Knowledge Transfer Document

Document Change Control :

Release Description Created by Date Reviewed Date Approved by Date
by
01 Purchase Ramanan.P.V 04.12.2009 Puneeta Singh Venkatanarayan
Order Som

Doc Control Number Marlabs_GG_US_SAP_L2_KT_MM_PO

Process Master Data
Applicable Business Types All
Applicable countries USA

1. Requirements / Expectations
A brief definition of the process and its requirements.

A Purchase Order (PO) is a legal document issued by purchasing department to the vendor which upon
acceptance, forms a contract between GG and vendor for the supply of goods and/or services with the
negotiated terms, conditions and pricing specified in the order.

2. General Explanations
This Contains the Knowledge Transferred from Gate Gourmet.

The purchase order can be used for a variety of procurement purposes. You can procure materials for direct
consumption or for stock. You can also procure services. Furthermore, the special procurement types
"subcontracting", "third-party" (involving triangular business deals and direct-to-customer shipments) and
"consignment" are possible.

You can use purchase orders for once-only procurement transactions. If, for example, you wish to procure a
material from a vendor only once, you create a purchase order. If you are thinking of entering into a longer-term
supply relationship with this vendor, it is advisable to set up a so-called outline agreement, since this usually
results in more favorable conditions of purchase.

In the interests of optimized purchasing, the PO quantity can be rounded in the course of PO processing to
allow full advantage to be taken of negotiated conditions or for the optimal utilization of existing transport
capacities.

In this case, you need not specify the individual materials or expend any effort with respect to goods receiving
activities. You can also reduce the amount of work involved in invoice verification to a minimum by employing
automatic processes

Automatic Generation of POs from Requisitions :

The SAP System can automatically convert requisitions that have been assigned to sources into purchase
orders. You can perform this function either online or in the background. During conversion, the system attempts
to consolidate as many requisition items as possible to form one purchase order. Usually, one PO whose
contents can be regarded as belonging together is created for each purchasing organization, vendor, and
contract.

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The item category determines whether the material defined in a purchase order item:

Requires a material number

Requires an account assignment

Is to be managed as a stock item

Requires a goods receipt (GR) and/or an invoice receipt (IR)

Direction consumption can be handled through Specification of the objects (e.g. cost center, sales order, and
project) that are charged in the case of a purchase order for a material that is intended for direct usage or
consumption.
Multiple account assignment allows you to apportion the cost of a material covered by a PO among your own
cost center and several others, for example. You specify which account assignment object is to be charged via
the account assignment category.
The account assignment category determines:
The nature of the account assignment (cost center, sales order, and so on)
Which accounts are to be charged when the incoming invoice or goods receipt is posted
Which account assignment data you must provide
You can change the account assignment category after entering the item provided that field selection has been
set up accordingly in Customizing.
Different types of procurement can be handled by item categories in Purchase document. The following item
categories are defined in the standard system:

Terms & conditions: The buyer generally defines the terms of payment in the purchase order which can also
flow from purchase info record/ vendor master. The terms of payment are entered in the purchase order header
and therefore apply to all items.

Delivery Instructions : You enter delivery instructions as either header or item text

Purchase order print out requirements: For country specific requirement as well as global requirements of
Purchase order prints with specific terms, conditions & legal bindings will be provided in detailed functional
specifications.
Attachment of drawings/ documents with PO is a standard feature and buyer can attach the documents if
required

Gate Gourmets Process:

Purchase Order is used for procurement purpose. Purchase orders are created manually. The
Purchase order in general does not associate multiple plants, i.e. different purchase orders are created
for each plant.
Standard Purchase Order Screen layouts are used for the purchase order maintenance.
The Following purchase orders are not practiced in GG US process,
1. Stock Transport Purchase Order.
2. Sub Contracting Purchase Order.
3. Consignment Purchase Order.
4. Service Purchase Order.
5. Third Party Purchase Order.

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Purchase Orders are grouped together based on documents, i.e. the document type. The other controls
document type attributes are 1) link various follow on documents, 2) Number Range etc,3) Screen
layout etc.,
Apart from the standard Document Types there are few customized document types created for GG US
process. These are given below,

Doc Type Doc.Type Description

FO Frame Work Order

NB Standard PO
UB Stock Transport Order
ZAIR Airline Material
ZB Non Inventory PO
ZSOB SOB Returns

Mostly commonly used document types are NB, ZB. ZAIR, ZSOB is not used GG US process.
Number Ranges used for the all the document type is in the range of 4500000000 to 4599999999.
These are internally generated purchase order number ranges.
Account Assignment Categories: Given below is the possible account assignment Categories

Acct.Assgn. Acct.Assgn.Category
Category Description

A Asset
B MTS prod./sales ord.
C Sales order
D Indiv.cust./project
E Ind. cust. w. KD-CO
F Order
G MTS prod./project
K Cost centre
M Ind. cust. w/o KD-CO
N Network
P Project
Q Proj. make-to-order
T All new aux.acc.ass.
U Unknown
X All aux.acct.assgts.
Z Cost Center & Order

Most commonly used account assignment categories are K, U, and Z.

Item Categories: Different types of procurement can be handled by item categories in Purchase
document. The Standard Item category is mostly used in GG US Process.

Pricing Procedure used is almost the standard SAP pricing procedure with all necessary conditions.
The procedure is RM0000: Purchasing Document (Big) which are the main pricing procedure and the
supplement pricing procedure used is RM0002: Condition Supplement Price.

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Mostly used pricing conditions are basic price and if necessary freight conditions, vendor discount
conditions are not maintained.

The Duty & Taxes at the time of purchase is not handled in the SAP Purchase order. Mostly taxes are
handled during the Logistics Invoice Verification (LIV). Tax Code at the purchase order level is I0,
which is Non-Taxable transaction.

Schema Groups for Vendor & Purchasing Organizations are not customized and practiced.

Standard Access Sequence is used in the price determination process.

Note: - As a Gate Gourmet practice for all Standard purchase an info record will be created with varies
conditions for a Vendor / Material Combination, and since the source list are maintained the source will
be identified after the MRP. Hence during purchase order creation in reference to purchase requisition,
sources would have identified and conditions are picked from info record for completion of Purchase
order. The user can manually change the price in the purchase order.

Tolerance Limit for Price Variance for both Effective price and discounts are kept as given below,
PE Price variance: Lower Limit (20%) & Upper Limit (10%)
SE Maximum Discount Variance: Lower Limit (0%) & Upper Limit (10%).
Purchase Order Confirmation (Order Acknowledgement) process in SAP is not used. Instead Gate
Gourmet used the standard email confirmations. Various Vendors sends the confirmations to the Third
party message handler like Amp hire, then the same will be mailed to Gate Gourmet person
responsible based on a generic list given. In the Case of Vendor Michael Lewis the PO confirmation of
every day will come as a text file next day morning.
Purchase Order does not go through any Release Process. Since the Purchase requisition process
goes through release procedure, Purchase orders cannot be created if the Purchase Requisition is not
released.
The Info Update parameter at PO item level is turned off in the purchase order based on user
parameters EVO. Normally user parameter for EVO is Z1.
Purchase Order Output (Standard)

Mentioned below are the Purchase Order outputs possible in Gate Gourmets process ,
1. Printed as hard copy printout.
2. Electronically transferred to Vendors (EDI).
3. Send Externally (Email).
4. Faxed to Vendor.

Message Type: Apart from standard Message Types, there are customized message types like
ZFAX, ZEDI, and ZNEU used in GG Process. As the name suggests the message types are
created based on the output device. ZEDI is used both in US and Europe.

Access Sequence: The Standard access sequence (0001) is modified with additions and used for
all the message types. The table added is Purch.Org./ Purchasing. Group / Vendor, which
facilitates the usage for a specific Condition Record.

Condition Record: Based on the above Access Sequence and Message type a condition record is
maintained for all required combinations (MN04).

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1. Print Output (ZNEU)

This is the hardcopy print out, output of the Purchase Order (PO).The Condition type used here is ZNEU.
Users need to maintain the condition record (MN04) for the Key Combination of Purchasing Org / Purchasing
Group. These types of condition records are normally communicated to the printer when the PO is save.

2. Electronically Transferred (ZEDI)

There are few vendors interfaced through EDI, for those vendors we need to maintain the following data.
Prerequisites:

2.1 Maintain Condition Record

Condition Records need to be maintained for the message type ZEDI, for the key combination of Purchasing
Org / Purchasing Group / Vendor.

These can be displayed and checked via transaction MN05. If this record itself is not maintained then while
creating the Purchase Order the Message creation will be failed.

2.2 Application.

The following points are important for identifying the recipient.

You have created a material info record, in which you assign the material number for the customer to the

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material number in your R/3 System (transaction ME11).

In most cases, the vendor uses a different number for the material than the one used in this system.Vendor
Material Number Field in the Info Record is an important field for the EDI message to create and process the
Idoc.
These Vendor Material number from the info record will be automatically updated when a purchase order is
created, which will be available in the PO, Item Level at Material Tab.

2.3 Idoc Interface: You must store this IDoc view in the partner profiles of your vendor.

Once the Vendor Master data is created, and if the vendor is an EDI vendor then we need to maintain the
partner profile for this vendor. In the case if the partner profile is not maintained then the EDI output will not
be generated. The same can be maintained in,

Description Maintain Partner Profile

Transaction WE20
Code
Menu Path Sap Easy Access / Tools / Business Communication / IDoc
Basis / Administration / Partner Profile

Field Value

Message type ORDERS ORDERS

Partner type LI(vendor/creditor) LI
Partner function LF (vendor) VN
Port for example SUBSYSTEM XI_XIP
Output Mode ( Transfer Idoc
Immediately) X
Basic type ORDERS01 ORDERS03 / ORDERS
ORDERS05 05
Optional: View
Packet size 1 1
Application EF EF
Output type NEU (new) ZEDI
Process code ME10 ME10

ORDERS03 / ORDERS05 are the two basic types used in GG case. This is basically for XML file
mapping. Vendor Michael Lewis has a partner profile with ORDERS05 for a different XML mapping.
Most of the other vendors have Basic Type: ORDERS03 for mapping.
Partner Status is always active (A), which can be set in the Classification Tab of Partner profile.
Idoc can be processed manually (Via transaction: WE14) are automatically. In Gate Gourmets
Case the Idocs generated are transferred immediately. The same is maintained in the Partner Profile
( Outbound Parameters / Transfer Idoc Immediately = X)

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F:\01_My_WorkPlace\
101_GG_BPS_MM\11_Useful_Others\GG_IDoc_PartnerPRofiles_0509.xls

2.4 Classification.
We need to maintain characteristic value for Account in Market place in the vendor master classification
view for the vendors who receive the PO by EDI.
If the Vendor has different ordering address based on the partner function (different ordering address based
on plants), then the characteristic value of the above need to be maintained in the OA Partner Vendor.

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2.5 XI Mapping.
There is customized Z Table created for maintaining the User parameters used in Market Place by the
vendors. The Z table is ZZMM_SAPXIMAP carries the information on the delivering address. This is
normally maintained by the SAP L2 Support team.

3. Sent by Email : Send Externally ( ZNEU)

There are some vendors who receive the purchase orders by email. In this case the purchase orders are
converted automatically into PDF format and then the same will be sent as email to the vendors.

The condition type used is ZNEU (Standard), and the difference will be in the condition record. Partner
function generally used is VN, which will refer the email address from the Vendor master record with partner
function VN. The Medium is External Send: 5 and the same will be sent immediately on saving on the PO.

The Status of the PO send externally by email can be checked in SOST transaction. Email messages getting
generated from the SAP server will be transmitted every 5 minutes. This is the SAP Basis level settings.

The Communication strategy to be maintained for the PO transmitted through Email, the standard
Communication strategy CS01 is used in Gate Gourmet.

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4. Fax ( ZFAX)

There are some vendors who receive the purchase orders by Fax. In this case the purchase orders will
be communicated to the third party (Esker) system, from the Esker System the PO will be faxed to the
respective Vendor. Esker provides the necessary tool (BC-CON Module) to deliver the faxes.

The Status of PO send by Fax can be checked in SOST transaction. Users will get SAP business
workplace mail box information for the POs to be sent via FAX.

Purchase Order Label Printout

After the creation of the purchase orders, a label print out is taken with reference to the purchase
order. The label printout is a customized format. Labels are printed out with selected conditions
using a customized transaction. ( Being Rolled out for all the plants in stages)
This is basically used,
To check the goods receipt quantity against the purchase order, and the labels will be
sticker on the material.
During Physical Inventory to identify the material master number. In the entire label print
out, only the material number will be bar coded.
The Transaction used to print the label information is ZMM_Labels_PO. Based on the selected
conditions (Ex: - Purchase Order, Purchasing Organization), labels to be printed will be displayed in
an ALV Grid format.
Users needs to check and correct the Number of Labels required based on the purchase unit of
measure, and then print the Labels. Bar coded printer is Zebra make printers.
User parameters for parameter ID: ZLBL_Printer need to be set up in SAP (SU01).
The printer used for Label Printing is Zebra ZM 400 Series printer. This is a network printer which
uses smart form developed for printing the labels. The printer can be configured and tested by
pinging to the IP address of the printer. Normally the IP address need not to be changed once the
Label printer is configured, if needed this can be reset. The device type in SAP for the Zebra
printers is ZLZEB2.
The Print method of the Label printer needs to be Direct Thermal.
Please refer the document Settings For ZM400 Zebra Printer for Further Details.

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3. Special Organizational Considerations.

If there are any special organizational considerations. Where in the organization a particular process exists or if it is unique
to a business division or if there are exceptions made to individual employees.

Nil

4. Process Diagrams
Provide links to all related process maps or diagrams.

C:\
01_My_Workplace\101_GG_BPS_MM\03_Marlabs_GG_Visio\Marlabs_GG_SAPL2Support_MM_PO.vsd

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5. Process Map in SAP.

Refer Configuration (IMG) document.

6. Description of Functional Deficits.

Observation of differences ( GAP )

Nil.

7. Integration considerations
Integration with other modules.

Nil.

8. Reporting Requirements
Document the various reports.

None

9. Authorization Requirements
Level of authorizations available in each process in the system.

As per Gate Gourmet authorization Matrix.

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