Procurement Blueprint Summary

Presentation Material Creation Date: 6th November 2002 Process Area: Demand Fulfillment Blueprint Document ID and Repository: H1698-EN 0.1, (Factory), H1699 EN 0.1 (Hub) Code DocMan

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Procurement Blueprint in the NET Delivery Process Operational Model

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Purpose and Scope of Procurement Blueprints (Factory, Hub)

Purpose Purpose of this document is to describe global Materials Call-off processes, transactions and organisational responsibilities in executing and controlling the procurement Scope Scope is limited to handling of procurement activities related to making call-offs i.e. in others words ordering. The ordering from external sources as well as from internal sources (hub-plant, hub-hub, etc.) are in scope

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Content of the presentation

This presentation will describe Hub Procurement BP summary with reference to Factory Procurement BP Examples (process flows) are from Hub BP, except DND process which is only valid in Factory Procurement related master data is similar in both BPs, depending on the delivery process

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Master Data creation process

M a i n ta i n M a te ri a l M a ste r, P u rch a si n g vi e w, M RP 1 -4 vi e ws M a te ri a l i n fo

Yes Is ve n d o r co d e fo r th e m a te ri a l su p p l i e r o p e n e d fo r a p l a n t? No M a i n ta i n V e n d o r M a ste r, P u rch a si n g vi e w, P a rtn e r fu n cti o n s Supp lier i n fo M a i n ta i n In fo re co rd (sta n d a rd , su b co n tra cti n g , co n si g n m e n t) In fo re co rd i n fo M a i n ta i n Co n tra ct o r S ch e d u l i n g A g re e m e n t S e ch e d u l i n g A g re e m e n t o r Co n tra ct i n fo

M A T E RIA L P L A NNE R

M a i n ta i n S o u rce L i st S o u rce i n fo

M a i n ta i n Qu o ta A rra n g e m e n t

M a i n ta i n P ro cu re m e n t m e th o d P ro cu re m e n t m e th o d i n fo

Q u o ta a rra n g e m e n t i n fo

E X T E RNA L P RO CE SS

G l o b a l M a te ri a l M a ste r a n d B O M Da ta M a i n te n a n ce

Ne w V e n d o r Cre a ti o n

IM S Y S T E M S A P R/3

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Master Data Maintenance

Material information [Material Master] Vendor information [Vendor Master] Material - Vendor [Info Record] Contracts [Contract tai Scheduling Agreement] Source of supply [Source List] Percentage split between Material - Vendors [Quota Arrangement] (Procurement Method)->is needed in order to run DV report

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

NMI from Supplier to Hub with PO

N MI from S up plier to H U B w ith P urch ase Order

Ord e red m a teri a l wi th d o cu m e n ta ti on De l i ve ry In fo Re ce i ve a n d che ck De m a n d V i si b i l i ty Bo o k T ra n sp o rtati o n a n d se n d g o o d s a n d DA to HUB Co n f. i n fo De l i ve ry In fo

SUPP L IER

Re ce i ve a n d con fi rm Pu rch a se Ord e r

DV In fo Cre a te an d Se n d De m a n d V i si b i l i ty Re p o rt Pu r. re q . Assig n e d Pu r.re q .

PO Ch e ck p ossi b l e ch a n ge s i n d e m a nd a fter M RP ru n

BUYE R

Assig n Pu rch a se re q ui si ti on s

Cre a te an d sen d p u rch ase ord e r

Re ce i ve a n d e n te r co n fi rm a ti o n d a ta

Co n f. i n fo (Di sp atch A d vi ce ) HUB E XE CUT ION (Go o ds Re ce i vi n g ) HUB E XE CUT ION

EX T E RNAL BL UEP RINT DV i n fo b a se d o n M RP M RP Re su l ts

GR i n form a ti o n

NO KIA S AP R/3 IM SYS T E M

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

NMI from Supplier to Hub (PO or SA)

NMI with Purchase Order is a basic procurement process in which short term forecast (Demand Visibility) report and call-offs (Purchase Orders) are sent separately. Purchase order confirmation can be used in this process. In this process Buyer needs to monitor possible changes in demand in order to react possible changes in form of cancelled or changed purchase orders In NMI process with Scheduling Agreement (SA), call-off and Demand Visibility information is sent to supplier using Demand Visibility report i.e separate Purchase Orders are not sent to supplier. To prevent the fluctuation of call-off figures the lines can be "frozen" for a certain time period. This restrains MRP to change the call-off quantities within the freezed time frame. In this process order confirmations are not used Same processes are also valid in factory BP (NMI from supplier to factory, PO or SA in use)

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

SMI from Supplier to Hub (SA)

S MI fro m S u p p lie r to H U B w ith S c h e d u lin g Ag re e m e n t

De m a n d i n f. Re ce i ve a n d ch e ck De m a n d Vi si b i l i ty S UP PL IE R S ch e d u l e re p l e n i sh m e n ts

Di sp a tch A d vi ce B o o k T ra n sp o rta ti o n , se n d g o o d s a n d DA to HUB De l i ve ry i n f. M a te ri a l s wi th d o cu m e n ta ti o n Re ce i ve i n fo rm a ti o n o f g o o d s re ce i vi n g

DV In f. B UY ER Cre a te a n d Se n d De m a n d Vi si b i l i ty Re p o rt

Co n su p ti o n i n f. Cre a te a n d se n d Co n su m p ti o n Re p o rt

E X T ERNA L B L UE P RINT DV i n fo b a se d o n M RP (S A ) Co n su p ti o n i n f.

(Di sp a tch A d vi ce ) HUB E X ECUT IO N

(G o o d s Re ce i vi n g ) HUB E X ECUT IO N

G R i n fo

No ki a S A P R/3 IM S Y S T EM

Re c. A d vi ce

NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

SMI from Supplier to Hub (SA)

In SMI-process call-offs or purchase orders are not sent, because supplier is responsible for keeping stock level between minimun and maximum quantity. To be able to schedule replenishments Nokia is sending to supplier Demand Visibility report with stock information. Additionally a Consumption Report is provided to supplier according to agreement. Self-billing prosess is used instead of invoices Scheduling agreement is maintained for goods receiving purposes
Same process is valid also in factory BP (SMI from supplier to factory, SA in use)

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Direct Customer Delivery from supplier to Custom

FORWA RDING COM P ANY

CUS T OM E R

P l a ce a n o rd e r

Cu sto m e r O rd e r

P u rch a se Ord e r i n fo S UP P L IER Re ce i ve a n d co n fi rm P u rch a se Ord e r Co n fi rm a ti o n i n fo P i ck a n d Pa ck o rd e re d g o o d s

P i cki n g a n d p a cki n g i n fo

In fo rm No ki a th a t g o o d s a re re a d y fo r p i ck-u p Di sp a tch Ad vi ce (DA )

P u rch a se o rd e r B UY E R/ L O GIS T ICS COORDINA T OR M o n i to r a n d A ssi n g P u rch a se re q u i si ti o n s A ssi g n e d P u r. Re q . Cre a te a n d se n d p u rch a se o rd e r Re ce i ve a n d e n te r co n fi rm a ti o n d a ta Co n fi rm a ti o n i n fo

P u rch a se Ord e r i n fo

P u rch a se Re q u i si ti o n i n fo E XT E RNA L B L UE P RINT (P RO CE S S) Cu sto m e r De l i ve ry fro m S u p p l i e r i n cl u d i n g Co n so l i d a ti o n fo r In te ri m P h a se

S a l e s O rd e r p ro ce ssi n g

S a l e s O rd e r i n fo

NOK IA IM S Y S T E M

P u rch a se Re q u i si ti o n s b a se d o n SO S AP R/3

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Direct Customer Delivery from supplier to Customer

Direct Customer Delivery (DCD) is a process, where Purchase Orders are placed from Nokia according to received customer orders (Sales Orders) to external sources of supply and delivery is done directly to delivery address specified by the customer. Materials are not stocked at LSP's premises i.e. they are not going through the HUB, but delivered directly from supplier to customer or project in MLS country Not valid process in factory BP (from supplier to factory)

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Sales order driven execution from supplier to Hu

Sale s Orde r Driv e n Puchasing from Supplie r to HUB

De l i ve ry i n f. B o o k T ra n sp o rta ti o n a n d se n d g o o d s, DA to HUB

O rd e re d m a te ri a l wi th d o cu m e n ta ti o n

S UP P L IE R

Re ce i ve a n d co n fi rm P u rch a se O rd e r

Co n f. i n fo

De l i ve ry i n f.

PO A ssi g n e d P u r.re q . Re ce i ve a n d e n te r co n fi rm a ti o n d a ta o n PO co n f, i n f P u r. Re q . i n f. b a se d o n SO E X T E RNA L B L UE P RINT S a l e s o rd e r han dling

B UY E R

A ssi n g P u rch a se re q u i si ti o n s

Cre a te a n d se n d p u rch a se o rd e r

(Di sp a tch A d vi ce ) HUB E X E CUT IO N

(G o o d s Re ce i vi n g ) HUB E X E CUT IO N GR i n fo rm a ti o n

NO K IA S A P R/3 IM S Y S T E M

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Sales order driven execution from supplier to Hub

Sales Order (SO) driven procurement is a process for nonstockable materials, which are only purchased against Customer Order and delivered to HUB for consolidation Not valid process in factory BP (from supplier to factory)

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Direct Nokia delivery from supplier to factor

D ire c t N o k ia D e liv e ry fro m S u p p lie r to F a c to ry

SUP PL IER

Re ce i ve a n d ch e ck De m a n d Vi si b i l i ty

Re ce i ve De l i ve ry Re q u e st

Bo o k T ran sp orta ti o n a n d se n d g o od s to No ki a fa cto ry O rde re d m a te ri a l wi th d o cu m e n ta ti o n De l i ve ry re q u e st

PRO DUCT IO N PERSO N IN NO KIA FACT ORY

DV i n fo

T ri g g e ri n g o f d e l i ve ry re q u e st ?

Vi su a l co ntro l M o n i to r L i n e Sto ck

Is Re p l e n i sm e n t needed?

Ye s Cre a te d e l i ve ry re q u e st

De l i ve ry re q u e st

Se n d De l i ve ry re q u e st

Au to m a ti c co ntro l

No

BUY ER

Cre a te a n d Se n d De m a n d Vi si b i l i ty Re p o rt

EXT ERNA L BL UE PRINT

Wa re h o use

M RP Re su l ts

GR i n fo rm a ti o n

NO KIA SA P R/3 IM SYS T EM

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Direct Nokia delivery from supplier to factory

In DND-process material is delivered through Nokia warehouse directly to production line buffer. DND-process is not always based on MRP-run. Call-offs are done using Delivery Requests, which are generated by the system automatically (stock requirement batch run) or manually by production persons. Scheduling Agreement is needed for Demand Visibility and Goods Receiving purposes. Not valid process in Hub BP (from supplier to Hub)

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Special cases in Hub/Factory BPs

Hub BP: HUB-to-HUB/Factory with Stock Transport Orders Bundle procurement Service procurement Intercompany procurement Factory BP: Subcontracting procurement Bulk procurement (Bulk Material process covers low-value
materials, which are not in MRP-run and not necessarily in production BOM, but are still needed in manufacturing of finished goods ) Consumable Goods Purchasing (In Consumable Goods Purchasing process Purchase Orders are assigned to cost center via account assignment. Goods purchased using this process are not included in MRP-run and demand is not in the system)

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Responsible Organization in the Procurement Blueprint

Direct DO/MEX procurement (person responsible for purchasing) DO/Plant procurement (person responsible for purchasing) DO/GEO procurement (person responsible for purchasing) Indirect: Warehouse operations

Goods receipt and warehousing

FSP supplier invoice verification Demand Visibility to supplier

DV report is a general tool for providing information to suppliers about short term (up to 4 months) forecast and call-offs, DV is just a tool that combines forecast and call-off information on one report

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Integration Points to other Blueprints

Software delivery BP Direct Customer Delivery from supplier including consolidation in interim phase BP SNM order handling during interim phase BP Makkyla miniplant BP Global return processes BP Inbound return processes BP Global material master and BOM data maintenance Sales availability management BP Karaportti ship Local Supply planning concept Karaportti make Warehousing BP Country of origin BP Export local clearance BP Import local clearance BP Import intrastat BP Hub execution BP Transportation area BP Proto production BP

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NOKIA

Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala

Frequently asked questions

In which processes MRP run is used? in NMI and SMI, in DND if re-order point or production order in use in consolidation (SODE) and DCD cases demand is based on Sales Order What is self-billing? Self billing process is used in SMI process, because the invoice is based on material consumption report Who is responsible for new vendor number creation in R/3? FSP has the responsibility of providing the vendor number to Sourcing/procurement Sourcing/procurement will create purchasing view in vendor master
20 NOKIA Procurement Blueprint Summary / 6th November 2002 / Heli Kekkonen & Leila Herrala