rfq comparison

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!"## !$ % TRF/P2P/1.2.2 & ''( ) ''

End User Training Manual

for

SAP MM Material Management

Process Name: RFQ & Comparision

Process No: TRF/P2P/1.2.2

Control Copy No: TRF/P2P/1.2.2/01

Doc Version Description Prepared by Date Reviewed by Approved by

00 Draft Srinivas .T 25/12/2009


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Project: Mission SURE

TRF-SURE-EU TRG Manual (TRF/P2P/1.2.2) 003 Rev. 00Page 2of 37

Enterprise Procurement to pay process in TRF has the following business processes.

Sl. No. TRFEnterprise

Process No.

Process Name

1 TRF/P2P/1.1 PR processing

2 TRF/P2P/1.2.1 Procurementplanning

3 TRF/P2P/1.2.2 RFQ & Comparison4 TRF/P2P/1.2.3 Purchase Contract

5 TRF/P2P/1.2.4 Create PO

6 TRF/P2P/1.3 GRN

7 TRF/P2P/1.4 StorageManagement

8 TRF/P2P/1.4.1 Inventoryverification

9 TRF/P2P/1.5 Invoice Verification

10 TRF/P2P/1.6 Vendor Evaluation

For each of the above processes, there are separate End User Training Manuals areavailable

This document covers sl. No.3 of the above list, that is RFQ & Comparison

This End User Training manual on RFQ & Comparisonconsists of the

Following sequence of sub-processes as listed in the Table of contents (next page)


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1.2.2-RFQ-PURPOSE & DEFINITION .................................................................................. 4

Process of RFQ as per TRF .............................................................................................. 5

This below information is only for readable purpose and creating RFQ is explained belowusing T code-ME41 ............................................................................................................... 6

Explanation-Creating an RFQ by Copying or Referencing .................................................... 6

This below information is only for readable purpose .............................................................. 7

Explanation -Creating an RFQ Manually ............................................................................... 7

Note: Mandatory fields when you are creating RFQ with reference to PR ............................. 8

Creation of RFQ with respect to Purchase requisition number in SAP-ME41 ...................... 11

Changing the RFQ-ME42 .................................................................................................... 18

Displaying the RFQ-ME43 .................................................................................................. 20

This below information is only for readable purpose ............................................................ 21

1.2.2- Quotations Purpose & Definition ............................................................................... 21

Maintaining Quotations-Me47 ............................................................................................. 22

This below information is only for readable purpose ............................................................ 29

Comparing Quotations ........................................................................................................ 29

Price comparison of different Quotations AS PER TRF ....................................................... 32

Price Comparison list-ME49 ................................................................................................ 34


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Purpose

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

Features

In Purchasing, the RFQ and the quotation form a single document. Prices and conditions

quoted by vendors are entered in the original RFQ. If you have issued an RFQ to severalvendors, you can have the system determine the most favorable quotation submitted andautomatically generate letters of rejection to the unsuccessful bidders. You can also storethe prices and terms of delivery from certain quotations in an info record for futureaccessing.

RFQs can be subject to a release procedure.

Definition

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

services.

Structure

An RFQ consists of the RFQ header and the items.

RFQ header

Contains general information on the RFQ, such as the vendors address

Items

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

An item of a quotation may contain a delivery schedule made up of a number ofschedule lines in which the total quantity is broken down into smaller quantities to bedelivered on the specified dates over a certain period.

An item of the procurement type "external service" contains a set of servicespecifications. The latter can be hierarchically structured. The summary view of sucha hierarchical structure is referred to as an outline. The outline comprises a number


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of levels, each representing a level of the service hierarchy. The RFQ quantities areset out in service lines, representing individual jobs or activities.

In contrast to other purchasing documents, you cannot enter an account assignment in anRFQ.

1. Request for quotation will be used to float enquiries in market to obtain quotationsfrom prospective vendors.

2. RFQ can be created with reference to purchase requisition.3. Enquiries for regular vendors will be created using their vendor codes whereas one

time vendor code shall be used for floating enquiries to new vendors.

4. Collective number can be entered while creating RFQ. This collective number will besame for all the RFQS created with reference to same PR.5. Printout of RFQ for common materials with reference to different PRS(different

projects) will contain total(cumulative) required quantity technical spec / details andall other initial inputs coming from Pr directly or can be attached (soft copy)with RFQ.

6. RFQ created above can be sent to vendor by taking printout or by email.Standard text can be created and used at the time of printouts.

7. Email from sap can be activated, provided that is allowed from system by the buyer.Vendor email ID should be maintained in vendor master.

8. Documents required can be attached to RFQ through document mgmt system.

List of the attached documents can be kept in word file from DMS or entered in item text.


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You can save time when creating or changing an RFQ by copying an already existing one or adopting items

from a purchase requisition or an outline purchase agreement.

Procedure

In the following example, an RFQ is created by referencing a purchase requisition.

Prerequisite: The requisition you are referencing must have previously been released (approved).

1. Path in SAP Easy Access Choose Logistics-Material Management-RFQ/quotation RFQ Create.

The initial screen appears.

2. Enter the deadline for submission of quotations, the purchasing organization, and the purchasing group.

3. ChooseRFQ Create with reference To requisition.

4. In the dialog box which now appears, enter the numbers of the reference requisition and the reference item to

be adopted. If you do not know the item numbers, simply enter the requisition number.

When you press ENTER, the desired item overview appears.

5. Select the items you wish to adopt.

6. Adopt the selected items from the requisition.

If you wish to change the selected items beforeadopting them, chooseEditAdopt +Details. Make your

changes on the item detail screen for each item you have selected.

If you wish to adopt the selected items withoutchanging them first, chooseEditAdopt.

TheItem overviewscreen of the requisition being created appears, with the copied items. You can add items, or

adopt further items from another purchase requisition viaRFQ Create with reference to requisition.

7. ChooseHeader Vendor address.

Enter the vendor number. The system will then take the address data from the vendor master record.


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If you enter the number of a one-time vendor, you must enter the complete address manually.

8. Save the RFQ. An RFQ is created for the vendor in question.

9. Perform steps 7 and 8 again for each additional vendor to whom the RFQ is to be sent.

Result

The RFQ is created in the R/3 System. In order that the information in the RFQ can be transmitted to the vendor,

the system generates a message for the RFQ

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1. Path in SAP Easy Access Choose Logistics-Material Management-RFQ/quotation RFQ Create.

The initial screen appears.

2. Enter the deadline for submission of quotations, the purchasing organization, and thepurchasing group.

Document data

RFQ type: In the standard system, the default value for the RFQ type is AN (RFQ). It is thevalue we assume for this example.

RFQ: Leave the field blank, the system will assign a Internal number automatically.

Organizational dataenter the key for your purchasing organization and purchasing group.

Default dataif you make an entry in any of these fields, the value becomes the default value in each item.

For example, if you enter the delivery date, then this date is suggested in each item. You canchange this value at any time.

3. Press


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ENTER.

The item overview screen appears.

4. For each item, enter:

The number of the material, if the material has a material master record

If the material does not have a master record, then leave the field for the material numberblank. In this case, entry of the short text, material group, and order unit is mandatory,however.

The quantity requested

The delivery date (day, week, or month - enter the corresponding date category)

The number of the receiving plant and that of the storage location, if known

5. To review the detailed information for an item, first select the item. Then chooseItem

Details

To review such header information as the important deadlines for the RFQ, choose Header

Details. You can also enter the collective number on this screen.

6. Choose Header

Vendor address

Enter the vendor number. The system will then take the address data from the vendor masterrecord.

If you enter the number of a one-time vendor, you must enter the complete address manually.

7. Save the RFQ so that the RFQ is created for the relevant vendor.8. For each further vendor to whom you want to send the RFQ, enter the vendor number and

save the document.

Result

The RFQ is created in the SAP System.

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S.N0 Fieldname/Activity

USE EG: User action andvalues

1 RFQ Type The RFQ type isproposed by thesystem. However,you can choose adifferent RFQ type

if one has beendefined for your

system.

E.g.; Enter the RFQtype as EAN

2 QuotationDeadline

Date by which thevendor is tosubmit thequotation.

Eg;26.12.2009

3 PurchaseOrganization

Entry of theresponsiblepurchasing

organization ismandatory.

1000

4 PurchasingGroup

Enter the key forthe responsible

purchasing group.

100

5 Plant You use the plantkey to determine,

for instance, whichplant is to receiveordered goods.

1000

6 PurchaseRequisition

Number

Enter the numberof the purchaserequisition you

wish to reference.

10000019

7 Storage Location Number of thestorage location atwhich the materialis stored. A plant

may contain oneor more storage

locations.

1000

8 CollectiveNumber

If the RFQs orpurchase orders

of a particularprocurementprocess have

been assigned toa collective

number, it is then

5


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possible to list andprocess all the

individualRFQs/inquiries orPOs that are

grouped underthis number

9 Vendor AccountNumber

With the vendornumber,

information fromthe vendor master

record (such asthe vendor's

address and bankdetails) is copied

into a purchasingdocument (suchas a request forquotation or a

purchase order).You can use the

vendor number tokeep track ofrequests forquotation,

purchase ordersand outline

agreements.

101308


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Enter required userinput as per SBUrequirement

Enter purchase organizationand purchase group as perrequirement.

After entering purchasedata click reference topurchase requisition


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After clicking reference to purchase requisition, next screen appears as

Next choose ,screen appears as

Enter the referencerequired PR number and

click


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Next select complete PR line andclick adopt details all the PR detailswill be copied, if any fields requiredenter the inputs and save


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Screen appears as

Choose header details next screenshown below


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Choose vendor address, to maintainvendor, next screen shown below


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Now Save the RFQ. An RFQ is created for the vendor.

Save & Repeat the same process forinputting the next vendor


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'' )*

Enter the RFQ number whichhas to be changed and press

enter


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Change the required fields as per SBU and save the document.


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!$' )*.

Enter RFQ number to

be displayed and click


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Contains a vendor's prices and conditions and is the basis for vendor selection

This step involves maintaining prices, payment terms, taxes and other things communicatedby vendor in the system.

Definition

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

Structure

A quotation is legally binding on the vendor for a certain period. The quotation is thevendors response to a request for quotation issued by a purchasing organization.

A quotation consists of items in which the total quantity and delivery date of an offeredmaterial or service are specified.

An item of a quotation may contain a delivery schedule made up of a number of schedulelines in which the total quantity is broken down into smaller quantities to be delivered on thespecified dates over a certain period.

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

If services cannot be defined precisely, value limits are stipulated instead of service lines.Value limits can be set for certain contracts.

Conditions can apply at various levels:

To the entire quotation

At item level, to the material to be supplied or to the planned procurement in the caseof services


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

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Description EG: User action andvalues

1 RFQ Number Enter the requirednumber of the

document.

6000000008

.

Enter the RFQ numberfor which quotation to bemaintained, next click


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Next screen appears as

Select line item and click header details, nextscreen appears as


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Next to see price related information

To see tax and price information click on itemconditions, next screen appears as


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Description EG: User action andvalues

3 PB00-conditiontype

Gross Price 2.000,00

4 FRA1-Conditiontype

Freight % 2,000


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To see vendor address details

Click on vendor address icon to see thedetails, next screen appears as


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

Prerequisites

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

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

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

If a quotation is submitted in a foreign currency, the price is automatically translatedinto the currency of the company code, which is determined by your purchasingorganization.

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

system.

Procedure

1. Choose RFQ/quotation

Quotation Price comparison list-Me49

The selection screen for the price comparison list appears.

2. Enter the selection criteria for the quotations that are to be compared.

You can enter either a range of quotation numbers or, by entering the collectivenumber, select all quotations belonging to a certain competitive bidding process. It isalso possible to select by vendor number and by material number. You mustspecifyeither a range of quotation numbers orthe collective number.

3. Choose the comparison values to be used.

Reference quotation


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

quotation.

Mean/minimum value quotation

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

Percentage basis

The price comparison list displays the percentage of each item in relation to the

maximum, minimum, or average price. To determine the display type, enter one ofthe following:

+highest value for each item is the 100% value

-Lowest value for each item is the 100% value

"_" Mean value for each item is the 100% value

Price computationsselect the appropriate field to specify which of the following should be taken intoaccount in determining the comparison price:

Cash discount

Delivery costs

Effective price

4. Choose Program

Execute.

The price comparison list is generated.

The price comparison list displays the price per item in the base unit stored in the materialmaster record.


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Further Information

From the price comparison list, you can do the following:

Display additional information about the material master record for a particularmaterial

Display additional information on the quotations in the price comparison

Display a certain quotation

Display a vendor master record

Invoke vendor evaluation functions

If you position the cursor on

A vendor, only the latters evaluation is displayed (in relation to thematerials he is able to supply).

A material, the system generates a ranking list of all vendors that havesubmitted a quotation.

- The quotation data (e.g. price or rank), the system will carry out a comparison of

evaluations.

Saving the Market Price

The market price is the basis for appraising the vendor's price level for a material and isused for vendor evaluation purposes. A market price can apply to a material or a materialgroup.

You can store a price as the market price from within the price comparison list. Position the

cursor on the desired price and choose Edit Save market price.


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# % & -

1. On the basis of quotations submitted by different vendors, price comparison can be

carried out through system. System doesnt provide any help in evaluating the

vendors on technical terms.

2. Collective number can be used as input for comparison.

3. System gives option of comparing Basic price / Effective price i.e. price along with

delivery cost & taxes etc.4. The system is capable of simulating pricing scenarios, allowing you to compare a

number of different quotations.

5. After selection of one of the vendors after comparison , rest can be rejected by giving

proper reason for rejection from the navigating through comparison screen itself and

if required rejection letters can also be printed / emailed through system for rejected

vendors after comparison process is over.

6. After negotiation changes in quotations can be done from this transaction, system

keeps the record of changes made in PO. And the same can be checked through

change document or audit trail.

7. Thus vendor wise offer for particular item / items can be stored in system and will

form the offer history.

8. Market price can be set from this transaction and same can be seen in a report

through transaction MEKH.

9. Final format for comparison statement needs to be finalized and developed during

realization phase which will include commercial comparison along with vendor quality

performance parameters captured under vendor rating system


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# !)*0

Enter RFQ number and clickexecute button


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