Business Blueprint Best Practice – SAP MATERIAL MANAGEMENT

Business Blueprint Best Practice

 

SAP MATERIAL MANAGEMENT

 

Developed by:

 

Miftah Fajri

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Introduction : The Importance Of SAP Business Blueprint

The SAP Business Blueprint phase includes a number of acivities, events, milestone and deliverables as described in ASAP roadmaps, and also Business Blueprint is a detail documentation of the results gathered during requirements workshops, documents the business process requirements of the company and better understand how the company intends to run its business within the SAP System.

In ASAP roadmaps, Blueprint is in the second step after profect preparation.

How-to: Effective SAP-MM Blueprint discussions

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.

This document is intended to guide you step by step through the Business Blueprint Phase. In our approach Business Blueprinting comprises these steps:

1. Organizational Structure
2. Master data
3. Business processes

This step-by-step document should give people involved in the Business Blueprint phase an idea what objectives are defined for each step and how these definitions influence the later steps of the project.

In this phase consultants will do documentation and define the scope of SAP implementation and create the Business Blueprint. The Business Blueprint is a detailed documentation of your company’s requirements in Winword format. Application consultants and the Business Process Teams achieve a common understanding of how the enterprise intends to run its business within the SAP System, by carrying out requirements-gathering workshops.

The Business Blueprint is a detailed description of your business processes and system requirements. You can print it out.

Defining the Organizational 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.

In SAP – MM, an organizational structure includes:

1. Plant
2. Storage Location
3. Purchasing Organizational
4. Purchasing Group

For company code, it is defined by SAP-FI, then after company code is defined, plant can be defined from MM.

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. And below is the example of plant.

Storage Location is the location for storage of materials in stock Plant. And each plant has its own storage location. Below is the example of storage location.

 

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.

Purchasing Group, in SAP can have 2 purposes:

1. Used to determine the PIC / employee of the Purchasing department is responsible for certain purchasing activities.

2. Used to determine the department which makes a request materials or services on the Purchase Requsition.

Here is the example of diagram of Purchasing Organizational:

 

 

 

 

 

Defining 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

Material Master, It is a Master file which contains information of a particular material, depending upon the views selected from the user departments.

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.

Info Record, A data record containing all the information necessary for any contact with a certain vendor, in particular for conducting business transactions such as purchasing process.

Source List, When we create info & Maintain Quotation, by quota we are determining the source. Also in Vendor Evaluation, we are evaluationg vendor. When we are creating PO,  from where the vendor will come from?  Is it from Quota or Vendor Evaluation?

We define source list requirements at plant level. If a source list requirement exists, you must maintain the source list for each material before you can order it.

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.

 

 

Defining the Business Processes

After you have defined your organizational structure for SAP, the definition of the business process for your Business Blueprint is the next step. You now map the enterprise requirements onto SAP business processes, in order to create the conceptual design for your SAP implementation.

In SAP – Material Management, there are some business process that must be carried out during blueprint.

1. Procurement Process
2. Inventory Management
3. Logistic Invoice Verification.
4. Material Requirement Planning

For this, the following activities need to be carried out:

• Conducting business process workshops
• Completing the Business Blueprint, reviewing it and obtaining management signoff
• Setting up an end user training schedule

Besides determining the SAP functionality to be implemented, the following types of requirements should be identified in the business process workshops:

1. Reports And Forms requirements
2. Interface requirements
3. Conversion requirements
4. Enhancement requirements
5. Authorization requirements

Since all the results gathered during the workshops will subsequently create the Business Blueprint, the importance of this step cannot be underestimated. And every steps of business process must identically with the existing run business in the enterprise.

How-to: Effective Questions to be Asked to Customer

Actually, In the Business Blueprint phase, we need to prepare AS-IS (which is a detailed list of the current business practices of the client) and then , we also need to prepare a QADB (Questions and Answer Data Base) questionnaire and send it to the client. Then, based on client’s answers,  we need to prepare TO-BE list ( procedure in SAP to match the client’s business process).  And after completion of discussion with the client, we need to map AS-IS process and TO-BE process in Flow process mapping.

Here are some questionaries to asked to the client during workshop.

Organizational Structure Questionaries

1. How many plants are there in the enterprise?
2. Do you plan to make a new plant within this year? How many?
3. How many storage location are there in each plant?
4. Do you plan to make a new SLOC within this year? How many?
5. Shall puchasing groups represent individual buyers or groups of buyers? If Groups of buyers, provide a list of groups?

1. Provide a list of buyer names that exist in your company.
2. If there is more than one department which handles all purchasing, specify which department(s) negotiate pricing terms and conditions with your suppliers.
3. Where do you procure materials/services in your enterprise centrally?

1. Which purchasing departments exist in your enterprise?

Master Data Questionaries

1. How many material Group do you have in your company?
2. How many material types are there in the enterprise?
3. How many vendor usually handle purchasing process?
4. Will you maintain your vendor’s part number within SAP, associated to your material master number? If yes, could there be more than one manufacturers part number associated with one of your material master numbers?
5. Will you maintain specific vendor hierarchies?

1. Is there a fixed vendor for some materials?
2. Should it be possible to for purchase orders to be created automatically in the course of material requirements planning (MRP)?

Business Process Questionaries

1. How are purchase requisitions created in the case of stock material, material for direct consumption, external services?
2. Are purchase requisitions converted into requests for quotations?
3. How is the person responsible for releasing the purchase requisition to be notified?
4. How will purchase orders be created in your system?
5. Do you want the system to check whether the purchase price is within a predefined tolerance in your system, compared with the material valuation price?
6. Describe how the source of supply is determined for manually created purchase requisitions!
7. How do you transmit purchase orders to your vendors?
8. Are purchase documents to be approved by someone before being issued to vendors? Describe the approval procedure….
9. How is the hierarchical structure for approval PR and PO?

How-to: Respond to customer explanation & questions

There are two alternative ways in responding questions from customers.

1. Collecting the questions.
2. Responding directly with the answers.

When responding to a client’s questions, A Functional will lead the client to SAP standard system and will show how SAP works. Here the role of a functional is needed. Because a good functional will lead the AS-IS process to the standard process in SAP. But when client notice that SAP system does not realy match with the business process at the entities then a functional should do map the AS-IS process to the to-be process.

How-to: Blueprint note-writing and compiling document

Blueprint note-writing and compiling document are important things in blueprint phase. During blueprint, we a functional not only do collecting requirement and interviewing customers, but also we need to take a note for every requirement that required to be implemented. Since documentation holds an significant role, every functional needs to concern to make documentation for every requirement and issues that come up during blueprint.

Here are some tips how to manage note-writing and document within blueprint phase:

1. Create Standard Template Minutes of Meeting. It is important to create minutes of meeting each time we have meeting or discussion with customers.
2. Create file that contain issue log. It is important to trace the issue, and we can ask for the confirmation for every issue when there is meeting between consultant and customers esp.BPO and key users.
3. Sign off every documents and Minutes of meeting. Why it is need to be signed off is to avoid any changes that happen during costumizing or ready for go live.

Conclusion

 

SAP Blueprint phase is the phase where The ERP foundation is set. A comprehensive SAP blueprint product consist of the use of the tools to configure, define, synchronize and implement SAP. Good implementation practice requires careful planning and there will be a good note-writing documentation to cover all requirements.

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