krishna tissues pvt ltd mm header final

Krishna Tissues Pvt. Ltd.(KTPL) Materials Management of 70

SAP ECC 6.0IMPLEMENTATION Business Blueprint Version No - 1.0

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Prepared by Checked by Reviewed by Approvedby

TAPAS KUMAR DASH Tanmoy Dutta Mr.Biswanath Maitra



PROJECT: SANKALPA

Produced by

BR ERP TECHNOLOGY

Organizational MM model:

A) Input and process refinement based on the reports and evaluation.What, when and how much to purchase, choosing the some of Purchase Cost Control, wasteelimination and Warehousing / storage== OBJECTIVES: MM OF ERP.B) PR, QUOTATION, PO, GR, Transfer Order, Transfer Information, Invoicing, Goods Movement, MaterialConsumption, Re-order Point, Safety Stock, Material Master, Vendor Master, MSR Model, Forecasting Model,

Organization Structure: MM OF ERP.A) +B) =====OUTPUT REPORTS AND PLANNING ====MRP, IR, PR, VENDOR EVALUATION,VENDOR CONTROL, Storage Goods Report and INVENTORY

ANALYSIS = = = = BENEFITS: 1) Keeping minimum Inventory possible, 2) Timely generation of PR, 3)Waste elimination, 4) Time saving and Paper saving, 5) Timely information to right person, 6) Vendor selectionbased on the past date, 7) Price Control in PO, 8) Purchasing Record, 9) Product Costing, 10) Segregationbetween Quality, Blocked and unrestricted stock, 11) Tracking of Assets issued to Employees. 12) Automatic FIentries = = =LIMITATIONS: a) Pre ERP preparation, b) Business Process Re-engineering (BPR), c) StrategyProject to choose ERP package and its Implementation Planning, d) Process design, departmentshould be very matured and e) Employees should be trained on the respective ERP packages.

FUTURE SCOPE: a) Business Process Management, b) Business Intelligence, c)Customer Relationship Management, d) Supplier Relationship Management and e)Supply Chain Management.



Materials Management

INTRODUCTION

Materials management function covers the activities carried out in Purchase & Stores function. The Purchasingfunction covers the activities like requirements (Purchase Requisition), Inquiry to supplier (Request forQuotation), Purchase Order, Contract, Purchase Info Record, Source determination.

The stores function (Inventory Management) covers the activities like Receipt of goods from supplier, receipt ofgoods from production, Issue of material to sub-contractor / production, periodic stock taking activity. Themodule also covers the Vendor’s Invoice accounting.

Organization Structure

The Organization Structure is the basic skeleton frame in SAP which structures the Company,Organizational units, Manufacturing units and all other departments essential in running the business. TheOrganization Structure at Company and Company Code level is decided by Finance and the MaterialsManagement Organization Structures, which will be linked to those structures, will be as follows



1. Plant

The Plant is an operating area or branch within a company. The plant is embedded in the organizationalstructure as follows:

The plant is assigned to a single Company Code. A company code has one or manyplants.

One or many Storage Locations in which material stocks are managed can belong to aplant.

A plant can be assigned one or many Sales organizations, Dealers and Distributionchannel or Sales Organization can be assigned by Company Code.

A plant can have several shipping points. A shipping point can be assigned to one plant.

A plant has the following attributes:

A plant has an address. A plant has a language. A plant belongs to a country. A plant has its own material master data.

We can maintain data at plant level for the following views on a material master record inparticular: MRP, Purchasing, Storage, Work scheduling, Production resources/tools,Forecasting, Quality management, Sales, Costing.

2. Storage Location

A storage location is the place where stock is physically kept within a plant. A storagelocation has the following attributes:

There are one or many storage locations within a plant.



A storage location has a description. It is possible to store material data specific to a storage location. 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.

3. Purchase Organization

The purchasing organization is responsible for the complete processing of purchasingactivities (such as requests for quotations and purchase orders). The purchasing organization isembedded in the organizational structure as follows:

A purchasing organization will be assigned to one or many company codes.

4. Purchasing Group

A purchasing group is the key for a buyer or group of buyers responsible for certainpurchasing activities. One or many purchasing groups will act for one purchasing organization.

KTPL Organizing Structure:

FOR PURCHASING:

1) Company2) Company Code3) Plant4) Purchasing Organization:5) Storage Location



Name of Company : KRISHNA TISSUE PRIVATE LTDCompany Code: KTPL………Plant Name: BAGNAN ( Search term: KTPL1)Purchasing Organization (Central ) : Head Office (KTPO)Purchasing Group:a) Head Office ( KTPG01)b) Plant Purchase ( KTPG02)Storage Location:

a) Mechanical ( KTSL01) b) Raw Material (KTSL02)

FOR SALES:a) Sales Organizationb) Shipping Pointsc) Dealersd) Distributors

In KTPL:

One Company Code. One PLANT. PLANT is assigned by one Company Code. ONE PURCHASING ORGANISATION is assigned by one Company Code. TWO PURCHASING GROUPS are assigned by One Purchasing Organization. Two STORAGE LOCATIONS are assigned by ONE PLANT. One Sales Organization and it is assigned by Company Code. There is no Sales Group. There are Shipping Points, Dealers and Distributors.



FLOW DIAGRAM OF ORGANISING STRUCTURE FOR PURCHASING OFKTPL.

COMPANY= = = COMPANY CODE = = = PURCHASINGORGANISATION: PURCHASING GROUPS: a) Head Office Purchase b)Local Purchase = = = PLANT = = = STORAGE LOCATIONS: a) Mechanical( for Engineering material) Store b) RAW material ( for Chemical products)Store.

PURCHASING MODEL (AS-IS)

A ) HEAD OFFICE PURCHASE

B ) LOCAL PURCHASE

Products : Chemical and Engineering

No PR for Chemical (Regular) Product and PO is placed by Head Office depending on Stock Level.

HEAD OFFICE PURCHASE:

PR ---- RFQ TO THE VENDOR----- CSQ ( PRICE COMPARISON LIST FROM VENDOR ) /QUATION --- RECOMMENDATION ------ PURCHASE ORDER -----:WAY BILL ----- DESPATCH ----: INVOICE : BILL ---- CLEARANCE FROM TRANSPORT ----- STORE : GOOD RECEIPT -----ACCEPTANCE BY DEPARTMENT ------ ACCOUNTS : PAYMENT

NO PR FOR CHEMICAL (REGULAR PRODUCTS). PO IS RAISED BY HEAD OFFICE DEPENDSON STOCK LEVEL (THROUGH DAILY INCOMING AND OUTGOING STOCK REPORT)



Purchase Order is raised on two views:

IF EXISTING VENDOR :

PURCHASE ORDER ---- DISPATCH ---- INVOICE : BILL ---- CLEARANCE FROM TRANSPORT ----- STORE : GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTS :PAYMENT(APPROVED BY HEAD OFFICE)

IF NON EXISTING VENDOR:

RFQ ---- CSQ / QUOTATION ----RECOMMENDATION ---- PURCHASE ORDER ----DESPATCH: WAY BILL---- INVOICE: BILL ---- CLEARANCE FROM TRANSPORT -----STORE: GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTSDEPT.: PAYMENT (APPROVED BY THE HEAD OFFICE).

LOCAL PURCHASE :

No PR and PO are raised by departments or Main Store (Mechanical) on engineering products.The products are purchased from the suppliers or Shops (Markets) directly.

For Engineering Item (Mechanical Store)

Local Purchase (near Plant) and the items are purchased by Store.

For any Engineering items, Civil materials and Furniture’s.

Requirement Slip from the Department (as needs) = = = To the Main Store (Mechanical) = = =To the Supplier or to the Shop (Markets) = = = Through the Cash Memo = = = Goods Receiptby the Store = = = Payments clearance by the Accounts Department at the Plant = ==Documents sent to the H.O and Approved.



For Chemical (RAW material Store)

Local Purchase (Inside WEST BENGAL) and items are purchased by Head Office.

For Waste Paper and Coal only.

Daily In-coming and Out-going Stock Report (through this report H.O raises order):



PURCHASE ORDER ---- INVOICE: BILL ---- CLEARANCE FROM TRANSPORT -----STORE: GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTSDEPT.: PAYMENT (APPROVED BY THE HEAD OFFICE).


RFQ ---- CSQ / QUOTATION ----RECOMMENDATION ---- PURCHASE ORDER ----DESPATCH: WAY BILL----- INVOICE: BILL ---- CLEARANCE FROM TRANSPORT -----STORE: GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTSDEPT.: PAYMENT (APPROVED BY THE HEAD OFFICE).

PROCESS OF SERVICING OF GOODS:

Request for Quotation = = = Recommendation or Release for Requestof Quotation = = = C.S.Q or Quotation = = = Recommendation = = =Purchase Order for Servicing of goods or Service Order Processing = == Receipt of Servicing Goods by the Dept. = = = Invoice or CreditMemo Verification = = =Recommendation = = = Billing Clearance andPayments = = = Follow up Inventory Management.



Generalized Organization Structure (SAP System)

FI-SD-MM ORGANISED PROCESS

SALESAREA

CREDIT CONTROLAREA

COMPANY CODE

CONTROLLINGAREACOMPANY

PLANTPURCHASEORGANIZATION

PURCHASEGROUP SHIPPING

POINT

SALES OFFICE

SALES GROUP

SALESEMPLOYEE

SALESEMPLOY

EE

SALES ORGANIZATION + DISTRIBUTIONCHANNEL

SALESORGANIZATION

DISTRIBUTIONCHANNEL

DIVISION



PURCHASING MODEL (TO BE):

LOCAL PURCHASE would be two types:

PLANT PURCHASE

HEAD OFFICE FOR RAW MATERIALS

PLANT PURCHASE

No PR and PO are raised by departments or Main Store (Mechanical) on engineering products.The products are purchased from the suppliers or Shops (Markets) directly.

For Engineering Item (Mechanical Store)

Local Purchase (near Plant) and items are purchased by STORE.

For any Engineering items, Civil materials and Furniture’s.

Requirement Slip from the Department (as needs) = = = To the Main Store (Mechanical) = = =To the Supplier or to the Shop (Markets) = = = Through the Cash Memo = = = Goods Receiptby the Store = = = Payments clearance by the Accounts Department at the Plant = ==Documents sent to the H.O and Approved.



HEAD OFFICE FOR RAW MATERIALS

For Chemical (RAW material Store)

Local Purchase (Inside WEST BENGAL)

For Waste Paper and Coal only.

Daily In-coming and Out-going Stock Report (through this report H.O raises order):



PURCHASE ORDER ---- INVOICE: BILL ---- CLEARANCE FROM TRANSPORT -----STORE: GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTSDEPT.: PAYMENT (APPROVED BY THE HEAD OFFICE).


RFQ ---- CSQ / QUOTATION ----RECOMMENDATION ---- PURCHASE ORDER ----DESPATCH: WAY BILL----- INVOICE: BILL ---- CLEARANCE FROM TRANSPORT -----STORE: GOODS RECEIPT ----- ACCEPTANCE BY DEPARTMENT ------ ACCOUNTSDEPT.: PAYMENT (APPROVED BY THE HEAD OFFICE).



PR is generated by user

department /MRP:

Purchase requisition is created by Two Processes.

- Automatically through MRP run with Re OrderLevel for Regular items (Engineering): for Mechanicalstore.

User department will create PR manually throughSTOCK LEVEL ( PARAMETER BASED )- For Chemical products: For Raw MaterialStore.

A) NORMAL PROCESS OF PURCHASING:

PR ---- RFQ TO THE VENDOR----- CSQ ( PRICE COMPARISON LIST FROM VENDOR ) /QUATION --- RECOMMENDATION ------ PURCHASE ORDER -----:WAY BILL ----- DESPATCH ----: INVOICE : BILL ---- CLEARANCE FROM TRANSPORT ----- STORE : GOOD RECEIPT -----ACCEPTANCE BY DEPARTMENT ------ ACCOUNTS : PAYMENT------ INVENTORYMANAGEMENT

B) PROCESS OF SERVICING OF GOODS:

PR = = = Request for Quotation = = = Recommendation and Release forRequest of Quotation = = = C.S.Q or Quotation = = = Recommendation == = Purchase Order for Servicing of goods or Service Order Processing =



= = Receipt of Servicing Goods by the Dept. = = = Invoice or CreditMemo Verification = = =Recommendation = = = Billing Clearance andPayments = = = Follow up Inventory Management.

General Procurement Process:

S no. Requirement Mapping in SAP Coverage Remarks

11.1 Indent

generation

11.1.1 PR is generated

by user

department

/MRP:

11.1.2

Purchase requisition is created by TwoProcesses.

- Automatically through MRP runwith Re Order Level for Regular items(Engineering): for Mechanical store.

- User department will create PRfor Chemical products: For RawMaterial Store.

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11.1.3 If purchaseorder is non-existing, thenEnquiry processis followed.Price quoteletter is sent tovendor askingfor price &delivery ofmaterial.

RFQ process will be created forthe PR. S

11.1.4 Availability ofprice history.

Info record’s Condition data.S

11.1.5 Enquiry is

floated to

approved

vendors &

unapproved

vendors also.

Approved vendor list ismaintained through source list.Enquiry can be sent to non-source list vendor also bymentioning Vendor addressmanually.

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11.1.6 Offers receivedin either case are

Quotation Maintenance to becarried out for technically S



submitted toindenter forscrutiny.

Indenter clearssome or all thequotations basedon technicalparameters.

approved technical offers.

Quotation Price Comparison isto be carried out.

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11.2PurchaseOrder

11.2.1 Purchase Orderis created as perdepartment andtype of PO.

The descriptionof the materialshould come asa read-only field.

Existing numbering scheme to beimplemented in SAP system.

Tax applicability is determinedthrough Tax code in PO.

Read-only description for materialcan be done throughcustomization.

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11.2.2 PO is preparedand released tovendors.

PO is sent bycourier, post or

Vendor’s copy of PO is mailed tovendor through SAP andsubsequently sent by courier.It is not required to sendhardcopy of PO to internaldepartments. Users in these

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E-mail. internal departments will be given“view” access to the PO.Required customisation will bedone for sending through E-mail

Material Valuation: Valuation by: Plant Level and Valuation Area: Plant.

Materials: Types of Materials and Material Groups.

Materials are valuated through different Material Types using different G/L Account.

MATERIAL TYPES = = = = ACCOUNT CATEGORY REFERENCE = ==VALUATION CLASS



Material Valuation

Material Price:

Raw Materials are valued at Moving Average Price.Semi Finished and Finished Products are valued at Standard Price but depends on Market Conditions.

Unit OF Measurement:

At the time of purchasing & Selling UOM of Material will be S.I Unit (Int. Standard Unit): METER, KG& Metric Ton.



PURCHASING CYCLE OF GOODS :

Determination of Requirement

Determination of Source of Supply

Price Comparison and Vendor Selection

Purchase Order Processing

Goods Receipt

Invoice Verification

Bill Processing

Inventory Management

Master Data for Purchase:

A) CONTRACT & SCHEDULING AGREEMENT

B) PURCHASING INFO RECORD

C) SOURCE LIST



CONTRACT & SCHEDULING AGREEMENT

S no. Requirement Mapping in SAP

9.1 Number Range Internal numbering system shall bemaintained.

9.2 Contract/SchedulingAgreement

Contract

A contract can be created with referenceto RFQ, PR or manually.

Message control and pricing conditionsof the contract to be defined.

Agreement type MK (QuantityContract)/WK (Value Contract)

Enter Target quantity or Target valuedepending upon the type of contract.

Net Price will get copied from the InfoRecord.

Once contract has been created, releaseorder can be created for the contract.

Create a release order



Enter Plant and Quantity

On saving, a Standard PO will getcreated.

Scheduling Agreement

Transaction code ME31L

Agreement Type LP

Target quantity is to be enteredmanually.

After creating the scheduling agreement,create the delivery schedule.

PURCHASING INFO RECORD

General Data:

Vendor

Material

Material Group

Purchasing Organization



Purchasing Group

Delivery Date

Stock Quantity

Tax Code & Conditions

Valid From & To

The purchasing info record is a source of information for Purchasing on a certain material and the

supplier of this material. It contains data such as the vendor’s current prices and conditions for this

material, the number of the last PO, or the time interval in which the vendor can supply the

material.

Sno.

Requirement Mapping in SAP Coverage

Remarks


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5.2 Info Record The following fields shall bemaintained in the creation of inforecords -General Data

Reminder 1

Reminder 2

Reminder 3

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Sno.

Requirement Mapping in SAP Coverage

Remarks

Order UnitPurchasing Org. Data

Planned delivery date

Purchasing Group

Standard quantity

Tax CodeConditions

Net Price (PB00 andsubsequent supplying priceconditions)

Valid from

Valid to

SOURCE LIST:

Plant

Material

Vendor

Order Unit of procurement from the source




Valid From and To

Agreement or Scheduling Agreement

The source list is used in the administration of sources of supply. It 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 record.

S no. Requirement Mapping in SAP Coverage

Remarks

6.1 Source List Before creating a source list,following details are required –

Material and plant: In eachsource list, one must enter thematerial number and the relevantplant key for each source.

Validity period: To beconsidered for which period thesource list is to be valid. One candefine several validity periods.If there is one info record for a

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Remarks

material, the vendor appears bydefault while creating a purchaseorder for the material. If there aremore than one info records, thepreferred vendor can be specified inthe source list.

Source List Transaction Code: ME01

If INFO RECORD exists, list of Source of procurement for a particular material are given below.

The Sources are:

Plant

Material

Vendor

Order Unit of procurement from the source


Valid From and To

Contract or Scheduling Agreement

Source can be fixed or blocked for the procurement of material for KTPL Plant.



MRP INDICATOR is used if MRP RUN is to use Source from Source List for the creation of PR or ofSchedule lines incase of Scheduling Agreement. MRP INDICATOR has three options:

Source List record not relevant to MRP

Record relevant to MRP

Record relevant to MRP; Scheduling lines generated automatically

Creation of Purchasing Info Record is mandatory before the creation of Source List.

When Contract and Scheduling Agreement are created Info Record gets automatically created inthe background.

MASTER DATA:

Material Master Vendor Master Service Master

MATERIAL MASTER

Contents:

Material Type Material Group Material Code or Batch No. Material Stock Quantity(Parameter based)

The material master contains information on all the materials that a company procures orproduces, stores, and sells. It is the company's central source for retrieving material-specific data. Thisinformation is stored in individual material master records.

The material master is used by all components in the SAP Logistics System. The integration of all materialdata 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 thefollowing functions:

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.

Codification of materials will be unique and there will be no duplication of data in the system. To achievethis, material data maintenance responsibility is taken care of by a central group and all new requests tocreate new material master data shall be through this group. Materials with the same basic attributes aregrouped together and assigned to a material type. This allows management of different materials in auniform manner in accordance with the company's requirements. Examples of material types are:

Raw Materials Chemical Packaging materials Capital goods Spares Semi finished Products Consumable materials Finished Products Non-Stock materials Non-Valuated materials

The Material types used here would be: HALB-Semi Finished Products FERT-Finished Products

Since different departments in a company work with the same material master, but each department usesdifferent information on the material, the data in a material master record is subdivided by user departmentinto views (Basic Data, MRP, Purchasing, Accounting, Sales, etc.)



KTPL MATERIAL MASTER

TYPES OF MATERIAL:

Raw Materials Packaging materials Capital goods Spares Semi finished Products Consumable materials Finished Products Civil Pipeline Material Service Maintenance Assembly Operating Supplies Production Resources ETP

MATERIAL GROUPS:

BUILDING MATERIALS AUTOMOBILES BOILER ETP for Engineering ETP for Chemical LABORATORY FINISHING HOUSE PULP MILL PAPER MACHINE



MECHANICAL MATERIAL INSTRUMENTS MATERIAL ELECTRICAL MATERIAL GENERAL MATERIAL PACKING MATERIALS WET END CHEMICAL COATING CHEMICALS RAW MATERIAL FOR CHEMICAL ETP & OTHER CHEMICALS COAL WASTE PAPER

Following is a Pictorial Representation of Material Master with important information stored indifferent views.

Material Master:MATERIAL TYPE = ==MATERIAL GROUP

Basic Data(Base UOM,

MaterialGroup)

Purchasing:(Purchasing

Organization,Purchasing Group,

UOM, PV key)

Sales (salesUOM, Sales

Area)

Storage(Store

Location,Issue UOM)

MRP (MRPtype, Lot size

proc)

Accounting (Val.Class, Val Type,Val Category)

Costing



Organized Materials Management Process Overview:

Purchase Requisition: This Role Cover all the activities necessary to process a purchase requisition. Request for Quotation: This role covers all the activities necessary to Process a Request for Quotation

(RFQ).It is used to request the vendor to submit a quotation for supply a material. Purchase Order: It enables to create a change in a purchase order as well as to convert requisition into

orders.

UserRequirement Projects

PurchaseRequisition Source

List

RFQ/Quotation Purchase

Order

VendorMaster

GoodsReceipt

Receipt of Material

Assignsourceofsupply Pur Info

Record

InvoiceVerification

Assignsource



Good Receipt: Goods receipt in the system updated the purchase order deliveryschedule (Quantity received and pending for delivery), Purchase.

Order history record and books of account (Inventory of material received and its

valuation).Goods receipt is also being done in production or process order in asimilar way. The reference document against which good receipt can be done arepurchase order or scheduling agreement, inbound delivery document, outbounddelivery document, reservation, order (production order as well as maintenanceorder) and others. Outbound delivery document is used in case of goods receipt forstock transfer order via SD route. If the stock transfer across the plants is via MMroute then stock transfer order is used for reference.

Invoice Verification: It is the last step for in procurement cycle. It is done to verifymaterial quantity receipt during goods receipt and value of quantity receipt. Valueis verified by verifying rate and Taxes applicable multiply with quantity.

Stock Shifting:

Naming of Various stocks Materials coming to stocks Materials going out from stocks Stock balance

This will also determine the materials in the materials management procedure in the SAPsystem.



VENDOR MASTER

Contents:

General View:

Name of Vendor

ADDRESS OF VENDOR

Purchasing View:

Order Currency

Terms of Payment

In co terms: Cost & Freight, CIF

Vendor Group

Planned Delivery Time

Schema Group

Purchasing Group

Reconciliation Account

GR based verificationThe Vendor Master contains information about the vendors.

A vendor master will be created for all registered vendors and one time vendor as well. This

information will be stored in individual vendor master records.

A Vendor Master record contains General, Purchasing and Accounting information.

But MM module is responsible for general data and purchasing data views.




Remarks

4.1 Number Range Internal numbering system shall bemaintained. See further detailsbelow in section 4.3.

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4.2 Data in VendorMaster

The following data will bemaintained at the MaterialsManagement data level –

General View

Title

Name

Search Item 1/2

Street / House No.

Postal Code / City

Country

Region

Language Key

Telephone No.

Mobile No.

Fax No.

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Remarks

E-mail

Purchasing View

Order Currency

Terms of Payment

In co terms

Schema Group Vendor

GR Based Invoice

Planned Delivery Time

Purchasing Group

Separate account group will be created for following vendors.

Sundry Plant & MachinerySundry CreditorsSundry Cement & SteelSundry Coal

Sundry ConsultancySundry ContractorsSundry ExpensesSundry FreightSundry ImportSundry Raw Material forChemical



Sundry Sand, AshSundry Stores for MechanicalVendors- Plant PurchaseVendors-Services

4.4Terms ofPayment

Standard payment terms arementioned below

Z001 COD Payment

100% payment againstmaterial delivery.

Z003 Payment within 10 daysof receipt and acceptance at stores.

Z003 Payment within 15 daysof receipt and acceptance at stores.

Z004 Payment within 30 daysof receipt and acceptance at Stores.

100% advance paymentagainst pro-forma invoice

ZS01 100 % Advance Paymentagainst Bank guarantee

100% payment against proofof dispatch.

100% against irrevocable andconfirmed LC at sight.

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100% Cash against deliveryagainst shipping documentspayable at sight

100% payment by CADthrough T/T payable at sight

4.5 Vendor SchemaGroup

Sundry Plant & MachinerySundry CreditorsSundry Cement & SteelSundry CoalSundry ConsultancySundry ContractorsSundry ExpensesSundry FreightSundry ImportSundry Raw Material for ChemicalSundry Sand, AshSundry Stores for MechanicalVendors- Plant PurchaseVendors-Services

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4.6 In co terms1. CFR Costs and freight2. CIF Costs, insurance &freight3. CIP Carriage and insurancepaid to4. CPT Carriage paid to5. DAF Delivered at frontier

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6. DDP Delivered Duty Paid7. DDU Delivered Duty Unpaid8. DEQ Delivered ex quay (dutypaid)9. DES Delivered ex ship10. EXW Ex Works11. FAS Free Alongside Ship12. FOB Free on board13. FRF Free Delivery14. FH Free house15. FCA Free Carrier16. FOR Free on Road17. PRE PrepaidTPY To Pay

4.7 Vendor change/deletion /blocking statusauthority to bewith selectexecutives.

Authority for these transactions willbe limited to appropriate personnel,as decided by KTPL

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Note: Views not related to Materials Management shall be maintained by the respectivemodules.



SERVICE MASTER:

Service Description

Unit of Measurement

Service Category

Service Group

Valuation Class

Details of Service

Authority Matrix(Release Approval)

PR / INDENT

RFQ

CSQ / QUOATION

PURCHASE ORDER

Release procedure:

Release conditions, Release Class, Release codes, release indicators, and Release strategy.



There will be information: Pending / Status of either last PR or PO and it shouldcontain Price / Source in the system so Purchasing Dept can follow up thepurchasing process and generate the PR / PO.

Purchase Requisition

While PR is raised the following points should follow up:

RESERVATION: (Movement Type: 201), Good Issue for Cost Centre, Goods Recipient, BusinessArea, Cost Centre, Order

MaterialQuantityOrder Unit (UOM)PlantStore LocationBatch SAFETY STOCK CRITICAL STOCK

Purchase Requisition (PR) is an internal document. PR is generated either by user department or

automatically by MRP.

In KTPL the PR should base on the two important points:

In KTPL the PR will be based on the availability position of the Stocks through “CriticalStock” which should be automatically indicated by the system.

Incase of Regular (Engineering) items:- In KTPL the Regular items will be maintained as

“Auto Requisition” through R.O.L (Re Order Level) in MRP.




Remarks


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7.2 PR : The following fields shall bemaintained in the creation of PR –

Material number

Quantity

Plant

Delivery Date

Tracking number

Requisitioner

Account assignmentcategory(Optional)

Item category(Optional)

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7.3 PR release:CEBAN

Release is possible on the followingparameters: a) Value b) Material group.

c) Purchasing Organization

Inputswillberequired atthe




Remarks

d) Account assignment categoryRelease procedure:

Release conditions, Release Class, Release

codes, release indicators, and Release

strategy.

time ofconfiguration.

Request for Quotation

Request for quotation (RFQ) is treated as one of the purchasing master records. RFQ’s are created

for material with quotation quantity and monitored against deadline dates and collective number.

Suppliers submit their quotations, which are tracked against RFQ’s collective number and are

compared for different supplying conditions.


Remarks

8.1 Number Range Internal numbering system shallbe maintained.

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Remarks

8.2 RFQ The following fields shall bemaintained in the creation of RFQ–

Material number

Quotation Deadline

Purchasing. Organization

Purchasing group

Plant

Delivery Date

Collective Number

Vendor Number

Conditions

Payment terms

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8.3 Quotation Different quotations withindividual supply conditions /rates of individual Vendors shallbe entered against the RFQalready created.

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8.4 Quotation PriceComparison

Different quotations withindividual supply conditions /

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Remarks

rates of individual Vendors, arecompared against –

Mean value quotation

Minimum value quotationSpecifying common CollectiveNumber entered in RFQ normallycompares quotations.

8.5 RFQ: Directthru. Email fromSAP.

Need to configure output type forE-mail option.

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Purchase Order


Remarks

10.1Number Ranges

Number ranges are created andattached to the PO document types& will be internal.

10.2 Create Purchaseorder

Input Fields – (Initial ScreenME21N – Create Purchase Order)Header Details

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Vendor

Order Type

PO Date (AutomaticallyPopulated)


Purchasing Group

Item Overview

Material

PO Quantity

Plant

Storage location (optional)

Net Price

Delivery Date (Default TodayDate Populated, change if required)Item Details

Under delivery Tolerance(Optional)

Over delivery Tolerance (10%for Quantity above 10 MT forChemicals only.



PO Quantity (Copied fromOverview)

Net Order Price (Copied fromOverview)

Delivery Date (Copied fromOverview)

Tax code Conditions Item text

Release of PO:CEKKO

This component is used to set up

approval procedures for purchasing

documents. Under such a procedure, if

an external purchasing document

fulfils certain conditions (e.g. the total

order value exceeds Rs.1, 00, 000), it

has to be approved (by the Asst

General manager, for instance) before

it can be processed further. This

process of approving a proposed item



of expenditure is replicated in the SAP

System by the "release procedure".

Value wise release procedure shall be

established.

Following parameters are needed to

establish Release procedure:

Release conditions, Release Class,

Release codes, release indicators, and

Release strategy.

Right now Dummy release strategy is

maintained at plant but for KTPL it

depends on final clarification from

KTPL. (Input required from KTPL).



PO FOR STOCK MATERIAL:

Create PO Manually

Create PO with a Master Record

If a Material Master Record exists for the item to be

ordered the proceed:

Logistics = = MM = = Purchasing = = PO---Create

Vendor / Supplying Plant known

Access the PO screen(single screen times out) and split

into three sections:

Header:

Conditions

Text

Address

Delivery



Partners(if applicable)

Status

Organization Data

Item Overview

Material

Short Text

Quantity

Delivery Date

Net Price

Item Details

Text

Quantity

Delivery

Invoice



Conditions

PO History

Account Assignment

Material Data

We can hold the PO and a PO Number is still issued and

we can come back to the document at a last time to fix

errors. We need to clear all the error messages so that the

PO should be approved.

PO for Non-Stock Material

Manual entry of details required on the Item

Overview

A PO without Master Record contains no Material

Number. We need to manually enter an item

description, a Material Group and an Account

Assignment category to manage the costs.



Reporting in material management

The user has the task of monitoring the following data in the Inventory Management component:

Stock data for company’s own stocks

Stock data for external stocks

Data on stock types

Data on special stock types

Movement data for stocks

Activities in Materials Management

Display Stock List Display SLED/Date of Production Display Valuated Special Stock Display Availability Overview Display Stocks for Posting Date Display Material Items Display Cancelled Material Documents Display Material Document for Reason for Movement Read/Display Material Document Archive

The stock entry is to done by the Legacy system (MAS). The table and fields used in Report making must beupdated in SAP along with the Legacy system (MAS).



TAX DETAILS(for Purchasing):

Purchase in Negative List:

VAT (INPUT: CAPITAL GOODS): 4% ; 13.50%

VAT (INPUT): 4% ; 13.50%

Excise Duty(incase of excisable goods):

Service Tax (for Service Order): 10.30% including (Education cess: 2%; HigherSecondary, Secondary education cess: 1%)

Purchase un-rested dealer (direct use):

Purchase un-rested dealer (indirect use):

‘0’ TAX (NO TAX):

PURCHASE AT Compound rate: 0.25%

IMPORT from Outside INDIA:

IMPORT CAPITAL GOODS:

E1 PURCHASE:

Inter State Purchase against FORM C:

Inter State Purchase without FORM C:

Inter State Purchase of Capital Goods:

High-Sea Purchase:



Sales:

VAT (OUT PUT): 4%

L.S.T: 4%

C.S.T: 2%

PURCHASE ORDER should contain the above and below details.

Freight(Party) / Delivery:

Packaging and Forwarding charges:

Discount:

PRICING PROCEDURE:

Pricing Conditions Table = = = Acc. Sequence = = = Condition Types = = =Calculation Schema = = = Schema Group = = = Schema Group Organization= = = Schema Group Determination = = = Conditions Record.

PRICING CONDITIONS IN QUOTATION(WITHOUT TAXES)

SUBMITTED BY VENDOR

A) BASIC PRICE OF MATERIAL PER PIECE (GROSS PRICE QUANTITY BASED)

B) DISCOUNT (Percentage basis)



C) PACKAGING & FORWARDING CHARGES (Surcharge)

D) NET PRICE: A+B+C

E) FREIGHT (DELIVERY COST: to be borne by the buyer): absolute fixed amount

F) EFFECTIVE PRICE (Landed cost of the material: D+E)

WITH TAXES

SALES TAX on NET PRICE.

INVENTORY PROCESS OF KTPL:

Age-wise / Group-wise inventory to be available to determine Slow-moving / Surplus /Obsolete items.

For Engineering item:

a) Slow-moving item (more than 3 months and less than 6 months).

b) Surplus item (less than 3 months).

c) Obsolete item (more than 1 year and less than 2 years).

For RAW MATERIAL:

Obsolete item only: more than 3 months.

Physical Inventory is a process by which actual inventory stock is counted by physical quantityand compared against the book quantity. It is done at Plant level, Storage Location level,Material Code level and Batch level.

It is based on three stages:

a) Physical Inventory Preparation



b) Physical Inventory Count

c) Physical Inventory Analysis

It is based on two types: Ad-hoc Physical Inventory and Cycle-Count Inventory.

GOODS ISSUE:

Goods Issue

S no. REQUIREMENT MAPPING ON SAP Coverage Remarks

18.1 Number Range Internal numbering system shall be

maintained.

S

18.2 Goods Issue (GI) Materials shall be issued with respect

to Reservations , Maintenance orders

and direct to cost centre with the

following fields -

GI Date

Cost Centre

Item Serial Number

Item Code

Item Description

Unit of Measure

S



Issued Quantity

Prepared by, Issued By,

Movement type (e.g. 201)

Batch Number

Transaction Code MIGO/MB1A

PROCESS CYCLE OF GOODS ISSUE OF KTPL:

MATERIAL: A) RAW MATERIAL (CHEMICAL) B) SPARES & CONSUMABLE(ENGINEERING) = = = CREATE RESERVATION = = = STOCK CHECK = = =RESERVATION POSTED = = = MATERIAL ISSUE.

INTERNAL DEPARTMENT TRANSFER = = = Through INTER UNIT MOVEMENTVOUCHER.

MATERIAL RETURN VOUCHER

TRANSFER POSTING:

Process description:

This process covers the stock transfer posting (logical) between stock types and betweenmaterials and stock transfers (physical) between plants and storage locations. There are anumber of movement types under the same transaction code.



Transfer between stock types (321) will be done in the process of usage decision in QMmodule.

In the case of material number change, the warehouse staff would perform a transfer frommaterial to material in SAP to balance the stock of the materials in question.

In the case of transfer between storage locations, the warehouse staff will do a relevant transferposting transaction in SAP and physically move the materials from one location to another.

In the case of transfer between plants belong to the same company code using one step, thewarehouse staff will do a relevant transfer posting transaction in SAP and physically move thematerials from one plant to another.

In the case of transfer material from consignment stock to own stock, the warehouse staff willtransfer the goods from one location to another location and then do a movement type 403transaction after which a clearing AP account occurs.

Movement Type:

Movement type is the heart of Inventory Management in SAP. Movement type is a three-digitnumeral classification key indicating the type of movement type (e.g. goods receipt, goods issueand physical stock transfer).Any movement type is characterized by stock update and valueupdate or sometimes only stock update.

Different movement type to be used for transfer posting or stock transfer such as One step stocktransfer between plant(301),Removal-First step of the two –step stock transfer betweenplant(303),Transfer posting of material within same plant different storage location(311) etc.



MOVEMENT TYPE TO BE USED IN SAP MM

MOVEMENT TYPE DESCRIPTION311 "Storage location to storage Location>unrestricted to

unrestricted " --This is used when you want to transfermaterials between two different storage locations. Movementtype 311 will be used as an example in this script to illustratethe one step approach which can only happen between samestock types in two different storage locations.

321 "QI to unrestricted"--This is used when usage decision in MMmodule.

309 "Material to Material"--This is used when you want to transferbetween same material with different material numbers

453 “Stock to stock>own from returns”—This is used when youtransfer the customer returned goods from the customer returnstock to your own stock. There will be accounting impactfollowing this transaction.

403 Transfer posting to own from consignment



MM & SD INTEGRATION IN KTPL

Item/Material Master is to be maintained in SAP system. Availability of Stock is maintained in SAP system. Transfer posting of material between different storage location to railway siding is to be

maintained SAP system through Movement type.

COMPANY CODE

SALES ORGANIZATION

DISTRIBUTION CHANNEL

DIVISION

SALES AREA

PLANT

STORAGE LOCATION

MATERIAL MASTER / ITEM MASTER

STOCK OVERVIEW TRANSFER POSTING

FINAL STOCK OVERVIEW



GOODS RECEIPT:

Goods Receipt

S no. REQUIREMENT MAPPING ON SAP Coverage Re

ma

rks

17.1 Number Range Internal numbering system shall be

maintained.

S

17.2 Goods Receipt(GR)Vendor suppliesmaterial along withDelivery Challan,Excise invoice (ifapplicable),Returnable Gatepass (In case ofsub-contract),

Recommended Process - Receive material Process GR (Material kept inBlocked/Quality stock/ unrestricted). Material Offered for Inspectionif necessary. (Material in Quality stock) Transaction code MIGOMovement type 101. For excisable material checkingof Excise documents and Part 1 andPart 2 entries will be done at this time. GR printed out. To view pending GR blockedstock (i.e. GR pending for inspection)transaction code MB51 to be used. Accepted material quantity willbe posted through the movement type105 to unrestricted stock on receipt ofInspected and accepted GRN from

S



S no. REQUIREMENT MAPPING ON SAP Coverage Re

ma

rks

Inspecting authority. (Accountingdocument will be created) Rejected material will return tothe vendor through movement type124. Challan no and challan date willbe maintained in the delivery Note. Stock is placed among differentstorage locations in a plant. For purchases against licensesthere shall be one GR for per license.

GOOD RECEIPT FOR PURCHASE ORDER:

Show overview Hold Check PostGoods Receipt: General Data: Document Date, Posting DateVendor, Head Text, Additional Detail, Delivery Note, Bill of ladingGR / GI Slip No.Material Short Text OK Qty Store LocationUOM Movement Type Cost Centre Order Qty



PROCESSING OF FREIGHT:

PURCHASING FOR RAW MATERIAL & ENGINEERING ITEM:

FREE DELIVERY

TO PAY (AFTER DELIVERY)

PAID (BEFORE DELIVERY)

NOT APPLICABLE for very less valuated item and less quantity also.

NO FREIGHT AGAINST LOCAL PURCHASE FOR ENGINEERING ITEM (LESSVALUATED ITEM AND LESS QUANTITY ALSO). Local Purchase for Stationery(Engineering) products generally.

FREIGHT WHILE SALES:

Since freight is not known till the receipt of T-bill from the transporters, it will need to beentered manually. A condition type will be created in the system for this purpose. There arethree cases in freight:

I) Freight is paid by the customer in which case we are not concerned with the fright in oursystem

II) Freight is paid by KTPL in which case it is shown as statistical condition (The amount isshown in sales document but has no bearing on the final price). A pricing condition will be



created for this. This condition will be statistical in nature and will not impact the invoiceamount.

III) The freight is to be paid by KTPL but the payment has to be made post delivery by thecustomer in which case KTPL subtracts it from the bill amount. A separate pricing conditionwill be created for this. This condition will impact the invoice amount and will be subtractedfrom it.

INVOICE CLARIFICATION:

COMPANY CODE

Show PO Structure ShowWorklist

Hold Simulate Messages Help

Transaction:

Number of Invoice………..

Balance:

Basic Data:

Invoice Date

Reference(Date)

INR: CalculateTAX & Type ofTax with %(Input).

Payment Details TAX WithholdingTax

VendorAddress &

BANK

ACCOUNT



Posting Date

Amount

Tax Amount

Text

Payment Terms

Baseline Date

Company Code

PO Reference:

Item

Amount

Quantity

OrderUnit(UOM)

PO Number

PO Text

TAX Code

G / LAccount

Material PO :

Contract

&Agreement

INVOICE TRANSACTION CODE: MIRO



ACCOUNTS & PAYMENTS:Accounts Payable – Product Invoice Verification

MM & FI INTEGRATION



GR & IR CLEARING ACCOUNT

Company Code

Company Code Order Type: Clear: Delivery cost

Posting Date Surplus Type :

Vendor DeliverySurplus

InvoiceSurplus

GR /IRClearingAccount

DeliveryCostAccount

Freight Vendor

PurchasingOrganization

PurchasingGroup

Plant

PurchasingDocument



Purchase OrderDate

Category

SUB-CONTRACTING PROCESS

Purchase Process – Sub-Contracting

Requirement Mapping in SAP

Indent generation

PR is generated by user

department /MRP:

Purchase requisition is created by Two Processes.

- Automatically through MRP run with Re OrderLevel for Regular items (Engineering): for Mechanicalstore.

- User department will create PR for Chemicalproducts: For Raw Material Store.

If purchase order is non-existing, then Enquiryprocess is followed. Pricequote letter is sent tovendor asking for price &delivery of material.

RFQ process will be created for the PR.



S no. REQUIREMENT MAPPING ON SAP Remark

s

14.1 Material is issuedto sub-contractorfor ProductionPurposes.

PO shall be prepared for sub-contractcharges.

BOM is to be maintained (whichcontains source material issued forsubcontracting & Target material to bereceived to stock).

Goods are issued against Sub-PO tovendor.

Sub-contract challan preparation iscarried out through SAP system &running numbers are assigned to it.

14.2 Vendor processesthe material &returns back thefinished material.

Sub-contracted material shall bereceived through GR.

14.3 During GR / QAprocess, rejectionsare charged toeither to vendor orhis subcontractor

GR Acceptance / Rejection will handlethis requirement.



EXCISABLE AND SUB CONTRACTING STRUCTURE OF KTPL

---- Finished or Semi-finished product supplier against the PO

PO issued to Raw Material Supplier with Delivery Address of Sub-Contracting Vendor-----

Sub-contracting PO issued for finished or Semi-finished product----

= = = = = = = = = = = = = = = = = = = = = = = = = = =

Organization A ---------------------Raw Material Supplier-----

Raw Material is supplied to Sub-Contracting Vendor against the PO issuedby Organization A-----

------------------Sub Contractor B



REPORTS:Sl

No. T Code Description

1 ME2N PO List By Number2 ME2L PO List By Vendor3 ME2M PO List By Material4 ME2B PO List By Tracking Number5 ME2K PO List By Account assignment6 ME1M Info record list By Material7 ME1L Info record list By Vendor

8 ME1WInfo record list By MaterialGroup

9 MEOM Source List10 MKVZ List Of Vendors11 MM60 List of Materials12 ME1P Purchase Order Price History13 ME4l RFQ By Vendor14 ME4M RFQ By Material15 ME80AN General Analyses for RFQ16 ML84 List of Service Entry Sheet17 ME80 General analysis for Purch docs18 ME81 Analysis for Order Values19 ME5A PR list20 MCE3 PIS Gen Analysis Vendor21 MCE7 PIS Gen Analysis Material22 MB51 List of Material doc. (GRN)23 MR51 List of Accounting docs

24 MBSMList of Cancelled MaterialDocs(GRN)

25 MMBE Stock overview26 MB53 Stock Plant wise27 MB52 Warehouse Stock28 MB5B Stock On posting date29 MB5S List of GR/IR Balances30 MC.9 Stock31 MC.A Receipts/Issues



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