ACO MM TBP 15 Purchasing Process - Sub-contracting-V3

TBMM15-Purchaising-process sub-contracting

To Be Process

Purchasing process Sub-contracting

V2-TBMM15 - Purchasing Process - sub-contracting-v2

Table of content

21.1Document updates and validations

2Scope22.1Process scope description22.2Application architecture (global)32.3Cross references33Process43.1Core model - process flow and description43.1.1General Warehouse products43.1.2Raw glass, PVB / Functional interlayers and Glass products73.2Country or customer specific - process flow and description103.2.1Principle specific process Flow Sales / Purchasing principle103.2.2Country specific process Flow Italy113.2.3Country specific process Flow Spain123.2.4Components stocks adjustments124Business Rules134.1Core model Business rules134.2Country or customer specific Business Rules135Key elements of system implementation135.1Core model Key elements of system implementation135.1.1General Warehouse products135.1.1.1Pre-requisites : Master data and customizing145.1.1.2Steps of the process145.1.2Raw glass, PVB / Functional interlayers and Glass products165.1.2.1Pre-requisites : Master data and customizing165.1.2.2Steps of the process185.1.3Components stocks adjustments195.2Country or customer specific Key elements of system implementation205.2.1Country specific process Flow Germany205.2.2Country specific process Flow Italy205.3Summary206Organizational roles and impacts217Application specific development requirements218Key volume & performance indicators229Added value for the Business and economical considerations22

1.1 Document updates and validations

The table below lists all modifications and updates done on the considered document. Fill in Date, Author and a summary of the documents update content, reason and/or objectives.

Updates

DateVersionAuthorComment

04/06/02V0C. HemeryDocument creation

10/10/02V1C. HemeryV2 document creation

23/10/02V2C. HemeryDocument completion

20/10/02V3J.A. SanzDocument completion

01/02/05

V2

S. BlanchardDocument revision

V3S BlanchardDocument validation

24/08/05V3C. ChoubardDocument update- Roll Out Italy

The table below lists all the successful validations done on the document ; if the document was asked for validation but not validated then there is no entry in this table (status by default is OK).

Validations

DateVersionValidation Resp.Comment

2 Scope

2.1 Process scope description

This document describes the sub-contracting flows, i.e. value added on our products by an external vendor, managed in the business processes of the countries in Sekurit Avenir solution.

It concerns all types of plants : glass plants, extrusion / encapsulation plants and Service Centers.

Sub-contracting applies to :

General warehouse products, with sub-contracting from external vendors : for example, connectors assembly to prepare pre-assembly phases

Glass products, with sub-contracting from external vendors : for cleaning, encapsulation / extrusion, quality control,

Raw glass and PVB products, with sub-contracting from group vendors : for example, PVB rolls drawn by SGSD for SGSIt, or raw glass cutting by a subcontractor for SGSIt.In some cases, the finished product is delivered to the purchasing plant, the same which provided the sub-contractor with the components. In other cases, the finished product is delivered to a plant different from the one which provided the components to the sub-contractor.

While the value addition, the component(s) and the finished product(s) are the ownership of Saint-Gobain Sekurit.

In some cases, a sales-rebuy process to subcontractors can be used. where parts (complete material / added value) that SGS could re-buy to subcontractors for SGS sales to Customers, with direct deliveries from sub-contractors to customers, without any transit to SGS plant.

Out of scope :

( This document does not deal with added value by Service Centers, for glass products, before delivery to the final customer.

( This document does not deal returns to sub-contractors.

Cf. V2-TBIN07 - ReturnsTransition period :

Not relevant.

2.2 Application architecture (global)

We shall distinguish :

The product families Raw glass / PVB, Functional interlayers / glass products : plants and some service centers use CIM+ to manage their stocks. So, purchases are managed in SAP, purchasing documents are sent to CIM+ (via idocs) where goods issues for components and goods receipts for finished products are declared.

Other products of the General Warehouse : SAP is the only application used, for both purchasing and stocks management. And no delivery is declared in SAP.2.3 Cross references

V2-TBMM08Supply - Manage deliveries requests

TBPP13Supply Generate deliveries requests

TBMM09Purchasing process per material type

V2-TBMM13Purchasing process Scheduling agreement

TBMM14Purchasing process Purchase orders

TBMM22Purchasing Document Outputs

TBMM23Purchasing Document Forms

TBIN08Process Shipments

TBIN02Process Receiving

TBMM25General Warehouse Entries

TBMM26General Warehouse Issues

TBPDC04Consumption declaration

3 Process

3.1 Core model - process flow and description

Sub-contracting takes place with an external vendor (not from Saint-Gobain Sekurit, outside Sekurit Avenir solution).

Perimeter This process is used by Sekurit in the following examples :

in France, Belgium and Germany - connectors assembly to prepare pre-assembly phases : several parts are provided to CATs (Centre dAide au Travail) to assemble them into connector parts,

in Spain - quality control on glass products,

in Italy cleaning on glass products,

in Spain undo the encapsulation / extrusion when there is a default to recover the glass product,

in Italy and France - sub-contractor Recticel provides us with encapsulation on glass products,

in Italy sub-contractors Eutostock or MGM provide us with DLFs they cut from PLFs.

The process principle is :

the finished product are ordered from a vendor (sub-contractor),

the components provided to the vendor are specified in the purchasing document,

when the component are sent to the vendor, we still are the owner of the stocks on which we have the visibility,

when the vendor has performed the expected added value, we receive the finished product. At the same time, components consumption is posted.

the vendor invoices the added value performed on the component.

3.1.1 General Warehouse products

Perimeter : This process concerns components that are assembled into connectors. Product types are :

HIBE for consumable parts,

ERSA for spare parts, STRA for strategic part.Remark : this flow is currently only used in Germany and France (SVE) for parts assembly. Belgium would also use it.

Pre-requisites to this flow are described below but will also be detailed in part 5.1.1.1.

This sub-contracting flow can be described as follows :

Step 1 : MRP calculationsCf. V2-TBMM08 Supply - Manage deliveries requestsMRP calculations : a job is planned to run every day for the Strategic material (included in the BOM), and for the others materials (ERSA, VERP and HIBE). It compares the needs, the stocks and the outstanding purchases or planned orders to the requirements, to trigger if required a planned order or a purchasing document.

To determine whether the product is produced and / or purchased, master data are used (material, source-list, quota arrangement).

If the product is purchased through purchase orders, MRP triggers automatically the creation of a purchase requisition,

If the product is purchased through a scheduling agreement, MRP creates or changes automatically delivery schedules.

Responsible : MRP results (automatic calculations) are analyzed by the Purchasing Department.

Step 2 : Purchase validation :

If the product is purchased through purchase orders, the purchase requisition is to be transformed into a purchase order.

Outputs :( Printout : The purchase order is printed and can be sent to the sub-contractor : it contains both components and finished product data.

It is sent either by letter or automatically faxed. If the product is purchased through scheduling agreements, delivery schedules can be checked and if required, changed manually.

Outputs :( Printout : the delivery schedule can be printed and sent to the vendor.

It is sent either by letter or automatically faxed.

For spot sub-contracting needs, a purchase order can also be directly created in the system, though no requirement was determined through MRP calculations.

Responsible : Purchasing Department.

Step 3 : Sub-contractor provided with the required components.

Physically, components are sent to the sub-contractor.

In the system, no shipping is treated, a manual delivery note is prepared and joined to the loading. There is a stock transfer declaration to issue the component (transfer from our stock to a Matl prov. to vendor stock status). We then have the visibility on stocks in SAP, per sub-contractor.


Step 4 : delivery by the vendor.

Out of our system : the sub-contractor delivers the finished product once the added value has been performed.

Responsible : sub-contractor.

Step 5 : Goods receipt

The goods receipt of the finished goods is performed referring to the Purchasing document : the component consumption is posted.

Responsible : Warehouse receiver.

Step 6 : Billing by the vendor

Out of our system : the sub-contractor emits an invoice for the added value.

Responsible : sub-contractor

Step 7 : Invoice verification

The accounting department performs the invoice verification when receiving the previous bill, based on the finished products goods receipts.

If there is a gap between the invoice and the expected invoice, on the price or on the quantity, the rule is to post the vendor invoice in any case. It is posted with the price / quantity difference if there is one, and the purchaser decides to ask for a credit memo or not.

Responsible : Accounting department

3.1.2 Raw glass, PVB / Functional interlayers and Glass products

Perimeter : This process concerns glass products for which there is sub-contracting for :

Quality control on semi-finished and finished products,

Cleaning on semi-finished and finished products,

Extrusion / Encapsulation on semi-finished and finished products,

Undo the encapsulation / extrusion on semi-finished and finished products,

Cutting on PLFs Product types are :

FER1 for semi-finished and finished glass products,

STRA for strategic part PVB / Functional interlayers and raw glass. .=> In fact, its not possible to use the same way of work for PVB and raw glass than for FER1, because the STRA materials cannot be issued thanks a normal subcontracting delivery (due to the fact that they are not tradable, they dont have sales views) So, the process is described hereafter as a specific process flow. Pre-requisites to this flow are described below but are also detailed in part 5.1.1.

This sub-contracting flow can be described as follows :

Step 1 : represents the customer need or the Production Planning requirements.

Customer requirements can be stored in a sales order for an external customer, or in a purchase order for an internal customer (inter-company or intra-company).

Production planning requirements are stored in the Production Planning, which is calculated outside SAP but automatically integrated in SAP once a week.

Responsible :

Customer requirements are keyed in either manually by the demand forecaster or automatically through EDI messages,

Production planning requirements are automatically integrated into SAP.

Step 2 : MRP calculations

MRP calculations : a job is planned to run every week. It compares the needs, the stocks and the outstanding purchases or planned orders to the requirements, to trigger if required a planned order or a purchasing document.


The product is purchased through a scheduling agreement, MRP creates or changes automatically delivery schedules.

Responsible : MRP results (automatic calculations) are analyzed by the MRP controller / Demand Forecaster.


The product is purchased through scheduling agreements, delivery schedules can be checked and if required, maintained manually.

Outputs :

( Printout : The delivery schedule can be printed and sent to the sub-contractor : it contains both components and finished product data. It is sent either by letter or automatically by fax.

For spot sub-contracting needs, a purchase order can also be directly created in the system, though no requirement was determined through MRP calculations.Responsible : Demand forecaster.

Step 4 : The demand forecaster then treats the SC monitoring stocks for vendor list and creates a delivery note in SAP for the component. This delivery is created referring to the purchasing document.

Cf. TBIN08 Process shipments.This delivery is sent to CIM+ to be treated.

Output : each time a delivery order is created or changed (before it was finished to be treated in CIM+) and if the shipping plant uses CIM+, it is automatically sent to the shipping plant CIM+ system via an idoc.

Responsible : Demand forecaster / Deliveries manager.

Step 5 : Delivery treatmentCf. TBIN08 Process Shipments If the shipping plant uses CIM+, the delivery is treated in CIM+ for Picking and Goods issue. Once treated, an idoc is sent to SAP to post Picking and Goods issue in SAP.

If the shipping plant does not use CIM+, the delivery is directly treated in SAP. The picking and goods issue are simulated in SAP.

In both cases, the goods issue posts a transfer movement type to decrease the storage location stock and increase the sub-contracting vendor stock. We have the visibility on component stocks in SAP not in CIM+ - per sub-contractor.

Responsible : Demand forecaster / Deliveries manager.Step 6 : Delivery by the vendor.




Cf. TBIN02 Process ReceivingThe goods receipt of the finished goods is performed referring to the Purchasing document and purchasing document item.

If the receiving plant uses CIM+, the finished products goods receipt is performed in CIM+. Output : once the received truck is closed, an idoc is posted to SAP to update stocks and the purchasing document history. If the receiving plant uses only SAP, the goods receipt is declared directly SAP.

This goods receipt movement triggers automatically a component consumption movement.






The accounting department performs the invoice verification when receiving the previous bill, based on the finished products goods receipts.


Responsible : Accounting department3.2 Country or customer specific - process flow and description

3.2.1 Principle specific process Flow Sales / Purchasing principle( Sub-contracting flows where components are sold to the sub-contractor, who sells us back the finished products.

Perimeter : This process concerns glass products for which there is sub-contracting for Extrusion / Encapsulation on semi-finished and finished products.

For instance :

Fritz in Germany,

SPI in France.

Product type is FER1 for semi-finished and finished glass products.

The process flow can be split into two phases :

1. Component sales to the sub-contractor

All these steps are detailed in the relevant To Be Process :

Material, customer and customer material information : Cf. TBSD02 SD master data Sales scheduling agreement : Cf. TBSD09 Scheduling agreement management Step 1 : Cf. TBSD09 Scheduling agreement management Steps 2 and 3 : Cf. TBIN08 Process shipments Step 4 : Cf. TBSD20 Standard billing processing.2. Finished product purchase from the sub-contractor

All these steps are detailed in the relevant To Be Process :

Material : Cf. TBMM02 Material master Vendor : Cf. TBMM03 Vendor master Info-record, source-list and quota arrangement : Cf. TBMM04 Purchasing master data Purchasing scheduling agreement : Cf. TBMM13 Purchasing process - Scheduling agreement Step 5 : Cf. TBIN02 Process goods receipt Step 6 : Cf. TBMM32 Invoice verification.In case of a Sales-rebuy process, steps are :-Create the stock reception from the right purchasing scheduling agreement in storage location *80-Create the SD delivery note and do the picking and the goods issue in storage location *80(see ACO_SD_UGD_04 Sales-rebuy process to subcontractors)3.2.2 Country specific process Flow Italy( Raw Glass : sub-contracting flow between two companies

Savigliano glass plant is not equipped for PLFs cutting.

First flow: For some glass types, SGSIt orders PLFs to SGGx, that are directly delivered to sub-contractors.These sub-contractors (currently M.G.M. and Eurostock) cut PLFs into DLFs, which are then delivered to SGSIt.So,

specific process flow( PVB : sub-contracting flow with direct delivery to the sub-contractor

Savigliano glass plant is not equipped for PVB rolls drawing.

SGSIt orders PVB rolls to Solutia that are directly delivered to SGSD (Stolberg). SGSD draws these rolls, which are then delivered to SGSIt.

A proposal to be confirmed for Italian Roll-out - is to manage this flow with a purchasing / sale principle :

PVB roll purchased by SGSD

PVB roll consumption declaration / drawn PVB roll production declaration in SGSD

Sales flow for drawn PVB roll by SGSD to SGSIt

Purchasing flow from SGSIt of drawn PVB rolls.

( ReturnsA problem was raised by Italy further to this sub-contracting flow : vendor returns. There is currently no possibility to create a delivery order and treat it in CIM+ to send the finished products back to the vendor.

However, two cases should be distinguished :

1. return to vendor when he is responsible for the problem. Return of the finished products, a credit memo and a new finished products goods receipt are expected.

2. Return to vendor for re-engineering (usually cleaning). Return of the finished products a new finished products goods receipt is expected, but the vendor should invoice again the service.

The first case is being studied, a solution should be purposed.

The second case was solved using a SD customer consignment flow.

Cf. TBIN07 Process returns3.2.3 Country specific process Flow Spain( Devisa : sub-contracting flow for recovery

Within the production line, if quality detects an extrusion / encapsulation defect, products can be recovered by removing the extrusion / encapsulation materials. It is performed by a sub-contractor.

This sub-contractor physically takes the products, removes the extrusion / encapsulation materials them and put them back in our stock.

It was decided to manage this flow manually, without using CIM+ and SAP. A manual delivery note is created.

( Arbo : sub-contracting flow for repair or cleaning

After control, if quality decides that a cleaning or a repair is necessary on products, it is performed by a sub-contractor. The production department determines an hourly productivity, and the purchasing department determines a unitary piece price.

This sub-contractor physically takes the products, cleans or repairs them and put them back in our stock : component = finished product.

The purchasing department maintains a purchase order, for a generic article for the provision of service, referring to which the sub-contractor invoices are saved.

It was decided to manage this flow manually, without using CIM+ and SAP. A manual delivery note is created.

3.2.4 Components stocks adjustments

As detailed before, components stocks are visible in SAP, once they have been provided to the sub-contractor. These stocks are updated during the process in two ways :

placement at the sub-contractors disposal with a movement type 541,

consumption triggered by an automatic movement when receiving the finished product, with a movement type 543. This consumption is based on the quantities declared in the BOM, taking into account the required quantity + yields if known.

So, in the end, the component stock at the sub-contractors is theoretical, it is not adjusted with the real sub-contractor production yields.

That is the reason why an inventory should regularly be performed at the sub-contractors. Once the physical component quantities are known, sub-contracting stocks are adjusted in SAP.

4 Business Rules

4.1 Core model Business rules

( For every product, i.e. every flow, it is possible to choose to use purchase orders or a scheduling agreement. It is defined in purchasing master data per product.

For regular flows such as the ones on PVB, raw glass and glass products, scheduling agreement will be used.

For spot needs such as the ones on assembled parts, purchase orders will be used.

( Stocks at the sub-contractors

The stocks that are visible in SAP are theoretical stocks, based on

component quantities provided to the sub-contractor,

Bill of material determining the component quantity per finished product,

Finished product quantities received.

At least an annual inventory should be performed at the vendors and / or a monthly report sent by the vendor - to check these stocks.

( Languages : whichever is the communication language with the vendor, purchasing documents are printed in the language of the purchasing company.

( Prices management

For current flows, prices are yearly negotiated. These prices are the value addition value, and include the sub-contractor service plus the additional components.

Sub-contracting prices for spot needs are negotiated when required.

4.2 Country or customer specific Business Rules

( Spain - Invoice verification : as for purchases in General Warehouse, ERS (Executive Receipt Settlement) could be used for national vendors. For instance, for flows between companies SG Cristaleria and Saint-Gobain Devisa.

Use of standard/ logistics or ERS invoice verification mode is determined through vendor master data.

5 Key elements of system implementation

5.1 Core model Key elements of system implementation

5.1.1 General Warehouse products

For the general warehouse products, it was defined not to use the SD delivery functionality to send the semi-finished products to the vendor. So, deliveries are treated manually, out of the system.

5.1.1.1 Pre-requisites : Master data and customizing

Please refer to pre-requisite scheme in part 3.1.1.( Material

Component and Finished material descriptions should be maintained in the vendor language

Finished material : on the receiving plant, MRP2 view,

set the Procurement type to F for External procurement. This is necessary for the MRP, to create a purchase requisition or a schedule line

set the Special Procurement to 30 for sub-contracting.

( Vendor Check in the Communication data that the language key is the good one

( Info-record Created in the sub-contracting info-record category.

The purchasing price stands for the added value valorization.

( Bill of Material - BOMFor recurrent sub-contracting flows, a bill of material is maintain to list, for a finished product on a plant, the component(s) with the required quantities.

( Scheduling agreementIf used (if chosen for general warehouse products), the scheduling agreement is created as a pre-requisite. For it to be fed by MRP calculations, it has to be created in SAP before the MRP calculations.

A document type LP is created, for one or several products. Sub-contracting items are created with a L item category, which stands for sub-contracting : it requires one or several components for the finished product. If existing, it uses the BOM content, and if not existing, the component(s) are to be filled in manually.

Cf. V2-TBMM13 Scheduling Agreement( Source-list The validity period should be correct, not to block MRP calculations,

Fill in the vendor number,

If working with a scheduling agreement, fill in the agreement and agreement item numbers,

Flag the Fix source of supply indicator so that the MRP can trigger the purchase automatically,

Fill the MRP column with 1 if working with purchase requisitions and purchase orders, with 2 if working with a scheduling agreement.

To be confirmed by CO : how is the CO/PA characteristic Tool / Supplier fed ?

( Quota arrangement The validity period should be correct, not to block MRP calculations,

if the product is possibly produced and supplied at the same time or it is purchased to 2 vendors at the same time, quota arrangement items should be maintained.

Rem : quota arrangement can only be maintained once the source-list has been maintained.

5.1.1.2 Steps of the process

Please refer to process flow scheme in part 3.1.1.Step 1 : MRP calculationsCf. V2-TBMM08 Supply - Manage deliveries requestsMRP calculations : a job is planned to run every week for the Strategic material (included in the BOM), and once a day for the others materials (ERSA, VERP and HIBE). It compares the needs, the stocks and the outstanding purchases or planned orders to the requirements, to trigger if required a planned order or a purchasing document.


If the product is purchased through purchase orders, MRP triggers automatically the creation of a purchase requisition document type NB, item category L for sub-contracting

If the product is purchased through a scheduling agreement (document type LP), MRP creates or changes automatically delivery schedules.

The MRP result is analyzed transaction MD04.

Responsible : MRP results (automatic calculations) are analyzed by the Purchasing Department.


If the product is purchased through purchase orders, the purchase requisition is to be transformed into a purchase order : document type LB item category L for sub-contracting.

Outputs :( Printout : The purchase order is printed and can be sent to the sub-contractor : it contains both components and finished product data.

Printing orders (message type ZNEU the message type determines the output type per purchasing document : printout, fax, EDI message, idoc and the form) are defined per Purchasing Group.


Transactions ME58 or ME59

If the product is purchased through scheduling agreements, delivery schedules can be checked and if required, maintained manually.

Outputs :( Printout : the delivery schedule can be printed and sent to the vendor.

Printing orders (message type ZLPE) are defined per Purchasing Group.


Transactions ME38 or ME39

For spot sub-contracting needs, a purchase order can also be directly created in the system, though no requirement was determined through MRP calculations.

Transaction ME21


Step 3 : Sub-contractor provided with the required components.

Physically, components are sent to the sub-contractor.

In the system, no shipping is treated, a manual delivery note is prepared and joined to the loading. There is a stock transfer declaration to issue the component (transfer from our stock to a Matl prov. to vendor stock status) : a 2-steps movement type

- 541

on plant / storage location

+ 541 (O) on plant

The O stock type is dedicated to sub-contracting.

Transaction MB1B

We then have the visibility on stocks in SAP, per sub-contractor - transaction MMBE.


Step 4 : delivery by the vendor.




The goods receipt of the finished goods is performed referring to the Purchasing document : the component consumption is posted.

The finished products goods receipt is performed using transaction ZB01, movement type 101. This goods receipt movement triggers automatically a movement type 543 (O) for the component consumption.






The accounting department performs the invoice verification transaction MRHR - when receiving the previous bill, based on the finished products goods receipts.


The invoice document type is RE.

Responsible : Accounting department

5.1.2 Raw glass, PVB / Functional interlayers and Glass products

It was defined for logistics to use the SD delivery functionality to send the semi-finished products to the vendor. If the concerned plant / service center works with CIM+, the delivery will be treated in it, else it will be treated in SAP.

5.1.2.1 Pre-requisites : Master data and customizing

Please refer to pre-requisite scheme in part 3.1.2.

( Material

Component material should be created in the Sales Organization concerned, on Distribution Channel CO and GR Component material : the delivery data in view Sales: General/Plant Data, including the Transportation group and the Loading group

Component and Finished product descriptions should be maintained in the vendor language

Finished product : on the receiving plant, MRP2 view,

set the Procurement type to F for External procurement. This is necessary for the MRP, to create a purchase requisition or a schedule line.

Set the Special Procurement to 30 for sub-contracting

( Vendor Check in the Communication data that the language key is the good one

As we need to deliver goods to the vendor, it also has to be declared as a customer. The two account numbers should be linked through the field Customer in the Control data view.

( Bill of materialIf the bill of material is fixed, it is created in SAP. It enables, for each purchasing document, to have the required component quantity automatically calculated.

For example, if 1 component is needed to produce 1 finished product, and if the ordered quantity (purchase order) or target quantity (scheduling agreement) is 1000, then the component required quantity is 1000.

( Info-record Created in the sub-contracting info-record category.

The purchasing price stands for the added value valorization.

( Scheduling agreementFor it to be fed by MRP calculations, it has to be created in SAP before the MRP calculations.

A document type LP is created, for one or several products. Sub-contracting items are created with a L item category, which stands for sub-contracting : it requires one or several components for the finished product brought from the BOM content.

If the receiving plant works with CIM+, scheduling agreements are sent to the receiving plant CIM+ system using idoc type BLAORD. These idocs is triggered by a XNEU message type, created automatically each time a purchasing document is created or modified.

To make the XNEU message type be automatically triggered, master data are maintained by the CDC with menu path :

Logistics ( Materials Management ( Purchasing

Master data ( Messages ( Purchase order OR Outline Agreement

Access sequence :Condition : Doc type + Purchasing group

Condition : Doc type + Purchasing Organization

Condition : Doc type

Additional remark : when a purchasing document is cleared : blocked or all expected goods have been delivered, an idoc should be sent to CIM+ to clean CIM+ purchasing document database.Cf. V2-TBMM13 Scheduling Agreement

Remark : beware of the item target quantity and the component required quantity.

By default, when creating the sub-contracting scheduling agreement item, the component required quantity is set proportionally to the target quantity (based on the bill of material).

If the target quantity is reviewed (manual modification), the component target quantity should also be changed. If not, components consumption triggered by finished products goods receipts get wrong (problems of this type were encountered in Italy).

( Source-list The validity period should be correct, not to block MRP calculations,

Fill in the vendor number,

If working with a scheduling agreement, fill in the agreement and agreement item numbers,

Flag the Fix source of supply indicator so that the MRP can trigger the purchase automatically,

Fill the MRP column with 1 if working with purchase requisitions and purchase orders, with 2 if working with a scheduling agreement.

( Quota arrangement The validity period should be correct, not to block MRP calculations,

if the product is possibly produced and supplied at the same time or it is purchased to 2 vendors at the same time, quota arrangement items should be maintained.

Rem : quota arrangement can only be maintained once the source-list has been maintained.

( Customer A customer must be created for the receiving plant Account group GRP in the sales area of the shipping plant, in the distribution channel GR,

The customer is also be declared as a vendor. The two account numbers should be linked through the field Vendor in the Control data view

( CustomizingCustomizing is performed to :

Define the Special Procurement per plant : 30 special procurement type is standard and already exist for any plant.

5.1.2.2 Steps of the process

Please refer to process flow scheme in part 3.1.2.Step 1 : represents the customer need or the Production Planning requirements.

Customer requirements can be stored in a sales order for an external vendor, or in a purchase order for an internal customer (inter-company or intra-company).

Production planning requirements are stored in the Production Planning, which is calculated outside SAP but automatically integrated in SAP once a week.

Responsible :

Customer requirements are keyed in either manually by the demand forecaster or automatically through EDI messages,

Production planning requirements are automatically integrated into SAP.


MRP calculations : a job is planned to run every week. It compares the needs, the stocks and the outstanding purchases or planned orders to the requirements, to trigger if required a planned order or a purchasing document.


The product is purchased through a scheduling agreement (document type LP), MRP creates or changes automatically delivery schedules.

Responsible : MRP results (automatic calculations) are analyzed by the MRP controller / Demand Forecaster.


The product is purchased through scheduling agreements, delivery schedules can be checked and if required, maintained manually.

Outputs :

( Printout : The delivery schedule can be printed and sent to the sub-contractor : it contains both components and finished product data. It is sent either by letter or automatically by fax.

Printing orders (message type ZLPE) are defined per Purchasing Group.

Transactions ME38 or ME39 For spot sub-contracting needs, a purchase order can also be directly created in the system, though no requirement was determined through MRP calculations.

Purchase order type NB, with item category L for sub-contracting - Transaction ME21Responsible : Demand forecaster.

Step 4 : The demand forecaster then treats the SC monitoring stocks for vendor list transaction ME2O and creates a delivery note in SAP for the component delivery type LB. This delivery is created referring to the purchasing document but in the purchasing document history or the delivery document flow, the link purchasing document delivery number is not kept. Cf. TBIN08 Process shipments.This delivery is sent to CIM+ to be treated.

Output : each time a delivery order is created or changed (before it was finished to be treated in CIM+) and if the shipping plant uses CIM+, it is automatically sent to the shipping plant CIM+ system via an idoc type DLVRY01. This idoc is triggered by a ZLD9 message type (to be confirmed for new idoc type).

Responsible : Demand forecaster / Deliveries manager.

Step 5 : Delivery treatmentCf. TBIN08 Process Shipments If the shipping plant uses CIM+, the delivery is treated in CIM+ for Picking and Goods issue. Once treated, an idoc is sent to SAP (idoc type WHSCON) to post Picking and Goods issue in SAP.

If the shipping plant does not use CIM+, the delivery is directly treated in SAP. The picking and goods issue are simulated in SAP.

In both cases, the goods issue posted for the delivery triggers the following movement type : a 2-steps movement type :

- 541

on plant / storage location

+ 541 (O) on plant

The O stock type is dedicated to sub-contracting.

We have the visibility on theoretical component stocks in SAP not in CIM+ - per sub-contractor - transaction MMBE.

Responsible : Demand forecaster / Deliveries manager.Step 6 : Delivery by the vendor.




Cf. TBIN02 Process ReceivingThe goods receipt of the finished goods is performed referring to the Purchasing document and purchasing document item.

If the receiving plant uses CIM+, the finished products goods receipt is performed in CIM+. Output : once the received truck is closed, an idoc type WMMBXY is posted to SAP to update stocks and the purchasing document history If the receiving plant uses only SAP, the goods receipt is declared directly SAP, using transaction ZB01 with a movement type 101.A control should be performed on the required products and markets.

This goods receipt movement (movement type 101) triggers automatically a movement type 543 (O) for the component consumption.






The accounting department performs the invoice verification transaction MRHR - when receiving the previous bill, based on the finished products goods receipts.


The invoice document type is RE.

Responsible : Accounting department5.1.3 Components stocks adjustments

As detailed before, components stocks are visible in SAP, once they have been provided to the sub-contractor. These stocks are updated during the process in two ways :

placement at the sub-contractors disposal with a movement type 541,

consumption triggered by an automatic movement when receiving the finished product, with a movement type 543. This consumption is based on the quantities declared in the BOM, taking into account the required quantity + yields if known.

So, in the end, the component stock at the sub-contractors is theoretical, it is not adjusted with the real sub-contractor production yields.

That is the reason why an inventory should regularly be performed at the sub-contractors. Once the physical component quantities are known, sub-contracting stocks are adjusted in SAP.

The procedure is :

Menu pathLogistics ( Materials management ( Inventory management

Goods movement ( Subsequent adjustment ( Sub-contracting

Transaction MB04

Referring to the sub-contracting purchasing document :

a movement type 121 is triggered on the finished product, for a quantity = 0,

and a movement type 543 is triggered on the component, for the quantity = difference between the physical stock and the theoretical stock in SAP.

5.2 Country or customer specific Key elements of system implementation

5.2.1 Country specific process Flow Germany( Document types for invoice verificationFor company AW03 SGSD, invoice document types are used depending on the plant concerned by the invoice :

For an invoice concerning Stolberg (plant 441), invoice document type is R4

For an invoice concerning Herzogenrath (plant 442), invoice document type is R5

For an invoice concerning Torgau (plant 448), invoice document type is R6.

For an invoice concerning Wrselen (plant 422). (Document type to check)

It does not concern companies AW05

5.2.2 Country specific process Flow Italy( Document types for invoice verificationThree document types are used in Italy for invoice verification, depending on the country of the vendor :

If the vendor is Italian, the document type is R3,

If the vendor is European but not from Italy, the document type is R1,

If the vendor is out of Europe, the document type is R2.

5.3 Summary

ActionTransac. / dataComments

Pre-requisites Material

Vendor

BOM

Info-record

Scheduling agreement

Source-list

Quota-arrangement

CustomerMM03

XK03

CS03

ME13

ME33L

ME03

MEQ3

XD03Display material master

Display vendor master

Display Bill of Material

Display purchasing info-record

Display Scheduling Agreement

Display Source-list

Display Quota-arrangement

Display customer

Step 1 : Requirements


Step 3 : Purchase validation

if using Purchase orders

if using a Scheduling agreement

spot needsME58 or ME59

ME38

ME21Transform a purchase requisition into a purchase order

Maintain the delivery schedule

Create a purchase order

Step 4 : Components provided to the sub-contractor

if performed in SAP

if CIM+ is usedMB1B

ME2OGoods transfer

Delivery treating

Step 5 : Delivery treatmentDelivery treatment in CIM+

Step 6 : Finished product delivery by the vendor

Step 7 : Goods receiptGoods receipt in CIM+


Step 9 : Invoice verificationMRHRStandard invoice verification

Components stock adjustmentsMB04Components stocks regularization

IMMM008-Partner determination

IMMM023-Number ranges for purchase orders

IMMM025-Message types

IMMM026-Layout sets per message type

IMMM027-Message determination schemas

IMMM028-Partner roles per message type

IMMM038-Adjustement for movement 543

6 Organizational roles and impacts

( Master data management

As detailed in pre-requisites, master data are very important for sub-contracting flows in the system. Master data maintenance procedures should be synchronized with flows data management procedures.

Master data management procedure scope is :

material types FER1, ZPRO, HLB1, ZNOM - Cf. TBMD03 Product creation process BOMs and routings - Cf. TBPP03 Define Bill of Material Structure and TBPP02 Define rate routing structure. purchasing master data : info-records, source-lists, quota arrangements - Cf. TBMM04 Purchasing master data customer-material informations - Cf. TBSD02 SD master data Flows data management also require :

Vendors Cf. TBMM03 Vendor master data customers - Cf. TBSD02 SD master data sales scheduling agreement for external customer requirements integration through EDI - Cf. TBSD09 Scheduling agreement management purchasing scheduling agreement if chosen - Cf. TBMM13 Purchasing process : Scheduling agreement.7 Application specific development requirements

Specific SAP transaction : the Material stocks between report was specifically adapted for Italy which required to differentiate goods receipt on sub-contracting orders from standard orders. The standard report is obtained with MB5B transaction. The adapted report is obtained with ZMB5B transaction.

Link to AIGD : MM_013_AIGD_Material_stock_with_purchase_order_ZMB5B. Query : report specifically created for Italy, to follow sub-contracting scraps.

Application area : Global area

User group : SGS_MM_USER

Query : STOCK_SCRAP.

Necessary AIG : XNEU message to be triggered when modifying a purchasing document, for a deleted / blocked / finally delivered items.8 Key volume & performance indicators

9 Added value for the Business and economical considerations

EMBED Word.Picture.8

Definitions :

Component : it is the product(s) provided to the sub-contractor, on which the added value is to be performed.

Finished product : it is the product delivered by the sub-contractor after added value.

SGS purchases the added value, i.e. the value difference between the finished product and the component.

12 / 2224/08/05 - 15:08

_1128168883.doc

Master data manager

Material, on receiving

plant

Receiving Plant

ZMATMAS

Pre-requisites

Master data manager

Vendor, on Purchasing

Organization

Master data manager

Sub-contracting

purchase info-record,

on receiving plant

Master data manager

Purchase Scheduling

Agreement, on

receiving plant

Master data manager

Customer, on Sales

Organization

ZCREMAS

ZDEBMAS

Master data manager

Source-list, on

receiving plant

Master data manager

Quota arrangement,

on receiving plant

ZBLAORD

Raw glass, PVB / PET and Glass products

Documents

ACO MM TBP 15 Purchasing Process - Sub-contracting-V3