What is local content in SAP PLM-PLC - Product Lifecycle Costing?

SAP Term: local content

• Component: PLM-PLC

• Component Name: Product Lifecycle Costing

• Description: Describes what percentage of the materials and activities used to create a product are provided locally or nationally. The plant that is assigned to a calculation version is used as a point of reference for determining what is local. However, the size of the area that is considered local is defined by each organization independently.

Smart SAP Assistant

• Key Concepts: 
  Local content is a term used in SAP Product Lifecycle Costing (PLM-PLC) to refer to the cost of materials and services that are sourced from within a specific geographic region. This cost is typically higher than the cost of materials and services sourced from outside the region, as local content is subject to additional taxes, tariffs, and other fees.
  
  How to use it: 
  In SAP PLM-PLC, local content can be used to calculate the total cost of a product or service. This cost includes the cost of materials and services sourced from within the region, as well as any additional taxes, tariffs, and fees associated with sourcing locally. The total cost can then be compared to the cost of sourcing materials and services from outside the region in order to determine which option is more cost-effective.
  
  Tips & Tricks: 
  When calculating the total cost of a product or service, it is important to consider both the direct costs (such as materials and services) and the indirect costs (such as taxes, tariffs, and fees). This will ensure that you are able to accurately compare the total cost of sourcing locally versus sourcing from outside the region.
  
  Related Information: 
  SAP PLM-PLC also includes other features such as product lifecycle management (PLM), product costing, and product configuration. These features can be used in conjunction with local content calculations in order to optimize product costs and maximize profitability.