Demand-driven Procurement
SAP Best Practices for Retail (France)
SAP Best Practices
Scenario Overview – 1
Purpose and Benefits:
Purpose

This scenario begins with the required planning steps. The forecasting processes and different
consumption-based MRP procedures. The supply source determination schema in SAP R/3 is
then outlined in brief and the various options explained. The Purchase Order process shows
you how to work with the Planning Workbench. Order optimizing comprises quantity
optimizing, investment buying, load building and goods receipt capacity check. The last
section shows you how vendor evaluations can be used to optimize goods procurement.
Benefits

Alongside article-specific inventory management, the SAP R/3 System provides an accurate
data basis for using the comprehensive range of requirements planning methods. The main
task in requirements planning is to monitor stocks and, in particular, generate automatic order
proposals for purchasing.

With the planning workbench, extensive functionalities for order optimization and vendor
evaluation you can handle the whole process for demand-driven procurement.
Key process flows covered
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Requirement Planning
Planning Run
Supply Source Determination
Contract Processing
Planning Workbench
Order Optimizing
Purchase Order Monitoring
Vendor Evaluation
Scenario Overview – 2
SAP Applications Required:
Required

SAP EHP3 for SAP ERP 6.0
Company roles involved in process flows

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
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
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Retail Non-Seasonal Purchaser
Retail Non-Seasonal Purchaser – Power User
Retail Non-Seasonal Purchase – Manager
Retail Replenishment Planner
Retail Replenishment Planner – Power User
Retail Master data Manager
Retail Warehouse Clerk
Retail Store Manager
Process Flow Diagram
R. NonSeas.
Purch.–
Power U
Retail
Replenishment
Planner
Retail Non-Seasonal Purchaser
Event
Requirement Planning
Unload
Materials
from
Truck
MRP Procedure
Automatic
reorder point
planning
MRP Procedure
Time-phased
planning
MRP Procedure
Time-phased
planning with
reorder point
planning
Carry out the
individual
Forecast from
the article
master
MRP Procedure
Forecast-based
planning
Alternative:
Carry out the
individual
Forecast from
the menu
Optional:
Planning File
Optional:
Reprocess the
Forecast
results
Carry out
Single-Item,
Single-Level
Planning
Optional:
Evaluating the
Planning
Results
Convert the
Purch.
Requisition to a
Purchase Order
Enter goods
receipt for
purchase order
Process Flow Diagram
Supply Source Determination
Supply Source:
Source List
Maintain
Source List
Release Order
for the Contract
Automatic
Conversion of
the Purchase
Requisition to a
Purchase Order
Retail Replen.
Planner Power
User
Retail NonSeas.
Purchaser
Retail NonSeas. Pur.
Power U.
Retail Replenish.
Planner
Event
Unload
Materials
from
Truck
Goods receipt
in DC
Supply Source:
Purchase Info
Record
Create Contract
Create
Purchase
Requisition
Create
Purchase Order
with reference
to P.
Requisition
Create
Purchase
Requisition
(Assign Supply
Source)
Process Flow Diagram
Comparison of
Evaluations
Create
Purchase Order
via eCATT
Plan
Workbench:
Online
Requirements
Planning
Executing an
Evaluation of
the Art./Merch.
Cat.
Ranking List
Order
Optimizing:
Investment
Buying Run
Order
Cancellation
Alternative:
Simulate
Investment
Buying Run
Order Release
Retail Replen.
Planner Power
User
Retail NonSeas.
Purchaser
Retail NonSeas. Pur.
Power U.
Retail Replenish.
Planner
RNS.
Pur.
Mngr
Purchase Order Process and Vendor Evaluation
Order
Optimizing:
Load Building:
Carry out
Single-Level,
Single Item
Planning
Convert
Purchase
Requisition to
Purchase Order
Manual Load
Building
Goods receipt
in DC
eCATT for
Vendor
Evaluation
Maintaining the
Vendor
Evaluation
Manually
Vendor
Evaluation
Automatic
Reevaluation
Create
Purchase Order
Return on
Investment
Investment
Buying
Analysis
Order
Optimizing:
Goods receipt
capacitiy check
Automatic Load
Building
Requirements Planning
Objectives
Automation of the procurement process on site level
Inventory monitoring of a site
Central + distributed application
Requirements Planning: Forecasting Model
Selection
Manual model selection with additional
automatic test
Manua
l
Constant model
Trend models
Seasonal models
Seasonal trend models
Models
Automatic
T: Test for trend
Automatic
S: Test for season
Model selection
A: Test for trend
and season
Parameters
Basic value
Basic value
Trend value
Basic value
Season indices
Requirements Planning: Overview
RP type
Forecast
indicator
Articles
Articles
?
Purchase
Requisition
Item 10
Consumption
values
10/2000
11/2000
12/2000
987
1000
1251
Item 20
Forecast
Requirements
Planning
Purchase Order
Item 10
Item 20
Forecast Applications
Forecast Application
Reorder Point
Reorder Point
Planning
Planning
Forecast-Based
Planning


Calculation of the reorder
point and the safety
stock by the forecast.
The forecast values are
copied as requirements
and replace the reorder
point.
 Calculation of the reorder
point and the safety
stock by the forecast.
Time-Phased
Planning

The forecast values are
copied as requirements.
 The planning run is only
carried out on predefined
dates.
 Time-Phased planning can
be applied in combination
with Reorder Point
planning.
Source Determination
Purchase Order: Supply Source Determination
1
Quota arrangement
60%
2
Source list
?
40%
40%
?
PReq
Vendor ??
Art. 3214
20 pc
Art.
5110
15 pc
Purch. requisition
WITHOUT
supply source
Article PCS-04-MRP201
for VZ01 50pc
Source list
3
Article
Article
Purch. order
Vendor PCS-V201
Supply source ind .
• Find external source of
supply only
• Find internal source of
supply only
• Find internal supply source
first , then external
• Find external supply source
first , then internal
4
Outline agreements
Purch info
. records
Regular vendor
Stock transfer deliv ery schedules
Supplying sites
Supply
region
5
Art. 3214
20 pc
Art. 5110
15 pc
MIT
?
Vendor
Vendor PCS-V201
R3001
Order Processing
Planning Workbench
Manual planning
Select worklist
- Site
- Vendor
Start variant
Material selection
- Stock planner
- Merchandise category
Default data
Internet services
- Item category
- Account assignment
category
Control data
- Sort algorithms
- Hide processed worklist
WWW
Application settings
- Sequence
- Expand levels with one
element
- Display symbols
- Display
Worklist settings
General settings
e-mail
Planning Workbench: Manual Planning
Planning workbench with integrated manual planning

Worklist personalization

Simple display navigation in tree format
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Display of additional information, for example, site or vendor
master data

Direct access to the Internet or mail system

Worklist view personalization
Manual planning

Display of consumption and/or forecast data

Use of restriction profiles
 Automatically
generated purchase requisitions
Order Optimizing
Quantity Optimizing: Rounding Profiles
Dynamic Rounding Profiles
Dynamic profile
•
Rounding method
•
Rounding rule
0 No rounding
1 Round up to a multiple of the order
units/sales units
2 Round up to order/sales/logistical units of
measure
3 Round up to order/sales/logistical units of
measure, or log. unit of measure, zero qty for
order units only
AUn
CAR
LAY
PAL
•
Unit of measure group
% Up % Down
70,0
10,0
80,0
10,0
90,0
10,0
Check the permitted units of measure
used by vendors or recipients
Investment Buying: Purpose

Investment buying is a method of determing procurement
proposals that take account of future price increases, and are
to be covered by external procurement

The aim of Investment buying is to purchase articles

in suitable quantities

in good time

as cheaply as possible

taking account of various influencing factors
Investment Buying: Overview
Purchase price
conditions
Select condition changes
Open
PO quantities
Stock on-hand
Select relevant articles
(Info Record)
ROI Parameters
Simulate
purchase price
Purchase price
higher than
future price
Forecast
Calculate ROI
Actual ROI
is lower than
required ROI
Purchase requisitions
Worklist
Log of items
Protokoll
found
relevant to
Purchasing
Calculate
order quantity
Purchase
orders
Investment
Buying
Analysis
Load Building
Definition
Load building is a process used to group together purchase
orders and other requirements, while taking account of
procurement restrictions, and thereby reduce procurement
costs.
Load Building Overview
Req. Planning
Investment buying
process
Promotion
orders
Purch.
Req.
. ... ...
Purch.
req.
Purch.
Req.
. ...
Without existing
requirement
elements
Purchase requisitions
Automatic
load building process
other
order
processes
Purchase orders
Purch. order ...
Lieferant 326
Purch. Order...
Vendor
326
Simulation list process
Manual load building
EDI to vendor
Goods receipt capacity check
Up to now, there was no check for sufficient capacity for the delivery date of a
planned delivery in the goods receipt area of a warehouse. If the goods are delivered
to a warehouse door that does not have any free capacity, there can be a bottleneck
in the goods receipt area of a warehouse. At the same time, another warehouse door
might have enough capacity.
Advantages for the retailer and vendor:

Taking the goods receipt capacity into account prevents potential bottlenecks.

The vendor's delivery date planning utilizes the capacity of the retailer's goods
receipt areas.

The vendor can schedule the deliveries better since the planned time window for
inbound deliveries is binding.
Vendor Evaluation
Functions in Vendor Evaluation
Regular vendor
for
Article 1
Vendor A
?
Vendor C
Vendor B
Quality audits
Vendor Evaluation
Vendor C
Automatic Subcriteria: Overview
Main Criteria
Subcriteria
Price
Price level
Price development
GR inspection
Complaints
Audit
On-time delivery
Quantity reliability
Shipping instructions
Confirmation
Quality
Delivery
Service
Analyses for Vendor Evaluation
HIT LIST
General Vendor Evaluation
Total
Price
Preis
Qual .
Dlvy.
Lief .
Service
Vendor
B
90
92
90
93
85
Vendor
A
84
75
92
88
81
Vendor
C
81
90
76
74
84
Analysis for Article/ Merchandise category
Vendor Evaluation Evaluation
Total
Price
Preis
Qual .
Dlvy.
Lief
Vendor
A
88
81
93
92
86
Vendor
C
81
90
76
74
84
Evaluation Comparison
General Vendor Evaluation
Total
Vendor A
Service
84
Price
Preis
Qual .
Dlvy.
Lief
75
92
88
Service
81
Evaluation for Article 1
Total
88
Price
Preis
Qual .
Dlvy.
Service
81
93
92
86
Legend
<Function>
Symbol
Description
Usage
Comments
Band: Identifies a user role, such as Accounts
Payable Clerk or Sales Representative. This band
can also identify an organization unit or group,
rather than a specific role.
Role band
contains tasks
common to that
role.
Symbol
Diagram
Connection
The other process flow symbols in this table go into
these rows. You have as many rows as required to
cover all of the roles in the scenario.
Hardcopy /
Document
External
to SAP
External Events: Contains events that start or end the
scenario, or influence the course of events in the
scenario.
Business
Activity /
Event
Flow line (solid): Line indicates the normal sequence
of steps and direction of flow in the scenario.
Flow line (dashed): Line indicates flow to infrequentlyused or conditional tasks in a scenario. Line can
also lead to documents involved in the process flow.
Connects two
tasks in a
scenario
process or a
non-step event
Business Activity / Event: Identifies an action that
either leads into or out of the scenario, or an outside
Process that happens during the scenario
Does not
correspond to a
task step in the
document
Unit Process: Identifies a task that is covered in a
step-by-step manner in the scenario
Corresponds to
a task step in
the document
SubProcess
Reference
Proces
s
Decisio
n
Usage Comments
To next / From last Diagram: Leads
to the next / previous page of the
Diagram
Flow chart continues on the next /
previous page
Hardcopy / Document: Identifies a
printed document, report, or form
Does not correspond to a task
step in a document; instead, it is
used to reflect a document
generated by a task step; this
shape does not have any outgoing
flow lines
Financial Actuals: Indicates a
financial posting document
Does not correspond to a task
step in a document; instead, it is
used to reflect a document
generated by a task step; this
shape does not have any outgoing
flow lines
Budget Planning: Indicates a
budget planning document
Does not correspond to a task
step in a document; instead, it is
used to reflect a document
generated by a task step; this
shape does not have any outgoing
flow lines
Manual Process: Covers a task
that is manually done
Does not generally correspond to
a task step in a document;
instead, it is used to reflect a task
that is manually performed, such
as unloading a truck in the
warehouse, which affects the
process flow.
Existing Version / Data: This block
covers data that feeds in from an
external process
Does not generally correspond to
a task step in a document;
instead, this shape reflects data
coming from an external source;
this step does not have any
incoming flow lines
System Pass / Fail Decision: This
block covers an automatic
decision made by the software
Does not generally correspond to
a task step in the document;
instead it is used to reflect an
automatic decision by the system
that is made after a step has been
executed.
Financial
Actuals
Budget
Planning
Manual
Proces
s
Unit Process
Process
Reference
Description
Process Reference: If the scenario references another
scenario in total, put the scenario number and name
here.
Sub-Process Reference: If the scenario references
another scenario in part, put the scenario number,
name, and the step numbers from that scenario here
Process Decision: Identifies a decision / branching
point, signifying a choice to be made by the end
user. Lines represent different choices emerging
from different parts of the diamond.
Corresponds to
a task step in
the document
Corresponds to
a task step in
the document
Does not
usually
correspond to a
task step in the
document;
Reflects a
choice to be
made after step
execution
Existing
Version /
Data
System
Pass/F
ail
Decisio
n