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S/4 HANA and IS-U
Implementation
SAP PM –Plant
Maintenance
28th Oct, 2020
IBM / TG Confidential

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PM Processes
2 IBM / TG Confidential
 Maintenance trigger
• Break down request
• Preventive maintenance call
 Maintenance process
• Maintenance Notification
• Work order execution
• Completion confirmation

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3 IBM / TG Confidential
Plant Maintenance
 It is important to understand the function of a PM Organization in SAP. As the maintenance execution involves several master
data, documents and interfaces to other parts of SAP, these need to be covered before you can understand how PM works in
SAP.
 Objective:
• Understand the definition of a PM Organization
• Know the different PM elements and their place in the PM execution Cycle

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External Procurement Environment
Goods / Service
Receipt
PO
Created
Invoice
Verification
Requirement
Source
Determined
Vendor
Selected
Purchase
History
Invoice
PO
Delivery
MRP
RFQ
Payment
Source List
Quota Arrangement
Outline Agreement
Info Record

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Purchasing (Purchasing Organizations Assigned to Company Codes)
External Logistics
Purchasing
Org
STP0
Plant
MON1
Plant
MEX1
Purchasing
Org
STP1
Plant
MEXT
Company
Code
T001
Company
Code
T002
Plant
TUX1
Client 100
A purchasing organisation's function is
to obtain materials/services from a
vendor on accepted terms and
conditions.
Each purchasing organisation has its
own company code, from a legal
standpoint. Processing of invoices is
carried out at this level.
More than one plant can be serviced by
a purchasing organisation. However,
both plant(s) and purchasing
organisation must have the same
company code.
The purchasing group carries out the
actual activities of purchasing. A
purchasing group for a plant is
assigned in the material master.
The activities of several purchasing
organisation's can be done by a
purchasing group

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Purchasing Documents
Quote B
Quote A
Vendor
Imports
Vendor
Domestic
Purchase
Order
Scheduling
Agreement
RFQ
Purchase
Requisition
Contract
Purchase requisition - represents a
“demand” for an item/service.
Request for quotation (RFQ) -
represents a potential “demand”
and requests specific vendors to
supply information/quotation.
Quotation - Vendor’s response to an
RFQ - used to select successful
vendor.
Purchase order - Legal contract to
obtain items/services on specified
terms and conditions.
Contract - is the buying party's
binding declaration of his intention
to purchase a material or service
within an agreed period with
agreed terms and conditions. It’s
called an Outline Agreement in SAP.
Scheduling agreement - is a type of
contract; a delivery schedule issued
under a scheduling agreement
contains precisely defined dates on
which deliveries are to be made
(schedule lines).

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 A purchasing organization is an organizational unit which procures materials and services and agrees on terms and conditions of
purchase with vendors.
 In legal terms, each purchasing organization is assigned to one company code. However, a central purchasing organization can be
created by not assigning the purchasing organization to a company code.
 The documents involved in the purchasing cycle are : purchase requisition, RFQ, quotation, purchase order, contract, and
scheduling agreement.
Purchasing Organization

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Purchasing
Purchase Requisitions
Purchasing Reviews

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 Before sending a purchase order to a supplier, it is necessary to have some internal agreement on what is required, together with
an audit trail of approvals for that requirement.
 A Purchase Requisition (PR) provides this facility and is an internal request to purchasing. Once it has been electronically signed
off, it can be used to generate a Purchase Order, which is an external request to a supplier.
 Users need to understand that a PR cannot be used for ordering from a supplier.
 Objectives:
• Understand how a Purchase Requisition (PR) is created and used
• Understand release procedures with/without classification
Purchasing- Purchase Requisition

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Purchase
Order
RFQ
Identify
Supplier
Release
Procedure
Allocate and
Process
Requisition
Planned
Order
Purchase
Requisition
Manual
Creation
MRP
Processing Purchase Requisitions
A purchase requisition is an internal request
to purchasing. You ask the buyer to provide
a certain quantity of a material or service on
a certain date.
A purchase requisition can be created
automatically by MRP or manually created.
The MRP controller can also convert a
planned order into a
purchase requisition.
Source determination is a separate function.
The buyer receives proposals if, for example,
fixed vendors or outline agreements exist for
the material.
A release procedure for purchase
requisitions can be set up. According to
certain conditions, you can determine that a
purchase requisition item can only be
approved for an RFQ or purchase order once
it has been released in sequence by certain
persons or departments.

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How to Create a Purchase Requisition
Purchase
Requisition
Purchasing
Manual
Creation
Planned
Order
MRP
A purchase requisition can be created in two ways:
Automatically as a result of an MRP run
Manually by a user department
You can see how a requisition was created by looking
at the creation indicator for the requisition line item.
(Goto Statistics General)

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Account Determination & Account Assignment Category
For manually created purchasing documents, you must
decide for each item where the costs will be
allocated. This is controlled by the account
assignment category. Thus, a purchasing document
can contain both account assigned and non-account
assigned items.
Automatic account assignment occurs for a stock
material with a material type that allows for
inventory management. At posting time, data from
the material master record determines which G/L
accounts to hit. For automatic account assignment,
the account assignment category field is left blank.
A consumable material may or may not have a
material master record. A consumable material with
a material master record would be for example, a
material whose material type does not allow for
inventory management (ex: pencils, paper, staplers,
etc.). When creating a requisition for one of these
consumable materials, you must enter something in
the account assignment category field.
When an account assignment category is specified, an
additional pop-up window appears for entering the
account assignment data.
Stock Material with
Material Master
Record
Update @ GR Time
to STOCK ACCOUNT
Receive
into
Stock
Consumable Material
with or without
Material Master
Record
?? ACCOUNT
ASSIGNMENT ??
?? ACCOUNT
ASSIGNMENT ??
Enter Account
Assignment Category
Automatic Account
Assignment from
Material Master Data
Manual Account
Assignment - User
Must Enter Account Data
Update @ GR Time
to CONSUMPTION or
ASSET ACCOUNT
Receive as Asset
or Consume
SAP Implementation at Arvind Limited

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Release Conditions
Value
Material Group
Plant
Does a Strategy Apply?
Release Indicator
Released/Blocked for Ordering
Released/Blocked for RFQ
What can the Requisition be Released to?
Release Strategy
Who is Authorised to Release?
In what Order must the
Releasing Occur?
What is the Release Indicator?
Who can do what?
Release Code
Two digit code associated with
a user ID
Who is Authorised to release?
Release Procedure

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Purchasing
Blocked
Purchase
Requisition
Individual
Requisition
Release
Single
Release
Collective (Multiple)
Requisition Release
Y N
Releasing Requisitions
One requisition can be released at a
time or else several requisitions can
be released at once.
Using Collective Release should be
exercised with caution.

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Release
Process
Scheduling
Agreement
Create Requisition
Contract
NB Purchase
Requisition
RV Outline
Agreement
Requisition
Outline Agreement Request
SAP Implementation at Arvind Limited
There are two different document types
for requisitions:
• Standard purchase requisition
(NB)
• Outline agreement request (RV)
An outline agreement request has two
special characteristics:
• The delivery date is not
significant
• You can only enter a desired
vendor as a source of supply

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SAP Implementation at Arvind Limited
Display purchase Requisition in SAP

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Purchasing
RFQ & Quotations
SAP Implementation at Arvind Limited
Purchasing

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Purchasing
RFQ & Quotation
A request for quotation (RFQ) is an invitation extended to a vendor to submit a quotation (bid)
for the supply of Materials or execution of Services.
A quotation is an offer by a vendor regarding the supply of materials or execution of services
subject to specified conditions.
Objectives:
Understand the options for creating RFQ and maintain Quotation.
Understand the preceding documents and related master data for a RFQ

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Purchasing
Structure - RFQ
Header
Contains general information on the RFQ, such as the vendor’s address
Items
Contain the total quantities and delivery dates for the materials or services specified in the
RFQ.
An item of a quotation may contain a delivery schedule made up of a number of schedule
lines in which the total quantity is broken down into smaller quantities to be delivered on
the specified dates over a certain period.

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Purchasing
Processing – RFQ
Manually
Entering all the data for the material or materials for which you wish the prices to be quoted.
Copying
Copying an existing RFQ.
Using the referencing technique
Refer the requisitions or an outline purchase agreement.

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Purchasing
Quotation Comparison
Reference quotation
Comparison of quotations within the list with a sample quotation. The system displays the
percentage deviation between each quotation in the list and the sample quotation.
Mean/minimum value quotation
Comparison based on "fictitious" quotation reflecting the average or minimum value of all
quotations.
Percentage basis
Comparison based on the percentage of each item in relation to the maximum, minimum,
or average price.
Price computations
Select the appropriate field to specify which of the following should be taken into account in
determining the comparison price:
Cash discount
Delivery costs
Effective price

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Purchase Orders
SAP Implementation at Arvind Limited
Purchasing

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SAP Implementation at Arvind Limited
Purchasing
A Purchase Order (PO) is the formal (legal) way of asking a vendor to provide certain materials or
services under certain conditions.
Objectives:
Understand the options for creating a PO
Understand the preceding documents and related master data for a purchase order.
Purchase Order

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SAP Implementation at Arvind Limited
Processing Purchase Order
Purchase Order
Create
Purchase
Requisition
RFQ
Reference
PO
Outline
Agreement
Vendor/
One-Time
Vendor
Purchasing
Info Rec
Price
Conditions
Purchase Order

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SAP Implementation at Arvind Limited
Organization of Purchase Orders
Order History
Changes
Additional
Data
Delivery
Schedule
Qty Date
Texts
Pricing
Conditions
Account
Assignment
Item Overview
Purchase Order
Header
Item Details

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SAP Implementation at Arvind Limited
Item Category in Purchase Oder
Item Category
Normal Item
Service
Subcontracting
Account Assignment
= Mandatory when material Consumable
= Optional when material Stocked
Purchase Order

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• A purchase order is a formal request to a vendor to provide certain materials or services under certain
conditions.
• All items on a purchase order must belong to the same company code.
• The purchase order history shows all transactions that have been recorded for an item.
• The item category on a purchasing document controls whether an order item:
• Requires a material number
• Requires an account assignment
• Should be kept in stock
Purchase Orders: Review
Purchasing

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SAP Implementation at Arvind Limited
Display Purchase Order in SAP

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Purchasing
Pricing
SAP Implementation at Arvind Limited
Purchasing - Price

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• The condition technique is a generic way within SAP to search for the correct ‘price’ or ‘output’
or ’Text’, etc. The components are: procedure (schema), types, access sequences, and records.
• Objectives:
• Understand the concepts of the Condition technique
• Know what are the components that make up this technique
Condition Technique in Purchasing
Purchasing - Price

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Purchasing - Price
How is Pricing Controlled in SAP?

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Pricing in Purchasing
Vendor Schema
Pur Org Schema
Purchase Order
Vendor National
Pur Org STPO
Condition Type: PB00
1. Outline Agreement
2. Info Record
(Plant Specific)
3. Info Record
Access Sequence: 0002
Pricing Procedure:
RM0000
1. Price PB00
2. Discount RA01
Condition Records
Manual Conditions
Order
Quantity: 120
Item 10 120 Pcs
PB00 Price: EUR 99
Scale
50 for EUR100
100 for EUR 99
200 for EUR 98

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Components of the Condition Technique
Procedure
Condition
Types
Access
Sequence
Condition
Records
Condition
Tables
The elements we have just discussed are the components of the
Condition Technique. The following is a summary with a brief
definition of each:
Procedure - List of all valid condition types and the rules for
processing them.
Condition Type - A condition type represents some aspect of the
pricing activities carried out in the organisation. For example, you
may have a different condition type for each type of price, discount,
or surcharge (i.e., material discount or gross price). A condition type
is associated with an access sequence.
Access Sequence - A group of condition tables set up in a particular
order. The access sequence is a search strategy which determine
the order in which the condition records database is searched to find
a valid condition record. The access sequence consists of one or
more accesses. You specify an access sequence for each condition
type for which you create condition records. You can also have a
single access sequence for different condition types.
Condition Table - A condition table defines the combination of fields
(the key) that identifies an individual condition record. A condition
table controls what prices to apply. For example, the key
combination ‘purchasing document/item’ is the table used to stor
prices in an info record.
Condition Records - A condition record is the master data used by the
system to apply the appropriate price. For example, a condition record
could be a contract, scheduling agreement, or info record.

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Output Mediums
Output
Printer EDI Fax
Purchase
Order
1 ------ ----
2 ----- ----
3 -- ------
Contract
1 ------ ----
2 ----- ----
3 -- ------
Delivery
Schedule
1 ------ ----
2 ----- ----
3 -- ------
RFQ
1 ------ ----
2 ----- ----
3 -- ------
Dunning
Reminder
1 ------ ----
2 ----- ----
3 -- ------
Purchasing documents can
be issued via various
output media.
You can either specify the
output medium
directly(manually) in the
purchasing document
or
it can be determined
automatically using the
condition technique.

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Output Message
Throughout SAP, output determination is
referred to as “message determination”.
The output determination procedure
(“schema”) is determined by purchasing
document type. The schema is made up of
condition types which represent the different
kinds of output that apply to the document.
Output condition types for a purchase order
may be, for example, a new printout of an
order, a reminder letter, or an order
confirmation request.
An output condition type controls:
The printer parameters that will be used.
(Print parameters refer to which organizational
unit will designate the printer defaults)
The layout set (print form) that will be used
Each output type is assigned an access
sequence that designates the search sequence
for a valid condition record. A condition record
is defined by a condition table (also called a
“key combination”) that lists fields from the
document for which output can be defined.
The condition record contains information
about the timing and medium of the output.
Purchasing
Document Type
Purchase Order
Vendor National
Pur OrgSTPO
Output Type: NEU
1. Document Type/
Purchasing Org./Vendor
2. Document Type
Access Sequence: 0001
Output Determination
Procedure: RM0000
1. New Printout NEU
2. Reminder MAHN
3. Ord. Confirm. AUFB
Dunning.
Condition Records
Header/Output
Output Type Partner
NEU 1 Printout LF 123
Output Medium:
1 = Printer
Send Time:
4 = Immediately

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• Pricing in SAP is controlled using the condition technique.
• When a purchasing document is created, the correct calculation schema (also called ‘pricing
procedure') to apply is determined from the vendor schema group and the purchasing organization
schema group.
Purchasing the Condition technique in Purhcasing :- Review

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• Each pricing procedure is made up of condition types which specify the type of condition to
apply, i.e., price, discount, surcharge, etc.
• Each condition type has one access sequence assigned to it. The access sequence designates
the search sequence that should be used to find a valid condition record.
• Examples of condition records for pricing in purchasing include outline agreements and info
records.
• Various output mediums can be used for purchasing documents. These include printer, EDI,
and fax.
Purchasing the Condition technique in Purhcasing :- Review

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SAP Implementation at Arvind Limited
Condition record :- Taxes Display in PO

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SAP Implementation at Arvind Limited
Condition record :- Taxes Display in PO

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Purchasing
Outline Agreements
SAP Implementation at Arvind Limited
Purchase Outline Agreements

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• Outline Agreements are longer-term purchasing arrangements with vendors regarding the supply of
materials or the performance of services.
• Objective:
• understand the application of Outline Agreements
Purchasing – Outline Agreements

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• Contracts
• Scheduling agreements
There are two types of Outline Agreements in SAP
Purchasing – Outline Agreements

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• Contracts can take the following forms:
• Quantity contracts
• This type of contract is used when the total quantity to be ordered during the
validity period of the contract is known in advance. The contract is regarded as
fulfilled when release orders totaling a given quantity have been issued.
• Value contracts
• This type of Contract is used when the total value of all release orders issued
against the contract is not to exceed a certain predefined value. The contract is
regarded as fulfilled when release orders totaling a given value have been issued.
Purchasing – Outline Agreements -- Contracts

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• Scheduling Agreements
• A form of outline purchase agreement under which materials are procured on
predetermined dates within a certain time period.
• Delivery of the total quantity of material specified in a scheduling agreement item is
spread over a certain period in a delivery schedule, consisting of lines indicating the
individual quantities with their corresponding planned delivery dates.
Purchasing – Outline Agreements – Scheduling Agreements

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Questions and Disucssion

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Thanks