BBP_MM[1]

Material Management

Business Blueprint

Submitted to

1.2 BUSINESS BLUEPRINT OVERVIEW...7

1.3 MODULE DETAILS...8 1.4 MODULE INTEGRATION...11 2 ORGANIZATION STRUCTURE...11 2.1 Plant...11 2.2 Storage Locations...12 2.3 Purchasing Organization...14 2.4 Purchase Group...15 3 MASTER DATA...16 3.1 Material Master...16 3.2 Vendor Master...23 3.3 Service Master...26

3.4 Purchasing Info record...26

3.5 Source List...27

4 BUSINESS PROCESSES...27

4.1 Configuration Settings...27

4.2 Consumption based planning...27

4.2.1 Purpose...29

4.2.2 Master Data...29

4.2.3 Features with respect to Janki Corp Ltd...29

4.2.4 Business Process...30

4.3 Purchasing...33

4.4 Inventory management...52

4.4.1 Purpose...52

4.4.2 Master Data...53

4.4.3 Features with respect to Janki Corp Ltd...53

4.5 Physical Inventory...60

4.5.1 Purpose...61

4.5.2 Master Data...61

4.5.3 Features with respect to Janki Corp Ltd...61

4.5.4 Business Process...62

4.6 Material Valuation...63

4.6.1 Master Data...65

4.6.2 Features with respect to Janki Corp Ltd...65

4.6.3 Business Process...65

4.7 Logistics Invoice Verification...66

4.7.1 Purpose...68

4.7.2 Master Data...68

4.7.3 Features with respect to Janki Corp Ltd...68

4.7.4 Business Process...69

5 INTERFACE REQUIREMENT...70

6 STANDARD INFORMATION SYSTEM...70

7 ANNEXURES...72

7.1 Annexure 1 – GAPS...72

7.2 Annexure 2- FRICE requirements...72

1 EXECUTIVE SUMMARY

1.1 BACKGROUND

Janki Corp Limited (JCL) was originally incorporated in the year 1993 as a public limited company under the name Janki Processors Limited. It was set up for carrying out the business of a textile process house in Bhilwara, Rajasthan. Later the name of the Company was changed to Janki Corp Ltd. w.e.f December 31, 2003. Since inception, the company has been growing by leaps and bounds and now enjoys the reputation of being one of the biggest processing houses in India.

In JCL there is two Business processes

 Sponge Iron Business

 Textile Business

SAP implementation is for Sponge Iron Business (Steel Plant)

The details of activities presently being carried on by the Company are as under:

 Business Segment – Sponge Iron

 Business Segment – Power

 Business Segment - Pellet

The company has undertaken manufacturing sponge iron as the nucleus for setting up a wholly Integrated Steel Plant. The setting up of integrated steel plant will make the company gain cost competitiveness. The sponge iron plant has a capacity of 1,80,000 MT per annum and is setup at Sidiginamola village, Bellary District, Karnataka. Our senior management team has more than 300 years of collective work experience.

1.2 BUSINESS BLUEPRINT OVERVIEW

The following activities have been covered in the business blueprint phase: 1. Organization structure finalization pertaining to this module

2. FSBP processes definition and identification wrt CSBP processes (Pls. attach a matrix of CSBP vis-à-vis FSBP Mapping with the final FSBP Code and names of processes)

S.No. Attachment Description

1 _{C:\Documents and}

Settings\wipro\Desktop\FSBP-CSBP.xls CSBP-FSBP Link

3. FSBP discussion along with changes in existing Organization structure, standard reports available in SAP

4. Online review of FSBPs by Infosys with comments and check points to be incorporated

5. Incorporation of JCL comments wherever justified and applicable and closure of other comments with reasoning in the FSBP Tracker

6. Discussion of FSBP with BPOs and incorporation of their review comments 7. Final release of FSBPs for purpose of sign-off

8. Gap discussion with CTMs

9. Review of Gaps by JCL and incorporation of review comments in Gap document to be released to BPOs

10. Gap discussion with BPOs

11. FRICE requirements discussion, prioritization and finalization

12. Review of FRICE requirements by Infosys and incorporation of review comments to be released to BPOs

13. Peer review of FSBPs by WIPRO Sr. Consultants

14. Incorporation of peer review remarks wherever justified and applicable in FSBP 15. Discussion of configurational values applicable to each FSBP and documenting them

in business blueprint document

16. Review of BBP document by JCL and incorporation of review comments for release to BPOs

17. Discussion of BBP with BPOs

The Objective of this document is:

1. To identify and document the configurational values applicable FSBP wise post discussion with CTMs

2. Have one comprehensive document wrt capturing of Gaps and FRICE requirements 3. Brief about the module’s standard functionalities, it’s integration with other modules,

master data requirements and relevant organization structure

Note: The configurational values given in the document is not an exhaustive list but can be

said as almost 80-90% final; the range may vary from module to module. The remaining configurational values will emerge during the Baseline Unit testing and testing prior to Final configuration.

1.3

Materials Managements module is used for mapping the Business process used in Janki Corp Ltd….., for Planning, Procurement, Receipts, Issues, Transfer Posting, Physical Inventory, Valuation of materials & Invoice verification.

It is sub divided into

 Consumption-based planning

 Purchasing

 Inventory Management

 Valuation

 Logistics Invoice Verification

Consumption-based planning:

The central role of MRP is to monitor stocks and in particular, to automatically create procurement proposals for purchasing (purchase requisitions). This target is achieved by using various materials planning methods which each cover different procedures.

In consumption-based planning, the following MRP procedures are available:

 Re-order point planning

 Forecast based planning

 Time phased planning

Following values are important for defining reorder point

 Safety stock

 Average consumption

 Replenishment lead time

At Janki Corp Ltd. Indirect materials will be procured externally with manual re-order point with Replenishment up to Maximum stock level, fixed lot size or lot to lot size.

The tasks of the MM Purchasing component are as follows:

 External procurement of materials and services.

 Determination of possible sources of supply for a requirement identified by the materials planning and control system or arising directly within a user department.

 Monitoring of deliveries from and payments to vendors.

Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.

The typical procurement cycle for a service or material consists of the following phases:

1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.

2. Source Determination

The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds the process of creating requests for quotation (RFQ’s), which can be sent to vendors electronically via SAP EDI, if desired.

3. Vendor Selection and Comparison of Quotations

The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.

4. Purchase Order Processing

The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate PO’s yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.

5. Purchase Order Follow-Up

The system checks the reminder periods you have specified and if necessary -automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.

Goods receiving personnel can confirm the receipt of goods simply by entering the PO number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods.

7. Invoice Verification

The system supports the checking and matching of invoices. The accounts payable is notified of quantity and price variances because the system has access to PO and goods receipt data. This speeds the process of auditing and clearing invoices for payment.

8. Payment

Payments are processed in FI in accounts payable.

Inventory Management:

This component deals with the following tasks.

 Management of material stocks on quantity and value basis.

 Planning, Entry, and Documentation of all Goods Movements.

 Carrying out the Physical Inventory.

Stock of materials that must be managed separately for reasons of ownership or location. Material is procured from external or internal sources on the basis of the requirements determined by Material Requirements Planning. The delivery is entered in Inventory Management as a goods receipt. The material is stored (and managed under Inventory Management) until it is delivered to customers (Sales & Distribution), or is used for internal purposes (for example, for production).

During all transactions, Inventory Management accesses both master data (such as material master data) and transaction data (such as purchasing documents) shared by all Logistics components.

Material Valuation:

This includes the following application areas:

 Purchasing.

 Inventory Management.

 Logistics Invoice Verification.

Material Valuation determines or records the stock value of a material. The stock value is calculated using the formula:

Thus, if the stock quantity or the material price changes, the stock value changes. Material Valuation serves the following purposes:

 Adjusting material price to market price.

 Performing Revaluation

 Balance sheet valuation

Logistics Invoice Verification:

It is carried out at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.

You receive an invoice and enter the information contained in it in the system, comparing the data (such as quantities and values) suggested by the system with that in the invoice and making any necessary corrections. You then post the invoice.

1.4 MODULE INTEGRATION

Materials Management is integrated with all relevant modules.

 Sales & Distribution –Delivery, availability check, Stock transfers etc.

 Finance/Controlling – Material Valuation, Vendor payments, Material costing etc.

2 ORGANIZATION STRUCTURE

2.1 Plant

Plant is an organizational unit within Logistics, serving to subdivide an enterprise according to procurement, maintenance, and materials planning. A plant is a place where either material is produced, or goods and services are provided. Material stocks are valued at the plant level.

Plants defined for Janki Corp Ltd

Plant (max 4 char) Name1 (max 30 char)

1100 Spongy Iron Plant

1200 Power Plant

Plants created for India are attached to Company code 1000 JCL

S.No. Attachment Description

1 _{G:\All doc\Plant} Template.xls

Plant Address

2.2 Storage Locations

A Storage location is the place where stocks are physically kept within a plant. Stocks are managed only on a quantity basis and not on a value basis at storage location level. Physical inventories are carried out at storage location level. Storage locations are always created for a plant. The Storage locations defined for various plants are as follows:

Storage Locations –Spongy Iron Plant -1100 Plant Sloc Description

Spongy Iron

Plant(1100) 1101 Mechanical_{1102 Electrical} 1103 Automobile 1104 Labortory 1105 Administration 1106 Process 1107 Project 1108 Accounts 1109 Purchase

1110 Safety & Security 1111 Marketing 1112 Stores 1113 Q & A 1114 Safe Custody 1115 Repaired 1116 Scrap 1117 Instrumentation

Plant Sloc Description

Power

Plant(1200) 1201_{1202 Electrical}Mechanical 1203 Automobile 1204 Labortory 1205 Administration 1206 Process 1207 Project 1208 Accounts 1209 Purchase

1210 Safety & Security 1211 Marketing 1212 Stores 1213 Q & A 1214 Safe Custody 1215 Repaired 1216 Scrap 1217 Instrumentation

Storage Locations – Pellet Plant 1300 Plant Sloc Description

Pellet Plant (1300) 1301 Mechanical 1302 Electrical 1303 Automobile 1304 Labortory 1305 Administration 1306 Process 1307 Project 1308 Accounts 1309 Purchase

1310 Safety & Security 1311 Marketing 1312 Stores 1313 Q & A 1314 Safe Custody 1315 Repaired 1316 Scrap 1317 Instrumentation

2.3 Purchasing Organization

Purchasing Organization is an organizational unit within Logistics, subdividing an enterprise according to the requirements of Purchasing. A Purchasing Organization procures materials and services, negotiates conditions of purchase with vendors, and bears responsibility for such transactions.

Master data: For every new Purchasing Organization created, a new set of master data at

the Purchasing Organizational level will have to be created for vendor masters, purchasing information records, source lists, and pricing information.

Maintenance of purchasing documents: Many purchasing documents are purchasing

Organization-specific. This is because the Purchasing Organization is a header field in the following SAP transaction documents - Purchase order, Contract.

Pricing Flexibility: The Purchasing Organization is one of the influencing factors in

determination of pricing schemes. Purchasing Organizations within JCL may choose to allow different types of prices, discounts, surcharges, delivery costs, etc.

Reporting Flexibility: In any business function, reporting is one of the basic business

requirements. The choice of the Purchasing Organization will influence the ease with which reports are being generated. In particular, reports that provide information on collective activities/transactions will be greatly affected by this decision. With multiple Purchasing Organizations, consolidating of information by plant will be more straightforward as Purchasing Organizations are used as selection criteria.

Authorisation Control: The Purchasing Organization is one of the authorisation objects in

SAP. The adoption of multiple Purchasing Organizations implies that authorisation can be enforced via the Purchasing Organization. If this is not the case, authorisation may have to be enforced via other alternatives such as Purchasing Groups.

Purchasing Organization (max 4 char)

Pur. Organization description (max 20 char)

2.4 Purchasing group

Purchasing Group is a buyer or a group of buyers’ responsible for certain purchasing activities. It is also being used for configuring release strategies. The Purchasing Groups defined for Janki Corp Ltd. are:

Plant

Purchasing Groups

PGP

Description

Spongy Iron Plant (1100) Power Plant (1200)

Pellet Plant (1300)

Purchase 101 S.Vijay Kumar

102 Suneel Kumar Prasad

103 _{Ajit Kumar} 104 R.Pavan Sudhir chowdary 105 _{Kiran Kumar.B} 106 _{R.L.Seetharam Shetty}

3 MASTER DATA

Purchasing Organization

(1000)

1100

₁₂₀₀

1300

3.1 Material Master

The Material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company's central source for retrieving material-specific data. This information is stored in individual material master records. A material master record contains data of a descriptive nature (such as size, dimension and weight) and data with a control function (such as Material type, MRP type and price control, Purchase group, Profit center etc.). Description of the material is at Client level. In addition to this data, which can be directly maintained by the user, it also contains data that is automatically updated by the system (such as stock levels).

The material master is used by all components in SAP logistics. The integration of all material data in single database object eliminates redundant data storage.

In the SAP Logistics System, the data contained in the material master is required, for example, for the following functions:

 In Purchasing for ordering.

 In Inventory Management for goods movement postings and physical inventory.

 In Invoice Verification for posting vendor invoices.

 In Sales and Distribution for sales order processing.

Master data is common across all plants. There are no multi-lingual descriptions for the materials. In addition to the basic description, Purchase Order Text will be maintained for the materials. All the existing materials will be loaded to the SAP system; to avoid duplication of master data a central department will create new materials. Janki Corp Ltd. will be operating in a multi-plant environment in SAP R/3. For common materials, master data in more than one plant will have to be maintained on an ongoing basis. The ownership and corresponding process for maintenance of these master data has to be finalized by Janki Corp Ltd., in the Realization Phase and documented.

When we create a material master record, it is required to classify the material according to industry sector and material type.

Industry

It is a factor determining the screen sequence and field selection in a material master record. Once assigned an industry sector to a material, it cannot change the industry sector again afterwards.

Material Type

Material type groups’ together material with the same basic attributes, for example, raw materials, semi-finished products, or finished products. When creating a material master record, materials are assigned to a material type. Material type determines whether the material number can be assigned internally or externally and the number range from which the material number is drawn.

When a material master record is created, the material type determines:

 Whether the material is intended for a specific purpose, for example, as a process material.

 Whether the material number can be assigned internally or externally.

 The number range from which the material number is taken.

 Which screens appear and in what sequence.

 Which departmental data is allowed to enter?

 What procurement type the material has; that is, whether it is manufactured in-house or procured externally, or both.

Together with the plant, the material type determines the material's inventory management requirement; that is:

 Whether changes in quantity are updated in the material master record

 Whether changes in value are also updated in the stock accounts in financial accounting.

In addition, the accounts affected by a material entering or leaving the Warehouse depend on the material type.

In Janki Corp Ltd...., currently the Material Master or Item Master, as it is known, is maintained independently at plant level and for the projects the materials are created as and when required. The concept of material type is followed to distinguish the material. The following Material types will be used in Janki Corp Ltd. Additional Material type can be created in future.

Material

Type Material Type Description Valuation Class Valuation Class Description

ROH Raw Materials ₃₀₀₀ Raw Materials

ZCON Consumables 3001 Consumables

ZSAS Stores & Spares 3002 Stores & Spares

ZCSP Capital Spares 4000 Capital Spares

ZCAS Capital Assets 4100 Capital Assets

ZCCN Capital Consumables 4150 Capital Consumables

ZGEN General 4200 General

ZCPT Captive 4300 Captive

ZSRP _{Scrap 4400 Scrap}

LEIH Returnable Packaging 3050 Returnable Packaging

FERT Finished Products 7920 Finished Products

Material Numbering

For every material a material master record in the material master must exit. A material number uniquely identifies this record.

Material numbering will be *internally/externally generated according to the material type. However the existing stock numbers in the legacy system will be transferred to SAP as an Old material number in the material master record. The maximum number of characters will be *18. In the case of external if the number of characters is less, then the leading zeros will not be displayed and for internal number assignment system will use the number from the range allocated.

Mat type From number (max 18 char) To number (max 18 char) Internal (I) or External (E) MAT_CODIFICATION .xlsx Material Group

A key that is used to group together several materials or services with same attributes. Each material can belong to only one material group. Material groups can be used to restrict the scope of analysis and search specifically for material master records via search helps. Material groups can access necessary reports. Additional Material groups and Series group will be added in future.

Material Group Material Group Description

M001 Mechanical M002 Electrical M003 Field Machinery M004 Instrumentataion M005 Laboratory M006 Administrative M007 Construction/Civil M008 Structural

M009 Tools & Tackles

Service

Group Sevice Group description

S001 Civil -C S002 Civil- R S003 Structurel -C S004 Structurel -R S005 Fabrication/Erection/Commission/Te sting -C S006 Fabrication/Erection/Commission/Te sting -R S007 Manpower supply - C S008 Manpower supply - R S009 Hiring of Vehical -C

S010 Hiring of Vehical -R S011 Rent - C S012 Rent - R S013 Repair -C S014 Repair -R S015 Installation -C S016 Installation -R S017 Plantation -C S018 Plantation -R S019 Supply - C S020 Supply - R S021 Grouting S022 Consultancy services S023 Miscellaneous - C S024 Miscellaneous - R Unit of measure

The R/3 System distinguishes between the following units of measure:

 Base unit of measure

This is the unit of measure in which the stocks of a material are managed. The system converts all quantities entered in other units to the base unit of measure.

 Alternative units of measure

Individual departments may have their own units of measure. For example, Purchasing may use a different unit than Sales or Warehouse Management (WM). All units of measure other than the base unit of measure are referred to as alternative units of measure. The R/3 System supports the following alternative units of measure:

o Order unit

Allows a material to be ordered in a unit differing from the base unit of measure. The order unit is proposed automatically in purchasing functions, where it can be changed.

o Sales unit

Allows a material to be sold in a unit differing from the base unit of measure. The sales unit is proposed automatically in the sales order, where it can be changed.

o Unit of issue

Unit of measure is the unit in which the material is issued from the Warehouse. It allows consumption, stock transfers, transfer postings, and

physical inventories to be recorded in a unit differing from the base unit of measure and from the stockkeeping unit.

The relationship between the base unit of measure and alternative units of measure

Basic Unit of Measure Description

NO NUMBERS KG KILOGRAM ROL ROLL L LITRE M METER BAG BAG M2 SQUARE METER FT2 SQUARE FEET FT RUNNING FEET FT3 CUBIC FEET FT FEET SET SET M METER G GRAM BTL BOTTLE PAC PACKET SET PAIRS BDL BUNDLE TIN TINS LOT LOT BOX BOX M3 CUBIC METER TUB TUBE

LBS POUND SPL SPOOL CAN CAN T METRIC TONE BAND BAND SHT SHEET CY CYLINDER Material Valuation

Material valuation is the determination of the value of a stock of materials. The valuation relevant data on a material include:

a) Valuation price.

b) Assignment to a valuation class, Valuation class is used to determine the G/ L account during the material movement.

c) Selection of the valuation method using the price control indicator, S – Standard Price , V – Moving Average Price.

The materials will be valuated at Standard Price and Moving average price. For Standard Price Control indicator will be S and Moving average price control indicator will be V. The Standard / moving average price should be entered at the time of creation of the Material Master. Standard cost estimate can be carried out in SAP to arrive at the standard price and can automatically update the current standard price of the material. Also the standard price can be changed manually through the price change functionality in SAP. Necessary authorization control will be put in place to restrict unauthorized change in the standard price.

Semi finish & Finish Material will have Standard Price all other Material type will Moving Average Price.

Period end closing has to be carried out in Materials Management at the end of each period to allow goods movement in the next period. This is required as the price; stock value and quantity are managed period wise in the system.

3.2 Vendor Master

Vendor master record is the data record containing all the information necessary for any contact with a certain vendor, in particular for carrying out business transactions. Data in the vendor master record is organized under general data, company code data and purchasing organization data.

It consists of data like Vendor name, address, reconciliation account, payment terms, Schema group etc. The vendor master will be created centrally and the required purchasing data will be maintained in the respective purchasing organization level. The order currency and the terms of payment will be in the display field in the purchasing organization data. If the master data currency differs from the purchasing currency it can be changed in the Purchase order.

Business partners have a number of different functions, described as partner functions, in connection with your company. You use partner functions to define the rights and responsibilities of each partner type in a business transaction. When you sell or order goods, for example, your business partners can assume partner functions such as: Ordering Address, Goods supplier, Alternate payee.

Vendor Account Group

Vendor account group is a classifying feature within vendor master records that determines:

 The type of number assignment, internal or external.

 A number range for assigning account numbers.

 Which fields are displayed and whether their entry is optional or required (field status) when you enter or change vendor master data.

 Whether the account is for one-time vendors.

To create a master record, an account group must be specified. The account group cannot be changed after you create the master record.

The following account groups will be created for Janki Corp Ltd..

Account Group Account Description From number To number

ZIRO JCL-Iron Ore 100000 199999

ZCOL JCL-Coal 200000 250000

ZORM JCL-Other Raw Materials 300000 399999

ZASS JCL-Assets 400000 499999

Consumables ZTRP ZTRS ZSAD ZCSS ZIMP ZCSR ZGEN ZOTV JCL-Transporters JCL-Trade Services JCL-Commission agent(S&D) JCL-Capital Services JCL-Overseas(Imported) JCL-Capital Spares JCL-General JCL-One Time 600000 700000 800000 900000 825001 850001 875001 250001 699999 600000 825000 999999 850000 875000 899999 299999

 Vendor Purchasing Organization data

Vendors can be maintained for each company code and for a purchasing organization. Wherever a Vendor exists in both a Company Code and a Purchasing Organization, the vendor master data can be copied to the other Purchasing Organizations or Company Codes. If required, default data for the material master like the planned delivery time, purchasing groups, etc. can be maintained at the vendor level in the vendor master. The data maintained in the vendor master will be defaulted and can be changed when purchasing. Janki Corp Ltd., Payment terms are on credit as well as on delivery & against advance. These terms will be maintained in the system along with the standard SAP payment terms as below:

S No

Description

001 100% Against Proforma invoice

002

85% Against Proforma invoice , 15% Payment Released along with order

003

70% Against Proforma invoice , 25% advance against Bank Gurantee , 5% against performance bank gurantee for the period of 12 months

004

50% Against Proforma invoice , 50% Payment Released along with order

005 100% Payment Released along with order

006

20% Payment Released along with order , 80% Payment Relased within 10 days from the date of receipt of material at our end

007 100% Payment shall be releeased against COD basis

008

100% Payment Relased within 5 days from the date of receipt of material at our end

009 100% Payment Relased within 30 days from the date of receipt of _{material at our end} 010

100% Payment Relased within 10 days from the date of receipt of material at our end

011

100% Payment Relased within 7 days from the date of receipt of material at our end

012

100% Payment Relased within 20 days from the date of receipt of material at our end

013

100% Payment Relased within 15 days from the date of receipt of material at our end

014

100% Payment Relased within 45 days from the date of receipt of material at our end

Incoterm is international commercial terms negotiated with vendor. The following Incoterm will be maintained in the SAP system.

Incoterm

Description

FOR FOR Destination

EXW EX- works

FOB Free on Board (FOB)

CIF Cost Insurance & Freight (CIF)

CFR Cost and Freight (CFR)

Pricing Schema

Pricing Schema Description

Z1 Raw material

Z2 Imports

Z3 Domestic / Service

3.3 Service Master

Services that are procured on a regular basis can be created as a service master. In the service master service specifications will be maintained.

A service master record contains the following principal information for the unique description of a service:

 Service number

 Service category

 Base unit of measure

 Material group

 Valuation class

Service masters can be referenced at the time of creation of the Purchase requisition and all the Purchasing documents. The Service Number will have External Number Range.

Service

Category Service Category Description ValuationClass Valuation Class Description

SMEC Mechanical A001 Mechanical

SELE Electrical A002 Electrical

SINS Instrumentation A003 Instrumentation

SCIV Civil A004 Civil

3.4 Purchasing Info record

Purchasing info record contains concise information about a material and a vendor supplying that material. Information like price, lead times, reminders, etc. can be stored in the info record. An info record thus represents a material-vendor relationship. Info records can be created for different procurement types (standard, sub-contracting and consignment). Info records can be created with material master. New data will be maintained on line in the info record prior to purchasing. Automatically it will be updated during the quotation process. The number range will be ten digits and will be system generated.

Info records can be created with or without a material

master record. From number Max 10 digits To Number Max 10 digits Internal (I) / External(E)

Info record with material master

record 5300000000 5399999999 I

3.5 Source List

A Source list specifies the allowed and disallowed sources of a material for a certain plant within a predefined period. Each source is defined by means of a source list. A Source list is also used to define a source as fixed for a period. In this case the system takes this source as a preferred source over that period. It is also used to define a vendor/source as blocked over a period of time; it can also be used as an aid in an optimized purchase.

In Janki Corp Ltd.. the source list will be used to maintain the preferred vendor list. If a contract exists it will be maintained in the Source list.

Currently in some of the plants preferred vendors exist for supplying certain parts, these will be maintained in the source list in SAP

No restriction will be placed initially for procurement only from the vendors maintained in the source list. There is no requirement to restrict suppliers according to their region.

4 BUSINESS PROCESSES

4.1 Configuration Settings

Sr.No. Configuration_Setting

1 _{C:\Documents and}

Settings\wipro\Desktop\MM_BBP1\SAN_BBP_MM_CON_SET_0.1.xls

4.2 Consumption based planning

Consumption-based planning is based on past consumption values and uses the

forecast or other statistical procedures to determine future requirements. The procedures in consumption-based planning do not refer to the master production schedule. That is, the net requirements calculation is not triggered either by planned independent requirements or dependent requirement. Instead, it is triggered when stock levels fall below a predefined reorder point or by forecast requirements calculated using past consumption values.

In consumption-based planning, the following MRP procedures are available:

 Reorder point procedure

 Forecast-based planning

 Time-phased materials planning

In the planning run, the system carries out the following processes:

1. The system checks the planning file entries. Here, the system checks to see whether a material has been changed in some way relevant to MRP and should therefore be included in the planning run.

2. The system carries out a net requirements calculation for every material. Here, the system checks to see whether the requirement quantity is covered by available Warehouse stock and fixed receipts from Purchasing or production. If the requirement quantity is not covered, the system creates a procurement proposal.

3. Then the system carries out the sizing calculation. Here, the system takes the lot-sizing procedure and, if necessary, the rounding up or down values into account. 4. The system carries out scheduling to calculate the start and finish dates of the

procurement proposals.

5. The system determines the type of procurement proposals. Depending on the settings, the system creates planned orders, purchase requisitions or schedule lines for a material (see determining the Procurement Proposal). If you have maintained the necessary specifications for procurement, the system determines the source of supply which it assigns to the procurement proposal.

6. The system recognizes critical situations, which the planner has to processes manually in the planning results. For this purpose, the system creates exception messages and carries out a rescheduling check.

7. It also calculates the actual days’ supply and the receipt days’ supply.

MRP Procedures

 Creation of procurement proposals

The type of procurement proposal to be created automatically in the planning run depends on the procurement type of the material. For in-house production, the system always creates a planned order. For external procurement, the MRP controller can choose between a planned order and a purchase requisition. If the MRP controller chooses a planned order, it then has to be converted into a purchase requisition in a separate step so that it is made available to Purchasing.

The advantage of creating a planned order is that the MRP controller has more control over the procurement proposals. The purchasing department cannot order the material until the MRP controller has checked and converted the order proposal. If a purchase requisition is created, it is immediately available to the purchasing department, which then takes over the responsibility for material availability and Warehouse stocks.

 Planning at plant level or for MRP areas

As materials planning are usually carried out at plant level, all available stock in the plant (from now on described as available Warehouse stock) is taken into account during planning. However, stocks from individual storage locations can be excluded from requirements planning or they can be planned independently. These stocks are then not included in material requirements planning at plant level. On the other hand, consignment stocks from the vendor are always included in MRP.

You can also carry out MRP for individual MRP areas. You can define the MRP areas. This means, for example, that you can group several storage locations into one MRP area and carry out MRP for this MRP area.

 Lot-sizing procedures

The standard lot-sizing procedures are available in the R/3 System. However, you can quite easily integrate your own formulas without much effort.

The automatic planning run determines shortages and creates the appropriate procurement elements. The system creates notes for critical parts and exceptional situations providing you with the necessary information for processing the planning results.

4.2.1

The central role of MRP is to monitor stocks and in particular, to automatically create procurement proposals for purchasing and production (planned orders, purchase requisitions or delivery schedules). This target is achieved by using various materials planning methods which each cover different procedures.

In Janki Corp Ltd. Indirect materials are planned on re-order point basis. Re-order point will be defined for each & every material in material master at plant level. MRP will calculate net requirement for each material, plant based on re-order point, lead time, stocks, expected receipts, expected Issues. MRP output will give planned order/ Purchase requisitions based on planning parameters. This output can be converted Purchase orders & send to vendors for supply of materials. The whole process is online having effective planning.

4.2.2

The master data in the area of consumption-based planning includes:

 Material Master

 Vendor master

 Source List

4.2.3

In Janki Corp Ltd. Business

 Direct materials will be planned based on report provided for stock level and consumption for each unit.

 Manuals re-order point planning will plan indirect materials based on manual re-order point.

 As a result of materials planning the identification of exact requirement is possible based on, lead time, stocks, Expected receipt, expected issues planned independent

requirement/ re-order point.

 It ensures optimum inventory at minimum procurement cost.  Plant dependent planning will be very easy.

4.2.4

In SAP, a material master for the stock material should exist in the system. No stock can be maintained without a material master.

In the material master Re-order levels can be maintained. Whenever the stock goes below this re-order level a Purchase requisition will be generated through Material Requirements Plans. If there is preferred vendor for the requirement created, MRP will create a PR with Vendor assigned. Creating a purchase requisition can create requirements for stock material on line.

Manual re-order planning is used to achieve the functionality of requirement calculation & generation of purchase requisitions.

The reorder point should cover the average material requirements expected during the replenishment lead time.

The safety stock exists to cover both excess material consumption within the replenishment lead time and any additional requirements that may occur due to delivery delays. Therefore, the safety stock is included in the reorder level.

The following values are important for defining the reorder point:

 Safety stock.

 Average consumption.

 Replenishment lead time.

The following values are important for defining the safety stock:

 Past consumption values (historical data) or future requirements.

 Vendor/production delivery timelines.

 Service level to be achieved.

 Forecast error, that is, the deviation from the expected requirements. Re-order point planning process flow will be:

1. The continuous monitoring of available Warehouse stock within reorder point planning is carried out in Inventory Management.

o Every time a material is withdrawn from the Warehouse, the system checks whether this withdrawal has caused stock levels to fall below the reorder level. If this is the case, the system makes an entry in the planning file for the next planning run

o If a material is returned to the Warehouse, the system checks in exactly the same way whether the available Warehouse stock exceeds the reorder level again. If this is the case, an entry is made in the planning file, which acts as an indicator for the planning run to delete any unnecessary procurement proposals.

o If planned receipts are no longer required due to material returns, for example, then the system will suggest that these receipts should be cancelled. In this case, the MRP controller in cooperation with Purchasing or Production must check whether the purchase order or the production order can be cancelled.

2. The system then calculates the net requirements. The system compares the available stock at plant level (including safety stock) plus the firmed receipts that have already been planned (purchase orders, production orders, firmed purchase requisitions and so on) with the reorder point. If the sum of the stock plus receipts is less than the reorder point, a material shortage exists.

3. The system then calculates the procurement quantity according to the lot sizing procedure defined in the material master.

For reorder point planning, the system supports the fixed lot size and Replenish up to maximum stock level lot-sizing procedures.

4. The system then schedules the procurement proposal, that is, the system calculates the dates, on which the purchase order has to be sent, or when production has to begin and the date on which the vendor has to deliver the goods or by which production has to have the goods ready.

Various control parameters are available for the total planning procedure and for single-item planning, which you can set in the initial screen of the planning run.

You use these parameters to determine how the planning run is to be executed and which results are to be produced.

The control parameters include:

 Planning run type

You can choose whether all materials are to be planned or only those with MRP relevant changes.

 Creation indicator for procurement proposals for materials that are procured externally

You can choose whether planned orders, purchase requisitions should be created for materials that are procured externally.

 Creation indicator for MRP lists

You can define whether MRP lists are to be created.

 Planning mode

You can determine how the system is to deal with procurement proposals (panned orders, purchase requisitions, scheduling agreement lines) from the last planning run, which are not yet firmed, in the next planning run.

 Scheduling - You can choose basic date calculation or lead time scheduling.

Once MRP run is over, the following evaluations are available for evaluating the planning results in consumption-based planning:

 MRP list

 Current stock/requirements list

Planned orders and purchase requisitions are internal planned elements that can be changed, rescheduled or deleted at any time.

Generated planned orders can be converted to Purchase requisitions/Production orders based on procurement type of the material. Direct generated purchase requisitions can be converted to Purchase Orders/Contracts.

FSBP Link:

S.No. Major Process Sub Process Minor Process _DocumentFSBP

1 Procurement Consumption Based Planning J CL_FSBP_MM_CBP_ 0009_1.0.doc

4.3 Purchasing

The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.

The tasks of the MM Purchasing component are as follows:

 External procurement of materials and services.

 Determination of possible sources of supply for a requirement identified by the materials planning and control system or arising directly within a user department.

 Monitoring of deliveries from and payments to vendors.

Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.

Purchase requisitions are usually regarded as internal documents used within Purchasing. Requisitions can be created either directly or indirectly.

S.No. Attachment Description

1 _{C:\Documents and}

Settings\wipro\Desktop\Tollerence limit.xls Tolerance Limit

"Directly" means that someone from the requesting department enters a purchase requisition manually. The person creating the requisition determines what and how much to order, and the delivery date.

There are primary two type of procurement in SAP

 Procurement for Stock

A stock material is a material that is kept in stock. Such materials are placed in storage following a goods receipt. When goods are received by or issued from stores or the Warehouse, the stock on hand is increased or reduced by the amount of the quantity received or issued.

When you order a material for stock, the system does not require an account assignment. This is because the posting to the appropriate stock and consumption accounts occurs automatically after each goods movement (for example, after a material is received by the stores or issued from stores). Furthermore, the value and the quantity of the stocked material are updated in the material master record.

To order a material for stock, the material must have a master record.

 Procurement for Direct Consumption

When you procure for direct consumption, you specify the consumption purpose by entering an account assignment (for example, a cost centre). On goods receipt, the material or service counts as having been consumed. If a material is procured for direct consumption, the consumption accounts in Financial Accounting are posted when the goods receipt is entered. The total quantity and value of existing stocks of the material are not affected. For spare parts under warranty the details will be captured through characteristics maintained for the material master. During Goods Receipt the warranty details are entered in the system.

The following list shows the various external purchasing documents available in the standard SAP System.

Request for quotation (RFQ)

Transmits a requirement defined in a requisition for a material or service to potential vendors.

Quotation

Contains a vendor's prices and conditions and is the basis for vendor selection.

Purchase order (PO)

The buying entity’s request or instruction to a vendor (external supplier) to supply certain materials or render/perform certain services/works, formalizing a purchase transaction. Purchase Value Key’s

1 _{C:\Documents and}

Settings\wipro\Desktop\Tollerence limit.xls Purchase Value Key’s

Contract

In the SAP Purchasing component, a type of "outline agreement", or longer-term buying arrangement. The contract is a binding commitment to procure a certain material or service from a vendor over a certain period of time.

For each item of a purchasing document, specify whether procurement is for stock or for direct consumption. In a purchasing document, can enter items with or without account assignments.

If you order stock materials, the ordered material must have a material master record. If order is for consumable materials, the ordered material may have a material master record. `

Account assignments are possible for the following purchasing documents:

 Purchase requisitions

 Purchase orders

 Outline agreements Contract and Release Orders:

For materials that are ordered regularly and in sufficient quantity, can negotiate longer-term pricing and conditions with the vendor and record them in a contract. In the contract, specify its validity period and the total target quantity or total INR value covered.

When creating a contract, we can reference an RFQ or another contract. The purchase requisition (representing a request to set up a longer-term contract) can also simplify the data entry process by serving as a reference document.

When creating the associated release orders, information is adopted from the contract. Individual deliveries are affected on the basis of the release orders, which specify the exact order quantity and the delivery date.

FSBP Link:

S.No. Major Process Sub Process Minor Process FSBP Document

1 Procurement Contract _{J CL_FSBP_MM_PRM_}

4.3.1

Various activities are involved in Purchasing

 Requirements identification

 Source determination

 Vendor selection & comparison of quotations

 Ordering the requirements

 Purchaser order follow up

Every document stores the history & subsequent relevant flow to have traceability & reporting purpose. Required purchasing documents will go through release strategy for better control on purchasing.

MM External Services Management is an application component within the Materials Management (MM) module. It supports the complete cycle of bid invitation, award/order placement phase, and acceptance of services, as well as the invoice verification process.

4.3.2

 Vendor master

 Service master

 Purchasing info record

 Source list

 Conditions

4.3.3

 For Direct materials PR will be converted to PO based on RFQ, Quotation, comparison.

 For indirect materials PR will be converted to PO based on old PO or RFQ, Quotation, comparison. .

 Online approval process will follow for Purchase order/Contracts/ and Purchase requisitions on predefined Conditions.

 Document history with all reference is available.

 Reduction in purchase cycle time due to online across purchase organizations visibility.

 Services will be coded & tracking will be simple.

 Pricing break up like discount, freight, packing, insurance etc will be available for each every material ordered in every purchase order/contract.

 Reporting will be very easy across JCL on procurement.

4.3.4

This country version is designed for use by businesses with operations in India. As well as the generic SAP R/3 functions, it comprises functions designed for laws and business practices particular to India.

Most of the country-specific functions for India relate to Financials and Logistics are covered under CIN. The main areas are as follows:

 Excise duty and the central value-added tax system (CENVAT)  Withholding tax (also known as tax deducted at source)  Sales tax

 Maintenance and printing of statutory excise registers

Country Version India comes with functions for calculating, posting, remitting, and reporting excise duty, and for handling incoming and outgoing excise invoices.

For these purposes, extra fields are available in the vendor master data and material master data for information required in India only.

Can enter incoming excise invoices in the R/3 System for goods receipts arising from external procurement, subcontracting, and stock transfer. Excise department can capture incoming excise invoices using a dedicated transaction, or, alternatively, warehousemen can capture them in the standard Goods Movement transaction, MIGO, when they enter a goods receipt.

As per the statutory requirements, necessary registers need to be updated at the end of each transaction and necessary registers can be generated.

 Utilization of CENVAT

 CENVAT Register – Monthly Return under rule 57AE of the Central Excise Rules  Updation of RG1 / RG23A Part I / RG23C Part I Registers

 RG1 Register Extraction Excise Registers

An entity in India that is entitled by law to produce any goods liable to excise. Each entity is assigned its own excise registration number.Every factory that manufactures excisable goods is required to register separately.

Details like ECC No, Excise Registration number, Excise Range, Excise Division , Excise Commissionerate at the plant level will be maintained.

1 _{G:\All doc\Plant} Template.xls

Excise Registration

Excise Groups

A unit within an excise registration, in India, which keeps its own set of excise records. Whereas the excise registration reports to the excise authorities, the excise group is a purely internal organizational unit. Each excise group keeps records of all transactions that have to be reported to the excise authorities. When the time comes to present these records to the authorities, the excise registration compiles the information from all of its excise groups.

Excise Groups will be finalized in detail during realization phase.

Excise

Grp Description Plant

E1 Excise Group for Spongy Iron Plant 1100

E2 Excise Group for Power plant 1200

E3 Excise Group for Pellet plant 1300

Series Groups

Different excise series groups are defined within the company. Series groups allow you to maintain multiple number ranges for the outgoing excise documents.

Plant Series group Description

Series Groups will be finalized in detail during realization phase. Master Data

Object Excise

Group No Year From number To number

RG23A1 E1 1 2011 100000 199999 RG23A2 E1 1 2011 200000 299999 RG23C1 E1 1 2011 300000 399999 RG23C2 E1 1 2011 400000 499999 RG23A1 E2 1 2011 500000 599999 RG23A2 E2 1 2011 600000 699999 RG23C1 E2 1 2011 700000 799999 RG23C2 E2 1 2011 800000 899999

RG23A1 E3 1 2011 900000 999999

RG23A2 E3 1 2011 1000000 1099999

RG23C1 E3 1 2011 1100000 1199999

RG23C2 E3 1 2011 1200000 1299999

Chapter ID:

 Define the Chapter IDs and corresponding descriptions as described in the excise tariff structure.

 This information is used when you create excise invoices and is also shown in the various excise registers.

Material Chapter ID combination:

 Define which chapter ID is relevant for the material (Plant specific)

 Whether the material can be sent to subcontractors.

 The material type (Raw material, RG1, asset or tools or etc). Cenvat Determination:

 Specify which raw materials are used to produce which finished (or semi finished) goods.

 This information is used to determine whether CENVAT credit can be claimed for a material.

Vendor excise details:

 Enter the vendors' tax numbers such as, Excise registration number (and the range, division, and collectorate in which this is located), Central sales tax (CST) number, Local sales tax (LST) registration number, Permanent account number (PAN).

 Assign the excise duty indicator, which determines excise duty status of the vendor.

 Specify what type, the vendor is, for example, a manufacturer, first-stage dealer, or importer, etc.

Excise indicator for Plant:

 Assign each of the plants an excise duty indicator; this determines how excise should be handled for that particular plant.

Excise indicator for plant and vendor:

 Define the final excise duty indicator, which helps in the determination of excise duty during excise transaction involving that plant and vendor.

Excise tax rates:

 Specify for each chapter ID every possible rate of excise duty that might apply for each combination of plant and vendor.

 For each rate, specify the validity period. Tax Codes

For condition based tax determination Input tax codes are created and entered in the purchasing documents. The combinations of tax code can be maintained as follows

o Excise Duty o Educational Cess

o VAT

o Local Sales Tax o Central Sales Tax o Surcharge

o Service Tax

o Educational Cess on Service Tax o Resale Tax

S.No. Attachment Description

1

G:\All doc\Tax codes_0.2.xls

Tax codes

Period End Processing

Extraction and Printing of the Registers:

 The excise registers are not created until they are extracted. The extraction process should be a routine procedure to ensure systematic updation of the registers.

 The print utility program will help in printing out the registers. Updation of excise registers during consumption and other movements:

 The system does not automatically generate Part I entries for goods issues of excisable materials.

 The missing entries have to be generated once a day using the Update of Registers RG 23 (Part I) program for all goods issues involving excisable material.

 Ensure that the receipts are updated first before the issues, so that any updation of incoming Part 1 entries, which were left out, gets updated and inconsistencies between receipts and issues are thus prevented.

Adjustment Entry

Material write- off / Declared Non-productive:

 Issue the materials out to scrap.

 Create an Excise JV with reference to the material document. The excise duty debited to the Cenvat account should be reversed.

 The excise duty to be reversed is calculated manually or using the get Excise invoice functions.

 The debit account can be overwritten when the JV postings happen. Additional Excise:

 This procedure is used when a vendor has increased the amount of excise duty that it originally charged.

 The additional duty is debited to the Cenvat Account with reference to the vendor’s invoice number.

 The Credit account can be changed at the posting the excise JV. Other Adjustments:

 When there are any adjustments, which do not fall into any of the above-mentioned category, then this function is used.

Cancel Excise invoice:

 This function can be used to cancel any out going invoice created through J1IS. It reverses the excise duty accounted for.

FSBP Link:

1 Goods Receipt GRN & Reversal _{J CL_FSBP_MM_GRN_} 0011_1.0.doc

4.3.5

Identifying requirement

The task in purchasing starts from identifying the purchasing requirement, which could be originated either by MRP or by manual. Manually created requisition will go through release strategy & MRP outputted PR’s will go through release strategy. Several selection criteria available to get list like PR MRP outputted PR, Manually crated PR, approved PR etc for buyers as well as indenters.

In case of annual services, manual PR will be created with service numbers indicating service wise qty & tentative rate will be paid for each service rendered.

Release strategy will be set up with pre requisites for requisitions that need to be fulfilled by respective release code approver. This will ensure administrative control

as well as visibility across organization.

S.No. Attachment Description 1 Release procedure for po will be decided later by JCL management. Requirements processing

Request for Quotation (RFQ) will be raised in the system with reference to the PR.

In SAP the quotation number is generated internally for each vendor. All these quotations can be linked through a collective number. The quotation can be sent electronically or can be printed and the hard copy forwarded. . Vendor selection can be decided with the help of the Info Record and the source list.

In SAP both the Requests for Quotation and the vendor’s response to the quotation documents will be handled through the Request for Quotation function.

The vendors pricing and different conditions can be entered in the maintenance of the quotation document. CST/LST/VAT, Excise can be maintained through the tax code.

History of all generated RFQ/quotations/Comparisons is available in the system for future reference or any traceability. This will help for vendor selection for RFQ also.

Service also PR can be converted to RFQ, quotation, comparison in the same line as material.

Purchase Requisition Types

An identifier allowing differentiation between the various forms of a document category. PR types can be used to setup different number ranges and release strategies.

Version Management is activated for Purchase Requisition. When a purchasing document is changed, the changes are recorded in a change document. Change documents from a certain period are collected in a version and are then available for analyses.

Doc Type Description

ZCAP CAPITAL PR

ZREN REVENUE PR

ZRAW RAW MATERIAL PR

ZSER SERVICE PR

ZCCN

CAPITAL CONSUMABLE

ZIMP IMPORT

FSBP Link:

S.No. Major Process Sub Process Minor Process _DocumentFSBP

1 Procurement Purchase Requisition _{J CL_FSBP_MM_PR_0}

002_1.0.doc

Vendor selection & comparison of quote

Through the price comparison screen SAP ranks all the quotations based on the price. Price comparison can have the break of pricing components like discount, packing, freight, insurance etc. along with taxes. The other details such as delivery date and related information is also displayed. The entire quotation of the vendors also can be viewed from the same screen. If quotation is submitted in foreign currency it can be converted to local currency.

The decision to select a vendor or a reject a vendor can be based on the price comparison list generated by the system and by checking the vendors technical competency (specifications, delivery terms), which will be done outside the system.

If vendors are negotiated, the same can be maintained with valid effective period & revised comparison can be done against the same quotations.

Services will follow the same procedure.

Ordering the requirements

Purchase orders can be created with reference to the quotation. Contracts will be created if there is a continuous requirement over a period of time. Normally contracts will be created for direct materials & Purchase orders will be created for indirect materials. Contracts & Purchase orders will go through release strategy for approval. Ordering can be done different unit of measure than stock keeping unit.

If a contract is issued, a separate release order has to be issued with reference to the contract. Contracts can be a value contract or a quantity contract. Contracts will have a validity period and a price specified for this period and the price can be maintained against a quantity scale.

Delivery schedules can be maintained in Purchase Order for every line item. The reference document information is maintained in the consecutive document.

The necessary payment terms and the Inco terms are automatically copied from the quotation and it can be changed in the purchase order if required. Purchase orders can be raised in foreign currency, standard functionality is available to maintain the foreign currency requirements.

In the purchase order delivery address, if there is a requirement to maintain delivery addresses other than the ordering plant, then they can be maintained at item level.

If more than one delivery address is required to be maintained then the item has to be split into more than one line item.

In the Purchase order/Contract apart from the material price, freight, Insurance, excise, tax and other delivery charges can be maintained in the pricing condition.

These will be maintained through separate Condition types. Condition types are the various elements in the pricing of the Purchase order. Different condition types will be defined to meet the requirements of Import purchases and local purchases.

The other delivery charges can be maintained in the Header level i.e. applicable to the whole Purchase order or in the item level of the Purchase order.

If the delivery charges are maintained at Purchase order level, then the system will treat them as planned delivery costs. For freight and other delivery charges, if there is a different vendor for the planned delivery costs, the vendor details can be maintained in the Purchase order against each of the condition types. Vendor pricing schema will decide which pricing procedure is applicable for the specific vendor.

The Purchase Order/Contract created will be subjected to an approval process. In the approval process certain approving personnel can be maintained as mandatory and non mandatory. If the person is not available alternative persons can be configured in the system to approve the document.

Purchase Orders/Contracts will have a 10-digit number.

Order Types

Number ranges for PR,PO,RFQs are decided to be maintained at Document Type Level

An identifier allowing differentiation between the various forms of a document category. Order types can be used to setup different number ranges and release strategies.

Procurement types are primarily getting divided based on account assignment & Item category given in the purchasing document. For all procurement types overall purchasing cycle remains the same. Various types of Purchasing involved in Janki Corp Ltd. are: