SmartPlant Materials How to Create a Blanket Order

SmartPlant Materials How to Create a Blanket Order

Version 2007.1 (6.2.3) January 2007 / April 2007 DMAR1-PE-200081A-UPDATED

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Table of Contents

Table of Contents

Preface .................................................................................................................................4

Overview .............................................................................................................................5

Creating Blanket Orders: A Workflow ...........................................................................7 Target Role ......................................................................................................................... 7 Session Goal ....................................................................................................................... 7 Workflow Prerequisites ...................................................................................................... 7 Budget Hours: Concept Transfer to Users .......................................................................... 7

Detailed Workflow .............................................................................................................8 Estimation ........................................................................................................................... 8 Requisition for Inquiry ........................................................................................................ 8 Inquiry Cycle ...................................................................................................................... 9 Creation and Approval of the Blanket Order .................................................................... 11

SmartPlant Materials How to Create a Blanket Order 3

Preface

Preface This document describes how to create a blanket order in SmartPlant® Materials 6.2.

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4 SmartPlant Materials How to Create a Blanket Order

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Overview

Overview To understand what a blanket order in SmartPlant Materials is, here some basic explanations.

Requisition for inquiry only:

Requisitions for inquiry only are normally created at the beginning of a project, when no or only basic engineering has been done. To get pricing for budgets or to speed up the later delivery, engineering creates requisitions for inquiry. For engineering, these requisitions have two major characteristics:

1. Procurement will NOT be able to purchase the materials requested.

2. Procurement will be able to use the collected prices and delivery conditions for later requisitions for purchase.

SmartPlant Materials offers the following business process for the inquiry cycle.

Create inquiry → Issue RFQ’s → evaluate bid’s (commercially, technically) → select supplier/s

The result of these steps is pricing and delivery conditions coming from the bidding process. This result can be reported. Since it is not possible to create a Purchase Order (PO) from an inquiry only from a requisition, there are special processes required to reuse the inquiry results.

For SmartPlant Materials to use the inquiry cycle results downstream, two optional business processes are available.

1. Create purchase requisition Procurement is able to create a purchase requisition based on the selection of a suppliers bid. The purchase requisition is checked and approved by engineering. After engineering approves the purchase requisition, procurement is able to create a PO based on the Purchase Requisition and on the selected suppliers bid, which means prices and delivery conditions are transferred automatically into the PO. This process can be used either for bulk or for tagged equipment.

2. Create blanket order Procurement is able to create a blanket order based on the selection of a suppliers bid. With a blanket order, no material is actually purchased. The blanket order is an agreement between the supplier and the EPC that in a certain period of time a certain range of materials and material quantities will be purchased for a certain price. After a Blanket Order (BO) is placed, engineering may at any time approve requisitions for purchase containing line items with identical ident compared to the BO line items. Procurement can now produce a PO based on the blanket order. The PO will contain all price information available in the BO. This process primarily covers the need for bulk material.


Overview

REMARK: Both processes are NOT compatible inside one requisition and inside one MTO type!

In the following diagram, the basic workflow for the creation of a blanket order is shown.

The flow chart also shows the workflow creating a PO based on a blanket order. This is part of the document “How to create a Call of Order based on blanket order” and is only shown to complete the business process.

How to create a blanket orderHow to create a blanket order

Create or import estimation data in BOM module

Prepare data for blanket orderPrepare data for blanket order

Create requisitionsfor Inquiry only

RTP, Assign bidders,create RFQ

Receive bids,evaluate and choose supplier

Create Blanket order

Create order from blanket orderCreate order from blanket order

Create detailed BOMOrImport BOM from design system

Create requisitionsfor Purchase

Create PO based onblanket order


Creating Blanket Orders: A Workflow

Creating Blanket Orders: A Workflow The goal of this document is to explain the specific tasks and best practices for creation of blanket orders.

Target Role The target audience for this document is home-office-based SmartPlant Materials administrators, Requisitioning Engineers, procurement super users, and buyers.

Session Goal This session will enable users to understand the process concept for blanket orders and how to create them.

Workflow Prerequisites This document assumes that the SmartPlant Materials introduction and overview session has been completed. The SmartPlant Materials requisition management and the procurement basics should be known.

Budget Hours: Concept Transfer to Users It will take between 4 to 6 hours to train users in this workflow.


Detailed Workflow

Detailed Workflow

Estimation The creation of blanket orders is normally done based on an estimation. Such an estimation is very often done on a very high level of the work breakdown structure (WBS). In this case, the estimation is created on the highest available node PIPING.

Requisition for Inquiry A material take-off (MTO) job was setup, which created ‘inquiry only’ requisitions. For this example, a requisition for valves was selected.


Detailed Workflow

Inquiry Cycle Based on the released requisition for inquiry, a normal inquiry cycle is started. This means there is no difference in the inquiry cycle for a blanket order compared to the inquiry cycle for a single PO.

For this document, an inquiry is created, approved, and maintained into three Request for Quotes ( RFQ) for the three bidders VALVE A, VALVE B, VALVE C.


Detailed Workflow

Since the bidder VALVE B did not quote and the bidder VALVE C was cheapest on most of the line items, bidder VALVE C is selected as supplier for all PO line items by simply double clicking on the supplier code. After the selection the RFQs are approved!


Detailed Workflow

Creation and Approval of the Blanket Order After a supplier is selected and the RFQ is approved, the blanket order can be created. An additional precondition, which has to be fulfilled to be able to create the blanket order, is that the selected supplier must have the approval check box checked in P2001 window 2.

If this is not done, the blanket order cannot be created!

The creation of the blanket order begins on screen P5001 by pressing the button “Create order.” In the following screen, the option “BASED ON QUOTE SUMMARY” has to be selected.


Detailed Workflow

In window 4 of P5001, the selected and approved supplier for the actual inquiry can be queried. The screen automatically recognizes that only a blanket order can be created because of the inquiry only requisition. Now, you can enter additional information fields. Afterwards, the blanket order can be created by pressing the button “CREATE ORDER.”


Detailed Workflow

The blanket order is now available in P5001 workload area. Double click on the BO Code to open the details for the blanket order. The process of the blanket order creation has transferred ALL available data (header and line items) from the approved quote to the blanket order. For example, all prices, delivery conditions, attached documents, and other costs are transferred to the BO.

In the field “estimated value” on the BO header, a value can be inserted that represents a maximum order value created from this BO. If this value is exceeded later by the creation of a new PO based on this BO, a warning appears.

If no “Incoterm” and no “Delivery Place” have been assigned to the line items during the inquiry cycle, they have to be set prior being able to approve the blanket order.


Detailed Workflow

The blanket order is now available for later use. You can create a Purchase Order based on the combined information coming from a requisition for purchase and the blanket order. This workflow is described in the SmartPlant Materials best practice document “How to Create a Call of Order Based on Blanket Order”


SmartPlant Materials How to Create a Blanket Order

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