Project Manufacturing (Engineer

To Order) in SAP managed by

Noveco solutions

Project Manufacturing – Engineer To Order

• The final product is always unique. It contains

standard components and assemblies purchased

or manufactured in-house as well as customer

specific assemblies.

• There is a high degree of engineering for

customer specific requirements.

• Cost Estimation is done based on costs of

standard assemblies, components, costs of

engineering plus cost of manufacturing of a final

product.

• The final design may not be completed before

project starts.

• The final cost may be different from initial

estimates due to design or engineering change or

due to manufacturing mistakes.

Characteristics of Engineer To Order (ETO)

Purchased items

or Made to Stock

Manufacturing of

Standard

Assemblies

Made to

Customer Order

ETO

Project Manufacturing – Engineer To Order

• Estimating must include:

– cost of manufacturing of standard assemblies

– cost of engineering & design and sub-contracted costs

– cost of fabrication of customer specific requirements

– risks and contingencies etc.

• Project Monitoring and Forecasting:

– create detailed project cost plan from the approved

estimate

– capture engineering costs as manufacturing project is in

progress

– roll up manufacturing costs to project WBS at any time

during project execution

– include engineering and design changes into project

budget, forecast and revenue plan

– update project forecast Cost To Complete and Estimated

At Completions (EAC)

– calculate project progress based on engineering and

manufacturing progress

Key requirements for Financial Control

Plant Stock

Engieneering

Manufacturing Standard

Assemblies Purchased

Components

Purchased Servcies

Manufacturing to Customer

Order

ETO Cost Breakdown

Project Lifecycle Management

≈

Execution

Execution

Estimation

Planning

Cost

DistributionForecasting

Variations

Reporting

Cost

Distribution

Planning

Estimation Reporting

Variations

Forecasting

• Project Structures

• Procurement

• Goods & Service Receipts

• Time Sheets

• Vendor Invoices

• Customer Billing

• Payments

• Settlement

• Estimates / Bidding Process

• Project Planning

• Cost Distribution (time phasing)

• Financial Forecasts

• Change and Risk Management

• Progress

• Reporting

in SAP : Project Execution

not in SAP : Project

Planning, Forecasting,

Variation Management,

Reporting etc.

▾ Actual Costs & Revenues

▾ Open Purchase Orders

▾

!

Business Challenges

• You use SAP Project System as a cost collector

• All planning, forecasting and reporting is done outside of your SAP system

Symptoms:

• High use of excel spreadsheets

• No information transparency

• No data consistency

• Lack of standardization and information accuracy

• High efforts during month end process

• No real time project reports available

As a result:

SAP Project System + Noveco ePM

Project Structures

Scheduling

Procurement to Project

Project Inventory &

Labour Confirmation

Settlement

Customer Billing

Vendor Invoicing

Project Financial / Cost

Accounting

Reports on Actual Costs

and Revenues

Project Cost / Revenue

Plan & Distribution

Cost Forecast (EAC /

CTC)

Variation & Risks

Management

Cash Flow Forecast

Progress Analysis

Graphical KPI & Full

Project Reporting

Estimation / Bid

Management

Resource & Capacity

Planning

Noveco complements

SAP PS with new

functionality, making it

more powerful and easy

to use.

Project

System

ePM:

Extended

Project

Management

Project Lifecycle in SAP directly

• Project Structures

• Procurement

• Goods and Service Receipts

• Time Sheets

• Vendor Invoices

• Customer Billing

• Payments

• Settlement

in SAP : Entire Project

Management Lifecycle

➕ Estimates / Bidding Process

➕ Project Planning

➕ Cost Distribution (time phasing)

➕ Resource Planning

➕ High Level Project Capacity

Planning

➕ Financial Forecasts

➕ Change and Risk Management

➕ Cash Flow

➕ Progress, Earned Values

➕ History tracking

➕ Graphical Reporting

PPM

BW / BO

Cloud

Analytics

Execution

Estimation

Planning

Cost

DistributionForecasting

Variations

Reporting

✓

With Noveco you can move the project

management lifecycle and reporting into your

SAP environment, making it excel sheet free!!

Noveco software add-on to SAP PS

Noveco is a family of seamlessly integrated software components designed to simplify SAP

standard Project System (PS) and enhance it with missing functionality such as cost and revenue

estimating, project cost and revenue forecasting, cash flow forecasting, variation management, risk

analysis, resource planning, graphical reporting

directly in SAP

Noveco enables integrated financial management of your project lifecycle directly inside your

SAP system

..

..

Efficient

Project

Management

Execution

MonitoringForecasting

Reporting

Analysis

Settlement

Estimating

Planning

Budgeting

Project Process flow

Bid Preparation /

TenderProject Planning

Project

Execution

• Cost Estimation

• Preliminary

Engineering

• Capacity

Evaluation

• Project

Structure

• Cost / Revenue

Planning

• Scheduling

• Resource

Planning

• Long items

procurement

• Detailed

Engineering

• Resource

Planning

• MRP (Material

Requirements

Planning)

• Production

order execution

• Procurement

Project

Forecasting

• Progress

Analysis

• Cost / Margin

Forecasting

• Variation/

Change

Management

• Operational

Reporting

• Analytical

Reports

Tender Preparation: Cost and Revenue Estimation

QuotationSales Order

Configurable

BOM

Standard

BOM

To Be

Engineered

BOM

Engineering &

Design

Delivery &

Installation

Estimate

Cost Estimation:

• Preliminary Engineering & Design

• Make To Order using standard BOMs

• Configurable BOMs

• New Customer specific BOMs

• Purchased Components & Equipment

• Long Lead Procurement items

• Stock Materials and Consumables

• Internal Labour, Machine, Setup Time

• Service, Sub-contract

* Project VariationsProcurement, Time Sheets

Invoicing, Billing

Schedule Dates Create Project

Portfolio Planning (PPM)Advanced Analytics* Project Portal / Reporting Profit Take (Result Analysis)

Planning

Execution

Variations

Monitoring

Forecasting

Progress Tracking

Reporting

Analysis

* Project Manager Workbench

* Noveco ApplicationsIntegrated Project Management in SAP

* Estimate: Cost & Revenue

* Resource Planning

Noveco Estimating solution in SAP

• Multi-Level Tree

Hierarchy with work

packages and sub-

packages

• Version and Status

Control

• BOMs are part of cost

estimation

• Fully integrated with

Project Cost and

Revenue Planning

• Easy and Flexible User

Interface

Noveco Estimating solution in SAP

• Example of a Resource Package that

will be further engineered (no BOM

exists yet). Its cost roughly estimated

and included in Tender price

Noveco Estimating solution in SAP

• Example of a BOM of standard component (may be

configurable)

• It is fully costed and included into the Estimate.

• PP orders will consume exact same resources as

were estimated here

Typical Structure

for Manufacturing (ETO)

Projects

Project Structures for Manufacturing projects

Manufacturing Project (ETO)

Electrical

Motor Kit Assembly

Engineering & Design

Kit Assembly

Fitting & Installation

Final Assembly

Tender Preparation: Capacity EvaluationProjects

Work Centers

March April May June July August September October

WC Hierarchy

Welding

Paint

Assembly

Cross Project Capacity Planning on Work Centers

• Check Work Centers

Available Capacity before

committing delivery date

• Cross Project High level

planning and capacity

evaluation

• Does not require PP orders

capacity loading

Project Process flow

Bid Preparation /

TenderProject Planning

Project

Execution

Project

Forecasting

• Cost Estimation

• Preliminary

Engineering

• Capacity

Evaluation

• Project

Structure

• Cost / Revenue

Planning

• Scheduling

• Resource

Planning

• Long items

procurement

• Detailed

Engineering

• Resource

Planning

• MRP (Material

Requirements

Planning)

• Production

order execution

• Procurement

• Progress

Analysis

• Cost / Margin

Forecasting

• Variation/

Change

Management

• Operational

Reporting

• Analytical

Reports

* Project VariationsProcurement, Time Sheets

Invoicing, Billing

Schedule Dates Create Project

Portfolio Planning (PPM)Advanced Analytics* Project Portal / Reporting Profit Take (Result Analysis)

Planning

Execution

Variations

Monitoring

Forecasting

Progress Tracking

Reporting

Analysis

* Project Manager Workbench

* Noveco ApplicationsIntegrated Project Management in SAP

* Estimate: Cost & Revenue

* Resource Planning

Create Project Structure

Sales Order and Project Planning

QuotationSales Order

Project Planning:

• Revenue Plan comes from Sales Order

• Project Structure: WBS elements,

Network Activities

• Project Schedule

• Procurement Plan

Sales Order / Contract

• Quotation accepted by customer

• Create Sales Order or Contract

• Terms and Conditions

• Down payment plan

• Revenue / Billing Plan

• Cash Flow of Incoming Payments

• Link to Project WBS automatically

generates:

⁃ Revenue Plan

⁃ Cash Flow forecast

Project✓

Generate Cost Plan on Project

Easy Cost Planning

Cost Plan(Original Estimate)

Noveco EstimateProject

1

1. Create Estimate

2. Create Project

3. Transfer to Project

4. Save Cost Plan

a. via ECP

b. directly

2

3

4 a

4 b

Estimate Project

“as engineered” “as built”

Transfer Cost and

Revenue plan to Project

✓ Estimate structure may be different from

Project Structure

✓ Labour rates and materials prices are are

up-to-date

✓ Project Structures are designed to

according its tasks and phases and not to

resemble cost structure

✓ Costing details are transferred to Project

and will be consistent with actual costs

collected on a project

✓ Compare Estimated Costs and Actual

Costs or Cost Forecast at any moment

during project execution

Benefits

Transfer Cost Estimate to Project

Transfer Cost Estimate to Project

• Transfer cost from the Estimate to

Project by drag & drop

• Transferred Costs and Revenue will

be saved as project cost and revenue

plan.

• This way you can create project

baseline.

Project Process flow

Bid Preparation /

TenderProject Planning

Project

Execution

Project

Forecasting

• Cost Estimation

• Preliminary

Engineering

• Capacity

Evaluation

• Project

Structure

• Cost / Revenue

Planning

• Scheduling

• Resource

Planning

• Long items

procurement

• Detailed

Engineering

• Resource

Planning

• MRP (Material

Requirements

Planning)

• Production

order execution

• Procurement

• Progress

Analysis

• Cost / Margin

Forecasting

• Variation/

Change

Management

• Operational

Reporting

• Analytical

Reports

* Project VariationsProcurement, Time Sheets

Invoicing, Billing

Schedule Dates Create Project

Portfolio Planning (PPM)Advanced Analytics* Project Portal / Reporting Profit Take (Result Analysis)

Planning

Execution

Variations

Monitoring

Forecasting

Progress Tracking

Reporting

Analysis

* Project Manager Workbench

* Noveco ApplicationsIntegrated Project Management in SAP

* Estimate: Cost & Revenue

* Resource Planning

Resource Planning

• Plan resources (high

skilled professionals)

across your projects.

• Drag & Drop allocation

of Person to Project

WBS or NWA

• Cross company

allocations possible

• Reading HR work

schedule

• Project demand based

on the most recent

forecast

Project Execution: MRP, Procurement, Actual Costs

Engineering & Design

CAD modeling

Time Sheets

Record Hours

Electrical Sub-Assembly

Mechanical Sub-Assembly

Final Assembly

Sub-Contract

Purchase Order

Direct Procurement of Services

Pass Material Requirements to MRP

Materials Requirements Planning

→ Requirements Quantity

→ Requirements Dates

← Stock Reservations

← Purchase Requisitions

← Production Orders

$

Execution of Production Orders

Purchase Order

Work Confirmation

Hours

Hours

Hours

Stock / Inventory

EA

Meters

Kilograms

Equipment

Services

Components

• Assign Purchase Orders directly

to Production Orders

• Post Order confirmations

• Issue materials from stock

• Project actual costs and purchase

commitments are posted

Project Process flow

Bid Preparation /

TenderProject Planning

Project

Execution

Project

Forecasting

• Cost Estimation

• Preliminary

Engineering

• Capacity

Evaluation

• Project

Structure

• Cost / Revenue

Planning

• Scheduling

• Resource

Planning

• Long items

procurement

• Detailed

Engineering

• Resource

Planning

• MRP (Material

Requirements

Planning)

• Production

order execution

• Procurement

• Progress

Analysis

• Cost / Margin

Forecasting

• Variation/

Change

Management

• Operational

Reporting

• Analytical

Reports

* Project VariationsProcurement, Time Sheets

Invoicing, Billing

Schedule Dates Create Project

Portfolio Planning (PPM)Advanced Analytics* Project Portal / Reporting Profit Take (Result Analysis)

Planning

Execution

Variations

Monitoring

Forecasting

Progress Tracking

Reporting

Analysis

* Project Manager Workbench

* Noveco ApplicationsIntegrated Project Management in SAP

* Estimate: Cost & Revenue

* Resource Planning

Project Manager Workbench• Automatically re-calculates cost to

complete (CTC) and Estimated at

Completion (EAC) from actual costs

and PO commitments posted to PP

orders at any time

• Recalculates and updates Project

Progress

• Manual and Automatic distribution

of Budget, CTC and Purchasing

Commitments

• Manual adjustment of CTC and

EAC

• Full forecast history tracking

• Supports monthly review cycle

using planning period concept

• Drill-down into transactional data:

commitments, actual line items etc.

• Variation & Risk Management

• Cash Flow Forecast

• Workbench uses PS info-system to

read and write and resides directly

in SAP

• No BW, BI-IP etc. is required

• No interfaces, no data transfer

Update Project Forecast

• Actual Costs and PO

commitments rolled up to WBS

from Production Orders

• Recalculate project Costs to

Complete (CTC) and Estimated

at Completion (EAC) from PP

orders

• Manually update (if needed) cost

and work to complete

• Drill down to source documents

• Real time integration

Distribute Remaining Cost To Complete

Manually or automatically

distribute:

• Cost To Complete

• Current Budget

• Plan Revenue

• PO Commitments

Calculate Project Progress

• Project Progress is

automatically

recalculated

• PP orders progress is

automatically included

into project overall

progress

Project Cash Flow report

Project Cash Flow report

calculates and presents:

• Cash In from Sales Order

billing plan, invoices, down

payments etc.

• Cash Out from Purchase

Order commitments,

invoices, down payments,

remained CTC etc.

Project Manager Workbench

• Graphical presentation of

project KPIs

• Configurable layout

• Up to 20 graphs available

(multi-) Project reporting

Multiple Project

Reporting with graphical

view directly from ECC

or S4 (no BW or other

reporting tools needed)

Noveco Application in SAP UI5 / Fiori

Fiori Tiles: Launchpad

Project Manager Workbench (S4 Fiori version)

Project Manager Workbench (S4 Fiori version)

Project Manager Workbench (S4 Fiori version)

Project Manager Portal (S4 Fiori version)

Project Manager Portal (S4 Fiori version)

Project Manager Portal (S4 Fiori version)

Project Manager Portal (S4 Fiori version)

Project Manager Portal (S4 Fiori version)

• With Noveco solutions you can now effectively control your ETO project

manufacturing and engineering processes directly in SAP Project System

• The Original Project Cost Plan is always accurate, since it is based on

Product Costing.

• The system automatically recalculates Cost and Work To Complete from

actual costs posted to network activities and PP orders.

• You can adjust project Forecast Costs at any time, if necessary.

• The system calculates Project progress by taking production progress into

account.

• You can Drill Down into source documents.

• Run operational reports directly from SAP PS.

Summary

Exe

cu

tion

Transactional System

Monitori

ng,

Fore

ca

stin

g,

Vari

ations,

Pro

gre

ss

● Project Manager Workbench

● Automatic Forecasting

● Manual adjustment of CTC or Work TC

● Progress Analysis

● Exception and drill down reporting

● Integrated variations into cost forecast

● Forecast history

Analy

sis

,

Resourc

ing

Repo

rts

Str

ate

gic

Pla

nnin

g

System Landscape including Noveco

Program &

Portfolio

Planning

Company

Reporting

Result AnalysisPS Information

System

Resource

Planning

Estimation

Budget valuesTime Sheets, Invoices

Actual Costs

Sales Orders

Revenue

Purchase Orders,

CommitmentsVariations

S

A

P

E

C

C

/

S

4

Advanced

Analytics

● Full scale Estimating solution in SAP PS. Create estimates before project is created / approved in

SAP

● Project Manager Workbench provides one central place to review KPIs, update forecasts, track and

update progress, execute analytical and drill down reports

● Complete Cost and Work To Complete management: Automatic reduction and Manual adjustment

● Instant Integration with ECC transactions: PO, time sheets, invoices etc.

● Forecasting results are immediately available for Result Analysis, Progress Analysis, PS Reports and

BI (no custom interfaces needed to native SAP reports)

● Period Sensitive Forecasts: designed for month end forecasts in live transactional system

● Saves project forecast history w/o need to perform version copy by the user

● Project Costs Forecasts integrated with PM/CS and PP orders

● Integrates Project Variations into cost forecasting and budgeting

● No modifications to SAP standard core applications. No “z-tables” to keep forecasts costs, all data

read/written from/to SAP standard database.

Noveco: Estimation, Forecasting, Progress and Variation Management

● Connects upstream (estimating, procurement, timesheets) and downstream (monitoring, resource

allocation, analytical reports) activities of project management lifecycle

● Closes the loop between execution and analysis processes providing 360 degree flow of information

● Replaces spreadsheets and other third party tools with centralized SAP database

● Reduces amount of effort required to produce project forecasts and analytical reports

● Reduces number of interdependent systems and interfaces needed; reduce costs of maintenance

and support of systems other then SAP

● Decreases potential for errors of data entry and manipulation

● Improves quality, transparency and accuracy of data

● Allows potential savings and process efficiency by relieving Project Managers from performing

routine transactional and administrative activities.

● Integrates Resource (personnel) Planning into project planning and forecasting

● Determine realistic project progress

● Unleashes the true power of integrated SAP system

Business Value of Integrated Project Forecasting in SAP

Our Customers

For more information visit Noveco Systems on

www.novecosystems.com