scm2008 phelan 25 tips and tricks final

© 2008 Wellesley Information Services. All rights reserved.

25 Tips and Tricks to ImprovePurchasing Procedures in SAP

Dennis PhelanBlount International

2

Why Are We Here?

• Many SAP functionalities are not understood or are not being used to their potential

• Most purchases in an organization are for items that have been previously purchased

• This session covers methods and techniques using SAP standard functionality to simplify and automate the purchasing of repeat buys

“I thought SAP was supposed to save me work – I need more people just to do what I used to do”

3

What We’ll Cover …

• Using the Source List • Using the Information Record• Using transaction ME57 to speed Purchase Order

creation• Automatic conversion of requisitions into Purchase

Orders• Configuration of entry aids for items with Material

Masters• Vendor evaluation• Vendor statistics• How to personalize screen settings• Wrap-up

4

Using the Source List

• Source Lists: Provide the sources of supply that the system can use when

assigning sources to requisitions or MRP-generated requirements

Are for Material Master items only Are created manually by transaction ME01 Are an excellent place to fix or block sources

• Always want to use the same supplier for a material?

TIP #1: Fixing the Source of Supply

Checking the Fix box makes that supplier the fixed supplier

5

• Want a convenient way to block ordering a material from a supplier?

TIP #2: Blocking a Source of Supply

Checking the Blk box blocks orders for this material from this supplier using that agreement

6

• Want to ensure the terms and conditions of a contract are used when purchasing a certain material?

TIP #3: Linking a Buy to a Contract

Listing an agreement number in a Source List will link requisitions using this source to the agreement

7

8

TIP #4: Generating Source Lists En Masse

• Transaction ME05 — Create Source Lists Choose your selection criteria carefully

Run in test mode first The system will propose a Source List line for each Information

Record and contract found Select the ones you want created — click Save

9






9

Things to Know About Purchasing Information Records

• Information Records are created by the system for every purchase of a unique vendor number/material number combination

• Such records default Purchasing data into Purchase Orders

• They are maintained at the Purchasing Org level and can be maintained at the Plant level (multiple Plants per Org)

• The system will attempt to find the information first in the Information Record, the Vendor Master next, and then the Material Master

10

More Things to Know About Purchasing Information Records

• The Information Record can be mass-updated via transaction MEMASSIN

• The Information Record is one of the most powerful Purchasing tools in SAP

11

12

The Information Record Structure

• The Information Record has five screens: General Data Purchase Org Data 1 Purchase Org Data 2 Conditions Texts

13

The Information Record Structure: General Data

14

General Data: Vendor Data

• Reminders: The system will generate expedite messages (must be configured) and send them to the vendor based on these settings. A negative number represents the number of days before the delivery date; positive numbers are the number of days after the delivery date.

15

General Data: Vendor Data (cont.)

• TIP #5: The vendor material number: Maintaining this information here will allow the data to be displayed on the PO and used during the Goods Receipt

16

General Data: Order Unit (Purchasing)

• Order unit: This allows entry of unique order unit conversions for this vendor-material combination TIP #6: This allows definition of a different number of units in a

common unit of measure (e.g., box) for different vendors

17

The Information Record Structure: Purchasing Org Data 1

18

Purchase Org Data 1: Purchasing Text Override

• No MText: Checking this box will override the Material Master purchasing text with the purchasing text contained in this Information Record TIP #7: This is an excellent method to define a unique message

concerning a particular material number/vendor combination (e.g., unique packaging requirements)

19

Purchase Org Data 1: Tax Code

• Tax Code default: The contents of this field will default into the Purchase Order line item tax code field TIP #8: Entering the tax code here will keep you from having to

choose the tax code on the Purchase Order In most cases, the tax code doesn’t change for a given

vendor/material number combination

20

Purchase Org Data 1: No ERS

• TIP #9A: No ERS: If you are using evaluated receipt settlement (ERS) for a given vendor (set in the Vendor Master), but want to exclude some of the materials, this is where you do it

21

Purchase Org Data 1: Delivery Tolerances

• TIP #9B: Tolerances: This is where you would set unique

delivery tolerances that are different from the Material Master Purchasing value key settings Handy for setting delivery tolerances for any material that has

special delivery tolerance considerations

22

Purchase Org Data 1: Min/Max Order Quantities

• TIP #10: Minimum/Maximum qty: Unique minimum order and maximum order quantity settings can be made here Be careful here: These settings override the MRP settings in the

Material Master and may cause orders to be different sizes than planned by MRP

Warning

23

Purchase Org Data 1: INCO Terms

• Incoterms: Unique INCO terms can be defined here TIP #11: This is handy for cases where some vendor materials

have different INCO terms than other parts from the same vendor

24

The Information Record Structure: Purchase Org Data 2

• This screen contains the last Purchase Order issued for this material/vendor combination. It also contains quote history information.

25

Purchase Org Data 2: Conditions

• This screen contains the pricing condition valid for this material/vendor combination

• TIP #12: These conditions can be mass-changed using transaction MEKP

26

Pricing Conditions — Transaction MEKP (Mass Update)

27

Transaction MEKP Output

• This is the list showing the old data and the new data using the test mode. Note the new status is 4% larger than the old status per my original setting.

28

TIP #13: Pricing Conditions: Pricing Scales

• This screen shows where the volume price break pricing is entered and maintained

29

Information Records for Non-Material Master Items

• Transaction ME11 — Create Information Record

• Enter the Vendor; Purchasing Org. and Plant are optional

30

Transaction ME11: Second Screen

• Note: The Material group and Sort string become required Sort string allows uniqueness between different records in the

same Material group Handy for use in “outside processing” orders in PP

31






31

32

• TIP #14: Create a variant to find released requisitions with release dates using dynamic date calculation

Assign and Process Requisitions

33

• Creating dynamic date variants Click on dropdown in Selection variable choose D Click on dropdown in Name of Variable make choice Save variant

Assign and Process Requisitions (cont.)

34

Using Transaction ME57 — Assign and Process Requisitions

• Assign and Process second screen

• Check the boxes and click Assign automatically

35

Using Transaction ME57 — Assign and Process Requisitions (cont.)

• With assignments made

• The system will assign sources of supply Uses Source List, Information Records, or contracts

• Click on Assignment overview button

36


• Assignment overview

• Note that requisitions for the same vendor have been grouped together

• Double-click on the white line below the vendor name• A dialog box will appear — verify the information • Click green check mark

37


• Creating the Purchase Order

• Highlight the requisitions (hold down the shift key and click on each one)

• Click on the adopt button• The requisitions will be moved to the Purchase Order• Click save and your are done

38






38

39

TIP #15: Automatic Conversion of Requisitions

• Automatic conversion is controlled in two places: The Vendor Master Purchasing view of the Material Master

• Requisitions must have sources assigned

40

Automatic Conversion of Requisitions

• Transaction ME59N creates the Purchase Orders

41

Automatic Conversion of Requisitions (cont.)

• Transaction ME59N — second screen

• Purchase Order 4500116971 created by system

42






42

43

TIP #16: Configuration of Entry Aids for Items without Material Master

• Menu Path: SPRO Display IMG Materials Management Purchasing Material Master Entry Aids for Items Without a Material Master

44

TIP #16: Configuration of Entry Aids for Items without Material Master (cont.)

• Value classes (G/L accounts) and Purchasing value keys may be assigned to material groups

• This will default the G/L account into your Purchase Order

45






45

Vendor Evaluation

• Vendor evaluation allows ranking of vendors based on business-defined criteria Delivery performance, Quality, Price, and other typical choices Many are predefined by SAP

• The transactions are ME63 (individual) or ME6G (background)

• TIP #17: Set up requires configuration Define the weighting keys (OMGC) Define the criteria (OMGI) Define the scope of list (OMGU) Define Purchasing Organization data for vendor evaluation

Path: SPRO Display IMG Materials Management Purchasing Vendor Evaluation 46

Vendor Valuation — Define Weighting Keys

• Transaction: OMGC

• In this step you are just creating the key name — the values will be defined later

47

Vendor Valuation — Define Criteria

• Transaction: OMGI

• The scoring method tells the system where to find the data

48

Vendor Valuation — Define Scope of List

• Transaction: OMGU

• Here you are defining the criterion that will be used in your overall evaluation

49

Vendor Valuation — Define Purchasing Org Data

• Menu path: SPRO Display IMG Materials Management Purchasing Vendor Evaluation Define Purchasing Org Data for Vendor Evaluation

• Click on a Purch. Org. and click on details 50

Vendor Valuation — Define Purchasing Org Data (cont.)

• The important data here are the Best score, Applicability period, and Calendar

• The Best score is the max allowed for a singe criterion• The Applicability period is the length of time considered• Click on Main Criteria

51


• This is where you define what criteria is to be used and if the update is manual or automatic

• Click on a criterion and double click on Subcriteria52


• This is where you assign weights to the subcriteria and define if the data is manually updated

• Note: These weights only apply to the value of that criterion with respect to the other criteria

• When finished, double click on Weighting in the dialog column

53


• This is where you assign the values and the points for those values

• The percentage is how much variance is allowed to get the number of points indicated

54

Vendor Evaluation — Results

• The transactions are ME63 or ME6G

• Running transaction ME63 produces this result

55

56






56

Vendor Statistics

• Must be maintained for vendor analysis to work• The transactions are MC$4 (purchasing values) and

MC$6 (vendor analysis)• TIP #17: Setup requires configuration

DeliveryMenu path: SPRO Display IMG Materials

Management Purchasing Statistics Define Grid for Delivery Date Variances

QuantityMenu path: SPRO Display IMG Materials

Management Purchasing Statistics Define Grid for Quantity Variances

57

Vendor Statistics — Delivery

• Must be maintained for vendor analysis to work• Setup requires configuration

DeliveryMenu path: SPRO Display IMG Materials

Management Purchasing Statistics Define Grid for Quantity Date Variances

58

Vendor Statistics — Delivery (cont.)

• Usually two of the values are negative and the other two are positive to form an even distribution around the PO value

• Delivery values are stated in number of days

59

Vendor Statistics — Quantity

• Must be maintained for vendor analysis to work• Setup requires configuration

QuantityMenu path: SPRO Display IMG Materials

Management Purchasing Statistics Define Grid for Quantity Variances

60

Vendor Statistics — Quantity (cont.)

• The four values will allow five variance measurements

• Usually two of the values are negative and the other two are positive to form an even distribution around the PO value

• Quantity values are stated in percentage

61

62






62

63

How to Personalize Screen Settings

• Default settings: Icon on requisitions and orders

• TIP #18A: Note the PO price setting: This means do not adopt the requisition price into the PO

64

How to Personalize Screen Settings (cont.)

• Default settings: Icon on requisitions and orders

• These are only default suggestions and can be changed

65

TIP #18B: Personal Lists

• Tired of scrolling through long search lists?

66

Personal Lists

• Select the desired item• Click on Insert in Personal List icon

You can repeat this for several entries. When finished, hit enter or the green check mark.

67

Personal Lists (cont.)

• In the future, when you search on this item, this list will be displayed

If you want to see all the items, press the “display all values” icon.

68






68

6969

Resources

• http://help.sap.com/saphelp_erp2004/helpdata/en/75/ee1fa755c811d189900000e8322d00/frameset.htm Has detailed help describing most purchasing functions

• Martin Murray, SAP MM – Functionality and Technical Configuration (SAP Press, 2006).

Excellent book describing the MM module functionalities• ERPgenie.com

http://erpgenie.com/index.php?option=com_content&task=blogcategory&id=70&Itemid=93Purchasing tables; detailed how-to on certain processes

• ITtoolbox.com http://sap.ittoolbox.com/groups/technical-functional/SAP-LO

G-MMExcellent discussion forum

70

7 Key Points to Take Home

• TIP #19: The “it just takes a second”s add up. SAP is quicker and faster than people on repeat items and every effort should be made to allow the system to do this work.

• TIP #20: The Source List is an effective way to source requisitions for Material Master items. Items on the list link to contracts or Information Records. They can be used to block vendors on specific materials.

• TIP #21: The Information Record is your friend! It will supply all of the default data to speed up PO processing. They control quantity pricing and provide a link to vendor part numbers.

71

7 Key Points to Take Home (cont.)

• TIP #22: If you are not using transaction ME57 to convert requisitions — you should

• TIP #23: Screen variants can be used to save a lot of time. If they are set up with dynamic date calculation, they become powerful work lists.

• TIP #24: Automatic requisition conversion should only be used on a proven ordering process, but when used, it’s fast!

• TIP #25: Personal lists can reduce large lists to a manageable size

72

Your Turn!

How to contact me:Dennis Phelan

[email protected]

scm2008 phelan 25 tips and tricks final

Documents

source of supplychecking

source listschoose

source list line

certain material

source listsource lists

purchase ordersthey

material master items

purchasing org level