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In this blog I will give a summary from our client project on integration of Sales process to Project Systems module by its inherent technique of revenue collection using WBS elements. You can use assembly processing with projects if you are working in make-to-order production.If your customer orders a product so complex to assemble or produce that you regard it as a project you can use networks to plan in the medium and long terms if, for example, assembly will only begin in six months time:

  • If your customer orders a product that you are producing or assembling for the first time, you can then use the network for rough-cut planning and refine it in further planning, and, if required, complement it with production order.
  • If your production or assembly includes technical or chronological dependencies
  • If you want to use Project System functions when carrying out an order

Therefore, for the above reasons we used the networks and then assigned WBS for cost collection, milestones under revenue activity for milestone billing and activities underneath for installation, warranty and revenue.

We had KMAT BOM structures in VC for hardware products in which the production relevant KMAT BOM was assigned to sales KMAT BOM and dependencies passed the config/product requirements from sales to the product KMAT. The pricing elements were maintained at Sales level and the production elements at the PROD KMAT BOM level. The complex pricing was driven using an external interface and pricing of these different sales features rolled over to a revenue line item in the BOM. This revenue line item of that particular KMAT is assigned the Billing activity in a network which has the related milestones. So that is how the milestone billing gets triggered on the total billing amount for that KMAT.

 Procedure:

  • Create a WBS template Structure in transaction CJ93. We created a project definition with a full WBS template structure. This contained the WBS for revenue, installation, warranty and a level below revenue, manufacturing (for Intercompany revenue allocations).
  • Create network templates for each final product in transaction CN03 which will contain the activities and the corresponding milestones for the billing activity (This milestone billing plan will be relevant for revenue item where all revenue is collected).
  • The materials BOM is assigned to the standard network. Here in transaction CN09 KMAT headers are assigned to network templates. Here you also have the planning profiles and the WBS templates assigned to these finished products. The standard network acts as the template for the network created automatically. The standard WBS acts as the template for the WBS created automatically. Network activities and WBS elements are assigned in the same way as the standard structures are.
  • You have assigned material, standard network, and BOM are assigned to the same variant class, using your configuration profile in transaction CU42. This ensures that their characteristics are identical. The configuration process at network and component levels can be executed using the characteristic valuations from the sales order.
  • Dependencies are maintained for activities and BOM items in the standard networks in transaction CN02. The characteristic valuations from the sales order act as parameters for the dependencies. The result of the dependencies is used to make the automatic selection of activities and components.

Operations:

When we create an order, we can see the network assigned to the KMAT header and the corresponding. This is also attached to the revenue item for milestone billing of the total price attached to that KMAT. This has billing blocks on it which are removed when we assign the actual date of completion of that milestone in the project in CJ20N.      

The WBS is attached in ‘Account Assignment’ tab on item level on each item of the sales order. The requested delivery dates is checked using the schedule date from network scheduling. If necessary, a later delivery date is determined.

 The project is released using transaction CJ20N. Once released it is open for settlement. 

With this we have almost finished the sales integration with project. Rest we have acceptance on delivery and confirmation of installation activity when a corresponding milestone gets completed and an equipment of the corresponding hardware is installed on the customer site. The certificate of acceptance is attached to this and post acceptance is then triggered. As the milestones get completed the corresponding WBS of the KMATs are used for revenue recognition purposes.

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