SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department Industrial Information System LAB 04 & 05: Procurement Process

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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.

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department Key Slides From Last Lab

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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 Lab 04 Objectives & outcomes

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department Basics of Procurement process Organizational level in procurement processes relevant to our enterprise

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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. Basics of Procurement process

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department Basics of Procurement process Purchasing organization: It is an organizational level that negotiates conditions of purchase with vendor for various plants Purchasing group: carries out the purchasing activities Plant Specific Cross Plant Cross Company Code

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department Basics of Procurement process The Procurement Cycle in SAP

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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. Basics of Procurement process

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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. Basics of Procurement process

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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.

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department 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

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department The IDES Case The IDES organizational Structure

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department The IDES Case The IDES organizational Structure

SE 464: Industrial Information systems Most Images and inform. used in these slides are SAP © Not to be used for other than educational purposes Systems Engineering Department The Exercises lab 04 1: Purchase Order Processing Lab 05 2: Goods Receipt 3: Invoice Verification Basics of Procurement process