Production order costs - change price using MR21 before confirmation

[msyed3]

Hi,

We use MTO scenario to manufacture unique products on an order basis. The products are unique and are mostly one time production. I have issues with understanding how the production order GR valuation works in this case.

Note - there is no BOM and the standard cost of the material is maintained at the time of creation of the material. New materials are created every time an order is received. There is no cost estimate.

Scenario:

- Plant A gets order from customer and enters the sales order. The material is manufactured and shipped to Plant A from Plant B.

- The sales order creates a PR and the PR is converted to STO PO and sent to Plant B.

- Plant B runs MRP and creates planned order. This is converted to a production order and the components are added directly to the production order.

- During the course of the production the customer wants changes to the product and plant B adds the components and labor to the production order.

Issue:

- Before the production order is confirmed and the material is received into stock of plant B, plant B want to change the material standard price to what the actual production cost was and confirm so that they can pass on the production cost to plant A. I suggested them to use MR21 to change price and then confirm the order. 

- Sometimes this works and sometimes this does not. I mean, when they confirm - it sometimes takes the standard price from the material master from the costing 2 tab and sometimes it takes the cost from the planned cost of the production order.

I am not a CO expert and I have searched the forums but could not find a suitable answer. Can someone guide me? Or help me understand the system behavior?

Thanks,

Syed

[Former Member]

Hi Syed,

First of all changing the Standard price in the middle of month will have other impacts also. Like, it will always revaluate the inventory with the new strandard price. So int his way, your revaluation account will have huge values and lots of entries.

However, MR21 updates the Standard price in Accountign1 View of amterial master.

Now if you have not changed the valuation variant then, while confirmation it should pick up the value from the standard price. Or else it will pick up as per the startegy maintianed in Actual costing variant.

You check, which Actual costing variant is used in Production order and check it its Valuation variant.

Hope this information will help you.

Regards

Kami

[msyed3]

Thanks Kami and Srinu.

There is no inventory for this product and this is never kept in stock. The product is a customer specific made on an order basis. This is almost all the time one time production.

I have checked the valuation variant for the production order and it has been configured to take the price from the material master (please screen shots below).

Any other thoughts why this would not take the price from the material master at the time of GR.

Production Order - Control tab

Valuation Variant - Planned

Valuation Variant - Actual

Requirement Class for the Requirement Type in the sales order.

[Former Member]

Hi Syed,

I agree with you, for customer specific materaisl we will not maintain any stock and price in the material master, Did you calculated the sales order cost estimate, If yes Sales order cost estimate price will be your GR price at production order level, If no system will not pick the any price and will through error mesage.

Normally we will do the sales order cost estimate at sales order level.

Please check the particular sales order, whether cost estimate is available or not.

Regards

Srinu

[msyed3]

Well, we maintain a price at the time of creating the material based on an estimate(calculated outside SAP) of what the customer wants. At the time of confirmation of the production order the cost has increased due to the changes requested by the customer. And the manufacturing plant just wants to change the price of the header material and deliver (GR) at this new price.

But that does not work all the time. Sometimes the system does GR at the planned price and sometimes it does GR at the price maintained in the material master.

We don't use sales order cost estimate.

Thanks for your help. Any other thoughts?

Thanks

Syed

[former_member220721]

Hi Syed,

As normally the stock is always used for sales orders,

Try by setting the "without val. strategy" indicator in requirement class.

This will stop the strategy if any system is using.

(Ensure that actual valuation variant used in production order takes price from material master.

I see that there is no costing variant used in req class which shows that you do not use sales order cost estimate - which is correct)

Regards,

SK

[msyed3]

Thanks SK. I have requested access to our sandbox and I will test your suggested changes and will let you know.

One thing that still confuses me is the system behavior that is not consistent. With the current config the system, sometimes posts the GR for production order at the price maintained in the material master "Costing 2" tab and sometimes at the planned cost of the production order.

I could not figure out when the system takes the production order planned cost and when it takes the material master price from "Costing 2" tab.

I have tested scenarios where I have changed the price of the material using MR21 after the production order was created & released and the GR was done for the price from material master which was different from the initial production order planned cost.

I suggested this process be used in production system and sometimes it works and sometimes it does not.

Thanks,

Syed