BUSINESS BLUEPRINT

PROJECT SYSTEMS

DOCUMENT APPROVALS

PROJECT SYSTEMS
BUSINESS BLUEPRINT

Submitted to

M/s HAILSTONE INNOVATIONS PVT LTD

By

INDUS NOVATEUR SOFTECH PVT LTD

FEB 2019

VERSION 1.0

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 BUSINESS BLUEPRINT
PROJECT SYSTEMS

DOCUMENT INFORMATION

Project Name Document Name Document Location

SAP S4 HANA PS Business Blueprint Document Server

DOCUMENT HISTORY

Version Document Name Date Author Reviewed BY Change Control

PS Business Blueprint 18.01.2019 Mr. RANJITH. N R Draft Version
0.0
PS Business Blueprint 25.02.2019 Mr. RANJITH. N R Final Version
1.0

REVIEWANDAPPROVAL

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Name Date (YYYY-MM-DD)

Key Stake Holders (HIPL)

Name Date (YYYY-MM-DD)

Key Stake Holders (HIPL)

Name Date (YYYY-MM-DD)

Customer Project Manager

Name Date (YYYY-MM-DD)

SAP Project Manager

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Contents

1. INTRODUCTION ....................................................................................................................................................... 5
1.1 PURPOSE OF THE DOCUMENT ............................................................................................................................ 6
2. SAP IMPLEMENTATION SCOPE................................................................................................................................ 6
3. PROJECT SYSTEM (PS) ............................................................................................................................................. 8
3.1 Purpose ............................................................................................................................................................... 8
3.2 PS IMPLEMENTATION SCOPE .............................................................................................................................. 9
4. ORGANIZATIONAL STRUCTURE ............................................................................................................................. 10
4.1 CONTROLLING AREA ......................................................................................................................................... 11
4.2 COMPANY CODE ............................................................................................................................................... 11
4.3 PLANT ................................................................................................................................................................ 11
4.4 Storage Location ............................................................................................................................................... 12
5. PS MASTER DATA .................................................................................................................................................. 13
5.1 Project Structuring ............................................................................................................................................ 13
5.2 Project ............................................................................................................................................................... 14
5.3 WBS ................................................................................................................................................................... 14
5.4 Network............................................................................................................................................................. 14
5.5 Activity............................................................................................................................................................... 15
5.6 Activity Elements............................................................................................................................................... 15
5.7 Internal resources (Work Centers) .................................................................................................................... 15
5.8 Other masters ................................................................................................................................................... 16
6. Project Nomenclature& Creation. ........................................................................................................................ 17
6.1.1 Project Coding Mask ............................................................................................................................. 17
7. PROJECT SYSTEMS BUSINESS PROCESS ................................................................................................................. 18
7.1 PROJECT INITIATION & STRUCTURE .................................................................................................................. 18
7.2 BUSINESS PROCESS DIAGRAMS ........................................................................................................................ 19
7.3 PURPOSE OF CREATING PROJECT STRUCTURE: ................................................................................................ 19
7.3.1 Master Data: ......................................................................................................................................... 20

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7.3.2 Standard Project:................................................................................................................................... 20

7.3.3 Project Status: ....................................................................................................................................... 20
7.3.4 Date Planning ........................................................................................................................................ 22
7.3.5 Planning of Resources and Material ..................................................................................................... 25
7.3.6 Planning of Cost .................................................................................................................................... 28
7.3.7 Procurement ......................................................................................................................................... 29
7.3.8 Settlement receivers ............................................................................................................................. 33
7.3.9 Project Settlement ................................................................................................................................ 33
7.3.10 Project Closure ...................................................................................................................................... 34
8. PROJECT SYSTEM INFORMATION SYSTEM ............................................................................................................ 34
9. RICEF...................................................................................................................................................................... 36
9.1.1 Report.................................................................................................................................................... 36
9.1.2 Interface ................................................................................................................................................ 36
9.1.3 Conversion ............................................................................................................................................ 37
9.1.4 Enhancement ........................................................................................................................................ 38
9.1.5 Forms..................................................................................................................................................... 38
10. Annexures ......................................................................................................................................................... 39
10.1 Annexure – Developments Identified and Functional Deficits (GAPS) ............................................................ 39

1. INTRODUCTION
Hailstone innovations pvt ltd formerly known as Technomesh Pvt Ltd was established in 2006 at
Thrissur, Kerala with major focus in design & fabrication of construction & mining equipment’s and its
accessories. With a wide experience in this sector we have already set our own footprint among the top
companies.

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1.1 PURPOSE OF THE DOCUMENT

This document is a result of Conference Room Pilot and discussions around the same. This document will help to
map Hailstone, business requirements with Industry Best Practice and standard functionality provided by SAP for
Project System business scenarios. The preparation of this document is an essential precursor to prototyping and
testing. The Business requirement process was documented by PS Consultant and reviewed by management team
of both PS Consultant and Hailstone. The body of this document describes the Enterprise Structure, Master Data,
and Business Functional process flows to be implemented at Hailstone.

The purpose of this document is to model Hailstone Project System business requirement and define how the
various business scenarios will be mapped on to it. Arrive at clear understanding of the business processes based
on requirements. Identify Gaps, if any with SAP R3standard functionalities and address business critical gaps. The
identified gaps are discussed and arrived at alternate solution which is mutually agreed by Hailstone user and
management.
The realization work will start after Hailstone has accepted this Business Blueprint Document.

2. SAP IMPLEMENTATION SCOPE

The Implementation will cover the following modules in SAP S/4HANA

 FICO -FINANCE AND COST CONTROLLING

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 FICO – FINANCE AND CONTROLLING

 MM -MATERIALS MANAGEMENT
 SD -SALES AND DISTRIBUTION
 PS -PROJECT SYSTEMS
 PP -PRODUCTION PLANNING
 QM -QUALITY MANAGEMENT

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3. PROJECT SYSTEM (PS)

3.1 Purpose

To handle the customer projects, such as one stage crushing plant, require precise planning of the many detailed
activities involved. The project manager has the job of ensuring that the project is executed efficiently, on time, and within
budget - which he or she achieves by ensuring that the required resources and funds are available as and when needed.

Projects are generally part of the internal processes of a company. To be able to control all tasks in project execution, you need
an organizational form that is specific to the project and which is shared by all departments involved. Before you can carry out
a project in its entirety, the project goals must be precisely described and the project activities to be carried out must be
structured. A clear, unambiguous project structure is the basis for successful project planning, monitoring, and control.

You structure your project per the following points of view:

 By structures, using a work breakdown structure (WBS)

 By process, using individual activities (work packages)

A project is structured:

 According to how it is organized

 According to the processes involved

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3.2 PS IMPLEMENTATION SCOPE

a) Project Structuring
b) Project Network
c) Project Activity Planning, Networking & scheduling
d) Project Budgeting
e) Project execution Delivery
f) Project Scheduling
g) Project Material Tracking
h) Project Resource Planning & Tracking
i) Material Delivery
j) Project Settlement
k) Standard SAP Project Systems report

Project Systems in SAP will be used to monitor the execution of projects in Hailstone

The Project Systems module in SAP helps in

1 Tracking of project related stocks separately from other plant stock along with its cost.
2 Tracking the execution of important activities in the projects (certification, license..)
3 Summary Reports on projects using the nomenclature as criteria.
4 Summary Reports on projects on a global corporate level.
5 Easy segregation of various costs within a project
6 Assigning Planned costs & facilitate calculation of actual Recognition.
7 Planning at Activity level & tracking its actuals.
8 Planning at WBS level & tracking its actuals.

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4. ORGANIZATIONAL STRUCTURE
The Project System has no organizational structures of its own; you incorporate it into the existing structure by
making assignments to the organizational units in Accounting and Logistics. It is this which enables the Project
System to present data clearly and in many different ways.

Project Definition

Controlling area

WBS Element
Plant

Controlling area

Company code
Networks
Plant
Plant

Activities

Internally Processed Activity

Plant

Work Centre

Externally Processed Activity

Plant
Purchasing org
Purchasing Group

General Costs Activities

Plant

Material Component

Purchasing org
Purchasing Group
Plant
Storage location

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4.1 CONTROLLING AREA

Controlling Area is an organizational unit in Accounting which views the business organization from a cost
accounting standpoint. Controlling Area is being used to represent a closed system for cost accounting purposes.
Controlling Areas is used for internal reporting purposes

Company Codes are assigned to Controlling Area.

Controlling Area Code Controlling Area Description

1000 HSPL Controlling Area

2000 HSPL Controlling Area

4.2 COMPANY CODE

The company code is the smallest organizational unit of Financial Accounting for which a complete self-contained
set of accounts can be drawn up for purposes of external reporting.
The process of external reporting involves recording all relevant transactions and generating all supporting
documents required for financial statements such as balance sheets and profit and loss statements.

Company Code Company Code Description

1000 Hailstone Innovations Pvt Ltd

2000 Hailstone Innovations Pvt Ltd

4.3 PLANT

Plant is an organizational unit within a company code. A Plant is an organizational unit that structures the
enterprise from the perspective of production, procurement, distribution and Stock Storage Area. The materials are
valuated at Plant level. Each plant can have its own set of parameters of control from organizational aspect of sales,
production, costing, purchase, quality. It is important to define plants based on the requirement to valuate stock &
to track the movement of stock between plants.

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At Hailstone: Plant definition would be a part of MM Module. Under company code Hailstone Manufacturing
locations, depot & Warehouse will be identified as plants. Material valuation will be at plant level. These will be
assigned to company code.

At Hailstone, Plant Structure:

Company Plant Description

Code
1000 1000 Hailstone Palakkad
2000 2000 Hailstone Thrissur

4.4 Storage Location

Storage Location is an organizational unit allowing the differentiation of material stocks within a plant. As
per material storage requirements of respective Plants, the following Storage Locations (Plant wise) are
maintained. The stock at certain Storage Locations can be excluded from MRP consideration. It is possible to
segregate stocks at shop floor& stores. Each plant should have at least one Storage Location. Movement between
storage locations generally will not create accounting entries.

Plant Storage Location Code Storage Location Description

1010 Central Storage
1020 FG
1030 Inward rejection
1040 Line rejection
1050 Field rejection
1060 Sub assembly
1000 – Hailstone Palakkad 1070 Spares
1080 Open yard
1090 Rework
1100 Scrap
4010 Project Central Storage
4020 Project FG
4030 Project Rework/Rejection
2010 Central Storage
2000 – Hailstone Thrissur 2020 FG
2030 Inward rejection

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2040 Line rejection

2050 Field rejection
2060 Sub
2070 Spares
2080 Open yard
2090 Rework
2100 Scrap

5. PS MASTER DATA

5.1 Project Structuring

This involves creation of the project structure based on the events that we would like to monitor in a project. The
user needs to clearly identify the breakup of the project. It could be based on responsibilities within projects,
budget criteria, and separate asset for each WBS, or based on the various sequence of phases. It is important to
structure a project correctly so that the events in a project can be controlled correctly.

Projects have the following elements available for creating Project structure:

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5.2 Project
The “Project” is the Project definition; it is like a name or placeholder for the project. The controlling features of a
particular project are populated due to the Project Profile.

5.3 WBS
Each Project can have its own WBSEs under itself, to represent the breakup for controlling different elements of a
project. We can have a maximum of 2 or 3 levels of WBSEs in the projects.

WBS can refer to the different phases in a project. It can be based on the responsibilities. It can be based on the
budgeting control. It can be based on the Assets involved in the project.

It has a hierarchy of its own like a tree with many levels. The lower levels of the WBS will summarize the planned
cost & the budget all the way to the top level.

There must be a single WBS at level 1 which is the topmost level. Under that WBS we can have many WBSEs at the
same level. Only the top most WBS must be assigned to the Appropriation request.

 They cannot be scheduled automatically.

5.4 Network
The Grouping of Activities is called Network. Scheduling of Activities can be done at Network level. Each Network
can have multiple Activities. Activities can be across WBSEs. Each WBSE can have multiple Activities.

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5.5 Activity
The Activities are elements which define what is required to be done to complete a WBSE. It is the list of work that
is be tracked for the execution of a project.

The relationships must be defined between the various activities. Only activities can be scheduled based on the
duration, relationships & constraints between them. Based on the scheduling, the system will create a Network
diagram. The user needs to maintain the above correctly in order for scheduling to be done.

 Internal Activity is used to track internal resources & also to track the input required for completion of
project.
E.g. procure, install, test, commission
 External Activity is used purchase Text items, Non-valuated items, or Services
 General Cost Activity is used to track expenses that have no purchase orders or towards unforeseen
expenses --like contingency, hotel expenses, travel expenses, etc.

The Materials that are required for the execution of the activities can be assigned to the above Activities. The
prerequisite is to have Material Master available in system.

5.6 Activity Elements

 Each activity can be detailed with Activity Elements. Activity Elements belong to each activity. They can be
of the same three types similar to the Activity types mentioned above.
 Activity Element can provide more details for each Activity.
 Activity Elements cannot be scheduled. Only their parent Activity can be scheduled. The parent Activities
need to be released in order that actual can be booked.

5.7 Internal resources (Work Centers)

Definition
Work Centers represent the facilities or persons involved in a project. These are internal resources of the
organization that is executing the project. It can be in the form of machines, Bulldozers owned by the
organization, or managers, operators, designers, etc. working as employees in the organization.
Purpose
They are mainly used to represent & capture the contribution of effort by the internal resources of the
organization executing the project. The work centers can be used to capture the costs due to the effort in the
project. The Work centers are used in scheduling based on the available capacity. Work Centers are assigned
to Activities.
Data in work centers

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The work center category determines which data can be maintained in the work center. The category “006”
will be used for Project Systems.
The data is grouped thematically together in screens and screen groups. Examples of such screen or screen
groups are:
 Basic Data
 Capacities
 Scheduling
 Costing
Basic Data View:
“006” will be used which signifies the usage of the work center for various modules.
Capacity View
The available capacity and formulae for calculating capacity requirements are entered in the “capacity” view
of the work center.
The normal capacity of the Work Centers can be maintained by maintaining the normal working time of the
work center. Capacity Planner group can be used to identify the various work center groups.
The various shift times will be maintained on the work center masters to enable the system to know the
normal working capacity. The factory calendar will be maintained as “all days working”.

Scheduling View
Scheduling formula will be maintained in this view. The unit of measurement for the work can be
maintained as “Day”

Costing View
It is mandatory to maintain data in the Costing View, if the effort performed at the work center are to be
costed.
The “Activity Type” is the rate at which the effort is to be evaluated. The combination of Cost center &
Activity type defines the rate. The Activity Type & the Cost Center data must be maintained in the “Costing”
view. The formula to calculate the effort is maintained in this view. Based on this the system will calculate
the planned cost & the actual costs using the efforts recorded for the activity.

5.8 Other masters

 Activity Type rates for each Work Center:
This will be the rate per hour or per day for each of the above possible categories. This helps in calculating the
planned & actual costs of internal resources.

 Cost Center for each of the above category of employees or Work Centers. This is the Cost Center that is
contributing to the project costs

 Person responsible

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It is possible to assign persons names to WBSEs as a reference field which will indicate responsibility (8 characters).

6. Project Nomenclature& Creation.

6.1.1 Project Coding Mask
In SAP Project Systems, a Project Coding Mask is used to create a structure for the project number. Masks
help in displaying complex project numbers and in indicating the position of a WBS element in the project
hierarchy.
The below characters are available for editing.
 X – Used for alpha numeric characters.
 0 – Used for numerical characters only.
 “- , /“ – Used for separator.

ID Coding Mask Description

P P-X-XX-00/000.00.00.00.0 Project for Execution

Q Q-X-XX-00/000.00.00.00.0 Quotation Projects

A work breakdown structure (WBS) is a model of the work to be performed in a project organized in a hierarchical
structure. The WBS is an important tool which helps you keep an overview of the project:
 It forms the basis for organization and coordination in the project.
 It shows the amount of work, the time required, and the costs involved in the project.
It is the functional basis for further planning steps in a project, such as process planning, cost planning, scheduling,
date and capacity planning, or costing, as well as project control.
The project structure can be represented according to different criteria:
 By phase (logic-oriented)
 By function (function-oriented)
 By object (object-oriented)

An example of project coding mask

ID Coding Mask Description Project Number

P P-X-XX-00/000.00.00.00.0 Project for Execution P-A-AA-19/001.00.00.00.0

AB C D E F G H I Type A Project with Sub type A
Q Q-X-XX-00/000.00.00.00.0 Quotation Projects
AB C D E F G H I

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P-X-XX-00/000.00.00.00.0

A Project identifier
B First 1 digits represent the kind of project
Project
A: Type A
B: Type B
C: Type C
C 2 digits Represent the type of Sub project
D 2 digits represent the year in which project has started
E 2 digits represent serial number of the project in that year
F Level 1 WBS element
G Level 2 WBS element
H Level 3 WBS element
I Level 4 WBS element

Eg.Project: P-A-AA-19/001
WBSE: P-A-AA-19/001.01

7. PROJECT SYSTEMS BUSINESS PROCESS

This document describes the Project Systems [Project Management] in SAP

This process starts from the Project creation phase, continues into planning & execution until closure of the project.
Projects are related to capitalization.

7.1 PROJECT INITIATION & STRUCTURE

Existing Processes
 Based on the customer requirements the project will be initiated
 the sales team enter the sales order as per the purchase order received from customer
 there are 3 types of projects
 Standard, partially customized and fully customized
 the project team identifies the type of project to be done
 the design team will do the modification if necessary
 send the drawings for approval

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 after project creation the project team will be do the master data work will done and MRP Run
 the procurement team will procure if any special material needed else store will transfer to
project
 the production team will do the production activities
 after project the sales team will do the delivery and raise the invoice

7.2 BUSINESS PROCESS DIAGRAMS

7.3 PURPOSE OF CREATING PROJECT STRUCTURE:

The structuring of a project is important since it has impact on product delivery and also on project settlement and
reporting. Depending on the type of project and the emphasis on the project monitoring, the structure will be
created in the Project System using the operative structures i.e., Work Breakdown Structure & Network. The
purposes of creating project structure are as follows:

 To have a functional basis where process planning, cost planning, scheduling as well as project control can
be done.
 To have a system where planning, analyzing, controlling and monitoring schedules and resources can be
done.
 To document the various activities that has been performed during the project along with the duration.
 To plan and procure the components and services required during project implementation.
 To capture the cost incurred during project execution.

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7.3.1 Master Data:

It is an object for defining project management process. The master data can be in the form of WBS elements,
network activities, work centers, milestones etc. which has been described in chapter 3.

7.3.2 Standard Project:

Project management requires numerous activities involved to be planned, controlled and monitored precisely,
systematically, and efficiently.

Successful project management requires structural identification of all processes that are necessary to and depict
them in a structural and process-oriented way. A clearly structured project and precisely described project goals
build the basis for successful planning, monitoring, and control of projects.

Although each project is unique, most efforts undertaken by a single organization follow a similar structure or a
finite set of similar structures.

SAP Project System module provides the standard structures or template, which simplify the process of creating
and planning various projects. Standard projects and networks are defined to facilitate the creation of simulation
project versions and operative projects. These templates speed up the creation process and default as much data
as is practical. The templates are set up to mirror, as closely as possible, the most commonly used project
structures. When the time comes to create new projects in the system, these templates are copied to create
simulated project versions or operative projects.

With respect to Hailstone

 For each project type, project team will identify different work units and tasks.
 Work units will be created as work breakdown structure of the project using standard Work Breakdown
Structure.
 Minor tasks of each work units will be created as activities by assigning relevant WBS element using
Standard Network structure.
 For each activity estimated duration can be entered.
 Each task will be linked with each other using relationships.

7.3.3 Project Status:

Since the project is not a static object and has its own life cycle that begins when it is created and continues till
completion. During this period of life cycle, various business transactions which take place change the project; for
instance planning tasks, posting costs and changing dates.
The current status of a project determines the type of business transactions executed within the system. The status
management in Project System differentiates system status and user status.

System Statuses: Following are the “System statuses” and briefly described as follows:

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Created (CRTD): It is the initial system status for new WBS elements created. In this status the project can be
structured and dates, costs etc., can be planned. Actual costs cannot be posted.

Released (REL): The released status can be set based on project approval. Actual costs can be posted in this status
after assigning costs/budget to WBS elements.

Technically Completed (TECO): This status is set for WBS elements which are completed from a technical point of
view; but still expects costs to accrue from the commitments (purchase order) already made.

Closed (CLSD): Closed status is set for a work breakdown structure or WBS element which has been completed
from both logistic and an accounting point of view.

Locked (LKD): Locked status is set to lock for individual business transactions or all the data in a work breakdown
structure or WBS element.
User status: The user status is linked to the authorization whereby certain people are authorized to create or
change the status.

PS-0001

PROJECT STRUCTURE BUILDING

Event Need for creation

of Operative Proj.

PS-0002
Project Copy New Or
Template Copy?
Processing
New

PS-0004
Create Project
Planning of
Definition (CJ20N)
Resources

Create WBS Need for Create Network Save the

Structural Network and activities operative project
Project
elements (CJ20N) Stru Yes (CJ20N) (CJ20N)
Management
No
Maintain activity Maintain PS
relations Texts / Document
(CJ20N) (CJ20N)

Yes
Need for Yes Maintain Need for
Mile- Milestones Texts
stones (CJ20N) Doc No
No

Figure 6.3: Flow chart for Project structure building.

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PS-0002

PROJECT TEMPLATE PROCESSING

Need for Need for Need for Need for

Event creation creation of creation of Transfer of
of template Operative Proj. Simulated Proj. simulated Proj.
From Std Template

PS-0001 Create Transfer project

Create Std Proj New Or Build New Or Verà Operative
Simulated
Def & Std WBS’s Copy? Operative Proj Copy? (CJV4 /CJ20N)
New version CJV1
(CJ91) New Str

Copy Copy
Create Std Copy the Copy the Save the Modify and use
Network & standard Proj standard Proj Simulated the Operative
Activities (CN01) (CJ20N) (CJV1) project (CJV1) project (CJ20N)

Project Delete Simulated

Assign Std Modify as per
Manage- version if not
Network to Std requirement.
ment required (CJV5)
WBS (CN01) (CJ20N)

Create Std Save the

Milestone for req operative project
Usage (CN11) (CJ20N)

Refer Std Mile

stone for the Std
Proj Obj (CN02)

Figure 6.4: Flow chart for project template processing.

7.3.4 Date Planning

Hailstone executes various types of projects which include work packages and tasks. The concerned person
responsible for the work package needs to plan dates. Considering the various interlinked activities among the
different work packages, overall scheduling of activities need to be carried out. The dates are recorded on the
schedule which is prepared in spread sheet.

Master Data:
 WBS element
 Network activities

Solution in SAP:

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Once the project is structured, the planning has to be done. Planning essentially covers cost planning, time
planning, material planning and manpower planning for the project.

Date Planning and Scheduling: In Project System, there are several options for planning and managing
dates and schedules (system updates automatically the earliest start date and end date of all activities depending
on backward / forward scheduling). Forward scheduling is used when we know the start date of the first activity
and the duration of the project, to arrive at the end date of the project; whereas backward scheduling is used when
we know the end date of the final activity and the duration of the project and desire to arrive at the start date of
the first activity. During scheduling, system uses normal duration of internally processed and general cost activities,
whereas for externally processed and services activities the system uses the number of planned delivery days.

The type of date used for planning and scheduling can be decided based on the project requirements.
System also calculates required dates of planned material with reference to activity start date. Various types of
dates are used in projects and the same are described here below:

Basic and Forecast Dates: Basic dates are the dates that have a binding character for time scheduling.
Forecast dates are the dates that are expected based on more detailed planning or on changes that will occur
during the course of the project.

Scheduled Dates: Scheduled dates for networks (for both the internal and external activity) are the start
and finish dates of activities calculated by the system on scheduling based on the duration (days / Hours) and
relationship that have been entered.

Actual dates: Actual dates provide the information on the state of the project. Actual dates are entered in
the system manually through confirmations of various activities.

SAP PS supports four types of relationships between activities, viz:

1. Finish to Start (FS)

2. Finish to Finish (FF)
3. Start to Finish (SF)
4. Start to Start (SS)

With leads and lags, the system also supports the constraint. SAP PS supports Critical Path Method (CPM) for
project scheduling and calculates free float and total float.

There are various ways of carrying out project structuring, planning and scheduling in SAP PS system using project
builder, project planning board and structure planning. For example, project Gantt chart could be viewed through
project planning board.

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Project Planning Board: The project planning board enables to process the entire project structure such as WBS
elements, activities, and the different objects assigned to them; in an integrated environment.

The project planning board is based on an interactive SAP Gantt chart. The Gantt chart comprises a table and
diagram area, and shows not only the hierarchical structure of the project but also the corresponding situation with
regard to dates.

In projects without networks, dates can be planned manually for the WBS elements (basic dates). The project
planning board can be used to plan basic dates for the WBS elements simply by dragging the mouse. Structure
planning function can be used to plan these dates in the form of a table.

Basic dates can be extrapolated from lower to higher-level WBS elements or, conversely, can be inherited from
higher to lower-level WBS elements. The consistency of scheduling data can be checked within the WBS structure.

In the execution phase, the actual dates can be entered by dragging mouse. In the project planning board or the
information system, the actual dates can be compared with the planned basic dates.

Process Diagram:

PS-0003

DATE PLANNING AND SCHEDULING

Event Need for planning Need for overall

of Dates network planning

PS-0001
Project
Structure
building

WBS+Network
Only WBS
Activity
PS-0002 Plan Basic/Frcst
Type of Scheduling Overall Network
Project dates in individual
Structure (CJ20N) Scheduling
Template WBS (CJ20N) (CN24 / CN24N)
Project Processing
Management
Network Activity
WBS Basis
Basis
Schedule as WBS Schedule as NWA Complete
basis
Dates as Basis determines dates

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7.3.5 Planning of Resources and Material

Master Data:

 WBS element
 Network Activity
 Material Master
 Service Master
 Work Centre

Solution in SAP:

Resources: The purpose of resource planning is to determine the resources usage to perform the activities planned
in the project structure.

When Hailstone wants to track internal resources, internal processed activity will be used. Service activities are
used if services are procured from the external agency. The resources in Project System are as follows:

Internal Processing: Internal processed activity contains a work center at which the work is to be carried out. It
contains the working time and the duration of the activity. The assignment of the work center to a cost center
provides an activity type and a rate so that planned costs can be calculated for the activity.

 The project team will have to create internal processed activities to plan the resources required for the
work that is carried out internally in a project.

 Relevant work center has to be assigned to the internal processed activity.

 The activity type is determined from the work centre. This is essential for the calculation of the cost for
an activity.

 During scheduling, the system determines the capacity requirements for the project.

 The objective of capacity planning is to provide a final schedule by considering the capacity
requirements of the facilities and work centers as well as the time structure of the processes. Often,
capacity supply does not match capacity demand.

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 Project team will compare the capacity requirements for the projects using project planning board for
the work centers assigned to internal activities. These work centers appear as bars on time axis. Red
sections of these bars indicate overload within a specified period.

 Project team will level the capacities by changing the work centre or rescheduling the activity to a
period when capacity is available.

Work Centre:

 Work Centers represents a group of people with the same skill set which belong to the same cost
center. Individuals assigned to a cost center are linked to a corresponding Work Center so that accurate
rates can be determined for labour cost planning purposes. A work center is the place where an activity
is carried out or work output is produced.

 System can determine capacity requirements when work center is assigned to activity.

 Work centers contain data for costing activities.

 Work centers also contain the scheduling and capacity data required for scheduling and capacity
planning.

 System calculates capacity for work centre using number of Individual capacity, work hours per day and
utilization of percentage.

External Processing: Externally-processed activities are used for procuring activities or services that are not
procured or available within the company. Purchase requisitions are generated for externally procured
activities.

Service activities: Service activities are also used to procure services externally. Unlike externally-processed
activities, this activity type enables to define service specifications and value limits for unplanned services
rendered by the service provider. Service processing which includes entry and acceptance of services
performed) is also carried out by the Purchasing Department.

Service procurement is mapped in networks by means of external processing and service activities.

When an external processing activity is created, a purchase requisition is also created that is processed further
in Purchasing. Data from Purchasing Department can be used for external processing (a purchasing info record,
for example, that contains prices and delivery times for external processing).

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A service activity triggers a similar purchasing process, but it contains a hierarchy of planned services to be
purchased, and value limits for unplanned services. The goods receipt for services involves two steps: entering
the service and accepting the service.

Material: The purpose of material planning is to determine the materials required in a project by means of
networks. This component is also used to monitor the material requirements and costs in projects, to control
the flow of materials and for scheduling.

During project planning project team, will assign components to activities that are required to execute the
work. Material number, Item category, Quantity, Purchasing organization and Purchase group are entered.

Item Category: If planned material is stock item, item category as L is assigned and item category as N is
assigned for non stock item. When the activity is released, a PR and a reservation will be generated for the
material.

Requirement for Non stock item: If the allocated material is identified as a non-stock item, the system
generates a purchase requisition for the material. This document authorizes the Purchasing Department to
procure the required quantity of in a specified date.

Material stock management: Material components in networks can be managed in different stocks. The
following different types of stock can be used, for current scenarios:

Plant stock: This material is managed in general stock. It is not assigned to any particular project object.

Project Stock: The projects can have their own stock. The individual stock segments are assigned to WBS
elements.

Process Diagram:

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PS-0004

PLANNING OF RESOURCES AND MATERIALS

Event Need for planning Need for planning

of Resources components

PS-0001 Internal
Material Master
Project Maintain Internal resource Type of Record
Structure Activity (CJ20N) Resource
building
External
Resource

PS-0002 Stock item

Assign component
Project Material Master Type of
Maintain External Type of master record with
Template Record procure-
Activity (CJ20N) External item cat L
Processing External ment
Project procure- Detailed (CJ20N)
Management ment service Consumables
specification
Trigger Purchase Assign component
Maintain Service master record with Master
Requisition
activity (CJ20N) item cat N record
(CJ20N)
(CJ20N) Yes
No

Maintain Material
Trigger Purchase
Work center Text with item
Requisition
category N
(CJ20N)
(CJ20N)

Figure 6.3.1: Flow chart for Planning of Resources and Material

7.3.6 Planning of Cost

Execute various types of projects like new installation and capacity enhancement etc. The project team identifies
new project and estimates cost and duration. Based on the project specific work packages, equipment and
activities, the cost is estimated. Previous project experiences, new/ revised prices, estimated prices etc., are used in
the preparation of cost estimate. Based on various options with respect to design and technology, the estimates
may vary. The estimated cost will be submitted to Competent Authority as budget proposal.

Purpose:

To have a functional basis where process planning, cost planning, scheduling or costing, as well as project
control can be done.

Master Data:

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 Work Breakdown Structure

 Network
 Material Master
 Service master

Solution in SAP:

Cost planning has different aims at different stages of the project and is elaborated as follows:

 During the conceptual and rough planning stage, cost planning acts as the base for an initial cost
estimate.
 At the approval stage, it forms the basis for the budget allocation.
 During project execution, planned cost is used to monitor and control cost variances.

Cost planning deals with the costs that are expected to incur during the execution of the project.

Network cost planning: will carry out detailed cost planning at activity level for capturing the details of
materials and services required to execute a project. Network cost planning includes automatic calculation of
the planned cost from activities, activity elements and components. The quantity structure is the basis for
costing. It contains all network data needed for the calculation. It also includes costing sheet for the overheads.

Cost of Internal Resources: Internal processed activity has to be maintained in order to plan the cost of internal
resources. Work (hours), work center, activity type and duration of activity has to be maintained. The price of
internal resources will be maintained using activity type. The system calculates the costs automatically on the
basis of the existing price/quantity structure.

External Resources Cost: Service activities have to be maintained in order to plan the cost of services to be
procured from service provider. Using service activities, service specifications are maintained for various
services provided by service provider. System calculates the planned cost using values maintained for service
specifications.

Material Cost: The material components are assigned to network activities in order to plan the cost of material
component. System calculates planned cost of material with moving average price maintained for that material
master. Travel expenses are planned using cost activity.

7.3.7 Procurement

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Purpose:
Project specific procurement is one of the major activities of Project management. Detailed procurement
processes including single tender, limited tender and open tender etc, are explained in the Material
Management (MM) module.

Master Data:

 Material Master

 Vendor Master

 Service Master

 Purchasing Info Record

Solution in SAP:

Project Procurement covers procurement of goods and services (including works) for a project. Material and
services can be initiated, procured and tracked throughout the project cycle. . A reservation is generated for
the material if it is identified as stock item. A reservation is an internal document that defines the requirements
of a material and reserves a specified quantity for the network activity.

A purchase requisition is an internal document that defines the requirements of a material or a service. As soon
as the activity is released, the system generates a purchase requisition for the material.

Purchase requisition will be created and the value of PR will be created as internal commitments for the
project. System will check the availability of the budget with committed value.

Technical Evaluation: Technical and commercial evaluation is done by the evaluation team. The technical
evaluation contains comparison of technical features and recommendation.

Purchase Order: Purchase order will be created by the Purchasing Department. Based on technical and
financial evaluation, purchase order will be issued to qualified vendor. When the purchase requisition is
converted as purchase order, external commitments will be created and internal commitments are reduced by
the value of purchase requisitions. System will check the availability of the budget with committed value.

Goods Receipt: The project specific stock is traceable specific to the project object. Goods are received with
reference to purchase order and stored as project stock. Goods receipt reduces the external commitment by
the amount of purchase order.

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Goods Issue: When the material is issued for execution of project activity, the project stock reduces and the
actual costs are debited to the corresponding activity.

Services:

 Generation of Purchase Requisitions: Service activity contain service specification containing planned
activities and value with limits for unplanned activities. The purchase requisitions for the services are
generated by creation of appropriate activities. Service activities give rise to the planned cost of the
project.

Techno-commercial evaluations:

 Service provider is finalized for the specific work/ services package based on technical and financial
evaluations and its approval by the Competent Authority.
 Issue letter of Intent to successful service provider.
 Service PO is issued.
 Based on this work execution is initiated.

Service acceptance: Service entry and service acceptance will be done by project team and will enter the
record of measurement in measurement book. Service entry sheet acceptance will post the actual cost into the
service activity.

Managing Stocks of Material Components: Material components in networks can be managed in different
stocks. Depending on the network and the settings entered in the material master, you can use the following
different types of stock:

 Plant stock: This material is managed in general stock. It is not assigned to any particular sales
order or project.
 Project Stock: Project can have its own stock and is viewed from material requirement planning.
The individual stock segments are assigned to WBS elements.

Materials that are needed to carry out the project are managed as project stock. Each WBS
element in a project definition has a separate individual stock segment. Each stock segment is
permanently assigned to a WBS element and, from a MRP view, is only available for this WBS
element.

Unlike general stock, the relevant WBS element must be entered, as well as the plant and storage
location, when entering goods movement.

Project stock can be valuated or non-valuated.

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 Valuated Project stock: Every material in project stock is managed both in a quantity basis and a
value basis. The monetary value of each quantity of material is calculated separately. All goods
movements for the project stock trigger corresponding postings in the stock accounts in Financial
Accounting.

 Non-valuated project stock: Project stock, where each material is managed in terms of cost on a
quantity basis only. Goods movements to individual stock are not valuated and do not give rise to
postings in Financial Accounting. In general, the value of the project stock is calculated in total at
the period end by result’s analysis and the values are then transferred to Financial Accounting.

PS-0007:Project Procurement

Generation of
Event

procurement
elements

PS-0005
Planning of Purchase
Costs (NWA Requisitions
Costing)
Project Management

PS-0002
Project
Template
Processing

PS-0001 Subsequent
Service
Project connected
acceptance
Structure activities
building

Commercial
Evaluation Team

evaluation

Services

Technical
Evaluation
Purchasing

Purchase
Dept.

RFQ with Tendering Order with Bills

Material Goods receipt
specification process necessary Processing
approvals

Figure 6.4: Flow chart for Project Procurement

The Purchase Requisitions can be converted to Purchase orders & then the Goods Receipt can be done for them by
the Purchase Department.

The goods receipt will reflect as Actual costs in the project.

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7.3.8 Settlement receivers

The settlement receivers for the various WBSes should also be maintained in coordination with the Finance
Department so that capital projects are settled to Network. The WBSes also facilitate maintenance of Person
Responsible for each WBS.

The Purchase Requisitions can be converted to Purchase orders & then the Goods Receipt can be done for them by
the Purchase Department.

The goods receipt will reflect as Actual costs in the project.

7.3.8.1 Internal Activity Confirmation

The confirmation of Internal Activities effort in time will result in increase of Actual costs in the project. This is
when Project Manager, Designer, Inspection, Supervisors, Maintenance person record their effort against as
number of Days of Hours against the activity.

The users must confirm Activities, as it signifies the completion of that Activity.

7.3.9 Project Settlement

The costs that are collected in the Projects should be settled to an appropriate final receiver. This can be Cost
Centers or Assets. The costs in each WBS are sent to the receiver during the settlement.

The user must assign the receiver to WBSes in coordination with the Finance department.

The activities in the projects will be settled to their parent WBS. This means the cost collected in the activities are
transferred to the WBS.

The lower WBSes can be settled to the higher WBS. The costs in the WBS can finally go to Assets or to Cost Center.
The user must assign suitable receiver manually to each WBS which can be as below:

 WBS
 Network

The receiver for an Expense WBS will be the Network of the receiving department or unit.

The system will expect the receiver to be an Asset once the WBS has been set as “TECO” Technically complete
status. Once the settlement is complete, an Asset can be considered as ‘Capitalized’ and depreciation calculation
can be initiated. “Technically completed” status means that the WBS has no other work pending & that no other
costs will be booked against that WBS. It can be finally settled.

It is possible to assign a percentage in the Settlement Rule so that the costs are distributed to various Cost Centers
or to various Assets.

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7.3.10 Project Closure

The Projects that are completed from a logistics perspective must be set to “TECO” Technically complete status.
This indicates that all the Actual costs against the project have been posted. Thereafter “Final” settlement for the
project can be performed. The costs must be settled to an Asset in case of Capital project.

Once the total costs are settled after TECO status, the WBS can be set to “CLSD” closed status.

The projects that are totally completed must be set to “CLSD’ Closed status. This status indicates that there is no
more work to be done in the project. The Closed status should be set only if all the costs in the project have been
completely settled.

System will not consider the closed projects for the next settlement run. Closed projects will be free from all
commitments to budget, all the reservation for materials and internal resources.

Integration Point SAP Component Data Element

Budget control of Controlling module Budgeting of projects
projects
Activity Type rates Controlling Plan Cost & Actual cost of Internal resource
Purchasing Material Purchase Order, Goods Receipt, Invoicing, goods issue
management
Cost Centers Controlling Cost centers for each of the Internal Resource categories – Work
Centers
Production Order Production Production order were created with the reference Projects(WBSe)
Planning

8. PROJECT SYSTEM INFORMATION SYSTEM

The following are the some of the standard reports
S.NO Reports T code
Goods Movement report based on material, or date, or
1 MB51
movement type
2 Stock over view / Projectwise inventory MMBE / MBBS
Planned Vs Budget Vs Actual expenses for range of
3 S_ALR_87013558
projects
4 Project start & completion dates (Basic planned & actual) CJ26
5 Report of Project related Purchase orders ME2J

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6 Stock on a date MB5B

7 Projects Overview CNPAR

8 Project Version Report / project structure overview CN41

9 Project actual cost / revenue report CJI3

10 Overview of Sales Document items CN55N
Planned Vs Actual Vs Commitment Vs Assigned expenses
11 S_ALR_87013533
for range of projects

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9. RICEF

9.1.1 Report

Reporting
Report Type Data RelevantK
TGC ID Description Owner
(ABAP,BI, BOBJ) Elements PI

9.1.2 Interface
Interfaces
Interface Frequency
TGC ID Description Applications Owner
Method /Volumes

NA NA NA NA NA NA

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9.1.3 Conversion
Conversions
Conversion
Conversion No of Objects
Method
TGCID Conversion Object Source Activities (e.g. to be Owner
(manual /
cleansing) converted
automated)

Work Center LSMW

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9.1.4 Enhancement
Enhancements
Alternative
WRICEF ID Functional
Description DataObject SAP Standard Reason Owner
Gap

BoM
Configurator

9.1.5 Forms
Forms

TGC ID Description Data Object Output Frequency Volumes Owner

Type

Note: The RICEF Objects would be finalized based on requirement

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10. Annexures

10.1 Annexure – Developments Identified and Functional Deficits

(GAPS)
The Developments, which were identified during the discussion of business processes yet to be finalized,
are attached as an Annexure for reference.

GAP_HIPL.xlsx

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