The Procurement Process Chapter 4 1 Magal and Word | Integrated Business Processes with ERP Systems...
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- Slide 1
- The Procurement Process Chapter 4 1 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
- Slide 2
- Learning Objectives 1. Describe the major organizational levels
associated with the procurement process. 2. Discuss the four basic
categories of master data that are utilized during the procurement
process. 3. Explain the key concepts associated with the
procurement process 4. Identify the key steps in the procurement
process and the data, documents, and information. 2 Magal and Word
| Integrated Business Processes with ERP Systems | 2011
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- Learning Objectives (Continued) 5. Effectively use SAP ERP to
execute the key steps in the procurement process 6. Utilize SAP ERP
to extract meaningful information about the procurement process 3
Magal and Word | Integrated Business Processes with ERP Systems |
2011
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- A Basic Procurement Process Magal and Word | Integrated
Business Processes with ERP Systems | 2011 4
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- Outline Organizational data Master data Key concepts Process
Reporting 5 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- Organizational Data Client Company code (CC) Plant Storage
location (S Loc) Purchasing organization (P Org) Purchasing group 6
Magal and Word | Integrated Business Processes with ERP Systems |
2011
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- Plant Many definitions or uses. A location That holds valuated
stock (for distribution) Where production planning is carried out
Where products and services are created That contains service or
maintenance facilities Factory, warehouse, distribution center Can
be assigned to one CC only A CC can have many plants 7 Magal and
Word | Integrated Business Processes with ERP Systems | 2011
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- Storage Location A place, within a plant, where materials are
stored Areas designated for different types of material (raw
material, work-in-process, finished goods) More sophisticated
divisions including storage bins, cabinets, trays A plant must have
at least one storage location A storage location can belong to only
one plant 8 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- GBI Storage Locations 9 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Purchasing Organization Identify and select vendors Negotiate
general conditions of purchase and contracts for one or more plants
or companies. Determine pricing conditions Typically three models
for Purchasing Organization Enterprise-Level Company-Level
Plant-Level 10 Magal and Word | Integrated Business Processes with
ERP Systems | 2011
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- Enterprise-Level Purchasing Organization Also known as
cross-company code model One Purchasing Organization assigned to
all CC in a client Purchasing for all plants across all CC Highly
centralized corporate Purchasing Org 11 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Enterprise-Level Purchasing Organization 12 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Company-Level Purchasing Organization Also known as cross-plant
model Different Purchasing Organizations are assigned to each CC
Purchasing for all plants in one or more CC 13 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Company-Level Purchasing Organization 14 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Plant-Level Purchasing Organization Also known as
plant-specific model Each plant has its own Purchasing Organization
Highly decentralized 15 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Plant-Level Purchasing Organization 16 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Reference Purchasing Organization One centralized Purchase Org
for high-level decisions across the enterprise Multiple CC-specific
and plant-specific Purchase Org 17 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Purchasing Group A buyer or group of buyers responsible for
certain materials or groups of materials Can be internal to the
company or external Decide to purchase land, but use a realtor
(external purchasing group) to execute the purchase Not assigned to
or related to purchasing org 18 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Master Data Material Master Vendor Master Purchasing info
record Conditions 19 Magal and Word | Integrated Business Processes
with ERP Systems | 2011
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- Material Master Data needed to execute transactions related to
materials (along with org data) Data are grouped by different user
areas (views) Data are specific to (defined for) for different
organizational levels 20 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Material Master Views Basic data Purchasing Accounting
Forecasting Sales Plant / Storage Work Scheduling MRP
Classification Warehouse Management 21 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Material Master Views Basic data Description, unit of measure,
weight, material group Purchasing Purchasing group, GR processing
time, delivery (under / over) tolerances Accounting Currency,
valuation class (link to G/L), price control (moving price,
standard price, future price) Plant / Storage Storage requirements
(hazard, temperature, etc.) Shelf life Weight, volume 22 Magal and
Word | Integrated Business Processes with ERP Systems | 2011
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- Material Master - Views Views for other processes Forecasting
(Material Planning process) Sales (Fulfillment process) Work
Scheduling (Production process) MRP (Production process)
Classification (PLM process) Warehouse Management (WM process) 23
Magal and Word | Integrated Business Processes with ERP Systems |
2011
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- Material Master - Views Different material types have different
required views Examples: Raw material: no sales view Finished
Goods: no purchasing view Trading goods: no production related
views 24 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- Material Master Org Levels Defines the level at which the
master data is maintained Can have different data for different
combinations of Org data Purchasing: Plant, storage location Sales:
Sales Area (Sales Org, Distribution Channel) Warehouse: Warehouse
#, storage type Example: SHRT1000 + MI00+ TG00 SHRT1000 + SD00+
TG00 SHRT1000 + US00 + Wholesale channel SHRT1000 + US00 + Internet
channel 25 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- Demo 4-1: Review Material Master Review some of the data
included in a material master. Magal and Word | Integrated Business
Processes with ERP Systems | 2011 26
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- Vendor Master Data needed to do business with vendors Data
needed to execute transactions related to vendors (along with org
data) Data are specific to (defined for) different organizational
levels. The three segments are: Client level data (General) Company
code level data (Accounting) Purchasing organization level data
(Purchasing) 27 Magal and Word | Integrated Business Processes with
ERP Systems | 2011
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- Vendor Master Segments 28 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Data in the Vendor Master 29 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Vendor General Data Client-level data Valid across all CC in a
client Examples Name, Address Communication (phone, fax) Search
term 30 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- Vendor Accounting Data Company code specific data Valid for the
entire company code across purchasing areas Examples Account
information Bank information Reconciliation account Payment terms
and methods Communication (dunning) 31 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Vendor Purchasing Data Separate for each Purchasing
Organization Applies to the specified Purchase Org Examples Partner
functions (vendor, invoicing party, payment recipient) InCoTerms:
defines responsibilities and costs of shipment Freight, insurance,
customs clearance, locations 32 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Demo 4-2: Review Vendor Master Review some of the data included
in a vendor master. Magal and Word | Integrated Business Processes
with ERP Systems | 2011 33
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- Purchasing Info Record Relates vendors and materials. One info
record per combination of vendor and material (or material group)
General data Conditions: pricing, discounts, free goods (current
and future) Vendor data Texts (notes) 34 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Purchasing Info Record Magal and Word | Integrated Business
Processes with ERP Systems | 2011 35
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- Purchasing Info Record Magal and Word | Integrated Business
Processes with ERP Systems | 2011 36
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- Conditions Pricing Conditions Gross price Discounts and
surcharges Freight / shipping Obtained from Purchasing info records
Contracts and agreements Other sources 37 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Demo 4-3: Review Purchasing Info Records Magal and Word |
Integrated Business Processes with ERP Systems | 2011 38 Review
data in a purchasing info record.
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- Key Concepts Item categories Account determination Stock
type/status Goods movement 39 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Item Categories Defines the process used to procure the item
Categories Standard Subcontracting Components provided; finished
product received Consignment Liability only when withdrawn from
stock Service Stock transfer Third party order Ship to third party;
bill to us (drop shipment) 40 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Demo 4-4: Review Item Categories 41 Magal and Word | Integrated
Business Processes with ERP Systems | 2011 Review various item
categories used in the purchasing process.
- Slide 42
- Account Determination Which GL account to assign to PO? Defined
in material master (valuation class) Account assignment categories
Used when purchasing material without material master Assets,
Production Order, Cost Center, Sales, Order, Project Automatic GL
account determination based on category 42 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Purchase for Stock vs. Consumption Magal and Word | Integrated
Business Processes with ERP Systems | 2011 43
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- Stock Types / Status Based on usability of material
Unrestricted use In quality inspection Blocked stock (damaged,
unusable; wrong delivery) Stock in transit 44 Magal and Word |
Integrated Business Processes with ERP Systems | 2011
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- Goods Movement A transaction that causes a change in stock
(value or status) Categories of Goods Movement Specific Movement
types 45 Magal and Word | Integrated Business Processes with ERP
Systems | 2011
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- Structure of a Material Document Magal and Word | Integrated
Business Processes with ERP Systems | 2011 46
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- Demo 4-5: Review a Material Document Magal and Word |
Integrated Business Processes with ERP Systems | 2011 47 Review
data included in a material document.
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- Goods Movements Goods Receipt From vendor or production process
Increase in quantity and value of stock Goods Issue To sales order
or internal consumption Decrease in warehouse stock Stock Transfer
Physical movement of material between storage locations Sloc to
Sloc Plant to Plant CC to CC 48 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Goods Movements Transfer Posting Results in a change in
material status In-quality inspection/ blocked/ unrestricted use
One material type to another May or may not include a change in
location (Sloc, plant) 49 Magal and Word | Integrated Business
Processes with ERP Systems | 2011
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- Demo 4-6: Review Goods Movements and Movement Types Magal and
Word | Integrated Business Processes with ERP Systems | 2011 50
Review various goods movements and movement types
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- A Detailed Procurement Process 51 Magal and Word | Integrated
Business Processes with ERP Systems | 2011
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- Process Steps Trigger Data Task details Outcomes 52 Magal and
Word | Integrated Business Processes with ERP Systems | 2011
- Slide 53
- GBI Story Inventory of t-shirts (SHRT1000) is low (