What is COPC?
COPC – Product Cost Planning is more or less related to SAP COPA. But COPC is used to plan costs for any materials or other assets without moving back & forth to orders, this in turn is used to set prices for materials and other accounting objects. Product cost planning can be used in different ways across different segments such as Manufacturing materials & also services. This is mostly used to analyse product costs which will help in identifying specific steps which adds value in production process, understanding the costs of different units such as materials, production costs & overhead costs. Helps improve the efficiency and identifying the rate of product at which it can be sold comparing with competitor.
Product Cost planning involves different components, such as
- Based on production planning process and its quantity structure, material cost can be estimated.
- Even without quantity structure, production planning of a material can be estimated.
- Helps update prices by migrating the estimates of materials cost to material master.
- Used in planning new product and service costing based on planning objects, called reference and simulation costing.
- Can swiftly plan and execute cost planning services even without master data.
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How COPA & COPC are inter-related:
COPA & COPC are two different sub-modules of some unique controlling module, out of which COPA represents Profitability Analysis, whereas COPC is Product cost planning. One identifiable concern here is that, COPC can be even implemented without just touch COPA (which is just profitability analysis). Another point to add here is that, COPC is used for allocating logistics costs to Stock keeping units (SKU’s), as it offers more cushion and flexibility to make some improvements and customizations in allocation process as and when required. This level of customisation is not possible in COPA as it maximum sticks to information gathering part of the module. COPA is specifically used at obtaining reports on external market segments such as customer groups based on geo-locations. Whereas COPC is used to obtain the understating on object costing purposes. It is more of static method used for planning purposes to set the standard costs. COPA reporting can be set based on the hierarchies which are dynamic but limited. This has 2 styles, one is an account based which will reconcile to General Ledger but comparing the same with COPC, here it is always costing based which supports different types of estimations and approximations but with a difficulty in reconciliation.
To know more about COPA & COPC, how they are used and other complete information can be known here.