mm1005 mm external services management
TRANSCRIPT
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India SAP CoE, Slide 1
MM1005
MM External Services Management
Basics Ver -1.0
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India SAP CoE, Slide 2
External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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India SAP CoE, Slide 3
External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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India SAP CoE, Slide 4
PrepareMeIn this s ect ion , we wi l l cover 3 topics w hich are,
1. Pu rp ose
2. Use
3. Chal lengesWhat is External Service Management?
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India SAP CoE, Slide 5
External Services Management…?
External services are certain services/maintenance tasks like
defective lights fixing, painting, plumbing, etc which companymay occasionally require to be carried out through externalcontractors.
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India SAP CoE, Slide 6
Use
• Facilitate procurement of occasional services such as „plumbing‟,„painting‟, „electrical maintenance‟ , etc.
• Helps to tighten the Company‟s focus on Core business by outsourcingservice.
• Reduces the burdan of managing manpower and other resourcesrequired to perform services.
• Helps in taking advantage of the competitive market by having multiple
service providers in the market.
• Have a better bargain power and negotiation by having Long termcontracts with service providers.
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India SAP CoE, Slide 7
Challenges
• Tracking of Services provided by the Service Provider• Evaluating the performance of the Service Provider• Data Entry and Maintaining records• Identifying correct Services providers
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External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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External Procurement Service
MM External Services Management (MM SRV) is a program within theMaterials Management (MM) module. It supports the complete cycle of bidinvitation, award of contract, and acceptance of services.
The MM External Services Management documentation• Affords a general introduction to the procurement of externally performed
services
• Indicates the Organization levels, master data and documents of theapplication.
• Describes the available functionality and how it works
• Explains the procedure for creating documents in the system.
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External Services- Flow
Goods Receipt
InvoiceVerification
Service Master Vendor Service
Condition
Service Acceptance
Service Entry
Requirement
Vendor SelectionRFQ
Quotation
Purchase order
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Service External Flow
Determination of requirements
Maintenance order
Purchase order
processing
Invoice verification
Acceptance of se rvices performed
Entry of services performed
Entry of quotation
Vendor selection
Creation of service
specifications
Source
determination
Invoice Purchase order
? ? = =
Inquiry
Bid invitation
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Service Master
Service Master
• Service Master serves as a master data within External Service Management and datastored in the Service Master can be called while creating service specifications.
• Service Master contains the short and long description of services that need to beprocured are stored.
• Along with description Service Master contains• Unique Service Number• Service Category• Base Unit of Measure• Material Group
• Price can be defined in the Service Master through Service conditions
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Vendor Master
Vendor Master
• Vendor Master contains information about theVendor who supplies goods and services. Theseinformation's are necessary for processing
Purchasing documents like the PurchaseRequisition, Purchase Order.
• Vendor Master contains information's like theVendor details, Accounting details andPurchasing details like the terms of payment,Currency, etc.
• Each Vendor Master will have a unique VendorNumber which can be Internal or Externallygenerated.
• Mostly a Vendor Master belongs to one Purchase
Organization, which can be extended to manyother Purchase Organization.
• In Vendor Master, Purchasing details can also bemaintained at Plant level by using Vendor Sub-range.
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Standard Service Catalog
The Standard Service Catalog (SSC) represents one way of storing servicedescriptions as master data without redundancy.Frequently used parts of service descriptions are stored in standard servicecatalogs in the form of individual text modules. The complete description of acertain service is compiled from different text modules.
A Standard Service Catalog contains:• Service Type Number• Edition Number• Text Module Number• Text Module
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Model Service Specification
• Model Service Specifications is set of service specifications that can be used asa model or template for the creation of other sets of service specifications in
procurement transactions.• Model Service Specification contains collection of services, the associateddescriptions, pricing and quantity data.
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Service Condition
Service Service Vendor Service Vendor
Plant
•Master Conditions helps in storing Terms of Payment like Price, discount,
surcharge, etc.•Master Conditions can be maintained at:
• Service Level Transaction Code: ML45• Service – Vendor Level Transaction Code: ML39• Service – Vendor – Plant Level Transaction Code: ML33
• Prices stored in the Master conditions are proposed in service specifications.
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Framework Purchase Order
• Framework Orders are PO‟s which are valid for a longer period and Invoice canbe directly posted against such PO.
• Framework PO has value limit and are valid for specified period of time.• Framework Orders can be used to procure recurring services. Example:
Cleaning work, routine services… • Creation and acceptance of Service Entry sheet is not required for FrameworkPurchase orders.
• Through Framework PO, benefits of Invoicing Plan can be availed.
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Service Entry
• Service Entry Sheet is a special document designed to record the serviceactually rendered by the Vendor.
• Service Entry contains list of all planned services that have actually beenperformed.
• It can also be used to list all unplanned services that have been performedand whose precise scope and nature were unknown at the time of thePlanning phase.
• Service Entry needs to be accepted once its accuracy is checked by theresponsible person.
• Material document & accounting document gets created on posting aService Entry Sheet.
• Release Procedure can be set up at Service Entry level.
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Invoice VerificationInvoice Verification
Few Transaction Code:MIRO: Invoice Entry
MIR7: Park InvoiceMIR4: Display InvoiceMR8M: Cancel InvoiceMRBR: Release Invoice
• Material document & accounting document gets created on posting aService Entry Sheet.
• The accounting document is then taken up for verification of the entries.• In case the service taxes are relevant then the same need also need to be
verified.
• Once the verification is over the invoice is posted. The Service provider iscredited, simultaneously debiting the Services a/c.
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External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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Configuration
Maintenance
External Service Procurement
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Service Master - Service Category
Service Master -1
Service Master -4
SERVICE CATALOGControl
• Number Assignment• Organizational Units
• Valuation Class
Service Master -2
Service Master -3
• Service Category helps in grouping Service
Master records based on there usage.• Service Category is the most important
criterion for structuring Service Master• It provides default value for the Valuation
class• Service Category also controls the number
range assignment for Service Master• The standard Service Category available
are:• Master Records describing internalservice
• Master records describing externallyprocured services• Master records describing third partyperformed services
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Service Master - Service
Category
SPRO Materials Management External Service Management
Service Master
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Source Determination & Default Value
Client
Purch Org
Controls
Source Determination
Default Values UOM Material Group Line Increment Update Condition
Define Text
Maintain
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Source Determination & Default ValueSPRO Materials Management External Service Management
Source determination & Default Value
Follow-On Processing for PR• Control whether to ignore price in thePR when converted to a PO
• Control automatic creation of PO
Condition Update• Controls whether the conditions inService Master needs to be updatedby PR, RFQ or PO
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Maintain Text
Service Master
Services
Service Catalog
Service Entry
Header Text
Supplement Text
Item Text
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India SAP CoE, Slide 27
Maintain TextSPRO Materials Management External Service Management
Messages
Controls the Print Operation• New Print Out• Print for changes• Reminder Letter
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India SAP CoE, Slide 28
Configuration
External Service Procurement
Maintenance
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India SAP CoE, Slide 29
Service Master
Basic Data
Standard Ser Cat
Purch Data
Long Text
Service Master
Org Ser
Cat
Service
Cat
• Organization Service Category controlsthe Views in Service Master.
• Service Category controls the Numberrange, default value for Valuation Class,etc
• Basic Data contains data like MaterialGrp, Division, Valuation Class &
Authorization Group.
• Purchasing status, Validity, EAN ismaintained in Purchasing data.
• Service Master can be created throughTransaction Code: AC03.
• Transaction Code:• AC03: Service Master• AC06: Service List
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India SAP CoE, Slide 30
Service Master
• Material Group helps to clubservices with same attributes
• Default Valuation Class can beassigned which helps inaccount determination
• Formals helps in calculatingquantities
• Purchasing Status helps inrestricting the use of ServiceMaster
• Text entered in the Long Text
gets copied in service POunder Service text
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India SAP CoE, Slide 31
Standard Service Catalog
Catalogs
Object parts Causes of damage Tasks
Damage Activities Coding
Code
Code group
Catalogs for Catalogs for
Structure of a catalog: Structure of a catalog: Example: Example:
Catalog
Code group
Code
Damage screen catalog
Mechanical damage
Code 010 Corrosion
020 Broken glass 030 Faulty engine . . . . . .
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India SAP CoE, Slide 32
Catalog Profile
Code
Code
group
Catalog
Code
group
Code
Preselection of code groups for
each catalog
Proposal of class
Assignment to:
Equipment master
Functional location master
Material Master
Notification type
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India SAP CoE, Slide 33
Standard Service Catalog
Trans Code:ML01 CreateML02 ChangeML03 Display
MLS6 List Display
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India SAP CoE, Slide 34
Model Service Specification
Model ServiceSpecification
General Data Description
Search Term Currency Matl/service grp
Default Data Purch Org
Fixed Vendor Contract
Service A
Service B
Service C
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India SAP CoE, Slide 35
Model Service SpecificationTransaction Code• ML10 Create• ML11 Change• ML12 Display• ML15 List Display
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India SAP CoE, Slide 36
Service Conditions
0001Rental Car C1 1 Day
Price 10 USD
0002Rental Car C1 1 DayVendor 1Price 12 USD
0003Rental Car C1 1 DayVendor 1Plant 1001Price 08 USD
Purchase Req
Vendor ?Service: 0001Price: 10
Purchase Req
Vendor: 1 Service: 0002Price: 12
Purchase Req
Vendor 1 Service: 0003Plant: 1001Price: 08
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India SAP CoE, Slide 37
Service Condition
•Prices are maintained fora specific periods
•You can also assignPayment Terms to aService Master
•Service Conditions canalso be updated throughthe current Purchasingdocument
• Master Conditions can be maintained at:• Service Level Transaction Code: ML45• Service – Vendor Level Transaction Code: ML39• Service – Vendor – Plant Level Transaction Code: ML33
• Prices stored in the Master conditions are proposed in service specifications.
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India SAP CoE, Slide 38
Service - PO
Purchase Order---------------------------------------------------------
--------------------------------------
-------------------
Header
• General data• Statistics• Message• Conditions
Item Sub – Item 1
GeneralDescription of
Project
• Servicedescription
• Qty• Conditions
Few Transaction Code:ME21n: Create POME22n: Change POME23n: Display POME29n: Release PO individuallyME59n: Create PO automatically
Item Category for Service PO is “D”
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India SAP CoE, Slide 39
Service - POTransaction Codeused is ME21N
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India SAP CoE, Slide 40
Service – PO - LimitsTransaction Code
used is ME21N
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India SAP CoE, Slide 41
History• Created by• Created on
• Changed by• Changed on
Service Entry Sheet
Service Entry
Sheet
--------------------------------------
---------------------------------------------------------
Header
• Entry Sheet• Purchase Order• Short Text
Value• Net Value• Total Value• UnplannedPortion
Basic• Acct Asst
• PersonResponsible
• Ext No• Period
Item Detail
• Service No• Short Text• Qty• Gross Price• Cost Center
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India SAP CoE, Slide 42
Service Entry SheetTransaction code used
is ML81N
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India SAP CoE, Slide 43
Release of Service Entry Sheet
•To set up approval procedures for entry sheets or otherpurchasing documents. Under such a procedure, if a entry sheet or external purchasing document fulfills certain conditions (e.g. thetotal order value exceeds $10,000), it has to be approved (by thecost center manager, for instance) before it can be processed
further. This process of approving (clearing, or giving the "greenlight" to) a proposed item of expenditure is replicated in the SAPSystem by the "release procedure".
•Entry sheets can only be released complete. There is no provisionfor release on an item-by-item basis (i.e. partial approval).
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India SAP CoE, Slide 44
Invoice Verification
Vendor Invoice
Goods Receipt
Purchase
Order
I n v o i c e
I n v o i c e
Few Transaction Code:MIRO: Invoice EntryMIR7: Park InvoiceMIR4: Display InvoiceMR8M: Cancel InvoiceMRBR: Release InvoiceMRRL: ERS (Evaluated Receipt Settlement)
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India SAP CoE, Slide 45
Invoice Verification
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India SAP CoE, Slide 46
Invoicing Plan
Rental
Leasing
Purchase Order
Item10 Service 1Invoice Plan
January‟ 07 1000$
February‟ 07 1000$
March‟07 1000$
April‟07 1000$
Auto Invoice Settlement
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India SAP CoE, Slide 47
ReportsTransaction Codeused is MSRV6
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India SAP CoE, Slide 48
External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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India SAP CoE, Slide 49
Let Me
A company (ABC Pvt ltd.) wants to hire an externalagency (XYZ services) for 2 years to do themaintenance for there machines. ABC Pvt Ltd requiresthis service once every month. Make a service contractto fulfill this requirement.
Make a service entry sheet for the above service orderand do the invoice verification for the same.Make a service master for a service and service orderfor the same.
Make a service order for a service with pre definedservice conditions.
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India SAP CoE, Slide 50
Let Me
• What is the basic difference between a standardPurchase order and a Service order.• Is it possible to create a service order with no account
assignment category? Give reason in support of theanswer.
• What do you mean by the service entry sheet? Whatis its relevance?
• What is the equivalent activity of goods receipt in caseof service procurement?
• Why do we do Invoice verification for a serviceprocurement?• On what basis is the invoice verification done for
services?
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India SAP CoE, Slide 51
Let Me
• What do you understand by SSC? What is itsimportance?• What is service master?• What do you understand by Invoicing plan?• How can we control if the system should takes the
PR price in the PO in case of automatic POcreation?
• From where can we control the price updating inservice master?
• On what levels can we maintain the serviceconditions?
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India SAP CoE, Slide 52
External Services Management
1 PrepareMe
2 TellMe
3 ShowMe
4 LetMe
5 HelpMe
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Addition InfoReports used in Service Management are as under:-
ML84 List of service entry sheet
ML92 Entry sheets for service
MSRV1 List of service
MSRV2 Service list for Requisition
MSRV3 Service list for Purchase Order
MSRV4 Service list for RFQ
MSRV5 Service list for Contracts
MSRV6 Service list for Entry sheet