brite procurement fundamentals. 2 course description during this course, you will learn how the...
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BRITE Procurement FundamentalsBRITE Procurement Fundamentals
2BRITE Procurement Fundamentals
Course DescriptionCourse Description
During this course, you will learn how the implementation of the BRITE Procurement process will change, and how it will improve the way business is conducted in SBBC. You will also be introduced to some basic SAP Procurement structures and vocabulary.
Professional Development
Budget
Payroll
Human Resources
Finance
Enterprise
Management
Information
Enterprise
Resource
Planning
OperationsOperations
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Course Objectives Course Objectives
After completing this course, you will be able to:
Explain the “To-Be” (future SBBC SAP) business processes
Describe the SBBC SAP organizational structure Describe the use of Master Data in SAP Explain the use and structure of various purchasing
documents in SAP Describe functions that are executed after the
procurement process is complete
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Key Purchasing TermsKey Purchasing Terms
Purchasing Organization
An organizational unit within purchasing responsible for the procurement of goods and services (will always be SBBC)
Plant Location where goods are received
Purchasing Group
A letter code used to identify a specific person (buyer) responsible for the purchase of goods and services
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Terms GlossaryTerms Glossary
SBBC Term SAP Term
Approval Process Release Strategy
(A set of business rules used to evaluate a requisition line item to determine the type of approvals needed before it can be released to Procurement)
Approval Status (RAI) Release Status
(The list of approvals a requisition has received and any still required)
Budgetkeeper or Bookkeeper
(The person who ordered goods/materials)
Requisitioner (New Role)
(The person who creates a requisition)
Line of Coding Account Assignment
(When creating an SAP requisition, account assignment means charging the goods and/or services to a specific cost center and G/L account)
Warehouse, Stockroom and grouping of Schools/Departments
Plant
(Anywhere stock is managed or valued material is kept)
Warehouse W Number; Textbook Item Number; Stockroom Stock Number
Material Number
(A unique identifier for an item number)
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Key Improvements: Need to ReceiptKey Improvements: Need to Receipt
Current State Future StateItems maintained in multiple systems
One central location/database for all materials used
Material data is entered by Data Strategy Group only
Material data is consistent with no duplication
Vendor creation is done by A/P and Purchasing department; vendor grouping is manually assigned
Centralized vendor creation with identifiable vendor types
Usage of partner functions to link vendors with same parent company
Consistent data with no duplication
Separate transactions are used for internal and external requisitions
Internal and external requisitions will use the same system and same transaction
Future StateFuture StateCurrent StateCurrent State
For those who already do purchasing, this is an overview of the changes coming.
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Key Improvements: Need to ReceiptKey Improvements: Need to Receipt
Current State Future StateSelect items requires system receipt
Materials, with very few exceptions, will require system receipt in both schools and departments
Goods receipt required for invoice payment
Attached lists were widely used for purchases
Electronic attached lists allowed for purchases of 25 non asset line items or more in one requisition
Purchases of 24 line items or less will require itemization
Provides better data collection of purchasing history
Allows for electronic record of attached materials list
No goods receipt, signed invoice for payment processing
Future StateFuture StateCurrent StateCurrent State
For those who already do purchasing, this is an overview of the changes coming.
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Key Improvements: Need to ReceiptKey Improvements: Need to Receipt
Current State Future StateCatalog Content Manager currently doesn’t exist
Catalog Content Manager allows “point and click” selection of materials to be purchased
Facilitates selection of materials on contract Automatically populates requisitions once
material is selected
Primary approvals are automatically routed, secondary approvals are handled manually
System automatically routes request to appropriate approver
Secondary approvals, if required, are also automatically routed
Overnight creation of paper PO with multiple copies
On-demand creation of PO PO immediately available once created Able to e-mail or e-fax PO Electronic record of PO
Future StateFuture StateCurrent StateCurrent State
For those who already do purchasing, this is an overview of the changes coming.
Organizational StructureOrganizational Structure
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Unit ObjectivesUnit Objectives
After completing this unit, you will be able to:
Describe the SBBC Organizational Structure Explain the usage of Purchasing Groups in SAP
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Organizational StructureOrganizational Structure
The companycode andPurchasingOrganization will always be SBBC.
All buyers have a Purchasing Group
Letter.
There are sevenplants within the
organization.Each Plant has various
storage locations some of which may/may not contain inventory – e.g. Plant 1000
(schools/departments) do not have inventory in SAP
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Purchasing GroupPurchasing Group
The SAP term for Buyer Code is Purchasing Group. Commodities will be assigned to Purchasing Groups within the SBBC purchasing organization
Each Buyer in SBBC has a Purchasing Group letter, which allows them to manage their Requisitions and Purchase Orders more effectively
Purchasing Master DataPurchasing Master Data
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Unit ObjectivesUnit Objectives
After completing this Unit, you should be able to:
Define key terminology related to SAP Master Data Explain the concept of Master Data in SAP Describe the purpose of a Material Master Record
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Material Master RecordsMaterial Master Records
The following information is essential to understanding the tasks discussed in this unit:
– Material Master Records contain information about a material that rarely changes (such as description, unit of measure, etc.)
– Material Master Records can be incorporated as default data in transactional documents such as RFQs (Request for Quote) and Purchase Orders
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Material Master RecordsMaterial Master Records
A Material Master Record:
Is the central repository for all details about a material number (description, dimensions, purchasing group, etc.)
Eliminates the need for redundant data entry
Reduces the likelihood of duplicate material numbers
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Material Master Records (cont’d)Material Master Records (cont’d)
There are six types of Material Master Records:
– Stock materials: Items stocked at the central warehouse or the textbook warehouse
– Food: Commodity materials managed at the external food warehouse
– Spare Parts: Spares used by Physical Plant Operations and Transportation
– Non-Valuated Materials: Items stored in B-stock and student assessments
– Non-Stock Items: Materials whose quantity will not be inventoried and will support purchasing functions
– Services: Services ordered by schools and departments
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Material Master Record Data FlowMaterial Master Record Data Flow
Material MasterRecord
Purchase Requisitions
ContractsRequests for
QuotationPurchase
OrdersInvoices
The Material Master Record can be used as input for any of the Purchasing Documents shown above.
Purchasing Purchasing DocumentsDocuments
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Unit ObjectivesUnit Objectives
After completing this unit, you will be able to:
Describe the procurement process flow Describe the structure and use of a Purchase Requisition Describe the Catalog Content Management (CCM) process Name the three types of Purchase Requisitions Describe the Requisition approval process Describe the structure and use of:
– Requests for Quotations– Quotations– Purchase Orders
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Procurement Process FlowProcurement Process Flow
Data Strategy Group Creates
Purchasing Master Data
Requisitioner Creates
Purchase Requisition
Site Administrator
Approval
Buyer Creates RFQ (if necessary)
Buyer Maintains Quotations (if
necessary)
Buyer Creates Purchase Order
Recipient Performs Goods
Receipt
Accounts Payable Pays
Invoice
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Requisitions Requisitions
All Requisitions have three (3) sections:
Header – Contains a “Text” tab where internal information can be entered
Item Overview – Shows an overview of all the line items on the Requisition
Item details – Shows detailed procurement information about one particular line item. There is an item details section for each item on the Requisition
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Purchase RequisitionPurchase Requisition
Header
Item Overview
Item Details
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Types of Purchase RequisitionsTypes of Purchase RequisitionsThere are three types of Purchase Requisitions:
Standard Requisition– Used for external procurements– Can be entered line by line or via Catalog Content Management
(CCM)– Can be entered with or without reference to Material Master Record
Framework Requisition– Used for External procurements– Will be created using an attached list for orders with 25 or more
lines items– Cannot be used for assets
Stock Transport Requisition– Are used for internal procurements (from the warehouse)– Will always be entered via Catalog Content Management (CCM)
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Account Assignment CategoriesAccount Assignment Categories
Each line item on a requisition must have an account assignment category. SBBC will use the following categories:
– Inventory– Asset– Cost Center– Project– Grant
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What is Catalog Content Management?What is Catalog Content Management?
Catalog Content Management (CCM):
Is a web-interface that allows end-users to search for and order standard catalog items from established suppliers with active contracts
Allows end-users to select materials by pointing and clicking
Allows end-users to create a Requisition in SAP directly from an on-line shopping cart
Reduces data input errors and redundancy
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CCM RequisitionsCCM Requisitions
Click the “Catalog”
icon to access the
on-line catalog.
Catalog Icon
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Catalog Content ManagementCatalog Content Management
CCM allows “point and click” selection of materials to be purchased
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Requisition ApprovalsRequisition Approvals
Two levels of approvals are required during normal operations depending on the materials procured. – Level: Principal/Department Manager/Supervisor approval. – Level: Only certain material groups need second level
approval. These material groups will be automatically routed to 2nd level approvers in areas such as Curriculum, Technology, Textbooks, and Food Service. (Food Service items approval will only be for Stock Transport Requisitions involving small equipment obtained from the Central Warehouse).
During a budget freeze an additional level of approval will be required on all purchases, both internal and external with the exception of Food Services and Grant-related, non-asset items. This approval will be done by the district Executive Leadership Team.
1st1st2nd2nd
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Request for Quotations (RFQs) and QuotationsRequest for Quotations (RFQs) and Quotations
RFQs and Quotations:
Are initiated by purchasing (rather than schools and departments) after a requisition is approved
Facilitate easy on-line quote comparison and vendor selection
Can be used to create purchase orders and contracts
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Purchase OrdersPurchase Orders
Purchase Orders:
Are created directly from requisitions or quotations in SAP
Can be created manually by a buyer or automatically by SAP (when a contract exists)
Are transmitted to vendors via e-mail or e-fax. Hard copy PO’s are sent only when a vendor has no e-mail or fax capability
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Purchase OrdersPurchase Orders
Just like the Purchase Requisition, All Purchase Orders have three (3) sections:
Header – Contains information applicable to the entire Purchase Order
Item Overview – Shows an overview of all the line items on the Purchase Order
Item details – Shows detailed procurement information about each line item.
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Unit ObjectivesUnit Objectives
You should now be able to:
Describe the procurement process flow Describe the structure and use of a Purchase Requisition Describe the Catalog Content Management (CCM) process Name the three types of Purchase Requisitions Describe the Requisition approval process Describe the structure and use of:
– Requests for Quotations– Quotations– Purchase Orders
Goods Receipt and InvoicesGoods Receipt and Invoices
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Unit ObjectivesUnit Objectives
After completing the unit, you will be able to:
• Define key terminology• Determine Requisition status• Describe the Goods Receipt process• Explain the Three-Way and Two-Way match processes• Describe the structure and use of invoice documents in
SAP
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Key TermsKey Terms
Three Way Match Match between the Purchase Order, amount received and the amount on the invoice
Goods Receipt A document created in SAP when goods have been received
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Goods ReceiptGoods Receipt
The Goods Receipt process:
Is executed when material is received against a purchase order
Results in the creation of a material document that acknowledges the receipt of goods and allows the invoice to be paid
Updates stock balances and purchase order history
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Material Document – Goods Receipt OverviewMaterial Document – Goods Receipt Overview
The Material Document shows
details about all the line items
included in the Goods Receipt.
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Goods Return Goods Return
The Goods Return process is executed:
When material is to be returned to the vendor after a goods receipt has been executed in SAP
Allows material returns to be tracked Automatically adjust inventory balances
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Three-Way Match Three-Way Match
A Three-way Match means that the Purchase Order, the Invoice, and the Goods Receipt all match, both in terms of quantity and price
The three-way match principle applies to all PO’s except Framework PO’s
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Two-Way Match Two-Way Match
A two-way match means that the Purchase Order and the Invoice must match, both in terms of quantity and price
The two-way match principle applies to all framework PO’s
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Unit ObjectivesUnit Objectives
You should now be able to:
• Define key terminology• Determine requisition status• Describe the Goods Receipt process• Explain the Three-Way and Two-Way match processes• Describe the structure and use of invoice documents in
SAP
SummarySummary
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Course Objectives Course Objectives
You should now be able to:
Explain To-Be business processes Describe the SBBC SAP organizational structure Describe the use of Material Master Data in SAP Explain the structure and use of various purchasing
documents in SAP Describe functions that are executed after the
procurement process is complete