Sap MM Business Blueprint

Volume
1
CHARMINAR STEEL CASTINGS
As- Is Process Mapped to SAP To- be process
BusinessBluePrint
BUSINESS BLUE PRINT
A Complete Process Manual For The

Configuration of SAP
KIT PVT LTD

C H A R M I N A R S T E E L C A S T I N G S
Table of Contents
Introduction:
CHAPTER 3 - Sales and Distribution
CHAPTER 1 - Finance And Controlling
Organization Structure 85
Gaps 1
Master Data 91
Enterprise Structure 15
Basic Functions 94
Financial Accounting Global Settings 16
Sales Cycle 117
Documents 18
Business Scenario 130
General Ledger Accounting 19
Reports 139
Bank Accounting 21
Parameters used for SIS 140
Accounts Receivables 22
Gaps 141
Accounts Payable 24
Terms of Payments 26
CHAPTER 4 - Production Planning
Interest Settings 27
Master Data 150
Reminders 28
Production Planning 166
Taxation 29
Material Requirement Planning 171
Asset Accounting 33
Shop Floor Control 175
Information System 35
Batch Management 182
Controlling 36
Reports 183
Information System 49
Gaps 187
CHAPTER 2 -MATERI AL Management

CHAPTER 5 - Human Resources
Master Data 60
Organization Unit 200
Procurement 65
Personnel Management 213
Valuation and Account Determination 71
Payroll 227
Inventory Management 73
Overtime 229
Logistic Invoice Verification 74
Pay scale Structure 231
External Service Management 74
Gaps 236
Reports 75
Gaps 75
1
Project Manager
Mr.VENKAT
MODULE EXPERTS
Finance and Controlling: Mr. VENKAT
Material Management: Mr.RAM
Sales and Distribution: Mr.LAKSHMAN
Production Planning: Mr. RAO
Human Resources: Mr. S.REDDY
Project : Co-ordinator Vertical Lead
Mr.Srinivas Reddy P. Surya Prakash
FI-CO MM SD PP HR
2
Chapter
1
Finance and Controlling
Finance and Controlling is the Key to start the Configuration of an SAP System
A
ny SAP Implementation starts with the Creation of Company Code which is created by FI
Module of SAP. Finance Module is to develop a framework under which, the rest of
modules will work. Here in this Chapter we will discuss various parameters in respect to
Finance and Controlling that is going to be the guiding principle for the implementation and
Functioning of SAP System in Charminar Steel Castings.
The Overview
F I - A R E A S
Here in FI And CO we Start Creating Company code, Plants Business Areas
G/L Accounts which will be followed by Financial Accounting Settings, Creation of General
A/C Receivables Ledger Accounts, Configuring the Bank Accounts, Mapping the Accounts
A/C Payables Receivables and Payables, Listing the Payment Terms, Etc and will Conclude
with Controlling Aspects of the Finance. Gaps are identified and measures to
Assets
fill the gaps are mentioned thereon.
Controlling
Controlling concept is used generally for cost accounting purpose in SAP R/3
System for internal reporting. It also uses sub modules like cost center accounting
Cost element accounting Profit Center Accounting Product Costing and internal
orders and profitability analysis.
Here in controlling the integration with Production Planning Modules done through assignment
of Cost Center to Work center. And also used for planning purposes like COPA (Profitability
Analysis).
3
As Is Vs To Be
As Is Process To Be Process
(1) Organization Structure
1.1 Group of Companies. 1.1 In SAP Company can be created with a
Reddy Group of Companies having Six six-character code. (REDDYS)
subsidiaries. T Code: OX15
1.2 Company
Charminar Steel Casting Limited, 1.2 In SAP a four character Company Code
Nacharam, Hyderabad. can be created. (CSCL).
T Code: OX02
Company Code is assigned to Company.
T Code: OX16
1.3 Manufacturing Units
Charminar Steel Casting Limited 1.3 In SAP Plants can be created with a four-
consists of two manufacturing units. character code. And Are assigned to their
Domestic Respective Company Codes.
Export T Code: OX10
(2) Accounting Process
2.1 Financial Year
Company follows April to March as its Fiscal Year variant can be maintained for the
Financial Year Financial Year and assigned to Company
Codes.
Fiscal Year Variant consists 12 periods starting
from April to March. And 4 special periods
can be maintained for closing purpose.
T Code: OB29
Fiscal year variant can be assigned to Company
code.
T Code: OB37
2.2 Books of Accounts
Books of Accounts are maintained for the In SAP periods can be opened and closed by
12 months periods from April to March using posting period variant and assigned to
every year. Company Code. Define Variant for open and
close period.
T Code: OBBO
Open and close periods.
T Code: OB52
Assigned to Company Code.
T Code: OBBP
4
2.3 Currencies
Book of accounts are maintained in Indian In SAP we can create and maintain Currency
Rupee (INR). Apart from the Indian Rupee codes.
for the purpose of Exports, the Company is T Code: OY03
dealing with Euro, Singapore Dollars and
Indonesian ruphaih.
(3) Accounting Structure
3.1 Journal In SAP document types classify transactions.
Day to day transactions are recorded in A Document number identifies each journal
journals. Separate journals are maintained entry. Document number intervals are
for cash, sales daybook, sales returns book, assigned to Number range of document types
purchases daybook and purchase returns in company code.
book.
Document types
T Codes: OBA7
‘Internal Number Ranges’ are maintained
for Document Numbering.
Maintain Number ranges.
T Code: FBN1
(4) General Ledger Accounting
The ‘Account Groups’ for creation of GL In SAP a Chart of Accounts can be created
Accounts: which contains list of G/L Accounts. Under
the Chart of Accounts, G/L accounts are
classified under Account groups.
T Code: OBD4
Account Groups:
Liabilities: Share Capital, Reserves & Liabilities: -
surplus, Secured Loans, Unsecured Loans, Share Capital
Current Liabilities & Provisions; Reserves & Surplus
Secured Loans & Unsecured Loans
Current Liabilities & Provisions
Assets: Fixed Assets, Investments, Current Assets: -
Assets, Loans & Advances. Liabilities: Fixed Assets
Investments
Current Assets
Loans & Advances
Incomes and Expenditure.
GL account is recognized by description. GL Master Records G/L Master record is
maintained for each General Ledger account.
A number recognizes each G/L master.
T Code: FS00
5
(5) Voucher Types

Receipt vouchers for Bank and Cash with Internal Number Ranges are maintained for
one Serial Number. Payment vouchers for Document Numbering.
Bank and Cash with one Serial Number.
Petty Cash Vouchers are used at Plants and
also at Head Office with respective Serial
Numbers.
Journal vouchers.
Two types of Sales Invoices are used - one
for exports and other for domestic sales.
Purchase Invoices with the name of bill
passing voucher.
6.Bank Accounting
Bank A/c’s: In SAP, a House bank can be maintained
for each bank account
a) State Bank Of India a) State Bank Of India
b) Ing Vysya Bank b) Ing Vysya Bank
All the Business transactions are carried out Each bank can be treated as a house bank.
through State Bank of India. T Code: FI12
All the Administration transactions are
carried out through Ing Vysya Bank.
Based on the bank statements, the amounts
are accounted in the books of accounts.
Bank reconciliation is done manually at the For Bank reconciliation purpose we can
end of every month. maintain Bank Accounts like main bank a/c,
cheques deposit a/c, cheques issue a/c and etc
(7) Cash Management
Authorized persons maintain cashbooks to In SAP Cash Journals can be maintained for
record cash Receipts & payments both at cashbooks.
the plant and administration Office. T Code: FBCJCO
(8) Payment Terms
8.1 Sundry Creditors
A 60 days credit limit is generally obtained In SAP Terms of Payment are maintained for
for the Vendor payments. both customers and vendors are same.
Payment done by cheques to Vendors. T Code: OBB8
8.2 Sundry Debtors
Receipts from customers are also by
cheques only. On order the customers pay
30% of the invoice Amount.
6
The company allows 30 days of credit limit

for the remaining amount.
If the invoice amount is paid completely the
customer is eligible for 2%discount.
Interest @ 24% will be charged after due
date i.e. 30days
(9) Loan Management
Interest on Cash Credit Account is credited The existing system can be followed by way of
to the Bank Account on the basis of Bank GL Postings.
Statement only. No separate system for In case of Customers / Vendors: The
calculation of the interest on Cash Credit ‘Interest calculation’ is done by settings made,
A/c. by assigning an Interest Indicator’ to the
On personal loans interest will be settled master records of the customer and vendor
finally on full repayment accounts for which interest is required to be
calculated.
T Code: OB46
(10) Budgeting System
A yearly budget is prepared based on the
Previous Year Statistics. Later the same is
converted into Monthly Budgets on
uniform basis. Budget amounts are
compared with the Actual amounts under
Expenditure, Revenues, Purchases and Sales
heads.
Cash Flow Statements and Funds Flow
Statements are prepared on monthly basis.
(11) Salaries and Advances
HR Department prepares the ‘Salary
Statement’ and passes it to the Finance
Department.
Finance department checks and pays the
salaries through ING VYSYA (Salary) A/c.
The finance department handles advance to
the employees against salary and in the
month end a summary statement will be
sent to HR department. Based on that
‘Salary Statement’ will be prepared after
incorporating the proper deductions.
Each employee is maintained as a separate
record in the sub ledger.
7
For travel advances, Finance dept gives the

advances and accounted against that
particular employee as ‘Advance against
Travel’. After the tour based on actual
expenditure, an expenditure entry will be
booked and the travel advance is reversed.
(12) Taxes
The following taxes are levied / collected
wherever applicable
12.1 Tax on Sales and Purchases
Excise duty payable / paid. In SAP, Account key is created for each Tax.
Customs duty payable / paid. Tax procedure is maintained and assigned to
Central sales tax payable / paid. country India. Tax codes are created with the
Value added tax payable / paid. percentage of Taxes.
Cess payable / paid.
Account keys T Code: OBCN
Condition types T Code: OBYZ
Tax procedure T Code: OBQ3
Assign country to calculation procedure
T Code: OBBG
Calculation method. T Code: FTXP
12.2 Withholding Taxes
As per the Income Tax Act 1961, TDS is In SAP, Withholding Tax types and
deducted on service related payments under Withholding Tax codes can be maintained for
the following categories. each category of Withholding Tax.
Salaries 192b We are deducting the withholding tax based on
Dividends 194 payment types like contract payment, salaries,
Interest payments 194a interest payments, etc….
Contract payments 194c
Rent 194i
Professional & Technical fees 194j
We are deducting withholding tax on total
amount or down payments which ever is
earlier.
In SAP, Remittance challans can be created.
T Code: J1INCHLN
In SAP. Withholding Tax certificate can be
created.
T Code: J1INCERT
8
(13) Exports
Export procedures are followed for Not implementing in SAP system.
payment of duty/ exemption of duty/ duty
draw back etc.
(14) Sundry Debtors (14) Accounts Receivable
The accounts department is maintaining a In SAP, generally customers are created by the
debtors ledger which contains customers Sales department in FI customers are grouped
sub-ledger accounts consisting of regular as customer account groups.
and one time customers T Code: OBD2
List of customers.
–Govt.(Defense) For accounting purpose we are creating
-Domestic Customers.
-Foreign T Code: OBD2
-One Time Customer
An account group can be created for regular
customers and one-time customers.
A customer master record is maintained for
each customer.
Customer master record is recognized by a
number from the number range interval and
assigned to account group.
In SAP Billing Document / Invoice can be
created. T Code: VF01
In SAP a house bank is maintained for each
bank account for receivable purpose.
(15) Sundry Creditors (15) Accounts Payable
The accounts department is maintaining a In SAP, generally Vendors are created by
Creditors ledger, which contains vendor Material Management dept, in FI we only
sub-ledger accounts consisting of regular, group the similar type of vendors as vendor
and one time Vendors. account groups. T Code: OBD3
List of vendors
–Domestic For accounting purpose we are creating
–One time vendors Vendors.
-Statutory Vendors T Code: XK01
-Employees
An account group can be created for regular
vendors and one-time vendors.
A vendor master record is maintained for each
vendor.
9
Vendor master record is recognized by a

number from the number range interval and
assigned to account group.
In SAP, advance to parties are done through
special GL transactions
Invoices can be created.
T Code: MIRO
House banks are maintained for each Bank
and cheque lots can be maintained for
outgoing payment to Suppliers by manual as
well as automatic payment programs.
T Code: FBZP
Automatic Payment Program Run.
T Code: F110
(16) Reminders
To follow up the advances paid to the To be addressed through ‘Dunning’. The
Vendors for Goods, a statement prepared SAP System allows using either the automatic
by the Accounts Department is sent to the dunning program, which duns all overdue
Purchase Department on periodic basis. items in accordance with selection criteria, or,
if required, individual customers or vendors
The Purchase Department checks the can be dunned.
pending Purchase Orders and Deliveries T Code: FBMP
and Bills with the vendor and sends some Dunning Program Run.
sort of reminders to the Vendors. T Code: F150
To follow up the outstanding amounts from

customers the accounts department sends
periodic reminders.
(17) Advances
Advance to Suppliers, Payments of EMDs / Advance to Suppliers, Security deposits and
Security Deposits and other Deposits viz., guarantees can be dealt with in SAP as ‘Special
Telephone, Electricity and Bank Guarantees G/L Transactions’.
etc.,
The EMD amount is received back on
completion of the tender process.
(18) Forms
For the exports the relevant records to be
maintained after export of material, the
proof of export should be submitted to
Excise / Customs and also to Bankers to
settle/ Claim the Excise Duty Refund /
Duty Draw Back claims Submission of
10
Documents to the Bankers and realization

of Receipts is done as per the requirement.
(19) Asset Management
19.1 Asset Accounting
Asset accounting is utilized for In SAP an asset class can be created for
managing companies fixed assets, we can each head. Asset class consists of account
categorize assets and to the said values for determination key, number range and screen
depreciation for each fixed asset. Fixed layout.
assets having a useful life and are utilized for
business process. In the course of process
some wear and tear will occur, for that
reason we calculate depreciation. An asset
management team is sitting in every
manufacturing unit and at the corporate
office, which is responsible for Asset
account maintenance and disclosure in the
financial statements as per accounting
standard 10 of ICAI
Acquisition of assets G/L master record is created for each asset class.
Retirement of assets An asset master is created for each asset. A
number recognizes each asset master.
Calculation of depreciation on assets Asset master: T Code: AS01
Asset classes: T Code: OAOA
Screen layout: T Code: AO21
IN SAP chart of depreciation can be created
and assign to company code
19.2 Depreciation Policy
Depreciation is provided on depreciable Method of depreciation and Rates of
assets under section 205(1) of the schedule depreciation is provided in depreciation keys.
XIV of companies Act, 1956 Charminar
steels follows written down value as per
income tax act 1951 and straight line
methods as per companies act 1956.
Copy reference chart of depreciation
T Code: EC08
Define depreciation areas. T Code: OADB
Depreciation key. T Code: AFAMA

Acquisition from purchase vendor:
T Code: F-90
11
Cost Accounting
(1) Costing
Cost Accounting provides supporting In SAP a controlling area is created for the
information to Management for the purpose purpose of cost accounting..
Planning, Monitoring and Reporting the
operations of their Business.
Charminar steel castings limited is Assignment of controlling area to company
maintaining cost accounts for Calculation of codes.
Costs for output produced. T Code: OKKP
It helps the management to take decision Number ranges are maintained for CO
making for cost control and cost reduction documents.
Management makes policy decisions for T Code: KANK
effective and smooth running of business.
(2) Cost Element Structure
Charminar Steel Casting Limited
Maintaining costs records in the form cost Cost element can created. T Code: KA01
elements.
Cost elements are classified into: Direct T Code: OKP2
material, direct labor, direct expenses and
overheads
Cost element category can be created.
T Code: OKA2
(3) Overheads
Distribution of Overheads. It Involves In SAP over heads can be
Three Stages distributed/apportioned or absorbed by using
Collection and Classification of Overheads assessment cycles
Departmentalization of Overheads: T Code: KSU1
Allocation / Apportionment of Overheads
Absorption of Overheads
(4) Cost Center Structure
Cost Center is an area for which cost is to In SAP Cost centers can be created in
be ascertained for the purpose of Cost controlling area.
Control and Cost Analysis. An area may be a T Code: KS01
Location or Persons or Group of Persons or
any Allocated Units
4.1 Cost Centers
Charminar Steel Castings Limited is
maintaining cost accounts for Cost Centers
Maintaining Cost centers for collection and
LISTED SEPERATLY
distribution of costs
Cost centers are classified into Production
Cost Centers and Service Cost centers.
12
Cost Centers and Service Cost centers.
(5) Product Cost

It provides to Management the ability to
analyze their Product Cost and to make
Decisions on the Optimal Price to market
their products. The result arrived in product
LISTED SEPERATLY
costing helps the Management to fix the
Pricing flows and to Optimize Cost of
Goods Manufactured and Cost of Goods
Sold.
13
Information Systems
Reports
Financial Accounting
External
Profit and loss account for yearly, half yearly
and quarterly basis
Balance sheet In SAP these are standard reports available.
For Balance sheet and profit & loss statement.
T Code: S_ALR_87012284
Cash flow statement Cash flow statement.
Funds flow statement
Remittance challans Remittance challans.
T Code: J1INCHLN
With holding tax certificates With holding tax certificates.
T Code: J1INCERT
Reminder notice to customer for over due Dunning Notices
items
Reminder notice to vendors for settlement Dunning Notices
of advances
Internal
Weekly, fortnight, monthly, quarterly, half- T Code: S_ALR_87012186
yearly, and yearly sales reports
Over due items from customer statements. T Code: S_ALR_87012168
Outstanding payments to accounts payable T Code: S_ALR_87012084
statement
Cost Accounting
Reconciliation Statement of Financial In SAP standard reports are available for all
Accounting with Cost Accounting the reports mentioned in AS IS.
Cost Sheet
Production Statement
Cost Element allocation to Cost Objects
report
Cost Center Actual/Actual, Plan/ Actual
Comparison, period comparison Reports
Variance Analysis reports
Allocation of OH Summary
Absorption of OH Summary.
14
Index
1. Introduction 15
2. Enterprise Structure 15
2.1. Company 15
2.2. Company codes 15
2.3. Plants 15
2.4. Business Areas 16
3. Financial Accounting global settings 16
3.1. Fiscal year variant 16
3.2. Posting period variant 16
3.3. Open posting periods 16
3.4. Field status variant 17
3.5. Tolerance groups 17
4. Documents 18
4.1. Document types 18
4.2. Document number range interval 18
4.3. Posting keys 18
5. General Ledger Accounting 19
5.1. Chart of Accounts 19
5.2. Account groups 19
5.3. Retained earnings Account 20
5.4. G/L Master records 20
6. Bank Accounting 21
6.1. House Bank
6.2. Cash Journal
7. Accounts Receivable 22
7.1. Credit control area
7.2. Sales Areas
7.3. Customer Account Groups
7.4. Customer Master records
7.5. Customer Billing
7.6. Customer payments
7.7. Special G/L transactions
8. Accounts Payable 24
8.1. Purchase Organizations
8.2. Vendor Account groups
8.3. Vendor Master records
8.4. Invoicing
8.5. Invoice Clearing
8.6. Special G/L transactions
8.7. Automatic Payment Program
15
9. Terms of Payments 26
8.8. Sundry Creditors
8.9. Sundry Debtors
8.10. Down Payments Received / Made
9. Interest settings 27
10. Reminders 28
10.1. Dunning procedure
10.2. Dunning Notices
11. Taxation 29
11.1. Tax on Sales and Purchases
11.2. Withholding Tax
12. Asset Accounting 33
12.1. Asset classes.
12.2. Depreciation Keys.
13. Information System 35
13.1. External Reports
13.2. Internal Reports
14. Controlling 36
14.1. Cost Element Accounting.
14.2. Cost Center Accounting.
14.3. Internal Orders.
14.4. Product Cost Controlling.
14.5. Profitability Analysis.
14.6. Profit Center Accounting.
15. Information System 49
15.1.Reports
16. Integrations 50
16.1. Integration with S.D
16.2. Integration with M.M
16.3. Integration with P.P
16.4. Integration with H.R
17. GAPS 52
16
1.INTRODUCTION
Charminar Steel Castings Ltd. is one of the Leading Manufacturer of Investment Steel Castings
to diversified sectors like automobile, surgical, defense etc, with Quality and Design as the core
competence, charminar enjoys high degree of confidence among the clients in various parts of
the world.
We have two units both located in Hyderabad one each for domestic orders and other for export
orders. Administered centrally from Balaji Bhavan Hyderabad, plant has its separate manager
who will report directly to the executive director of operations. The company has a strong
marketing network in Southeast Asia, Europe along with Domestic network in India. The total
turnover for the company for the financial year 2006-07 is 200 crores with a growth rate of 20%.
The company’s objective is to cross 500crores by 2010-2011.The company has been awarded
ISO 9001:2000 and AD2000 for its quality management systems.
2.ENTERPRISE STRUCTURE
2.1 Company
Reddy Group of Companies having six company codes.
A Company is created with a six-digit character code with the information of address, language,
currency and country. The Company is used for the consolidation of financial results of the
companies within the group.
Company – REDDYS
T Code: OX15
2.2 Company Code

A four character Company Code is created.
Company Code – CSCL T Code: OX02
Company code is assigned to company.
T Code:OX16.
2.3 Plant
Charminar Steel Castings Limited consists for two Manufacturing units.
Plants are created with four-character code.
Domestic plant code – “CSDP”
Export Plant code – “CSEP”
Transactioncode:OX10
Plants are assigned to Company code.
T Code:OX18
17
2.4 Business Areas

Charminar Steel Casting Limited having 4 Market segments.
• North - BANO
• East - BAET
• West - BAWT
• South - BASO
• Export - BAEX
These business areas are created for internal reporting purpose

T Code:OX03
3. Financial Accounting Global Settings
3.1 Fiscal Year Variant

Books of Accounts are maintained by the Company with Financial year April to March.
Fiscal Year variant is maintained for the Financial Year.
Fiscal Year Variant - CS

Fiscal Year Variant
T Code: OB29
Fiscal Year Variant consists 12 periods starting from April to March.
4 special periods can be maintained for closing purpose.
Fiscal Year variant CS is assigned to Company Code.
T Code: OB37
3.2 Posting period variant
In every financial yearbooks are opened on 1st April and closed on 31st March. Books are
closed in every month and balances are carried forward to next month.
So, Posting period variant is created. Posting Period Variant CSCL is used.
T Code: OBBO
Posting period variant is assigned to Company Code.
T Code: OBBP
3.3 Open posting periods
Periods are opened for the fiscal year through the posting period variant.
T Code: OB52
18
3.4 Field Status Variant

Field Status Variant is copies from standard SAP with 47 field status groups.
Field Status group defines the status of the fields while making posting to the GL accounts.
Field status variant –CSCL

T Code: OBC4
Field Status variant is assigned to Company Code.
T Code: OBC5
3.5 Tolerance Groups
Tolerance group for GL Account is created in each Company Code. In Tolerance groups
the permissible amounts for accounts and for line items are specified
T Code: OBA0
Tolerance group for employees is created in each Company Code.
This group defines different amount limits for your employees. It determines:
The maximum amount for which an employee is permitted to post a document. The
maximum line item amount an employee is permitted to enter in a customer, vendor or general
ledger account.
The percentage amount related to cash discount.

The maximum permitted payment differences.
T Code: OBA4
Tolerance group for (vendor / customer) is created for each company code. In the
tolerance group limits for vendor / customer payment differences are defined. The tolerance
group determines:
Limits to which differences in payments are posted automatically to expense or revenue

accounts when clearing open items.
Terms of payments are used for settle the invoices.
T Code: OBA3
19
4. DOCUMENTS
4.1 Document Types

Every transaction is recorded in Journal at the first and separate journals are maintained
for cash, sales daybook, sales returns, and purchase daybook, purchase returns.
Standard SAP Document Types are used to classify the transactions.
Document number intervals are maintained for each document type. From this number interval,
system picks and assigns a number to each transaction in SA.
No. No. Intervals

Doc.type Description
Range From To
SA GL account document 01
AA Asset accounting document 01
100000 199999
AB Reversed clearing 01
document
DR Customer invoice 18 200000 299999
KR Vendor invoice 19 300000 399999
DZ Incoming payment 14 400000 499999
KZ Outgoing payment 15 500000 599999
DG Customer memos 16
DA Reversal/Clearing Doc. of 16 600000 699999
customers
KG Vendor memo 17
KA Reversal/Clearing Doc. 17 700000 799999
Of vendor
AF Depreciation posting 04 800000 899999
4.1 Document type

T Code:OBA7
4.2 Document number range interval

Number intervals
T Code: FBN1
4.3 Posting Keys

Standard posting keys defined in SAP are used.
T Code: OB41
20
5. General Ledger Accounting

5.1 Chart of Account:
Chart of Account Consists list of GL accounts
Chart of accounts defines the language, length of GL accounts and its helps to integration with
Controlling.
Chart of Account: CSCL
T Code:OB13
Chart of accounts CSCL is assigned to Company Code.
T Code:OB62
5.2 Account Groups

• General ledger accounts are maintained under various heads like Capital, Liabilities,
Assets, Income, Expenditure, Creditors and Debtors ledger
• List of General Ledger Accounts, Account Groups and Document Posting
• Same List of General Ledger Accounts is used for each company.
• Account groups and number ranges to be created based on the nature of account
• GL Account numbers shall be externally assigned.
• Field status groups shall be created for controlling transaction processing.
• Reconciliation accounts shall be identified.
• Open items accounts shall be identified.
• Accounts where line items display is required shall be identified.
• Cost elements for P&L accounts shall be created in controlling module.
• GL account is recognized by description and Number Range.
• The ‘Account Groups’ for creation of GL Accounts:
• The ‘Account Group’ is a summary of characteristics that control the creation of master
records. The following are the Account groups.
Assets: Fixed Assets, Investments, Current Assets, Loans & Advances.
Liabilities: Share Capital, Reserves & surplus, Secured Loans, Unsecured Loans, Current
Liabilities & Provisions;
Incomes
Expenditure.
T Code:OBD4
21
The following account groups are created for the Chart of Accounts CSCL
Acc. From To
COA Description
Group Account Account
CSCL SC10 Share Capital 100000 100199
CSCL RS11 Reserves & Surplus 100200 119999
CSCL SU12 Secured and Unsecured Loans 120000 149999
CSCL CL15 Current Liabilities & Provisions 150000 199999
CSCL FA20 Fixed Assets 200000 209999
CSCL IN21 Investments 210000 219999
CSCL CA22 Current Assets 220000 289999
CSCL LA29 Loans & Advances 290000 299999
CSCL IC30 Incomes 300000 399999
CSCL EX40 Expenses 400000 499999
T Code:OBD4
5.3 Retained earnings

One retained earnings account is created with GL account 110000 and P&L statement
account type X.
T Code:OB53
5.4 GL Master Records

G/L Master record is maintained for each General Ledger account.
Each G/L master record is recognized by a number and text
GL master record consists of two segments chart of account segment and company code segment.
T Code: FS00, OBY7, OBY2.
22
6. BANK ACCOUNTING
6.1 House Bank
In SAP, a House bank can be maintained for each bank account.
T Code: FI12, FCHI.
House bank of a company code is denoted as banks ID every account specifies by an account ID
in the SAP system.
In the SAP system, use the bank ID and the account ID to specify bank details. These
specifications are used to determine the bank details for payment.
Bankers: CSCL dealing with SBI, ING VYSYA BANK.
One House bank is created for each bank account.

Co. code House Bank Key Bank Ac. GL account
Description
bank No
CSCL SBI SBICSCL SBI Bank 123456789 221000
CSCL IVY IVYCSCL IVY Bank 123456789 222000
T Code: FI12
6.2 Cash Journal

The cash journal is a sub ledger of Bank Accounting. It is used to manage record the cash
receipts and payments. The Company would be maintaining two Cash Books, One is for the
Main Cash and other is for Petty Cash Book.
By setting the cash balance at the beginning of the day, the cash journal shows the cash
balance at any time by adding the cash receipts and deducting the cash payments. The cash
journal also serves as a basis for entries in the general ledger and thereby represents the "Cash"
G/L account.
Settings for Cash journal

GL account for Cash journal – 210000
Document type for Cash journal – SA (General Accounting Document)
Number Range Intervals-01: 1 – 999999 T Code: FBCJC1
Set up Cash Journal T Code: FBCJC0
Create Bank transactions T Code: FBCJC2
Set up print parameters T Code: FBCJC3
Postings to cash journal is made through T Code: FBCJ
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7. ACCOUNTS RECEIVABLE
The Accounts Receivable application component records and manages accounting data
of all customers. It is also an integral part of sales management. All postings in Accounts
Receivable are also recorded directly in the General Ledger.
7.1 Credit Control Area

Credit Control Area is responsible for granting and monitoring credit to the customers.
Credit Control Area Code – CSCL
Maintain credit control area
T Code: OB45
Company Code CSCL is assigned to credit control area CSCL.
Assign credit control area to company code.
T Code: OB38
7.2 Sales Areas
7.3Customer Account Groups

Customer Account Groups
Account Group Description
CSGC Govt. (Defence) Customers
CSDC Domestic Customers
CSFC Foreign Customers
CSOT One time Customers
T Code: OBD2
Number range for customer account groups
Account group Number range Number interval

From To
CSGC GC 10000 19999
CSDC DC 20000 29999
CSFC FC 30000 39999
CSOT OT 40000 49999
T Code: XDN1
Number ranges are assigned to customer account groups.
T Code: OBAR
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7.4 Customer Master Records

Customer master record is maintained for each customer. Each customer master record
is recognized by number.
Customer Masters: Customer Master record consists of three segments, general data, company
code data and sales area data
T Code: FD01, XD01
7.5 Customer Billing

Customer billing is done through the following steps:
Sales order
T Code: VA01
Outbound Delivery
T Code: VL01N
Billing a Document
T Code: VF01
7.6 Customer Payments

Payments are accepted from customers through Cheque, Bills Receivable and Cash.
Document type – DZ is used to make payments.
Incoming payments are made through cheques.
T Code: F-28
7.7 Special GL transactions

Advances from customers are treated as Special GL transactions
F – Down payment request
A – Down payments
T Code: OBXR
8. ACCOUNTS PAYABLE
The Accounts Payable application component records and manages accounting data for
all vendors. It is also an integral part of the purchasing system: Deliveries and invoices are
managed according to vendors.
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8.1 Purchase organization
8.2 Vendor Account Groups

Vendor Account Groups
Account Group Description

CSDV Domestic Vendors
CSEV Employees
CSOV One time Vendors
CSSV Statutory Vendors
T Code:OBD3
Number range for vendor account groups
Account group Number range Number interval
From To
CSDV DV 50000 59999
CSEV EV 70000 79999
CSOV OV 80000 89999
CSSV SV 90000 99999
T Code: XKN1
Number ranges are assigned to vendor account groups.
T Code: OBAS
8.3 Vendor Master Records

A Vendor master record is maintained for each Vendor. Each Vendor master record is
recognized by number.
Vendor Masters: Vendor Master record consists of three segments, general data,
company code data and purchasing data.
T Code: FK01, XK01
8.4 Invoicing
Invoicing is done through the following steps:
Purchase order
T Code: ME21N
Goods receipt
T Code: MIGO
Invoice verification
T Code: MIRO
8.5 Invoice clearing
Invoices are cleared through cheques, Bills Payable and Cash.
Payment method – C (Cheque payment)
Document type – KZ
T Code: F-53
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8.6 Special GL Transactions

Advances made to vendors are treated as Special GL transactions
Special GL indicators
F – Down payment request
A – Down payments
G – Bank guarantees
T Code: OBYR
8.7 Automatic Payment Program

Steps involved in APP:
1. All Company Codes for payment transactions
2. Paying Company Codes
3. Payment methods in Country
4. Payment methods in Company Code
5. Bank Determination
6. House Banks
T Code: FBZP
9. TERMS OF PAYMENTS
9.1 Sundry Creditors
A 60 days credit limit is generally obtained for the Vendor payments.
Payment is done by cheques to Vendors.
9.2 Sundry Debtors

Customer’s payments received by cheques only.
On order the customers pay 30% of the invoice Amount in Advance.
The company allows 30 days of credit limit for the remaining amount.
If the invoice amount is paid completely in advance, the customer is eligible for 2%discount.
Terms of payment
1. 0001 Payable Immediately
2. CSCL 30 Days credit
T Code: OBB8
Payment Terms for installments
3. CSCI Installment Payments
T Code:OBB9
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10. INTEREST SETTINGS
Interest Calculation: As per the Company Policy, interest is calculated @ 24% p.a. on the
balance overdue. Company has taken working capital loans from their bankers for which they are
paying interest @ 14% p.a.
Account balance interest or Interest on arrears can be calculated on customer as well as
vendor accounts Balance interest calculates interest on balance amounts periodically where as
Item interest calculates interest for the overdue or delayed days of payments.
Standard Interest Calculation Types available

P: Item Interest
S: Balance Interest
Z: Penal Interest
Interest Indicators
CB: Balance Interest Indicator
CI: Item Interest Indicator
T Code: OB46
Reference Interest rates
CSC1: Reference Interest @ 24%
CSC2: Reference Interest @ 14%
T Code: OBAC
Time based terms
CB: Term – Debit Interest: Balance Interest calculation
CB: Term – Credit Interest: Balance Interest calculation
CI: Term – Debit Interest: Arrears Interest calculation
CI: Term – Credit Interest: Arrears Interest calculation
T Code: OB81
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11. REMINDERS
11.1 Dunning Procedure
The dunning procedure determines how business partners can be dunned. It contains the
number of dunning levels, dunning frequency, minimum amounts and dunning activities.
Dunning Level indicates how often an item or an account has been dunned and describes the
steps to be maintained for a dunning procedure. Dunning levels control the dunning process.
Dunning Area is an organizational unit within a company code from which dunning is
conducted. The dunning procedure is controlled and the dunning notices are sent separately per
dunning area.
A dunning area can represent the following:
Business Area
Sales Organization
Distribution Channel
Division
11.2 Dunning Notices

Weekly reminders are sent to customers with regard to overdue more than Rs.30000/-.
Fortnightly reminders are sent to customers with regard to overdue less than Rs.30000/-.
Yearly once Balance confirmation statement is sent to vendors Dunning charges will be
charged.
Interest notice send to the customers on overdue
Dunning procedure: CSCL

Dunning Interval in days: 7
Dunning levels: 4
Minimum amount for dunning: INR 30000
Dunning charges: INR 100 to 500
T Code: FBMP
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12. TAXATION
12.1 Taxes on Sales & Purchases
The following are the Taxes, which the company is paying on Sales and Purchases
Sales: Output Tax: Excise duty payable,
Customs Duty payable,
Cess payable,
SH Cess payable,
VAT payable,
CST payable,
Purchases: Input Tax: Excise duty paid,
Customs Duty Paid,
Cess paid,
VAT paid,
CST paid.
Tax on sales and purchases are procedure-based taxation in FI component.
Condition Types:
Condition Types Description

CS01 Excise Duty Paid
CS02 Education Cess Paid
CS03 SH Education Cess Paid
CS04 VAT Paid
CS05 CST Paid
CS06 Customs Duty Paid
CL01 Excise Duty Payable

CL02 Education Cess Payable
CL03 SH Education Cess Payable
CL04 VAT Payable
CL05 CST Payable
CL06 Customs Duty Payable
Note: CS – Input Tax, CL – Output Tax T Code: OBQ1
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Account Keys:
Not Posting
A/c Key Description Type
Deductible Indicator
CS1 Excise Duty Paid Input Tax 2
CS2 Education Cess Paid Input Tax 2
CS3 SH Education Cess Paid Input Tax 2
CS4 VAT Paid Input Tax 2
CS5 CST Paid Input Tax 2
CS6 Customs Duty Paid Input Tax 2
CL1 Excise Duty Payable Output Tax 2
CL2 Education Cess Payable Output Tax 2
CL3 SH Education Cess Payable Output Tax 2
CL4 VAT Payable Output Tax 2
CL5 CST Payable Output Tax 2
CL6 Customs Duty Payable Output Tax 2
NOTE: - 2 - Separate line item.
3 - Distribute to relevant expense / revenue item. T Code: OBCN
Tax Procedure:
A calculation procedure is defined for each country INDIA, containing the specifications
required to calculate and post tax on sales/purchases. Calculation procedure contains tax types,
which are called condition types in the procedure.
The system defaults condition types when you define a tax code. The condition type
(such as input or output tax) specifies the base amount on which the tax is calculated and the
account key that is used to post the tax. The specifications necessary for calculating and posting
tax have been defined for the condition type and account key.
Tax Procedure – CSCL
Conditi Account
Step Description From To
on Type Key
10 BASB
100 CS01 Excise Duty Paid –Input Tax 10 CS1
110 CS02 Education Cess Paid- Input Tax 100 100 CS2
120 CS03 SH Education Cess Paid- Input Tax 100 100 CS3
130 CS04 VAT paid-Input Tax 10 120 CS4
140 CS05 CST Paid –Input Tax 10 120 CS5
150 CS06 Customs Duty Paid- Input Tax 10 CS6
200 CL01 Excise Duty Payable-Output 10 CL1
210 CL02 Education Cess Payable-Output Tax 200 200 CL2
220 CL03 SH E Cess Payable-Output Tax 200 200 CL3
230 CL04 VAT Payable-Output Tax 10 220 CL4
240 CL05 CST Payable – Output Tax 10 220 CL5
250 CL06 Customs Duty Payable – Output Tax 10 CL6
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T Code: OBQ3.
Tax procedure CSCL is assigned to country India.
T Code: OBBG
Tax Codes
The tax code represents a tax category, which must be taken into consideration when
making a tax return to the tax authorities. Tax codes are unique per country.
The tax rate calculation rules and further features are stored in a table for each tax code.
Tax Code Description Tax Type
I0 Input Tax Exempted V
I1 Customs Duty V
I2 Excise + Cess + VAT V
I3 Excise + Cess + CST V
I4 Customs + Excise + Cess V
O0 Output Tax Exempted A
O1 Customs Duty A
O2 Excise + Cess + VAT A
O3 Excise + Cess + CST A
O4 Customs + Excise + Cess A
Maintain tax codes T Code: FTXP
Rates of Tax
Tax Rate of Tax (Percentage)
Customs Duty 8
Excise Duty 16
Education Cess 2
SH Education Cess 1
VAT 12.5
CST 3
12.2 Withholding Tax

As per the Income Tax Act 1961, TDS is deducted on service related payments under the
following categories.
Salaries,
Dividends,
Interest payments,
Contract payments,
Rent,
Professional & Technical fees
Quarterly Returns are submitted to the Tax Department
At the Year End, TDS certificates are issued to the concerned parties from whom the TDS is made.
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When customer makes TDS, it is not accounted until receipt of certificate. Up to that time it is
shown as outstanding against certificate.
In the year-end TDS certificates are obtained from the customers.

Withholding Tax types and Withholding Tax codes are maintained for each category of
Withholding Tax.
Withholding tax types
01: TDS on Payment posting

02: Surcharge on TDS
03: Cess on TDS
04: Higher Education Cess on TDS
05: Cess on Surcharge
06: Higher Education Cess on Surcharge
Withholding tax codes

Remittance challans are created in
T Code: J1INCHLN
Withholding Tax certificates are created in
T Code: J1INCERT
12.ASSET ACCOUNTING
Asset Accounting is utilized for managing companies fixed assets, we can categorize assets and to
the said values for depreciation for each fixed asset. Fixed Asset having a useful life and are
utilized for business process. In the course of process some wear & tear will occur, for that
reason we calculate depreciation. An Asset Management Team is sitting in every Manufacturing
Unit and at the Corporate Office, which is responsible for
Asset Account Maintenance and Disclosure in the Financial Statements as per
Accounting Standard 10 of ICAI
Acquisition of assets
Retirement of assets
Calculation of Depreciation on assets
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Charts of depreciation
A chart of depreciation is used in order to manage various legal requirements for the depreciation
and valuation of assets.
Chart of Depreciation code: CSCL
T Code: EC08
Depreciation areas: Book depreciation
CHART OF
DEPRECIATION
COMPANY CODE
CSCL
Chart of depreciation CSCL is used for company code CSCL to country India
T Code: OAOB
Tax codes to assigned to non-taxable transactions
Input Tax: I0 – exempted

Output Tax: O0 – exempted
Assets are grouped under the following heads

Plant and Machinery, land and Buildings, Furniture and fixtures and Vehicles.
12.1 Asset Classes
Asset classes are used to structure fixed assets. Asset classes are applied to all
Company Codes. Asset classes provide default values for all asset master records.
Asset classes consists of account determination, screen layouts and number ranges.
Account Determination
GL accounts for acquisition, retirement, profit or loss on sale of assets, accumulated
depreciation; depreciation and special reserve are specified in account determination.
Account Determination Description

number
200000 Land & Buildings
201000 Plant & Machinery
202000 Vehicles
203000 Furniture & Fixtures
204000 Low Value Assets
205000 Asset Under Construction
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Number interval for asset numbers in asset class.
Number From To
range
01 10000 19999
02 20000 29999
03 30000 39999
04 40000 49999
05 50000 59999
06 60000 69999
T Code: AS08
Asset class
Asset Account Screen Number
Description
Class Determination layout Range
200000 Land & Buildings 200000 1100 01
201000 Plant & Machinery 201000 2000 02
202000 Vehicles 202000 3100 03
203000 Furniture & Fixtures 203000 3000 04
204000 Low Value Assets 204000 3300 05
205000 Asset Under Const 205000 4000 06
12.2 Depreciation Keys

Depreciation method – The Company follows Written down value method for
depreciation Rates of depreciation
Company is following the Depreciation rates prescribed by Schedule 14 of the
Companies Act 1956.
For each rate of depreciation, a Depreciation Key is maintained.
T Code: AFAMA
13. INFORMATION SYSTEM

Standard Reports
13.1 External Reports
Report Standard Report
Profit and loss account for year
Profit and loss account half yearly or quarterly S_ALR_87012284
Balance sheet actual / actual year
Cash flow statement S_ALR_87012271
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13.2 Internal Reports

Report Standard Report
Weekly, fortnight, monthly, quarter- year, half- S_ALR_87012186
yearly, yearly Sales reports
Over due items from customers statement S_ALR_87012168
Outstanding payments to accounts payable
S_ALR_87012084
statements
14. CONTROLLING
Controlling (CO) module is one of the integral components of standard SAP R/3 system.
Controlling module provides information to the organization in decision-making. It facilitates
coordination, monitoring and optimization of all processes in an organization
CSCL is maintaining cost accounts for the purpose of controlling costs in manufacturing
units
Controlling Area represents a closed system used for cost accounting purposes.
T Code: OKKP
Controlling Area
Company code (CSCL)
Company code CSCL is assigned to Controlling Area CSCL
Components are activated in the Controlling Areas
Number intervals for controlling areas are maintained at

T Code: KANK.
Versions
Version 0 (Plan / Actual Version) is maintained for controlling areas.
Cost Element Accounting: This process takes care of integrating FI GL accounts with CO.
Through cost element accounting, an enterprise can get complete information on what costs are
36
incurred within the enterprise. Maintenance of Cost Element accounting of the enterprise is for
the preparation of internal reporting.
Cost Center Accounting: This functionality enables an enterprise to get information on where
costs are incurred. It provides supporting data for management decision making to
check/control the costs of individual functional areas (cost centers). This requires that all costs
be assigned according to their source. However, source-related assignment is especially difficult
for overhead costs. Cost Center Accounting lets you analyze the overhead costs according to
where they were incurred within the organization.
Internal Orders: Internal orders are used to plan, collect, and settle the costs of internal jobs
and tasks. The SAP system enables you to monitor your internal orders throughout their entire
life cycle; from initial creation, through the planning and posting of all the actual costs, to the
final settlement. Internal order is also a powerful tool to collect expenses posted in FI to suitably
segregate through creation and deployment of statistical orders.
Product Cost Controlling: This part of CO enables determination of:

Cost of goods manufactured
WIP calculation
Variance Analysis and
Inventory Valuation (at actual cost with the activation of Material Ledger and Actual Costing)
Profitability Analysis: This functionality of CO enables an enterprise to get profitability related

information that is critical and useful for Sales & Marketing strategic decisions. The functionality
uses critical Sales & Marketing related characteristics (such as Sales order, customer, division,
sales organization) mapped as profitability segment and value figures are captured for profitability
analysis. These in turn provide input for strategic decisions relating to product mix, regional
focus, specific customer care etc. Operating concern is the organizational unit created for
profitability analysis.
Profit Center Accounting: Profit centers are another organizational units in CO similar to cost
centers. The objectives of creation of profit centers are of two fold:
To enable transfer price mechanism within organization between two profit centers
To evaluate performance of profit centers based on ROI, where the numerator is costing based
profits earned by profit center and the denominator is investment in the profit center (fixed
assets and current assets are values are derived from these assets assigned to cost centers, which
are in turn assigned to profit centers) overhead costs. Cost Center Accounting lets you analyze
the overhead costs according to where they were incurred within the organization.
14.1 Cost Element Accounting- Cost Elements-Master Data:
CSCL expects cost accounting records should be updated automatically when the corresponding
financial documents are posted in Financial Accounting to know what costs incurred within
organization.
37
General Explanations: Cost and revenue elements describe the origin of costs, revenues. Cost
elements are defined as either primary cost elements or secondary cost elements.
Primary cost elements in Controlling are created with reference to corresponding expense
or revenue accounts in Financial Accounting. It is a prerequisite to create relevant general ledger
accounts in FI, in order to create corresponding primary cost elements in CO. Examples for
primary cost elements are material costs, salary costs. To be able to post to a primary cost
element, you require cost carrying object such cost center or internal order etc. to identify the
origin of the cost.
T Code: KA01; OKB2
Secondary cost elements are used exclusively in CO to record internal value flows like
assessments, activity allocations and settlements. Secondary cost elements can be created only in
Controlling and they do not have any corresponding general ledger accounts in FI.
T Code: KA06
When you create a cost element, you must assign a cost element category. This
assignment determines the transactions for which you can use the cost element. CSCL uses
primary cost elements based on requirements under the following categories:
Primary costs/cost reducing revenues,

Accrual/deferral per surcharge,
Accrual/deferral per debit = actual,
Revenues,
Sales deductions and
External settlement
Similarly you can define secondary cost elements under the following categories:
Internal Settlement, Order/project results analysis,

Overheads, Assessment and Distributions,
Internal activity allocation
Cost Element Groups are created to group together the cost elements of similar kind of
nature to process the cost elements collectively in cost center planning, assessment etc. Cost
element groups are also useful in deriving information regarding group wise totals.
A new secondary cost element should be created when ever a new assessment or activity
allocation or settlement are created for existing/ new controlling objects like cost center, internal
order etc. A corresponding primary cost element should be created whenever a new
expense/revenue account in general ledger accounts is created.
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14.2 Cost Center Accounting- Cost Center-Master Data

CSCL expects to compare actual operating results (cost / revenue) with the planned cost
/ revenue and identify the variance that serve as signals to take corrective measures at cost center
level, by updating cost center records automatically on online real time basis when ever
corresponding business transaction takes place.
General Explanations:
Cost centers are locations at which costs are incurred or revenues are generated. Cost
centers are designed based on functional requirements, activities provided and areas of
responsibility. In CSCL, cost centers are created according to the cost center categories of
Management, Production, Administration, Other Services, Sales and Distribution, Personnel and
Purchases.
For over head cost controlling, cost centers are of similar type are grouped in to Cost
Center Groups, for instance, Inventory Management, Information Systems, Accounting etc., to
process the group of cost centers together in cost center planning, assessment, information
system to generate reports.
A new cost center should be created whenever there is a need for CSCL to further
classify the originations of the costs for controlling purposes.
T Code: KSH1
Standard Cost Center Categories are used for
1: Production 7: Service Cost Center
5: Management Cost center categories
8: Purchasing 7: Personnel
3: Sales 4: Administration
Cost Center Groups
Cost Center Groups are created to classify the Cost Centers
Cost Center Structure – CSCL Groups
Under this group, Cost Centers are grouped into the following heads
0000 Management 1000 Production
2000 Administration 3000 Purchasing (M&m)
4000 Sales & Distribution 5000 Other Services T Code: KSH1
Cost Centers: CSCL
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Cost Center Description CC Category Hierarchy

STEELMNGT Management 5 0000
STEELPROD Production 1 1000
STEELPD&D DES&DEV 1 1000
STEELPWAX WAXING 1 1000
STEELPASM ASSEMBLY 1 1000
STEELPPRC PRE COAT 1 1000
STEELPSHB SHELBLDG 1 1000
STEELPDWX DEWAX 1 1000
STEELPSSK SHELSOAK 1 1000
STEELPMLT MELTING 1 1000
STEELPFTL FETTLING 1 1000
STEELPHET HEATTRTM 1 1000
STEELPFNG FINISHING 1 1000
STEELSADM Administration 4 2000
STEELSPUR Purchasing 8 3000
STEELSSND Sales & 3 4000
Distribution
STEELSOSR OTHERSERVIC 7 5000
ES
STEELSPER Personnel 7 5000
STEELSPWR Power 7 5000
STEELSDSL Diesel 7 5000
STEELSRNT Rent 7 5000
STEELSR&M Repairs & 7 5000
Maintenance
STEELSQAS QUATYASS 7 5000
STEELSPKG PACKING 7 5000
STEELSDSP DISPATCH 7 5000
T Code: KS01
Cost Center Accounting-Master Data-Statistical Key Figures

CSCL desires to distribute the expenses of service and administrative cost centers expenses on a
logical basis to other cost centers.
General Explanations
Statistical key figures serves as tracing factors for periodic transactions such as assessment
to allocate the costs from non-production cost centers to production cost centers. Statistical
Key Figures are defined such as power consumption units, telephone units etc., for the purpose
of allocation of power costs, communication costs respectively to the consumption cost centers.
Statistical key figures can be defined as fixed value or as a total value. The fixed value is
carried over from the period in which it is entered to all subsequent periods of the same fiscal
40
year. You need to enter a new posting only if the value changes. The total value posts the value
only in the period, which it was entered. This means that if the statistical key figure is a total
value, it has to be entered for each period.
Statistical Key Figures
Statistical Key Fig Description Units Category

1000 Number of Employees Each Fixed
2000 Area Occupied FT2 Fixed
3000 Power KW Total
4000 Repairing Hours Hours Total
5000 Admin Hours Hours Total
6000 Asset Value Each Fixed
7000 Purchase Order Unit Total
T Code: KK01
Cost Center Accounting-Master Data-Activity Types
There is a need for CSCL to allocate proportionate cost of a (production) cost center to a
production order on logical basis such as machine hour rate or labor hour rate etc. for each of
production order on online real time basis using SAP functionalities.
General Explanations:
Activity Types categorize production and service activities provided by a cost center to
the organization and used for allocating costs of internal activities to the respective production
departments, for example, in CSCL, activity types are defined in such a way that all activity types
should be measured in terms of quantity and value.
T Code: KL01
Activity Types of CSCL
ACTIVITY ACTIVITY
TYPE DESCRIPTION UNITS
500000 MACHINE HOURS HOURS
501000 LABOUR HOURS HOURS
502000 SET UP HOURS HOURS
503000 PROCESS HOURS HOURS
504000 TESTING HOURS HOURS
505000 PRODUCTION HOURS UNITS
Activity types are classified into two categories namely, direct activity allocation and
indirect activity allocation.
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Direct activity allocation: is used to allocate the production process costs directly to the
respective production cost centers.
Indirect activity allocation: is used to allocate costs of cost center such as utility costs
(Power and Steam) activities costs to the respective production cost centers.
T Code: KP06
While designing cost center accounting and activity types, it has been firmed up that the
activity type would be designed for production cost centers only. Thus, only direct activity
allocation functionality would be designed and would be machine hour, process hour and labor
hour as the basis.
Activity types in a cost center are closely correlated with the operations performed in the
corresponding work center in PP. As such, any change in production process or creation of new
work center and cost center calls for corresponding designing of activity types.
T Code: KP26
Through designing of activity types, the costs of production (cost of goods

manufactured) are computed in line with configured parameters. This is achieved on online real
time basis for each of the production order / each of the semi-finished / finished goods.
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Cost Center Accounting-Planning
In order to determine the overhead absorption / recovery rate it is imperative to prepare

the budget estimate of expenses that would be part of costs.
The basic goals of cost center’s cost planning are:
Plan and structure of company’s future operations for specific period in monetary terms
Create benchmarks for controlling the business transactions within an accounting period
Monitor efficiency by means of plan/actual comparisons and
To Valuate organizational activities, though estimating the unit cost of a specific activity in given
period.
T Code: KP04
The cost and activity inputs section of planning facilitates in planning of both activity-
independent and activity-dependent primary costs based on cost elements of cost centers
periodically. In activity-independent primary cost planning, planning will be done only for fixed
costs.
Activity-dependent primary cost planning enables to plan primary costs on a cost center
that are dependent on the work performed by the cost center, in terms of activity quantities.
In activity-dependent planning, provision is made to plan the costs dependent on these

activities in fixed and variable portions. This means that the activity type price include two fixed
cost portions per cost center: Activity-independent plan costs and activity-dependent fixed plan
costs.
The Activity output/prices segment of planning assists in planning of which cost centers
provide which activity at what price. These planned prices are used to calculate the actual
activities value by considering actual quantities of activities, carried out at production cost
centers.
T Code: KP26; KP06
Planning of statistical key figures (such as number of power units per cost center that are
used as tracing factors) is for periodic transactions such as assessment. These statistical key
figures can be defined as fixed value or as a total value. The fixed value is carried over from the
period in which it is entered to all subsequent periods of the same fiscal year. You need to enter a
new posting only if the value changes. The total value posts the value only in the period, which it
was entered.
T Code: KP46
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Cost Center Accounting-Actual Postings-Reposting

Errors are unavoidable and may result particularly during initial days of SAP live
operations. Thus, there will be occasions where postings are assigned to the wrong controlling
object, and CSCL should be able to rectify posting errors related to erroneous assignment to
controlling objects.
CSCL can repost primary costs from one controlling object to another using transaction-
based transfers; the original cost element is always retained. This function is designed to correct
posting errors. Posting errors should preferably be corrected in the application component
where they originate, so that external and internal accounting (FI and CO) is always reconciled.
Cost Center Accounting-Period-End Closing-Assessment
CSCL anticipate automating the process of allocating primary and secondary costs of
some non-production cost centers to the production cost centers based on predefined
apportionment basis with statistical key figure, periodically (say monthly).
Assessment is the process used to transfer primary and secondary costs from sender cost
center to receiving controlling objects. Cost centers are used as senders, where as receivers can be
cost centers, internal orders, or cost objects. During assessment, the original cost elements are
summarized into assessment cost elements and assessed to the receiving object.
Should consider the following sender and receiver relations before allocating the costs,
from which objects the costs are allocated, which objects costs are allocated to, which costs
should be allocated, how the costs are distributed among the receivers.
Can combine sender and receiver relations using sender and receiver rules.
Sender values can be posted values, fixed amounts as well as fixed prices. On the receiver
side rules can be, fixed amounts, fixed percentages, fixed portions and variable portions. The
tracing factor of the variable portion identifies a posted value on the cost center as an allocation
base. Provision is made to specify whether the variable portion is to consist of costs,
consumption, statistical key figures, or activities. Plan and actual values can be used as an
allocation base.
In assessment, line items are posted for the sender as well as receiver, enabling the
allocation to be recorded exactly. The system does not display the original cost elements in the
receivers.
T Code: KSU5
44
Distribution of overheads
Overhead Structure
Overhead Structure defines the rules for the calculation of the values to be posted.
An overhead structure consists of the following rows:
Base row - Contains the amount used as a basis for the overhead application.
Calculation row - Contains the overhead percentage rate to be applied to the base row.
Totals row - Contains the sum of the base and overhead amounts
Overhead structures are used to calculate accrual costs.
It involves three stages
Collection and classification of overheads
Departmentalization of overheads: allocation / apportionment of overheads
Absorption of overheads
Overheads can be distributed/apportioned or absorbed by using assessment cycles

T Code: KSU1
14.3 Internal Orders
Internal Orders are normally used to plan, collect and settle the cost of internal jobs and
tasks. You can create an internal Order to monitor the cost of a time-restricted jobs are the cost
for the production of activities.
Internal Orders can be used to monitor the cost of short-term measures, the cost and revenues
related to a specific services and monitor on going costs.
Internal Orders are categorized as :
Orders used only for monitoring objects in Cost Accounting (such as, Advertising or
Trade Fair Orders)
Productive Orders that are value added i.e. Orders that can be capitalized (Such as in-
House construction of an assembly line)
Type of Internal Orders:
1) Accrual Orders: This is used to Monitor such a period-related accrual calculations for Cost
Accounting.
2) Capital Investment Orders: These are used to monitor Investment Costs that can be
capitalized. These Investment cost can then be settled in the fixed assets.
3) Orders With Revenues: You can use Orders with revenues to perform Tasks such as:
a) Monitoring activities for Partners outside the business organization.
b) Monitoring organizational activities that do not affect the core business of the
organization
4) Overhead Cost Orders: These are used to Monitor Overhead Costs independently of the
cost center structure and process unit.
45
Master data is partly used for system- technical purposes, and partly for business process. You
use the master data to define the attributes of an internal order, such as the purpose and the
processing possibilities.
Define order type T Codes: KOT2

Maintain number ranges for orders T Code: KONK
Creation of Internal orders T Code: KO01
To see Internal Orders T Code: KOB1
14.4 Product costing

Product cost controlling is part of R/3 controlling application component and is a tool
for managing costs related to manufacturing process and rendering of services.
It uses information from the overhead cost-controlling tool to calculate such cost as
labour, machine or factory overhead and it supplies information to profitability Analysis.
Product costing tools:
A) Product cost planning: It is a planning tool that helps you predicts the cost incurred when
you manufacture a product or provide a services.
It shows us
Cost composition of each product
Value added in each manufacturing step
Value added in each overhead process
Value added by each profit center, plan, business area and company.
B) Cost object controlling: It is a management tool that Traces the cost incurred when you
manufacture a product or provide a service.
It Answers recurring question like:
How high or actual cost by period in my area?
How high should the cost have been given actual production output?
Do some product groups perform significantly better than others?
Can I identify the cause of these variant?
C) Actual costing: Initially the system values goods movement with a standard price and
collects all variances against this standard price into a ledger. Uses these values to calculate the
actual cost for each material at the end of period.
D) Information System: It helps you perform high-level analyses of the cost by plant, area of
responsibility, product groups and so on. It provides a variety of report that display the detail of
individual orders and postings.
46
Benefit of product cost controlling
Product cost controlling application components support both management and legal
requirements. You can customize it to meet your company specific needs without addition tools.
Management requirements:
Cost Reduction
Evaluation of effectiveness
Variance analysis
Support strategies, decisions that effect which products are manufactured.
Supports operating decisions such as pricing a particular product re determining the effectiveness
of changing the manufacturing process i.e. Activity based costing tools.
Legal requirements:
Product cost controlling helps you satisfy two legal requirements.
A. Inventory valuation
valuated according to tax law and commercial law and inter company consolidation.
Work in process Inventory: Done at the closing of period, outstanding orders and update
balance sheet and p&l a/c statements.
Raw material Inventory:
B. Provision for losses:
In a make to order environment, we may expect certain losses, we can use result analysis to
create reserves and update p&l and balance sheet statements accordingly.
Detail functions of product cost planning:
Material cost estimates:

Costed BOM (Bill of Material) Steps:
Determine cost of Raw material, purchased items and Trading goods by selecting price from the
material master.
Calculate the cost of finished and semi – finished products using BOM
Itemization: Itemization is done to show the cost of operation in each phase and itemization
based on standard routings
Cost component splits:
Cost of goods manufactured: Shows value added in each production level, Typical cost
components included Direct material cost, Direct labour, direct cost, Material over head, Factory
over head etc..
Primary cost component split: Shows the production resources used in manufacturing process.
Typical cost components include direct material cost energy cost, depreciation, wages, and
salaries and so on.
47
PRODUCT COST PLANNING

The following settings are made for the Product Cost Planning.
A. Calculation bases are defined
B. Overhead rates are defined
C. Overhead Cost Elements are maintained for Material overheads, Personnel overheads and
Manufacturing Overheads
D. Credits are defined
E. Cost sheets
1. Cost Sheets defines how values are posted in the SAP system
2. A cost sheet consists of the following lines:
i. Base lines - These contain the amount or quantity on which the overhead is calculated.
ii. Calculation lines – Contain the percentage rate to be applied to one or more base lines.
iii. Totals lines – These contain the sum of the base amount and calculated amounts.
F. Cost Component Structure.
G. Cost Estimation with Quantity Structure.
Cost Object Controlling

The following steps are involved in Cost Object Controlling
Order Type – Standard Order Type PP01 is used. T Code: OPJH
Order Type dependent parameters are defined. Plant is specified in this step.
T Code: OPL8
Scheduling parameters for Production orders are defined
T Code: OPU3
Confirmation of parameters. T Code: OPK4
Costing Variants
PPP1 - Production Order: Planned
PPP2 - Production Order: Actual are used T Code: OPL1
Work in Process (WIP)
The following steps are involved for calculating Work in Process
Result Analysis Keys. T Code: OKG1
Define Cost Element for WIP Calculation. T Code: KA02
Define Result Analysis Versions T Code: OKG9
Define Valuation Methods. T Code: OKGC
Define Line Ids
Define Assignments T Code: OKGB
Define Posting Rules for settling WIP T Code: OKG8
Calculation of WIP T Code: KKAX
Maintain Automatic Account Assignment of Revenue element
T Code OKB9
48
14.5 Profit center Accounting:
Profit centers are another organizational unit in CO similar to cost centers. The
objectives of creation of profit centers are of two fold:
To enable transfer price mechanism within organization between two profit centers.
To evaluate performance of profit centers based on ROI, where the numerator is costing based
profits earned by profit center and the denominator is investment in the profit center (fixed
assets and current assets are values are derived from these assets assigned to cost centers, which
are in turn assigned to profit centers) overhead costs. Cost Center Accounting lets you analyze
the overhead costs according to where they were incurred within the organization.
Dummy Profit Center T Code KE59

Define Profit Center T Code KE51
Maintain Automatic Account Assignment of Revenue element
T Code OKB9
15. INFORMATION SYSTEM

15.1 Reporting
Standard SAP Reports
Costing Reports
available
Reconciliation statement of financial
S_ALR_87013603
accounting with cost accounting
Production statement (periodic) S_ALR_87013158
Cost element allocation to cost centers
S_ALR_87013601
report
Cost center plan/ actual comparison, S_ALR_87013611
S_ALR_87013623,
Cost center actual/actual
S_ALR_87013624
Production Variance Analysis Report S_ALR_87013143
49
16.INTEGRATIONS
16.1 Integration with SD
The integration with SD happens through T Code- VKOA, a combination of particulars

of customer Account Assignment group, Material Account Assignment group and Account key
in an access sequence. The related GL accounts are assigned to Condition types (The condition
type denotes the discount offered on the net / gross price on sales), The Account assignment
group (The customer account assignment group denotes the type of customer, the material
account assignment denotes the type of material), and Account keys - ERL, ERS, ERF, MWS
(The account keys denotes the respective G/L accounts for the transactions involved in sales)
map up the FI – SD integration.
T Code – VKOA
16.2 Integration with MM
The data integration happens through Account Determination Linkage of Account Key with
General Ledger Accounts by the following.
1. Movement Types: The Posting and Updating of the stock fields in the Material Master.
2. Valuation Class: The assignment of G/L Accounts use to determine the respective G/L
Accounts, which is to be updated as result of goods movements.
3. Transaction / Events Key: It differentiates various transactions such as goods

movement that occurred in inventory.
4.
5. Material Type: Each material should be assigned material type in material master record.
Which in turn updates the changes made in quantity and values in stock account.
The integration between FI – MM through the T Code

T Code – OBYC
50
16.3 Integration with PP
The integration with PP – CO is through Cost Centers and Activity Types.

Activity types in a cost center are closely correlated with the operations performed in the
corresponding work center in PP. Through designing of an Activity Types, the cost of
production are computed through configured parameters.
Activity Types of CSCL
ACTIVITY ACTIVITY
TYPE DESCRIPTION UNITS
500000 MACHINE HOURS HOURS
501000 LABOUR HOURS HOURS
502000 SET UP HOURS HOURS
503000 PROCESS HOURS HOURS
504000 TESTING HOURS HOURS
505000 PRODUCTION HOURS UNITS
Change Cost Element / Activity input planning
T Code – KP06
Change activity type /Price Planning
T Code – KP26
Set Planner Profile
T Code – KP04
16.4 Integration with HR
Integration with hr involves assignment of Company code, cost center (mgmt) and
through the creation of related GL accounts like salaries and allowances, medical aid, and bonus
a/c.
51
17.GAPS
1. Customer statement of accounts- to get the report showing opening balance, credits &
debits closing balance based on fiscal year.
But our customers want their own format for identification of their transactions during the
FINANCIAL YEAR.
Customer balance as is Format.
Output desired
Customer Statement
Company Code Customer Name
Fiscal year Customer No
City
Document Parti Outstanding
Sl No Date culars Debit Credit Discount Interest Balance
52
2. Vendor statement of accounts- to get the report showing opening balance, credits & debits
closing balance based on fiscal year.
But our Vendors want their own format for identification of their transactions during the
FINANCIAL YEAR.
Vendor balance as is Format
Output desired
Vendor Statement of Accounts
Company
Code Vendor name
Vendor No
Fiscal year City
Document Outstanding
Sl No Date Particulars Debit Credit Discount Interest Balance
53
3. Depreciation posted for each month customized reports showing opening balance and
transactions in a columnar fashion is not available in standard sap reports in T Code- ART0 (Asset
Accounting Info systems).
Asset Depreciation as-is format (output screen)
Output desired
Depreciation for monthly wise statement

Depreciation
Asset Asset No Posting periods
class Main Sub 1 2 3 4 5 6 7 8 9 10 11 12
54
4. Reports on RELATED PARTY’S USING USER EXITS. Transaction occurred with

related parties are to be reported as per the ICAI guidelines. There are SCAC and other
fields, which are active, we need to have only SCAC field mandatory.
Related party reports
DESIRED OUTPUT
Report on Related Party Transactions

for the Year / Quarter
Company Code
Address
Name Particulars of
of
Sl.No Date Vendor Transaction Amount
55
MATERIALS MANGAGEMENT
Chapter
2
Materials Management
Materials Management Module is where Key Sources like Materials and Vendors
are defined in the System
M
aterials is the central point of the business process in the company. This module basically
deals with the record and defining of Enterprise elements, Master date, Purchasing data,
Inventory Management & Physical inventory, Logistics Invoice Verification, Valuation &
Account Determination & External Service Management etc.
The Overview
I C O N K E Y
Here in Material Management Module we calibrate the system to understand
Enterprise Structure various types of materials that are used in the business process. Mapping
Master Data different business processes like Stock/Non stock item purchase, sub
Purchasing
contracting, Stock transfers, services etc. It also configures different purchase
documents like PR, RFQ, PO, Contract and Schedule Agreement etc with or
Inventory Management without Release procedure. Logistics invoice verification for incoming invoice
Invoice Verification checking.
Configuration
Creating the types of materials, the types of sales, various types orders in respect to
purchases and sales, Storage locations, Configuring the Pricing Procedures are some
the many important configuration elements that are deals by a Material Management
Consultant. In Addition Material Management Consultant also looks after issue and
receipt of goods, Posting, inventory. The various reports that could be generated by
a consultant are the key factors to depend on when crucial decision-making is done. Material
Management Consultant is responsible for one of the crucial element of the sap implementation-
Material Maste3r.
56
MATERIALS MANGAGEMENT
INDEX
1. Organization Structure 58
1.1 Plants
1.2 Storage Locations
1.3 purchase organization
1.4 purchasing group
1.5 procurement process
2. Master Data 60
2.1 Material Master
2.2 Vendor Master
2.3 Purchase Information Record
2.4 Source List
3. Procurement 65
3.1 Purchase Requisition
3.2 Request For Quotation
3.3 Purchase Order
3.4 Transmission Of Purchase Order
3.5 Contracts
3.6 Release Of Purchase Order
3.7 Pricing Procedure
4 Valuations And Account Determination 71
4.1 Valuation
4.1.1 Valuation Area
4.1.2 Valuation Class
4.1.3 Account Category Reference
4.1.4 Valuation And Grouping Code
4.2 Event Keys and Account Modifiers
5 Inventory Management and Physical Inventory 73
5.1 Inventory Management
5.1.1 Goods Receipt
5.1.2 Goods Issue
5.1.3 Transfer Posting
5.1.4 Physical Inventory Posting
5.2 Physical Inventory
6. Logistic Invoice Verification 74
7. External Services Management 74
8. Reports 75
9. Gap Analysis 75
57
1. ORGANIZATION STRUCTURE
1.
1.1 Plants
Company
Plant Description SAP Code Location
Code
CSCL PLANT 1 (DOMESTIC) PL01 Hyderabad
CSCL PLANT 2 (EXPORT) PL02 Hyderabad
58
STORAGE LOCATIONS
SAP solution will have the following storage locations.
Sr. No Plant Storage Location Nomenclatur

e
In SAP
1 Raw Materials RM01
2 Consumables CO01
3 Maintenance, Repairs & Operational Spares MR01
4 PL01 Semi-Finished SF01
5 Finished Products FG01
6 Packing Material Store PK01
7 Scrap Yard SC01
8 Raw Materials RM01
9 Consumables CO01
10 Maintenance, Repairs & Operational Spares MR01
11 PL02
Semi-Finished SF01
12 Finished Products FG01
13 Packing Material Store PK01
14 Scrap Yard SC01
PURCHASE ORGANIZATION
SAP solution will have the following Purchase Organizations:
Sr. Company Plant Purchase Organizations

No. Code Normal Standard Reference
1 PL01 CPO1
CSCL CPOS CPOR
2 PL02 CPO2
59
1.4 PURCHASING GROUPS
The purchasing groups defined for CSCL.
Company Purchasing Description Telephone

Group Number
PG01 Raw Material 9989860101
PG02 Consumables 9989860102
PG03 Spare Parts 9989860103
PG04 Services 9989860104
CSCL
PG05 Raw Material 9989860105
PG06 Consumables 9989860106
PG07 Spare Parts 9989860107
PG08 Services 9989860108
60
PROCUREMENT PROCESS
61
2. MASTER DATA
2.1 Material Master
Material master contains information of all the materials that a company produces & procures, stores
& sales. It is the company’s central source for retrieving material specific data.
2.1.1 MATERIAL TYPES
The following material types are used in PL01 & PL02.
Material types Description

ROH Raw materials
KMAT Configurable Materials
HALB Semi finished materials
LIEH Returnable Packaging
HIBE Operating Supplies
HAWA Trading goods
FERT Finished products
ERSA Spare Parts
VERP Packing Material
NLAG Non stock items
PIPE Pipe line
DIEN Services
UNBW Non valuated items
2.1.2 NUMBER RANGE FOR MATERIAL TYPES
All materials are having external number ranges, each material number contains 10 digits in
which first four letters represents the material type and the remaining 6 digits tell the sequence
number of that material type.
Number Range
Material types
From To
ROH RAWM0000001 RAWM9999999
KMAT CONF0000001 CONF9999999
HALB SEMI0000001 SEMI9999999
LIEH LIEH0000001 LIEH9999999
HIBE CONS0000001 CONS9999999
NLAG NONS0000001 NONS9999999
HAWA TRAD0000001 TRAD9999999
FERT FINI0000001 FINI9999999
ERSA SPAR0000001 SPAR9999999
VERP PACK0000001 PACK9999999
PIPE PIPE0000001 PIPE9999999
DIEN SERV0000001 SERV9999999
UNBW NONV0000001 NONV9999999
62
2.1.3 MATERIAL VALUATION
In PL01 & PL02 materials are valuated according to material type
Sr. Material Moving Avg. Standard

No. Type Price Price
1 ROH X
2 KMAT X
3 HALB X
4 LIEH X
5 HIBE X
6 NLAG X
7 HAWA X
8 FERT X
9 ERSA X
10 VERP X
11 PIPE X
12 DIEN X
13 UNBW X
2.1.3 MATERIAL VIEWS
Sr. Material Basic Sales MRP Purchase Store A/c Fore Costing
No. Type Data caste
1 ROH X - X X X X X -
2 KMAT X X X X X X X -
3 HALB X X X X X X X -
4 LIEH X - - X X X - X
5 HIBE X - X X X X X -
6 NLAG X - X X X X X -
7 HAWA X X X - X X X -
8 FERT X - X X X X X -
9 ERSA X - - X - X - -
10 VERP X - - X X - - -
11 PIPE X - - X X - - -
12 DIEN X - - X X - - -
13 UNBW X - - X X - - -
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2.1.5 MATERIAL GROUPS
Sr. No. Material Group Code (SAP)

1 Chromium MG01
2 Manganese MG02
3 Scrap MG03
4 Sand MG04
5 Bismuth Metal MG05
6 Tin Metal MG06
7 Furniture MG07
8 Cobalt MG08
9 Welding Rods MG09
10 Hand Gloves MG10
11 Wax MG11
12 Bearings MG12
13 Wooden Boxes MG13
14 M Seal MG14
15 Silicon MG15
16 Services MG16
17 Oils MG17
18 Gases MG18
19 Stationary MG19
20 Nickel MG20
21 Office Equipments MG21
2.2 VENDOR MASTER

The vendor master contains information on vendors from whom a company procures
materials or services. Business transactions are posted to vendor accounts and managed using
these documents. Data in vendor master record control how transaction data is posted and
processed for a vendor. The vendor master record also contains all the data required to do the
business with vendors.
64
2.2.1 VENDOR ACCOUNT GROUPS
Vendor account group is classifying feature in vendor master that determines

• The type of number assignment
• A number range for assigning account numbers
• Which fields are displayed and whether their entry is optional or required when
you enter or change vendor master data
Whether the account is for one time vendor?
Vendor Account Group Description
0001 Main Vendor
0002 Goods supplier
0003 Alternative payee
0004 Invoicing party
0005 Freight Vendor
0006 Ordering address
0007 Plants
OTVN One time vendor
2.2.2 NUMBER RANGES
Internal number ranges are used.

Vendor Number Ranges
Account Group From To
0001 110000 119999
0002 120000 129999
0003 130000 139999
0004 140000 149999
0005 150000 159999
0006 160000 169999
0007 170000 179999
MNFR 180000 189999
OTVN 190000 199999
65
2.2.3 INCO TERMS
The following INCOTERMS (Price Basis) will be maintained in the SAP system
Sr. No. INCO Description
Terms
1 EDS Ex-destination station
2 EXW Ex- works
3 EVG Ex-vendor go-down
4 EVS Ex-vendor station
5 ONS On site
6 FOB Free on board
7 EXS Ex- (our) site
2.3 PURCHASING INFORMATION RECORD

Vendor and material information is stored in SAP in the form of purchase info record.
Info record will have the following key data
• Info record number * Vendor code
• Material code * Purchasing organization
• Info Category (standard, sub-contracting, pipeline).
2.4 SOURCE LIST
• To define a source of supply as fixed. Such sources count as preferred sources over a certain
period of time.
• As an aid in selecting the preferred source during the source determination process.
• To block the external procurement of a material with respect to a particular
vendor for a specified period of time.
3. PROCUREMENT
3.1 PURCHASE REQUISITION
Purchase requisition processing:
At CSCL internal number range will be used for PR documents, these will be identified basing on
the document types of PR.
In SAP Description Document type Number Range

From To
NB Standard STD 100000000 109999999
FO Framework FRM 110000000 119999999
RV Outline Agreement AGR 120000000 129999999
66
Item categories – standard ()

Sub contracting (L),
Stock transfer (U),
Services (D),
Third Party (S).
3.2 REQUEST FOR QUOTATION
Document type for this will be AN
Number range for this document --- 20000000 ---29999999
The vendor pricing and different pricing conditions can be entered in the maintenance of the
quotation document.
3.2.1 APPROVAL OF QUOTATION
Through the price comparison screen SAP ranks all the quotations based on the price. The other
details such as delivery date and the related information is also displayed the entire quotation of
the vendors also can be viewed from the same screen.
The decision to select/reject a vendor can be based on the price comparison list generated by the
system and by checking the vendor’s technical competency (specifications, delivery terms, free
sample inspection), which will be done outside the system.
Once the vendor is selected the price can be updated in the info record from the price
comparison list by selecting the info record indicator.
3.3 PURCHASE ORDER

In CSCL plant wise procurement is as follow
Type of the procurement
Standard Sub-contracting Third Party Stock transfer
PL01 X X X X
PL02 X X X X
3.3.1. STANDARD PURCHASE ORDER
The approved requisitions can be converted to a purchase order, if there is a preferred vendor or
if there is an existing contract. By using with reference functionality, a single PO can be created
with multiple requisitions. Individual requisitions will be represented as separate line items in the
PO to maintain the reference of the PR.
67
3.3.2. SUB-CONTRACTING
Order Processing
In a sub-contracting purchase, the normal purchase order is raised with a sub contracting item
category indicator L. SAP allows creation of the purchase order without creating a RFQ also.
Issue of components
Receipt of the final product
Once the vendor sends the final product, it will be received against the sub-contract purchase
order. The system will copy the quantity of the final product and the components mentioned at
the time of the PO in the goods receipt document. Based on the consumption quantity
mentioned by the sub-contractor or the transferred quantity, the components quantity will be
adjusted in the Goods Receipt document before posting.
3.3.3. THIRD PARTY
Order processing
In CSCL, manufacturing plant is having third party process. As per the requirement from the
sales department (sales order) a standard purchase order created with account assignment 1 &
item category S. These purchase orders are sent vendors who are approved only.
Receipt of Third Party Stock

No stock is received against purchase order into receipt storage location in our plant but we will
get the acknowledgement from the customer about the same.
Vendor will send the invoice to us for the payment.

3.3.4. STOCK TRANSPORT ORDER
In Plant 2, manufacturing plant procures components from the plant 1, the procurement is done
with billing.
Vendor master and customer master will be created to manage intra business unit purchases and
will be handled through stock transport order procedure of SAP.
Procurement Process
When the goods are received at the receiving business unit, a goods receipt will be posted against
the delivery document of the issuing plant. The goods are posted to Unrestricted Use Stock.
Invoice is entered in the receiving plant against the stock transfer order of the receiving plant.
The required reconciliation accounts will be done in the financial module with the defined
account groups of internal vendors.
3.4 TRANSMISSION OF PURCHASE ORDER
Purchase orders will generally be sent through electronic - mail and hard copy by out put device
settings.
68
Summary of Purchasing Document Types and Number Ranges
Sr. Document Allowed item Number Internal

Document
No. type Categories ranges /external
Standard. Stock
transport.
1 Standard PO NB Sub-contracts, Standard Internal
Third Party
Stock
2 UB Stock transport Standard Internal
transfer
3.5 CONTRACTS
Central purchase organization will create the contract after arrival of the total requirements of
individual plants after negotiations with vendors.
Referring to the contracts individual purchase organizations will raise the Release order as per the
plant requirement.
There are two types of contract.
Description Doc type Number Range

Value contract WK Standard
Quantity contract MK Standard
3.6 RELEASE OF PURCHASE ORDER

3.6.1. CHARACTERISTICS AND CLASS
• The parameters VALUE, PLANT, PURCHASING GROUP, COST CENTRE

AND DOCUMENT TYPE are main criteria to release the purchase order, these
can be created as characteristics in SAP
• These characteristics are grouped into classes
3.6.2. RELEASE CODE
The release code is a two-character ID allowing a person to release (clear, or

approve) a requisition or an external purchasing document.
In CSCL the release of PO has four releasing authorities, these authorities can be
created as release codes in SAP.
69
Release Code Release Authority

01 Purchase Officer
02 Asst. Manager – Purchase
03 Purchasing Manager
04 Commercial Director
3.6.3 Release Group
All the releasing authorities are grouped in one group. And the class is assigned to the release
group.
Release Group Name of the Release Group
PO Purchase Order Release Group
Value / <= 100000 (INR) > 100000 (INR)

Plant
Purchasing Asst. Purchasing Asst.
Asst. Manager Purchasing Asst. Manager Purchasing
Plant 1
Manager-Purchasing Manager-Purchasing
Commercial Director
Purchasing Asst. Purchasing Asst.
Asst. Manager Purchasing Asst. Manager Purchasing
Plant 2
Manager-Purchasing Manager-Purchasing
- Commercial Director
3.8 PRICING PROCEDURE

We define access sequence and condition types in purchasing conditions and assign these
condition types in the pricing procedure.
Schema Group
Schema group allow you to group together certain purchase organizations that uses the same
calculation schema, we can also use them to group together vendors for whom the same
calculation schema is valid.
Schema Group For Purchase Purchase for
organization
ZSGC All Purchasing Organizations in PL01 &
PL02
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Schema Group Vendor

We will assign these schema groups to the pricing procedure based on the vendor it triggers the
corresponding pricing procedure in the purchasing document.
Schema group Schema group Pricing Description for Pricing
purchase org. vendor Procedure Procedure
ZSGC All Vendors RM0000 Domestic
Procurement
The procedure can be defined by using the following pricing conditions.

Condition Types Percentage Value Quantity
Gross Price Automatic X
Gross Price Manual X
Discount X X X
Packing and forwarding X X X
Excise Duty X X
Educational Cess X X
Service Tax X X
Educational Cess on ST X X
Manual LST (VAT) X X X
CST X X
Insurance X X
Freight X X X
Cash Discount. X X X
Loading Charges X X X
Unloading Charges X X X
Surcharge On Gross X X X
Surcharge On Net X X X
71
4. VALUATION AND ACCOUNT

DETERMINATION
4.1 VALUATION
4.1.1 VALUATION AREA
All materials are valuated at plant level only. Each material is assigned to valuation class while
creation of its master record.
4.1.2 VALUATION CLASS
Grouping of similar accounting requirement materials for automatic determination of G/L
accounts is called valuation Class.
4.1.3 ACCOUNT CATEGORY REFERENCE
Grouping of valuation classes for the purpose of automatic account determination is called as
account category reference.
In CSCL the following valuation classes and account category references are defined.
Material Valuation Valuation class Account category

type class description reference
ROH 3000 Indigenous Raw materials 0001
HALB 7900 Semi finished materials 0008
FERT 7920 Finished goods 0009
HAWA 3100 Trading goods 0005
ERSA 3040 Mechanical spares 0003
ERSA 3040 Electrical spares 0003
HIBE 3030 Operating Supplies 0002
VERP 3050 Packing Material 0004
NLAG 9000 Non Stock Items 0010
DIEN 3400 Services 0006
UNBW 3300 No valuated 0007
4.1.4 VALUATION GROUPING CODE
Grouping of valuation areas for the purposes of automatic account determination

Valuation Area Valuation Grouping
Code
PL01 0001
PL02 0001
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4.2 ACCOUNT POSTING
In SAP automatically the G/L accounts are updated while goods receipt and invoice receipt
according to the movement type control data. To up date the stock accounts the following
transaction/event keys are defined for CSCL.
Event Key Description
BSX Inventory postings
WRX GR/IR clearing account
BSV Stock change account
GBB Off setting entry for inventory postings
UPF Unplanned Freight
PRD Price difference accounts
KON Consignment Liabilities
FRL Purchasing Services.
FR1 Freight clearing
FR2 Freight provision
FRE Purchase price account
Account Modifiers:
Account Description
Modifiers
GBB
AUF Goods Receipt for Purchase Order
BSA Initial Entry of Stock Balances
INV Expenditure / Income from Inv. Diff. (Physical Inv.)
VAX Goods Issue for Sales Order
VBO Consumption from Stock of Material Provided to Vendor
VBR For Internal Goods Issue ( Cost Center)
VNG Scrapping / Destruction
VQP Withdrawal of Samples
ZOB Goods Receipt without Purchase Order
ZOF Goods Receipt without Production Order
PRD
BLANK Goods & Inv. Receipt against Purchase Order
PRF Goods Receipt against Production Order
PRA Goods issue & other Movements
PRU For Transfer Posting
KON
PIP Pipeline Materials Liabilities
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5. INVENTORY MANAGEMENT & PHYSICAL

INVENTORY
5.1 INVENTORY MANAGEMENT
5.1.1 GOODS RECEIPT:
A goods receipt (GR) is goods movement with which the receipt of the goods from a vendor or
from a production is posted. A goods receipt leads to increase in the stock in the storage
location.
5.1.2 GOODS ISSUE:
a goods issue is a goods movement with which a material withdrawal or material issue, a material
consumption, or a shipment of goods to customer is posted. A goods issue leads to reduction in
warehouse stock.
5.1.3 TRANSFER POSTINGS:

a transfer posting is a general term for stock transfers and changes in stock type or stock category
of a material. It is relevant whether the posting occurs in conjunction with a physical movement
or not.
5.1.4D PHYSICAL INVENTORY POSTINGS:
after user decides to carry out physical count, user will have to create physical inventory
document, enter the count and post the difference (excess/shortage). At the time of posting the
difference the system will generate the material document. For valuated stocks accounting
document will also be generated.
ventory
In SAP system the Physical inventory is done in three steps.
• Creation of physical inventory documents

• Counting of physical stock and entering physical stock into the system
• Simulate and posting the differences, recounting if necessary and re-posting where the
difference goes to the Profit and Loss statement i.e. automatic charging of GL a/c and
adjustment in the physical inventory.
74
6. LOGISTICS INVOICE VERIFICATION

It is in Logistics Invoice Verification that incoming invoices are verified in terms of their
content, prices, and arithmetic. When an invoice is posted, the invoice data is saved in the
system. The system updates the data saved in the invoice documents in Materials
Management and Financial Accounting.
Process Decided
There will be two types of invoice verifications, one for the vendor who has supplied the
material and the other is for freight/ delivery cost / services.
Invoice verification will be performed with reference to a Purchase Order or a Delivery
Note, based on provision created at the time of Goods receipt. Invoice verification can
be done after goods receipt.
Any cost, which needs to be loaded on the inventory, should be incorporated in the
purchase order as a part of price.
7. EXTERNAL SERVICE MANAGEMENT

External Services Management provides a basic process for the procurement of externally
performed services. This basic process comprises the following functionality:
Service master records in which descriptions of all services that may need to be procured can be
stored. In addition, a standard service catalog (SSC) and model service specifications (MSS) are
available.
A separate set of service specifications can be created for each concrete procurement project in
the desired document (e.g. PM maintenance plan or maintenance order; PS network; MM
purchase requisition, RFQ, contract, purchase order, or service entry sheet).
External Services Management offers two basic ways of specifying services:
7.1 As planned services with description, quantity, and price.
By “planned services” we mean services whose nature and you know scope at the start of a
procurement project or transaction.
At the time the services are requested, the individual specifications are entered either with the aid
of a service master record or directly as short and long texts. Price and quantity are specified in
both cases.
75
a. As unplanned services with the setting of a value limit only.
By unplanned services, we mean services that cannot be specified in detail because their
precise nature and scope are not initially known, or services which - for various reasons -
you do not wish to plan. Unplanned services therefore have no descriptions.
They are entered in the form of maximum values in the relevant currency. Services may be
performed up to a value not exceeding these value limits. This ensures an element of cost
control.
REPORTS
Sr. No. Title Code Purpose Intended For
Director, Manager, Asst.
Stock Overview for
1 MMBE To check the current stock levels Manager, Officer &
Material Number wise
Assts.
Material Document
2 MB51 To know details of Material doc. Manager, Officer &
List
Assts.
Materials analysis, To know Material / Plant / Pur. Org. Director, Manager, Asst.
3 Purchasing values, MC$G wise PO Value, GR Value, Invoice Manager, Officer &
Basic List Amt. Assts.
To know GR/IR balances with Director, Manager, Asst.
List of GR/IR
4 MB5S reference to vendor, Pur. Org., Pur. Manager, Officer &
balances
Group, Material, Pur. Doc. or Item Assts.
To know stock in transit with Director, Manager, Asst.
Display of Stock in
5 MB5T reference to material, sending plant, Manager, Officer &
Transit
receiving plant or company code. Assts.
To know the list of materials
available in SAP with reference to
6 Materials List MM60 Manager, Officer &
material, plant, material type,
Assts.
material group or created by
Material analysis To know the report on material,
7 MC.9 Manager, Officer &
Stock selection valuated stock, consignment stock
Assts.
Storage location To know the report on valuated stock Director, Manager, Asst.
8 analysis, Stock MC.5 & consignment stock of storage Manager, Officer &
selection location Assts.
To know the slow moving items Director, Manager, Asst.
Key-figure, Slow
9 MC46 (number of days wise) and total stock Manager, Officer &
Moving Items
value. Assts.
Purchasing Doc. Per List of Purchase Docs. & status of
10 ME2L Manager, Officer &
Vendor GR, IV
Assts.
76

Purchasing Doc. Per List of Purchase Docs. & status of
11 ME2M Manager, Officer &
Material GR, IV
Assts.
Purchasing Doc Per List of Purchase Docs. & status of
12 ME2K Manager, Officer &
Account Assignment GR, IV
Assts.
13 ME2J Manager, Officer &
Project GR, IV
Assts.
14 ME2C Manager, Officer &
Material Group GR, IV
Assts.
Purchasing Doc Per Director, Manager, Asst.
List of Purchase Docs. & status of
15 requirement Tracking ME2B Manager, Officer &
GR, IV
Number Assts.
16 ME2N Manager, Officer &
Doc. Number GR, IV
Assts.
17 ME2W Manager, Officer &
Supplying Plant GR, IV
Assts.
18 Stock on Posting Date MB5B Stock on Posting Date Manager, Officer &
Assts.
19 List of Vendors MKVZ List of Vendors Manager, Officer &
Assts.
List of Diff. between the physical
20 List of Inventory Diff. MI20 Manager, Officer &
count entered and the book stock.
Assts.
List of Inbound
21 VL06I List of Inbound Deliveries Manager, Officer &
Deliveries
Assts.
List of POs Pending
22 ME55 List of POs pending release Manager, Officer &
Release
Assts.
23 List of PRs ME5A List of PRs Manager, Officer &
Assts.
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UPLOADS
Uploads that are identified to be loaded in the system through customized program
1. Material Master 2.Vendor Master 3. Purchase orders
9. GAP ANALYSIS
1. GAP:
In the Collective Number (10 char) field of the RFQ, The number in series should
be automatically generated by the system while the document is saved.
78
CHARMINAR STEEL CASTINGS LIMITED

TO PURCHASE ORDER
DOC NO:
DATE
PR NO:
DATE
YOUR REF: TIN No:
CST NO:
ECC No:
With reference to your quotation and further negotiations, we are pleased to forward the order-
as per the terms and conditions hereunder and as mentioned overleaf and any annexure thereof:
Sl.# Our Mat. Item Description UOM QTY RATE TOTAL

Code
Rupees (in words): Total

Amount
Price Basis: Terms % age
Date of delivery: Discount
Special Instructions: P&F
EXCISEDUTY
Edu. Cess
Material to be delivered at: VAT/CST
Freight
Insurance
Grand Total
We request you to send an acknowledge receipt and acceptance of the order.
79
TO PURCHASE ORDER
DOC NO:
DATE
PR NO:
DATE
YOUR REF: TIN No:
CST NO:
ECC No:
With reference to your quotation and further negotiations, we are pleased to forward the order-
as per the terms and conditions hereunder and as mentioned overleaf and any annexure thereof:
Our
Mat. Item
Sl.# Code Description UOM QTY RATE TOTAL
Rupees (in words): Total

Amount
EXCISEDUTY
Edu. Cess
Freight
Insurance
Grand Total
We request you to send an acknowledge receipt and acceptance of the order.
80

TO,S011_LIFNR PURCHASE ORDER
DOC NO:EKPO_EBELN
DATE S011_SPTAG
PR NO: EBNA_BANFN
DATE EBNA_BADAT
YOUR REF: TIN No:
CST NO:
ECC No:
With reference to your quotation and further negotiations, we are pleased to forward the
order-
as per the terms and conditions hereunder and as mentioned overleaf and any annexure
thereof:
Our Mat. Item TO
Sl.# Code Description UOM QTY RATE TAL
Rupees (in words):

Total Amount
EXCISEDUTY
Edu. Cess
Freight
Insurance
Grand
Total
We request you to send an acknowledge receipt and acceptance of the
order.
81
Chapter
3
Sales and Distribution
“ Cavet Emptor “ Or Customer is the king
… and SD module is the Link between the Company and the Customer.
S
ales and Distribution Module of SAP have key elements like sales offices, Customer data
base, or A Sale as a whole under its jurisdiction. Sales and Distribution will be responsible to
configure all the elements that are related to sale and client either independently or in co
ordination with Finance and Controlling. This Module works closely with all the other
modules as it is the link between the customer and the company which puts sales and distribution
module in a key junction which is of crucial nature. .
The Overview
I C O N K E Y
Sales and Distribution Module will Create, Configure and Operate the key
Sales Order Processing elements like customer database , sales offices, and various documents like
Warehouse Management sales orders, quotation. Credit management will be working in parallel with
Billing
Finance and Controlling of SAP and Product Costing will bring Material
Management and Production Planning into Picture. Revenue Account is
Credit Management
determined at sales end.
Sales and Distribution module will create Sales office, various types of sales,
shipping types. Customer Database is the key for various decision-making
aspects of an organization. This module also covers various external
elements like return goods policy, shipping forms, taxation aspects etc, for
whole and broader smooth functioning of an organization.
INDEX
1. As-Is / To-Be 81
2. Executive Summary 84
3. Organizational Structure 85
4. Master Data 91
5. Basic Functions 94
5.1 Revenue Account Determination
5.2 Credit Management
5.3 Output Determination
5.4 Text Determination
5.5 Log Of Incompletion
5.6 Availability Check And Transfer Of Requirements
6. Sales Cycle 117
6.1 Sales Documents
6.2 Delivery
6.3 Billing
7. Business Scenario 1: Standard Sales 130
8. Business Scenario 2: Quantity Contract 133
9. Business Scenario 3: Make To Order 135
10. Business Scenario 4: Returnable Packaging 137
11 Business Scenario 5: Return Of Goods 138
12.Business Scenario 6: Third Party Sales 128
13.Reports 139
14.Parameters Used For Sis 140
15.Gaps 141
83
1.AS – IS TO BE
AS - IS TO – BE
Organization For mapping the company’s organizational
Charminar Steel castings have five structure in SAP standard system the following
operating companies. The group has been done:-
runs its sales through 4 Branch Operating Companies - Company codes
offices at mumbai, Calcutta, Sales head office –
Kanpur and Trichy. Export sales is Sales Organizations (1) Taking care of both
routed through the consultant and Domestic and Export market
its operated from sales head office Branch Offices – Sales Offices Domestic (4)
Hyd. Based at mumbai, Calcutta, kanpur and trichy,
Sales office export- hyderabad
Sales personal – Sales groups
Channels In SAP standard system these 3 approaches have
Charminar Steel Castings has 3 been mapped to Distribution Channels, Which are
various approaches where in the nothing but channels through which material or
products of the company are services, is reached to customer. They are as
reached to customers. They are follows:-
Direct selling, Institutional selling Direct selling – Direct Sales
and Exports Institutional selling – Institutional Sales
Export sales – Export Sales (direct sales)
Products In SAP standard system the products of the group
Charminar Steel Castings has have been mapped to Divisions. Division is
various products group like nothing but a group or range of products.
Defence, Surgical, Engineering and Defence
Pressure valve. Surgical
Engineering
Pressure Valve
Customers In SAP standard system the data on business
Charminar Steel Castings has its partners Charminar Investment Steel Castings has
customers in the form of a business relationship is kept in master records.
Institutions like government, Master records contain all data necessary for
Defence public sectors, MNC’s and processing business transactions. A customer
Private Institutions. master record is created when you start a business
relationship with a new customer. Customers have
been mapped to Regular customer, One time
Customers.
Materials In SAP standard system, Sales and Distribution
Charminar Steel Castings procures data in a material master record is defined for a
most of its materials from local specific sales organization and distribution
suppliers / vendors and process channel. The division, delivering plant, sales
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them further to make finished groups, grouping terms for price agreements and
products. sales texts etc are included in sales and distribution
data. The fact that a material is linked to a
distribution channel allows the material to be sold
with different conditions.
Inquiry In SAP standard system, Inquiry is a customer’s

Inquiry for domestic market and request to the company that they provide a
export market are for all the quotation or sales information without obligation..
charminar steel products. The sales area that accepts the inquiry becomes
responsible for further processing. The total
An Inquiry can relate to materials quantity of an inquiry item can be subdivided
or conditions and if necessary between the schedule lines in different amounts
delivery dates and relevant delivery dates.
Quotations Quotations are created when a customer has an
The company quotes to the informed sales query. The customer wants to
customer a specific price with a know, for example, how much a certain quantity
validity period along with the terms of a product will cost and when it will be available
& condition. for shipping.
Sales Orders During sales order processing, the system carries

After the customer agrees to the out monitoring the sales transactions, checking for
terms and condition given in the availability, transferring requirements to materials
Quotation, they will issue purchase planning (MRP), scheduling the delivery, checking
order with the required quantity of credit limits and creating printed or electronically
goods to be delivered on a specific transmitted documents (confirmations, and so on).
date. Based on the requested
delivery date the company will
check the availability and proceed
further to delivery. If the stock is
not available then the next possible
delivery date will be intimated to
customer.
Delivery Outbound delivery supports all shipping activities
Based on the requested delivery including picking, packing, transportation and
date given by the customer, the goods issue. During the outbound delivery
company will deliver the goods process, shipping-planning information is
from a particular plant. recorded, status of shipping activities is monitored
and data accumulated during shipping processing
is documented. When the outbound delivery is
created, the shipping activities, such as picking or
delivery scheduling, are initiated, and data that is
generated during shipping processing is included
in the delivery.
Billing Billing is done on the basis of sales orders and
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After delivering the goods an deliveries, which includes Invoice, Credit and
Invoice is raised as per the delivery Debit memo, Performa Invoice. If no complaints
depending on the price. are made about the delivery, the business
transaction is considered complete from the sales
point of view.
Credit and Debit Memo:
Credit memo: A sales document created on the
basis of a customer complaint. This reduces
receivables in Financial Accounting.
Debit memo: A sales document created on the
basis of a customer complaint. This increases
receivables in Financial Accounting.
Credit memos are created for various reasons (for
example, because of defective goods or because
you have overcharged a customer). Similarly, you
may need to create a debit memo (for example,
you have not charged the customer enough).
When you create a credit or debit memo, you can
refer to an invoice or a credit memo request.
Returns Returns documents are created when the customer
If the customer returns the goods a wants to return damaged goods or goods that were
returns delivery is created and delivered on a trial basis. The returns document
credit memo is issued to the can be created with or without reference to the
customer. sales order. When the returned goods arrive back
at the warehouse, you then create a returns
delivery, which refers to the returns document you
already created. The goods issue posted for the
return delivery records the inward movement of
the goods into your own stock.
Exports In SAP standard system the exports sales process
Charminar Steel castings is is mapped just like that normal sales order process
primarily being exported to except that distribution channel involved will be
European countries. The nature of Exports through which the products reach its
business is bulk. The sale is done customer in the European countries.
through agents
SPECIAL SALES PROCESSES
Cash Sales In SAP standard system this sales process can be
This process occurs when the configured by sales document type (CS) available.
customer is ready to take the The delivery is done automatically along with the
Product by paying the required sales order, while an Invoice is raised when the
amount immediately. order is created.
Rush Order In SAP standard system this sales process can be

The Rush Order also follows configured by special sales document type (RO)
a cycle similar to the Cash Sales available. Only difference to that cash sales and
86
except that an Invoice is raised later rush order is that invoice is raised later and
and customer pays the amount at a customer pays the amount at a later date.
later date.
Third Party Sales In the SAP standard system, control parameters

All orders for Charminar Steel like Item Category group (BANS) and Item
Castings Limited are procured Category (TAS) map Third party sales. The
through the Vendor using third party Standard sales document type is used to execute
sales process. Vendor directly sends the third party sales.
the goods to the customer as per the
requirement mentioned in the sales
order and vendor bills the company.
Make-to-order In SAP standard system the make-to-order

When a customer orders for a particular process is mapped by using standard sales
material, which are not maintained in order process, he item category group 0001
stock, based on the customer requirement, in the material master and requirement type
company, manufacture the products and KE. The item category TAK is triggered in
supplies to that particular customer only sales document.
2.EXECUTIVE SUMMARY
OVERVIEW OF THIS REPORT
A Business Process Workshop (BPW) was held with the key users of Sales & Distribution.
Over these discussions, the Implementation Team has developed a high degree of process
understanding. During the BPW, various business scenarios have been discussed that needs to
be addressed. The purpose of this report is to confirm the understanding of these business
scenarios and freeze these business requirements, which will form the basis for development
or configuration activity.
This document would provide the way forward during the Realization phase, where these
processes will be configured in the SAP System.
87
SCOPE FOR THIS REPORT
For Sales & Distribution:

The complete Sales structure and Master data as well as the business process will be included
in the scope of the project.
This project will include the following business processes of Sales & Distribution.
Export sales
Domestic sales
Direct Sales
Institutional Sale
Sales Returns
3 ORGANIZATIONAL STRUCTURE
3.1 Sales Organization
The following Sales Organizations are created for Project.
• Sales Organization is an organizational unit that sells and distributes products,

negotiates terms of sale, and is responsible for sales transactions. The zonal nature of the
organization structure is mapped using sales organizations.
SALES ORGANIZATION DESCRIPTION
Charminar steel casting Sales

1001
Organization
3.2 Distribution Channel

A distribution channel is a channel through which materials or services reach to customers.
The following three Distribution Channels will be created for Project Charminar Investment
Steel Castings Limited.
CHARMINAR STEEL CASTING SALES ORGANIZATION
Distribution Channel Description
10 Direct Sales
11 Domestic Institutional Sales
12 Exports
88
3.3 Division
A division is a product group that can be defined for a wide ranging spectrum of products.
The above divisions have been created to indicate the Four main product groups in the
company.
The following divisions will be created for Project Charminar steel casting Limited.
10 Defence
11 Surgical
12 Engineering
13 Pressure Valve
3.4 SALES OFFICES
Sales office is defined as it is a physical location (for example, a branch office) that has
responsibility for the sale of certain products or services within a given geographical area.
The following Sales Offices will be created for Project Charminar Steel Casting Limited.
1001 North Office (kanpur)

1002 South Office (Trichy)
1003 East Office (Calcutta)
1004 West Office (Mumbai)
1005 Export sales office (Hyderabad)
3.5 SALES GROUP
Sales Group is a group of sales people who are responsible for processing sales of certain
products or services. By using sales groups you can designate different areas of responsibility
within a sales office and also can be used for reporting purposes.
The following Sales Groups will be created for Project Charminar Steel Castings Limited
110 Sales Group North Office
111 Sales Group South Office
112 Sales Group East Office
113 Sales Group West Office
114 Sales group export office
89
3.6 SHIPPING POINTS
The shipping point is the top level in the organization for shipping. A delivery is always
initiated from exactly one shipping point. Thus, all items of a delivery belong to one shipping
point. Groups of deliveries also belong to exactly one shipping point.
The following Shipping Points will be created for Project Charminar Steel Castings Limited..
1001 Shipping point Standard

1002 Shipping Point Returns
3.7 LOADING POINTS

The loading point is the top level in the organization for loading. Picking is always initiated
from exactly one loading point. Thus, all items of a picking belongs to one loading point.
Loading Points are assigned to Shipping Points.
The following loading Points will be created for Project Charminar Steel Castings Limited
Charminar Steel Castings Limited

SALES ORGANISATION
SHIPPING POINT LOADING POINT DESCRIPTION
1001 10 LP 1D
1002 11 LP 1R
ASSIGN SALES ORGANIZATION TO COMPANY CODE
The purpose of this is to allocate the company code so that it establishes a link between the
SD and FI systems. A sales organization belongs to just one company code
Sales Org Desc Company Code Desc
1001 Charminar Steel
CSCL Sales CSCL
Castings Ltd.
ASSIGN DISTRIBUTION CHANNELS TO SALES ORGANIZATION
The purpose of this step is to allocate the distribution channel to Sales organization to find
out which distribution channel is responsible for the sale.. A distribution channel can be valid
for several sales organizations.
90
DIST
SALES DESC
CHANNEL DESC DIV DESC
ORG
1001 CSCL Sales 10 Direct Sales 10 DEFENCE
1001 CSCL Sales 10 Direct Sales 13 ENGINEERING
1001 CSCL Sales 10 Direct Sales 12 PRESSURE VALVE
1001 CSCL Sales 10 Direct sales 11 SURGICAL
Institutional
1001 CSCL Sales 11 11 SURGICAL
Sales
1001 CSCL Sales 12 Exports 12 PRESSURE VALVE
Charminar Steel castings Limited
Sales Org Desc Dist Chl Desc

1001 CSCL Sales 10 Direct Sales
1001 CSCL Sales 11 Institutional Sales
1001 CSCL Sales 12 Export Sales

ASSIGN DIVISION TO SALES ORGANIZATION
The purpose of this step is to allocate as many as division desired to a sales organization. Any
one division can belong to several sales organizations.
Charminar Steel castings Limited
Sales Org Desc Div Desc

1001 CSCL Sales 10 Defence
1001 CSCLSales 11 Surgical
1001 CSCL Sales 12 Pressure
1001 CSCL Sales 13 value
Engineering
91
SETUP SALES AREAS
Sales area is a combination of sales organization, distribution channel and division. The
following Sales Areas will be created for Project Charminar Steel Castings Ltd.
The purpose of this step is that you can allocate as many as desired . Any one sales office can
belong to several sales areas at the same time.

Sales Area
Sales Office
(Sales Org + DC + DIV)
CSCL (1001)-
Direct(10))-
Defence (10)
CSCL (1001)- 1001 (Kanpur),
Direct(10))- 1002 (Trichy),
Surgical (11) 1003 (Calcutta),
CSCL (1001)- 1004 (Mumbai)
Direct(10))-
Pressure Valve (12)
CSCL (1001)-
Direct(10))-
Engineering (13)
1001 (Kanpur),
CSCL (1001)-
1002(Trichy),
Institutional (11))-
1003(Calcutta),
Surgical (11)
1004(Mumbai)
CSCL (1001)-
Export (12))- Export sales office Hyderabad (1005)
Pressure Valve (12)
Assign sales groups to sales office

The purpose of this step is that you can assign as many as desired. Any one sales group can
belong to several sales offices.
92
ALES OFFICE SALES GROUP DESC
1001 (kanpur) 110 Sales Group North Office

1002 (Trichy) 111 Sales Group South Office
Sales Group East Office
1003 (Kolkata) 112
1004 (Mumbai ) 113 Sales Group West Office

1005 114 Sales group Export Hyderabad
Assign sales organization, distribution channel to plant

The purpose of this step is to assign any number of Distribution Channel to a combination of
Sales Orgonization and a plant.

SALES
DESC DC DESC PLANT DESC
ORG
1001 CSCL Sales 10 Direct Sales Domestic DP
1001 CSCL Sales 11 Institutional Sales Domestic DP
1001 CSCL Sales 12 Export Export EP
Assign shipping points to plant

The purpose is to allocate as many shipping points as desired to the plants. Any one shipping
point can belong to several plants.
CHARMINAR STEEL CASTINGS SALES ORGANISATION
1001 Shipping point Standard Domestic Plant DP
1002 Shipping Point Returns Export Plant EP
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4. MASTER DATA
Create Customer Master Record
The customer master record is the basis for all sales transactions as well
as deliveries and payments. It represents the data relevant to the entity
being dealt with.
Here, we maintain Customer related information for all the customers of Charminar Steel Castings
Limited in the following fields.
• General data.
• Company specific i.e. Company code related data.
• Sales area related data.
Inputs
• New Customer details

• Customer details modification
The process will be managed in SAP as follows
• The customer master will be maintained centrally for SD and FI purposes using
transaction XD01. Customer numbers will be generated internally.
• Specific inputs from finance view will be detailed on the reconciliation account, receipt of
payment modes, terms and the credit limit. Also information like House Bank for receipt of
payment from the customer. Receipt payment method, planning group etc. will be entered.
• One authorization profile will be created for maintaining the customer master for all fields
in finance view.
• The new customer master record will be created and / or the changes will be recorded.
94
CONFI GURATI ON
• CUSTOMER ACCOUNT GROUPS / PARTNER FUNCTIONS
Account Group: Account Group is grouping of customers or classification of customers.

Partner Functions: The rights and responsibilities of each partner in a business transaction.
• When creating a customer account, we must specify an account group. We can specify
a reference account group under "Control" in the "General data" part of a one-time account's
master data. If we do not specify a reference account group, then, as previously, all fields of
the one-time account screen are ready for input during document entry.
• We use the account group to determine:
o The interval for the account numbers
o Whether the number is assigned internally by the system or externally by the
user (type of number assignment)
o Whether it is a one-time account
o Which fields are ready for input or must be filled when creating and changing
master records (field status)
Following Customer groups will be created for all Charminar Steel Castings Ltd business sector
A C C O U N T G R O U P
0001 Sold to Party 01-1000

0002 Ship to Party 1001-2000
0003 Payer 2001-3000
0004 Bill to Party 3001-4000
0005 Export Agent 4001-5000
CREATE MATERIAL MASTER RECORD.
• The material master data is used by the system to represent the data pertinent to the
products your company is selling or producing.
• It is configured much the same way as the customer master record with different
views.
Maintain Material related information for all the materials of Charminar steel castings ltd. in
the following fields
Industry Sector
Material Types
95

I N P U T S
Plants
Sales Organization
Distribution Channel
The process will be managed in SAP as follows:

The material master will be maintained centrally for SD and MM purposes using
transaction MM01.
Material Numbers will be created externally for all products and services.
A product hierarchy will be assigned to each material. Product hierarchy will be
created based on the products or service group.
Scenario: Material Master Creation

Transaction: MM01
Organizational Level
Plant
Sales Organization
Distribution Level
Basic data 1 (To be maintained by MM)

Base Unit of Measure
Material Group
Material Group Packaging Material
Sales Organization
Delivering Plant
Cash Discount Option
Product Hierarchy
Material Pricing Group
Account Assignment Group
Transportation Group
Loading Group
Foreign Trade Export

Export / Import Group
Country of Origin
Region of Origin
Exemption Certificate
Sales Text
Long Text
Short Text.
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5.BASIC FUNCTIONS
Pricing
In SAP standard system we use pricing to calculate price and cost of the material by using
Condition Technique.
CONDITION TECHNIQUE
Condition technique is a method by which system determines the values from the
information stored in condition record during sales order processing.
PRICING PROCEDURE
The following factors influence condition technique:

CONDITION TABLE
In a condition table, you define the combination of fields for which you can
create condition records.
CONDITION TABLE DESCRIPTION
601 Customer Price

602 Material Price
603 Customer Discount
604 Material Discount
605 Freight
606 Domestic Taxes
MAINTAIN CONDITION TYPE (V/06)
Price elements are represented in the SAP system by condition types. Price elements can be,
for example, prices, surcharges, discounts, taxes or, freight, and are stored in the system in
condition records.
COND TYPE DESC ACC SEQ DESC
PR00 Price PR00 Price
K004 Material Discount K004 Material Discount
K007 Customer Discount K007 Customer Discount
KF00 Freight KF00 Freight
MWST Output Tax MWST Output Tax
Maintain Access Sequence (V/07)
The access sequence is a search strategy, which the SAP System uses to search for condition
records valid for a condition type.
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Access Description
Sequence
PR00 Price
K004 Material Discount
K007 Customer Discount

KF00 Freight
MWST Output Tax
Maintain Pricing Procedure

Procedure Description
CSCL10 Direct Sales (Dealers)
CSCL11 Institutional
CSCL12 Exports
Maintain Pricing procedure determination
Pricing Procedure Determination for Company Code CSCL
Charminar steel castings Limited
Sales Dist Doc. Cust Pricing Condition

Division Pricing Proc
Org Channel Pricing Proc Proc Type
1001 10 10 A 1 CSCL10 PR00
1001 10 11 A 1 CSCL10 PR00
1001 10 12 A 1 CSCL10 PR00
1001 10 13 A 1 CSCL10 PR00
1001 11 11 A 1 CSCL11 PR00
1001 12 13 A 1 CSCL12 PR00
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CONDITION TECHNIQUE:
CONDITION TABLE
ACCESS SEQUENCE CONDITION RECORD
CONDITION TYPE
PRICING PROCEDURE
Customer Pricing Procedure
It is one of the elements to determine the pricing procedure. We specify the customer
determination procedure in the customer master record for each sales area.
Document Pricing Procedure
It is also one of the elements to determine the pricing procedure. We specify the document
pricing procedure for each sales document type.
Sales area: We define sales area in enterprise structure.
MAINTAIN CONDITION RECORDS (VK11)
We maintain Condition Records for pricing elements in VK11.
Assign document pricing procedure to order type
Sales Doc Doc Price

Description Description
Types Proc
OR Standard Order A Standard
CR Credit Memo Request A Standard
DR Debit Memo Request A Standard
RO Rush Order A Standard
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Assign document pricing procedure to billing type
Billing Doc Types Description Doc Pricing Proc Description
F2 Invoice A Standard
L2 Debit Memo - -
LG Credit Memo List - -
LR Invoice List - -
Define Pricing by Item Category
Here we show the relevancy of Pricing by Item Category.
Item Category Description Pricing
AFN Inquiry Item X
AGN Quotation Item X
TAN Standard Item X
TAS Third party item X
TANN Free of charge Item -
BVN Cash Sales Item X
REN Standard Item (Return) X
Cost Determination for Item Category

• Carry out pricing: Indicates whether the system automatically carries out pricing at
the item level
• Determine cost: Indicates whether, during pricing, the system determines the cost
(stock value) of a sales document item.
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Item Category Description Carry out Pricing Determine Cost
AFN Inquiry Item - -
AGN Quotation Item X X
TAN Standard Item X X
TANN Free of charge Item - X

BVN Cash Sale Item X X
REN Standard Item (Return) X X
TAS Third party item X X
In SAP we are implementing special functionality in Pricing.
1. Condition Exclusion Group

2. Condition Supplement
3. Pricing Limit
4. Scale Price
5. Header, Item and Group Conditions.
TAXES:
We define the defaults for tax calculation. In pricing the SAP System automatically calculates the taxes. Here
tax classifications indicates at what level customer and material is liable for tax
Define Determination rules
We define the rules for tax calculation. The SAP System determines the taxes automatically
within pricing
Define Regional codes
We define the following indicators for tax calculation:

• Country-specific regional codes (county codes), which represent, for example, states in
the USA or counties in Great Britain
• Country-specific city codes
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ASSIGN DELIVERING PLANTS FOR TAX DETERMINATION
We allocate the plants to a country, and if appropriate to a geographical region, a county/state

code as well as a city code. The allocation always depends on the countries in which you are
using the SAP System.
Define Tax relevancy for master record
Customer Taxes
Tax Cat Desc Tax Class Desc
MWST Output tax 0 Tax Exempt

MWST Output tax 1 Taxable
Material Taxes
Tax Cat Desc Tax Class Desc
MWST Ouput tax 0 Exemption
MWST Ouput tax 1 Taxable
REVENUE ACCOUNT DETERMINATION
Check Master Data relevant for Account Assignment
Revenue determination is dependent upon the following master data fields:
• Account group for material in the material master record

• Account group for customer in the customer master record
Settings have to be maintained for Material account assignment group for account
determination.
For Charminar Steel Castings Limited, following configuration settings are maintained
Account Assignment Group Description

01 Finished Goods
02 Trading Goods
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CUSTOMER ACCOUNT ASSIGNMENT GROUP
Settings have to be maintained for customer account assignment group for account
determination.
For Charminar steel castings Limited, following configuration settings are maintained
Account Assignment Group Description

01 Domestic Revenues
02 Foreign Revenues
Define dependencies of Revenue Account Determination

The purpose of defining the dependencies for the revenue account determination is to store
the combination of criteria on which should depend in an account determination table.
You can select the following criteria for an account determination table:
• Condition Type
• Chart Accounts
• Account group customer
• Account group material
• Account key
Create the condition table used for account determination. When creating the condition table,
remember that you have to select a key between 501 and 999 for the condition table.
By defining access sequences and account determination types revenue account determination is
made automatic.
Using the, you define

• With which condition tables the SAP System is to access condition records
• In which sequence the condition tables are to be read
• With which field contents the are to be read
In the account determination type, you define the control data and validity date.
Acc No Table Description

10 601 Cust.Grp/MaterialGrp/AcctKey
20 602 Cust.Grp/Account Key
30 603 Material Grp/Acct Key
40 604 Acct Key
50 605 General
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The purpose is to define account determination procedures and allocate them to the billing
types.
In an account determination procedure, you define the sequence in which the SAP System
should read the account determination types used for Revenue Account Determination.
You allocate the account determination procedures to the billing types for which a
corresponding account determination is to be carried out. Charminar Steel Castings Ltd.
follows the standard condition type KOFI
Step Cntr Ctype Description

10 1 KOFI Acct Determination
10 2 KOFK Acct Determination with CO
The Purpose to define account keys is to allocate them to the condition types in the pricing
procedures. With the account keys, you group together similar accounts in financial
accounting. Using the account key, the SAP System finds the desired G/L Account. This way
you can allocate a separate account key to each condition type within a pricing procedure to
implement detailed revenue account determination.
For example, you can allocate a freight condition to a freight revenue account, or a surcharge
for packaging costs to a corresponding account for packaging revenues
Account Keys
Account Key Description
ERL Sales Revenues

ERS Sales Deductions
ERF Frieght Revenue
MWS OutPut Tax

Assign G/L Accounts
The purpose is to allocate G/L accounts for revenue account determination. You have to make the
allocation for every access sequence you have defined beforehand.
A variety of criteria is valid for a G/L account, depending on the key combination. For the key
combination "Customer Group/Material Group/Account key" a G/L account depending upon
the following criteria, for example, is given:
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• Application (key for SD application)
• Condition type
• Chart of accounts (from the module FI)
• Sales organization
• Account assignment group for Customer
• Account assignment group for Material
• Account key
AAG G/L G/L

App Cndty Ch S Org AAG M Actky
C A/c NO A/c No
V KOFI CSCL 1001 01 01 ERL
V KOFI CSCL 1001 01 01 ERS
V KOFI CSCL 1001 01 01 ERF
V KOFI CSCL 1001 01 01 MWS
CREDIT MANAGEMENT
In business process credit sales is quite common to encourage the customer as well as slow
moving goods. While generating credit to the customer, the business should be cautious other
wise business may go bankrupt; so as to avoid these kinds of situations SAP delivers a feature
called “Credit Management”
Here we have “centralized Credit Control Area” to monitor the credit limit of the customer.
The credit limit of the individual customer can be carried out through “Automatic Credit
Check” by taking three factors in to consideration.
Credit Control Area: Credit control area is an independent organizational unit, which is
responsible to monitor credit of the customer, and it is defined in FI/CO module.
Credit Control
Description
Area
Credit Control
IACC
Area
• Risk Category: Classifying attributes for customers from the viewpoint of credit risk
such as: - high risk category, medium risk category and low risk category, which is maintained
in FI Customizing
Risk Category Description
001 High Risk
002 Medium Risk
003 Low Risk
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Configuration Settings
Define Credit Groups
Credit group group’s together different business transactions that at which document level
credit check is going to be carried out, whether it is at
Credit Group Document credit group
01 Credit Group for Sales Order
02 Credit Group Delivery
03 Credit Group for Goods Issue
Assign Sales Documents and Delivery Documents
Credit Limit Check for Order Types
SaTy Description Check Cr Description Cr.Group Description
Credit Group
Automatic
OR Standard Order D 01 for Order
Credit Check
Level
Credit Group
Automatic
RO Rush Order D 01 for Order
Credit Check
Level
Check Credit Limit for Delivery Types

DelTy Description Check Cr Description Credit Gr. Description
or Del.Lvl or PGI
LF Delivery D Auto Cr.Chk
Lvl.
or Del.Lvl or PGI
LO Dlv.W/O D Auto Cr.Chk
Lvl.
Define Automatic Credit Control

CCAR Risk Cat. Cr. Group Cr. Control
High Risk or Med.
IACC 001 or 002 or 003 01 or 02 or 03
Risk or Low Risk
DETERMINE
ACTIVE RECEIVABLES PER ITEM CATEGORY
Item Category Credit Active

TAN – STANDARD ORDER Yes
BVN – CASH SALES Yes
RO – RUSH ORDER Yes
TAS – THIRD PARTY ITEM Yes
TAK-MAKE TO ORDER Yes
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ORDER TYPES ASSIGNED WITH RESPECTIVE CREDIT CHECK PARAMETERS.
Sales Doc Check

Description DESCRIPTIOPN
Type Credit
STANDARD AUTOMATIC CREDIT
OR D
ORDER CHECK
AUTOMATIC CREDIT
RO RUSH ORDER D CHECK
The meaning of Check Credit is whether system has to carry out simple or automatic credit
check as follow
DELIVERY TYPES
Del type Description Del Credit Gp

LF Outbound Delivery 01
LO Returns 02
LR Delivery without Reference 03
LF Outbound Delivery 02
LO Returns 02
LR Delivery without Reference 02
5.3 OUTPUT DETERMINATION

Purpose:
Outputs are an important media for communicating with Business Partners or with your
own employees in sales processing. Sales and distribution output can be sent both
electronically and by mail. Output control which is dependent on various criteria allows
output to be processed and sent subject to certain conditions and restrictions.
You have to define the following:
• Rules of output determination
• Print parameters
• When the sending of output is to be initiated
Output Determination Using the Condition Technique

Purpose:
You can use the condition technique to propose output in SD documents. This can be done
according to criteria which you freely define. There are however some limitations to the
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condition technique in picking lists. For more information see the chapter on output
determination for picking lists in the Implementation Guide.
In this case, you can control output processing individually for each output recipient.
Maintain Output Determination for Sales Documents
Maintain Condition Tables

501 Sales Org/Customer
502 Sales Org/Material
OUTPU T TYPE DESCRIPTION

AF00 Inquiry
AN00 Quotation
BA00 Order Confirmation
K000 Contracts
LP00 Scheduling Agreements
RD03 Cash Sales
MAINTAIN ACCESS SEQUENCE
ACCESS DESCRIPTION
SEQUENCE
601 Sales
Org/Customer.
ASSIGN OUTPUT TYPES TO PARTNER FUNCTION

In this step, you assign the allowed output types to Partner Functions .In addition, you can
specify the allowed type of output processing for the combination of output types and
partner functions.
MAINTAIN OUTPUT DETERMINATION
PROCEDURE DESCRIPTION
V01000 Inquiry Output
V02000 Quotation output
V03000 Order output
V04000 Contract output
V05000 Scheduling Agreement
output
V06000 Cash sales output
V07000 Item output
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ASSIGN OUPUT DETERMINATION PROCEDURE
Here we assign output determination procedures to the documents. You may also specify an
output type, which is to be displayed when the relevant document is displayed or changed.
MAINTAIN MASTER RECORDS.
OUTPUT DETERMINATION FOR OUTBOUND DELIVERIES
CONDITION TABLE
CONDITION TABLES DESCRIPTIION

504 Sales
Org/Customer
OUTPUT TYPES
OUTPUT TYPES DESCRIPTION

LD00 Delivery Note
ACCESS SEQUENCE
ACCESS SEQUENCE DESCRIPTION

Sales Org/Customer
ASSIGN OUTPUT TYPES TO PARTNER FUNCTIONS
In this step, you assign the allowed output types to Partner Functions. In addition, you can
specify the allowed type of output processing for the combination of output types and partner
functions.
OUTPUT
PROCEDURE DESCRIPTION
V08000 Delivery Output procedure

DETERMINATION PROCEDURE
ASSIGN OUTPUT DETERMINATION PROCEDURES
Here we assign output determination procedures to the documents. You may also specify an
output type, which is to be displayed when the relevant document is displayed or changed.
OUTPUT DETERMINATION FOR BILLING DOCUMENTS
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CONDITON TABLE
506 Sales Org/Material
OUTPUT TYPES
OUTPUT TYPE DESCRIPTION
RD00 INVOICE
RD04 INVOICE RECEIPT
ACCESS SEQUENCE
ACCESS SEQUENCE DESCRIPTION
ASSIGN OUTPUT TYPES TO PARTNER FUNCTIONS

In this step, you assign the allowed output types to Partner Functions . In addition, you can
specify the allowed type of output processing for the combination of output types and partner
functions.
OUTPUT DETERMINATION PROCEDURES
PROCEDURE DESCRITION
V09000 BILLING
5.4 TEXT DETERMINATION

Purpose:
In this IMG activity, you define the rules for text determination. You must carry out the
following steps:
• Select a text object and define the rules for text determination for this object. Text
objects are, for example, the sales texts in the customer master record or the sales document
header.
• Define the permitted Text Type for every text object. If the text types contained in the
standard SAP R/3 System are not sufficient, create new ones.
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• Define the Access sequence . This way, you define how the SAP System should
determine the texts for a text type.
• Group the text types together in Text determination procedure. The SAP System then
proposes the text types from the procedure when you maintain a customer master record or a
sales & distribution document. The search for the respective text is carried out using the
access sequence, which you have stored for each text type in the procedure.
• Allocate the text determination procedures so that a procedure applies to the following
criteria in each case:
Account Group customer
Sales & distribution document type
Item category
The following text objects exist:

Customer
Central texts
Accounting texts
Texts concerning the contact persons
Sales and distribution texts
Sales Document
Header texts
Item texts
Delivery
Header texts
Item texts
Billing Document
Header texts
Item texts
CAS
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Define Text Types
Purpose:
You define the text types in this menu option. Different texts can exist for every text object.
These are distinguished by there
Text types.
Sales note for the customer
Shipping instructions
Selection for shipping

Marketing notes
Customer text
For every text type, you have to make the following definitions:
• ID (key of the text type)
• Description (description of the text type)
• Include ID (not yet used)
• Display text name
Define Access Sequences For Determining Texts
Purpose:
In this IMG activity, you define the Access sequences, which the SAP System uses to
determine the texts for a text object.
Afterwards, you specify an Access sequence for the text search in the determination
procedure for every text type.
You only define access sequences for sales and distribution documents, not for customer
master records. With an access sequence, you define the sequence and the requirements of
the search used by the SAP System to find a text.
NOTE: It is recommended to select the same text type for the text to be copied. For
example, the text for the form header in the customer master record (text type 0001) should
be copied into the text for form header of a sales document (text type 0001).
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Define And Assign Text Determination Procedures
Purpose:
The Text types of a text object are grouped together in Text determination procedures.
You assign a text determination procedure using certain keys, for example, account group
customer or sales document type.
Afterwards you assign the defined text determination procedures as follows:
Text object Key
Customer master Account group
record
Sales document header Sales document type
Sales document item Item category
Delivery header Delivery type
Delivery item Item category
Billing header Billing type
Billing item Billing type
CAS CAS sales activity type
Note
Currently you cannot set up your own error groups for the incompletion log for texts in customizing.
In the standard SAP R/3 System, error group "50" is defined for texts. The incompletion log
takes it into account if the texts are additionally characterized as required in the procedure.
5.5 LOG OFF INCOMPLETION ITEMS

Purpose
To have complete Document, it doesn’t effect to subsequent document.

We define when a sales document or sales activity should be regarded as incomplete and how
the system should respond when you create a document.
The system can make an entry in the incompletion log for the following data:
GROUP DESCRIPTION
A Sales-Header
B Sales-Item
C Sales-Schedule line
D Partner
E Sales Activity
F Delivery header
G Delivery Item
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DEFINE INCOMPLETION PROCEDURE
SALES HEADER
Incomplete Procedure DESCRIPTION

10 Inquiry or
Quotation
11 Sales Order
12 Outline Agreement
14 Credit Memo
15 Debit Memo
16 Item Proposal
17 Contract
SALES ITEM
Incomplete Procedure DESCRIPTION

20 Standard Item
21 Credit/Debit memo
Item
22 Sched.Agreement
Item
23 Qty Contract Item
24 Free Charge of Item
33 Consignment/Ret.Pa
ck.
35 Contract Item
SALES SCHEDULE LINE

INCOMPLETE DESCRIPTION
PROCEDURE
30 General Schedule line
31 Sched.Line w/Pur.Req
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PARTNER
INCOMPLETE PROCEDURE DESCRIPTION

07 Customer
DELIVERY HEADER

K0 Outbound delivery
K2 Inbound delivery
DELIVERY ITEM

L0 Out bound
delivery
L2 Inbound delivery
ASSIGN INCOMPLETION PROCEDURE
Here we assign procedures to the different incomplete objects.

DEFINE STATUS GROUPS
We use status groups to define the status of incomplete sales and distribution documents.
Then assign the status group to the fields in an incompletion procedure
5.6 AVAILABILITY CHECK & TRANSFER OF REQUIREMENT
Purpose:
Depending on the system configuration, the SAP System can check availability for every item
in a sales document or delivery. Furthermore, it creates MRP records and passes them on to
materials planning. The availability check is carried out at plant level.
TRANSFER OF REQUIREMENTS
The Transfer of requirements is basically dependent upon the following factors:
Requirements Class
Requirement Types
Check group
Schedule line category
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Purpose:
The requirement class controls the MRP and the requirements consumption strategy as well as
the relevancy for planning.
Define Requirements Types
Purpose:
Together with the item category and the MRP type of the material, an allocation to the
individual transactions in sales and distribution is carried out by means of the requirements
type. Requirements type. Every requirements type is allocated to a requirements class with its
corresponding control features.
Determination Of Requirement Types Using Transaction
Purpose:
In the standard system, requirements types are determined according to a specific search
strategy beginning with the material strategy group.
Define procedure for each schedule line category
In this IMG step, you specify for the respective schedule line categories of the sales
documents whether an availability check and/or transfer of requirements should be carried
out. These configurations are only relevant for the sales documents.
Maintain Requirements for Transfer of Requirements:

In this step you can maintain your own requirements for the transfer of requirements.
Maintain requirements for purchase and assembly orders
Purpose:
In this step you can maintain your own requirements for creating purchase requisitions.
AVAILABILITY CHECK
The availability check is controlled by means of the same elements as the transfer of
requirements:
Requirements class
Requirements type
Checking group
Checking rule
Schedule line category
Strategy group
Planning strategy
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In this step, make settings for planning and the availability check in ATP logic.
Purpose:
In this IMG activity, you define the checking group that the system proposes when you create a
new material master record. You can overwrite the default value for the checking group in the
material master record.
Carry out control for availability check

When specifying the inspection scope for a certain checking rule, you can currently select the
following receipts and issues:
Purchase orders
Production orders
Purchase requisitions
Planned orders
Dependent requirements
Reservations
Dependent reservations
Sales requirements
Delivery requirements
SD requirements (= sales requirements and delivery requirements) reduce an available stock or
inward stock movement on the material availability date so that other issues cannot access
the reserved quantity.
When specifying the inspection scope for a certain check rule, you can currently select the
following stock elements:
• Safety stock (to be maintained in material master record, MRP data)
• Stock in transfer in the receiving plant
• Stock in quality inspection
• Blocked stock
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Replenishment lead time
Purpose:
The replenishment lead time specifies the time which is needed to order or produce a certain
material. The system determines the replenishment lead-time as follows:
• For internally procured materials the replenishment lead-time is determined from the
in-house production time and the goods receipt processing time or alternatively from the
total replenishment lead time, if it is specified.
• For externally procured materials the replenishment lead time is determined from the
goods receipt processing time and the processing time for purchasing.
Define procedure by requirements class
Purpose:
In this IMG activity you define for each requirements class whether an availability check
and/or transfer or requirements should be carried out.
Define procedure for each schedule line category
Purpose:
In this IMG step, you specify for the respective schedule line categories of the sales
documents whether an availability check and/or transfer of requirements should be
carried out. These configurations are only relevant for the sales documents.
Requirements
The schedule line categories must already have been defined (see section Defining and
allocating schedule line categories). The defined schedule line categories are automatically
displayed for maintaining.
Determine procedure for delivery item category
Purpose:In this step, you can switch off the availability check for particular item categories in
deliveries.
The availability check should be switched off for transactions such as returns delivery.
Checking rule for updating backorders
Purpose:
In this IMG step, you assign a checking rule to a plant. The checking rule specifies for the
individual applications the checking rule according to which the availability check is carried
out. The checking rule is described in the section "Carry out control of the availability
check".
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Note:- The checking rule entered here is used in production planning. During backorder
processing (CO06) and the availability overview (CO09), you should make sure that you are
not using any checking rules that deviate from the SD configurations (checking rule A for
orders and checking rule B for deliveries).
6.SALES CYCLE
6.1 SALES: Sales Document Types
The sales document types represent the different business transactions in sales, such as inquiry
processing, quotation processing, and consignment stock processing. Following sales
document types have been defined for Charminar Steel Castings Limited
IN Inquiry A
QT Quotation B
OR Standard Order C
BV Cash sale C
SO Rush Order C
RE Sales Returns H
CR Credit Memo Request K
DR Debit Memo Request L
RK Invoice Correction Request K
FD Delivery Free of Charge I
PV Item Proposal D
Number Ranges
When creating a sales document, a unique number is assigned which identifies the sales
document. The number comes from the number range which is provided for the document
type.
There are two possible types of number assignment:
• Internal number assignment (The SAP System automatically assigns a consecutive

number from the defined number range.)
• External number assignment (You specify a number from the external number range.)
Charminar steel castings Limited is following the internal number ranges only.
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Number ranges for sales document types (Comp code -)
Sales Doc Type No Range From Number To Number
IN 01 1 10000
QT 02 10001 20000
OR 03 20000 30000
BV 04 30001 40000
SO 05 40001 50000
RE 06 50001 60000
CR 07 60001 70000
DR 08 70001 80000
RK 09 80001 85000
SD 10 85001 90000
FD 11 90001 95000
PV 12 95001 100000
Item Category
AFN Inquiry Item

AGN Quotation Item
TAN Standard Item
TATX Text Item
BVN Cash Sale Item
REN Sales Return Item
G2N Credit Memo Request
L2N Debit Memo Request
TAS Third Party Sales
TAB Individual Purchase
Order
TAX Non - Stock Item
PVN Item Proposal
TAK Make to order
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Item Category Group
The purpose for using the item category group is you group together different material types
for item category determination. For every material type, you can define a default item
category group which is proposed by the SAP System when you create a material master
record. For Oil and Foods Limited following Item category groups are being maintained
Item Category Group Description
NORM Standard Item
ERLA Header Level BOM
LUMF Item Level BOM
BANS Third Party Sales
BANC Individual Purchase Order
0001 Make to order
Item Category Usage
The purpose to specify item category usages is to control the usage of an item. Item category
usage controls, for example, the system response if during document processing an item does
not refer to a material but to a text item. Item category usage can also be maintained via the
item categories.
For Charminar Steel Castings Limited following usages is maintained:
Item Category Usage Description
TEXT Text Item

ASSIGNING ITEM CATEGORIES
The purpose of assigning item categories is to specify which item categories the system
proposes during document processing for each sales document type and item category group.
At the same time, you can specify additional item categories with which the system default can
be overwritten.
The system default and the allowed alternatives are always determined from the sales
document type and one or two further criteria. The system default depends on the following
criteria:
• Sales Document Type
• Item Category Group
• Item Category Usage
• Item Category Of The Higher-Level Item
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The SAP System automatically copies the item category determined for a sales document item
to the delivery.
Item category assignment for Company Code - BFLC
Sales Doc Item Cat High Level Item

Usage Description
Type Grp Item Cat Grp Cat
IN NORM -- AFN Inquiry Item
QT NORM -- AGN Quotation Item
OR NORM -- TAN Standard Item
OR NORM TEXT TAN TATX Text Item
OR BANS TAS Third party
OR BANC TAB Individual Purchase
Order
BV NORM BVN Cash sales
SO NORM TAN Rush order

RE NORM REN Sales Returns
PV NORM PVN Item Proposal
OR 0001 TAK Make To order
SCHEDULE LINES
Charminar Steel Castings Limited is following Standard SAP Schedule line categories and
assignments.
Item Cat MRP Type Schedule Line

AGN ND BN
TAN PD CP
REN - DN
TAS - CS
TAK - CP
LAN - F3
LNN - C3
TAL - E3
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Copy controls for Sales Documents
The Purpose of defining copy controls is to control data for the GL Document Flow of Sales
Documents. Here we can specify for a particular sales document type, which document type is
to be assigned to copied reference documents, and which item categories or schedule line
categories are to be copied.
Sales Doc types to Sales Doc types for Company Code - CSLC
Source S
Target S Doc Description Description
Doc
QT Standard Quotation IN Standard Inquiry
OR Standard Order QT Standard Quotation
RE Returns OR Standard Order
G2 Credit Memo Request OR Standard Order
L2 Debit Memo Request OR Standard Order
G2 Credit Memo Request G2 Credit Memo Request
L2 Debit Memo Request L2 Debit Memo Request
OR Standard Order OR Standard Order
Billing Document types to Sales Doc types for Company Code – CSLC
G2 Credit Memo Request F1 Invoice
G2 Credit Memo Request F1 Invoice
L2 Debit Memo Request F2 Invoice
RK Invoice correction request F2 Invoice
L2 Debit Memo Request F2 Invoice
Delivery
Outbound delivery supports all shipping activities including picking, packing,
transportation and goods issue. During the outbound delivery process,
shipping-planning information is recorded, status of shipping activities is
monitored and data accumulated during shipping processing is documented.
When the outbound delivery is created, the shipping activities, such as
picking or delivery scheduling, are initiated, and data that is generated during
shipping processing is included in the delivery.
Delivery Processing
Charminar Steel Castings Limited has the need to do on-line release of goods to eliminate
confusion whether it be product specific, customer specific, delivery hold, etc.
The delivery serves as a basis for:
Planning material requirements (MRP)
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Picking
The process of grouping goods (materials) from the warehouse on the basis of sales orders,
deliveries, or for staging materials for production.
A reduction in warehouse stock due to a withdrawal of stock or the delivery of goods to a

customer.
The delivery forms the basis of goods issue posting. The data required for goods issue
posting is copied from the delivery into the goods issue document.
When the goods have left your plant, the business transaction is regarded as completed from
the point of view of shipping.
The material stock is reduced by the goods issue quantity and the corresponding value
changes take place in accounting. This ensures that the quantity and value flows are parallel.
Material requirements for the delivery are reduced
The delivery status is updated
Delivery documents used for Company Code – CSCL
Delivery Doc Type DESCRIPTION Doc Category
LF Outbound Delivery J
LR Returns Delivery T
LO Del. Without Ref. J
Number Ranges
Number ranges used for Delivery documents (Company Code - CSCL):
NUMBER RANGE
Delivery Doc Type
CODE FROM TO
LF 33 1 100000
LR 34 100001 200000
LO 35 200001 300000
124
Item Category Determination for Deliveries
Ddocty Itctrgr Usage Hgitctr Dfitctr
LF NORM - - TAN
LO NORM DLN
LR NORM REN
LF NORM - - TAN
LO NORM - - DLN
LR NORM - - REN
Sales doc types to Delivery doc types for the Company Code - CSCL:
Target Source
S Doc S Doc
LF Outbound Delivery OR Standard Order
LR Returns Delivery RE Returns
LF Outbound Delivery BV Cash Sale
LF Outbound Delivery RO Rush Order
6.3 Billing
A key functional area of SAP that provides information about customer contracts rebates,
billing status, and accounts.
6.3 Billing Document Configuration
1. Check billing block
2. Select type of invoice creation
3. Create billing document from delivery / sales order
4. Determine billing prices and taxes
5. Determine rebate amounts and accrual rates
6. Billing document relevant to accounting created
7. Monitor billing document
8. Send billing document
125
Billing Documents
Billing documents used for the Company Code - CSCL
Billing Type Description

F2 Invoice
G2 Credit Memo
L2 Debit Memo
LG Credit Memo List
LR Invoice List
LS Cancel Invoice List
S3 Cancellation
F5 Proforma Invoice for Order
F8 Proforma Invoice for Delivery
F1 Invoice
BV Cash Sale
SV Cancel cash sale
Number Ranges
Number ranges used for Billing documents (Company Code - CSCL):
NUMBER RANGE
Billing Type
CODE FROM TO
F2 39 1 100000
G2 40 100001 200000
L2 41 200001 300000
LG 42 300001 400000
LR 43 400001 500000
LS 44 500001 600000
S3 45 600001 700000
SV 46 700001 800000
F5 47 800001 900000
F8 48 900001 1000000
F1 49
BV 50
126
Sales Doc to Billing Doc for the Company Code - : CSCL
Target Billing Doc Type Source Sales Doc Type
F2 Invoice OR Standard Order

G2 Credit Memo G2 Credit Memo Request
L2 Debit Memo L2 Debit Memo Request
BV Cash Sale BV Cash Sale
F5 Proforma Invoice for Order OR Standard Order
F1 Invoice OR Standard Order
LR Returns LR Returns
Delivery Doc to Billing Doc for the Company Code - CSCL:
Target Source
S Doc S Doc
F1 Invoice LF Delivery
F1 Invoice LO Delivery without Ref.
F2 Invoice LF Delivery
F2 Invoice LO Delivery without Ref.
LF Outbound Delivery RO Rush Order
F8 Proforma Invoice for Invoice LF Delivery
JX Excise Invoice India LF Delivery
Billing Doc to Billing Doc for the Company Code - CSCL:
Target Billing Doc Type Source Billing Doc Type

L2 Debit Memo F2 Invoice
LG Credit Memo List G2 Credit Memo
G2 Credit Memo F2 Invoice
LR Invoice List F2 Invoice
LR Invoice List L2 Debit Memo
LS Cancel Inv List F2 Invoice
LS Cancel Inv List G2 Credit Memo
LS Cancel Inv List L2 Debit Memo
JX Excise Invoice India F2 Invoice
LR Invoice List F1 Invoice
LS Cancel Inv List F1 Invoice
127
CASH SALES
A cash sale is an order type for when the customer orders, picks up and pays for the goods
immediately. The delivery is processed as soon as the order has been entered. A cash invoice
can be printed immediately from the order and billing is related to the order. Receivables do
not occur for the customer as they do for rush or standard orders, because the invoice amount
is posted directly to a cash account.
Sales document type BV is used for cash sales with immediate delivery type BV. Once the
customer has received the goods and is satisfied with them, the transaction is considered to be
complete.
The system automatically processes the delivery in the background and prints out a cash sale
invoice. The amount of the sale is processed later in an order-related billing transaction. The
amount is posted to financial accounting, using the order number as reference. Because this is
a cash sale, no invoice is produced during the billing run.
Cash sale Delivery Billing
(Document type is BV for all transactions.)
RUSH ORDER
In a rush order transaction, the customer picks up the goods or delivers the goods on the
same day as the order is placed. When the sales document type save, a delivery is
automatically created and billing is related to the delivery.
Sales document type RO is saved for rush orders with immediate delivery type LF.
RUSH ORDER(RO) DELIVERY(LF)
SALES RETURNS
Charminar Steel Castings Limited requires the ability to process returns for defective
goods/rework/wrong shipments etc.
Charminar Steel Castings Limited has to improve the efficiency and turn around time in
processing Returns
Returns processes vary between Company and Distribution Channel
Returns Documents Configuration

1. Delivery for Returns
2. Goods Receipt Processing for Returns
3. Create Inbound Delivery
4. Post goods Receipt
128
Return of Goods from Dealer to Plant - Business Process
• Returns are created when distributor returns the goods to the company.
• Returns scenario is only applicable for sales to domestic market.
Return of Goods from Institutional Customer to Plant - Business Process

• Returns are created when customer returns the goods to the company and returns the gods
to Plant.
THIRD PARTY SALES

Business Process
In third-party order processing, your company does not deliver the items requested by a
customer. Instead, you pass the order along to a third-party vendor who then ships the goods
directly to the customer and bills you. A sales order may consist partly or wholly of third-party
items. Occasionally, you may need to let a vendor deliver items you would normally deliver
yourself.
If you order products from a third-party vendor, who delivers the goods directly to you so
that you can then deliver them to the customer yourself, you can use individual purchase order
processing.
Processing Third-Party Orders in Sales
Third-party items can be created automatically by the system, depending on how your system
is set. However, you can also change a standard item to a third-party item during sales
processing manually.
• Automatic third-party order processing
If a material is always delivered from one or more third-party vendors, you can specify in the
material master that the material is a third-party item. During subsequent sales order
processing, the system automatically determines the appropriate item category for a third-party
item: TAS. To specify a material as a third-party item, enter BANS in the Item category
group field in the Sales 2 screen of the material master record.
• Manual third-party order processing
In the case of a material that you normally deliver yourself but occasionally need to order from
a third-party vendor, you can overwrite the item category during sales order processing. For a
material that you normally deliver yourself, you specify the item category group NORM in the
material master.
If, as an exception, you use a third-party material, change the entry TAN to TAS in the ItCa
field when processing the sales document. The item is then processed as third-party item.
129
Processing Third-Party Orders in Purchasing
When you save a sales order that contains one or more third-party items, the system
automatically creates a purchase requisition in Purchasing. Each third-party item in a sales
order automatically generates a corresponding purchase requisition item. During creation of
the requisition, the system automatically determines a vendor for each requisition item. If a
sales order item has more than one schedule line, the system creates a purchase requisition
item for each schedule line.
Comparing Purchasing Data with Sales Data
You can create a list of all sales orders with third party items for which there are discrepancies
between the quantities ordered, invoiced, canceled, or credited in Sales and the quantities
ordered, invoiced or credited in Purchasing.
ITEM CATEGORY DETERMINATIONS
SATY ITCATGR ITEMUSAGE HGLVLITCTR DFITCTR
OR BANS - - TAS
YOR BANS - - TAS
BILL OF MATERIAL (BOM)

Charminar Steel Castings Limited is using the BOM for its finished products and the
subcomponents it is comprised of and the pricing of different sub items of its Consumables.
Main Item Level

BOM Processing
Sub Item Level
In Processing we maintain pricing.

We maintain Inventory and Pricing for Sub-items. Main item, which is composed by sub
items, may not involve in either pricing/inventory. Based on the sub-items selected the
system displays price of the main item.
130
System Configuration Considerations
When maintaining pricing
For main item, the Item Category Group of the should be ERLA.
When maintaining Pricing of sub-item
For sub-items the Item Category Group of the should LUMF
ERLA Main Item Processing
MAIN ITEM
Sub Item Processing
LUMF
When it is Main Item processing – Item Category Group ERLA and main item –Item
Category is TAQ and Sub-item Item Category is TAE.
When it is Sub-Item processing – Item Category Group LUMF and main item – Item
Category is TAP and sub-item Item Category is TAN.
The TC code to create the BOM is CS01.
In this we are assigning sub-component as a stock item to main item.
In Material Master Record(MMR) Sales Org. 2 Screen we maintain under the General Item
Category group :
Item Category Group: NORM
ERLA LUMF
(Main Item Processing) (Sub-Item Processing)
Item Category Determination for BOM
SATY Itctrgr ItemUsage Hg.it.ctlvl Dfitmcat

OR ERLA - TAQ TAN
OR LUMF - TAP TAE
YOR ERLA - TAQ TAN
YOR LUMF - TAP TAE
131
7. BUSINESS SCENARIO 1
Sales from plant to International MARKET SCENARIO – A
Process: For New Inquiries
This scenario covers creation of quantity-based contract for Make to Order based orders
received from customers from overseas market.
A typical Quantity contract may have the following components:
Target quantity of the products with relevant prices.
The release order will be created as per customer requirement and subsequently billing to be
done.
Business Process:
Create Inquiry Create Excise Bond
Create Quotation Create ARE 1
Create Quantity Post ARE 1

Contract
Print ARE 1
Create Release Order
Update ARE 1
Create Outbound
Delivery
Sending ARE 1 to
Create Billing Document Excise Dept.
Closing ARE 1
Create Excise Invoice
Print Excise Invoice
RG1 Entry
132
SCENARIO B
Process: For Existing Contracts
• A typical Quantity contract may have the following components:
Target quantity of the products.

Fixed price for the quantity.
• The release order will be created as per customer requirement and subsequently billing to be
done.
Business Process:
Create Excise Bond

Quantity Contract Create Production
Order
Create ARE 1
Create Release Order

Post ARE 1
Print ARE 1
Create Outbound
Delivery
Update ARE 1
Create Billing Document

Sending ARE 1 to
Excise Dept.

Closing ARE 1
RG1 Entry
133
CREATION OF QUANTITY CONTRACT
Creation of quantity contract by setting a target quantity at header level and entering the items
with basic information with prices but no schedule of specific delivery dates and quantities.
Release order will be created against the quantity contract and subsequently billing will be
done. During creation of release orders, items selection will be done based on target quantity.
Quantity contract provides the feature to check the released quantity as needed against the
target quantity. A check on the target quantity will be put so that release order cannot be made
once the target quantity is reached. The target quantity may be changed later after agreement
with the customer.
creation of released order
CREATE CONTRACT RELEASE ORDER 1 BILLING
RELEASE ORDER 2
Taking a reference of a quantity contract using transaction VA01 will create release Orders. This
will help in selecting individual items from the target quantity. Billing will be done after release the
release order using transaction VF01.
Billing
Billing will be done using transaction VF01 for the release order created against a quantity contract.
Billing type F2 will be used for order related billing.
134
SALE FROM PLANT TO DOMESTIC MARKET
SCENARIO A: Sale from Plant to Domestic Market
Business Process
• This scenario covers creation of sales orders for the Domestic for all over India from all the Hyderabad plants.
• The Sales Order will be created based on purchase order received from the Domectis market.
Additional items and rates will be decided as per the price list maintained for the domestic Market.
• Discounts & Schemes, if any to be kept in the sales order.
• Payment terms to be mentioned in the sales order.
Business Process:
Create Sales Order
Updation of RG1
Register
Create Outbound
Delivery
RG1 Register
Extraction
RG1 Register
Print Billing Document
Printing
RG1 Entry
135
STOCK TRANSFER FROM PLANT TO PLANT
Scenario a: INTRACOMPANY PLANT TO PLANT STOCK TRANSFER
Business Process
This scenario covers delivery of goods from one plant to another with in the same company.
Business Process:
Plant Hyderabad Plant Hyderabad
Create Stock Transfer Create Purchase

Order Order
Create Outbound
Delivery Goods Receipt for
Purchase Order
RG1 Entry
RG23D Entry
136
Scenario B: INTERCOMPANY PLANT TO PLANT STOCK TRANSFER
Business Process
• This scenario covers stock transfer of goods from one manufacturing plant to another
manufacturing plant.
• In Charminar Steels Limited two manufacturing plants, bothof them in Hyderabad .
Business Process:
At Plant Hyderabad At Plant Hyderabad
Create Stock Transfer

Order
Create Purchase Order
Create Outbound
Delivery
Goods Receipt for
Purchase Order
RG1 Entry RG23D Entry
137
RETURN OF GOODS
Scenario a: RETURN OF GOODS FROM DISTRIBUTOR TO PLANT
Business Process
• Returns are created when distributor returns the goods to the company.
Business Process:
Create Returns Sales Order
With ref. to Billing Doc.
Create Returns Delivery
Create Credit for Returns
Capture Excise Invoice Credit Memo Request
RG23D Entry Credit Memo
SCENARIO B: Return of Goods from Institutional Customer to Plant
Business Process
• Returns are created when customer returns the goods to the company and returns the gods to Plant.
138
Business Process:
Create Returns Sales Order
Create Returns Delivery
Create Credit for Returns
Capture Excise Invoice Credit Memo Request
RG1 Entry
Credit Memo

Make to Order
Inquiry
Quotation
Order Production Order
Outbound Stock Creation

Delivery
139
13.REPORTS
Reports can be generated in SD module from Sales Information System (SIS), which have a
standardized interface and similar basic functionality. SIS is based on information structures.
These statistics tables contain transactional data from the different applications. This data is
constantly collected and updated by the System.
REPORTS REQUIRED FOR CHARMINAR STEEL CASTINGS LTD.
• Customer and material wise reports.
• Sales documents status wise reports such as sales order, delivery, billing etc.
• Sales Area wise reports. (export & Imports)
• Sales employee wise reports
• List of items with qty. already released against quantity contract.
• Cumulative invoice status quarterly/half yearly/annually against the contract.
• Payment received status customer wise/Business Area wise.
• Payment outstanding status customer wise/Business Area wise.
• Sales Report (Dealer Wise with cumulative past sales history) (Customized report)
Reporting Requirement
• List of items with qty. already released against different release orders of a contract.
• Cumulative invoice status quarterly/half yearly/annually against the contract.
• Billing status customer wise / Business Area wise.
• Payment receipt status customer wise/Business Area wise.
• Payment outstanding status customer wise/Business Area wise.
Standard Transaction Codes to be used are:
MCTA: Customer analysis
MCTC: Material Analysis
MCTE: Sales Organization Analysis
MCTI : Sales Employee Analysis
VA05 : Display list of Sales/Release Order (Area Wise)
VA05 : Display list of Sales/Release Order (Month/Year Wise)
VF04 : Display Billing Due List (Month/Year Wise)
VC/2 : Sales Summary (Area Wise / Month/Year Wise)
V.02 : Display list of incomplete orders (Area /Year/Month Wise)
SDV3 : Display list of complete orders (Area /Year/Month Wise)
VF06 : Create background processing of Billing (Batch Billing)
F.35 : Credit Master Sheet (Customer Wise)
140
14. PARAMETERS USED FOR SIS :
o Customer Statistical Group:
CUSTOMER STAT.
DESCRIPTION
GROUP
1 À’ group
2 `B’ group
o Material Statistical Group
MATERIAL STAT. GROUP DESCRIPTION

1 À’ Material group
2 `B’ Material group
The Following rules are used for Sales Information Structure:

In charminar steel casting Limited we are following the rules for updating the data of the
sales documents into SIS. They are
UPDATING
DESCRIPTION
RULES
1 Sales doc. Delivery doc. Billing doc.
Return order, Return delivery, Credit

2
Memo
Third party: Sales Document, Delivery,

401
billling document,
Return order, Return Delivery, Credit

402
memo
Deliveries where preceding doc. Is

403
purchase order
Returns deliveries where preceding doc. is

404
purchase order
141
15.GAPS IDENTIFIED
Customers advance payments in the form of deposits to be reflected in the Invoice.
Sales Persons Employe ID to be reflected in the Invoice raised.

Company logo and Terms and Conditions to be reflected in the Invoice.
Billing doc no. and accounting no should be same.

Customers One time deposit to be reflected in the Customer Master.
First ,Second and Third gaps will be address in the following way.
Customers advance payments to be reflected in the Invoice in Make to order scenario.

Sales Persons Employee ID to be reflected in the Invoice.
Company logo and Terms and Conditions to be reflected in the Invoice
INVOICE FORMAT
INVOICE
Address:---------------------------------- NUMBER\DATE Xxxxxx\\xxxx
-----------------------------------
REFNO\DATE Xxxxxx\\xxxx
------- DELIVERY NOTENO\DATE
Xxxxxx\\xxxx
Order No\Date Xxxxxx\\xxxx
Customer No Xxxxxx
SALES PERSONNEL IDNO
Xxxxxx
CUSTOMER ADVANCE PAYMENT

RS xxxxxx
Terms Of Payment Upto date. xxxxxxx without deduction currency INR

Terms of Delivery xxxxxxxxxxx
Weight \Volume selection
Gross weight xxxxxx units xxxxxx Net weight xxxxxx units xxxxxx
142
ITEM MATERIAL DESCRIPTION PRICE PRICE UNIT VALUE
Discount XXXXX
Net Value of item
xxxxxxxxx Total Value of item
xxxxxxxxx
INTEGRATION WITH OTHER MODULES
FINANCE&CONTROLLING (FI/CO):
1.SALES ORGANISATION ASSIGNING TO COMPANY CODE:
Sales Org Descripti Company Code Description

CSCL1 on
Sales Org CSCL CSCL company code
2.ACCOUNT GROUPS
0001 Sold to Party 0-1000

0002 Ship to Party 1001-2000
0003 Payer 2001-3000
0004 Bill to Party 3001-4000
0005 Export Agent 4001-5000
ACCOUNT GROUP ASSIGNED TO PARTNER DETERMINATION PROCEDURE AND

PARTNER FUNCTIONS
ACCOUNT GROUP PARTNER DETERMINATION

PRO.
0001 CSCl
0002 CSCL
0003 CSCL
0004 CSCL
0005 CSCL
143
ACCOUNT GROUP PARTENER FUNCTIONS
0001 SP
0002 SH
0003 PY
0004 BP
0005 EA
Sales Org DIST.CHANNAL DIVISION CREDIT CONTROL AREA
SORG Direct Sales Defence

SORG Direct Sales Surgical
SORG Direct Sales Pressure valve
SORG Direct sales Engineering
SORG Institutional Sales Surgical
SORG Export Sales Pressure Valve
3.CREDIT CONTROL AREA ASSAIGNED TO SALES AREA AND CREDIT GROUPS
CREDIT CONTROL AREARISK CATEGORY CREDIT GROUP CREDIT CONTROL
01 CR.GR. FOR SALES ORDER

02 CR.GR.FOR DELIVERIES
03 CR.GR. FOR GOODS ISSUE
144
4. REVENUE ACCOUNT DETERMINATION;
G/L
App Cond ty Ch Ac S. Org AAG C AAG M Actky G/L A/c No
A/c NO
V KOFI SORG 01 01 ERL
V KOFI SORG 01 01 ERS
V KOFI SORG 01 01 ERF
V KOFI SORG 01 01 MWS
5. MAKE -TO-ORDER
• Separate G/L account for make to order
6. CUSTOMER MASTER RECORD
General data
i. Payment transactions
Company code
ii. Account management
iii. Payment transactions
iv. Correspondence
v. Insurance
Sales area data
i. Terms of payment
ii. Tax codes
145
PRODUCTION PLANNING (PP);
1. AILABILITY CHECK AND TRANSFER OF REQUIREMENTS
Item Cat MRP Type Schedule Line

AGN ND BN
TAN PD CP
REN - DN
TAS - CS
TAK - CP
LAN - F3
LNN - C3
TAL - E3
2.MATERIAL MASTER RECORD

Sales/General plant
Gross Weight
Net Weight
Material Management(MM):
1. MATERIAL MASTER RECORD
Sales Org 1
Fields
Sales Unit
Delivery Plant
Material Group
Division
Tax Data
Minimum Order Qty
Minimum Deliver Qty
Delivery Unit
Rounding Profile
Sales /General Plant

Availability Check
Transport Group
Loading Group
Material Group Packing Materials
Sales text
Customer text
Material text
CUSTOMER MASTER:
Billing documents
incoterms
146
Chapter
4
Production Planning
Production Planning the Heart of the operations module and is the essence of
implementing SAP. Cost Cutting and Efficient Use of Resource
P
roduction Planning is where the logistics of the Shop Floor is taken Care. This is where
important elements like functioning of Shop Floor, Planning of the Material, Designing of
Production Scheduled Etc. In Production Planning Sales Data from the Sales and
Distribution is used for Planning and After a Cross check with cross modules will be
Production Planning will plan the production of Shop Floor.
Overview
I C O N K E Y
In Production Planning Material Requirement Is Planned. Operations are
Bill Of Materials Planned in response to the Orders from Sales and Distribution, Shop Floor
Production Orders Activities Like Production Orders, Creation, Release, Confirmation are
Shop Floor Control
taken Care of. Demand Management is Done and Material Requirement
Planning Elements are Taken care Off.. Production Planning Module
Sales and Operations Plan
integrates with various other modules like Finance and Controlling,
Material Management, Sales And Distribution in various Regards pf the Functioning of the
Organization.
Configuration
In Production Planning Bill Of Materials Are Designed and Configured,
Work Centers are Mapped and Configured and Routing of the materials is
charted out and configured. Functioning of the module involved in various
key elements of the organization, which influences the performance and
costing of the company.
147
Index
1. Introduction 149
2. Purpose 149
3. Scope
4. Business Benefits
5. Organization
6. Master Data 150
6.1. Material Master
6.2. Bill Of Material
6.3. Work Center
6.4. Routing
7. Production Planning 166
7.1. Sales & Operations Planning
7.2. Demand Management
8. Material Requirement Planning 171
8.1 MRP Control Parameters
8.2 MRP Out Put
8.3 Consumption Based Planning
8.4 Planned Orders Processing
9. Shop Floor Control 175
9.1. Production Order
9.2. Production Order Creation
9.3. Release Of Production Order
9.4. Order Confirmation
9.5. Print Out Of Production Order
10. Batch Management 182
10.1 Purpose
10.2 Features
10.3 Classification
11. Reports 183
12. Gaps 187
12.1 Identification Of Gaps
12.2 Addressing Of Gaps
Annexure - 1 191
Annexure - 2 192
148
1. MASTER DATA
MATERIALS Types:
Sr. No. Material Type Description
1 ROH Raw Materials
2 HALB Semi Finished Products
3 FERT Finished Products
4 ERSA Spare parts
5 VERP Packing Material
6 PIPE Pipeline Material
7 FHMI Production resources / Tools
08 UNBW Non–Valuated Materials
09 NLAG Non–Stock Materials
10 ABF Waste
11 DEN Service
12 PROD Product groups
13 VKHM Additional
14 WERB Product catalogs
1.1. MATERIAL MASTER

For Plant 1 – Domestic
The materials are categorized into three types namely
i. Finished Product
ii. Semi-Finished Products
iii. Raw Materials
149
FI NI SHED PRODUCTS
Category Product code Description

DDE-REA143/07 Pistol Body
DDE-ROA144/07 Revolver Body
Defense DDE-PIB144/07 Fire Arm
DDE-PIC145/07 Rifle bracket
EKE-PIC12/07 2.84Gun body
DMM-PIA12/07 Switch Gear
DMM-PIB12/07 Housing gear
Engineering/
Automobile DMM-PIC12/07 Machine tool
DTA-PIA25/07 Loom part
DMM-COA12/07 wippe
DYR-LIV1/07 Knee Cap
DYR-LIU1/07 A M Tail
Surgical DYR-LIU2/07 A M Head
DYR-LIU3/07 Lever Arm
DYR-LIK03/07 Mobilty 135
DOG-PIS1/07 Pressure valve
ESH-VLV02/07 Beel typre body
Oil and Gas ESH-VLV03/07 Lantern ring
ESH-VLU03/07 flange
ESH-VLU04/07 Gas valve
150
RAW MATERI ALS
This is the List of aw Materials Used In Charminar Steel Castings and are sorted Section wise
Section Used Raw Material

Filled Wax
Waxing Paraffin Wax
Re-Used Wax
Zircon Floor
Colloidal Silica 1
Trichlorine Ethelyne 2
Pre Coat
Laboline
Pctonil
Zircon Sand
Gorg 200
Shell Building 16/30 Malachite
30/30 Malachite
Carbon
Silicon
Manganese
Chromium
Molybdenum
Melting Vanadium
Copper
Titanium
MS(Scrap)
SS(Scrap)
Cobalt
151
SEMI FI NI SHED PRODUCTS
Semi Finished(Actual)
Work Center Semi Finished for reference
Waxing Wax Pattern Wax Pattern
Runner Bars Runner Bars
Risers Risers
Assembly Assembly Tree Assembly Tree
Pre Coat Slurry(Precoat)
Pre Coated 1 Sheel
Precoated 2 Shell
Pre coated shell builded shell
Shell Building Shell Building 16/30
Shell Building 30/30
Slurry(Shell Building)
De-Waxing De-Waxed Shell De-Waxed & Pre heated Shell
Pre Heat Pre Heated Shell
De-Waxed & Pre heated Shell
Charge(MS + Alloys)
Casted Shell
Charge(SS + Alloys)
Melting Charge(Re-cycled MS + SS)
Fettling Chemical Composition Casted Castings Castings
152
1.2. BILL OF MATERIAL
Bill of materials is used in their different forms in various situations where a
finished product is assembled from several component parts or materials.
The structure of BOM is a multi level BOM and various scrap (component,
operation & assembly) are considered during the production process.
B I L L S O F M A T E R I A L I N P R O D U C T I O N P L A N N I N G
Bills of material (BOMs) and routings contain essential master data for integrated materials
management and production control. In the design department, a new product is designed
such that it is suitable for production and for its intended purpose. The result of this product
phase is drawings and a list of all the parts required to produce the product. This list is the
bill of material.
The data stored in bills of material serves as a basis for production planning activities such as:
• A design department (working with CAD) can base its work on bills of
material. You can also create a BOM in the R/3 System from your CAD program, via the
SAP-CAD interface.
• A material requirements planning (MRP) department explodes bills of

material on a certain date to calculate cost-effective order quantities for materials.
• A work-scheduling department uses bills of material as a basis for operation

planning and production control.
• A production order management department uses bills of material to plan the
provision of materials.
Finish and Semi Finished Products Pistol A M Loom Flange
Body Tail part
1Tree= 1Tree= 1Tree= 1Tree=

Base Qty 4nos 8nos 20nos 10nos
Operation Loss 0.50% 1% 0.75% 0.80%
Selling Cost In Rs 800 1600 1000 2000
Sr. Material
No GR Purchase
Raw Material U/M Cost In Rs. Qty. Qty. Qty. Qty.
1 Filled wax Kg 120 2 2.25 2.35 2.5
2 Paraffin Wax Kg 74 1 1.25 1.5 1.6
3 Re-used wax Kg 1 1.25 1.5 1.6
4 Zircon Flour Kg 53.82 0.1 0.2 0.25 0.5
5 Colloidal silica 1 Lit 17.5 0.1 0.15 0.2 0.25
153
6 Zircon Sand Kg 40 0.5 0.6 0.8 0.85
7 Grog 200 Kg 8.82 0.2 0.25 0.35 0.45
8 16/30 Molachite Kg 6.86 2 2.25 2.5 2.6
9 30/80 Molachite Kg 6.86 2 2.25 2.5 2.65
10 Carbon Kg 17.5 0.05 0.006 0.04 0.007
11 Silicon Kg 45 0.055 0.1 0.023 0.075
12 Manganese Kg 46 0.075 0.2 0.065 0.075
13 Chromium Kg 60 0.1 1.8 0.103 1.9
14 Nickel Kg 2400 1.25 0.95
15 Molybdenum Kg 1975 0.25 0.03
16 MS (scrap) Kg 22 9.6 14.74
17 SS (scrap) Kg. 290 17.79 23.47
18 Re-Used MS Scrap Kg
19 Re-used SS Scrap
Kg
20 Power KW hr 40 40 42 45
21 Diesel
Kg 13.7 13.1 13.5 13.6
22 Wooden Box
1 no. 138 0.08 0.1 0.12 0.15
Category Description Carbon Silicon Chromium Nickel Molyb Total

Manga denum Vane MS SS Tree
Product Code nese dium Scrap Scrap Cobolt Weight
DDE-REA143/07 Revolver Body 40 45 75 100 17 9723 10000
DDE-ROA144/07 Rocker Arm 41 40 65 30 40 10 9774 10000
DDE-PIB144/07 Defense Pistol Body 50 55 75 100 9720 10000
DDE-PIC145/07 Pistol Trigger 60 65 100 115 60 9600 10000
EKE-PIC12/07 LMG Bracket 20 40 70 9870 10000
DMM-PIM55/07 Forward Gear 40 43 75 14842 15000
Engineering/
DMM-PIB12/07 Gear Insert 55 43 65 14837 15000
Automobiles
DMM-PIC12/07 Piston Ring 40 23 78 100 14759 15000
DTA-PIA25/07 Loom Part 40 23 65 103 30 14739 15000
DMM-COA12/07 Piston 35 33 155 28 14749 15000
DYR-LIV1/07 Knee Cap 35 100 100 2800 100 600 100 17742 16365 20000
DYR-LIU1/07 Knee Joint 8 100 200 1700 1200 250 18535 20000
Surgical
DYR-LIU2/07 Mobility Joint 15 100 100 1250 100 17644 20000
DYR-LIU3/07 Am Tail 6 100 200 1800 1250 250 17792 20000
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Storage Locations:
Nomenclature
Sr. No Plant’s Description
in sap
01 Raw Material storage SD10
02 Spare parts storage SD20
03 DOMESTIC Finished Products storage SD30
04 Plant Recycled wax SD40
05 Recycled Metal SD50
06 Scrap storage SD60
07 Raw Material storage SE10
08 Spare parts storage SE20
09 EXPORT Finished Products storage SE30
10 Plant Recycled wax SE40
11 Recycled Metal SE50
12 Scrap storage SE60
INTEGRATION
The data stored in bills of material is also used in other activities in a company such as:
Material Management (MM)

Reservation and goods issue
Finance and Controlling (FI / CO)
Product costing
To calculate the costs of materials required for a specific product
6.3. WORK CENTER
The work centers represent the different processing centers or production line responsible for
the production of the finished product.
Processing of the work centers involves the maintenance of the following data:
Basic Data
Capacity data
Scheduling data
Costing data
Operations are carried out at a work center. It is categorized as follows
o Machines, machine groups
o Production lines
o Assembly work centers
155
o Employees, groups of employees
• The different screens are controlled by the work center category, whereas the
capacity data is differentiated according to the capacity category.
• The basic data view includes the description of the work center, the task list
usage and the standard value key. The usage describes the usability of the work center in
routings or other task lists.
• The standard value key supports the parameters, which represent the
individual operational segments like machining and labor etc.
• The capacity view contains all the data for the availability of the capacity and
the different formulas for the capacity requirement calculation.
• The scheduling view contains the scheduling data.
• The cost center view contains the costing data.
Work Centers and Machinery Plant wise
Name Of The Work Center Design And Development
Plant 1& 2 Plant 1& 2

Plant 1 And 2
CDDDW Category Activity type
CNC Lathe Machine 1 CDDDM101
CNC Lathe Machine2 CDDDM102
Milling Machine1 CDDDM103

Set,
Mach,
Machines Machine
Milling Machine2 CDDDM104 Labour,
Power
Drilling Machine CDDDM105
Die Making Machine CDDDM106
Vernier Height Guage CDDDI101

Slip Guage CDDDI102
Vernier Calipurse CDDDI103
Digital Micro Meter CDDDI104 Testing Time,
Instruments Instrument
Measurement Guage 1 CDDDI105 Lab time
Measurement Guage 2 CDDDI106
Measurement Guage 3 CDDDI107
Surface Base Plate CDDDI108
156
Name Of The Work
Centre Waxing
Plant 1 Plant 2 Plant 1 & 2

BCT in Work Activity
Hrs/batc center type
h) category
Waxing CDWPW1 CEWPW1
35 Ton Wax Injection
4 4
Machine CDWPM201 CEWPM201
12 Ton Wax injection
4 4
10 Ton Wax injection
4 4
Wax Melting Tank
2 2
(Used Wax) CDWPM204 CEWPM204 Setup,
Fresh Wax melting Machine,
2 2 Machine
Tank CDWPM205 CEWPM205 Labour,
Pneumatic Wax Power
4 4
Water Cooler for
4 4
Wax m/c cooling CDWPM207 CEWPM207
4 4
Drying machine CDWPM208 CEWPM208
1 HP Single Air
4 4
Compressor CDWPM209 CEWPM209
1 1 Testing
Vernier Caliper, CDWPI201 CEWPI201
Instrument time,
1 1 Lab time
Micro Meter, CDWPI202 CEWPI201
157
Name OF the Work Center PreCoat 1
Plant 1 Plant 2 Plant 1 & 2
Plant 1 Plant 2
BCT in Category Activity
CDPCW1 CEPCW1 Hrs/batch type
4 4
Slurry tank CDPCM401 CEPCM401
4 4
Slurry tank CDPCM402 CEPCM402
2 2
Pre Coat Slurry Tank CDPCM403 CEPCM403 setup,
1 1 Mach labour,
Machine
Sand Raining Machine CDPCM404 CEPCM404 ine machine,
Wall Mounted Air 1 1 power
Circulating Machine CDPCM405 CEPCM405
1 1
Slurry Mixing Machines CDPCM406 CEPCM406
2 2
Wax De Waxing Tank CDPCM407 CEPCM407
1 1
B4 Cup, CDPCI401 CEPCI401
Dry and wet 1 1 Testing,
Instru
Instruments temperature labour
ment
Indicator, CDPCI402 CEPCI402
1 1
Digital Hydro Meter CDPCI403 CEPCI403
Name Of The Work Centre Assembly Line

Plant 1 Plant 2 Plant 1 Plant 2
plant1& 2
Work
center
Activity
category
Assembly Line CDALW CEALMW BCT in Hrs/batch Types
4 Setup,
Soldering Guns CDALM301 CEALM301 4 machine,
Machine
Assembly Making 2 2 labour,
Machine CDALM302 CEALM302 power
158
Name Of the Work
Centre Pre Coat 2
Plant 1 Plant 2 Plant 1 Plant 2 plant 1& 2
BCT in Work
Hrs/batch center Activity
CDPCW2 CEPCW2 category Type
CDPCM50 4 4
Slurry tank 1 CEPCM501
CDPCM50 4 4
Slurry tank 2 CEPCM502
Pre Coat CDPCM50 2 2
Slurry Tank 3 CEPCM503
Sand Raining CDPCM50 1 1 Setup,
Machine 4 CEPCM504 Labor,
Machine Machine
Wall Mounted 1 1 Machine,
Air Power
Circulating CDPCM50
Machine 5 CEPCM505
Slurry Mixing CDPCM50 1 1
Machines 6 CEPCM506
Wax De CDPCM50 2 2
Waxing Tank 7 CEPCM507
1 1
B4 Cup, CDPCI501 CEPCI501
Dry and wet 1 1
Instru Testing,
temperature Instrument
ments CDPCI502 CEPCI502 Labor
Indicator,
Digital Hydro 1 1
Meter CDPCI503 CEPCI503
Name Of The Work Center Shell Building 1

Plant Plant 2 Plant 1&2
Plant 1 Plant 2 1
Shell Building 1 CDSBW1 CESBW1 Hrs/batch Type
2 2 Setup,labour,
Machine machine,
Slurry Making CDSBM6 CESBM6 power
Machine, 01 01
Mach
ines Ceramic Sand CDSBM6 CESBM6 4 4
Raining Machine 02 02
CDSBM6 CESBM6 2 2
Drying Machine 03 03
159
Name Of The Work Center Shell Building 2
Plant 1 Plant 2 Plant 1 Plant 2 Plant 1 & 2
BCT in Categor
Shell Building CDSB Hrs/batch y Activity
2 W2 CESBW2 type
Slurry Making CDSBM CESBM70 2 2
Machine, 701 1
setup,
Machine Ceramic Sand 4 4 labour,
Raining CDSB CESBM6 Machine
s machine,
Machine M602 02 power
Drying CDSB CESBM6 2 2
Machine M603 03
Name Of The Work
Center De Waxing
Plant Plant Plant 1 & 2
Plant 1 Plant 2
1 2
CDDWW CEDWW BCT in Activity
De Waxing 1 1 Hrs/batch category type
De Waxing CDDWM8 CEDWM 2 2
Tank 01 801 setup,
De Waxing CDDWM CEDW labour,
Machines 2 2 Machine
Tank 802 M802 machine,
De Waxing CDDWM CEDW power
2 2
Tank 803 M803
Name Of The Work Center Pre Heat 1

Pla Plant 2 Plant 1 & 2
nt
Plant 1 Plant 2 1
Pre Heat CDPHW1 CEPHW1 Hrs/batch type
Diesel Fired 2 2
Setup,
Machine Furnace CDPHM850 CEPHM850
Machine labor,
s Diesel Fired 2 2 machine
Furnace CDPHM851 CEPHM851
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Name Of The Work Center Melting
Plant 1 Plant 2 Plant 1 Plant 2
BCT in Hrs/batch Category Activity type
Name Of The Machine CDMSW1 CEMSW1
Induction Melting F/C 1 1

25Kg CDMSM881 CEMSM881
Induction Melting F/C
2 2
35Kg CDMSM882 CEMSM882
Induction Melting F/C
3 3
75 Kg CDMSM883 CEMSM883
1 1 Setup,
Diesel Fired Furnace1 CDMSM884 CEMSM884 Machine,
Machine Machine
Labour,
1 1 Power
Diesel Fired Furnace2 CDMSM885 CEMSM885
1 1
Diesel Fired Furnace3 CDMSM886 CEMSM886
1HP Single Head
1 1
Air Compressor CDMSM887 CEMSM887
1 1
WaterSoftening Plant CDMSM888 CEMSM888
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Name Of The Work Center Fettling
Plant 1 Plant 2 1 2
BCT in Catego Activit
CDFE CEFE Hrs/b ry y
W1 W1 atch type
Shot Blasting CDFEM CEFEM 1 1
Machine1 901 901
Machine 2 902 902
Machine3 903 903
Belt Polishing CDFEM CEFEM 1 1
Machine1 904 904
Machine2 905 905
Machine3 906 906
CDFEM CEFEM 1 1
Pneumatic Gun1 907 907
CDFEM CEFEM 1 1
Pneumatic Gun2 908 908
CDFEM CEFEM 1 1 setup,
Pneumatic Gun3 909 909 labour,
Machin Mac
es CDFEM CEFEM 1 1 hine machi
Pneumatic Gun4 910 910 ne
CDFEM CEFEM 1 1 ,power
Pneumatic Guns5 911 911
Electric Heat 4 4
Treatment CDFEM CEFEM
Furnace2 912 912
CDFEM CEFEM 1 1
Muffle Furnace 913 913
CDFEM CEFEM 1 1
Virgo (Electric) 914 914
Cuttinv CDFEM CEFEM 1 1
MachineX2) 915 915
Hydraullic Press CDFEM CEFEM 1 1
Machine 916 916
Shelll Knocking CDFEM CEFEM 1 1
Machine 917 917
CDFEM CEFEM
Chain Pulley Block 918 918
162
Name Of The Work Center Quality Assurence
Plant 1 Plant 2 1 2
BCT in Category
Hrs/batc Activity
CDQMW1 CEQMW1 h types
Tensile Testing CDQMM95 CEQMM95
1 1
Machine 1 1
Brinell Hardness CDQMM95 CEQMM95
1 1
Testing Machine 2 2
Rockwell Hardness CDQMM95 CEQMM95 1 1
Testing Machine 3 3
Impact Testing CDQMM95 CEQMM95 Testing time,
Machin Machine 1 1 Testing
4 4 Labor time,
e CDQMM95 CEQMM95 Machines
1 1 power
Spectro Meter 5 5
Crack Detection
Machine (Magnetic CDQMM95 CEQMM95 1 1
Machine) 6 6
Crack Detection
Machine CDQMM95 CEQMM95 1 1
(Dye Penetrant) 7 7
Digita Verneir
1 1
Calipurse CDQMI950 CEQMI950
Digital Micrometer CDQMI951 CEQMI951 1 1
Instru Testing Testing time,
Guage 1 CDQMI952 CEQMI952 1 1
ments Instruments Labour time
Gauge 4 CDQMI955 CEQMI955 1 1
SHIFT AND SHIFT SEQUENCE

The available capacity of a shift is defined by the following data:
• Shift start, shift end, break times
• Capacity utilization rate
• Number of individual capacities
Shift start, shift end and break times can be manually maintained in capacity. You can however
also use shift
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Shift definition
In a shift definition you define the start, finish, break times, and validity period of a shift.
Shift sequence
In a shift sequence, you define how shifts follow another on a daily basis for the duration of a Cycle.
You use shift definitions to do this.
The following graphic illustrates the principle of shift definitions and shift sequences:
INTEGRATION
Human Resource (HR)
A Logistics work center can be assigned to either an organizational unit or a work center in
the Human Resource Management System (HRMS). Assignments to other HR-objects,
for example employees or qualifications, can be maintained via the HR work center.
• Costing
Formulas are entered in the work center, so that the costs of an operation can be calculated.
A work center is also assigned to a production cost center and the production cost center
has been assigned to appropriate activity types. The prices for these activity quantities are
calculated using the activity prices.
164
6.4. ROUTING
Routings enable you to plan the production of materials (products). Therefore, routings
are used as a template for production orders and run schedules as well as a basis for
product costing.
As the production scenario in plant1, plant3 and plant1 (auto-components) is of discrete

manufacturing, so normal routing is considered for the above plants.
165
Routing Plant 1 Plant 2
Design & Development CDDDW
Waxing CDWPW1 CEWPW1
Assembly CDALW1 CEALW1
Pre Coat 1 CDPCW1 CEPCW1
Pre Coat 2 CDPCW2 CEPCW2
Shell building 16/30 CDSBW1 CESBW1
Shell Building 30/80 CDSBW2 CESBW2
De Waxing CDDWW1 CEDWW1
Pre – Heat CDPHW1 CEPHW1
Melting CDMLW1 CEMLW1
Fettling CDFEW1 CEFEW1
Heat Treatment CDHTW1 CEHTW1
Finishing CDFIW1 CEFIW1
Testing CDQAW1 CEQAW1
Packing CDPKW1 CEPKW1
166
Rate Routing
A routing for whose operations the production quantity and a fixed duration has been
defined. Thus the production rate is also defined.
Rate routing is considered for plant 1 (Domestic) as it purely involves repetitive
manufacturing scenario.
Plant wise list Of Production Resource Tools for Plant 1.
Loom
AM
Sr.No PRTs U/M Pistol part Flange
Tail
Body
1. Pistol Body Die Nos 1
2. A M Tail Die Nos 1
3. Loom Part Die Nos 1
4. Flange Die Nos 1
5. Weighing Balance Nos 1 1 1 1
6. Trolleys Nos 1 1 1 1
7. Lift Nos 1 1 1 1
8. Samplers Nos 10 10 15 10
9. Temp Indicator Nos 10 10 10 10
10 B4 cup Nos 1 1 1 1
11 Vernier caliper Nos 1 1 1 1
12 Micro Meter Nos 1 1 1 1
13 Pressure Indicator Nos 1 1 1 1
167
Plant wise list Of Production Resource Tools for Plant 2.
Sr. PRTs U/M Pistol Knee Pressure Bell

No Ring Joint Valve Type
body
1 Pistol Ring Die Nos 1
2 Knee Joint Die Nos 1
3 Pressure Valve Die Nos 1
4 Bell type Body Die Nos 1
5 Weighing Balance Nos 1 1 1 1
6 Trolleys Nos 1 1 1 1
7 Lift Nos 1 1 1 1
8 Samplers Nos 10 10 15 10
9 Temp Indicator Nos 10 10 10 10
10 B4 cup Nos 1 1 1 1
11 Vernier caliper Nos 1 1 1 1
11 Micro Meter Nos 1 1 1 1
12 Pressure Indicator Nos 1 1 1 1
168
INTEGRATION
Material Management (MM)
Plan the usage of materials
Plan the external processing of operations
Prepare cost calculation according to routings
7. PRODUCTION PLANNING
7.1SALES & OPERATIONS PLANNING (SOP)
Sales & Operations Planning (SOP) is a flexible forecasting and planning tool with which
sales, production, and other supply chain targets can be set on the basis of historical,
existing, and estimated future data. Rough-cut planning can also be carried out to
determine the amounts of the capacities and other resources required to meet these targets.
SOP is particularly suitable for long- and medium-term planning.
For planning purpose, the required sales plan can be gathered from various sources like
Forecasting, Sales Information Systems and Co-PA (Cost-Profitability analysis) or can be created
manually.
Based on sales plan, the production plan is created and the requirements are then
transferred to demand management.
169
• Planning with final Assembly – 40
170
PLANT 1:
This is a domestic plant. Here we use strategy 40 i.e planning with final assembly. In this PIR’s
are created based on the forecast of sales plan and sets the targets for the future.
Transaction code: MC87
Planning and Processing of Production Process
Sale and Operation Planning for Material or Product Group using Sale Forecast SD
MC87
DEMAND AMANGEMENT
Creation Planned Ind. Requirement using
MD61
Cust Req Sales

Material Requirement Planning MD02 Order
Planned
Order
Conversion of Planned Order

to Prod. Order/ Purchase
Order
Check Availability
Components Capacity
N
Purchase Req.
N
Purchase Shift Dates /
Y order Provide Addl.
Y
Capacities
Production
Order
Goods Movement
Order Release Confirmation
To FG Store
CO15/CO11N
171
Order
Settleme
PLANT2:
This is an export plan. Here we use strategy 20 i.e make to order. In this plant SOP is not
maintained as production depends on sales orders only.
• Make-to-Order - 20
INTEGRATION
Sales and Distribution (SD)
SOP constitutes the planning functionality of the LIS information
systems.
SOP plans are passed on to Demand Management in the form of

independent requirements. In turn, this data is fed to Master Production Scheduling and
Material Requirements Planning.
Finance and Controlling (FI/CO)
An interface with Profitability Analysis (CO-PA) allows using CO-PA
data as the basis for sales planning in SOP.
SOP results are passed on to Profitability Analysis (CO-PA), Cost
Center Accounting and Activity-Based Costing.
172
7.2 DEMAND MANAGEMENT
The function of Demand Management is to determine requirement quantities

and delivery dates for finished products assemblies. Customer requirements
are created in sales order management.
• The demand program is created in the form of planned independent
requirements. Demand management uses planned independent requirements and
customer requirements. Customer requirements are created in sales order management
• To create the demand program, define the planning strategy for a product.
Planning strategies represent the methods of production for planning and manufacturing
or procuring a product.
• Using these strategies, it can be decided if production is triggered by sales
orders (make-to-order production), or if it is not triggered by sales orders (make-to-stock
production).
• Or, you may want both sales orders and stock orders in the demand
program. If the production time is relatively long in relation to the standard market delivery
time, you may want to produce the product or, at least, certain assemblies before any sales
orders exist. In this case, the sales quantities are preplanned (for example, with the aid of the
sales forecast).
PLANT 1:
Here planning with final assembly strategy was fallowed. Demand program is created in the
form of PIR’s and also sales orders. According to this strategy, Sales forecast quantity can be
transferred to demand management that planned independent requirements quantity needs to
be produced and creates Planned Orders at that time of MRP run.
Transaction code: MD61
PLANT 2:
Here Make to Order Planning strategy was fallowed. Demand program is created from sales
orders. According to this strategy Customers requirement (Sales Orders) quantity to be
produced and create Planned Orders at that time of MRP Run.
Transaction code: VA01
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8. MATERIAL REQUIREMENT PLANNING
The main function of material requirements planning is to guarantee material availability, that
is, it is used to procure or produce the requirement quantities on time both for internal
purposes and for sales and distribution.
This process involves the monitoring of stocks and, in particular, the automatic creation of
procurement proposals for purchasing and production.
In doing so, MRP tries to strike the best balance possible between
Optimizing the service level and
Minimizing costs and capital lockup.
So, when MRP run is carried out using PD (normal planning) as MRP type, the PLANNED
ORDERS are generated according to the demand mgmt (Planned Independent requirements).
The MRP controller checks the scheduled dates of the planned orders and converts them into
the production orders.
Material requirements planning take current and future sales as its reference points. The
planned and, depending on planning strategy, actual requirements trigger the MRP calculation.
In MRP the requirements include sales orders, planned independent requirements, material
reservations, the dependent requirements created by exploding the BOM and so on.
In case of in-house production the system creates planned orders for planning of production
quantities. When planning is complete planned orders can be converted into production
orders.
In case of external procurement the system creates either a planned order or directly creates a
purchase requisition or a schedule line for a pre-existing scheduling agreement for planning
the external purchase order quantity.
DEMAND
ELEMENTS
DEMAND FROM USER

DEPARTMENTS
MRP
RUN
PLANNED ORDER
PURCHASE
REQUISITION
174
Create the master data to be able to work with the MRP component. To do this, we require
the following components:
Material master
Bills of material
When you use MRP for in-house production dates we require
Work center
Routings
Demand Management component to define requirement quantities and requirements dates for
finished products and important assemblies. Demand Management also determines the
strategy you are to use for planning, procuring, or producing a certain finished product.
MRP control parameters Transaction code: MD02
Various control parameters are available for the total planning procedure and for single-item
planning and multi-level planning, which you can set in the initial screen of the planning run.
You use these parameters to determine how the planning run is to be executed and which
results are to be produced.
The control parameters include:
• Planning run type
o Regenerative planning --NEUPL
o Net changing planning– NTECH
Net change planning in the planning horizon ---NETPL

• Creation indicator for procurement proposals for materials that are
procured externally
For materials procured externally, purchase requisitions will be generated and for the material
produced in-house, planned orders will be generated.
• Creation indicator for MRP lists
It defines whether MRP lists are to be created or not.
• Planning mode
Determine how the system is to deal with procurement proposals (planned orders, purchase
requisitions, scheduling agreement lines) from the last planning run, which are not yet firmed,
in the next planning run.
• Scheduling
Scheduling is based on lead time scheduling.
175
Screen shot for MRP run
During the planning run, the system analyzes the requirements that exist for the planned
materials and creates procurement elements that cover these requirements. The evaluations in
the component display all receipt and issue elements for a material in the form of a table and
enable you to gain a quick overview of the stock/requirements situation for the material as
well as to branch into the editing function for the MRP elements for this material.
MRP Out put
The following evaluations are available for analyzing the planning result:
MRP list (MD02)
Stock/requirements list (md04)
Planning result (corresponds to the MRP list with individual evaluation layout)
Planning situation (corresponds to the stock/requirements list with individual evaluation
layout)
CAPACITY PLANNING
Capacity planning comprises the following partial components:

The Objective of Capacity Planning’s to ensure optimum utilization of
resources
• Capacity evaluation
In the capacity evaluation, available capacity and capacity requirements are determined and
compared with each other in lists or graphics.
176
• Capacity leveling
The objectives of capacity leveling are:
Optimal capacity commitment
Selection of appropriate resources
In most applications, you can use two types of planning table (graphical and tabular versions)
to display the capacity situation and to carry out capacity leveling.
CONSUMPTION BASED PLANNING
Consumption based planning is based on consumption values and uses forecasts or statistical
procedures to determine future requirements. Consumption based planning is characterized by
its simplicity and is mainly used for low value items. Manual reorder point planning is a typical
process in consumption based planning.
PLANNED ORDER PROCESSING
Manually Transaction code: MD11

The MRP controller enters a planned order manually. He determines which material is to be
procured, the required quantity, the date required, and whether the material is to be procured
externally or internally.
Automatically Transaction code: MD02

During the planning run, the system automatically determines the materials to be procured as
well as the required quantity and the required date.
After the planned order is created either manually or automatically a planned order profile is
allocated and data is processed. The data would include: material, plant, order quantity and
177
basic order dates. This will trigger the processing of material components, schedule the
planned order, edit account assignment and process the source of supply.
The system will check component and capacity availability and if needed, capacity leveling can
be carried out. Saving the planned order creates a purchase requisition, planned load, creates
dependent requirements and allows the processing of the planned order.
9. SHOP FLOOR CONTROL

Plant – 1 (Repetitive Manufacturing)
SL stock, open PO/Pur.Ord,

Lead times, lot sizes.
Demand
Plan Customer
MRP Orders
Production
Orders
Production (Released
Planned
Orders status)
Orders
(Created
Status)
Missing Mat.
Availa Y
Parts N
List bility
9.1. PRODUCTION ORDER

A production order defines which material is to be processed, at which location, at what time
and how much work is required. It also defines which resources are to be used and how the
order costs are to be settled.
• The work processes within a company are executed using orders.
• As soon as a planned order or a company-internal requirement is generated from
previous planning levels (material requirements planning) shop floor control takes over the
information available and adds the order-relevant data to it to guarantee complete order
processing.
178
• Production orders are used to control production within a company and also to
control cost accounting.
• The production scheduler confirms and releases the order to shop floor for actual
production. After production, operation wise confirmation of the order is carried out and
relevant goods are sent (GR) into the storage location.
9.2. PRODUCTION ORDER CREATION

This function supports the production of goods in-house using the production order or work
order concept. The different functions involved are:
• Order creation
• Order release
• Inspection lot processing
• Goods issues
• Order confirmation
• Goods receipt
• Order settlement
For creation of a production order, the data that is to be entered includes the material number
of the finished good to be produced, the plant, the WO/production order number and the
order type. The order type selected The properties and the control parameters are to be
customized for the order type for that product's manufacturing. Here, among the other things
it will be decided whether the WO will have external no. or internal number.
Then subsequently the order quantity and the planned start or the finish dates depending on
whether it is forward or backward scheduling is to be entered. At the time of order creation,
the system copies the BOM and the Routing of the finished good to be produced and
schedules the order. At this point of time, the system performs the availability check for the
raw materials and PRTs, checks the capacity creates the inspection lot and does the
preliminary costing and creates the order.
179
PROCESS FLOW
During the course of the production order processing, we can track down the different data
related to the scheduling, capacity utilisation, material availability, inspection lot processing,
preliminary costing, goods issues, order progress confirmations, tools receipt and order
settlement.
9.3 RELEASE OF PRODUCTION ORDER

Release of the production order is an important business function, which controls things like
the goods issue for the order, confirmation of the order progress etc. Here either individual
production operations or the order itself can be released.
The production order release function is to be exercised in each production order, in the
transaction menu of the order header, after the creation of the production order. This
function sets the "released" status in the order header
After the creation of the production order, the individual operations or the order header itself
can be released as per the release date specified in the material master scheduling margin key.
9.4. ORDER CONFIRMATION

A confirmation documents the processing status of orders, operations, sub-operations and
individual capacities. It is an instrument for controlling orders.
180
With a confirmation you specify
o The quantity in an operation that was produced as yield, scrap and the quantity
to be reworked
o How much work was actually done
o Which work center was used for the operation
o Who carried out the operation
o Exact confirmation shortly after completion of an operation is essential for
realistic production planning and control.
The following business transactions can be executed via confirmations:

o Updating order data (for example, quantities, activities, dates, status)
o Back flushing of components
o Automatic goods receipt (for one operation per order max.)
o Capacity reduction in the work center
o Updating costs based on confirmed data
o Updating MRP-relevant excess or missing quantities in the order
o You can enter confirmations for
o An order- to be entered daily
o An operation- to be done before period closing for inventory valuation of WIP.
o A sub-operation
o An individual capacity in an operation
o An individual capacity in a sub-operation
o For scrap, rejection, reworks, operation confirmation will be done.
9.5. PRINTOUT OF PRODUCTION ORDER

This function controls the printing of the shop papers, such as the operation confirmation
slips, time tickets etc.
The printing of the different shop papers is controlled by the settings made in the control key
attached to the individual production operations.
INTEGRATION
Production orders is fully integrated in the Logistics (LO) component and has, among others,
interfaces to
o Sales and Distribution (SD)
o Materials Management (MM)
o Controlling (CO)
Plant – 2 (Discrete Manufacturing)

Purpose
This component can be used for production planning and control in a repetitive
manufacturing environment.
You can use repetitive manufacturing as either make-to-stock REM or make-to-order REM
such as in the automotive industry, for example.
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The goals of repetitive manufacturing are the following:
• Creation and revision of production quantities on a period and quantity basis
(reduction in individual lot and order-specific processing).
• Reduction in the production control effort and simpler back flushing tools (with the
option of using the full scope of the PP functionality).
Implementation considerations
You can implement Repetitive Manufacturing if the following is true of your production
process:
• You produce the same or similar products over a lengthy period of time.
• You do not manufacture in individually defined lots. Instead, a total quantity is
produced over a certain period at a certain rate per part-period.
• Your products always follow the same sequence through the machines and work
centers in production.
• Routings tend to be simple and do not vary much.
Integration
Within logistics, Demand Management precedes Repetitive Manufacturing:
o SD Sales Operations (Receipt of sales orders)
o PP Demand Management (Creation of PIR)
o PP MRP
The following Logistics components are also relevant:
o PP Work Centers
o PP Routings
o PP Bills of Materials
o If required, Line Design for mapping complex production lines
Features
• Master data
There is specific master data required for Repetitive Manufacturing. This includes the
repetitive manufacturing profile and the product cost collector.
• Planning table
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Within the framework of repetitive manufacturing, planning and control is carried out on the
basis of time buckets. Starting from the existing requirements situation, you can plan
production quantities based on periods. The scheduling data for products and product groups
is thus broken down into a series of time buckets, the user being presented with period views
for the purposes of checking and revision.
• Sequencing
You can use Sequencing to carry out takt-based scheduling which determines the sequence in
which planned orders are produced on the production line. Sequencing simplifies the
dispatching process, especially for high order volumes, and enables you to display them in a
graphic.
• Pull list
You can use the pull list to control in-house material flow, supplying production with
materials. The pull list checks the stock situation at the production line, calculates the missing
parts for the components and triggers replenishment for these missing parts.
• Back flushing
Production completion confirmations are simplified and are made with reference to the
material being produced. The completion confirmation usually includes the backflushing of
components and the posting of production costs.
• Cost Object Controlling
In repetitive manufacturing, you ususally detemine costs per material or per production
version via a product cost collector (product cost per period).
Master Data for Repetitive Manufacturing
The following master data is available:
• The repetitive manufacturing profile is set in Customizing for repetitive manufacturing
and is entered in the material master record. You must also authorize the material for
repetitive manufacturing in the material master record.
• You create the production version in the material master record.
• If you want to plan using a planning ID , you must define one and enter it in the
material master record.
• If you want to use a production line for planning purposes, you must create one and
enter it in the material master record.
• If you use repetitive manufacturing in conjunction with the component PP line Design,
you can represent the production line as a line hierarchy. This makes sense if you have
complex production lines, which you want to schedule using takts.
• If you want to plan capacity, you must create a routing and enter it in the production
version.
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• You create a product cost collector for creating production costs.
INTEGRATION
Production orders is fully integrated in the Logistics (LO) component and has, among others,
interfaces to
o Sales and Distribution (SD)
o Materials Management (MM)
o Controlling (CO)
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10 BATCH MANAGEMENT
The quantity or partial quantity of a certain material or product that has been
produced according to the same batch, and represents one homogenous,
non- reproducible unit with unique specifications.
10.1 Purpose of batch management

Legal requirements (for example, the guidelines set out by GMP-Good Manufacturing
Practice) or regulations on hazardous material.
Defect tracing, callback activities, and regression requirement.
The need for differentiated quantity-and value-based Inventory Management (for

example, due to heterogeneous yield/result qualities or varying constituents in Production.
Differences in usage and the monitoring thereof in materials planning in SD and

Production.
Production or procedural requirements (for example, settlement of material quantities

on the basis of different batch specifications
10.3 CLASSIFICATION
The classification system allows you to use characteristics to describe all types of objects and to
group similar objects in classes – to classify objects
Characteristics describe the properties of objects. The values of a
characteristic specify these properties.
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When you create or change a characteristic, you can define the following settings:
Format For example, numeric format is for figures, and character format is for alphanumeric characters.
Units of measure for numeric values
Templates for entering values
Required entries for a characteristic (required characteristics)
whether intervals are allowed as values
Language-dependent descriptions and texts for characteristics and characteristic values
Display options for characteristics on the value assignment screen
Allowed values
Default values that are set automatically on the value assignment screen Class:
Classes allow to group objects together according to criteria that is.
Create classes for certain object types for example, material, workplace, equipment.
Use the class type to determine which object types can be classified in a class.
Assign characteristics to class. These describe the objects classify in class. When assign a characteristic to a
class, it can adapt (overwrite) the characteristic.
CLASS TYPE
The class type is a central concept in the classification system. The class type determines how
classes are processed, and how objects can be classified and retrieved in these classes. Class
types for a specific object type, such as materials. Then use classes of this class type to classify
objects of this object type. First create a class, and then enter a class type for the class. Each
class type is a closed system. There is no link between the different class types.
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11. REPORTS
Following reports will be provided
1. Shift Wise / Daily Production Reports
2. Monthly Production Reports
3. Daily Rejection Report
4. Monthly Rejection Reports
5. Rework Report
6. Scrap Generation Report
7. Shift Wise / Machine Report
8. Stock Status Report Of Raw Material
9. Order Status
The following standard reports are to be used in the Production Planning module
10.2 Features of batch management
· Batch Number Assignment
This function used to assign a batch with a number that uniquely identifies it.
Batch Specification
This function used to describe each batch uniquely using characteristics and characteristic
values. It specifies the permitted value range in the allocated material master record.
Batch Status Management
This function used to indicate whether a batch is usable or unusable. We can set this status
Manually in the batch master record or at goods receipt
Automatically in the usage decision in quality management
Batch Determination
With this function, we can use various criteria to search for batches that are in stock, for
example:-
When posting goods issues
When combining suitable material components for production orders and process orders
When creating a delivery according to particular customer requirements
Batch Where-Used List
The batch record contains all quality-relevant planned and actual data for the production of a
batch and complies with the GMP guidelines (Good Manufacturing Practices) for the
pharmaceutical industry and food industry.
The batch where-used list shows the path of the batch from its procurement to its delivery to
your customer.
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TRANSACTION PURPOSE
CODE
MMSC This report allows a user to easily create, or view, storage
location views for a material.
CRO5 This report produces a list of all work centers.
CR06 This report produces a list of all cost center assignments.
CR07 This report produces a list of all work center capacity.
CA60 This report enables you to list changes to individual routing
fields in the sequence which they occurred.
MD73 In the "Total Requirements Display", you can check and, if
necessary, change the planning figures. With this evaluation
function you can list all the planned independent
requirements that exist for a particular material or a
product group. From this total requirements display, you
can access more detailed information or you can branch
into the change mode.
MD04 In the stock/requirements list, the most up-to-date
development of stocks and requirements is displayed. The
layout of the list on the screen is the same as that of the
MRP list.
MD05 Once you have carried out the planning run for the
material via single-item or total planning and where you
have also specified that an MRP list is to be created, you
can then display one of the lists with the function
individual display. Proceed as follows:
Starting from the menu screen of material requirements
planning, select Evaluations -> MRP list ->Individual
display.
The initial screen for the Individual Display of MRP List
appears.
Enter the material number and the plant and press
ENTER.
The MRP List screen now appears with an overview of the
Individual Lines.
MD06 With the collective display, all planned orders which
correspond to the specified selection criteria are displayed;
for example, all planned orders of a certain MRP
controller.
MS07 The results of long-term planning are simulative planned
orders at finished product level for the long-term planning
version of the demand program. Simulative dependent
requirements and receipts are created for the components.
Simulative capacity requirements are also created for
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materials that are produced in-house. Separate MRP lists
are also created for long-term planning. In the long-term
planning menu, the stock/requirements list is also available
as well as the planning situation as an individual layout.
MD09 With the evaluation, "Pegged requirements", you can
retrace which requirements are the source of which order
proposals and which independent requirements (especially
sales orders) will be affected if an order proposal is
cancelled or if its date or quantity is changed.
With the function, "Pegged requirements", you can
determine which requirements and order proposals caused
the current stock/requirements situation. This information
is particularly useful when you have to find out which
independent requirements (especially sales orders) are
endangered if planned orders are cancelled or if they
cannot be delivered on time.
CO20 This report shows a list of production orders according to
the selection criteria entered. The material produced, the
order schedule dates, the status of the order, and more are
shown for each production order. From this list, the user
can view the components and operational information for
each order. This report is one that is standard delivered
with the information systems, and in standard it does not
include any totals listing. Using this report requires that
certain info structures are active to reflect current data.
CO24 This report shows a list of missing parts according to the
selection criteria. You can use the missing parts
information system to display the missing parts list for a
selection of materials, or for all materials. It is possible to
restrict your selection to a specific plant, MRP group or
requirements data.
CO26 The Production Order Information System offers various
list types in reporting.
Their layout can be adapted to suit your requirements. The
information displayed in the production order information
system as well as the layout of the information is controlled
via an overall profile, which you can enter on the initial
screen. The overall profile contains several subordinated
single profiles. They contain information regarding
selection criteria and layout of lists.
Overall Profiles
MM60 Your company may have so many materials that you will
not always know whether a specific material already exists
in the material master. You can find this out with the help
of the materials list.
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CM01 Cap. Planning Evaluation by Work Centers – Load
CM02 Cap. Planning Evaluation by Work Centers –Orders
CM05 This report list displays all work centers and capacities with
overload in the next 60 calendar days.
CM21 This is a report of capacity leveling evaluation-work center
view
MCP3 Report for Production order analysis
MCP7 Report for work center analysis
MCRE Material usage analysis report
MCRI Product cost analysis report
12. GAPS
12.1 IDENTIFICATION OF GAPS
The following gaps have been identified for Indian Automobiles

1. BOM weight calculation report
Bills of Material in As Is Process Contains A List Of Material with compostion in
Percentage wise but the client required that BOM should contain the composition in respect
to weight. To attain this we have to capture weights of materials involved and to be displayed
in the bom list.
Solution Suggested
In Table STKO Fields IDNRK, MENGE, MEINS are to be captured and Weight to be
captured from Material Master and to be adopted as new values in BOM in the said fields.
Name Of The Work Center Name 1 Batch Number Batch no.
Date Date 1 Heat No Heat No
Description Description 1
Material Material 1 Material 2 Material 3 Material 4 Material 5 Material 6 Total
Used Total 2
S.No. Description Total Weight No Produced Avg Wt. Piece
Part
Runner Bars
Riser Bars
Total of produced TOTAL#
2. Shift wise Plan/Actual Production report = cumulated

A Daily Production report that shows cumulative quantities of production per cost center and
also the total planned quantity for that cost center. is to be developed in sap
190
The report have to be generated anytime the user wants and also at the end of the shift where
the report to be emailed to the manager concerned. When BUDAT(Posting Date), WERK
(Plant) is entered the Report have to extract records from MATNR,AUFNR,PSMNG(Prod
order quantity), VORNR(Operation Number), POSID(Cost Center Number), and To Check
the Status (Fully Confirmed, Delivery Complete, Locked, Technically Complete, Closed ,
Deletion Flag Etc.) and to populate the list with 4 columns viz.
(MATNR,GSMNG,PSPEL,PRPS_MATNR)
Output Data Should be in the below mentioned format
HEADING DESCRIPTON TABLE/FIELD
"PLAN VS ACTUAL (Production accumulation) report"
1 Material Material Number
2 For Batch Batch Number
3 For Cost Center WBS element Number
4 Qty WBS Lot Qty
5 Operation Operation Number
6 Production Production Qty
7 Accumulation Production Cumulative Qty
8 S.No From Serial Number From
9 S.No To Serial Numbr To
3. Machine wise production report

We have to Capture the Production of individual machine Work Center wise and the
individual who is responsible for the production, shift wise and a report to be generated
with the details of machine start and stop time the name of the operator and the total
produced and total planned
Date Work center Person production
planned actual
Solution Suggested
191
SELECTION SCREEN
MACHINE WISE PRODUCTION REPORT
Plant (Mandatory)
Work
center (Optional)
Date (Mandatory)
REPORT
S.N0 Plant Work Person from to date planned production Produced quantity
center responsible date quantity
actual Cumulative Actual cumulative
(date (Today)
entered)
TABLE & FIELDS
column column description formula

1 plant AFRU-WERKS
work center= selact all work centers from SO24-ARBPL where plant
2 work center =column1
select person responsible from CRHD-VERAN where work
3 person responsible center=column2
4 FROM date date=first date of the month
5 to date date=date entered by the user
planed production PLANNED QTY=qty released (AFKO-GAMNG) where
6 qty plant=column1and date =released date(CAUFVD-FTRMS)
cumulative
7 production total of all released work center qtys
Produced qty=Qty confirmed (AFRUD-LMNGA) on date =post date
8 actual produced qty (AFRUD-BUDAT)
Cumulative
9 production total of all confirmed qtys
192
In Table CCRHD Fields ARBPL and Machine id and employee id and start time and stop time of the work
center to be captured from the fields BEGZT and ENDZT . A user exit is requested so that we can able to
capture the machine id and individual operating the machine so that we can do away with creating a work center
for each individual machine
Name Of The Work Centre Work Centre 1 Report From Dt. To Dt.
Machine ID Machine 1
Machine Production
Date Shift Start Stop Employee Planned Actual
A
B
C
Tot
Total al# Total#
Gap 4
Total Production Status Report
Here the Client requires overall status of the whole production of the plant giving the detailed
tabulated data of the production status as a whole.
Data from each process has to be captured batch and client wise and to be displayed in
preformatted screen with interactivity and drilldown features to analyse bottlenecks and
production overloads of the system.
Data to be collected
In Process data from each process to be captured like data to be collected from each
workcentre at three different levels viz. ready for, in process, for/in qc and finished
Requested format of the report is

Date
Time
Pre Pre Shell Shell De
Design And Assembly Coat Coat Buildi Buildi Wa Fettli Quality
Development Waxing Line 1 2 ng 1 ng 2 xing Preheat Melting ng Assurance
Client
Client 1 Client 2 Client 1 2
Batch Batch Batch
Batch 1 2 1 2
Machine
Machine 1 2
For
Process
In
Process
QC
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12.2 ADDRESSING OF GAPS
The above gaps would be addressed by user exits/enhancements.
ANEXURE I
SHIFT SEQUENCE
Shift Start Shift End Break Break Type Days/Week
Shift I 7:00 AM 3:00 PM 30 MIN CCIS 6
Shift II 3:00 PM 11:00 PM 30 MIN CC2S 6
Shift III 11:00 PM 7:00 AM 30 MIN CC3S 6
BREAK DETAILS
Break Break Text Breaks Timings Duration Of Break

CCIS
Lunch 11:30 am to 12:00 pm 30 Mins
Tea 01:00 pm to 01:15 pm 15 Mins
CC2S
Dinner 07:00 pm to 07:30 pm 30 Mins
CC3S
Snacks 02:00 pm to 02:30 pm 30 Mins
CALENDAR
Requirements/Expectations
Factory calendar needs to be maintained in the system. In this the working days are to be
defined and the holidays. This information is used in various modules. Country wise
calendars are already maintained in the system.
The Factory Calendar needs to be updated each year based on the decided holidays. The
Factory Calendar acts as the basis for Capacity Planning as it defines the working days in a
year. In SAP there are two types of holidays. Holidays are to be created and then assigned to
the factory calendar.
194
ANNEXURE II
Work Center Formulae
The execution time of an operation is defined as the sum of the set-up time and the
processing time. The is expressed in the following formula.
F=SET+RUN*LOT/B
The meaning of the formula parameters and the origins of their values are given in the table
below.
Meaning Origin
Base Quantity General Operation Value
Lot Size General Operation Value
Processing time for base Quantity Standard Value
Set-up time Standard Value
195
Volume
5
Human Resources
The Nerve System of Any Organization, Human Resources are well taken care of with
HR Module in SAP
E
fficient Human Resources Management constantly requires complete, up-to-the-minute
information on employees at the enterprise. The R/3 System’s Human Resources (HR)
component contains all relevant employee data. With its multitude of reporting and
analysis options, HR helps you process data quickly. This provides you with the
information you require, and supports your decision-making processes. Human Resources (HR)
component is an efficient analytical reporting tool used for information and decision-making
purposes, it provides solutions for your most frequent reporting requirements, Hierarchies are
displayed as graphics and is user-friendly method of displaying hierarchical structures.
Orgonizational Management
I C O N K E Y
This is the basis for additional Human Resources components and
Organizational Management functions as well as for SAP Business Workflow. In order to carry out
Time Management numerous business and human resources processes, you need an
Pay Roll
organizational plan, that is, a functional structure representing your
enterprise based on tasks. .
Planning
Personnel Time Management:
This component offers you support in performing all human resources
processes involving the planning, recording, and valuation of internal and
external employees’ work performed and absence times. It provides other SAP
applications with planning data and delivers information to business processes.
Payroll: The component uses data from other areas of SAP HR for calculating all statutory
and non-statutory additions and deductions for your employees. SAP HR Payroll India offers a
number of standard reports used in payroll, superannuation, leave, advance payments and
taxation.
196
ORGANZATIONAL MANAGEMENT
Organizational Management is the basis for additional Human Resources components and
functions as well as for SAP Business Workflow. The fact that these components can be
integrated should be taken into account when you are installing them.
Personnel Development
Recruitment
Compensation Management
Personnel Cost Planning
Training and Event Management
Shift Planning
Capacity Requirements Planning
Personnel Administration
Human Resources Information System
ORGANISATION STRUCTURE
CSCL
MD01 SD01 FI01 QA01 PP01

DE01 HR01 PD01
Materials Department MD01 Sales And Distribution SD01

Design And Development DE01 Human Resources HR01
Purchase Department PD01 Finance Department FI01
Quality Assurance QA01 Production And Planning PP01
197
CSCL
COMMERCIAL DIRECTOR
Human Resources Sales Purchase Finance

& Distribution
HR PURCHASE FINANCE
HR MANAGER SALES MANAGER MANAGER
MANAGER
ASSISTANT ASST SALES ASST URCHASE ASST

MANAGER_HR MANAGER MANAGER FINANCE
MANAGER
EXECUTIVES
EXECUTIVES EXECUTIVES EXECUTIVES
198
EXECUTIVE DIRECTOR
QUALITY
DESIGN AND ASSURANCE PRODUCTION
MATERIALS DEVELOPMENT
QA
MATERIALS DES & DEV MANAGER PROD
MANAGER MANAGER MANAGER
ASST ASST
ASST MANAGER MANAGER
MANAGER ASST
MANAGER
ENGINEERS ENGINEERS
SUPERVISORS SUPERVISORS
SUPERVISORS SUPERVISORS
OPERATORS OPERATORS
OPERATORS OPERATORS
HELPERS
HELPERS
HELPERS HELPERS
199
ORGANISATION UNIT
Representation of the reporting structure and the distribution of tasks

using organizational units for example, departments in an enterprise.
Definition and Meaning
Represents a functional unit in the company, for example marketing and sales department.
According to how tasks are divided up within an enterprise, that could be a department, group
or project team.
Organizational units differ from other units in an enterprise such as personnel areas, company
codes, business areas, etc.,
These are used to depict structures for example administration or accounting in the
corresponding components.
We depict the functional units of our enterprise with organizational units.
We create an organizational structure by assigning these organizational units to each other.

The highest organizational unit in an organizational structure is the root organizational unit.
JOB
Jobs are classifications of functions in an enterprise (for example administrator), which are
defined by the assignment of characteristics. Jobs serve as job descriptions that apply to
several positions with similar tasks or characteristics.
Sl no Job type Job code
1 Chairman CH
2 Director DIR
3 Manager MR
4 Assistant Manager AMR

5 Engineer EGR
6 Supervisor SUP
7 Executive EXE
8 Operator OPR
9 Helper HLP
200
POSITION
Represents a post, which can be occupied by a person (employee) in the

staff assignments of an organizational unit.
For example, job = manager and position = manager-hr.
S.No Job Position No of employees
1 Chairman Chairman 1
Commercial Director 1
2 Director Executive Director 1
Hr Manager 1
Sales Manager 1
Purchase Manager 1
Manager Finance Manager 1
3
Materials Manager 1
Design and Development Manager 1
Quality Assurance Manager 1
Production Manager 1
Assistant Manager_Hr 1
Assistant Manager Sales 1
Assistant Manager Purchase 1
4
Assistant Manager Finance 1
Assistant Manager_Materials 1
Assistant Manager_Des&Dev 1
Assistant Manager_QA 1
Assistant Manager Assistant Manager_Prod 1
1
5 Engineer Engineer_Des&Dev
Engineer_QA
201
6 Supervisor_Materials
Supervisor_Des&Dev
Supervisor Supervisor_QA
Supervisor_Prod
7 Executive_Hr 5
Executive_Sales 5
Executive Executive_Purchase 5
Executive_Finance 5
8 Operator_Materials
Operator_Des&Dev
Operator Operator_QA
Operator_Prod
9 Helper_Materials
Helper_Des&Dev
Helper Helper_QA
Helper_Prod
RELATIONSHIPS
Definition
By defining relationships between objects, you create a hierarchy of objects that mirrors your
organizational structure.The standard syntax used to identify a relationship is A/B 000. A/B
refers to the two different sides of a relationship, which you create when you link two objects.
The system calls these sides passive (A) and active (B). They form the reciprocal relationship,
and are vital in holding the relationship together. The three-digit numerical code identifies the
relationship.You assign a position to an organizational unit, to identify where the position is
allocated. The system creates a relationship infotype record between the organizational unit
and the position. You can check the relationship in the Relationship infotype screen in Detail
Maintenance. This relationship is called 003. This means the position belongs to the
organizational unit, which in turn incorporates the position. The organizational unit’s
relationship record is B 003 and the position’s is A 003.
Relationship between root organization unit and other organization units
202
HR
SALES AND
DISTRIBUTION
PURCHASE
B002
CSCL
FINANCE
A002 MATERIALS
DES AND DEV

QUALITY
PRODUCTION
CHAIRMAN
B003
COMMERCIAL DIRECTOR
CSCL A003
EXECUTIVE DIRECTOR
203
COMMERCIAL
CHAIRMAN B002 DIRECTOR
EXECUTIVE
A002 DIRECTOR
Relationship between position and organization units
HR
B003 SALES AND

COMMERCIAL DISTRIBUTION
DIRECTOR
PURCHASE
A003
FINANCE
MATERIALS
B003
DES AND DEV
EXECUTIVE
DIRECTOR
A003 QUALITY
PRODUCTION
Relationship between one position and another position

HR MANAGER
B002
SALES MANAGER
204
COMMERCIAL A002 PURCHASE
DIRECTOR MANAGER
FINANCE MANAGER
MATERIALS MANAGER
B002
DES AND DEV
EXECUTIVE MANAGER
DIRECTOR
A002
QUALITY MANAGER
PRODCTION MANAGER
HR MANAGER B002 ASST

MANAGER_HR
HR DEPT A002
ASST B002 EXECUTIVE_HR

MANAGER_HR
A002
205
SALES B002 ASST SALES
MANAGER MANAGER
SALES AND A002
DISTRIBUTION
DEPT
ASST SALES B002 EXECUTIVE_SALES
MANAGER
A002
PURCHASE B002 ASST PURCHASE

MANAGER MANAGER
PURCHASE A002
DEPT
ASST B002 EXECUTIVE_PURC

PURCHASE HASE
MANAGER A002
FINANCE B002 ASST FINANCE

MANAGER MANAGER
FINANCE A002
DEPT
ASST FINANCE B002 EXECUTIVE_FINA

HR NCE
A002
206
MATERIALS B002 ASST MATERIALS
MANAGER MANAGER
A002
MATERIALS ASST B002 SUPERVISOR_MATER

DEPT MATERIALS IALS
MANAGER A002
SUPERVISOR_ B002 OPERATOR_MATERIA

MATERIALS LS
A002
OPERATOR_M B002 HELPER_MATERIALS

ATERIALS
A002
DES AND DEV B002 ASST

MANAGER MANAGER_DES
A002 AND DEV
ASST B002 ENGINEER_DES

MANAGER_DES AND DEV
AND DEV A002
DESIGN AND
DEVELOPMENT
207
DEVELOPMENT ENGINEER_DES B002 SUPERVISOR_DES
DEPT AND DEV AND DEV
A002
SUPERVISOR_DES B002 OPERATOR-DES

AND DEV AND DEV
A002
OPERATOR-DES B002 HELPER_DES AND

AND DEV DEV
A002
QUALITY MANAGER ASST

B002 MANAGER_QUALITY
A002
ASST ENGINEER_QUALITY
MANAGER_QUALITY B002
QUALITY A002
DEPT
208
DEPT ENGINEER_QUALITY SUPERVISOR_QUALITY
B002
A002
SUPERVISOR_QUALITY OPERATOR-QUALITY
B002
A002
OPERATOR-QUALITY HELPER_DES AND DEV

B002
A002
PRODUCTION B002 ASST PRODUCTION

MANAGER MANAGER
A002
PRODUCTIO ASST B002 SUPERVISOR_PROD

N DEPT PRODUCTION UCTION
MANAGER A002
SUPERVISOR_ B002 OPERATOR_PRODUC

PRODUCTION TION
A002
209
OPERATOR_P B002 HELPER_PRODUCTIO
RODUCTION N
A002
Relationship between job and position
A007
CHAIRMAN B007 CHAIRMAN
A007 COMMERCIAL
DIRECTOR
DIRECTOR B007
EXECUTIVE
DIRECTOR
MANAGER_HR
MANAGER_SALES
MANAGER_PURCHASE
MANAGER_FINANCE
MANAGER A007 MANAGER_MATERIALS
B007 MANAGER_DES AND DEV
MANAGER_QUALITY
MANAGER_PRODUCTION
210
ASST MANAGER_HR
ASST MANAGER_SALES
ASST MANAGER_PURCASE
ASST MANAGER_FINANCE
ASST MANAGER_MATERIALS
ASST A007 ASST MANAGER_DES AND

MANAGER DEV
B007
ASST MANAGER_QUALITY
ASST
MANAGER_PRODUCTION
EXECUTIVE_HR
EXECUTIVE _SALES
EXECUTIVE A007 EXECUTIVE _PURCASE
B007 EXECUTIVE _FINANCE
211
SUPERVISOR
_MATERIALS
SUPERVISOR _DES AND

SUPERVISOR A007 DEV
B007 SUPERVISOR _QUALITY
SUPERVISOR
_PRODUCTION
OPERATOR _MATERIALS
OPERATOR _DES AND

DEV
OPERATOR A007
OPERATOR _QUALITY
B007
OPERATOR
_PRODUCTION
HELPER _MATERIALS
HELPER _DES AND DEV
HELPER A007 HELPER _QUALITY
B007 HELPER _PRODUCTION
212
ENGINEER A007 ENGINEER _DES AND
DEV
B007
ENGINEER _QUALITY
COST CENTERS
Definition
Organizational unit within a controlling area that represents a clearly delimited location where
costs occur. There is one cost center and it is assigned to the organization units.
Relationship between org units and cost center
Human Resource
Sales STEEL
Purchase A011 MNGT(Cost
Finance Center)
Materials
Des and Dev
Quality
Production
PERSONNEL MANAGEMENT
ENTERPRISE STRUCTURE
The elements which define the ensterprise structure are the

Client
Personal area
Personal sub area
The client is an independent legal and organizational unit of the company.
Personnel area
213
A personnel area is a specific entity for personnel administration, it represents a sub
division of company code .The personnel area, which is used in personnel administration,
personnel time management, and payroll accounting in SAP, is unique in each client, which
should be assigned to the company code.
Personnel area performs the following functions
It allows to generate default values for data entry, for example, for the payroll accounting area
(eg determination of payroll accounting areas)
Acts as a selection criterion for reporting; and
Acts as a unit in authorization checks.
S.NO. PERSONNEL AREA TEXT PERSONNEL AREA CODE
1 PLANT 0007
Personnel sub area

Personnel sub-areas are sub divisions of personnel areas. Personnel sub-area is the smallest
element in the company. The principal organizational aspects of human resources are
controlled at this level, namely the pay scale and wage type structures and the planning of
work schedules. The personnel sub-area is assigned a four-character alphanumeric identifier.
S.LNO PERSONNEL SUB AREA TEXT PERSONNEL SUB AREA
CODE
1 SALES DEPT 1000
2 PURCHASE DEPT 1001
3 FINANCE DEPT 1002
4 HUMAN RESOURCE DEPT 1003
5 MATERIAL DEPT 1004
6 DESIGN DEPT 1005
7 QA DEPT 1006
8 PRODUCTION DEPT 1007
PERSONNEL STRUCTURE
Personnel structure displays the position of the individual employees in the enterprise as a
whole.
Employee group
Employee group is used to classify employees in general terms. It defines the position
of the employee with in the company’s work force. Employee groups are used to generate
default values for data entry, selection criterion for reporting, as an entity for authorization
checks. Employee group consists of a number of employee sub groups
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Employee Subgroup
Employee groups are divided into employee sub groups, which controls the following key
functions:
You can standardize or differentiate how an employee is dealt with for a personnel calculation
rule using the grouping of employee subgroups. For example, you can control whether an
employee’s remuneration is calculated on a monthly or hourly basis using this grouping.
You determine which wage types are permissible for which employee subgroups using the
employee subgroup grouping for the primary wage types.
You determine which work schedules are permissible for which employee subgroups using the
employee subgroup grouping for the work schedule.
The employee subgroup is a selection criterion for reports.
Employee subgroups are an authorization check unit.
S.No Employee Employee Employee Employee

Group Code Group Text Subgroup Subgroup Text
Code
SENIOR S1 CHAIRMAN
1. S
MANAGMENT S2 DIRECTORS
M1 MANAGERS
MID ASSISTANT
2. M M2
MANAGMENT MANAGERS
M3 ENGINEERS
JR. J1 EXECUTIVES
3. L
MANAGMENT J2 SUPERVISORS
T1 OPERATORS
4 T TRAINEE
T2 HELPERS
DATA STRUCTURE IN PERSONNEL ADMINISTRATION:
In the standard system, different types of employee data are stored in individual infotypes.
Rather than accessing each infotype individually and entering data into them, the system can
group together the most important infotypes into personnel actions and lead you through
processing the employee data
An infogroup exists in the standard system for every personnel action type in the Personnel
Actions section. In Customizing for Personnel Administration, you can modify the
relationship between individual infogroup’s and define the info groups as user-dependent.
In the standard SAP System, the following basic personnel procedures are represented as
personnel actions in the HR master data system:
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1. Hiring:
When a new employee is hired in the organization, a large amount of data about the employee
has to be entered. We enter the employee data in different Infotypes in the SAP R/3 System.
We hire the employee by performing a Personnel Action. When we perform the Hiring
personnel action type, all of the infotypes that need to maintain to hire an employee are
displayed automatically, one after the other.
CODE INFO N0 OPE INFO INFOTYPE TEXT

GROUP TYPES
10 INS 0000 Actions
20 INS 0001 Organization Assignment
30 INS 0002 Personal Data
40 INS 0006 Address
50 INS 0007 Planned working time
HI Hiring 60 INS 0008 Basic Pay
70 INS 0009 Bank Details
80 INS 0021 Family Member/Dependents
90 INS 0022 Education
91 INS 0023 Other/Previous Employers
92 INS 0041 Date Specifications
Organizational reassignment:
When we hire an employee, assign him or her to the Enterprise Structure and the Personnel
Structure. If during the course of his or her employment, the employee changes positions, cost
centers, or is moved to another subsidiary, his or her organizational assignment also change.
To record one of these developments in the system, you run a Personnel Action. In the
personnel action type Organizational reassignment, the system automatically displays all the
Infotypes, one after another, that must be maintained in order to record such a reassignment
in the system.
CODE INFOGROUP NO OPE INFO INFOTYPE

TYPES TEXT
10 INS 0000 Actions

OR
Organization
Reassignment 20 COP 0001 Organization
Assignment
Promotion:
When we hire an employee, assign him or her to the Enterprise Structure and the Personnel
Structure. If during the course of his or her employment, the employee is promoted or
demoted, we record one of these developments in the system and run Personnel Action. In
the personnel action type Promotion/Demotion, the system automatically displays all the
Infotypes, one after another, and that must be maintained in order to record in the system.
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CODE INFOGROUP NO OPE INFOTYPES INFOTYPE TEXT
10 INS 0000 Actions
20 COP 0001 Organization Assignment

PD Promotion
30 COP 0007 Planned Working Time
40 COP 0008 Basic Pay
CODE INFO NO OPE INFO INFOTYPE TEXT

GROUP TYPES
10 INS 0000 Actions
20 COP 0001 Organization Assignment
SP Separation 30 COP 0006 Address
40 LIS9 0009 Bank Details
50 LIS9 0014 Recurring payments /deductions
60 COP 0015 Additional payment
4. Transfer:
When an employee is transferred them one business unit/location to another and retain its
identity after the transfer .So New recruits for a new location will not be considered as a
transfer. Moving from a city to other, which by virtue are same cities will not be considered as
a transfer.
CODE INFOGROUP NO OPE INFO INFOTYPE TEXT
TYPES
10 INS 0000 Actions

20 COP 0006 Address
TR Transfer 30 COP 0007 Planned Working
Time
40 COP 0008 Basic pay

5. Separation:
A large amount of employee data is stored in the system during the period of employment in
the company. This data is stored in individual Infotypes.
If the employee leaves the company, certain infotypes must not be changed as they contain
data that is used to create histories. Other infotype records must be delimited in the system.
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Furthermore, you must ensure that the final payroll has run successfully, and that retroactive
accounting runs have also been performed, if necessary.
When an employee leaves your company, the administer it using a Personnel Action. The
personnel action type leaving only offers the data records for maintenance if they must be
edited when an employee leaves the company.
Note, an employee’s personnel number must never be deleted when they leave your company.
A distinction must be made between employees, who have left the company, and:
Employees who have retired
Employees who are absent for a long period of time, for example, for maternity protection or
military or non-military service.
6. Increments:
Awarding an employee with certain benefits for which the reasons can be varied according to
company’s policies.
50 INS 0000 Actions

60 COP 0001 Organization
IN Increment
Assignment
70 COP 0008 Basic pay
7. Rehire:
An employee is considered to be re-hired following a termination of employment lasting a

minimum of 6 consecutive weeks.
10 INS 0000 Action

20 INS 0001 Organization
Assignment
RE Hire 30 INS 0006 Address
40 INS 0007 Planned Working
Time
50 INS 0008 Basic pay
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ACTION REASONS:
The following are the delivered reasons associated with each action.
INFOTYPE MENUS:
SLNO ACTIONS CODE REASONS

A1 New position
A2 Expansion
1 Hire
A3 Special project
A4 Attrition
Organization B1 Position change
2
Reassignment B2 Reorganization
C1 Pay scale increase
3 Promotion
C2 Promotion
D1 Re-organization
4 TR-Transfer D2 Career opportunity
D3 Employee request
E1 Resignation
5 SP-Separation E2 Contract expired
E3 Dismissal
6 IN-Increment F1 Change in pay
7 Re-hire G1 No reason
MENUS MENU TEXT INFO
NO INFOTYPE TEXT
TYPE
O1 0000 Action
02 0001 Organizational assignment
03 0002 Personal data
Personnel 04 0006 Addresses
7A 05 0007 Planned working time
Administration
06 0008 Basic pay
Bank details
07 0009
08 0040 Object on loan
09 0105 Communication
7B Payroll 01 0014 Recurring payments/deductions
Information 02 0015 Additional payment
Previous employment tax detail
03 580
Housing (hra / cla / coa)
04 581
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05 582 Exemptions
Car & conveyance
06 583
Income from other sources
07 584
Section 80 deductions
08 585
Provident fund contribution
10 587
11 588 Other statutory deductions
Long term reimbursements
12 590
Nominations
13 591
Off cycle payments
14 267
01 0007 Planned working time
02 2001 Absences
Time
7C 03 2006 Absence quotas
Management
04 0416 Time Quota Compensation
05 2010 Employee Remuneration Info
MAINTAIN NUMBER RANGE INTERVALS FOR PERSONNEL NUMBERS:
No From number To number Current no Internal

01 00000001 00008000 0
Personal data:
The following areas are maintained in personal data.
Forms of address:
The common forms of address used in SAP. The gender has also been attached
to the form of address to allow for the default on infotype 0002.
NO DESCRIPTION GENDER
1 MR 1
2 MRS 2
3 MISS 2
4 MS 2
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Marital status:
The most commonly used marital statuses have been configured into SAP.
TYPE DESCRIPTION
0 Single
1 Married
2 Widow
3 Divorce
5 Separated
Family and related persons:
The family /related persons infotype 0021 the following categories are available. Remember to
update this list with all potential benefit plan dependants’ beneficiaries’ categories. As defined
within your benefit policies.
TYPE DESCRIPTION TIME CONSTRAINT
1 Spouse 2
8 Related person 2
11 Father 2
12 Mother 2
2 Child 2
5 Guardian 2
7 Emergency contact 2
Addresses:
An additional address type has been created in SAP. Every employee must have an address
type “1” permanent residence which is include
TYPE DESCRIPTION TIME CONSTRAINT

1 Permanent residence 1
2 Temporary residence 3
3 Home address 2
4 Emergency address 2
The following communication types have also been configured for use on the address info
type 0006.
TYPE DESCRIPTION CATEGORY CATEGORY TEXT
CELL Cell phone 1 Telephone
FAX1 Fax machine 2 Telefax
TEL2 Telephone 1 Telephone
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Bank details:
The following identifies those bank connection, type available for use.
TYPE BANK CONNECTION TYPE TEXT TIME CONSTRAINT
0 Main bank 1
1 Other bank 3
Payment methods:
PAY METHOD PAY METHOD TEXT

C Cheque
T Transfer
Reports in Personnel Administration:
Employee List
Employee Entered & Left
Family members
Birthday List
List of employees having company provided vehicles
Family members details
Service Anniversaries (List of employees who have completed specific number of days)
Employees Remuneration Statements.
Employees wage type statements.
Employees Absences and Attendance statements.
Total no of employees in each department and their Salary related reports.
Total no of vacancies in each department.
Time Recording reports for each employee for every month.
Gaps and possible Approaches to bridge the gaps
Triggering of Mails in the resignation action

Maintaining checklist for previous employee details.
TIME MANAGEMENT
Employees in CSCL are entitled to leave, additional training, and so on. These types of
entitlements can be stored in quotas and deducted from attendances and absences. We can
determine which entries the system checks when an absence is recorded. Enables flexible
representation of all personnel procedures involved in recording and evaluating employee time
data
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–Infrastructure for time data recording
–Work schedules
–Record of planned attendance and absences
–Recording of attendance and absence
–Annual and Sick Leave accrual
–Time evaluation
Ability to transfer absence and attendance data to other SAP applications
INTEGRATING TIME MANAGEMENT IN CSCL ORGANIZATIONAL STRUCTURE:
The Time Management component is closely integrated in the organizational structure of your
enterprise. When working with Time Management, it is therefore essential that you maintain
certain master data infotypes for your employees. One of the most important infotypes is
Organizational Assignment (0001), which contains data on the organizational units to which the
employee is assigned within the enterprise (personnel area, employee subgroup, and so on).
Public Holiday Calendar:

In SAP Time Management, public holidays are grouped together in the public holiday calendar.
To set up a work schedule, you need a valid public holiday calendar including company-wide
public holidays relevant for CCL.
At CCL the factory calendar is same as the Holiday calendar.The employees of the Charminar
Castings will be granted with 12 days of holidays per year out of which 2 are Optional
Holidays for the choice of employees dependence on the region wise
S.No Holiday Date Day
1 Pongal January 15th Monday

2 Republic Day January 26th Friday
3 Holi March 3rd Saturday
4 Ugadi March 20th Tuesday
5 Good Friday April 6th Friday
6 Labour Day May 1st Tuesday
7 Independence Day August 15th Wednesday
8 Krishna Jamastami September 5th Wednesday
9 Gandhi Jayanthi October 2nd Tuesday
10 Ramzan October 15th Monday
11 Dasara/Vijayadasami October 22nd Monday
12 Deepavali November 8th Thursday
13 Id-Ul-Fitr/ Bakrid December 21st Friday
14 Christmas December 25th Tuesday
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Daily Work Schedule:
The daily work schedule determines the structure of working times in your enterprise at the daily
level.
Break Schedules:
You define the break rules in the work schedule for any particular working day and assign
them to a personnel subarea grouping for work schedules.
Personal Work Schedules:
Work schedules for individual employees include data from Absences (2001), Attendances
(2002) and Substitutions (2003).
Work Schedule Rules:
You specify in the work schedule rule which period work schedule is to be used when and on
which day of the period for the work schedule to be generated.
Code Period Work schedule Text

Planned
S.NO Time
1 CSGN General Shift 9:00 - 17:00
Lunch Break (Paid) 12:00 - 12:30
Tea Break (Un-Paid) 15:45 - 16:00
2 CSS1 Shift 1 06:00 - 14:00
Tea Break (Paid) 07:45 - 08:00
Lunch Break (Un-Paid) 10:30 - 11:00
3 CSS2 Shift - 2 14:00 - 22:00
Lunch Break (Un-Paid) 18:30 - 19:00
4 CSS3 Shift - 3 22:00 - 06:00
Refreshment Break (Un-Paid) 02:30 - 03:00
Tea Break (Un-Paid) 04:45 -05:00
5 3CSR 3 Shifts Rotation Rotating Shift
CSOF Weekly Off OFF
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SL No Code Work Schedule Rule Text
1 CSGN WSR - General Shift
2 CSS1 WSR - Shift 1
5 Rotating_ CSCL WSR - Rotating Shift
Time Data Recording and Administration:

Time Recording and Administration component, you can record and manage time data
effectively and efficiently. Time recording allows you to enter employee time data for working
time, leave, business trips, and substitutions using different methods. This data can be entered
as clock times or in hours and can contain account assignment specifications for other SAP
applications.
Absences:
Absences are times when employees are not at work. Employees are absent if their planned
working time, as stipulated in their work schedules, is not fully worked. If any employee
joines in a middle of the year, leaves can be allotted on prorata basis.
Sl No Absence Code Absence Text Entitlement

1 CSCL Casual Leave 12
2 CSEL Earned Leave 20
3 CSPL Paternity Leave 03
4 CSML Maternity Leave 12 Weeks
5 CSSL Sick Leave 10
6 CLOP Loss Of Pay -
Casual leave:
The casual leaves will be given 12 days in a calendar year Here the term calendar means that
year starting from 1st January to 31st Dec. The casual leaves are allowed in pro rata basis. An
employee will not be allowed to use to go on leave more than 3 at a time. If an employee does
not take the 12 CLs in a calendar year his CL will not be carried forward however he will be
reimbursed with Basic wages for the remaining leaves.
Earned leave:
All the employees working in the CSCL are entitled for 20 ELs in a calendar year The
calculation for the ELs will be as for 20 Physical working days 1 EL will be accumulated. The
employee has to put his service at least 240 days per a calendar year. Els can be carried
forward
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Sick leave:
Sick leave eligibility is for the employees who are not covered under ESI act 10 Sick leaves
per year are given. The employee who is applying for this should submit the physical fitness
certificate from the asst civil surgeon rank Doctor while resuming towards duties. We feel that
the employees who are working with us should not fall sick.
Maternity leave:
Maternity leave is applicable only for married woman who will not fall under ESI act. The
maternity leave will be for a period for 12 weeks. It is expected from the employee that who
ever is availing this leave should intimate before pr15 days before proceeding on leave, This
either she could take from 30 days before delivery date are as advised by the doctor. Eligibility
is the candidate should complete at least one year of service with company. This leave would
be given two times in her whole lifetime.
Leave policy on miss carriage:
The married female employees will be entitled for this two times in her whole service. For
each miss carriage 15 days will be given as paid leave.
Paternity leave:
All the married male employees are entitled for 3 days paternity leave. However the employee
who is availing this would give the birth certificate for his son/daughter obtained form the
nursing home.
Loss Of Pay:
Unauthorized absence from the planned working time is considered as Loss of Pay.
Counting Rules:
A counting rule is assigned to the absence type to determine the payroll hours and days for the
duration of this absence. The sequence for deducting quotas of different quota types is
specified in the deduction rules.
Deduction Rules:
The rules according to which absences are to be deducted from the absence quotas. Quota
deduction does not depend on individual absence types, but is determined by the Counting
rule for absences that is assigned to an absence type
Absence Quotas:
Employees in the enterprise are entitled to leave, additional training, and so on. These types of
entitlements can be stored in quotas; from which absences are deducted we set up employees.
An absence quota is an employee’s time-limited entitlement to an absence.
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Sl Absence Absence Entitle Absence Counting Deduction
No Code Text ment Quota Rule Rule
1 CSCL Casual Leave 12 001 001 CS
2 CSEL Earned Leave 20 002 001 CD
3 CSPL Paternity Leave 3 003 CD
4 CSML Maternity Leave 12 Weeks 004 CD
5 CSSL Sick Leave 10 005 CD
6 CLOP Loss Of Pay 0 006 CS
7 CESI ESI Leave 0 007 CS
Infotypes used To Be in Time Management:
Sl No SAP Info type Info type Text

2 2001 Absences
3 2006 Absence quotas
4 0416 Time Quota Compensation
5 2010 Employee Remuneration Info
PAYROLL
Payroll is used to calculate remuneration for work performed by individual
employees. Payroll is an umbrella term for a variety of work processes, such
as the creation of payroll results and remuneration statements, bank transfers
and payments by check. It also covers a number of subsequent activities
such as the posting of results to Accounting and other evaluations.
S.NO Payroll area code
1 Payroll area for CSCL Co
Payroll Area Text Payroll Run Date Pay Date

Monthly 1st of every month 6th Of every Month
Remuneration is calculated in two main steps:

Calculation of remuneration elements
Statutory and voluntary deductions (which are country-specific)
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Purpose
The payroll program is run at a specific point in time, not only to calculate an employee’s basic
remuneration but also any special payments, overtime payments or bonuses that must be
effected for the period in question.
Wage Types:
Wage elements, statutory deductions, and voluntary deductions are all based on the individual
payments and deductions that are calculated for an employee during a payroll period. The
payments and deductions are Stored as wage types and then included in the payroll calculation.
An employee's wage elements are determined on the basis of the individual Wage types used
in a payroll period. Payments that may be included in the calculation of remuneration are, for
example, basic pay, bonuses, Vacation allowances gratuities. Company-owned apartments,
Company-sponsored day care services and the like can all cause deductions from an
employee's pay. Such payments and deductions can increase or reduce the amount of an
employee's income that is subject to tax, and this is determined by a variety of factors such as
the laws of a specific country or a particular company's policies.
The compulsory info types for calculation of payroll is:
S.N. Infotype Text

1 0000 Actions
3 0008 Basic pay
4 0009 Bank details
Additional info types for calculation of payroll is :

S.NO INFO INFO TYPE TEXT
TYPE
1 580 Previous Employment Tax Details
2 581 Housing (Hra / Cla / Coa)
3 582 Exemptions
4 583 Car & Conveyance
5 584 Income From Other Sources
6 585 Section 80 Deductions
8 587 Provident Fund Contribution
9 588 Other Statutory Deductions

10 590 Long Term Reimbursements
11 591 Nominations
12 267 Off Cycle Payments
228
The basic pay differs from one group to the other group. HRA, DA CA will be calculated
based on the percentage of Basic Pay.
Basic pay wage types

Basic Pay:
It is the minimum earning of the employee out of his gross salary, which is a must. it would be
minimum of 60% out of agreed cost to company. This is to protect employee’s interest.
HRA:
50% of Basic pay is paid as House Rent Allowance to all the employees.
Conveyance Allowance:
Paid to all employees of the company i.e. managerial and above entitles of Rs.2000 and others
Rs.1500
DA:
30% of basic is paid as dearness allowance to all the employees.
OVERTIME:
Calculation rule
Basic+DA*No.of overtime hours/total no. of hours in month..
Leave Encashment
Calculation rule Basic+DA*No. Of Days/30.
Additional Payments of Info Type 15
1.LTA
LTA paid to all the employees of the company and they pays Rs.25000to manager and above
and the rest Rs.15000.
2.Medical
Medical paid to all the employees who are not covered under ESI of the company and they
pays Rs.15000to manager and above and the rest Rs.6000.
3.Variale pay
Paid to all the employees on performance basis twice in a year and the amount decided by the
management.
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4. Buddy referral
If any new employee joined in company on referral and the person who refers him gets
Rs.10000 as incentive.
5. Festival Bonus
Paid to all the employees at the time of dasera festival Rs.10000.
6. Salary Advance
Every employee entitles to get 2-month salary as advance and repaying the amount only he
can eligible for next.
7. Attendance Incentive
Statutory Deductions:
Provident Fund: Paid to the institution of Provident Fund on behalf of the

Employees by Employers. It is 12% of the Basic pay + Dearness Allowance as per the
Employees’ Provident Funds and Miscellaneous Provisions Act 1952.
Gratuity: According to the
Payment of the Gratuity Act I F A N Y E M P L O Y E E O F T H E
1972,employer pays the employee at C O M P A N Y A T T E N D S T O
O F F I C E W I T H O U T A N Y
the rate of 15 days pay based on the
A B S E N C E I N A N Y M O N T H
pay last drawn by the employee T H E N H E G E T S O N E - D A Y
concerned after the completion of S A L A R Y A S I N C E N T I V E .
every year of his/her service.
ESI: According to the State Insurance Act 1948.
Labor welfare Fund: Every employee contributes Rs.2 every month to

labor welfare trust.
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Deductions:
The loans availed by the employee, and the PF, Professional Tax, IT, third Party deductions
like LIC, Bank Loans will be deducted from pay that is paid to the employee by the employer.
Income Tax:
The will be deducted by the employer and paid to the Income tax Office as per the rule of the
Government at the end of every financial year i.e. March.
CSR:
Every employee contributes Rs.20 every month to a NGO.
Professional Tax slabs
Range end PT Amount

1,499.99 0.00
1,999.99 16.00
2,999.99 25.00
3,999.99 35.00
4,999.99 45.00
5,999.99 60.00
9,999.99 80.00
14,999.99 100.00
19,999.99 150.00
9,999,999.99 200.00
PAY SCALE STRUCTURE

PAY SCALE TYPE:
The pay scale type defines the area of economic activity for which a collective agreement is
valid. The area in which it is valid may be determined at company and often applies to a whole
industry.
SN Pay scale type code Pay scale type text

1 C1 Charimnar
PAY SCALE AREA:

Pay scale area defines the geographical area in which a collective agreement is valid. The
geographical validity area is determined by the size of the pay scale area. With in a pay scale
231
area, you define the pay scale groups and levels for each pay scale type and employee
subgroup grouping for collective agreement provisions.
SN Pay scale Area code Pay scale Area text
1 CH HYDERABAD
PAY SCALE GROUP & LEVEL

Pay scale groups and pay scale levels are the criteria used to classify data for job evaluations
and indirect valuations. Pay scale levels are subdivisions of pay scale groups
SN Pay scale Group
1 Chairman
2 Director
3 Manager
4 Asst. Mang
5 Engineer
6 Executive
7 Supervisor
8 Worker
9 Helper
Payment Method:
All the employees paid through bank except workers and helpers, they paid by cash.
Rounding Off:
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Remuneration Statement:
R O U N D I N G O F F T O A M O U N T S I S N E A R E S T T O U P P E R R U P E E .
The SAP System enables you to create remuneration statements for your employees. A
remuneration statement contains a clear list of payments and deductions effected during a
payroll run for an employee.
Pay Slip Form Name: CSCL
Integration
Various components of the R/3 system interact when posting to Accounting:
Payroll (PY)
The Payroll component creates payroll results for each payroll period. To do so, wage types
with different business purposes are created. They are created according to tax, social
insurance law, industrial law, pay scale and operative points of view.
Financial Accounting (FI)
Financial Accounting illustrates all business transactions in the enterprise using postings to the
relevant accounts. Posting to Accounting provides the necessary data for the following
components in Financial Accounting:
General Ledger Accounting (FI-GL)
Accounts Payable (FI-AP)
Accounts Receivable (FI-AR)
Special Ledger (FI-SL)
Funds Management (FI-FM)
The graphic shows how the components link together

when posting to Accounting
Implementation Considerations
The components involved in posting to Accounting do not have to be in the same client in the
R/3 system. If the components involved are in different R/3 systems, R/2 systems or third-
party systems, you can find more information in the following sections:
In Customizing of Cross-Application Components, under Predefined ALE Business Processes
Human Resources HR <--> AC Posting of Payroll Results to Accounting
The wagetype components to be transferred to Symbolic Accounts/G/L accounts are as
below.
The Navigation path as follows:
233
Payroll Customizing, under Reporting for Posting Payroll Results to Accounting → Special Scenarios →
Posting in Previous Releases → Set Up Export to s R/3 System
The following various components of the R/3 system interact when posting to Accounting:
SN Pay Component G/L Account

1 Basic pay
2 HRA
3 Dearness Allowance
4 Leave Travel allowance
5 Leave Encashment
6 Overtime allowance
7 Festival Bonus
8 Medical Reimbursement
9 ESI (ER)
10 PF (ER)
11 Labor welfare fund
12 Pension
13 Gratuity
14 PF (EE)
15 ESI (EE)
16 LWF (EE)
17 Professional Tax
18 Income tax
19 Loss of Pay
20 Conveyance allowance
21 Attendance Incentive
22 Variable Pay
23 Buddy referral
24 Salary advance
25 CSR
Cost Accounting (CO)

Cost Accounting provides information on the relationship between costs and activities within
the enterprise. To do so, costs are either assigned to a cost center or to another account
assignment object. The posting to Accounting component usually posts to the following
account assignment objects:
Cost center
Order
It is also possible to post to the following account assignment objects:
Cost object
Work breakdown structure element
Network number
234
Activity number
Project Name CSCL HR
Document Name Functional Specification For “Appointment Letter”
Document ID CSCL_PA01_FS_Appointmentletter Version ID 1.0
Prepared By Date
Reviewed By Date
Approved By Date
Released By Date
Sales order
Item in sales order
a master cost center via relationship A 011 (cost center assignment) or with several via relationship
A 014 (cost center distribution)
Organizational unit within a controlling area that represents a clearly delimited location where
costs occur. There is one cost center and it is assigned to the organization units.
Personnel Cost Planning (PA-CM-CP)

The system can provide Personnel Cost Planning with data based on simulated or actual payroll
results from posting to Accounting
Relationship between org units and cost center(STEELMNGT) which is provided by FICO
module consultants will be integrate while posting the Symbolic Accounts.
Human Resource
Sales STEELMNGT
Purchase A011 (Cost Center)
Finance
Materials
Des and Dev
Quality
Production
1. Functional Specification on Appoint Letter

Revision History:
S.no Version Date Of Section Description Reason For Change Revised
ID Revision No Of Change Change Made By By
1. 1.0 dd.mm.yy Initials
235
SAP_ABAP_FUNCTIONAL SPECIFICATION
Identification
Module Personnel Administration
Process Functional Specification For “Appointment Letter”
FS ID CSCL_PA01_FS_Appointmentletter
GENERAL REQUIREMENTS
S.No Topics
1.1 Functional Description
Description: A Customized Appointment Letter.
Expected data volume
1.2 Development Plan
Required start date of Development:
Required end date of Development:
1.3 Testing/Validation Plan
Required start date of Testing:
Required end date of Testing:
Availability of Test Date:
DETAILED FUNCTIONAL DESCRIPTION

S.No Topics
2.1 Input Requirements
Selection Option on the screen
Date 1 DD.MM.YYYY (Mandatory)

Personnel number PERNR
Personnel area WERKS
Personnel sub area BTRTL
Employee group PERSG
Employee subgroup PERSK
Name Free Text (Mandatory)
236
2.2 Processing Requirements
Date 1: Get date from selection screen
Address: Get value from P0006-01 – STRAS and ORT01
Employee name: Get value from infotype P0001 – ENAME
Position: Get value from IT P0001 – PLSTX, where IT0001-BEGDA=

IT0000= BEGDA, where MASSN=01.
Date 2: IT0000= BEGDA, where MASSN=01
Value1: Get value from IT P0008 - BETRG, wage type is 9001, where
IT0008-BEGDA= IT0000= BEGDA, where MASSN=01.
Value2: Get value from IT P0008 – BETRG, wage type is 9002, where
Name: Get Name from selection screen

2.3 Output Requirements
Report should be updated with Date, Address, Employee name, Position,

Pay values and Name.
Report
Application Letter
The output is to be given in Word format.
2.4 Authorizations
237
Document Name Functional Specification For User Exit For Medical & LTA
Document ID CSCL_TM1085_FS_Medical_LTA Version ID 1.0
Prepared By Date
Reviewed By Date
Approved By Date
Released By Date
FUNCTIONAL SPECIFICATION SIGNOFF

Module Personnel Administration
Process Functional Specification For “Appointment Letter”
FS ID CSCL_PA01_FS_Appointmentletter
Client Name
Project Manager Consultant Organizational Core Team Project Manager
Units Member
2. Functional Specification on Medical and LTA:
Revision History
S.no Version Date Of Section Description Reason Change Revised
ID Revisio No Of Change For Made By
n Change By
1. 1.0 03.11.07 Initials
IDENTIFICATION
Module Time Management

Process User Exit For Medical & LTA
FS ID CSCL_TM1085_FS_Medical_LTA
238
S.No Topics
o Description: A Customized User Exit For Medical & LTA
o Expected data volume
o Required start date of Development:
o Required end date of Development:
o Required start date of Testing:
o Required end date of Testing:
o Availability of Test Date:
S.No Topics
Infotype 0015
System should check IT0015-lgart = 1050 or 1060,
If Yes,
Then check Begda-P0015, if BEGDA is > IT0000 – Begda, where MASSN
= 05,
Then allow the system to save the record.
Else
If 1050, then System should give Error Message “Not Eligible for
Medical”.
If 1060, then System should give Error Message “Not Eligible for
LTA”.
239
Document Name Functional Specification For User Exit For Sick Leave
Document ID CSCL_TM2001_FS_Sickleave Version ID 1.0
Prepared By Date dd.mm.yy
Reviewed By Date dd.mm.yy
Approved By Date
Released By Date
As per requirement
2.4 Authorizations

Process User Exit For Medical & LTA
FS ID CSCL_TM1085_FS_Medical_LTA
Client Name
Project Consultant Organizational Core Team Project
Manager Units Member Manager
Functional Specification Sign Off
3. Functional Specification on Sick Leave:
240
REVISION HISTORY
S.no Version Date Of Section Description Of Reason Change Revised
ID Revision No Change For Made By By
Change
IDENTIFICATION

Process User Exit For Sick leave
FS ID CSCL_TM2001_FS_Sickleave
S.No Topics
o Description: A Customized User Exit For Sick Leave
o Expected data volume
o Required start date of Development:
o Required end date of Development:
o Required start date of Testing:
o Required end date of Testing:
o Availability of Test Date:
241
S.No Topics
Infotype P2001
IF IT2001, Subtype = SL BEGDA (MM/YYYY) = IT0000-BEGDA

(MM/YYYY), where MASSN=01
IF yes,
Get wage type from IT0008, IT0014, where LGART=1000,1010,1020 and
1040, then check table v_512_w_d, where cummulation class=12, if
maintained then get the total amount <X>
Check if X is > 10000.01, then system should allow saving the record.
Else
Error message “Employee is not eligible for SL”
Else
If MM = 04 or 10
Check if X is > 10000.01, then system should allow saving the record.
Else
Get the amount from RT where In Period=IT2001-BEGDA MM-1 (In
Period = For Period), where LGART=/3E1, if exists
Error message “Employee is not eligible for SL”
Else
System should allow saving the record.
As per requirement
2.4 Authorizations
242
FUNCTIONAL SPECIFICATION SIGNOFF
Process User Exit For Sick leave
FS ID CSCL_TM2001_FS_Sickleave
Client Name
Units Member
4.Functional Specification on Cost to The Company(CTC)
243
Document Name Functional Specification of customized infotype For “Cost To Company”
Document ID CSCL_PA9001_FS_CTC Version ID 1.0
Prepared By Date dd.mm.yy
Approved By Date dd.mm.yy
Released By Date
Revision History
S.no Version Date Of Section Description Of Reason For Change Revised

ID Revision No Change Change Made By By
Identification
Module Payroll
Process Infotype for Cost to company
FS ID CSCL_PA9001_FS_ CTC
General Requirements
S.No Topics
Description: A Customized Infotype for Employees
244
Detailed Functional Description
S.No Topics
Annual Salary <Free Text> (0)
Monthly:
Basic <Free Text> (1)
HRA <Value (2)>
Metro
Non-Metro (By default)
DA <Rs.1000> (3)
Conveyance Allowance <Rs.2000> (4)
Special Day < Value (5)>
Total <Total (A)>
LTA < Free Text >(6)
Medical < Free Text >(7)
Bonus < Free Text >(8)
Total <Total (B)>
PF < Value (9)>
Gratuity < Value (10)>
Superannuation < Value (11)>
Total: <Total (C)>
GRAND TOTAL: <Total A+B+C>

Annual Salary (0): Free Text, Currency.
245
Basic (1): Free Text, Currency
Value (2): If Metro, 50% of (1), Currency

If Non Metro, 40% of (1), Currency
DA (3): Rs.1000/- Fixed, Currency
Conveyance (4): Rs.2000/- Fixed, Currency
Value (5): Annual Salary (0)-Grant Total, Currency

Condition: If the value is greater than or equal to zero, then add to special pay,
Else,
“Error message”
Total A = (1)+(2)+(3)+(4)+(5), Currency
LTA (6): Free Text, Currency
MEDICAL (7): Free Text, Currency
BONUS (8): Free Text, Currency
Total B = (6)+(7)+(8), Currency
Value (9): 12 % on (1) + (3), Currency
Value (10): 4.25% on Basic <1>, Currency
Value (11): 15 % on Basic <1>, Currency
Total C = (9)+(10)+(11), Currency
Grant Total =Total A+ Total B+ Total C
Time Constraint = 1 for this Infotype

Infotype should be as per requirement
Infotype
246
Document Name Functional Specification For “Report on Leave Details Of Employees”
Document ID CSCL_TM2006_FS_Leavedetails Version ID 1.0
Prepared By Date dd.mmyy
Approved By Date dd.mm.yy
Released By Date
Microsoft Excel Chart
2.4 Authorizations
Functional Specification Signoff
Module Payroll
Process Infotype for Cost To Company
FS ID CSCL_PA9001_FS_CTC
Client Name
Units Member
5. Functional Specification on Leave Details:
FUNCTIONAL SPECIFICATION
REVISION HISTORY
S.no Version ID Date Of Section No Description Of Reason For Change Made Revised By
Revision Change Change By
247
IDENTIFICATION
Process Report on Leave Details Of Employees
FS ID CSCL_TM2006_FS_Leavedetails
General Requirements
S.No Topics
Description: A Customized Report on Leave Details Of Employees
248
S.No Topics
Selection Option on the screen

Period:
Start DD.MM.YYYY End DD.MM.YYYY (Mandatory)
Date: Date:
Personnel number PERNR

Personnel area WERKS
Personnel sub area BTRTL
Employee group PERSG
Employee subgroup PERSK
Absence Type P2006-KPART (Mandatory)
PERNR: IT0001-PERNR
Employee Name: IT0001-ENAME
From Period: Get Value from Selection Screen Start Date
To Period: Get Value from Selection Screen End Date
A = Entitlement: Get Value from P2001-ANZHL, where subtype =

selection screen subtype, where Period = Selection Screen Period.
B = No of Leave: Get Value from P2001-KBERB, where subtype =

selection screen subtype, where Period = Selection Screen Period.
Remaining Leave: A-B.

Report should be updated with Personnel Number, Employee name, Leave

Entitlement, Leave Taken and Leave Remaining.
Report
249
Output Table
The output is to be given in Text format.

2.4 Authorizations
Functional Specification Signoff

Process Report on Leave Details Of Employees
FS ID CSCL_TM2006_FS_Leavedetails
Client Name
Units Member
* * * End of Report * * *
250
Business Blueprint Document
Material Procurement
Document Information
Deliverable Name Material Procurement Process

Proposed &
Sandeep Verma Signature
Recommended by
Team Material Management
Status Final
Reference Documents
Reference Document Comment

SP8.1.1 Operational Supplies Demand monitoring
SP8.2.1 Requirement Determination
SP8.3.1 & 8.3.2 Import procurement Request
Management_PR
SP8.3.3 Import procurement Decision for Bidding Business Process Document
SP8.3.4 Import procurement_ Bidding Provided by SAP TA / HMEL
SP8.3.5 Import procurement_ Bid evaluation and award Core Team
of order
SP8.3.6 Import Order Processing and communication
SP8.4.1 Capital_ Asset procurement Requirement
identification
Accenture Assets (AAES) – BP315 Dtd 14th Jan 2010 AAES document
Document Review & Sign-off
Approved by
Role Name Signature Date
MM Business Chinmoy Chattopadhyay

Process Owner
Validated by
G.M. Procurement T.N.Ashok
Reviewed by
SAP Trusted Advisor Ravi Prakash Srivastava
HMEL Core Team Kapil Mohan Gupta

Member
HMEL Core Team Vishwajeet Singh Sandhu
Member
Revision History
Version
Date Author Revision Description
No.
th
0.1 4 Oct-10 Sandeep Verma & Business Blue-print
Navaneet
Srivastava
1.0 20th Oct -10 Sandeep Verma & Changes
Navaneet
Srivastava
TABLE OF CONTENTS
1 Business Scenario Description ........................................................................................................5
1.1 Capital Item Procurement....................................................................................................................6
1.2 Operating Goods .................................................................................................................................7
1.3 User Based Procurement ....................................................................................................................7
1.4 Emergency Procurement.....................................................................................................................7
Imported Procurement .......................................................................................................................................7
Indigenous Procurement ...................................................................................................................................7
2 Business Scenario Schematic ..........................................................................................................9
2.1 Capital Item Procurement....................................................................................................................9
2.2 Operating Goods Procurement .........................................................................................................10
3 Scenario Activities ..............................................................................................................................11
3.1 Activity List: Capital Item Procurement ....................................................................................11
3.2 Operating Goods Procurement: ........................................................................................................13
3.3 User Procurement: ............................................................................................................................16
3.4 Emergency Procurement:..................................................................................................................17
4 Master Data & Organization Structure ......................................................................................18
5 Governance / Regulatory Controls / Compliances ...............................................................18
6 Prerequisites ........................................................................................................................................18
7 Role Profile Inventory ......................................................................................................................18
8 Other (Document type mapping) .................................................................................................19
9 RICEFW ...................................................................................................................................................20
10 Gap Analysis .....................................................................................................................................21
10.1 Gap Analysis ...................................................................................................................................21
11 Integration Points ..........................................................................................................................21
11.1 Specify the integration with other modules as well as interface........................................................21
11.1.1 Integration Issues: ....................................................................................................................21
12 Modifications to SAP Ph I Solution Design, Processes ...................................................22
1 Business Scenario Description

This business blueprint document is concerned with the procurement of all Non Hydrocarbon Items such as
chemicals, catalysts, spares, Consumables etc to be used during the operational phase and any subsequent
expansion of the refinery, and can be procured both domestically and imported.
The first phase of implementation was focused on the procurement of project related items such as bulk items
(tagged and non tagged). This second phase of implementation would be covering the procurement of items
to be used during the operational phase of the refinery including both Hydrocarbons & Non Hydrocarbon
materials.
As far Hydrocarbon procurement is concerned the entire process would be covered in a separate BBP
document. With respect to the procurement of Non Hydrocarbon items the process is covered below:
1. The procurement process will begin with the creation of Purchase Requisition based on the need
identified by the user either manually or based on the MRP run. Broadly speaking there can be two
types of PR :
a. System generated
b. Manually created by the user
2. In case of MRP created PRs, which are multiple in number as system creates one PR for each
material and a plant, there shall be a provision to consolidate such PRs into one or more PRs. A
separate document type (Consolidated PR HCPR) for such PR’s will be created.
3. It is envisaged that Material code is mandatory for the procurement of all Non Hydrocarbon materials
only exception being User Based Procurement where procurement without material code may be
allowed but will be treated similar to service procurement. Any material that has to be stocked will
have to be procured against a valid material code.
4. The PRs cannot be processed further unless released by competent authority. The release strategy
should typically include creator, MRP controller, Finance and Approving authority. However in case of
user based procurement and in Emergency procurement release strategy could consist of creator,
finance and competent authority. Further all cases where foreign currency is involved i.e imported
cases PR has to be released by VP Treasury in addition to the above.
5. In general approved PRs would follow the path of tendering route which has been explained in the
tendering BBP (HMEL RFx Process-Tendering BBP). System should not enforce creation of RFQ in
case of user based and emergency procurement. However if desired the RFQ route may be followed.
6. Based on the nature of items being procured procurement process can be subdivided into following
sub categories:
o Capital Item procurement
o Operating Goods procurement
o User based procurement
o Emergency procurement
7. Below is the list of PR document types to be used for different procurement (Material) PR creation
o Capital Item Imported (HCII)
o Capital Item Indigenous (HCID)
o Operating Goods Imported (HSII)
o Operating Goods Indigenous (HSID)
o Emergency (HEMP)
o User Based (HUSB)
o Material Rate Contract (HMRC)
o Consolidated PR (HCPR)
8. Consolidated PR – These PRs will consolidate unreleased PRs into one PR, where in it is sorted
Material Code wise. The referred PRs are marked as deleted.
9. The follow on document for PR in general shall be RFQ followed by either PO or OLA (outline
agreement). The OLA could be contract or a scheduling agreement.
10. In case of Outline agreement the utilization PR has to be of type Material Rate Contract wherein it is
mandatory to maintain the OLA number. Such PRs shall be exempted from tendering.
11. In order to capture all the material procurement scenarios, below PO document types will be created
o Capital Item Imported (HCII)
o Capital Item Indigenous (HCID)
o Òperating Goods Imported(HSSI)
o Operating Goods Indigenous(HSSD)
o Emergency (HEMP)
o User Based (HUSB)
o Material Rate Contract (HMRC)
12. OLA will have the below mentioned document types:

o Quantity (HQC)
o Rate Contract (HRC)
o Scheduling Agreement (HSA)
13. The purchase requisition and purchase order shall be subjected to budget check based on
commitment item and fund center mentioned in these purchasing documents (PR & PO) in addition to
validation check that PO value can not exceed the PR value. The detailed process of budget check is
covered in BBP ( BBP by Finance—name to be checked with FI)
1.1 Capital Item Procurement
Typically the procurement process of capital goods would begin with the creation of the account assigned
object which can be either WBS or AUC or an internal order. This shall be followed by creating an account
assigned PR using the above mentioned account assignment objects with categories A (asset), P (project), Q
(Project assigned stock) and F (order). Based on the material type (Capital Item) there would be a validation
to ensure that such PRs are account assigned only using the above mentioned Account Assignment
Categories i.e. A, P, Q and F.
In case capital items are procured along with spares and / or services like installation and commissioning,
these items can be included as separate line items in Capital PR and PO. However if such procurement has
explicit service contracts of complex AMC nature which may consist of some fixed charges along with rates of
other items , such services are to be included in the PR but their follow on document shall be an OLA for
service part, details of which are as per services blueprint. The utilization of such OLA shall be by means of a
release order for which a secondary PR and PO will be required, which are basically Limit Based Documents
referring to an OLA.
General provisions:
1. To capture Fund Centre

2. Technical specifications for each item will flow from PR to PO including Tenders.
3. Attachment functionality can be used.
1.2 Operating Goods

The procurement process of operating goods would begin with the creation of PR (Purchase Requisition).
Typically such PRs are not account assigned however in exceptional cases these may be account assigned.
These PRs should not allow service items (item category ―D‖).
In case of PO corresponding to spares MPN internal codes can be used which will give vendor MPN specific
printouts.
General provisions:
1. Consolidation of PRs will be there.

2. Mandatory material code
3. Inspection details will be there in PR/PO
1.3 User Based Procurement

Typically user based procurements are account assigned and such items cannot be stocked. This document
type will be used for generic items only. The text based procurement for certain material groups only shall be
allowed in which case the G/L will be populated based on material group and valuation class combination.
Items procured without code shall be treated as service procurement.
1.4 Emergency Procurement

The PR process is same for Emergency procurement except that it includes both material and services
scenario. The release strategy would be similar to corresponding material / services cases. System would not
enforce RFQ process for emergency procurement. The purchase approval of such cases is different and the
release strategy will be based on emergency provisions contained in Limits of Authority.
Imported Procurement
The scenario is common to all the above four procurement processes. Key difference being that PO can be
placed to only those vendors whose country of origin is other than India in vendor master. In addition PO shall
cater to requirements of custom duty and clearance charges, Port charges, handling charges, CHA agent
charges, stevedoring charges, C&F charges and other miscellaneous payments. These charges would be
maintained at the item or header level via conditions derived through an import pricing procedure. Except
Customs, Additional Customs and CVD all other miscellaneous charges would be derived via conditions
having condition category as Planned Delivery Cost.
Such documents may refer to payment terms like Advance Payments, Payment after shipment of material,
Progressive payment etc linked with Letter of Credit. Payments against LC are interfaced with Collabera.
Imported cases will have PO based invoice Verification i.e. the GR based IV indicator would not be checked in
the Vendor Master record and the same would be a display field at the PO level.
Indigenous Procurement
The scenario is common to all the above four procurement processes. The PO would be placed on vendors
whose country of origin is India but vendor schema might be Import Vendor for determination of import pricing
procedure in case the vendor premises is within an SEZ zone and we are to pay customs and CVD . In
addition PO shall cater to requirements of input taxes, freight, rebates or surcharges etc. Except taxes these
charges would be maintained at the item or header level via conditions derived through an import or domestic
pricing procedure.
Such documents may refer to payment terms like Advance Payments, Payment after shipment of material,
Progressive payment etc linked with Letter of Credit. Payments against LC are interfaced with Collabera.
Domestic cases will have GR based invoice Verification i.e. the GR based IV indicator would be checked in
the domestic POs at the document type level and it would non editable.
2 Business Scenario Schematic
2.1 Capital Item Procurement

Start
SAP
Purchase
Requition
NO
SAP
Emergency
Yes PO Approval
PR
No Yes
SAP
User Based Yes GRN
No
SAP End
Tendering
Process
Process already covered in RFx process
SAP Indicates that it is a SAP process
Project 9/22
2.2 Operating Goods Procurement
Start
SAP
Purchase
Requition
NO
SAP
Emergency
Yes PO Approval
PR
No Yes
SAP
User Based Yes GRN
No
SAP End
Tendering
PO/OLA
Process
Process already covered in RFx process
SAP Indicates that it is a SAP process
Project 10/22
3 Scenario Activities
3.1 Activity List: Capital Item Procurement
Transaction
Activity Name Activity Description Input Output Roles Remark
Code
1. Create Account Assigned To be created by Finance
Object or Project Deptt
2. Create Account Assigned ME51N Select document PR User Select the document type
Purchase Requisition type, desired Created (Imported/Indigenous)
vendor, plant, Define urgency
Material code etc (Normal/Urgent)
(Acct assignment
cat A, P, Q, F or
K)
3. Add other line item for ME51N / ME52N Item category as PR created User Select the service master
service if required along “D” along with and item category.
with Capital Item. account
assignment
same as capital
Item.
4. Add other line item for ME51N / ME52N No account PR created User In case the spares are
spares if required along assignment supplied without any
with the Capital Item. required additional cost (i.e FOC)
then the correct valuation
type has to be selected
5. Change PR ME52N PR number PR User or
changed approver
6. Display PR ME53N PR Number PR
displayed
Project 11/22
Transaction
Code
7. PR Release ME54N or via Purchase PR Creator, MRP
workflow Requisition approved Controller,
Number Finance and
final authority
8. Tendering Process Tender No Purchasing Except emergency/user
Deptt based and material rate
contract PR the tendering
process will be followed
and the process is
explained in RFx
tendering BBP document.
9. Create Purchase Order ME21N Purchase PO Purchasing Unless exempted PO will
requisition Created Deptt be created against RFQ
number /RFQ else against PR
Number
10. Change Purchase Order ME22N PO number PO Purchasing Change in release
Changed Deptt strategy in case of
change.
11. Display Purchase Order ME23N PO number PO Purchasing
Displayed Deptt
12. PO release ME29N or via PO Number PO Creator, Release will be based on
workflow released Checker and power to sign the PO /
approver Contract
In case if Outline Agreement is required
13. OLA (Outline ME31K RFQ Number OLA Purchase OLAs in case of capital
Agreement) created Deptt procurement would be
created for complex
service scenarios only.
Project 12/22
Transaction
Code
14. Change Out Line ME32K OLA Number OLA Purchase
agreement changed Deptt
15. Display OLA ME33K OLA Number Display
OLA
16. Release OLA ME35 OLA Number OLA Subsequent Processing of
released OLA corresponding to
services scenario.
3.2 Operating Goods Procurement:
Transaction
Code
1 Create Purchase ME51N Select document PR User
Requisition type, desired Created
vendor, plant,
Material code etc
2. Change PR ME52N PR number PR User or approver
changed
displayed
4. PR Release ME54N or via Purchase PR Creator, MRP
Number Finance and final
authority
Project 13/22
Transaction
Code
5. Tendering Process Tender No Purchasing Deptt Except
emergency/user
based and material
rate contract PR the
tendering process will
be followed and the
process is explained
in RFx tendering BBP
document.
6. Create Purchase Order ME21N Purchase PO User Unless exempted PO
requisition Created will be created
number /RFQ against RFQ else
Number against PR
7. Change Purchase Order ME22N PO number PO Purchasing Deptt Change in release
Changed strategy in case of
change.
8. Display Purchase Order ME23N PO number PO Purchasing Deptt
Displayed
9. PO release ME29N or via PO Number PO Creator, Checker Release will be based
workflow released and approver on power to sign the
PO / Contract.
Incase Outline Agreement is required.
10. OLA (Outline ME31K RFQ Number OLA Purchase Deptt OLAs would be
Agreement) created created in case of
Rate contract /
scheduling agreement
11. Change Out Line ME32K OLA Number OLA Purchase Deptt
agreement changed
Project 14/22
Transaction
Code
12. Display OLA ME33K OLA Number Display
OLA
13. Release OLA ME35 OLA Number OLA
released
14. Create Purchase ME51N Select document PR User Document type
Requisition to utilize type, desired Created selected as material
rate contract vendor, plant, rate contract.
Material code etc
changed
displayed
17 PR Release ME54N or via Purchase PR Creator, MRP
authority
18 Create Purchase Order ME21N Purchase PO Purchasing Deptt Document type will
requisition Created be Material Rate
number Contract
19 Change Purchase Order ME22N PO number PO Purchasing Deptt
Changed
20 Display Purchase Order ME23N PO number PO Purchasing Deptt
Displayed
21 PO release ME29N or via PO Number PO Creator, Checker Release will be based
workflow released and approver on power to sign the
PO / Contract.
Project 15/22
3.3 User Procurement:
Transaction
Code
1 Create Account Assigned ME51N Select document PR User Text based material &
Purchase Requisition type, desired Created service for allowed
vendor, plant, material / service
Material code etc groups, generic
items.
changed
displayed
4. PR Release ME54N or via Purchase PR Creator, Finance
workflow Requisition approved and final authority
Number
5. Create Purchase Order ME21N Purchase PO User
requisition Created
number
6. Change Purchase Order ME22N PO number PO User Change in release
change.
7. Display Purchase Order ME23N PO number PO User
Displayed
8. PO release ME29N or via PO Number PO Creator, Approver Release will be based
workflow released on power mentioned
in limits of authority
Project 16/22
3.4 Emergency Procurement:
Transaction
Code
1 Create Purchase ME51N Select document PR User No text based
Requisition which may type, desired Created material procurement
be account assigned vendor, plant, allowed. Service are
Material code etc allowed.
changed
displayed
4. PR Release ME54N or via Purchase PR Creator, Checker/
workflow Requisition approved MRP Controller,
authority
5. Create Purchase Order ME21N Purchase PO User
requisition Created
number
6. Change Purchase Order ME22N PO number PO User Change in release
change.
7. Display Purchase Order ME23N PO number PO User
Displayed
8. PO release ME29N or via PO Number PO Creator, checker, Release will be based
workflow released Approver on power mentioned
in limits of authority
Project 17/22
4 Master Data & Organization Structure

Material Master:
Material master contains all the in formations about materials an enterprise buys, produces, stores, and sells. This information of the materials stored
here is accessed through out the R/3 system for various applications. The material master contains all the data required to define and manage material.
It integrates data from engineering, manufacturing, sales and distribution, purchasing, accounting, and other departments. The material master is used
as a source of data for purchase order processing throughout the procurement cycle.
Capital items masters will be identified by initial two characters.
Vendor Master:
The vendor master stores the information about the vendors who supply goods and services. These records are kept in individual master records.
The vendor master record is maintained by Purchasing and Accounting. The data will be organized in form of General data, Company Code Data and
the Purchasing Organization Data.
Service Master:
The Service master is source for retrieving service-specific data. The services have to be coded at the activity level.
All the Services are classified using Service Category and the Service Category determines number assignment whether external or internal.
5 Governance / Regulatory Controls / Compliances

1. Technical Specification entered in PR at the Header or Item Text Level shall flow to RFQ and Purchase Order.
2. Attachments via DMS linked with PR, PO, OLA
6 Prerequisites
N/A
7 Role Profile Inventory

Role Profile Role Description Comments
(e.g. impact to existing organization)
User Creates PR
Approver Authorized to approve the PR and As per LOA (limits of Authority)
PO.
Project 18/22
Role Profile Role Description Comments

(e.g. impact to existing organization)
Pricing Upload
8 Other (Document type mapping)

Following mapping will be required in various document types created
PR PO OLA Remarks
Capital Item Imported (HCII) Capital Item Imported (HCII) Rate Contract (HRC) Will have a validation of
on currency (non INR)
and A/c assignment.
Capital Item Indigenous (HCID) Capital Item Indigenous (HCID) Quantity (HQC) Will have a validation of
Scheduling Agreement (HSA) on currency (only INR)
and A/c assignment.
Operating Goods Imported (HSII) Operating Goods Imported(HSSI) Quantity (HQC) Will have a validation of
Scheduling Agreement (HSA) on currency (non INR)
and A/c assignment.
Operating Goods Indigenous Operating Goods Quantity (HQC) Will have a validation of
(HSID) Indigenous(HSSD) Scheduling Agreement (HSA) on currency (only INR)
and A/c assignment.
Emergency (HEMP) Emergency (HEMP)
User Based (HUSB) User Based (HUSB)
Material Rate Contract (HMRC) Material Rate Contract (HMRC) Rate Contract (HRC)
Consolidated PR All type All type Once the PRs are

clubbed in to
consolidated PR, all the
selected PRs will be
deleted.
Project 19/22
9 RICEFW
# Team Type Short description Long text Ref. Comple Priority Comments (e.g.
Activity # xity (H/M/L) assignment to activity)
(H/M/L)
1 MM E Validation on For Capital Item PR, validation to 3.1, 3.2, 3.3 M H
Document Type check that it would be only against & 3.4
WBS or AUC or Internal order
2 MM E Consolidation of PR Based on the criteria selected PR will 3.5 M M To Be covered in
be consolidated in a single PR and Functional specification
deletion of the reference PRs document.
3 MM F PR Print Out If an approval on hard copy is required, All M H
PR printout is required.
4 MM F OLA Print out One at LOI stage and other when fully All M H
released and one for amendment
5 MM F PO print out One at LOI stage and other when fully All M H
released and one for amendment
6 MM E No PO without Unless exempted All M H

maintained RFQ
7 MM E No PO /OLA beyond There will be a validation on POs that All M H

PR value there value cannot exceed the PR
value.
8 MM E Template based In case of creating POs for multiple All M H
upload for pricing line items, it is not possible to maintain
Conditions pricing manually. So a template is
required to upload the pricing.
Project 20/22
9 MM W Workflow for sending All M H

email for approvals In case or PR/PO approval
10 Gap Analysis
10.1 Gap Analysis
Solution not provided with standard / any development should be listed below:
Gap Description Legal Magnitude Any work Description of Work around solution
Req. of Impact around
(Y/N) (L/M/H) solution
provided
11 Integration Points
11.1 Specify the integration with other modules as well as interface.

SAP Finance.
11.1.1 Integration Issues:
Project 21/22
Reference No Issue Description Impact Status Resolution
12 Modifications to SAP Ph I Solution Design, Processes

Existing Process Steps in Ph I Process Steps on implementation of Ph II
Project 22/22
Walvoil Fluid Power India Pvt ltd
4.Materials Management
As Is Business Process and Business Requirement from Walvoil Fluid To Be Business Process for Walvoil Fluid Power (India) Pvt.
Power (India) Pvt. Ltd. Ltd.
(Implementation of mySAP ERP and Walvoil by CVS IT Services (I) Pvt. Ltd. for Walvoil Fluid Power (India) Pvt Ltd
yiva
Sign-off on Business Blue Print on
4. Materials Management
Introduction
This Business Blue Print Document describes the following:
Enterprise Structure of Walvoil (GO LIVE on 21st Feb 2006)
Business r Users
Mr. Ivano Chiossi
Project Sponsor
Mr. Amarnath Ramchandran Mr. Fabrizio Strozzi Mr. N H Krishnamurthy Mr. Avinash Humbrey
Steering Committee Steering Committee Steering Committee Steering Committee

Member, Walvoil Member, Walvoil Member, CVS IT Member, CVS IT
Mr. Avinash Humbrey Mr. Narayana Rajan.N
Project Manager, Project Manager,

CVS IT Walvoil
Mr.Srinivasa Rao .V Mr. Narayana Rajan. N Mr. Vinay Kumar Reddy Mr. SathyaNarayana.A & Mr. Ravikanth S.
Consultant, CVSIT Module Owner, Walvoil Team Member, Walvoil Team Members, Walvoil
Business Blue Print – Materials Management – Mr.Rajan, Mr.Vinay – WALVOIL, Mr.Srinivas - CVS IT Page 1 of 77
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

Contents
D-Possible with ABAP (But Can be implemented on mySAP through ABAP/4 development but system performance may be
performance issue) effected Page Numbers
# Topic
E-Not possible with out Major Cannot be implemented on mySAP without major system modification
Start End
Modification
1 Definitions 5 7
F-Open for exploration Possibility of implementation will be explored in the development environment. Cannot be confirmed
2 at thisstructure
Enterprise stage
8 9
G-Not possible Cannot be implemented on mySAP
3 Business Process Scope 10 11
H-Not in Scope Cannot be implemented because it is not part of the scope defined in the “Software Services
4 Agreement”
Business between CVS IT & Walvoil
Process Details 12 76
5 Reports 77 77
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:
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

Code Description Code Description Organizational Unit
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
company codes and plants.
The following forms of purchasing exist:
Corporate-group-wide
A purchasing organization procures for all the
Walvoil Fluid Power (India) 1100 Walvoil Purchase
company codes belonging to a client.
Pvt Ltd Organization
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
Code Description Code Description 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
Current New
Justification / Purpose of the Organizational
Code Description Code Description 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 Master Data Maintenance
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 or produces, stores, and sells. It is the company's
central source for retrieving material-specific data. This information is
stored in individual material master records.
The material master is used by all components in the SAP Logistics
System. The integration of all material data in a single database object
eliminates redundant data storage. In the SAP Logistics System, the
data contained in the material master is 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 work scheduling
Service Master
Service master records, in which descriptions of all services that may
need to be procured can be stored
Vendor Master
Data in vendor master records controls how transaction data is posted
and processed for a vendor. The vendor master record also contains all
the data you require to do business with your vendors.
The master record is used not only in Accounting but also in Materials
Management. By storing vendor master data centrally and sharing it
throughout your organization, you only need to enter it once. You can
prevent inconsistencies in master data by maintaining it centrally. If one
of your vendors changes their address, you only have to enter this
change once and your accounting and purchasing departments will
always have up-to-date information.
Purchase info records
You use this component if you wish to store information on a vendor and
a material as master data at purchasing organization or plant level. You
can create purchasing info records for different procurement types
(standard, subcontracting, pipeline, 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 a predefined period. Each source is defined by
means of a source list record.
Vendor Evaluation Criteria
The Vendor Evaluation component supports you in optimizing your
procurement processes in the case of both materials and services.
Gaps:
4.1.1 Material Master Maintenance

Not following any material master data 1. You can identify material or document changes that are made with
Item Code Numbering System reference to a change number by the use of revision levels.
When you want to process the BOMs for these materials or documents at
a later date, you can find and call them using either the change number
Business Requirement:
or the revision level.
1.SAP Best Practises for IM & C to be implemented where ever
You can assign a revision level to a material either from an engineering
suits to Walvoil requirement
change management function or while you are processing a material

master record or BOM for the material.
2. Over deliveries
In the standard, over deliveries are not allowed. In the event of an over
delivery, the system issues an error message.
If over deliveries are to be allowed, you can specify the following data in
the purchase order:
Unlimited indicator
If this indicator is set, over deliveries of any size are allowed. The
system does not issue any message.
Over delivery tolerance
You can enter a percentage over delivery tolerance in the purchase
order. If a quantity of goods is received that is larger than the order
quantity plus the over delivery tolerance, it is not accepted by the
system.
3.Scrap factor is generally considered in the Bill of Materials of
production planning module
4. By using the relevant fields in net requirements planning and
scheduling of MRP2 view in material master this can be addressed.
5. SAP provides various fields using MRP1 View in the material master
and by selecting the MRP Procedure one can maintain Lot Size, Lot for
Lot Order quantity, Minimum lot size, Maximum lot size and maximum
stock level.
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 converts all quantities entered in other units to
the base unit of measure.
Alternative units of measure
Individual departments may have their own units of measure. For
example, Purchasing may use a different unit than Sales or Warehouse
Management (WM). All units of measure other than the base unit of
measure are referred to as alternative 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 order unit is proposed automatically in purchasing
functions, where it can be changed.
Sales unit
Allows a material to be sold in a unit differing from the base unit of
measure. The sales unit is proposed automatically in the sales order,
where it can be changed.
Unit of issue
Unit of measure in which the material is issued from the Stores. It allows
consumption, stock transfers, transfer postings, and physical inventories
to be recorded in a unit differing from the base unit of measure and from
the stock keeping unit.
8. FIFO valuations are a method that enables you to valuate the stocks
of a material as realistically as possible. FIFO (first in, first out) stands
for the assumption that the first stocks of a material to be received are
the first to be consumed. The 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 concerned. The results are displayed in the form of a list
that contains the following information:
- The closing stock quantity and closing stock value for each material for
the period in question as well as the FIFO value and the difference
between that and the stock value
- The net value based on lowest value determination (if you carry out
FIFO valuation with lowest value comparison)
- 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 Scheduling for activation of newly created materials,
changes Display etc., Also one can make use of setting deletion indicator
for a material at various levels in the organization structure. Walvoil can
make use of this available feature as per the business requirement.
10. Search help control is an ActiveX component. It was developed to

support the SAP search help technique.
In contrast to the previous search help technique, which used R/3 dialog
boxes, search help control uses a dialog technique that is session-
independent. This means that the user can only open search help
windows one at a time.
Search help windows may, however, remain open within a single
transaction. This allows you to refer to the results displayed in a
particular search help window on subsequent screens of the same
transaction.
With match codes, you can use the menu to choose from the various
different search possibilities displayed
Clicking on the right mouse button displays all of the search help control
functions available in the current context.
11. A material may have various documents such as drawings and

photographs assigned to it. The system differentiates between these
documents by means of the document type. If your company uses SAP’s
document management system, you can manage documents and assign
existing documents to a material in the material master record.
Document data is managed at client level.
If one document of the standard document type has been assigned to
the material, the details are displayed directly on the Design documents
assigned sub screen. In the standard R/3 System, this sub screen
appears on 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 basic data.
If the document is not of the standard document type, the No link
indicator is set on the Design documents assigned sub screen. You can
display such documents by choosing Additional data -> Document data.
The No link indicator is also set if a document has not yet been assigned
to the material.
If more than one document of the standard document type has been
assigned to the material, the Several links indicator is set on the Design
documents assigned sub screen. You can view these documents by
choosing Additional data -> Document data.

12. There are various possibilities for maintaining material code. It is
suggested to go for a single code instead of maintaining two different
codes for a material.
13. Materials shall be created as per the assignment to the organization
structure. Provision to define various storage locations as per the Walvoil
shall be considered and will be suggested.
14. MRP1 to MRP4 view allows to maintain data related to MPS. Suitable
fields shall be considered as per Walvoil Requirement.
15. MRP1 to MRP4 view allows to maintain data related to MPS. Suitable
fields shall be considered as per Walvoil Requirement.
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 training shall be provided by CVSIT.
It is possible to maintain specifications, Drawings etc in the material
master records Material master view provides a filed to maintain OEM
Information.
Suggested Business Process :
The material master contains information on all the materials that a
company procures or produces, stores, and sells. It is the company's
central source for retrieving material-specific data. This information is
stored in individual material master records.
Integration
The material master is used by all components in the SAP Logistics
System. The integration of all material data in a single database object
eliminates redundant data storage. In the SAP Logistics System, the
data contained in the material master is 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 work scheduling
Material Master Records
All the information Walvoil needs to manage a material is stored in a
data record in the material master, sorted by various different criteria.
Walvoil can enter and change most of the data in a material master
record. However, some information can only be updated by the system.
For example, the system updates the administrative data when you
process a material master record, and 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 department uses different information on the material, the data in
a material master record is subdivided by user department.
User Departments at Walvoil using one material record
Since several departments of Walvoil work with one material and each
department uses different information for the material, the data is
structured in a material master record, according to user departments.
This is portrayed in the following graphic:
Material Type:
Materials with the same basic attributes are grouped together and
assigned to a material type. This allows Walvoil to manage different
materials in a uniform manner in accordance with your company's
requirements. Examples of material types are given in the graphic
below.
Material Group:
Key that you use to group together several materials or services with
the same attributes, and to assign them to a particular material group.
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 Master Maintenance

Not following Service master data Service activities process shall be carried in SAP System as per the
requirement.
Business Requirement: Service Request/Material Request/ Capex Request shall be through the
SAP System (Purchase requisition – RFQ – Quotation- Price Comparison-
Purchase Order-Service entry sheet-Invoice Verification and Payment).
suits to Walvoil requirement Purchase Requisition shall be based on the material group but Standard
system also provides features to create PR’s on Material, Account
Assignment, Item category, plant etc.,
Suggested Business Process:
The service master record counts as part of the master data within
External Services Management and serves as a source of data for you to
draw upon when creating service specifications. This enables you to save
time and reduces the frequency of errors, since you need only enter the
complete service descriptions in the service master record once.
Structure
A service master record contains the following principal information for
the unique description of a service:
Service number
Service category
Descriptive texts (short and long text)
Base unit of measure
Material group
Valuation class
Gaps:
4.1.3 Maintenance of Vendor Master
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 functions, in connection with your company. You use partner
Business Requirement: functions to define the rights and responsibilities of each partner type in
a business transaction. When you sell or order goods, for example, your
business partners can assume partner functions such as:
Vendor Partner functions:
a. Ordering address
b. Goods supplier
c. Invoice presented by
d. Alternative payee
Different business partners may carry out one or more partner functions.
For this reason, you can assign individual business partners a number of
partner functions.
You manage data on business partners in master records. Data on
partner functions is stored in these master records and used in Financial
Accounting and Logistics.
A business partner can be a customer and a vendor at the same time if,
for example, your customer also supplies goods to you or if a vendor is
also one of your customers. In this case, you must create a customer
master record and a vendor master record for the business partner. You
can create a link between the two master records by entering the vendor
number in the customer master record and the customer number in the
vendor master record.
2. Terms of payment are rules agreed with your business partners. They
apply to financial clearing for goods and services. Standard system
allows one to associate terms of payment at master data level and at
transaction level.
3. Your company does business with some business partners for a long
time. For example, you have special price agreements with long-term
customers and their deliveries get preferential treatment. At the end of
the fiscal year, you can honour the loyalty of these customers with
rebate payments. In other cases, you have only one contact with a
business partner. For example, you order merchandise from a different

vendor once, because your preferred vendor cannot deliver. In the R/3
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-time customers and one-time vendors. You do not have to
create a master record for one-time customers or one-time vendors
because you do not need this master record after the business
transaction, and it uses space. You create collective master records for
one-time customers and one-time vendors.
4. Quotations and delivery reminders can be sent using features
available in Standard system.
Data in vendor master records controls how transaction data is posted
and processed for a vendor. The vendor master record also contains all
the data you require to do business with your vendors.
The master record is used not only in Accounting but also in Materials
Management. By storing vendor master data centrally and sharing it
throughout your organization, you only need to enter it once. You can
prevent inconsistencies in master data by maintaining it centrally. If one
of your vendors changes their address, you only have to enter this
change once and your accounting and purchasing departments will
always have up-to-date information.
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 account
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 purchasing organization can store its own information for
doing business with vendors.
General data
This is data that applies to every company code and every purchasing
organization in your company. The general area includes, for example,
the vendor’s name, address, language, and telephone number.
Company code data
This is data that is specific to an individual company code. Company
code data includes, for example, the reconciliation account number and
payment terms.
Purchasing organization data
This is data relevant to the purchasing organization of your company. For
example, requests for quotations, purchase orders, and invoice
verifications are stored in this section.
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. Internal numbers are assigned by the system, whereas you
enter external numbers yourself when you create the vendor master
record. External numbers can be alphanumeric.
The account group determines whether account numbers are internal or
external and what the valid number interval for a vendor master record
is.
The system ensures that the numbers assigned are always unique. With
Internal assignment, the system selects the next number from the
interval. With external assignment, the system prevents you from
entering the same number twice.
Access Authorisation
You can restrict access to master records in order to prevent
unauthorized changes. Depending on how you organize your master
data, you can assign authorizations for maintaining this data. For
example, one user may have authorization to maintain all master data,
while another may have authorization to maintain only accounting
master data.
You can even assign authorizations for different types of processing. All
users could have authorization to display master records while only a
limited group of users may be able to create and change master data.
Gaps:
4.1.4 Purchase info records

Not Following Info Record Price Versus PO Price
The net price in the info record and the net price in the purchase order
Business Requirement: are two different prices.

1.SAP Best Practises for IM & C to be implemented where ever The net price of an item in the info record is based on the conditions
suits to Walvoil requirement stipulated in the info record. If you change the conditions, the net price
in the info record is recalculated and the pricing date adjusted
accordingly.
In contrast, the price in the purchase order may reflect the deduction of
a quantity discount according to a price/quantity scale.
As a rule, the conditions from the info record are adopted in the PO.
However, if a price/quantity scale has been defined, the price for the
relevant order quantity is taken.
Suggested business process:
You use this component if you wish to store information on a vendor and
a material as master data at purchasing organization or plant level. You
can create purchasing info records for different procurement types
(standard, subcontracting, pipeline, consignment).
Definition
Serves as a source of information for Purchasing. The purchasing info
record (also referred to in abbreviated form as the "info record")
contains information on a specific material and a vendor supplying the
material. For example, the vendor's 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 organization or plant
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 example) is also used as default data for purchase
orders.
For instance, you can store the current and future quotation conditions
(discounts, fixed costs etc.) in the info record, in order to be able to copy
them into Pos. You can also maintain the vendor’s conditions directly in
the info record.
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 records can be created for materials and services with
and without master records.
Subcontracting
A subcontractor info record contains ordering information for subcontract
orders. For example, if you subcontract the assembly of a component,
the subcontractor info record would include the vendor's
(subcontractor’s) price for assembling the component.
Validity periods.
Consignment
A consignment info record contains information on a material that
vendors keep available at their own cost on the orderer’s premises. The
info record contains the vendor’s price for withdrawals by the ordered
from consignment stock. As in the case of the pipeline info record, you
can store prices for different validity periods.
Gaps:
4.1.5 Source list maintenance

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
1.SAP Best Practises for IM & C to be implemented where ever certain plant within a predefined period. Each source is defined by
suits to Walvoil requirement means of a source list record.
The source list serves:
To define a source of supply as "fixed". Such sources count as
preferred sources over a certain period of time.
(For example, the fixed vendor for material 1 is Acme Corp. for the
first quarter and Zenith Co. for the second quarter of the year.)
To define a source of supply as "blocked".
(This means, for example, that contract 123 may not be used for a
certain period of time.)
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 requisition dated 15th June relating to material 1.)
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 Vendor Evaluation Criteria

Not Following Suggested Business Process:
The Vendor Evaluation component supports you in optimizing your
Business Requirement: procurement processes in the case of both materials and services.

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 procure materials.

External service provision
This main criterion serves as a basis for evaluating those vendors you
employ as external service providers.
Gaps:
4.1.7 Maintenance of Conditions for Procuring Materials
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
price for the merchandise. the vendor (such as applicable discounts or surcharges, or stipulations
1. Basic price: It is unit price. regarding the payment of freight costs) in the system. You can enter
2.Gross price: Basic + Duties and taxes also these conditions in quotations, outline purchase agreements, and info
net of discounts records. You also have the option of entering general conditions at
vendor level, for example. The system then applies the conditions in
3.Economy of price of supply should capture
determining the price in purchase orders (POs). You can enter further
vendors rejections
conditions in the PO itself.
There are three kinds of price in Purchasing:
Gross price
Price without taking any possible discounts and surcharges into
account.
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 provisions, delivery costs, and non-deductible taxes.
Pricing conditions shall be maintained in the purchasing info records or
in the header or item level as applicable
4.1.7.2 Discounts 1.% Discount: Adholeram discount (Basic 1. Different discounts required by Walvoil are Discount before Tax and
Price) Discount after tax. The Discount condition records shall be maintained
2.Value Discounts: On the total value fixed with conditions and values associated with conditions. While processing
amount is a transaction system will search for valid record and as soon as it finds
3. Cash discounts: Discount given on the record matching the condition of sale it should return a discount
Immediate Payment (Basic Price). value.
4. Quantity Discounts: In specific Slabs of the Some of the discounts can be maintained at the time of preparing the
PO Or Order quantity the discount % or the purchasing document.
value changes.
4.1.7.3 Excise andExcise Duty 1. Vendor, Material and other factors that determine the Excise duty
Import 1.Excise Duty in %: Percentage could be in shall be maintained through the CIN Module of SAP R/3.
Duty whole number or could be in Decimals 2. This shall include the Exceptional rates that may be applicable for
2.Special Excise Duty in %: Percentage could certain vendors and material combination.
be in whole number or could be in Decimals 3. This shall also take into account different tax rates based on the
Vendor’s Status (SSI or Normal). The setoff of excise duty or
inventorying of excise duty will be controlled by Tax codes.
In Imports the CVD, which needs to be captured for CENVAT postings,
shall also be incorporated.
4.1.7.4 Sales 1.For Raw materials and Packing materials 1. Tax condition records can be maintained in the system for various
Tax/VAT Normal Sales tax (KST/CST) are taxed at % levels of taxes, like central and state level, which will be automatically
2.Present VAT Tax rate is 12.5% determined during a transaction depending upon the receiving plant
and the vendor’s locations.
2. The tax values are maintained as percentages with the help of tax
codes.
4.1.7.5 Local Hamali charges (as per slab). Local delivery and Cartages can be maintained in the system, these
Delivery 2. Other Handling and Delivery charges (as conditions shall be determined during the transaction.
and per slab).
Cartages
4.1.7.6 Freight/Tr Freight % of the Basic 1. The Planned Freight costs shall be booked in the same Purchase
ansport Freight/Transport on Actual Order for which the procurement is to be done.
Freight/Transport on fixed amount 2. In cases where the Material carrying party is different from the one
Freight as per quantity on whom the PO is raised the Freight Vendor shall also be maintained
in the same PO.
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
2.Import: well as in Import procurement.
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 Payment Terms
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 Payment with LC.
1.SAP Best Practises for IM & C to be implemented where ever Gaps:
4.2 Procurement Process
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 Purchase Requisition

Product code, Product description, required qty. . . . Now at Walvoil PR Shall be addressed as different Purchase requisition Document type
using Excel for creating the Purchase Requisition. and Number range
Approved vendor list shall be created in the system.
Business Requirement: Changes to Purchase requisition shall be made possible upon approval
from authorised person.
1.SAP Best Practises for IM & C to be implemented where ever SAP Standard Report is available
suits to Walvoil requirement Integration issue with PP module. To explore further
Recheck option like error messages and warnings can be thrown.
Requirement Analysis MRO Items
Each procurement document will have a unique number
Purchase requisition line item details like material code, plant, storage
location, material group details etc.,
Since Purchase requisition line items will have materials codes, the
specification attached to master data can be copied to document.
Previous supply details can be seen through a separate SAP Standard
report
Through source determination component Recommended supplier
details can be incorporated.
Purchase requisition line item will have all such details
Possible through Release procedure. Release procedure process is
explained in sub process 4.2.5
Changes to the approved purchase document shall be restricted
Purchase requisition document provides feature to capture costs on to
a cost centre or to G/L account.
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 the requesting department. Manual creation of Purchase
Requisitions for Stock Items shall be restricted to the corresponding
MRP Controllers through authorization profiles.
Manual creation of Purchase Requisition for MRO items will be
controlled by authorization profiles.
Release Strategy shall be incorporated for release of Purchase
Requisition as defined in the requirements.
Gaps:
4.2.2 Request for Quotation

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

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
Quotations are compared based on price, Vendor has been regarding the supply of materials or performance of services subject to
finalised. specified conditions.
A quotation is legally binding on the vendor for a certain period. The
Business Requirement : quotation is the vendor’s response to a request for quotation issued by
a purchasing organization.
1. SAP Best Practises for IM & C to be implemented where ever A quotation consists of items in which the total quantity and delivery
suits to Walvoil requirement. date of an offered material or service are specified.
An item of a quotation may contain a delivery schedule made up of a
number of schedule lines in which the total quantity is broken down
into smaller quantities to be delivered on the specified dates over a
certain period.
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 quantities of the quotation are set
out in service lines, representing individual jobs or activities.
If services cannot be defined precisely, value limits are stipulated
instead of service lines. Value limits can be set for certain contracts.
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 case of services

At service line level for individual services (tasks or activities)
Processing of quotation shall be based on the Request for Quotation
where the Vendor specifies the rates and other details like the period
for which the rates will be valid.
The Vendors can be allowed to maintain the quotation.
Info records are updated for the validity period, which shall be copied
as conditions during the creation of the Purchase order.
Gaps:
4.2.4 Purchase Order - Local (RM, MRO Items)
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
Based on the indents received manual segregation of urgent and services.
normal indents are made, enquires over phone, fax, mail etc., are Purchasing Document - Definition
made. At times numerous attempts are made to obtain realistic, A purchasing document is an instrument used by Purchasing to procure
competitive prices from vendors of the material group. Depending materials or services.
on the quotes received negotiations with the prospective vendor is
The following list shows the various external purchasing documents
made and order confirmation over phone is first made. On this
available in the standard SAP System. (Note: purchase requisitions are
context it is to be noted that details of the specifications to be
not included on this list because they are usually regarded as internal
communicated over phone or fax is an important aspect of
documents used within Purchasing and are therefore treated
obtaining possible offers. It is also possible that vendors taken for
separately.)
obtaining quotes may not be interested, may not be dealing in that
line of product or make. Hence new vendors are explored through Request for quotation (RFQ)
old records, yellow pages, Indenting department’s contacts. Transmits a requirement defined in a requisition for a material or
service to potential vendors.
Once PO is made after the terms are finalised, PO are faxed to the
party and original is sent by courier/post. Quotation
Contains a vendor's prices and conditions and is the basis for vendor
PO is generated using excel worksheet and a manual register for
selection.
PO number is maintained. This register will contain brief details of
the item on order and the file number of the item on order. Purchase order (PO)
The buying entity’s request or instruction to a vendor (external
The typical PO will contain PO number, date, File number, Quote or
supplier) to supply certain materials or render/perform certain
offer reference if any,
services/works, formalizing a purchase transaction.
Also details of material description, specification, rate, quantity,
Requirements of materials or services can be reported to Purchasing by
and value are incorporated. Further order terms such as price,
means of purchase requisitions.
delivery, delivery schedule, duties, taxes, transport, payment
terms as well as excise and tax particulars are mentioned in the Structure
order. Each purchasing document is subdivided into two main areas: the
header and individual items. Each document will contain a header and
can contain several items.
Business Requirement :
The header contains information relevant to the whole document. The
items specify the materials or services to be procured. For example,
1. SAP Best Practises for IM & C to be implemented where ever information about the vendor and the document number is contained
suits to Walvoil requirement. in the document header, and the material description and the order
quantity are specified in each item.
The additional data provides extra information about the item, and has
no direct connection with the item procurement data. Additional data

includes, for example, account assignment data (such as cost center
and G/L account) and the PO history for an item, which contains
information on already recorded goods and invoice receipts relating to
the item.
Each item in a purchasing document represents a unit of procurement.
Purchasing operations (involving requisitioning, ordering and follow-up
processes) occur on an item-specific basis.
How does the SAP System Differentiate Between Purchasing
Documents?
In the SAP System, the different kinds of purchasing document are
distinguished from one another by means of the document type. The
later determines the relevant number range and the fields that are
offered to you for data maintenance purposes, for example. The
relevant document type appears as a default value when you create a
purchasing document.
Document types are defined for RFQs, purchase orders, and contracts,
for example. The standard SAP system includes certain document
types. However, your enterprise can also define its own.
How is Purchasing Documents Numbered?
Each document is assigned a unique number. (Note that the "number"
may also be an alphanumeric code: see below). This number can be
assigned internally or externally, depending on the policy of your
requirement. Internal number assignment means that the system
assigns the number. External number assignment means that the
person creating the document must supply it.
Alphanumeric assignment is only possible in the latter case.
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
 contracts
 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.
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.
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 vendor’s (creditor’s)
invoice is directed.
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.
Gaps :
4.2.5 Release Strategy
As Is Business Process: Suggested Business Process:

Walvoil shall use this component if it wishes to set up approval
Not following any release procedure procedures for purchase requisitions or other purchasing documents.
Under such a procedure, if a purchase requisition or external
purchasing document fulfils certain conditions (e.g. the total order
Business Requirement
value exceeds Rs10, 000), it has to be approved (by the cost center
manager, for instance) before it can be processed further. This process
1.SAP Best Practises for IM & C to be implemented where ever suits of approving (clearing, or giving the "green light" to) a proposed item
to Walvoil requirement of expenditure is replicated in the SAP System by the "release
procedure".
Which Documents Can be Released (Approved)?
Release procedures can be defined for the following documents:
Purchase Requisition
The external purchasing documents purchase order (PO), contract,
scheduling agreement, request for quotation (RFQ), and service entry
sheet
Gaps:
4.2.6 Purchase Order - Imports
Imports Raw materials and capital goods , Finished Goods Walvoil make use of this component for import procurement.
Import Procurement procedure Difference will be the Conditions in purchase pricing procedure. A
Based on the above formal indent is obtained for a specific quantity Detailed explanation shall be made available to the user team about
and delivery schedule. If necessary new vendors are also the pricing procedure
approached and offers are obtained before final vendor is finalised A purchase order is a formal request or instruction from a purchasing
and the import price is fixed after negotiating. Also in certain cases organization to a vendor or a plant to supply or provide a certain
our buyer of the FG advises the vendor and the import price and quantity of goods or services at or by a certain point in time.
accordingly order is placed for import. The same price details are Pricing conditions will be maintained based on Imports pricing and tax
taken for costing purposes (worked out using excel) conditions.
Separate Document type and Number range shall be maintained for
PO are created manually with all the import indent terms and local purchases.
bankers details etc., and forwarded to the seller/indenting agent. Advance payment shall be through Internal order (Based on the
However before the imported material is received at our stores a Payment request) from FI, Internal order shall have reference to the PO
formal order is created through the system to account the material created.
on receipt. LC cannot be addressed in Standard SAP System.
Copies of such manual order are passed to accounts for Duty Payment (CVD) and Customs duty payment shall be through the
information. Advance payment request, For availing the Customs duty; This will be
As and when import activities take place, generally an estimated same process as that of availing cenvat. Customs duty and CV D
funds requirement plan is advised to accounts. This plan takes into condition shall have vendors mentioned against to those conditions
account the LC’s being opened, Bank documents to be retired, mentioned in PO. Customs department shall be created as vendor in
customs duty payments becoming due during the week/month. the system. Clearances Charges (CHO charges) shall also mentioned in
Payment Procedure PO as conditions. These conditions shall have provision to maintain
Depending on the payment terms agreed with the vendor like Vendors in PO.
advance LC or DD payment procedure is initiated.
For Opening LC the following documents are prepared. Gaps:
 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.
1.SAP Best Practises for IM & C to be implemented where ever suits

to Walvoil requirement
4.2.7 Outbound Service Orders / Job work
As Is Business Process : Suggested Business Process:

Not Following Service Purchase Orders are created for the external procurement of
Business Requirement: services from a vendor. These services can be account assigned to a
Cost center or a network or a Project.
1.SAP Best Practises for IM & C to be implemented where ever suits Separate pricing conditions are maintained for services.
to Walvoil requirement 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.
Standard SAP Purchase requisition with a different number range shall
be used
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 shall be provided using CIN component.
Left over quantities at job work vendor can be seen using Standard SAP
System. Provision to receive unprocessed materials is possible with GR
Transactions
Subcontracting PO will have BOM; batch number can be specified to
each line item.
4.2.8 Purchase Order Services

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 master can be maintained with short description and
Long description.
Service Purchase requisition can be created for one line item or for
multiple line items.
Purchase requisitions can be subjected to release approval
Walvoil will create Service PO for the service providing Vendor as &
when they will get the Service from that Vendor they will go for Service
acceptance i.e. Service Entry sheet w.r.t. Service PO, like this Service
PO will get connected with Service Entry Sheet.
When Service Entry Sheet is entered in the System w.r.t. Service PO

then it will be open for Invoice Verification.
In Service PO itself we can mention the Service taken & Material used
for Services in 2 different Line Items against which we can show the
receipt of Service along with material in service sheet w.r.t. Service PO.
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 Purchase Order Amendment

Not Following
Business Requirement: Purchase Orders can be amended before the Goods Receipt If the
purchase order is subjected to release strategy, the changes made to
1.SAP Best Practises for IM & C to be implemented where ever suits the Purchase order may reset the release strategy depending on what
to Walvoil requirement type of changes have been made to the order. If the release strategy
has value limits, the purchase order change in value or quantity, if it
violates the existing release already affected, will reset the release
strategy and a new strategy will be assigned.
The Purchase Order amendments can be reported for changes in
different fields.
Purchase order amendments shall be traced; Changes will be recorded
in the system as log.
Gaps:
4.2.10 Cash purchases

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

4.3 Goods Receipt
GRN at Stores – In general It is possible to capture through a separate field in GR screen. It is

Using Excel GRN at Stores is doing now. suggested as a solution that Each and every GR Transaction will have
GRN is prepared based on PO for all purchasing scenario. feature to capture excise invoice. Provision to capture excise invoice
separately apart from GR Transaction will be provided.
GRN for Misc items is prepared without PO. PO is prepared
manually. To print GR details like Document date, LR number (should be
mentioned in header text) shall be printed.
For all the materials Goods Receipted Note (GRN) Check List -
Which is to be filled before GRN is Prepared Consignment should accompany COA as per the requirement in QM
module and Inventory module of MM.
Supplier Name
Goods receipt in Standard system is based on with Reference to orders
Manufacturer name
basically (PO, Production order, etc.,) or without reference to any
Item Name document. GR Program will only refer to the documents. Hence at time
PO Number and Date of creating any orders e.g PO it is possible to refer to the approved
Delivery Challans Number and Date vendor list and give error or warning message.
Duplicate for Transporters Available or not
Manufacturer Name approved or Not Suggested Business Process:
Transporters name
LR Number and Date Inventory Management
Vehicle number and This component deals with the following tasks:
Item Lot number  Management of material stocks on a quantity and value basis
Manufacturing date  Planning, Entry, and Documentation of all Goods Movements
Delivery Challans Qty  Carrying out the Physical Inventory
Received Qty Managing Stocks by Quantity
Location All transactions that bring about a change in stock are entered in real
Category (Customer name or Parent Company name) time, as are the stock updates resulting from these changes. You can
obtain an overview of the current stock situation of any given material
Division
at any time. This, for example, applies to stocks that:
Excisable / Non excisable
 Are located in the warehouse
GRN number
 Have already been ordered, but have not yet been received
Authorised Signatory
 Are located in the warehouse, but have already been reserved
for production or a customer
 Are in quality inspection.
If a further subdivision by lots is required for a material, one batch per
Business Requirement lot is possible. These batches are then managed individually in the
stock.
1.SAP Best Practises for IM & C to be implemented where ever suits Special Stocks
to Walvoil requirement Inventory Management can manage various types of a company’s own
special stocks and externally owned special stocks separately from
standard stock.
Managing Stocks By Value
The stocks are managed not only on a quantity basis but also by value.
The system automatically updates the following data each time there is
a goods movement:
 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 managed. The valuation area can be plant level or
company code level.
In Inventory Management, work is basically done at plant and storage
location levels. When you enter a goods movement, you only have to
enter the plant and the storage location of the goods. The system
derives the company code from the plant via the valuation area.
Planning, Entry, and Documentation of all Goods Movements

Goods movements include both "external" movements (goods receipts
from external procurement, goods issues for sales orders) and
"internal" movements (goods receipts from production, withdrawals of
material for internal purposes, stock transfers, and transfer postings).
For each goods movement a document is created which is used by the
system to update quantities and values and serves as proof of goods
movements.
You can print goods receipt/issue slips to facilitate physical movements
and monitor the individual stocks in the warehouse.
Integration of Inventory Management in the Logistics
System
Use
Inventory Management is part of the Materials Management module
and is fully integrated in the entire logistics system:
Material is procured from external or internal sources on the basis of

the requirements determined by Material Requirements Planning. The
delivery is entered in Inventory Management as a goods receipt. The
material is stored (and managed under Inventory Management) until it
is delivered to customers (Sales & Distribution), or is used for internal
purposes (for example, for production).
During all transactions, Inventory Management accesses both master
data (such as material master data) and transaction data (such as
purchasing documents) shared by all Logistics components.
Features
Integration in Materials Management
As a component of Materials Management, Inventory Management is
directly linked with Material Requirements Planning, Purchasing, and
Invoice Verification.
Inventory Management provides information for MRP, which takes into
account not only physical stocks but also planned movements
(requirements, receipts).
When a material is ordered from a vendor, Inventory Management
posts the delivery as a goods receipt with reference to the purchase
order. The vendor invoice is processed later by Invoice Verification.
Here, the quantities and values from the purchase order and the goods
receipt document are checked to ensure that they match those in the
invoice.
Integration in Production Planning
Inventory Management is closely linked to the Production Planning
module:
 Inventory Management is responsible for staging of the
components required for production orders
 The receipt of the finished products in the warehouse is posted
in Inventory Management.
Integration in Sales & Distribution
As soon as you enter a sales order, you can initiate a dynamic
availability check of stocks on hand.
When the delivery is created, the quantity to be delivered is marked as
"Scheduled for delivery". It is deducted from the total stock when the
goods issue is posted.
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 subject to an inspection operation. If so, a corresponding
activity is initiated for the movement in the Quality Management
system.
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 case of every goods movement. Serial numbers are managed in
the Plant Maintenance system
Integration in the Logistics Information System

With the Inventory Controlling component, the Logistics Information
System offers a tool for collecting, compressing, and evaluating
inventory management data.

Gaps:
4.3.1 Quality Check
As Is Business Process : Suggested Business Process :

Not following
Goods Receipt When Quality Management (QM) is Active
Business Requirement: The SAP System differentiates between two different forms of quality
management:
1.SAP Best Practises for IM & C to be implemented where ever  Quality Management in Material Procurement
suits to Walvoil requirement  Quality Management in Material Inspection
Quality Management in Material Procurement
Quality management shall be active for procurement, Walvoil can
define in the material master record (Quality Management screen) that
a certificate is required for the material.
If a certificate is required, the system displays a box during goods
receipt for a purchase where you can confirm the receipt of a
certificate.
Quality Management in Material Inspection
If an inspection at the time of goods receipt has been defined for the
material, the system automatically creates an inspection lot when the
goods receipt is posted. Quality Management uses this inspection lot to
carry out the inspection.
Shall be considered, .QM module based on the sample drawing
procedure.
Gaps:
4.3.2 GRN due to Purchase of Assets

All the Capital Items, Furniture, Equipments etc. With Reference to 1.Goods receipt shall be with reference of PO. Subsequent functioning
Capex PO GR is done, Based on the User Certification Materials are like GR shall be with reference to PO
Accepted. GRN for Goods Receipt, GRN For Goods Acceptance This 2.Report to Distinguish GR Material group wise shall be addressed
Applies for all Items.

Business Requirement: You use this component to post the receipt of goods from an external
1.SAP Best Practises for IM & C to be implemented where ever vendor or from production. A goods receipt leads to an increase in
suits to Walvoil requirement warehouse stock.
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
Gaps:
4.3.3 GRN due to Production

Not Following 1.Receiving material from Production order into finished goods stores
shall be taken care
Business Requirement: Suggested business process:
Deliveries from production are the result of orders used as a basis for
1.SAP Best Practises for IM & C to be implemented where ever manufacturing the materials required.
suits to Walvoil requirement The production order is not only the document on the basis of which a
material is manufactured; it is also an important planning and tracking
tool for the following departments: Materials Planning and Inventory
Management.
Features
Reference to an Order
When material resulting from a production order is delivered, it is
important for the departments involved that the goods receipt entry in
the system reference this order, for the following reasons:
Goods receiving can check whether the delivery actually corresponds to
what has been planned.
The system can propose data from the order during entry of the goods
receipt (for example, the material produced, its quantity, and so on).
This simplifies both the data entry and checking (over deliveries and
under deliveries).
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. If it is not listed on the slip accompanying the
delivered material, you can find the order pertaining to the delivery via
the material number.
Gaps:
4.3.4 GRN due to Finished Goods Rejection
Not following Suggested business process: (PP Module)
Even without a returns delivery, you can post returns from a customer
Business Requirement: into blocked stock returns.
1.SAP Best Practises for IM & C to be implemented where ever There is no need to create new material code for receiving such
suits to Walvoil requirement rejected materials. The returned lot of material will be separately
maintained in the system as blocked stock. Walvoil once taking a
decision on such materials relevant movement like destroy or scrap can
be carried out.
Gaps:
4.3.5 GRN for MRO items

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
1.SAP Best Practises for IM & C to be implemented where ever through those reports on certain intervals.
suits to Walvoil requirement Should be decided by the relevant department/Management of Walvoil.
Should be decided by the relevant department/Management of Walvoil.
SAP Standard report is available in the inventory management module,
sub module of materials management module.
Goods Receipt
Purpose
You use this component to post the receipt of goods from an external
vendor or from production. A goods receipt leads to an increase in
warehouse stock.
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 order.
 The system can propose data from the purchase order during
entry of the goods receipt (for example, the material ordered,
its quantity, and so on). This simplifies both data entry and
checking (over deliveries and under deliveries).
 The delivery is marked in the purchase order history. This allows
the Purchasing department to monitor the purchase order
history and initiate reminder procedures in the event of a late
delivery.
 The vendor invoice is checked against the ordered quantity and
the delivered quantity.
 The goods receipt is valuated on the basis of the purchase order
price or the invoice price.
Gaps:
4.3.6 GRN into Blocked Stock
As Is Business Process: Suggested business process:

Not following Blocked Stock
Company's own stock that should not be used. It is not for
Business Requirement: unrestricted-use in Inventory Management.

1.SAP Best Practises for IM & C to be implemented where ever Posting a Goods receipt into Goods receipt blocked stock
suits to Walvoil requirement When you post a Goods receipt in goods receipt blocked stock one must
first determine the quantity of stock to be posted to blocked stock first.
Since the material is not to be added to the inventory yet, do not enter
a storage location.
Gaps:
4.3.7 GRN due to Outbound Service / Job Orders(Purchase Orders for Service)
As Is Business Process: Requirement Analysis:

Material sent to vendor shall be QC Passed if and only the material is
Not following issued for subcontracting from Walvoil location.
Business Requirement Suggested business process:

Purchase orders shall be created for services and Service entry sheets
1.SAP Best Practises for IM & C to be implemented where ever suits shall be created for the quantity of Service received. Part service of the
to Walvoil requirement total quantity of service mentioned in the PO can be received and
Invoice verification shall be done for the invoice raised by the service
vendor based on the service entry sheet created. If required a release
strategy can be used for control of the service entry sheets.
Gaps:
4.3.8 Excise Transactions
As Is Business Process : Requirement analysis:
Not following Automatic Entries to Cenvat Credit/Debit will happen during the
postings happening while doing the excise transactions using Standard
Business Requirement: SAP Transactions.
Party wise Debit note and Credit note and the transaction details like
Excise invoice number, Excise invoice details shall be made available as
a report
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 requirement.
The general flow is part1 posting will be done along with the GR; Part2
posting will be done after the GR is and Part1 posting is finished.
Separate posting of excise duty and education shall be taken care. In
Standard report separate columns for Excise duty and education cess
shall also be provided.
This will be considered as purchase return scenario. Provision to
generate excise invoice and send back material is also possible after
reversal of excise duty.
Addressed in sales and distribution module.
Country Version India comes with functions for calculating, posting,

remitting, and reporting excise duty, and for handling incoming and
outgoing excise invoices.
For these purposes, extra fields are available in the vendor master data
and material master data for information required in India only.
You can enter incoming excise invoices in the R/3 System for goods
receipts arising from external procurement, subcontracting, and stock
transfer. Excise clerks can capture incoming excise invoices using a
dedicated transaction, or, alternatively, warehousemen can capture
them in the standard Goods Movement transaction, MIGO, when they
enter a goods receipt.
Finally, you can prepare copies of all excise registers for submission to
the excise authorities
Definition
A business document, in India, that your vendor sends you when it
delivers excisable goods. It lists the goods and states how much excise
duty applies on them. Your use the excise invoice to claim back the
excise that you have paid from the excise authorities.
Use
When you procure goods externally, an excise invoice accompanies
each delivery that your vendors make. You have to post these in the
system. This document is required as proof of the excise duty that you
have paid, so that you can then 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 business requirements.
 In the two-step procedure, the excise clerk captures the
incoming excise invoice. This means that the clerk enters the
data, but the system does not yet create an entry in Part II of
the appropriate excise register. Another user (the excise
supervisor) checks the excise invoice and posts it. The system
then creates a Part II entry.
 In the one-step procedure, the excise clerk captures and posts
the incoming excise invoice simultaneously. The system creates
the Part II entry automatically.
Generally speaking, you have one excise invoice for each goods
receipt; u can also do multiple GR for a single excise invoice.
In the R/3 System, the excise invoice consists of header data and line
items. The header data comprises:
 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 vendor purchased the goods from another
vendor and was merely selling them on to you
At line item level, the excise invoice lists the materials on the excise
invoice, showing the following information:
 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 excise duty. They have to be printed out monthly and shown
to the authorities in the event of an audit. The R/3 System makes all
the entries for these registers automatically, and you can prepare
copies of them as and when necessary. Alternatively, you can download
the data for processing by non-SAP software.
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 excise authorities.
 Register RT-12
This is a monthly report that summarizes the CENVAT and PLA
information from the other registers.
Register RG 1
Definition
A register of excisable finished goods kept by manufacturing plants.
The register shows goods movements from the factory to a store
specifically for excisable finished goods.
Register RG 23A/23C
Definition
A record of receipts and issues of excisable materials, as kept by
manufacturing plants. The register consists of two parts:
 Part I shows the quantities of the materials.
 Part II shows the amounts of excise duty on the materials, and
how much you have transferred to the CENVAT accounts.
Previously, manufacturers were required to keep two separate
registers, RG 23A and RG 23C for raw materials and capital goods
respectively. This is no longer the case, but the distinction still remains
in the R/3 System.
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 number:
 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 drive. The information is saved in flat file format and
can then be processed by non-SAP software to produce registers. This
solution is thus an alternative to that described under Creation of
Excise Registers.
Use
You use this report to download data from the registers listed below
onto your hard drive. The information is saved in flat file format and
can then be processed by non-SAP software to produce registers. This
solution is thus an alternative to that 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 April, 2000, prescribed the form of monthly return under
rule 57AE of the central Excise Rules, 1944.
The SAP System offers you a report with which you can prepare the
necessary printouts. It covers both of the following:
Annexure
This is a list of all the invoices and bills of entry for which you have
made a Part II credit posting over the past month. For each document,
it shows the information required by the authorities.
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 materials you have issued and when they have to be returned by.
The reason for this close monitoring has to do with India’s tax law.
Under excise law 57AC, when you send materials to a subcontractor for
processing, you are not required to pay any excise duty, even though
the materials have left your premises. However, if the materials have
not been returned to you within a given length of time specified by the
law (in 2000, 180 days), you will have to reverse any excise credit that
you posted when you purchased the materials. In the case of materials
that you have manufactured in-house, you will have to post credit
entries to the extent of the CENVAT rate of the assessable value of the
materials.
Subcontracting Under Full Payment of Duty
Purpose
This procedure illustrates how you use the R/3 System to send
materials to your subcontractors for processing using normal excise
invoices.
Capital Goods
Use
Businesses are allowed to set off excise duty on purchases of capital
goods against excise duty on outputs. However, unlike with raw
materials, you can only set off half of the duty in the first year, and the
rest in any year after that.
Features
When you post an excise invoice that contains capital goods, the
system posts half of the excise duty to your CENVAT account and post
the rest to a G/L account for CENVAT on hold.
In following years, you can use a report to identify the capital goods
with excise duty on hold and transfer the duty to the CENVAT account
Transfer of CENVAT Credit on Capital Goods
Use
You use this report to display a list of the vendor excise invoices where
the vendor has levied excise duty but you have not posted it (in full) to
your CENVAT account.
This is particularly useful in the case of capital goods in order to find
out how much credit remains from previous years.
Capturing Excise Invoices Without Reference Documents
Use
This procedure shows you how to capture an incoming excise invoice if
you do not have any reference documents.
You can also follow this procedure if you do have a material document
that you want to use as a reference document, but you want the
system to cross-check the excise invoice data against other master
data or transaction data less stringently than it normally would
You commission a construction company build a new plant for you. The
company purchases all the materials it needs to build the plant, deals
with all of the invoices and most of the other paperwork, with the
exception of the incoming excise invoices, which the law requires you
to deal with yourself. The subcontractor sends you all excise invoices
accordingly and you capture them in the system without any reference
documents.
Gaps :
4.3.9 Normal Rejections Handling

Not following
Based on the Usage Decision carried in QM module materials
Business Requirement: 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. If
suits to Walvoil requirement 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 Rejections Handling

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
around solution.
Gaps:
4.4 Goods Issue
Suggested Business process:
Not Following
Companies usually distinguish between various types of
goods issues, each of which is handled in the R/3 System as
Business Requirement: follows:
1.SAP Best Practises for IM & C to be implemented where ever 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 subcontract vendor
1.SAP Best Practises for IM & C to be implemented where ever Suggested business process:
suits to Walvoil requirement 1. The material to be produced by the vendor can be ordered as a
subcontract item in a purchase requisition, purchase order or
scheduling agreement. Each subcontract item has one or more sub-
items which contain the individual components 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 provided to vendor. Components in a subcontract order that
are consumed can only be debited from the stock of the material
provided to the particular vendor
Gaps :
4.4.2 Goods Issue To Scrap
W
Not Following Walvoil scrap a material if cannot use it any more, for example
because:
Business requirement:
 the quality has been reduced due to long storage time
1. SAP Best Practises for IM & C to be implemented where ever
 the quality rejected materials lying long time in stores
suits to Walvoil requirement.
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 scrap account
 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 the posting.
Gaps:
to production
4.4.3 Goods issue to production

Not following Goods Issue to production done with or without reservation. Whenever
Business Requirement: a production order is released, the reservation is automatically created
1. SAP Best Practises for IM & C to be implemented where ever and goods can be issued against the reservation. Where there is no
suits to Walvoil requirement reservation, issues shall be done against a production order.
Gaps:
4.4.4 Goods Issue to Sales Order
As Is Business Process: Requirement analysis:

Not following 1. Through reference technique method This feature is available in
standard SAP system.
Business Requirement: Suggested business process:
1.SAP Best Practises for IM & C to be implemented where ever Goods issues shall be based on the sales order, deliveries will have
suits to Walvoil requirement reference to the sales order. Goods issues will be based on the lot, qty,
Issuing plant and storage location
Gaps:
4.4.5 Goods issue to quality

Not Following Goods issues to quality will be through the automatic postings as per
Business Requirement: the settings in master data and setting from quality module. The
1.SAP Best Practises for IM & C to be implemented where ever procedure at various stages in production process is addressed in QM
suits to Walvoil requirement module.
Gaps :
4.4.6 Goods issues to Customer/Vendor/third party
Not Following Suggested business process:
In Standard SAP system any Goods issues and Goods receipts are
Business Requirement: handled through Movement type Goods issues to customers are
1.SAP Best Practises for IM & C to be implemented where ever automatically handled through Post Goods issue. Goods returns to
suits to Walvoil requirement vendor are addressed through A Separate transaction. This is same to
third party
Gaps:
4.5 Logistics Invoice Verification

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
for Invoice amount less than Rs 6000/-) invoice verification the system shall display the materials returned back
Invoice verification for transporters payment (Reference is to the vendor for which deductions will be made.
agreement) Subsequent debit shall be used for transactions where the Original
Invoice verification for services (Labour work, AMC, Testing charges invoice has already been cleared and a subsequent invoice has been
etc.,) raised by the vendor for materials already sent. Example: Rate change
with retrospective effect.
Business Requirement Subsequent Credit shall be used when any deduction/ penalty is to be
levied on the vendor.
1.SAP Best Practises for IM & C to be implemented where ever suits There are 3 options, which can be used for Invoice Verification.
to Walvoil requirement 1.Goods / Service Item
2.Delivery Costs
3.Goods/Service Item + Delivery costs
Based on the Goods/Service and delivery vendors, the option shall be
selected.
Gaps:
4.5.1 Entry of Vendors’ Invoice Sub Process S

Local Vendor
It takes some time to function completely. Local vendor invoice shall be entered with reference to Purchase Order.
1.Invoice Verification against to PO (PO Generated through Excel More than one purchase order can also be processed at one time for
software for RM and other materials) one vendor. If required the vendor can be changed from the original
vendor to whom the payment is to be done. If any Invoice verification
has been done for any GR for a PO, the quantity for this GR will not
Under this scenario GRN and PO reference is taken, check for the
appear in the list. In case where the freight vendor is different, only
Excise or Non-excise, qty received, PO number, GRN Number,
those entries related to the delivery costs will be chosen for the
Accepted Qty. All the entries are done in Excel software as well as
payments to this vendor. It is also possible to raise credit memo
maintained in a register.
against the goods returned to the vendor. In case of Subsequent
2.Invoice verification against to PO (PO manually done for Misc and debit/credit to be made to the vendor account, (reasons can be change
capital items) of rates for previous supplies made, etc), 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
Excise or Non-excise, qty received, PO number, GRN Number, be entered with invoice verification.
Accepted Qty. All the entries are done in Excel software as well as Unplanned delivery costs are costs which are not known at the time of
maintained in a register. creation of purchase orders and these are charged in the invoice sent
3. Invoice verification with out PO. (Reference is taken through GRN by the vendor can also be entered during invoice verification.
for Invoice amount less than Rs 6000/-) In these adjustments wherever the invoice involves the CENVAT, based
on the Tax code maintained, vendor and material tax details CENVAT
Under this scenario GRN and PO reference is taken, check for the clearing account is prompted and will be updated on saving. Simulation
Excise or Non-excise, qty received, PO number, GRN Number, facility is available for checking the accounting effect.
Accepted Qty. Import Vendor
4.Invoice verification for transporters payment (Reference is Imports invoice verification is slightly different from the normal invoice
agreement) verification. In this case the CVD applicable is taken into RG23
Under this scenario commercial department will send the vendor Registers. In Import PO the CVD and other conditions are maintained
invoice. Commercial department will mention the GAN number on as delivery condition types hence the Invoice verification for the CVD
back end of the invoice. Invoice entries are done using Excel. part is to be done first before the GR is done. Then RG part1 entries are
done then GR is done and then RG part2 entries are posted. Invoice
5.Invoice verification for services (Labour work, AMC, Testing
verification is done for the Purchase Order. In this case No GR based
charges etc.,)
Invoice verification is possible (This is specific to Imports only).
Entries are done by referring to PO (>6000) else the entries are
The other functions as mentioned under Local Vendor Invoice
passed without any reference.
verification are also applicable for Import Vendor.

4.5.2 Parking of Vendor Invoice Sub Process S

Not following Invoice verification documents can be parked and later processed
Vendor invoices can be parked for later processing. In case there is
Business Requirement: some doubt about the invoice in hand, the document can be parked
and later processed for posting. The accounting entries get generated
only when the document is posted.
Gaps :
4.5.3 Cancelling Vendors Invoice Sub Process S

Not following Invoice Documents in Invoice Verification are either Invoices or Credit
Memos. If an invoice is cancelled, the system generates a credit memo
Business Requirement: and if a credit memo is cancelled the system generates an Invoice. The
system takes into account the quantity and amount in the credit memo
or invoice thus avoiding any differences between the original and the
cancelled documents.
The invoice can be cancelled only if
The document is invoice document
The document is not already cancelled
The document is not cancellation document of another document.
Gaps:
4.5.4 Material Valuation

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
suits to Walvoil requirement planned prices, change material prices, debit/ credit material.
 Split Valuation
 Split valuation serves the purpose of valuating stock at different
values based on different sources of procurement.
If a material is subject to split valuation, every quantity (sub-stock) of
this material must be assigned to a valuation Type.
If you want to valuate stocks of a material separately, you must create
a material master record with the appropriate valuation category. This
record is called the valuation header record. Each material always has
only one such record for each company code or plant (depending on
whether the material is valuated at company code level or plant level).
Once you have specified the valuation category, you can create a
material master record for each quantity of the material you want to
valuate separately, with the appropriate valuation type and accounting
data
Gaps:
4.5.5 Physical Inventory
Requirement Analysis:
As Is Business Process: With physical inventory process the adjustment of stocks shall be done
Not following with the required accounting effect
Business Requirement: Physical inventory component allows the carrying out of physical
1.SAP Best Practises for IM & C to be implemented where ever inventory of the company’s warehouse stock for balance sheet purpose.
suits to Walvoil requirement There are different types of physical inventory procedures like Periodic
Processing, Continuous inventory, Cycle counting. Any of these
techniques can be used for this process.
Periodic Inventory:
In this process all the stocks in the company are physically counted on
the balance sheet key date. The entire warehouse must be blocked for
materials movement
Continuous Inventory
Continuous inventory ensures that all the material is counted at least
once during the year. Stocks are counted throughout the year.
Cycle counting
Cycle counting is a method of physical inventory where inventory is
counted at regular intervals within a fiscal year.
Inventory Sampling
Inventory sampling method uses random selection of stocks and these
samples are physically counted on the balance sheet date. If only small
variances occur in the count and the physical inventory, it is presumed
that the inventory balances and book stock are correct.
The counts can be entered in the system and the differences can be
reconciled between physical and book balance. The required accounting
effect is provided through this reconciliation.
Gaps :
5.0 Reports
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 :
Compiled by: M.Sairamkumar,DE; S.Laxmidhar, SamanthaKumar, &G.Ramanaiah, ADEs
Page 1 of 80
Table of Contents
Introduction to SAP .......................................................................................................................................................... 4
Login to SAP...................................................................................................................................................................... 5
SAP Screen Navigation...................................................................................................................................................... 6
Log Off .............................................................................................................................................................................. 7
Maintain User Details/Defaults ........................................................................................................................................ 8
APTRANSO Organization Mapping in SAP ........................................................................................................................ 9
Client............................................................................................................................................................................. 9
Company Code : ......................................................................................................................................................... 10
Plant :..........................................................................................................................................................................10
Storage Location:........................................................................................................................................................ 10
Purchasing Organization:............................................................................................................................................10
Master Data – SAP MM ..................................................................................................................................................11
Material Master Data : ............................................................................................................................................... 11
Vendor Master Data ...................................................................................................................................................13
Procurement Process ..................................................................................................................................................... 14
Determination of Requirement:................................................................................................................................. 14
For P&MM POs : PR > RFQ > CONTRACT > PO......................................................................................................... 14
For Turn-key HQ-POs : PR > RFQ > PO .................................................................................................................... 14
Purchase Requisition (PR): ....................................................................................................................................... 15
Setting Default Values In PR/PO Transactions: Personal Setting .............................................................................. 18
Defining the Document Overview ...........................................................................................................................19
Request For Quotation (RFQ) : ................................................................................................................................... 22
RFQ can be created manually by following the below steps:..................................................................................22
Maintain Price Against A Quotation ........................................................................................................................26
UPDATE Conditions for RFQ :ZRFQ ..........................................................................................................................29
Price Comparison (w.r.t. Bid No./Coll.No.) : ............................................................................................................ 31
Changing an RFQ and Displaying the Change Log.................................................................................................... 32
Creating a Delivery Schedule for an RFQ .................................................................................................................32
Monitoring RFQs and Quotations ............................................................................................................................ 33
Page 2 of 80
Purchase Order : ME21N .. .....................................................................................................................................34
Release Purchase Order: ME29N........................................................................................................................... 43
Bank Guarantee Process in SAP-ERP: ......................................................................................................................... 44
Maintain Bank Guarantee:....................................................................................................................................... 44
Request Letter to Banker for BG Confirmation: ...................................................................................................... 45
Source Inspection ....................................................................................................................................................... 47
Inventory Management:............................................................................................................................................. 50
Movement Type:............................................................................................................................................................50
Creation of Goods Receipt : .....................................................................................................................................51
Cancellation of Goods Receipt:................................................................................................................................ 51
Reservation: .. .....................................................................................................................................52
Goods issue .. .....................................................................................................................................53
APPENDIX ....................................................................................................................................................................... 55
Movement Types in SAP ERP...................................................................................................................................... 55
Material and Service Grouping................................................................................................................................... 57
Document Types......................................................................................................................................................... 59
Buyer Codes (Purchase Groups)................................................................................................................................. 60
Zonal Purchase Groups: .. .....................................................................................................................................61
Important Transaction Codes in SAP ERP - MM Module ........................................................................................... 64
Requirement Tracking Number:.................................................................................................................................. 69
SAP ERP – ICONS : QUCIK REFERENCE........................................................................................................................70
SERVICE ENTRY SHEET ................................................................................................................................................ 73
Pre-Requisites for Creation of Open POs (POs of IFS-ERP) :....................................................................................... 76
Work Break-down Structure ...................................................................................................................................... 79
Page 3 of 80
Introduction to SAP
SAP stands for “Systems, Applications and Products in data processing”. Amongst the software provider,
SAP comes up as the world’s third largest. 5 IBM employees founded SAP in 1972 in Walldorf, Germany.
SAP is an enterprise resource planning software which is produced by the German corporation.SAP is an
enterprise information software that was basically designed to manage resources, information and activities
that are required to complete business processes like procurement and managing orders, billing of orders
and management of human resources.SAP applications work with real time data. It has the ability to be
configured according to the needs of the business. It allows business to make rapid changes in their business
requirements through a common set of programs.
SAP ERP (Enterprise Resource Planning) is commercial software that will integrate all information altogether
in a single software considering various factors like time and cost. Organizations can easily meet their
business demands with the help of SAP.
SAP solutions include a number of functional modules, which support transactions to execute key
business processes, such as −
 Financial Accounting (FI)

 Financial Supply Chain Management (FSCM)
 Controlling (CO)
 Materials Management (MM)
 Sales and Distribution (SD)
 Logistics Execution (LE)
 Production Planning (PP)
 Quality Management (QM)
 Plant Maintenance (PM)
 Project System (PS)
 Human Resources (HR)
SAP MM is known as SAP Material Management system. SAP MM role in business process is as follows:
* A business process in SAP is termed as “Module”.
* SAP Materials Management (MM) is a part of Logistics area and helps to manage the procurement
activity of an organization from procurement.
* It supports all aspects of material management (planning, control etc.).
* It is the backbone of the Logistics area which incorporates modules like Sales and Distribution,
Production Planning, Plant Maintenance, Project Systems, Warehouse Management which are
extremely obsessed on Materials Management module.
Page 4 of 80
The features of SAP MM system are as follows:
* SAP MM is one of the modules of SAP that deals with material management and inventory
management.
* Material Management process ensures that there is never a shortage of materials or any gaps in the
supply chain process of the organization. SAP MM speeds up the procurement and material
management activities making the business run smoother with complete time and cost efficiency.
* It deals with managing the materials (products and or services) resources of an organization with the
aim of accelerating productivity, reducing costs and increase improvement and at a similar time be
versatile to accommodate changes in day to day life.
* It deals with the Procurement Process, Master Data (Material & Vendor Master), Account
Determination & Valuation of Material, Inventory Management, Invoice Verification, Material
Requirement Planning etc.
The SAP System consists of a number of components that are completely integrated with one another.
This integration allows the various departments and units of an enterprise to share and maintain the same
information.
Purchasing is a component of Materials Management (MM). The Materials Management (MM) module is
fully integrated with the other modules of the SAP System. It supports all the phases of materials
management: materials planning and control, purchasing, goods receiving, inventory management, and
invoice verification.
The first step to understand SAP is to have basic knowledge of screens like Login screen, Logout screen and so
on. Following screens will describes about the screen navigation and the functionalities of standard tool-bar.
Login to SAP
Log on to SAP ERP server. SAP login screen will prompt for User ID and Password. Provide the valid user ID
and Password and press enter. The user id and password is provided by system administrator.
Page 5 of 80
SAP Screen Navigation
 Menu Bar - Menu bar is the top line of dialog window in the SAP system.
 Standard Toolbar - Standard functions like save, top of page, end of page, page up, page down, print,
etc. are available in toolbar.
 Title Bar - Title Bar displays the name of the application/business process you are currently in.
 Application Toolbar - Application specific menu options are available on this toolbar.
 Command Field - To start a business application without navigating through the menu transaction,
some logical codes are assigned to the business processes.
Transaction codes are entered in the command field to directly start the application.
Page 6 of 80
Standard Exit Keys [ Back / Exit / Cancel]
Exit keys are used to exit the module or to log off.
They are used to go back to the last accessed screen.
New Session Icon

For creating a new session we use the ‘New session’ icon key.
Log Off
It is a good practice to log off from the SAP system when you finish your work.
There are several ways of login off from the system but it can be done using following instructions as shown
in image:
a) Click on System (from Menu Bar) and choose “Logoff”
b) You can also logoff by clicking the button at the upper-right corner of the screen.
When you log off, a message pops up stating, “Unsaved data will be lost. Do you want to log off?” Click “Yes”
if you have already safely posted (or saved) the transactions you were working on.
Page 7 of 80
Maintain User Details/Defaults
Click “System” on the menu bar. Select “User Profile” → “Own Data” as specified in the following
screenshot.
Page 8 of 80
APTRANSO Organization Mapping in SAP
Every organization has some framework or some structure is defined according to which the whole
business runs.
Enterprise structure is the structure that represents an enterprise in SAP ERP system. It is subdivided into
various organizational units which for legal reason or business related reason are grouped together.
Enterprise structure defines various levels in an organization. These levels are placed according to some
hierarchy.
Each level has some specific functionality associated with it, which in a combined way describes the
working of an organization. Also enterprise structure defines various organizational units that are present
in an enterprise.
Following diagram is one such organizational structure which describes the levels incorporated in an
organization. Client being at the topmost, followed by multiple company codes, followed by multiple
plants, plants having multiple storage locations with their own or centralized purchasing organizations.
Client
The fundamental explanation of Client is as follows:
 Client is a commercial organizational unit in R/3 system.
 It has its own set of master data with independent table sets.
 According to hierarchy, Client is at highest level in SAP system.
 Data that is maintained at client level is valid for all organizational levels.
Page 9 of 80
Company Code :
The fundamental explanation of Company Code is as follows:
 Within Client, Company code is the independent accounting unit.
 It is a legal entity that has its own profit, loss and balance statement.
Plant :
 Plant is an organizational unit within a company where activities take place. A plant will produce goods
and/or makes goods available for the company.
 It is unit having manufacturing facility or warehouse distribution center or a regional sales office within
logistic. It subdivides an enterprise in different aspects.
Storage Location:
 Storage location is an organizational unit which actually differentiates between different material
stocks in a Plant.
 Storage location is a place where stock is kept physically.
 Plant can be consisting of multiple storage locations. All data is stored at storage location level for a
particular storage location.
Purchasing Organization:
 Purchasing Organization is an organizational unit under company or plant which is responsible for
procurement activities according to requirements. It is responsible for external Procurement.
 Purchasing organization can be at client level i.e. centralized purchasing organization.
APTRANSCO is client to SAP.

In SAP-ERP, under APTRANSCO, each accounting unit/ Central Stores/AO(CPR)are a Plants.
A total number of 31 Plants are configured in the SAP ERP System. For Example: - AO/CPR, SE/OMCs are
individual plants. Also each Central Store is a Plant. There are Seven Central Store Plants configured in the
SAP ERP system.
Under each Plant there are Storage Locations. Under each Central Storage Plant there are storage
locations like Indoor, Outdoor, Indoor RMI, Outdoor RMI, etc. Under each SE/OMC Plant all the SE, DEs,
Sub-stations are Storage Locations.
Page 10 of 80
Master Data – SAP MM
SAP works on real time data that is there is no time lag between data entry and data availability. The
important thing while creating any data is to maintain data integrity. SAP data is categorized into two:
1) Master data - Data that is created centrally and it is valid for all applications. It remains constant
over the time but we need to update it on regular basis. For Example: Vendor is a type of master
data that is used for creating purchase orders or contracts.
2) Transactional data - Data that is associated with processing of business transactions is

Transactional data.
SAP MM Master Data is of following two types:

 Material Master Data
 Vendor Master Data
Material Master Data :
The key points about material master are as follows:
 This is the enterprise main source of material specific data. This data will include information on the
materials that a company can procure, or produce, or store or sell.
 Since there are different departments in an enterprise and each department works on some specific
material. So they will enter different information regarding their material. So each user department has its
own view of material master record. So, the data screens that are used to create material master can be
divided into two categories:
Main Data: This will include basic data (base unit of measure, weight), purchasing data (over tolerance and
under tolerance), accounting data (standard price, moving price).
Additional Data: This will include additional information like short description about material, currency
etc.
Material master has the four characteristics which will be discussing one by one in below context.
Material Type
Material Type is the classification of material mainly based on the attributes of the material. It gives an
indication of the category to which a particular material belongs.
Materials with some common attributes are grouped together and they are assigned to a material type.
Page 11 of 80
Sl No Material Type Code Material Description
1 ZSLM Substation Line Material
2 ZTOW Tower & Substation Structures
3 ZTPR Tower Parts
4 ZSCR Un Serviceable Obsolete Scrap Material
5 ZTPC T&P and Consumables
6 ZSER Service Materials
7 ZNST Non Stock Material
8 ZNVM Non Valuated Material
Material Group :
Material Group is a key that is used to group together several materials or services with the same
attributes. Each Material or Service is assigned to a particular material/ service group.
Material group is used to classify materials for reporting/classification/authorization purposes.
Material Group is used for reporting purpose and you can restrict the scope of analyses and
search material master records via search helps. The detailed list enclosed separately. The sample list of
material & service groups proposed in SAP ERP are as below.
MATERIAL GROUPS SERVICE GROUPS
Sl Material Group Service Group

Mat Group Description Sl No Service Group Description
No Code Code
1 M001 Power Transformers 1 S001 Power Transf. Erectn
2 M004 Station Transformers 2 S004 Stn. Transf. Erection
3 M006 Reactors & Stat Comp 3 S006 Reactors Erection
4 M008 Capacitor Banks 4 S008 Capacitor Banks Erec
5 M010 CT's upto 33 KV 5 S010 CTs1 Erection
6 M011 CT's above 33KV 6 S011 CTs2 Erection
7 M014 CVTs 7 S014 CVTs Erection
8 M016 PTs upto 33 KV 8 S016 PTs1 Erection
9 M017 PTs above 33 KV 9 S017 PTs2 Erection
Page 12 of 80
Number Range
When we create material master record every material is recognized by a number, that number will be
unique and known as material number. We can assign number to material through two ways:
 External number assignment - While creating material you have to enter your own number
(containing alphabets or digits), and that should be unique.
 Internal number assignment - While creating material you need not enter any number, system will
automatically generate a unique number to that material.
Material master contains all materials that a company procures produces or sells. Material Master is a
central data that is available at all the levels.
Vendor Master Data
The key points about vendor master are as follows:
 This is the enterprise main source of vendor specific data. This data will include information on vendors
from which a company can procure or it can sell.
 Vendor Master Record will contain information like vendor's name, address.
 Data in vendor master record is divided into three categories:
General Data: General data is maintained at client level and it is valid for all organizational levels.
Accounting Data: Accounting data is maintained at company level and it is valid for all plants belonging to
that company.
Purchasing Data: Purchasing data is maintained at purchasing organization level.
Vendor master has the three characteristics which will be discussed one by one in below context.
Vendor Account Group: Vendors are categorized according to requirements and some of the vendors
having similar characteristics are grouped together and placed in one category.
For Example: All local vendors can be placed under one account group.
Number Range : When we create vendor master record every vendor is recognized by a number, that
number will be unique and known as vendor number.
Vendor no., address like street name, postal code, country, bank details of vendor, accounting information
of the vendor, terms of payment that are defined between company and vendor (if available) are saved
while creating the vendor master.
Page 13 of 80
Procurement Process
Every organization acquires material or services to complete its business needs. The process of buying
materials and obtaining services from vendors or dealers is procurement. The steps which are required to
procure a material forms the procurement cycle. Every organization performs some common sequential
steps so that a material can be procured in right quantity at the right price. The important steps in
procurement cycle are as follows:
 Determination of Requirement
 Inviting bids from the vendors
 Creating Purchase Order
 Posting Goods Receipt
 Posting Invoice
Determination of Requirement:
This is the first step in procurement cycle. It is the logical subdivision where it is determined that what
material or services are required by company, and which supplier can fulfil the requirement. A list of
requirements is made and then it is approved by senior authority within the organization.
For P&MM POs : PR > RFQ > CONTRACT > PO
For Turn-key HQ-POs: PR > RFQ > PO
Page 14 of 80
Purchase Requisition (PR):
Purchase Requisition is a document that will contain list of requirements. A purchase requisition is a
request or instruction to Purchasing to procure a certain quantity of a material or a service so that it is
available at a certain point in time. Procurement in every organization starts with gathering of
requirements. Once requirements are gathered we need to inform the purchasing organization.
Purchase Requisition can be created by following below steps:
1) T-Codes:
ME51N for Create PR / ME52Nfor Change / ME53N for Display /ME54N for Release.
2) Path to Create Purchase requisition:
Logistics => Materials Management => Purchasing => Purchasing Requisition => Create / Change/ Display /
Release
On SAP Menu screen select Create execute icon by following the below path.
Select PR Document Type:

Page 15 of 80
Select the relevant ‘Account Assignment Category & Item Category’ if required and,
Select Material, Plant, and enter Quantity, Delivery Date etc.
Page 16 of 80
After entering all the values as above, check the document for correctness by clicking on the icon
and save the document, if no errors. Purchase Requisition will be created with an internal No. of ERP.
To display the document created, click on the ‘Other PR’ icon

By default latest document will be displayed, alternatively the document No. is entered in the relevant field.
Page 17 of 80
Maintaining Default Values
To reduce the amount of work involved in creating requisitions and POs, you can maintain default values.
This makes particular sense in the case of data that you have to enter over and over again in every
requisition or PO (the purchasing organization and purchasing group, for example).
You can maintain your personal default values for header and item data. This data is then automatically
inserted into the relevant fields when you create a new purchase order.
Choose Personal Settings in the application toolbar of the application in order to maintain your own
personal settings.
Setting Default Values In PR/PO Transactions: Personal Setting
Page 18 of 80
Defining the Document Overview
Page 19 of 80
Note that in the variant My Purchase Requisitions, only those requisitions that you created yourself are selected.
Page 20 of 80
Specifying the Criteria:
1. Choose to choose a selection variant. A menu appears.

2. Choose Purchase Requisitions from this menu. A selection screen appears.
3. On the selection screen, select Open only and enter 112 in the Purchasing group field.
4. Choose for dynamic selections.
In the upper left-hand part of the screen, requisition fields that can be used as additional criteria are
offered to you. Display the sub-nodes for Purchase requisition at that point.
5. Select Changed on and click to adopt selected criteria.
6. Choose to enter further data and enter '01.10.2017' to '14.01.2018' on the Intervals tab page in the
next window.
7. Choose Adopt . The selection screen reappears.
8. Choose Execute to carry out the selection immediately.
Choose Save to save your criteria as a variant.
If you no longer need the document overview, you can hide it by choosing the Document Overview Off.
Page 21 of 80
Request For Quotation (RFQ) :
A Request For Quotation (RFQ) is an invitation extended to a vendor by a purchasing organization to

submit a quotation (bid) for the supply of materials or performance of Services. RFQ contains details
about goods or services, quantity, date of delivery and date of bid on which it is to be submitted.
In Purchasing, the RFQ and the quotation form a single document. Prices and conditions quoted by
vendors are entered in the original RFQ. RFQs are subject to a release procedure.
RFQ can be created by following two ways – Manually or Automatically from PR.
RFQ can be created manually by following the below steps:
1) T-Code: ME41
2) Path to create RFQ:
Logistics >Material Management> Purchasing >RFQ/Quotation> Request for Quotation >Create
Page 22 of 80
In RFQ Initial Screen,
1) Select RFQ document type: ZANQ – Common RFQ,

2) RFQ Date will be the current date by default, and can be changed.
3) Select Quotation Deadline date, (Bid opening date shall be maintained forPVpurpose)
4) Purchase Organization – 1000,
5) Select the relevant Purchase Group,
6) Select the Delivery Date, if known otherwise keep blank.
7) Enter/select the Plant, if same plant is applicable for all the PO Items, otherwise keep blank,
8) Enter/select the Material Group, if the same is applicable for all items commonly, otherwise blank.
9) The Requirement Tracking Number enables to group together the purchasing documents that exist
for a certain material requirement. (Optional).
RFQ can be created 1) directly entering all data of material fo which prices are to be maintained, or
2) copying an existing RFQ using “ RFQ > Copy” from the Menu Bar, or
3) with reference to a Purchase Requisition [PR].
Page 23 of 80
1) Click on the icon and enter/select the required PR No. from the PRs screen,
Click on Continue
2) In the ‘Create RFQ : Header Data’ screen, enter the Bid No. in the “Coll.No.” field, and
Enter Bid opening Date in the “QuotDdln” field.
The input date in the “QuotDdln” field will be considered as the Base Date for Price Variation
Calculation purpose aginst the Purchase Orders placed based on this RFQ.
Page 24 of 80
3) In the ‘Create RFQ:Selection List: PRs’, select the required items and click on the ‘Adopt’ icon ,
4) In the ‘Create RFQ : Item” screen, Check the Quantity, Quotation Deadline, Delivery Date, for all items
selected,
5) In the ‘Create RFQ : Item overview’ screen, click on the ‘Vendor address’ icon ,
Page 25 of 80
6) Enter / Select the required Vendor from the master list, and save the document.
A new RFQ (Request for Quotation) against a vendor will be created with reference to PR.
Similarly Quotation/RFQs can be created for multiple vendors.
Maintain Price Against A Quotation
Vendor communicates or submit price for material and RFQ needs to be updated in SAP.
Using transaction code ME47, we can create a quotation based on a RFQ.
Page 26 of 80
1) Type the T-Code “ME47” in the command field,
2) Enter/ select the RFQ No. in the ‘Maintain Quotation: Initial screen’,
Enter the RFQ Number in the RFQ field, for which Vendor Quotation Price is to be maintained.
3) Select the relevant Payment Terms in the ‘Maintain Quotation: Header Data’ screen,
4) Enter the price quoted by the Vendor in the ‘Net price’ field against each item,
Page 27 of 80
5) Click on ‘Item Conditions’ icon and enter/maintain required Conditions, i.e. F&I, Discount etc.
for each item separately.
6) Go back and click on the ‘Item details’ icon and select/enter Tax Code as 01 (GST)
Page 28 of 80
For applying same tax code to all the items at a time, select all items by clicking on icon , click on ‘Tax code
update’ icon
7) Save the document after quotation is maintained for all items.
The Quantity & Prices of items can be revised/ edited before saving the document.
8) For display of item wise taxes, keep the cursor in the item line, and Select from Menu path :Item >
More Functions > Taxes
UPDATE Conditions for RFQ :ZRFQ
Run ‘ZRFQ’ for the RFQ document – 1000000473, to update the RFQ Conditions:
Enter the T-Code ‘ZRFQ’ in the command field, enter the RFQ document No. in the RFQ field, Execute.
Page 29 of 80
Note: AllQuotations against the Bid from different vendors shall be maintained in the same manner.
An RFQ document already created with a Vendor can be copied to create a new RFQ with another Vendor:
Select all or required items for which RFQ is to be created, and click on
By clicking on “Adopt+Details”, all Price conditions & Terms of original RFQ/Quotation will be copied.
Check the item wise Quantities required, and click on Vendor address, Select the Vendor and Save the new RFQ
document.
New RFQ document with a new Vendor will be created.
Page 30 of 80
Price Comparison (w.r.t. Bid No./Coll.No.) :
You can compare the prices from all quotations received as a result of a competitive bidding process using
the price comparison list. The comparison list ranks the quotations by item from lowest to highest price.
You can compare the quotations within the list with a sample quotation. The system displays the
percentage deviation between each quotation in the list and the sample quotation.
1) Type the T-Code “ME49” in the command field, for Price comparison,
2) In the ‘Price Comparison List’ screen, enter/select the details as below, and click on the ‘Execute’ icon.
3) Price Comparison of all the Vendors maintained with the same Bid No. will be displayed as below:
4) Position the cursor on particular item, and clicking on the menu “Quotation / Material / Vendor /
Additional Info” will display the relevant information.
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Changing an RFQ and Displaying the Change Log
Before you go about changing RFQs, you must find out which ones actually need to be changed.
For this purpose, generate a list of all RFQs (preferably by collective number).The desired changes must
be made separately for each RFQ.
Changing an RFQ
1. Choose> RFQ/quotation> RFQ>Change [ T-Code : ME42 ]

2. The initial screen appears.
3. Enter the number of the RFQ that is to be changed (use the "possible entries" facility to list the
RFQs to be changed by collective number).
4. Press ENTER .
5. The item overview screen appears.
6. Change the RFQ as desired:
7. Adding an item: To add a new item, choose> Edit> Enter lines
Changing details: If the changes you wish to make do not appear on the item overview, select the
item and choose> Item> Details. You can then make your changes on the item detail screen.
Deleting items: To delete an item, first select the items you wish to delete. Then
choose> Edit>Delete.
8. Save the RFQ.
Displaying the Change Log:
All changes to items are logged. The log shows: When the relevant data record was changed, Who
changed it, and What was changed.
1. Select the desired item in the item overview.
2. Choose: Item > Statistics > Changes
A log of all changes made to the selected item is displayed.
Creating a Delivery Schedule for an RFQ

If the desired quantity is to be delivered according to a pre-arranged schedule, you can enter each
desired delivery date (and time if you wish) in schedule lines. You enter this data in the delivery schedule
for the relevant PO item.
1. Select the desired item in the item overview.
2. Choose: Item > Delivery schedule.
The screen for entering schedule lines for the item appears.
1. Enter the delivery date, the delivery time-spot, and the scheduled quantity for each delivery. You
can specify the delivery date as a calendar day, week, or month.
The section Outline Agreements with Vendors contains detailed information on the subject of delivery
schedules created under scheduling agreements.
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Monitoring RFQs and Quotations
Displaying an RFQ:
1. Choose RFQ/quotation > RFQ or Quotation > Display.
2. Enter the RFQ number.
3. Press ENTER .
The item overview screen appears.
Displaying Statistical data on an Item:
To display general information about the status of individual RFQ items, first select the item.
Then choose: Item > Statistics > General.
The screen with the statistical details relating to the relevant items appears.
Analyses of RFQ :
To analyse RFQs, choose: RFQ/Quotation > RFQ > List displays.
You can analyse RFQs according to a variety of criteria:
• General : Listing of RFQs by range of material numbers or by purchasing group.
• Collective number : Listing of all RFQs having the specified collective number.
• RFQ number : Listing of RFQs belonging to a certain RFQ number range specified by you.
• Requirement Tracking Number : Listing of all RFQs having the tracking number assigned to a set of
purchase requisitions. Shows the requisitions for which RFQs have already been entered.
• Vendor/material : Listing of RFQs for a vendor, a material, or a material group.
Page 33 of 80
PURCHASING DOCUMENTS :
In the SAP System, the different kinds of purchasing document are distinguished from one another by
means of the document type. The latter determines the relevant number range and the fields that are
offered to you for data maintenance purposes, for example. The relevant document type appears as a
default value when you create a purchasing document.
Document types are defined for RFQs, purchase orders, and contracts, for example. The standard SAP
system includes certain document types. However, your enterprise can also define its own.
The Purchase Orders can be created directly by entering all data required for creating PO or by copying
another PO or with reference to RFQ/Contract/PR.
To create a purchase order by copying existing document (PO/RFQ/PR), you can either select the desired
document in the document overview, and adopt it in the current purchase order in the right-hand area of
the screen using the ADOPT button.In addition you can drag it onto the shopping basket symbol with the
left-hand mouse button.
The Purchase Order forms the basis for all follow-on activities like Goods Receipt, Invoice Verification, etc.
The incomplete Purchase Orders can be saved as HOLD document and later completed and saved thru
Change PO menu.
Purchase Order : ME21N

Type the T-Code ‘ME21N’ in the command field and press Enter.
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1) Select the relevant PO document Type from the drop down list of
Page 35 of 80
2) Select RFQ document [from document overview] and adopt the items for which PO is to be created.
To select the required RFQ document from the ERP System, open the Document Overview:
Click on and, Click on “Selection Variant” icon ,
Click on “Request for quotations”, enter the RFQ selection criteria, or for further criteria selection,
Click on the ‘dynamic selections’ icon & select the required variants to get the required documents
list, and Execute .
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From the list of RFQ documents, in the “Document Overview”, select the required document for which PO is to be
created, and Adopt the documents in to the PO by clicking on the icon .
3) Enter the respective Plant against each line item.

Alternatively, to select the same plant to all the line items,
Select the Plant column & Click on ‘Fast change’ icon below the Item Overview window.
Enter the plant code in the relevant space, and Execute, the plant code will be copied to all the line items.
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4) Check for the ‘Tax Code’ : “01” for all items under the tab: ‘Invoice’;
The HSN Code under the tab: ‘India’;
The Tax Code & HSN Codes will be copied in to the PO from RFQ, if the same are maintained in RFQ.
For free supply items un-check the Inv. Receipt,
Page 38 of 80
5) Enter the required item wise ‘Delivery Schedule’ under the Item Details [for all/required items]
Click on the triangular buttons beside the Item description, to scroll up/down the items:
6) Check the item details : Freight / Insurance of the items in the ‘Conditions’ tab.
7) For all the PO items having scheme id (except RMI and O&M), 5th level WBS element shall be selected in the Account
st
Assignment tab of Item details. For RMI 1 level WBS element is selected and for O&M no WBS element is required.
8) Check/select the code-004 : Inbound Delivery* in the confirmations control field under the ‘Confirmations’
tab of the Item Details. [ For field POs where no DI is issued, the Conf.Control field shall be blank ]
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*[ For all Purchase Orders of Corporate office for which dispatch instructions are mandatory ]
No dispatch Instructions against a PO are allowed in SAP-ERP unless 004 code selected under the confirmations tab.
9) Scheme ID & Funding Agency details can be viewed in “Customer Data” tab of Item details.
The Funding agency is to be selected in the confirmations tab of the Item details, if not fetched automatically.
10) Click on the ‘Header’ icon, to select the PO Header level Terms & Conditions. These are applicable to the
entire Purchase Order, i.e. For all items of the PO.
a) Select the Payment terms under the “Delivery/Invoice” tab: LA45 (Ex.LOA payment in 45 days)
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b) Penalty conditions under the “Conditions” tab: YMAT -Material Penalty, YMAX-Max. Penalty
c) Enter Bid No. in the Collective No. field, under “Additional Data” tab. Bid opening date can be entered in
‘Quotation Date’ field.
Note: For PV calculations the bid opening date, i.e. Quotation deadline dateof RFQ / the date entered in
‘Quotation Date’ field of the PO Header is considered as the Base date.
d) In the “External PO/” tab, Enter the required BG amount (in %), External PO No. (if any), Work
commencement & completion details etc. as required :
Page 41 of 80
e) Enter the Purchase Group under “Org. Data”. The Co. Code is 3000 & Purchase Org. is 1000 for APTRANSCO.
Click the button on the tool bar, this function is for default information for purchase order
header data and also purchase order item data. This will reduce the amount of redundancy in the data entry, i.e.
plant, company code etc.
Check the items copied in to the PO (from RFQ) and check for the associated PR, RFQ Nos. in the item lines.
11) Check the document by clicking on the icon and if no error messages observed, Save the document.
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After creation of a PO, it can be displayed using t-code ‘ME23N’ as below:
Display details of ‘Confirmations’ tab of Item details of a PO :
The type of procurement can be maintained in a field that is known as item category as shown below.
One Purchase Order may be created for several purchase requisitions
Release Purchase Order: ME29N
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Bank Guarantee Process in SAP-ERP:
ZBG1 – Create BG; ZBG3 – Edit BG; ZBG4 – Display BG
Maintain Bank Guarantee:
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Request Letter to Banker for BG Confirmation:
T-Code : “ZBGCFMPR”
 The confirmation details from the Banker can be entered with the t-code “ZBGCNFM”
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 “ZBGAPPR” T-Code is used for generating BG acceptance letter.
Select BG Type & BG document No. and Execute.

In the print window, select/ type “lp01” or “pdfprint” and click on ‘print preview’.
[In case No. of Extensions of BG, BG Extension Sl.No. is to be specified for Approval of specific BG]
“ZBGREP” T-Code is used to display a report of required BGs with a selection criteria shown in the image
below. [ No mandatory fields to be filled-in ]
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Source Inspection
T-Code : “ZQM_INSP”
1) Run the transaction code “ZQM_INSP”, and in the screen that appears:
2) Enter the PO document No.; PO Item No. (PO Item Over-view); andpress ‘Enter’ .
3) Select the inspection type ‘ZSOURCE’ and click on tab;
4) In the item details line, check & correct the Quantity, and enter Supplier’s Name & Location, Inspection
offer date; click on save icon to save the details.
5) Click on ; Inspection lot will be created, with an internal number.
6) Continue / press Enter.
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Dispatch Instructions- Inbound Delivery
T-Code : “VL31N”
1) Run the transaction code “VL31N”, and in the screen that appears:
2) Select the list of items to be deleted (for which no DI is to be issued at present), and click on delete
icon at the bottom left side of the screen and the selected items will be deleted from the list.
Note : PO Item quantity will be displayed in this screen and will be updated after entering the
inspection lot.
3) Now select a single item for which DI is to be issued, and click on the ‘Item details’ icon at the
bottom left side of the screen,
4) Click on the fourth tab ‘Tower Details” tab of the ‘Item Details’ screen, and enter the inspection lot No.
Check the Scheme ID, Funding Agency & Funding Partner etc.
5) Click on ‘Back” icon and continue the 3rd& 4th steps for other items for which DI is to be issued.
6) Save the document, an In-bound delivery Number will be generated.
Page 48 of 80
Page 49 of 80
Inventory Management:
Once goods are procured from vendor they need to be placed in company’s premises in correct place
so that they can be consumed when required. This introduces the term known as inventory
management. Inventory management deals with placing and handling stock received from vendors in
correct place within company’s premises. The key points about inventory management are as follows:
 Inventory management deals with management of stock either on value or quantity basis.
 Planning, entry and keeping records of all goods movement comes under inventory management.
 Goods movement will create a document that will update all stock quantity and value in inventory
that is known as material document.
 Material document will be referred by a document number and document year.
Inventory management deal with the following terms which are as follows:
 Movement Type, Goods Receipt, Reservation, Goods Issue
Movement Type:
Movement type describes the type of stock posting in inventory. It represents the posting in stock is
due to which type of order like whether stock is posted against goods receipt or goods issue. The
important movement types in sap mm are as follows:
 101 - Goods receipt for purchase order or order
 103 - Goods receipt for purchase order into GR blocked stock
 201 - Goods issue for a cost centre
 261 - Goods issue for an order
 301 - Transfer posting plant to plant in one step
 305 - Transfer posting plant to plant in two steps - placement in storage
 311 - Transfer posting storage location to storage location in one step
 313 - Stock transfer storage locations to storage location in two steps - removal from storage.
Movement types can be reached out by following the below steps:

Path to reach Movement Type:
Logistics => Materials Management => Inventory Management => Goods Movement => Goods Movement
(MIGO)
T-Code: MIGO
Page 50 of 80
Creation of Goods Receipt :
Goods receipt can be posted against various documents, ex. directly against a PO (or) through an inbound
delivery etc. Select the required document from the drop-down.
Select the movement type according to the requirement.
It will fetch all the details from the selected reference document like material, quantity, plant.
Select check tab to check the document. Then click on save. A material document number will be
generated.
Goods receipt is now posted against a purchase document.
Cancellation of Goods Receipt:
Sometimes goods receipt is not posted correctly. So goods receipt needs to be cancelled and it can be
cancelled. For this, on the same MIGO screen select from drop-down Cancellation against a material
document number. Provide the material document number.
It will fetch all the details from the material document. Select check tab to check the document. Then click
on save. A material document number will be generated. Goods receipt is now cancelled.
Page 51 of 80
Reservation:
Sometimes, stock need to be blocked in advance so that it can be available at a particular point of time.
This is known as reservation. Reservation ensures that stock is available and it can be used when
required. Reserved quantity can be viewed by T-Code MMBE. Provide the material number and plant.
Reserved quantity can be seen in the reserved tab as shown below.
Page 52 of 80
Goods issue
Goods Issue means moving stock out of inventory that may be due to several reasons like withdrawing of
material for sampling or returning the goods back to vendor. So, goods issue will result in decrease in
quantity in warehouse. Goods issue can be done by the same T-Code “MIGO”.
SAP Reversal
Sl APT Current SAP MIGO Mvt.
What to Do For What MIGO MVT.
No Process T-Code Trans Ref. Type
Transac Type
For Receipt of
Material from
Goods Receipt by Goods Delivery
1 Receipt Vendor against MIGO 103 104
Stores/AE Receipt Note
Delivery
Instruction
For Receipt of
Material from
Goods Receipt by Goods Purchase
2 Receipt Vendor against MIGO 103 104
Stores/AE Receipt Order
Purchase Order
(Local)
Release
Receipt/
Release GR Goods Receipt by GR Material
3 Release MIGO 105 106
Blocked Stock Stores/AE Blocked Document
Order
Stock
For Issue of
Goods Issue by
Material to
Issue/ Stores/AE from
4 O&M from VL02N NA NA 641
Transfer stores to Transit
Central Stores to
(Allotment)
Circle Location
Receipt of
Goods Receipt by
Receipt/ Material from Goods Outbound
5 Field/ AE from MIGO 101 --
Consumption Central Stores at Receipt Delivery
Transit (Allotment)
Circle Location
Consumption of
material to the
Maintenance Order
Issue of Material
Issue/ For creation of Goods
6 to Maintenance MIGO Order 261 262
Consumption Stock at field Issue
Order
Location
(For Devolution) -
Reversal
Consumption of
material to the
Project from the
For Issue of
Issue/ Location Goods
7 Material to MIGO Other 221Q 222Q
Consumption For creation of Issue
projects
Stock at field
Location
(For Devolution)
Transfer of
Issue/ material from From Project stock Transfer
8 MIGO Other 411Q 412Q
Transfer Project to Own to unrestricted Posting
stock in a plant
Transfer of
Issue/ material from From unrestricted Transfer
Transfer Own to Project to Project stock Posting
stock in a plant
Page 53 of 80
Reversal
Sl SAP SAP MIGO MIGO Trans Mvt.
What to Do For What APT Current Process MVT.
No T-Code Transac Ref. Type
Type
Transfer of
Issue/ material from one from Project to Transfer
Transfer Project to another Project Posting
Project in a plant
For creation of
Issue/ Devolution order Goods
11 Stock at field MIGO Order 262 261
Reversal for O&M Issue
Location
Issue of Material
against Devolution For Issue of
Issue/ Goods Purchase
12 Order - From Material against MIGO 351 352
Transfer Issue Order
Circle to Central DEV PO
Stores
Receipt of
Receipt/ Material against Receipt of material Goods Purchase
13 MIGO 101 102
Transfer Devolution Order - by Stores/AE Receipt Order
at Central Stores
Devolution order For creation of
Issue/ Goods
14 for project at Stock at field MIGO Other 222Q 221Q
Reversal Issue
Circle Location Location
Issue of Material
against Devolution
For Issue of
Issue/ Order - From Goods Purchase
15 Material against MIGO 351Q 352Q
Transfer Circle to Central Issue Order
DEV PO
Stores (For
Project)
Receipt of
Material against
Receipt/ Receipt of material Goods Purchase
16 Devolution Order - MIGO 101Q 102Q
Transfer by Stores/AE Receipt Order
at Central Stores
(For Project)
Goods
Return Rejection of Return
17 Return to Vendor MIGO Receipt 122 123
Delivery Material Delivery
PO or DI
Return
Return
delivery /
Return Rejection of Delivery
18 Return to Vendor MIGO 103 124 125
Delivery Material From GR
Material
Block
Document
Stock to
Transfer Handing Over of Transfer
19 Contractor for MIGO other 541 542
Posting Material for Repairs Posting
Refurbishment
Against Cost Stores Internal Goods
20 Goods Issue MIGO Reservation 201 202
Centre Drawl Issue
Removal of Survey
Goods
21 Goods Issue Scrapping Reported Items MIGO Other 551 552
Issue
from Stock
Items to be taken
into Stock after
Goods Goods
22 Scrapping approval of Survey MIGO Other Z61 Z62
Receipt Receipt
Reporting & its
execution in system
Page 54 of 80
APPENDIX
Movement Types in SAP ERP
Required For
S. Movement Corpor
Description of Movement
No Type FIELD ate
Office
1 101 Receipt of Material against Devolution Order - at Central Stores
Receipt of Material against Devolution Order - at Central Stores

2 101Q
(For Projects) Central Stores AE
NA
Receipt of Material against Devolution Order - at Central Stores - & ADE
3 102
Reversal
Receipt of Material against Devolution Order - at Central Stores -
4 102Q
Reversal (For Projects)
For Receipt of Material from Vendor against PO / Delivery

5 103
Instruction
For Receipt of Material from Vendor against PO / Delivery

6 104
Instruction - Reversal
For all Central
7 105 Release GR Blocked Stock to Un-Restricted / WBS Stock
Stores AE & ADE;
Field AE & ADE All
8 106 Release GR Blocked Stock to Un-Restricted / WBS Stock - reversal (TLC, Maint,
Lines, MRT)
9 122 Return Delivery to Vendor from UR
10 123 Return Delivery to vendor - Reversal
11 124 Return Delivery From GR Block
12 125 Return Delivery From GR Block - Reversal
13 201 Stores Internal Drawl

Central Stores AE
NA
& ADE
14 202 Stores Internal Drawl - reversal
Consumption of material to the Project from the Location

15 221Q
For creation of Stock at field Location (For Devolution) - Reversal
All TLC AE / ADE NA
Consumption of material to the Project from the Location -
16 222Q Reversal
For creation of Stock at field Location (For Devolution)
For Issue of Material to Maintenance Order For all Central

17 261
For creation of Stock at field Location (For Devolution) - Reversal Stores AE & ADE;
Field AE & ADE All
(TLC, Maint,
For Issue of Material to Maintenance Order - Reversal
18 262 Lines, MRT)
For creation of Stock at field Location (For Devolution)
19 344 Transfer Posting - UR to Blocked
Page 55 of 80
Required For
S. Movement
Description of Movement Corporate
No Type FIELD
Office
All AE / ADE
20 351 For Issue of Material against DEV PO
(Maint ..Lines .. MRT)
21 351Q For Issue of Material against DEV PO - Projects All TLC AE / ADE
All AE / ADE
22 352 For Issue of Material against DEV PO - Reversal
(Maint ..Lines .. MRT)
For Issue of Material against DEV PO for Projects -
23 352Q All TLC AE / ADE
reversal
24 411Q Conversion of Project stock to unrestricted Stock
25 412Q Conversion of unrestricted Stock to Project stock Central Stores AE &

ADE and all Field AE &
Conversion of Project stock to another project Stock ADE (TLC, Maint,
26 415Q
(WBS to other WBS) Lines, MRT)
Conversion of Project stock to another project Stock -
27 416Q
Reversal
NA
Transfer Posting of Stock to Contractor for
28 541
Refurbishment Field AE & ADE
Transfer Posting of Stock to Contractor for (Maint, Lines, MRT)
29 542
Refurbishment - Reversal
30 551 Removal of Survey Reported Items from Stock For all Central Stores
AE & ADE; Field AE &
ADE (TLC, Maint,
31 552 Removal of Survey Reported Items from Stock - Reversal
Lines, MRT)
Goods Issue by Stores/AE from stores to Transit Central Stores AE &
32 641
(Allotment) ADE
For taking Items into Stock after approval of Survey For all Central Stores
33 Z61
Reporting & its execution in system
AE & ADE; Field AE &
ADE (TLC, Maint,
For taking Items into Stock after approval of Survey
34 Z62 Lines, MRT)
Reporting & its execution in system - Reversal
Page 56 of 80
Material and Service Grouping
Sl No Code Description Sl No Code Description
1 M001 Power Transformers 1 S001 Power Transf. Erectn
2 M004 Station Transformers 2 S004 Stn Transf. Erection
3 M006 Reactors & Stat Comp 3 S006 Reactors Erection
4 M008 Capacitor Banks 4 S008 Capacitor Banks Erec
5 M010 CTs upto 33 KV 5 S010 CT Erection 33kV
6 M011 CTs above 33KV 6 S011 CT Erection >33kV
7 M014 CVTs 7 S014 CVT Erection
8 M016 PTs upto 33 KV 8 S016 PT Erection 33kV
9 M017 PTs above 33 KV 9 S017 PT Erection >33kV
10 M020 CBs upto 33 KV 10 S020 CB Erection 33kV
11 M021 CBs above 33 KV 11 S021 CB Erection >33kV
12 M023 Isolators upto 33 KV 12 S023 ISOL Erection 33kV
13 M024 Isolator above 33 KV 13 S024 ISOL Erection >33kV
14 M026 Lightning Arrestors 14 S026 LAs Erection
15 M030 Copper Cable 15 S030 Copper Cables Erect
16 M031 Aluminium Cable 16 S031 Aluminium Cable Erec
17 M032 Cable Accessories 17 S032 Cables-Not in Use
18 M033 EHT Line Cable 18 S033 EHT Line Cables Erec
19 M040 CR&Protection Panels 19 S040 CR&Protn.Panels Erec
20 M042 Relays 20 S044 Met. Equipment Erec
21 M044 Meters&Met.Equipment 21 S046 ACDC DB Panels Erect
22 M046 AC/PT Distr. Boards 22 S048 Bat&BatChargers Erec
23 M048 Battery&Bat.Chargers 23 S100 Grounding & Earthing
24 M050 Spares for PTRs 24 S104 Hardware Instalation
25 M051 Spares for CBs 25 S106 Piping Material Erec
26 M052 Spares for Isolators 26 S107 Marshalling Boxes Er
27 M059 Spares 27 S108 Busbar & InterConns
28 M100 Grounding & Earthing 28 S110 Lighting System Erec
29 M101 MS Rod 29 S112 Fire Fighting Works
30 M102 MS Flat 30 S113 Fire Protection Work
31 M103 GI Flat 31 S114 AC&Ventl. System Ere
32 M104 Hardware 32 S116 DG Set Erection
33 M105 Clamps & Connectors 33 S120 Conductor Stringing
34 M106 Piping Material 34 S123 Earth Wire Stringing
35 M107 Marshalling Boxes 35 S126 Insulators Hoisting
36 M110 Lighting System 36 S200 SAS Erection
37 M112 Fire Fighting 37 S250 GIS Erection-Proj
38 M113 Fire Protection 38 S251 Trans Con Equip-Proj
39 M114 AC & Ventlation 39 S252 Trans ConEHTPow-Prj
40 M116 DG Sets 40 S253 Air Cond Plant-Proj
41 M120 Conductor 41 S254 Porta Air Cond-Proj
42 M123 Earth Wire 42 S255 Compu includ-Proj
43 M126 Insulators 43 S300 Wave Traps Erection
44 M127 Composite Insulators 44 S302 PLCC Equipment Erec
Page 57 of 80
Sl No Code Description Sl No Code Description
45 M130 Bolts Nuts & Washers 45 S303 EPAX & Prot.Couplers
46 M200 SAS System 46 S304 RTU & Ass.Equipt Ere
47 M250 GIS Material 47 S310 OPGW & Hardware Erec
48 M300 Wave Traps 48 S311 OLTE Equipment Erec
49 M302 PLCC Equipment 49 S320 Telecom Cables Erec
50 M303 EPAX & Prot.Couplers 50 S350 Land & Rights
51 M304 RTU & Ass.Equipment 51 S351 Surveying
52 M310 OPGW & Hardware 52 S352 Roads & Bldg. Works
53 M311 OLTE Equipment 53 S360 Other Civil Works
54 M320 Telecom Cables 54 S400 Tower Works132&220KV
55 M322 Telecom Spares 55 S411 400kV Tower Erection
56 M350 Civil Material 56 S412 Special Towers Erec
57 M400 Towers 132kV 57 S414 Lattice Struct. Erec
58 M401 Towers 220kV 58 S415 Pipe Structure Erect
59 M411 Towers 400kV 59 S430 SS Structure Parts
60 M412 Special Towers 60 S440 TowerStructure Parts
61 M414 SS Structures 61 S450 Tower Accessories
62 M420 Not In Use 62 S500 Tools & Plants Erect
63 M430 SS Structure Parts 63 S510 Office Eqpt Services
64 M440 TowerStructure Parts 64 S520 Furniture & Fixtures
65 M450 Tower Accessories 65 S530 Vehicle Services
66 M500 Tools & Plants 66 S570 MeterTestng Services
67 M501 Testing Equipment 67 S710 Store Handling
68 M510 Office Equipment 68 S711 Store Handling SM-RM
69 M520 Furniture&Fixtures 69 S712 Store Handling LM-RM
70 M530 Vehicles 70 S715 Load/UnLoading SSM
71 M540 Stationery 71 S716 Load/UnLoading LNM
72 M550 Consumables 72 S720 Tansport SSM
73 M560 Fuels & Lubricants 73 S721 Transport LNM
74 M561 New Transformer Oil 74 S725 Hiring
75 M562 AC Plants 75 S726 Hire-Out
76 M563 Computer incl Softwa 76 S727 Hiringout4 officials
77 M600 Scrap Material-SubSt 77 S900 Professional Charges
78 M601 Scrap Material-Lines 78 S901 Audit fees
79 M602 Scrap Material-Veh 79 S902 Internl Auditor Fees
80 M603 Scrap Material-Gen 80 S903 Legal Charges
81 M610 Not in Use 81 S904 Other Profsnl Charge
82 M620 Not in Use 82 S910 Consultancy Charges
83 M630 Obsolete-Sub Station 83 S911 Honorarium
84 M631 Obsolete-Lines 84 S912 Technical Fees
85 M640 Un-Serviceable-SubSt 85 S914 Outsourcing wages
86 M641 Un-Serviceable-Lines 86 S916 Print& Statnry Works
87 M700 Non Stock Materials 87 S918 Traing& Partcp Fees
88 M800 Sales Service 88 S920 Advertisements
Page 58 of 80
Document Types
DOCUMENT TYPES IN SAP ERP SYSTEM

Sl No Doc Type Doc Description Purpose
A) PURCHASE REQUISTION
1 ZCON Annual Indent For Submitting O&M Annual Indents
2 ZFMP Field Material Indent for Material Procurement at Field Level
3 ZPRJ Projects Indent for Material Procurement for a Project / RMI
4 ZSER Field Service Indent for Service Procurement at Field Level
5 ZSTO Material Indent Indent for Allotment of Material
Indent for Procurement of Material / Service at Corporate
6 ZGEN Corp Off Mat &Ser
Office Level
B) REQUEST FOR QUOTATION (RFQ)
1 ZANQ Common RFQ
C) PURCHASE ORDER
For Placing a Purchase Order without any Reference

1 ZDPO Direct PO
Document (Any Authority)
P&MM Wing to enter details of Inspection Offer by Vendor
2 ZPMM P&MM PO
(Reference is Contract)
3 ZPRO HQ PO For Creation of Project Purchase Order
For Creation of RMI Works Purchase Order by Zonal Chief
4 ZRMI RMI Works
Engineers
For Creation of Material Purchase Order at Field Level
5 ZFMT Field Material PO
(Without any Dispatch Instructions)
6 ZSOM Field Works For Creation of Service (Works) Purchase Order at Field Level
For Creating Purchase Orders beyond delegated Powers by
7 ZFSP Field Special PO
Field CE / SE upon approval from competant authority
STO Allotment For Creating Allotment Orders for Material (For drawl of
8 ZSTO
Order Material from Central Stores)
9 ZDEV Devolution Order For Creating Devolution Orders
D) CONTRACT
P&MM Wing - For entering the Purchase Order without

1 ZQTY P&MM PO
reference to plant
2 ZRTC Rate Contract CE Transmission - For entering Rate Contracts
Page 59 of 80
Buyer Codes (Purchase Groups)
S. No Purchase Group Code Pur Group Members Description
1 100 AET-ADET-CE/CONST CE Construction
2 101 A1-D1-SEC-CE/CONST CE Construction
12 111 A3-D3-SE-CE/CONST CE Construction
13 112 A1-D1-SEP-CE/CONST P&MM / Construction
19 120 ADET-CE/LI Lift Irrigation
20 121 A1-D1-SE-CE/LI Lift Irrigation
24 130 ADET-CE/TEL&IT Telecom & IT
25 131 Ae-DT1-CE/TEL&IT Telecom & IT
26 132 A1-D1-SE-CE/TEL&IT Telecom & IT
34 140 ADET-CETR TRANSMISSION
35 141 A1-D1-SE-CE/TRANS TRANSMISSION
38 150 AET/ADET-CE/Civil CIVIL
39 151 A1-D1-SE-CE/Civil CIVIL
43 160 ADET-DET-ED/HR&P HRD & Planning
44 161 A1-D1-SE-ED/HR&P HRD & Planning
45 165 ADET-CE/PS&IPC Power Systems & IPC
46 170 ADET-CE/Comml Commercial & APPCC
47 175 PO-ED/General General
48 176 DMCC-ED/General General
49 180 PO-AS-DS-ADS Furniture
50 185 A-CE/SLDC SLDC
51 186 A1-SE-CE/SLDC SLDC
52 187 A1-D1-SE-CE/SLDC SLDC (EBC)
53 188 A1-D2-SE-CE/SLDC SLDC (SCADA)
54 190 JAO-FA&CCA/ACS ACCOUNTS
55 191 J1-SAO-DC1-FA/ACS ACCOUNTS
56 195 JAO-FA&CCA/FIN FINANCE
Page 60 of 80
Zonal Purchase Groups:
S. No Pur Group Code Pur Group Members Details

57 200 AET1-A1-DE-CE/VSP Visakhapatnam Zonal Office
61 210 AET-A1-SE/CVL/VSP SE Civil Visakhapatnam
62 211 AET-EE/CIVIL/VSP SE Civil Visakhapatnam
63 212 AET-EE/CIVIL/RJY EE Civil Rajahmundry
64 220 AET-A1-SE/TELC/VSP SE Telecom Visakhapatnam
65 221 AET-DE/TELC/VSP SE Telecom Visakhapatnam
66 222 AET-DE/TELC/RJY DE Telecom Rajahmundry
67 230 AE1-A1-DE-SEOMCVSP SE OMC Visakhapatnam
68 231 AE2-A1-DE-SEOMCVSP SE OMC Visakhapatnam
69 232 AET-DE/O&M/GWK DE O&M Gajuwaka
70 233 AET-EE/CONST/VSP EE Construction Visakhapatnam
71 234 AET-DE/MRT/VSP DE MRT Visakhapatnam
72 235 AET-DE/O&M/PENDRTY DE O&M Pendurthy
73 240 AE1-A1-DE-SEOMCSKM SE OMC Srikakulam
74 241 AE2-A1-DE-SEOMCSKM SE OMC Srikakulam
75 242 AET-DE/O&M/SKM DE O&M Srikakulam
76 243 AET-EE/CONST/SKM EE Construction Srikakulam
77 244 AET-DE/MRT/SKM DE MRT Srikakulam
78 250 AE1-A1-DE-SEOMCVZM SE OMC Vizayanagaram
79 251 AE2-A1-DE-SEOMCVZM SE OMC Vizayanagaram
80 252 AET-DE/O&M/GARIVID DE O&M Garividi
81 253 AET-EE/CONST/VZM EE Construction Vizayanagaram
82 254 AET-DE/MRT/VZM DE MRT Vizayanagaram
83 260 AE1-A1-DE-SEOMCRJY SE OMC Rajahmundry
84 261 AE2-A1-DE-SEOMCRJY SE OMC Rajahmundry
85 262 AET-DE/O&M/BMR DE O&M Bommuru
86 263 AET-EE/CONST/RJY EE Construction Rajahmundry
87 264 AET-DE/MRT/RJY DE MRT Rajahmundry
88 265 AET-DE/O&M/KKD DE O&M Kakinada
89 270 AE1-A1-DE-SEOMCELR SE OMC Eluru
90 271 AE2-A1-DE-SEOMCELR SE OMC Eluru
91 272 AET-DE/O&M/ELUR DE O&M Eluru
92 273 AET-EE/CONST/ELUR EE Construction Eluru
93 274 AET-DE/MRT/ELUR DE MRT Eluru
94 275 AET-DE/O&M/NDVL DE O&M Nidadavolu
95 300 AET1-A1-DE-CE/VJA CE Vijayawada Zone
99 310 AET-A1-SE/CVL/VJA SE Civil Vijayawada
100 311 AET-EE/CIVIL/VJA EE Civil Vijayawada
101 312 AET-EE/CIVIL/NLR EE Civil Nellore
102 320 AET-A1-AO-SE/TELC SE Telecom Vijayawada
103 321 AET-DE/TELC/VJA DE Telecom Vijayawada
104 322 AET-DE/TELC/NLR DE Telecom Nellore
105 330 AE1-A1-DE-SEOMCVJA SE OMC Vijayawada
106 331 AE2-A1-DE-SEOMCVJA SE OMC Vijayawada
Page 61 of 80
107 332 AET-DE/O&M/VJA DE O&M Vijayawada
108 333 AET-EE/CONST/VJA EE Construction Vijayawada
109 334 AET-DE/MRT/VJA DE MRT Vijayawada
110 335 AET-DE/HTL/VJA DE Hot Lines Vijayawada
111 340 AE1-A1-DE-SEOMCGTR SE OMC Guntur
112 341 AE2-A1-DE-SEOMCGTR SE OMC Guntur
113 342 AET-DE/O&M/GTR DE O&M Guntur
114 343 AET-EE/CONST/GTR EE Construction Guntur
115 344 AET-DE/MRT/GTR DE MRT Guntur
116 345 AET-DE/O&M/NRSRPT DE O&M Narasaraopeta
117 350 AE1-A1-DE-SEOMCOGL SE OMC Ongole
118 351 AE2-A1-DE-SEOMCOGL SE OMC Ongole
119 352 AET-DE/O&M/OGL DE O&M Ongole
120 353 AET-EE/CONST/OGL EE Construction Ongole
121 354 AET-DE/MRT/OGL DE MRT Ongole
122 360 AE1-A1-DE-SEOMCNLR SE OMC Nellore
123 361 AE2-A1-DE-SEOMCNLR SE OMC Nellore
124 362 AET-DE/O&M/NLR DE O&M Nellore
125 363 AET-EE/CONST/NLR EE Construction Nellore
126 364 AET-DE/MRT/NLR DE MRT Nellore
127 400 ADET-CE/400kV CE 400kV Construction
128 401 A1-D1-SE-CE/400kV CE 400kV Construction
135 421 AET1-A1-SE400C/VSP SE 400 KV Civil Visakhapatnam
136 422 AET2-A1-SE400C/VSP SE 400 KV Civil Visakhapatnam
137 423 AET1-A1-SE4O&M/VSP SE 400 KV O&M Visakhapatnam
138 424 AET2-A1-SE4O&M/VSP SE 400 KV O&M Visakhapatnam
139 425 AET-EE/400kV/VSP EE 400 KV Visakhapatnam
140 426 AET-DE/400MRT/VSP DE MRT 400 KV Visakhapatnam
141 427 AET-DE/400O&M/KLP DE O&M 400 KV Kalpaka
142 428 AET-DE/400O&M/VMG DE O&M 400 KV Vemagiri
143 429 AET-EE/400kV/VZM EE 400 KV Vijayanagaram
144 430 AET-EE/400kV/RJY EE 400 KV Rajahmundry
145 440 AET1-ADE-SE400/VJA SE 400 KV Vijayawada
146 441 AET2-ADE-SE400/VJA SE 400 KV Vijayawada
147 442 AET-EE/400CON/VJA EE 400 KV construction Vijayawada
148 443 AET-DE/400MRT/VJA DE MRT 400 KV Vijayawada
149 444 AET-DE/400O&M/STPL DE O&M 400 KV sattenapally
150 445 AET-DE/400O&M/MNBL DE O&M 400 KVManubolu
151 446 AET-EE/400CON/GTR EE Construction 400 KVGuntur
152 450 AET-EE/400CVL/VJA EE 400 KV civil Vijayawada
153 460 AET1-ADE-SE400/KDP SE 400 KV Kadapa
154 461 AET2-ADE-SE400/KDP SE 400 KV Kadapa
155 462 AET-EE/400CON/KDP EE Construction 400 KV Kadapa
156 463 AET-EE/400CON/ATP EE Construction 400 KV Anantapur
157 464 AET-DE/400MRT/KDP DE MRT 400 KV Kadapa
158 465 AET-DE/400O&M/CTR DE MRT 400 KV O&M Chittoor
Page 62 of 80
159 466 AET-DE/400O&M/NNR DE O&M 400 KV Nannoor
160 500 AET1-A1-DE-CE/KDP CE Kadapa Zone
164 510 AET-EE/CIVIL/KNL EE Civil Kurnool
165 520 AET-A1-SE/TELC/KDP SE Telecom Kadapa
166 521 AET-DE/TELC/KDP DE Telecom Kadapa
167 522 AET-DE/TELC/KNL DE Telecom Kurnool
168 523 AET-DE/TELC/TPT DE Telecom Tirupathi
169 530 AET1-A1-SE/O&M/KDP SE O&M Kadapa
170 531 AET2-A1-SE/O&M/KDP SE O&M Kadapa
171 532 AET-DE/O&M/KDP DE O&M Kadapa
172 533 AET-DE/MRT/KDP DE MRT Kadapa
173 534 AET-DE/HTL/KDP DE Hot Lines Kadapa
174 535 AET-DE/O&M/YGL DE O&M Yerraguntla
175 540 AE1-A1-SECONST/KDP SE Construction Kadapa
176 541 AE2-A1-SECONST/KDP SE Construction Kadapa
177 542 AET-A1-EECONST/KDP EE Construction Kadapa
178 550 AET1-A1-SE/O&M/KNL SE O&M kurnool
179 551 AET2-A1-SE/O&M/KNL SE O&M kurnool
180 552 AET-DE/O&M/KNL DE O&M kurnool
181 553 AET-DE/MRT/KNL DE MRT Kurnool
182 554 AET-DE/O&M/NDL DE O&M Nandyala
183 560 AE1-A1-SECONST/KNL SE Construction Kurnool
184 561 AET-A1-SECONST/KNL SE Construction Kurnool
185 562 AET-A1-EECONST/KNL SE Construction Kurnool
186 570 AE1-A1-DE-SEOMCATP SE OMC Ananthapur
187 571 AE2-A1-DE-SEOMCATP SE OMC Ananthapur
188 572 AET-DE/O&M/ATP DE O&Manathapur
189 573 AET-EE/CON/ATP EE Construction Anathapur
190 574 AET-DE/MRT/ATP DE MRT Ananthapur
191 575 AET-DE/WF/ATP DE WindfirmsAnathapur
192 576 AET-DE/O&M/HPR DE O&M hindupur
193 580 AE1-A1-DE-SEOMCTPT SE OMC Tirupathi
194 581 AE2-A1-DE-SEOMCTPT SE OMC Tirupathi
195 582 AET-DE/O&M/TPT DE O&M Tirupathi
196 583 AET-EE/CON/TPT EE Construction Tirupathi
197 584 AET-DE/MRT/TPT DE MRT Tirupathi
198 585 AET-DE/O&M/CTR
Page 63 of 80
Important Transaction Codes in SAP ERP - MM Module
IMPORTANT TRANSACTION CODES IN SAP ERP - MM MODULE
Master Data >>> Purchase Requisition >>>
MM03 Display Material (by selecting Views) ME51N Create Purchase Requisition
CS03 Display of Tower BOM ME52N Change Purchase Requisition
MM60 Materials List ME53N Display Purchase Requisition
AC03 Display Services ME54N Release Purchase Requisition
AC06 List Display: Service Master
XK03 Display vendor ME5A List of Purchase Requisitions
MKVZ List of Vendors: Purchasing MSRV1 Reporting on Services
Request For Quotation >>> Contract >>>

ME41 Create Request For Quotation ME31K Create Contract
ME42 Change Request For Quotation ME32K Change Contract
ME43 Display Request For Quotation ME33K Display Contract
ME47 Maintain Quotation ME35K Release Contract
ME49 Price Comparison ME9K Message Output: Contracts
Purchase Order >>> ME9F Message Output: Purchase Orders
ME21N Create Purchase Order ME2L Purchasing Document per vendor

ME22N Change Purchase Order ME2M Purchasing Document per Material
ME23N Display Purchase Order ME2N Purchasing Documents
ME29N Release purchase order MB51 Material Document List
Inspection >>> Dispatch Instructions (Inbound Delivery) >>>

ZQM_INSP Inspection Call Screen VL31N Create Inbound Delivery
QA11 Record Usage decision VL32N Change Inbound Delivery
QA12 Change Usage Decision VL33N Display Inbound Delivery
QA32 Inspection Lot selection
QA33 Inspection Lot selection VL06I In Bound Delivery Monitor
QE01 Results recording
QE02 Change Results
QE03 Display results
Page 64 of 80
Bank Guarantee >>> Price Variation >>>
ZBG1 Maintain Bank Guarantee ZMM_PR_VAR Price Variation
ZBG3 Bank Guarantee Change ZMMR_PRICE_REPORT Price Variation Report
ZBG4 Bank Guarantee Display
ZBG6 BG Extension
ZBG7 BG Return/Release
Request to Banker for
ZBGCFMPR
BG Confirmation
BG Confirmation details
ZBGCNFM ZPR1 Permanent Receipt
from Banker - Record
ZBGAPPR Acknowledgment of BG ZPR2 Change Payment Receipt
ZBGREP Bank Guarantee Report ZPR3 Display Payment Receipt
TOWERS >>> MATERIAL STOCK VIEWS >>>

ZBOMDISPLAY Display of Tower BOM MB52 Display Warehouse Material
ZTOWGR1 Tower GR MB53 Plant Availability
ZTOWGR2 Tower GR 105 & 310 MMBE Stock Overview
ZTOWCANCEL Cancel Posting MB5B Stock on Posting Date
ZTOWCONV Tower and Conversion MB5L List of Stock Values
ZTOWCALC Tower Calculation MB5T Stock in Transit
ZTOWERSTOCK Tower Stock
MATERIAL RESERVATION (Stores Internal) >>>

GOODS RECEIPT & ISSUE >>>
Good Receipt / Post
MIGO ZMB21 Create Reservation
Goods Movement
ZMM_Form13 Form 13 ZMB22 Project Stock Reservation
ZUD_REV UD Reversal ZMB23 Project Stock Reservation
ZMM_TNOTE Transport Note
ZRES_APPROVAL Reservation Approval
ZGATE01 Create Gate Pass
ZGATE02 Gate Pass Edit
ZGATE03 Print Gate Pass
ZMM_GATENORANGE Gate Pass No Range
VL10D Purchase Order Items

Change Outbound
VL02N
delivery
VLSP Outbound Delivery Split
Purchase Order Items
VL04
selection
ZMR_PRINT Out Bound Delivery Print
ME80RN General Analyses (L,K) ZVENDOR_DETAILS ZQM_VENDOR_REGISTRATION
Print Work Bill : ZMM_WORKBILL, For Form-13 : ZMM_FORM13 (enter data) & ZMM_FORM13PRINT (for print)
Page 65 of 80
SAP ESY ACCESS TREE & T-CODES :
Page 66 of 80
Page 67 of 80
Page 68 of 80
Requirement Tracking Number:
Requirement Tracking Number is used for tracking specific requirements.

It can be entered during purchase requisition creation and is copied into purchase order document.
It is maintained on item level and items can be selected by this number in several reports like MELB.
When you click Continue, you will be back to the initial selection screen.
You also have a variety of select options and should choose the most suitable options to narrow the search.
 Enter requirement tracking number(s).
 Execute.
Page 69 of 80
SAP ERP – ICONS : QUCIK REFERENCE
Page 70 of 80
Page 71 of 80
Page 72 of 80
SERVICE ENTRY SHEET
* Services are meant for direct consumption instead of keeping them in inventory
* Service description along with its unit of measure is stored as master data in a record that is known
as the service master record.
* The system stores the services that have been procured as a record in a sheet that is called as the
service entry sheet.
Path to Create Service Entry Sheet:
Logistics => Materials Management => Service Entry Sheet => Maintain T-Code: ML81N
1) On the SAP Menu screen, select the Maintain execute icon by following the above path,
2) Click on “Other Purchase Order” and Select/ Enter PO No. & PO Item No. in the Select Screen.
Page 73 of 80
3) Click on the “Create Entry Sheet” icon ,
4) Click on the “Service Selection“ icon ,
5) In the Service Selection screen, click on ‘continue’ and the following screen will be displayed.
6) Select the lines for which Service Entry Sheet is to be created, and click on , all the selected lines
will be copied in to the Service Entry Sheet.
7) Provide all the necessary details, Document date (Bill/Invoice date), Posting date, and enter the relevant short
text,
8) Click on the Accept icon and if document is O.K., then click on save icon.
9) The Service Entry Sheet will be saved with the already displayed Entry Sheet No.
Page 74 of 80
Different display Views of Service Entry Sheet :
Page 75 of 80
Pre-Requisites for Creation of Open POs (POs of IFS-ERP) :
1) Check the Vendor (Firm / Supplier/ Contractor) details in SAP-ERP ( Use the T-code XK03 )
a) Check for Vendor Address,
b) Click on “CIN Details” to check PAN No. & Vendor is Registered or not. If the Vendor is registered, the GSTN
of the Vendor and City & Region Code in the Address shall match, i.e. both GSTN & Region Code shall be of
the same State only.
[In SAP-ERP unlike IFS-ERP, Vendor shall be created with single address only. In case the Vendor has
multiple/different addresses in the same region (state) or other region, Vendor codes are to be created for
each address separately, and PO Vendor is to be selected based on the address & corresponding GSTN only].
c) If the Vendor is registered under GST Act, GSTN shall be get updated in the Vendor Master, before placing PO
List of Vendors can also be checked with the T-Code “MKVZ” [ P.Org.-1000, A/c Group-ZDOM ]
Page 76 of 80
2) Check for all the items of PO, i.e. Material & Service items of PO are available in SAP-ERP or not.
a) Material can be checked by using the T-code “MM03”
b) The HSN Code of Material shall be checked for correctness [in the tab of Foreign Trade Export].
The Material items wise GST percentage will be fetched based on this HSN Code mapped to the Material in
Material Master. In case of any mis-match of HSN code, the same shall be get corrected before PO create.
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c) Similarly SAC Code of Service items shall be checked for correctness, as the SAC Code in the Vendor
Invoice shall be matched with that of our SAP-ERP System code.
3) PO Creation shall be started after all the information pertaining to the PO items & Vendor details are readily
available in SAP-ERP.
4) While creation of a new Purchase Order using t-code ME21N if it is in-complete and to be continued later,
click on the ‘Hold’ to save the so far entered item details, a SAP-ERP PO No. will be generated, and can be
continued later using the t-code ME22N (edit/change PO) using the PO No.
Page 78 of 80
SAP-ERP : PROJECT SYSTEMS :
Work Break-down Structure:
* WBS - Work Breakdown Structure is mainly used in Project System (PS) module. Tcode : CJ20N
* For any project defined we must have at least one WBS. Within this WBS we can have Networks.
* Networks are nothing but the series of activities. Material are used to perform the activities. In a Project with WBS element
you can create a structure to book the cost on different heads. The budget allocated for Project can be distributed to various
WBS elements and helps in monitoring the cost at WBS level as well as Project level. WBS elements also help you to plan
material & resource by using activities.
st
* In present SAP-ERP, the Scheme Code is considered as 1 level WBS and sub-divided in to different activities.
th
* For all the PO items having scheme id (except RMI and O&M), 5 level WBS element shall be selected in the Account
Assignment tab of Item details. For RMI 1st level WBS element is selected and for O&M no WBS element is required.
Page 79 of 80
Page 80 of 80
CONTENTS
1. Enterprise Structure ..................................................................................................... 2

1.1 Plant .............................................................................................................. 2
1.2 Storage Location ............................................................................................ 3
1.3 Purchase Organization .................................................................................. 3
1.4 Purchase Group ............................................................................................. 3
2. Master Data ............................................................................................................... 3

2.1 Material Master ........................................................................................... 4
2.2 Vendor Master ............................................................................................. 5
2.3 Purchase Information Record ...................................................................... 5
2.4 Source List .................................................................................................... 6
2.5 Quota Arrangement ........................................................................................ 6
3. Procurement .............................................................................................................. 6
3.1 Purchase Requisition ................................................................................... 7
3.2 Request for Quotation .................................................................................. 7
3.3 Contract ...................................................................................................... 7
3.4 Purchase Order ............................................................................................ 7
3.5 Release of Purchase Order ........................................................................... 8
3.6 Pricing Procedure ........................................................................................... 8
3.7 Valuation ........................................................................................................ 8
4. Inventory Management & Physical Inventory ............................................................ 9
5. Logistics Invoice Verification ....................................................................................... 10
6. External Services management ................................................................................... 10
7. Reports ....................................................................................................................... 11
1
Business Blue Print
The Business Blueprint is a detailed description of business processes and system requirements. In a
Business Blueprint for Projects, you create a project structure in which relevant business scenarios,
business processes and process steps are organized in a hierarchical structure. You can also create
project documentation and assign it to individual scenarios, processes or process steps. You then assign
transactions to each process step, to specify how your business processes should run in your SAP
systems.
1. Enterprise Structure
An important step during the implementation of SAP is the mapping of enterprise-specific structures
and requirements using R/3 organizational units. Decisions on the use of specific organizational units are
influenced by various factors relevant to the organization itself and the implementation goals it is
pursuing.
The selection, usage specification and linking of the SAP organizational units should be carried out at an
early point in the project, and involves management as well as user departments. Usually there are
several different possibilities of mapping enterprise-specific organizational units. You can define
alternative organizational structure scenarios in order to compare them and decide on the most suitable
one. Mapping the enterprise onto SAP organizational units becomes transparent, and the simple,
systematic display supports the interpretation of differences between alternative structure scenarios.
organization structure includes:
1. Plant
2. Storage Location
3. Purchasing Organizational
4. Purchasing Group
1.1 Plant
Plant is the organizational unit within logistics. It is a place where the material is produced or goods &
services produced. And besides, it also can be a branch plant or warehouse of collected goods & services
to be delivered to the customer.
For company code, it is defined by SAP-FI, then after plant can be defined from MM.
Company code Plant Description SAP Code Location

CS01 Plant (domestic) PL01 Bangalore
2
1.2 Storage Location
A storage location is the place where stock is physically kept within a plant.
SNO Plant Storage Location SAP Code
1 Raw Materials RW01

2 Semi Finished SF01
PL01
3 Finished Products FP01
4 Consumables CN01
1.3 Purchasing Organization

Purchasing Organization is an organization of logistics units. This unit functions as procurement needs.
Purchasing organization will make the purchase of materials and services (services) as needed, to
negotiate a purchase with vendors, and responsible for this purchase transaction.
Company code Plant Pursh Org
CS01 PL01 PR01
1.4 Purchasing Group

The purchasing organization is further subdivided into purchasing groups (buyer groups), which are
responsible for day-to-day buying activities. A purchasing group is an entity, which communicates with
the vendor. Used to determine the department which makes a request materials or services on the
Purchase Requisition.
Company code Pursh Org Pursh Group
CS01 PR01 PG1
2. Master Data
Master data is related to data that will be used in the SAP system. In Material Management, there are
some master data that must be met are:
1. Material Master
2. Vendor Master
3. Info Records
4. Source list
5. Quota Arrangement
3
2.1 Material Master
It is a Master file which contains information of a particular material, depending upon the views selected
from the user departments. It is the company's central source for retrieving material specific data.
2.1.1 Material Type:
Material Type Description
ROH Raw Material

FERT Finished Product
HALB Semi finished product
PIPE Pipeline
DIEN Services
ERSA Spare parts
2.1.2 Number Range for Material Type:
Material Type Number range Number Range
ROH 0000000001 9999999999

FERT 0000000001 9999999999
HALB 0000000001 9999999999
PIPE 0000000001 9999999999
DIEN 0000000001 9999999999
ERSA 0000000001 9999999999
2.1.3 Material Valuation:
Material Type Mvg Avg price Standard price
ROH X -
FERT - X
HALB X -
PIPE X -
DIEN X -
ERSA X -
4
2.1.4 Material views:
Material Type Basic sales MRP Purchase store A/c Forecast

data
ROH X - X X X X X
FERT X - X X X X X
HALB X X X X X X X
PIPE X - - X X - -
DIEN X - - X X - -
ERSA X - - X - X -
2.1.5 Material Group:
Company code Pursh Org Pursh Group Mat Group
CS01 PR01 PG1 MG01
2.2 Vendor Master
The collective term for all vendor master records. The vendor master contains the data of all vendors
with which a company Conducts business. Data in vendor master record control how transaction data is
posted and processed for a vendor.
Vendor Account Group:
Vendor Account group is classifying features in vendor master that determines

 the type of number assignment
 A number range for assigning account numbers
 which field are displayed and whether their entry is required when you enter or change vendor
master data.
2.3 Purchase Info Record
Vendor and material information is stored is SAP in the form of purchase info record. Info record will
have the following key data:
 Info Record Number
 Vendor code
 Material code
 Purchasing Organization
 Info category( standard, Sub-contracting, Pipeline)
5
2.4 Source List
To define a source of supply as fixed. Such sources count as preferred sources over a certain period of
time. As an aid in selecting the preferred source during the source determination process. To block the
external procurement of a material with respect to a particular vendor for a specified period of time.
2.5 Quota Arrangement
Quota Arrangement is a mechanism for determining which portion of the total requirement of a
material over a period is to be procured from a certain source. If quota arrangements exist in the
system, they exert an influence with regard to precisely which source (perhaps from a number of
different possibilities) is assigned to a given purchase requisition.
3. Procurement
Procurement Cycle Summary
Purch. req.
8 Payment processing 1 Determination of Req.

Invoice
Purch. ord.
10
? 20
30
2 Source determination
7 Invoice verification Procurement
6 Goods receipt
Purchase 3 Vendor selection
Order
10
20
30
5 PO monitoring 4 PO processing
6
3.1 Purchase Requisition(PR)
A Purchase Requisition is an internal document, which is a request or instruction to Purchasing

Department to procure a certain quantity of a material or services so that it is available at a certain point
in time.
The following shall be the source of Purchase Requisition (PR):
 MRP (Materials requirement planning including reorder /forecast)
 Manual
 Maintenance Order
3.2 Request for Quotation (RFQ)
Request for Quotations are the enquiries issued to the identified vendors for receiving the Price quote of
required materials. RFQ’s will be issued to each of the approved vendors for a particular material. Based
on the numbers of vendors the same number of RFQ’s will be issued.
RFQ will be created with reference to the Purchase requisition if it exists as per the PR
procedure earlier defined e.g. PR created manually or through MRP. RFQ’s also will be created without
any reference if no PR exists.
3.3 Contract
Central purchase organization will create the contract after arrival of the total requirements of
individual plants after negotiations with vendors. Referring to the contracts individual purchase
organizations will raise the Release order as per the plant requirement.
There are two types of contract.
Description Doc Type Number Range
Value Contract WK Standard

Quantity Contract MK Standard
3.4 Purchase Order(PO)
A purchase order is a formal request to a vendor to supply certain goods or services under certain
conditions. Purchase Order can be created with reference to the RFQ, PR, Contract or Last Purchase
Order, this will help the system to copy all the details in the RFQ on to the purchase order and the
relation of the RFQ and the purchase order is set in the system.
If purchase order is created with reference the vendor details e.g. Vendor Address, Payment
Terms, Inco terms will be copied from the vendor master. Purchase Order can also be created without
any reference, in this case the user will have to enter all the details e.g. Vendor, material, pricing
condition etc
Material and Vendor related Excise and Sales tax details shall be identified using the Tax Code at
the Item level in PO.
7
3.5 Release of Purchase Order
Release procedures will be defined for the following documents:

 Purchase Requisition
 Purchase Orders
In case of Purchase Requisitions only Engineering Purchase Requisitions will follow a release procedure
as the engineering specification are to be vetted out.
In case of Purchase Order the entire PO will follow a Release Procedure. Release procedure will be
different for each of the Purchasing Groups as per the person responsible (i.e. Imports, Local, Service,
Admin and Plant Purchases). The entire POs will be finally released by the MD. All types of PO will have a
release procedure including STO.
3.6 Pricing Procedure
We define access sequence and condition types in purchasing conditions and assign these condition
types in the pricing procedure. Schema group allow you to group together certain purchase
organizations that uses the same calculation schema, we can also use them to group together vendors
for whom the same calculation schema is valid.
3.7 Valuation
Valuation Area:
All materials are evaluated at plant level only. Each material is assigned to valuation class while creation
of its master record.
Valuation Class:
Grouping of similar accounting requirement materials for automatic determination of G/L accounts is
called valuation Class.
Account Category Reference:
Grouping of valuation classes for the purpose of automatic account determination is called as account
category reference.
Valuation class Material Type Valuation Class Account Category

description reference
Raw Material ROH 3000 0001
Finished Product FERT 7920 0009
Semi Finished Product HALB 7900 0008
Services DIEN 3400 0006
Spare Parts ERSA 3040 0003
8
Valuation grouping Code:
Valuation Area Valuation grouping code
PL01 0001
4. Inventory management
4.1 Goods Receipt:
Goods receipt is done using Movement Type 101, Stock is directly posted to unrestricted stock or quality
inspection stock and vendor can be paid after invoice verification.
Both rejection and acceptance cannot be done for the material on which quality management is
not activated. The system cannot allow posting accepted quantity and rejected quantity simultaneously
in single posting and for such condition two step goods receipt procedure is to be followed.
4.2 Goods Issue:
A goods issue is a goods movement with which a material withdrawal or material issue, a material
consumption, or a shipment of goods to customer is posted. A goods issue leads to reduction in
warehouse stock.
4.3 Transfer Posting:
A transfer posting is a general term for stock transfers and changes in stock type or stock category of a
material. It is relevant whether the posting occurs in conjunction with a physical movement or not.
4.4 Physical Inventory:
In SAP system the Physical inventory is done in three steps.

• Creation of physical inventory documents
• Counting of physical stock and entering physical stock into the system
• Simulate and posting the differences, recounting if necessary and re-posting where the difference goes
to the Profit and Loss statement i.e. automatic charging of GL a/c and adjustment in the physical
inventory.
After user decides to carry out physical count, user will have to create physical inventory document,
enter the count and post the difference (excess/shortage). At the time of posting the difference the
system will generate the material document. For valuated stocks accounting document will also be
generated.
9
5. Logistics Invoice Verification
Incoming invoices are verified in terms of their content, prices, and arithmetic. When an invoice is
posted, the invoice data is saved in the system. The system updates the data saved in the invoice
documents in Materials Management and Financial Accounting.
 There will be two types of invoice verifications, one for

 the vendor who has supplied the material and the other is for freight/ delivery cost / services.
 Invoice verification will be performed with reference to a Purchase Order or a Delivery Note,
based on provision created at the time of Goods receipt. Invoice verification can be done after
goods receipt.
 Any cost, which needs to be loaded on the inventory, should be incorporated in the purchase
order as a part of price.
6. External Service Management:

External Services Management provides a basic process for the procurement of externally performed
services. This basic process comprises the following functionality:
Service master records in which descriptions of all services that may need to be procured can be
stored. In addition, a standard service catalog (SSC) and model service specifications (MSS) are
available.
A separate set of service specifications can be created for each concrete procurement project in
the desired document (e.g. PM maintenance plan or maintenance order; PS network; MM purchase
requisition, RFQ, contract, purchase order, or service entry sheet).
External Services Management offers two basic ways of specifying services:
1. As planned services with description, quantity, and price.
By “planned services” we mean services whose nature and you know scope at the start of a
procurement project or transaction.
At the time the services are requested, the individual specifications are entered either with the aid of a
service master record or directly as short and long texts. Price and quantity are specified in both cases.
2. As unplanned services with the setting of a value limit only.
By unplanned services, we mean services that cannot be specified in detail because their precise
nature and scope are not initially known, or services which - for various reasons - you do not wish to
plan. Unplanned services therefore have no descriptions.
They are entered in the form of maximum values in the relevant currency. Services may be performed
up to a value not exceeding these value limits. This ensures an element of cost control.
10
7. Reports
SNO Title Code Purpose
1 Stock Overview for Material MMBE To check the current stock levels
2 Material Document List MB51 To know details of Material doc.
3 Materials analysis, Purchasing values, To know Material / Plant / Pur. Org. wise
Basic List MCSG PO Value, GR Value, Invoice Amt.
To know GR/IR balances with reference
4 List of GR/IR balances MB5S to vendor, Pur. Org., Pur. Group,
Material, Pur. Doc. or Item
5 Display of Stock in Transit MB5T To know stock in transit with reference to
material, sending plant, receiving plant or
company code.
To know the list of materials available in
6 Materials List MM60 SAP with reference to material, plant,
material type, material group or created
by
7 Material analysis Stock selection MC.9 To know the report on material, valuated
stock, consignment stock
8 Storage location analysis, Stock MC.5 To know the report on valuated stock &
selection consignment stock of storage location
9 Key-figure, Slow Moving Items MC46 To know the slow moving items (number
. of days wise) and total stock value
10 Purchasing Doc. Per Vendor ME2L List of Purchase Docs. & status of GR, IV
11 Purchasing Doc. Per Material ME2M List of Purchase Docs. & status of GR, IV
12 Purchasing Doc Per Account ME2K List of Purchase Docs. & status of GR, IV
Assignment
13 Purchasing Doc Per Project ME2J List of Purchase Docs. & status of GR, IV
14 Purchasing Doc Per Material Group ME2C List of Purchase Docs. & status of GR, IV
15 Purchasing Doc Per requirement ME2B List of Purchase Docs. & status of GR, IV
Tracking Number
16 Purchasing Doc Per Doc. Number ME2N List of Purchase Docs. & status of GR, IV
17 Purchasing Doc Per Supplying Plant ME2W List of Purchase Docs. & status of GR, IV
18 Stock on Posting Date MB5B Stock on Posting Date
19 List of Vendors MKVZ List of Vendors
20 List of Inventory Diff. MI20 List of Diff. between the physical count
. entered and the book stock.
21 List of Inbound Deliveries VL06I List of Inbound Deliveries
22 List of POs Pending ME55 List of POs pending release
Release
23 List of PRs ME5A List of PRs
11
Content:
1. General Overview
2. Blueprint: Organization Structure
3. Blueprint: Master Data
4. Blueprint: Business Process
5. Mapping customer's organization with SAP Solution
6. Managing customer expectations
7. Challenges and how to overcome
Call us : (414) 433-4823 / (414) 433-4825

General Overview
 BP: The Business Blueprint is a detailed
description of company’s business
processes and system requirements that
will be implemented on SAP system
 Global Mining services is mining
company implementing SAP module
MM, FI, CO and PM.
Call us : (414) 433-4823 / (414) 433-4825

Blueprint: Organizational
Structure - MM
 Company code
 Plant
 Storage location
 Purchasing organization
 Purchasing group
Call us : (414) 433-4823 / (414) 433-4825

Enterprise Structure
PT.Mandala Karya Prima
Picture
Company
PT. MANDALA KARYA PRIMA
Code
(0200)
Plant
JAKARTA TARAKAN SESAYAP
(0201) (0202) (0203)
Jakarta Headquarter Tarakan Office Main Warehouse

(0001) (0001) (0001)
Bekasi Warehouse Krassi Warehouse

(0002) (0002)
Fuel Storage
(0003)
Loan
(0004)
Fuel Truck 1
(9F01)
Fuel Truck 2
(9F02)
Fuel Truck 3
(9F03)
Storage Location
Fuel Truck 4
(9F04)
Fuel Truck 5
(9F05)
Fuel Truck 6
(9F06)
Fuel Truck 7
(9F07)
Lube Truck 1
(9L01)
Lube Truck 2
(9L02)
Lube Truck 3
(9L03)
Lube Truck 4
(9L04)
Blueprint: Master Data - MM
 Material master data
 Vendor master data
 Purchasing info record
Call us : (414) 433-4823 / (414) 433-4825

Blueprint: Business process
 Master data maintenance
 Procurement
 Inventory Management
 Logistic Invoice Verification
 Automatic Posting
 Material Requirement Planning
Call us : (414) 433-4823 / (414) 433-4825

Procurement
Call us : (414) 433-4823 / (414) 433-4825

Procurement
 Purchase requisition
- Type (Z102 – standard & ZSAP external) & number
range
- Release strategy: release code for approval,
scenario of approval
 RFQ
- Type (Z202) & number range
 Contract
- Type (Z302) & number range
 PO
- Type (Z402, Z502, Z499) & number range
- Release strategy: release code for approval,
scenario of approval
- Condition type
Call us : (414) 433-4823 / (414) 433-4825

Inventory Management
 Good Receipt
- From PO (manual & Automatic)
- From others
- From refurbishment
- Return to vendor
 Good Issue
- Good issue to work center
- Good issue to cost center
- Good issue to be scrapped
Call us : (414) 433-4823 / (414) 433-4825

Inventory Management
 Stock transfer
- Between plant
- Between storage location
- Block stock to unrestricted & the
opposite
 Good Issue
- For free stock
- For block stock
Call us : (414) 433-4823 / (414) 433-4825

Logistic Invoice verification
Automatic Posting Configuration
• Inventory • FICO
Management
Material Accounting
Document Document
Automatic posting configuration
Call us : (414) 433-4823 / (414) 433-4825

Material Requirement Planning
 Determine MRP Group & Controller
 Factory calendar
 MRP Type (PD, ND, VB)
 Calculation:
- PR processing time
- Planned delivery date
- GR processing time
Call us : (414) 433-4823 / (414) 433-4825

Mapping customer's organization
with SAP Solution
Call us : (414) 433-4823 / (414) 433-4825

Managing customer
expectations
 Brief overview of SAP capability and
limitation on the overview training
 State from beginning to set realistic
objective
 Grab as much as you can of customer
expectation and offer realistic solution
 Knowing the scope in order to manage
customer request
Call us : (414) 433-4823 / (414) 433-4825

Challenges and how to overcome
Users
 Key user & BPO availability:
- Commitment from company’s management
- Be strict: it will influence project time line &
budget
 Users unfamiliar with computer & system
 BPO may forget about some of his Business
processes which may come up later:
consultant should be more explorative and
function of blueprint minute of meeting is
important to handle this.
 Users ability to grab SAP concept: if it is
become big issue, ask additional person who
can be partner of this person
Challenges and how to overcome
Consultant
 Unable to grab company business
process since consultant experience is
low
 Communication skill
 The Consultant handle more than one
project at same time
Call us : (414) 433-4823 / (414) 433-4825

 WEB : http://www.pennonsoft.com/
 Email : info@pennonsoft.com Phone : (414) 433-4823
WEB : http://www.pennonsoft.com/
Email : info@pennonsoft.com Phone : (414) 433-4823

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Volume

A Complete Process Manual For The

KIT PVT LTD

CHAPTER 2 -MATERI AL Management

Project : Co-ordinator Vertical Lead

Mr.Srinivas Reddy P. Surya Prakash

(5) Voucher Types

The company allows 30 days of credit limit

For travel advances, Finance dept gives the

Vendor master record is recognized by a

To follow up the outstanding amounts from

Documents to the Bankers and realization

Depreciation key. T Code: AFAMA

Cost Centers and Service Cost centers.

(5) Product Cost

2.2 Company Code

2.4 Business Areas

These business areas are created for internal reporting purpose

3. Financial Accounting Global Settings

3.1 Fiscal Year Variant

Fiscal Year Variant - CS

3.4 Field Status Variant

Field status variant –CSCL

The percentage amount related to cash discount.

Limits to which differences in payments are posted automatically to expense or revenue

4.1 Document Types

No. No. Intervals

4.1 Document type

4.2 Document number range interval

4.3 Posting Keys

5. General Ledger Accounting

5.2 Account Groups

Assets: Fixed Assets, Investments, Current Assets, Loans & Advances.

5.3 Retained earnings

5.4 GL Master Records

T Code: FI12, FCHI.

Bankers: CSCL dealing with SBI, ING VYSYA BANK.

One House bank is created for each bank account.

6.2 Cash Journal

Settings for Cash journal

7.1 Credit Control Area

7.2 Sales Areas

7.3Customer Account Groups

Number range for customer account groups

Account group Number range Number interval

7.4 Customer Master Records

7.5 Customer Billing

7.6 Customer Payments

7.7 Special GL transactions

8.1 Purchase organization

8.2 Vendor Account Groups

Account Group Description

8.3 Vendor Master Records

8.6 Special GL Transactions

8.7 Automatic Payment Program

9.2 Sundry Debtors

10. INTEREST SETTINGS

Standard Interest Calculation Types available

11.2 Dunning Notices

Dunning procedure: CSCL

Tax on sales and purchases are procedure-based taxation in FI component.

Condition Types Description

CL01 Excise Duty Payable