Hi All,
NCO Cost Absorptionto the SO Cost:
One my client's Controlling Module is Designed with a Focus to get CorrectSale Order Wise Profitability, based on the Actual Cost of Materials Consumedfor the respective Orders, and Activity Costs incurred during the processing,and allocable Over heads defined. The Objective is to get Correct Post Execution Profitability of each Order, and to compare the same with Plan Costs, so as to find out the Plan V/s Actual Variance.
The Same Data will be collated and compared to Customer wise Profitability to support long term business strategies, and Critical Business Decisions, based on the cost of producing as per the Customised Order requirements of Customers.
NCO (Non Confirming to order) Cost.
While doing the manufacturing against Orders as per Customer Speciation’s (especially in case of High Value items in OE, Appliances etc.) there are high chances of Rejection / Diversion of Coils from the Order, due to Quality rejections (Seconds). These materials are declared as not matching to the respective High End Quality required by the Customer in the Specific Order, but can be used for some other lower quality orders / commercial qualities.
Once detached from the SO, this coil is available as unattached SFG or FG (as the case may be) with will be automatically attached to a new Order, through the APO Run, based on the Characteristics available.
Business Impact
As these coils are of High Cost, Generated against High Value Order, and Carrying the Accumulated Cost while Detaching from the Original SO and carries to the new SO, which actually require a low cost material, which eventually result in to:
- Original SO has not absorbed the Cost of Quality and so gives a wrong Profitability.
- Second SO which actually require a low Cost Material, absorb extra material Cost , which is not relevant to it, and results again in wrong profitability records.
To achieve correct SO Profitability and Customer Profitability records in SAP, we need to overcome the above limitation.
Kindly requesting to all SAP gurus if any one have solution based on my above requirement please let me know.
Regards,
Puri