Results Analysis (RA)

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The objective for calculating Work in Process (WIP) is to determine the value of manufacturing activity in process at the end of a fiscal period, during a fiscal period and to properly reflect this value on the financial statements. WIP calculation is a facet of Results Analysis (RA). RA is a specialized tool within the controlling module that computes and analyzes the value of WIP. The terms WIP calculation and RA are generally interchangeable.

Results analysis is used to:
a. Calculate the inventory value of finished and unfinished products in a non-valuated project stock or non-valuated sales stock environment or
b. You are using a valuated sales order stock or valuated project stock and want to capitalize goods that have been delivered but not yet invoiced.

The difference between SAP and other systems is in the treatment of material consumption for manufacturing. Component issues to production orders, run schedules, WBSs, etc is immediately treated as an expense to the P&L statement. The issue is not treated as a reclassification from raw or semi-finished inventory to WIP inventory. SAP considers WIP to be a snapshot of values that can be computed on demand and passed to the general ledger as required to re-class the values to the balance sheet. This process demands a specific, methodical approach to be used for period-end and mid-period processing. Rules used to calculate the value of WIP and settle WIP to the G/L are defined in multiple RA tables depending upon the requirements of the company. RA is designed to support a variety of calculation techniques and there may and are alternate settings depending on the demands of the company. To support the configuration, scenarios and unit testing need to be thorough. RA needs to be configured towards the middle of the of the implementation with subsequent testing. This will allow for configuration of the data needed to support WIP and RA (chart of accounts, production orders, projects, cost centers, cost elements, etc.)

Configuration Transactions:
OKG1 — Create Results Analysis Key
OKG2 — Results Analysis Version
OKG9 — Results Analysis Version
OKGC – OKGD — Valuation Methods
IMG SPRO — Define Line IDs
OKGB — Define Assignment Mapping by incoming charges by cost element to line IDs
OKG5 — Define Assignment Mapping by incoming charges by cost element to line IDs
OKG4 — Define Update
OKG6 — Define Number Ranges

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Issues to Determine for Webinar

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  • Agenda
  • PBL overview in the A&D industry (How A&D is moving towards Performance Based Logistics)
  • How PBL requires specific costing, enabled by PS, to allocate costs to specific PBL contracts
  • Setting up PBL Contracts as Projects in PS
  • Explain
    • WBS
    • Contracts
    • Network Activities
    • MRP

PBL Flow in SAP

Demo Steps

  1. Setup a project in project builder
  2. Create a WBS called “PBL”
  3. Locate one material
  4. Perform a stock transport order, sales order and service order for the material
  5. Determine how are stock transport orders, sales orders and service orders assigned to a particular WBS and assign them
  6. Report on the cost of 1 stock transport order, 1 purchase order (run MRP), and 1 service order
  7. Explain what Network planning does vs. WBS planning

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PS Initial Configuration

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Project Builder (CJ20N) can be used to create and modify project structures. The project structure includes the Structure Tree in the upper left. This displays the project definition, WBS elements, network headers, activities, activity elements, milestones, PS texts, documents and assigned material components of a project. The Templates are in the lower left pane. Objects can be inserted from the Templates area such as new WBS elements or activities, into the structure of the project either by double clicking on the objects or via drag and drop. The Work Area pane to the right simply shows the details

The Project Planning Board (CJ27, CJ2B, CJ2C) enable you to create and modify WBSs and assigned networks. In order to open a project in the PP, you must specify a planning board profile.

Simulation Versions allow you to carry out What If analyses for project structures. You can create simulation versions without an existing operative project.

Work Breakdown Structure

Why Understand Work Breakdown Structures?

Work Breakdown Structures were created by the US defense establishment for actual costing. However within SAP they are the critical elements within the SAP PS system. Understanding the WBS is important to understanding GPD (Grouping, Pegging and Distribution) which is a manufacturing solution for research and development, make-to-order and engineering-to-order environments. (More on GPD in the Appendix)


What is a Work Breakdown Structure?

Simply put, Work Breakdown Structures are “buckets” to which cost centers are assigned , allowing Lockheed to track the costs of its PBL contracts. Below is a sample of a simple WBS structure for the creation of a bicycle. “A WBS is not a project plan, project schedule or a chronological listing. It is considered poor practice to construct a project schedule (e.g. using project management software) before designing a proper WBS. This would be similar to scheduling the activities of home construction before completing the house design. It is not possible to recover from an improperly defined WBS without starting over[citation needed], so it is worthwhile to finish the WBS design before starting a project plan or project schedule Parts is not.

Simple WBS Structure for Building a Bicycle


WBS Capabilities

In a product-oriented WBS, functional categories of work may form “cost accounts” within a WBS element. Cost account managers are responsible for a functional area’s contribution to a WBS element. Cost accounts from several departments or functions may combine into one WBS element. Internal department planning for a cost account will be made up of individual work packages. A work package will typically have its own budget and schedule. Work packages should be small enough to be executed by individuals or small groups in a single department, and they should be of relatively short schedule duration. A small project might define a maximum work package size as two weeks of effort. Larger projects will assemble larger work packages that can be appropriately managed and controlled.” – SAP Help

WBSs allow you to map the structure of a project in SAP. The WBS is made up of WBS elements, which can be broken down further. Structuring the WBS is primarily answered by considering what you want to report on.

Dependent Configuration

Dependent configuration relates how a configuration one system affects another system. Here it involves other areas in SAP that are affected by WBS creation and use. One of the most important features of WBS usage is distinguishing between Plant Stock and Project Stock. Each material can be coded as several stock types. Typically Plant Stock is the more common, however in a project environment it becomes necessary to code at least some of the materials as Project Stock. Plant Stock vs. Project stock is broken down in the matrix below.

Plant Stock

Project Stock

For: planning collective requirements in warehouse material

For: individual project planning

Usage: Materials at subordinate BOM levels which are required in all projects can be planned and procured in the warehouse, independently of WBS elements. In requirements planning, all the requirements for a material are determined in one plant. Such procurement is made jointly, with no reference to a WBS element.

New Demand to A Location

Usage: In individual project planning, only individual requirements are planned – that is, materials which are required for a WBS element, are planned for that purpose, and procured with reference to the WBS element.


Assignment: The material is managed in general stock. It is not assigned to any particular project or sales order.

Assignment: In individual project planning, only individual requirements are planned – that is, materials which are required for a WBS element, are planned for that purpose, and procured with reference to the WBS element.

This procedure is used to plan the finished product and important components.

The material stock is assigned to a single WBS element in the project and is, as far as planning is concerned, available only for that WBS element. Stock is managed separately for each WBS element in a project definition.

Unlike general stock, you must specify the relevant WBS element, as well as the plant and storage location, in all goods movements involving project stock.


Question: What costs will be allocated to a SAP PS Project?

Answer: We will want to allocate the costs of Purchase Orders, Stock Transport Orders and Service Orders to specific projects.

New Demand to A Location

Not New Demand to the Overall System

1. If there is sufficient inventory to cover the STO, a new demand is created at a location, however, this is not a new demand for the system. If one considers this a new demand then it is true to stay that an STO creates a new demand.

2. If there is insufficient inventory to cover the STO, a demand is created both at the location, and for the overall system.

What is Necessary to Tie Back to the PS PBL Project

A Network in SAP PS is a parallel hierarchy of the operations of a project rather than the financial areas of the project. The necessity is to tie the operational transactions (and their costs) back to the project. The transactions necessary to map to the PBL projects are:

  • Purchase Orders
  • Stock Transport Orders
  • Service Orders

“The grouping WBS element is the organizational unit which produces the goods and to which the material belongs. Requirements planning creates the replenishment elements (planned orders, purchase requisitions) which are assigned to the grouping WBS element. A separate planning section is managed for each grouping WBS element in the evaluations in inventory/requirements planning.”


A sample of WBS Elements in a project

From Project Management Academy:

Notice how the Project is the top of the hierarchy. A Work Package contains a WBS code along with costs. A Work Package is “ a quantitative and qualitative description of an activity to be carried out in the project – for example, the work to be done and the result to be achieved for a clearly defined task within the project.”

Other Important Features of the WBS:

WBS Connections to Other SAP Transactions

WBS Links to Activities

1. The STO is tied in with MRP

1. If there is insufficient inventory to cover the STO, a demand is created both at the location, and for the overall system.

2. The procedure of converting purchase requisitions to Work Breakdown Structures can be monitored using PO history.

New Demand to A Location

2. A goods receipt can be planned in the receiving plant.


3. The system can run an availability check for the stock transfer.

3. The goods receipt (GR) can be posted directly to consumption.


The STO is both a type of Stock Transfer and a Purchase Order which has characteristics that closely map to the Transshipment in MCA, most notably its calculation of inventory movement based upon lead times. The STO is used to move materials between two Plants in SAP.


Grouping Pegging Distribution

GPD includes the following capabilities:

  • Grouping, which allows manufacturers to group requirements originating from different WBS elements or projects.
  • Pegging, which makes it possible to keep track of the origin of the demand
  • Distribution, which distributes the actual costs and commitments back to the original project.

This means that GPD enables you to utilize the advantages of larger lot sizes while still being able to apply resource-related billing and project-specific cost controlling.

· Transfer/Borrow-Loan-Payback (TBLP)

During the realization of projects in a complex manufacturing environment, requirements frequently undergo a number of unplanned changes. TBLP provides an easy way to transfer or loan material items to another project. With respect to loans, borrowed material items can be repaid either fully or partially.

· Resource-Related Billing

Prices for services performed for individual customers are not always stored as fixed prices in a contract or are determined using a standard pricing procedure. For example, the work performed may be completely new. This function enables orders for such work to be billed on a resource-related basis. The billing document provides detailed information, for example on individual materials, internal activities, costs, and so on.

· Project Earned Value

Because of unplanned changes to costs and schedules the actual project becomes increasingly different than the project plan. This application allows you to monitor and control your projects effectively, as well as easily access information about project status and progress at any time.

· Project-Related Incoming Orders

This function enables the system to determine key figures from sales orders assigned to projects for incoming and open order values. This provides you with a report on the expected results for customer projects at an early stage.

Setting Up GPD:


For the Plant and MRP Group that you plan to perform GPD for, the Grouping Requirement Flag must be checked

Material Management:

Any material that will be used for GPD must be in an MRP Group that is GPD relevant

Under the MRP4 Tab in MM01, the requirements must be set to “Individual Requirements” (1) as opposed to “Collective Requirements”

Project Setup:

Grouping WBS elements must be defined as Grouping WBS elements for all materials (1) or for selected MRP groups (2) when they are created in the system