Sap MM Business Blueprint Sample

4.
Materials As Is Business Process and Business Requirement from Walvoil To Be Business Process for Walvoil Fluid Power (India)
Management Fluid Power (India) Pvt. Ltd. Pvt. Ltd.
yiva
Introduction
This Business Blue Print Document describes the following:
Enterprise Structure of Walvoil
Business r Users
Mr. Ivano Chiossi
Mr. Amarnath Ramchandran Mr. Fabrizio Strozzi Mr. N H Krishnamurthy Mr. Avinash Humbrey
Mr. Avinash Humbrey Mr. Narayana Rajan.N
Mr.Srinivasa Rao .V Mr. Narayana Rajan. N Mr. Vinay Kumar Reddy Mr. SathyaNarayana.A & Mr. Ravikanth S.
Business Blue Print – Materials Management – Mr.Rajan, Mr.Vinay – WALVOIL, Mr.Srinivas - CVS IT Page 1 of 62
4.Materials As Is Business Process and Business Requirement from Walvoil To Be Business Process for Walvoil Fluid Power (India)
Introduction
This Business Blue Print Document describes the following:
● Enterprise Structure of Walvoil
● Business requirements as given by the Walvoil Key Users
● Suggestions by CVS IT consultants wherever mySAP ERP features are found to be useful to Walvoil business functionality
● To-Be Process on mySAP ERP system suggested by CVS IT Consultants
● Comments whether the requirement can be realized on the SAP R/3 system or not.
● Gaps which are at different stages of exploration
The following codes are given to each module that is within the scope of the agreement:
Module
Module
ID
1 Financial Accounting
2 Controlling
3 Sales & Distribution
4 Materials Management
5 Production & Planning
6 Quality Management
Further processes, sub-process and activities in each module are denoted by, say. 1.1, 1.1.1, 1.2.1 etc.
A Business Blueprint document is prepared for each module and reference shall be made wherever required to other modules, whenever
there is an overlap of business processes across modules or a business process requires to be completed in more than one module. The
reference to the business process shall be made using the process numbers as described above;
For e.g.:
As per the above notation, All processes in Sales & Distribution start with 3.*… So if a reference has to be made to process in Accounts
Receivable of Financial Accounting, then the reference is made using the notation say, 1.2.*… where ‘1’ refers to Financial Accounting and
1.2 refers to Accounts Receivable and then further numbers denote the sub-processes and activities in the module.
Step 1:
The Module Owner shall identify various existing business processes at a broad level and make a list of them as described under section 1
of this document
Step 2:
Depending upon the various business processes thus identified in Step 1, various business scenarios are described in the following way:
As Is Business Processes: The current way of executing the business process shall be explained in detail with data/information flow along
with the IT systems / Manual Systems being used in the whole cycle.
Business Requirement: Under this head, the module owner shall describe the requirements of the company vis-à-vis this business scenario,
if necessary with examples. Following situations can arise:
The current provisions in the system are sufficient enough and additional configuration efforts are not required.
The current provisions are not sufficient and satisfactory and additional features need to be incorporated in the system
There is no current provision to handle this transaction at all.
The module owner shall identify each business scenario with the above classification.
Step 3:
Based on the Business Requirement, CVS IT consultant shall do a detailed Requirement Analysis and based on the analysis, shall propose
the best fit business process on the SAP R/3 system.
It may not be possible to decide the realization possibility of all Business requirements on the mySAP ERP/CIN4.0A system immediately and
hence the following legend is being followed for describing the statuses:
Status of To-Be Business

Status Description
Process
A-Possible Can be implemented on mySAP ERP and WALVOIL

B-Possible with workaround Can be implemented on mySAP through indirect means
C-Possible with ABAP Can be implemented on mySAP through ABAP/4 development
D-Possible with ABAP (But Can be implemented on mySAP through ABAP/4 development but system performance may be
performance issue) effected
E-Not possible with out
Cannot be implemented on mySAP without major system modification
Major Modification
Possibility of implementation will be explored in the development environment. Cannot be
F-Open for exploration
confirmed at this stage
G-Not possible Cannot be implemented on mySAP
Cannot be implemented because it is not part of the scope defined in the “Software Services
H-Not in Scope
Agreement” between CVS IT & Walvoil
The To-Be business process realization is dependent on the following aspects:

Scope of services described in the Software Services Agreement signed by WALVOIL & CVS IT
Scope of functionality described in the Software Services Agreement mentioned above.
Capabilities & Limitations of mySAP ERP
As-Is Business Knowledge Transfer from mySAP ERP Project Team members
Business Requirements defined by the Walvoil Project Team members
WALVOIL accepts that the decision to accept the ‘To-Be’ Business Processes is completely it’s own and not influenced by CVS IT. CVS IT
shall not be responsible for the business consequences on Walvoil after the realization and usage of the processes being suggested here.
Walvoil shall indemnify CVS IT from all responsibilities for any other business consequences during the framing of the To-Be Business
processes, or at any time during or after the realization / implementation of these processes on mySAP ERP system or while using the
system.
Methodology to be adopted for preparing Business Blue Print:
Contents
Page Numbers
# Topic
Start End
1 Definitions 5 7
2 Enterprise structure
8 9
3 Business Process Scope 10 11
4 Business Process Details 12 76
5 Reports 77 77
1. Definitions:
Company Code:
The Company code is smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be
created. This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements,
such as the balance sheet and the profit and loss statement.
Walvoil Fluid Power (India) Pvt. Ltd. are mentioned as Company in this document.
Chart of Accounts:
This is a list of all G/L accounts used by one or several company codes.
For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account
functions and how a G/L account is created in a company code.
Plant:
A plant is an organizational logistics unit that structures the enterprise from the perspective of production, procurement, plant
maintenance, and materials planning. A plant is manufacturing a facility or branch with in a company.
Purchase Organization:
A purchase Organization is an organizational level that negotiates conditions of purchase with vendors for one or more plants. It is legally
responsible for completing purchase contracts.
Purchasing group: is the key for a buyer or group of buyers responsible for certain purchasing activities.
Storage Location:
A Storage location is a Storage area comprising warehouses in close proximity. Material stocks can be differentiated with in one plant
according to storage location.
State Excise Invoice:
A document that is required at the time of sale of finished goods produced by using the state excisable goods like Rectified Spirit as Raw
Materials.
VAT:
Type of tax introduced by Govt of India, and has been implemented by many states including Karnataka where Walvoil operates from.
State Excise Duty:
As per the provisions of the Karnataka State Excise Act, the company is filing an application to take the approval of State Excise
Department, for using the excisable inputs in the manufacturing activity by remitting the applicable duty on the assessable value of the
proposed finished product. This approval needs to be taken before the commencement of the Manufacturing Activity. The said application
shall contain all the details of “products to be manufactured” and “Quantity in each batch” during a given period of time. In case, the
company produces more quantity in a batch than that was mentioned in the approved application, then company shall remit the excise
duty on the differential quantity. If the quantity produced in a batch is less than the approved one, the refund of unutilized excised duty
from the department cannot be claimed. The produced units shall absorb the said unutilized excise duty amount. The company considers
the normal loss while making the application and accordingly mentions the estimated quantity in each batch.
Custom Duty:
Duty levied by the government when a material is imported to India from abroad.
2. Enterprise Structure on SAP R/3 System
Purchasing Organization
Current New Justification / Purpose of the

Organizational Unit
Code Description Code Description
Definition
An organizational unit subdividing an enterprise
according to the requirements of Purchasing. It
procures materials and services, negotiates
conditions of purchase with vendors, and is
responsible for such transactions.
Structure
The form of procurement is defined by the

assignment of purchasing organizations to
Walvoil Fluid Power (India) 1100 Walvoil Purchase company codes and plants.
Pvt Ltd Organization
The following forms of purchasing exist:
Corporate-group-wide
A purchasing organization procures for all the
company codes belonging to a client.
Company-specific
A purchasing organization procures for just one
company code.
Plant-specific
A purchasing organization procures for a plant.

Mixed forms are possible, which can be
replicated in the system by the use of reference
purchasing organizations.
A purchasing organization can utilize the more
favourable conditions and contracts of the
reference purchasing organization that has
been assigned to it.
Purchase groups
Current New
Justification / Purpose of the Organizational
Unit
buyer or group of buyers responsible for certain

101 Domestic
purchasing activities
102 Imports
103 Services
104 MRO
105 Jobwork
106 Miscellaneous purchasing activities
Storage Locations
Justification / Purpose of the Organizational
Current New
Unit
RM01 Raw materials Storage location

SF01 Semi Finished Storage location
FG01 Finished Storage location
SP01 spares Storage location
PK01 Packing Storage location
SC01 Scrap Storage location
3. Business Processes scope:
Business Process
Business Process Description
Id
4.1 Master data Maintenance
4.1.1 Material Master Maintenance
4.1.2 Service Master Maintenance
4.1.3 Vendor Master Maintenance
4.1.4 Purchase info records
4.1.5 Source list maintenance
4.1.6 Maintain vendor evaluation criteria
4.1.7 Maintenance of Conditions for Procuring Materials
4.1.8 Payment Terms
4.2 Procurement Process
4.2.1 Purchase Requisition
4.2.2 Request for Quotation
4.2.3 Quotation
4.2.4 Purchase Order - Local (RM, PM, MRO Items)

4.2.5 Release Strategy
4.2.6 Purchase Order - Imports
4.2.7 Outbound service orders / Job work
4.2.8 Purchase order - services
4.2.9 Purchase Order Amendment
4.2.10 Cash Purchases
4.3 Goods Receipts
4.3.1 Quality Check
4.3.2 GRN due to Purchase of Assets
4.3.3 GRN due to Production
4.3.4 GRN due to Finished Goods Rejection
4.3.5 GRN for MRO items
4.3.6 GRN in to Blocked Stock
GRN due to Outbound Service / Job Orders(Purchase
4.3.7
Orders for Service)
4.3.8 Excise Transactions
4.3.9 Normal rejection handling
4.3.10 Line Rejection handling
4.4 Goods Issue
4.4.1 Goods Issue to Outgoing Service/Job Work Orders
4.4.2 Goods Issue to Scrap
4.4.3 Goods Issue to Production
4.4.4 Goods Issue to Sales Order
4.4.5 Goods Issue to Quality
4.4.6 Goods Issue to Customer/Vendor/Third Party
4.5 Logistics Invoice Verification
4.5.1 Entry of Vendors Invoice
4.5.2 Parking Vendors Invoice
4.5.3 Cancelling Vendors Invoice

4.5.4 Material Valuation
4.5.5 Physical Inventory
4. Business Process details:
Material/Services Coverage & Different Types of Procurement

Procurement at Walvoil covers the following items but it will take some time to function completely:
Raw Material required for Production
Semi finished goods
MRO Items – Maintenance, Repairs & Operating Supplies
Services - Adhoc & Periodic
Services with Material Supply Repairs etc
Walvoil makes the following type of purchases it also takes some time to function fully:
Procure-to-Stock (RM and MRO items)
Need-based Procurement – based on Purchase Requisition (RM, MRO items)
Capital - Budgeted
Capital - Non-budgeted
Service Contracts
Service with material supply - Job work

Repairs
Cash Purchases
Material Coding
As Is
Material Type
External /
Total Length Logic1
Internal
Raw materials Not following any codes now
Semi finished

Goods
Finished Goods
Spares
Misc

To Be
Materia
l Type Ext Group Group Group
Total
/ 1 Logic1 2 Logic2 3 Logic3
Length
Int. length length length
Part No. as per Walvoil
Ext 10
(Italy)


4.1 Ma
As Is Business Process: Requirement Analysis

Not following any separate master data like SAP R/3 provides functionality for maintaining the following master data:
Material master Materials
Vendor master Services
Customer master Vendors
Vendor approved price list Purchasing Info Records
Service master Source List
Vendor Evaluation Criteria
Business Requirement : Conditions (Commercial)
Payment Terms
1. SAP Best Practises for IM & C to be implemented where ever
suits to Walvoil requirement. Suggested Business Process:
Materials:
The material master contains information on all the materials that a company procures
records.
The material master is used by all components in the SAP Logistics System. The integra
required, for example, for the following functions:
In Purchasing for ordering
In Inventory Management for goods movement postings and physical inventory
In Invoice Verification for posting invoices
In Sales and Distribution for sales order processing
In Production Planning and Control for material requirements planning, scheduling, and
Service Master
Service master records, in which descriptions of all services that may need to be procur
Vendor Master
Data in vendor master records controls how transaction data is posted and processed fo
The master record is used not only in Accounting but also in Materials Management. By
by maintaining it centrally. If one of your vendors changes their address, you only have
Purchase info records
You use this component if you wish to store information on a vendor and a material as m
consignment).
Source List
The source list is used in the administration of sources of supply.
It specifies the allowed (and disallowed) sources of a material for a certain plant within
Vendor Evaluation Criteria
The Vendor Evaluation component supports you in optimizing your procurement process
Gaps:
4.1.1 Mat

Not following any material master data 1. You can identify material or document changes that are made with reference to a cha
Item Code Numbering System When you want to process the BOMs for these materials or documents at a later date, y
You can assign a revision level to a material either from an engineering change manage
Business Requirement: 2. Over deliveries
1.SAP Best Practises for IM & C to be implemented where ever In the standard, over deliveries are not allowed. In the event of an over delivery, the sy
suits to Walvoil requirement If over deliveries are to be allowed, you can specify the following data in the purchase o
Unlimited indicator
If this indicator is set, over deliveries of any size are allowed. The system does not issu
Over delivery tolerance

You can enter a percentage over delivery tolerance in the purchase order. If a quantity o
3.Scrap factor is generally considered in the Bill of Materials of production planning mod
4. By using the relevant fields in net requirements planning and scheduling of MRP2 vie
5. SAP provides various fields using MRP1 View in the material master and by selecting
6. System Distinguishes between the following units of measure.
Base Unit of measure
This is the unit of measure in which the stocks of a material are managed.
This is the unit of measure in which the stocks of a material are managed. The system c
Alternative units of measure
Individual departments may have their own units of measure. For example, Purchasing
units of measure. The R/3 System supports the following alternative units of measure:
Order unit
Allows a material to be ordered in a unit differing from the base unit of measure. The or
Sales unit
Allows a material to be sold in a unit differing from the base unit of measure. The sales
Unit of issue
Unit of measure in which the material is issued from the Stores. It allows consumption,
8. FIFO valuations are a method that enables you to valuate the stocks of a material as
value of the stock is therefore calculated based on the last stocks received.
FIFO valuation has a number of uses:
Listing the FIFO values of certain materials.
When you run FIFO valuation, the system calculates the FIFO values of the materials co
- The closing stock quantity and closing stock value for each material for the period in q
- The net value based on lowest value determination (if you carry out FIFO valuation wi
- The totals for each valuation area or company code by material stock account
- The totals by valuation area or company code
9. Date Freezing – There are Various features available in SAP System features like Sch
organization structure. Walvoil can make use of this available feature as per the busines
10. Search help control is an ActiveX component. It was developed to support the SAP s
In contrast to the previous search help technique, which used R/3 dialog boxes, search
Search help windows may, however, remain open within a single transaction. This allow
With match codes, you can use the menu to choose from the various different search po
Clicking on the right mouse button displays all of the search help control functions avail
11. A material may have various documents such as drawings and photographs assigne
can manage documents and assign existing documents to a material in the material ma
If one document of the standard document type has been assigned to the material, the
Basic Data screen in the industry system
Other Basic Data screen in the retail system
You access the Other Basic Data screen from the Basic Data screen by choosing Other b
If the document is not of the standard document type, the No link indicator is set on the
document has not yet been assigned to the material.
If more than one document of the standard document type has been assigned to the m
data.
12. There are various possibilities for maintaining material code. It is suggested to go fo
13. Materials shall be created as per the assignment to the organization structure. Prov
14. MRP1 to MRP4 view allows to maintain data related to MPS. Suitable fields shall be
15. MRP1 to MRP4 view allows to maintain data related to MPS. Suitable fields shall be c
MRO Items
Material specific texts can be maintained in the materials texts in material masters
Material Description logic depends on Walvoil policy.
Walvoil responsibility to assign roles for maintaining material master data. A detailed tra
It is possible to maintain specifications, Drawings etc in the material master records Ma
Information.
Suggested Business Process :
The material master contains information on all the materials that a company procures
records.
Integration
The material master is used by all components in the SAP Logistics System. The integra
required, for example, for the following functions:
In Purchasing for ordering
In Inventory Management for goods movement postings and physical inventory
In Invoice Verification for posting invoices
In Sales and Distribution for sales order processing
In Production Planning and Control for material requirements planning, scheduling, and
Material Master Records
All the information Walvoil needs to manage a material is stored in a data record in the
Walvoil can enter and change most of the data in a material master record. However, so
stock balances when goods receipts or goods issues are posted.
The data in a material master record can be divided into two categories:
Data of a purely descriptive nature
This is data with information content such as name, size, or dimension.
Data that the system uses to perform a control function
This is data such as MRP type and price control.
Since different departments in Walvoil work with the same material, but each departme
User Departments at Walvoil using one material record
Since several departments of Walvoil work with one material and each department uses
graphic:
Material Type:
Materials with the same basic attributes are grouped together and assigned to a materi
given in the graphic below.
Material Group:
Key that you use to group together several materials or services with the same attrib
Use
You can use material groups to:
Restrict the scope of analyses
Search specifically for material master records via search helps
Gaps :
4.1.2 Service

Not following Service master data Service activities process shall be carried in SAP System as per the requirement.
Service Request/Material Request/ Capex Request shall be through the SAP System (Pu
Business Requirement: Purchase Requisition shall be based on the material group but Standard system also pro
Suggested Business Process:
1.SAP Best Practises for IM & C to be implemented where ever The service master record counts as part of the master data within External Services Ma
suits to Walvoil requirement errors, since you need only enter the complete service descriptions in the service maste
Structure
A service master record contains the following principal information for the unique desc
Service number
Service category
Descriptive texts (short and long text)

Base unit of measure
Material group
Valuation class
Gaps:
4.1.3 Maintena
As Is Business Process : Requirement Analysis

Not following any separate vendor master data 1. Business partners have a number of different functions, described as partner function
sell or order goods, for example, your business partners can assume partner functions s
Business Requirement: Vendor Partner functions:
1.SAP Best Practises for IM & C to be implemented where ever a. Ordering address
suits to Walvoil requirement b. Goods supplier
c. Invoice presented by
d. Alternative payee
Different business partners may carry out one or more partner functions. For this reaso
You manage data on business partners in master records. Data on partner functions is s
A business partner can be a customer and a vendor at the same time if, for example, yo
master record for the business partner. You can create a link between the two master re
2. Terms of payment are rules agreed with your business partners. They apply to financ
3. Your company does business with some business partners for a long time. For examp
loyalty of these customers with rebate payments. In other cases, you have only one con
System you can distinguish between:
Customers and vendors
You create a master record and assign partner functions for each business partner.
One-time customers and one-time vendors
Business partners who have a business transaction with you only once are called one-ti
master record after the business transaction, and it uses space. You create collective m
4. Quotations and delivery reminders can be sent using features available in Standard s
Data in vendor master records controls how transaction data is posted and processed fo
The master record is used not only in Accounting but also in Materials Management. By
by maintaining it centrally. If one of your vendors changes their address, you only have
vendor master record contains:

Vendor’s name, address, language, and phone numbers
Tax numbers
Bank details
Account control data like the number of the G/L reconciliation account for the vendor ac
Payment methods and terms of payment set up with the vendor
Purchasing data
How the Data is organised
Master records are divided into the following areas so that each company code and each
General data
This is data that applies to every company code and every purchasing organization in yo
Company code data
This is data that is specific to an individual company code. Company code data includes
Purchasing organization data
This is data relevant to the purchasing organization of your company. For example, requ
Vendor groups
1. Raw material supplier- domestic
2. Packing material supplier -Domestic
3. Miscellaneous purchases Vendors
4. Capital Purchases
5. One time vendors
6. Financial vendors
7. Transport vendors
8. Raw material supplier- Imports

9. Packing material supplier –imports
10. Employee vendors
11. Capital Purchases - Imports
Vendor Number Assignment

The vendor master record number can be assigned either internally or externally. Intern
alphanumeric.
The account group determines whether account numbers are internal or external and w
The system ensures that the numbers assigned are always unique. With
Internal assignment, the system selects the next number from the interval. With extern
Access Authorisation
You can restrict access to master records in order to prevent unauthorized changes. De
maintain all master data, while another may have authorization to maintain only accoun
You can even assign authorizations for different types of processing. All users could hav
Gaps:
4.1.4 Purc

Not Following Info Record Price Versus PO Price
The net price in the info record and the net price in the purchase order are two differen
Business Requirement: The net price of an item in the info record is based on the conditions stipulated in the in
1.SAP Best Practises for IM & C to be implemented where ever In contrast, the price in the purchase order may reflect the deduction of a quantity disc
suits to Walvoil requirement As a rule, the conditions from the info record are adopted in the PO. However, if a price/
Suggested business process:
You use this component if you wish to store information on a vendor and a material as m
consignment).
Definition
Serves as a source of information for Purchasing. The purchasing info record (also refer
current pricing is stored in the info record.
The info record allows buyers to quickly determine:
Which materials have been previously offered or supplied by a specific vendor

Which vendors have offered or supplied a specific material
The info record contains:
Data such as prices and conditions that you can store for the relevant purchasing organ
The number of the last purchase order
Tolerance limits for over deliveries and under deliveries
The planned delivery time (lead time required by the vendor to deliver the material)
Vendor evaluation data
An indicator showing whether the vendor counts as the regular vendor for the material
The vendor sub-range to which the material belongs
The availability period during which the vendor can supply the material
The info record contains quotation and ordering data. The data in the info record (prices
For instance, you can store the current and future quotation conditions (discounts, fixed
Organizational Levels
An info record can apply to the following organizational levels:
Purchasing organization
Plant
Procurement Types in Info Records
Standard
A standard info record contains information for standard purchase orders. The info reco
Subcontracting
A subcontractor info record contains ordering information for subcontract orders. For ex
component.
Validity periods.
Consignment
A consignment info record contains information on a material that vendors keep availab
of the pipeline info record, you can store prices for different validity periods.
Gaps:
4.1.5 Sourc
Not Following Suggested Business Process :

The source list is used in the administration of sources of supply.
Business Requirement: It specifies the allowed (and disallowed) sources of a material for a certain plant with
1.SAP Best Practises for IM & C to be implemented where ever The source list serves:
suits to Walvoil requirement To define a source of supply as "fixed". Such sources count as preferred sources over
(For example, the fixed vendor for material 1 is Acme Corp. for the first quarter and
To define a source of supply as "blocked".
(This means, for example, that contract 123 may not be used for a certain period of
As an aid in selecting the preferred source during the source determination process.
(For example, the vendor Zenith Co. is determined as the source for an item of a req
To block the external procurement of a material.
(For example, material 1 may not be ordered from 01.01.98 to 12.31.98.)
Gaps:
4.1.6 Maintain Ve

Not Following Suggested Business Process:
The Vendor Evaluation component supports you in optimizing your procurement proc
Business Requirement:
1.SAP Best Practises for IM & C to be implemented where ever
suits to Walvoil requirement
Elements of Vendor evaluation

The following sections introduce you to the concept of vendor evaluation
Overall score
Main criterion
Sub criterion
Scoring Range
Weighting of scores
The following five main criteria are available in the standard system:
Price
Quality
Delivery
Gen. service/support
These four main criteria serve as a basis for evaluating vendors from whom you proc
External service provision

This main criterion serves as a basis for evaluating those vendors you employ as exte
Gaps:
4.1.7 Maintenance of Con
4.1.7.1 Prices As Is Business Process : Suggested Business Process:

All Inclusive prices (Net Price): It is a net This component enables you to store pricing stipulations agreed with the vendor (suc
price for the merchandise. outline purchase agreements, and info records. You also have the option of entering
1. Basic price: It is unit price. conditions in the PO itself.
2.Gross price: Basic + Duties and taxes also There are three kinds of price in Purchasing:
net of discounts Gross price
3.Economy of price of supply should capture Price without taking any possible discounts and surcharges into account.
vendors rejections Net price
Price taking any applicable discounts and surcharges into account.
Effective price
Net price after deduction of cash discount, with allowance for any miscellaneous prov
Pricing conditions shall be maintained in the purchasing info records or in the header
4.1.7.2 Discount 1.% Discount: Adholeram discount (Basic 1. Different discounts required by Walvoil are Discount before Tax and Discount after
s Price) for valid record and as soon as it finds the record matching the condition of sale it sh
2.Value Discounts: On the total value fixed Some of the discounts can be maintained at the time of preparing the purchasing do
amount is
3. Cash discounts: Discount given on
Immediate Payment (Basic Price).
4. Quantity Discounts: In specific Slabs of
the PO Or Order quantity the discount % or
the value changes.
4.1.7.3 Excise Excise Duty 1. Vendor, Material and other factors that determine the Excise duty shall be maintai
and 1.Excise Duty in %: Percentage could be in 2. This shall include the Exceptional rates that may be applicable for certain vendors
Import whole number or could be in Decimals 3. This shall also take into account different tax rates based on the Vendor’s Status (
Duty 2.Special Excise Duty in %: Percentage could In Imports the CVD, which needs to be captured for CENVAT postings, shall also be i
be in whole number or could be in Decimals
4.1.7.4 Sales 1.For Raw materials and Packing materials 1. Tax condition records can be maintained in the system for various levels of taxes,
Tax/VAT Normal Sales tax (KST/CST) are taxed at % 2. The tax values are maintained as percentages with the help of tax codes.
2.Present VAT Tax rate is 12.5%
4.1.7.5 Local Hamali charges (as per slab). Local delivery and Cartages can be maintained in the system, these conditions shall
Delivery 2. Other Handling and Delivery charges (as
and per slab).
Cartages
4.1.7.6 Freight/T Freight % of the Basic 1. The Planned Freight costs shall be booked in the same Purchase Order for which t
ransport Freight/Transport on Actual 2. In cases where the Material carrying party is different from the one on whom the
Freight/Transport on fixed amount
Freight as per quantity
Freight/Transport borne by the supplier
Transport Per Load - fixed amount.
4.1.7.7 Service Service tax % on gross Service Tax will be maintained as condition type
Tax
4.1.7.8 Cess 1. Local: % on the ED or Service Tax. Education cess will be maintained as condition type in both local as well as in Import
2.Import:
Assessable value = “X” = CIF Price X 101%
Customs Duty = “X” X () % = Y
Cess of CD = “Y” X () % = Z
CVD = (“X” X “Y”) X () % = A
Cess on CVD = (A + Y + Z) X () %
4.1.8 Pa
As Is Business Process Requirement Analysis

There are various payment terms. Payment terms for procuring RM Suggested business process:
and PM, Payment terms for Procuring Assets, MRO Items are 1. Walvoil shall use the standard payment terms wherever possible.
different. 2. Wherever required, specific payment terms shall be defined in the system like Pay
Business Requirement: Gaps:

4.2 Procu
As Is Business Process
Procurement process at Walvoil Suggested business process:
Walvoil procuring office needs like furniture and
Capital Goods like machinery etc., Procurement Process is mentioned in following points 4.2.1 to 4.2.11

4.2.1 Purc

Product code, Product description, required qty. . . . Now at Walvoil PR Shall be addressed as different Purchase requisition Document type and Number
using Excel for creating the Purchase Requisition. Approved vendor list shall be created in the system.
Changes to Purchase requisition shall be made possible upon approval from authorise
Business Requirement: SAP Standard Report is available
Integration issue with PP module. To explore further
1.SAP Best Practises for IM & C to be implemented where ever Recheck option like error messages and warnings can be thrown.
suits to Walvoil requirement Requirement Analysis MRO Items
Each procurement document will have a unique number
Purchase requisition line item details like material code, plant, storage location, mate
Since Purchase requisition line items will have materials codes, the specification atta
Previous supply details can be seen through a separate SAP Standard report
Through source determination component Recommended supplier details can be inco
Purchase requisition line item will have all such details
Possible through Release procedure. Release procedure process is explained in sub p

Changes to the approved purchase document shall be restricted
Purchase requisition document provides feature to capture costs on to a cost centre o
Amendment to Purchase requisition shall be made possible before release.
SAP Standard Report provides this feature
All the Purchase documents in Standard SAP System are linked.
SAP Standard Reports provides this feature
Purchase Requisitions are created under the following situations:

Purchase Requisitions shall be created - automatically on MRP Run or manually by th
profiles.
Manual creation of Purchase Requisition for MRO items will be controlled by authoriza
Release Strategy shall be incorporated for release of Purchase Requisition as defined
Gaps:
4.2.2 Requ

Using reference technique method provided by SAP One can copy the contents for fu
MRO ITEMS Each indent will have separate enquiry.
For Capex items possible, electrical items (bulbs, fans etc) Specification about materials shall be copied if they are maintained
Sources are identified (Identification of Sources by past Purchases Quantity shall be copied as per the reference technique method
by Journals or Industrial Directory or by reference) and enquiry is It is possible to mention Quotation expected date
floated over phone or by letter. Provision for mentioning a bench mark price is possible.
Technical/ Commercial Specifications are explained, Requirement is Provision for mentioning tax and duty structure is possible.
emphasised and quotes are obtained. Mentioning of commercial terms is possible
Specification should include the individual characteristics of the SAP Standard Report General Analysis report
item make material etc.,
Tax and duty structures applicable for the company in respective of
Suggested Business Process :
the item on procurement
You use this component if you wish to manage and compare requests for quotation (
Other requirement of commercial terms should be explicitly In Purchasing, the RFQ and the quotation form a single document. Prices and conditi
mentioned. quotation submitted. You can also store the prices and terms of delivery from certain
Sending Enquires to vendors should be possible through direct Gaps:
mailing, fax, Printout.
Business Requirement :

suits to Walvoil requirement.
4.2.3

Standard SAP Report Price comparison list
Quotation received from the vendor will consist of quantity, price, Suggested Business Process:
Payment terms, CST and KST, ECC Number, Delivery terms. A quotation is an offer by a vendor to a purchasing organization regarding the supply
Quotations are compared based on price, Vendor has been A quotation is legally binding on the vendor for a certain period. The quotation is the
finalised. A quotation consists of items in which the total quantity and delivery date of an offer
An item of a quotation may contain a delivery schedule made up of a number of sche
Business Requirement : An item of the procurement type External service contains a set of service specificati
of levels, each representing a level of the service hierarchy. The quantities of the quo
1. SAP Best Practises for IM & C to be implemented where ever If services cannot be defined precisely, value limits are stipulated instead of service l
suits to Walvoil requirement. Conditions can apply at various levels:
To the entire quotation
At item level, to the material to be supplied or to the planned procurement in the cas
At service line level for individual services (tasks or activities)
Processing of quotation shall be based on the Request for Quotation where the Vendo
The Vendors can be allowed to maintain the quotation.
Info records are updated for the validity period, which shall be copied as conditions d
Gaps:
4.2.4 Purchase Orde
As Is Business Process:
Purchasing raw materials, Bought-Out items, consumables, MRO Suggested Business Process:
Items, Capital Goods, Tools and samples. Walvoil shall make use of this component to procure materials or services.
Based on the indents received manual segregation of urgent and Purchasing Document - Definition
normal indents are made, enquires over phone, fax, mail etc., are A purchasing document is an instrument used by Purchasing to procure materials or
made. At times numerous attempts are made to obtain realistic, The following list shows the various external purchasing documents available in the s
competitive prices from vendors of the material group. Depending and are therefore treated separately.)
on the quotes received negotiations with the prospective vendor is Request for quotation (RFQ)
made and order confirmation over phone is first made. On this Transmits a requirement defined in a requisition for a material or service to potential
context it is to be noted that details of the specifications to be
Quotation
communicated over phone or fax is an important aspect of Contains a vendor's prices and conditions and is the basis for vendor selection.
obtaining possible offers. It is also possible that vendors taken for
Purchase order (PO)
obtaining quotes may not be interested, may not be dealing in that
The buying entity’s request or instruction to a vendor (external supplier) to supply ce
line of product or make. Hence new vendors are explored through
Requirements of materials or services can be reported to Purchasing by means of pu
old records, yellow pages, Indenting department’s contacts.
Structure
Once PO is made after the terms are finalised, PO are faxed to the
party and original is sent by courier/post. Each purchasing document is subdivided into two main areas: the header and individ
PO is generated using excel worksheet and a manual register for The header contains information relevant to the whole document. The items specify t
PO number is maintained. This register will contain brief details of material description and the order quantity are specified in each item.
the item on order and the file number of the item on order. The additional data provides extra information about the item, and has no direct con
The typical PO will contain PO number, date, File number, Quote or history for an item, which contains information on already recorded goods and invoic
offer reference if any, Each item in a purchasing document represents a unit of procurement. Purchasing op
Also details of material description, specification, rate, quantity, How does the SAP System Differentiate Between Purchasing Documents?
and value are incorporated. Further order terms such as price, In the SAP System, the different kinds of purchasing document are
delivery, delivery schedule, duties, taxes, transport, payment distinguished from one another by means of the document type. The later determine
terms as well as excise and tax particulars are mentioned in the value when you create a purchasing document.
order. Document types are defined for RFQs, purchase orders, and contracts, for example. T
How is Purchasing Documents Numbered?
Business Requirement : Each document is assigned a unique number. (Note that the "number" may also be a
assignment means that the system assigns the number. External number assignmen
1. SAP Best Practises for IM & C to be implemented where ever Alphanumeric assignment is only possible in the latter case.
suits to Walvoil requirement. A purchase order is a formal request or instruction from a purchasing organization to
Structure
A purchase order (PO) consists of a document header and a number of items.
The information shown in the header relates to the entire PO. For example, the term
A procurement type is defined for each of the document items. The following procure
● Standard
● Subcontracting
● contracts
● Stock transfer
● External service
Delivery of the total quantity of material (or performance of the total volume of servi
corresponding planned delivery dates.
An item of the procurement type "external service" contains a set of service specifica
of levels, each representing a level of the service hierarchy. The order quantities are
specified precisely.
If services covered by an already existing contract are released (ordered, or called of
Conditions
Conditions can apply at various levels:
To the entire purchase order
At item level, to the material to be supplied or to the set of service specifications in t
At service line level for individual services (tasks or activities)
Account Assignment
Costs can be apportioned among various Controlling objects via the account assignm
PO History
The transactions following on from a purchase order are documented in the PO histo
Partner Roles
Instead of the vendor as the order recipient, other business partners can appear in v
Plant
In the purchase order, each item is destined for a certain plant. Each plant belongs to
Texts
You can enter text in a purchase order directly or change texts that are suggested by
Header text: applies to the entire document
Item text: applies only to the relevant item
You define which texts appear in which order on printouts in Customizing for Purchas
Gaps :
4.2.5 Re
As Is Business Process: Suggested Business Process:

Walvoil shall use this component if it wishes to set up approval procedures for purch
Not following any release procedure (e.g. the total order value exceeds Rs10, 000), it has to be approved (by the cost ce
is replicated in the SAP System by the "release procedure".
Business Requirement Which Documents Can be Released (Approved)?
Release procedures can be defined for the following documents:
1.SAP Best Practises for IM & C to be implemented where ever suits Purchase Requisition
to Walvoil requirement The external purchasing documents purchase order (PO), contract, scheduling agree
Gaps:
4.2.6 Purcha
As Is Business Process: Suggested Business Process:
Imports Raw materials and capital goods , Finished Goods Walvoil make use of this component for import procurement. Difference will be the
Import Procurement procedure A purchase order is a formal request or instruction from a purchasing organization t
Based on the above formal indent is obtained for a specific quantity Pricing conditions will be maintained based on Imports pricing and tax conditions.
and delivery schedule. If necessary new vendors are also Separate Document type and Number range shall be maintained for local purchases
approached and offers are obtained before final vendor is finalised Advance payment shall be through Internal order (Based on the Payment request) f
and the import price is fixed after negotiating. Also in certain cases LC cannot be addressed in Standard SAP System.
our buyer of the FG advises the vendor and the import price and Duty Payment (CVD) and Customs duty payment shall be through the Advance paym
accordingly order is placed for import. The same price details are mentioned against to those conditions mentioned in PO. Customs department shall
taken for costing purposes (worked out using excel) maintain Vendors in PO.
Gaps:
PO are created manually with all the import indent terms and
bankers details etc., and forwarded to the seller/indenting agent.
However before the imported material is received at our stores a
formal order is created through the system to account the material
on receipt.
Copies of such manual order are passed to accounts for
information.
As and when import activities take place, generally an estimated
funds requirement plan is advised to accounts. This plan takes into
account the LC’s being opened, Bank documents to be retired,
customs duty payments becoming due during the week/month.
Payment Procedure
Depending on the payment terms agreed with the vendor like
advance LC or DD payment procedure is initiated.
For Opening LC the following documents are prepared.
● Covering letter to bank
● LC application
● Declaration
● Indemnity bond
● PO
● Proforma invoice or indent
Such documents duly signed by authorised signatories are
forwarded to the bank for further action.
Once LC document or advice is received the same is forwarded by
fax to the buyer and indenting agency.
In case of FOB terms of shipment, Insurance company is
approached and PO details are faxed to obtain a premium advice.
Based on this advise cheque is requested from the accounts
department for forwarding to insurance company and further issue
of the policy. Once shipment is effected shipment details are
advised to insurance company by way of letter, fax.
In case of CIF terms of purchase insurance is taken by the vendor
themselves and accordingly shipment takes place.
Follow ups are made with the vendor about the despatch and
shipment details. Shipment advice from vendor is immediately
communicated to the clearing agent for follow up with
airlines/steamer lines Cargo arrival advice is obtained. Immediately
after shipment of the goods the vendor sends one complete set of
shipping documents by fax.
Details of documents are as follows
Invoice
Packing list
Certificate of origin
A.W.B or BL (air way bill/bill of lading)
Insurance certificate.
Certificate of analysis
Such above set of advance documents are immediately faxed/sent
to the clearing agent for further customs clearance process.
Necessary copies if required and detailed write-up of the imported
item, End use certificate is also forwarded. Appropriate classification
of the item under import as well as previous import B/E is also send
to for easy clearance.
In case of LC related/Documents through bank shipments original
documents are forwarded through the bank and as and when such
documents are received by the bank, the bankers sends us an
advice for acceptance of shipment documents.
In this process we also follow up with bankers about the documents
arrival so that original documents in case of sea shipment can be
collected earliest to avoid demurrage and speedy clearance.
In the case of Air Consignments, the goods would have landed
much before the receipt of original documents with the bank hence
the cargo arrival notice, airway bill and invoice copies are forwarded
with the covering letter to the bank for issue of necessary release
order.
Once the cargo is arrived at the port/airport the will file necessary
bill of entry and other documents. After the assessment of the
goods by the customs authorities advises through fax the actual
customs duty and other duties with individual break up. The same
is checked for correctness and if necessary taken up with Customs.
Advice to accounts for obtaining DD for customs duty with break up
is forwarded along with necessary PO copy.
Customs duty payment by DD is sent to by courier or hand delivery.
Necessary follow-up are made about the status of clearance and
dispatch of material to the factory.
Upon receipt of the material at factory the material is in warded
against the system order. The submits his agency and other charges
bill along with B/E copies.
The exchange control copy of the B/E is forwarded to the bankers
as proof of import along with a covering letter giving details of
import, payment reference etc., and The same advice is copied to
accounts department with all relevant documents for reference and
action. The triplicate copy of the B/E is handed over to the excise
department for availing modvat of CVD amount.
The CHA’s (Clearing House Agent) Bill is passed for payment with a
cross reference to the GRN raised for the imported items and sent
to accounts through the manual register maintained for this
purpose. The Cost of Clearance and other charges are taken into
account for arriving at the landed cost of the RM and PM in the
costing calculations.
Business Requirement
1.SAP Best Practises for IM & C to be implemented where ever suits

to Walvoil requirement
4.2.7 Outbound Se
As Is Business Process : Suggested Business Process:

Not Following Service Purchase Orders are created for the external procurement of services from
Business Requirement: Separate pricing conditions are maintained for services.
For PO items to be supplied by subcontractors, you can specify the necessary input
1.SAP Best Practises for IM & C to be implemented where ever suits Standard SAP Purchase requisition with a different number range shall be used
to Walvoil requirement Purchase requisition shall consist all the fields
Reminders can be maintained in Standard SAP PO.
This is addressed as Goods receipt against to PO. Provision to capture excise entries
Left over quantities at job work vendor can be seen using Standard SAP System. Pr
Subcontracting PO will have BOM; batch number can be specified to each line item
4.2.8 Purcha

Not Following The procurement of services shall involve the following steps:
Determination and recording of requirements
Business Requirement: Determination of possible sources
1.SAP Best Practises for IM & C to be implemented where ever suits Bid invitation procedure
to Walvoil requirement Entry of data from quotations submitted by bidders
Comparison of quotations
Award phase (order placement)
Monitoring of purchase orders
Entry of services actually performed
Acceptance of services performed
Verification of invoices for services

Services shall be maintained as master data in the standard SAP system. Service m
Service Purchase requisition can be created for one line item or for multiple line item
Purchase requisitions can be subjected to release approval
Walvoil will create Service PO for the service providing Vendor as & when they will g
Entry Sheet.
When Service Entry Sheet is entered in the System w.r.t. Service PO then it will be
In Service PO itself we can mention the Service taken & Material used for Services i
Accounting Entries gets generated as per Account Assignment given in Service PO.
Invoice Verification for Service PO can be done after Service acceptance.
Gaps:
4.2.9 Purchas

Not Following
Business Requirement: Purchase Orders can be amended before the Goods Receipt If the purchase order is
the order. If the release strategy has value limits, the purchase order change in valu
1.SAP Best Practises for IM & C to be implemented where ever suits The Purchase Order amendments can be reported for changes in different fields.
to Walvoil requirement Purchase order amendments shall be traced; Changes will be recorded in the system
Gaps:
4.2.10 C

Currently purchase through cash payment is resorted for various
small value and consumable items as well as office maintenance Cash purchases can be carried out in the Standard SAP System through invoice veri
items. Such purchases are also resorted in case of any emergency 1. GR without reference to any order can be set to active.
requirements of specific items. 2.Indicator for cash purchase can be set at header level texts at the time of GR
The items of purchase are initiated by the departments through a 3. A Separate report shall be developed using ABAP.
formal material indent and sent to commercial department. As and 5.PO History would fulfil this requirement
when such materials are received at the stores and necessary
GRN’s made the relevant bills are submitted to accounts after due
Gaps:
approval by commercial head to square up the impreset advance.

4.3 Go
GRN at Stores – In general It is possible to capture through a separate field in GR screen. It is suggested as a s
Using Excel GRN at Stores is doing now. will be provided.
GRN is prepared based on PO for all purchasing scenario. To print GR details like Document date, LR number (should be mentioned in header
GRN for Misc items is prepared without PO. PO is prepared Consignment should accompany COA as per the requirement in QM module and Inv
manually. Goods receipt in Standard system is based on with Reference to orders basically (PO
For all the materials Goods Receipted Note (GRN) Check List - possible to refer to the approved vendor list and give error or warning message.
Which is to be filled before GRN is Prepared
Supplier Name Suggested Business Process:
Manufacturer name
Item Name Inventory Management
PO Number and Date This component deals with the following tasks:
Delivery Challans Number and Date ● Management of material stocks on a quantity and value basis
Duplicate for Transporters Available or not ● Planning, Entry, and Documentation of all Goods Movements
Manufacturer Name approved or Not ● Carrying out the Physical Inventory
Transporters name Managing Stocks by Quantity
LR Number and Date All transactions that bring about a change in stock are entered in real time, as are t
Vehicle number and applies to stocks that:
Item Lot number ● Are located in the warehouse
Manufacturing date ● Have already been ordered, but have not yet been received
Delivery Challans Qty ● Are located in the warehouse, but have already been reserved for production
Received Qty ● Are in quality inspection.
Location If a further subdivision by lots is required for a material, one batch per lot is possibl
Category (Customer name or Parent Company name) Special Stocks
Division Inventory Management can manage various types of a company’s own special stock
Excisable / Non excisable Managing Stocks By Value
GRN number The stocks are managed not only on a quantity basis but also by value. The system
Authorised Signatory ● Quantity and value for Inventory Management
● Account assignment for cost accounting
● G/L accounts for financial accounting via automatic account assignment
The valuation area is the organizational level at which a material's stock value is ma
Business Requirement In Inventory Management, work is basically done at plant and storage location leve
plant via the valuation area.
to Walvoil requirement Planning, Entry, and Documentation of all Goods Movements
Goods movements include both "external" movements (goods receipts from externa
transfers, and transfer postings).
For each goods movement a document is created which is used by the system to up
You can print goods receipt/issue slips to facilitate physical movements and monitor
Integration of Inventory Management in the Logistics System
Use
Inventory Management is part of the Materials Management module and is fully inte
Material is procured from external or internal sources on the basis of the requireme
under Inventory Management) until it is delivered to customers (Sales & Distributio
During all transactions, Inventory Management accesses both master data (such as
Features
Integration in Materials Management
As a component of Materials Management, Inventory Management is directly linked
Inventory Management provides information for MRP, which takes into account not o
When a material is ordered from a vendor, Inventory Management posts the deliver
purchase order and the goods receipt document are checked to ensure that they ma
Integration in Production Planning
Inventory Management is closely linked to the Production Planning module:
● Inventory Management is responsible for staging of the components required
● The receipt of the finished products in the warehouse is posted in Inventory
Integration in Sales & Distribution
As soon as you enter a sales order, you can initiate a dynamic availability check of s
When the delivery is created, the quantity to be delivered is marked as "Scheduled
It is also possible to create sales order stocks.
Integration in Quality Management
In the case of a goods movement, the system determines whether the material is s
Integration in Plant Maintenance
Inventory Management is linked with Plant Maintenance as follows:
● It is possible to post goods movements with reference to equipment BOMs.

● It is possible to withdraw parts for maintenance orders.
When serial number management is active, the individual serial numbers are entered in the c
Integration in the Logistics Information System

With the Inventory Controlling component, the Logistics Information System offers
Gaps:
4.3.1
As Is Business Process : Suggested Business Process :

Not following Goods Receipt When Quality Management (QM) is Active
The SAP System differentiates between two different forms of quality management:
Business Requirement: ● Quality Management in Material Procurement
● Quality Management in Material Inspection
1.SAP Best Practises for IM & C to be implemented where ever Quality Management in Material Procurement
suits to Walvoil requirement Quality management shall be active for procurement, Walvoil can define in the mate
If a certificate is required, the system displays a box during goods receipt for a purc
Quality Management in Material Inspection
If an inspection at the time of goods receipt has been defined for the material, the s
Shall be considered, .QM module based on the sample drawing procedure.
Gaps:
4.3.2 GRN due

All the Capital Items, Furniture, Equipments etc. With Reference to 1.Goods receipt shall be with reference of PO. Subsequent functioning like GR shall
Capex PO GR is done, Based on the User Certification Materials are 2.Report to Distinguish GR Material group wise shall be addressed
Accepted. GRN for Goods Receipt, GRN For Goods Acceptance This
Applies for all Items. Suggested business process:
You use this component to post the receipt of goods from an external vendor or from
Business Requirement: Features
1.SAP Best Practises for IM & C to be implemented where ever The R/3 System distinguishes between the following types of goods receipts:
suits to Walvoil requirement Goods receipts with reference to a reservation
Goods receipts with reference to an order
Other goods receipts
Gaps:
4.3.3 GRN d

Not Following 1.Receiving material from Production order into finished goods stores shall be taken
Business Requirement: Deliveries from production are the result of orders used as a basis for manufacturin
The production order is not only the document on the basis of which a material is m
1.SAP Best Practises for IM & C to be implemented where ever Features
suits to Walvoil requirement Reference to an Order
When material resulting from a production order is delivered, it is important for the
Goods receiving can check whether the delivery actually corresponds to what has be
The system can propose data from the order during entry of the goods receipt (for e
The quantity delivered and the delivery date is updated in the order.
The order number is usually listed on the slip accompanying the delivered material.
Gaps:
4.3.4 GRN due to F
Not following Suggested business process: (PP Module)
Even without a returns delivery, you can post returns from a customer into blocked
Business Requirement: There is no need to create new material code for receiving such rejected materials.
1.SAP Best Practises for IM & C to be implemented where ever like destroy or scrap can be carried out.
suits to Walvoil requirement Gaps:
4.3.5 GRN

Not following This is addressed in the sub process: Purchase order.
Should be decided by the relevant department/Management of Walvoil.
Business Requirement: There are stock statement reports in SAP System. Indenter to run through those re
1.SAP Best Practises for IM & C to be implemented where ever Should be decided by the relevant department/Management of Walvoil.
suits to Walvoil requirement Should be decided by the relevant department/Management of Walvoil.
SAP Standard report is available in the inventory management module, sub module
Goods Receipt
Purpose
You use this component to post the receipt of goods from an external vendor or from
Features
The R/3 System distinguishes between the following types of goods receipts:
● Goods receipts with reference to a reservation
● Goods receipts with reference to an order
● Other goods receipts

● Goods receiving can check whether the delivery actually corresponds to the o
● The system can propose data from the purchase order during entry of the go
● The delivery is marked in the purchase order history. This allows the Purchas
● The vendor invoice is checked against the ordered quantity and the delivered
● The goods receipt is valuated on the basis of the purchase order price or the
Gaps:
4.3.6 GRN i
As Is Business Process: Suggested business process:

Not following Blocked Stock
Company's own stock that should not be used. It is not for unrestricted-use in Inven
Business Requirement: Posting a Goods receipt into Goods receipt blocked stock
1.SAP Best Practises for IM & C to be implemented where ever When you post a Goods receipt in goods receipt blocked stock one must first determ
suits to Walvoil requirement Gaps:
4.3.7 GRN due to Outbound Service /
As Is Business Process: Requirement Analysis:

Material sent to vendor shall be QC Passed if and only the material is issued for sub
Not following
Business Requirement Purchase orders shall be created for services and Service entry sheets shall be crea
the invoice raised by the service vendor based on the service entry sheet created. I
1.SAP Best Practises for IM & C to be implemented where ever suits Gaps:
4.3.8 Exc
As Is Business Process : Requirement analysis:
Not following Automatic Entries to Cenvat Credit/Debit will happen during the postings happening
Party wise Debit note and Credit note and the transaction details like Excise invoice
Business Requirement: Assessable value shall be maintained as master data for trading materials.
Addressed in SD Module, however this will be checked and reviewed as per the requ
1.SAP Best Practises for IM & C to be implemented where ever suits The general flow is part1 posting will be done along with the GR; Part2 posting will
to Walvoil requirement Separate posting of excise duty and education shall be taken care. In Standard repo
This will be considered as purchase return scenario. Provision to generate excise inv
Addressed in sales and distribution module.
Country Version India comes with functions for calculating, posting, remitting, and r
For these purposes, extra fields are available in the vendor master data and materia
You can enter incoming excise invoices in the R/3 System for goods receipts arising
alternatively, warehousemen can capture them in the standard Goods Movement tra
Finally, you can prepare copies of all excise registers for submission to the excise au
Definition
A business document, in India, that your vendor sends you when it delivers excisab
excise authorities.
Use
When you procure goods externally, an excise invoice accompanies each delivery th
offset the duty against the excise duty that you levy on outputs.
You can capture and post excise invoices in one or two steps, depending on your bu
● In the two-step procedure, the excise clerk captures the incoming excise inv
supervisor) checks the excise invoice and posts it. The system then creates a
● In the one-step procedure, the excise clerk captures and posts the incoming
Generally speaking, you have one excise invoice for each goods receipt; u can also
In the R/3 System, the excise invoice consists of header data and line items. The he
● An internal number
● The excise invoice number
● The date of the excise invoice

● The details of the original vendor who generated the excise invoice, if your v
At line item level, the excise invoice lists the materials on the excise invoice, showin
● Chapter ID
● Quantity of materials
● Excise duty base amount
● Rates of excise duty
● Amount of duty paid
Excise Registers
Use
The excise authorities require you to maintain a number of registers relating to exci
automatically, and you can prepare copies of them as and when necessary. Alternat
Features
The SAP System handles the following excise registers:
● Register RG 1
● Register RG 23A and 23C, Parts I and II
● Register RG 23D
● Personal Ledger Account (PLA)
● This is the bank account from which you transfer any money owing to the ex
● Register RT-12
This is a monthly report that summarizes the CENVAT and PLA information from the
Register RG 1
Definition
A register of excisable finished goods kept by manufacturing plants. The register sh
Register RG 23A/23C
Definition
A record of receipts and issues of excisable materials, as kept by manufacturing pla
● Part I shows the quantities of the materials.
● Part II shows the amounts of excise duty on the materials, and how much yo
Previously, manufacturers were required to keep two separate registers, RG 23A an
Register RG 23D
Definition
A record of receipts and issues of excisable materials, as kept by depots.
Serial Numbers
Use
The system automatically numbers all entries in the following registers with a serial
● RG 1
● RG 23A and RG 23C, Parts I and II
● RG 23D
● PLA
Each excise group defines its own number range intervals
Download Register Data

Use
You use this report to download data from the registers listed below onto your hard
described under Creation of Excise Registers.
Use
You use this report to download data from the registers listed below onto your hard
described under Creation of Excise Registers.
This report covers the following registers:
● RG 1
● RG 23 A and RG 23 C (Parts I and II)
● PLA
● Plant excise details
● Monthly Return
Use
The central excise authorities have by vided notification no: 2000-(N.T) dated 28th
The SAP System offers you a report with which you can prepare the necessary print
Annexure
This is a list of all the invoices and bills of entry for which you have made a Part II c
Abstract
This is a summary of the excise information from the annexure.
Subcontracting Without Payment of Excise Duty
Purpose
When you issue materials to a subcontractor, you need to keep track of what mater
The reason for this close monitoring has to do with India’s tax law. Under excise law
premises. However, if the materials have not been returned to you within a given le
of materials that you have manufactured in-house, you will have to post credit entri
Subcontracting Under Full Payment of Duty
Purpose
This procedure illustrates how you use the R/3 System to send materials to your su
Capital Goods
Use
Businesses are allowed to set off excise duty on purchases of capital goods against
Features
When you post an excise invoice that contains capital goods, the system posts half
In following years, you can use a report to identify the capital goods with excise dut
Transfer of CENVAT Credit on Capital Goods
Use
You use this report to display a list of the vendor excise invoices where the vendor h
This is particularly useful in the case of capital goods in order to find out how much
Capturing Excise Invoices Without Reference Documents
Use
This procedure shows you how to capture an incoming excise invoice if you do not h
You can also follow this procedure if you do have a material document that you wan
than it normally would
You commission a construction company build a new plant for you. The company pu
invoices, which the law requires you to deal with yourself. The subcontractor sends
Gaps :
4.3.9 Normal

Not following
Based on the Usage Decision carried in QM module
Business Requirement: materials accepted/Rejected will be posted to relevant
stock.
1.SAP Best Practises for IM & C to be implemented where ever Any Rejections shall be handled through SAP Transactions.
suits to Walvoil requirement If in case the rejected materials are to be sent to back to
vendor by creating excise invoice can also be carried out
using Standard SAP transactions.
Gaps:
4.3.10 Line R

Not following Line Rejections can be handled through Standard SAP
Transaction. If in case additional quantity is required to be
Business Requirement: issued to production shall also be addressed through work
1.SAP Best Practises for IM & C to be implemented where ever around solution.
Gaps:
4.4 G
Not Following Suggested Business process:
Companies usually distinguish between various types of
Business Requirement: goods issues, each of which is handled in the R/3 System
1.SAP Best Practises for IM & C to be implemented where ever as follows:
suits to Walvoil requirement Stock Scheduled for Delivery
Withdrawal, picking, and shipping of goods to customers
are carried out in the Sales & Distribution (SD) component
and are dealt with in detail in the document SD Shipping
Guide. They are not dealt with in this section.
The Inventory Management system provides two
movement types for posting goods issues to customers if
your company does not use the SD module. These are the
movement types "Consumption to sales order" and
"Consumption to sales".
Material Withdrawals for Production Orders

Inventory Management provides for the staging of
components for production. You enter withdrawals for
production as goods issues with reference to the
production orders for which the components are required.
Other Types of Internal Staging of Material

Materials can be withdrawn not only for production but also
for other purposes (for example, for cost centre, CO order,
maintenance order, or asset).
Return Deliveries to Vendors
Return deliveries to vendors are entered with the function
Material document ® Return delivery or with the function
Goods receipt ® For purchase order.
Scrapping/Sampling
If a material is no longer usable, it must be scrapped.
Scrapping of a material is entered in the R/3 System as a
goods issue. The withdrawal of samples must also be
entered as a goods issue.
This section explains the following goods issues:
● Material withdrawals for production orders
● Other types of internal staging of material
● Scrapping/sampling
Process Flow
Entering a Goods Issue with/Without Reference
Document
Before entering a goods issue, you have to find out
whether any reference document or data exists in the
system.
When you enter a goods receipt, you can reference:
● Reservations
● Production orders
● Bills of material
If a reference document (reservation/order) exists, it is

important to enter the goods issue with reference to this
document, for the following reasons:
● The goods issuing department can check whether
what was requested is actually issued.
● During entry of goods issue, the system can
suggest data from the reference document (for
example, account assignment, requested material,
quantity, etc.). This simplifies both data entry and
checking (over deliveries and under deliveries)
when entering a goods issue.
● After a withdrawal, the quantity withdrawn is
updated in the reference document and the
reserved quantity is reduced accordingly. Thus,
Inventory Management can monitor the withdrawal
process and Materials Planning can update the
stock/requirements list.
If you do not reference the corresponding reference

document during the goods issue, the reservation remains
open and the requested quantity remains reserved,
although the request no longer really exists. Consequently,
available stock in Materials Planning no longer corresponds
to the stock actually available!
How do you find the reference document?

If you do not know the number of the reference document,
you can find it in the system using the material number or
the account assignment.
Gaps:
4.4.1 Goods Issue to Outgoing Service/Job Work Orders
As Is Business Process: Requirement analysis:

Not Following SAP Standard report will give output to users to view materials left out at subcontra
Business Requirement: Suggested business process:

1.SAP Best Practises for IM & C to be implemented where ever 1. The material to be produced by the vendor can be ordered as a subcontract item
suits to Walvoil requirement the vendor needs to perform the subcontract work or value-added service.
2. The components that are provided to the subcontractor are managed as stock pr
Gaps :
4.4.2 Goods Issue To Scrap
W
Not Following Suggested Business Process:
Business requirement: Walvoil scrap a material if cannot use it any more, for example because:
suits to Walvoil requirement. ● the quality has been reduced due to long storage time
● the quality rejected materials lying long time in stores
In the R/3 System, you post a scrapping like a goods issue without reference
Walvoil can scrap materials from the stock types below:

● unrestricted-use stock
● quality inspection stock
● blocked stock
A scrapping has the following results in the system:
● the relevant stock is reduced
● the value of the scrapped material is posted from the stock account to a scra
● the costs of the scrapped material are assigned to the cost center specified.
● The value used is the value from the material master record at the time of th
Gaps:
to production
4.4.3 Goods

Not following Goods Issue to production done with or without reservation. Whenever a production
Business Requirement: against a production order.
1. SAP Best Practises for IM & C to be implemented where ever Gaps:
4.4.4 Goods I
As Is Business Process: Requirement analysis:

Not following 1. Through reference technique method This feature is available in standard SAP sy
Business Requirement: Goods issues shall be based on the sales order, deliveries will have reference to the
1.SAP Best Practises for IM & C to be implemented where ever Gaps:
4.4.5 Good

Not Following Goods issues to quality will be through the automatic postings as per the settings in
Business Requirement: Gaps :
4.4.6 Goods issues to C
Not Following Suggested business process:
In Standard SAP system any Goods issues and Goods receipts are handled through
Business Requirement: transaction. This is same to third party
1.SAP Best Practises for IM & C to be implemented where ever Gaps:

4.5 Logistics
As Is Business Process: The Invoice verification involves the following processes :
It Will take some time to function completly 1.Invoice
Invoice verification is done at Walvoil under the following scenarios 2.Credit Memo
Invoice Verification against to PO 3.Subsequent Debit
Invoice verification against to PO (PO manually done for Misc and 4.Subsequent Credit
capital items) Invoice option is used when the payment is to be made to the vendor.
Invoice verification with out PO. (Reference is taken through GRN Credit memo is used for materials returned back to the vendor. During invoice verifi
for Invoice amount less than Rs 6000/-) Subsequent debit shall be used for transactions where the Original invoice has alrea
Invoice verification for transporters payment (Reference is Subsequent Credit shall be used when any deduction/ penalty is to be levied on the
agreement) There are 3 options, which can be used for Invoice Verification.
Invoice verification for services (Labour work, AMC, Testing charges 1.Goods / Service Item
etc.,) 2.Delivery Costs
3.Goods/Service Item + Delivery costs
Business Requirement Based on the Goods/Service and delivery vendors, the option shall be selected.
1.SAP Best Practises for IM & C to be implemented where ever suits Gaps:
4.5.1 Entry of Vendors’ Invoice Sub Proce

Local Vendor
It takes some time to function completely. Local vendor invoice shall be entered with reference to Purchase Order. More than o
1.Invoice Verification against to PO (PO Generated through Excel be done. If any Invoice verification has been done for any GR for a PO, the quantity
software for RM and other materials) payments to this vendor. It is also possible to raise credit memo against the goods r
the entries are made using the Invoice Verification.
Under this scenario GRN and PO reference is taken, check for the Adjustments to other accounts like Insurance claims Account, etc. can be entered w
Excise or Non-excise, qty received, PO number, GRN Number, Unplanned delivery costs are costs which are not known at the time of creation of p
Accepted Qty. All the entries are done in Excel software as well as In these adjustments wherever the invoice involves the CENVAT, based on the Tax c
maintained in a register. the accounting effect.
2.Invoice verification against to PO (PO manually done for Misc and Import Vendor
capital items) Imports invoice verification is slightly different from the normal invoice verification.
Invoice verification for the CVD part is to be done first before the GR is done. Then
Under this scenario GRN and PO reference is taken, check for the Invoice verification is possible (This is specific to Imports only).
Excise or Non-excise, qty received, PO number, GRN Number, The other functions as mentioned under Local Vendor Invoice verification are also a
Accepted Qty. All the entries are done in Excel software as well as
maintained in a register.
3. Invoice verification with out PO. (Reference is taken through GRN
for Invoice amount less than Rs 6000/-)
Under this scenario GRN and PO reference is taken, check for the
Excise or Non-excise, qty received, PO number, GRN Number,
Accepted Qty.
4.Invoice verification for transporters payment (Reference is
agreement)
Under this scenario commercial department will send the vendor
invoice. Commercial department will mention the GAN number on
back end of the invoice. Invoice entries are done using Excel.
5.Invoice verification for services (Labour work, AMC, Testing
charges etc.,)
Entries are done by referring to PO (>6000) else the entries are
passed without any reference.

4.5.2 Parking of Vendor Invoice Sub Proce

Not following Invoice verification documents can be parked and later processed Vendor invoices c
accounting entries get generated only when the document is posted.
Business Requirement: Gaps :
4.5.3 Cancelling Vendors Invoice Sub Proce

Not following Invoice Documents in Invoice Verification are either Invoices or Credit Memos. If an
quantity and amount in the credit memo or invoice thus avoiding any differences be
Business Requirement: The invoice can be cancelled only if
1.SAP Best Practises for IM & C to be implemented where ever The document is invoice document
suits to Walvoil requirement The document is not already cancelled
The document is not cancellation document of another document.
Gaps:
4.5.4 Ma

Not following Material Valuation can be used for the following purposes :
Adjusting material prices to market price
Performing revaluations
Business Requirement: Executing balance sheet valuation.
1.SAP Best Practises for IM & C to be implemented where ever Material valuation can be used for maintaining future prices, release planned prices,
● Split Valuation
● Split valuation serves the purpose of valuating stock at different values base
If a material is subject to split valuation, every quantity (sub-stock) of this material
If you want to valuate stocks of a material separately, you must create a material m
company code or plant (depending on whether the material is valuated at company
Once you have specified the valuation category, you can create a material master re
Gaps:
4.5.5 Phy
Requirement Analysis:
As Is Business Process: With physical inventory process the adjustment of stocks shall be done with the req
Not following Suggested business process:
Physical inventory component allows the carrying out of physical inventory of the co
Business Requirement: Cycle counting. Any of these techniques can be used for this process.
1.SAP Best Practises for IM & C to be implemented where ever Periodic Inventory:
suits to Walvoil requirement In this process all the stocks in the company are physically counted on the balance
Continuous Inventory
Continuous inventory ensures that all the material is counted at least once during th
Cycle counting
Cycle counting is a method of physical inventory where inventory is counted at regu
Inventory Sampling
Inventory sampling method uses random selection of stocks and these samples are
and book stock are correct.
The counts can be entered in the system and the differences can be reconciled betw
Gaps :
5.0
AS Is Business Process : Suggested Business Process :

No Reports are maintained
Standard SAP Reports are available :
1.SAP Best Practises for IM & C to be implemented where ever Purchase requisition : List
suits to Walvoil requirement Quotation
Purchase order : List
Purchase order History

Info Records
Vendor List
Stock Overview
Invoice Verification
Balance Display: Reports on the GR/IR clearing account.
Material Master
Material document list
Gaps :

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4.

Mr. Avinash Humbrey Mr. Narayana Rajan.N

3 Sales & Distribution

5 Production & Planning

Status of To-Be Business

A-Possible Can be implemented on mySAP ERP and WALVOIL

C-Possible with ABAP Can be implemented on mySAP through ABAP/4 development

The To-Be business process realization is dependent on the following aspects:

3 Business Process Scope 10 11

4 Business Process Details 12 76

State Excise Invoice:

State Excise Duty:

2. Enterprise Structure on SAP R/3 System

Current New Justification / Purpose of the

A purchasing organization procures for a plant.

buyer or group of buyers responsible for certain

Code Description Code Description

RM01 Raw materials Storage location

3. Business Processes scope:

4.2.4 Purchase Order - Local (RM, PM, MRO Items)

4.5.3 Cancelling Vendors Invoice

4. Business Process details:

Material/Services Coverage & Different Types of Procurement

Service with material supply - Job work

Raw materials Not following any codes now

As Is Business Process: Requirement Analysis

As Is Business Process: Requirement Analysis

Over delivery tolerance

As Is Business Process: Requirement Analysis

Descriptive texts (short and long text)

As Is Business Process : Requirement Analysis

vendor master record contains:

8. Raw material supplier- Imports

Vendor Number Assignment

As Is Business Process : Requirement Analysis

Which materials have been previously offered or supplied by a specific vendor

As Is Business Process : Requirement Analysis

Not Following Suggested Business Process :

As Is Business Process : Requirement Analysis

Elements of Vendor evaluation

External service provision

4.1.7 Maintenance of Con

4.1.7.1 Prices As Is Business Process : Suggested Business Process:

As Is Business Process Requirement Analysis

Business Requirement: Gaps:

1.SAP Best Practises for IM & C to be implemented where ever

1.SAP Best Practises for IM & C to be implemented where ever

As Is Business Process : Requirement Analysis

Possible through Release procedure. Release procedure process is explained in sub p

Suggested Business Process:

Purchase Requisitions are created under the following situations:

As Is Business Process : Requirement Analysis

1. SAP Best Practises for IM & C to be implemented where ever

As Is Business Process: Requirement Analysis

4.2.4 Purchase Orde

As Is Business Process: Suggested Business Process:

As Is Business Process: Suggested Business Process:

1.SAP Best Practises for IM & C to be implemented where ever suits

As Is Business Process : Suggested Business Process:

As Is Business Process : Suggested Business Process:

As Is Business Process : Suggested Business Process:

As Is Business Process : Suggested Business Process: