scrapping of goods v1.0

8/12/2019 Scrapping of Goods V1.0

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Scrapping of goods

BUSINESS BLUEPRINT PROCESS DOCUMENT

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Contents

Contents...................................................................................................................................................2

List of Abbreviations...............................................................................................................................3

................................................................................................................................................................3

1.Mission Statement ...........................................................................................................................4

2.Objectives.........................................................................................................................................43.Expectation.......................................................................................................................................4

4.Key erformance !n"icators.............................................................................................................#

#.$escription.......................................................................................................................................#

%.Specia& Consi"erations.....................................................................................................................#

'.So&(tion in SA................................................................................................................................%

).*(siness rocess +&o,.....................................................................................................................)

-.aps................................................................................................................................................11

1/.0oraro(n" So&(tions..................................................................................................................11

11.Canes to Existin rocesses.....................................................................................................11

12.eportin e5(irements...............................................................................................................11

13.A(tori6ation e5(irements........................................................................................................1114.Miration e5(irements...............................................................................................................12

1#.C(stomi6ation e5(irement.........................................................................................................12

1%.*enefits.........................................................................................................................................12

1'.7rainin 8ee"s.............................................................................................................................12

1). +ee"bac +orm.........................................................................................................................13




List of Abbreviations

Acron!s DescriptionLSP Laboratory Supply Points

SLOC Storage Location

SAP Systems Applications and Products in !ata Processing

SC" Supply Chain "anagement

#P$ #ey Performance $ndicator

"$S "anagement $nformation System

%O$ %eturn on $n&estment

C'S(O")% #ing Abdullah 'ni&ersity of Science and (echnology

PO Purchase order SO Sales Order

P% Purchase %e*uisition

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"# Mission State!ent

,

$# Ob%ectives

CO"PA-. wants to transform business processes by implementing SAP Supply Chain

"odules to reduce the processing times of administrati&e tass and to eep full data records

a&ailable for near real time reporting, $mplementing SAP according to best industry

practices resulting into timely decisions with the help of real time data and a&oiding any

delay in reporting, (his in turn will mae all areas of SC" administration &ery effecti&e and

competent in the business en&ironment, !etailed &isibility of &arious aspects of the Supply

Chain should enable higher efficiency and robustness,

CO"PA-. wants to &iew trac and replenish the stocs based on the agreed LSAs with

C'S(O")% and also raise $n&oices to the customers, (he SAP process will help the Procurement

and !istribution staff in streamlining the processes with regards to identifying re*uirements from

C'S(O")% procuring the right *uantity of goods at the right price and subse*uently deli&eringright goods to the right person, (he processes designed will help the procurement and distribution

staff in managing day0to0day operations using different &iews of master data in different ways to

maintain information, CO"PA-. also wants the process to be e*uipped with the capability to

communicate with the SAP system at C'S(O")% so that the data and information can flow

seamlessly and effecti&ely,

&# E'pectation

ollowing are the epectations of CO"PA-. team3

• Setting up of the business process in line with the est business practices to handle the

re*uirements of 5endor %eturns generated due to nominal supply chain gaps that cannot be

eliminated,

• (o minimi6e the time spent on decision maing by isolating the non confirming goods

in&entory at the time of identification of -on conformance,




• (o maintain separate &isibility of such in&entory through the Standard SAP system in order to

eradicate the chances of accidental consumption loss or degradation,

• (o appropriately update system stocs and accounts when goods are physically scrapped or

are re*uired to be written off the boos,

(# )e Perfor!ance Indicators

*# Description

!uring day to day operations of managing handling consolidating and distributing the goods

re*uirement of writing off certain materials may arise, (his can be due to damages epiration or

weathering of goods due to reasons beyond control, (his is re*uired to be captured in the system so

that the boos of accounts are updated accordingly and the $n&entory &alues are in sync with the

actual in&entories stored in the warehouse, (his is specifically important from the reporting

perspecti&e, Also the balancing entries are re*uired to be posted to the appropriate accounts, (his

should be reflected in the statement of accounts,

Any in&entory rendered un usable due to any reasons will be reported to the in&entory controller

immediately, (his will then be transfer posted to the loced stoc, (his will identify the in&entory

separately from the normal usable in&entories, At the le&el of warehouse this will be transferred to

separate Storage (ype, All in&entories in this Storage (ype is identified as !amaged, !uring

scrapping the in&entories of such materials will be remo&ed from the system, $n&entory &alues are

updated and the resultant difference is posted to the appropriate 7/L accounts, %easons for

scrapping can be recorded for each material, (his facilitates the detailed reporting of such e&ents,

+# Specia, Considerations

(he following will be considered in the system configuration3

• SAP standard functionality will be used for all actions lie (ransfer postings of stocs and

Scrapping of 7oods,

• (o clearly demarcate the in&entories due for Scrapping a separate Storage (ype 8!amaged9

will be created in the :arehouse "anagement module,

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-# So,.tion in SAP

CO"PA-.<s re*uirement for Scrapping of 7oods is being met by employing the SAP standard

processes of Scrapping of 7oods,

(he (ransaction list as deri&ed from SAP best = practices is gi&en below

o "1 (ransfer Posting for Stoc

o "$%O $n&oice receipt

o ";1 "aterial !ocument List

o L1> List of open transfer %e*uirements

o L(22 List of Open (ransfer Orders

o L?>+ List of )mpty ins

o

(he process flow in&ol&ed will impact the following modules in SAP 3

• "aterials "anagement 3 ""

• :arehouse "anagement 3 :"

• inance 3 $

-#" Enterprise Str.ct.re E,e!ents

)nterprise Structure elements for this process include the following3

-#"#" P,ant

ollowing Plants will be impacted3

Plant !escription

1>>> CO"PA-. :arehousing location

$n SAP Plant 1>>> represents the CO"PA-. warehousing premises within C'S(O")%, $t will be

used for all purposes lie $n&entory "aintenance "anagement Controlling and 5aluation,

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or the eecution of this process Plant 1>>> will be used,

-#"#$ Storage ,ocation

ollowing Storage Locations will be impacted3

Storage location !escription

1>>> eeder :arehouse

Storage Location 1>>> represents the actual 8))!)%9 warehouse in the CO"PA-. premises,

(his will hold the stocs of "aterials in the form of 8uilt up $n&entory9 housed to fulfil the

re*uirements coming in from LSPs and also the ad0hoc re*uirements coming in directly from the

%esearchers for the 8Stocable "aterials9,

or the eecution of this process Storage Location 1>>> will be used,

-#"#& /are0o.se n.!ber

ollowing warehouse will be made use of for eecution of the Scrapping process

:arehouse number !escription

1>> eeder :arehouse

-#"#( Storage tpe

(o demarcate the goods to be returned to the 5endor the goods will be posted to a separate

Storage type within the warehouse, Scrapping will be handled through the following Storage (ype3

:arehouse number Storage (ype !escription

1>> ;1> !amaged

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-#$ Process 1,o2 Steps

%e*uirement for scrapping is generated when some goods are identified as -on0'sable, (his is

reported to the appropriate authorities and the decision pertaining to the 8'sability of the products is

taen offline, Once a decision is made on the same goods are immediately mo&ed to a separate

area within the warehouse to isolate them from the normal unrestricted use in&entories, Additionally

an appro&al for Scrapping would be sought from the inancial controllers as scrapping of goods

re*uire writing off the goods and subse*uently accounts for loss/in&entory write off are re*uired to be

updated for the &alue of $n&entory thus affected, After the necessary appro&als ha&e been obtained

goods are remo&ed from the warehouse for scrapping, (he process ends when the $n&entories are

updated and accounts are adBusted with the affected &alue,

3# B.siness Process 1,o2

3#" Identification of Scrapping re4.ire!ent#

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(he process originates from the 7oods being reported as damaged weathered or rendered 'n0

usable due to any reason, (his is reported offline,

3#$ Transfer Posting

7oods identified as -on usable are posted to a separate Duarantine area of the warehouse, $n SAP

this will be done by (ransfer posting the goods into bloced stoc, (his is done through (ransaction

code "1, (he mo&ement type in&ol&ed in the transaction is +44, (his facilitates the &isibility of the

stocs separately, All stocs posted to the loced Stoc can be &iewed separately during in&entory

reporting under loced stoc,

3#& Transfer Re4.ire!ent creation

$n&entory (ransfer posting using mo&ement type +44 will create (ransfer re*uirement automatically

in the :arehouse "anagement, (his transfer re*uirement will be assigned storage type ;1>

E!amagedF as the destination storage type by the warehouse controller,

3#( Conversion of TR to Transfer Order

(ransfer %e*uirement will be con&erted into the (ransfer Order using transaction code L1>, (his

will ser&e as the reference for the warehouse staff for transferring the incoming goods into their

respecti&e bins, Once created transfer order will be printed, (he print out will contain material

number material description destination storage type and storage bin for each material, (he print

out of transfer order will be put in the respecti&e pellets for transferring bac to the warehouse,

3#* Confir!ation of Transfer Order

Once materials are put into its respecti&e bins (O will be confirmed, (his is done using the

(ransaction code L(12, (he warehouse controller will ha&e an option to change destination bin

during transfer order confirmation, (his is done in case any non a&ailability of space is reported in

the destination bin and the material has to be ept in another bin instead of the designated one,

3#+ Scrapping

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After seeing the appropriate appro&als from the inance department the goods are written off, $s

SAP this is done by posting a goods issue in the system, $t is done by using the transaction code

"1A, ollowing mo&ement types can be used for the transaction3

"o&ement type !escription

;;1 Scrapping from 'nrestricted use Stoc

;;+ Scrapping from Duality $nspection Stoc

;;; Scrapping from loced Stoc

Howe&er for CO"PA-. operations goods will be posted to loced Stoc prior to Scrapping,

(herefore "o&ement (ype ;;; will be used for the eecution of the process,

!uring the transaction system will prompt the user to enter a reason for Scrapping, (he user will

ha&e the option of choosing from a list of pre defined reasons associated with the mo&ement type,

(his will assist the future reporting,

At the time of sa&ing the transaction a material document is generated which records the mo&ement

of material, An accounting document is also simultaneously generated, (his records the accounting

entries that tae place at the time of Scrapping, $n&entory accounts are debited and the difference is

posted to the appropriate account,

3#- /are0o.se Pic5

3#-#" Creation of Transfer Re4.ire!ent

$n&entory (ransfer posting using mo&ement type ;;; will create (ransfer re*uirement automatically

in the :arehouse "anagement, (his transfer re*uirement will be assigned storage type ;1>

E!amagedF as the Source storage type,

3#-#$ Conversion of TR to Transfer Order

(ransfer %e*uirement will be con&erted into the (ransfer Order using transaction code L1>, (his

will ser&e as a reference for the warehouse staff for picing the goods from their respecti&e bins,

Once created transfer order will be printed, (he print out will contain material number material

description source storage type and storage bin for each material,

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3#-#& Confir!ation of Transfer Order

Once materials are put into its respecti&e bins (O will be confirmed, (his is done using the

(ransaction code L(12, (he warehouse controller will ha&e an option to change destination bin

during transfer order confirmation,

(he process ends with the updating of the warehouse in&entories,

6# 7aps

-one

"8# /or5aro.nd So,.tions

-A

""# C0anges to E'isting Processes

-one

"$# Reporting Re4.ire!ents

All standard reports

";1 "aterial document list

"") Stoc O&er&iew

L1> List of Open (ransfer re*uirements

L(22 List of open (ransfer Orders

"&# A.t0ori9ation Re4.ire!ents




Authori6ation re*uirements may &ary as per re*uirements,

"(# Migration Re4.ire!ents

-o identified "igration re*uirements are associated with the process,

"*# C.sto!i9ation Re4.ire!ent

• %eason for mo&ement EScrappingF needs to be maintained for the mo&ement type ;;;

under customi6ing

"+# Benefits

eing based on the standard SAP functionality many benefits can be drawn3

o (he process draws strength from the SAP est practices which are accepted world o&er as a

reference,

o SAP system follows simple series for maintenance of master data, (here are no complications

and inbuilt intelligence, (he "aterial data and other details can be gathered by referring to the

"aterial master data when re*uired,

o Process #P$s can be monitored in near real time by the management which can ser&e as basis

for Strategy !esign and !eployment,

o Automatic and %eal time update of accounting entries,

"-# Training Needs

(raining to ey users and end users will be pro&ided on the following transactions3

• "1 (ransfer Posting

• "1A 7oods issue




"3# 1eedbac5 1or!

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scrapping of goods v1.0

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