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SAP Fiori Apps for Variance Analysis in Manufacturing

TomKingSince the introduction of SAP S/4HANA, there have been many functional improvements in SAP Controlling including:

 - Cost elements are now part of general ledger accounts.

 - SAP Material Ledger has been streamlined and improved.

 - Account-based CO-PA has become Margin Analysis with improvements to make it preferable to costing-based CO-PA.

One area that has lagged behind in innovations is Controlling in manufacturing. This included the management of variances at cost center and manufacturing order levels. As of AnyPremise release 2020, there is still no way of viewing target costs based on activity postings at the cost center level without using older reports such as S_ALR_87013625 Cost Centers: Actual/Target/Variance. These reports are not fully tied to the universal journal tables. The actuals in ACDOCA are only indirectly accessed and the planning table ACDOCP not at all. They instead rely on traditional cost center planning with transactions KP06 and KP26.

Controlling manufacturing order variance is improved with two new Fiori apps with enhanced views of variance at the order and work center levels:

  • Production Cost Analysis (ID F1780)
  • Analyze Costs by Work Center/Operation (ID F3331)

The Production Cost Analysis app shown in Figure 1 replaces the Order Selection Report S_ALR_87013127. A list of orders is displayed with target costs, actual costs, and variances. You select the primary report filters to display a summary of order costs as shown.

TKing fig1

Figure 1 : Production Cost Analysis - Summary View

Drill down into an item to display order detailed costs. This view is similar to order detail report KKBC_ORD. Click on > to switch to an individual order. Figure 2 displays one of the available report layouts for order 1003133. You can group costs by G/L Account, business transaction, and cost component. A special view displays order WIP.

 TKing fig2

Figure 2: Production Cost Analysis - Order Details

This app uses universal journal actual and target order costs.

S_ALR_87013127 and KKBC_ORD use summary tables COSS and COSP.

Actual costs are from ACDOCA.

Target costs are from ACDOCP with a plan category to define the purpose of the plan data. In cost center planning, one plan category is assigned to actual cost center plans, while others represent forecast plans. Two plan categories are for manufacturing orders: PLANORD01 and PLANORD02.

PLANORD01 plan values use the order preliminary cost estimate, generated during order creation. Order target costs are calculated based on this plan and represent expected costs using the bill of materials and routing task list assigned to the order during creation. When the order is processed, variances using these targets represent manufacturing performance. These differences correspond to variance calculations for Target Cost Version 1.

PLANORD02 costs are based on the standard cost estimate, and differences from targets represent total variances for the order. This is similar to Target Cost Version 0 view in previous reports.Total variances are relevant for settlement.

Target costs are calculated from ACDOCP regardless of order status. For previous reports relying on summary tables, target cost calculation is only performed on orders not processed by the variance calculation transaction KKS1. Once this is processed, target costs are set and will not change until you run variance calculation next. This can lead to issues interpreting variance data if activity occurs after VCAL status is set.

Immediate target calculations were only made for orders twithout VCAL status. Doing this for all orders results in increasing report time. Plan table ACDOCP and the speed of HANA allow targets to be recalculated when the report is executed.

Plan Category selection in the app determines the variance view shown. Figure 3 shows the two available options.

When you select Production Order Standard Costs, targets are calculated based on the standard cost estimate for plan category PLANORD02 in ACDOCP.

Production Order Plan Cost uses the preliminary order cost estimate values with PLANORD01.

TKing fig3

Figure 3: Selecting How Target Costs are Calculated

Order Status is important to understand the differences that show up in the report:

Open status refers to orders which are released (REL) but not fully delivered (DLV) or technically complete (TECO). Differences for these orders are work in process (WIP).

Closed status orders are either DLV or TECO and differences represent variances.

Order Status selection narrows the list to either open or closed orders.

You can also select both open and closed status to display all orders. The report displays order status.

This app's simplifications are laudable, but they also tend to limit the ability to effectively use this report. A goal for using these reports is to restrict the amount of information to display only actionable items.

One of the features of the SAPGUI Order Selection Report is the ability to use a specific status selection profile to define a range of order status which will include or exclude certain orders from the report. For example, once an order reaches CLSD status, there should be no further need to include this order in variance reports. This can be done using transaction S_ALR_87013127 and status selection profiles, but not with the Production Cost Analysis app. There are also other features of the Order Selection Report which have not yet made it into the Production Cost Analysis app that would be useful for limiting which orders show up on the report. In general, the new app is great, but it does not replace all the functionality of the older report, and, if properly configured, the older report could provide more actionable information.

The best new enhancement for managing production variances is the Analyze Costs by Work Center/Operation app.There is no equivalent for this app in ECC, and this provides a level of information that was difficult to achieve before. This app uses the the universal journal design and the speed of HANA to provide variance management at the work center level. This report contains chart and tabular report sections, and these are both displayed when the app is first executed as shown in Figure 4.

TKing fig4

Figure 4: Analyze Costs by Work Center/Operation Initial Report Window

You can expand each section display more information. The chart section is useful for comparing the performance of the different work centers to help identify the areas which need to be reviewed in more detail. Multiple different measures can be assigned to the chart for different analysis purposes. Although these examples use bar charts to display the data, many other representations can be selected, including pie charts, stacked bar charts, line charts, and scatter charts. A bar chart view comparing plan/actual debit variances with target/actual debit variances by work center is displayed in Figure 5.

TKing fig5

Figure 5: Analyze Costs by Work Center/Operation Chart View

The tabular report, as shown in Figure 6, details details of costs incurred at each work center based on both activity posting and material goods issues. Component allocations in routes and recipes determine how goods movements are assigned to specific work centers, and these goods issues are displayed along with the activity postings at the work center level. Production managers now have a view of performance at the work center level and can use this information to find areas that need the most attention. Figure 6 shows the Work Center Summary view. You can select other views to highlight the data in different ways.

TKing fig6

Figure 6: Analyze Costs by Work Center/Operation Tabular View

Like the Production Cost Analysis app, you select the plan category when you execute the report, which allows you to use order-based targets rather than financial targets for analysis. The data is cumulative for a fiscal period, and the results of corrective actions may not be apparent until the next period. However, having the ability to aggregate this data by work center is useful for a production manager and opens up new possibilities to control the manufacturing environment.

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