unit 13-materials management-transactions part 2

7/30/2019 Unit 13-Materials Management-Transactions Part 2

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Unit 13

Materials Management(MM)- Transactions -

MELJUN

CORTES


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January 2008 SAP AG - University 2

Business Process Integration

MM

Transactions


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Transaction Data

Includes internal and externalexchanges that describe businessactivities

Unlike master data, aggregatetransactional data is dynamic eachtransaction is unique


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R/3

FIFinancial

Accounting

COControlling

PSProject

SystemWFWorkflow

ISIndustry

Solutions

MMMaterials

Mgmt.

HRHuman

Resources

SDSales and

Distribution

PPProduction

Planning

QMQuality

Mgmt.PMPlant Maintenance

SMServiceMgmt.

Client / Server

Integrated Business

Solution

ECEnterpriseControlling

AMFixed Assets

Mgmt.

Materials Management (MM)


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Unit 13 Overview

A company may want to establish along term purchasing relationshipwith a vendor

Its is accomplished through apurchasing contract (outlineagreement or blanket order)

Purchases of that material from thatvendor are then simplified andstreamlined


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Buyer/Supplier Relationships

Antagonistic parties view eachother as the enemy (lose/lose)

Adversarial each party attempts tomaximize their gain (win/lose)

Cooperative parties understand the

benefits of working together(win/win)

Collaborative parties look for

opportunities to create value


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Buyer/Supplier Relationships

Long term partnerships are theobjective of the supplier evaluationand selection process for contracts

Traditional purchasing process

Creates an environment of mistrust andlow bidder mentality

Leads to higher total purchasing costs


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Supplier Evaluation and

Selection Identify need for long term suppliercontract

Determine specific sourcingrequirements

Identify potential suppliers

Determine method of evaluatingsuppliers

Select supplier for contract

Ne otiate and execute contract


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Benefits of Managing the

Supply Base Contract with only world-classsuppliers

The fewer suppliers the lower thepurchasing overhead

Purchasing can pursue strategic

sourcing issues, instead of clericalfunctions

Streamline the supply chain

Improved overall quality


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Outline Agreement

Long-term purchase agreements

Outline agreements can be

subdivided into the following types: Contracts

Scheduling agreements

Outline agreements can be subject toa release (approval or clearance)procedure


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Contract Process Overview

Step one is to identify and evaluatesuppliers

It may involve supplier development The goals are:

Develop partnerships with good

suppliers Reduce total cost of purchased materials

and services


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Contracting Questions

How will potential suppliers beevaluated and selected?

What procedures will be required to

manage the contracts (andsuppliers)? How will performance be measured?

How many are too many suppliers? Too many suppliers cost money

Supplier integration

Collaborative agreements

Supplier development


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Contract Management

Supplier performance metrics On-time delivery

Material and/or service quality

Returned materials

Expedite issues

Pricing analysis Problem resolution procedures

Improve or else

Continuous improvement process


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Creating a Contract

Is a long-term agreement with avendor to provide a material orservice

For an agreed upon period of time

At a negotiated price or quantity

Can be created manually or withreference to purchase requisition,Request for Quote (RFQ)/quotation

etc.


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Two Types of Contracts

Quantity contracts are agreementswith a particular vendor to purchasea specific quantity of materials.

Example: Target quantity of 50,000meters of electrical wire at $2/meter.(MK)

Value contracts are similar toquantity contract except theagreement is to purchase an

established monetary value of


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Quotations/Contracts

Process Requirement for material is identified Process followed to select a vendor

Request for Quotation (RFQ) Maintaining a Quotation

Comparison of Prices

Creating a Contract

Creating a Release Order


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Request for Quotation (RFQ)

Is an invitation to a vendor toindicate their terms and conditions(in particular, their price) for the

supply of a material or the provisionof a service by submitting aquotation

Identifies the required material,quantity, and delivery dates


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Quotation

A quotation contains the vendor'spricing and conditions for providingthe material or service stated in the

Request for Quotation (RFQ)

In the SAP component MaterialsManagement (MM) Purchasing, theRFQ and quotation are the samedocument. You enter the vendor'spricing and conditions in the original

RFQ.


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Maintaining a Quotation

Enter each vendor's quotation in theassociated Request for Quotation(RFQ)

Compare prices using the pricecomparison list

Store the best quote in an info record Optionally, send rejection letters to

the losing bidders


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Comparison of Prices

You can compare the prices from allquotations from the competitivebidding process using the price

comparison list

The comparison list ranks thequotations by item from lowest to

highest price


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Purchase order that references acontract is called a release orders,they specify:

Number of the contract

Quantity to be released

Delivery date Release order documentation (open

quantity, quantity released to date,

total value) is automatically updated


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(continued) The vendor data, price data, and thedelivery terms and conditions arecopied directly to the release order

Release orders can be created from aproposed purchase requisitiongenerated off an Materials

Requirement Planning (MRP) run (netrequirements)

Manually


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Unit 13 Exercises

107. Create Purchase Outline Agreement(Contract) for Stock Items

108. Run Materials Requirements Planning Single Item, Single Level

109. Convert Proposed Purchase Requisition toRelease Order

110. Review Outline Agreements

111. Create Goods Receipt

112. Create Invoice Receipt from Vendor

113. Post Payment to Vendor

unit 13-materials management-transactions part 2

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