Demand Driven Procuremnt -Retail

8/10/2019 Demand Driven Procuremnt -Retail

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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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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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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

e-mail

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

Date post:	02-Jun-2018
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Demand Driven Procuremnt -Retail

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