SAP Procurement Overview: Master Data, Purchasing Documents & Inventory Management
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SAP Procurement Overview: Master Data, Purchasing Documents & Inventory Management
- 1. SAP OVERVIEW
- 2. Training Methodology Understanding ERP Overview of SAP Org structure Business Process Overview SAP Navigation SAP Terminology Conclusion
- 4. Presentations Hands On Exercises Handouts
- 5. An ERP system is – A unified environment – Comprising of key business and management processes, information blocks and functional areas – to deliver consistent, reliable and detailed information – to facilitate timely and quality business decisions But, beyond that it is…
- 7. Before ERPs became popular, the typical company had many specialized computer systems Each system was specified designed to serve the needs of an individual department Why ERP
- 8. One system might manage accountingAnother might control production planningA third might serve the Human Resources department Some large companies had hundreds of different systems, and many companies built custom systems from scratch to meet their business needs Why ERP
- 9. Sometimes the different computer systems didn't communicateDuplicate information had to be entered by hand in each systemThis was slow and inefficient Why ERP
- 12. SAP R/3 is an enterprise resource planning application, or ERP An ERP is an integrated information system that usually serves many departments within a company You may hear SAP R/3 called simply SAP or R/3 SAP – What, How & Why
- 13. SAP was founded in 1972 in Mannheim, Germany The name SAP is derived from the German phrase meaning “Systems, Applications, and Products in Data Processing” It is pronounced as separate letters, and not as the word “sap” SAP – What, How & WhySAP – What, How & Why
- 14. As the software was integrated information no longer had to be entered more than once Changes made in one part of the business were immediately visible to users working in other parts of the business, because the different parts of SAP's software were in constant communication Users could have better, more accurate information with less effort SAP – What, How & WhySAP – What, How & Why
- 15. ECC 60 Enterprise Edition is the latest release of the SAP system It contains many new features--the most obvious change is a new user interface that is more colorful and easier to use than that of earlier versions SAP – What, How & WhySAP – What, How & Why
- 16. Sales &Sales & DistributionDistribution SDSD MMMM PPPP QMQM PMPM HRHR FIFI COCO TRTR PSPS WFWF ISIS MaterialsMaterials MgmtMgmt ProductProduct PlanningPlanning QualityQuality MgmtMgmt Plant Mainte-Plant Mainte- nancenance HumanHuman ResourcesResources FinancialFinancial AccountingAccounting ControllingControlling TreasuryTreasury ProjectProject SystemSystem WorkflowWorkflow IndustryIndustry SolutionsSolutions ECCECC Client/ServerClient/Server ABAP/4ABAP/4
- 17. Production planning Consumption Materials requirements planning Forecasting Material Purchasing Service Procurement Goods movement Inventory management Physical Inventory Invoice verification PPPP MMMM
- 18. Quality planning Quality inspection Quality Management Information System Maintenance planning Processing maintenance orders Maintenance Information System Personnel Administration Recruitment Organization Management Payroll accounting Training Administration QMQM PMPM HRHR Module Details
- 19. FIFI COCO PSPS General ledger Accounts Receivable/ Payable Fixed Asset Accounting Budgeting/Controlling Depreciation Forecast/ Simulation/Calculation Funds Management Financial Supply Chain Management Overhead Management Activity Based Costing Product Cost Accounting Profitability Analysis Work Breakdown Structure Costs and budgeting Time scheduling Orders in the project Module Details
- 20. Device Management Energy Data Management Billing and Invoicing Customer Service FI CA (Contract Account Receivable) CRM ISUISU Quality planning Quality inspection Quality Management Information System QMQM Document Management System Environment Health & Safety OthersOthers
- 21. S U P P L I E R C U S T O M E R S A P R / 3S A P R / 3 Procurement Generation Distribution Finance and Accounting MMMM PPPP ISUISU FIFI COCO All business processes throughout the supply chain are executedAll business processes throughout the supply chain are executed in one system sharing all informationin one system sharing all information Workflow
- 23. ABC COMP A C A1 A2 CommonCommonCC C2 DD EE FF D X2X2 CZCZ AZAZX3X3 Company Code Segme nt Profi t Cent er Input/Output AvailabilityCost Cente r Import Profitabili ty Segment D1C3C1 GZGZ B B1 NZNZX1X1 Z0Z0 Import 22 33HTHT SN N SN NNZ1NZ1 Sub-zone
- 24. FINANCEFINANCE ClientClient ABC1 All Financial transactions are recorded at Company Code levelProvides a critical link to all modules in SAP ECC Company CodeCompany Code ABC1
- 25. | Sales OrganizationSales Organization ABC1 Distribution ChannelDistribution Channel Direct (10) Company CodeCompany Code Open Access (20) DivisionDivision Miscellaneous (20) DivisionDivision RAW (10) Sales Area ABC1/10/10
- 26. | Sales OrganizationSales Organization ABC1 Distribution ChannelDistribution Channel Direct (10) Company CodeCompany Code Open Access (20) DivisionDivision Miscellaneous (20) DivisionDivision RAW (10) Sales Area ABC1/10/20
- 28. Company CodeCompany Code ABC Purchasing OrgPurchasing Org ABC1 All purchasing organizations are assigned to company codes Required plants are assigned to purchasing organization Purchasing OrgPurchasing Org ABC2
- 30. Project Steps
- 31. COURSE GOALS:- UNDERSTND THE PURPOSE AND FUNCTIONS OF PROCUREMENT PROCESS USE THE BASIC PROCUREMENT PROCESS FUNCTIONALITY OF THE SAP SYSTEM
- 32. COURSE OBJECTIVES:- BASIC PROCUREMENT PROCESS,CREATE,DISPLAY, MAINTAIN MATERIAL & VENDOR MASTER CREATE,DISPALY,MAINTAIN PURCHASE REQUISITIONS, REQUEST FOR QUOTATION, CONTRACTS AND PURCHASE ORDERS VENDOR EVALUATION AND CONSUMPTION BASED PLANNING INVENTORY MANAGEMENT
- 34. Client
- 35. The client is a commercial, organizational unit within the R/3 System, with its own data and master records From a business perspective, the client forms a corporate group A client is assigned a unique three-character alphabetic, alphanumeric, or numeric key
- 37. The company code is the smallest organizational unit for which you can have an independent Accounting department for the purposes of external Accounting A company code represents an independent accounting unit, for example, a company within a corporate group (client) Balance sheets and Profit and Loss statements, required by law, are created at company code level
- 38. You can set up several company codes in one client in order to manage various separate legal entities simultaneously, each with their own balanced set of financial books A defined company code must be assigned to a client to be used in application processes A company code is assigned a unique four-character alphabetic, alphanumeric, or numeric key
- 40. A plant is an organizational logistics unit that structures the enterprise from the perspective of production, procurement, plant maintenance, and materials planning A plant can be one of the following locations: Central delivery warehouse Regional sales office Manufacturing facility Maintenance plant
- 41. A plant has the following attributes: A plant has an address A plant has a language A plant belongs to a country The plant plays an important role in the following areas: Material Valuation Inventory Management MRP
- 42. The plant is an operating area or branch within a companyThe plant is embedded in the organizational structure as follows: The plant is assigned to a single company codeA company code can have several plants Several storage locations in which material stocks are managed can belong to a plant A unique four-character alphabetic, alphanumeric, or numeric key is assigned to a plant
- 44. The storage location is an organizational unit allowing the differentiation of material stocks within a plant A storage location has the following attributes: Physical inventory is carried out at storage location level There may be one or more storage locations within a plant A storage location has a description and at least one address
- 45. It is possible to store material data specific to a storage location Stocks are managed on a quantity basis only and not on a value basis at storage location level Storage locations are always created for a plant A unique four-character alphabetic, alphanumeric, or numeric key is assigned to the storage location
- 47. A purchasing organization is an organizational level that negotiates conditions of purchase with vendors for one or more plants It is legally responsible for completing purchasing contracts A purchasing organization is assigned a unique four-character alphabetic, alphanumeric, or numeric key
- 48. A purchasing group is the business defined key for a buyer or group of buyers responsible for certain purchasing activities Internally, the purchasing group is responsible for the procurement of a material or a class of materials Externally, it is the medium through which contacts with the vendor are maintained
- 52. SAP Organization Client Company Code Plant Storage Locations Ware House
- 53. Procurement to Payment Requisition Requirements determination Requirements determination 11 Vendor selection Vendor selection33 Source determination Source determination22 Vendor payment Vendor payment99 Purchase Order processing Purchase Order processing44 Purchase Order 10 20 Order follow-up Order follow-up 55 Invoice 20 10 Invoice Verification Invoice Verification88 Basic Procurement Process Goods receipt and Inventory Mgmt Goods receipt and Inventory Mgmt 66 Quality Inspection Quality Inspection77
- 54. The typical procurement cycle for a service or material consists of nine phases: 1Determination of requirements: 2Determination of the source of supply 3Vendor selection 4Purchase order processing 5Purchase order monitoring 6Goods receipt 7Quality Inspection 8Invoice verification 9Payment processing
- 55. Unit Overview The focus of this unit will be the maintenance of the material and vendor masters, with emphasis on the impact of organizational levels on the individual records
- 56. Significance of the material master Create and maintain material master records Impact of organizational levels on material masters Create and maintain a vendor master record Impact of organizational levels on vendor masters Concept of partner roles in the vendor master
- 58. Master data contains data records that are stored in the database for a long period of time These are stored centrally used and processed on a cross-application basisThis prevents the multiple storage (redundancy) of data The material master record and vendor master record are the most important master data in the procurement process
- 59. You use an info record if you want to store information on a vendor and a material as master data at purchasing organization or plant level An info record represents a material-vendor relationship It also shows price changes affecting the material in question
- 62. Source lists contain information on which sources of supply are defined for a material in a plant within a particular periodA source of supply (vendor or outline agreement) can be selected as a fixed source of supplyYou can also block a source of supply for a material In the material master record, you can define that a material is procured only for sources of supply that are valid in the source list (source list requirement) Source list entries are taken into account in automatic source determination in Purchasing
- 65. Data at client level: General material data that is valid for the whole company is stored at client level Data at plant level: All data that is valid within a plant, and for all storage locations in it, is stored at plant level Data at storage location level: All data that is valid for a particular storage location is stored at storage location level
- 70. Data in the vendor master record is subdivided into three categories: General data: This includes the vendor’s address and bank detailsThis data is valid for the whole client Purchasing data: This includes the purchase order currency, inco terms, and the vendor’s tax dataThis data is maintained for each purchasing organizationYou can also maintain different data on a plant-dependent basis or for vendor sub-ranges Accounting data: This comprises data such as the number of the reconciliation account and the payment methods for automatic payment transactionsThis is maintained at company code level
- 73. MMMM MM FUNCTIONAL OVERVIEWMM FUNCTIONAL OVERVIEW Consumption/Sales Financial accounting Inventory management Goods receipt A B Warehouse mgmt MRP Master data Material Batches Vendor G/L accounts Customer Bin locations Invoice receipt External procurement: purchasing Internal procurement: production Goods issue Transfer posting Invoice verification
- 75. What to Procure ??????? (Answer : Material) When to Procure ??????? (Answer : Release Date & Delivery Date) How much to Procure ?????? (Answer : Quantity) Where to Procure ????? (Answer : Supplier) Advantages : Keeping stocks at optimum level… Avoid excess stocks & at the same time eliminate shortages ……
- 76. Reorder point planning ◦ Manual ◦ Automatic Forecast based planning Time-phased planning Lot Sizing (Static, Period, Optimum) Lot-for-Lot Fixed lot size Replenish to maximum stock level
- 78. Request or instruction to Purchasing to procure certain quantity of a material or a service so that it is available at a certain point in time Created either manually or automatically by Requirements Planning Release points are individuals responsible for authorizing the request Source determination
- 79. THE GRAND DESIGN !!THE GRAND DESIGN !! Requisition Requirements determination Requirements determination 11 Vendor selection Vendor selection33 Source determination Source determination22 Vendor payment Vendor payment88 Purchase Order processing Purchase Order processing44 Purchase Order 10 20 Order follow-up Order follow-up 55 Invoice 10 20 Invoice Verification Invoice Verification77 Basic Procurement Process Goods receipt and Inventory Mgmt Goods receipt and Inventory Mgmt 66
- 80. |
- 81. Subcontracting – Assembly Items Stock transfer – Plant to Plant Consignment – Water Treatment Chemical
- 84. GENERAL CONCEPTSGENERAL CONCEPTS StockStock Receipts Withdrawals Unrestricted-use Stock Stock in Quality Inspection Blocked Stock Scrapping / Sampling
- 85. Management of material stocks by qty and val Planning, data entry, documentation of all goods movements Physical Inventory
- 86. Default data from PO Updates PO and vendor evaluation Notifying procurement Different units of measure allowed Direct posting to consumption for account assigned POs
- 87. Reservations Plan goods movements for specific dates Dynamic Availability Check Goods Issues Planned / Unplanned withdrawals
- 88. Automatic Reservations Bulk materials (Back flushing)
- 89. Stock Transfers Storage location to storage location Plant to plant Company code to company code Stock Transport Order Transfer Postings Batch to Batch transfer posting Material to Material transfer posting Release from stock in quality inspection Transfer from consignment material to company stock
- 90. Vendor Special Stock Consignment Material Returnable packaging Material provided to Subcontractor Customer Special Stock Consignment Material Returnable packaging Sales Order stock Project Stock
- 91. Periodic inventory Continuous inventory Cycle Counting Inventory Sampling
- 93. Valuation area (Company or plant) Valuation class Split Valuation (Valuation categories and types) Revaluation
- 94. Standard Price All inventory postings are carried out with the std price Variances are posted to price difference accounts Price changes can be monitored Moving average price is displayed for statistical purpose Moving Average Price All goods receipts are posted with the goods receipt value Price difference postings occur in exceptional cases only Manual price changes are usually unnecessary
- 96. POSTING INVOICESPOSTING INVOICES Example Of A Simple PostingExample Of A Simple Posting Purchase Order Qnty : 50 pcs Rate : Rs2/pc Material Stock Account GR/IR Account Vendor Account 100 + 100 - 100 + 100 - GR Invoice Goods Receipt Qnty : 50 pcs Goods Receipt Qnty : 50 pcs Invoice Qnty : 50 pcs Rate : Rs2/pc Val : Rs100 Invoice Qnty : 50 pcs Rate : Rs2/pc Val : Rs100
- 98. SAP Logon Icon on your Desktop On double Clicking the SAPLogon Icon, the SAP Logon Pad will Popup on your desktop
- 99. This is the SAP Logon On ScreenYou need to enter the User name and Password
- 100. This is the command windowWe shall be making use of the command window during the entire testing to enable us to maneuver speedily between the transactions This is the main SAP ScreenOn the left hand side is the SAP Menu
- 101. This is a typical SAP screenThe exact information will vary depending on the transaction you are working on
- 102. The Menu Bar appears at the top of every SAP screenJust as with any Windows program, the Menu Bar provides access to a variety of functions within the programThese functions vary depending on the current screen
- 103. The Title Bar shows the name of the current screen Click Next to continue
- 104. The Standard Toolbar contains standard buttons that enable you to navigate through each transactionThe same buttons are present on every screenHowever, not all buttons work on all screensActive buttons are highlightedInactive buttons are grayed out The Standard Toolbar also contains the SAP Command Field
- 105. The Command Field enables you to enter special codes to quickly perform certain functions within SAP You will learn about how to use the Command Field in a later lesson
- 106. The Application Toolbar is located just below the Standard ToolbarIt contains buttons related to the specific screen and transaction with which you are workingThese buttons vary depending on the current screen Some buttons have text labels, and others are identified with icons onlyIf you are not sure what a particular button does, you can point the mouse at it without clicking, and a button label will appear
- 107. The screen body is where SAP gives transaction information
- 108. A system field is a field the system uses to display informationYou cannot change the contents of a system field
- 109. An Edit Field is a field in which you can enter or modify data
- 110. The Status Bar, located at the bottom of the SAP window, displays system messages and other session information
- 111. Messages appear hereThe status bar will flash and an icon will appear in front of the message to call your attention to it
- 112. The session status display is located on the right side of the status barThe status display can be hidden or displayed by clicking the triangle to its left
- 113. ICONSICONS The Enter button (check) signals SAP that you have finished entering information on a screenNote that pressing the Enter key on the keyboard has the same effect The Save button (floppy disk) saves the document you are working with, along with any changes you have made The Back button (left arrow) takes you to the previous screen The Exit button (up arrow) exits the current menu or transaction without saving data
- 114. ICONSICONS The Cancel button (letter X) cancels the transaction in which you are working If you have entered information, the system will ask you to confirm that you want to cancel, so that you do not accidentally lose data The Print button (printer) prints the current document, screen, or report, depending on the transaction in which you are working The Find button (binoculars) is used to search for text in the current document, report, or list The Find Again button (binoculars with a +) looks for the next occurrence of text in the current document, report, or list
- 115. The First Page button takes you to the first screen in a display list or report The Page Up button takes you to the screen before the one that you are viewing in a display list or report The Page Down button takes you to the screen after the one that you are viewing in a display list or report The Last Page button takes you to the last screen in a display list or report The New Session button (window with a *) creates a new SAP window, so that you can work on more than one task at a time ICONSICONS
- 116. The Create Shortcut button (window with an arrow) creates a shortcut icon to the current transaction on your Windows desktop The Help button (question mark) displays descriptive information about the field in which your cursor is located The Options button controls settings for SAP, including the appearance and behavior of error messages and the cursor ICONSICONS
- 117. MESSAGE ICONSMESSAGE ICONS Fatal error (program terminates) Error message Warning message Information message
- 119. A transaction is a task that you perform in SAP Any time you view a report, or create or display a document you are running a transaction
- 120. TRANSACTION CODETRANSACTION CODE Most transactions within SAP are associated with a four-character code called a transaction codeThis transaction code can be used in the command field to jump directly to a transaction without having to follow the navigation pathYou will learn how to do this in a later lesson
- 121. MASTER DATAMASTER DATA Master data is important, long-term data stored within the SAP system Vendors, customers, plant IDs, the chart of accounts, and product numbers are all examples of information that is stored as master data records
- 122. DOCUMENTDOCUMENT A document is data created in association with a particular business event or transaction Sales orders, purchase orders, material requisitions, and general ledger postings are all examples of documents stored within SAP Every document created in SAP is assigned a document number that uniquely identifies it
- 123. A create transaction is one that creates a document or master data record from scratchMost create transactions have transaction codes ending in "1"For example, the transaction code for "Create A Requisition" is ME51N CREATE TRANSACTIONCREATE TRANSACTION
- 124. CHANGE TRANSACTIONCHANGE TRANSACTION A change transaction is one that allows you to modify an existing document or master data recordMost change transactions have transaction codes ending in "2"For example, the transaction code for "Change A Requisition" is ME52N
- 125. DISPLAY TRANSACTIONDISPLAY TRANSACTION A display transaction is one that allows you to view an existing document or master data record without making changesMost display transactions have transaction codes ending in "3"For example, the transaction code for "Display A Requisition" is ME53N
- 126. POSTPOST The act of saving a document in SAP is also called posting the document
- 127. REQUIRED FIELDSREQUIRED FIELDS Some screens have edit fields for which SAP needs entries to properly process the transactionThese fields are called required fieldsYou cannot complete the screen or transaction until you have entered a valid value in each required field SAP marks required fields with a checked box, as shown
- 128. SESSIONSESSION A session is an instance of the SAP windowMultiple sessions can be opened to allow use of more than one transaction at a time
- 129. LOGGING ON & OFF Identifying yourself, and confirming your identify to SAP so you can begin working, is called logging onShutting SAP down when you are finished working is logging off
- 130. USER IDUSER ID Your User ID is the name you use to identify yourself to SAP when you log on
- 131. CLIENT A client is a self-contained unit within the R/3 System, containing separate master data and its own set of tablesThe client is selected on the initial log on screen Typically a single client is used for day-to-day business useMost SAP customers set up additional clients for development or training purposes
- 132. USER ROLEUSER ROLE A user role is a collection of transactions that together are assigned to a user so that they can perform a certain job function within SAPSeveral job roles together might be required to complete a job function
- 133. ABAP The programming language of SAP is called ABAP, short for Advanced Business Application ProgrammingAll R/3 applications are written in ABAP Many SAP clients develop custom transactions and reports using ABAPIt is an accepted standard that custom transactions are assigned a transaction code that begins with a Z