Industrial Information System

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Industrial Information System

• LAB 04 05 Procurement Process

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Key Slides From Last Lab

• Some Terminologies
• Master Data
• Data that remains unchanged for an extended
  period of time (in contrast to transaction data).
  Contains info that is used in the same way for
  similar objects. Examples are suppliers (name,
  address and banking information), materials,
  customers.

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Key Slides From Last Lab
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Lab 04 Objectives outcomes

• Part 1 Procurement Process Objectives
  outcomes
• Get familiarized with the basic functionality of
  Procurement process in SAP.
• Create display and maintain purchase
  requisitions, purchase orders etc.
• Create display and maintain material and vendor
  masters and list the required organizational
  levels

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Basics of Procurement process

• Organizational level in procurement
  processesrelevant to our enterprise

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Basics of Procurement process

• Organizational level in procurement processes
• Client From business perspective it is a
  corporate group
• Company code It the smallest organizational unit
  that can have its own independent accounting
  department within external accounting
• Plant It is an organizational logistic unit that
  structures an organization from the perspective
  of procurement, production, plant maintenance an
  materials planning
• Storage location It is an organizational unit
  that allows the differentiation and physical
  storage of material stocks within a plant.
  Inventory management is carried out here.

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Basics of Procurement process

• Organizational level in inventory management

• Unique three digit client code
• 4 digit alphanumeric code for a company
• Each company having its own organizational
  structure

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Basics of Procurement process
Plant Specific

• Purchasing organization It is an organizational
  level that negotiates conditions of purchase with
  vendor for various plants
• Purchasing group carries out the purchasing
  activities

Cross Company Code
Cross Plant
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Basics of Procurement process

• The Procurement Cycle in SAP

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Basics of Procurement process

• The procurement cycle in SAP
• Determination of requirements The user
  (department) can manually pass a requirement for
  materials to the Purchasing department via a
  purchase requisition.
• If you have set a MRP procedure for a material in
  the material master, the R/3 System automatically
  generates a purchase requisition.
• Determination of the source of supply SAP helps
  the buyer determine possible sources of supply.
• You can use this to create requests for quotation
  (RFQs) and then enter the quotations. You can
  also access existing purchase orders and
  conditions in the system.
• Vendor selection The system simplifies the
  selection of vendors by making price comparisons
  between the various quotations. It automatically
  sends rejection letters.

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Basics of Procurement process

• The procurement cycle in SAP
• Purchase order processing The facilitated data
  entry.
• Purchase order monitoring The buyer can monitor
  the processing status of the purchase order
  online at any time.
• The system also supports reminder procedures.
• Goods receipt The system compares the goods
  receipt quantity with the purchase order
  quantity.
• Invoice processing
• Invoice verification Vendor invoices are checked
  for accuracy of prices and contents.
• Payment processing Financial Accounting normally
  deals with vendor payments.

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Basics of Procurement process

• The PO (purchase order)

• A purchase order is a formal request to a vendor
  to supply certain goods or services under the
  stated conditions
• Purchase orders can be created with or without
  reference to a purchase requisition, a request
  for quotation, or another purchase order.
• A purchase order can be sent to a vendor or carry
  out a stock transport order in another plant
  belonging to your company or group
• With a stock transport order the associated
  freight costs is considered

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Basics of Procurement process

• The Goods Receipt

• When a goods receipt is posted to the warehouse,
  the system creates a material document containing
  information such as the material delivered and
  the quantity delivered.
• The system also records the storage location in
  which you place the material into stock in the
  plant concerned.
• In transactions relevant for material valuation,
  the system creates at least one accounting
  document, which records the effects of the goods
  movement on the value of the stock.

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Basics of Procurement process

• Invoice Processing

• The procurement process is concluded by the
  invoice verification process, during which
  invoices and credit memos are entered and the
  contents and prices are checked for accuracy.
• If there are discrepancies between the purchase
  order or goods receipt and the invoice, the
  system warns the user, and depending on how the
  system is configured, blocks the invoice for
  payment

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The IDES Case

• The IDES organizational Structure

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The IDES Case

• The IDES organizational Structure

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Basics of Procurement process

• The Exercises
• lab 04
• 1 Purchase Order Processing
• Lab 05
• 2 Goods Receipt
• 3 Invoice Verification