Material Ledger and Value Flow Monitor – Not Distributed and non-allocated balances:CKMLCP and CKMVFM
Material Ledger and Value flow monitor. CKMLCP and CKMVFM
The objective of the blog is to explain the reason for Non distributed PRD differences in the value flow monitor.
By reading this blog you can able to answer the following questions:
- Why should we use Value flow Monitor..?
- The reason why price differences/ exchange rate differences not apportioned to the SFG/FG Materials.?
Material Ledger and Value Flow Monitor – Not Distributed and non-allocated balances:
The blog is more about the value flow monitor– Not Distributed and non-allocated balances, before that I will give a brief introduction to Material Ledger as it is helpful for the newcomers.
The objective of the Material Ledger:
The primary objective of the material ledger functionality is arriving the actual cost and we can see the results in multiple valuations and multiple currencies.
How system arrives the actual cost:
Initially, all the transactions are happening with the standard price, during CO Month end process we will get the variances and those variances got settled when we execute the settlement.
By following the CO Month end process (OH Calculation – There are many methods, WIP calculation, Variance calculation, and Settlement), we are able to settle the variances to the production or process order, but unable to get the actual price.
Importance of ML Run:
By performing ML run these variances/ price differences/exchange rate differences will get settled to the respective material. We will get the actual price. Actual price can be called as a periodic unit price (PUP).
I will start the primary topic – Value flow monitor – Not Distributed and Non Allocated Balances:
By reading the functionality of ML, management and everyone feels that all the variances and differences due to price and exchange rate should get settled to the material and be expecting no balances should appear in PRD GLs.
Management expectation – Differences in PRD should be zero. But it is very much difficult in real time scenarios…but …..Why…?
We will look into that……Here I am posting two questions:
- Is the actual price arrived during ML run is accurate only if there are no differences found in Value flow monitor….?
- Is there any hard and must rule, that the differences in PRD should be apportioned to the SFG/FG to arrive at the actual price..?
By the end of this blog, you can able to answer those questions. Please find the further details:
Nature of the differences:
- Price differences
- Exchange rate differences
- Single level differences
- Single level price differences
- Multilevel differences
- Multilevel price differences
- Multilevel exchange differences
Reason for the differences which are appearing in the Value flow monitor:
There are many differences, it depends on the transaction history of that material.
Example – This issue I have faced recently.
There is a huge difference appearing in the value flow monitor. Management asking for the clearing that difference.
Then I went into the transaction history of that material.
I found some process orders which were partially confirmed and GR not happen. They feel that getting the output from that process order is no longer possible then they have confirmed with lower quantity and completed the final delivery.
- During CO Month end process, system posted a huge variance and got settled.
- After performing ML run, while analyzing the Value flow monitor found these differences which are not apportioned to the material.
- The system has cleverly ignored the difference (Which is not practical and genuine) while calculating actual price calculation.
- Still, there is an option of apportioning these differences if management feels it is required.
- If we apportion, in my case resulted price will be negative….so we strict to Value flow monitor.
Hope you got the answers to those questions mentioned above.
Last but not least:
Every error is not dangerous, sometimes it is an alert. Every difference need not distribute.
Pavan Kumar Arvapally
Nice document with nice explanation.
Thank you Prasad...
Pavan Kumar Arvapally
Simple and nice analysis..
Sometimes people (client) are worried about this non-allocated/undistributed amount in CKMLCP.. This topic may give them some confidence
Thanks for the feed back.Added a screen for more clarity...
Pavan Kumar Arvapally
I think that this note 908776 - Not included/not allocated and not distributed is helpful for your document.
Thank you Big Choi...
Very good aproach!
Thank you Manuel....
Are there a program to apport the Not distributed value?
Are the Not distributed value come from partially confirmed process order?
Good Explanation. This is very useful for me.
Thank you so much for given the valuable information.
Satish Kumar. N
How can i solve this problem? How can i distribute that not distributed values?
Thanks a lot!
Yes Cuneyt Azak it is possible by using price limiter indicator in ckmvfm.
Nicely explained and documented.
Wonderful work !!