Sap Mm Business Blueprint Sample

Walvoil Fluid Flui d Power India Pvt ltd

4.Materials Management

As Is Business Process and Business Business Requirement from Walvoil Fluid !o Be Business Process for Walvoil Fluid Power (India) Pvt. Power (India) Pvt. td.

td.

(Im"lementation of m#$AP %RP and Walvoil &# '$ I! $ervices (I) Pvt. td. for Walvoil Fluid Power (India) Pvt td

yiva

$ignoff on Business Blue Print on

4. Materials Management

Introduction This Business Blue Print Document describes the following: (*+ I% on ,-st Fe& ,/) Enterprise Structure of Walvoil Business r sers !r" Ivano #hiossi

Project Sponsor !r" !r" $marn marnat ath h %amc %amch handr andran an !r" !r" &abr &abri' i'io io Stro tro''i ''i

Steering Committee Member, Walvoil

Steering Committee Member, Walvoil

!r" $vinash )umbrey

Project Manager, CVS IT

!r"Srinivasa %ao ",

Consultant, CVSIT

!r" !r" ( ) *ri *rishn shnamu amurthy rthy

!r" (arayana %a+an" (

Module Owner, Walvoil

!r" !r" $vina vinash sh )umb )umbre rey y

Steering Committee Member, CVS IT

Steering Committee Member, CVS IT

!r" (arayana %a+an"(

Project Manager, Walvoil

!r" ,inay *umar %eddy

Team Member, Walvoil

Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

!r" Sathya(arayana"$ - !r" %avi.anth S"

Team Members, Walvoil

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td.

Introduction

This Business Blue Print Document describes the following: 

Enterprise Structure of Walvoil



Business re6uirements as given given by the Walvoil *ey sers

   

Suggestions by #,S IT consultants wherever myS$P myS$P E%P features are found to be useful to Walvoil Walvoil business functionality To3Be Process on myS$P E%P system suggested by #,S IT #onsultants #omments whether the re6uirement can be reali'ed on the S$P %78 system or not" 9aps which are at different stages of eploration

The following codes are given to each module that is within the scope of the agreement:

!odule ID

!odule

4

&inancial $ccounting

;

#ontrolling

8

Sales - Distribution

<

!aterials !anagement

=

Production - Planning

>

?uality !anagement

&urther processes0 sub3process and activities in each module are denoted by0 say" 4"40 4"4"40 4";"4 etc" $ Business Blueprint document is prepared for each module and reference shall be made wherever re6uired to other modules0 whenever there is an overlap of business processes across across modules or a business process re6uires to be completed completed in more than one module" The reference to the business process shall be made using the process numbers a s described above@


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td.

Introduction

This Business Blue Print Document describes the following: 

Enterprise Structure of Walvoil



Business re6uirements as given given by the Walvoil *ey sers

   

Suggestions by #,S IT consultants wherever myS$P myS$P E%P features are found to be useful to Walvoil Walvoil business functionality To3Be Process on myS$P E%P system suggested by #,S IT #onsultants #omments whether the re6uirement can be reali'ed on the S$P %78 system or not" 9aps which are at different stages of eploration

The following codes are given to each module that is within the scope of the agreement:

!odule ID

!odule

4

&inancial $ccounting

;

#ontrolling

8

Sales - Distribution

<

!aterials !anagement

=

Production - Planning

>

?uality !anagement

&urther processes0 sub3process and activities in each module are denoted by0 say" 4"40 4"4"40 4";"4 etc" $ Business Blueprint document is prepared for each module and reference shall be made wherever re6uired to other modules0 whenever there is an overlap of business processes across across modules or a business process re6uires to be completed completed in more than one module" The reference to the business process shall be made using the process numbers a s described above@


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&or e"g": $s per the above notation0 $ll processes in Sales - Distribution start with 8"A So if a reference has to be made to process in $ccounts %eceivable of &inancial $ccounting0 then the reference is made using the notation say0 4";" A where C4 refers to &inancial $ccounting and 4"; refers to $ccounts %eceivable and then further numbers denote the sub3 processes and activities in the module" Step 4: The !odule 2wner shall identify various eisting business processes at a broad level and ma.e a list of them as described under section 4 of this document Step ;: Depending upon the various business processes thus identified in Step 40 various business scenarios are described in the following way: $s Is Business Processes: The current way of eecuting the business process shall be eplained in detail with data7information flow along with the IT systems 7 !anual Systems being used in the whole cycle" Business %e6uirement: nder this head0 the module owner shall describe the re6uirements of the company vis33vis this business scenario0 if necessary with eamples" &ollowing situations can arise: The current provisions in the system are sufficient enough and additional configuration efforts are not re6uired" The current provisions are not sufficient and satisfactory and additional features need to be incorporated in the system There is no current provision to handle this transaction at all" The module owner shall identify each business scenario with the above classification" Step 8: Based on the Business %e6uirement0 #,S IT consultant shall do a detailed %e6uirement $nalysis and based on the analysis0 shall propose the best fit business process on the S$P %78 system" It may not be possible to decide the reali'ation possibility of all Business re6uirements on the myS$P E%P7#I(<"F$ system immediately and hence the following legend is being followed for describing the statuses:


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As Is Business Process and Business Requirement from Walvoil Fluid !o Be Business Process for Walvoil Fluid Power (India) Pvt. Power (India) Pvt. td.

Status of To3Be Business Process

td.

Status Description

$3Possible

#an be implemented on myS$P E%P and W$1,2I1

B3Possible with wor.around

#an be implemented on myS$P through indirect means

#3Possible with $B$P

#an be implemented on myS$P through $B$P7< development 'ontents

D3Possible with $B$P GBut #an be implemented on myS$P through $B$P7< development but system performance may be performance issueH effected Page 1um&ers 0 !o"ic E3(ot possible with out !a+or #annot be implemented on myS$P without ma+or system modification $tart %nd !odification 4 Definitions = 5 &32pen for eploration Possibility of implementation will be eplored in the development environment" #annot be confirmed at thisstructure stage ; Enterprise K L 93(ot possible #annot be implemented on myS$P 8 Business Process Scope 4F 44 )3(ot in Scope #annot be implemented because it is not part of the scope defined in the Software Services $greementJ between #,S IT - Walvoil < Business Process Details 4; 5> = %eports 55 55 The To3Be business process reali'ation is dependent on the following aspects: Scope of services described in the Software Services $greement signed by W$1,2I1 - #,S IT Scope of functionality described in the Software Services $greement mentioned above" #apabilities - 1imitations of myS$P E%P $s3Is Business *nowledge Transfer from myS$P E%P Pro+ect Team members Business %e6uirements defined by the Walvoil Pro+ect Team members W$1,2I1 accepts that the decision to accept the CTo3Be Business Processes is completely its own and not influenced by #,S IT" #,S IT shall not be responsible for the business conse6uences on Walvoil after the reali'ation and usage of the processes being suggested here" Walvoil shall indemnify #,S IT from all responsibilities for any other business conse6uences during the framing of the To3Be Business processes0 or at any time during or after the reali'ation 7 implementation of these processes on myS$P E%P system or while using the system" !ethodology to be adopted for preparing Business Blue Print:


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-. 2efinitions3 Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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'om"an# 'ode3

The #ompany code is smallest organi'ational unit of eternal accounting for which a complete0 self3contained set of accounts can be created" This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements0 such as the balance sheet and the profit and loss statement" Walvoil &luid Power GIndiaH Pvt" 1td" are mentioned as #ompany in this document" 'art of Accounts3 This is a list of all 971 accounts used by one or several company codes" &or each 971 account0 the chart of accounts contains the account number0 a ccount name0 and the information that controls how an account functions and how a 971 account is created in a company code" Plant3

$ plant is an organi'ational logistics unit that structures the enterprise from the perspective of p roduction0 procurement0 plant maintenance0 and materials planning" $ plant is manufacturing a facility or branch with in a company" Purcase +rgani5ation3

$ purchase 2rgani'ation is an organi'ational level that negotiates conditions of purchase with vendors for one or more plants" It is legally responsible for completing purchase contracts" Purcasing grou"3 is the .ey for a buyer or group of buyers responsible for certain purchasing a ctivities" $torage ocation3

$ Storage location is a Storage area comprising warehouses in close proimity" !aterial stoc.s can be differentiated with in one plant according to storage location"

$tate %6cise Invoice3 Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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$ document that is re6uired at the time of sale of finished goods produced by using the state ecisable goods li.e %ectified Spirit as %aw !aterials" A!3

Type of ta introduced by 9ovt of India0 and has been implemented by many states including *arnata.a where Walvoil operates from" $tate %6cise 2ut#3

$s per the provisions of the *arnata.a State Ecise $ct0 the company is filing an application to ta.e the approval of State Ecise Department0 for using the ecisable inputs in the manufacturing activity by remitting the applicable duty on the assessable value of the proposed finished product" This approval needs to be ta.en before the commencement of the !anufacturing $ctivity" The said application shall contain all the details of products to be manufacturedJ and ?uantity in each batchJ during a given period of time" In case0 the company produces more 6uantity in a batch than that was mentioned in the approved application0 then company shall remit the ecise duty on the differential 6uantity" If the 6uantity produced in a batch is less than the approved one0 the refund of unutili'ed ecised duty from the department cannot be claimed" The produced units shall absorb the said unutili'ed ecise duty amount" The company considers the normal loss while ma.ing the application and accordingly mentions the estimated 6uantity in each batch" 'ustom 2ut#3

Duty levied by the government when a material is imported to India from abroad"

,. %nter"rise $tructure on $AP R78 $#stem


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Purcasing +rgani5ation 'urrent

#ode

1ew

Description

Walvoil &luid Power GIndiaH Pvt 1td

#ode

44FF

Description

Walvoil Purchase 2rgani'ation

9ustification 7 Pur"ose of te +rgani5ational :nit

Definition $n organi'ational unit subdividing an enterprise according to the re6uirements of Purchasing" It procures materials and services0 negotiates conditions of purchase with vendors0 and is responsible for such transactions" Structure The form of procurement is defined by the assignment of purchasing organi'ations to company codes and plants" The following forms of purchasing eist: #orporate3group3wide $ purchasing organi'ation procures for all the company codes belonging to a client" #ompany3specific $ purchasing organi'ation procures for +ust one company code" Plant3specific $ purchasing organi'ation procures for a plant" !ied forms are possible0 which can be replicated in the system by the use of reference purchasing organi'ations" $ purchasing organi'ation can utili'e the more favourable conditions and contracts of the reference purchasing organi'ation that has been assigned to it"

Purcase grou"s


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'urrent

1ew

#ode

#ode

Description

4F4

Domestic

4F;

Imports

4F8

Services

4F<

!%2

4F=

Mobwor.

4F>

!iscellaneous

buyer or group of buyers purchasing activities buyer or group of buyers purchasing activities buyer or group of buyers purchasing activities buyer or group of buyers purchasing activities buyer or group of buyers purchasing activities buyer or group of buyers purchasing activities

Description


responsible for certain responsible for certain responsible for certain responsible for certain responsible for certain responsible for certain

$torage ocations 'urrent

1ew

#ode

#ode

Description


%!F4

%aw materials

Storage location

S&F4 &9F4 SPF4 P*F4 S#F4

Semi &inished &inished spares Pac.ing Scrap

Storage location Storage location Storage location Storage location

Description

Storage location


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8. Business Processes sco"e3

Business Process Id

Business Process Description

<"4

!aster data !aintenance

<"4"4 <"4"; <"4"8 <"4"< <"4"= <"4"> <"4"5 <"4"K <"; <";"4 <";"; <";"8 <";"< <";"= <";"> <";"5 <";"K <";"L <";"4F <"8 <"8"4 <"8"; <"8"8 <"8"< <"8"=

!aterial !aster !aintenance Service !aster !aintenance ,endor !aster !aintenance Purchase info records Source list maintenance !aintain vendor evaluation criteria !aintenance of #onditions for Procuring !aterials Payment Terms Procurement Process Purchase %e6uisition %e6uest for ?uotation ?uotation Purchase 2rder 3 1ocal G%!0 P!0 !%2 ItemsH %elease Strategy Purchase 2rder 3 Imports 2utbound service orders 7 Mob wor. Purchase order 3 services Purchase 2rder $mendment #ash Purchases 9oods %eceipts ?uality #hec. 9%( due to Purchase of $ssets 9%( due to Production 9%( due to &inished 9oods %e+ection 9%( for !%2 items


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<"8"> <"8"5 <"8"K <"8"L <"8"4F <"< <"<"4 <"<"; <"<"8 <"<"< <"<"= <"<"> <"= <"="4 <"="; <"="8 <"="< <"="=

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9%( in to Bloc.ed Stoc. 9%( due to 2utbound Service 7 Mob 2rdersGPurchase 2rders for ServiceH Ecise Transactions (ormal re+ection handling 1ine %e+ection handling 9oods Issue 9oods Issue to 2utgoing Service7Mob Wor. 2rders 9oods Issue to Scrap 9oods Issue to Production 9oods Issue to Sales 2rder 9oods Issue to ?uality 9oods Issue to #ustomer7,endor7Third Party 1ogistics Invoice ,erification Entry of ,endors Invoice Par.ing ,endors Invoice #ancelling ,endors Invoice !aterial ,aluation Physical Inventory


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4. Business Process details3 !aterial7Services #overage - Different Types of Procurement Procurement at Walvoil covers the following items but it will ta.e some time to function completely: %aw !aterial re6uired for Production Semi finished goods !%2 Items / !aintenance0 %epairs - 2perating Supplies Services 3 $dhoc - Periodic Services with !aterial Supply %epairs etc Walvoil ma.es the following type of purchases it also ta.es some time to function fully: Procure3to3Stoc. G%! and !%2 itemsH (eed3based Procurement / based on Purchase % e6uisition G%!0 !%2 itemsH #apital 3 Budgeted #apital 3 (on3budgeted Service #ontracts Service with material supply 3 Mob wor. %epairs #ash Purchases


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Material 'oding

$s Is !aterial Type

%aw materials

Eternal 7 Internal

Total 1ength

1ogic4 (ot following any codes now

Semi finished 9oods &inished 9oods Spares !isc


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!o Be

!ateria l Type

Et 7 Int" Et

Total 1ength 4F

9roup 4 length

1ogic4

9roup ; length

1ogic;

9roup 8 length

1ogic8

Part (o" as per Walvoil GItalyH

4.- Master 2ata Maintenance Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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As Is Business Process3 (ot following any separate master data li.e !aterial master ,endor master #ustomer master ,endor approved price list Service master Business Requirement 3

4" S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement"

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Requirement Anal#sis S$P %78 provides functionality for maintaining the following master data: !aterials Services ,endors Purchasing Info %ecords Source 1ist ,endor Evaluation #riteria #onditions G#ommercialH Payment Terms $uggested Business Process3 Materials3 The material master contains information on all the materials that a company procures or produces0 stores0 and sells" It is the companyNs central source for retrieving material3specific data" This information is stored in individual material master records" The material master is used by all components in the S$P 1ogistics System" The integration of all material data in a single database ob+ect eliminates redundant data storage" In the S$P 1ogistics System0 the data contained in the material master is re6uired0 for eample0 for the following functions: In Purchasing for ordering In Inventory !anagement for goods movement postings and physical inventory In Invoice ,erification for posting invoices In Sales and Distribution for sales order processing In Production Planning and #ontrol for material re6uirements planning0 scheduling0 and wor. scheduling Service !aster Service master records0 in which descriptions of all services that may need to be procured can be stored


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endor Master Data in vendor master records controls how transaction data is posted and processed for a vendor" The vendor master record also contains all the data you re6uire to do business with your vendors" The master record is used not only in $ccounting but also in !aterials !anagement" By storing vendor master data centrally and sharing it throughout your organi'ation0 you only need to enter it once" Oou can prevent inconsistencies in master data by maintaining it centrally" If one of your vendors changes their address0 you only have to enter this change once and your accounting and purchasing departments will always have up3to3date information" Purcase info records Oou use this component if you wish to store information on a vendor and a material as master data at purchasing organi'ation or plant level" Oou can create purchasing info records for different procurement types Gstandard0 subcontracting0 pipeline0 consignmentH" $ource ist The source list is used in the administration of sources of supply" It specifies the allowed Gand disallowedH sources of a material for a certain plant within a predefined period" Each source is defined by means of a source list record" endor %valuation 'riteria The ,endor Evaluation component supports you in optimi'ing your procurement processes in the case of both materials and services" *a"s3 4.-.- Material Master Maintenance As Is Business Process3 (ot following any material master data Item #ode (umbering System Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement Anal#sis 4" Oou can identify material or document changes that are made with reference to a change number by the use of revision levels" When you want to process the B2!s for these materials or documents at a later date0 you can find and call them using either the change number or the revision level" Oou can assign a revision level to a material either from an engineering


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change management function or while you are processing a material master record or B2! for the material" ;" 2ver deliveries In the standard0 over deliveries are not allowed" In the event of an over delivery0 the system issues an error message" If over deliveries are to be allowed0 you can specify the following data in the purchase order: nlimited indicator If this indicator is set0 over deliveries of any si'e are allowed" The system does not issue any message" 2ver delivery tolerance Oou can enter a percentage over delivery tolerance in the purchase order" If a 6uantity of goods is received that is larger than the order 6uantity plus the over delivery tolerance0 it is not accepted by the system" 8"Scrap factor is generally considered in the Bill of !aterials of production planning module <" By using the relevant fields in net re6uirements planning and scheduling of !%P; view in material master this can be addressed" =" S$P provides various fields using !%P4 ,iew in the material master and by selecting the !%P Procedure one can maintain 1ot Si'e0 1ot for 1ot 2rder 6uantity0 !inimum lot si'e0 !aimum lot si'e and maimum stoc. level" >" System Distinguishes between the following units of measure" Base :nit of measure This is the unit of measure in which the stoc.s of a material are managed" This is the unit of measure in which the stoc.s of a material are managed" The system converts all 6uantities entered in other units to the base unit of measure" Alternative units of measure Individual departments may have their own units of measure" &or eample0 Purchasing may use a different unit than Sales or Warehouse !anagement GW!H" $ll units of measure other than the base unit of Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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measure are referred to as alternative units of measure" The %78 System supports the following alternative units of measure: +rder unit $llows a material to be ordered in a unit differing from the base unit of measure" The order unit is proposed automatically in purchasing functions0 where it can be changed" $ales unit $llows a material to be sold in a unit differing from the base unit of measure" The sales unit is proposed automatically in the sales order0 where it can be changed" :nit of issue nit of measure in which the material is issued from the Stores" It allows consumption0 stoc. transfers0 transfer postings0 and physical inventories to be recorded in a unit differing from the base unit of measure and from the stoc. .eeping unit" K" &I&2 valuations are a method that enables you to valuate the stoc.s of a material as realistically as possible" &I&2 Gfirst in0 first outH stands for the assumption that the first stoc.s of a material to be received are the first to be consumed" The value of the stoc. is therefore calculated based on the last stoc.s received" &I&2 valuation has a number of uses: 1isting the &I&2 values of certain materials" When you run &I&2 valuation0 the system calculates the &I&2 values of the materials concerned" The results are displayed in the form of a list that contains the following information: 3 The closing stoc. 6uantity and closing stoc. value for each material for the period in 6uestion as well as the &I&2 value and the difference between that and the stoc. value 3 The net value based on lowest value determination Gif you carry out &I&2 valuation with lowest value comparisonH 3 The totals for each valuation area or company code by material stoc. account 3 The totals by valuation area or company code L" Date &ree'ing / There are ,arious features available in S$P System features li.e Scheduling for activation of newly created materials0 Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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changes Display etc"0 $lso one can ma.e use of setting deletion indicator for a material at various levels in the organi'ation structure" Walvoil can ma.e use of this available feature as per the business re6uirement" 4F" Search help control is an $ctive component" It was developed to support the S$P search help techni6ue" In contrast to the previous search help techni6ue0 which used %78 dialog boes0 search help control uses a dialog techni6ue that is session3 independent" This means that the user can only open search help windows one at a time" Search help windows may0 however0 remain open within a single transaction" This allows you to refer to the results displayed in a particular search help window on subse6uent screens of the same transaction" With match codes0 you can use the menu to choose from the various different search possibilities displayed

#lic.ing on the right mouse button displays all of the search help control functions available in the current contet"


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44" $ material may have various documents such as drawings and photographs assigned to it" The system differentiates between these documents by means of the document type" If your company uses S$Ps document management system0 you can manage documents and assign eisting documents to a material in the material master record" Document data is managed at client level" If one document of the standard document type has been assigned to the material0 the details are displayed directly on the Design documents assigned sub screen" In the standard %78 System0 this sub screen appears on the: Basic Data screen in the industry system 2ther Basic Data screen in the retail system Oou access the 2ther Basic Data screen from the Basic Data screen by choosing 2ther basic data" If the document is not of the standard document type0 the (o lin. indicator is set on the Design documents assigned sub screen" Oou can display such documents by choosing $dditional data 3Q Document data" The (o lin. indicator is also set if a document has not yet been assigned to the material" If more than one document of the standard document type has been assigned to the material0 the Several lin.s indicator is set on the Design documents assigned sub screen" Oou can view these documents by Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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choosing $dditional data 3Q Document data" 4;" There are various possibilities for maintaining material code" It is suggested to go for a single code instead of maintaining two different codes for a material" 48" !aterials shall be created as per the assignment to the organi'ation structure" Provision to define various storage locations as per the Walvoil shall be considered and will be suggested" 4<" !%P4 to !%P< view allows to maintain data related to !PS" Suitable fields shall be considered as per Walvoil %e6uirement" 4=" !%P4 to !%P< view allows to maintain data related to !PS" Suitable fields shall be considered as per Walvoil %e6uirement" !%2 Items !aterial specific tets can be maintained in the materials tets in material masters !aterial Description logic depends on Walvoil policy" Walvoil responsibility to assign roles for maintaining material master data" $ detailed training shall be provided by #,SIT" It is possible to maintain specifications0 Drawings etc in the material master records !aterial master view provides a filed to maintain 2E! Information" $uggested Business Process 3 The material master contains information on all the materials that a company procures or produces0 stores0 and sells" It is the companyNs central source for retrieving material3specific data" This information is stored in individual material master records" Integration The material master is used by all components in the S$P 1ogistics System" The integration of all material data in a single database ob+ect eliminates redundant data storage" In the S$P 1ogistics System0 the data contained in the material master is re6uired0 for eample0 for the following functions: In Purchasing for ordering In Inventory !anagement for goods movement postings and physical inventory Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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In Invoice ,erification for posting invoices In Sales and Distribution for sales order processing In Production Planning and #ontrol for material re6uirements planning0 scheduling0 and wor. scheduling !aterial !aster %ecords $ll the information Walvoil needs to manage a material is stored in a data record in the material master0 sorted by various different criteria" Walvoil can enter and change most of the data in a material master record" )owever0 some information can only be updated by the system" &or eample0 the system updates the administrative data when you process a material master record0 and stoc. balances when goods receipts or goods issues are posted" The data in a material master record can be divided into two categories: Data of a purely descriptive nature This is data with information content such as name0 si'e0 or dimension" Data that the system uses to perform a control function This is data such as !%P type and price control" Since different departments in Walvoil wor. with the same material0 but each department uses different information on the material0 the data in a material master record is subdivided by user department" ser Departments at Walvoil using one material record Since several departments of Walvoil wor. with one material and each department uses different information for the material0 the data is structured in a material master record0 according to user departments" This is portrayed in the following graphic:


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Material !#"e3 !aterials with the same basic attributes are grouped together and assigned to a material type" This allows Walvoil to manage different materials in a uniform manner in accordance with your companyNs re6uirements" Eamples of material types are given in the graphic below"

Material *rou"3

*ey that you use to group together several materials or services with the same attributes0 and to assign them to a particular material group" Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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se Oou can use material groups to: %estrict the scope of analyses Search specifically for material master records via searc el"s *a"s 3 4.-., $ervice Master Maintenance As Is Business Process3 (ot following Service master data Business Requirement3

4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement Anal#sis Service activities process shall be carried in S$P System as per the re6uirement" Service %e6uest7!aterial %e6uest7 #ape %e6uest shall be through the S$P System GPurchase re6uisition / %&? / ?uotation3 Price #omparison3 Purchase 2rder3Service entry sheet3Invoice ,erification and PaymentH" Purchase %e6uisition shall be based on the material group but Standard system also provides features to create P%s on !aterial0 $ccount $ssignment0 Item category0 plant etc"0 $uggested Business Process3 The service master record counts as part of the master data within Eternal Services !anagement and serves as a source of data for you to draw upon when creating service specifications" This enables you to save time and reduces the fre6uency of errors0 since you need only enter the complete service descriptions in the service master record once" Structure $ service master record contains the following principal information for the uni6ue description of a service: Service number Service category Descriptive tets Gshort and long tetH Base unit of measure !aterial group ,aluation class *a"s3


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4.-.8 Maintenance of endor Master As Is Business Process 3 (ot following any separate vendor master data Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement Anal#sis 4" Business partners have a number of different functions0 described as partner functions0 in connection with your company" Oou use partner functions to define the rights and responsibilities of each partner type in a business transaction" When you sell or order goods0 for eample0 your business partners can assume partner functions such as: endor Partner functions3 a" 2rdering address b" 9oods supplier c" Invoice presented by d" $lternative payee Different business partners may carry out one or more partner functions" &or this reason0 you can assign individual business partners a number of partner functions" Oou manage data on business partners in master records" Data on partner functions is stored in these master records and used in &inancial $ccounting and 1ogistics" $ business partner can be a customer and a vendor at the same time if0 for eample0 your customer also supplies goods to you or if a vendor is also one of your customers" In this case0 you must create a customer master record and a vendor master record for the business partner" Oou can create a lin. between the two master records by entering the vendor number in the customer master record and the customer number in the vendor master record" ;" Terms of payment are rules agreed with your business partners" They apply to financial clearing for goods and services" Standard system allows one to associate terms of payment at master data level and at transaction level" 8" Oour company does business with some business partners for a long time" &or eample0 you have special price agreements with long3term customers and their deliveries get preferential treatment" $t the end of the fiscal year0 you can honour the loyalty of these customers with rebate payments" In other cases0 you have only one contact with a


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business partner" &or eample0 you order merchandise from a different vendor once0 because your preferred vendor cannot deliver" In the %78 System you can distinguish between: #ustomers and vendors Oou create a master record and assign partner functions for each business partner" 2ne3time customers and one3time vendors Business partners who have a business transaction with you only once are called one3time customers and one3time vendors" Oou do not have to create a master record for one3time customers or one3time vendors because you do not need this master record after the business transaction0 and it uses space" Oou create collective master records for one3time customers and one3time vendors" <" ?uotations and delivery reminders can be sent using features available in Standard system" $uggested Business Process3 Data in vendor master records controls how transaction data is posted and processed for a vendor" The vendor master record also contains all the data you re6uire to do business with your vendors" The master record is used not only in $ccounting but also in !aterials !anagement" By storing vendor master data centrally and sharing it throughout your organi'ation0 you only need to enter it once" Oou can prevent inconsistencies in master data by maintaining it centrally" If one of your vendors changes their address0 you only have to enter this change once and your accounting and purchasing departments will always have up3to3date information" vendor master record contains3 ,endors name0 address0 language0 and phone numbers Ta numbers Ban. details $ccount control data li.e the number of the 971 reconciliation account for the vendor account Payment methods and terms of payment set up with the vendor Purchasing data Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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)ow the Data is organised !aster records are divided into the following areas so that each company code and each purchasing organi'ation can store its own information for doing business with vendors"

*eneral data This is data that applies to every company code a nd every purchasing organi'ation in your company" The general area includes0 for eample0 the vendors name0 address0 language0 and telephone number" 'om"an# code data This is data that is specific to an individual company code" #ompany code data includes0 for eample0 the reconciliation account number and payment terms" Purcasing organi5ation data This is data relevant to the purchasing organi'ation of your company" &or eample0 re6uests for 6uotations0 purchase orders0 and invoice verifications are stored in this section" endor grou"s 4" %aw material supplier3 domestic ;" Pac.ing material supplier 3Domestic 8" !iscellaneous purchases ,endors <" #apital Purchases =" 2ne time vendors >" &inancial vendors 5" Transport vendors K" %aw material supplier3 Imports Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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L" Pac.ing material supplier /imports 4F" Employee vendors 44" #apital Purchases 3 Imports

endor 1um&er Assignment The vendor master record number can be assigned either internally or eternally" Internal numbers are assigned by the system0 whereas you enter eternal numbers yourself when you create the vendor master record" Eternal numbers can be alphanumeric" The account group determines whether account numbers are internal or eternal and what the valid number interval for a vendor master record is" The system ensures that the numbers assigned are always uni6ue" With Internal assignment0 the system selects the net number from the interval" With eternal assignment0 the system prevents you from entering the same number twice" Access Autorisation Oou can restrict access to master records in order to prevent unauthori'ed changes" Depending on how you organi'e your master data0 you can assign authori'ations for maintaining this data" &or eample0 one user may have authori'ation to maintain all master data0 while another may have authori'ation to maintain only accounting master data" Oou can even assign authori'ations for different types of processing" $ll users could have authori'ation to display master records while only a limited group of users may be able to create and change master data" *a"s3 4.-.4 Purcase info records As Is Business Process 3 (ot &ollowing

Requirement Anal#sis Info Record Price ersus P+ Price The net price in the info record and the net price in the purchase order


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Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

td.

are two different prices" The net price of an item in the info record is based on the conditions stipulated in the info record" If you change the conditions0 the net price in the info record is recalculated and the pricing date ad+usted accordingly" In contrast0 the price in the purchase order may reflect the deduction of a 6uantity discount according to a price76uantity scale" $s a rule0 the conditions from the info record are adopted in the P2" )owever0 if a price76uantity scale has been defined0 the price for the relevant order 6uantity is ta.en" $uggested &usiness "rocess3 Oou use this component if you wish to store information on a vendor and a material as master data at purchasing organi'ation or plant level" Oou can create purchasing info records for different procurement types Gstandard0 subcontracting0 pipeline0 consignmentH" Definition Serves as a source of information for Purchasing" The purchasing info record Galso referred to in abbreviated form as the Rinfo recordRH contains information on a specific material and a vendor supplying the material" &or eample0 the vendorNs current pricing is stored in the info record" The info record allows buyers to 6uic.ly determine: Which materials have been previously offered or supplied by a specific vendor Which vendors have offered or supplied a specific material !e info record contains3 Data such as prices and conditions that you can store for the relevant purchasing organi'ation or plant The number of the last purchase order Tolerance limits for over deliveries and under deliveries The planned delivery time Glead time re6uired by the vendor to deliver the materialH ,endor evaluation data $n indicator showing whether the vendor counts as the regular vendor


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for the material The vendor sub3range to which the material belongs The availability period during which the vendor can supply the material The info record contains 6uotation and ordering data" The data in the info record Gprices for eampleH is also used as default data for purchase orders" &or instance0 you can store the current and future 6uotation conditions Gdiscounts0 fied costs etc"H in the info record0 in order to be able to copy them into Pos" Oou can also maintain the vendors conditions directly in the info record" +rgani5ational evels $n info record can apply to the following organi'ational levels: Purchasing organi'ation Plant Procurement !#"es in Info Records $tandard $ standard info record contains information for standard purchase orders" The info records can be created for materials and services with and without master records" $u&contracting $ subcontractor info record contains ordering information for subcontract orders" &or eample0 if you subcontract the assembly of a component0 the subcontractor info record would include the vendorNs GsubcontractorsH price for assembling the component" ,alidity periods" 'onsignment $ consignment info record contains information on a material that vendors .eep available at their own cost on the orderers premises" The info record contains the vendors price for withdrawals by the ordered from consignment stoc." $s in the case of the pipeline info record0 you can store prices for different validity periods" *a"s3


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4.-.; $ource list maintenance As Is Business Process 3 (ot &ollowing Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement Anal#sis $uggested Business Process 3 The source list is used in the administration of sources of supply" It specifies the allowed Gand disallowedH sources of a material for a certain plant within a predefined period" Each source is defined by means of a source list record" The source list serves: To define a source of supply as RfiedR" Such sources count as preferred sources over a certain period of time" G&or eample0 the fied vendor for material 4 is $cme #orp" for the first 6uarter and enith #o" for the second 6uarter of the year"H To define a source of supply as Rbloc.edR" GThis means0 for eample0 that contract 4;8 may not be used for a certain period of time"H $s an aid in selecting the preferred source during the source determination process" G&or eample0 the vendor enith #o" is determined as the source for an item of a re6uisition dated 4= th Mune relating to material 4"H To bloc. the eternal procurement of a material" G&or eample0 material 4 may not be ordered from F4"F4"LK to 4;"84"LK"H *a"s3

4.-./ Maintain endor %valuation 'riteria As Is Business Process 3 (ot &ollowing Business Requirement3

Requirement Anal#sis $uggested Business Process3 The ,endor Evaluation component supports you in optimi'ing your procurement processes in the case of both materials and services"


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Elements of ,endor evaluation The following sections introduce you to the concept of vendor evaluation 2verall score !ain criterion Sub criterion Scoring %ange Weighting of scores The following five main criteria are available in the standard system: Price ?uality Delivery 9en" service7support These four main criteria serve as a basis for evaluating vendors from Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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whom you procure materials" Eternal service provision This main criterion serves as a basis for evaluating those vendors you employ as eternal service providers" 9aps: 4.-.< Maintenance of 'onditions for Procuring Materials

<"4"5"4

Prices

<"4"5";

Discounts 4"U Discount: $dholeram discount GBasic PriceH ;",alue Discounts: 2n the total value fied amount is 8" #ash discounts: Discount given on Immediate Payment GBasic PriceH"

As Is Business Process 3 $ll Inclusive prices G(et PriceH: It is a net price for the merchandise" 4" Basic price: It is unit price" ;"9ross price: Basic  Duties and taes also net of discounts 8"Economy of price of supply should capture vendors re+ections

$uggested Business Process3 This component enables you to store pricing stipulations agreed with the vendor Gsuch as applicable discounts or surcharges0 or stipulations regarding the payment of freight costsH in the system" Oou can enter these conditions in 6uotations0 outline purchase agreements0 and info records" Oou also have the option of entering general conditions at vendor level0 for eample" The system then applies the conditions in determining the price in purchase orders GP2sH" Oou can enter further conditions in the P2 itself" There are three .inds of price in Purchasing: 9ross price Price without ta.ing any possible discounts and surcharges into account" (et price Price ta.ing any applicable discounts and surcharges into account" Effective price (et price after deduction of cash discount0 with allowance for any miscellaneous provisions0 delivery costs0 and non3deductible taes" Pricing conditions shall be maintained in the purchasing info records or in the header or item level as applicable 4" Different discounts re6uired by Walvoil are Discount before Ta and Discount after ta" The Discount condition records shall be maintained with conditions and values associated with conditions" While processing a transaction system will search for valid record and as soon as it finds the record matching the condition of sale it should return a discount value"


Page 88 of 55


< "4" 5"8


<" ?uantity Discounts: In specific Slabs of the P2 2r 2rder 6uantity the discount U or the value changes" Ecise andEcise Duty Import 4"Ecise Duty in U: Percentage could be in Duty whole number or could be in Decimals ;"Special Ecise Duty in U: Percentage could be in whole number or could be in Decimals

td.

Some of the discounts can be maintained at the time of preparing the purchasing document" 4" ,endor0 !aterial and other factors that determine the Ecise duty shall be maintained through the #I( !odule of S$P %78" ;" This shall include the Eceptional rates that may be applicable for certain vendors and material combination" 8" This shall also ta.e into account different ta rates based on the ,endors Status GSSI or (ormalH" The setoff of ecise duty or inventorying of ecise duty will be controlled by Ta codes" In Imports the #,D0 which needs to be captured for #E(,$T postings0 shall also be incorporated" 4" Ta condition records can be maintained in the system for various levels of taes0 li.e central and state level0 which will be automatically determined during a transaction depending upon the receiving plant and the vendors locations" ;" The ta values are maintained as percentages with the help of ta codes" 1ocal delivery and #artages can be maintained in the system0 these conditions shall be determined during the transaction"

<"4"5"<

Sales Ta7,$T

4"&or %aw materials and Pac.ing materials (ormal Sales ta G*ST7#STH are taed at U ;"Present ,$T Ta rate is 4;"=U

<"4"5"=

1ocal Delivery and #artages &reight7Tr ansport

)amali charges Gas per slabH" ;" 2ther )andling and Delivery charges Gas per slabH" &reight U of the Basic &reight7Transport on $ctual &reight7Transport on fied amount &reight as per 6uantity &reight7Transport borne by the supplier Transport Per 1oad 3 fied amount"

4" The Planned &reight costs shall be boo.ed in the same Purchase 2rder for which the procurement is to be done" ;" In cases where the !aterial carrying party is different from the one on whom the P2 is raised the &reight ,endor shall also be maintained in the same P2"

Service Ta #ess

Service ta U on gross

Service Ta will be maintained as condition type

4" 1ocal: U on the ED or Service Ta" ;"Import: $ssessable value V J V #I& Price  4F4U

Education cess will be maintained as condition type in both local as well as in Import procurement"

< "4" 5">

< "4" 5"5 < "4" 5"K


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td.

#ustoms Duty V J  GH U V O #ess of #D V OJ  GH U V  #,D V GJ  OJH  GH U V $ #ess on #,D V G$  O  H  GH U 4.-.= Pa#ment !erms As Is Business Process Requirement Anal#sis There are various payment terms" Payment terms for procuring %! Suggested business process: and P!0 Payment terms for Procuring $ssets0 !% 2 Items are 4" Walvoil shall use the standard payment terms wherever possible" different" ;" Wherever re6uired0 specific payment terms shall be defined in the system li.e Payment with 1#" Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever *a"s3 suits to Walvoil re6uirement

4., Procurement Process As Is Business Process Procurement process at Walvoil Walvoil procuring office needs li.e furniture and #apital 9oods li.e machinery etc"0

$uggested &usiness "rocess3

Procurement Process is mentioned in following points <";"4 to <";"44

Business Requirement3


4.,.- Purcase Requisition


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td.

As Is Business Process 3 Requirement Anal#sis Product code0 Product description0 re6uired 6ty" " " " (ow at Walvoil P% Shall be addressed as different Purchase re6uisition Document type using Ecel for creating the Purchase %e6uisition" and (umber range $pproved vendor list shall be created in the system" #hanges to Purchase re6uisition shall be made possible upon approval Business Requirement3 from authorised person" S$P Standard %eport is available 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement Integration issue with PP module" To eplore further %echec. option li.e error messages and warnings can be thrown" %e6uirement $nalysis !%2 Items Each procurement document will have a uni6ue number Purchase re6uisition line item details li.e material code0 plant0 storage location0 material group details etc"0 Since Purchase re6uisition line items will have materials codes0 the specification attached to master data can be copied to document" Previous supply details can be seen through a separate S$P Standard report Through source determination component %ecommended supplier details can be incorporated" Purchase re6uisition line item will have all such details Possible through %elease procedure" %elease procedure process is eplained in sub process <";"= #hanges to the approved purchase document shall be restricted Purchase re6uisition document provides feature to capture costs on to a cost centre or to 971 account" $mendment to Purchase re6uisition shall be made possible before release" S$P Standard %eport provides this feature $ll the Purchase documents in Standard S$P System are lin.ed" S$P Standard %eports provides this feature $uggested Business Process3


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td.

Purchase %e6uisitions are created under the following situations: Purchase %e6uisitions shall be created 3 automatically on !%P %un or manually by the re6uesting department" !anual creation of Purchase %e6uisitions for Stoc. Items shall be restricted to the corresponding !%P #ontrollers through authori'ation profiles" !anual creation of Purchase %e6uisition for !%2 items will be controlled by authori'ation profiles" %elease Strategy shall be incorporated for release of Purchase %e6uisition as defined in the re6uirements" *a"s3 4.,., Request for >uotation As Is Business Process 3

Requirement Anal#sis sing reference techni6ue method provided by S$P 2ne can copy the contents for further processing" !%2 ITE!S &or #ape items possible0 electrical items Gbulbs0 fans etcH Sources Each indent will have separate en6uiry" are identified GIdentification of Sources by past Purchases by Specification about materials shall be copied if they are maintained Mournals or Industrial Directory or by referenceH and en6uiry is ?uantity shall be copied as per the reference techni6ue method floated over phone or by letter" It is possible to mention ?uotation epected date Technical7 #ommercial Specifications are eplained0 %e6uirement is Provision for mentioning a bench mar. price is possible" emphasised and 6uotes are obtained" Provision for mentioning ta and duty structure is possible" Specification should include the individual characteristics of the !entioning of commercial terms is possible item ma.e material etc"0 S$P Standard %eport 9eneral $nalysis report Ta and duty structures applicable for the company in respective of the item on procurement $uggested Business Process 3 2ther re6uirement of commercial terms should be eplicitly Oou use this component if you wish to manage and compare re6uests mentioned" for 6uotation G%&?sH issued to vendors and the 6uotations submitted Sending En6uires to vendors should be possible through direct by the latter in response to them" mailing0 fa0 Printout" In Purchasing0 the %&? and the 6uotation form a single document" Prices and conditions 6uoted by vendors are entered in the original %&?" If you have issued an %&? to several vendors0 you can have the Business Requirement 3 system determine the most favourable 6uotation submitted" Oou can Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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also store the prices and terms of delivery from certain 6uotations in an info record for future a ccessing" *a"s3

4.,.8 >uotation As Is Business Process3

?uotation received from the vendor will consist of 6uantity0 price0 Payment terms0 #ST and *ST0 E## (umber0 Delivery terms" ?uotations are compared based on price0 ,endor has been finalised" Business Requirement 3


Requirement Anal#sis Standard S$P %eport Price comparison list $uggested Business Process3 $ 6uotation is an offer by a vendor to a purchasing organi'ation regarding the supply of materials or performance of services sub+ect to specified conditions" $ 6uotation is legally binding on the vendor for a certain period" The 6uotation is the vendors response to a re6uest for 6uotation issued by a purchasing organi'ation" $ 6uotation consists of items in which the total 6uantity and delivery date of an offered material or service are specified" $n item of a 6uotation may contain a delivery schedule made up of a number of schedule lines in which the total 6uantity is bro.en down into smaller 6uantities to be delivered on the specified dates over a certain period" $n item of the procurement type Eternal service contains a set of service specifications" The latter can be hierarchically structured" The summary view of such a hierarchical structure is referred to as an outline" The outline comprises a number of levels0 each representing a level of the service hierarchy" The 6uantities of the 6uotation are set out in service lines0 representing individual +obs or activities" If services cannot be defined precisely0 value limits are stipulated instead of service lines" ,alue limits can be set for certain contracts" #onditions can apply at various levels: To the entire 6uotation $t item level0 to the material to be supplied or to the planned


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procurement in the case of services $t service line level for individual services Gtas.s or activitiesH Processing of 6uotation shall be based on the %e6uest for ?uotation where the ,endor specifies the rates and other details li.e the period for which the rates will be valid" The ,endors can be allowed to maintain the 6uotation" Info records are updated for the validity period0 which shall be copied as conditions during the creation of the Purchase order" *a"s3

4.,.4 Purcase +rder  ocal (RM? MR+ Items)


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As Is Business Process3 Purchasing raw materials0 Bought32ut items0 consumables0 !%2 Items0 #apital 9oods0 Tools and samples" Based on the indents received manual segregation of urgent and normal indents are made0 en6uires over phone0 fa0 mail etc"0 are made" $t times numerous attempts are made to obtain realistic0 competitive prices from vendors of the material group" Depending on the 6uotes received negotiations with the prospective vendor is made and order confirmation over phone is first made" 2n this contet it is to be noted that details of the specifications to be communicated over phone or fa is an important aspect of obtaining possible offers" It is also possible that vendors ta.en for obtaining 6uotes may not be interested0 may not be dealing in that line of product or ma.e" )ence new vendors are eplored through old records0 yellow pages0 Indenting departments contacts" 2nce P2 is made after the terms are finalised0 P2 are faed to the party and original is sent by courier7post" P2 is generated using ecel wor.sheet and a manual register for P2 number is maintained" This register will contain brief details of the item on order and the file number of the item on order" The typical P2 will contain P2 number0 date0 &ile number0 ?uote or offer reference if any0 $lso details of material description0 specification0 rate0 6uantity0 and value are incorporated" &urther order terms such as price0 delivery0 delivery schedule0 duties0 taes0 transport0 payment terms as well as ecise and ta particulars are mentioned in the order" Business Requirement 3


td.

$uggested Business Process3 Walvoil shall ma.e use of this component to procure materials or services" Purcasing 2ocument  2efinition $ purchasing document is an instrument used by Purchasing to procure materials or services" The following list shows the various eternal purchasing documents available in the standard S$P System" G(ote: purchase re6uisitions are not included on this list because they are usually regarded as internal documents used within Purchasing and are therefore treated separately"H Request for quotation (RF>) Transmits a re6uirement defined in a re6uisition for a material or service to potential vendors" >uotation #ontains a vendorNs prices and conditions and is the basis for vendor selection" Purcase order (P+) The buying entitys re6uest or instruction to a vendor Geternal supplierH to supply certain materials or render7perform certain services7wor.s0 formali'ing a purchase transaction" %e6uirements of materials or services can be reported to Purchasing by means of purchase re6uisitions" $tructure Each purchasing document is subdivided into two main areas: the header and individual items" Each document will contain a header and can contain several items" The header contains information relevant to the whole document" The items specify the materials or services to be procured" &or eample0 information about the vendor and the document number is contained in the document header0 and the material description and the order 6uantity are specified in each item" The additional data provides etra information about the item0 and has


Page


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no direct connection with the item procurement data" $dditional data includes0 for eample0 account assignment data Gsuch as cost center and 971 accountH and the P2 history for an item0 which contains information on already recorded goods and invoice receipts relating to the item" Each item in a purchasing document represents a unit of procurement" Purchasing operations Ginvolving re6uisitioning0 ordering and follow3up processesH occur on an item3specific basis" @ow does te $AP $#stem 2ifferentiate Between Purcasing 2ocuments In the S$P System0 the different .inds of purchasing document are distinguished from one another by means of the document type" The later determines the relevant number range and the fields that are offered to you for data maintenance purposes0 for eample" The relevant document type appears as a default value when you create a purchasing document" Document types are defined for %&?s0 purchase orders0 and contracts0 for eample" The standard S$P system includes certain document types" )owever0 your enterprise can also define its own" @ow is Purcasing 2ocuments 1um&ered Each document is assigned a uni6ue number" G(ote that the RnumberR may also be an alphanumeric code: see belowH" This number can be assigned internally or eternally0 depending on the policy of your re6uirement" Internal number assignment means that the system assigns the number" Eternal number assignment means that the person creating the document must supply it" $lphanumeric assignment is only possible in the latter case" $ purchase order is a formal re6uest or instruction from a purchasing organi'ation to a vendor or a plant to supply or provide a certain 6uantity of goods or services at or by a certain point in time" Structure $ purchase order GP2H consists of a document header and a number of items" The information shown in the header relates to the entire P2" &or eample0 the terms of payment and the delivery terms are defined in Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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the header" $ procurement type is defined for each of the document items" The following procurement types eist: $tandard $u&contracting contracts $toc transfer %6ternal service Delivery of the total 6uantity of material Gor performance of the total volume of servicesH specified in a purchase order item can be spread over a certain period in a delivery schedule0 consisting of lines indicating the individual 6uantities with their corresponding planned delivery dates" $n item of the procurement type Reternal serviceR contains a set of service specifications" The latter can be hierarchically structured" The summary view of such a hierarchical structure is referred to as an outline" The outline comprises a number of levels0 each representing a level of the service hierarchy" The order 6uantities are set out in service lines0 representing individual +obs or activities" ,alue limits are specified instead of service lines for services or wor. that initially cannot be specified precisely" If services covered by an already eisting contract are released Gordered0 or called off against the contractH0 the P2 item can contain a value limit relating to the contract in 6uestion" 'onditions #onditions can apply at various levels: To the entire purchase order $t item level0 to the material to be supplied or to the set of service specifications in the case of services $t service line level for individual services Gtas.s or activitiesH Account Assignment #osts can be apportioned among various #ontrolling ob+ects via the account assignment" P+ @istor#     


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td.

The transactions following on from a purchase order are documented in the P2 history on an item3specific basis" Partner Roles Instead of the vendor as the order recipient0 other business partners can appear in various partner roles Ge"g" goods supplier or invoicing partyH" Plant In the purchase order0 each item is destined for a certain plant" Each plant belongs to a company code0 to which the vendors GcreditorsH invoice is directed" !e6ts Oou can enter tet in a purchase order directly or change tets that are suggested by the system" There are two .inds of tet: )eader tet: applies to the entire document Item tet: applies only to the relevant item Oou define which tets appear in which order on printouts in #ustomi'ing for Purchasing" Oou can enter several header or item tets0 which you can identify by your own codes" *a"s 3

4.,.; Release $trateg#


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As Is Business Process3

$uggested Business Process3 Walvoil shall use this component if it wishes to set up approval procedures for purchase re6uisitions or other purchasing documents" (ot following any release procedure nder such a procedure0 if a purchase re6uisition or eternal purchasing document fulfils certain conditions Ge"g" the total order Business Requirement value eceeds %s4F0 FFFH0 it has to be approved Gby the cost center manager0 for instanceH before it can be processed further" This process 4"S$P Best Practises for I! - # to be implemented where ever suits of approving Gclearing0 or giving the Rgreen lightR toH a proposed item to Walvoil re6uirement of ependiture is replicated in the S$P System by the Rrelease procedureR" Which Documents #an be %eleased G$pprovedH %elease procedures can be defined for the following documents: Purchase %e6uisition The eternal purchasing documents purchase order GP2H0 contract0 scheduling agreement0 re6uest for 6uotation G%&?H0 and service entry sheet *a"s3 4.,./ Purcase +rder  Im"orts As Is Business Process3

$uggested Business Process :

Imports %aw materials and capital goods 0 &inished 9oods Import Procurement procedure Based on the above formal indent is obtained for a specific 6uantity and delivery schedule" If necessary new vendors are also approached and offers are obtained before final vendor is finalised and the import price is fied after negotiating" $lso in certain cases our buyer of the &9 advises the vendor and the import price and accordingly order is placed for import" The same price details are ta.en for costing purposes Gwor.ed out using ecelH

Walvoil ma.e use of this component for import procurement" Difference will be the #onditions in purchase pricing procedure" $ Detailed eplanation shall be made available to the user team about the pricing procedure $ purchase order is a formal re6uest or instruction from a purchasing organi'ation to a vendor or a plant to supply or provide a certain 6uantity of goods or services at or by a certain point in time" Pricing conditions will be maintained based on Imports pricing and ta conditions" Separate Document type and (umber range shall be maintained for local purchases" $dvance payment shall be through Internal order GBased on the

P2 are created manually with all the import indent terms and ban.ers details etc"0 and forwarded to the seller7indenting agent"


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)owever before the imported material is received at our stores a formal order is created through the system to account the material on receipt" #opies of such manual order are passed to accounts for information" $s and when import activities ta.e place0 generally an estimated funds re6uirement plan is advised to accounts" This plan ta.es into account the 1#s being opened0 Ban. documents to be retired0 customs duty payments becoming due during the wee.7month" Payment Procedure Depending on the payment terms agreed with the vendor li.e advance 1# or DD payment procedure is initiated" &or 2pening 1# the following documents are prepared" #overing letter to ban. 1# application Declaration Indemnity bond P2 Proforma invoice or indent Such documents duly signed by authorised signatories are forwarded to the ban. for further action" 2nce 1# document or advice is received the same is forwarded by fa to the buyer and indenting agency" In case of &2B terms of shipment0 Insurance company is approached and P2 details are faed to obtain a premium advice" Based on this advise che6ue is re6uested from the accounts department for forwarding to insurance company and further issue of the policy" 2nce shipment is effected shipment details are advised to insurance company by way of letter0 fa" In case of #I& terms of purchase insurance is ta.en by the vendor themselves and accordingly shipment ta.es place" &ollow ups are made with the vendor about the despatch and shipment details" Shipment advice from vendor is immediately communicated to the clearing agent for follow up with

td.

Payment re6uestH from &I0 Internal order shall have reference to the P2 created" 1# cannot be addressed in Standard S$P System" Duty Payment G#,DH and #ustoms duty payment shall be through the $dvance payment re6uest0 &or availing the #ustoms duty@ This will be same process as that of availing cenvat" #ustoms duty and #, D condition shall have vendors mentioned against to those conditions mentioned in P2" #ustoms department shall be created as vendor in the system" #learances #harges G#)2 chargesH shall also mentioned in P2 as conditions" These conditions shall have provision to maintain ,endors in P2" *a"s3

     


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airlines7steamer lines #argo arrival advice is obtained" Immediately after shipment of the goods the vendor sends one complete set of shipping documents by fa" Details of documents are as follows Invoice Pac.ing list #ertificate of origin $"W"B or B1 Gair way bill7bill of ladingH Insurance certificate" #ertificate of analysis Such above set of advance documents are immediately faed7sent to the clearing agent for further customs clearance process" (ecessary copies if re6uired and detailed write3up of the imported item0 End use certificate is also forwarded" $ppropriate classification of the item under import as well as previous import B7E is also send to for easy clearance" In case of 1# related7Documents through ban. shipments original documents are forwarded through the ban. and as and when such documents are received by the ban.0 the ban.ers sends us an advice for acceptance of shipment documents" In this process we also follow up with ban.ers about the documents arrival so that original documents in case of sea shipment can be collected earliest to avoid demurrage and speedy clearance" In the case of $ir #onsignments0 the goods would have landed much before the receipt of original documents with the ban. hence the cargo arrival notice0 airway bill and invoice copies are forwarded with the covering letter to the ban. for issue of necessary release order" 2nce the cargo is arrived at the port7airport the will file necessary bill of entry and other documents" $fter the assessment of the goods by the customs authorities advises through fa the actual customs duty and other duties with individual brea. up" The same is chec.ed for correctness and if necessary ta.en up with #ustoms" $dvice to accounts for obtaining DD for customs duty with brea. up is forwarded along with necessary P2 copy" Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

#ustoms duty payment by DD is sent to by courier or hand delivery" (ecessary follow3up are made about the status of clearance and dispatch of material to the factory" pon receipt of the material at factory the material is in warded against the system order" The submits his agency and other charges bill along with B7E copies" The echange control copy of the B7E is forwarded to the ban.ers as proof of import along with a covering letter giving details of import0 payment reference etc"0 and The same advice is copied to accounts department with all relevant documents for reference and action" The triplicate copy of the B7E is handed over to the ecise department for availing modvat of #,D amount" The #)$s G#learing )ouse $gentH Bill is passed for payment with a cross reference to the 9%( raised for the imported items and sent to accounts through the manual register maintained for this purpose" The #ost of #learance and other charges are ta.en into account for arriving at the landed cost of the %! and P! in the costing calculations" Business Requirement


4.,.< +ut&ound $ervice +rders 7 9o& wor Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

As Is Business Process 3 (ot &ollowing Business Requirement3

$uggested Business Process3 Service Purchase 2rders are created for the eternal procurement of services from a vendor" These services can be account assigned to a #ost center or a networ. or a Pro+ect" 4"S$P Best Practises for I! - # to be implemented where ever suits Separate pricing conditions are maintained for services" &or P2 items to be supplied by subcontractors0 you can specify the to Walvoil re6uirement necessary input materials or components that are to be provided to the subcontractor for assembly or processing in respect of each delivery date stipulated" Standard S$P Purchase re6uisition with a different number range shall be used Purchase re6uisition shall consist all the fields %eminders can be maintained in Standard S$P P2" This is addressed as 9oods receipt against to P2" Provision to capture ecise entries shall be provided using #I( component" 1eft over 6uantities at +ob wor. vendor can be seen using Standard S$P System" Provision to receive unprocessed materials is possible with 9% Transactions Subcontracting P2 will have B2!@ batch number can be specified to each line item" 4.,.= Purcase +rder $ervices As Is Business Process : (ot &ollowing

$uggested Business Process3 The procurement of services shall involve the following steps: Determination and recording of re6uirements Determination of possible sources Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits Bid invitation procedure to Walvoil re6uirement Entry of data from 6uotations submitted by bidders #omparison of 6uotations $ward phase Gorder placementH !onitoring of purchase orders Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

Page


td.

Entry of services actually performed $cceptance of services performed ,erification of invoices for services

Services shall be maintained as master data in the standard S$P system" Service master can be maintained with short description and 1ong description" Service Purchase re6uisition can be created for one line item or for multiple line items" Purchase re6uisitions can be sub+ected to release approval Walvoil will create Service P2 for the service providing ,endor as when they will get the Service from that ,endor they will go for Service acceptance i"e" Service Entry sheet w"r"t" Service P20 li.e this Service P2 will get connected with Service Entry Sheet" Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

Page


td.

When Service Entry Sheet is entered in the System w"r"t" Service PO then it will be open for Invoice ,erification" In Service P2 itself we can mention the Service ta.en - !aterial used for Services in ; different 1ine Items against which we can show the receipt of Service along with material in service sheet w"r"t" Service P2" $ccounting Entries gets generated as per $ccount $ssignment given in Service P2" Invoice ,erification for Service P2 can be done after Service acceptance" *a"s3

4.,.C Purcase +rder Amendment As Is Business Process 3 (ot &ollowing Business Requirement3

$uggested Business Process3

Purchase 2rders can be amended before the 9oods %eceipt If the purchase order is sub+ected to release strategy0 the changes made to 4"S$P Best Practises for I! - # to be implemented where ever suits the Purchase order may reset the release strategy depending on what type of changes have been made to the order" If the release strategy to Walvoil re6uirement has value limits0 the purchase order change in value or 6uantity0 if it violates the eisting release already affected0 will reset the release strategy and a new strategy will be assigned" The Purchase 2rder amendments can be reported for changes in different fields" Purchase order amendments shall be traced@ #hanges will be recorded in the system as log" *a"s3 4.,.- 'as "urcases


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td.

As Is Business Process : #urrently purchase through cash payment is resorted for various small value and consumable items as well as office maintenance items" Such purchases are also resorted in case of any emergency re6uirements of specific items" The items of purchase are initiated by the departments through a formal material indent and sent to commercial department" $s and when such materials are received at the stores and necessary 9%(s made the relevant bills are submitted to accounts after due approval by commercial head to s6uare up the impreset advance"


Business Requirement

*a"s3

#ash purchases can be carried out in the Standard S$P System through invoice verification and posting to relevant accounts" 4" 9% without reference to any order can be set to active" ;"Indicator for cash purchase can be set at header level tets at the time of 9% 8" $ Separate report shall be developed using $B$P" ="P2 )istory would fulfil this re6uirement


4.8 *oods Recei"t As Is Business Process 3

9%( at Stores / In general sing Ecel 9%( at Stores is doing now" 9%( is prepared based on P2 for all purchasing scenario" 9%( for !isc items is prepared without P2" P2 is prepared manually" &or all the materials 9oods %eceipted (ote G9%(H #hec. 1ist 3 Which is to be filled before 9%( is Prepared Supplier (ame !anufacturer name Item (ame

Requirement Anal#sis

It is possible to capture through a separate field in 9% screen" It is suggested as a solution that Each and every 9% Transaction will have feature to capture ecise invoice" Provision to capture ecise invoice separately apart from 9% Transaction will be provided" To print 9% details li.e Document date0 1% number Gshould be mentioned in header tetH shall be printed" #onsignment should accompany #2$ as per the re6uirement in ?! module and Inventory module of !!" 9oods receipt in Standard system is based on with %eference to orders basically GP20 Production order0 etc"0H or without reference to any document" 9% Program will only refer to the documents" )ence at time


Page =4 of 55



P2 (umber and Date Delivery #hallans (umber and Date Duplicate for Transporters $vailable or not !anufacturer (ame approved or (ot Transporters name 1% (umber and Date ,ehicle number and Item 1ot number !anufacturing date Delivery #hallans ?ty %eceived ?ty 1ocation #ategory G#ustomer name or Parent #ompany nameH Division Ecisable 7 (on ecisable 9%( number $uthorised Signatory

td.

of creating any orders e"g P2 it is possible to refer to the approved vendor list and give error or warning message" $uggested Business Process3

Inventor# Management This component deals with the following tas.s: !anagement of material stoc.s on a 6uantity and value basis Planning0 Entry0 and Documentation of all 9oods !ovements #arrying out the Physical Inventory Managing $tocs &# >uantit# $ll transactions that bring about a change in stoc. are entered in real time0 as are the stoc. updates resulting from these changes" Oou can obtain an overview of the current stoc. situation of any given material at any time" This0 for eample0 applies to stoc.s that: $re located in the warehouse )ave already been ordered0 but have not yet been received $re located in the warehouse0 but have already been reserved for production or a customer $re in 6uality inspection" If a further subdivision by lots is re6uired for a material0 one batch per Business Requirement lot is possible" These batches are then managed individually in the stoc." 4"S$P Best Practises for I! - # to be implemented where ever suits $"ecial $tocs to Walvoil re6uirement Inventory !anagement can manage various types of a companys own special stoc.s and eternally owned special stoc.s separately from standard stoc." Managing $tocs B# alue The stoc.s are managed not only on a 6uantity basis but also by value" The system automatically updates the following data each time there is a goods movement: ?uantity and value for Inventory !anagement $ccount assignment for cost accounting   

  



 


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td.

971 accounts for financial accounting via automatic account assignment The valuation area is the organi'ational level at which a materialNs stoc. value is managed" The valuation area can be plant level or company code level" In Inventory !anagement0 wor. is basically done at plant and storage location levels" When you enter a goods movement0 you only have to enter the plant and the storage location of the goods" The system derives the company code from the plant via the valuation area" 

Planning? %ntr#? and 2ocumentation of all *oods Movements 9oods movements include both ReternalR movements Ggoods receipts from eternal procurement0 goods issues for sales ordersH and RinternalR movements Ggoods receipts from production0 withdrawals of material for internal purposes0 stoc. transfers0 and transfer postingsH" &or each goods movement a document is created which is used by the system to update 6uantities and values and serves as proof of goods movements" Oou can print goods receipt7issue slips to facilitate physical movements and monitor the individual stoc.s in the warehouse" Integration of Inventor# Management in te ogistics $#stem :se Inventory !anagement is part of the !aterials !anagement module and is fully integrated in the entire logistics system:


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td.

!aterial is procured from eternal or internal sources on the basis of the re6uirements determined by !aterial %e6uirements Planning" The delivery is entered in Inventory !anagement as a goods receipt" The material is stored Gand managed under Inventory !anagementH until it is delivered to customers GSales - DistributionH0 or is used for internal purposes Gfor eample0 for productionH" During all transactions0 Inventory !anagement accesses both master data Gsuch as material master dataH and transaction data Gsuch as purchasing documentsH shared by all 1ogistics components" Features Integration in Materials Management $s a component of !aterials !anagement0 Inventory !anagement is directly lin.ed with !aterial %e6uirements Planning0 Purchasing0 and Invoice ,erification" Inventory !anagement provides information for !%P0 which ta.es into account not only physical stoc.s but also planned movements Gre6uirements0 receiptsH" When a material is ordered from a vendor0 Inventory !anagement posts the delivery as a goods receipt with reference to the purchase order" The vendor invoice is processed later by Invoice ,erification" )ere0 the 6uantities and values from the purchase order and the goods Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

receipt document are chec.ed to ensure that they match those in the invoice" Integration in Production Planning Inventory !anagement is closely lin.ed to the Production Planning module: Inventory !anagement is responsible for staging of the components re6uired for production orders The receipt of the finished products in the warehouse is posted in Inventory !anagement" Integration in $ales D 2istri&ution $s soon as you enter a sales order0 you can initiate a dynamic availability chec. of stoc.s on hand" When the delivery is created0 the 6uantity to be delivered is mar.ed as RScheduled for deliveryR" It is deducted from the total stoc. when the goods issue is posted" It is also possible to create sales order stoc.s" Integration in >ualit# Management In the case of a goods movement0 the system determines whether the material is sub+ect to an inspection operation" If so0 a corresponding activity is initiated for the movement in the ?uality !anagement system" 



Integration in Plant Maintenance

Inventory !anagement is lin.ed with Plant !aintenance as follows: 



It is possible to post goods movements with reference to e6uipment B2!s" It is possible to withdraw parts for maintenance orders"

When serial number management is active0 the individual serial numbers are entered in the case of every goods movement" Serial numbers are managed in the Plant !aintenance system

Integration in te ogistics Information $#stem With the Inventory #ontrolling component0 the 1ogistics Information System offers a tool for collecting0 compressing0 and evaluating Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

inventory management data" *a"s3 4.8.- >ualit# 'ec As Is Business Process 3 (ot following

$uggested Business Process 3



*oods Recei"t Wen >ualit# Management (>M) is Active The S$P System differentiates between two different forms of 6uality management: ?uality !anagement in !aterial Procurement ?uality !anagement in !aterial Inspection >ualit# Management in Material Procurement ?uality management shall be active for procurement0 Walvoil can define in the material master record G?uality !anagement screenH that a certificate is re6uired for the material" If a certificate is re6uired0 the system displays a bo during goods receipt for a purchase where you can confirm the receipt of a certificate" >ualit# Management in Material Ins"ection If an inspection at the time of goods receipt has b een defined for the material0 the system automatically creates an inspection lot when the goods receipt is posted" ?uality !anagement uses this inspection lot to carry out the inspection" Shall be considered0 "?! module based on the sample drawing procedure" *a"s3  

4.8., *R1 due to Purcase of Assets As Is Business Process 3 $ll the #apital Items0 &urniture0 E6uipments etc" With %eference to #ape P2 9% is done0 Based on the ser #ertification !aterials are $ccepted" 9%( for 9oods %eceipt0 9%( &or 9oods $cceptance This

Requirement Anal#sis 4"9oods receipt shall be with reference of P2" Subse6uent functioning li.e 9% shall be with reference to P2 ;"%eport to Distinguish 9% !aterial group wise shall be addressed


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td.

$pplies for all Items" $uggested &usiness "rocess3 Oou use this component to post the receipt of goods from an eternal vendor or from production" $ goods receipt leads to an increase in warehouse stoc." &eatures The %78 System distinguishes between the following types of goods receipts: 9oods receipts with reference to a reservation 9oods receipts with reference to an order 2ther goods receipts *a"s3 4.8.8 *R1 due to Production


As Is Business Process3 (ot &ollowing Business Requirement3


Requirement Anal#sis 4"%eceiving material from Production order into finished goods stores shall be ta.en care $uggested &usiness "rocess3 Deliveries from production are the result of orders used as a basis for manufacturing the materials re6uired" The production order is not only the document on the basis of which a material is manufactured@ it is also an important planning and trac.ing tool for the following departments: !aterials Planning and Inventory !anagement" &eatures %eference to an 2rder When material resulting from a production order is delivered0 it is important for the departments involved that the goods receipt entry in the system reference this order0 for the following reasons: 9oods receiving can chec. whether the delivery actually corresponds to what has been planned" The system can propose data from the order during entry of the goods receipt Gfor eample0 the material produced0 its 6uantity0 and so onH"


Page =5 of 55



td.

This simplifies both the data entry and chec.ing Gover deliveries and under deliveriesH" The 6uantity delivered and the delivery date is updated in the order" The order number is usually listed on the slip accompanying the delivered material" If it is not listed on the slip accompanying the delivered material0 you can find the order pertaining to the delivery via the material number" *a"s3 4.8.4 *R1 due to Finised *oods ReEection As Is Business Process3 (ot following

$uggested &usiness "rocess3 (PP Module) Even without a returns delivery0 you can post returns from a customer into bloc.ed stoc. returns" Business Requirement3 There is no need to create new material code for receiving such 4"S$P Best Practises for I! - # to be implemented where ever re+ected materials" The returned lot of material will be separately suits to Walvoil re6uirement maintained in the system as bloc.ed stoc." Walvoil once ta.ing a decision on such materials relevant movement li.e destroy or scrap can be carried out" *a"s3 4.8.; *R1 for MR+ items As Is Business Process3 (ot following Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement Anal#sis This is addressed in the sub process: Purchase order" Should be decided by the relevant department7!anagement of Walvoil" There are stoc. statement reports in S$P System" Indenter to run through those reports on certain intervals" Should be decided by the relevant department7!anagement of Walvoil" Should be decided by the relevant department7!anagement of Walvoil" S$P Standard report is available in the inventory management module0 sub module of materials management module" $uggested &usiness "rocess3


Page =K of 55



td.

*oods Recei"t Pur"ose Oou use this component to post the receipt of goods from an eternal vendor or from production" $ goods receipt leads to an increase in warehouse stoc." Features The %78 System distinguishes between the following types of goods receipts: 9oods receipts with reference to a reservation 9oods receipts with reference to an order 2ther goods receipts 9oods receiving can chec. whether the delivery actually corresponds to the order" The system can propose data from the purchase order during entry of the goods receipt Gfor eample0 the material ordered0 its 6uantity0 and so onH" This simplifies both data entry and chec.ing Gover deliveries and under deliveriesH" The delivery is mar.ed in the purchase order history" This allows the Purchasing department to monitor the purchase order history and initiate reminder procedures in the event of a late delivery" The vendor invoice is chec.ed against the ordered 6uantity and the delivered 6uantity" The goods receipt is valuated on the basis of the purchase order price or the invoice price" *a"s3    









4.8./ *R1 into Bloced $toc As Is Business Process3 (ot following

$uggested &usiness "rocess3 Bloc.ed Stoc. #ompanyNs own stoc. that should not be used" It is not for


Page =L of 55



td.


unrestricted3use in Inventory !anagement" Posting a 9oods receipt into 9oods receipt bloc.ed stoc. When you post a 9oods receipt in goods receipt bloc.ed stoc. one must first determine the 6uantity of stoc. to be posted to bloc.ed stoc. first" Since the material is not to be added to the inventory yet0 do not enter a storage location" 9aps:

4.8.< *R1 due to +ut&ound $ervice 7 9o& +rders(Purcas e +rders for $ervice) As Is Business Process3

(ot following

Requirement Anal#sis3 !aterial sent to vendor shall be ?# Passed if and only the material is issued for subcontracting from Walvoil location"

$uggested &usiness "rocess3 Purchase orders shall be created for services and Service entry sheets 4"S$P Best Practises for I! - # to be implemented where ever suits shall be created for the 6uantity of Service received" Part service of the total 6uantity of service mentioned in the P2 can be received and to Walvoil re6uirement Invoice verification shall be done for the invoice raised by the service vendor based on the service entry sheet created" If re6uired a release strategy can be used for control of the service entry sheets" *a"s3 Business Requirement

4.8.= %6cise !ransactions As Is Business Process 3

Requirement anal#sis3

(ot following

$utomatic Entries to #envat #redit7Debit will happen during the postings happening while doing the ecise transactions using Standard S$P Transactions" Business Requirement3 Party wise Debit note and #redit note and the transaction details li.e Ecise invoice number0 Ecise invoice details shall be made available as 4"S$P Best Practises for I! - # to be implemented where ever suits a report to Walvoil re6uirement Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

Page >F of 55



td.

$ssessable value shall be maintained as master data for trading materials" $ddressed in SD !odule0 however this will be chec.ed and reviewed as per the re6uirement" The general flow is part4 posting will be done along with the 9%@ Part; posting will be done after the 9% is and Part4 posting is finished" Separate posting of ecise duty and education shall be ta.en care" In Standard report separate columns for Ecise duty and education cess shall also be provided" This will be considered as purchase return scenario" Provision to generate ecise invoice and send bac. material is also possible after reversal of ecise duty" $ddressed in sales and distribution module" $uggested &usiness "rocess3

#ountry ,ersion India comes with functions for calculating0 posting0 remitting0 and reporting ecise duty0 and for handling incoming and outgoing ecise invoices" &or these purposes0 etra fields are available in the vendor master da ta and material master data for information re6uired in India only" Oou can enter incoming ecise invoices in the %78 System for goods receipts arising from eternal procurement0 subcontracting0 and stoc. transfer" Ecise cler.s can capture incoming ecise invoices using a dedicated transaction0 or0 alternatively0 warehousemen can capture them in the standard 9oods !ovemen t transaction0 !I920 when they enter a goods receipt" &inally0 you can prepare copies of all ecise registers for submission to the ecise authorities Definition $ business document0 in India0 that your vendor sends you when it delivers ecisable goods" It lists the goods and states how much ecise duty applies on them" Oour use the ecise invoice to claim bac. the ecise that you have paid from the ecise authorities" Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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se When you procure goods eternally0 an ecise invoice accompanies each delivery that your vendors ma.e" Oou have to post these in the system" This document is re6uired as proof of the ecise duty that you have paid0 so that you can then offset the duty against the ecise duty that you levy on outputs" Oou can capture and post ecise invoices in one or two steps0 depending on your business re6uirements" In the two3step procedure0 the ecise cler. captures the incoming ecise invoice" This means that the cler. enters the data0 but the system does not yet create an entry in Part II of the appropriate ecise register" $nother user Gthe ecise supervisorH chec.s the ecise invoice and posts it" The system then creates a Part II entry" In the one3step procedure0 the ecise cler. captures and posts the incoming ecise invoice simultaneously" The system creates the Part II entry automatically" 9enerally spea.ing0 you have one ecise invoice for each goods receipt@ u can also do multiple 9% for a single ecise invoice" In the %78 System0 the ecise invoice consists of header data and line items" The header data comprises: $n internal number The ecise invoice number The date of the ecise invoice The details of the original vendor who generated the ecise invoice0 if your vendor purchased the goods from another vendor and was merely selling them on to you $t line item level0 the ecise invoice lists the materials on the ecise invoice0 showing the following information: #hapter ID ?uantity of materials Ecise duty base amount %ates of ecise duty $mount of duty paid 



   

    


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td.

%6cise Registers :se The ecise authorities re6uire you to maintain a number of registers relating to ecise duty" They have to be printed out monthly and shown to the authorities in the event of an audit" The % 78 System ma.es all the entries for these registers automatically0 and you can prepare copies of them as and when necessary" $lternatively0 you can download the data for processing by non3S$P software" Features The S$P System handles the following ecise registers: %egister %9 4 %egister %9 ;8$ and ;8#0 Parts I and II %egister %9 ;8D Personal 1edger $ccount GP1$H This is the ban. account from which you transfer any money owing to the ecise a uthorities" %egister %T34; This is a monthly report that summari'es the #E(,$T and P1$ information from the other registers" Register R* 2efinition $ register of ecisable finished goods .ept by manufacturing plants" The register shows goods movements from the factory to a store specifically for ecisable finished goods" Register R* ,8A7,8' 2efinition $ record of receipts and issues of ecisable materials0 as .ept by manufacturing plants" The register consists of two parts: Part I shows the 6uantities of the materials" Part II shows the amounts of ecise duty on the materials0 and how much you have transferred to the #E(,$T accounts" Previously0 manufacturers were re6uired to .eep two separate registers0 %9 ;8$ and %9 ;8# for raw materials and capital goods     



 


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td.

respectively" This is no longer the case0 but the distinction still remains in the %78 System" Register R* ,82 2efinition $ record of receipts and issues of ecisable materials0 as .ept by depots" Serial (umbers se The system automatically numbers all entries in the following registers with a serial number: %9 4 %9 ;8$ and %9 ;8#0 Parts I and II %9 ;8D P1$ Each ecise group defines its own number range intervals    

Download %egister Data se Oou use this report to download data from the registers listed below onto your hard drive" The information is saved in flat file format and can then be processed by non3S$P software to produce registers" This solution is thus an alternative to that described under #reation of Ecise %egisters" se Oou use this report to download data from the registers listed below onto your hard drive" The information is saved in flat file format and can then be processed by non3S$P software to produce registers" This solution is thus an alternative to that described under #reation of Ecise %egisters" This report covers the following registers: %9 4 %9 ;8 $ and %9 ;8 # GParts I and IIH P1$   


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td.

 

Plant ecise details !onthly %eturn

se The central ecise authorities have by vided notification no: ;FFF3G("TH dated ;Kth $pril0 ;FFF0 prescribed the form of monthly return under rule =5$E of the central Ecise %ules0 4L<<" The S$P System offers you a report with which you can prepare the necessary printouts" It covers both of the following: Anne6ure This is a list of all the invoices and bills of entry for which you have made a Part II credit posting over the past month" &or each document0 it shows the information re6uired by the authorities" A&stract This is a summary of the ecise information from the anneure" $u&contracting Witout Pa#ment of %6cise 2ut# Pur"ose When you issue materials to a subcontractor0 you need to .eep trac. of what materials you have issued and when they have to be returned by" The reason for this close monitoring has to do with Indias ta law" nder ecise law =5$#0 when you send materials to a subcontractor for processing0 you are not re6uired to pay any ecise duty0 even though the materials have left your premises" )owever0 if the materials have not been returned to you within a given length of time specified by the law Gin ;FFF0 4KF daysH0 you will have to reverse any ecise credit that you posted when you purchased the materials" In the case of ma terials that you have manufactured in3house0 you will have to post credit entries to the etent of the #E(,$T rate of the assessable value of the materials" $u&contracting :nder Full Pa#ment of 2ut# Pur"ose This procedure illustrates how you use the %78 System to send materials to your subcontractors for processing using normal ecise invoices" 'a"ital *oods Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

:se Businesses are allowed to set off ecise duty on purchases of capital goods against ecise duty on outputs" )owever0 unli.e with raw materials0 you can only set off half of the duty in the first year0 and the rest in any year after that" Features When you post an ecise invoice that contains capital goods0 the system posts half of the ecise duty to your #E(,$T account and post the rest to a 971 account for #E(,$T on hold" In following years0 you can use a report to identify the capital goods with ecise duty on hold and transfer the duty to the #E(,$T account !ransfer of '%1A! 'redit on 'a"ital *oods :se Oou use this report to display a list of the vendor ecise invoices where the vendor has levied ecise duty but you have not posted it Gin fullH to your #E(,$T account" This is particularly useful in the case of capital goods in order to find out how much credit remains from previous years" 'a"turing %6cise Invoices Witout Reference 2ocuments :se This procedure shows you how to capture an incoming ecise invoice if you do not have any reference documents" Oou can also follow this procedure if you do have a material document that you want to use as a reference document0 but you want the system to cross3chec. the ecise invoice data against other master data or transaction data less stringently than it normally would Oou commission a construction company build a new plant for you" The company purchases all the materials it needs to build the plant0 deals with all of the invoices and most of the other paperwor.0 with the eception of the incoming ecise invoices0 which the law re6uires you to deal with yourself" The subcontractor sends you all ecise invoices accordingly and you capture them in the system without any reference documents" *a"s 3


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td.

4.8.C 1ormal ReEections @andling As Is Business Process3 (ot following

$uggested &usiness "rocess3

Based on the sage Decision carried in ?! module materials accepted7%e+ected will be posted to relevant stoc."



$ny %e+ections shall be handled through S$P Transactions" If in case the re+ected materials are to be sent to bac. to vendor by creating ecise invoice can also be carried out using Standard S$P transactions" *a"s3

4.8.- ine ReEections @andling As Is Business Process3 (ot following Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested &usiness "rocess3 1ine %e+ections can be handled through Standard S$P Transaction" If in case additional 6uantity is re6uired to be issued to production shall also be addressed through wor. around solution" *a"s3

4.4 *oods Issue As Is Business Process3 (ot &ollowing Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested Business "rocess3 #ompanies usually distinguish between various types of goods issues0 each of which is handled in the %78 System as follows: $toc $ceduled for 2eliver# Withdrawal0 pic.ing0 and shipping of goods to customers are


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td.

carried out in the Sales - Distribution GSDH component and are dealt with in detail in the document SD Shipping 9uide" They are not dealt with in this section" The Inventory !anagement system provides two movement types for posting goods issues to customers if your company does not use the SD module" These are the movement types R#onsumption to sales orderR and R#onsumption to salesR" Material Witdrawals for Production +rders Inventory !anagement provides for the staging of components for production" Oou enter withdrawals for production as goods issues with reference to the production orders for which the components are re6uired" +ter !#"es of Internal $taging of Material !aterials can be withdrawn not only for production but also for other purposes Gfor eample0 for cost centre0 #2 order0 maintenance order0 or assetH" Return 2eliveries to endors %eturn deliveries to vendors are entered with the function !aterial document X %eturn delivery or with the function 9oods receipt X &or purchase order" $cra""ing7$am"ling If a material is no longer usable0 it must be scrapped" Scrapping of a material is entered in the %78 System as a goods issue" The withdrawal of samples must also be entered as a goods issue" This section eplains the following goods issues: !aterial withdrawals for production orders 2ther types of internal staging of material Scrapping7sampling Process Flow %ntering a *oods Issue wit7Witout Reference 2ocument Before entering a goods issue0 you have to find out whether   


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td.

any reference document or data eists in the system" When you enter a goods receipt0 you can reference: %eservations Production orders Bills of material If a reference document Greservation7orderH eists0 it is important to enter the goods issue with reference to this document0 for the following reasons: The goods issuing department can chec. whether what was re6uested is actually issued" During entry of goods issue0 the system can suggest data from the reference document Gfor eample0 account assignment0 re6uested material0 6uantity0 etc"H" This simplifies both data entry and chec.ing Gover deliveries and under deliveriesH when entering a goods issue" $fter a withdrawal0 the 6uantity withdrawn is updated in the reference document and the reserved 6uantity is reduced accordingly" Thus0 Inventory !anagement can monitor the withdrawal process and !aterials Planning can update the stoc.7re6uirements list"   







If you do not reference the corresponding reference document during the goods issue0 the reservation remains open and the re6uested 6uantity remains reserved0 although the re6uest no longer really eists" #onse6uently0 available stoc. in !aterials Planning no longer corresponds to the stoc. actually availableY @ow do #ou find te reference document If you do not .now the number of the reference document0 you can find it in the system using the material number or the account assignment"


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td.

*a"s3 4.4.- *oods Issue to +utgoing $ervice79o& Wor +rders As Is Business Process3 (ot &ollowing

Requirement anal#sis3 S$P Standard report will give output to users to view materials left out at subcontract vendor


$uggested &usiness "rocess3 4" The material to be produced by the vendor can be ordered as a subcontract item in a purchase re6uisition0 purchase order or scheduling agreement" Each subcontract item has one or more sub3 items which contain the individual components the vendor needs to perform the subcontract wor. or value3added service" ;" The components that are provided to the subcontractor are managed as stoc. provided to vendor" #omponents in a subcontract order that are consumed can only be debited from the stoc. of the material provided to the particular vendor

*a"s 3 4.4., *oods Issue !o $cra"

W As Is Business Process3 (ot &ollowing Business requirement3 4" S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement"


Walvoil scrap a material if cannot use it any more0 for eample because:  

the 6uality has been reduced due to long storage time the 6uality re+ected materials lying long time in stores

In the %78 System0 you post a scrapping li.e a goods issue without reference Walvoil can scrap materials from the stoc. types below:


Page 5F of 55



td.

unrestricted3use stoc. 6uality inspection stoc. bloc.ed stoc. $ scrapping has the following results in the system: the relevant stoc. is reduced the value of the scrapped material is posted from the stoc. account to a scrap account the costs of the scrapped material are assigned to the cost center specified" The value used is the value from the material master record at the time of the posting"   

 





9aps: to production 4.4.8 *oods issue to "roduction As Is Business Process3 (ot following Business Requirement3 4" S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested &usiness "rocess3 9oods Issue to production done with or without reservation" Whenever a production order is released0 the reservation is automatically created and goods can be issued against the reservation" Where there is no reservation0 issues shall be done against a production order" *a"s3

4.4.4 *oods Issue to $ales +rder As Is Business Process3 (ot following Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

Requirement anal#sis3 4" Through reference techni6ue method This feature is available in standard S$P system" $uggested &usiness "rocess3 9oods issues shall be based on the sales order0 deliveries will have reference to the sales order" 9oods issues will be based on the lot0 6ty0 Issuing plant and storage location *a"s3


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4.4.; *oods issue to qualit# As Is Business Process3 (ot &ollowing Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested &usiness "rocess3 9oods issues to 6uality will be through the automatic postings as per the settings in master data and setting from 6uality module" The procedure at various stages in production process is addressed in ?! module" *a"s 3

4.4./ *oods issues to 'ustomer7endor7tird "art# As Is Business Process3 (ot &ollowing Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested &usiness "rocess3 In Standard S$P system any 9oods issues and 9oods receipts are handled through !ovement type 9oods issues to customers are automatically handled through Post 9oods issue" 9oods returns to vendor are addressed through $ Separate transaction" This is same to third party *a"s3

4.; ogistics Invoice erification As Is Business Process3 It Will ta.e some time to function completly Invoice verification is done at Walvoil under the following scenarios Invoice ,erification against to P2 Invoice verification against to P2 GP2 manually done for !isc and capital itemsH Invoice verification with out P2" G%eference is ta.en through 9%( for Invoice amount less than %s >FFF73H Invoice verification for transporters payment G%eference is agreementH

$uggested &usiness "rocess3 The Invoice verification involves the following processes : 4"Invoice ;"#redit !emo 8"Subse6uent Debit <"Subse6uent #redit Invoice option is used when the payment is to be made to the vendor" #redit memo is used for materials returned bac. to the vendor" During invoice verification the system shall display the materials returned bac. to the vendor for which deductions will be made" Subse6uent debit shall be used for transactions where the 2riginal


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td.

Invoice verification for services G1abour wor.0 $!#0 Testing charges invoice has already been cleared and a subse6uent invoice has been etc"0H raised by the vendor for materials already sent" Eample: %ate change with retrospective effect" Subse6uent #redit shall be used when any deduction7 penalty is to be Business Requirement levied on the vendor" 4"S$P Best Practises for I! - # to be implemented where ever suits There are 8 options0 which can be used for Invoice ,erification" 4"9oods 7 Service Item to Walvoil re6uirement ;"Delivery #osts 8"9oods7Service Item  Delivery costs Based on the 9oods7Service and delivery vendors0 the option shall be selected" *a"s3 4.;.- %ntr# of endors Invoice

Sub Process S

As Is Business Process3

$uggested &usiness "rocess3 ocal endor It ta.es some time to function completely" 1ocal vendor invoice shall be entered with reference to Purchase 2rder" 4"Invoice ,erification against to P2 GP2 9enerated through Ecel !ore than one purchase order can also be processed at one time for one vendor" If re6uired the vendor can be changed from the original software for %! and other materialsH vendor to whom the payment is to be done" If any Invoice verification has been done for any 9% for a P20 the 6uantity for this 9% will not nder this scenario 9%( and P2 reference is ta.en0 chec. for the appear in the list" In case where the freight vendor is different0 only Ecise or (on3ecise0 6ty received0 P2 number0 9%( (umber0 those entries related to the delivery costs will be chosen for the $ccepted ?ty" $ll the entries are done in Ecel software as well as payments to this vendor" It is also possible to raise credit memo maintained in a register" against the goods returned to the vendor" In case of Subse6uent ;"Invoice verification against to P2 GP2 manually done for !isc and debit7credit to be made to the vendor account0 Greasons can be change capital itemsH of rates for previous supplies made0 etcH0 the entries are made using the Invoice ,erification" nder this scenario 9%( and P2 reference is ta.en0 chec. for the $d+ustments to other accounts li.e Insurance claims $ccount0 etc" can Ecise or (on3ecise0 6ty received0 P2 number0 9%( (umber0 be entered with invoice verification" $ccepted ?ty" $ll the entries are done in Ecel software as well as nplanned delivery costs are costs which are not .nown at the time of maintained in a register" creation of purchase orders and these are charged in the invoice sent 8" Invoice verification with out P2" G%eference is ta.en through 9%( by the vendor can also be entered during invoice verification" Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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td.

for Invoice amount less than %s >FFF73H nder this scenario 9%( and P2 reference is ta.en0 chec. for the Ecise or (on3ecise0 6ty received0 P2 number0 9%( (umber0 $ccepted ?ty" <"Invoice verification for transporters payment G%eference is agreementH nder this scenario commercial department will send the vendor invoice" #ommercial department will mention the 9$( number on bac. end of the invoice" Invoice entries are done using Ecel" ="Invoice verification for services G1abour wor.0 $!#0 Testing charges etc"0H Entries are done by referring to P2 GQ>FFFH else the entries are passed without any reference"

In these ad+ustments wherever the invoice involves the #E(,$T0 based on the Ta code maintained0 vendor and material ta details #E(,$T clearing account is prompted and will be updated on saving" Simulation facility is available for chec.ing the accounting effect" Im"ort endor Imports invoice verification is slightly different from the normal invoice verification" In this case the #,D applicable is ta.en into %9;8 %egisters" In Import P2 the #,D and other conditions are maintained as delivery condition types hence the Invoice verification for the #,D part is to be done first before the 9% is done" Then %9 part4 entries are done then 9% is done and then %9 part; entries are posted" Invoice verification is done for the Purchase 2rder" In this case (o 9% based Invoice verification is possible GThis is specific to Imports onlyH" The other functions as mentioned under 1ocal ,endor Invoice verification are also applicable for Import ,endor"

Business Requirement

4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement Sub Process S

4.;., Paring of endor Invoice

As Is Business Process3 (ot following Business Requirement3 4"S$P Best Practises for I! - # to be implemented where ever suits to Walvoil re6uirement

$uggested &usiness "rocess3 Invoice verification documents can be par.ed and later processed ,endor invoices can be par.ed for later processing" In case there is some doubt about the invoice in hand0 the document can be par.ed and later processed for posting" The accounting entries get generated only when the document is posted" *a"s 3

Sub Process S

4.;.8 'ancelling endors Invoice Business Blue Print / !aterials !anagement / !r"%a+an0 !r",inay / W$1,2I10 !r"Srinivas 3 #,S IT

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As Is Business Process3 (ot following

$uggested &usiness "rocess3 Invoice Documents in Invoice ,erification are either Invoices or #redit !emos" If an invoice is cancelled0 the system generates a credit memo and if a credit memo is cancelled the system generates an Invoice" The Business Requirement3 system ta.es into account the 6uantity and amount in the credit memo 4"S$P Best Practises for I! - # to be implemented where ever or invoice thus avoiding any differences between the original and the suits to Walvoil re6uirement cancelled documents" The invoice can be cancelled only if The document is invoice document The document is not already cancelled The document is not cancellation document of another document" *a"s3 4.;.4 Material aluation As Is Business Process3 (ot following


$uggested &usiness "rocess3 !aterial ,aluation can be used for the following purposes : $d+usting material prices to mar.et price Performing revaluations Eecuting balance sheet valuation" !aterial valuation can be used for maintaining future prices0 release planned prices0 change material prices0 debit7 credit material"

Split ,aluation Split valuation serves the purpose of valuating stoc. at different values based on different sources of procurement" If a material is sub+ect to split valuation0 every 6uantity Gsub3stoc.H of this material must be assigned to a valuation Type" If you want to valuate stoc.s of a material separately0 you must create a material master record with the appropriate valuation category" This record is called the valuation header record" Each material always has only one such record for each company code or plant Gdepending on whether the material is valuated at company code level or plant levelH"  


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2nce you have specified the valuation category0 you can create a material master record for each 6uantity of the material you want to valuate separately0 with the appropriate valuation type and a ccounting data *a"s3 4.;.; P#sical Inventor# Requirement Anal#sis3 With physical inventory process the ad+ustment of stoc.s shall be done As Is Business Process3 with the re6uired accounting effect (ot following $uggested &usiness "rocess3 Physical inventory component allows the carrying out of physical Business Requirement3 inventory of the companys warehouse stoc. for balance sheet purpose" 4"S$P Best Practises for I! - # to be implemented where ever There are different types of physical inventory procedures li.e Periodic suits to Walvoil re6uirement Processing0 #ontinuous inventory0 #ycle counting" $ny of these techni6ues can be used for this process" Periodic Inventory: In this process all the stoc.s in the company are physically counted on the balance sheet .ey date" The entire warehouse must be bloc.ed for materials movement #ontinuous Inventory #ontinuous inventory ensures that all the material is counted at least once during the year" Stoc.s are counted throughout the year" #ycle counting #ycle counting is a method of physical inventory where inventory is counted at regular intervals within a fiscal year" Inventory Sampling Inventory sampling method uses random selection of stoc.s and these samples are physically counted on the balance sheet date" If only small variances occur in the count and the physical inventory0 it is presumed that the inventory balances and boo. stoc. are correct" The counts can be entered in the system and the differences can be reconciled between physical and boo. balance" The re6uired accounting effect is provided through this reconciliation"


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Sap Mm Business Blueprint Sample

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