Document Statistics:

Document Identification

CUSTOMER NAME REZAYAT GROUP

PROJECT NAME Rezayat

DOCUMENT ID RTCL_MM_Business Process Design_Ver_V1

TITLE SCOPE– Material Management

VERSION

CREATION DATE

AUTHOR

OWNER

STATUS Final

Revision History

REVISION # REVISION DATE SUMMARY OF CHANGES UPDATED BY

0.0 10.12.2017

0.1 24.01.2018

Review and Approval of RCL Division

Business Process Design

2
 NAME ROLE SIGNATURE DATE

Review and Approval of ERP Team

NAME ROLE SIGNATURE DATE

Distribution

DISTRIBUTION
Name/ Title Review

Table of Contents
1. Overview....................................................................................................................................... 4

2. Project Purpose........................................................................................................................... 5

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3
3. Business Objective...................................................................................................................... 6

4. Functional Scope......................................................................................................................... 7

5. Organization Structure................................................................................................................ 8
5.1. Company Code.......................................................................................................................8
5.2. Plant.......................................................................................................................................9
5.3. Storage Location..................................................................................................................11
5.4. Purchasing Organization......................................................................................................14
5.5. Purchasing Group................................................................................................................15

6. Master Data................................................................................................................................ 16
6.1 Material Master Data...........................................................................................................17
6.2 Service Master.....................................................................................................................25
6.3 Vendor Master Data............................................................................................................28
6.4 Purchasing Info. Record.......................................................................................................32
6.5 Source List............................................................................................................................35
6.6 Pricing Procedure.................................................................................................................35
6.7 Serial Number Management................................................................................................38

7. SAP Enabled Business Processes........................................................................................... 40

7.1 Purchase Requisition for Asset (Capex)...............................................................................43
7.2 Purchase Requisition for Stock Item....................................................................................46
7.3 Purchase Requisition for Stock Item through MRP..............................................................48
7.4 Purchase Requisition for Services........................................................................................52
7.5 Purchase Requisition for Consumables................................................................................54
7.6 Purchase Requisition for Sales Order...................................................................................57
7.7 Purchase Requisition for Project, maintenance...................................................................62
7.8 Request for Quotation.........................................................................................................67
7.9 Contract creation process....................................................................................................71
7.10 Purchase Order for Asset.....................................................................................................75
7.11 Purchase Order for Stock Material.......................................................................................77
7.12 Purchase Order for Services.................................................................................................80
7.13 Purchase Order for Trade Services.......................................................................................83
7.14 Purchase Order for Consumables........................................................................................87
7.15 Purchase Order for Project and Maintenance.....................................................................90
7.16 Purchase Order for Intra company stock transport order....................................................93
7.17 Import Purchase Order Process...........................................................................................95
7.18 Cash Purchase Order............................................................................................................99
7.19 Vendor Evaluation Process................................................................................................104
7.20 Service Entry Sheet Process...............................................................................................110
7.21 Goods Receipt Process.......................................................................................................113
7.22 Vendor Return Process......................................................................................................116
7.23 Free Goods Receipt Process...............................................................................................121
7.24 Goods Issue to Project/maintenance/Cost Center.............................................................124
7.25 Tools Issue to Technician...................................................................................................127
7.26 Material Issue for Employee.............................................................................................132

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 7.27 Goods Issue for Scraping....................................................................................................135
7.28 Goods receipt for Stock Transport Order...........................................................................138
7.29 Batch Management & Shelf Life Expiration.......................................................................141
7.30 Physical Inventory Process.................................................................................................142
7.31 Reservation Process...........................................................................................................145
7.32 Invoice Verification............................................................................................................148

1. Overview

The purpose of this document is to create Business Blueprint, which is a detailed documentation of
the information gathered during business process design workshops. Furthermore, the Business
Blueprint documents the business process requirements of the company. It provides an overview of
the processes that the company intend to follow as an integral part of the SAP S/4HANA system.

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It also describes the design of the proposed solution and implications for the business process. This
document is to communicate the new business solution and expected changes to the business
process. The information includes:

 Enterprise organizational structures

 Proposed integrated business processes
 Associated function definitions

With the information conveyed by this document, the business should be able to approve the
proposed solution. The Business Blueprint becomes the master deliverable/document, which serves
as a basis for the entire project.

The first step in the implementation of the SAP S/4HANA System involves mapping of enterprise
structure. The enterprise structure forms a framework in which all business transactions can be
processed. This structure mapping must ensure that

 All business processes run smoothly

 The requirements for internal and external reporting are met
 Integration with SAP S/4HANA modules like Material Management, Finance and Controlling
 There is flexibility to add new entities to meet future growth

REZAYAT has decided to implement SAP S/4 HANA through Solution Manager in phase-I to meet
REZAYAT present and future requirements, to enable its business processes and to integrate all the
functional areas. ARETE understood RTCLrequirements and propose the following modules to be
implemented.

 FI/CO
 MM
 SD
 PM/CS
 PS
 PP
 QM
 HCM
 DMS
 PI
 Workflows

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2. Project Purpose

The overall purpose of this Project Rezayat is to enhance REZAYAT's primary functions in Sales,
Project Management, Finance, Cost Control, Purchase, and Human Capital Management etc.,
activities. This will be achieved primarily through the implementation of SAP S/4HANA Specific
project goals are as follows:

 To support the business growth of REZAYAT and to improve Sales, Financial

Management, Cost Management, Human Capital Management through implementation of
SAP
 To help REZAYAT become more cost effective and agile organization by better and well
informed decision making
 Proactive approach rather than reactive
 Make integrated real time Enterprise System available
 To standardize and simplify the core business processes of REZAYAT by eliminating
unnecessary paperwork, reviews, approvals and duplication of work
 Uniform procedures and controls
 Adopting best practices of SAP S/4HANA
 Implementing electronic routing and approval of documents

Help REZAYAT to get more effective Management Information by

 Implementing real time processing environment

 Establish secure and reliable systems that are easy to use and easy to maintain
 Implementing a help desk to assist REZAYAT in SAP S/4HANA
 Implementing interactive online help for SAP S/4HANA
 Delegating approval authority to departmental level where applicable
 Providing REZAYAT employees with variety of self-service capabilities
 Enabling REZAYAT employees to produce their own financial, budgeting, costing,
procurement, and human resource reports in variety of formats

3. Business Objective

We will do this by leveraging S 4HANA ERP system to:

 Make our decision Transparently

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  Manage our business Efficiently
 Deliver the required goods and services Cost Effectively

The primary business objectives or benefits expected out of this project are listed below but not
limited to

 Run all business transactions in SAP S/4HANA with the help of Fiori Apps
 Empowerment to end users
 Better decisions due to better access to information
 Allow REZAYAT staff to focus on analysis rather than transactional issues
 Reduction in administrative overhead through the simplification of processes
 Reduction in process cycle time
 Monitoring and controlling actual costs
 Continuous visibility of Actual vs. Planned values across the enterprise

4. Functional Scope

Material Management (MM)

The Materials Management (MM) module is the business process area that handles daily activities of
a business such as Procurement, Inventory Management, Materials Requirement Planning, Master
data (Material and Vendor), Material Valuation, Vendor Evaluation, and Invoice Verification and so
on.
SAP MM is strongly integrated with other modules. As the backbone of the logistics it is integrated
with Production Planning (especially in Material Requirements Planning), Sales and Distribution,
Warehouse Management, Transportation Management, Shipping, Environment, Health and safety,
Quality Management (for stock materials that most pass through quality assurance procedure), Plant
Maintenance (in the areas of bills of materials used for materials spares), Project Systems (WBS
elements).
SAP MM is also strongly integrated with Financials module as every postings occurring in inventory
has direct impacts on general ledger accounts which report to balance sheet and profit and loss
statements. Material valuation also integrates with Finance. It also integrates with the Controlling
module in areas of budget controls for release for funds to procurement. Other areas of integration
points are with Human Resource Management module in the use of organization level in defining
release approval for purchase orders based on positions IDs of the responsible staff personnel.

The scope of work from Materials Management module includes the processes and sub-processesin
RTCL is as follow,

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 S# Sub Module / Solution Processes
1 Master Data  Material Master
 Service Master
 Vendor Master
 Purchasing Information Records
 Source List
2 Purchasing  Purchase Requisition
 Request for Quotations
 Contracts & Scheduling Agreements
 External Services Management
 Purchase Order
 Release strategy & Approval for Purchasing Documents
 Vendor Evaluation
3 Inventory Management  Reservations
 Goods Receipt
 Shipment Tracking
 Goods Issue
 Transfer Posting
 Returns
 Cancellations
 Physical Inventory
4 Logistics Invoice  Invoice processing with reference to Purchase Order (3
Verification Way Matching)
 Subsequent Debit / Subsequent Credit
5 Valuation  Standard Price
 Moving Average Price
 Split Valuation

5. Organization Structure

The decision of organisation structure is a fundamental step in the project RTCL. It is a critical step as
to how the project will be structured for the purpose of final reporting. The organization structure is
a framework of company which describes the entire structure and functioning of a company. It is
designed in a way that it is split into different levels and each level is placed according to hierarchy.
These levels have relationship to one another and the various levels in the organization are;
The organization structure for RTCL in SAP - MM consists of;
 Company Code
 Plant
 Storage Location
 Purchase Organisation
 Purchasing Group

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As per the requirement, the following organisational units have been considered for the system
design and have been briefly explained which are relevant to the Materials Management Module.

5.1. Company Code

Company Code is the organizational unit of external accounting for which a complete, self-contained
set of accounts can be created. This includes the entry of all transactions that must be posted and
the creation of all items for legal individual financial statements, such as the balance sheet and the
profit and loss statement. A company code represents an independent unit producing its own
balance sheet, for example, a company within a corporate group (client).

Naming Convention
A company code is defined in the system by means of a four-character alphanumeric key that is
unique in the client and its definition is obligatory.
10XX – first 2 digit will denote Rezayat group and rest of 2 digits will be the company code in
sequential number.

Company Code Description

1011 Rezayat Trading Company Ltd

5.2. Plant
A plant is the branch, Showroom, Service Centre /Workshop and Warehouse of a company or simply
a collection of several locations of material stocks in close physical proximity.
It is a place where material is procured, stocked, valuated and sold. A Plant has its own material
master data. If the company has several plants, it can maintain data at Plant level for the following
views on a material master record in particular:
 Purchasing
 Plant / Storage
 Sales
 Accounting

The main reasons that are considered for defining plants for RTCL are;
 Materials at different plants may have different costs
 Sales Forecast and the resulting materials requirement is independent at plant level
 Interplant Transfers (Division to Division) & Stock in Transit visibility is possible with the help
of a plant

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  Most of the standard SAP reports are based on plant
 Materials planning are executed at the plant level

Naming Convention
 The RTCL shall have a unique codification for plants, the following codification structure has
been suggested in order to unify the sequence of plant codes for;
 Division, Show rooms, Service stations and Warehouses - Distribution centers
 11XX – first 2 digit will denote company codeand rest of 2 digits will be the plant code in
sequential number.

Plant Description Company Code

1101 RTCL-Head Office 1011

1102 RTCL-Catering 1011

1103 RTCL-Catering tech.store 1011

1104 RTCL-Commercial-Khobar 1011

1105 RTCL-Commercial-Riyadh 1011

1106 RTCL-Commercial-Jeddah 1011

1107 RTCL-IT & Communications 1011

1108 RTCL-Travel and Tourism 1011

1109 RTCL-Automotive Div. Dammam 1011

1110 RTCL-Automotive Div. Riyadh 1011

1111 RTCL-Automotive Div. Jeddah 1011

1112 RTCL-Power Rental 1011

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 5.3. Storage Location
The storage location is an organizational unit that facilitates quantity based differentiation of stocks
of materials within a plant. A storage location is defined by means of a four-character alphanumeric
key that is unique in the plant.
A storage location has the following attributes:
 There may be one or more storage locations within a Plant.
 Stocks are managed only on a quantity basis and not on a value basis at storage location
level.
 Physical inventory is carried out at storage location level.
 Storage locations are always created for a Plant.

Naming Convention
The Storage Location defined for RTCL for procuring, storing and delivering project related materials.
SXXX – The first digit denotesthe storage location and rest of 3 digits will be the storage location
code in sequential number.

Plant Description Storage Short description Long description

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 Location
S001 General store General store
S002 Water &HVAC Water &HVAC Store
S003 E&I Store E&I Store
S004 Military stores Military stores
RTCL-Commercial- S005 Engineering store Engineering store
1104
Khobar S006 WT store Water Treatment store
S007 Oil & GAS Oil, Gas & Marine products
S008 Coating store Coating product
S009 E&I Store in CTC E&I Store
SCRP Scrap store Scrap store
S001 General store General store
S002 Water &HVAC Water &HVAC Store
RTCL-Commercial-
1105 S003 E&I Store E&I Store
Riyadh
S004 Military stores Military stores
SCRP Scrap store Scrap store
S001 General store General store
S002 Water &HVAC Water &HVAC Store
RTCL-Commercial-
1106 S003 E&I Store E&I Store
Jeddah
S004 Military stores Military stores
SCRP Scrap store Scrap store

5.4. Purchasing Organization

The Purchase Organization is an organizational unit responsible for procuring materials or services
for one or more plants and for negotiating general conditions of purchase with vendors and it
assumes legal responsibility for all external purchase transactions.

RTCL will have one centralized Purchasing Organization, which will be responsible for Capex and
consumable procurement. The main reason for defining a centralized purchase organization for RTCL
is centralized purchasing aids finding the best deals with vendors.
 Facilitates high volume bulk discounts
 Organized transactions and improved vendor relationship
 Management of a single balance of payment per vendor
 Unified reporting for all procurement activities

Naming Convention
RTCL will have the following purchase organization defined for facilitating and reporting all the
procurement related activities;
 Division wise purchase organization codeis equal to head of the division plant.

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  Centralized purchase organization 1000 is equal to Rezayatgroup controlling area 1000.
 Division level purchase organization is equal to division wise Head plant.

Company Centralize Div.wise Div.wise

Code Description Plant Description d Pur.Org Pur. Org. Purchase Org.
RTCL-Commercial-
1104
Khobar
RTCL-Commercial-
1105 1000 1104 RTCL-Commercial
Riyadh
RTCL-Commercial-
1106
Jeddah

5.5. Purchasing Group

The purchasing group is a key for a buyer or a group of buyers who is/are responsible for certain
purchasing activities. Internally, the purchasing group is responsible for the procurement of a
material or class of materials. Externally, it is the principal channel for an enterprise's dealings with
its vendors.

The main reason for defining the purchasing group by the name of individual buyer for RTCL is;
 Buyer is a Single point of contact for procurement of specific product range of materials
 Each material shall have a purchasing group (buyer) assigned in the purchasing tab of the
material master which will update the buyer directly for any procurement related
requirements
 Unified reporting for all procurement activities per buyer for specific product range

Naming Convention
RTCL will have the following purchase groups defined for facilitating and reporting all the
procurement related activities;
2XX – first digit will denote thepurchasing group and rest of 2 digits will be the purchasing group
code in sequential number.

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Company Descrip Div.wise Purchasing
Description
Code tion Pur. Org. Group Purchasing Group Des.
207 RTCL- Commercial- Railways
208 RTCL- Commercial - Military
RTCL- Commercial –
209 Engineering
RTCL-Commercial- Industrial
210 Supplies
RTCL-Commercial-Water
RTCL- 211 &HVAC
1104
Commercial 212 RTCL-Coating Team
213 RTCL-Commercial-E&I
RTCL-Commercial - Water
214 Treatment
RTCL-Commercial - Oil, Gas
215 & Marine
RTCL-CommercialBusiness
216 Development
217 RTCL-Electro Mechanical

6. Master Data

In Materials Management, the master data comprises data records that are stored in the database
for a long period of time. These data records are stored centrally, and are used and processed on a
cross-application basis. In this way, multiple data storage and redundancy of data is avoided.
In Materials Management, the master data comprises data records that are stored in the database
for a long period of time. These data records are stored centrally, and are used and processed on a
cross-application basis. In this way, multiple data storage and redundancy of data is avoided.

6.1Material Master Data

The material master record is an enterprise's main source of material specific data. It is used by all
areas of logistics such as purchasing, inventory management, materials planning can jointly use the
data stored.
The data stored in the material master record is required for many purposes, including the following:
 Purchasing data is required for material procurement purposes.
 Sales data is required for selling purposes.
 Storage data is needed to post goods movements and carryout physical inventories.
 Accounting data is required for material valuation.
 Materials planning data is needed for material requirements planning.

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Since different user departments within an enterprise work with one material, and each department
enters different information relating to it, the data in a material master record is subdivided
according to area of use. Each user department thus has its own view of a material master record
and is responsible for maintaining the data covered by this view. The integration of all material data
in a single database object eliminates the problem of data redundancy.

Design of Material Master

Material Master Characteristic To be Design

Material Number Will be unique across Rezayat group

Material Codification Uniform across all plants in group

Numbering Internal numbers will be generated

Material Description Standardized across the group for all the materials.
Below is the formulation:
• Main Description
• Property
• Material
• Size
• Unit of dimensions
Material Type Configured, taking into consideration materials used
across the Group
Material Group CPV code will be configured for material group

Industry Sector
When a material master record, you are required to classify the material according to industry sector
which is a factor determining the screen sequence and field selection in a material master record

Naming Convention

Industry Sector Industry Sector Description

Z Rezayat Industries
Material Types
Materials with some common attributes are grouped together and they are assigned to a material
type. This will differentiate materials and allow organization to manage different materials in
systematic manner in accordance to company’s requirement.
Among other things, the material type controls:
 Type of number assignment (internal or external).
 Permissible number range intervals.
 Screens appear and in which order.

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  Procurement type that is allowed for a material (that is, whether the material is
produced in-house, procured externally, or both)

For REZAYAT, the material types are defined as below;

The main reason for defining the material types by copying the standard material types are;
 To keep a copy of SAP standard material type for creation of new material types in future as
per any new business requirements
 Flexibility of having more than one material type with similar attributes from
allowing/disallowing external procurement, assignment of multiple material types to single
account category reference for account determination
 Unified and specific reporting for all procurement activities per material type for specific
product range

In RTCL, the following material types shall be configured

Material Type Material Type Description

ROH Raw Materials
HAWA Trading Material
SERV Service Material
NLAG Non-Stock Material
ZCON Consumables
HIBE Operating supplies
ERSA Spare Parts
HALB Semi - Finished Material
FERT Finished Goods
FHMI Production Resource/Tool

Structure of Material Master:

Since several departments of a company work with one material and each department use different
information for the material, the data is structured in a material master record, according to user
departments.

Sr. No. View Details of the View

1. Basic data 1 Contains Data that applies equally to each company code within
your enterprise

a) General Data
 Material Code (40 Characters / Internal)

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  Material Description (40 Characters)
 Base unit of measure (Stock Keeping Unit)
 Material Group (Key used to group together
several materials)
 Old material number (Material code of Legacy
System)-Customer Material Number will be
updated in this field.
Material can be classified at different class level like at Batch,
Material class etc... (A class is a set of characteristics giving a

Classification specific value ranges that are acceptable) Characteristics & class
2.
need to be created first before they can be linked to material
master.

a) General data
 Ordering unit (To be entered only if it is different
from Base Unit of Measure)
 Purchasing group (Buyer group responsible for
purchasing the material) – Purchase Group will
be defined for group of buyers.
Purchasing
3.
b) Purchasing Values Keys (This will be used for monitoring
Deviations from delivery schedule as well as acceptable
quantity tolerance along with shipping instructions)
c) Other data / Manufacture Data
 Source list may be used. (To Activate Approved
Vendor List for the material)
a) Will be used for incorporating those details which will
Purchase Order text
4.
always form a part of PO for this item.
a) This view contains details like;
 Sales Unit (If different from Base Unit of
Measure)
Sales Org. data 1
5.
 X-Distribution Channel Status
 Delivery Plant
 Tax Classification Key (Taxable / Exempted)
6. Sales Org. data 2 a) This view contains details like;
 Material Statistics Group (Used for generation of

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 Logistics Information System Reports)
 Material Pricing Group
 Account Assignment Group for Material (Used by
the system when creating an accounting
document from a billing document to determine
the sales revenue account)
 Volume Rebate Group
 Item Category Group (Materials grouping that
helps the system to determine item categories
during sales document processing)
 Profit Center
 Availability Check
Sales: General /
7. Plant  Loading Group (Shipping Point Determination)
 Transportation Group (Shipping Point
Determination)
 ABC Indicator
 MRP Type (PD – MRP and VB – Manual Re-Order
Point Planning)
 Reorder Point (For materials with MRP Type “VB”
MRP1
8.
only)
 Lot Size (EX – Lot for Lot Order Quantity and FX –
Fixed Lot Size)
 MRP Controller
 Procurement type shall be used to decide
whether material is to be procured externally,
MRP 2
9.
produced in-house or both
 Planned Delivery Time in days
MRP3  Availability Check
10.
 Individual / Collective (To be maintained as per
MRP4
11.
the requirement)
12. Plant Data & a) General data
storage 1  Batch Management
 Shelf Life Data
Shelf Life will be maintained for catering food

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 products.

Plant Data &

13. Storage 2  Profit Center

 QM Control Key
Quality
14. Management  Certificate Type (Provides facility to confirm the
receipt of Quality Certificate from Vendor)
a) This view contains details like;
 Valuation Category (This is applicable for split
valuated materials)
 Valuation Class
 Price Control (Moving Average Price – V or
Accounting 1 & 2 Standard Price – S)
15.
 Price (Moving Average Price or Standard Price as
per Price Control)
 Split Valuation will be activated for Fasteners
items which are produced as well as procured
under same material code.
a) This view contains details like;
 Profit Center
Costing 1 & 2
16.
 Valuation Class, Price Control, Price, Price Unit,
etc…

Material Master Flowchart:

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Process Narrative
 Procurement team will gather the relavent information about the material from the Vendor
 Check the Material master for any existing record available in the system, If exist then check
the for any changes or update the information if required
 Create a New Material master, If their is no existing record in the system
 Material group will be centrally configured. All the required CPV codes will be available
based on the current materials across the group
 While creating the material master the relevant material group has to be assigned to it
 Requester of individual BU will communicate the requirement of creation of material master
to central master data team with the standard material master template
 Material master will be created by central master data team-creation, once created it will
get blocked
 The central master data team-validationwill check the material, then validate and release
the blocked material to be used
 Once the item is validated and unblocked by the designated central master data team, the
creator of the item will not be allowed to either edit or delete the item from the database.

Process Steps

Process Step Business Role Fiori App Expected Results

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 Material Master
Central Master Data Team Create Material Material is created
creation/Validation

Number range
When creating a material master record, a unique number is assigned and this record uniquely
identifies the material. You can assign mnemonic keys or non-mnemonic keys as material number,
depending on the method assigned. For this reason, you have the following types of number
assignment in SAP:
 Internal number assignment:In RTCL, material master creation using numeric keys, the
system assigns an internal number as the material number when you create the material
master record.
In RTCL, the following number ranges shall be configured for material master records;

Material
Material Type Description Interval Number Range
Type
ROH Raw Materials 1100000000 1199999999
HAWA Trading Material 1200000000 1299999999
SERV Service Material 1300000000 1399999999
NLAG Non-stock Materials 1400000000 1499999999
ZCON Consumables 1500000000 1599999999
HIBE Operating supplies 1700000000 1799999999
ERSA Spare Parts 1800000000 1899999999
HALB Semi - Finished Material 1900000000 1999999999
FERT Finished Goods 2000000000 2099999999
FHMI Production Resource/Tool 2100000000 2199999999

Units of Measure
 Base unit of measure:This is the unit of measure in which the stocks of a material are
managed. The system converts all quantities entered in other units to the base unit of
measure.
 Alternative units of measure:Individual departments may have their own units of measure.
For example, Purchasing may use a different unit than Sales. All units of measure other than
the base unit of measure are referred to as alternative units of measure. The Standard SAP
system allows the use of the following types of alternative unit of measure
 Order unit: Allows a material to be ordered in a unit differing from the base unit of measure.
The order unit is proposed automatically in purchasing functions, where it can be changed.
 Sales unit: Allows a material to be sold in a unit differing from the base unit of measure. The
sales unit is proposed automatically in the sales order, where it can be changed.

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  Unit of issue: Unit of measure in which the material is issued from the warehouse. It allows
consumption, stock transfers, transfer postings, and physical inventories to be recorded in a
unit differing from the base unit of measure and from the stock keeping unit.
 In RTCL, the following units of measure shall be used;

Measurement unit Description

A Ampere
BAG Bag
BOT Bottle
BQK Becquerel/kilogram
CDM Cubic decimeter
CM Centimeter
CM2 Square centimeter
CMH Centimeter/hour
CS Case
DR Drum
DZ Dozen
EA Each
FA Fahrenheit
G Gram
GLL US gallon
GLM Gallons per mile (US)
GM Gram/Mole
GM2 Gram/square meter
GPH Gallons per hour (US)
H Hour
HZ Hertz (1/second)
IN Inch
IN3 Cubic inch
JHR Years
JKK Spec. Heat Capacity
KG Kilogram
KM Kilometer
L Liter
L2 Liter/Minute
LB Pound
LBJ Pounds/Year
LBm Pounds/Month
LE Activity unit
LHK Liter per 100 km
LM Length in Meters per Unit
LMS Liter/Mole Second
LPH Liter per hour
M Meter
M2 Square meter
M3 Cubic meter
M3D Cubic meter/day

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M3S Cubic meter/second
MA Milliampere
MG Milligram
MGW Megawatt
MHZ Megahertz
MI Mile
MI2 Square mile
MIM Micrometer
MIN Minute
MIS Microsecond
ML Milliliter
MM Millimeter
MON Months
MPA Mega Pascal
MQH Cubic meter/Hour
MS Millisecond
BOX Box
CV Case
CAR Carton
AU Activity unit
CRT Crate
PC Piece
ROL Roll
TON US Ton
Material Groups
 Material Group is a key that is used to group together several materials with the same
attributes. Each Material is assigned to a particular material group and is used for reporting
purpose, you can restrict the scope of analyses and search material master records via
search helps.

 Several materials with the same attributes grouped together and assigned them with a key
which is “Material Group” You can use material groups to CPV (Common Procurement
Vocabulary) code is international standard of material classification and has been developed
by the European Union specifically for public procurement.

 Rezayat has decided to use CPV (Common Procurement Vocabulary) with built in logic for
material classification using the material group in SAP.

 The material group is a maximum of nine characters alphanumeric key. The first eight
characters of the material group will be the CPV code up to the category level. The below
example explains the CPV coding and hierarchy.

Divisio Group Class Category CPV Code Material Description

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24
 n Group
Electrical machinery,
31 31000000 310000000 apparatus, equipment
and consumables; lighting
Electricity distribution and
312 31200000 312000000
control apparatus
3121 31213 31213000 312130000 Distribution equipment
31213100 312131000 Distribution boxes
31213200 312132000 Distribution transformers
Distribution transformer
31213200 312132001
33kv/380v/300kva
Distribution transformer
31213200 312132002
33kv/380v/500kva
Distribution transformer
31213200 312132003
33kv/380v/1500kva
Distribution transformer
31213200 312132004
33kv/380v/1600kva
Material Valuation
The price control procedure set in the material master record determines the value used to evaluate
the goods receipt of a material. Material valuation can be carried out According to the standard
price (S price) or the moving average price (V price).
Standard Price(Price Control-S):The Valuation using a standard price happens as per the following
points:
 All inventory postings are carried out at the standard price
 Variances are posted to price difference accounts
 Variances are updated
 Price changes can be monitored
 If a material is assigned a standard price (S), the value of the material is always calculated at
this price.
 If goods movements or invoice receipts contain a price that differs from the standard price,
the differences are posted to a price difference account. The variance is not taken into
account in valuation.
 The system calculates the total value for every goods movement as follows:
 Total value = standard price (per base unit of measure) * total stock
 Moving Average Price(Price Control-V):The Valuation using a standard price happens as per
the following points:
 The system valuates goods receipts with the purchase order price
 Goods issue happens with the current moving average price.

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  The system automatically calculates the moving average price for every goods movement as
follows:
 Moving average price = total stock value / total stock quantity
 Any differences from the purchase order price that occur during the invoice receipt are
posted directly to the stock account during stock coverage, and the system determines a
new moving average price.

In RTCL, the following valuation control shall class be assigned to the material types;

Valuation
Material Type Material Type Description Valuation Class Description
Class
ROH Raw Materials 3000 Raw Materials
HAWA Trading Material 3100 Trading Material
SERV Service Material 3200 Service Material
NLAG Non-Stock Materials 3300 Non-Valuated Materials
ZCON Consumables 3400 Consumables
HIBE Operating supplies 3030 Operating supplies
ERSA Spare Parts 3040 Spare Parts
HALB Semi - Finished Material 7900 Semi - Finished Material
FERT Finished Goods 7920 Finished Goods
FHMI Production Resource/Tool 7930 Production Resource/Tool
Valuation class:
The valuation class determines the G/L accounts that are updated as a result of a valuation-relevant
transaction or event such as a goods movement. The valuation class makes it possible to:
 Post the stock values of materials of the same material type to different G/L accounts
 Post the stock values of materials of different material types to the same G/L account.

Development

SI No WRICEF ID Object Description

1 MM-E1013 Enhancement Rezayat has requirement that when material will be

created by central master data team creation, initially it
will be blocked for use. Development will be done so
that on creation of material master, system will pass fill
the field X - plant material status and set block the
material master for all use.
Rezayat has requirement that, Material Master creation
2 MM-E1002 Enhancement
validate with duplicate materials, enhancement has to be
made to fulfil this requirements

Rezayat has requirement that, Material Master enhance with

3 MM-E1003 Enhancement
functional description, specification, capacity to update the

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 master data details.

4 MM-W1013 Workflow Rezayat has requirement that once material code is

validated and released by central master data team,
workflow need to configured and automatic e-mail
notification to be sent to material requestor for
information that material is validated and released.
Rezayat has requirement to trigger notification to manager if
5 MM-W1014 Workflow
user changes MRP related data in material master.
Enhancement has to be done and workflow mail
communication required for this requirement.

Key Integration Point

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Valuation Class SAP FI FI Dept.
MM_IN_01_2
MRP Data SAP PP PP Dept.
MM_IN_01_3
Quality Management View SAP QM QM Dept.
MM_IN_01_4
Maintainence of costing view SAP CO CO Dept.
MM_IN_01_5 Sales and Distribution related
SAP SD SD Dept.
view

Report
GAP Description
Name of Report Comments Customized Report Transaction Code
(WRICEF ID).
Material Master
1 No Standard
list
Authorization Roles

Process Step Business Role Authorization

Create Material Central Master Data Team-creation

Central Master Data Team – validation
Release Material Master

6.2Service Master
Service Master Overview

The service master contains information about all the services that a company procures. It is the
Company’s central source for retrieving service-specific data. This information is stored in individual

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27
Service master records. In RTCL service master will be required for any service procurement. Service
master is a better way in SAP to pass the true information of the service required so it is
recommended that service master should be created for all service procurement.

Design Considerations

Services / works with the same basic attributes are grouped together and assigned to a Service
Category. This allows business to manage different services/ works in a uniform manner in
Accordance with company's requirements.
Numbering for Service Master will be according to the service category and it will be internally
Generate by the system.

S.Cat (4 Char
Description From No. To No.
Code)

SERV Service: Purchasing 1000000 1999999

Following are service Category finalized for Rezayat.

Service
Category Description as service category description
Category
2050 Repair and maintenance services
2051 Installation services (except software)
2055 Hotel, restaurant and retail trade services
2060 Transport services (excl. Waste transport)
2063 Supporting and auxiliary transport services; travel agencies services
2064 Postal and telecommunications services
2065 Public utilities
2066 Financial and insurance services
2070 Real estate services
2071 Architectural, construction, engineering and inspection services
2072 IT services: consulting, software development, Internet and support
2073 Research and development services and related consultancy services
2075 Administration, defense and social security services
2076 Services related to the oil and gas industry
2077 Agricultural, forestry, horticultural, aqua cultural and apicultural services
Business services: law, marketing, consulting, recruitment, printing and
2079 security
2080 Education and training services
2085 Health and social work services
2090 Sewage, refuse, cleaning and environmental services
2092 Recreational, cultural and sporting services
2098 Other community, social and personal services
1000 Bill of services for Rezayat

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Process flow chart:

Process Narrative
 A central Master Data Team (CMDT) will be responsible for maintaining and validating the
service Master Records for all plants
 If any business unit will have a requirement of new service master record creation in the
system, need to fill the service master template
 The personnel responsible for service master data maintenance in CMDT shall check for the
duplications and errors at the time of creation of new service master
 Service master will be created by central master data team-creation, once created it will get
blocked
 The central master data team-validation will check the service master, then validate and
release the blocked service master to be used
 Once the service master is validated and unblocked by the designated central master data
team, the creator of the item will not be allowed to either edit or delete the item from the
database

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29
  As the new service master is created / modified, CMDT will inform the requester with the
SAP service Master Number.

Key integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Valuation Class SAP FI FI Dept.

Development

SI No WRICEF ID Object Description

1 MM-E1013 Enhancement Rezayat has requirement that when service master will
be created by central master data team creation, initially
it will be blocked for use. Development will be done so
that on creation of service master, system will pass fill
the field X - plant service master status and set block the
service master for all use.

2 MM-W1013 Workflow Rezayat has requirement that once service master is

validated and released by central master data team,
workflow need to configured and automatic e-mail
notification to be sent to service master requestor for
information that service master is validated and
released.

Report
GAP Description
Name of Report Comments Customized Report Transaction Code
(WRICEF ID).
Service Master
1 No Standard
list
Authorization Roles

Process Step Business Role Authorization

Create service master Central Master Data Team

Central Master Data Team
Release service master

6.3Vendor Master Data

Vendors are business partners with whom the organization does purchase related transactions. It is
the central unit in the overall purchase cycle & can denote internal users, external vendors or end

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customers. It is advisable to maintain data centrally in order to avoid duplicates & exercise effective
control over master records.

The (mandatory) target approach in S/4HANA is the Business Partner approach.Business Partner is
now capable of centrally managing master data for business partners, customers, and vendors. With
current development, BP is the single point of entry to create, edit, and display master data for
business partners, customers, and vendors

Business Partner – SAP Strategic Object Model

General data are shared across different roles One business partner could perform multiple roles,
e.g., customer and vendor (supplier) One business partner could have multiple addresses Time-
dependency object attributes and relationships Provide harmonized architecture Customer/Vendor
Integration (CVI) component ensure the synchronization between the Business Partner object and
the customer/vendor objects

In material management, materials are purchase from business partners. Data about the material as
well as about the business partners is the basis for purchase processing. Business partner have 3
types of category like person, organization, group.

After creation of business partner, it extends to purchasing and accounting views. The data in the
vendor master record is subdivided into the following categories:

Business Partner data: This data is valid for the whole client. It includes the vendor’s address and
bank details

Accounting data: This is maintained at company code level. It comprises data such as the number of
the reconciliation account and the payment methods for automatic payment transactions

Purchasing data: This data is maintained for each purchasing organization. It includes the purchase
order currency, Incoterms, and various control data pertaining to the vendor. You can also maintain
different data for specific plants or for vendor sub ranges.

The vendor master record contains information of external vendors of an enterprise, this
information is stored in individual vendor master records. In addition to the vendor’s name and
address, a vendor master record contains both purchasing and accounting data such as the
following:
 Currency used in transactions with the vendor
 Terms of payment
 Names of important contacts
 Reconciliation account from the general ledger

Terms of payment

S. No Description
Z001 Due upon Invoicing
Z002 7 Days
Z003 10 Days
Z004 15 Days
Z005 20 Days
Z006 21 Days

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31
Z007 30 Days
Z008 45 Days
Z009 60 Days
Z010 90 Days
Z011 120 Days
Z012 150 Days
Z013 Cash payment
Z014 10% Advance
Z015 20% Advance
Z016 25% Advance
Z017 30% Advance
Z018 40% Advance
Z019 50% Advance
Z020 60% Advance
Z021 70% Advance
Z022 80% Advance
Z023 90% Advance
Z024 100% Advance
Z025 5% advance against approval of final document
Z026 45% against an ILC confirmed by the bank.
Z027 Through L/C (ILC) confirmed by the bank
Z028 30% advance & balance 70% before shipment
Z029 50% advance & balance 50% before shipment
Z030 25% advance & balance 75% before shipment
Z031 50% advance & balance 50% against an ILC confirmed by the bank
Z032 25% advance & balance 75% against an ILC confirmed by the bank
Z033 10%advance & balance 90% against an ILC confirmed by the bank
Z034 50%advance & balance 50% against FCR
Z035 Net 60 days against invoice and FCR

Inco Terms

S. No Description
CFR Cost and Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid To
CIP Carriage and Insurance Paid To
DAT Delivered At Terminal
DAP Delivered At Place
DDP Delivered Duty Paid
DDU Delivered Duty Unpaid
EXW Ex Works
FCA Free Carrier
FAS Free Alongside Ship
FOB Free On Board

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Process flow chart:

Process Narrative
 Whenever there is a need to create / update a vendor master record by the business unit or
central sourcing they will start the vendor enrolment process.
 New Vendor enrolment eligibility (Vendor Pre-Qualification) process has to be handled out
of SAP.
 All the documents related to the vendor will be scanned and uploaded in the document
management system and linked to the respective vendor master.
 Once the data is collected the vendor master is created in SAP by the CMDT. DMDT will
enter cpv code of materials supplied by vendor and vendor category ( i.e trading or
manufacturer)
 After creation of vendor master by CMDT team, it will be blocked for use until group
purchase, group audit, group finance is validated
 Once the vendor master is validated and approved by all the three departments, CMDT send
a mail communicates to BU requestor and vendor code be used.
 If the vendor have new payment terms which are not created in SAP, during purchase order
creation header text will be maintained with text payment terms.
Process Steps:

Process Step Business Role Fiori App Expected Results

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33
 Create Business Business Partner is
Creation of Business Partner Master Data Team
Partner created
Group Business Partneris
Purchasing/Group Display Business displayed
Release Business Partner
Internal Audit/Group Partner
Finance
Configuration Considerations
When creating a vendor master record, an account group needs to be selected which signifies which
group of vendors that this vendor is being assigned. The account group of a vendor master record
controls the screens and fields that are needed to be updated for the relevant role of your business
partner (vendor).

The vendor account group has the following control functions and determines;
 The type of number assignment (internal or external) assigned to the vendor account group.
 The field selection – which fields are ready for user input, which fields must be maintained,
and which fields are hidden
 The status whether the vendor is a one-time vendor

In RTCL, the following vendor account groups shall be created;

Vendor Account Groups Vendor Account Groups Description

ZVEN Vendors
ZEMP Employee Vendor
ZOTV One Time Vendor
ZICV Intercompany

In RTCL, Vendor master will be created by central master data team:

When you create a vendor master record, a unique number for the vendor (creditor) is assigned
from the number range that is assigned to the relevant vendor account group. The vendor (creditor)
number is also used as the subsidiary ledger number in financial accounting, the total liabilities are
continually updated for each vendor.When creating a vendor master record, you must also maintain
a reconciliation account, the reconciliation account is a G/L account which depicts a company’s
liabilities towards several vendors in G/L accounting.

Number Range:

A vendor number is a unique number for each vendor.It can be maintained internally or externally.
In RTCL, creation of vendor master using mnemonic keys as vendor numbers, depending on the
method assigned to the vendor account group. For this reason, you have the following types of
number assignment in SAP:

Internal number assignment: Rezayat uses numeric keys, the system assigns an internal number as
the vendor number when you create the vendor master record.

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In RTCL, the following number ranges shall be configured for vendor master records;

Vendor Account Groups Vendor Account Groups Description From TO

ZVEN Vendor 100000 199999

ZEMP Employee Vendor 200000 299999
ZOTV One Time Vendor 300000 399999
ZICV Intercompany 400000 499999

Key integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Vendor Account Group SAP MM MM Dept.
MM_IN_01_2
Reconciliation Accounts SAP FI FI Dept.
MM_IN_01_3
Payment terms and tax data SAP FI FI Dept.

Development

SI No WRICEF ID Object Description

1 MM-E1008 Enhancement Rezayat has requirement that vendor master will be

created by central master data team, initially it will be
blocked for use. Group purchasing will first validate the
vendor data and release. Secondly Group Internal Audit
will validate the data and release. After Internal Audit
release Group finance will check the vendor data and
release the vendor for use. Enhancement is required to
develop this requirements.

Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Vendor Master list No Standard

GAP Analysis
 Rezayat has requirement that when vendor will be created by Business Unit, initially it will
be blocked for use. Central master data team will check the vendor master and release it for
use. For this requirement development is required. (Gap Code: MM-E1008 )

Authorization Roles
Process Step Business Role Authorization

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35
 Creation of Supplier Master Central Master Data Team
Group Purchasing/Group internal
Release Supplier Master
Audit/Group Finance

6.4Purchasing Info. Record

Purchasing Info Record Overview
The purchasing info record provides the option of storing information about a vendor and a material
as the master data at purchasing organization and plant level. Thefollowing information can be
maintained in the purchasing info records:
 Current and future prices and conditions (for example, freight and discounts)
 Delivery data
 Planned delivery time
 Over delivery tolerances
 Under delivery tolerances
 Vendor specific data
 Contact person
 Contact person’s email
 vendor-specific data about the material
 Number of the last purchase order
 Purchase Order Texts.
 When you create an info record, data is drawn from the material and vendor master records
and inserted in the info record as default values. You can also use the list displays for the
info records to determine which vendors offer a particular material or which materials can
be procured from a particular vendor.
 The purchasing info record is an important source of information for the buyer. When
creating the purchasing documents, the data from the info record is copied into the
purchasing documents as default values.
 In RTCL, the purchasing information record shall be created and maintained for the following
procurement types
 Standard: Standard info record has information on standard purchase orders. This info
record will include vendor’s price for supplying the particular material.
 Subcontracting: A subcontractor info record contains ordering information for subcontract
orders. For example, if you subcontract the assembly of a component, the subcontractor
info record would include the vendor’s (subcontractor’s) price for assembling the
component.

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  Order Price History: The purchase order price history logs the various prices charged for a
material by a vendor
 PO text in info record:This text serves to describe the order item and corresponds to the PO
text in the material master record. It is adopted in the PO item and included in the printout.
 In RTCL, the purchase information record update indicator shall be set at the item level of
the purchase order in order to automatically update the first purchase order number for a
material and all subsequent purchase orders for that material sourced from that particular
vendor shall have the prices updated from the purchase information record.
 In RTCL, Material are created in group level, vendor level material details can maintain in
vendor info record. Customer level material details are maintained in customer info record,

Process flow chart:

Process Narrative
 BU Purchase will be responsible for maintaining and validating the purchasing info records
 If any business unit requestor have any requirement of new purchasing info record creation
in the system, need to fill the info record template and send to BU Purchaser
 BU Purchaser check the availability of material code in SAP. If material code does not exist it
will be created by following business process number RZ_MM_MD_10

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37
  If material code exists, BU Purchaser will check for the vendor code availability in SAP. If
vendor code does not exist it will be created by following business process number
RZ_MM_MD_12
 Once material code and vendor code is available in SAP, BU Purchaser will create purchasing
info record
 Once the new purchasing info record is created / modified, BU Purchaser will send a mail
communicates to the requester that purchasing info record been created/modified in SAP.

Key integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Source List SAP MM MM Dept.

Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Info Record per supplier No Standard

2 Info Record per material No Standard

Info Record by material
3 No Standard
group
4 Purchase order price history No Standard

Authorization Roles
Process Step Business Role Authorization
Create Purchasing info record BU Purchase

Validate Purchasing info record BU Purchase

6.5Source List
The combined information of material and vendor together is kept in the purchase info record. But if
a particular material needs to be ordered from different vendors in different time intervals, this
information can be maintained in a source list.

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 The key points about source list are as follows:
 Source list include list of possible sources of supply for a material over a given framework of
time.
 Source list specifies the time period of ordering of a particular material from a given vendor.
 Source list can be copied from one plant to another plant.
In RTCL, Single source will be define base on those materials whose list of approved vendors is
known and purchase information record has been maintained as a pre-requisite for source list
creation.

The purpose of the source determination process is to automatically assign a source of supply to a
purchase requisition. If the person entering the requisition has set the Source Determination
indicator in the requisition header, the system searches for possible sources of supply for all the
items of the requisition. If the system finds several valid sources for an item, the decision process
can be supported by a price simulation.Each source list record consists of the following data:
Validity period: Period within which the settings made in the source list are valid. The time period
always makes reference to the delivery date for a requirement.
Fixed source: Select the Fixed field to define a source as a fixed source for the purpose of source
determination. The fixed source is determined in all cases except the planning run.
Blocked source: Select the Blocked field to define a source of supply as blocked. The info record or
outline agreement is not suggested in the course of the source determination process and no PO or
requisition can be created with this source.
MRP: You use the MRP indicator to control whether a source should be found during the planning
run.
The source list requirements indicator can be set at plant level. If a source list requirement exists,
you must maintain the source list for each material of that particular plant before you can order it.
In RTCL, the source list requirement indicator shall not be flagged at the plant level and source list
shall be created manually for only those materials whose list of approved vendors is known and
purchase information record has been maintained as a pre-requisite for source list creation.

6.6Pricing Procedure

A Pricing procedure defines how the pricing values that are entered in the system are calculated. In
MM module, pricing procedure is used during creation purchasing documents.
Total value of material based on all addition and subtraction of pricing conditions like discount,
surcharge, freight, customs etc. The Elements of Price Determination process are;
Condition Table:

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39
A condition table consists of one or more condition keys and a data part. The data part contains a
number that refer a record in another table. The Condition Keys are
 Vendor
 Material
 Purchase Organization
 Document Type

Possible way of creating Condition Table:

 Plant/Purchase Organisation/Vendor/Material Type/Material Group/Material
 Plant/ Purchase Organisation/Vendor/Material Type/Material
 Plant/Purchase Organisation/Vendor/Material
 Plant/Purchase Organisation/Material/Document Type
In RTCL, the condition keys in the condition table created for pricing conditions are;
Document Type
Access sequence
The access sequence defines the order in which the system searches for condition records.
In RTCL, the access sequence shall drive the order in which the condition records are searched and
will be based on;
 Material
 Vendor
Calculation Type:
Determines how the systems calculate Prices, Discounts, and Surcharges in a condition.

 Fixed Amount
 Percentage based on Quantity
 Volume
 Weight.
In RTCL, the calculation type for all the condition types shall be based on;

 Fixed Amount
 Percentage based on Quantity
Condition Type:
 The condition type represent price factor in the system.
In RTCL, the condition types for pricing procedure are;

Condition Calculation
Description
Type Type

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40
ZB00 Base Price Price
Z001 Discount Percentage
Z002 Discount Value
Z003 Sea Freight Cost Percentage
Z004 Sea Freight Cost Value
Z005 Air Freight Cost Percentage
Z006 Air Express Freight Cost Value
Z007 Inland Insurance Charges Percentage
Z008 Inland Insurance Charges Value
Z009 Attested Documentation Charges Value
Z010 SASO Certificates Charges Value
Z011 Courier Charges Value
Z012 Cargo Inspection Charges Value
Z013 Overseas Shipment Insurance Charges Value
Z014 Inland Transportation Charges Value
Z015 Loading/Unloading Charges Value
Z016 Inspection Charges Value
Z017 Packing cost Value
Z018 Calibration Charges Value
Z019 NMR 601 – Engineering Drawings Value
Z020 NMR 602 – Certified Drawings Value
Z021 NMR 603 – Miscellaneous Documents. Value
Z022 SPDP – Spare Parts Data Packages Value
Incidental Services (Commissioning, Installation & testing
Z023 Value
charges)
Z024 Third party Inspection charges Value
Other Charges 1 (option to provide text – we will input the type
Z025 Value
of charges)
Other Charges 2 (option to provide text – we will input the type
Z026 Value
of charges)
Other Charges 3 (option to provide text – we will input the type
Z027 Value
of charges)
Z028 Air Freight Cost Value
Z029 Packing Cost Percentage
Z028 TAX Value

Calculation Schema:

A Calculation Schema group together all condition types that plays a part in calculating the price.

In RTCL, one calculation schema shall be created for pricing procedure determination.
Schema Group:

These allow you to group together purchasing organizations that use the same calculation schema.
You can also use them to group together vendors for whom the same calculation schema is valid.
In RTCL, one schema group shall be created for assigning the pricing procedure to the purchase
organization and vendor.

Schema Determination:

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41
Assign Purchase transaction and processes to a calculation schema
• For Standard Purchase Order
• For STPO
• For Market Price Determination
In RTCL, the schema group determination shall be done for standard purchase order creation only.
Condition Record:
The stores record that a condition, or condition supplements conditions includes:
• Prices
• Discounts
• Surcharges (Freight/Customs/Insurance)
In RTCL, the condition records for materials shall be created based on the need by user as per the
agreement with the supplier for material prices.

In RTCL Commercial, Free condition type text can be used during purchase order entry buyer can
change the condition type text and can use percentage/value as per material.

Configuration Consideration
Pricing master data is classified according to the business requirement i.e. by;
• Domestic Purchasing
• Import Purchasing

For RTCL, the following condition types shall be used in the Local Pricing procedure as below

Purchase Price Calculation

Condition Based
Description Type
Type On
ZB00 Base Price Price
Z001 Percent Discount ZB00 Discount
Z002 Amount Discount ZB00 Discount
Net Value

For RTCL, the following condition types shall be used in the Foreign Pricing procedure as below

Purchase Price Calculation

Condition Type Description Based On Type

ZB00 Base Price Price

Z001 Percent Discount ZB00 Discount
Z002 Amount Discount ZB00 Discount
Z003 Freight ZB00 Fixed Value
Z004 Freight ZB00 Percentage
Z005 Customs ZB00 Fixed Value
Z006 Customs ZB00 Percentage
Net Value

6.7Serial Number Management

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42
The SAP serial number functionality allows managing serialized stock keeping.
 The Serial number management is mainly focuses on Inventory Tracking from

maintenance point of view.

 It is a precise approach than batch management as batches are defined as subset of
material in stock.
 Serial number is given to individual item of material in addition to the material number,
in order to differentiate between this individual piece and all other items of the material.
 Always the material number and serial number combination is unique in system.
 The SAP serial number component contributes in following business area.
 Inventory management
 Production orders
 Repetitive manufacturing
 Quality Management
 Sales orders
 Plant Maintenance

Serial Number Profile

Serial numbers profile defines the conditions and operations for assigning serial numbers to
materials.
 It is plant level definition in material master work scheduling view
 Serial Number Masters Serial numbers can be auto generated or created manually; the
length of single number is limited to 18 characters.
 SAP supports both numeric and alphanumeric serial numbers.
 Serial number master record can be created directly prior to business transaction, this
would appropriate to have serial numbers already in system so these can be assigned
during business process.
 Serial numbers can be created individually (IQ01) or several at the time (IQ04),
depending on transaction chosen.
 Serial number masters contents following information
 Status information: System status of gives idea about current status and
availability of serial number. User status also used for precise control over serial
number movement.
 Stock information: This shows the plant and storage location of material, also
the stock type of material like unrestricted, quality or blocked stock.
 Serial number history: The history tells about the past business process with
serial number. Serial numbers are also categorized on broader level like

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 Machine, Customer equipment etc. These categories mainly serve the reporting
purpose.
The following information is recorded for the serial number for each goods movement:
 Plant and storage location
 Batch
 Valuation type
 Stock type
 Special stock indicator
 Sales order number and order item
 Account number of the vendor or customer
 Work breakdown structure element
Reports:

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
1 List display material serial
Standard
number

7. SAP Enabled Business Processes

Procurement Process
This section documents the Procurement functionality available in SAP Materials Management
Module and how it can be used to cover the current processes In RTCL. The basic task
ofProcurement component in SAP is to facilitate and optimize the activities for external
procurementof materials and services.
The typical procurement cycle for a service or material consists of the following phases:
1. Determination of Requirement
Materials or Services requirement are identified either in the projects, user departments or
viaplanning activities in other modules. A purchase requirement can be created manually or it can
begenerated automatically.
2. Source Determination
The Purchasing component helps in identifying potential sources of supply based on existing Source
List, info records or longer-term purchase agreements. This speeds the process of creating
requestsfor quotation (RFQs), which can be sent to vendors for collecting Quotations.

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3. Vendor Selection and Comparison of Quotations
The system is capable of simulating pricing scenarios and enables the comparison of a number
ofdifferent quotations. Rejection letters (Appreciation letter) can also be generated automatically.
4. Purchase Order Processing
The Purchasing system adopts information from the requisition and the quotation to facilitate
thecreation of purchase order. Information can also be copied from a previous PO by using
referencingtechnique.
5. Purchase Order Monitoring
Standard functions are available to monitor the shipments and confirmations from vendor. It also
Provides an up-to-date status of all purchase requisitions, quotations, and purchase orders.
6. Goods Receiving and Inventory Management
Goods Receipt in SAP is as simple as by entering the PO number and confirming the delivery. By
specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods. This
section is covered in Inventory Management of blueprint.
7. 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 invoices for payment.

Purchase Requisition
In RTCL, the Purchase Requisition will serve as a formal request or instruction to procure a certain
quantity of a material or a service so that it is available at a certain point and date. It will be treated
as the notification of requirements for materials and/or external services and to keep follow up /
track of such requirements.
Item Category
Special identifiers are available in SAP to indicate the characteristic of each line item in the
purchasing document. These are known as Item categories.

The item category determines whether the material defined in a purchase order item:
• Requires a material number
• Requires an account assignment
• Is to be managed as a stock item
• Requires a goods receipt (GR) and/or an invoice receipt (IR)

Following standard item categories will be used

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Item Category Description Purpose
blank Standard item For standard stock / non stock item

L Subcontracting For subcontracting requirements where materials are

provided to subcontractor, free of cost.

U Stock Transfer For transfer of stocks from one division to another division

C Stock provided by For stock provided by customer

customer

D Services For procurement of external services where additional field

will be required to maintain the details of services

Account Assignment Category

As best business practice, the identification and allocation of expense should be known at the time
of initiation of purchasing request. In SAP PR, account assignment keys are provided for the same
purpose. It determines automatically the necessary GL accounts and necessary cost elements that
need to be provided during creation of purchase requisition. Following standard account assignment
categories will be used in RTCL.
Account Assignment Description PurposeNot Applicable Account Assignment
Category Object
Blank For the procurement of those Not Applicable
materials which will be received in
inventory
F Order For materials and services charged For materials and
directly to the orders services charged directly
to the orders
A Asset For materials procured as Assets. Asset Number
Example: equipment’s, vehicles,
machinery etc.
C Sales Order For the Service Purchase Requisition Not Applicable
created automatically through Sales
Order
K Cost Center For directly consumable items which Cost Center Number
will not be kept as stocks. Example:
stationery
P Project For non-stock project items which Project work breakdown
are directly consumed on projects Structure ( WBS of
Project )
N Network For non-stock project items which Project Network

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 are directly consumed on networks
in projects
E Customer For the Material Purchase Not Applicable
Individual requisition created through Sales
Requirement Order

Following table gives idea of combination of item category and account assignment to be used for
different nature of procurements in SAP
Sr No Procurement Scenario Item Category Account Assignment
1 Procurement of asset Blank A - Asset
2 Procurement of stock material Blank Blank
Procurement of material for project
3 Blank P - Project
consumption
E - Customer Individual
4 Back to back procurement Blank
Requirement
5 Procurement of material for cost center Blank K - Cost center
Procurement of material for plant
F - Plant maintenance order
6 maintenance order / customer service Blank
/ customer service order
order
7 Procurement of service for cost center D - Service K - Cost center
Procurement of service for Plant
F - Plant maintenance order
8 maintenance order / customer service D - Service
/ customer service order
order
9 Procurement of service for project D - Service P - Project
10 Procurement of material for project stock Blank Q - Project - Make to Order
L-
11 Sub-contracting work for material Blank
Subcontracting
U - Stock
12 Stock transport order Blank
transfer Blank
C - Stock
13 Receive stock provided by customer provided by Blank
customer Blank

Various Purchase Requisition scenarios are explained below.

7.1Purchase Requisition for Asset (Capex)

7.1.1 Process Definition

A purchase requisition is a request or instruction to purchasing to procure an Asset.
During each Asset purchase requirement (like Vehicle, Laptop etc.) purchase requisition
will be raised with reference to the approved internal order. During Purchase
requisition, system will check for the available budget. If the available budget is

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 sufficient, system will create the PR else it will not allow to save the Purchase
Requisition.All the manual purchase requests are subjected to approval which will be
managed in the system with the release procedure functionality. There will be various
types of purchase requisitions document types created in the system in order to
facilitate the business.

7.1.2 Process Details

Process Characteristics
Manual request
Process Trigger

Process Input Internal ordernumber, Material, Price.

Process Output Asset Purchase Requisition
Process Owner Purchase Department
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.1.3 Process Flowchart

7.1.4 Process Narrative

 The Capex budget will be approved then create a Capex purhcase requisition.
 Requestor will Initiate the Creation of Purchase Requisition as per the requirement by the
Individual department for Assets.
 On approval from the finance department, requisitioner will get internal order number from
finance department

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  Requisitioner will check for the material code for the asset to be procured. If the material
code exists requisitioner can go ahead with creation of Purchase Requisition.
 If required material code does not exist, requisitioner initiate CMDT to create a material
master. The creation of material master business process been discussed in RZ_MM_MD_10
 Once PR is created, Budget will be checked and PR release startegy will trigger, if budget is
available.
 If Purchase Requisition is correct, BU Management will approve the Purchase Requisition.
 If Purchase Requisition is incorrect, BU management will send the requisition back to
requisitioner. Requisitioner will change the Purchase Requisition and resend to BU
management.
 If the department budget exceeding the limit or no budget, then finance team will
supplement the Budget. If it is rejected or not approved then PR will be closed and If it is
approved, the Budget Supplement will be initiated by the finance department and then PR
will continue with the budget check and further PR approvals
 PR – Release startegy will have approvals from BU management
 For any PR cancellation or Change. PR will trigger again with a New approval.
 Once PR is Released, Sigle source will be determind and PR will be converted into a Purchase
Order.
 In case, if Single source does not exist then Request for Quotation process (RZ_MM_SP_18)
will be initated.
 The workflow object need to be developed for PR approval process, the WRICEF ID for
workflow development is MM-W1001.
 Once the Purchase Requisition is approved by all approvers, BU purchasing department will
initiate procurement process.

7.1.5 Process Steps

Process Step Business Role Fiori App Expected Results

Creation ofCapex
Create Purchase
Purchase Requisitioner Purchase Requisition is created
Requisition
Requisition
Approve BU Individual
Purchase Management/To release/collective Purchase Requisition is approved
Requisition p Management releases

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 7.2Purchase Requisition for Stock Item

7.2.1 Process Definition

A purchase requisition is a request or instruction to purchasing to procure a stock item. So that it
is available at a certain point in time.All stock materials which are stored at central store,
manual purchase requests are subjected to approval which will be managed in the system with
the release procedure functionality. There will be various types of purchase requisitions
document types created in the system in order to facilitate the business.

7.2.2 Process Details

Process Characteristics
Manual request
Process Trigger

Process Input Material Number, Quantity.

Process Output Purchase Requisition
Process Owner Purchase Department
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.2.3 Process Flowchart

7.2.4 Process Narrative

 Requisitioner will get the requirements of stock material purhcases and check the material
code in system. If the material is not available then follow material master creation proccess
(RZ_MM_MD_10).

 If material code exists and stock is available, then reservation procecss will be initiated by
the requisitioner(RZ_MM_IM_24)

 After approval of the reservation PR, reservation will be created automatically by the system
and store keeper will issue the goods to requestor

 If material code exists and stock is not available, requisitioner will create a Stock Purchase
Requisition discuss with the store manager and initiate the approval process.

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  If material is relevant to MRP , MRP controller process the MRP run will be carried out as per
MRP business process(RZ_MM_SP_12)

 After creation of the purhcase requisition manually/MRP, workflow triggers to BU

management to approve the purchase requisition.BU management will review the Purchase
Requisition. If purchase requisition is faulty, BU management will reject the approval of
Purchase Requisition for requisitioner corrections.

 If the Purchase Requisition is correct, BU management will approve the Purchase

Requisition.

 Once the Purchase Requisition is approved all the levels, BU Purchase will initiate the
procurement.

7.2.5 Process Steps

Process Step Business Role Fiori App Expected Results

Creation ofPurchase Purchase Requisition is
Requisitioner Create Purchase Requisition
Requisition created
Approve Purchase BU Head Purchase Requisition is
Individual/Collective Release
Requisition Released

7.3Purchase Requisition for Stock Item through MRP

7.3.1 Process Definition

Material Requirement Planning (MRP) is a tool which helps in planning the requirement quantities
and schedules of a given material. The main objective of MRP is to guarantee material availability.
MRP is required to procure the required quantities on time for internal purpose or for Sales.

MRP also carries out scheduling of the procurement proposals using the lead times for the
materials/componentsand when the material is an external procured material, it will fetch the lead
times or delivery times for the material defined at an appropriate place in the system.

While the Material Requirement Planning in SAP, derives a plan for the materials and helps the
planners and supervisors to purchase or sell. It offers all the possible planning methods available in
the market like the reorder point planning and forecast based planning methods which uses the past
historical figures to extrapolate the future requirements

7.3.2 Process Details

Process Characteristics
MRP
Process Trigger

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 Process Input MRP run
Process Output Purchase Requisition
Process Owner MRP Controller
Process Frequency Monthly
Global/Harmonized/Local

7.3.3 Process Flowchart

7.3.4 Process Narrative

Re-order point planning

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 In RTCL Commercial, MRP will be used for fast moving items
 Procurement is triggered when the sum of plant stock and firmed receipts falls below their
order point
 Material master MRP type will be maintained with reorder point planning, ex: Spare parts,
inventory consumables.

 Material master will be maintain with safety stock, average consumption, re-order point,
minimum qty. maximum qty. and replenishment lead time.

 In manual reorder point planning, define both the reorder level and the safety stock level
manually in the appropriate material master.

 In automatic reorder point planning, both the reorder level and the safety stock level are
determined by the integrated forecasting program.

 Since the forecast is carried out at regular intervals, the reorder level and the safety stock
level are continually adapted to the current consumption and delivery situation. This means
that a contribution is made towards keeping stock levels low.

 The inventory controller check the material available stock which are procured through re-
order point planning.

 MRP run happens once the re-order point stock fall down and the purchase requisition will
be created.

 Source list will be maintained for the fixed vendor and contract.

 Source will be automatically assigned in purchase requisition, procure through contract or

fixed vendor.

 If the MRP purchase requisition does not assign any sources, BU management to approve
the purchase requisition.

 If the MRP purchase requisition have single sources of contract, then approval is not
required in SAP.

 The workflow will trigger for the purchase requisition to BU management to approve the
purchase requisition.

Forecasting based planning:

 In RTCL, Forecasting based planning used for regular project stock material and regular
customer supply materials

 The forecast, which calculates future requirements using historical data, is carried out at
regular intervals

 If consumption is higher than the forecast requirements in the current month, then the
system also reduces future forecast requirements

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  If consumption is higher than the forecast requirements in the current month, then the
system does not reduce future forecast requirements

 The system uses past consumption data (historical data) to forecast future requirements.
The system then uses these forecast values to calculate the reorder level and the safety
stock level, taking the service level, which is specified by the MRP controller, and the
material's replenishment lead time into account, and transfers them to the material master
 In RTCL, three years of historical data will be maintained and MRP will be run based on
forecast, or the past material consumption data. Here the forecast values form the basis of
the planning run for CBP
 The replenishment lead time refers the planned delivery time for external procurement. In
RTCL lead time will maintained based on the planned delivery time for the materials which
will be procured from vendor
 Manual Safety stock calculation by maintaining safety stock indicator in the system will
calculate the Safety stock

 Safety stock = Safety stock indicator in days X Average daily requirement from the last six
months consumption

 Planning Algorithm:SAP material requirement planning or SAP MRP, uses the following
factors in its planning run: Requirement = (On hand stock + Open PO - Open Sales – Forecast
sales) – Target stock + Safety stock

 In RTCL, System generated or suggested quantities can be editable based on the

requirements or by correcting the MRP Parameters in order to maintain accurate planning
for the future

 Source list will be maintained for the fixed vendor and contract

 The workflow will trigger to approve the MRP purchase requisition to BU management, if
required

 Approved purchase requisition will convert into purchase order by BU Purchaser.

7.3.5 Process Steps

Process Step Business Role Fiori App Expected Results

Maintain MRP controller Change Material Consumption values are
consumption values Master maintained in material master
Execute Forecast MRP controller Execute Forecast Execute Forecast report is
displayed

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Maintian MRP Material Master MRP Prameters been
MRP Controller
Parameters Change maintianed in Material Master
Run MRP MRP controller Run MRP MRP executed for the material
to generate the purchase
requsition
Creation ofPurchase MRP Controller/ Create Purchase
Purchase Requisition is created
Requisition Requisitioner Requisition
Approve Purchase BU Head Individual/ Purchase Requisition is
Requisition Collective Release Released

7.4 Purchase Requisition for Services

7.4.1 Process Definition

A purchase requisition is a request or instruction to purchasing to procure a Service for cost
center, project and maintenance service. So that it is available at a certain point in time. All the
manual purchase requests, system triggered purchase requisition are subjected to approval
which will be managed in the system with the release procedure functionality. There will be
various types of purchase requisitions document types created in the system in order to
facilitate the business.

7.4.2 Process Details

Process Characteristics
Manual/Project/Maintenance
Process Trigger

Process Input Project/Maintenance order

Process Output Purchase Requisition
Process Owner Project/Plant Maintenance Department
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.4.3 Process Flowchart

7.4.4 Process Narrative

 Requisitioner will identify the requirement of the service to be procured.

 Service purchase requisition will be created with reference to project, maintenance and cost
center basis.

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58
 Requisitioner will check for the required service code in SAP, if service master does not exists,
requisitioner will create a service master using (RZ_MM_MD_11) service master creation
process.

 If service code exists in SAP, initiator can able to generate purchase requisition automatically in
SAP.

 If service purchase requisition belongs to cost center basis, then manual purchase requisition
will be created.

 Purchase Requisition will be created with account assignment "P - Projects", item category "D -
Service" with accurate WBS element.

 This Purchase Requisition will have account assignment category "N - Network" and item
category "D - Service". Requisitioner will enter budgeted price and requirement priority in
purchase requisition.

 Maintenance order case account assignment category "F - Order" and item category "D -
Service". Requisitioner will enter budgeted price and requirement priority in purchase
requisition.

 If the service purchase requisition assigned with single source of contract then approval is not
required in BU level.

 Once the Purchase Requisition is created without sources, workflow triggers to approve the
purchase requisition to the BU management.

 BU Management will review the Purchase Requisition at the time of approval. If Purchase
Requisition is faulty, approving authority will refuse the Purchase Requisition approval.

 Faulty Purchase Requisition will be corrected by the requisitioner and will be resent for
approval.

 If the Purchase Requisition is correct, BU management will approve the Purchase Requisition.

 Once the Purchase Requisition is approved, BU purchase will initiate the procurement process.

7.4.5 Process Steps

Process Step Business Role Fiori App Expected Results

Creation ofservice Create Purchase Purchase Requisition is
Requisitioner
Purchase Requisition Requisition created
Approve Purchase Individual Purchase Requisition is
BU Management
Requisition release/collective release approved

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7.5 Purchase Requisition for Consumables

7.5.1 Process Definition

Consumable purchase requisition is a request or instruction to purchasing to procure a certain
quantity of a material. So that it is available at a certain point in time. Consumable material
which are not kept in stock but instead procured directly for an account assignment object.It is
optional for a consumable material to have a master record. Non-valuated material (UNBW).
This type of material is managed on a quantity but not on a value basis.
RTCL, procure consumable material, the material can be a special consumable material with a
master record or a material without a master record. However, you can also procure stock
material for direct consumption. In all cases, you must specifyan account assignment category
and other dependent account assignment data such as an account assignment object and G/L
account (consumption account).This process would cover the process of all external services
procurement done in RTCL.

7.5.2 Process Details

Process Characteristics
Manual request
Process Trigger

Process Input Material Number, Quantity, Price.

Process Output Purchase Requisition
Process Owner Purchase Department
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.5.3 Process Flowchart

7.5.4 Process Narrative

 Requestor will Initiate the Creation of Purchase Requisition as per the requirement by the
Individual department for Materials.
 If material does not exists, initiate CMDT to create a material master master in SAP
 Requestor will create a Purchase requisition, workflow mail notification send to BU Head to
approve the purhchase requisition

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61
  After approval of the PR, system will check for Single source automatically based on Contract
or purchasing info record
 IF BU Management rejects the PR, then requestor will modify the purchase requisition and
re-approve the PR.
 In case, if Single source does not exist then Request for Quotation will be initated.

7.5.5 Process Steps

Process Step Description

Description
Business
Process Step Fiori App Expected Results (WRICEF
Role
ID)
Creation ofPurchase Create Purchase Purchase Requisition
Purchaser
Requisition Requisition is created
Individual
Approve Purchase BU Purchase Requisition
release/collective
Requisition Management is approved
release

7.6 Purchase Requisition for Sales Order

7.6.1 Process Definition

A purchase requisition is a request or instruction to purchasing to procureindent/back to back
item. In this process purchase requisition will be created automatically through confirmed sales
order. Purchase requisition will be converted to Purchase Order and material will be procured in
a sales order special stock. This material will be reserved and tagged in sales order reference.

7.6.2 Process Details

Process Characteristics
Sales Order
Process Trigger

Process Input Sales Order Creation

Process Output Purchase Requisition
Process Owner Purchase Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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7.6.3 Process Flowchart

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63
 7.6.4 Process Narrative
 External customer:RTCL commercial receives inquiry from external Customer,
salesexecutivecreate customer inquiryin system.

 Workflow notification sends to BU purchase to create a RFQ,If there is no any sources.

 BU Purchasewill check the single sources of contract or purchasing info record., if single
source does not exists RFQ process will be initiated(RZ_MM_SP_18)

 BU purchase will print or download the RFQ and sent to vendor by E-mail or Fax to get the
quotation

 Vendor will send the quoted price. Once the quotation is received BU purchase will maintain
the price in quotation and attach the soft copy of the quotation received from vendor.

 Vendor quotation soft/hard copy document will scan and upload into Quotation in DMS
system during price maintenace.

 BU purchase will compare the vendor quotation, BU management will approve the final
quotation.

 BU sales team receives the workflow notification mail for approved vendor quotation and
convert into customer quotation.

 BU sales person will create a customer quotation and print the pdf file document and send
to the customer.

 Customer will approve the selected material and send the purchase order to BU sales
department.Sales person will create Sales Order in SAP with reference to Purchase order
received from customer.

 Sales executive create a sales order reference to customer purchase orde. After creation of
the sales order, purchase requisition will be created automatically by system.

 BU purchaser will select the single source (RFQ) and conver the Purchase requisition into
purchase order

 Purchase requisition will convert into purchase order, the process flow been explained in
RZ_MM_SP_25

 In RTCL-commercial, Approved sales order will have material code. When the customer
order different size of the material for Pipe,High level material code will be created for pipes,
such as pipe with flange and to have batch classification to maintain the size.

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 7.6.5 Process Steps for External Customer

Process Step Business Role Fiori App Expected Results

Internal Sales
Inquiry Creation Sales Inquiry Sales Inquiry is created
Representative
Create Request for Request for Quotation
Create RFQ BU Purchaser
Quotation is created
Vendor Quotation BU Purchaser Create Quotation Quotation is created
Price comparision list is
Quotation Comparision BU Purchaser Price comparision list
generated
BU Purchase
Approve Quotation Rrelease Quotation Quotation is Approved
Head
Create Customer Internal sales
Create Quotation Quotation is created
Quotation executive
Internal sales
Sales Order Creation Create Sales Order Sales Order is created
executive
Purchase Requisition Purchase Requisition is
Internal sales Create Purchase
Creation for confirmed created for confirmed
executive Requisition
order order
Convert PR to Purchase Purchase order is
BU Purchaser Create Purchase order
Order created

7.6 Purchase Requisitionfor Project, Maintenance.

7.7.1 Process Definition

A purchase requisition is a request or instruction to procure item for project, maintenance. The
project and maintenance order will be created and executed by the project engineer and
maintenance planner. If the warehouse have sufficient stock, reservation will be created and
store keeper issues the goods to project, maintenance order. For non-stock case purchase
requisition will create and workflow mail communicates to BU Head to approve the purchase
requisition to procure the material.
Process Details

Process Characteristics
Project, maintenance order creation
Process Trigger

Process Input Project, maintenance order number

Process Output Purchase Requisition creation for project and maintenance
Process Owner Purchase department
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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7.7.2 Process Flowchart

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66
 7.7.3 Process Narrative
 Project engineer, maintenance planner willcheck the material master during creation of the
order in system, If material master does not exists initiate CMDT to create a materia lmaster

 If material master is available in system, Purchase requisition will create automatically from
project system and maintenance order.

 Project Purchase Requisition will be created automatically for project order with account
assignment category "P", item category "blank" and correct WBS element.

 Maintenance Purchase Requisition will be crated automatically through mainteance order

with account assignment category "F", item category "blank" .

 Requisitioner will enter budgeted price and requirement priority in purchase requisition.

 Project, maintenance purchase requisition is subjected to approval. BU Management will

review the Purchase Requisition at the time of approval.

 If Purchase Requisition is correct, BU Management will approve the Purchase Requisition

and BU purchase create the purchase order.

7.7.4 Process Steps

Process Step Description

Description
Business
Process Step Fiori App Expected Results (WRICEF
Role
ID)
Creation ofPurchase Create Purchase Purchase
Requisitioner
Requisition Requisition Requisitioniscreated
Approval of Individual/collective Purchase Requisition
BU Head
Purchase Requisition Release is approved

7.7.5 Purchase Process Interface Details

Interface
IDOC/
Point Data Object Required Reason
PROXY
ID
NA

7.7.6 Key Integration Points

Integration
Integration Data
Point Component Description
Point Element
ID
NA

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 7.7.7 Enhancement/Customizations Required

SI No WRICEF ID Object Description

1 MM-F1001 Form Rezayat has requirement that printing of Purchase

Requisition, there is no standard print outs for purchase
requisition. For this requirement layout of purchase
requisition needs to be developed.
Rezayat has requirement that, after creation of purchase
2 MM-W1001 Workflow
requisition workflow mail communicates to the approver as
per the PR approval matrix to approve the purchase
requisition.

7.7.8 Scripts & Forms

WRICEF Output
Description Data Object Frequency Volumes Owner
ID Types

Purchase
MM-F1001 Requisitione
Requisition Form NA Monthly 100
r
Print

7.7.9 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Purchasing Analytics Standard

2 List display of Purchase Standard
Requisition
3 Purchase Requisition per Standard
tracking number
4 Archived Purchase Standard
Requisition

7.7.10 Workflow
Workflow for PR Approval: After creation of Purchase requisition by requisitioner, workflow mail
communicates to the approver of BU Head to approve the purchase requisition.The workflows that
need to be developed as part of RTCL business process.

WRICEF Engaged
Description Data Object Owner
ID Parties
MM-W1001 Workflow triggers for PR PR workflow BU Head Purchase

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 approval process Department

7.7.11 GAP Analysis

NA

7.7.12 Organziational Structure Considerations

Company
Code Purchase Organization Plant
1011 1000,1104 1104,1105,1106

7.7.13 Master Data Considerations

 Material Master
 Service Master
 Vendor Master.
 Purchasing info record / Condition Record
 Asset Master
Purchase Document Type

PR.Doc.Types Description From To

ZAPR Purchase Requisition for Asset (Capex) 1100000000 1199999999
ZSIP Purchase Requisition for stock item 1200000000 1299999999
ZMRP Purchase Requisition stock item - MRP 1300000000 1399999999
Purchase Requisition for services (Project,
1400000000 1499999999
ZSPR Maintenance, Cost Center)
ZCPR Purchase Requisition for consumables 1500000000 1599999999
ZSOP Purchase requisition for sales order 1600000000 1699999999
Purchase Requisition for non-stock (Project,
1700000000 1799999999
ZNSP Maintenance)
ZSCR Purchase Requisition for subcontracting 1800000000 1899999999
ZRPT Reservation Purchase Requisition for Tools 1900000000 1999999999

ZRPC Reservation Purchase Requisition for

2000000000 2099999999
Consumables

7.8 Request for Quotation

7.8.1 Process Definition

Request for quotation is a form of invitation that is sent to vendors to submit quotation
indicating pricing and their terms and conditions. RFQ contains details about goods or services,
quantity, date of delivery and date of bid on which it is to be submitted. Quotation is a reply by a
vendor in response to request for quotation. A quotation comparison list enables him to select

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 the best source of supply by evaluating the responses/quotations of the relevant vendors. The
accepted quotation is later converted into a purchase order.

Process Details

Process Characteristics
Quotation and Vendor Selection
Process Trigger

Process Input Purchase Requisition

Process Output Request for Quotation or Purchase Order created
Process Owner Procurement Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

7.8.2 Process Flowchart

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7.8.3 Process Narrative
• Approved Purchase Requisition/Customer Inquiry will be received by BU Purchaser to
create a RFQ process.
• Request for Quotation will be initiated by the BU Purchaser, when contract, purchasing
info record is not available
• RFQ’s will be forwarded to the various vendors through Email or Fax
• As many suppliers as practically possible shall be invited to support the receipt of a
minimum of three quotes.
• As per the Quotation deadline all quotations will be collected from the vendors and
maintain the prices in the SAP system
• Technical and Commercial evaluation will be done outside of the system
• If it’s a Capex Quotation and check the RFQ valueexceeds 100,000 SAR then Group
Procurement approvals is required,if it’s less than 100,000 SAR then BU Purchase Head
will approve the Quotation.
• For RFQ approval, workflow mail communicates to Group Procurement/BU Purchase
Head to approve the quotation.
• Once the final approval done by BU purchase Head/Group Procurement, then reward
the Quotation to vendor
• If the Quotation will be rejected, rejection letter will be send to the vendor
• Selected vendor Quotation, RFQ will be converted in a Contract or Purchase Order.

7.8.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results (WRICEF
ID)
Create Request for
Create RFQ BU Purchaser RFQ is created
Quotation
Create Vendor BU Purchaser
Create Quotation Quotation is created
Quotation
Quotation Procurement Head Price comparision is
Price comparison
comparison completed
Procurement Head Individual/Collective
Approve RFQ RFQ is approved
Release

7.8.5 Purchase Process Interface Details

Interface
IDOC/
Point Data Object Required Reason
PROXY
ID

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 NA

7.8.6 Key Integration Points

Integration
Integration Data
Point Component Description
Point Element
ID
NA

7.8.7 Enhancement/Customizations Required

SI No WRICEF ID Object Description

1 MM-F1002 Form RFQ print layout has to be developed as per

RTCLrequirement.

2 MM-E1001 Enhancement Quotation Comparison Report needs to be developed as

per requirement of RTCL.
Rezayat the requirement is that, after approve the vendor
3 MM-W1003 Workflow
quotation by Purchase Head, the workflow mail communicates
to Sales executive to create a customer quotation.

Rezayat the requirement is that, Sales executive creates

4 MM-C1001 Conversion
Inquiry and workflow communicates to BU Purchase to create
RFQ automatically. Need to develop program to upload the
inquiry data into RFQ creation.

Rezayat the requirement is that, vendor send the quotation to

5 MM-C1002 Conversion
BU Purchase. Quotation data need to upload by conversion
program in SAP.

7.8.8 Scripts & Forms

WRICEF Output
Description Data Object Frequency Volumes Owner
ID Types

Request for
MM-F1002 Purchase
Quotation Form RFQ Monthly 100
Head
output

7.8.9 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 RFQ’s by Vendor No Standard

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 Standard
2 RFQ’s by Material No
Standard
3 RFQ’s by Material Group No
Standard
4 RFQ’s by Collective number No

7.8.10 Workflow
WRICEF Engaged
Description Data Object Owner
ID Parties
Workflow triggers for workflow BU Purchase Head
MM-W1003
Quotation approval Purchase
process r

7.8.11 GAP Analysis

NA

7.8.12 Organziational Structure Considerations

Company
Code Purchase Organization Plant
1000,1101,1102,1104,1107,1108,1109,11 1101,1102,1104,1107,1108,1109,11
1011 12 12

7.8.13 Master Data Considerations

 Material Master
 Service Master
 Vendor Master.
Purchase Document Type

PR.Doc.Types Description From To

AN Request for Quotation 4100000000 4199999999

7.9 Contract creation process

7.9.1 Process Definition

A contract is a type of outline purchase agreement against which release orders (releases) can be
issued for agreed materials or services as and when required during a certain overall time-frame.
These are long term agreements made with the supplier. In case of local procurement we will use
.quantity or value contract based on the negotiations with the supplier

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  When purchasing department want to setup long term relationship with vendor for
specific group of materials or services
 To negotiate binding conditions for purchasing (i.e. price, quantity, discounts etc.) without
actually releasing purchase order
 Using pre-negotiated offer during day-to-day purchasing
 Increase speed of actual purchasing to satisfy actual requirements
 Provides better monitoring and control of actual release of purchase order against offer.
Process Details

Process Characteristics
Negotiation with supplier about long term agreement
Process Trigger

Process Input Purchase Requisition or RFQ

Process Output Contract created
Process Owner BU Purchaser Head/Central Sourcing Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.9.2 Process Flowchart

7.9.3 Process Narrative

 BU purchase will generate a report from the system for the most frequently procured
materials and services
 Contract Specialist will identify the requirement of creating a Contract based on the past
goods and services procurement history
 After identifying the requirements, initiate to create the contract with single source
 If the contract is created with Group Procurement level, Group Procurement and Top
Management involves to approve the contract
 If thecontract is created with BU level and requires approval for Group Procurement then
there will be approval from BU Head, Group Procurement Head
 Group procurement will create a centralized contract of Capex Material and Consumable
material for across the Rezayat group
 For any Contract cancellation or Change, PR will trigger again with a New approval
 If contract is approved then print and forward the copy of contract to vendor
 If contract is not approved then a rejection letter will be submitted to vendor

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Contract Release Procedure
It is a component can be used if you wish to set up approval procedures for Contract. Under such a
procedure, for any contract created, it has to be approved before it can be processed further. This
process of approving (clearing, or giving the “green light “) to a proposed item of expenditure is
replicated in the SAP System by the “release procedure “. This release procedure automatically
blocks the relevant documents for further processing.

7.9.4 Process Steps

Process Step Description

Description
SI No Business Role Fiori App Expected Results (WRICEF
ID)
Create Purchase Create Purchase Contract is
BU Purchaser
contract contract created
Procurement
Approve Purchase Individual/Collective Contract is
Contract Head Release approved

7.9.5 Purchase Process Interface Details

Interface
IDOC/
Point Data Object Required Reason
PROXY
ID
NA

7.9.6 Key Integration Points

Integration
Integration Data
Point Component Description
Point Element
ID
NA

7.9.7 Enhancement/Customizations Required

SI No WRICEF ID Object Description

1 MM-F1002 Form Contract print layout has to be developed as per

RTCLrequirement
Rezayat the requirement is that, after created the contract,
2 MM-W1003 Workflow
the workflow mail communicates to BU management, central
sourcing and top management to approve the contract as per
the approval matrix

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 7.9.8 Value Additions
Serial No. Description Value Addition Remarks
1 .The contract agreement is created in the system
2 Any legal documents can be attached to the contract document
3 The status of the contract is available online in the SAP system

7.9.9 Scripts & Forms

WRICEF Output
Description Data Object Frequency Volumes Owner
ID Types
MM-F1003 Contract Purchase
Form NEU Weekly 100
Printout Head

7.9.10 Reports

Customized Transaction
SI. No. Name of Report Comments
Report Code
1 Contracts per vendor Standard
Standard
2 Contracts per Material
Standard
3 Contracts by Material Group
Standard
4 Contracts for services
Contract by agreement Standard
5
number

7.10 Purchase Order for Asset

7.10.1 Process Definition

Procurement for Assets
Procurement for assets involves procuring and managing the capital goods needed for
manufacturing, project. It involves the transactional flow of data that is sent to a supplier as well as
the data related to the fulfilment of the actual order and payment for the capital goods.
Capital goods include
 Machinery & Equipment
 Tools
 Office Equipment and Accessories
 Vehicles
Purchase Orders can be created in the following ways:

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 a. With reference to Quotation
b. With reference to Contracts
c. With reference to Purchase Requisitions
If the Purchase Order is created with reference to a Quotation, then the key purchasing information,
including the pricing details, gets copied to the Purchase Order. In case the Buyer creates a Purchase
Order directly, without any reference then the key fields need to be maintained by the purchaser.

For RTCL, procurement of assets/capital goods process as part of Asset Management (FI-AA) module
of SAP shall be used to support the asset procurement related requirements across all the business
units of RTCL where the asset required are procured from external vendors and then charged to
individual cost centres
Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Asset Purchase Requisition

Process Output Asset Purchase Order created
Process Owner BU Head/Central Sourcing Head
Process Frequency Weekly/Monthly
Global/Harmonized/Local

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 7.10.2 Process Flowchart

7.10.3 Process Narrative

 Approved Asset PR’s will be received within the system
 BU Purchaser will check the list of Open PR’s and then initiate the process of converting PR
to PO
 All Purchase Orders must be created with reference to either a Purchase Requisition, a
Quotation or a Contract.
 Before converting PR to PO, Purchaser will check the source – Fixed vendor/contract. If Fixed
vendor/Contract exist, Purchaser will create an Purchase order
 In case, If Fixed vendor/Contract does not exist then RFQ process will be initiated

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  BU Purchaser will maintain Down Payment in the Purchase Order. If there is an Down
Payment to the Vendor
 Tax code will be created and maintain the condition record in SAP. VAT tax code will be used
in purchase order
 If the department budget exceeding the limit, then BU Head communicates to Finance
manager to supplement the budget
 Once the Finance manager supplement the budget, the purchase order will be created in the
system
 After creation of purchase order, workflow mail communicates to BU Purchase Head and the
Top Management to approve the Capex Purchase order
 If the purchase order is approved by BU Purchase Head and Top Management, PO
print/Email/PDF will be taken and send to the vendor
 IF the purchase order not been approved by any of the approver, then PO cancellation or
Changes to be made. PO will be process through Change or cancellation process.
 For the approved purchase order, system will check the down payment category been
maintained. If yes, workflow notification send to finance department to create a down
payment request
 The down payment business process been discussed in RZ_MM_IV_11.

7.10.4 Process Steps

Process Step Description

Descriptio
Expected
Process Step Business Role Fiori App n (WRICEF
Results
ID)
Purchase Purchase Order
Order is Created
BU Purchaser Create Purchase order
Creation

Procurement
Approve
Head/Top Individual/ Purchase Order
Purchase
Management collectiveRelease is approved
Order

7.11 Purchase Order for Stock Material

7.11.1 Process Definition

Stock Purchase order is an external purchasing document, which will be sent to the vendor for any
procurement activities. The approved stock purchase requisition convert into purchase order. If

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there is a contract, purchasing info record then assign the source to purchase requisition. If there is
no source RFQ process will be initiated.

StockPurchase Orders can be created in the following ways:

a. With reference to Quotation

b. With reference to Contracts
c. With reference to Purchase Requisitions
If the Purchase Order is created with reference to a Quotation/ Contract, then the key purchasing
information, including the pricing details, gets copied to the Purchase Order. In case the Buyer
creates a Purchase Order directly, without any reference then the key fields need to be maintained
by the purchaser.

Process Details

Process Characteristics
Process Trigger Requirement
Process Input Stock Purchase Requisition
Process Output Stock Purchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.11.2 Process Flowchart

7.11.3 Process Narrative

 Approved stock purchase requisition will convert into the purchase order.

 The stock purchase order can create with reference to Quotation, Contract, and Purchase
requisition.

 If the Purchase Order is created with reference to a Quotation/ Contract, then the key
purchasing information, including the pricing details, gets copied to the Purchase Order. In

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 case the Buyer creates a Purchase Order directly, without any reference then the key fields
need to be maintained by the BU purchaser.

 BU Purchaser will receive the approved Purchase Requisition. BU Purchaser will check if
contract exist for the material or service. If contract exist, BU Purchaser will assign the
contract number to the Purchase Requisition and create the Purchase Order.

 If contract does not exist, BU Purchaser will follow the process of RFQ creation process.

 BU Purchaser will attach the relevant documents to the Purchase Order using Document
Management System. On saving the Purchase Order in SAP, Purchase Order approval will be
initiated.

 Tax code will be created and maintain the condition record in SAP. VAT tax code will
be used in purchase order
 The workflow triggers to the BU management and review the Purchase Order. If Purchase
Order is correct, BU management will approve the Purchase Order as per the approval
matrix.

 If Purchase order is faulty, BU management will refuse Purchase Order to release.

 After the approval of final authority,BU Purchaser will Email/Fax/PDF print to the vendor.

 For the approved purchase order, system will check the down payment category
been maintained. If yes, workflow notification send to finance department to create
a down payment request
 The down payment business process been discussed in RZ_MM_IV_11.

7.11.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results (WRICEF
ID)
Purchase Purchase Order is
Order Creation BU Purchaser Create Purchase order Created

Approve Procurement
Individual/collective Purchase Order is
Purchase Head
Release approved
Order

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7.12 Purchase Order for Services

7.12.1 Process Definition

Procurement for external services commonly known as Procure to pay process, involves procuring
and managing the external services needed. It involves the transactional flow of data that is sent to a
supplier as well as the data related to the fulfillment of the actual order and payment for the
product.
For RTCL, procurement of external services process as part of External Services Management (MM-
SRV) module of SAP shall be used to support the service procurement related requirements across
all the business units of RTCL where the services required are procured from external vendors and
directly charged as expense to individual department cost centres.

This section describes the business processes available within the application component MM
External Services Management for the efficient procurement of externally performed services:
 Procurement of External Services for Maintenance Plans (PM Plant Maintenance)
 Procurement of External Services for Project Plans (PS Project Systems)
 Procurement of External Services for Cost Centers

Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Service Purchase Requisition

Process Output Service Purchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.12.2 Process Flowchart

7.12.3 Process Narrative

 Service Purchase requisition process(RZ_MM_SP_13) will be created and approved with
reference to Project, Maintenance order, Cost Center
 Approved Service PR’s will be received within the system
 BU Purchaser will check the list of Open PR’s and then initiate the process of converting PR
to PO
 All Purchase Orders must be created with reference to either a Purchase Requisition, a
Quotation or a Contract.
 Before converting PR to PO, BU Purchaser will check the Single source – Fixed
vendor/Contract. If Fixed vendor/Contract exist, Purchaser will create an Purchase order
 In case, If Fixed vendor/Contract does not exist then RFQ process will be initiated
 Tax code will be created and maintain the condition record in SAP. VAT tax code will
be used in purchase order

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  Purchaser will maintain the Down Payment category in Purchase Order, as per the vendor
payment terms if any
 If the department budget exceeding the limit, then Purchase Head communicates to finance
manager to supplement the budget
 Once the budget been supplemented, purchase purchaser will create a purchase order and
save it
 The workflow triggers to the BU management and review the Purchase Order. If Purchase
Order is correct, BU management will approve the Purchase Order as per the approval
matrix.
 If Purchase order is faulty, BU management will refuse Purchase Order to release.

 After the approval of final authority,BU Purchaser will Email/Fax/PDF print to the vendor.

 For the approved purchase order, system will check the down payment category
been maintained. If yes, workflow notification send to finance department to create
a down payment request
 The down payment business process been discussed in RZ_MM_IV_11.

7.12.4 Process Steps

Process Step Business Role Fiori App Expected Results
Purchase Order Purchase Order is
Creation BU Purchaser Create Purchase order Created

Approve Procurement Head Individual/collective Purchase Order is

Purchase Order Release approved

7.13 Purchase Order for Consumables

7.13.1 Process Definition

Procurement for Consumables commonly known as procure to pay process, involves procuring
and managing the consumables/office materials. It involves the transactional flow of data that is
sent to a supplier as well as the data related to the fulfillment of the actual order and payment
for the product.
The transactional flow begins with the creation of the purchase requisition and purchase order
items followed by goods receipt & invoice verification with the approvals required to issue a
purchase order to the suppliers and in return the processing of invoices.

Process Details

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86
Process Characteristics
Requirement
Process Trigger

Process Input Consumble Purchase Requisition

Process Output Consumable Purchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

7.13.2 Process Flowchart

7.13.3 Process Narrative

 Approved consumable PR’s will be received within the system

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  BU Purchaser will check the list of Open PR’s and then initiate the process of converting PR
to PO
 All Purchase Orders must be created with reference to either a Purchase Requisition,
Quotation or Contract.
 Before converting PR to PO, Purchaser will check the Single source – Fixed vendor/Contract.
If Fixed vendor/Contract exist, Purchaser will create an Purchase order
 In case, If Fixed vendor/Contract does not exist then RFQ process will be initiated
 Tax code will be created and maintain the condition record in SAP. VAT tax code will
be used in purchase order
 Purchaser will maintain Down Payment in the Purchase Order. If there is an Down Payment
to the Vendor
 If the department budget exceeding the limit, then Purchase Head communicates to finance
manager to supplement the budget
 Once the budget been supplemented, purchase purchaser will create a purchase order and
save it
 The workflow triggers to the BU management and review the Purchase Order. If Purchase
Order is correct, BU management will approve the Purchase Order as per the approval
matrix.
 If Purchase order is faulty, BU management will refuse Purchase Order to release.

 After the approval of final authority,BU Purchaser will Email/Fax/PDF print to the vendor.

 For the approved purchase order, system will check the down payment category
been maintained. If yes, workflow notification send to finance department to create
a down payment request
 The down payment business process been discussed in RZ_MM_IV_11.

7.13.4 Process Steps

Process Step Description

Description
Expected
Process Step Business Role Fiori App (WRICEF
Results
ID)
Purchase Purchase Order
Order Creation BU Purchaser Create Purchase order is Created

Purchase BU Purchaser Purchase Order

Order change Change purchase order is changed

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Purchase BU Purchaser Purchase Order
Order display Display purchse order is displayed

Individual Procurement Head

Release Individual Release Purchase Order
purchsing purchsing documents is Released
documents
Collective Procurement Head
release Collective release Purchase Order
purchasing purchasing documents is Released
documents

7.14 Purchase Order for Project,Maintenance,Sales Order

7.14.1 Process Definition

Procurement for project and maintenance Material
Procurement for project and maintenance materials commonly known as procure to pay
process, involves procuring and managing the project, maintenance. The purchase requisition
will be created automatically from the order and approved by the BU Head. The approved
Purchase requisition will be assigned to single source/RFQ process and convert into purchase
order. The material will be procured with reference to project and maintenance order and issue
to the order.

Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Project, Maintenance, Sales OrderPurchase Requisition

Process Output Purchase order created for project,maintenance,sales order
Process Owner Purchase Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.14.2 Process Flowchart

7.14.3 Process Narrative

 Approved Purchase requisition will be received within the system
 BU Purchaser will check the list of Open Project, maintenance, Sales order PR and then
initiate the process of converting PR to PO
 All Purchase Orders must be created with reference to either a Purchase Requisition, a
Quotation or a Contract.
 Before converting PR to PO, BU Purchaser will check the Single source – Fixed
vendor/Contract. If Fixed vendor/Contract exist, Purchaser will create an Purchase order
 In case, If Fixed vendor/Contract does not exist then RFQ process will be initiated

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  Tax code will be created and maintain the condition record in SAP. VAT tax code will be used
in purchase order
 BU Purchaser will maintain Down Payment in the Purchase Order. If there is an Down
Payment to the Vendor
 During creation of the purchase order, budget will be checked against the project WBS
element and if its exceeds budget will be supplemented by the project manager
 Once Purchase order is created, workflow mail communicates to the BU Management and
review the Purchase Order. If Purchase Order is correct, BU management will approve the
Purchase Order as per the approval matrix.
 If Purchase order is faulty, BU management will refuse Purchase Order to release.

 After the approval of final authority, BU Purchaser will Email/Fax/PDF print to the vendor.

 For the approved purchase order, system will check the down payment category been
maintained. If yes, workflow notification send to finance department to create a down
payment request
 The down payment business process been discussed in RZ_MM_IV_11.
 In RTCL Commercial, Text payment terms will be created, Buyer can add the payment text
during PO creation as per vendor terms.
 In RTCL Commercial, when there is a changes in PO with Fields, Incoterms, Total Net Order
Value, Value Changes, Currency, Deletion indicator in purchasing document & Purchase
order quantity then version should create with the changes.

7.14.4 Process Steps

Process Step Business Role Fiori App Expected Results
Approved Purchase Purchase Requisition
Individual/Collective
Requisition BU Head is Approved
Release
Purchase Order Purchase Order is
Creation for Project BU Purchaser Create Purchase order Created for Project

Purchase Order Purchase Order is

Creation for Created for
BU Purchaser Create Purchase order
Maintenance Order Maintenance order

Purchase Order Purchase Order is

Creation for Sales Created for sales
BU Purchaser Create Purchase order
Order order

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Individual/ Procurement Head
Collecctive Release Individual Release Purchase Order is
purchsing purchsing documents Released
documents

7.15 Purchase Order for Intra company stock transport order

7.15.1 Process Definition

Whenever receiving plant requires materials, store keeper will raise a Stock Transport Order on
supplying plant.This order is an authentication to supplying plant for supply of specific quantity
of material. The workflow mail triggers to supplying plant BU Head and Receiving plant BU head
for approval. After approval of the purchase order supplying plant store keeper will create an
outbound delivery and do the post goods issue.
The stock will be removed from receiving plant and move to transit stock and receiving plant will
do the goods receipt. The workflow mail notification sends to receiving plant store keeper as the
request material been created the outbound delivery and store keeper to do the goods receipt
once it’s reached to his premises.

7.15.2 Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Intra-company STO Purchase Requisition

Process Output Intra-company STOPurchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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 7.15.3 Process Flowchart

7.15.4 Process Narrative

 Store Keeper at receiving plant will identify the requirement of material and create the purchase
order. Intra-company stock transport purchase order will be approved by the supplying plant BU
Head.
 After creating stock transport order, first approving authority of receiving plant will approve the
Stock transport order. Secondly approving authority of supplying plant will approve the stock
transport order.
 Once the stock transport order is approved Store Keeper of the supplying plant will create outbound
delivery with reference to the Stock transport order.
 After creation of outbound delivery, store keeper of supplying plant will post goods issue with
reference to outbound delivery.
 Once the goods are issued from supplying plant, stock will be shown as stock in transit until goods
receipt is posted at receiving plant.
 On receiving material at receiving plant, store keeper at receiving plant will post goods receipt.

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 7.15.5 Process Steps
Process Step Business Role Fiori App Expected Results
Purchase Order Purchase Order is Created
Creation BU Purchaser Create Purchase order

Purchase Order BU Purchaser Purchase Order is changed

change Change purchase order

Purchase Order BU Purchaser Purchase Order is displayed

display Display purchse order

Individual Procurement
Release Head Individual Release
Purchase Order is Released
purchsing purchsing documents
documents
Collective release Procurement
Collective release
purchasing Head Purchase Order is Released
purchasing documents
documents
Outbound Shipping Clerk Purchase Orders, Fast
Outbound delivery is created
Delivery Creation Display

7.16 Import Purchase Order Process

7.16.1 Process Definition

Import purchase order will be created and approved as per RTCL requirements. Approved Purchase
order will send to vendor, vendor will acknowledge the purchase order and deliver the goods.As
soon as the delivery is done by the overseas supplier, the buyer receives the set of documents by
email, fax or by courier. The documents are Invoice, packing list, Bill of Lading copy, Country of
Origin Certificate, Insurance certificate in case of CIF shipments).

The buyer verifies these documents as per the purchase order and L/C and forwards them to EXIM
person.The import checklist is for Duty Calculation.The Import Duty and Advance requirement is
given to Accounts based on the import checklist. A purchase order is a commercial document issued
by a buyer to an external supplier, indicating type of material being ordered with quantities and
agreed prices for products or services. It is used to control the purchasing of products and services
from external suppliers and the acceptance of a purchase order by a supplier forms a contract
between the buyer and supplier.

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 Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Purchase Requisition

Process Output Import Purchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

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7.16.2 Process Flowchart

7.16.3 Process Narrative

• Import purchase requisition will be created through material requirement planning,
or manual stock purchase requisition creation.

• The approved purchase requisition have single source or RFQ process will be created

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 • Purchase order will be created with custom charges, landing charges, insurance and
other planned delivery cost;

• Import Pricing elements will be configured as condition type, condition type been
used in purchase order

• Import purchase order will have budget check, if the budget is exceeded finance
team will do the budget supplement
• The approved purchase order will print/Email/PDF send to import vendor and
vendor acknowledge the delivery of the goods
• Import purchase order have planned and unplanned delivery cost, the planned
delivery cost will be booked into material cost and un-planned delivery cost will be
booked into the project-WBS element or the cost center.
• Planned and un-planned delivery cost will be booked during Invoice verification
(RZ_MM_IV_10).
• For the approved purchase order, system will check the down payment category
been maintained. If yes, workflow notification send to finance department to create
a down payment request
• The down payment business process been discussed in RZ_MM_IV_11.

7.16.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results (WRICEF
ID)
Purchase Purchase Order is
Order Creation BU Purchaser Create Purchase order Created

Approve Procurement Individual/Collective

Purchase Order is
Purchase Head Release purchsing
approved
Order documents

7.17 Cash Purchase Order

7.17.1 Process Definition

Cash purchase involves immediate payment of cash at the time of purchase. The site
buyer/requisitioner will identify the requirement of the material to be purchased and send for
the approval. BU management will approve the list and procure the item and send the invoice to
accounts.

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 In SAP cash purchase vendor consider as one time vendor,In PO change the vendor name and
create a purchase order. The workflow mail communicates to the BU Purchase manager to
approve the cash purchase order. After approve the purchase order goods receipt and goods
issue posted as per the business process.

Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Purchase Requisition

Process Output Cash Purchase Order created
Process Owner BU Head
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

7.17.2 Process Flowchart

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98
 7.17.3 Process Narrative
 Site buyer or requisitioner will prepare the list of the items to be purchased by petty cash
and send for approval to BU management.

 On approval of BU management, site engineer or requisitioner will send invoices to the

finance to approval.

 BU accounts team will check and decide to regularize it using Purchase order or not.

 If petty cash purchase need not to be regularized, BU accounts team will follow the process
of petty cash as per the business process in finance BBP.

 If petty cash needs to be regularized through purchase order, site buyer or requisitioner will
create purchase requisition.

 BU management will approve the purchase requisition and BU Purchaser will create
Purchase Order with reference to purchase requisition for petty cash regularization.

 BU Purchaser management will approve the purchase order.

 After approval of purchase order store keeper or requisitioner will process Goods Receipt
and Goods Issue as per the business

 BU accounts will process the Invoice of the vendor as per the business process number
RZ_MM_IV_10.

7.17.4 Process Steps

.Requirement for petty cash purchase will be determined by the requisitioner

Process Step Description

Descriptio
Expected
Process Step Business Role Fiori App n (WRICEF
Results
ID)
Create
Purchase Order
Purchase Requisitioner Create Purchase order
is created
order
Approve
Individual/ Purchase order
Purchase BU Management
collectiverelease is released
Order
Store/ Goods Receipt is
Goods Receipt Goods Receipt
Requisitioner posted
Store/ Goods Issue
Goods Issue Goods Issue
Requisitioner posted

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 7.17.5 Purchase Process Interface Details
Interface
IDOC/
Point Data Object Required Reason
PROXY
ID
NA

7.17.6 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 MRP Run SAP PP PP Dept.
MM_IN_01_2 Tax Code SAP FI FI Dept.
MM_IN_01_3 Payment Terms SAP FI FI Dept.
MM_IN_01_4 Advance Payment SAP FI FI Dept.
MM_IN_01_5 Visibility of budget at the time
SAP FI FI Dept.
of PO processing
Invoice verification and
MM_IN_01_6 SAP FI FI Dept.
payments
MM_IN_01_7 FI – Letter of Credit request,
Buyers Credit, Original SAP FI FI Dept.
documents from Bank
MM_IN_01_8 GL Accounts for account
SAP FI FI Dept.
determination

7.17.7 Enhancement/Customizations Required

SI No WRICEF ID Object Description

1 MM-F1004 Form Purchase order print layout has to be developed as per

RTCL requirement.
Rezayat the requirement is that, after creation of purchase
2 MM-W1007 Workflow
order the workflow mail communicates to BU Purchaser Head
to approve the purchase order.

Rezayat has requirement that after approved the purchase

3 MM-W1004 Workflow
order, if buyer amend the delivery date, quantity and price in
purchase order, Requisitioner get workflow mail notification
for amended delivery date, quantity and price.

Rezayat, there is a requirement that, if purchase order create

4 MM-W1007 Workflow
with maintain down payment category, after PO approval
workflow mail send to finance department to create down
payment request.Vendor send the proforma invoice to finance
department and finance department will create a down

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 payment request with reference to purchase order

7.17.8 Scripts & Forms

WRICEF Output
Description Data Object Frequency Volumes Owner
ID Types

Purchase Purchase Purchasing

MM-F1004 ZNEU Daily 100
Order output Order Department

7.17.9 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Purchase Requisition List No Standard

Standard
2 Purchase Order by Vendor No
Standard
3 Purchase Order by Material No
Standard
4 General Analysis No
Purchase Order by Standard
5 No
document number

7.17.10 Workflow
WRICEF Engaged
Description Data Object Owner
ID Parties
Workflow notification Workflow Purchase Purchasing
MM-W1002 send to Purchase Head to Head Department
approve the Purchase
Order

MM-W1007 Workflow Accountant Rezayat, there is a

requirement that, if
purchase order
create with
maintain down
payment category,
after PO approval
workflow mail send
to finance
department to
create down
payment

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101
 request.Vendor
send the proforma
invoice to finance
department and
finance department
will create a down
payment request
with reference to
purchase order

7.17.11 GAP Analysis

NA

7.17.12 Organziational Structure Considerations

Company
Code Purchase Organization Plant
1000,1101,1102,1104,1107,1108,1109,11 1101,1102,1104,1107,1108,1109,11
1011 12 12

7.17.13 Master Data Considerations

 Material Master
 Service Master
 Vendor Master.
 Purchasing info record
Purchase Document Type

PR.Doc.Types Description From To

ZAPO Purchase Order for Assets 4510000000 4519999999

ZSPO Purchase order for Stock Materials 4520000000 4529999999

ZSER Purchase Order for Services 4530000000 4539999999

ZBTB Back to Back Order 4540000000 4549999999

ZCON Purchase Order for Consumables 4550000000 4559999999

Purchase order for non-stock (Project, Sales

ZNST order, Maintenance) 4560000000 4569999999

ZSCO Purchase order for Subcontracting 4570000000 4579999999

Purchase order for Intra company Stock transport

ZSTO order 4580000000 4589999999

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ZIMP Purchase Order for Import Purchase 4590000000 4599999999

ZCAS Cash Purchase Order 4600000000 4609999999

7.18 Vendor Evaluation Process

7.18.1 Process Definition

This process describes how vendors will be evaluated at RTCL for their performance on the basis
of various business transactions happening with them. S 4HANA provides functionality to
evaluate vendors on the basis of transactions; this doesn’t talk about capturing parameters
while registering vendor’s evaluation is always done for vendors at purchase organization level.
Vendor evaluation will be done on quarterly basis. In the proposed system, purchasing activities
and evaluation of vendors will be performed at different organization levels viz. Vendor
evaluation will depict the performance of vendor i.e. how he performed for orders placed at
various organization levels.
Process Details

Process Characteristics
Requirement
Process Trigger

Process Input Goods receipt/Return

Process Output Vendor evaluation and score card
Process Owner Purchase Manager
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

7.18.2 Process Narrative

 Create questions to use to evaluate suppliers, sections and groups, by app “Manage
Questions”.

 Then we need to create questionnaires in order to group the questions created in the
above step, by app “Manage questionnaires”

 When questionnaires are done, we need to create and release an evaluation template
by app “Create Template (Group-based evaluation), in order to indicate which appraiser
are going to evaluate which suppliers, based on which questionnaires.

 Once these two steps are done, emails notifications are sent to the selected appraisers.

 After receiving the mail notification, the appraiser can evaluate assigned Suppliers by
app “Evaluate Suppliers”

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103
  And the Purchase responsible can monitor responses by app “Monitor Responses” or
“Display Scorecards”. Moreover, he/she can graphically analyze the scorecards by using
app “Supplier Evaluation by questionnaire”.

 This new functionality brings more flexibility to the supplier evaluation process. Users
can decide at any time which supplier to evaluate, by which appraiser and, overall,
based on which criteria.

Main criterion and sub criterions to evaluate the Vendors as under:

1. Material Quality

a.GR Inspection (from system through QM Inspection):

This sub criterion is used to evaluate the quality of the material that the vendor delivers. Quality
inspection takes place at the time of goods receipt

b.Quality audit (from system through QM manual Insp. Lot):

This sub criterion is used to evaluate the quality assurance system used by a company in
manufacturing products

c.Complaints/Rejection Level: This sub criterion is used to evaluate whether the materials
delivered by the vendor are regularly found to be faulty subsequent to incoming inspection (for
example, on the shop-floor) leading to additional expense and loss of time (due to loss of
production, reworking etc.).

2. Material Delivery
a.On time delivery (From system-PO deli. Date vs. GR date):
This sub criterion is used to determine how precisely a vendor has adhered to the specified
delivery dates.
b.Quantity reliability (From system-PO quantity vs. GR Quantity):
This sub criterion is used to determine whether a vendor has delivered the quantity specified in
the purchase order

3. Price
a. Price level (Automatic Determination from Purchase Statistics: Price Level):
This sub criterion compares relationship of a vendor's price to the market price. If the vendor's
price is lower than the market price, he/she receives a good score; if it is higher than the market
price he/she is assigned a poor score. On the basis of the sub criterion "Price Level" you can
compare a vendor's price to the current market price at a certain point in time.

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b. Price history (Automatic Determination from Purchase Statistics: Price history).
This sub criterion compares the development of the vendor's price with the market price. On the
basis of the sub criterion "Price History", you can determine whether the vendor's price has
increased or decreased over a certain period in comparison with changes in the market price
over the same period.
Calculating Overall Score/Scores for Main Criteria
For each automatic sub criterion in the SAP Standard System there is a specific pre-defined
scoring method. These methods cannot be changed by the user.
This section describes how the Vendor Evaluation system calculates a vendor's overall score and
the scores for the main criteria

Calculating the Overall Score

The system derives the overall score from the scores for the various main criteria, taking the
weighting factors assigned by Purchasing in the system settings for each main criterion into
account.
Main criterion Score Weighting factor
Price 70 40
Quality 85 25
Delivery 50 10
General service/support 50 5

To make the weighting factors clearer to the user, the system converts them into percentages.
1. The system adds the factors together and equates the total with 100 %:
2. 40 + 25 + 10 + 5 = 80 equals 100 %
3. To express the individual weighting factors as percentages of 100%, the system first
divides 100% by the sum of the weighting factors:
4. 100 / 80 = 1.25 %
5. Then the system multiplies the weighting factors the buyer assigned to the main criteria
by this figure:
6. 40 x 1.25 = 50.00 %
25 x 1.25 = 31.25 %
10 x 1.25 = 12.50 %
5 x 1.25 = 6.25 %
7. The following table shows the results as a percentage of the overall score:

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 Main criterion Score Percentage of overall score
Price 70 50.00%
Quality 85 31.25%
Delivery 50 12.50%
General service/support 50 6.25%

However, internally, the system uses the weighting factors to compute the overall score.
1. The scores for the main criteria are multiplied by their weighting factors.
2. 70 x 40 = 2800 points
85 x 25 = 2125 points
50 x 10 = 500 points
50 x 5 = 250 points
3. Total points = 5675.
4. This total is divided by the sum of the weighting factors: 5675 / 80 = 70.94 points
The vendor is awarded an overall score of 71 points.

Calculating the Score for a Main Criterion

The scores for the individual main criteria are determined in the same way as the overall score:
The system calculates the scores for all the sub criteria for a main criterion according to the
weighting factors assigned to them.
The system derives the overall score from the scores for the various main criteria, taking the
weighting factors assigned by Purchasing in the system settings for each main criterion into
account.
Expected
Process Step Business Role Fiori App
Results
questions
Manage questions
Manage questions evaluation BU_Procurement evaluation is
evaluation
completed
BU_Procurement questionnaire
Manage questionnaire
Manage questionnaire evaluation evaluation is
evaluation
completed
BU_Procurement Template
Manage Template
Manage Template evaluation evaluation is
evaluation
completed
BU_Procurement responses
Monitor responses
Monitor responses evaluation evaluation is
evaluation
completed

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 BU_Procurement score card is
Display score cards Display score cards
displayed
BU_Procurement operational
Adjust operational
Adjust operational supplier supplier
supplier evaluation
evaluation score evaluation score
score
is adjusted
BU_Procurement Supplier
evaluation
Supplier evaluation weighting Supplier evaluation
weighting and
and scoring weighting and scoring
scoring is
displayed

7.18.3 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
Ranking list of supplier
1 evaluation based on Standard
material/material group
Standard
2 Vendor Evaluation Analysis
Standard
3 Display Supplier Evaluation

7.18.4 Authorization Roles

Process Step Business Role Authorization
Manage questions evaluation BU_Procurement
BU_Procurement
Manage questionnaire evaluation
BU_Procurement
Manage Template evaluation
BU_Procurement
Monitor responses evaluation
BU_Procurement
Display score cards
BU_Procurement
Translate questions evluation
BU_Procurement
Translate questionnaire evluation
BU_Procurement
Translate template evaluation
BU_Procurement
Adjust operational supplier evaluation score
BU_Procurement
Supplier evaluation weighting and scoring

7.18.5 Organziational Structure Considerations

Company Code Purchase Organization Plant

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 1011 1101,1102,1104,1107,1108,1109,1112 1101,1102,1104,1107,1108,1109,1112

7.18.6 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.18.7 Transactional Data

 Approved Purchase order
 Goods receipt
 Goods return process

7.19 Service Entry Sheet Process

7.19.1 Process Definition

Services are acknowledged in SAP through service entry sheet against Purchase Order. Services
can be acknowledged partially or fully. If no further services are expected to be delivered against
that Purchase Order service completion indicator should be selected while doing final service
entry sheet.Release procedure can be applied to service entry sheet.Output of service entry
sheet can be taken from system.In RTCL, Service procurement with suitable vendor to
perform /deliver the Services as per the terms and conditions as laid in the contract or service
purchase order.
The following types of services may be procured;
• Repair and Maintenance
• Administrative Service
• Transportation services
RTCL acquires goods to complete its business needs. These services will include maintenance
task, fitting, assembling, painting and housekeeping. These services are carried out by external
contractors and hence the whole process of procurement of services is known as service
management.
Process Details

Process Characteristics
Requirement
Process Trigger
Process Input Services are delivered by supplier

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108
 Service Entry sheet creation and Approval
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

7.19.2 Process Flowchart

7.19.3 Process Narrative

 Service engineer or requisitioner will receive the invoice for the service performed or vendor
may submit the progress sheet.

 Service Engineer will create a service entry sheet.

 After creation of the service entry sheet, workflow mail communicates to TeamManager to
approve the service entry sheet

 If team manager reject the service entry sheet, the service engineer amend the service entry
sheet and workflow mail send for re-approval process

 Service engineer will take the print out of service entry sheet performed and send to
accounts department

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109
  Accounts team verify the vendor invoice and initiate the payment process.

7.19.4 Process Steps

Process Step Description

Expected Description
Process Step Business Role Fiori App
Results (WRICEF ID)
Service entry Service entry sheet Service entry
Service Engineer
sheet creation creation sheet is created
Team Manager Individual/Collective Service entry
service entry
release of service sheet is
sheet approval
entry sheets approved

7.19.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
Relevant tax codes applicable
MM_IN_01_1 SAP FI FI Dept.
should be maintained
MM_IN_01_2 G/L accounts for Service Entry
SAP FI FI Dept.
Sheet Posting
MM_IN_01_3 Creation and maintenance of
SAP CO CO Dept.
Cost Center

7.19.6 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
Approved Service Entry
1 Standard
sheet Report
Pending approval of Service
2 Standard
Entry sheet Report

7.19.7 Authorization Roles

Process Step Business Role Authorization
Service entry sheet creation Service Engineer

Single/Collective release of service entry Team Manager

sheets

7.19.8 Organziational Structure Considerations

Company Code Plant Storage Location

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 1011 1104,1105, 1106

7.19.9 Master Data Considerations

 Service Master
 Vendor Master.
 Purchasing info record / condition Record

7.19.10 Transactional Data

Service Entry Sheet Document Type

Types Description From To

1 Service Entry Sheet 1000000000 1099999999

7.20 Goods Receipt Process

7.20.1 Process Definition

Goods receipt is the process of receiving materials in to the storage location. Example receiving
goods with reference to PO, customer returns, from production. When goods are received,
inventory will be increased and relevant other documents will be adjusted. During the material
movement, material document is generated for all movements. Relevant accounting and
controlling documents are also created for relevant movement types. The IM document serves
as proof of the issue transaction, where all relevant inventory data is stored including
Movement Type, Material, Quantity, Unit of Measure, Plant and Storage Location. Parallel to the
material document an accounting document is also created. Financial document contains all
financial data elements including Business Area and GL accounts.

Process Details

Process Characteristics
Requirement
Process Trigger
Purchase order
Process Input
Goods Receipt
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

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 7.20.2 Process Flowchart

7.20.3 Process Narrative

 The approved purchase order sends to vendor, vendor acknowledge the delivery date and
deliver the goods to RTCL as per the purchase order.

 Store Keeper will check the goods and compare with the vendor's delivery note. If any
discrepancy found, store keeper will inform the store manager. Store manager will check
with the procurement team or requisitioner regarding the material supplied. If there is no
discrepancy, store keeper will view the purchase order in SAP and compare vendor's
delivery note with purchase order.

 If quantity of ordered materials and delivered are matching, store keeper will create GRN.
While creating GRN if material is subjected to batch management or serial number profile,
store keeper will enter the details for the same.

 If there is discrepancy in quantity of ordered materials and delivered, store keeper will
check with vendor for under delivery of material. If vendor is going to delivery remaining
quantity of material, store keeper will create GRN. If Vendor is not going to deliver balance
quantity, store keeper will check with requisitioner. If requisitioner is Ok with under
delivery, store keeper will create goods receipt note and will mention in goods receipt note
as final delivery. If requisitioner is not ok with under delivery, store keeper will inform store
manager. Store manager will contact vendor for clarification.

 In case of discrepancy in quantity of ordered materials where vendor has done over
delivery, store keeper will check with requisitioner for accepting over delivery. If over

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112
 delivery ofmaterials is accepted, store keeper will post goods receipt note. If over delivery is
not accepted, store keeper will return excess goods to vendor and post goods receipt of
materials as per quantity mentioned in purchase order.

 During goods receipt internal batch number will be created for batch material. And shelf life
expiry case the batch classification will be created and assigned in material master
classification view. During goods receipt batch will check with manufacturing date, goods
receipt date along with shelf life days which are specified in material master. If material
have expiry, system will not accept this material to post the GRN in SAP.

 After posting the GRN if material is subjected to Quality inspection and pre-requisites are
maintained, SAP will automatically generate quality inspection lot. If material is not
subjected to Quality inspection stock will get posted in unrestricted use. For keeping
material to the correct storage bin, warehouse management process will be used.

 Material posted in Quality inspection stock will be released by Quality Inspection

department as per the business process number explained in QM BBP.

7.20.4 Process Steps

Process Step Description

Description
Process
Business Role Fiori App Expected Results (WRICEF
Step
ID)
Goods Store Keeper Goods Receipt is
Goods Receipt
Receipt posted

7.20.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 G/L accounts maintenance SAP FI FI Dept.

7.20.6 Scripts & Forms

WRICEF Data Output

Description Frequency Volumes Owner
ID Object Types

MM-F1005 Store
Goods Receipt print Form WE01 Daily 100
Manager

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 7.20.7 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Material Document Report standard

standard
2 Stock Overview Report
Display warehouse stock of standard
3
material
standard
4 Stock on posting date

7.20.8 Authorization Roles

Process Step Business Role Authorization
Goods Receipt Purchaser
Create/Cancel/Display

7.20.9 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.20.10 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.20.11 Transactional Data

Types Description
1 Purchase Order
2 Goods Receipt
3 Stock overview

7.21 Vendor Return Process

7.21.1 Process Definition

Vendor return is the process of returning the materials, if the material does not meet the quality
standards, damaged etc.;there are two different type of business process to return the material
to vendor.

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114
  Material Return during quality inspection failed (before invoice posted)

 Material Return after vendor invoice posted

Material Return during quality inspection failed: Thematerial which are rejected by the QM
during Quality Inspection and the material kept in blocked storage location. Rejected material
are returned back to the Vendor with Return delivery note.

Material is returned after the invoice is posted:If material is rejected after vendor invoice is
posted, store keeper communicates buyer to create a return purchase order. Buyer create a
purchase order and send to vendor for acknowledge the returnable material. If vendor is agreed
and acknowledge the purchase order, buyer send a mail to store keeper to create a return
delivery with the approval of return purchase order. Store keeper create a return delivery and
print the vendor delivery note and send it to finance to create a credit memo. Finance will create
a credit memo and adjust the vendor payment.

Process Details

Process Characteristics
Requirement
Process Trigger
QM notificationfor rejected material
Process Input
Material return to vendor
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

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115
7.21.2 Process Flowchart (Material Return for Quality Rejected Material)

7.21.3 Process Narrative

 Goods will be received from the vendor and Goods Receipt will be posted in S 4HANA as
per the business process.

 BU quality team will do the quality inspection as per the business process explained in
QM BBP

 Accepted quality material moves to unrestricted storage location and rejected quality
material kept it in block storage location

 BU Quality team will create QM notification for the rejected material.

 As per the notification from BU quality team, store keeper will do the return delivery

 BU store keeper print the Return delivery note, signed with store manager and send the
material back to vendor.

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116
7.21.4 Process Flowchart (Material returned after invoice posted)

7.21.5 Process Narrative

 Goods will be received from the vendor and invoice and payment posted for the
material.

 Store keeper receive the rejected material from project, maintenance and customer.

 Store keeper send a mail to BU purchase to create a return purchase order to vendor

 BU Purchase create a return purchase order and send the PO print to vendor to
acknowledgement the material

 Vendor acknowledge the return purchase order and approve the return material

 BU Purchase send a mail to store keeper to do the goods receipt (Return material), Store
keeper do the goods receipt (Return material) and print the return delivery note.

 Store keeper signed the return delivery note with store manager and create a credit
memo.

 Store keeper return the material to vendor with reference to return delivery note and
credit memo.

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 7.21.6 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results (WRICEF
ID)
Create return Create
BU Purchase Purchase Order is created
purchase order purchase Order
Material Return Store Keeper Material is returned to
Return Delivery
to vendor vendor
Create credit Finance
Credit memo Credit memo is created
memo

7.21.7 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
Credit note from vendor for
MM_IN_01_1 SAP FI FI Dept.
rejected material value
Generation of Inspection lot
MM_IN_01_2 SAP QM QM Dept.
and usage decision

7.21.8 Scripts & Forms

Data
WRICEF Output
Description Objec Frequency Volumes Owner
ID Types
t
Inventor
MM-F1005 Return delivery note
Form WE01 monthly 10 y
Print
Manager

7.21.9 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
Material Return Document
1 Standard
Report
2 Quality Rejection Report Standard

3 Stock overview report Standard

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118
 7.21.10 Authorization Roles

Process Step Business Role Authorization

Return Delivery Store Keeper
Create/Cancel/Display

7.21.11 Organziational Structure Considerations

Company Code Plant

1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.21.12 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.21.13 Transactional Data

Types Description
1 Goods Receipt
2 Quality Rejection
3 Material Return to vendor

7.22 Free Goods Receipt Process

7.22.1 Process Definition

In RTCL, vendor supply the free goods tocatering division,the free goods are free of charge and
nothing is charged from the vendor. Hence, catering relishes 100% discount on the free goods.
Based on the country’s taxation structure and commercial laws, vendor may charge taxes,
surcharges, duties or levies from the customer, only if either the customer or material or both are
liable for taxes. In this case, catering shall only pay for the tax, surcharge, duties or levies applicable
on the free goods and the rest will be his discount 100% applied on the base, trade or retail price.

Process Characteristics
Requirement
Process Trigger
Reservation creation
Process Input
Goods Issue to Project/Maintenance/Cost Center
Process Output
Process Owner Warehouse Manager

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119
Process Frequency Daily/Weekly/Monthly
Global/Harmonized/Local

7.22.2 Process Flowchart

7.22.3 Process Narrative

 In material masterpurchasing data,select the “Material qualifies for discount in kind”
indicator. If the material subject to discount in kind for only purchasing, then select the
key “2” for this purpose.

 In vendor master, need to maintain under purchasing data, mark the Grant discount in
kind field.

 Create condition record for free goods for the combination of vendor, material, plant
and the purchase organization with the corresponding validity period

 Enter the minimum quantity to be ordered in order to avail the free goods / bonus
goods and the ratio of the quantity, free goods in the respective field.

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  If Order quantity = 250 pieces: No free goods will be there as order quantity as not
meeting the minimum quantity criteria.

 If Order quantity = 400 pieces: 12 pieces free goods, = document quantity / free goods
quantity * free goods (400/100*3=12)

 Create purchase order with 400 pieces and the item will split into two. Order quantity
has been adjusted with free quantity is a part of order quantity.

 The goods receipt will be posted for all 400 pieces, the accounting will be posted for line
item1 of 388 pieces and no accounting documents for line item2 12 pieces.

 Invoice will be booked as per the goods receipt, line item1 of the material amount been
verified and line item2 of the material price will be zero.

7.22.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results
(WRICEF ID)
Goods Goods receipt posted with
Store Keeper Goods Receipt
receipt free goods

7.22.5 Scripts & Forms

Data
WRICEF Output
Description Objec Frequency Volumes Owner
ID Types
t
Store
MM-F1005 Goods receipt Print Form WE01 monthly 10 Manage
r

7.22.6 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Stock Overview Standard

2 Material document list Standard

Display warehouse stock of
3 Standard
material

7.22.7 Authorization Roles

Process Step Business Role Authorization

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121
 Goods receipt Store Keeper
Create/Cancel/Display

7.22.8 Organizational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.22.9 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.22.10 Transactional Data

Types Description
1 Approved Purchased order
3 Goods Receipt

7.23 Goods Issue to Project/maintenance/Cost Center

7.23.1 Process Definition

Goods Issue is basically movement of material within the plant for project,maintenance
consumption/manufacturing or outside the plant as delivery to Customer. In Inventory
terminology, Depletion (reduction in) of stock level as material is getting consumed.
Reservation will be created for project, maintenance automatically by system and manul
reservation will be created for cost center.The approved reservation, material will be
issued to project, maintancec and cost enter.

Process Characteristics
Requirement
Process Trigger
Reservation creation
Process Input
Goods Issue to Project/Maintenance/Cost Center
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

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122
7.23.2 Process Flowchart

7.23.3 Process Narrative

 In RTCL, reservation creates in 2 ways, Automatic reservation will be created from
project, maintenance order and manual reservation case reservation purchase
requisition will be created. The reservation process been discussed in business process
RZ_MM_IM_24.

 Store keeper will run the report for open reservations in SAP

 Reservation will be created for stock material, store keeper issue the material to
Project, Maintenance order or cost center

 If goods issue has to be made against Plant maintenance order, it will be done using
261 movement.

 For goods issue against cost center, 201 movement will be used.

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123
  For goods issue for project, it will be either done using 281 movement or 221
movement. SAP supports both the movement type.

 All goods issue will be done with reference to reservation.

 Depending on the stock availability, goods issue document will be posted by store
keeper with reference to approved reservation.

 Once the goods issue is done, store keeper will take print of goods issue slip.

 Store keeper will hand over material to material requestor and get a signature on
goods issue slip for acknowledgement.

 Soft copy of the signed goods issue slip will be attached to goods issue document
using DMS.

7.23.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results
(WRICEF ID)
Reservation list
Overview
Reservation will be displayed as
Store Keeper inventory
List per the
processing
requirement
Goods Issue Store Keeper Goods Issue to
Goods Issue
to project project is posted
Goods Issue Store Keeper
Goods Issue to
to
Goods Issue Maintenance order
Maintenance
is posted
order
Goods Issue Store Keeper Goods Issue to
to cost Goods Issue cost center is
center posted

7.23.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Project WBS element SAP PS PS Dept.
MM_IN_01_2 GL Account maintenance SAP FI FI Dept.

7.23.6 Scripts & Forms

WRICEF Description Data Output Frequency Volumes Owner

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124
 Objec
ID Types
t
Store
MM-F1006 Goods Issue Print Form WA01 Daily 10 Manage
r

7.23.7 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Stock Overview Standard

2 Material document list Standard

Display warehouse stock of
3 Standard
material

7.23.8 Authorization Roles

Process Step Business Role Authorization

Goods Issue Store Keeper
Create/Cancel/Display

7.23.9 Organizational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.23.10 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.23.11 Transactional Data

Types Description
1 Reservation Creation
3 Goods Issue to Project
4 Goods Issue to Maintenance order
5 Goods Issue to Cost center

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 7.24 Material Issue for Employee/Storage location

7.24.1 Process Definition

In RTCL, Temporary material issue to employee is basically movement of material within the
plant storage location and consumed for project, maintenance or cost center. In Inventory
terminology, Depletion (reduction in) of stock level as material is getting consumed .
Requisitioner will create a reservartion if the material does not require any approval process. If
the temporary material requires any approval process then follow the reservation business
process RZ_MM_IM_24.

Process Characteristics
Requirement
Process Trigger
Reservation/reservation PR
Process Input
Goods Issue to employee
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

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126
7.24.2 Process Flowchart (Temporary material issue to employee)

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127
7.24.3 Flow Chart (Transfer Posting location to location)

7.24.4 Process Narrative

 The requisitioner create a reservation for the temporary material to store keeper

 If the material does not have stock in warehouse, purchase requisition will be created
manually

 Store keeper will get the list of reservation and temporary materialwill be transferred
from warehouse to technician custody location

 Consumable material case reservation will be created, Store keeper will get the list of
reservation and materialwill be issued from one location another location

 The stock of the consumable material will be credited from supplying location and
debited to the receiving location

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128
  There is no any accounting impacts, when material are transfer from one location another
location within the plant

 Whenever there is a requirement of material to project, maintenance,and cost center.

Store keeper issue the material to project, maintenance on behalf of the employee
recipient name

 The employee custody location have all the tracking details of individual employee receipt
and issue of the material records

 We need to develop a report on transferred tools from warehouse, issued tools to

project, maintenance and the cumulative stock available in employee custody location.
This is a customized report, need to develop as per RTCL business requirements in SAP.
WRICEF ID is RZ_MM_R1001.

7.24.5 Process Steps

Business
Process Step Fiori App Expected Results
Role
Tools transfer from central Store
Tools is transferred to
warehouse to employee custody Keeper
Transfer Posting employee custody
location location
Goods Issue from Employee custody Store
Tools is issued to
location to project/maintenance Keeper Goods Issue
project/maintenance
Material return to central Store Tools is return from
warehouse Keeper Transfer Posting employee custody
location to central store

7.24.6 Scripts & Forms

Data
WRICEF Output
Description Objec Frequency Volumes Owner
ID Types
t
Store
MM-F1006 Goods Issue Print Form WE01 Monthly 10 Manage
r

7.24.7 Reports

GAP
Description Customized Transaction
Name of Report Comments
(WRICEF Report Code
ID).

1 Stock Overview Standard

2 Material document list Standard

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129
 Display warehouse stock
3 Standard
of material
Report needs to
Tools reconciliation
4 develop as per ZMM_INV_R1001 Development
report
RTCL requirements

7.24.8 Authorization Roles

Process Step Business Role Authorization

Transfer Posting Store Keeper
Create/Cancel/Display
Goods Issue Store Keeper
Create/Cancel/Display

7.24.9 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.24.10 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.24.11 Transactional Data

Types Description
1 Tools transfer from central store to employee custody location
2 Goods Issue from employee custody location to project/maintenance

3 Goods return to warehouse from employee custody location

7.25 Goods Issue for Scraping

7.25.1 Process Definition

Scrapping is the process of issuing stock from the scrap zone or directly from any other storage
location in the warehouse. The goods issue is posted with movement type 551 in SAP.Scrapping
of material can be from any of the areas namely unrestricted stock, quality inspection stock,
Blocked stock. Scrapping has the follow effects in the system.The relevant stock is reduced, the
value of the scrapped material is posted from the stock account to a scrap account, and the
costs of the scrapped material are assigned to the cost center.

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130
Process Characteristics
Requirement
Process Trigger
Identify the scrap material
Process Input
Goods Issue to Scrap
Process Output
Store Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

7.25.2 Process Flowchart

7.25.3 Process Narrative

 Store Keeper will identify the items to be scrapped and get the mail approval from top
management

 Store keeper will post goods issue for scrapping using 551 movements in SAP

 Once the goods issue is posted, stock of the material will be reduced from SAP

 Accounting entries for Goods Issue to scrap would be Stock Acc (BSX) Cr, Inventory
gain/loss (GBB - VNG) Dr

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  Store Keeper will take the print of the material document for record

 Physical stock would be removed from storage location to scrap location.

7.25.4 Process Steps

Process Step Description

Description
Process Step Business Role Fiori App Expected Results
(WRICEF ID)
Goods Issue to scrap Store Keeper Goods Issue
Material is scraped

7.25.5 Scripts & Forms

Data
WRICEF Output
Description Objec Frequency Volumes Owner
ID Types
t
Store
MM-F1006 Goods Issue Print Form WE01 Yearly 10 Manage
r

7.25.6 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Stock Overview Standard

2 Material document list Standard

Display warehouse stock of
3 Standard
material

7.25.7 Authorization Roles

Process Step Business Role Authorization

Goods Issue Store Keeper
Create/Cancel/Display

7.25.8 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.25.9 Master Data Considerations

 Material Master

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132
  Vendor Master.
 Purchasing info record / Condition Record

7.25.10 Transactional Data

Types Description
1 Goods Receipt against stock transport order
2 Goods Issue to scrap

3 Print Goods Issue slip

7.26 Batch Management & Shelf Life Expiration

Batch Management

Batch Management can be defined as tagging a code to the material produced or material procured.
Every batch number has an inventory quantity associated with it. This code in SAP helps in uniquely
identifying a material and the quantity associated with it.

A partial quantity of production or procurement can be tagged with a batch number that clearly
makes that material inventory unique.The Batch number generated for the material quantity not
only helps in uniquely assorting the material inventory, but it also stores the characteristics values or
the product specifications at the time of its production or procurement. Material should be activated
for batch management

Shelf Life Expiration Date

The system calculates the shelf life expiration date the first time a batch is received. It is calculated
from the date of production plus the total shelf life. You specify the date of production when making
the goods receipt posting. If the total shelf life has not been stored in the material master record,
you must enter the shelf life expiration date at this point. The difference between the shelf life
expiration date and the posting date is the remaining shelf life of the goods received. It must not be
less than the minimum remaining shelf life from the material master record. If it were less, the
system would respond with an error message. All the perishable materials In RTCL group will be
activated for batch management and shelf life expiration tracking of each of the food materials.

When the goods receipt for a batch managed material from a Purchase order is posted batch
number needs to be entered before saving the goods receipt. During receipt the shelf life details
should also be entered. These data are stored in the batch after the posting of goods receipt.

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133
7.27 Physical Inventory Process

7.27.1 Process Definition

Physical inventory captures the physical count activity carried out to check the accuracy of the
inventory. This can be carried out monthly/Yearly depending on the nature of the material. The
process starts off with the creation of the physical inventory document for the items which needs to
be counted. The physical count is carried out for all the materials as per the physical inventory
document. The count is entered in the system to analyse the difference. The difference is posted to
adjust the inventory quantity.

Process Characteristics
Requirement
Process Trigger
Physical Inventory creation
Process Input
Physical Inventory Posting
Process Output
Store Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

7.27.2 Process Flowchart

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134
 7.27.3 Process Narrative
 Store Manager will identify the requirement of physical inventory.

 Store manager will create physical inventory document for the materials to be counted.

 At the time of creation of physical inventory document store keeper will select the tick for
blocking the goods movement of material so that goods receipt and goods issue of the
materials will be blocked for posting.

 Store keeper will print the physical inventory document created.

 Store keeper will physical check the material count and write the material count on the
document printed.

 Store keeper will submit the physical inventory document along with the counts entered to
store manager for approval.

 Store manager will review the document and provide the approval on paper.

 Approved physical inventory document counts will be entered by store keeper.

 Finance will review the physical inventory document and post the document in SAP.

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135
 7.27.4 Process Steps

Process Step Business Role Fiori App Expected Results

Create Physical Create physical Physical inventory document
Inventory Store Keeper
inventory count is created
Count Physical Store Keeper Physical inventory document
Inventory Enter Inventory count is counted

Post Physical Store Keeper Physical inventory document

Post Inventory
Inventory is posted
differences

7.27.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Create Physical Inventory SAP MM MM Dept.
MM_IN_01_2 Count Physical Inventory SAP MM MM Dept.
MM_IN_01_3 Post Physical Inventory SAP FI FI Dept.

7.27.6 Scripts & Forms

WRICEF Data Output

Description Frequency Volumes Owner
ID Object Types

MM- Store
Physical Inventory
F1008 Form WE01 Yearly 10 Manage
document Print
r

7.27.7 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
Print Physical Inventory
1 Standard
Document
List of inventory differences Standard
2

7.27.8 Authorization Roles

Process Step Business Role Authorization

Physical Inventory Store Keeper
Create/count/post

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136
 7.27.9 Organziational Structure Considerations
Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.27.10 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.27.11 Transactional Data

Types Description
1 Physical Inventory Creation
2 Physical Inventory Counting
3 Physical Inventory posting

7.28 Reservation Process

7.28.1 Process Definition

A reservation for goods issue can be requested by various departments for various
account assignment objects (such as cost center, order, project, etc.).The purpose of a
reservation is to ensure that a material will be available when it is needed. It also serves
to simplify and accelerate the goods issue process and prepare the tasks at the point of
goods issue. It is also important that reservations are taken into account by Material
Requirements Planning (MRP), which means that required materials are procured in
time if they are out of stock.

Process Characteristics
Requirement
Process Trigger
Material Requirements
Process Input
Reservation Creation
Process Output
Warehouse Manager
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

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137
 7.28.2 Process Flowchart

7.28.3 Process Narrative

 Requisitioner will identify the requirement of material and create reservation purchase
requisition with required quantity of the material.

 Approving authority will review the purchase requisition and check the need of material. If
reservation purchase requisition is Ok, approving authority will approve the reservation.

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138
 If reservation PR is not Ok, approving authority will reject the reservation PR.

 Once the reservation PR gets approved and material have available stock in warehouse,
Reservation will be created automatically in system.

 Auto reservation creation can achieve through custom development with ABAP module in SAP.

 If material does not have available stock in warehouse, purchase requisition will be created
automatically in system.

 Store keeper will run the reservation list reportand issue material reference toreservation
number.

7.28.4 Process Steps

Process Step Business Role Fiori App Expected Results

Purchase Requisition Store Keeper Create Purchase Purchase Requisition
creation Requisition is created
Approve Purchase Store Manager Purchase requisition
Individual Release
Requisition is approved
Reservation is
Reservation creation Store Manager Create reservation
created

7.28.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
NA

7.28.6 Scripts & Forms

Data
WRICEF Output
Description Objec Frequency Volumes Owner
ID Types
t
Store
Reservation Creation
MM-1009 Form NA Monthly 10 Manage
Print
r

7.28.7 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).

1 Purchase Requisition list Standard

Reservation list Standard
1

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139
 Goods Issue Document Standard
2
Stock overview Standard
3

7.28.8 Authorization Roles

Process Step Business Role Authorization

Purchase Requisition creation Store Keeper
Approve Purchase Requisition Store Manager
Reservation creation Store Manager
Goods Issue Store Keeper

7.28.9 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.28.10 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.28.11 Transactional Data

Types Description
1 Purchase Requisition creation
2 Approve Purchase Requisition
3 Reservation creation
4 Goods Issue

7.29 Invoice Verification

7.29.1 Process Definition

RTCL acquires goods or services from vendor to complete its business needs. Once goods are
procured from vendor and placed in company’s premises through goods receipt then we need to
pay to vendor for acquired goods and services. The amount to be paid along with details of
material is provided by vendor in form of document that is known as invoice. Before paying to
vendor we need to verify the invoice. This process of verifying invoice and paying to vendor is
known as invoice verification. The key points about invoice verification are as follows.

 Invoice verification marks the end of procurement after purchase order and goods
receipt.

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140
  Invoice posting will update all related documents in financial and accounting.

 Blocked invoice that vary from actual invoice can be processed through invoice
verification.

Invoice verification deals with the following terms which are as follows.

Process Characteristics
Purchase Order
Process Trigger
Goods Receipt
Process Input
Invoice verification Posted
Process Output
Accounts Department
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

7.29.2 Process Flowchart

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141
 7.29.3 Process Narrative
 Posting of invoice is done after goods are received from vendor and goods receipt is done.

 Invoice received from vendor is verified against cost, quantity and quality by ordering party
and then invoice is posted against that purchase order.

 BU accounts will send the copy of vendor Invoice to the concern person to check and
confirm.

 Site engineer or requisitioner will check and confirm the vendor invoice to BU finance.

 Invoice verification always have 3 ways matches with purchase order, goods receipt and
vendor invoice.

 On confirmation from the concern person, BU accounts will park vendor Invoice in SAP.

 Invoice can be posted with invoice posting date, amount that is paid to vendor along with
quantity for which amount is paid. Click on save. Invoice is now posted for the goods receipt.

 BU accounts will attach the soft copy of vendor Invoice to the parked Invoice using
Document Management System.

 Accounts Manager will review the invoice parked and post the invoice in SAP.

 After posting invoice in SAP, BU accounts will make vendor payment as per business process
number explained in Finance Business Blue Print.

7.29.4 Procecss Steps

Process Step Business Role Fiori App Expected Results

Park Invoice BU_Accounts Create supplier
Invoice is Parked
invoice
Release blocked Accounts Manager Release blocked Invoice is
invoice invoice Released

7.29.5 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Purchase order SAP MM MM Dept.
MM_IN_01_2 Goods receipt SAP MM MM Dept.
MM_IN_01_2 Invoice verification SAP FI FI Dept.

7.29.6 Reports

GAP Name of Report Comments Customized Transaction

Description Report Code

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142
 (WRICEF ID).

1 Invoice list Report No Standard

Parked Invoice Report Standard
2 No

7.29.7 Authorization Roles

Process Step Business Role Authorization

Park Invoice BU_Accounts
Release blocked invoice Accounts Manager

7.29.8 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

7.29.9 Master Data Considerations

 Material Master
 Vendor Master.
 Purchasing info record / Condition Record

7.29.10 Transactional Data

Types Description
1 Invoice verification
2 Parked Invoice Report

3 Credit Memo

7.30 Down Payment Procecss

7.30.1 Process Definition

A down payment is a payment made or received before the physical exchange of goods and
services. Once the receipt or delivery of goods and services occurs, the down payment clears
against the final invoice.Down Payment Request is created as per the vendor payment terms,
percentage of the advance amount, due date of the advance payment maintained in purchase
order. After approval of the purchase order, Finance get the notification to create a down
payment to the vendor with reference to the purchase order. The final payment been cleared
between goods delivered and goods invoiced and adjust with the down payment amount. Then
accounts team make the final payment.

Process Characteristics
Approved Purchase Order
Process Trigger

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143
 Down payment notification
Process Input
Down payment posted
Process Output
Purchase Head
Process Owner

Process Frequency Daily/Weekly/Monthly

Global/Harmonized/Local

7.30.2 Process Flowchart

7.30.3 Process Narrative

8 The approved purchase order contains down payment amount or % along with the due date for
the payment.

9 Workflow triggers the notification to finance team to initiate the down payment to vendor

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144
10 There are 2 types of down payment categories: a) Mandatory Down Payment – As per
negotiation, down payment is must for this transaction. b) Voluntary Down Payment –
Company is willing to pay down payment without any request from vendor

11 Once the DP category is selected, system displays the relevant filed of down payment
percentage, down payment due date

12 After release the purchase order, Finance department receive the workflow notification for
down payment posting to the approved purchase order

13 The report called down payment monitoring for purchase order contains the details of
purchase order which contains the list of down payment request in PO header or item level

14 In down payment monitoring for PO reports, the red colour indicator represents, down
payment not yet processed

15 The green colour indicator represents, down payment is processed and payment made to the
vendor

16 Finance department process the down payment based on purchase order, item and transfer
tax on sales/purchase code from purchase order

17 Vendor down payment transaction contains document date, posting date, document type,
company code, currency, vendor account, bank account, amount, value date etc;

18 After posting the down payment, the report updates from red colour indicator to green colour
indicator and PO history also will get updates

19 Vendor receives and acknowledge the payment made by Rezayat accounts payable team and
deliver the material to RTCL

19.7.1 Process Steps

Process Step Business Role Fiori App Expected Results

Approved Purchase BU Purchase Individual/collective release Purchase order is
Order approved
Down payment request BU Accounts Release blocked invoice Down payment
creation request is created
Down payment BU Accounts Post vendor down payment
Down payment is
reference to vendor
posted
purchase order

19.7.2 Key Integration Points

Component
Integration
(e.g. SAP Point of
Point Integration Point Description
module/ other Contact
ID
system)
MM_IN_01_1 Approved Purchase order SAP MM MM Dept.
MM_IN_01_2 Down payment request SAP FI FI Dept.

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145
 19.7.3 Reports

GAP
Customized Transaction
Description Name of Report Comments
Report Code
(WRICEF ID).
Down payment monitoring
1 Standard
for PO
PO History for purchase Standard
2 order

Vendor line item display Standard

3

19.7.4 Authorization Roles

Process Step Business Role Authorization

Approved Purchase Order BU Purchase
Down payment request BU Accounts
creation
Down payment reference to BU Accounts
vendor purchase order

19.7.5 Workflow

WRICEF Engaged
Description Data Object Owner
ID Parties
Workflow notification for Workflow Accounts Purchasing
MM-W1007 down payment request Department Department
creation process to
accounts department

Workflow notification mail Workflow Accounts Purchasing

communicates to finance Department Department
MM-W1015 team, purchaser and
general manager if down
payment is not made as
per due date

19.7.6 Organziational Structure Considerations

Company Code Plant
1101,1102,1103,1104,1105,1106,1107
1011 1108,1109,1110,1111,1112

19.7.7 Master Data Considerations

 Material Master

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146
  Vendor Master.
 Purchasing info record / Condition Record

19.7.8 Transactional Data

Types Description
1 Approved Purchase Order
2 Down payment request creation
3 Down payment posting reference to vendor purchase order

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147