This activity is used to define a commercial rule.
MRO (Maintenance, Repair, and Overhaul) service providers are service companies and need to work according to a set of agreed rules, and quote/invoice customers according to the same set of rules. In the heavy maintenance contract, these rules are referred to as heavy maintenance contract rules. Some rules are contract or customer specific while other rules are more commonly used in MRO or heavy maintenance operations (e.g., Time no Material cap, Time & Material cap, Material cap only, etc.). These common rules can be set up as commercial rules in the application. While the terminology differs based on context, the content and behavior are the same.
The ability to set up commercial rules streamlines the process for users, as these pre-defined commercial rules can be used to create contract-specific rules to handle the commercial behavior of the heavy maintenance contract.
A commercial rule can consist of multiple commercial rule lines, each detailing how to invoice and/or quote customers for planned and/or completed maintenance work. Commercial rule lines can be defined for different sales groups and cost types as well as a default, compulsory commercial rule line covering all other prices that are not handled by any other specific commercial rule line.
A commercial rule can be connected to a contract line using the Commercial Rule field in the Heavy Maintenance Contract page. Upon connection, the commercial rule lines will be replicated as heavy maintenance contract rule lines, which can be further adjusted to meet the specific contract needs. When replicating the commercial rule lines as heavy maintenance contract rule lines, if a heavy maintenance contract rule line similar to a commercial rule line already exists, that line will be skipped.
Commercial rules can be defined from the New Commercial Rule assistant by entering a unique identity in the Commercial Rule ID field and a description of the commercial rule in the Description field. A single commercial rule can have multiple commercial rule lines.
| Field | Description |
| Event Type | Determines whether the commercial rule should be applicable for Routine work, Non Routine work, or both types of work if All is selected. |
| Item Type | Determines whether the commercial rule should be applicable on a Cost Type (e.g., Material, Personnel) or at a Sales Group level (e.g., Engineering, Consumables, Rotables). |
| Cost Type | Specifies the cost type for which the commercial rule will be applicable. Valid values are Expenses, External, Material, Personnel, and Tool/Equipment. A value in this field is required if the item type of the commercial rule line is Cost Type. |
| Sales Group | A value in this field is required if the item type of the commercial rule line is Sales Group. Once a value is defined, the specified commercial behavior of the commercial rule line will be applicable to the sales parts belonging to the defined sales group. |
| Commercial Type |
The commercial behavior of the commercial rule line is mainly decided by the commercial type on each commercial rule line. Valid values are;
|
| Sales Part | Sales part is mandatory if the commercial type is either Firm Fixed Price, Free of Charge or Resource Used with cap values defined. Sales part defined here will be used when invoicing and/or quoting the exceeded cap values or the fixed price amounts. |
| Sales Price | Sales part is mandatory when defining a sales price. This price will be used as the sales part price when quoting and/or invoicing exceeded cap values or fixed price amounts. The price is always shown in the currency of the service contract. |
| Price Rollup | Applicable only if the commercial type is Firm Fixed Price. If Price Rollup is enabled for a fixed price commercial rule line, all the prices of resources and materials planned under the specified grouping level will be aggregated and invoiced as a fixed price amount. |
| Grouping Level |
For cap handling and fixed price handling, a grouping level is mandatory. This indicates the level at which the cap values or a fixed price should be applied. The valid values are:
Note: In the context of cap values, the grouping level indicates the level at which reported non routines should be grouped to calculate the cap values. |
| Revenue % | Enter a percentage value here to represent the revenue percent used to calculate the sales price amount. For instance, if the revenue percentage is set to 100, the total of the sales price will be included on the customer invoice, whereas a revenue percentage of 0 indicates that the transaction is not to be invoiced. |
| Free Price Cap | Price cap value (price limit) agreed between
the customer and the MRO shop for material usage. The customer will
not be charged up to the exceeded cap values. For example, if the material/price
cap for consumable parts is set at 1000 for the grouping level “maintenance
event”, and the currency of the contract is USD ($), it means up to
$1000 of planned consumables for non routine work reported for the originating
routine maintenance event will not be charged. Any amount exceeding
$1000 will be invoiced to the customer. Note: Cap values can only be defined for the Non Routine event type. |
| Free Quantity Cap | Quantity cap value (hour limit) agreed between
the customer and the MRO shop. The customer will not be charged up to
the agreed-upon cap values. For example, if the quantity/man-hours cap
for engineering work is defined as 10 for the grouping level “maintenance
event”, the first 10 hours of engineering work planned for non routines
reported for the originating routine maintenance event will not incur
charges. Anything beyond 10 hours will be billed to the customer.
Note: Cap values can only be defined for the Non Routine event type. |
| Cost Based Pricing | Enable this option to calculate the sales price amount based on the cost and markup%. If the option is disabled, the revenue percentage is used to calculate the sales price amount. |
| Cost Based Markup % | The markup percentage when the price source is Cost Based. The sales price will be calculated accordingly by adding a markup to the cost. Discounts will not be applicable when markup is present. SALES PRICE = COST + (COST × MARKUP %) |
| Invoice Zero Amounts | This option defines whether to include or
exclude certain work task sales lines with amount zero from the customer
invoice when invoicing a work task connected to a heavy maintenance
contract line. If this option is enabled, any corresponding work task sales lines created with amount zero will appear on the customer invoice. If disabled, any corresponding work task sales lines with amount zero will not be transferred to the customer invoice from the work task. |