ETM (Equipment and tools

management)

Definition

Planning, processing, settlement and evaluation of the resources in order to

achieve optimal process flow in constriction /equipment rental companies.
It is one of the topics from subject Engineering, construction and operations
Performance measurement of resources (materials and equipments)

Modules involved
SD
PM
FI and CO

Features
1. Representation of various catalogs containing equipment, machinery,
tools, accessories, attachments etc.
2. Catalog BOMs
3. Shipping and settlement packages
4. Relationship between owners and administrators of equipment
5. Shipping and performance based equipment (PBE) documents
6. Settlement calendar
7. Filler calendar for PBE
8. Time based /performance based settlement
9. Inventory management
10.Equipment planning

1. Catalogs
Its a structural list of different types of machinery, for example equipment,
vehicles, machines etc.

It is based on SAP standard classification system

Each ETM catalog is assigned to class and class type
That means all numbers assigned in particular catalog along with
characteristics and values are assigned to class

2. Catalog BOMs
Representation of catalogs in SAP is ETM BOMs.
These are similar to production BOMs, in other words, these are assemblies
like vehicles, equipment/machinery
BOMs include list of parts along with item descriptions, quantities and unit

3. Shipping and settlement packages

Minibus driven to the construction site with a box containing small several
items like shovels, buckets, floor cloths, hand gloves etc. All these materials
are entered in system and sent together as one shipping package
Settlement packages are related to cost assignment of the equipment.

4. Owners/Administrators Owner is owner of the equipment which manages equipment in plant

finance/accounting and responsible for depreciation of equipment. (reduction
in value of asset over a certain period due to wear and tear
Administrator manages on behalf of owner.
Owner and administrator can be same
It collects/receives revenue from rental/external third parties.
Generally administrator pays lease charges to owner. This can be fixed
amount or may be dynamic based on % basis.

5. Shipping and PBE documents

Shipping document enables to send the
materials/equipment/resources/packages along with information like quantity,
description etc.
PBE documents enable to record No of working hours, idle hours, number of
kilometers, oil consumption etc. for resources/equipment

6. Settlement calendar-

Important settlement data is stored in this calendar.

It also controls release of the settlement

7. ETM/equipment planning
ETM planning is similar kind of concept like requirement planning.
Planning is being carried out as per the requirement and availability of the
equipment in warehouse or magazines at construction sites.
There is a stock and requirements planning controller
The controller uses the classes and characteristics of the equipment in order
to choose best suited equipment which can fulfill most of requirements.
Controller also ensures the equipment availability for use at required time

8. Filler Calendar for PBE

Filler calendar generates missing PBE documents or completes existing PBE
documents that are incomplete.
For example, project manager/construction site manager has forgotten to
enter PBE document for excavator A which was idle on 20/12/2016, due to
repairing/maintenance activity
So activity and settlement types in operation defined in filler calendar for PBE
settles and fills missing hour entries.

9. Inventory management
Inventory management is based on different levels as follows,
Document level, recipient level, material level or equipment level

There are 2 types- chronological and chaotic inventory management

Prerequisites
Basic customization knowledge for following modules is essential,

PM
MM
SD
FI/CO
PS

Customizing settings are required to be carried out for following

parameters,

Master data
Catalog
Calendar (Settlement calendar)
EDI (Cross company settlement)
Account determination
Inventory

Master data

ETM Catalog
ETM Bill of materials
ETM equipment
Owner/Administrator
Recipient

Benefits

Improve availability and tracking of the equipment

Manage administrative workload
Reduce handling and administration cost
Most flexible prices and account determination
Optimal equipment utilization
Profitability analysis/return on asset or equipment

Key process flows

1.
2.
3.
4.

Time based equipment process

Performance based equipment process
Non-consumable material process
Consumable material process

1. Time based equipment process

Process includes planning, dispatching and settlement of the time

based equipment

Equipment can be single part or multipart

Shipped via ETM shipping document
Settlement is carried out as per the number of days or period for which
equipment is been present at recipient location or at construction site.
The shipping document allows tracking of each equipment (single part
or multipart)
TBE is settled periodically with the fixed price, whereas it is not
relevant how often equipment has been used in operation. Example is
Crane (e.g. Hook high max. 20 mtr.)
Process starts with equipment request created by project manager or
foreman.
ETM requisition note may directly be created by project manager or
he /she may call to administrator/equipment manager responsible for
equipment & then he will enter requirement in the system accordingly.
Once equipment manager assigns the request to equipment, it will
then send out to the project site
Settlement and billing run takes place during month end generally.

2. Performance based equipment process

This business process is based on performance measurement of equipment in

terms of amount of fuel consumption, amount of kilometers etc. for a project
& settle PBE
Performance based equipment document is also sent to construction site
along with shipping document for respective equipment in order to control
and record the equipment usage. Ex. Excavator.
The requisition process for PBE is similar to TBE
ETM requisition note may directly be created by project manager or he /she
may call to administrator/equipment manager responsible for equipment &
then he will enter requirement in the system accordingly.
Once equipment manager assigns the request to equipment, it will then send
out to the project site
Once all PBE documents are entered for the required or agreed period,
settlement is being carried out accordingly.
Billing run takes place after creation & correctness checking of the
settlement list by project manager or foreman.

3. Non-consumable material process

This process is used if non-consumable material, e.g. site facilities, ladders

etc. has to be shipped from warehouse to a recipient together with
equipment in one ETM shipping document or may be taken out of
magazine.
The same ETM shipping document is utilized to return the non-consumable
material to magazine or in warehouse in order to save time, transport cost
& administrative efforts.
Magazines are like little project warehouses on big construction
sites/projects.
Construction sites buy non consumable material at a fixed price & after
usage, non-consumable material is given back either to the magazine or
warehouse wherein reduced value will be credited to the project.
During periodic settlement, project gets debited for received material and
credited for returned material. In other words, project pays a kind of
provision fee for the material usage.
Settlement is based on quantity and not on time period.
Cost charging and automated repurchase of non-consumable material is
fully automated/handled via ETM

4. Consumable material process

The business process is used for shipping consumable material like concrete,
nails together with equipment with ETM shipping document to reduce
transport/handling cost for the project in construction industry.
Cost charging is done by standard SAP-SD and MM modules
No settlement takes place in ETM for consumable materials.