1. BRITE Procurement Fundamentals

2. 2 Course Description During this course, you will learn how the implementation of the BRITE Procurement process will change, and how it will improve the way business is conducted in SBBC. You will also be introduced to some basic SAP Procurement structures and vocabulary. Professional Development Budget Payroll Human Resources Finance Enterprise Management Information Enterprise Resource Planning Operations

3. 3BRITE Procurement Fundamentals Course Objectives After completing this course, you will be able to:  Explain the “To-Be” (future SBBC SAP) business processes  Describe the SBBC SAP organizational structure  Describe the use of Master Data in SAP  Explain the use and structure of various purchasing documents in SAP  Describe functions that are executed after the procurement process is complete

4. 4BRITE Procurement Fundamentals Key Purchasing Terms Purchasing Organization An organizational unit within purchasing responsible for the procurement of goods and services (will always be SBBC) PlantLocation where goods are received Purchasing Group A letter code used to identify a specific person (buyer) responsible for the purchase of goods and services

5. 5BRITE Procurement Fundamentals Terms Glossary SBBC TermSAP Term Approval ProcessRelease Strategy (A set of business rules used to evaluate a requisition line item to determine the type of approvals needed before it can be released to Procurement) Approval Status (RAI)Release Status (The list of approvals a requisition has received and any still required) Budgetkeeper or Bookkeeper (The person who ordered goods/materials) Requisitioner (New Role) (The person who creates a requisition) Line of CodingAccount Assignment (When creating an SAP requisition, account assignment means charging the goods and/or services to a specific cost center and G/L account) Warehouse, Stockroom and grouping of Schools/Departments Plant (Anywhere stock is managed or valued material is kept) Warehouse W Number; Textbook Item Number; Stockroom Stock Number Material Number (A unique identifier for an item number)

6. 6BRITE Procurement Fundamentals Key Improvements: Need to Receipt Current StateFuture State Items maintained in multiple systems  One central location/database for all materials used  Material data is entered by Data Strategy Group only  Material data is consistent with no duplication Vendor creation is done by A/P and Purchasing department; vendor grouping is manually assigned  Centralized vendor creation with identifiable vendor types  Usage of partner functions to link vendors with same parent company  Consistent data with no duplication Separate transactions are used for internal and external requisitions  Internal and external requisitions will use the same system and same transaction Future State Current State For those who already do purchasing, this is an overview of the changes coming.

7. 7BRITE Procurement Fundamentals Key Improvements: Need to Receipt Current StateFuture State Select items requires system receipt  Materials, with very few exceptions, will require system receipt in both schools and departments  Goods receipt required for invoice payment Attached lists were widely used for purchases  Electronic attached lists allowed for purchases of 25 non asset line items or more in one requisition  Purchases of 24 line items or less will require itemization  Provides better data collection of purchasing history  Allows for electronic record of attached materials list  No goods receipt, signed invoice for payment processing Future State Current State For those who already do purchasing, this is an overview of the changes coming.

8. 8BRITE Procurement Fundamentals Key Improvements: Need to Receipt Current StateFuture State Catalog Content Manager currently doesn’t exist  Catalog Content Manager allows “point and click” selection of materials to be purchased  Facilitates selection of materials on contract  Automatically populates requisitions once material is selected Primary approvals are automatically routed, secondary approvals are handled manually  System automatically routes request to appropriate approver  Secondary approvals, if required, are also automatically routed Overnight creation of paper PO with multiple copies  On-demand creation of PO  PO immediately available once created  Able to e-mail or e-fax PO  Electronic record of PO Future State Current State For those who already do purchasing, this is an overview of the changes coming.

9. Organizational Structure

10. 10BRITE Procurement Fundamentals Unit Objectives After completing this unit, you will be able to:  Describe the SBBC Organizational Structure  Explain the usage of Purchasing Groups in SAP

11. 11BRITE Procurement Fundamentals Organizational Structure The company code and Purchasing Organization will always be SBBC. All buyers have a Purchasing Group Letter. There are seven plants within the organization. Each Plant has various storage locations some of which may/may not contain inventory – e.g. Plant 1000 (schools/departments) do not have inventory in SAP

12. 12BRITE Procurement Fundamentals Purchasing Group  The SAP term for Buyer Code is Purchasing Group. Commodities will be assigned to Purchasing Groups within the SBBC purchasing organization  Each Buyer in SBBC has a Purchasing Group letter, which allows them to manage their Requisitions and Purchase Orders more effectively

13. Purchasing Master Data

14. 14BRITE Procurement Fundamentals Unit Objectives After completing this Unit, you should be able to:  Define key terminology related to SAP Master Data  Explain the concept of Master Data in SAP  Describe the purpose of a Material Master Record

15. 15BRITE Procurement Fundamentals Material Master Records  The following information is essential to understanding the tasks discussed in this unit: –Material Master Records contain information about a material that rarely changes (such as description, unit of measure, etc.) –Material Master Records can be incorporated as default data in transactional documents such as RFQs (Request for Quote) and Purchase Orders

16. 16BRITE Procurement Fundamentals Material Master Records A Material Master Record:  Is the central repository for all details about a material number (description, dimensions, purchasing group, etc.)  Eliminates the need for redundant data entry  Reduces the likelihood of duplicate material numbers

17. 17BRITE Procurement Fundamentals Material Master Records (cont’d)  There are six types of Material Master Records: –Stock materials: Items stocked at the central warehouse or the textbook warehouse –Food: Commodity materials managed at the external food warehouse –Spare Parts: Spares used by Physical Plant Operations and Transportation –Non-Valuated Materials: Items stored in B-stock and student assessments –Non-Stock Items: Materials whose quantity will not be inventoried and will support purchasing functions –Services: Services ordered by schools and departments

18. 18BRITE Procurement Fundamentals Material Master Record Data Flow Material Master Record Purchase Requisitions Contracts Requests for Quotation Purchase Orders Invoices The Material Master Record can be used as input for any of the Purchasing Documents shown above.

19. Purchasing Documents

20. 20BRITE Procurement Fundamentals Unit Objectives After completing this unit, you will be able to: Describe the procurement process flow  Describe the structure and use of a Purchase Requisition  Describe the Catalog Content Management (CCM) process  Name the three types of Purchase Requisitions  Describe the Requisition approval process  Describe the structure and use of: –Requests for Quotations –Quotations –Purchase Orders

21. 21BRITE Procurement Fundamentals Procurement Process Flow Data Strategy Group Creates Purchasing Master Data Requisitioner Creates Purchase Requisition Site Administrator Approval Buyer Creates RFQ (if necessary) Buyer Maintains Quotations (if necessary) Buyer Creates Purchase Order Recipient Performs Goods Receipt Accounts Payable Pays Invoice

22. 22BRITE Procurement FundamentalsRequisitions All Requisitions have three (3) sections:  Header – Contains a “Text” tab where internal information can be entered  Item Overview – Shows an overview of all the line items on the Requisition  Item details – Shows detailed procurement information about one particular line item. There is an item details section for each item on the Requisition

23. 23BRITE Procurement Fundamentals Purchase Requisition Header Item Overview Item Details

24. 24BRITE Procurement Fundamentals Types of Purchase Requisitions There are three types of Purchase Requisitions:  Standard Requisition –Used for external procurements –Can be entered line by line or via Catalog Content Management (CCM) –Can be entered with or without reference to Material Master Record  Framework Requisition –Used for External procurements –Will be created using an attached list for orders with 25 or more lines items –Cannot be used for assets  Stock Transport Requisition –Are used for internal procurements (from the warehouse) –Will always be entered via Catalog Content Management (CCM)

25. 25BRITE Procurement Fundamentals Account Assignment Categories Each line item on a requisition must have an account assignment category. SBBC will use the following categories: –Inventory –Asset –Cost Center –Project –Grant

26. 26BRITE Procurement Fundamentals What is Catalog Content Management? Catalog Content Management (CCM):  Is a web-interface that allows end-users to search for and order standard catalog items from established suppliers with active contracts  Allows end-users to select materials by pointing and clicking  Allows end-users to create a Requisition in SAP directly from an on-line shopping cart  Reduces data input errors and redundancy

27. 27BRITE Procurement Fundamentals CCM Requisitions Click the “Catalog” icon to access the on-line catalog. Catalog Icon

28. 28BRITE Procurement Fundamentals Catalog Content Management CCM allows “point and click” selection of materials to be purchased

29. 29BRITE Procurement Fundamentals Requisition Approvals  Two levels of approvals are required during normal operations depending on the materials procured. – Level: Principal/Department Manager/Supervisor approval. – Level: Only certain material groups need second level approval. These material groups will be automatically routed to 2 nd level approvers in areas such as Curriculum, Technology, Textbooks, and Food Service. (Food Service items approval will only be for Stock Transport Requisitions involving small equipment obtained from the Central Warehouse).  During a budget freeze an additional level of approval will be required on all purchases, both internal and external with the exception of Food Services and Grant-related, non-asset items. This approval will be done by the district Executive Leadership Team. 1st 2nd

30. 30BRITE Procurement Fundamentals Request for Quotations (RFQs) and Quotations RFQs and Quotations:  Are initiated by purchasing (rather than schools and departments) after a requisition is approved  Facilitate easy on-line quote comparison and vendor selection  Can be used to create purchase orders and contracts

31. 31BRITE Procurement Fundamentals Purchase Orders Purchase Orders:  Are created directly from requisitions or quotations in SAP  Can be created manually by a buyer or automatically by SAP (when a contract exists)  Are transmitted to vendors via e-mail or e-fax. Hard copy PO’s are sent only when a vendor has no e-mail or fax capability

32. 32BRITE Procurement Fundamentals Purchase Orders Just like the Purchase Requisition, All Purchase Orders have three (3) sections:  Header – Contains information applicable to the entire Purchase Order  Item Overview – Shows an overview of all the line items on the Purchase Order  Item details – Shows detailed procurement information about each line item.

33. 33BRITE Procurement Fundamentals Unit Objectives You should now be able to:  Describe the procurement process flow  Describe the structure and use of a Purchase Requisition  Describe the Catalog Content Management (CCM) process  Name the three types of Purchase Requisitions  Describe the Requisition approval process  Describe the structure and use of: –Requests for Quotations –Quotations –Purchase Orders

34. Goods Receipt and Invoices

35. 35BRITE Procurement Fundamentals Unit Objectives After completing the unit, you will be able to: Define key terminology Determine Requisition status Describe the Goods Receipt process Explain the Three-Way and Two-Way match processes Describe the structure and use of invoice documents in SAP

36. 36BRITE Procurement Fundamentals Key Terms Three Way MatchMatch between the Purchase Order, amount received and the amount on the invoice Goods ReceiptA document created in SAP when goods have been received

37. 37BRITE Procurement Fundamentals Goods Receipt The Goods Receipt process:  Is executed when material is received against a purchase order  Results in the creation of a material document that acknowledges the receipt of goods and allows the invoice to be paid  Updates stock balances and purchase order history

38. 38BRITE Procurement Fundamentals Material Document – Goods Receipt Overview The Material Document shows details about all the line items included in the Goods Receipt.

39. 39BRITE Procurement Fundamentals Goods Return The Goods Return process is executed:  When material is to be returned to the vendor after a goods receipt has been executed in SAP  Allows material returns to be tracked  Automatically adjust inventory balances

40. 40BRITE Procurement Fundamentals Three-Way Match  A Three-way Match means that the Purchase Order, the Invoice, and the Goods Receipt all match, both in terms of quantity and price  The three-way match principle applies to all PO’s except Framework PO’s

41. 41BRITE Procurement Fundamentals Two-Way Match  A two-way match means that the Purchase Order and the Invoice must match, both in terms of quantity and price  The two-way match principle applies to all framework PO’s

42. 42BRITE Procurement Fundamentals Unit Objectives You should now be able to: Define key terminology Determine requisition status Describe the Goods Receipt process Explain the Three-Way and Two-Way match processes Describe the structure and use of invoice documents in SAP

43. Summary

44. 44BRITE Procurement Fundamentals Course Objectives You should now be able to:  Explain To-Be business processes  Describe the SBBC SAP organizational structure  Describe the use of Material Master Data in SAP  Explain the structure and use of various purchasing documents in SAP  Describe functions that are executed after the procurement process is complete