Enhance Your Cost Estimates with Complex Logic Through the Use of Templates

  • by Daniel Svejda, Managing Consultant, Capgemini
  • April 15, 2007
Bills of materials and routings that most companies use as a basis for product costing build on the standard values per lot size manufactured. However, businesses often need to perform allocations based on quantities calculated in a more flexible way using dependencies inherent in their mySAP ERP systems. You can use a template to enhance the estimates derived straight from the logistical structures that are not covered by the operations in the routing — for example, for distribution or cleaning costs.
Key Concept

A template is a set of rules used in the Controlling (CO) module that allows you to create a quantity structure that you can use in the allocation of costs between CO objects. You can use templates for plan data and actuals, for the allocation of costs to cost centers, production orders, profitability segments, and for cost estimates in product costing (among others). By using predefined functions, you can implement complex logic with a lot of flexibility without any programming.

Most companies that implement product costing in R/3 or mySAP ERP Central Component (ECC) desire close integration between logistical (master) data and financial calculations. When trying to calculate meaningful and detailed cost estimates, however, these companies often want more information and detail in their cost estimates than is necessary from a manufacturing control point of view.

The cost of quality assurance, cleaning, or logistics can be significant, but traditionally these costs are not included either in the bill of materials (BOM) or the routing of the materials, as they focus only on the steps required to manufacture the product. That is because dummy materials or operations would bloat the master data and cause confusion on the shop floor or, worse, add extra operations that you need to confirm.

Using a template as part of your costing setup, you can achieve two important goals while maintaining transparency and accountability:

  • Make optimal use of already existing (logistical) master data

  • Add the necessary data without encumbering logistics, either in the master data setup or the administrative processes

I will quickly outline what a template is and how it works, and then focus on real-life examples of how you can use a template.

Daniel Svejda

Daniel Svejda has been working as a financial SAP consultant for more than 10 years, mainly in full cycle implementations. Apart from product costing, he is also very interested in the Treasury functionality of the mySAP ERP system.

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