Defense Forces and Public Security

Purpose

Due to the specific character of their missions and tasks, armed forces, police,
and aid organizations need to be able to plan and carry out deployment
operations flexibly from their respective domestic bases, and trigger and
control accompanying or subsequent business processes.

The Defense Forces and Public Security component enhances the standard
SAP R/3 functions, thus meeting the requirements outlined above by providing
functions for the following business tasks and processes:

 Mapping organizational and logistical structures

 Material and personnel resource planning
 Materials management
 Budgeting and account assignment
 Maintenance
 Dangerous goods management

This component provides the following benefits:

 Complete process chains from planning through implementation and

execution to the provision of information and evaluation options.
 Integration of personnel and material organization and resource
management.
 Organizational flexibility in your daily business: Changes to
organizational or logistical structures and modified resource requirements
are immediately taken into account and implemented in downstream
processes.

Implementation Considerations

The IMG activities for this component that supplement the standard functions
are contained in Customizing for Defense Forces and Public Security.

Integration
The Defense Forces and Public Security component is integrated with many
other SAP R/3 components:

 Organizational Management (BC-BMT-OM)

The object types and relationship types in Organizational Management
are used to map the organizational structures. The object type
‘organizational unit’ is closely connected to the object type ‘force
element’. The object types ‘position’ and ‘person’ are also used to map
the authorized and actual personnel. The object type ‘task’ can be used
to describe organizational objects containing tasks and skills.
For more information about Organizational Management, see the relevant
information in the SAP Library under Human Resources  Personnel
Management (PA)  Organizational Management.
 Integrated Product and Process Engineering (LO-MD-PPE)
The object types ‘material planning object (MPO)’ and ‘material package
(MPA)’ in this component are used to map the authorized material and
logistical requirements in the system.
 Materials Management (MM)
The actual material is mapped as stock (vis-à-vis the authorized material)
or as provisions (vis-à-vis the logistical requirements).
 Controlling, Funds Management,and Project System (CO, PMS, and PS)
To enable account assignments to be mapped, organizational objects are
assigned cost centers (usually in the domestic bases) or WBS elements
(usually for deployment operations).
A derivation rule between cost center and funds center can be used to
establish integration with Funds Management.
 Plant Maintenance (PM)
A relationship is created between the organizational unit and a
technical/logistics work center in the Logistics component so that
maintenance units can also be uniquely assigned in this component.
 Environment, Health and Safety(EHS)
 The functions in the Environment, Health and Safety component can be
used to manage dangerous goods.

Applied Overhead

Use

You can apply both percentage overhead and quantity-based overhead to reference objects. In the R/3
System, you can assign the overhead to a product by creating a costing sheet in Customizing for Product
Cost Planning. Using this costing sheet, you specify the level of overhead and the conditions under which
it is calculated.

You can calculate the following:

 Material and production overhead

 Administration and sales overhead

The costing sheet thus specifies the cost elements under which the sales and administration
costs are updated in costing. The cost component structure determines the cost
 components under which these costs are shown. It flags these cost components as sales and
administration costs.

In make-to-order production, the sales and administration costs are generally assigned to the
product as applied overhead. The cost of goods sold for the product is passed on to Profitability
Analysis. ( See also: Product Cost by Sales Order)

In order-related production, repetitive manufacturing and process manufacturing, the sales and
administration costs are generally passed on from Cost Center Accounting directly to Profitability
Analysis. The cost of goods manufactured for the product is passed on to Profitability Analysis.
( See also: Product Cost by Order or Product Cost by Period)

Prerequisites

To be able to calculate overhead in the R/3 System, you must do the following:

 Create a costing sheet in Customizing

 Assign the costing sheet to the valuation variant in Customizing
 In the initial screen of the cost estimate, enter a costing variant that either contains this
valuation variant or that assigns the costing variant to the order type

To define particular overhead conditions for certain reference objects, you must do the
following:

 Enter an overhead group in the master record of the reference object (such as the
material master record, base object master record, cost object)
 Enter an overhead key in the costing sheet that is linked to this overhead group in Customizing
for Product Cost Controlling.

Features

Applied Overhead Using Planned Data

The applied overhead is calculated using the information in the itemization for the material costed.
Because the system updates an itemization for each cost component view, you can calculate applied
overhead for a specific cost component view. Overhead is only calculated on one basis, such as the cost
of goods manufactured or cost of goods sold. As a general rule, the cost of goods manufactured is used
as the basis for calculating overhead. You make the assignment in the costing type in Customizing.

When calculating overhead, the system inserts a costing category of type G. The applied overhead is
updated under the cost elements that you specified in the costing sheet in Customizing for Product Cost
Controlling.

In costing with a quantity structure, overhead is calculated automatically by the system when you carry
out costing.

In unit costing (such as costing without a quantity structure and base object costing), overhead is
calculated when you save the cost estimate. You can calculate overhead manually by choosing the menu
option Calculate overhead.

To calculate the overhead application in unit costing (such as in a cost estimate without quantity
structure, or a base object cost estimate), you must assign all the costing items to cost elements. Non-
assigned costing items will not be included in the overhead application.

If you want to calculate overhead in unit costing, you must enter the key of the costing sheet in the master
record of the reference object. To define overhead conditions for certain reference objects, you must
enter an overhead key in the master record of the reference object and create a costing sheet that refers
to this key.

Applied Overhead Using Actual Data

You can calculate actual overhead for cost objects in Cost Object Controlling (CO-PC-OBJ). You can find
further information under Calculating Overhead in Cost Object Controlling.

See also:

Implementation Guide (IMG) for Product Cost Controlling

 In Product Cost Planning under Basic Settings  Overhead.

 In Product Cost Planning under Reference and Simulation Costing  Overhead.
 In Cost Object Controlling, under:

o Product Cost by Period  Basic Settings  Overhead

o Product Cost by Order  Basic Settings  Overhead
o Product Cost by Sales Order  Basic Settings  Overhead
 o Costs for Intangible Goods and Services  Basic Settings  Overhead

Overhead

Use

Overhead costs are costs which can only indirectly be attributed to the product, such as
electricity or general storage costs. You can allocate these overhead costs in the following
ways:

 Overhead application

In the conventional method, overhead is applied to the reference object as a percentage

rate or a quantity-based rate. The overhead is applied by means of costing sheets.

 Template allocation

Here, cost drivers are used to assign overhead to the reference object on a source-
related basis according to usage. The overhead is applied by means of templates.
Sender objects can be business processes or cost centers/activity types.

 Integration of business processes into the routing

Assigning process costs to routing operations is particularly suitable for direct production
processes. On the other hand, indirect processes should be assigned using templates.

Integration

Overhead is assigned from Financial Accounting (FI) to the cost centers in Cost Center
Accounting (CO-OM-CCA). If you use Activity-Based Costing (CO-OM-ABC), overhead is
passed on from Cost Center Accounting to the business processes of Activity-Based Costing.

The overhead costs are in turn passed on from Cost Center Accounting or Activity-Based
Costing to Product Cost Controlling (CO-PC).

You can transfer the costs from Cost Object Controlling to the following:
  Financial Accounting (FI), to valuate finished and unfinished products, for example
 Profit Center Accounting (EC-PCA)
 Profitability Analysis (CO-PA)
 Material Ledger/Actual Costing (CO-PC-ACT)

You can pass on overhead costs that have not been applied to a cost object (such as sales and
marketing costs) directly from Cost Center Accounting or from Activity-Based Costing to
Profitability Analysis.

Features

You can calculate both planned and actual overhead costs. You can also apply overhead to
process costs. You can use overhead calculation for all the cost objects in the R/3 System.

You can calculate planned overhead costs in the following:

 Product Cost Planning (non-order-related material costing)

 Preliminary costing of manufacturing orders (production orders and process orders), and
product cost collectors
 Sales order cost estimates
 Order BOM cost estimates
 Calculation of planned costs for general cost objects
 Preliminary costing for internal orders

You can calculate actual overhead costs at period-end closing in Cost Object Controlling
based on the actual costs or quantities incurred thus far.

For more information about calculating overhead in manufacturing orders, product cost
collectors, general cost objects, and sales order items see the following sections:

 Product Cost by Order

 Product Cost by Period
 Product Cost by Sales Order
 Costs for Intangible Goods and Services

For more information about calculating overhead costs, see the following sections in the R/3
Library:

 Overhead Cost Controlling

  Activity-Based Costing

Control of Requirements Type Determination

The requirements class is selected through the requirements type.

You can select the requirements type in different ways:

 Through the MRP group or strategy group in the MRP view of the material's master
record

 Through the item category and the MRP type in the MRP view

The item category is determined through the item category group in the sales and
distribution view of the material master record, and through the order type of the sales
document (inquiry, quotation, or sales order).

The Source field under Check Control of Requirements Type Determination in Customizing
for Product Cost Controlling determines what method is used. You have the following options:

1. Strategy material master, then item category and MRP type

The MRP group or the strategy group in the MRP view of the material master record
determines what requirements type is used.
If you have not specified this information, the requirements type will be selected through
the item category of the sales order item and the MRP type in the MRP view of the
material master record.
If you have maintained both an MRP group and a strategy group, the system uses the
strategy group (precedence to strategy group).

You can enter the strategy group directly in the MRP view. If you have specified a
strategy group, you do not need to enter an MRP group.

2. Item category and MRP type

The item category is derived from the item category group in the Sales view of the
material master record and from the order type of the sales document. Together with the
MRP type in the MRP view of the material master record, the item category determines
what requirements type is selected. The MRP group in the material master record is
irrelevant here.
 The advantage of this method is that the selection of the requirements type depends on
the business process (such as quotation, sales order, or repair).

3. Item category and MRP type with verification of allowed requirements type

Example for source indicator 0: Strategy for material master

The MRP group is 0020 (sales-order-related production).

The MRP group points to the strategy group 20 (sales-order-related production),

which combines a range of planning strategies such as main strategy 20 (sales-
order-related production), alternative 21 (sales-order-related production/project
settlement).

The strategy specifies a requirements type for the customer independent

requirements (such as sales-order-related production without charging). The
requirements type specifies a requirements class containing default values for
the calculation of overhead, for results analysis, and for settlement.

The requirements class determines the account assignment category of the sales
order item. You use the account assignment category to control whether costs
can be collected on the sales order item.

Example for Source indicator option 1: Item category and MRP type

In the Sales view of the material master record, you have entered the item
category group NORM (normal item).

 Item category TAN is selected for standard orders (order type TA). Requirements type
KE (sales-order-related production without charging) is selected for item category TAN.

 Item category REN is selected for returns (such as order type RE). No requirements type
is selected for item category REN. The only purpose of the sales order item is to
manage returns from customers in the Sales and Distribution component.

The system specifies the requirements type in the sales order.

For more information on the control of requirements type determination, see the IMG for Product Cost
Controlling under Cost Object Controlling  Product Cost by Sales Order  Control of Make-to-Order
Production  Check Control of Requirements Type Determination.