brite procurement fundamentals. 2 course description during this course, you will learn how the...

BRITE Procurement FundamentalsBRITE Procurement Fundamentals

2BRITE Procurement Fundamentals

Course DescriptionCourse Description

During this course, you will learn how the implementation of the BRITE Procurement process will change, and how it will improve the way business is conducted in SBBC. You will also be introduced to some basic SAP Procurement structures and vocabulary.

Professional Development

Budget

Payroll

Human Resources

Finance

Enterprise

Management

Information

Enterprise

Resource

Planning

OperationsOperations


Course Objectives Course Objectives

After completing this course, you will be able to:

Explain the “To-Be” (future SBBC SAP) business processes

Describe the SBBC SAP organizational structure Describe the use of Master Data in SAP Explain the use and structure of various purchasing

documents in SAP Describe functions that are executed after the

procurement process is complete


Key Purchasing TermsKey Purchasing Terms

Purchasing Organization

An organizational unit within purchasing responsible for the procurement of goods and services (will always be SBBC)

Plant Location where goods are received

Purchasing Group

A letter code used to identify a specific person (buyer) responsible for the purchase of goods and services


Terms GlossaryTerms Glossary

SBBC Term SAP Term

Approval Process Release Strategy

(A set of business rules used to evaluate a requisition line item to determine the type of approvals needed before it can be released to Procurement)

Approval Status (RAI) Release Status

(The list of approvals a requisition has received and any still required)

Budgetkeeper or Bookkeeper

(The person who ordered goods/materials)

Requisitioner (New Role)

(The person who creates a requisition)

Line of Coding Account Assignment

(When creating an SAP requisition, account assignment means charging the goods and/or services to a specific cost center and G/L account)

Warehouse, Stockroom and grouping of Schools/Departments

Plant

(Anywhere stock is managed or valued material is kept)

Warehouse W Number; Textbook Item Number; Stockroom Stock Number

Material Number

(A unique identifier for an item number)


Key Improvements: Need to ReceiptKey Improvements: Need to Receipt

Current State Future StateItems maintained in multiple systems

One central location/database for all materials used

Material data is entered by Data Strategy Group only

Material data is consistent with no duplication

Vendor creation is done by A/P and Purchasing department; vendor grouping is manually assigned

Centralized vendor creation with identifiable vendor types

Usage of partner functions to link vendors with same parent company

Consistent data with no duplication

Separate transactions are used for internal and external requisitions

Internal and external requisitions will use the same system and same transaction

Future StateFuture StateCurrent StateCurrent State

For those who already do purchasing, this is an overview of the changes coming.



Current State Future StateSelect items requires system receipt

Materials, with very few exceptions, will require system receipt in both schools and departments

Goods receipt required for invoice payment

Attached lists were widely used for purchases

Electronic attached lists allowed for purchases of 25 non asset line items or more in one requisition

Purchases of 24 line items or less will require itemization

Provides better data collection of purchasing history

Allows for electronic record of attached materials list

No goods receipt, signed invoice for payment processing





Current State Future StateCatalog Content Manager currently doesn’t exist

Catalog Content Manager allows “point and click” selection of materials to be purchased

Facilitates selection of materials on contract Automatically populates requisitions once

material is selected

Primary approvals are automatically routed, secondary approvals are handled manually

System automatically routes request to appropriate approver

Secondary approvals, if required, are also automatically routed

Overnight creation of paper PO with multiple copies

On-demand creation of PO PO immediately available once created Able to e-mail or e-fax PO Electronic record of PO



Organizational StructureOrganizational Structure


Unit ObjectivesUnit Objectives

After completing this unit, you will be able to:

Describe the SBBC Organizational Structure Explain the usage of Purchasing Groups in SAP


Organizational StructureOrganizational Structure

The companycode andPurchasingOrganization will always be SBBC.

All buyers have a Purchasing Group

Letter.

There are sevenplants within the

organization.Each Plant has various

storage locations some of which may/may not contain inventory – e.g. Plant 1000

(schools/departments) do not have inventory in SAP


Purchasing GroupPurchasing Group

The SAP term for Buyer Code is Purchasing Group. Commodities will be assigned to Purchasing Groups within the SBBC purchasing organization

Each Buyer in SBBC has a Purchasing Group letter, which allows them to manage their Requisitions and Purchase Orders more effectively

Purchasing Master DataPurchasing Master Data



After completing this Unit, you should be able to:

Define key terminology related to SAP Master Data Explain the concept of Master Data in SAP Describe the purpose of a Material Master Record


Material Master RecordsMaterial Master Records

The following information is essential to understanding the tasks discussed in this unit:

– Material Master Records contain information about a material that rarely changes (such as description, unit of measure, etc.)

– Material Master Records can be incorporated as default data in transactional documents such as RFQs (Request for Quote) and Purchase Orders


Material Master RecordsMaterial Master Records

A Material Master Record:

Is the central repository for all details about a material number (description, dimensions, purchasing group, etc.)

Eliminates the need for redundant data entry

Reduces the likelihood of duplicate material numbers


Material Master Records (cont’d)Material Master Records (cont’d)

There are six types of Material Master Records:

– Stock materials: Items stocked at the central warehouse or the textbook warehouse

– Food: Commodity materials managed at the external food warehouse

– Spare Parts: Spares used by Physical Plant Operations and Transportation

– Non-Valuated Materials: Items stored in B-stock and student assessments

– Non-Stock Items: Materials whose quantity will not be inventoried and will support purchasing functions

– Services: Services ordered by schools and departments


Material Master Record Data FlowMaterial Master Record Data Flow

Material MasterRecord

Purchase Requisitions

ContractsRequests for

QuotationPurchase

OrdersInvoices

The Material Master Record can be used as input for any of the Purchasing Documents shown above.

Purchasing Purchasing DocumentsDocuments



After completing this unit, you will be able to:

Describe the procurement process flow Describe the structure and use of a Purchase Requisition Describe the Catalog Content Management (CCM) process Name the three types of Purchase Requisitions Describe the Requisition approval process Describe the structure and use of:

– Requests for Quotations– Quotations– Purchase Orders


Procurement Process FlowProcurement Process Flow

Data Strategy Group Creates

Purchasing Master Data

Requisitioner Creates

Purchase Requisition

Site Administrator

Approval

Buyer Creates RFQ (if necessary)

Buyer Maintains Quotations (if

necessary)

Buyer Creates Purchase Order

Recipient Performs Goods

Receipt

Accounts Payable Pays

Invoice


Requisitions Requisitions

All Requisitions have three (3) sections:

Header – Contains a “Text” tab where internal information can be entered

Item Overview – Shows an overview of all the line items on the Requisition

Item details – Shows detailed procurement information about one particular line item. There is an item details section for each item on the Requisition


Purchase RequisitionPurchase Requisition

Header

Item Overview

Item Details


Types of Purchase RequisitionsTypes of Purchase RequisitionsThere are three types of Purchase Requisitions:

Standard Requisition– Used for external procurements– Can be entered line by line or via Catalog Content Management

(CCM)– Can be entered with or without reference to Material Master Record

Framework Requisition– Used for External procurements– Will be created using an attached list for orders with 25 or more

lines items– Cannot be used for assets

Stock Transport Requisition– Are used for internal procurements (from the warehouse)– Will always be entered via Catalog Content Management (CCM)


Account Assignment CategoriesAccount Assignment Categories

Each line item on a requisition must have an account assignment category. SBBC will use the following categories:

– Inventory– Asset– Cost Center– Project– Grant


What is Catalog Content Management?What is Catalog Content Management?

Catalog Content Management (CCM):

Is a web-interface that allows end-users to search for and order standard catalog items from established suppliers with active contracts

Allows end-users to select materials by pointing and clicking

Allows end-users to create a Requisition in SAP directly from an on-line shopping cart

Reduces data input errors and redundancy


CCM RequisitionsCCM Requisitions

Click the “Catalog”

icon to access the

on-line catalog.

Catalog Icon


Catalog Content ManagementCatalog Content Management

CCM allows “point and click” selection of materials to be purchased


Requisition ApprovalsRequisition Approvals

Two levels of approvals are required during normal operations depending on the materials procured. – Level: Principal/Department Manager/Supervisor approval. – Level: Only certain material groups need second level

approval. These material groups will be automatically routed to 2nd level approvers in areas such as Curriculum, Technology, Textbooks, and Food Service. (Food Service items approval will only be for Stock Transport Requisitions involving small equipment obtained from the Central Warehouse).

During a budget freeze an additional level of approval will be required on all purchases, both internal and external with the exception of Food Services and Grant-related, non-asset items. This approval will be done by the district Executive Leadership Team.

1st1st2nd2nd


Request for Quotations (RFQs) and QuotationsRequest for Quotations (RFQs) and Quotations

RFQs and Quotations:

Are initiated by purchasing (rather than schools and departments) after a requisition is approved

Facilitate easy on-line quote comparison and vendor selection

Can be used to create purchase orders and contracts


Purchase OrdersPurchase Orders

Purchase Orders:

Are created directly from requisitions or quotations in SAP

Can be created manually by a buyer or automatically by SAP (when a contract exists)

Are transmitted to vendors via e-mail or e-fax. Hard copy PO’s are sent only when a vendor has no e-mail or fax capability


Purchase OrdersPurchase Orders

Just like the Purchase Requisition, All Purchase Orders have three (3) sections:

Header – Contains information applicable to the entire Purchase Order

Item Overview – Shows an overview of all the line items on the Purchase Order

Item details – Shows detailed procurement information about each line item.



You should now be able to:

Describe the procurement process flow Describe the structure and use of a Purchase Requisition Describe the Catalog Content Management (CCM) process Name the three types of Purchase Requisitions Describe the Requisition approval process Describe the structure and use of:

– Requests for Quotations– Quotations– Purchase Orders

Goods Receipt and InvoicesGoods Receipt and Invoices



After completing the unit, you will be able to:

• Define key terminology• Determine Requisition status• Describe the Goods Receipt process• Explain the Three-Way and Two-Way match processes• Describe the structure and use of invoice documents in

SAP


Key TermsKey Terms

Three Way Match Match between the Purchase Order, amount received and the amount on the invoice

Goods Receipt A document created in SAP when goods have been received


Goods ReceiptGoods Receipt

The Goods Receipt process:

Is executed when material is received against a purchase order

Results in the creation of a material document that acknowledges the receipt of goods and allows the invoice to be paid

Updates stock balances and purchase order history


Material Document – Goods Receipt OverviewMaterial Document – Goods Receipt Overview

The Material Document shows

details about all the line items

included in the Goods Receipt.


Goods Return Goods Return

The Goods Return process is executed:

When material is to be returned to the vendor after a goods receipt has been executed in SAP

Allows material returns to be tracked Automatically adjust inventory balances


Three-Way Match Three-Way Match

A Three-way Match means that the Purchase Order, the Invoice, and the Goods Receipt all match, both in terms of quantity and price

The three-way match principle applies to all PO’s except Framework PO’s


Two-Way Match Two-Way Match

A two-way match means that the Purchase Order and the Invoice must match, both in terms of quantity and price

The two-way match principle applies to all framework PO’s




• Define key terminology• Determine requisition status• Describe the Goods Receipt process• Explain the Three-Way and Two-Way match processes• Describe the structure and use of invoice documents in

SAP

SummarySummary


Course Objectives Course Objectives


Explain To-Be business processes Describe the SBBC SAP organizational structure Describe the use of Material Master Data in SAP Explain the structure and use of various purchasing

documents in SAP Describe functions that are executed after the

procurement process is complete

brite procurement fundamentals. 2 course description during this course, you will learn how the...

Documents

procurement of goods

brite procurement process

item number slide

sap requisition

material data

purchasing group

complete slide

departments goods receipt