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, register, and supply inventory.

Throughout the entire flow of goods, pegging information is added to items, inventory, and transactions when goods are ordered, received, issued, and consumed. Consequently, you can track the costs at the project, activity, and element level.

Peg distribution information is available for purchase, warehouse and job shop orders 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, therefore, pegs are not recorded at the stock point level. Consequently, no peg information or peg distribution is recorded for warehouse locations, lots, serials, handling units, or inbound advice.

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.

  1. Select the Project Pegging check box in the Implemented Software Components (tccom0100s000) session.

    If you want to use project pegging in combination with costing breaks, also select the Costing Breaks check box.

  2. Specify the project pegging parameters in the Project Pegging Parameters (tcpeg0100m000) session.
  3. For each item, specify the peg parameters in the Items (tcibd0501m000) session. Select the Inherit Project Peg and/or Mandatory Project Peg check boxes.

    Note: If you are only using Project to record the cost that is generated from processes in other packages such as Manufacturing or Sales Control, project item data, as specified in the Items - Project (tppdm0505m000) session, is not required.

Project (cost) pegging

Project cost pegging affects multiple LN packages. For more information, refer to the main topics as shown in this table:

Package Topic
Project Linking CLIN to a project structure
Common

Cost peg transfers - borrow/loan and payback

To set up borrow/loan and payback transfers

Cost peg transfer rules

Cost peg transfer settings for specific scenarios

Use ATT inventory with or without lead time fences

Sales Project pegging in Sales
Enterprise Planning

Using cost peg supplying relationships

Cost peg transfers in Enterprise Planning

Manufacturing Project Pegging in Manufacturing
Procurement

Project pegging in Procurement

Project pegged purchase documents - related processes

Warehousing

Peg distribution in the inbound and inspection processes

Peg distribution in the outbound process

Peg distribution for cycle counting and adjustment orders

Peg distribution - gains and losses

Cost peg transfers in Warehousing

Service Project pegging in depot repair
People Costs distribution of production order hours – examples