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production order vs cost collector

Former Member
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hi,

would like to seek advice of which process to use which order.

1 production order co01. it is called discrete. why it is called discrete?

2 say to build material A (fert). I need item X (halb) and Y (halb). whereas to build item X and Y, i need roh components.

meaning i have to use production order X to build X and production order Y to build Y. after done, i need to have production order A to build A. in this case, i need to use production order.

3 cost collector kkf6n. say i just need to assemble several parts to become a finished goods in the same production line, then i can use cost collector?

Thank you very much

Accepted Solutions (1)

Accepted Solutions (1)

rajneesh_saxena
Active Contributor
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Dear Friend

1     In SAP,Discrete and REM and Process Manufacturing are the manufacturing processes.

Discrete Manufacturing :Discrete Manufacturing is an order-based production for product lines where there is frequent switching from one product to another.  Finished products are typically manufactured in individual lots and the sequence on the work centers can vary between different finished products.  Bills of material and routings are more complex.  Semi-finished products are usually put into an interim storage location prior to further processing.

REM : REM is usually known as the easiest flow for producing in SAP.  Production Planning creates planned orders and they are never converted into Production orders.  There is thus no release of production orders, nor reservation for raw material, nor costing by orders. There is also no finite scheduling of the orders.

As there are no production orders, costing is done on cost collector level.  A cost collector can be seen as an ‘open’ order for a specific combination of finished product/product version which collects all costs and revenues for a long period of time (or indefinitely).

As it is clear with the above that in REM production orders are not created hence CO01 in considered for discrete process only.

2     Right you are. What is the confusion in it?

3     In product costing (SAP) there are mainly three methods: Product Cost by Order, Product Cost by period and product cost by Sale order.

We use Product cost by order when we want to see our costs on order level. We use Product cost by period when we are interested in knowing our cost over a period say a month . In this case we create Cost collectors for each product with their respective production versions. And when our production is dependent on Sale order received then of course we may be interested in seeing our cost for Sale orders then we use the third method called Product cost by sale order.

In short we can say that we create Cost collectors in REM production scenario and they are created for a longer period.

Regards

Rajneesh Saxena

Answers (1)

Answers (1)

Anupam1143
Active Contributor
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Hi

Whenever your product line is complex and require swicthing of products as per sales demand, then you need to use discrete manufacturing in which the costing variances can be collected and analysed production order wise.Where as in REM ,which is periodic and mass production , the same product is produced for a  period on the same production line,, cost and variances are collected over cost collector.

Also in discrete manufacturing if you want to collect costing variances on period basis , then you need to use PCC(KKF6N ), thorugh order type dependent parameters.

Regards,

Anupam Sharma