Project pegging overview

In project manufacturing environments, to facilitate cost accountability for finished goods within projects, you can implement project pegging and indicate that items are project pegged. If a project pegged item is specified on a demand order, pegging information is used to allocate, track, trace, register, and supply inventory. You can track the costs at the project, activity, and element level throughout the entire flow of goods. That is, pegging information is added to items, inventory, and transactions when goods are ordered, received, issued, and consumed.

Peg distribution information is available for purchase, warehouse and shop floor orders to be able to track for which project cost account the goods are ordered. The peg distribution lines include the item, required quantity, unit, configuration, and the project cost account (peg) elements. In addition, the distribution lines contain information on the top demand order, such as customer, contract, prime contractor, and top demand order date. The main purpose of distribution lines is cost distribution and not the physical movement of items.

In case of exceptional situations, such as partial receipts, over issues, rejections, and returns, the quantities are allocated according to the fair, equitable and unbiased accounting principle in which the demand need date is the main driver. Multilevel order pegging inquiries are available to manage dependencies in the supply chain, and requirements of multiple projects can be commingled in one purchase order to leverage volume discounts.

Actual costing and earned value can be reported any time against the project.