Procurement for Service Management – Valuation Price Concept

Introduction

In this blog post, you can find the details of valuation price concept of externally procured non-stock service Parts and External Workforce in SAP S/4HANA Cloud for Service. An estimate of the procurement cost is necessary to create a Purchase requisition against the Service Order. With the addition of service quotation, the price estimate of externally procured items is needed to determine the pricing information wholly.

For more details about the Integration of Service Order with Procurement

Procurement for Service Management(3NI)

Source of the Valuation Price

For such non-stock materials which are externally procured as on demand, a vendor or supplier, is the source of supply. The price of these externally procured items are obtained from the source list or the purchasing info-record in SAP sourcing process.

Now I will briefly explain the flow of this price in the two service management processes.

Service Quotation

In a service quotation, the valuation price of externally procured material is first determined from the above-mentioned source of supply. When a price is obtained from one of the sources, it is stored in the price element of charged cost (PCO4). If multiple source of supply are found, then the one with the highest price is considered. In case the source of supply is not maintained, the service manager is required to enter the price of the material in the price element of charged cost which is a manual pricing condition type. The charge cost is carried forward to the successor document that gets created later, which is a service order.

Service Order

Like Service Quotation, the valuation price of material is first determined from the Source of supply. In case the Service Order have a predecessor document, which is a Service quotation, the valuation price is directly obtained from the pricing element of charged cost. If the system is not able to get the price from any of the mentioned places, then it is required for the customer service manager to provide the price of the material manually. The manual condition type (PMP0) is a standard pricing element for this purpose. This value will then be considered as the valuation price of the material during purchase requisition creation. It is important to note that the manual price is populated only when the source of supply is not found in the system, otherwise this pricing condition type will be empty.

But in case of service quotation, the pricing element of charged cost allows manual entry when source of supply is not found. But also when the price of material is obtained from the sources then that amount is stored in the charged cost component.

SSCUI for Custom Condition Types

If you are using your own pricing procedures and have want to use custom pricing condition types instead of the SAP delivered one. To enable that, SSCUI is provided for maintaining the custom condition types for the procurement relevant item categories. The Configuration path is :

Service-> Service Order Management-> Item Pricing

The flow of the process is provided below:

Flow Chart

Conclusion

The valuation price is key input for the automatic purchase requisition creation from Service Order.

I hope this blog post helped you understand the Valuation Price determination of externally procured items in Service Management processes.