PMMO Pegging and Distribution

[RahulKini]

Purpose of this blog

Through this blog series, I have been sharing functional and business relevance of the new PMMO (Project Manufacturing Management & Optimization) solution in SAP S/4HANA On-Premise.

In the previous article https://blogs.sap.com/2020/12/07/pmmo-solution-overview-and-pmmo-grouping/, I explained about PMMO Grouping functionality in addition to introducing PMMO.

In this post I will cover more about PMMO Pegging and Distribution functionalities.

PMMO Pegging and Distribution: Maintaining Actual Cost Control

In PMMO grouping, “grouped” WBS elements are created, and consequently supply costs are collected on grouped WBS level. The Pegging process determines which share of each grouped replenishment has to be allocated back to the various originating requirements (demanding project).

This is a quantity-based assignment which is used by the subsequent distribution program to distribute actual cost from the grouped project element back to the original demand project. This allows for detailed transparency of actual cost data on original source.

I will start by showing the heart of PMMO’s DB Pegging Table structure needed for pushing “Non-Valuated” cost to the appropriate project cost objects.

PMMO Pegging Assignment Table

This table is the “Raw” MRP  pegging data which captures the Next Higher Assembly (NHA) Order info and the Top Level Requirement info driving MRP. The Red Bracket shows the buy and make parts with their Order Numbers, GR planned quantities and delivery dates. The Green Bracket shows their NHA Orders with the component requirement quantities and dates and the Black Bracket shows the customer requirements that the buy and make parts are supporting. SAP’s vision is that such data could be made available for many such purposes.

Non-Valuated requires tracking open and closed Orders; where as Valuated costed stock may only requiring tracking open orders.

Key Capabilities of PMMO Pegging in S/4HANA 2020

• Detailed transparency of supply-demand relationships for grouped supply elements


• Granular data model for full pegging tree traceability (NHA, End Item Requirement)


• Break-points to alternative cost collectors


• Management of exceptions and excess, scrap, loss, overpegs, underpegs

Master data for Exceptions (Txn: PMMO_PEGEXC)

• Follow MRP pegging (non-fixed), peg WIP & already closed orders


• Pegging run profile


• Support recursive rework orders, detailed stock types, M2M and G2G


• Performance optimization with parallelization and code pushdown


• Schedule Lines for open PO Item, Sales Order Item


• Stock Transport Orders pegged as real replenishments (new prefix UE for STO POs) and No limitation on number of plants in a Type 2 Grouping scenario

Stock Transport Orders

 

Business Benefits of PMMO Pegging

• Enhanced details captured in pegging assignments


• Multi-level traceability of supply-demand assignments and cost allocation rules for project manufacturing scenarios

 

Key Capabilities of PMMO Distribution in S/4HANA 2020

• Distribution of actual costs and other selected financial values from grouped project work breakdown structure (WBS) supply elements back to original demands


• Flexible cost distribution that supports alternative avenues of cost movements, such as breakpoints (per WBS element, network activity, end-item reservation, or cost center) or the exception WBS


• Performance optimization with parallelization


• Material Number and Plant filled during COEP posting (custom implementation of Note 923937 no longer required)


• Material Number and CO document number displayed in distribution results


• Remaining Balance Check Report – to check any undistributed costs still assigned to the grouping WBS after the distribution run


• All actual cost postings read directly from COEP and posted to COEP

 

Business Benefits of PMMO Distribution

• Automate process of cost distribution related to project manufacturing to different cost objects, avoiding manual process errors and inconsistencies


• Exact determination of actual costs using non-valued stock, basis for US Government CAS compliance rules


• Improve compliance documentation across projects and contracts using accurate real-time trace and reporting functionality

 

Additional Links

For more information on the Business Impact of considering GPD and PMMO, please check out more information in these 2 SAP Notes:

2933435 – S4TWL – Grouping Pegging Distribution (GPD) in SAP S/4HANA

2928343 Data Migration from GPD on S/4HANA to PMMO