BUSINESS BLUEPRINT Sales & Distribution– Bitumen, BBP Page 1 of46Mr. Ravi ShankarProject Manager PRISM Informatics Ltd.Mr. Vimlesh AgrawalFunctional Consultant PRISM Informatics Ltd. Mr. Anushman RajaratnamManaging Director LANKEM Ceylon Plc Mr. Lal PeirisFunctional Head LANKEM Ceylon Plc Mr. C. ThurairajahProject Manager LANKEM Ceylon Plc Mr. Ishan WijetungaSD Key User LANKEM Ceylon Plc PROJECT MISSION - IS [Implementation of SAP ERP 6.0 by Prism Informatics Ltd. for LANKEM CEYLON PLC.]Sign-off Business Blue Print Sales and Distribution
This Business Blueprint Document describes the following:Business requirements as given by the LANKEM Key Users.
Suggestions by PRISM consultants wherever SAP ERP 6.0 features are found to be useful to LANKEM ‟s business f un ct io nal ity . To-Be Process on SAP ERP 6.0 suggested by PRISM Consultants
Comments whether the requirement can be realized on the SAP ERP 6.0 or not.
Gaps which are at different stages of exploration
The following codes are given to each module that is within the scope of the agreement:
Module ID Module
1 Financial Accounting
2 Controlling
3 Production Planning
4 Materials Management
5 Quality Management
6 Sales and Distribution
Further processes, sub-process and activities i n each module are denoted by, say. 1.1, 1.1.1, 1.2.1 etc.A Business Blueprint document is prepared for each module and reference shall be made wherever required to other modules, whenever there is anoverlap of business processes across modules or a business process requires to be completed in more than one module. The reference to the businessprocess shall be made using the process numbers as described above;
As per the above notation, all processes in Sales and Distribution start with 3. * … So if a reference has to be made to proce ss in Accounts Receivable of Financial Accounting, then the reference is made using the notation say, 1.2. * … Where „1‟ refers to Financial Accoun t ing and 1.2 refers to AccountsReceivable and then further numbers denote the sub-processes and activities in the module.Step 1:The Module Owner shall identify various existing business processes at a broad level and make a list of them as described under section 1 of thisdocument
Step 2:Depending upon the various business processes thus identified in Step 1, various business scenario are described in the following way:As Is Business Processes: The current way of executing the business process shall be explained in detail with data/information flow along with the ITsystems / Manual Systems being used in the whole cycle. Business Requirement: Under this head, the module owner shall describe the requirements of the company vis-à-vis this business scenario, if necessarywith examples. Following situations can arise:
(a) The current provisions in the system are sufficient enough and additional configuration efforts are not required.(b) The current provisions are not sufficient and satisfactory and additional features need to be incorporated in the system(c) There is no current provision to handle this transaction at all.
The module owner shall identify each business scenario with the above classification.
Step 3:Based on the Business Requirement, PRISM consultant shall do a detailed Requirement Analysis and based on the analysis shall propose the best-fitbusiness process on the SAP ERP 6.0 system.
It may not be possible to decide the realization possibility of all Business requirements on the SAP ERP 6.0 immediately and hence the following legend isbeing followed for describing the statuses:
Status of To-Be BusinessProcess Status Description A-Possible Can be implemented on SAP ERP 6.0
B-Possible with workaround Can be implemented on SAP ERP 6.0 through indirect means
C-Possible with ABAP Can be implemented on SAP ERP 6.0 through ABAP/4 development
D-Possible with ABAP (Butperformance issue) Can be implemented on SAP ERP 6.0 through ABAP/4 development but system performance may be effected
E-Not possible withoutMajor Modification Cannot be implemented on SAP ERP 6.0 without major system modification
F-Open for exploration Possibility of implementation will be explored in the development environment. Cannot be confirmed at this
stage G-Not possible Cannot be implemented on SAP ERP 6.0
H-Not in Scope Cannot be implemented because it is not part of the scope defined in the “S oftware S e rv ices Ag re e me n t ” between PRISM and LANKEM
The To-Be business process realization is dependent on the following aspects: Scope of services described in the Software Services Agreement signed by LANKEM and PRISM Scope of functionality described in the Software Services Agreement mentioned above. Capabilities and Limitations of SAP ERP 6.0
As-Is Business Knowledge Transfer from LANKEM Project Team members Business Requirements defined by the LANKEM Project Team members
LANKEM accepts that the decision to accept the „To -B e ‟ Business Processes is completely its own and not influenced by PRISM . PRISM shall not
b e responsible for the business consequences on LANKEM after the realization and usage of t he processes being suggested here.LANKEM shall indemnify PRISM from all responsibilities for any other business consequences during the framing of the To-Be Business processes, or atany time during or after the realization / implementation of these processes on SAP ERP 6.0 or while using the system.
Lankem group is a major manufacturing and trading group having its operations based in & out of Sri Lanka. The principal activity of the Company ismanufacturing of chemicals, CONSUMERS and consumer products. The company has now diversified its business to many other areas becoming marketleaders in many sectors of its diversified businesses. The major business segments Lankem operates in are:
Chemicals, which includes manufacturing, distribution and service activities relating to chemicals.Consumer, which includes manufacturing, selling and distribution of consumer products.Hardware, which includes manufacturing, selling and distribution of hardware products.Construction, which includes road construction, waterproofing and industrial flooring.Hotels, which include owning and operation of resort hotels.Plantations, which include cultivation and processing of tea and rubber, and agriculture, which includes farming and dairying.
The Company’s subsidiaries include Lankem Ceylon plc, Lankem Developments PLC, Sigriya Village Hotels PLC, Marawila Resorts PLC , Colombo Fort HotelsLtd., Lankem Plantation Holdings Ltd., Lankem Tea & Rubber Plantations (Pvt.) Ltd. and Lankem Plantation Services Ltd. Lankem Ceylon plc is a listedcompany in Colombo stock exchange (CSE) with a broad base of shareholders.
7.0 Enterprise Structure
Company Code: It is the smallest organizational unit of Financial Accounting for which a complete self-contained set of accounts can be drawn up for purposes of external reporting.
The Company Code have been bifurcated and codified in the following:
It is an organizational unit that represents an area responsible for granting and monitoring credit. A credit control area is an organizational unit forspecifying and controlling customer credit limits. A credit control area can include one or more company codes.
The Credit control area have been bifurcated and codified in the following:
Old Credit Control Area New Credit Control Area
Code Description Codes Description NA NA LB01 LANKEM BITUMEN CREDIT CONTROL AREA
Sales Organization: It is an organizational unit in Logistics that structures the company according to its sales requirements. A sales organization is responsible for selling
materials and services.
The Sales Organisations have been bifurcated and codified in the following:
Distribution Channels: They are the channels through which saleable materials or services reach customers. Distribution channels include wholesale, retail, and direct sales.
The Distribution channel have been bifurcated and codified in the following:
Old Distribution Channels New Distribution Channels Code Description Code Description
NA DISTRIBUTOR DS DISTRIBUTOR NA DIRECT DEALER DD DIRECT DEALER NA INSTITUTIONS IN INSTITUTIONS
It is an organizational unit based on responsibility for sales or profits from saleable materials or services. It is the product line.
The divisions have been bifurcated and codified in the following:
OLD DIVISIONS NEW DIVISIONS Code Description Code Description
XA EMULSIONS BE EMULSIONS XB CUTBACK BT BITUMENXC BITUMEN 60/70 HP HARDWARE PRODUCTXD BITUMEN 80/100 OT OTHERXE SHIELDCOAT -3,5,7XF DPC TAR
Sales Office: It is an organizational unit in a geographical area of a sales organization. A sales office establishes contact between the firm and the regional market.The sales offices have been bifurcated and codified in the following:
OLD SALES OFFICES NEW SALES OFFICES Code Description Code Description NA NA ASST. SALES MANAGER
Sales Group: It is an organizational unit that performs and is responsible for sales transactions. Sales representatives will be assigned to sales groups in their
masters.The sales groups have been bifurcated and codified in the following:
OLD SALES GROUPS NEW SALES GROUPS Code Description Code Description
In Logistics a plant is an organizational unit where materials are produced, or goods and services are provided. The plants in the sy stem will be identified by the codes as listed below:
Old Plants New Plants Code Description Codes Description
NA SAPUGASKANDA LK30 SAPUGASKANDA
Shipping Point: It is an organizational unit in Logistics that performs shipping processing. The shipping point is the part of the company responsible for the type of shipping, the necessary shipping materials and the means of transport.
The shipping points have been bifurcated and codified in the following:
PLANTS OLD SHIPPING POINTS PLANTS NEW SHIPPING POINTS
Codes Description Codes Plant Code Codes DescriptionNA NA NA LK30 LK30 SAPUGASKANDA
Storage Locations:They are the organizational units allowing differentiation between the various stocks of a material in a plant.
The storage locations have been bifurcated and codified in the following:
Old Storage Locations New Storage Locations Codes Description Code Description
XA RAW MATERIAL WAREHOUSE 0001 RAW MATERIAL WAREHOUSE XA PACKAGING WAREHOUSE 0002 PACKAGING WAREHOUSE XA FINISHED GOODS WAREHOUSE 0004 FINISHED GOODS WAREHOUSE XA SEMI FINISHED GOODS WH 0003 SEMI FINISHED GOODS WH XA ENGINEERING GOODS WH 0008 ENGINEERING GOODS WH
SP Sold to Party SH Ship to Party BP Bill to Party PY Payer PE Sales Representative
7.1 Account Groups and Partner Functions
7.1 Account Groups and Partner Functions
AS IS Business Process: TO BE Business Process:
Account Group: When you create a master record for acustomer, you must enter an account group. The accountgroup determines:
Which screens and fields are necessary for enteringmaster data.Whether you can or must make an entry in thesefieldsHow master record numbers are assigned(externally by you or internally by the system) andthe number range from which they are assignedWhich partner functions are validWhether the customer is a one-time customer
No account groups defined in the system. Numbers are e n t e r e dm a n u a l l y for customer master in legacy. Number ranges are
operative on customer groups of legacy.
It is suggested that following account groups will be created in SAP:1. Direct Dealer2. Distributor3. Institutional4. Inter Company
Following Partner Functions maintained in the system for LANKEM.
In legacy there is single number series for each group. TO BE number series as mentioned below.
Partner function:In legacy no as such partner functions maintained. All the functionsare ca rr ie d out by a single party i.e. order placing, shipmentreceiving, accepting invoice and payment of invoice amount is
done by same customer f un ct io n . Most of the times, its
cu st o m e r ’ s responsibility to receive goods from plant or distribution
AS IS Business Process: TO BE Business Process: All the masters would be maintained in the SAP system as below.
Master Data is maintained in the legacy system but withoutsufficient data provided for reports and integration. Customer Groups :
Business requirement: 1. Distributors
Following Masters should be maintained in the system: 2. Direct Dealers
1. Business partners (customers) 3. Institutional2. Materials3. Sales representatives, supervisors, area sales managers. 4. Inter Company4. Price Conditions. There is account groups maintained in the SAP for all above customers.
These customers would be grouped under account groups mentionedabove.Other partners will be maintained as below
1. Asst. Sales Manager: As discussed above, sales Office will be actingas Asst. Sales Manager in sap.
2. Area Manager/Executive : In SAP sales groups will be acting as areamanager /Sales Executive.
3. Sales representative master will be created in SAP underpartner function PE, as sales employee and will be attached toeach customer master.
4. Pricing condition records will be created in the system for differentcombinations of fields.
7.2.1 Maintenance of Business Partners 7.2.1.1 Maintenance of Customers
AS IS Business Process:
Master Data is maintained in the legacy system. But it doesnot accommodate all the information.
1. The customers is NOT classified & distributed in sales distributioncenters. NO customer groups in legacy.
2. Numbering of the customer is alpha- numeric.
Business requirement:
1. Different account groups for Distributors, Institutional & General Customers should be maintained in SAP with differentnumber series.
2. For new customer creation there should be four level of authorization. First by ASM, second by AGM, Third by Directorand lastly by Finance dept.
TO BE Business Process:
Standard masters would be maintained in SAP with all integration pointsrequired in other modules like reconciliation account, tax category,payment terms, account assignment group for FI and delivery priority,shipping condition for LE.
Account groups will define which fields amongst below are required andwhich are to be suppressed/optional. For each master name, address,region, mobile number will be required fields in general data.Reconciliation account is required data under company code data section.
Sales office, sales di stricts, sales group, customer group, currency,Customer pricing procedure will be required fields for sales tab undersales area data section. Shipping condition will be required field inshipping tab under sales area data section.
Account assignment group and tax category will be required fields forbilling data tab under sales area data section.
Sales Office will indicate Asst. Sales Managers.Sales Groups will indicate Area Managers/Sales Executive.
Account assignment group for customer will be only “ 01 ” as domesticrevenues.
For Authorization of New Customer, work flow need to bedeveloped. Refer Annexure – 1.
7.2.1.2 Sales Representative As Is Business Process:
Sales representative master is maintained in the current system.
Business requirement:
Sales representative should be maintained in the system.
TO BE Business Process:
1. Basic HR personnel administration configuration will be done in SAPto create sales representative.
2. Sales representative master will be created in SAP with assignmentto sales group.
3. Each sales representative (sales representative) will be assigned toone distributor/customer.
4. Number series for sales representative will be external & numeric.
Gaps: A 7.2.2 Maintenance of materials
7.2.2.1 Materials AS IS Business Process:
Materials are maintained in legacy system. But it does notaccommodate all the information for PP and MM aspects.
Business requirement:
1. Raw materials, Finished goods, packing materials, consumables,and semi finished goods are required t o b e maintained in SAPsystem.
2. Finished Goods number series is internal .
TO BE Business Process:
Materials will be created in the SAP system in required material type.For finish goods material type will be used as FERT. FERT material typewill contain sales data views to accommodate all sales related data. Alsoit will contain availability checking group in sales/plant data view.
Following fields will be maintained in material master.1. Availability check as 01 daily requirements2. Material statistic group3. Account assignment group4. Tax category5. Sales UoM6. Profit centre assignment
7.2.3 Maintenance of Conditions 7.2.3.1 Price elements (basic price, discount, freight, VAT)
AS IS Business Process:
Conditions: Condition type in SAP is the unit of specifying pricingconditions such as material selling price, discounts, surcharges,freight, taxes etc.
1. Pricing is maintained in the legacy system. Standard price list isavailable per material in the system.
2. Discounts maintained in records as a fixed % for Dealers,Distributors etc.
3. Promotional discount given to match the negotiated price.4. Freight is NOT charged.5. VAT is charged only for materials sold through Lankem Ceylon.
Business requirement :
For change in Price of product (permanently), Asst. General Managerfills the form and send it to Director for approval. Once approved bydirector it is sent to Finance dept for approval. MIS update the price inthe system once it is approved by finance dept.
TO BE Business Process:
Sales price, discounts, freight, taxes will be maintained in the conditiotype in SAP system. This will be responsible for pricing of a sales ordein SAP system.
1. Sales price will be fixed and can be changed in sales order as andwhen required.
2. Discounts (%)will be maintained in condition types.3. Discount (value based) will be maintained so that can be used as
Promotional discount.3. Freight is NOT charged but will be maintained so that cane be used asand when required.
4. Tax code defined in FI will take care of VAT=12% and NBT=3% which will be same for all finish materials.
5. There will be two types of tax codes as V0= Zero tax, V1 = Full tax.
For Authorization of Price Change of Product, work flow needto be developed. Refer Annexure - 2
1. Payment terms are maintained in the Legacy system.2. Bank guarantee is taken for credit given to customers and postdated cheques are taken against Invoice.
Business requirements:
Payment terms required for Cash, Credit- 45 days,60 days terms.
TO BE Business Process:
1. Payment terms can be changed in the master as well as in the salesdocument whenever required.
2. Master records have separate areas for Financial Accounting, Sales,and Purchasing. You can specify different terms of payment keys ineach of these areas. When you then enter a business transaction,the application in question will use the key specified in its area of the
master record.3. Posting date of document will be the baseline date for calculatingpayment term.
Terms of payment will be defined in the system as below:
Incoterms: The ICC in Paris developed the IN ternationalCO mmercial TERMS (INCOTERMS) as a uniform set of rules that areused to help define costs, risks and obligations of buyers and sellersin international trade.
Commonly used INCOTERMS are :
EXW: Ex WorksCFR: Cost and FreightCIF: Cost, Insurance and FreightFOB: Free on board
Inco terms are not maintained in the current sales system.
Business requirements:
TO BE Business Process:
Incoterms will be maintained in the system as per standard.
1. Inco terms specify certain internationally recognised procedures thatthe shipper and the receiving party must follow for the shippingtransaction to be successfully completed.
2. All the Inco terms will be maintained in the system.
Standard Inco terms like -CFR : Costs and freightCIF : Costs, insurance & freightEXW : Ex worksFOB : Free on board
1. Credit limit for customer should be fixed as per the bankguarantee.
2. Authorization to specific users only for changing the creditmaster.
3. Automatic credit check for all customers.4. For change in Credit Limit of customer (permanently), Asst.
General manager first approves and send it to Director forapproval. Once approved by director it is sent to Finance dept forapproval. MIS update the limit in the system once it is approved.
TO BE Business Process:
Each customer will be assigned to credit control area through riskcategory attached to him in credit master. Credit management will beactive for sales document through credit group assigned to salesdocument type.
1. Credit control area will be assigned to customer master in sales areadata billing view.
2. It will be activated at sales document type level and item category too.3. Credit master for all customers will be maintained in the system by
the finance department after consultation with the sales department.4. Credit limit will be assigned to customer at credit control area level
and will be valid for all company codes and credit limit for customerwill be decided by GM sales & to the extent of bank guarantee forthat customer.
5. Automatic credit check for all customers using risk categories asunder:a. High risk customersb. Low risk customers
6. Authorization to create or to change credit master will be provided tothe authorized users only. The authorized person should change themaster data only after he has received due approvals.
7. Credit management will be active at the time of sales order creationand it will give error if the credit limit is exceeded and the user wont beable to create delivery for that order.
8. Authorization to release blocked documents will be provided tothe authorized users only.
For Authorization of Credit Limit change of Customer, workflow need to be developed. Refer Annexure -3Gaps: D
1. Inquiries are usually made over the phone .2. Inquiry generation in the current system is absent.
Business requirements:
Inquiry Creation should be done in the system.
TO BE Business Process:
1. Inquiry will be created in SAP as per standard but only if required.2. Document type ZZIN will be used for the same.3. Number will be internally generated for inquiry by system.
Gaps: A
7.3.1.2 Quotation Creation
AS IS Business Process:
1. Quotations are generally created manually as and when the needarises.
2. Quotation is valid for 30 days.
Business requirements:
Quotation should be created in the system.
TO BE Business Process:
1. Quotation will be created in the system with document type ZZQT.2. Quotation will be created in the system with reference to
manual quotation .3. The system will assign a number automatically to the quotation with
1. When customer/Distributor/dealer or sales personnel confirm theorder by Fax /email/letter sales pool direct the order to therelevant parties (Sales Manager/ Senior AdministrationManager/Director/Finance manager/Credit controller) for approvaland then invoice is raised /it is printed at the factory.
2. If the sales person confirm the order by over the phone it ismanually recorded in the order form and then invoice is raisedafter getting approval from the relevant parties.
3. During Sales Order creation(only if there is Credit issue) , sales
order is authorized by Three persons. First by AGM second byDirector, third by Finance Dept but Manually.
Business requirement: During Sales Order creation(only if there is Credit issue) , sales order isauthorized by Three persons. First by AGM second by Director, third byFinance Dept.
TO BE Business Process:
1. Customer purchase order on Pre-printed format will be given tosales admin by sales representative.
2. Sales admin will create a sales order in the system with requireddelivery date.
3. All other details required will be automatically fetched from customerand material masters. Remaining if any and required will be manuallyentered in the order by sales admin.
4. Sales admin may change payment terms, required delivery date andprice if required. He can al so change any partner function otherthan sold to party if required.
5. With the help of internal number range, the system will generate anumber for the sales order automatically.
6. Daily created sales orders can be seen in standard report in SAP.
Document type used for creating sales order will be ZORD .For Authorization of blocked sales order work flow need to bedeveloped. Refer Annexure -4
1. On the Basis of the sales order, a delivery is created. All thedetails get copied from the sales order. The shipping point needsto be specified along with the sales order number in the initialscreen.
2. With the help of internal number range, the system will generate a number for the delivery note automatically.
3. The print out of the delivery note will be the loading invoice.4. No. Of copies can be printed of delivery note.5. Batch number for the shipment material will be available from
production dept and will be printed on the finished product.
Batch management in SD will be activated in SAP.
Document type used for Delivery will be LF .Gaps : A
According to the generated invoices, FGS will do the needful todeliver the goods accordingly.
Business requirement:
TO BE Business Process:
1. It can be done through delivery change mode.2. As soon as Goods Issue is posted in the system, the inventory of the
material will reduce and the Delivery will be removed from PendingDelivery List.
3. The system will generate a material document for the goodsdelivered. Against this material document the system will generatethe finance document where the G/L entries will be shown inthe accounting document.Inventory account : credit Cost of goods sold : debit
Gaps: A
7.3.1.6 Invoice Creation
AS IS Business Process:
Invoice is raised as per the PO and it gets printed in the factory. Itconsist of 5 copies ( Customer copy/Stores copy/account Copy/ GatePass/ Delivery copy).
Business requirement:
TO BE Business Process:
1. The system will generate the invoice with reference to the delivery incase of delivery relevant items.
2. The system with the help of internal number range will assign anumber automatically.
3. Accounting entries will be passed automatically in the system.
Customer account : debit Sales account : credit
4. The printout of the invoice can be taken directly from the system.
1. Currently there is NO PGI done in legacy system.2. Customer carries the copy of Invoice along with the cash receipt
to the factory and collects the goods from there.
Business Requirement:
TO BE Business Process:
1. It can be done through delivery change mode.2. As soon as Goods Issue is posted in the system, the inventory of the
material will reduce and the Delivery will be removed from PendingDelivery List.
3. The system will generate a material document for the goodsdelivered. Against this material document the system will generatethe finance document where the G/L entries will be shown inthe accounting document.Inventory account : credit Cost of goods sold : debit
Gaps: A
7.3.2.4 Invoice Creation
AS IS Business Process:
Invoice is Created in the HO/Color studio itself.
Business Requirement:
TO BE Business Process:
1. The system will generate the invoice with reference to the deliveryin case of delivery relevant items.
2. The system with the help of internal number range will assign anumber automatically.
3. Accounting entries will be passed automatically in the system.
Customer account : debit Sales account : credit
4. The printout of the invoice can be taken directly from the system.
7.3.3 Free Of Charge Order (FOC)7.3.3.1 Create Sales order
AS IS Business Process:
There is no such provision in the current system.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. The free of charge order will be created whenever goods are givenFree of cost or as Sample.
2. The system will assign a number automatically to the FOC order.3. Document type used for creating sales order will be ZFDO. 4. There will be Delivery Block whenever order is saved. Authorised
person needs to remove and then only delivery can be created.
Gaps: A
7.3.3.2 Delivery Creation
AS IS Business Process:
There is no such provision in the current system.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. FOC delivery will be created with reference to the FOC sales order.2. The system will automatically assign a number to the FOC delivery.
7.3.3.3 Post Goods Issue from PlantAS IS Business Process:
There is no provision in the current system.
Business requirement:
As per SAP best practice.
TO BE Business Process:
1. As soon as Goods Issue is posted in the system, the inventory of thematerial will reduce and the Delivery will be removed from PendingDelivery List.
2. The system will generate a material document for the goodsdelivered. Against this material document the system will generatethe finance document where the G/L entries will be shown in theaccounting document.
Gaps: A
7.3.3.4 Invoice Creation
AS IS Business Process:
No separate order type for FOC sales in legacy system.
Business requirement:
As per SAP best practice.
TO BE Business Process:
1. Invoice with respect to delivery number will be created in thesystem.
2. Internal number will be assigned to invoice saved.
7.3.4 Customer return order 7.3.4.1 Create return order for customer
AS IS Business Process:
Request is made by relevant sales person to return the goods statingthe reason , Invoice number , if a complaint was made with thecomplaint number , for the approval of BM – IC. Upon the approval of the BM-IC , factory will collect the return from the customer.
Business Requirement:
For Returns AM authorizes at customer point and it is approved byTwo persons. First by AGM, second by Director. Once this is done thenonly goods are received in the factory.
TO BE Business Process:
1. Return order will be created for customer returned material in SAPsystem under ZCRE order type.
2. Returns in SAP can be created with or without reference to Invoice.3. There is will be Delivery block & Billing block activated for all the
Returns orders.4. This Delivery block needs to be removed before creating delivery
(Asst. General Manager will be authorized to remove this block).
5. Credit Note will not be created unless and until Billing block isremoved (Director will be authorized to remove this block).
6. Once Billing block is removed Finance dept will be able to createCredit Note.
7. The system will assign a number to the return order.8. G/L accounts will be updated at the invoice level (after credit memo
saved in this case).
Gaps: A 7.3.4.2 Return Delivery Creation
AS IS Business Process: No return delivery note is created.
Business Requirement:
TO BE Business Process:
1. Return delivery will be created in the system with reference to thereturn sales order.
2. The system will assign a number to the return delivery.
Once the goods received the SRN is raised by the factory.
Business Requirement:
TO BE Business Process:
1. Return goods are accepted in return storage location of individual distribution plants as soon as goods receipt done.
2. The system will create a material document for the goodsreceipt done without any account document.
Gaps: A
7.3.4.4 Credit Note Creation
AS IS Business Process:
1. Two types of SRN raised – Verified & Non Verified.2. Verified – Directly credited to the relevant Invoice no.3. Non Verified – Credited to the customer account and the
allocation to be done accordingly.
Business Requirement:
TO BE Business Process:
1. After releasing the billing block from the return sales order, it will bepossible to create a credit memo (note).The system will assigna number automatically to the credit note.
2. The authorized user needs to release the credit note so that the accounting entries will be automatically created in the system.
1. No order is currently created in the system.2. There are different customers for defected/damaged materials
and expired material food.3. Rate is sometimes decided by the management but only FI
invoice is created in the current system.4. No quantity records available since for return also no inbound
delivery is made in the system.5. All records are maintained outside system. Only incoming
payment for scrap sales is shown in trial balance.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. Scrap sales order will be created in SAP under order type ZSCR.2. Quotation will be issued to the customer bidding high value for the
stock but outside SAP.3. According to the quotation issued, scrap sales order will be created in
SAP.4. System will assign an internal number to order. Sales order created
once will be seen under sales order list.
Gaps: A
7.3.5.2 Delivery creation
AS IS Business Process:
No delivery document is created in current system for scrap sales.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. Delivery will be created in the system.2. Internal number will be assigned to system for the delivery created.3. Delivery note print can be taken from the system.
Warehouse manager issue the material to customer and send manualreport to accounting for recording revenue.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. It can be done through delivery change mode.2. As soon as Goods Issue is posted in the system, the inventory of the
material will reduce from welfare storage location of plant.3. The system will generate a material document for the goods
delivered.4. Against this material document the system will generate the finance
document where the G/L entries will be shown in the accountingdocument.Inventory account : credit
Cost of goods sold : debit
Gaps: A
7.3.5.4 Invoice Creation
AS IS Business Process:
No invoice is created for sales of scrap material. Accountingdepartment records the revenue in FI as per records given bywarehouse manager.
Business Requirement:
As per SAP best practice.
TO BE Business Process:
1. Invoice with respect to delivery number will be created in the system.2. Internal number will be assigned to invoice saved.3. Values will be passed to accounting automatically.
Process Description Pricing Elements Dependent factors Automatic
/Manual Header/
Item
Changes allowed/not
allowed
GL A/C to be debited
GL A/C to becredited
StandardSales Pricing
1) LANKEM Price.(ZPR0)
It is mandatory .Lankem has only ONE price for the eachproduct. Condition record is maintainedfor the Price. This price is charged to theall the customer irrespective of customerclass.
Automatic Item Not Allowed Sales revenue Sales revenue
2) Discount on %basis(ZDIP) The discount is automatically given inthe sales document. Automatic Item Not Allowed Sales deductions Sales deductions
3) Discount on Fixed value basis
(ZDIV).
This is rarely given but provision is given in SAP for future requirements.
Manual Item/ Header
Yes Sales deductions Sales deductions
4) Freight(ZFRI) Currently NO Freight charged.The user will select & key in theamount as per the requirement.
Manual Item/ Header
Yes Freight Freight
5) V.A.T. (ZVAT) This is automatic as per tax code effective .
Automatic Item No V.A.T V.A.T
6) N.B.T.(ZNBT) National building tax is charged on net
value before vat and is automaticallyactive through output tax code.
Automatic Item No N.B.T. N.B.T.
7) Cost of Goods (VPRS)
The amount of the condition will be directly picked from the materialmaster.
Automatic Item No
8) Gross Profit Difference between the discounted price & the cost of goods.
Tax classification of material and customer will be the responsiblefactors in deciding taxes determination & will be maintained in taxdetermination. There will be only two types of cl ass if icat io n i.e. “0” will indicate no tax & “1 ” will indicate full t ax .
3.5.3 Tax codes One tax code for output is used forLANKEM.
Tax codes for calculation of taxes on sales will be codified in SAP in FI in the consultation with SD. Taxpercentage will be assigned to tax code.Tax code for output tax will be coded as Z0 and Z1.
Accounting document will begenerated on the base of
material Document (Cost of goods sold account Dr.,Inventory FG account Cr.)
Material document will begenerated through PGI andInventory is updated.
Requirement eliminated
Billing 8 Invoice
Creation Customer A/C Dr & all otherelements like revenue,freight, V.A.T will Cr.
All sales values,discounts, taxes,charges, freight, arecaptured from theBilling Document.
Customer Complaints 9 Customer
Returns Cost of goods sold accountCr & Inventory FG accountDr;
All sales values,recoveries, rebates,commissions, exportbenefits, any accrualexpenses like freight,insurances arecaptured from theBilling Document innegative values.
On the basis of PGRInventory is Updated.
At the time of post goodsreceipt material will bereceived in return storagelocation. An Inspection lotwill be created for returnmaterial. After inspectionmaterial will eithertransferred to finishmaterial stock if it ’s OK or material to materialtransfer will be done toconvert it in scrap.
10 Credit Memo Customer Account: CrSales Discounts Account: Dr
All credit notes postedare also updated in PA-customer wise credits
Type of Sale / Stageof Sale Inquiry Quotation Sales Order
Delivery Note (Loadingadvice)
Invoice Credit Note
Standard Sales No No No YES YES -
Cash Sales - - NO - YES -
Return Sales No No No YES - YES
Free of Charge Sales - - NO YES YES -
Scrap Sales - - NO YES YES -
Note: ABAP developments will be required to design output formats as desired. It will be considered as a separate development. Inabove chart there will be total Nine developments e.g. Quotation, Delivery note, Invoice print & Credit Memo.
Key user is hereby requested to finalise format of above print outputs within 15 days after signing of BBP document.
