Experts,
I have a fundamental question, and since I'm unsure about all the areas it affects, I need your guidance.
The situation is that my client has a small manufacturing setup without a separate maintenance department. The operations manager handles both operations and maintenance tasks. Critical equipment maintenance, such as relief valves (PRV), is outsourced to an external vendor, while minor maintenance is carried out by an in-house technician. Currently, they are using a Non-SAP ERP system, which they plan to replace with S4HANA.
Now, here's the challenge: they lack dedicated manpower to handle inventory management and material issuance for work orders. Consequently, whenever they procure stock items or spare parts, the costs are immediately expensed to the maintenance general ledger (G/L), regardless of whether they will be used immediately, in a month, or in six months. In other words, the materials are not stored in a stock account; instead, they are immediately charged to the maintenance G/L.
Although this practice is not ideal since it fails to capture component costs on work orders, they still wish to continue with this process due to a lack of personnel to handle individual spare issuances for each work order. They want to use the SAP PM work orders to record the work done , but not to record any material / service cost on it.
Question: I would like to explore the other challenges that may arise from this approach, apart from the difficulty in obtaining order-specific reports for material costs. Please assume that their finance team and upper management are okay with the existing setup of posting spare costs to the maintenance expense account (whatever they are doing currenty).
I want to ensure that I consider all aspects and don't overlook anything. I would greatly appreciate a prompt response.
Please provide your response in English.
Thanks ,
Regards,
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.