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Demand-driven Procurement
SAP Best Practices for Retail (France)
SAP Best Practices
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Scenario Overview 1
Purpose
This scenario begins with the required planning steps. The forecasting processes and different
consumption-based MRP procedures. The supply source determination schema in SAP R/3 is
then outlined in brief and the various options explained. The Purchase Order process shows
you how to work with the Planning Workbench. Order optimizing comprises quantity
optimizing, investment buying, load building and goods receipt capacity check. The last
section shows you how vendor evaluations can be used to optimize goods procurement.
Benefits Alongside article-specific inventory management, the SAP R/3 System provides an accurate
data basis for using the comprehensive range of requirements planning methods. The main
task in requirements planning is to monitor stocks and, in particular, generate automatic order
proposals for purchasing.
With the planning workbench, extensive functionalities for order optimization and vendor
evaluation you can handle the whole process for demand-driven procurement.
Key process flows covered Requirement Planning
Planning Run
Supply Source Determination
Contract Processing
Planning Workbench
Order Optimizing
Purchase Order Monitoring
Vendor Evaluation
Purpose and Benefits:
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Scenario Overview 2
Required
SAP EHP3 for SAP ERP 6.0
Company roles involved in process flows
Retail Non-Seasonal Purchaser
Retail Non-Seasonal Purchaser Power User
Retail Non-Seasonal Purchase Manager
Retail Replenishment Planner
Retail Replenishment Planner Power User
Retail Master data Manager
Retail Warehouse Clerk
Retail Store Manager
SAPApplications Required:
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Process Flow Diagram
Requirement Planning
MRP ProcedureAutomatic
reorder pointplanning
Carry out theindividual
Forecast fromthe article
master
Optional:Evaluating the
PlanningResults
Enter goodsreceipt for
purchase order
Optional:Planning File
Optional:Reprocess the
Forecastresults
Event
UnloadMaterials
fromTruck
RetailNon-S
easonalPurchaser
Ret
ail
Replenishment
Plan
ner
R.Non-
Seas.
Purch.
PowerU
Convert thePurch.
Requisition to aPurchase Order
MRP ProcedureTime-phased
planning
MRP ProcedureForecast-based
planning
MRP ProcedureTime-phasedplanning withreorder point
planning
Alternative:Carry out the
individual
Forecast fromthe menu Carry out
Single-Item,Single-Level
Planning
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Process Flow Diagram
Supply Source Determination
RetailReplenish.
Planner
RetailNon-
Seas.
Purchas
er
Supply Source:Source List
MaintainSource List
AutomaticConversion ofthe Purchase
Requisition to aPurchase Order
CreatePurchase Orderwith reference
to P.Requisition
Supply Source:Purchase Info
Record
CreatePurchase
Requisition
RetailNon-
Seas.Pur.
PowerU.
Goods receiptin DC
Ev-
ent Unload
MaterialsfromTruck
RetailReplen.
Plan
nerPower
User
Create Contract
CreatePurchase
Requisition(Assign Supply
Source)
Release Orderfor the Contract
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Process Flow Diagram
Purchase Order Process and Vendor Evaluation
RetailReplenish.
Planner
RetailNon-
Seas.
Purchas
er
CreatePurchase Order
via eCATT
PlanWorkbench:
OnlineRequirements
Planning
RetailNon-
Seas.Pur.
PowerU.
Goods receiptin DC
RNS.
Pur.
Mngr
RetailReplen.
Plan
nerPower
User
Return onInvestment
OrderCancellation
Order Release
OrderOptimizing:InvestmentBuying Run
Alternative:Simulate
InvestmentBuying Run
InvestmentBuying
Analysis
OrderOptimizing:
Load Building:Carry out
Single-Level,Single Item
Planning
ConvertPurchase
Requisition toPurchase Order
Automatic LoadBuilding
Manual LoadBuilding
Maintaining the
VendorEvaluationManually
Vendor
EvaluationAutomatic
Reevaluation
Comparison ofEvaluations
Ranking List
Executing anEvaluation of
the Art./Merch.Cat.
eCATT forVendorEvaluation
CreatePurchase Order
Order
Optimizing:Goods receipt
capacitiy check
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Requirements Planning
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Objectives
Automation of the procurement process on site level
Inventory monitoring of a site
Central + distributed application
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Requirements Planning: Forecasting Model
Basic value
Basic value
Trend value
Basic value
Season indices
Constant model
Trend models
Seasonal models
Seasonal trend models
Manua
l
Models Parameters
Automatic
Model selection
Automatic
T: Test for trend
S: Test for season
A: Test for trendand season
Manual model selection with additional
automatic test
Selection
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Requirements Planning: Overview
RP type
Requirements
Planning
Consumption
values
10/2000 987
11/2000 1000
12/2000 1251
Purchase
Requisition
Item 10
Item 20
Purchase Order
Item 10
Item 20
Forecast
indicator ?ArticlesArticles
Forecast
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Forecast Applications
Forecast Application
Calculation of the reorder
point and the safety
stock by the forecast.
The forecast values are
copied as requirements
and replace the reorder
point.
Calculation of the reorderpoint and the safety
stock by the forecast.
Reorder Point
Planning
The forecast values are
copied as requirements.
The planning run is only
carried out on predefined
dates.
Time-Phased planning can
be applied in combination
with Reorder Point
planning.
Forecast-Based
Planning
Time-Phased
Planning
Reorder Point
Planning
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Source Determination
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Purchase Order: Supply Source Determination
Quota arrangementQuota arrangement
??60%60% 40%40%
2 Source listSource list
Outline agreementsPurch .info records
Regular vendor
Purch . requisitionWITHOUT
supply source
Article PCS-04-MRP201for VZ01 50 pc?
3
MIT
Supply source ind .
1
Stock transfer deliv -ery schedules
Supplying sites
Find external source ofsupply only
Find internal source ofsupply only
Find internal supply sourcefirst , then external
Find external supply sourcefirst , then internal
Purch . orderVendor PCS-V201
Art. 3214 20 pc
Art. 5110 15 pc
PReqVendor ??
Art. 321420 pcArt. 511015 pc
ArticleArticle
5
4 Supplyregion ?
VendorR3001VendorPCS-V201
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Order Processing
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Planning Workbench
Manual planning
Select worklist
- Site
- Vendor
Material selection- Stock planner
- Merchandise category
Default data
- Item category
- Account assignment
category
Control data
- Sort algorithms
Application settings- Display
Worklist settings
- Sequence
Internet services
WWW
General settings
- Hideprocessed worklist
- Expand levels with one
element
- Display symbols
Start variant
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Planning Workbench: Manual Planning
Planning workbench with integrated manual planning
Worklist personalization
Simple display navigation in tree format
Display of additional information, for example, site or vendor
master data
Direct access to the Internet or mail system
Worklist view personalization
Manual planningDisplay of consumption and/or forecast data
Use of restriction profiles
Automatically generated purchase requisitions
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Order Optimizing
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Quantity Optimizing: Rounding Profiles
0 No rounding
1 Round up to a multiple of the order
units/sales units
2 Round up to order/sales/logistical units of
measure
3 Round up to order/sales/logistical units ofmeasure, or log. unit of measure, zero qty for
order units only
Check the permitted units of measure
used by vendors or recipients
Rounding method
Rounding rule
Unit of measure group
Dynamic profile
AUn % Up % Down
CAR 70,0 10,0
LAY 80,0 10,0PAL 90,0 10,0
Dynamic Rounding Profiles
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Investment Buying: Purpose
Investment buying is a method of determing procurement
proposals that take account of future price increases, and are
to be covered by external procurement
The aim of Investment buying is to purchase articles
in suitable quantities
in good time
as cheaply as possible
taking account of various influencing factors
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Investment Buying: Overview
Open
PO quantities Stock on-hand
ROI Parameters
Forecast
Investment
Buying
Analysis
ProtokollLog of items
found relevant to
Purchasing
Purchase
requisitions
-
Worklist
Purchase
orders
Purchase price
conditions
Purchase price
higher than
future price
Actual ROI
is lower than
required ROI
Calculate
order quantity
Select condition changes
Select relevant articles
(Info Record)
Simulate
purchase price
Calculate ROI
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Load Building
Load building is a process used to group together purchase
orders and other requirements, while taking account of
procurement restrictions, and thereby reduce procurement
costs.
Definition
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Load Building Overview
Purchase requisitions
otherorder
processes
Manual load building
EDI to vendor
Automatic
load building process
Req. Planning Investment buyingprocess
Promotionorders
Simulation list process
Purch. Req.. ...Purch. req . ...
Purch. Req.. ...
Purch. order ...Lieferant 326
Purch. Order...Vendor 326
Without existing
requirementelements
Purchase orders
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Goods receipt capacity check
Up to now, there was no check for sufficient capacity for the delivery date of a
planned delivery in the goods receipt area of a warehouse. If the goods are deliveredto a warehouse door that does not have any free capacity, there can be a bottleneck
in the goods receipt area of a warehouse. At the same time, another warehouse door
might have enough capacity.
Advantages for the retailer and vendor:
Taking the goods receipt capacity into account prevents potential bottlenecks.
The vendor's delivery date planning utilizes the capacity of the retailer's goods
receipt areas.
The vendor can schedule the deliveries better since the planned time window for
inbound deliveries is binding.
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Vendor Evaluation
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Functions in Vendor Evaluation
Quality audits
Vendor C
Regular vendor
forArticle 1 ?
Vendor A Vendor B Vendor C
Vendor Evaluation
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Automatic Subcriteria: Overview
Main Criteria
Price
Quality
Delivery
Service
Subcriteria
Price level
Price development
GR inspection
Complaints
Audit
On-time delivery
Quantity reliability
Shipping instructions
Confirmation
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Analyses for Vendor Evaluation
Evaluation for Article 1General Vendor Evaluation
84 75 92 88 81Vendor A
General Vendor Evaluation
Total PreisPrice QualQual.. LiefDlvy.. ServiceService
90
84
81
92
75
90
90
92
76
93
88
74
85
81
84
Analysis for Article/ Merchandise category
Vendor Evaluation Evaluation
Total PreisPrice QualQual.. LiefDlvy. ServiceService
88
81
81
90
93
76
92
74
86
84
Vendor A
Vendor C
Evaluation Comparison
Total PreisPrice QualQual.. LiefDlvy. ServiceService
Vendor B
Vendor A
Vendor C
Total PreisPrice QualQual.. Dlvy. ServiceService
88 81 93 92 86
HIT LIST
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Legend
Symbol Description Usage Comments
To next / From last Diagram:Leads
to the next / previous page of theDiagram
Flow chart continues on the next /
previous page
Hardcopy / Document: Identifies aprinted document, report, or form
Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; thisshape does not have any outgoingflow lines
Financial Actuals: Indicates afinancial posting document
Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; this
shape does not have any outgoingflow lines
Budget Planning: Indicates abudget planning document
Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; thisshape does not have any outgoingflow lines
Manual Process: Covers a taskthat is manually done
Does not generally correspond toa task step in a document;instead, it is used to reflect a taskthat is manually performed, suchas unloading a truck in thewarehouse, which affects theprocess flow.
Existing Version / Data: This blockcovers data that feeds in from anexternal process
Does not generally correspond toa task step in a document;instead, this shape reflects datacoming from an external source;this step does not have anyincoming flow lines
System Pass / Fail Decision: Thisblock covers an automaticdecision made by the software
Does not generally correspond toa task step in the document;instead it is used to reflect anautomatic decision by the systemthat is made after a step has beenexecuted.
DiagramConnection
Hardcopy /Document
FinancialActuals
BudgetPlanning
ManualProces
s
ExistingVersion /
Data
SystemPass/F
ailDecisio
n
Symbol Description Usage
Comments
Band: Identifies a user role, such as AccountsPayable Clerk or Sales Representative. This band
can also identify an organization unit or group,
rather than a specific role.
The other process flow symbols in this table go into
these rows. You have as many rows as required to
cover all of the roles in the scenario.
Role bandcontains tasks
common to that
role.
External Events: Contains events that start or end the
scenario, or influence the course of events in the
scenario.
Flow line (solid):Line indicates the normal sequence
of steps and direction of flow in the scenario.
Flow line (dashed):Line indicates flow to infrequently-used or conditional tasks in a scenario. Line can
also lead to documents involved in the process flow.
Connects twotasks in ascenario
process or anon-step event
Business Activity / Event:Identifies an action thateither leads into or out of the scenario, or an outsideProcess that happens during the scenario
Does notcorrespond to atask step in thedocument
Unit Process: Identifies a task that is covered in astep-by-step manner in the scenario
Corresponds toa task step inthe document
Process Reference: If the scenario references another
scenario in total, put the scenario number and namehere.
Corresponds to
a task step inthe document
Sub-Process Reference: If the scenario referencesanother scenario in part, put the scenario number,name, and the step numbers from that scenario here
Corresponds toa task step inthe document
Process Decision: Identifies a decision / branchingpoint, signifying a choice to be made by the enduser. Lines represent different choices emergingfrom different parts of the diamond.
Does notusuallycorrespond to atask step in thedocument;Reflects achoice to be
made after stepexecution
External
to
SAP
BusinessActivity /
Event
Unit Process
ProcessReference
Sub-Process
Reference
Process
Decision