SAP Business

Blue Print
(Materials
Management)
Strictly Private and
Confidential
Final Version

May 2016

Import Procurement
Lakshya - S/4 Hana
Implementation

SAR Group
Table of Contents

Lakshya - S/4 Hana 1

Implementation 1

1 SAR Group Overview 4

2 Purpose of Blueprint 5

2.1 Project assumptions, restrictions, and requirements 5

2.1.1 Key Assumptions 5

2.2 List of Abbreviations 5

3 MM03 – 04 Import Procurement 7

3.1 Import Purchase Process Flow (Scenario-1) 9

3.2 Import Purchase Process Flow – High Sea Sale (Scenario-2) 10
3.3 Import Purchase Process Flow – Third Party (Scenario-3) 15

4 Key reports 16
5 Functional Gaps 18
6 Process Owners Approval 19

6.1 Signatures 19
 Lakshya - S/4 Hana Implementation: Materials Management Business Blueprint
Document (Import Procurement)
Date: 24.05.2016 Version: Draft 1.0
Nature of Document: Business Blueprint Module: MM
Document
Distribution of Copies:
Revision History
Version No. Version Date Prepared By Remark and Details of Changes
1.0 24.05.2016 Prateek Vijayvergia

Core Team Approvers

Yogendra Kumar Alok Goswami
R. Kumar K C Pradhan
Saurabh Nema Navneet Kapoor
Santosh Singh

© 2016 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to
PricewaterhouseCoopers Private Limited (a limited liability company in India having Corporate Identity Number or
CIN : U74140WB1983PTC036093), which is a member firm of PricewaterhouseCoopers International Limited
(PwCIL), each member firm of which is a separate legal entity.
1. SAR Group Overview
SAR Group, progenitor of brand Luminous is a leading global company delivering high quality power products for
home and commercial applications.

SAR is a unique Group, with a bright future, with the ambitious plans for sustainable growth and an intense sense
of purpose. The company works towards the purpose of making good living attainable.

By combining our expertise with our deep roots in diverse cultures, we’re continuing to provide a range of
products to suit a wealth of consumers.

After the resounding success of Luminous, in 2011 Mr Rakesh Malhotra, who has nurtured the brand for over 24
years, divested 74% of his holding in Luminous Power Technologies to French electrical and power management
major, Schneider Electric.

The company’s group portfolio comprises purity, health and wellness, energy storage, home electricals, renewable
energy, power backup and power storage, renewable and alternate energy solutions like biomass pellets and solar,
respectively.

Founded in 1988, the group has revenues exceeding US $ 500 million in FY 14-15 and has grown in strength year-
after-year to 4000 employees. The group, apart from its dominating position in the domestic market has spread
its magic globally.

SAR Group

Livguard
Ncubate India Livguard
Lectrix Motors Energy
Livpure Pvt. Services Batteries
Private Limited Technologies
Ltd. (LPL) Private Limited Private Limited
(LMPL) Private Limited
(NISPL) (LBPL)
(LETPL)

© 2016 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to
PricewaterhouseCoopers Private Limited (a limited liability company in India having Corporate Identity Number or
CIN : U74140WB1983PTC036093), which is a member firm of PricewaterhouseCoopers International Limited
(PwCIL), each member firm of which is a separate legal entity.
2. Purpose of Blueprint
The Blueprint phase seeks to define the business processes to be supported by the SAP system. The
identified and defined business processes are only a starting point to a continuous improvement process.
The Blueprint Phase mainly focuses on implementing the SAP best practices keeping in mind SAR Group
“as is” process.

The content of this document is a combination of experience from SAR Group Core Users and SAP
Consultants. The information about the current processes was gathered through intensive discussions
with the core team members highlighting major areas of focus for process improvement.

This document also incorporates specific requirements that surfaced during the BBP workshops. The
same have been duly included along with the process descriptions.

1.

2.1. Project assumptions, restrictions, and

requirements
2.1.1. Key Assumptions
 All raw materials, stores and consumables, packing material, trading material, etc shall be valued
with moving average price.
 Postings shall be open in current period as well as previous period. Eg. If the current period is
May, one may be able to post goods movements/transactions for May as well as for April.
However, posting in March shall not be possible. Opening of next period shall be done at month
end.

2.2.List of Abbreviations

Abbreviation Description

MM Materials Management

SD Sales and Distribution

FI Finance

CO Controlling

PR Purchase Requisition

PO Purchase Order

RFQ Request for Quotations

GR Goods Receipt

LIV Logistics Invoice Verification (Vendor Bill passing)

WO Work Order / Service PO

SES Service Entry Sheet

GI Goods Issue

QM Quality Management

QC Quality Check

PI Physical Inventory

RO Return Order

STO Stock Transport/Transfer Order

3. MM03 – 04 Import Procurement
Scenario Requirements
 This scenario deals with the steps involved in the process of import procurement.
 Materials can be procured through Import purchase. Raw materials, Packing Materials, Trading
goods, SFG & consumables etc. are imported in Business Units.
 It also states the prerequisites for the successful completion of the process.
 If procured material is not consider as Excise input than don’t create excise master data for it.
 For requirements of CIN (India) version, the Customs Duty and Countervailing Duty if any, shall
be identified as Delivery Costs in the PO.
 Exchange rate should be maintain at background.
 Mode of Shipment required in PO.
 IEC No should mention in PO and come in PO print also.
 Payment terms provided by client as per requirement.

Organization Data and Master Data used during the process

Company Code : 1000, 1100, 1200, 2000, 3000

Purchasing Org.: Organization which is purchasing the material

Plant : Plant which is purchasing the material.

Purchasing P.Grp. to be selected based on the Buyer/Group of Buyers making the

Group: procurement

Material Master Material master data must be maintained for the material to procure.

Vendor Master Vendor master data must be created for purchasing organization making
the purchase

Pricing
The following calculation schema shall be used.

Pricing Procedure Description

ZIMP01 Import Pricing

ZI Vendor Schema Group

The following condition types have been identified during the BBP discussion for domestic procurement
process. Any other condition types identified during realization will also be configured.
 Condition type description

BASIC PRICE
DISCOUNT ON BASIC VALUE
DISCOUNT (QTY BASED)
AIR FREIGHT
OCEAN FREIGHT
INSURANCE CHARGES
TOTAL OF ABOVE = CIF VALUE
LANDING CHARGES
BASIC DUTY (Inventoried)
CVD (Cenvatable & Inventoried Both)
SAD (ADDITIONAL CUSTOMS DUTY)
(Cenvatable & Inventoried Both)
INLAND HAULAGE
CUSTOM CLEARANCE
LOCAL TRANSPORTATION (% BASED)
LOCAL TRANSPORTATION (QTY. BASED)
DETENTION/DEMURRAGE
MISCELLANEOUS CHARGES
CHA CHARGES

The following formula is used to calculate custom duties

Duty
Duty CENVA
Duty Description Condition Calculated On
% T Status
Type

Basic Customs 7.50% JCDB No Base Value

CVD 10% JCV1 Yes (Base Value + Basic Customs)

Customs ED Cess BED 2% JEDB No Basic Customs + CVD

Customs S.Ed Cess
1% JSED No Basic Customs + CVD
BED
SAD (Addl. Customs
4% JADC Yes (Base Value + Addition of All Above Duties)
Duty)

Note: Duty percentage can be vary.

3.

3.1. Import Purchase Process Flow (Scenario-1)

Import Procurement

SAR Unit Import Vendor

Create
RFQ, Price Can Send to
Maintain & Multiple
Price Vendor
Compariso
n

Automatically
Planning
Purchase Create PO wrt PR Approval through Manual PR
Through MRP
Requisition PR or RFQ Fiori Apps on Mobile Created
Run
Created

Create Vendor
with
International PO Approval
Currency & through Fiori Receive PO
Import Apps on Mobile
Schema
Material Dispatched &
Received @ Customs
Warehouse in India
No Custom
Duty
GRN at
Payment, Relevant All Documents
Material is for
Customs Capture & Post Inbound send to Purchaser (AWB &
Warehouse Customs Duty Delivery
Export Customs Doc.)
Location
Directly

Gate Inward Weighbridge

Entry Weighment

Further
Export from
Bounded GRN w.r.t
Warehouse Custom
Post Excise
Doc In
Part-II
Quality
Inspection

Quality Un-
Usage Restricted
Decision Use Stock Payment
Received by
Invoice Vendor in
Verification Respective
Currency
3.2. Import Purchase Process Flow – High Sea Sale
(Scenario-2)
High Sea Sale Procurement

International
SAR Unit Domestic Vendor
Vendor

Create RFQ,
Price Can Send to
Maintain & Multiple Vendor
Price
Comparison

Automatically
Planning PR Approval
Purchase Create PO wrt Manual PR
through MRP through Fiori Apps
Requisition PR or RFQ Created
run on Mobile
Created

Create Vendor
with INR
Currency & PO Approval through
Receive PO
Import Schema Fiori Apps on Mobile

Send PO to
Parent Co. Out Receive PO
Of India

Received @ Customs Material

Warehouse in India Despatch

Relevant All
Capture & Post Documents send to
Customs Duty Purchaser (AWB &
Customs Doc.)

Gate Inward Entry

Rejected
GRN w.r.t Custom
Post Excise
Doc In Quality
Part-II
Inspection

Quality Un-
Usage Restricted
Decision Use Stock
Payment
Received by Further
Invoice Verification Vendor in INR Payment

Stepwise Process
Steps Process Description SAP
Transaction
Code to be
used
Step 1  Create Purchase Requisition or use Automatically ME51N
created PR through MRP run
Step 2  Release Purchase Requisition ME54N
 3 Level Release (L1, L2, L3)
Step 3 (RFQ-  The Purchasing Department collates the ME41
Optional requirements and prepares Request for Quotations
(RFQ) to be sent to selected vendors.
Process)
  User enters collective no. & quotation deadline
date
 User selects & adopts PR items
 Material no, Net PR Quantity, delivery date,
Plant & complete material specification
mentioned in Item Text are copied from PR
 Quantity & delivery date can be changed but
qty. cannot be increased from the Net PR qty.
If qty increase is required, PR should be
rejected/cancelled with reasons for same and
new PR shall be raised. An email shall be
triggered to the indenter for the same
 Header Information text: All the specifics of
the RFQ which is required for the RFQ
processing will be entered in Header text.

 Item text: Basic data text is copied from the PR

and cannot be changed

 Item note: Additional text that the user has

written in the PR shall be copied here.

 RFQ Document is generated. This may be printed

and sent to the vendors. RFQ may contain
reference of PR.

 RFQ can create directly also without reference to

PR

Step 4  RFQ document may be printed or transmitted to ME9A

vendor along with suitable attachments
Step 5  The received Quotations are maintained in the ME47
(Quotation system against the RFQ documents generated.
 User enters the following
Maintenance)
 Prices,
 Pricing conditions (discounts, packing
& forwarding, freight etc.)
 Payment terms
 Incoterms
 Delivery text highlighting info.
Provided by vendor regarding delivery
 In case, vendor sends the quotation in a different
UoM, the user shall have the option of entering the
price in different UoM, but conversion factor
needs to be specified in quotation itself. But for
this, the different UoM used by the vendor must
exist in the system, else the different unit should
be created before entering quotation
 Maintained Quotation documents are saved.
Step 6 (Price  All the Quotations received are compared based on ME49
Comparison) Price of the Vendor.

Step 7  Create Contract with the vendor ME31K

(Contract  Document type: MK, WK
Creation)  Maintain the Validity, Quantity, rate etc for
the purchase.
 Maintain the conditions for taxes, charges etc
required for the approval sheet.
Step 8 (Print  The print of the contract is taken and will be ME9K
Contract) considered as “Approval Sheet”.

Step 9  Purchase Order (PO) is created with reference to ME21N

(Purchase RFQ or can be created directly with reference to
PR or contract
Order)
 Purchase Order Type : Import Document
Type
 Material no., Quantity, Required by date, plant
and price are copied from RFQ item but can be
changed
 Header text: All the specifics of the PO which
is required for the PR processing will be
entered in PO text.
 Item text: Basic data text is copied from the
PR/RFQ and cannot be changed

 Item note: Additional text that the user has

written in the PR shall be copied here and can
be modified

 Payment terms agreed with the vendor are

mentioned at the PO header. This would be a
mandatory field
 Condition should capture in PO
o Incoterms
o Payment Terms
Step 10 (PO  The Purchase Order (PO) is released by ME28
Approval) appropriate approvers for further processing.
 L1
 L2
 L3
Step 11  PO can be printed/transmitted to vendor post final ME9F
release along with attachments like general terms
& conditions
Step 12  In case of advance against PO, advance amount/ ME21N
percentage will be mentioned in the PO header
data at the time of creating the PO.
F-47
 For other advances, create an Advance Request.
Assign the TDS code while creating the request, if
applicable F-48
 Post advance payment against the request
generated and print cheque / RTGS (single vendor
entry). TDS, if applicable, will be deducted here.
Step 13  If order acknowledgement is coming from vendor ME22N
with delivery schedule than update the same in PO
 The PO may be required to be amended to put the
actual delivery costs and transportation overheads. ME28
 On PO amendment, the release strategy will be
fired and hence PO needs to be approved again.

Step-14  Create Inbound Delivery wrt PO VL31N

 Here you need to capture Bill Of Lading details
Step 15  Value should be in INR MIRO
 Put customs duty manually from Bill Of Entry
(BOE) and post the document.
 If material need to put in bounded warehouse
without paying customs duty than do this step
with zero value.
 Posting under planned delivery cost
 Accounting Entry
Customs Commission Office - Cr
CVD Clearing - Dr
Customs Clearing - Dr
Step 15 A  Do goods receipt at Bonded Warehouse in case of MIGO
(Conditional further Export
Requirement)  Movement Type – 101
 Storage Location – Bonded Warehouse
 Inventory can be managed
 Here material is procured till bounded warehouse
only and it will further export from port only. No
custom duty payment here.
 Accounting Entry
Stock A/C – Dr
GR/IR - Cr
 If material is purchase for SAR group of companies
use than transfer to locations across India through
local transportation
Step-16  Gate Inward Entry with reference to PO Z-Transaction
Step-17  At the time of GRN all bills (CHA Invoices, Freight MIGO
(@ SAR Invoices, and Demurrage Charges) required. With
these charges user will amend the PO in respective
Warehouses) condition type for each line item. Release will be
Re-trigger with these changes.
 Upon receipt of goods a GR is posted to Quality
inspection stock
 Goods Receipt (MRN/GRN) with reference to PO
 Partial GRN can also done
 All transportation cost upload to material only.
 If material is under excisable than Excise part-1
posting and capturing part-2 at GRN level only.
 If material is not excisable than all cost loaded to
 material only
 Accounting Entries
Stock A/C - Dr
Customs Clearing - Cr
Freight Clearing - Cr
Insurance Clearing - Cr
Step-18  If material is excisable than Post Excise Part-2 J1IEX
posting with reference to Vendor invoice no. or
internal excise no.
 Accounting Entries
RG23A BED - Dr
RG23A AED - Dr
CVD Clearing A/C - Cr
STEP-19  Post import vendor invoice details with reference MIRO
to PO in international currency
 Unplanned delivery cost can maintain here with
tolerance limits, this cost may or may not be
upload to material but quantity of GRN should be
in inventory otherwise system will load this value
on available quantity which effect moving average
price.
 Planned delivery cost also can be post here with
reference to PO
 Sales/Service input taxes at capture here.
 Accounting Entries
Vendor A/C - Cr
GR/IR Clearing - Dr
Freight Clearing - Dr
3.3. Import Purchase Process Flow – Third Party
(Scenario-3)

Third Party Purchase/Sale Import

Customer Vendor
SAR India
(International) (International)

Create Purchase Receive PO & Automatically

Order & Send Create Sales Order PR Created

PR
Approval

Create PO wrt
PR

PO
Receive PO
Approval

Material
Despatch to
Port

Material
Material
Ready
Receive
(Despatch)

Create Export Third Party – Dr

Receive Invoice wrt Sales GR/IR - Cr
GRN wrt PO
Invoice Order and send
to Customer

Invoice Payment
Verification Receive
4. Key reports
The following reports shall be used:

T-Code for Report Report Description

ME5A Report on Purchase Requisition
ME4L RFQ’s by vendor
ME4N RFQ’s by RFQ no.
ME4M RFQ’s by material
ME4S RFQ’s by collective no.
ME80AN General analysis on RFQs
ME2N List of PO by PO Number

ME2M List of PO by Material

ME2L List of PO by Vendor
ME80FN Report on Purchase orders
MSRV5 Report on Services
MB51 Material Documents list
MBLB Stock with subcontractor
ME2O Subcontracting stock with vendor
MR51 Accounting Document list
MMBE Stock Overview
MB5B Stock on Posting Date
MB5T Stock in Transit
MD04 Stock/ Requirements List
MB52 Warehouse stock (value)
MC40 ABC analysis report
MIR5 List of Invoices
MI22 List of PI documents
MB60 Material Master List
MVKZ Vendor List
ME1L List of Info records by vendor
ME1M List of info records by Material
MB24 Reservation List
5. Functional Gaps
GAP List
GAP Type S.No Process Code Description
Transactional 1. MM02-01  Material Master data initial upload program
Gap
2. MM02-02  Vendor Master data initial upload program
3. PO Release  For Condition Types amendment other than
Base price, release won’t re-trigger.
Process Gap 4. For All PO Processes  System should generate one unique number on
every Gate entry
 Gate Inward Entry with following requirement
 With Reference to Purchase Order
 Current Date
 Vendor invoice no. & Invoice date
 Material & Vendor Description
 Source Station
 Material Quantity
 Vehicle Number

Smartforms 5. MM03-PO  Purchase Order Print

Reports 6. All PO Processes  Import Purchase Register
6. Process Owners Approval
4.

6.1. Signatures
Module Persons
Name Role Signature Date
Livpure Pvt. Ltd.
Mr. Yogendra Kumar Core Member
Mr. Saurabh Nema Core Member
Mr. R. Kumar Core Member
Mr. Santosh Singh Core Member
Mr. Alok Goswami Process Owner
Mr. K C Pradhan Process Owner
Mr. Virender Bansal Project Manager
PwC
Mr. Prateek Vijayvergia Consultant
Mr. Vinay Tehlan Project Manager
Mr. Amit Arora Program Manager