Project pegging overview

A production order can be used to meet multiple demands from multiple projects and hence requires pegging distribution at the order level and at order line levels (such as estimated materials, production planning). This process is called (cost) pegging and the attributes are called pegs. If an item is project pegged, you can track the costs at the project, activity, and element level through the complete product life-cycle.

To perform proper (cost) allocation, tracking and tracing, inventory registration, and supply, pegging information must be added to items, inventory, and transactions throughout the entire goods flow, from ordering/receiving to issue/consumption. Because item lines can be split into multiple cost pegs, a peg distribution level is required below the item line. The main purpose of these cost pegs is cost distribution and not the physical movement of items.