MMtest.ppt

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AgendaName of the section

SAP overview

Duration (hours) 6 Hrs

Objective To understand what is SAP and its various applications.

Pre-requisites • Knowledge on ERP Solution

Course Content • SAP Overview• Industry Solutions from SAP• Main Modules of SAP

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• SAP stands for “Systems, Applications and Products in data processing".

• SAP is the worlds third-largest independent software provider.

• SAP was founded by 5 former IBM employees in 1972 and head quartered in Walldorf,Germany.

• SAP is the global market leader in ERP and in collaborative and inter-enterprise business solutions

SAP Overview

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SAP overview

• Various SAP Business suite :

─ mySAP Enterprise resource planning

─ mySAP Supply chain management

─ mySAP Customer relationship management

─ mySAP Product life cycle management

─ mySAP Supplier relationship management

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SAP overview -Industry solutions from SAP

Aerospace & Defense AutomotiveBanking Defense & SecurityEngineering, Construction & Operations

High Tech

Healthcare Higher Education & ResearchIndustrial Machinery ChemicalsConsumer Products Life SciencesHigher Education & Research Industrial Machinery &

ComponentsLife Sciences Logistics Service ProvidersMedia Mill ProductsHealth Care High Tech

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SAP overview -Industry solutions from SAP (..Contd)

Mining Oil & GasPostal Services Professional ServicesPublic Sector Railways Retail TelecommunicationsUtilities Wholesale Distribution

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SAP-Overview• Small and medium business solutions

─ mySAP all-in-one─ SAP business one

• New dimension products─ Strategic enterprise management─ Advanced planer and optimizer ─ Enterprise buyer profession edition ─ Business information warehouse

• mySAP technology SAP Net weaver

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SAP-Overview• SAP R/3 main modules are

─ Financial Accounting (FI) ─ Controlling (CO) ─ Materials Management (MM)─ Sales & distribution (SD)─ Production Planning and Execution - Discrete, Repetitive, Process (PP)─ Logistics execution (LE)─ Quality Management (QM)─ Project Systems (PS)─ Plant Maintenance (PM)─ Customer Service (CS)─ Human Resources (HR)

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SAP Application Modules

SAP has several layers. The Basis System is the heart of the data operations and should be not evident to higher level or managerial users. Other customizing and implementation tools exist also. The heart of the system from a manager’s viewpoint are the application modules.

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Course Begins

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Curriculum

1. Introduction to Procurement2. Organization Structure3. Master Data

1. Material Master2. Vendor Master3. Customizing settings for master data

4. Purchasing5. Inventory Management6. Invoice Verification7. Account Determination8. Batch Management9. Physical Inventory10. Consumption Based Planning11. Standard Reports in MM12. Standard Tables in MM

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AgendaName of the section

Introduction to procurement

Duration (hours) 1 Hrs

Objective To understand the various organizational structures from legal and business transaction point of view.

Pre-requisites •Functional experience in Procurement.•Understanding of Organizational structure.

Course Content •Introduction to procurement•Internal Procurement•External procurement•Methods of procurement

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Definition

• The process of obtaining services, supplies, and equipment from a vendor is called Procurement.

• The procurement department or the purchase department within an organization manages all the purchases.

Introduction To Procurement

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Organizational levels in a procurement cycle

A client can be termed as a corporate group

A company code is a company (accounting unit) within the corporate group (client)

A plant is the manufacturing facility or branch within the company

Storage location is a area in the plant where all the materials procured for the plant gets stored. Inventory management and physical inventory is carried out at the storage location level

The Procurement activity is taken care by this department in the plant

Client

Note:- A plant can be one of the following # Central delivery # warehouse #Regional sales office #Manufacturing facility # Corporate headquarters

Company Code

Plant

Storage Location

Pur Org

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Types of Procurement

• Internal Procurement

• External Procurement

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Internal Procurement

In a company, goods movements do not only occur in the form of goods receipts and goods issues. Depending on the organization of the company and its sales policy, internal

stock transfers may also be necessary. Stock transfer with delivery is a plant-to-plant scenario. You are posting a goods issue in

plant A and a goods receipt in plant B. This type of stock transfer can only be carried out from unrestricted-use stock of the issuing plant to unrestricted-use stock of the receiving plant. In a second step, you post the placement into storage at the receiving plant. Only then is the event complete and the transferred quantity part of unrestricted-use stock.

The following are a must for internal procurement between plant to plant within the same company code.

• Creating a stock transport order in plant B• Generating a delivery in plant A• Picking the material in plant A• Posting the goods issue in the delivering plant i.e. Plant A• Posting the goods receipt in the receiving plant i.e. Plant B

The quantity posted from stock is first of all managed as stock in transit for the receiving plant. The quantity is only posted to the unrestricted-use stock of the receiving plant once the goods receipt has been posted. This enables the quantity 'on the road' to be monitored.

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Internal Procurement

You post a stock transfer from company code to company code in the same way that you post a stock transfer from plant to plant, except that both plants belong to different company codes.

During the stock transfer, two accounting documents are created in addition to the material document

An accounting document for the removal from storage at the issuing company code An accounting document for the placement into storage at the receiving company code

The following are a must for internal procurement between plant to plant between 2 different company codes.

• Creating a purchase order at the receiving plant• Creating delivery and billing documents at the issuing plant• Posting the goods receipt at the receiving plant• Posting the invoice receipt at the receiving plant

The key points in this kind of procurement is • The issuing plant enters a delivery for the stock transport order and a billing document.

This is an inter company billing document. Pricing takes place as normal. • When the goods arrive, the receiving plant posts a goods receipt for the purchase order.

The unrestricted-use stock increases and an accounting document get created. • The invoice is checked with reference to the purchase order.

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External Procurement

General cycle of activities:

Procurement

Determination of

requirement

Selection of vendors from

the vendor database

Vendor Selection and Comparison

of Quotations

PO processingPO Monitoring

Goods Receipt

Invoice Verification

Payment

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External Procurement1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control & passed on to the Purchasing department via a Purchase requisitions. You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.

2. Source Determination The Purchasing component helps you identify potential sources of supply based on old orders

and existing longer-term agreements with the vendor. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors.

3. Vendor Selection and Comparison of Quotations The system is capable of simulating pricing scenarios, allowing you to compare a number of

different quotations. Rejection letters can be sent automatically.

4. Purchase Order ProcessingThe Purchasing system takes up input data’s from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically.

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External Procurement5. Purchase Order Monitoring

The buyer can check the status of the PO i.e. if the goods or invoices have been received for a particular PO. The system checks the reminder periods you have specified and - if necessary -automatically prints reminders or expediters at the predefined intervals.

6. Goods Receipt

Goods receiving personnel can confirm the receipt of goods simply by entering the PO number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods.

7. Invoice Verification

Vendor invoices are checked for accuracy of prices and contents.

8. Payment Processing

Based on the invoice verification, the Accounts Dept / Finance Dept normally deals with vendor payments.

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Methods of Procurement

• Procurement for StockA stock material is a material that is kept in stock. These materials are kept in stock once received from the vendor. The stock of this materials keeps on increasing or decreasing based on amount of the quantity received or issued.

To order a material for stock, the material ‘must’ have a master record.

• Procurement for Direct ConsumptionWhen you procure for direct consumption, you specify the consumption purpose by entering an account assignment (for example, a cost center).

To order a material for consumption, the material ‘may’ have a master record.

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Methods of Procurement

There are 3 basic forms of external procurement supported by MM Purchasing component.

• One-time purchase orders

• Longer-term contracts with the subsequent issue of release orders

• Longer-term scheduling agreements and delivery schedules

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Forms of Procurement

• One-Time Purchase Order

You use one-time orders for materials or services that you order irregularly.You can reference a purchase requisition, RFQ, or another PO when creating a one-time order.

• Contract and Release Orders

For materials that are being ordered regularly and in large quantities, we can negotiate a deal with the vendor for pricing or conditions & record then in a contract.

In a contract you also specify the validity date.

• Scheduling Agreement

If a material is ordered on a regular basis and is to be delivered according to an exact time schedule, then you set up a scheduling agreement. This method of procurement is typically used when Just-in-Time deliveries are required from the vendor (for example, in the automobile industry).

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Curriculum




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MM Enterprise Structure

Client

Company

Plant

Purchasing Org.

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Client

• Is the Highest Legal Entity • An Independent Unit in R/3 System

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Company

• An Independent accounting unit within the client.• Each has its own P&L account and Balance Sheet

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Plant

• A unit under the company• All Operation of the company take place here (e.g. Manufacturing, sales, storage

Unit, Admin Building)

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Storage Location

• The storage location is an organizational unit that allows the differentiation of material stocks with in a plant.

• Physical Inventory is carried out at storage location level.

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Purchasing Organization

• Responsible Organizational Unit for Procuring material / Service• Procure the Material / Service for one or more plants within the company

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Purchasing Groups

• The groups which are responsible for day –to – day buying activity in the Purchasing organization

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MM Enterprise Structure

ASPL

BDC MDC

BDC1 BDC2 MDC1 MDC2

Bay11 Bay12 Bay21 Bay22 Bay31 Bay32 Bay41 Bay42

PURB PURM

PURA

CLIENT

COMPANY

PLANT

STORAGELOCATION

PURCHASE ORGANIZATION

REF PURCHASE ORGANIZATION

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Configuration – Enterprise Structure

Define here

Assign here

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Defining Organizational Elements

Client : SPRO > IMG > Enterprise Structure > Definition > Financial Accounting >

Define Company > New Entries

Company Code :SPRO > IMG > Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company Code > Copy, Delete, Check Company Code

Controlling Area :SPRO > IMG > Enterprise Structure > Definition > Controlling > Maintain Controlling Area > Maintain Controlling AreaUse Currency type : 10 & Chart of Accounts as : INT

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Defining Organizational Elements

Plant : SPRO > IMG > Enterprise Structure > Definition > Logistics General > Define , copy, delete , check plant > copy, delete , check plant

Storage Location : SPRO > IMG > Enterprise Structure > Definition > Materials Management >

Maintain Storage Loc ( w.r.t plant ) > New Entries

Purchase Organization : SPRO > IMG > Enterprise Structure > Definition > Materials Management >

Maintain Pur. Org >New Entries.

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Assigning – Enterprise Structure

• SPRO > IMG > Enterprise Structure > Assignment > Financial Accounting > Assign Company Code to Company.

• SPRO > IMG > Enterprise Structure > Assignment > Controlling> Assign Company Code to Controlling area

• SPRO > IMG > Enterprise Structure > Assignment > logistics General > Assign Plant to Company Code

• SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Co . Code

• SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Plant

• SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign Standard P.Org to Plant

• SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > Assign P.Org to Reference P.Org

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Activate Company code for Materials Mgmt

SPRO > IMG > Logistics General > Material Master > Basic Settings >Maintain Co.Code for Materials Mgmt

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Curriculum




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AgendaMaterial master Material master contains the information on all the

materials that a company procures or produces, stores or sells

Duration (Hours) 1

Objective To get familiar with Material Master

Pre-requisites •Material Master

Course content •Introduction•Material Master•Demo1_ Creation of Material master•Demo2_Customization settings

Note – Fields in red boxes are mandatory fields.

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Introduction

• What is Material Master ?• How the Material master is used in all the departments ?• How it is useful in creating PO ?

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Material Master

• Material master contains the information on all the materials that a company procures or produces, stores or sells. The material master record is a companies main source of material specific data. It is used by all components in the R/3 logistics system.

Material Master Record

Basic data

Materials planning

Stocks in Plant/ stor Loc

Accounting

Storage

Warehouse Mgmt

Purchasing

S & D

Work scheduling

Quality management

Forecasting

Classification

Material Master Data

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Material Master

• Integration of all material data in a single database , prevents the problem of data redundancy. Data contained in material master record is required for many functions with in the R/3 logistics system, for example:• Purchasing data for ordering • Inventory management data for posting a goods movements and

managing physical inventory.• Accounting data for material valuation.• MRP data for material requirements planning.

• Each department in company has it’s own view in material master• Some material is valid for all organization levels, while some is valid only for

certain levels.• Data at client level • Data at plant level• Data at storage location level

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Maintain a material master record: screens

• When creating or editing a material master data, you go through a number of screens.

From initial screen you go to two successive dialogue boxes . In the first dialogue box, you specify the view you want to process. In second you specify the relevant organizational levels. You then go to the data screens.

• You can change the standard screen sequence by changing the default values

Material Master

Material

(Industry sector) (Material type)

Organizational levels - Plant -Storage location -………..

Selective views - Basic Data - Purchasing - - Accounting

Data screens

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Material type

• Materials with the same basic attributes are grouped together and assigned to a material type. This allows you to manage different materials in a uniform manner in accordance with your company's requirements. Examples of material types are given in the graphic below

Material type

Number assignment

Procurement type

Field selection

User departments

Account determination

..............

Control

Raw materials

Semi finished

Finished products

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Industry sector

• Like material type, the industry sector has a control function in SAP R/3 • When you create a material master record, the industry sector defines.

• which screens are displayed and in which order• which industry specific fields are displayed in each screen• Industry sector you assigned to material cannot be changed latter.

• In customizing , you can define new industry sectors and maintain field reference for field selection control according to your company- specific requirements.

Industry sector

Selection Screen

ControlField selection

Raw materials

Operating suppliers

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Material Type

Material type controls :• The type of number assignment (internal or external).• The permitted number range interval.• Which screens are displayed and in which order.• Which user-department-specific data (view) is suggested for entry.• Which procurement type is permitted for a material; that is, whether the material

is produced in-house, procured externally, or whether both options are allowed.

• Along with the plant, the material type determines a material's inventory management requirement; that is, whether the system updates quantity changes in the material master record or updates changes in value in the stock accounts in Financial Accounting.

• The material type also determines which accounts are posted when a material is posted to stock or leaves the warehouse.

• Various material types are provided in the standard SAP R/3 System. If your company needs additional material types, you can define these in Customizing according to your requirements

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Unit of measure

• In addition to the base unit of measure the system uses for stock keeping unit and to execute all its calculations, other departments use their own unit of measure. For example Purchasing can use another unit of measure to sales and distribution or to the warehouse.

• Base unit of measure: stock keeping unit. All the other unit

of measure that you use, are converted to base unit of measure. You must enter the conversion factor for the unit of measure in the material master.

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Purchasing data in material master record

In the Purchasing view of the material master • Source list requirement• Quota Arrangement usage• Automatic PO• Other additional details as might be needed based on specific

functionality as currency, etc

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Valuation class

• You can use the valuation class to Combine the materials for assigning G/L accounts so that you do not have to manage a separate stock account for each material.

• You maintain the valuation class in accounting view of the material master record. The valuation class allowed for a material depends on the material type and can be configured in customizing.

Valuation class

Valuation class

Valuation class 1

Valuation class 2

Material type 300000

300100

Accounting 1

Material Master

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Material Valuation procedures

Material valuation

Price control( In material master )

“ S “ Standard price

“ V “ Moving average price

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Price Control

• Valuation of goods receipts depends on the price control procedure you set in the material master record. In the R/3 System, material valuation can be carried out according to the moving average price procedure (V price) or the standard price procedure (S price).

• In the standard price procedure (price control “S”), the system carries out all stock postings at a price defined in the material master. Variances are posted to price difference account

• In the moving average price procedure (price control “V”), the system valuates goods receipts with the purchase order price and goods issues with the current moving average price. The system automatically calculates the latter upon every goods movement by dividing the total value by the total stock quantity. Differences between the purchase order price and the invoice are posted directly to the relevant stock account if there is sufficient stock coverage.

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Demo1_Create Material MasterObjective To create a Material Master

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Demo1_Create Material MasterObjective Selective views for creating material master

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Demo1_Create Material MasterObjective To maintain the data in Basic data1 view

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Demo1_Create Material MasterObjective To maintain the data in Purchasing view

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Demo1_Create Material MasterObjective To maintain the data in Accounting1 view

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Demo2_Cutomizing settingsObjective To create Purchasing group, purchasing Value key…etc

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Important T – Codes in Material Master

• MM 01 - Create Material Master• MM02 - Change Material Master• MM03 - Display Material Master• MM 17 - Mass Maintenance• MMAM - Change Material Type• MM11 - Schedule creation of Material Master• MM50 - Extend the material view(s)

Once material masters are created from one plant same can be extended to other plants using T- Code MM 01.

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Curriculum




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Agenda

Vendor Master The vendor Master record contains all the information about the vendor that is needed to be able to conduct business with them.

Duration (hours) 1

Objective To get familiar with Vendor master

Pre-requisites N.A

Course content • Introduction• Concept• Important Data for Vendor Master.• Demo1_Customizing Settings• Demo 2_Creation,Change and display of vendor master

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Introduction

• What is meant by vendor master ?

• How is it useful in purchasing?

• How is your organization maintaining this master record?

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Concept• All the relevent data on vendors is managed in Vendor master records that is

specifically related to purchasing. It contains information about external suppliers like vendor’s name and address as well as data such as :

- General data

- Accounting data

- Purchasing data

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Account Group

– When creating a vendor master record, you must specify an account group. The account group determines :

– The type of number assignment.– Whether or not a one time vendor is involved.– Which fields screens contain and whether entries in these fields are mandatory

or optional.

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Partner Function

A vendor can take up different roles depending upon the requirement.these roles are called Partner roles or partner Function. some of the roles are given below:

– Ordering address– Supplier of goods– Invoicing party– Payee

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Demo1_Customizing Settings• Define Account group• Define Number Ranges• Define the term of payment• Define the Partner function• Define the Partner schemas

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Demo1_Customizing SettingsObjective To create an account group

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Demo1_Customizing SettingsObjective To define Number Ranges

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Demo1_Customizing SettingsObjective Assign vendor Account group to number ranges.

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Demo1_Customizing SettingsObjective To Define Terms of payment

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Demo1_Customizing SettingsObjective Define Partner function

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Demo1_Customizing SettingsObjective Define partner determination procedure for schema.

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Demo1_Customizing SettingsObjective Define partner function in schema.

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Demo2_Creation of vendor masterObjective To create a new vendor

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Demo2_Change of vendor masterObjective To change a Vendor master.

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Demo2_Display of vendor masterObjective To display a master record.

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Curriculum




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Customizing settings for material masterCustomizing settings for material master

Customizing the Material Master, according to our business requirement.

Duration (Hours) 1

Objective To get familiar with customizing settings with material master

Pre-requisites •Material Master

Course content •Introduction•Concept •Demo1_ Customizing settings for Material Master

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Introduction

What is customizing settings for material master ?

How is it useful for end users ?

How does it satisfy company’s own business requirement ?

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Concept

• Customizing settings for material master, we can customize fields according to the business requirements. Most cases standard SAP providing is enough, but some case you need to customize( i.e your own industry sector, material type, no ranges….. ).

• We can restrict the material number length

• When ever you are creating a Material , if u select you select your own material type and industry sector, it will display the selective views required views for our material( i.e., what we have customized )

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Demo1_Cutomizing settings for Material Master

Objective Material number length – Material

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Objective To create Industry sector

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Objective To create Material type

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Objective To maintain a number ranges

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Objective To copy the standard screen sequence to own

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Objective To assign the screen sequences to material type and industry sector

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Curriculum




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Agenda

Purchase requisition

This component use to give notification of requirements of materials and/or external services and keep track of such requirements.

Duration (Hours) 1 Objective To get familiar with PR

Pre-requisites Material Master, Vendor Master

Course content •Introduction•Concept•Demo1_Customizing Settings•Demo2_Creation of PR•Change of PR


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Introduction

• Define Purchase Requisition

• What are the procurement types exist?

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Concept

• A purchase requisition is a request to Purchasing to procure a certain quantity of a material or a service so that it is available at a certain point in time.

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Purchase Requisition

• Requisitions can be created

• Directly • Indirectly

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Purchase Requisition

• PR contains number of Items, for each of which a procurement type is defined.

• Following procurement type are exist.

• Standard• Subcontracting • Consignment • Stock Transfer• External Service

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Concept

• Changing a Purchase Requisition• If the requisition has already had a PO issued against it then it is required to

inform the purchasing group• If the requisition has been approved then changes are only possible to a

limited extent and may themselves be subject to approval• If the requisition was created by Materials Planning then you may not be

able to change the requisition or it is require to notify the materials planner before making any changes.

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Demo1_Customizing Settings

• Define Document Types

• Define Number Ranges

• Define Screen Layout at Document Level

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Demo1_Customizing SettingsObjective To create different document types for PR

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Demo1_Customizing SettingsObjective To assign Number ranges to a document type

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Demo1_Customizing SettingsObjective Define Screen Layout at Document Level

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Demo2_ Create Purchase RequisitionObjective To create a Purchase Requisition

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AgendaRequest For Quotation This tool is used to manage and compare requests for

quotation (RFQ) issued to vendors and the quotations submitted by the latter in response to them.

Duration (Hours) 1

Objective To get familiar with RFQ/Quotation

Pre-requisites •Material Master, Vendor Master, Purchase Requisition

Course content •Introduction•Concept •Demo1_ Creation of RFQ •Demo2_Maintaining a Quotation and Price comparison•Demo3_Customization settings


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Introduction

• What is a quotation?

• What is RFQ ?

• What is the difference between the two?

• What is the process of vendor selection in your organization?

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Concept

• Request For Quotation (RFQ) is an invite made to a vendor by purchasing organization to submit a quotation for the supply of goods or service performance.

• A quotation is a reply by a vendor to a purchasing organization related to the supply of goods or service performance subject to specified conditions.

• Price Comparison is the process of comparing the prices for all the quotations received from vendors.

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Demo1_Creation of RFQObjective To create an RFQ

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Demo1_Creation of RFQObjective To create a RFQ

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Demo2_Maintaining the quotationObjective To maintain a quotation

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Demo2_Maintaining the quotationObjective Price comparison of quotations

Vendor1 is ranked as 1st (green highlight) and can

be selected for further processing

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• Define Document Types

• Define Number Ranges

• Define Screen Layout at Document Level

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Demo3_Customizing SettingsObjective To create different document types for RFQ

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Demo3_Customizing SettingsObjective To assign Number ranges to a document type

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Demo3_Customizing SettingsObjective Define Screen Layout at Document Level

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AgendaSource list Source list specifies the possible sources of supply for a material

over a given period of time

Duration (hours) 1

Objective To get familiar with Source list

Pre-requisites •Material master•Vendor master

Course content • Introduction• Demo 1_Source list


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Introduction• What is meant by source list ?

• How does your organization maintain this master record ?

• Source list specifies the possible sources of supply for a material over a given period of time. It shows the time period in which a material may be ordered from a given vendor or under a certain long-term purchase agreement.

• Source list is used in the administration of source of supply.

• Source list can be created manually or generated automatically.

• Source list you can be copied from one plant to another plant

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Demo1_Source listObjective Maintain a source list – ME01

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Demo1_Source listObjective Material Master settings for Source List

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Demo1_Source listObjective Source list requirement at plant level

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AgendaInfo record Purchasing info record contains the concise information on a

vendor and the material( i.e., the vendors current price is stored in the info record )

Duration (Hours) 1

Objective To get familiar with info record

Pre-requisites •Material master•Vendor master

Course content •Introduction•Demo 1_inforecord•Demo 2_inforecord•Demo 3_inforecord


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Introduction• What is meant by info record?

• How is your organization maintaining this master record?

• How is it useful in purchasing?

• The purchasing info record ( Info record )contains the information on a specific material and vendor supplying the material, For example, the vendor's current pricing is stored in the info record.

• Info records can be created at purchasing org / plant level or Purchasing organization level.

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Introduction

• When you create a purchase order, the system searches for info record for purchasing organization/plant combination. If there in no record for this combination, the system searches for purchasing organization only.

• You can maintain info record manually or automatically from quotations, purchase orders or outline agreements.

• Info record can be maintained for different procurement types • Standard • Subcontracting • Pipeline • Consignment

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Demo 1_ Info recordObjective To create an Info record – Purchasing org / Plant level

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Demo 2_ Info recordObjective To create an Info record at Purchasing Organization level

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Demo 2_ Info recordObjective To create an Info record at Purchasing Organization level

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Demo2 _ Info recordObjective To Create an Info record at Purchasing Organization level

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Demo3 _ Info recordObjective Info Update in quotation

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Demo3 _ Info recordObjective Info Update in Purchase order

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Demo3 _ Info recordObjective Info Update in contract ( Outline agreement )

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AgendaPurchase Order A purchase order is a formal request to a vendor to supply or

provide goods or services at a certain point of time with certainquantity.

Duration (Hours)

1

Objective To get familiar with purchase order.

Pre-requisites Material master, Vendor master

Course content •Concept •Important Data for Purchase order •Process Flow•Demo1_Purchase order Creation s•Demo2_Customization


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Concept

• It represents the formal and final confirmation to the vendor to supply material or service.

• Its an external document created with ref to PR / RFQ/PO/Outline agreement by the Purchasing group as per the agreed terms & conditions.

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Important Data for Purchase order • Prerequisites required for maintaining purchase order are as follows.

Header data Item data

VendorOrder(doc.) typePurchase organizationPurchase groupCompany codeThe terms of payment

Material no.Plant no.QuantityDelivery datePrice

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• Item category • Item category controls the procurement process and defines whether an

item requires material number, account assignment, goods receipt, and/or invoice receipt.

• Standard Item categories• Standard • Subcontracting • Third Party • Consignment • Stock Transport Order

Important Data for Purchase order

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Important Data for Purchase order• Account Assignment Category

• It determines the nature of account assignment and accounts to be charged when the incoming invoice or goods receipt is posted.

• Standard Account assignment categories :

• Asset• Order• Production Order• Cost Center• Project• Unknown• Sales order

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Document type

• The purchasing documents are differentiated via document type, also determines which is the relevant number ranges and which field should be offered during maintenance purposes.

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Process flow

Purchase Order

With ref.to PR With ref. to Outline Agree. With ref.to RFQ

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Demo1_Creating a Purchase OrderObjective To create a Purchase Order

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• Define document type• Define number ranges• Define screen layout• Set tolerance limit for price variance

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Select the document Type(NB)

Objective To Define the document type purchase order document.

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Demo2_Customizing SettingsObjective To Define the number ranges for purchase order document.

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Select the field ME21And double click.

Demo2_Customizing SettingsObjective To change the screen layout for Purchase Order

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Marked the check box asPer requirement

Objective To change the screen layout for Purchase Order

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Click on radio buttonAs per requirement And enter the% also

Objective To change the tolerance settings

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AgendaOutline Agreement This component can be used to enter into longer-term

purchasing arrangements with vendors regarding the supply of materials or the performance of services.

Duration (Hours) 3

Objective To be familiar about Outline agreement

Pre-requisite Vendor MasterMaterial MasterPurchase Order

Course content • Definition of Outline Agreement• Contracts• Scheduling Agreement • Demo1_Creation of Contracts• Demo2_Customizing Settings for Contracts• Demo3_Creation of scheduling agreements• Demo4_Customizing Settings


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Outline agreement

• In the R/3 System, an “outline agreement” is a longer-term purchase agreement concerning the supply of goods or the services performance according to predetermined conditions. These are valid up to a certain period of time and cover a predefined total purchase quantity or value.

• In SAP outline agreements are again subdivided into the following categories

• Contracts• Scheduling agreements

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Definition

• Structure of an Outline Agreement

• Document header: It contains information relating to the entire agreement. For example, the vendor information and header conditions are in the document header.

• Items: It contains the information specific to the relevant material or service. • Quantity or price of the item • Conditions, such as quantity discounts and surcharges

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Contracts

A contract is a type of Outline agreement between the company and the vendor for a agreed material or service which can be issued as and when required during a certain overall time frame.

There are two types of Contracts • Quantity contract• Value contract

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Contract

You can also set up corporate buying contracts with your vendors.• Plant contract/Centrally agreed contract

Contract 1 Contract 2

Plant 1 Plant 2 Plant 3

• Distributed contracts are centrally agreed contracts that are made available to other R/3 Systems for the purpose of issuing release orders against them.

Date post:	13-Feb-2016
Category:	Documents
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