Issue

The purpose of this document is to provide an assessment of the two valuation approaches that we have currently in Syensqo. These are,  the revaluation on actuals with the use of the Material ledger and the so-called semi-standard approach. The objective is to collectively, business and IT,  assess what will be the approach that will be implemented in the S4 in relation to the above.

This document explores in detail the product cost approach and the integration with the manufacturing.

Decision

Background & Context

Assumptions

• We currently have two systems with two different valuation approaches. These are:
• Revolution on actuals with Material ledger for PF1
• Semi-standard for WP1
• Currently we have two different approaches for assigning company codes to controlling areas in the two systems. These are, 
• PF1: single controlling area 
• WP1: Four controlling areas by Region (Europe, APAC, North America, South America) + one for Financial companies, total five controlling areas

In S4 we anticipate having a uniform approach.

• In S4 we will have a single costing approach for all Legal entities. Local deviations are expected due to local fiscal requirements.
• The product cost system will be S4
• In S4 material ledger is mandatory. This does not imply that actual cost is mandatory.
• If the transfer price functionality is implemented then actual costing has to be activated
• The Universal parallel accounting positive or negative implications to the valuation question are not considered in this KDD. There will be another KDD for Universal parallel accounting new features and its implications to product costing.
• Manufacturing is using Manufacturing execution systems as well as planning systems. Dynasys and in the future Kinaxis. MES feed SAP process and production orders with confirmations and consumptions. More in particular:
• In PF1 the confirmation is on std quantities and hours
• In WP1 in some plant they confirm actual quantities and hours and some not
• Std prices are calculated in both systems
• Activity prices are entered manually. Although in WP1 there is an activity calculation process. But the capacities are loaded manually. Please see below on the additional information sections  

Constraints

Impacts

Business Rules

Options considered

Option A: 

Option B: 

Option C: 

Option D: 

Evaluation

	Option A	Option B	Option C	Option D
Criterion 1	Pro Con	Pro Pro	Pro Con	Pro Con
Criterion 2	Pro Con	Con	Pro Pro	Con Con
Criterion 3	Pro	Con	Con	Pro

See also

Change log

Workflow history