Summary of LO 020 Processes in Procurement

At the conclusion of this course, you will be able to:

Enter invoices for inventory and non-inventory items Create, display, and maintain material and vendor masters and list the required organizational levels Create, display, and maintain purchase requisitions, RFQs, contracts, and purchase orders Explain the financial and valuation effect of basic procurement Carry out standard analyses in the system

02 Navigation

The R/3 System is a client system. The client concept enables the joint operation, in one system, of several enterprises

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Screen Elements

I42 (1) (400) iwdf4042 INS

Input field

1st selection

2nd selection

3rd selection

4th selection

5th selection

ChangeDisplay

2nd selection1st selection 3rd selection

Green light; positive

Yellow light; neutral

Overview

Execute

Message

Status setzen

PushbuttonPushbutton

Status barStatus bar

CheckboxesCheckboxes

Command fieldCommand field Standard toolbarStandard toolbar

Radio buttonRadio button

Menu barMenu bar

Title barTitle bar

Application toolbarApplication toolbarInput fieldInput field

TabTab

Menu Edit Favorites Extras System Help

System function name : ActivitySystem function name : Activity

This screen is madeup of various screenelements. It does notexist in the system.

OptionsOptions

03 Basic of Procurement Process Client (Corporate Group)> Company Code (ind acc unit)> Plant (organizational logistics)> Str Loc (IM and PhyInv

at this level)> P org (legally response for completing contract)> P grp (buyer) P Org : Plant-specific P.Org / Cross-Plant P.Org (within a CC) / Cross-Company Code P.Org (Do not assign a

company code to the purchasing organization) Procurement Cycle : Determination of reqmts > Determination of the source > Vendor selection > PO processing

> PO Monitoring > GR > IR > Payment Processing Invoice Verification therefore creates a link between Materials Management and external or internal accounting

Invoices that do not reference a purchase order can only be entered with conventional Invoice Verification.

PO creation : Manual / refer to PR / RFQ PO Header : document currency, the document date, and the terms of payment. Item Category : defines whether an item requires and/or can have a material no, acc asgmt, GR,IR

( )Standard, (L)Subcontract, (K)Consignment, (D)Service, (U)Stock Transfer, (S)Third-Party Messages : Printout / Dlv Schedule / Expeditor / Reminder / Rejection Letter / Order acknowledge expeditior Movement Type : Together with other influencing factors, the movement type determines which stock or

consumption accounts are updated in Financial Accounting. The movement type also determines the format of the screen when you enter documents and how the quantity fields are updated.

04 Master Data

Vendor Master : You can block a vendor for an individual material via the source list

Account Group controls,

Status / Field Selection / Partner Schema / Vendor Sub-ranges or Plant-Specific Data / Type of number assignment / Number interval

Partner Roles : Order recipient / the supplier of goods / the invoicing party / the payee.

Material type controls :

1. The type of number assignment (internal or external).

2. The permitted number range interval.

3. Which screens are displayed and in which order.

4. Which user-department-specific data (view) is suggested for entry.

5. Which procurement type is permitted for a material

6. determines which accounts are posted

Industry Sector controls :

1. Which screens are displayed and in which order

2. Which industry-specific fields are displayed on each screen

05 Procurement of Stock Material

RFQ :

Creation manually, refer to PR, refer to another RFQ, refer to outline agreement / Quotation and condition entering / Quotation Comparison + save as market price / Save info record from RFQ / rejection (how to print?)

Collective number in the header data of the RFQ

Condition in PO : from contract / info record or extended condition (more flex coz can define criteria must be met if the conditions are to apply to POs)

Info Record : Contains data in the combination of mat&Vendor (Current and future prices and conditions, planned Dlv time, Tolerance )

valuated goods receipts : MVT 101 into three stock type

Documents: Material Doc and Acc Doc (If the goods movement is relevant to valuation)

Inv Ver : Unlike conventional Invoice Verification, Logistics Invoice Verification enables you to post invoices across company codes.

One time vendor : entering address at PO / Entering Bank data at Inv Ver

Condition : Created in (Quotation / info record / Outline agreement)- time-dependent conditions / PO - time-independent conditions

Only in Quotation and Sch Agremnt can define time-dependent or not.

Calculation Schema – framwork for price determination 1. Conditions type used 2. Access sequence of condition record.

Info Record : General data / P Org data or P org+Plant data : can config to allow the validity for the Porg or plant. IMG > Materials Management > Purchasing > Conditions > Display Condition Control at Plant Level.

Text : Info record note (not print) / PO text (print)

Info Record : Manually / Quotation / PO / Outline agrmnt

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Info Records and Prices

Create purchase orderCreate purchase order

Item

Piece % Conditions

UNI

Info recordavailable?

Conditions:Conditions:Price/UoM 50 UNI / pcFreight 2%

Last purchaseorder: 4500006398

Info record

?

Yes

Yes

No

No

ManualPrice entry

Material Short text Price

10 T-RA120 Chromolux 2000 ?

In the default values for buyers (Customizing), you can define how the system handles conditions from the last purchase order. IMG > Materials Management > Purchasing > Environment Data > Define Default Values for Buyers > Settings for Default Values

Valuation Area : Plant or CC level. Recommend Plant Level (in IMG > Enterprise Structure > Definition > Logistics General > Define Valuation Level)

Valuation Class : combine materials for assigning G/L accounts. 1 Material 1 Valuation class Val Clss assigned to Mat type

Material Valuation Procedure : price Control Procedure : S and V

06 Procurement of Consumable Material

Account Assignment :

> Materials Management > Purchasing > Account Assignment > Maintain Account Assignment Categories

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Stock Material <=> Consumable Material

Entry of material numberrequired

No account assignmentcategory

Posting to stock accounts

Quantity, value, andconsumption updated inmaterial master record

Moving average price isadjusted

Entry of material number notrequired, but is possible

Account assignment categorymandatory

Posting to consumptionaccounts

Value is not updated, quantityand consumption can beupdated

Blanket PO : are usually valid for a longer period of time / it is not worth creating a separate purchase order for each procurement transaction / use FO doc type and B item cat / PO no GR IR / Acc assmnt (optional) / no mat no

07 Procurement of External Service

Service Master AC01 / Service Condition – Service, Service+Vendor, Service+Vendor+Plant

Service direct consumption / sometime do not know exact service and cost define value limits.

Process : PO Enter Sevice Entry sheet Release , Signoff IR

You do not give an exact description of unplanned services or their quantity and price details until you enter them. The system checks whether the unplanned services adhere to the limit defined in the purchase order.

You can set up release procedures for service entry sheets.

08 Automate Procurement

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Invoice receipt

ERSERS

• Material master• Source of supply, e.g. contract• Source list

Indicator in:• Material master• Vendor master

• Indicator in purchase order

• Indicator in vendor master

Matls Matls planningplanning Automatic POAutomatic PO Shipping Shipping notifnotif..

Goodsreceipt

Purch. orderPurch. req.

Automated Procurement: Overview

MRP : Planned orders are proposals used for requirements coverage

source list : define which sources of supply are allowed or not allowed (block) for a material in a particular plant.

(fixed vendors or preferred outline agreements)

Source list Creation : Manually / updating info records / outline agreements / Auto (ME05) (info record+contract / info only / contract only)

Auto PO : 1. Mat master 2. Vendor master 3. Source of supply in PR 4. Online (ME59) or background

Acknowledgements : enable you to plan more accurately by providing you with the actual delivery dates and quantities.

evaluated receipt settlement (ERS), This ensures that there are no discrepancies between the goods invoiced and the goods received.

You cannot process planned delivery costs with the ERS procedure.

In Logistics Invoice Verification, you can create a message for the vendor.

MRP : Pur procurement time (IMG > Production > MRP > Plant parameter > Carry Out Overall Maintenance of Plant Parameters / working days according to the factory calendar) + planned dlv time (Mat Master,info rec, contract)+ GR processing time (factory calendar-Mat master or contract)

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Reorder Point Planning

Replenishmentlead time

Stock Lot size

Reorderpoint

Safety stock

Reorder point Deliverytime

Time

Reorder point concept : available warehouse stock (purchase orders, firm planned orders, and firm purchase requisitions) VS Reorder point

Lot-for-Lot : If you have specified that the exact lot size (lot-for-lot order quantity) is to be used, the system uses the exact shortage quantity as the order quantity in the case of a material shortfall. If there are several goods issues leading to a material shortfall in one day, the system groups the shortage quantity from this day in one order proposal, rather than creating an order proposal for each shortage.

Order Confirmation

ERS : 1. ERS set in vendor 2. GR based inv in vendor 3. Tax code in PO

* If you do not want a particular material to be settled automatically, you have to exclude the ERS procedure from the info record for the vendor and the material. ??

09 Report in MM

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Scope of List and Selection Parameters

Vendor

Purch. organization

Scope of list

Selection parameters

Document type

Purchasing group

Plant

Item category

Acct assgmt cat.

Delivery date

Validity key date

T-L05B03

1000

BEST

INVOICE

1000

Scope of list Description of scope of list

ALL : : :

: :BEST

: : : :

RAHM

SelParam Descript. Selection parameters

A-ERLEDIGT Completed RFQs :Open invoices : :Open goods receipt

: :INVOICE

: : : :

GR 101

Outline agreements

All

Purchase orders:

::

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Qty

Time

Info structures

BusinessIntelligence

SAP R/3SAP R/3 SAP R/2SAP R/2

S012S012

LIS updating

S...S...

S039S039S001S001

OnlineTransactionProcessing

DATAWARE-HOUSE

OLTP

OLAP OnlineAnalytical

Processing

The Logistics Data Warehouse in the SAP System

Info Structure : key figure / Char / Period

Early warning system EWS : in OLAP used for looking for any unusual situations and react to and correct these in good time.

standard analyses VS flexible analyses : compile and compress key figures

10 ASAP do not read a’

11 Conclusion

12 Appendix