PLM - PLC Costing - Projects conceptualization..

Understanding Projects in SAP Product Lifecycle Costing (PLC)

Table of Contents

1. Introduction
2. Key Features and Functionalities of Projects
   • 2.1 Project Organization and Structure
   • 2.2 Project Data Management
   • 2.3 Project Lifecycle Management
   • 2.4 Lifecycle Periods and Quantities
   • 2.5 One-Time Costs
   • 2.6 Lifecycle Surcharges
   • 2.7 Authorizations
3. Best Practices for Managing Projects
   • 3.1 Data Retention Policies
   • 3.2 Lifecycle Planning
   • 3.3 Collaboration and Accountability
   • 3.4 Authorization Management
4. Example Use Case
5. Conclusion

1. Introduction

In the context of SAP Product Lifecycle Costing (PLC), a Project serves as a container for organizing and managing cost calculations and their versions. Projects are typically used to group related calculations, such as those created for a specific product type, customer quotation, or development initiative. They provide a structured way to analyze costs throughout the product lifecycle, ensuring accuracy and consistency in decision-making.

2. Key Features and Functionalities of Projects

2.1 Project Organization and Structure

• A project acts as a central repository for all calculations and calculation versions associated with a product or customer.
• Projects can be further organized into folders for easy navigation and management.
• Users can link related projects to maintain a coherent structure across multiple initiatives.

2.2 Project Data Management

• Users can create or modify projects and assign responsibilities to specific individuals.
• Important dates such as start, end, and valuation dates can be maintained to define the lifecycle of the project.
• Price determination strategies for cost calculations can be configured at the project level.

Note: Lifecycle periods, quantities, one-time costs, and surcharges are recalculated if project dates are modified.

2.3 Project Lifecycle Management

• The lifecycle of a project allows users to prepare and calculate multiple versions of cost scenarios over time.
• One-time costs, such as setup expenses, can be assigned to individual calculation versions.
• Users can define and distribute material and activity surcharges to ensure comprehensive cost coverage.

2.4 Lifecycle Periods and Quantities

• Projects can adopt various lifecycle period types (e.g., yearly, quarterly, monthly, or custom).
• Quantities for each lifecycle period are entered for every calculation, enabling detailed cost distribution.

For example:

Calculation	2021	2022/Q1	2022/Q2	2022/Q3	2022/Q4
Drive	100	40	50	60	70

2.5 One-Time Costs

• Projects allow for the creation and distribution of one-time costs, such as tooling or setup fees.
• These costs can be allocated based on quantity, evenly distributed, or assigned manually across calculations.

2.6 Lifecycle Surcharges

• Material Price Surcharges: Rules can be defined to apply surcharges to material prices.
• Activity Price Surcharges: Similar rules can be defined for activity costs, ensuring comprehensive cost calculations.
• These surcharges must be applied to individual calculation versions in the Project Lifecycle screen.

2.7 Authorizations

• Projects include granular authorization settings, allowing control over what users or user groups can view or modify.
• This ensures data security and limits access to sensitive information.

3. Best Practices for Managing Projects

3.1 Data Retention Policies

• Be mindful of organizational data retention policies, as expired periods may lead to automatic deletion of critical data.
• Assign multiple administrators to projects to prevent access issues in case of user deletion.

3.2 Lifecycle Planning

• Carefully plan lifecycle periods and valuation dates to ensure accurate cost projections.
• Update lifecycle quantities and surcharges periodically to reflect the latest business scenarios.

3.3 Collaboration and Accountability

• Assign clear responsibilities for each project to enhance accountability.
• Use linked projects to foster collaboration across different departments or product lines.

3.4 Authorization Management

• Regularly review and update project authorizations to ensure the right people have access.
• Limit access to sensitive data by assigning user-specific roles and permissions.

4. Example Use Case

A manufacturing company is launching a new product and wants to analyze its lifecycle costs over five years. The project manager uses the following steps:

• Creates a project in SAP PLC and assigns it to the product development team.
• Configures yearly lifecycle periods for the first two years, then switches to quarterly periods for the subsequent years.
• Enters planned production quantities for each period.
• Assigns one-time costs, such as design and prototype expenses, to the first calculation version.
• Defines and applies material and activity surcharges for more accurate cost tracking.
• Regularly reviews and updates lifecycle periods, quantities, and surcharges based on project progress.

5. Conclusion

Projects in SAP PLC provide a robust framework for managing cost calculations throughout a product's lifecycle. By leveraging their organizational and analytical capabilities, businesses can gain deeper insights into their cost structures, enhance decision-making, and optimize profitability. Proper planning, execution, and management of projects ensure seamless collaboration and data accuracy across the organization.