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3

PROJECT Mission Online

Sign-off on Business Blue Print

3. Materials Management

Implementation of mySAP ERP by SEAL InfoTech (P) Ltd. for Kajaria Ceramics Ltd

Mr. Rajesh Mahajan Consultant, SEAL Infotech

(Pvt) Ltd.

Mr. Amit Gupta Project Manager, SEAL Infotech (Pvt) Ltd.

P.N. Pareek Key User, Kajaria Steering Committee

Member, Kajaria Steering Committee Member, Kajaria

Steering Committee Member, SEAL Infotech

(Pvt) Ltd.

Mr. Anil Singh Project Manager, Kajaria Ceramics Ltd

Prem Kumar Key User, Kajaria

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Introduction

This Business Blue Print Document describes the following:

Enterprise Structure of Kajaria Ceramics LTD.,

Business requirements as given by the Kajaria Key Users

Suggestions by SEAL consultants wherever mySAP features are found to be useful to Kajaria’ s business functionality • To-Be Process on mySAP system suggested by SEAL Consultants

• Comments whether the requirement can be realized on the mySAP system or not. • Gaps which are at different stages of exploration

The following codes are given to each module that is within the scope of the agreement:

Module ID Module

1 Financial Accounting 2 Controlling

3 Sales & Distribution 4 Materials Management 5 Production & Planning 6 Plant Maintenance 7 Quality Management

8 Payroll

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A Business Blueprint document is prepared for each module and reference shall be made wherever required to other modules, whenever there is an overlap of business processes across modules or a business process requires to be completed in more than one module. The reference to the business process shall be made using the process numbers as described above;

For e.g.:

As per the above notation, all processes in Sales and Distribution start with 3.*… So if a reference has to be made to process in Accounts Receivable of Financial Accounting, then the reference is made using the notation say, 1.2.*… where ‘1’ refers to Financial Accounting and 1.2 refers to Accounts Receivable and then further numbers denote the sub-processes and activities in the module.

Step 1:

The Module Owner shall identify various existing business processes at a broad level and make a list of them as described under section 1 of this document

Step 2:

Depending upon the various business processes thus identified in Step 1, various business scenario are described in the following way:

As Is Business Processes: The current way of executing the business process shall be explained in detail with data/information flow along with the IT systems / Manual Systems being used in the whole cycle.

Business Requirement: Under this head, the module owner shall describe the requirements of the company vis-à-vis this business scenario, if necessary with examples. Following situations can arise:

(a) The current provisions in the system are sufficient enough and additional configuration efforts are not required. (b) The current provisions are not sufficient and satisfactory and additional features need to be incorporated in the system (c) There is no current provision to handle this transaction at all.

The module owner shall identify each business scenario with the above classification. Step 3:

Based on the Business Requirement, SEAL consultant shall do a detailed Suggested Business Process and based on the analysis, shall propose the best fit business process on the mySAP Business Suite system.

It may not be possible to decide the realization possibility of all Business requirements on the mySAP Business Suite immediately and hence the following legend is being followed for describing the statuses:

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Status of To-Be Business

Process Status Description

A-Possible Can be implemented on mySAP ERP 2005

B-Possible with workaround Can be implemented on mySAP ERP 2005 through indirect means C-Possible with ABAP Can be implemented on mySAP ERP 2005 through ABAP/4 development D-Possible with ABAP (But

performance issue)

Can be implemented on mySAP ERP 2005 through ABAP/4 development but system performance may be effected

E-Not possible with out

Major Modification Cannot be implemented on mySAP ERP 2005 without major system modification

F-Open for exploration Possibility of implementation will be explored in the development environment. Cannot be confirmed at this stage

G-Not possible Cannot be implemented on mySAP ERP 2005

H-Not in Scope Cannot be implemented because it is not part of the scope defined in the “Software Services Agreement” between SEAL and Kajaria Ceramics Ltd.

The To-Be business process realization is dependent on the following aspects:

Scope of services described in the Software Services Agreement signed by Kajaria Ceramics and SEAL  Scope of functionality described in the Software Services Agreement mentioned above.

 Capabilities and Limitations of mySAP ERP 2005

As-Is Business Knowledge Transfer from Kajaria Ceramics Project Team members

Business Requirements defined by the Kajaria Ceramics Project Team members

Kajaria Ceramics accepts that the decision to accept the ‘To-Be’ Business Processes is completely its own and not influenced by SEAL. SEAL shall not be responsible for the business consequences on Kajaria Ceramics Ltd. after the realization and usage of the processes being suggested here.

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Kajaria Ceramics shall indemnify SEAL from all responsibilities for any other business consequences during the framing of the To-Be Business processes, or at any time during or after the realization / implementation of these processes on mySAP ERP 2005 or while using the system.

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Contents

# Topic Page Numbers

Start End

0 Process Scope – List of Business Processes 6 7

1 Material / Services Range and Procurement Types 8 9

2 Enterprise Structure 10 13

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0. Process Scope – List of Business Processes

Process

Id Process Description

4.1 Master Data Maintenance 4.1.1 Material Master Maintenance 4.1.2 Shipping Instructions

4.1.3 Purchasing Value Keys 4.1.4 Service Master Maintenance 4.1.5 Vendor Master Maintenance 4.1.6 Purchasing Info Records 4.1.7 Source List Maintenance

4.1.8 Maintaining Vendor Evaluation Criteria 4.1.9 Maintaining Conditions

4.1.10 Payment Terms

4.2 Material Requirement Planning 4.3 Procurement Process

4.3.1 Purchase Requisition

4.3.2 Approval of Purchase Requisition 4.3.3 Request for Quotation

4.3.4 Quotation

4.3.5 Purchase Order Creation 4.3.6 Purchase Order Approval 4.3.7 Purchase Order Follow-Up

4.4 Gate Pass for Entry & Exit of Goods 4.5 Goods Receipt

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4.5.2 Goods Receipt against Stock Transport Orders 4.5.3 Goods Receipt against Service Orders

4.5.4 Goods Receipt against Subcontracting Orders 4.5.5 Screen manufacturing

4.5.6 Goods Receipt of Customer Returned Materials 4.5.7 Rejection Handling while GR

4.5.8 Excise Transactions while GR 4.6 Goods Issue

4.6.1 Goods Issue to Production 4.6.2 Goods Issue to Consumables 4.6.3 Goods Issue to Capital Items

4.6.4 Goods Issue against Subcontracting Orders 4.7 Scrap Handling

4.8 Logistics Invoice Verification

4.8.1 Invoice Variance and Vendor Invoice Block 4.8.2 Releasing Blocked Invoices

4.8.3 Subsequent Debit/Credit

4.8.4 Delivery cost- Planned/Unplanned 4.8.5 GR/IR Account Maintenance 4.9 Physical Inventory

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1. Material/Services Coverage & Different Types of Procurement Procurement at Kajaria covers the following items:

• Raw Material required for Production

• Packing Material and accessories required for Packed Finished Products • Engineering / Spares item & Consumables

• Services with Material Supply Repairs etc Kajaria makes the following type of purchases:

1. Procure-to-Stock 2. MRP based Procurement

3. Need-based Procurement – based on Purchase Requisition 4. Capital – Projects / General

5. Services

6. Service with material supply – Job work 7. Cash Purchase

Brief Explanation of each type of Purchase:

1. Procure-To-Stock

In case of Procure-To-Stock type, the re-order level for each material is maintained by stores department. Stores create purchase requisitions. It goes through approval process. Further, a purchase order is prepared with reference to PREQ, approved by Purchase Committee and send to the concerned vendor.

2. Purchase Requisition based

In case of purchase requisition based purchases, concerned departments raise a purchase requisition, which is approved by their respective Hod’s. Then the purchase checks for available sources of suppliers and price of that material is enquired with various sources, based on Price, Quality and delivery a best possible vendor is selected and the final quotation goes through a approval process. Then the PO document is finally prepared and approved and sent to the vendor.

3. Capital Items

For capital purchases, the purchase requisitions is raised by the concerned dept and it’s approved by concerned authorities and then purchase dept obtains different quotes from various sources and compared the best quote as final quotation and it’s goes through approval process. The Purchase then prepares a PO and it’s approved by Purchase Committee.

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4. Service Purchase Orders with Material Supply/ Job work Orders

Sub-contracting / Job work Orders are created on service providers in case where Kajaria needs to get its material processed from service providers due to lack of that service capability / capacity with in KCL. After processing, KCL will take back the entire processed material.

5. Services

Services are performed by various vendors, either at in house or outside the factory by creating the purchase orders with required terms and conditions and the applicable service charges shall be paid to the vendor, after satisfactory performances.

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2. Enterprise Structure

Plants (under Company Kajaria Ceramics Ltd.)

Current New

Code Description Code Description Justification / Purpose of the Organizational Unit

Sikanderabad Plant 1100 Kajaria Sikanderabad Plant Kajaria’s Floor Tiles Manufacturing facility at Sikanderabad

Gailpur Plant 1200 Kajaria Gailpur Plant Kajaria’s wall Tiles Manufacturing facility at Gailpur Kajaria’s Delhi Depot 2100 Kajaria’s Delhi Depot Kajaria’s Delhi Depot

Kajaria’s Jaipur Depot 2200 Kajaria’s Jaipur Depot Kajaria’s Jaipur Depot Kajaria’s Mumbai Depot 2300 Kajaria’s Mumbai Depot Kajaria’s Mumbai Depot Kajaria’s Kolkata Depot 2400 Kajaria’s Kolkata Depot Kajaria’s Kolkata Depot Kajaria’s Cochin Depot 2500 Kajaria’s Cochin Depot Kajaria’s Cochin Depot Kajaria’s Chennai Depot 2600 Kajaria’s Delhi Depot Kajaria’s Chennai Depot Kajaria’s Bangalore Depot 2700 Kajaria’s Bangalore Depot Kajaria’s Bangalore Depot Kajaria’s Ahmedabad Showroom 3100 Kajaria’s Ahmedabad Showroom Kajaria’s Ahmedabad Showroom Kajaria’s Gurgaon Showroom 3200 Kajaria’s Gurgaon Showroom Kajaria’s Gurgaon Showroom Kajaria’s Mumbai Showroom 3300 Kajaria’s Mumbai Showroom Kajaria’s Mumbai Showroom Kajaria’s Bangalore Showroom 3400 Kajaria’s Bangalore Showroom Kajaria’s Bangalore Showroom

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Current New

Code Description Code Description Justification / Purpose of the Organizational Unit

Raw materials – Bin ST01 Storage of raw materials

Raw materials – Bin ST02 Storage of raw materials

Raw materials – Bin ST03 Storage of raw materials

Raw materials – Bin ST04 Storage of raw materials

Raw materials – Bin ST05 Storage of raw materials

Raw materials – Bin ST06 Storage of raw materials

Raw materials – Bin ST07 Storage of raw materials

Raw materials – Bin ST08 Storage of raw materials

Raw materials – Bin ST09 Storage of raw materials

Raw materials – Bin ST10 Storage of raw materials

Raw materials – Bin ST11 Storage of raw materials

Raw materials – Bin ST12 Storage of raw materials

Raw materials – Bin ST13 Storage of raw materials

Raw materials – Bin ST14 Storage of raw materials

Raw materials – Bin ST15 Storage of raw materials

Raw materials – Bin ST16 Storage of raw materials

Raw materials – Bin ST17 Storage of raw materials

Raw materials – Bin ST18 Storage of raw materials

Raw materials – Bin ST19 Storage of raw materials

Raw materials – Bin(OUTSIDE) ST20 Storage of raw materials

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Glazed Raw Material ST22 Glazed Raw Material

Pigments and stains PS01 Pigments and stains

Packing Materials PM01 Pack Mat (Plant) Storage location of packing materials

Finished Goods FG01 FG (Plant) Storage of finished goods

LPG LPG1 LPG Storage Location Storage of LPG (cylinders)

LPG BULK LPG2 LPG Storage Location (bullet) Storage of LPG (In bullet) Engineering & Spares ES01 Engg/Spares Storage Storage of engg and spares

High Speed Diesel DST1 HSD Storage Storage of HSD

Furnace Oil FO01 Furnace Oil Storage Furnace Oil Storage

LDO LDO1 LDO Storage LDO Storage

Note: Codification for the storage locations, yet to be given for C&F and head office by the Key User Purchasing Organization

Current New

Code Description Code Description

Justification / Purpose of the Organizational Unit

Purchase Department 1000 Kajaria Purchasing Organization Centralised Purchasing Organisation for Kajaria

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in KCL is to be finalised.

Purchase Group

Current New

Code Description Code Description

Justification / Purpose of the Organizational Unit

Factory Operations, Sikandarabad Sikandarabad Factory Operations Factory Operations, Factory Operations, Gailpur Gailpur Factory Operations Factory Operations,

Head Office operations, New Delhi Head Office, New Delhi Head Office Operations, New Delhi

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3. To - Be Business Processes 4.1 Master Data Maintenance

AS-IS Business Process

At Kajaria Ceramics, general data is maintained in the existing legacy system for raw materials, stores, spares, power and fuel and packaging materials. And the prices, terms and conditions for vendors are also maintained.

Business Requirements

Master data is required to maintain uniquely, as per the SAP standard system, for the following:

1. Material 2. Vendor

3. Purchasing info record (Conditions) 4. Services

5. Vendor evaluation

Suggested Business Process

SAP R/3 provides functionality for maintaining the following master data:

1. Materials 2. Services 3. Vendors

4. Purchasing Info Records 5. Source List

6. Vendor Evaluation 7. Conditions (Commercial) Gaps:

A

4.1.1 Sub-Process Scope: Maintenance of Material Master AS-IS Business Process

Material Master: is maintained in legacy system. Following information is maintained in the system:

1 material description 2.unit of measure

3. Sub-Ledger account description 4. Cost Centre

Whenever there is a new material, material code is opened by Stores in the system with above mentioned details.

Suggested Business Process

Kajaria Ceramics shall maintain material master data in Standard SAP System. In mySAP ERP 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.

The material master is used by all components in the SAP Logistics System. The integration of all material data in a 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:

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Materials are grouped into:

1.Raw materials: these are further categorized according to manufacturing operation,

viz-• Body • Glaze Frits

• Glaze material others • Stains

• Zirconium

These are further differentiated according to local/ Indigenous and import.

2. Packing materials: include cartoons of various sizes, wooden pallets, and plastic sheets for shrink wrap, glue, ink and strapping rolls.

3. Fuel: include RLNG, HSD, LDO, Furnace oil.

4. Finished goods: There are two types of finished goods: 1. Floor Tiles ( matt)

2. Wall Tiles (glossy)

Floor tiles are categorized according to the size like 300 X 300 mm, 400 x 400 mm, 395 x395 mm, etc which is further grouped into series like Plain, printed, budget series, and etc The product in the series is further divided into standard, commercial and utility.

Broken tiles are sold separately as scrap.

5. Trading Goods: Wall and floor tiles, borders and cassette are procured within India and are also imported from china, Italy, Spain, etc for trading.

Walls and floor tiles meant for trading are classified like finished goods. (See 4.)

In Purchasing for ordering

In Inventory Management for goods movement postings and physical inventory

In Invoice Verification for posting invoices

In Sales and Distribution for sales order processing

In Production Planning and Control for material requirements planning, scheduling, and work scheduling

Material Type

Materials with the same basic attributes are grouped together and assigned to a material type.

This allows managing different materials in a uniform manner in accordance with your company's requirements. SAP Standard Material types can be used for all the materials. At Kajaria, the material types, used are,

Raw Materials (ROH)Packing Materials (VERP)Semi finished (HALB)

Pipeline (PIPE) - Only in case of SikanderabadFinished (FERT)

Trading Goods (HAWA)Spares (ERSA)

Manufacturer Parts (HERS)

Operating supplies (HIBE)–Only in case of Sikanderabad Plant for screen

Non-stock Materials (NLAG)Non valuated Materials (UNBW)Service (DIEN)

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Business Requirements

Material master is required to maintain uniquely, for raw materials, packaging materials, semi finished goods, finished goods, spares, trading goods, pipeline materials.

Requirement to have external number range.

Manufacturer Part Number (MPN), which is different from Kajaria’ s material number, to be added while creating PO, for certain trading materials as and when required.

Requirement is to make Fuel as a new material type (statutory requirement)

Whether the material number can be assigned internally or externally

Which screens appear and in what sequence which departmental data you may enter.

What procurement type the material has, that is, whether it is manufactured in-house or procured externally, or both (for Semi-finish)

Material master creation includes Material Basic data, Purchasing, MRP, Accounting Views, information like description of the material, base unit of measure, order unit, valuation class, Price control etc. are given while creating the material master.

Material coding for all material types will be provided as per the requirement.

Material Group

Key that you use to group together several materials or services

with the same attributes, and to assign them to a particular material group.

Material groups are maintained in order to meet the analysis & reporting requirements as well for searching material master records.

Material will be grouped according to their characteristics maintained and a 4 digit materials groups provided as required. Material Master (Excise Data)

The part of the material master record that contains information relating to Indian excise duty. In conjunction with other data, this data is used to calculate excise duty on various transactions.

The excise part of the material master is divided into the following screens:

Chapter IDs

On this screen, you 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

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Material and Chapter ID Combination

On this screen, you maintain the excise data relating to materials. For each material, specify:

• Chapter ID

• Whether the material can be sent to subcontractors • The material type

This denotes, for example, whether the material is a raw material, a capital good this affects the CENVAT process – or if it is a finished good on which excise has been paid, to be covered by the Update of RG 1 and Part I Registers

• Whether you accept more than one goods receipt per excise invoice, and if so, whether the excise duty should be credited to the CENVAT account immediately a goods receipt is posted (multiple credit) or not until all the goods receipts have arrived (single credit) This information is valid for a given plant. If the information is valid for all the plants, however, leave the Plant field blank.

Material Assessable Value

On this screen, you maintain the net dealer price and the assessable value of all materials that you send to subcontractors or for any other issue. These values serve as the excise base value when the materials are issued, and tell the system how much excise duty to reverse from your CENVAT account.

CENVAT Determination

On this screen, you specify which raw materials are used to produce which finished (or semi finished) goods. The system uses this information to determine whether it you can claim a CENVAT credit for a material.

Excise Tax Rate

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of excise duty that might apply, so you must take into consideration each permutation of plant and customer; and each combination of plant and vendor.

You can maintain the basic excise rates in the following forms: • Ad valorem

• Specific

• As a combination of both

For each rate, specify until which date it applies.

You can also maintain the additional excise duty and special excise duty in ad valorem form, should any apply. If you need to give these rates as a fixed sum, use the Quantity Based AED and SED screen. Additional Excise Rate

On this screen, maintain any cess applicable. Exceptional Material Excise Rate

On this screen, maintain any exceptions that apply to the excise rates that you have defined. Exceptions can apply to a single material from all vendors, of to a single material from one vendor only. If you have an exceptional rate for a customer–material combination, you can maintain it here as well.

Sales Tax Setoff Percentages

On this screen, maintain the percentage of local sales tax on inputs that you can deduct against LST on outputs. The setoff amount is deducted from the inventory valuation of the material.

Currently very few states, for example, Maharashtra and Gujarat, participate in this scheme.

Gaps: A.

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4.1.2 Sub-Process Scope: Shipping Instructions AS-IS Business Process

Shipping and packaging instruction are mentioned in PO. Business Requirements

Suggested Business Process

Shipping and packaging instructions are set out in purchase orders issued to vendors. When the relevant goods receipts are entered, the extent to which the vendor has complied with these instructions can then be noted.

In PO it will be specified:

Which packaging and shipping instructions apply to deliveries of ordered goods

Whether the instructions are to be included in the PO document printout

Which criteria apply in assessing the degree of the vendor's compliance with the instructions

Example: CO coil NE unpacked NT nylon net Gaps: A

4.1.3 Sub-Process Scope: Purchasing Value Keys AS-IS Business Process

At KCL, no purchasing value keys are maintained in the legacy system.

Business Requirements

Suggested Business Process Purchasing value key

A key defining the valid reminder days and tolerance limits applicable to this material for the purchasing department.

The purchasing value key serves as a data entry aid.

In the material master record, you can store rules governing: The issue of reminders and urging letters (expediters) with respect to nearly due and overdue deliveries

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"underage")

Order acknowledgment requirements for PO items Shipping/packaging instructions

This data appears as default data in purchasing documents and is taken from the material master record (unless a purchasing info record exists, in which case it is taken from the latter source). Gaps:

A

4.1.4 Sub Process Scope: Service Master Maintenance AS-IS Business Process

At Kajaria Ceramics, services are used for General, Engineering, Housekeeping, Security, Forklifts, Maintenance of AC’s, Network and photocopier. Also Kajaria has also got some services on AMC’s with some vendors. No service master is maintained in the legacy system.

TDS and service Tax, works Tax, etc are charged by vendor/service provider.

Business Requirements

Services are required as per the SAP standard system, as part of service contracts negotiated with predetermined terms and conditions with approved vendors for performing the services of engineering, production, general, house keeping, network, maintenance of AC’s, security and photocopier.

Services shall always be made available through the SAP system to obtain the services with the vendors whenever the requirement comes

Suggested Business Process

Service masters shall be maintained for various Services with Description, Category and Unit of Measure using the ‘Master Data Maintenance’ in ‘External Services management’ of Materials management Module.

Following critical information shall be maintained in the service master record:

1.

Service Number , which gives a unique identification to the service. This shall be internally generated by the system.

2.

Service Category , which describes whether a service is an internal service or a service to be procured externally. In conjunction with the organizational (maintenance) status of the service master, the maintenance views can be controlled i.e. whether a service master can have – a basic data view, controlling view, sales & distribution view. Based on the type of service, the service category shall be maintained.

3.

Description which describes the service in brief

Examples of Services for which Master records shall be created: 1. Annual Maintenance Contracts

2.

Repairs in KCL premises 3. Repairs outside

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Gaps: A

4.1.5 Sub Process Scope: Maintenance of Vendor Master AS-IS Business Process

At Kajaria Ceramics, the vendor master is maintained in the legacy system like their names, addresses, telephone numbers, CST/LST NO, PAN NO. Payment terms and terms and conditions. But the complete information is not maintained.

Vendor Master is maintained in legacy system separately for each manufacturing plant. Following information is maintained in the system:

1.

Address details, telephone, Fax, CST, and LST no. 2. credit days

Material Master: is maintained in legacy system. Following information is maintained in the system:

1 material description, 2.unit of measure

3. Sub-Ledger account description 4. Cost Centre

Business Requirements

Unique vendor master data is required to maintain for each vendor, by giving account numbers, as per SAP standard system. The vendor master data shall be integrated in the system and should be accessed during procurement of materials and the liabilities, for each vendor, to be accounted automatically as and when a transactions takes place

The payment status shall be tracked through the system online, vendor-wise and total vendors

Suggested Business Process

Vendor Master Data shall be maintained at the following levels: • General data

• Company Code Data • Purchase Organisation Data General Data:

The general data includes such information as the vendor's address and telephone number, the language of communication with the vendor, email address, etc.

Company Code Data:

Accounting information shall be maintained at company code level. This data includes, for example, payment transaction data and the number of the relevant control account. Only one control account can be assigned to each vendor. And we can maintain vendor customer relation and vendor bank details in vendor master.

Purchase Organisation Data:

Purchasing data like contact persons, terms of delivery, etc. shall be maintained at purchasing organization level. Vendor’s excise details can be maintained using the CIN functionality of R/3.

Vendor Schema Group

The schema group mentioned in the vendor master is useful in determination of pricing procedures.

Vendor Account Group:

Vendor account Group mentioned in the vendor master is useful to group the vendor e.g.:

1. Domestic Vendors 2. Import Vendors 3. Service vendors

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4. Employee vendors Terms Of Payment

Details of Terms of payments has to be provided by KCL

Terms of payment could be used on different options available in the SAP standard system.

Vendor Master (Excise Data)

The part of the vendor master record that contains information relating to excise duty.

In conjunction with other data, this data is used to calculate excise duty on various transactions.

The excise part of the vendor master is divided into the following screens:

Vendor Excise Details

On this screen, you enter your vendors' tax numbers, which are used for various forms of correspondence and reports:

• Excise registration number (and the range, division, and collector ate in which this is located)

• Central sales tax (CST) number

• Local sales tax (LST) registration number • Permanent account number (PAN)

In order for the system to be able to calculate which rate of excise duty to apply on purchases from the vendor, you must also:

• Assign it a vendor excise duty status

• Specify what type the vendor is, for example, a manufacturer, first-stage dealer, or importer for 57AE returns

• If the vendor qualifies as a small-scale industry(SSI), you must also specify:

− What its SSI status is (which you must first have defined under SSI rates,

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Rates

On this screen, you define the excise rates that apply to purchases from vendors that qualify as SSIs.

You define one status for each band (or "slab") of sales volume provided for by the law, and for each SSI status, the rates of excise duty that applies to that slab under the two schemes

Excise Indicator for Plant and Vendor

On this screen, you define the final excise duty indicator Gaps:

A:

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AS-IS Business Process

At Kajaria Ceramics, no purchasing info record is maintained in the legacy system.

Business Requirements

Kajaria Ceramics shall be required to maintain applicable condition records, for desired vendors, for arriving effective prices, while making purchase orders, as per the SAP standard system

Suggested Business Process

Purchasing Info records shall store vendor - material details for various types of procurement like standard and sub-contracting. These details shall be maintained for a Plant and Purchasing Organization. Details like Prices & other conditions, under and over delivery tolerances, are stored in these records. The information in the latest purchasing info record for a combination of vendor and material for that purchasing organization and plant shall always be defaulted when creating a Purchase Order.

Purchasing info records shall be created manually or automatically. Manual Creation shall be done when a purchasing info record doesn’t exist already for a vendor – material combination for a purchasing organization and plant. Manual Update can be done when there are changes in the values of the Purchasing Info Records

Automatic updation/creation is also possible at the time of creation of Quotation, Purchase Order or Contract for those records that already exist. Purchasing Info Records for multiple validity periods can be maintained at the same time.

Gaps: A

4.1.7 Source List Maintenance AS-IS Business Process

At Kajaria Ceramics, no standard source lists is maintained in the legacy system.

Business Requirements

Shall be maintained as per SAP standard system

Suggested Business Process

The source list shall be used to maintain the possible sources of supply of material for a given period or to block a possible source of supply for a specific period or to completely block the external procurement of a material.

A Source List shall be created automatically or manually.

1. Automatic creation of a record in the source list for a particular material is done when a purchasing info record is created. Source list shall also be automatically created when

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an outline agreement is created.

2. Manual maintenance shall be done when a new source / new material is identified.

Gaps: A

4.1.8 Maintain Vendor Evaluation Criteria AS-IS Business Process

At Kajaria Ceramics, vendor evaluation assessment is carried, manually, once in a year, to carry out the total performance results of each vendor with respect to delivery on time, competitive price, satisfied quality and committed service. This is also calculated based on no of rejections and delayed deliveries and services

Business Requirements

Vendor evaluation criteria is required, for desired vendors, as per the SAP standard system to facilitate and give scoring system for individual vendors

Suggested Business Process

Vendor evaluation is to be done to analyze and assess the performance of external suppliers of materials & services

Vendors shall be awarded scores for a number of different criteria. Vendor’s overall scores shall be used to determine whether they are retained in or eliminated from Kajaria’s vendor base.

Vendor evaluation shall be done on the basis of the following main criteria:

Price Quality Delivery and Service.

Under the main criterion, again further sub-criterion can be defined like Price level, Price History, Goods Receipt, Quality Audit, Complaints / Rejection level, On-time delivery performance, Quantity reliability, Compliance with shipping instructions, Confirmation Date etc.

KCL shall define a scoring range i.e. a common scale on which the vendors can be rated. The scale shall be between 1-100 points. For every main criteria, a weightage can be assigned The overall score shall be calculated from the scores of the main criteria taking the weighing factors for each main criterion into account. All the values shall be decided at the time of configuration.

Gaps: A

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4.1.9 Sub-Process Scope: Maintenance of Conditions for Procuring Materials 4.1.9.1 Prices

AS-IS Business Process

The pricing structure is maintained manually, at Kajaria, based on each vendor’s terms and conditions which include Gross Price, VAT, Education CESS, CENVAT, MODVAT, taxes, service tax, discounts, service charges , work tax, etc and this is being used in the purchase orders for procuring the materials

Business Requirements

The pricing is required to be calculated and maintained for each vendor, in order to generate effective price while creating a purchase order, as per the SAP standard system which can be calculated on Gross Price for VAT, Education CESS, taxes, discounts, service charges, as per legal requirements.

Suggested Business Process

This component enables you to store pricing stipulations agreed with the vendor (such as applicable discounts or surcharges, or stipulations regarding the payment of freight costs) in the system. You can enter these conditions in quotations, outline purchase agreements, and info records. You also have the option of entering general conditions at vendor level, for example. The system then applies the conditions in determining the price in purchase orders (POs). You can enter further conditions in the PO itself

Prices shall be of three types –

(a) Gross Price which is exclusive of Discounts or surcharges, (b) Net Price inclusive of surcharges, discounts, taxes,

(c) Effective Price which includes the Net Price but taking delivery costs, cash discount and other incidental costs. Pricing conditions shall be maintained in the purchasing info records or in the header or item level as applicable at the time of PO creation.

Gaps: A

4.1.9.2 Discounts AS-IS Business Process

At Kajaria Ceramics, the discounts are maintained in the legacy system for applicable vendors along with vendor information data, terms and conditions.

Qty discounts, Qty Scale discounts both on percentage basis as well as on value basis are offered by vendors. Like in the case of

Suggested Business Process

The Discount condition records shall be maintained with conditions and values associated with conditions. While processing a transaction, the system will search for valid record and as soon as it finds the record matching the condition of sale it should return a discount value. Some of the discounts can be maintained at the

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Propane purchase.

End of the period rebate on purchases are also given by vendors. These discounts shall be used in the purchase orders during procurement process.

Business Requirements

Shall be maintained as per SAP standard system

time of preparing the purchasing document. Gaps:

A

4.1.9.3 Excise & Import Duty AS-IS Business Process

At Kajaria Ceramics, the applicable excise duty with each vendor, is currently maintained in legacy system to use in the purchase order document while procuring the materials

Business Requirements

Shall be maintained as per SAP standard system

Suggested Business Process

This shall include the exceptional rates that may be applicable for certain vendors and material combination. The setoff of excise duty or inventorying of excise duty will be controlled by Tax codes. Vendor, Material and other factors that determine the excise duty shall be maintained through the CIN Module of SAP R/3.

In Imports the CVD, which needs to be captured for CENVAT postings, shall also be incorporated.

Gaps: A

4.1.9.4 Sales Tax / VAT AS-IS Business Process

At Kajaria Ceramics, applicable sales tax and VAT is used, in the purchase order documents against each vendor

Business Requirements

Shall be maintained as per SAP standard system

Suggested Business Process

Tax condition records can be maintained in the system for various levels of taxes, like central and state level, which will be automatically determined during a transaction depending upon the receiving plant and the vendor’s locations.

The tax values are maintained as percentages with the help of tax codes.

Various sales tax codes are to be maintained in FICO Module of SAP R/3.

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AS-IS Business Process

At Kajaria Ceramics, no Octroi is paid. Business Requirements

Nil

Suggested Business Process

Gaps: A 4.1.9.6 Freight AS-IS Business Process

At Kajaria Ceramics, freight is being used as and when applicable with respective vendors and it’s been given in the purchase order. Freight charges are borne by Kajaria Ceramics and /or by the vendor as per the terms and conditions agreed in PO.

• Freight charges are paid directly to the supplier.

• Freight charges are paid to the goods carrier at the time of GR.

KCL has hired the services of Goods carrier/Transporters in the form of an agreement to transport the goods from vendor to the plant on the behalf of KCL.

Business Requirements

Shall be maintained as per SAP standard system.

Suggested Business Process

Freight is to be maintained as a condition type.

The Planned Freight costs shall be booked in the same Purchase Order for which the procurement is to be done. In cases where the material carrying party is different from the one on whom the PO is raised the Freight Vendor shall also be maintained in the same PO. For uncertain freights, approximate/minimal freight shall be entered in the PO, for the internal system purpose and final PO for vendor shall be sent without mentioning the freight. And when the actual freight comes to be known, during invoice entry, the correct freight amount can be entered. The freight invoice will be booked as soon as the material is received in the stores and the value will be updated in the stocks.

Gaps: A

4.1.10 Payment Terms AS-IS Business Process

At Kajaria Ceramics, payment terms are maintained manually for each vendor, based on the predetermined negotiations and terms & conditions.

Following Payment terms are used: 1.Advance against Purchase 2.100% payment against delivery

Suggested Business Process

Kajaria Ceramics shall use the standard payment terms wherever possible. Wherever required, specific payment terms shall be defined in the system like Payment with LC.

Payment terms could feasibly be carried out for each vendor as per the agreed negotiations like 30 days, 45 days, payment against delivery, etc, etc

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3. Partly advance, balance against delivery

4. partly advance+ partly against delivery,+ partly against certain credit days and remaining after retention period

5. Payment after certain credit days.

Percentage in payment terms varies from vendors to vendor and material to material.

Business Requirements

Shall be maintained as per SAP standard system.

The system should be able to allow LC payment for local and import vendors.

The total quantity shall be received, but the entire payment can not be released based on the deviation of quality parameters. Gaps: A

The payment shall be blocked under deviation of material quality. The total quantity shall be received, but the entire payment can not be released based on the deviation of quality parameters.

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AS-IS Business Process This is covered in PP module Business Requirements

The requirement is covered in PP module

Suggested Business Process

MRP: - The main function of MRP (Material Requirements Planning) is to ensure material availability at right time and in right quantity. It is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production based on the requirements against the available stocks. You must first create the master data to be able to work with the MRP component. To do this, you require the following components:

Material Master

Bills of Material

The MRP is covered in PP module Gaps:

A

4.3 Procurement Process AS-IS Business Process

At Kajaria Ceramics, procurement is categorised into • Local Purchase

• Import Purchase

Service Purchase

The purchase department at New Delhi, Sikanderabad and Gailpur, prepares purchase requisitions, Request for quotations, Contracts, Scheduling Agreement and purchase orders. The purchases at depots and showrooms are through Head Office. Once, the vendor is finalised, then the purchase orders is prepared and it is approved by Purchase Committee comprising of User Dept’s Head, Purchase Dept’s Head, Plant Head, Account’s Head, GMD and CMD.

Suggested Business Process

External procurement in the MM System centers around a general cycle of activities.

Process Flow

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

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

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Against the PO, the materials will be supplied by the vendor and GR will be prepared against vendor’s delivery challan /invoice, after inspection of the materials as per the inspection criteria / parameters given for the raw material and packaging materials and then it is finally sent to the stores department. Any materials being found defect or rejected, it’s then sent back to the vendor with return note and gate pass

Based on the GR and inspection reports, the invoice of the vendor, will be processed by purchasing dept and forwarded to the finance dept for the payment release

Business Requirements

The procurement process shall be managed as per SAP standard system.

The Purchase requisition should be the basis for starting the procurement process

The Request for quotation shall be processed based on purchase requisition approval only and the RFQs shall be obtained from several vendors and the rates and conditions shall be entered in the system in order to prepare a comparison statement on a mean / minimum criteria

During the purchase order creation, for the given materials with respective vendors, the predefined prices, conditions and payment terms should be taken automatically, from the master data that are maintained in the SAP system

The approval process shall be applicable for Purchase Requisitions, Request for Quotations, Purchase Orders and Contracts, on document type basis. The approvers shall include User Deptt Head, Purchase Deptt Head, Plant Head, Account ‘s Deptt Head, GMD and CMD. It is based on the PO value. The purchasing order documents shall be converted in to

word/text format, so as to facilitate for sending them to vendors, through e-mail.

Purchasing groups that are defined for Head Office should be

requisitions manually, or they can be generated automatically by the materials planning and control system.

Source Determination

The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements.

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.

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 Pos 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.

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 Receipt and Inventory Management

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.

Invoice Verification

The system supports the checking and matching of invoices. The accounts payable clerk 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

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flexible while placing orders for Sikanderabad, Gailpur, depots and showrooms. Either of the groups shall be used through either locations

invoices for payment.

Procurement for Stock Versus Procurement for Direct Consumption

In the MM System, you procure either for stock or for direct consumption. You can determine the purpose for which ordered materials are being procured in the purchase order, for example. This section describes the differences between procuring for stock and procuring for direct consumption in the MM System.

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 center) . 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.

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

If you order stock materials, the ordered material must have a material master record. If you order 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

The Procurement process has various stages like Purchase Requisition, Request for Quotation, Quotation, Purchase Order, Contract, Goods Receipt with RG23 Postings and Invoice Verification

Purchase requisition can be created for a given plant storage location, purchase organisation, material code and delivery date. Request for Quotation, can be created by giving the material code, Plant, Storage location, purchase organisation, quotation deadline and requirement date. Vendor prices can be maintained and price comparison can be made.

Gaps:

The purchase order documents that need to be converted into word/text format in order to send them to vendors through e-mail, shall be considered during the ABAP enhancement.

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AS-IS Business Process

At Kajaria Ceramics, any material is required, it’s generated through purchase requisition and approved by the individual dept head and forwarded to the purchase dept for the procurement.

Materials requirements are identified either in the user departments or via 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 for identifying the material requirement for purchase.

Minimum and maximum level of stock is maintained in stores. When the material falls below minimum level, a Purchase Requisition/Indent is created by stores. The stock is monitored on daily basis by taking the report from legacy system.

In case of plan for more production, production department creates indent for raw materials.

Business Requirements

The purchase requisition shall be created through SAP standard system. A purchase requisition can be created manually as well as automatically through MRP run. The business requirement is to have a different number range for PREQ’S for both the plants for differentiating and identifying purpose on plant basis.

The purchase requisition should be created for services and materials requirements

Suggested Business Process

A purchase requisition is a request or instruction to Purchasing to procure a certain quantity of a material or a service so that it is available at a certain point in time.

Purchase requisition contains item category, account assignment category, material group, quantity and delivery date of the material to be supplied or the service to be performed.

Purchase Requisitions are created under the following situations:

a.

Purchase Requisitions shall be created - automatically on MRP Run or manually by the requesting department.

b. Purchase requisition shall be created manually as well as automatically by the plant maintenance.

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AS-IS Business Process

At Kajaria Ceramics, there is PREQ approval process the purchase requisition after approval from Plant head/ JMD is forwarded to Purchase Dept.

Only in the case of capital goods and high value items PREQ is sent for approval to JMD and/or CMD then only the purchase requisition is ready for further process.

Business Requirements

The purchase requisition should undergo the approval process as per the SAP system for all the purchase.

Suggested Business Process

Release Strategy shall be incorporated for release of Purchase Requisition as per the requirements.

The release is applicable for only manually generated Purchase Requisitions

Gaps: A

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AS-IS Business Process

In case of any new material or services or in some cases for existing material/services being requisitioned, multiple enquiries are floated by the purchase dept with concerned suppliers for quotation.

Request to suppliers is send either by Fax, E-mail, Verbal/Phone to submit price quotation for the specified quantity, terms & conditions, delivery schedule for the materials & services.

Business Requirements

Request for quotations shall be created through SAP standard system, with reference to approved purchase requisitions or in general.

Different RFQs shall be prepared through SAP standard system and send to various vendors for the quotations

The RFQ shall contain the total quantity required, name & address of the vendor, valid date and the predefined terms and conditions.

Suggested Business Process

A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing organization to submit a quotation (bid) for the supply of materials or performance of services.

An RFQ consists of the RFQ header and the items.

RFQ header

Contains general information on the RFQ, such as the vendor’s address

Items

Contain the total quantities and delivery dates for the materials or services specified in the RFQ.

You use this component if you wish to manage and compare requests for quotation (RFQs) issued to vendors and the quotations submitted by the latter in response to them.

Gaps: A

4.3.4 Sub-Process Scope: Quotation AS-IS Business Process

At Kajaria Ceramics, upon receipt of quotes from various suppliers, a comparative statement is prepared in excel, based on the conditions like price, taxes, duties, Freight, discount, credit days, timely delivery, reliability, service , etc . Total cost to the company is calculated and then evaluation is carried out for the best option to find a right vendor for procurement of materials.

Depending on the value the Quotation undergoes the approval process and then Quotation is finalization.

The most suitable quote is finalised for further process.

Suggested Business Process

A quotation is an offer by a vendor to a purchasing organization regarding the supply of materials or performance of services subject to specified conditions.

The RFQ and the quotation form is a single document. Prices and conditions quoted by vendors are entered in the original RFQ. If you have issued an RFQ to several vendors, you can have the system determine the most favourable quotation submitted and automatically generate letters of rejection to the unsuccessful bidders. You can also store the prices and terms of delivery from certain quotations in an info record for future accessing.

A quotation is legally binding on the vendor for a certain period. The quotation is the vendor’s response to a request for quotation

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Business Requirements:

The comparison statement or list shall be generated through SAP standard system.

The price comparison list can be prepared based on either average or minimum value of all the obtained quotations for various vendors by providing collective number.

The RFQ’S should undergo the approval process as per the SAP system for all the purchase.

issued by a purchasing organization.

A quotation consists of items in which the total quantity and delivery date of an offered material or service are specified. An item of a quotation may contain a delivery schedule made up of a number of schedule lines in which the total quantity is broken down into smaller quantities to be delivered on the specified dates over a certain period.

An item of the procurement type External service contains a set of service specifications. The latter can be hierarchically structured. The summary view of such a hierarchical structure is referred to as an outline. The outline comprises a number of levels, each representing a level of the service hierarchy. The quantities of the quotation are set out in service lines, representing individual jobs or activities

You can compare the prices from all quotations received as a result of a competitive bidding process using the price comparison list . The comparison list ranks the quotations by item from lowest to highest price.

Prerequisites

Before you generate the price comparison list, you need to consider the following:

If possible, each quotation should have pricing data for the same item. Only then is the correct interpretation of the mean and total values possible.

If quotations 1 and 2 have pricing data for item 1, but quotation 3 only has price information for item 2, then the system does not have enough information to accurately compare the prices of all three quotations.

If a quotation is submitted in a foreign currency, the price is automatically translated into the currency of the company code, which is determined by your purchasing organization.

You should therefore make certain that up-to-date exchange rates are defined in your system.

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You can compare the quotations within the list with a sample quotation. The system displays the percentage deviation between each quotation in the list and the sample quotation.

Mean/minimum value quotation

The price comparison list can also display a "fictitious" quotation reflecting the average or minimum value of all quotations. Select either the Mean or Minimum value quotation field to choose the type of fictitious quotation.

Percentage basis

The price comparison list displays the percentage of each item in relation to the maximum, minimum, or average price. To determine the display type, enter one of the following:

– “+” Highest value for each item is the 100% value – “-“ Lowest value for each item is the 100% value – +"_" Mean value for each item is the 100% value Price Computations

Select the appropriate field to specify which of the following should be taken into account in determining the comparison price:

– Cash discount – Delivery costs – Effective price Gaps:

A

The existing RPO document will not be brought into SAP system. The Purchase Order document will be used as direct document.

4.3.5 Sub-Process Scope: Purchase Order Creation

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At Kajaria Ceramics, purchase orders are prepared for materials and services with reference to purchase requisitions

Purchase orders are prepared some times for imported raw materials as and when they find attractive pricing terms vendors and it’s been negotiated by head office for pricing terms and conditions and the plant shall then place orders based on the production requirements.

Also sends some materials for job work through purchase orders to sub-contractors for making final product. The sub-contractor shall perform his services and return the final products back to Kajaria. Thus the sub-contractor is liable for his service charges only.

Business Requirements

The purchase order shall be created as per SAP standard system and every PO must have purchase requisition reference.

The payment and delivery terms and conditions, which are fed in the master data, should be accessible while creating purchase order

Import PO should display figures in foreign currency, while indigenous PO should display in INR.

The history of PO should be available in the system Shipping notification is required for import goods.

A purchase order is a formal request or instruction from a purchasing organization to a vendor or a plant to supply or provide a certain quantity of goods or services at or by a certain point in time.

A purchase order (PO) consists of a document header and a number of items.

The information shown in the header relates to the entire PO. For example, the terms of payment and the delivery terms are defined in the header.

A procurement type is defined for each of the document items. The following procurement types exist:

• Standard

• Subcontracting

• Stock transfer

• External service

Delivery of the total quantity of material (or performance of the total volume of services) specified in a purchase order item can be spread over a certain period in a delivery schedule, consisting of lines indicating the individual quantities with their corresponding planned delivery dates.

For PO items to be supplied by subcontractors, you can specify the necessary input materials or components that are to be provided to the subcontractor for assembly or processing in respect of each delivery date stipulated.

An item of the procurement type "external service" contains a set of service specifications. The latter can be hierarchically structured. The summary view of such a hierarchical structure is referred to as an outline. The outline comprises a number of levels, each representing a level of the service hierarchy. The order quantities are set out in service lines, representing individual jobs or activities. Value limits are specified instead of service lines for services or work that initially cannot be specified precisely.

If services covered by an already existing contract are released (ordered, or called off against the contract), the PO item can

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contain a value limit relating to the contract in question. Conditions

Conditions can apply at various levels:

• To the entire purchase order

• At item level, to the material to be supplied or to the set of service specifications in the case of services

• At service line level for individual services (tasks or activities)

Account Assignment

Costs can be apportioned among various Controlling objects via the account assignment.

Vendor Confirmations

Vendors can issue confirmations to the relevant purchasing organization indicating their compliance or non-compliance with scheduled delivery dates.

PO History

The transactions following on from a purchase order are documented in the PO history on an item-specific basis.

Partner Roles

Instead of the vendor as the order recipient, other business partners can appear in various partner roles (e.g. goods supplier or invoicing party).

Plant

In the purchase order, each item is destined for a certain plant. Each plant belongs to a company code, to which the vendor’s (creditor’s) invoice is directed.

Texts

You can enter text in a purchase order directly or change texts that are suggested by the system. There are two kinds of text:

• Header text: applies to the entire document

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You define which texts appear in which order on printouts in Customizing for Purchasing. You can enter several header or item texts, which you can identify by your own codes.

Types of Purchase Orders

Purchase Order Types are classified as

• Standard PO

• Imports PO

• Service Orders

• Stock Transport Orders

• Sub-contractor purchase order

These Purchase Documents will have separate numbering series. Standard PO will cover the domestic procurement need of raw & packing materials, consumables, capital items etc. Consumables/Capital items are account assigned to a respective Cost Centre & G/L account.

Imports PO will be used for procurement from foreign countries. Pricing conditions will be maintained based on CVD / Customs Duty and tax conditions which are separate condition types.

Service Purchase Orders are created for the external procurement of services from a vendor. These services can be account assigned to a Cost center & G/L account.

Stock transport orders are used in case of stock transfer from one plant to another.

At the time of Purchase Order creation, system will capture from various masters e.g. purchasing info record, vendor master etc.. which can be changed subsequently.

Change history of Purchase order is available at header as well as item level.

GAPS:A

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