smartplant materials how to manage commercial...

SmartPlant Materials How to Manage Commercial Evaluation

Version 2011 SP1 (7.0.1) September 2010 DMAR1-PE-200101B

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Table of Contents

Table of Contents Preface .................................................................................................................................4

Overview .............................................................................................................................5

Managing Commercial Evaluation of Quotes .................................................................6 Target Role ......................................................................................................................... 6 Session Goal ....................................................................................................................... 6 Workflow Prerequisites ...................................................................................................... 6 Budget Hours: Concept Transfer to Users .......................................................................... 6

Detailed Workflow .............................................................................................................7 Manage Quote Summary .................................................................................................... 8 Manage Quote Detail Information .................................................................................... 10 Manage Quote Summary Status ........................................................................................ 14 Assign Commercial Evaluation Complete Status ............................................................. 14 Award (Select) Supplier(s) ............................................................................................... 15 Approve the Selection ....................................................................................................... 19

SmartPlant Materials How to Manage Commercial Evaluation 3

Preface

Preface This document is a user’s guide for SmartPlant® Materials.

It describes the processes for managing commercial evaluation of quotes.

Send documentation comments or suggestions to [email protected].

4 SmartPlant Materials How to Manage Commercial Evaluation

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Overview

Overview This document describes how to manage commercial evaluation of quotes.

Commercial evaluation of quotes is an essential part of the collaboration between engineering, procurement and bidder. During the creation of a requisition, engineering determines if a technical evaluation (TE) is to be done or not. A commercial evaluation is the mandatory part of an inquiry.

The commercial evaluation ensures a representative and comparable bid analysis. While the bid creation is already part of that aim, the evaluation of bids makes certain that the best total price, with lowest risk for the project is selected.

How to manage technical How to manage technical evaluation of quotesevaluation of quotes

Assign bidders,create RFQ Receive bids Create short list

and choose supplierCreate Inquiry

Commercial evaluation

Technicalevaluation

Picture 1

As shown in the above workflow, the commercial evaluation is part of the bidding cycle and is on a par with the technical evaluation, which means both evaluations can be a precondition for the supplier award.


Managing Commercial Evaluation of Quotes

Managing Commercial Evaluation of Quotes The goal of this document is to explain the specific tasks and best practices for managing the commercial evaluation.

Target Role The target audience for this document is home-office-based, procurement super users and buyers.

Session Goal This session will enable users to manage the commercial evaluation of quotes.

Workflow Prerequisites This document assumes that the SmartPlant Materials introduction, overview session has been completed.

Budget Hours: Concept Transfer to Users It will take between 4 to 6 hours to train users in this workflow.


Detailed Workflow

Detailed Workflow The commercial evaluation of quotes in general marks the step before the bidder selection. The final step – the approval of a bidder selection – is a simple workflow. However, the process to get to this final step is much more complex. SmartPlant Materials provides a wider definition of the commercial evaluation process. The commercial evaluation contains the following main functions.

• Control quote summary status

• Manage quote detail information

Manage quote detail prices, delivery conditions and dates

Manage other costs (quote summary and detail level)

Manage cancellation costs

• Download RFQs

• Load RFQs

• Assign commercial evaluation complete status

• Award (select) supplier/suppliers

• Approve the selection

The commercial evaluation is executed from the core workflow screen (CWS) P.30.11 Inquiries. In this screen, the actual inquiry is selected. The appropriate area is reached by selecting Commercial Evaluation.


Detailed Workflow

Manage Quote Summary On the P.30.22 Commercial Evaluation screen, the first tab page opened is Quote Summaries.

The Quote Summaries screen shows the accumulated prices for the actual quotes for each bidder. Since a quote contains much more price information than only the quote detail prices, the Quote Summaries screen offers many price columns.

Picture 2

The prices shown in this screen are calculated from the quote details as well as from other costs on header and detail level. The screen provides additional functionality to Archive, Approve, Reverse Approval, and Create PO Req.

The functions are executed for the quote, which is chosen by selecting the appropriate check box shown in the next screen shot.

Picture 3

• Archive – Stores a snapshot of the bidder price and delivery condition values into special tables. This archive can be used to document the development of prices in the course of the negotiation process with the supplier.


Detailed Workflow

• Approve – Once a quote has been approved, it cannot be modified any longer. You must have permissions for quote approval to approve a quote. After approval, the quote is colored light green. Without approval, no further actions in the downstream processes are possible.

• Reverse Approval – The approval of a quote can only be reversed as long as no order and/or no PO requisition has been created based on the quote. If a quote does not fulfill these prerequisites or if a quote has not been approved, this check box cannot be set.

• PO Req – For requisitions for inquiry only, PO requisitions based on the results of the commercial bid evaluation process can be created. This is only possible if the quote has been approved. Also, this function is only available if the MTO job used for the creation of inquiry requisitions based on the quote has never created a purchase requisition.


Detailed Workflow


Manage Quote Detail Information To view quote detail information, double-click on the bidder1 on the Quote Summaries screen. Each bidder has its own quote detail information.

Within the quote detail information screens, the following information can be entered:

• Quote Details – Quote detail quantities, prices, weights, and delivery conditions such as incoterms are available for insert or verification if they have been updated by an import or by the bidders’ web access.

Picture 4

Double-click on Ident code or Seq to open window3. Quote details other than cost can be managed here. They cannot be prepared with the RFQ preparation. Only other cost for the header can be prepared at the RFQ level.

Create Alternate copies the actual quote detail and marks the field Alt. Each new Alternate created receives the next sequence value for Alt. An alternate in SmartPlant Materials represents an alternative material which in the bidders view would be a possible replacement for the originally requested material. The alternative material might be cheaper or better, or the originally requested material is not available. In order to provide the alternative description for it, the attribute can be used, which is assigned to project default ZP_DEVATTR.

1 The field in SmartPlant Materials is called Supplier, but for correctness in the process it should be defined as Bidder.

Detailed Workflow

In the best practice database, this attribute is DEVIATION with the label Alternate. With the CWS functionality to visualize attributes, the alternate description can be made visible and inserted directly.

Picture 5

Check Split and the current quote detail is copied. It is the user’s responsibility to verify the quoted quantities against the total required quantity. This option allows the user to insert different prices for different deliveries for the same quote detail.

• Other Costs – Quote header other costs can be managed here. The other costs prepared on the RFQ are visible here.

• Attachments – Attachments can be assigned here to the quote header level. The attachments are inherited from the requisition or from the RFQ preparation. Additional attachments can be inserted here.

Picture 6


Detailed Workflow

• Prog Pay Events – Contractual payment events can be assigned or viewed if they were created via the RFQ preparation.

Picture 7

• Cancellation Costs – Cancellation costs can be inserted for each line item depending on a number of weeks following an action, for example, after a PO is issued. These values can be used for reports or CIP calculation. SmartPlant Materials standard functionality does not process these values in the downstream processes.

• Price Agreements – Assign price agreements to a quote and apply these prices to the quote details.

• Files – An additional feature to attach documents as files to line items.

• Orders – Displays order information, which is created from the actual quote detail.

Picture 8


Detailed Workflow

• History – Shows the price history for the current quote detail. The history is created by selecting ARCHIVE on the Quote Summaries screen.

Picture 9


Detailed Workflow

Manage Quote Summary Status The quote summary status is available in the tab screen of P30.22. In this screen the progress of the negotiation with the bidder is documented.

Picture 10

All values entered in this screen have NO direct influence on downstream processes in SmartPlant Materials. These fields are used for documentation of the negotiation progression.

Assign Commercial Evaluation Complete Status The Commercial Evaluation screen has two sub pages:

• Overview – Shows at a glance the current status of the commercial evaluation and allows the user to mark a bid as evaluated completely by selecting the check box CE Passed. This is a prerequisite to assigning positions to a supplier in the Awarding screen. After at least one item for a quote has been selected in the awarding screen, the commercial evaluation cannot be updated any more.

Picture 11


Detailed Workflow

• Checklists – Shows the previously assigned checklists for commercial evaluation of all bidders. This can be checked and comments added one by one. If the CE Passed check box in the Overview is checked, all checklists are marked as checked as well.

Picture 12

Award (Select) Supplier(s) The Awarding screen provides a view of all bids from all bidders in a tabulation screen format. This is the only place in SmartPlant Materials where this selection can be executed.

Visible are quote details with their line item costs. All costs are shown for the currency of the inquiry. The quote details with the lowest costs are marked green.

By selecting Best Bid, the quote details with the least costs are selected automatically. This is called “Cherry Picking.”

At the bottom of the screen, the price index is shown. The cheapest bidder for the entire quote receives a price index of 100. For all nearer quotes, the price index is calculated.

In addition to the best bid functionality, SmartPlant Materials provides other processes to select a bidder.

• Selection of single quote details to a bidder – Double-click on any matrix fields 1 to 7, which is for example unit price or extended price. To deselect a position so it can be assigned to another bidder, double-click a second time. Or, right-mouse click on the shortcut menu and select Reset selection.


Detailed Workflow

• Selection of all position for one bidder – Double-click on any of the header fields, for example, the supplier or company fields. Or, right-mouse click on the shortcut menu and select Reset selection.

Picture 13

Positions can only be assigned to a bidder if the following prerequisites are fulfilled:

• The supplier has returned a bid.

• The quote has not been rejected.

• The quote has not been approved.

• The commercial evaluation has been performed.

• The technical evaluation has been passed in case it is required.

• The position has not been assigned to another bidder whose bid has already been approved.

You must have permissions to allow awarding to award positions.

To visualize the different price situations for line items, many different colors are used. A short legend can be seen at the bottom of the folder. The first colors apply to the matrix header fields, the last ones to the matrix body fields. If you wish, you can use functions get_line_mark and get_sum_line_mark found in package m_pck_quote_custom to visualize a special condition.


Detailed Workflow

Double-click Alt to select alternate quote detail. This opens a sub screen. Here the Alternate or the original line item can be selected. Select the Sel check box.

Picture 14


Detailed Workflow

The awarding for all quote details split to the two bidders is shown in the next screen.

Picture 15


Detailed Workflow

Approve the Selection After all quote details have been awarded to bidders, the bid(s) can be approved on the Quote Summaries screen. In this example, the inquiry has been split to two bidders; this means both quotes have to be approved.

Picture 16

Click OK. Approved quotes are displayed in light green.

Picture 17


Detailed Workflow


Due to the fact that the requisition used as a basis for this inquiry was an inquiry only requisition, no direct purchase order can be created from the approved quotes. The available downstream process options are:

• Create blanket order from quote – For more information, see the document How to Create a Blanket Order.

• Create purchase requisition from quote

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