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Scenario Overview: ETO - Quot. Proc.

with BOM PS Interface & Machine History

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 months) 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

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Engineer-to-Order (ETO): Environment


- Order probability is not very high - Very extensive order processing phase (over several years) - Very expensive unique products 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 Joint Ventures are necessary

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ETO - Quot. Proc. with BOM PS Interface & Machine History

Industrial Machinery & Components 4 Machinery and Equipment Value Chain


E83 O v e r v i e w Content e n t Summary C o n t

ETO - Quot. - BOM PS Interface & Machine History

ETO - Quot. Proc. with BOM PS Interface & Machine History - Customer inquiry receipt - 1st quotation creation - Project creation with network - BOM-PS transfer - Project costing - Quotation price definition - Project version copying - 2nd quotation creation - BOM-PS updating - Project cost updating - Advance procurement requesting - Records management linking with project
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Organizational Structure SAP Best Practices


Manufacturer

Operating Concern Controlling Area

1000

1000

Company Code Plant Country City Sales Org. Distribution Channel Division
01 01 02 03 04 05
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1000

1000

1100

1000 10
01 02 03 04 05

1100 30
01 02 03 04 05

20

02
01

10
01 01 02 03

20
02 03 04 05

30
01 02 03 04 05

02

04 05

ETO - Quot. Proc. with BOM PS Interface & Machine History: Component View
Customer
SAP CRM
Purchase order for a robot route. Create inquiry to do the variant configuration for the robot route during the building of inquiry, select the number of robots and the voltage of the power supply. Create 1st quotation (copy from the inquiry). Adapt the variant configuration, and adjust the date of the delivery. Create project by copying the existing template for robot route, then link the project with the quotation created. BOM-PS transferring (transfer the material in quotation to the project). Here, the number of each component in the BOM bases on the VC result of the SD order. Project scheduling in the project builder. Project costing for both the activities and components inside, and check the costing by PS report. Pricing defining bases on the costing of the whole project, and other business characteristics. Create project version by copying the current project status. Create 2nd quotation by copying the 1st quotation, and change the configuration of the BOM components based on customer specification change. BOM-PS transferring again to update the project with the new result of the variant configuration in 2nd quotation. Project costing run again to update the cost with new variant configuration. Calculate the new price and update the price in 2nd quotation. Assign the long-lead time procurement component to the related activity in the project. Release the long-lead time procurement activity. Link the related business documents with the record management model.
Next step is the creation of a customer order as a copy of the accepted quotation. This is subject of E84 - ETO Order Processing

Manufacturer
mySAP ERP

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Business Benefits
Variant configuration in Quotation Flexibility for SD BOM structure definition, including quantity and components screen out the complexity of ETO BOM in SD side Linkage set to control the component relationship in background 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 Handles long lead-times procurement BOM-PS Transfers the ETO SD-BOM directly from quotation to project Update the quantity or name of component in project whenever SD document changed Record Management Sets the linkage among customer documents, design documents, SAP documents/objects, and transactions Delivers an overview of the business centrally

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BoM Structure
E83

ETO - Quot. - BOM PS Interface & Machine History

E83-1000 Robot Route E83-1100 Switchgear Cabinet E83-1200 Robot

SD BOM
(Variant Configurable)

PP BOM
E83-1210 Basic System E83-1220-XXX Control Cabinet E83-1230 Enhancements

PP BOM

E83-1211 Base Frame

E83-1212 Rotating Column E83-1212-HALB Rotating Column - Raw Material

E83-1231 Picker Arm E83-1232

E83-1233 Tox Pliers

Spot Welding Gun

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Material Master Data

E83-1000 Robot Route


E83-1100 Switchgear cabinet E83-1200 Robot E83-1210 Basic 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

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Variant Configuration
E83

ETO - Quot. - BOM PS Interface & Machine History

Quotation Document
E83-1000 Robot Route E83-1100 Switchgear Cabinet E83-1200 Robot E83-1210 Basic System E83-1220-XXX Control Cabinet E83-1230 Enhancements

Number of robots can be configured

Voltage of the Power Supply could be selected (material selection with VC)

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Project Structure
Quotation Document

Billing WBS linked to the quotation item to handle the revenue of the project

SD Order Item

Milestones linked to SD order item to control the progressive billing Activities in central WBS element linked to different WBS elements to control the project phases centrally

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BOM-PS Transferring

BOM-PS transferring will update the component in project with the materials in SD quotation. Reference points can be set in BOM and standard network, to control the linkage.

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Record Management

Record Management links complete lifecycle data of the value chain, including:  Business Documentation  SAP documents like order and inquiry  SAP objects like project and material/BOM Record Management gives controller an overview of the whole business procedure and history
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