&KDSWHU 

0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\
0&2(DVSDUWRI,62LO'RZQVWUHDP
+LJK/HYHO6XPPDU\
The objective of MCOE is to enhance the Marketing Contracts and Order
Entry functionality in the Core R/3 System. The enhancements provide
specific functionality required by the downstream oil industry.
Part of the required MCOE functionality is already supported in the Core
R/3 System; the remainder is implemented in the IS-Oil Downstream MCOE
enhancement.
q A streamlined, fast order-entry process, with various defaults such as
preferred supply plant for each order item, sales area from the customer,
sold-to party for ordering ship-to
q Ability to indicate final delivery against a call-off and reflect the actual
delivered quantity in the contract in the contract UoM
q Ability to specify restrictions in the contract which apply to call-off
details, e.g. product, quantity, ship-to party
q Ability to specify multiple ship-to parties in a contract and selection of
one at call-off entry time
q Ability to check the sold-to/ship-to relationship defined in the customer
master

.H\)XQFWLRQ%HQHILWV
The key function benefits are as follows:
The order-entry process is enhanced to speed up the process of order taking. )DVW2UGHU(QWU\
Due to the high transaction volumes, large number of customers, large
number of products and variety of delivery locations and methods, the
process can be sped up by the automatic determination of data. This
improves the speed and accuracy of the order-entry process.
The key benefit within a tele-sales environment is that the customer need only
specify his customer number, material and quantity in order to place an order.
The system automatically determines the supply plant, storage location and
sales area without any required input from the user. The IS-Oil order also
accepts a ship-to customer and links it automatically to the sold-to customer.


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP

These benefits result in a higher degree of customer satisfaction by requiring

less customer time necessary for placing an order. It also reduces costs by
allowing a higher order throughput.
The system can be adapted to interface to an automated telephone ordering
system. By keeping the information required to a minimum, the customer
can enter an order via telephone without needing an operator to accept it.
$FFXUDWH5HFRUGRI The quantity correction when calling off orders ensures that the system has a
'HOLYHU\4XDQWLW\ more accurate record of what has been delivered to the customers. This
ensures that the contract data is more accurate.
)OH[LEOH8R0+DQGOLQJ The modifications to pricing improve customer service by allowing changes
to the ordered UoM to be made while taking the order. This also allows the
customer to be advised of what his order will be in various UoMs without
actually changing the order UoM. Enhanced customer service is a key
competitive advantage in a commodity market and this enhancement helps
make the company more competitive.
$GKHUHQFHWR Checking the call-off order for adherence to contract terms ensures that
&RQWUDFW7HUPV agreed terms will be observed.

.H\,62LO)XQFWLRQV6XSSRUWHGE\WKH
,62LO'RZQVWUHDP0&2(&RPSRQHQW
The following MCOE enhancements are provided in the IS-Oil Downstream
system:

)DVW2UGHU(QWU\
Within a downstream oil company, considerable business benefit is realized
by the ability to take orders quickly - for example, in response to telephone
orders. In this process, the manual determination of data is minimized as far
as possible in favor of having the system automatically determine fields for
the order. For instance, the selection of supply plant and storage location
can be automatically determined and the sales area can be defaulted from
the customer. The order-taker is no longer required to enter the sales
organization, distribution channel and division on the initial order entry
screen. The ship-to party can be entered as the ordering party and the
system finds the appropriate sold-to party automatically.


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP 

)LJ)DVW2UGHU(QWU\

4XDQWLW\&RUUHFWLRQIRU&RQWUDFW&DOO2IIV
The functionality concerning calling off orders from a contract is enhanced
with respect to differing units of measure (UoM). The functionality is also
enhanced to support those cases when the delivered quantities differ from the
ordered quantities: the delivered quantity is subtracted from the available
contract volume.

)LJ4XDQWLW\&RUUHFWLRQEDVHGRQ&DOO2IIV

3ULFLQJ
The basic system of pricing agreements based on contracts is enhanced in IS-
Oil Downstream so that sales documents created with reference to the
contract include the contract number. Contract specific pricing allows
specific pricing conditions to be set up for a customer and then to be applied


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP

to all call-offs from that contract. This ensures that when pricing is carried
out (during order or invoice creation), the correct contract-specific pricing is
used. For more details, see chapter on MAP.

$GKHUHQFHWR&RQWUDFW7HUPV
Functionality to add validation to certain fields in the call-off to ensure that
the values entered do not exceed/differ from the terms agreed in the
corresponding contract.

+DQGOLQJ6KLSWR3DUWLHVLQ&RQWUDFW
Functionality to enter multiple ship-to partners in the contract header to
indicate that all contract items are applicable to those ship-to parties. When
calling off an order against a contract with multiple ship-to partners defined,
a selection screen appears so that the user can choose the ship-to for this call-
off.

'HOLYHU\'RFXPHQW
New fields in the delivery document to allow entry of more detailed external
information (for example bill of lading number) and possibility to indicate
that no further deliveries will take place for a call-off. The latter will be
reflected in the call-off and contract.

6ROGWR6KLSWR5HODWLRQVKLS
Functionality to prevent assignment of the same ship-to party to multiple
sold-to parties and report the sold-to/ship-to relationship.

.H\,62LO)XQFWLRQV6HUYHGE\WKH&RUH56\VWHP
The Core R/3 System covers only some functions required by the
downstream oil industry. IS-Oil Downstream meets this requirement with
functionality which adds to the Core functionality.

2UGHU(QWU\
The existing R/3 order entry process supports some of the requirements of the
IS-Oil fast order entry enhancements, e.g. some customer data is already
provided within the order entry transaction. Another example is availability
checking: this is already in R/3 but is enhanced further in IS-Oil Downstream,
including proposal of alternate sources of supply at the order item level.


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP 

4XDQWLW\&RUUHFWLRQIRU&RQWUDFW&DOO2IIV
The R/3 System currently supports orders where the called-off order UoM
differs from the contract UoM.

'HWDLOHG'HVFULSWLRQRI%XVLQHVV)XQFWLRQV6XSSRUWHG
E\WKH,62LO'RZQVWUHDP0&2(&RPSRQHQW
)DVW2UGHU(QWU\
The order-entry department at a downstream oil company is faced with the
following challenges:
q High transaction volumes
q Large number of customers
q Large number of products
q Large number of possible delivery locations
q Wide range of possible delivery methods
Therefore, the order entry process needs to be as quick as possible with
automatic determination of data, where possible.
The Core order entry process within R/3 allows a significant amount of data
relating to the order to be available and automatically determined when the
order is taken. This data is available via the various pull-down menus within
sales order-entry processing.
In IS-Oil Downstream, no separate “fast order” entry path can be created.
Rather, the existing order entry process is enhanced to meet the requirements
of the oil industry.
The following details show the functional enhancements to the current order
entry process.

Automatic Allocation of Order Type, Supply Plant and Storage Location

The Core R/3 System automatically defaults the last order type used. The $XWRPDWLFDOORFDWLRQRI
user can override the order type defaulted if desired. The exception to this is 2UGHU7\SH6XSSO\3ODQW
the first time the transaction is used in a session, the user must select the DQG6WRUDJH/RFDWLRQ
order type (i.e. there is no initial automatic default).
The Core R/3 System selects a default supply plant. This selection is
determined from the customer master record of the ship-to party or the
material master record. The selection is automatic, but can be manually
overridden. In IS-Oil Downstream, the supply plant selection is enhanced to
include full availability checking across all the preferred and alternative
plants.


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP

Sales Area Defaulting

6DOHV$UHD'HIDXOWLQJ In Core R/3, the sales area needs to be entered on the order entry screen.
On the IS-Oil entry screen, after a customer has been entered, the system
searches for the corresponding sales areas to which it is assigned. If only one
sales area is found, then it is automatically defaulted in the Sales Area fields.
If several sales areas are found for the customer, then a popup appears,
prompting you to choose one of the sales areas. The entry selected is then
copied into the sales area fields.
There is also a pushbutton that can be used to trigger the sales area
defaulting functionality on request. The popup shows all the valid sales
areas for a particular customer, if it is assigned to several sales areas. This
option is only possible if there are no line items on the order.

Fast Order Entry Fields

)DVW2UGHU(QWU\)LHOGV The following fields are mandatory in the fast order-entry transaction:
q Order type (one-time)
q Sold-to or Ship-to party
q Material
q Order quantity
q Customer purchase order number (depending on configuration)
The following fields can be defaulted:
q Sold-to party (if ship-to is entered as ordering party)
q Sales organization
q Distribution channel
q Division
q Handling type
q Item category
q Plant
q Contact details
Speed and accuracy are optimized by limiting the number of mandatory
input fields and maximizing the number of defaulted fields.
Core R/3 allows the order-taker to select and copy the last order from the
sold-to party. IS-Oil enhances this function to allow the order-taker to select
and copy the last orders from a combination of sold-to and ship-to customers.
Line Item Functionality
/LQH,WHP)XQFWLRQDOLW\ Within Core R/3, some data is displayed in the header during this process.
Further information on the customer is quickly available via the specific
function buttons or pull-down menus (within the order entry transaction).
The Core System carries out validation checks on the data entered in the line
item fields. In addition, enhanced availability checking is carried out in the
IS-Oil Downstream System.
The system is enhanced to allow the handling type to be displayed at the line
item level. This code establishes how a material that is subject to excise duty


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP 

will be used by the customer. In the IS-Oil Downstream System, the handling
type is used to determine the excise duty status of the material/customer
combination (see TDP).
The system defaults a handling type. This comes from either the customer
master record or the customer/material information. Both these areas are
enhanced to include handling type fields. The default handling type can be
manually overridden with a value entered by the user. The user selects from
a pre-defined list of handling types. The system is enhanced to provide a list
of handling types.

Availability Checking
The IS-Oil Downstream enhancements in the MCOE area are based on the $YDLODELOLW\&KHFNLQJ
availability check functionality in the Core R/3 System.
Within Core R/3, availability checking is carried out by using the default
supply plant in the line item. The default supply plant comes from the
customer master record or the material master record. When creating or
changing an order, this default plant can be manually overridden (selected
from a list of possible supply plants) by the user. The availability check is
then carried out against the selected plant. Within the Core R/3 System, this
check runs only against that one plant.
The IS-Oil Downstream MCOE enhancement allows for the creation of a list
of alternative plants for availability checking. If the default plant does not
have sufficient availability, then the first alternative plant is checked. The
system then searches down the pre-defined list of alternative plants until a
plant with availability is found. A total of 4 alternative plants can be
specified. These are manually set by the user prior to order-entry.
The availability checking functions which are carried out on each alternative
plant are the Core R/3 functions, for example static checks (based on the
total available quantity at a plant) or dynamic checks (taking into account all
planned receipts and deliveries) can be configured; replenishment lead time
(RLT) can be included or excluded from the calculations.

)LJ,62LO3ODQW'HWHUPLQDWLRQ


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP

In IS-Oil Downstream , if no plant has the required availability, the system

defaults back to the initial plant and warns the user of the shortage. This
“warning” is the Core R/3 window: “Standard Order: Availability Control”.
This allows the user the normal options of choosing partial delivery,
rescheduling the delivery date, or accepting a lower, confirmed order
quantity. This applies to the initial default plant.
Line Item Category
/LQH,WHP&DWHJRU\ The Core R/3 System supports the allocation of item categories to the line
items on an order or any other sales document. This is used to determine the
requirements on the line item (for example a text line would have the item
category of “text” and would not be part of any pricing calculation). The
item category controls pricing, billing, delivery processing, stock postings
and the transfer of requirements. For each document type, certain item
categories are permitted. The way each line item category is processed is
controlled by control elements. The system automatically allocates the line
item category to each item on the order based on the sales document type
and material. The user has the option of manually overriding the item
category, if required.
The Core R/3 System’s automatic allocation of item category is enhanced to
allocate each line item with an item category determined by the customer
/material combination. The customer is identified by a customer classifi-
cation. The Core R/3 System currently supports this customer classification
code. The material is identified by the material group which the R/3 System
currently supports. The customer classification/material group thus defines
the item category. In IS-Oil Downstream, this is defined in a new table. The
item category found by this search overrides that set by the document type.
Thus, for example, if a customer group has a material normally delivered
from consignment stock, then the relevant table entries might be:

4XDQWLW\&RUUHFWLRQIRU&RQWUDFW&DOO2IIV
The business situation addressed by this functionality concerns call-offs
from contracts. Typically, a contract is set up for a customer and then
various sales orders are created, which call-off from the contract. Core R/3
functionality supports this process.
The contract specifies various materials and associated quantities and units
of measure (UoM). The total price of these materials is then determined.
The order call-off need not be in the same UoM as the contract. The Core
R/3 System supports this and converts the called-off UoM to the contract
UoM in order to update the contract accordingly. The UoM on the order
remains unchanged.
The enhancements to this process are as follows:
Correction for Final Delivery Quantity
The situation this addresses is one in which the actual final delivery quantity
against the call-off does not equal the original quantity in the call-off. The
Core System did not update the contract with the actual final delivery


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP 

quantity. It only updated the contract with the original quantities in the sales
order. The enhancement indicates when the final delivery has been made
from the call-off and then updates the contract accordingly with the actual
delivered quantity. In addition, the UoM of the delivered quantity need not
be the same as on the contract, as the system converts it to the contract UoM
and updates the contract accordingly. Depending on the UoMs used, this
conversion may require the use of ASTM (American Society for Testing &
Materials) conversion functionality.
The user indicates when a final delivery has been made by using the final
delivery indicator in the delivery document. When the final delivery is
made, the system does the following:
q Calculates the total quantity called off in the order UoM
q Calculates the total call-off quantity in contract units of measure (this
may utilize ASTM functionality)
q Updates the contract called-off quantity (released quantity)
q Sets call-off status to “completed”

3ULFLQJEDVHGRQ&RQWUDFWV
It is sometimes necessary to have price agreements that are related to a
specific contract. It is therefore necessary to price call-offs based on the
original contract. The IS-Oil enhancements offer the basis for this functionality
by copying the contract number into the call-off and any subsequent
documents.

$GKHUHQFHWR&RQWUDFW7HUPV
When call-off orders are entered against a contract, the system proposes
those contract items which have not been fully delivered and which have not
been set to “completed”.
Call-off quantity and other item data, like unit of measure, ship-to party and
payment terms are defaulted from the contract. The Core R/3 System allows
those details to be changed during the call-off, as well as entry of additional
items which were not specified in the contract.
The IS-Oil enhancement provides the possibility of setting restrictions at the
contract level which apply to the orders called off against the contract. These
restrictions can apply to products, quantities, units of measure, validity
periods, payment terms and allowable ship-to parties. The new functionality
checks the details of the call-off against the restriction and prompts the user
with a message, if the details are different. The type of message (error,
warning or information) is specified when the restriction is set in the
contract.
A call-off may be referenced to multiple contracts, all of which may have
restrictions set. In this case, the type of message for each respective restriction
is applied.


 0DUNHWLQJ&RQWUDFWVDQG2UGHU(QWU\0&2(DVSDUWRI,62LO'RZQVWUHDP

+DQGOLQJ6KLSWR3DUWLHVLQWKH&RQWUDFW
In the Core R/3 System, only one ship-to party can be entered in the contract
header/item level. In the oil industry, one contract often covers delivery to
multiple locations (ship-to parties). In the Core R/3 System, this business
requirement would result in a manual adjustment of the ship-to party during
entry of each call-off. The IS-Oil enhancement allows the specification of
multiple ship-to parties in the contract header to indicate that the entire
contract is applicable to those ship-to parties. In contract create mode, all the
ship-to parties in the sold-to party customer master are proposed for selection
as alternative ship-to partners. This selection screen is reached by a new
pushbutton in the header partner screen.
When calling off an order from a contract with multiple ship-to partners
defined, a selection window is displayed so that the user can choose the
ship-to partner for the call-off.
This functionality is integrated with the call-off restriction functionality
described above, so that the assignment of ship-to parties can be restricted to
those specified in the contract.

'HOLYHU\'RFXPHQW
The delivery document has been enhanced with new fields to allow the user
to specify more detailed external information and to indicate that no further
deliveries will take place for a call-off, which is reflected in the contract.
The delivery document contains a new external details button in the header
and in the details screens. This button causes a popup screen to be displayed,
showing the external bill of lading number, miscellaneous delivery number,
origin/destination information and other miscellaneous information. The
external bill of lading number and miscellaneous delivery number can be
accessed with a new matchcode. The external details popup is also available in
the contract and call-off.

6ROGWR6KLSWR5HODWLRQVKLS
In the Core R/3 System there is no check on the ship-to/sold-to party
relationship which is defined in the customer master. It is possible to assign
the same ship-to party to several sold-to parties. The IS-Oil enhancement
performs a check on this relationship during customer master maintenance.
The check, which is optional, and the outcome (error, warning, information
message) are defined at sales organization level. Reporting functions are
available to show sold-to/ship-to party assignment and vice versa.