Scenario Overview: E73: Engineer-to-Order (ETO) � Sales Order ... - Download as PowerPoint

							ETO - Project Manuf. - Sales Order
Processing with ProMan

SAP Best Practices for IM&C (France)




SAP Best Practices
Engineer-to-Order (ETO): Environment


   Engineer-to-order (ETO) activities involve customer-specific manufacturing of
   a product, such as the construction of a plant. Both complexity and uniqueness
   characterize the product. The products require large order-specific project and
   engineering services that carry considerable risk for technical solutions, costs,
   and deadlines. A project therefore processes a customer order.

   The following features characterize engineer-to-order activities:


        Extensive quotation phase (over several month)
        Order-Specific Engineering Services
        Complex and Dynamic Product Structures
        Internal and External Procurement
        Complex Information and Communication Structure
        Long Lead-Times
        Calculation and Cost Control
         Milestone Billing
        Assembly, Start-up and Warranty
Engineer-to-Order (ETO): Environment



     - Order probability is not very high
     - Very extensive order processing phase (over several years)
     - Very expensive unique products  Joint Ventures are necessary
      Milestone billing
      Billing, results analysis and costing
      Complex and dynamic product structures
      Risk analysis – technical and commercial evaluation is necessary
      Order-specific engineering services
      Engineering Change Management/ Claim Management
      Make or Buy decisions have to be made

      Long lead-times procurement

      Contractual negotiations have to be documented
      Installation and Assembly on site
ETO - Project Manuf. - Sales Order Processing
with ProMan


 Industrial Machinery & Components
  E84                             Summary C o n t
                              O v e r v i e w Content e n t
               ETO - Project Manuf. –
              Order Proc. with ProMan

            ETO - Project Manuf. - Sales Order Processing with
             ProMan
            - Sales order creation
            - Linkage set between project and SD order
            - Material procurement through PRO-MAN
            - Milestone transferring from project to SD order
            - Progressive billing with milestones
            - Component planning and production in PRO-MAN
            - Re-work processing with claim and debit memo
            - Delivery through project
            - Assembly and acceptance test at customer controlled by
              netwok activities
            - Cost/revenue analysis through project infomation system
            - Open link to maintenance work
            - Object linked to Record Model
ETO - Project Manuf. - Sales Order Processing
with ProMan: Component View
    Customer                                                             Manufacturer
                                                                          SAP ERP
                                                 The step before is the acceptence of a customer quotation.
                                 This is subject of E83 – ETO Quotation Processing with BOM-PS and Record Management
                                   Create customer order copying the 2nd quotation created in ETO quotation processing,
                                                        and adopt the variant configuration result.
                          Project tuning bases on the detail business situation, and confirm the project start with the 1st milestone.

                                        Execute long-lead time procurement by Pro-MAN, create the purchase order.

                                                   Milestone transferring from the project to the SD order.

                                             Invoice the down payment billing since the first milestone reached.
      Down payment.
                          Process R&D work of the project by release the related WBS element, then confirm the related activities.

   2nd advance payment.                                Release 2nd milestone then settle the 2nd invoice.

                                          Start Production work of the project by release the related WBS element.

                                             GR for long-lead time procurement component to the project stock.

                                   Initial stock for the raw materials, and some of them need to be posted to project stock.

                                             Production processing using Pro-MAN, for all the semi-finish goods.

                                              Customer specification change to change the component of BOM.
                                                        Scrap one component from the project stock.

                                                          Re-work of the component using Pro-MAN.
                                         Create debit request to customer to charge the special cost for the re-work.
                            Create claim document to record the cost of re-work, and link the claim to production WBS element.
                                            Finish the production part of project by confirm the related activities.

   2nd advance payment.                               Release 3rd milestone then settle the 3rd invoice.

                                            Start delivery work of project and delivery creation from the project.
                                                                  Delivery process and GI.

     final payment.                                Finish the Delivery work and release the last milestone.

                                                          Cost and revenue analysis by PS reports.

                                              Link related business documents to record management model.
Business Benefits


   Project structuring/execution via project system
    Clear definition of deliverables and responsibilities
    Clear definition and milestones to break down the work by project phases
    Centralized control for project costing and revenue
   Milestone billing
    Determines the percentage of completion (milestone technique for
   earned value analysis)
    Determines dates in the billing plan for sales orders (cost control)
   PRO-MAN
    Centralized control of components consumed during the project
    Control and monitor MRP, procurement, production through a single interface
   Change Management in Project
    Control the material scraping and re-work through PRO-MAN
    Control the cost of re-work by claim
    Charge the cost of re-work to customer by debit request
   Delivery through Project/Final Assembly on Customer Site
    Deliver the main items to customer through project
    Control the assembly work and customer acceptance test by network
   activities
BoM Structure

                             Engineer-to-Order
   E84                      Order Processing


                                                                            SD BOM
                          E83-1000                                    (Variant Configurable)
                         Robot Route


                                             E83-1100
                                         Switchgear Cabinet

                                             E83-1200
                                                 Robot
                              PP BOM
                                                                                               PP BOM
              E83-1210                                                     E83-1230
         Basis System                                                  Enhancements
                                           E83-1220-XXX
                                          Control Cabinet

  E83-1211               E83-1212                              E83-1231                E83-1233
 Base Frame        Rotating Column                            Picker Arm               Tox Pliers


                    E83-1212-HALB                                          E83-1232
                   Rotating Column                                   Spot Welding Gun
                    - Raw Material
Material Master Data



   E83-1000 Robot Route
                          E83-1100 Switchgear cabinet
                          E83-1200 Robot
                          E83-1210 Basis system
                          E83-1211 Base frame
                          E83-1212 Routing column
                          E83-1212-HALB Routing column - Raw
                          E83-1220-110 Power supply 110V
                          E83-1220-230 Power supply 230V
                          E83-1220-380 Power supply 380V
                          E83-1230 Enhancements
                          E83-1231 Picker arm
                          E83-1232 Spot welding gun
                          E83-1233 Tox pliers
Project Structure


     SD Order
       Item




 Billing WBS linked to
   the SD Order item
 to handle the revenue
      of the project




                         Activities in central WBS
                             element linked to
                         different WBS elements
                          to control the project
                             phases centrally
Milestone with Progressive Billing




                                      Milestones linked to
                                        SD order item to
                                     control the progressive
                                              billing
PRO-MAN


           Centralized control of
          components consumed
             during the project




                                    Control and monitor MRP,
                                    procurement, production
                                    through a single interface
Change Management in Project


                                                          PRO-MAN to
                              Project                   Handle the change
                                                         In logistic side

       Cost                                 Charge
  of the change                         of the change




             Claim is built, and the     Debit Memo Request is
              assignment goes to        built, and assignment also
                related WBS in           goes to related WBS in
                  the project                    the project
Delivery through Project/Final Assembly on
Customer Site




                                           Item Category DLP
                                         stands for the delivery
                                         items generated from
                                                a project
 Deliver the main items
  to customer through
         project