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(SA Upgrade, ke[uvenat|on & Lxpans|on)

rocuremenL Lo aymenL (2)

Document No: 1kI-SUkL-LU 1kG Manua| (TRF/P2P/1.2.4) - 00S kev. 00


End User Training Manual

for

SAP MM Material Management


Process Name: Creating Purchase Order

Process No: TRF/P2P/1.2.4


Control Copy No: TRF/P2P/1.2.4/01

Document Change Contro|
Doc Version Description Prepared by Date Reviewed by Approved by
00 Draft Srinivas .T 25/12/2009







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Enterprise Procurement to pay process in TRF has the following business processes.



Sl. No. TRF
Enterprise
Process No.
Process Name
1 TRF/P2P/1.1 PR processing
2 TRF/P2P/1.2.1 Procurement
planning
3 TRF/P2P/1.2.2 RFQ & Comparison
4 TRF/P2P/1.2.3 Purchase Contract
5 TRF/P2P/1.2.4 Create PO
6 TRF/P2P/1.3 GRN
7 TRF/P2P/1.4 Storage
Management
8 TRF/P2P/1.4.1 Inventory
verification
9 TRF/P2P/1.5 Invoice Verification
10 TRF/P2P/1.6 Vendor Evaluation


For each of the above processes, there are separate End User Training Manuals are
available


This document covers sl. No.5 of the above list, that is Create PO

This End User Training manual on Create PO consists of the
Following sequence of sub-processes as listed in the Table of contents (next page)


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Contents
Procurement in Materials Management -Overview ................................................................ 4
1.2-Purchase Order Processing -Overview ........................................................................... 6
This below information is only for readable purpose .......................................................... 6
Purchase Order ................................................................................................................. 6
Overview & definition ......................................................................................................... 6
Purchase Order Processing in TRF ................................................................................. 10
Purchase Order release / Approval in TRF ...................................................................... 10
1.2.4-Creation Of purchase Order in SAP - Individual Purchase order ME21n .............. 11
1.2.4-Changing the Purchase order-ME22N .................................................................... 30
1.2.4-Displaying the purchase Document-ME23N ........................................................... 33
PRINTING APPROVED PO-ME9F ..................................................................................... 35
Display Message before Printing ......................................................................................... 38
. .......................................................................................................................................... 41









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Procurement in Materials Management -Uverview
Purpose
External procurement in the MM System centres on a general cycle of activities.
Process Flow
The typical procurement cycle for a service or material consists of the following phases:
1. Determination of Requirements
Materials requirements are identified either in the user departments or via materials
planning and control. (This can cover both MRP proper and the demand-based
approach to inventory control. The regular checking of stock levels of materials
defined by master records, use of the order-point method, and forecasting on the
basis of past usage are important aspects of the latter.) You can enter purchase
requisitions yourself, or they can be generated automatically by the materials
planning and control system.
2. Source Determination
The Purchasing component helps you identify potential sources of supply based on
past orders and existing longer-term purchase agreements. This speeds the process
of creating requests for quotation (RFQs), which can be sent to vendors electronically
via SAP EDI, if desired.
3. Vendor Selection and Comparison of Quotations
The system is capable of simulating pricing scenarios, allowing you to compare a
number of different quotations. Rejection letters can be sent automatically.
4. Purchase Order Processing
The Purchasing system adopts information from the requisition and the quotation to
help you create a purchase order. As with purchase requisitions, you can generate
Pos yourself or have the system generate them automatically. Vendor scheduling
agreements and contracts (in the SAP System, types of longer-term purchase
agreement) are also supported.
5. Purchase Order Follow-Up
The system checks the reminder periods you have specified and - if necessary -
automatically prints reminders or expediters at the predefined intervals. It also
provides you with an up-to-date status of all purchase requisitions, quotations, and
purchase orders.
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6. Goods Receiving and Inventory Management
Goods receiving personnel can confirm the receipt of goods simply by entering the
Po number. By specifying permissible tolerances, buyers can limit over- and under
deliveries of ordered goods.
7. Invoice Verification
The system supports the checking and matching of invoices. The accounts payable
clerk is notified of quantity and price variances because the system has access to PO
and goods receipt data. This speeds the process of auditing and clearing invoices for
payment.



















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1.2-Purcbase Urder Processing -Uverview


Purchasing Order Processing
Service
Consumable material
Stock material
Account assignment
(cost center, asset,
internal order)
Statistics
Order
history
Purchase
Order
Standard
Purchase
requisition
Direct Entry
or Purchase
requisition


Tbis below information is only for readable purpose
Purcbase Urder
Uverview & definition
Purpose
The purchase order can be used for a variety of procurement purposes. You can procure
materials for direct consumption or for stock. You can also procure services. Furthermore,
the special procurement types "subcontracting", "third-party" (involving triangular business
deals and direct-to-customer shipments) and "consignment" are possible.
You can use purchase orders to cover your requirements using external sources (i.e. a
vendor supplies a material or performs a service). You can also use a purchase order to
procure a material that is needed in one of your plants from an internal source, i.e. from
another plant. Such transactions involve longer-distance stock transfers. The activities
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following on from purchase orders (such as the receipt of goods and invoices) are logged,
enabling you to monitor the procurement process.
You can use purchase orders for once-only procurement transactions. If, for example, you
wish to procure a material from a vendor only once, you create a purchase order. If you are
thinking of entering into a longer-term supply relationship with this vendor, it is advisable to
set up a so-called outline agreement, since this usually results in more favourable conditions
of purchase.
In the interests of optimized purchasing, the PO quantity can be rounded in the course of PO
processing to allow full advantage to be taken of negotiated conditions or for the optimal
utilization of existing transport capacities.
Because not all materials or services to be procured justify the effort involved in individual
monitoring, you can also create a purchase order with an extended, predefined validity
period and a value limit. (You may wish to do this when procuring office supplies, for
example.) This type of purchase order is similar in nature to the "contract".
In this case, you need not specify the individual materials or expend any effort with respect
to goods receiving activities. You can also reduce the amount of work involved in invoice
verification to a minimum by employing automatic processes.
Definition
A purchase order is a formal request or instruction from a purchasing organization to a
vendor or a plant to supply or provide a certain quantity of goods or services at or by a
certain point in time.
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 terms of
payment and the delivery terms are defined in the header.
A procurement type is defined for each of the document items. The following procurement
types exist:
Standard
Subcontracting
Consignment
Stock transfer
External service
Delivery of the total quantity of material (or performance of the total volume of services)
specified in a purchase order item can be spread over a certain period in a delivery
schedule, consisting of lines indicating the individual quantities with their corresponding
planned delivery dates.
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For PO items to be supplied by subcontractors, you can specify the necessary input
materials or components that are to be provided to the subcontractor for assembly or
processing in respect of each delivery date stipulated.
An item of the procurement type "external service" contains a set of service specifications.
The latter can be hierarchically structured. The summary view of such a hierarchical
structure is referred to as an outline. The outline comprises a number of levels, each
representing a level of the service hierarchy. The order quantities are set out in service lines,
representing individual jobs or activities. Value limits are specified instead of service lines for
services or work that initially cannot be specified precisely.
If services covered by an already existing contract are released (ordered, or called off
against the contract), the PO item can contain a value limit relating to the contract in
question.
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
the case of services
At service line level for individual services (tasks or activities)
Account Assignment
Costs can be apportioned among various Controlling objects via the account assignment.
Vendor Confirmations
Vendors can issue confirmations to the relevant purchasing organization indicating their
compliance or non-compliance with scheduled delivery dates.
PO History
The transactions following on from a purchase order are documented in the PO history on an
item-specific basis.
Partner Roles
Instead of the vendor as the order recipient, other business partners can appear in various
partner roles (e.g. goods supplier or invoicing party).
Plant
In the purchase order, each item is destined for a certain plant. Each plant belongs to a
company code, to which the vendors (creditors) invoice is directed.
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Texts
You can enter text in a purchase order directly or change texts that are suggested by the
system. There are two kinds of text:
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
Purchasing. You can enter several header or item texts, which you can identify by
your own codes.


Processing Purchase Orders
Purchase
requisition
Reference
document
Contract
Vendor
One-time vendor
Purchase
order
10
20
30



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Purcbase Urder Processing in TRF

Purchase order shall be created using selected RFQS, system copies all the things
mentioned in the quotation, which includes price, Tax code, Terms and conditions etc.
Purchase order can otherwise be created directly by referencing a purchase requisition in
case of repeat orders etc.
If any drawing / document needs to be attached with RFQ/PO line item ,then it needs to be
converted to sap document through document mgmt system and then attached to PO line
item

In case of projects getting on hold / delivery destinations being changed from Jamshedpur to
Kolkata(say) or from Jamshedpur to project or vice versa , purchase order needs to be
amended as per amended PRs in terms of plant of destination , taxes if applicable etc. and
same shall be communicated to the vendor by taking printout of the amendment.

Purcbase Urder release J Approval in TRF

As per TRF policy all purchase orders will be approved by single/multiple authorities.
Release procedure in SAP system shall be defined as per TRF approval policy. Release
strategy is used to set up approval procedures for purchase requisitions or purchase order
.Under such a procedure, if a purchase order fulfils certain conditions it has to be approved
before it can be processed further.
This process of approving (clearing or giving the go ahead) a proposed item of expenditure
is replicated in the SAP system by the release procedure. This will be guided by the
validation mentioned in system based on approval matrix.

Each person involved in the release procedure effects release (signifies approval) via. a
release transaction, using his release code. Once effected, a release can also be cancelled
with the same code (that is to stay, the original status is reinstated).

Existing system of P.O and amendment approvals shall be re-looked on the basis of value
limits and type of purchase etc.
Finalization of these needs to be done before realization phase

Tcode-ME29N-Individual Release
Me28-Collective release







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1.2.4-Creation Uf purcbase Urder in SAP - Individual Purcbase order -
ME21n
Mandatory Fields while creating Purchase Order

S.N0 Field
name/Activity
EG: User action and
values
1 Vendor 100002
2 Purchase
organization
1000-TRF Central
Purchase Organization
3 Purchasing
group
1000-BMHE
4 Company Code 1000-TRF limited
5 Material 2000000003
6 PO Quantity 10
7 Delivery Date 18.12.2009
8 Net price 95,000.00
9 Account
assignment
Category
Q-Project make to-
Order
10 Item category Standard
Plant 1000-BMHE
12 Material Group 2001-Plant & machines
13 Conditions-
PB00-Gross
Price
95,000.00
14 Tax Code V0
15 Inco terms EXW-Danbhad
16 Payment terms 0001-payment
immediately due net

















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2. Transaction Menu Path

2.1. Required User Input

Access the transaction ME21N - Vendor / Supplying Plant Known

2.2. SAP Screen Snap



2.3. Description


Logistics --> Materials Management --> Purchasing Purchase Order --> Create -->
Vendor/Supplying Plant Known

Alternatively, you can use transaction code ME21N directly from the command field.















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3. Document Type

3.1. Required User Input

Select Po document type from drop down list


3.2. SAP Screen Snap



3.3. Description
Select the appropriate document type for Creation of required PO. For TRF a separate
document type for each purchasing function has been defined specifically for different
SBUS. You can select the PO type respective to your department (with description ending
with SBU of TRF)

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4. Org. Data


4.1. Required User Input

Vendor Number
Enter Purchasing Organization
Enter Purchasing Group

4.2. SAP Screen Snap




4.3. Description
Maintain Org. Data in PO document header which is a mandatory requirement.






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5. Document Currency

5.1. Required User Input

Maintain Document Currency


5.2. SAP Screen Snap

5.3. Description
The document currency is defaulted by the Vendor Master data. However, you can change
the currency in the Document header tab 'Delivery/Invoice'. System picks up the exchange
rate which is defined in the system.
The currency is applicable to all items in PO.
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Caution: Enter / Change the currency before entering the items in PO
6. Maintain Items


6.1. Required User Input
Maintain items to be procured

6.2. SAP Screen Snap


6.3. Description
Enter the Item codes for materials to be procured. However, in case of non stock items, you
can define the short text description only as no material master record exists for non stock
items. Also, in case of Non stock items, you will have to specify the account assignment
category. For details please see the related documentation.







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7. Inco terms (header delivery/Invoice tab

7.1. Required User Input

Maintain Inco terms

7.2. SAP Screen Snap



7.3. Description
Inco terms are used to specify the type of shipments. There is a complete list of standard
Inco terms available in SAP. You can select the desired one from the drop down list.









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8 Maintain Delivery Cost Provisions

8.1. Required User Input
Maintain Delivery cost Provisions for all cost components


8.2 SAP Screen Snap



8.3. Description

Planned delivery cost provisions, as an estimated percentage of C&F value are
maintained in Purchase Order so that the estimated landed cost can be evaluated.
Further, at the time of Goods Receipt (if actual cost from Invoice) could not be captured
(due to late arrival of invoice of certain delivery expenses) the provisional cost could be
loaded in the material landed cost.
The cost variance is adjusted later as a period expense or debit/credit to material.
Planned Delivery cost can be maintained for each item at Item Level as well as at Header
level. Separate delivery cost components are mapped as PO conditions, which can be
updated as required.



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9. Check Document

9.1 Required User Input

Click on 'Check' button.



9.2. SAP Screen Snap


9.3. Description
To ensure the correctness of document, check it before saving.








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10. Review system messages

10.1. Required User Input

Review System messages and take appropriate action

10.2. SAP Screen Snap



10.3. Description
System Messages are generated as the document is checked, read the messages carefully
for all warning / information. However, you can still continue posting your document as
warning messages do not halt the document posting.







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11. Save Document

11.1. Required User Input

Click 'Save' button, next screen appears as


11.2. SAP Screen Snap



11.3. Description
Save document to record your entries.

12. Confirm Save

12.1. Required User Input

Click 'Save' to Continue Or

Edit / Cancel if required
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Confirmation is asked by the system if the document is saved inspite of the warning
messages generated by the system during document check.
13. Document Saved & no. generated

13.1. Required User Input

Note document number.

13.2. SAP Screen Snap

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.


1.2.4-Creation of purchase order with respect to RFQ-ME21N

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Selection Variant - Purchase Requisition
Required User Input
Choose RFQ from selection variant list

You can take help of the selection variant to specify that what type of document you are
searching for.
There are a number of options available in Selection Variant list. Click on Selection variant
button to Display the list

To search for your reference
document i.e. RFQ in this case, you
can take help of the Document
Overview Window. Click on
Document Overview On button to
open it.
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RFQ Search Screen
Required User Input
Call Document category drop down list.

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This will take you to a search screen from where you can easily search your RFQ by
providing some key parameters. In this case you will use the Document category field A. and
Click execute Button.














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Search Result - List of RFQ
Required User Input
Select document
Click on Adopt button


















Click on Adopt button -by selecting required RFQ
document. The search will result by providing the list of
all valid RFQ that satisfy the search criteria.
Select the document and click on adopt button to copy
the contents of PR into PO screen.
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As you adopt your RFQ, it will copy all the contents into PO. Now you can close the
document overview window by clicking on Document Overview Off switch.



Enter all the data required as explained above for individual purchase order. Check the
completeness of your document and verification of data provided in fields by using the
standard Check button in the application toolbar. Save the document.
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1.2.4-Cbanging tbe Purcbase order-ME22N



Click the icon other purchase order and
press enter, next screen appears as
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Enter the purchase order number to be
changed and press enter. Next screen
appears as
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Change the required fields as per TRF SBU and save the document.







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1.2.4-Displaying tbe purcbase Document-ME23N

Here we can only view the information




Click other purchase order icon
and press enter. Next screen
displays as
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PRINTINC APPRUVED PU-ME9F




A Purchase Order can only be Printed / Output Transmitted if it is approved. Make sure that
your purchase order is approved only then you can print it, otherwise system would not
select the document for Print Transmission.








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Next screen appears as


Enter the document number of the PO to be printed.





In the Message Output selection screen you should enter the Document Number which is to
be printed.
By default, the system automatically suggests the last Purchasing document that has been
posted by you. Another option is to execute the transaction without specifying the document
number, in this case all pending PO print list will be displayed to you.




Execute button
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Next screen appears as



Select document by clicking on check box










Select the document which you wish to print. In case of multiple documents, multiple selections
can be made and printed simultaneously.
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Display Message before Printing

Click on 'Display Message' button











You can display the Print preview before giving the print command.











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Enter Print parameters

Enter Output device: LP01
Select: Print Immediately
Select: Print Preview




Maintain print parameters so that a print command can be given directly from the Display
Message screen. These parameters should be set by default in your profile; however, you
can maintain them here as well











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Click on 'Print Icon' to Print/Transmit PO




From the print preview screen, after reviewing the document you can give the print
command by clicking on the Printer Icon.








Print icon
Back
button
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Next Click 'Back' button to go to main screen

You can exit from the screen without giving the print command. This may be required if you
want make some more changes in your Purchase Order before Printing it.






This ends the Processing of Purchase order- TRF-SURE-EU TRG Manual (TRF/P2P/1.2.4) 007 Rev. 00
.





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