual and plan costs are managed at the Cost Center level, and, throughthe assignment of one or many Cost Centers to a Profit Center, an income statement can beproduced.Profit Center assessments or distributions are used to allocate actual and plan revenuesbetween Profit Centers. Costs may be allocated between Profit Centers; however, this may beconsidered a "top side" adjustment because an allocation between Profit Centers will not bereflected in the assigned Cost Centers.Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center isassigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to aControlling Area.

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Display of Profit Center: The Enterprise contains Profit Centers at the lowest organizationalunit that requires a full Income Statement. All actual and plan revenues are managed at theProfit Center level. Actual and plan costs are managed at the Cost Center level, and, throughthe assignment of one or many Cost Centers to a Profit Center, an income statement can beproduced.Profit Center assessments or distributions are used to allocate actual and plan revenuesbetween Profit Centers. Costs may be allocated between Profit Centers; however, this may beconsidered a "top side" adjustment because an allocation between Profit Centers will not bereflected in the assigned Cost Centers.Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center isassigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to aControlling Area.

Step Ref Procedures T.Code Input Output1 CO-12-01 & Creation of Profit Center KE51 Profit center, ProfitCO-12-02 Valid from Center(Valid) to, createdName,Person incharge,

Profit centergroup.2 Change of Profit Center: KE52 Profit center ProfitValid from Center(Valid) to ChangedNamePerson incharge

Profit centergroup3 Display of Profit Center KE53 Profit center ProfitInput - Required Fields: Valid from Center(Valid) to displayedNamePerson incharge

Profit centergroup

Gap Analysis-- NIL

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801- CO- 022Sub-Process: Profit Center Standard Hierarchy/Group

Current Scenario / AS IS:

SRNO Activity Inn"t n"tnlltCO-13-01 Data compilation for all these profit Profit center, Profit Centercenters are done manually Approval from hierarchyconcern dept createdProfit Center hierarchy is1. Unit wise: Under UnitA. SBUB. Divisions.

SAP Scenario / TO BE Process:

Creation of Standard Hierarchy/Group: - All profit centers must be assigned to the profitcenter standard hierarchy. This profit center standard hierarchy is created during the initialconfiguration of the SAP system. The standard hierarchy is defined with various nodes at thetop level. Additional nodes and sub-nodes may be added to this profit center standard hierarchyas required.The standard hierarchy is a profit center group, or tree structure, which contains all the profitcenters in one controlling area. The standard hierarchy usually corresponds to theorganizational structure used in Profit Center Accounting.The standard hierarchy consists of two types of nodes:

A profit center area is an end node in the structure which is not the top node. You canonly assign your profit centers to the end nodes of the structure. A summarization area groups together profit center data at a higher level. Each node ofthe standard hierarchy which is not an end node is a summarization area. You cannotassign profit centers directly to a summarization area. It merely groups together theprofit center areas and summarization areas which lie below it.In addition to the standard hierarchy for your controlling area, you can also create alternativeprofit center hierarchies -- so-called "profit center groups" -- for use in the information system,allocations and planning.

In contrast to the standard hierarchy, these profit center groups do not have to contain all theprofit centers in the controlling area. On the contrary, profit center groups let you select onlycertain profit centers and reorganize them to allow you more flexibility.

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Step Ref Procedures T.Code Input Output1 CO-13-01 Creation of Standard Profit StandardHierarchy/Group: KCH1 center Hierarchygroup created2 Change A Profit Center Profit ProfitHierarchy: KCH5N/ center CenterKCH2 group Hierarchychanged3 Display A Profit Center KCH6N/ Profit ProfitHierarchy: KCH3 center Centergroup Hierarchy

Displayed


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B01- CO- 023Sub-Process: Planning & Budgeting - Prepare Initial

PlanCurrent Scenario I AS IS:SRNO Activity Input Output

CO-14-01 Budget is prepared as per budget manual. RevenuelExp Initialization ofPrepares revenue and capital budget and this is enditure Budgetprepared for 3 years. details preparation1. Budget estimate for next year (BE) approach(At present, BE is prepared for 2006-07)2. Revised Estimate (RE)-Current year(At present, RE is prepared for 2005-06)3. Forecast (FC)- Year after next year(At present, RE is prepared for 2007-08)

CO-14-02 The budget exercise is bottom-up approach andprepared from division level to corp. levelCO-14-03 Revenue Budget: - Roll On Plan RevenueThe sales budget is prepared based on roll on details Budgetplan. This plan takes into alc the existing pending preparedorders from the customers and the anticipatedorders.Other budgets like purchase, Inventory,Manpower, revenue, R&D, FE, budget follows thesales budget.CO-14-04 In Capital budget is mainly divided into Project, Civil Capital Budget1. Project work prepared2. Augmentation Needs. DetailsPlant&Machinary, Test Instruments,Infrastructure, R&D3.Civil WorksNew Structures, Miscellaneous Works,

Town ship worksCO-14-05 Cash Budget Cash Flow Cash budgetProjected Cash flow is prepared i.e. Cash Budget prepared

SAP Scenario I TO BE Process:The planning and budgeting process starts with the setting of the overall planning parametersand ends with the approved plan and budget being distributed to the cost center managers. Thisprocess is sub-divided into 7 sub-processes as follows: Prepare initial planReview draft plan

Set-up plan overhead cost allocationsAllocate plan overhead costs

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION Calculate planned activity type pricesReview preliminary plan

Finalize plan and budgetSAP distinguishes between planning and budgeting. In SAP, planning is the bottom-up processof determining the level of expenses for each item of expenditures. Budgeting is the top-downprocess of setting the level of allowable expenditures for the cost center. Planning is byindividual account codes (cost elements). Budgeting is in total and at cost center level.SAP assists in the monitoring of the plan and budget. Hence all plan items are entered into thesystem. These planned items can then be cross allocated among the cost centers and internalorders in Controlling. The allocation rules for these cost centers and internal order costs can beset-up in the system to be applied consistently over the period of plan and among cost objects.At BEL, SAP will be set-up to support the planning and budgeting for the cost centers, profitcenters, activity types and internal orders.BEL proposes to capture plan and budget figures at individual cost center and profit centerlevels as well as at individual cost element level for planning. They would like to use Excel tosimulate and finalize the plan and budget figures and then upload the same into SAP. Theywould also like to directly do planning and budgeting in SAP by using previous year figures,whenever necessary.Prepare Initial PlanThis sub-process starts with the issue of the plan assumptions. These plan assumptions arecontained in a plan and budget package and provide the basis for the total company plan to bedeveloped. Typically the sales plan is developed for each strategic business unit and agreed.From these sales plan, the cost centers and profit centers plan can then be developed.This sub-process covers the preparation of the initial cost center, profit center and internal orderplans. The items to be planned are:Planning items Cost center Profit Center Internal

orderActivity independent costs Yes YesActivity dependent costs Yes -Activity independent activity inputs Yes YesActivity dependent activity inputs Yes -Activity independent statistical key figures Yes Yes YesRevenue Planning - Yes -Activity types scheduled, capacity and Yes -prices

Planning for each of these items is entered using input screens. These input screens arecontrolled by the planner profile. There is a generic profile SAPALL that can be used to plan forall these items. BEL intends to use the standard input screens as provided by the SAP system.The plan can be inputted into the SAP system manually, copied from historical data and re-valued or prepared in an external spreadsheet and uploaded to the system.

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1 CO-14-01 PREPARE INITIAL KP04 Plan and Set plannerTo PLAN: budget profileCO-14-05 Set planner profile assumptions2 Change statistical key KP46/7KE5/ Statistical key Allocation of

figures planning in CCA. KP46 figures, Plan Overheads toVersion, Cost cost centerscenters, Profitcenters3 Change cost element / KP06 Plan Version, Changes inactivity input planning Cost centers, activity inputProfit centers, planCost Elements.4 Change activity type / KP26 Plan Version, Using Activityactivity price planning Cost centers, typesProfit centers,Cost Elements,

Activity types5 Change cost element / KP06 Plan Version, Changing costactivity input planning Cost centers, elements/Profit centers, activity typesCost Elements,Activity types6 Change overall planning K012 Plan version, Over all plan

Internal orders Changed7 Change cost/revenue KPF6 Plan Version,element planning Cost centers,Profit centers,Cost Elements,

Activity types9 Copy planning K014 Historical Plan Copying planData12 Create plan revaluation KPU1 Historical Plan Plan

Data revaluation13 Plan revaluation KSPU SKF, Activity Initial plantypes prepared

Gap Analysis

-- NIL --

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801- CO- 024Sub-Process: Review Draft Plan

Current Scenario I AS IS:SRNO Activity Inout OutoutCO-15-01 Draft plan of the Budgets are reviewed Initial budget Approvedat division / SBU /Units. details budget fromboard ofdirectors.

SAP Scenario I TO BE Process:Cost centers: Planning overview: - SAP provides a transaction for viewing all the planned itemsfor the cost centers. However it only allows the viewing of a single cost center each time.Nevertheless it is possible to print out the plan for all cost centers using the 'Execute multipletime' function of this transactionSAP provides a transaction for viewing all the planned items for the internal order. However itonly allows the viewing of a single internal order each time. Nevertheless it is possible to printout the plan for all internal orders using the 'Execute multiple time' function of this transactionThe draft plan reports printed from work steps (1) and (2) are reviewed to identify error andadjustments.If no errors are detected and no adjustments are required, then the cost allocations of theseplanned cost center costs and internal order costs can commence.If errors are found, then the original plan entry needs to be changed.If there are many errors/changes, then the changes can be prepared in a spreadsheet anduploaded to the SAP system using the plan uploads programs provided. If there are only fewchanges, then the changes can be entered directly into the system

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Step Ref Procedures T-code Input Output1 CO-15-01 Cost centers: Planning KSBL Initial Plan Plan overview atoverview details cost centers

2 Orders: Planning overview KABL Initial Plan Plan overview atdetails internal orders

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 025Sub-Process: Set-Up Plan Costs for Plan Overheads

Current Scenario I AS IS:This sub-process is to set-up all the cost allocation templates required to allocate the costcenter and internal order costs as well as profit center revenues. SAP supports various cost andrevenue allocation methods. The most typical cost allocations used are:

Re-posting of cost center and internal order costs Distribution of cost center costs and profit center cost and revenues Surcharging of cost center and internal order costs Settlement of internal order costs Assessment of cost center costs and profit center cost and revenue Direct posting of profit center plan figures.

The re-posting of costs, distribution and assessment of costs and revenue are similar exceptthat cost (revenue) assessment uses an assessment cost element to record the allocation ofcosts (revenue) whereas cost re-posting and cost (revenue) distribution uses the original costelements to record the allocation of costs (revenue). The difference between cost re-posting andcost distribution is that the partner object is not captured in cost re-posting.

SRNO Activity Input OutputCO-16-01 New process in SAP

SAP Scenario I TO BE Process:Cost allocation is the transfer of costs among cost centers and internal orders. SAP provides thefollowing functions to assist in the cost allocations of cost center and internal order costs Periodic re-posting of cost center and internal order costs Distribution of cost center costs Settlement of internal order costs Assessment of cost center costsThe activity independent cost center costs for activity type producing cost centers also need tobe allocated to the activity types of the cost center. This is supported by the cost center costssplitting function of SAP.It is recommended that:a) Periodic re-posting be used as an aid to data entryb) Assessment be used for allocation of cost center and profit center costsc) Settlement with settlement cost element be used for internal order costs

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONStep Ref Procedures T-code Input Output1 Change cycle for planned periodic re- KSW8 Planned Changedposting overhead periodicdetails reporting2 Execute planned distribution cycle for cost KSVB Cost centers Distribution tocenter cost centers3 Execute planned d istri bution cycle for 4KEB Profit center Distribution toprofit center profit centers4 Change cycle for planned distribution for KSW8 Overheads Overheadscost center details distributed tocost centers

Change cycle for planned distribution for 4KE8 Overheads Overheadsprofit center details distributed toprofit centers5 Maintaining Costing sheet KZS2 Base value, Cost sheetSurchargerate, Credit

objects,Surchargecost elements.6 Planned overhead calculation: cost KSP4 Cost center Cost centercenters wise overhead wisedetails overheadscalculated7 Plan overhead calculation: internal orders KGP2 Internal order Internal orderwise overhead wise overheaddetails calculated8 Cost settlement of planned internal order K09E Planned Plancosts (Individual processing) internal order settlement

costs9 Create planned assessment cycle for cost KSU7 Assessment Plannedcenter cycle name, assessment

Validity period. cycle to costcenters.10 Create planned assessment cycle for 3KE7 Segmentprofit center identifier,Assessmentcost element,

Sender andreceiverinformation,statistical keyfigures, activityquantity andcosts.

11 Execute planned assessment cycle for KSUB Cycle Data Cycle Runcost center12 Execute planned assessment cycle for 3KEB Execution Cycleprofit center Processing

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION13 Change cycle for planned assessment for KSU8 Cycle Data Cycle Runcost center14 Change cycle for planned assessment 3KE8 Cycle Data Cyclecycle for profit center Processing15 Splitting of cost center costs to activity Splitting rules, Splittingtypes OKES

Cost structureassignment tosplitting rules

16 Assignment of cost center to splitting OKEW Cost centers Assigning tostructure cost centers

17 Planned cost splitting KSS4 Planned cost Setting up ofdetails planned coststo plannedoverheads

Gap Analysis

-- NIL --

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801- CO- 026Sub-Process: Allocate Plan Overhead Cost

Current Scenario I AS IS:SRNO Activity lnnut OutnutCO-17-01 New process in SAP

SAP Scenario I TO BE Process:The typical sequence for cost allocation is:

a) Periodic re-posting of cost center and internal order costsb) Distribution to cost center / profit center costs / revenuesc) Overhead cost surcharging for cost center and internal order costsd) Settlement of internal order costse) Assessment of cost center / profit center costs / revenuef) Splitting of cost center costs

However there may be circumstances where this sequence is not followed. In all cases, (e) and(f) should be the last two cost allocations.

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Step Ref Procedures T-code Input Output1 Execute planned periodic re-posting KSWB Internal Periodic re-orders, cost postingscenters

2 Execute planned distribution cycle for cost KSVB Cost center Plannedcenter costs & CostsrevenuesExecute planned distribution cycle for profit 4KEB Profit center Plannedcenter costs & Costsrevenues

3 Planned overhead calculation: cost centers KSP4 Planned over Overheadheads details surchargesof costcenter4 Plan overhead calculation: internal orders KGP2 Planned over Overhead

heads details surchargesof Profitcenters5 Plan settlement (Individual processing) K09E Settlement Plan

OH Data Settlement6 Execute planned assessment cycle for cost KSUB Cycle Data Assessmentcenter of costcenter /Execute planned assessment cycle for profit centerprofit center 3KEB costs /revenues7 Planned cost splitting KSS4 Planned cost Allocation of

details plannedoverheadcosts

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 027Sub-Process: Calculate Planned Activity Type Prices


CO-18-01 New process in SAP

SAP Scenario I TO BE Process:This sub-process is required to ensure that the quantities of activity planned and the pricescharged are proper. The quantities of activity types produced should be equal to the quantityrequired by the consuming cost centers and internal orders. The activity prices must beaccurate to ensure that all the cost center costs of the maintenance cost center are fullyabsorbed by the receiving cost centers and internal orders.This reconciliation is necessary to ensure that the quantity of activity types scheduled bythe maintenance (sending) cost centers matches the quantity consumed by thereceiving cost centers. Any variance between these quantities will lead to erroneoussystem calculated activity type prices. If mismatches are detected, the system willpropose the total activity consumed to be adopted as the scheduled level of activitytypes. If this is not acceptable, then adjustments are to be entered via Set-up Initial PlanThis price determination will result in activity types consumed being valued and chargedto the consuming cost centers. If the splitting of activity independent cost center costs to theactivity types of the cost center is omitted in the earlier sub-process (Allocate Plan Overheadcosts), then the system will automatically invoke this cost splitting before calculating the activitytype prices.

Step Ref Procedures T-code Input Output1 Plan reconciliation KSPI Quantity of Planned Pricesactivity typesscheduled bythe cost centers

2 Activity price calculation KSPI Pricing details Calculation ofplannedactivity typeprices


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801- CO- 028Sub-Process: Review of Preliminary Plan

Current Scenario I AS IS:SRNO Activity lnnut OutnutCO-19-01 Preliminary Budgets are reviewed atdivision I SBU IUnits ICorporate Office

SAP Scenario I TO BE Process:In this sub-process, the plan data entered and cost allocations performed in the previous sub-processes are reviewed to identify errors and adjustments required. If no adjustments arerequired, these plan reports may be presented to senior management for concurrence. If errorsare detected or the senior managers propose changes to the plan, then the previous sub-processes are used to make changes to the data entered and amend the cost allocationtemplates.This is an iterative process and may be re-processed until senior management is in fullagreement with the proposed plan. Multiple versions of the plan may be kept so as to keep trackof the changes made to the plan.

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Step Ref Procedures T- Input OutputCode1 The preliminary plan reports are reviewed N/A cost center,to identify error and adjustments. profit center

cost center,and internal

If no errors are detected and no order plansadjustments are required, then the cost profit centercenter, profit center and internal order and internalplans can be presented to the senior order plansmanagement team for review andconcurrence.If errors are found, then the original plan Reversal ofentry or the cost / revenue allocations need the originalto be changed. In the event that changes cost/to cost / revenue allocations are required, revenuethen a reversal of the original cost / allocationrevenue allocation is required.

2 The initial plan and budget are presented N/A - -to the senior management team forconsideration.3 Any revision request arising from the N/Apresentation to the senior management

team will be evaluated and the planadjusted accordingly.

Gap Analysis

-- NIL --

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B01- CO- 029Sub-Process: Finalise Plan & Budget


CO-20-01 Board of directors approves all finalbudgets based on the draft budget

SAP Scenario I TO BE Process:Once the proposed plan is agreed, it has to be transferred to the plan version '0' and lockedfrom changes. This is the 'active' plan version in SAP. The final plan and allocated budget isthen printed out and distributed to the cost center and profit center managers for theircompliance.Copy planning: - In SAP, plan version '0' is the active plan version. Hence the final cost centerplan has to be copied to plan version '0'.The entry parameters are: Source plan (version, plan period, and cost centers) Target plan (version '0', plan period and cost centers)Budget planning: - Once the final cost center plan has been copied to version '0', the allottedbudget can be entered against each cost center.Copy plan version - Internal orders: - In SAP, plan version '0' is the active plan version. Hencethe final internal order plan has to be copied to plan version '0'.The entry parameters are: Internal orders or internal order groups Source plan (version and plan period) Target plan (version '0' and plan period)Original budget: - Once the final internal order plan has been copied to version '0', the allottedbudget can be entered against each internal order.

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Step Ref Procedures T-Code Input Output1 Copy planning KP97 Source Plan, PlanTarget Plan Copying2 Budget planning KPZ2 Overall cost Budgetcenter budget planned3 Copy plan version - Internal orders K014 Internal Plan willorders, Source bePlan, Target CopiedPlan4 Original budget K022 Overall Finalinternal order Plan &budget Budget5 The reports on the cost centers, profit N /A - Reportscenters and internal orders plan andbudget are distributed to theresponsible managers.

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 030Sub-Process: Set-up Cost Allocation for ActualOverheads


CO-21-01 New process in SAP

SAP Scenario I TO BE Process:This sub-process is to set-up all the cost allocation templates required to allocate the costcenter and internal order costs. SAP supports various cost allocation methods. The most typicalcost allocations used are:

Re-posting of cost center and internal order costs Distribution of cost center costs Surcharging of cost center and internal order costs Settlement of internal order costs Assessment of cost center costs Assessment of profit center costs and revenues

In most cases the cost allocation methods used for the cost objects are the same for theplanned and actual costs. Indeed the same cost allocation template may be used on both theplanned and actual costs. However there is no restriction in the SAP system to enforce thesame cost allocation method for the planned and actual costs in the cost objects. Nevertheless,using different cost allocation methods on the planned and actual costs will make costcomparison between planned and actual difficult and inconsistent.Cost allocations are the transfer of costs among cost centers and internal orders. SAP providesthe following functions to assist in the cost allocations of cost center and internal order costs Periodic re-posting of cost center and internal order costs Distribution of cost center costs Overhead surcharging of cost center and internal order costs Settlement of internal order costs Assessment of cost center costsThe activity independent cost center costs for activity type maintenance cost centers also needto be allocated to the activity types of the cost center. This is supported by the cost center costsplitting function of SAP.Sender cost centers and their corresponding receiver cost centers have to be identifiedand allocation rules need to be defined and frozen.

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONIt is recommended that:

Periodic re-posting be used as an aid to data entry Assessment be used for allocation of cost center costs Settlement with settlement cost element be used for internal order costs

Periodic re-posting of actual cost centers and internal orders costsPeriodic re-posting allows for the costs posted to a central cost center to be transferred to othercost centers. This function is useful as a data entry tool for costs, which are allocated to costcenters and internal orders in a pre-set manner and formula.This function is typically used for entry of utility charges, telephone and insurance.Periodic re-posting can only be used to re-post primary costs.The entry parameters are: Periodic re-posting cycle name Validity periodFor each segment of the cycle, the required information are: Segment identifier and name Sender and receiver information Sender values Receiver tracing factor and rule Receiver weight-age factor (where appropriate)Allowable tracing factors are: Fixed amounts Fixed portion PercentageVariable factors (statistical key figures, activity quantity and costs)

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1 Create cycle for actual periodic re- KSW1 Periodic re-posting Allocationposting cycle name, CycleValidity period

2 Execute actual periodic re-posting KSW5 Posting Data Periodic Re-Posting3 Change cycle for actual periodic re- KSW2 Cycle Data All errors &posting Adjustments

Update toStep 24 Cost distribution of actual cost center KSV1 Distribution cycle Creation ofcosts name, actualValidity period distributioncycle5 Execute actual distribution cycle KSV5 Test run for Step 4 Ensuring noErrors6 Change cycle for actual distribution KSV2 Error details Clearing theerrors foundin Step 5

(If any)7 Overhead surcharging for cost centers KS02 Updating Changingand internal orders costs Overhead rate in cost centercost center8 Change internal orders K002 Updating the 'Costingsheet' field in theinternal order master.

9 Actual overhead calculation: cost KSI4 Test run for errors Errorcenters in cost centers detection10 Actual overhead calculation: internal KGI2 Test run for errors Errororders in Profit centers detection11 Maintain costing sheet KZS2 Over head details Cost Sheet12 Cost settlement of actual internal K002 Actual settlement, Changingorder costs Settlement, receivers, internal orderTracing factor,Validity period

Settlement type13 Actual settlement (Individual K08 Settlement rules Updatingprocessing) Settlement

rules14 Change internal order K002 Internal Order Re-testedInformation afterUpdating

Settlementrules

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION15 Cost assessment of actual cost center KSU1 Segment identifier Creatingcosts and name, actualAssessment cost assessmentelement, cycleSender and receiverinformation

Sender values,Receiver tracingfactor and rule,Receiver weight-age factor

16 Execute actual assessment cycle KCU5 Assessment Cycle ErrorInformation detection inAssessmentcycle17 Change cycle for actual assessment KSU2 Errors Rectificationof errors18 Splitting of cost center costs to activity OKES Splitting rules, Splitting

types Cost assignment to structuresplitting rules19 Assignment of cost center to splitting OKEW Identif ied splitting Cost splittingstructure of costs (costcenter wise)20 Actual cost splitting KSS2 Actual costsplitting21 Splitting structure OKES All errors and Rectificationadjustmentsidentified in step2022 Assessment of actual profit center 3KE1 Assessment cycle Create actualcosts and revenues name, assessmentValidity period cycle23 Execute actual assessment cycle 3KE5 Running Identifiedassessment cycle errorin test mode rectification24 Change cycle for actual assessment 3KE2 Actual cost details Setup costallocation foractual costs

Gap Analysis

-- NIL --

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATION801- CO- 031Sub-Process: Allocation of Actual Overhead Costs

Current Scenario I AS IS:SRNO Activity lnnut Outnut

SAP Scenario I TO BE Process:The typical sequence for cost allocation is:a) Periodic re-posting of cost center and internal order costsb) Cost distribution of cost center costsc) Overhead cost surcharging for cost center and internal order costsd) Settlement of internal order costse) Cost assessment of cost center costsf) Assessment of costs and revenues in profit center accounting

However there may be circumstances where this sequence is not followed. In all cases, (e) and(f) should be the last allocation cycles.Step Ref Procedures T-Code Input Output

1 Execute actual periodic re-posting KSW5 Cost centers periodic re-& Internal postingOrder costs2 Execute actual distribution cycle KSV5 Cost centers Reversing

& Internal CostOrder costs distributionsand re-runningif required.3 Actual overhead calculation - cost KSI4 Cost centers Overheadcenters Costs4 Actual overhead calculation - order KGI2 Internal order Handling overcosts headsurcharging ofinternal order

costs &processed in'Productionmode

5 Actual settlement (Individual K088 Internal Settlement ofprocessing). Order costs costs and errorrectification

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Easy Cost Planning and Execution Services Rapid cost planning without master data withinan ad hoc cost estimate

In order to carry out costing, Product Cost Planning accesses master data in other components,such as BOMs, routings, and work centers from Production Planning, and cost centers, activitytypes, and business processes from Overhead Cost Controlling. Conversely, you can make thecosting results available for other applications. For example, you can use the costing results toupdate the standard price in the material master and carry out material valuation using thisprice.Process Description Usage Transaction CodeMaterial Costing -Edit Costing Run Cost estimate formultiple materials

with BOM androuting

Is used to processmass data and iscreated automaticallyusing ProductionPlanning data(product costestimate)

CK40N - EditCosting Run

Material Costing -Cost Estimate withQuantity StructureCost estimate for amaterial with BOMand routing ormaster recipe

Is createdautomatically usingthe ProductionPlanning data(product costestimate)

CK11 N - CreateCK13N - DisplayCK33 - Compare

Mark/Release of Customer wants toStandard Cost Estimate Mark standard cost

estimateThis documentdescribes theprocedure to Mark astandard costestimate. Thistransaction will Markin the Future field ofthe costing view in thematerial master

CK20

Material Costing ~Price UpdateRelease of StandardCost Estimate

Transfer of CostEstimate Results tothe Material MasterRecordThis transaction willpost a new standardto the Current field ofthe costing view in thematerial master andupdate the Financialaccounting generalledger depending oninventory Chance.

CK24 - PriceUpdate

Material Costing - Cost estimate for aCost Estimate Without material without BOMQuantity Structure orIs created using datayou enteredmanually (unit

CKUC - EditMultilevel

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BHARAT ELECTRONICS LIMITEDSAP IMPLEMENTATIONrouting costing) or transferred KKPAN - Createfrom a non-SAP KKPBN - Changesystem KKPCN - Display

CK33 - CompareReference and Base Object Cost Is created using data CKUC - Edit BaseSimulation Costing Estimate that you enter Planning Object -manually (unit Multilevelcosting) KKE 1 - CreateBase PlanningObject

KKE2 - ChangeBase PlanningObjectKKE3 - DisplayBase PlanningObjectKKEB - RevaluateBase PlanningObject

Easy Cost Planning & Adhoc Cost Is created using a CKCM - EditExecution Services Estimate planning form Costing ModelEdit Ad hoc Cost (costing model that CKECP - Edit AdEstimate can access the Hoc Cost EstimateCost Estimate data in the SAPEdit Ad hoc Cost systemEstimateYou can use the costing run to process mass data. It enables you to cost, mark, and releasemore than one material at the same time.Every processing step involved in costing with quantity structure is performed by the costingrun, from the same screen.The cost of the material can be created for a number of reasons including margin analysis,make-buy decisions, and profitability analysis are among the most common. The costing viewidentifies values by material, activities and cost elements. The cost estimate with quantitystructure enables you to calculate the non-order-related cost of goods manufactured and thecosts of goods sold for products, based on the BOMs and routing in the Production Planningmodule. The system creates a quantity structure, which is the BOM and routing combination,using data from the PP master data. You determine what data is selected for costing by meansof the costing variant in Customizing for Product Cost Planning. The system valuates thequantity structure based on the valuation variant contained in the costing variant in Customizing.

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Step Ref Procedures T-Code Input Out Put1 Edit Costing Run CK40N Material cost,(To cost, mark, and release more than one Plant mark,material at the same time) Details andreleasemorethanonematerial

2 Procedure to cost a material CK11N Material CostCreate Plant EstimDetails ate3 This document describes the procedure to KKE1- cost Basecreate a Base Object Planning cost Create object Objecestimate., which can be used with access Base tto R/3 or a stand alone spreadsheet. You Planning Planncan enter a multilevel by entering a base Object ingcost object cost estimate. KKE2 - costChange estimBase ateFor change/ Display related Transactions Planningneed to be used. Object

KKE3-DisplayBasePlanningObject

4 This document describes the procedure to CK24 - Plant, Pricerelease a standard cost estimate. This Price Material Updattransaction will post a new standard to the Update details eCurrent field of the costing view in thematerial master and update the Financialaccounting general ledger depending oninventoryChange

Gap Analysis

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