Equipment Object Cost/Revenue Analysis

Once a work order has been successfully completed for a given object or objects (in the case of Route Work Orders) the costs and revenues are recorded for the particular equipment object.

Costs on objects are accumulated and revenues generated throughout their life time. In case of a serial object, the object, may be located under several parent objects during its life time. At each placement the costs and revenues vary. Plus the total costs incurred for an object can include project related costs as well. Thus, it is important to have a mechanism by which costs and revenues for a given object can be viewed and analyzed based on the object's placement within a structure.

IFS/Service Management and IFS/Enterprise Asset Management provides you with the means of analyzing these costs and revenues based on a predefined search criteria as well as the placement of the object. Costs and revenues are displayed for the following cost types:

Costs are recorded when postings are authorized, whereas revenues are recorded when the postings are transferred to IFS/Customer Order. In general, manually entered costs (external, expenses, fixed price) are not recorded for objects, however the revenues generated by them are recorded. In the case of expenses that are transferred from IFS/Human Resources the costs are recorded for the object.

Search Criteria

Before you can view the costs and revenues associated with an object or object structure, you need to set the search criteria, which includes a time interval, selection and currency.

You can either set the search criteria as a default value or select them each time you need to view the information. If you want to set them as default you can do so by using one of the following methods:

You can specify a time interval for which you want to view the costs and revenues. This could be an interval of six months, a year, two years, etc, depending on your requirement. When querying for structures, you will only be able to see the objects where costs have incurred during the specified time period (See example described below).

Next specify how you would like to view the costs and/or revenues (i.e., a selection). Select one of the following options:

Finally, specify the currency in which you would like to view the costs and revenues. If the values are recorded in different currencies, they will be converted to the currency selected by you.

Costs related to Route Work Orders

In Route Work Orders where several objects are involved, dividing the costs related to the different cost types among the objects (if no prior planning is available in the Route PM action) is a difficult task.

The following costs are divided equally among the objects associated with the route work order:

Where material costs are involved there are certain exceptions.

Material Costs

The example below describes a situation where an excess of material have been used in addition to the quantity planned. See table below (assumption: the same material is used for all the objects).

Object Identity Planned Quantity on PM action Reported Quantity on Work Order
Object 1 1 2
Object 2 4 8
Object 3 0 0

In cases such as these the costs are calculated and assigned to each object according to the following formula:

Total Cost per Object = (Total Reported Qty x Planned Qty / Total Planned Qty) x Cost

The definitions of the terms are as follows:

Hence, the costs can be calculated and allocated to the relevant object as shown below.

Total Reported Quantity = 10; Total Planned Quantity = 5

Object Identity Planned Quantity on PM Action Reported Quantity on Work Order Cost Total Cost divided per Object
Object 1 1 2 25 50
Object 2 4 8 25 200
Object 3 0 0 0 0

Displaying object structure and calculating Structure Costs and Revenues

The related window displays costs for both objects and object structures. Structure Cost means cost of current object including all underlying objects. It does not take parent objects’ cost into account.

Consider the following object structure:

Figure 1: Example Object Structure

The table shows the full cost for the whole structure.

Object Identity Superior Object Identity Date the cost incurred Object Cost Structure Cost Comment

A

N/A

08-Jan

500

5300

 

A1

A

05-Jan

1500

3025

 

A11

A1

17-Jan

700

700

 

A12

A1

03-Dec

500

500

 

A13

A1

07-Jan

325

325

Structure Cost is equal to Object Cost since there are no underlying Objects.

A2

A

-

0

500

Object without cost.

A21

A2

27-Dec

500

500

 

A3

A

29-Dec

300

1275

 

A31

A3

05-Jan

975

975

The above table is also applicable for object revenues and margins.

Assume we want to see all costs registered between 01-Jan to 31-Jan. The full underlying object structure will always show up, even if the cost in chosen interval is zero. The division of the Structure Cost for the top object, Object A, within this time period is equal to:

Object Identity Object Cost

A

500

A1

1500

A11

700

A12

0

A13

325

A2

0

A21

0

A3

0

A31

975

Total Structure Cost for object A 4000

Direct Sales

The cost type direct sales displays the cost and revenue from sales related to the superior SM object on the customer order line which is an equipment object. By registering a superior SM object and not checking the Created SM Object checkbox on the customer order line, the cost and revenue is shown in the Equipment Object Cost/Revenue Analysis window under Direct Sales. Values are displayed after the customer order line has been delivered.

Contract Invoicing

The cost type contract invoicing displays the revenue from service contract lines connected to the equipment object. Values are displayed after the service contract line has been periodically invoiced.