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

Optionally supplement with additional details or diagrams if required, else delete this 'Details' section.

Background & Context

We currently have two systems with two different valuation approaches and ways of working. These differences stem from mergers and acquisitions (M&As), where the acquired organizations used different valuation methodologies. Additionally, there were fiscal requirements that necessitated deviations from standard operating procedures. In this document, the two approaches are referred to as follows:

• • Re-valuation on actuals with Material ledger for PF1
  • Semi-standard for WP1

Assumptions

• 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 enterprise structure. Especially on lower controlling objects like cost centers, profit centers, segments etc
• 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. but his does not imply that actual cost is mandatory.
• If the transfer price functionality is implemented then actual costing has to be activated
• The implications of Universal Parallel Accounting, whether positive or negative, on the valuation question are not considered in this KDD. There will be another KDD to address Universal Parallel Accounting's new features and their overall implications for product costing.
• Manufacturing is using Manufacturing Execution Systems (MES) as well as planning systems, specifically Dynasys, and in the future, Kinaxis. MES and in some instances spreadsheets and manual input feeds SAP processes and production orders with confirmations and consumptions. 
• Currently, in PF1 the confirmation is on std quantities and hour
• Currently, In WP1, some plants confirm actual quantities and hours, while others do not.
• Std prices are calculated in both systems
• Activity prices are entered manually. Although in WP1, there is an activity calculation process, the capacities are loaded manually. Please see below on the additional information sections  

Constraints

Capture any additional constraints that the chosen alternative (i.e. the decision made) might impose on other parts of the overall design, solution, or processes.

Impacts

Describe the impact of the decision on processes, infrastructure, other SAP modules or systems, data cleansing and migration, developments, automations, interfaces, in-flight projects, etc.

Business Rules

The decision may translate into business rules which enforce the decision and will require configuration. List these business rules here. For example, "An Outline Agreement cannot be created via the RFQ process. An awarded RFQ can only result in a Purchase Order". 

Options considered

List the options (viable options or alternatives) you considered. These often require a longer explanation with diagrams, or references to other documents (links are best, but attachments are also possible). Use enough detail to adequately explain what you considered so that a project or business stakeholder reviewing this decision will not come back and ask "did you think about...?"; this leads to loss of credibility and questioning of other decisions. This section also helps ensure that you considered enough suitable alternatives rather than just copy/pasting SAP's recommendations.

Option A: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option B: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option C: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option D: Option Title

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Evaluation

Outline why you selected a position. The best format could be a pro/con table (sample below), but is up to you as the author. You must consider complexity, feasibility, cost/effort to implement, but also ongoing operational impact and cost. You must consider the program principles and explain any deviations in detail. This is probably as important as the decision itself.

	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

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

Change log

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