SAP provides the ability to manage individual stock segments as either project stock or sales order stock. Each of the stock segments can be managed in either valuated or non-valuated stock. This document is aimed at providing an overview of the general business processes associated with the logistical processing of project materials – valuated or non-valuated. In view of the extensive configuration and master data maintenance requirements, it is not feasible to provide extensive screenshots at this point in time, but we’ll save that for later..
A number of business situations require a material to be managed separately from the collective stock in the form of an individually managed stock segment.
- Materials with long replenishment times can be procured using preliminary requirements planning only if those materials are managed in an individual stock.
- Requirements planning for configurable materials in only possible if those materials are managed in individual stock.
- You want to monitor the flow of costs for material used in your projects within project WBS elements as the material goes through the different stages of the production/assembly process
- From an inventory management or requirement planning point of view, it is required to separate materials for one project against another.
The configuration to manage stock for your project as valuated or non-valuated is derived from the project profile and can be changed in the project. However, once the project is created and saved, the setting can no longer be changed.
The “Automatic reqmnts grouping” indicator enables project requirements to be grouped at the top WBS element level for the whole project.
Additionally, the material master should allow individual requirements in the material master (MRP4 view). If the indicator is set to Collective requirements only, project stock (or sales order) stock cannot be used.
A material component can be assigned to a network activity as either a stock or a non-stock item. The item category (stock / non-stock), together with other configuration settings, determines:
- The procurement type
- In which kinds of stocks the material can be managed
- The account assignment category
The procurement type for a material can also be maintained in the material master. If this is maintained, the assignment of a material component to a network activity as stock/non-stock item is validated to ensure compatibility between the behavior of the item category. The following procurement types are available (material master: MRP2 view):
- in-house (internal) production (E)
- external procurement (F)
- no procurement (_)
- both procurement types (X)
Components with non-stock item category (N)Non-stock materials are always procured using direct procurement (these materials are not maintained in stock, therefore, they need to be supplied by a supplier). A purchase requisition is created for the material component depending on the configuration for reservations / purchase requisitions defined in the network profile assigned to the relevant network activity.
Once the purchase requisition is created, it is then converted into a purchase order by Purchasing. If commitments are active for Project Systems, the corresponding purchase requisition / purchase order commitments can be evaluated in the Information System.
Components with stock item category (L)
When a stock item is assigned to a network activity, a reservation is created in the system for the network activity that reserves the specified quantity of the material for the network activity. The material is then procured using Material Requirement Planning (MRP). An MRP can be executed for each WBS element maintaining stock. When the MRP is executed, an availability check is performed for each reservation. If there is not enough material in stock, a planned order / purchase requisition is created, which can then be converted by the concerned department into a production order for internal manufacturing of the item or into a purchase requisition and then into a purchase order for external procurement. This decision to procure internally or externally is made at each BOM level upon exploding the BOM during the MRP run.
The procedure is the same as for non-stock items when the item is procured externally. If stock components are used, a decision could still be made whether the item is manufactured internally or procured externally, but the decision is made by the MRP controller, who may or may not be directly involved with the execution of the project. Furthermore, externally procured items can be sent directly to the customer by placing a third-party order. This indicator is specified in the PS customization in the procurement configuration (OPS8):
Assembly items are items that are assembled in a network activity and are represented by a network requirement quantity. The reservation is also raised with a negative quantity and the receipt date is automatically assigned as the finish date of the network activity.
When materials procured externally are received, they are first posted to the project stock. A reservation is then made either to the network activity or to the production order requiring that material. Account assignment category Q is used for the purchasing documents and the project WBS maintaining the stock for the material is used for account assignment in the purchasing documents. This procedure is different from that used for non-stock items, where the account assignment category is F and the account assignment is made to the network or network activity.
For stock items, if planned orders from reservations are converted into production orders, the production orders and the items held in stock for them are assigned to the stock-bearing WBS element. The same assignment is maintained for subsequent documents. Production orders for semi-finished goods deliver materials to project stock. The materials are then issued from project stock to the subsequent production orders.
Hopefully, this provides a general overview of the logistical processing aspects of project stock. I shall attempt at an example in a future blog.
A number of business situations require a material to be managed separately from the collective stock in the form of an individually managed stock segment.
- Materials with long replenishment times can be procured using preliminary requirements planning only if those materials are managed in an individual stock.
- Requirements planning for configurable materials in only possible if those materials are managed in individual stock.
- You want to monitor the flow of costs for material used in your projects within project WBS elements as the material goes through the different stages of the production/assembly process
- From an inventory management or requirement planning point of view, it is required to separate materials for one project against another.
The configuration to manage stock for your project as valuated or non-valuated is derived from the project profile and can be changed in the project. However, once the project is created and saved, the setting can no longer be changed.
The “Automatic reqmnts grouping” indicator enables project requirements to be grouped at the top WBS element level for the whole project.
Additionally, the material master should allow individual requirements in the material master (MRP4 view). If the indicator is set to Collective requirements only, project stock (or sales order) stock cannot be used.
A material component can be assigned to a network activity as either a stock or a non-stock item. The item category (stock / non-stock), together with other configuration settings, determines:
- The procurement type
- In which kinds of stocks the material can be managed
- The account assignment category
The procurement type for a material can also be maintained in the material master. If this is maintained, the assignment of a material component to a network activity as stock/non-stock item is validated to ensure compatibility between the behavior of the item category. The following procurement types are available (material master: MRP2 view):
- in-house (internal) production (E)
- external procurement (F)
- no procurement (_)
- both procurement types (X)
Components with non-stock item category (N)Non-stock materials are always procured using direct procurement (these materials are not maintained in stock, therefore, they need to be supplied by a supplier). A purchase requisition is created for the material component depending on the configuration for reservations / purchase requisitions defined in the network profile assigned to the relevant network activity.
Once the purchase requisition is created, it is then converted into a purchase order by Purchasing. If commitments are active for Project Systems, the corresponding purchase requisition / purchase order commitments can be evaluated in the Information System.
Components with stock item category (L)
When a stock item is assigned to a network activity, a reservation is created in the system for the network activity that reserves the specified quantity of the material for the network activity. The material is then procured using Material Requirement Planning (MRP). An MRP can be executed for each WBS element maintaining stock. When the MRP is executed, an availability check is performed for each reservation. If there is not enough material in stock, a planned order / purchase requisition is created, which can then be converted by the concerned department into a production order for internal manufacturing of the item or into a purchase requisition and then into a purchase order for external procurement. This decision to procure internally or externally is made at each BOM level upon exploding the BOM during the MRP run.
The procedure is the same as for non-stock items when the item is procured externally. If stock components are used, a decision could still be made whether the item is manufactured internally or procured externally, but the decision is made by the MRP controller, who may or may not be directly involved with the execution of the project. Furthermore, externally procured items can be sent directly to the customer by placing a third-party order. This indicator is specified in the PS customization in the procurement configuration (OPS8):
Assembly items are items that are assembled in a network activity and are represented by a network requirement quantity. The reservation is also raised with a negative quantity and the receipt date is automatically assigned as the finish date of the network activity.When materials procured externally are received, they are first posted to the project stock. A reservation is then made either to the network activity or to the production order requiring that material. Account assignment category Q is used for the purchasing documents and the project WBS maintaining the stock for the material is used for account assignment in the purchasing documents. This procedure is different from that used for non-stock items, where the account assignment category is F and the account assignment is made to the network or network activity.
For stock items, if planned orders from reservations are converted into production orders, the production orders and the items held in stock for them are assigned to the stock-bearing WBS element. The same assignment is maintained for subsequent documents. Production orders for semi-finished goods deliver materials to project stock. The materials are then issued from project stock to the subsequent production orders.
Hopefully, this provides a general overview of the logistical processing aspects of project stock. I shall attempt at an example in a future blog.
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