Multilevel production can be planned in the SAP production module. The first step in planning is to write down recipes/specifications for products to be issued. It is also possible to have multiple recipe options for the same product. These recipes contain the necessary materials for production, labor, and machinery.
In addition to consumable resources, it is possible to plan the production process in time for both continuous and production based on orders.
We can record production in SAP based on both factual and planned normative. Normative accounting is based on pre-defined planned costs of supplies and services. Production accounting starts with entering the specification, and then production orders are indicated. Production orders may be attached to customer orders, helping us to schedule product deliveries on time and optimally manage performance deadlines. Based on the performance of production, the products actually produced are put in the balance sheet, and the spent resources are written off.
In case of positive accounting of production – with only actual data input – the program allows us to analyze the cost of materials and the cost of the final product.
In the case of the normative accounting of production, after the actual expenditure and output are entered, we can compare the actual results with the planned one. As a result, we will identify points of over- expenditure and under expenditure and consider them when planning the next production cycle.
As a result of normative accounting of production, the company can continuously improve production efficiency.