Procure to Pay

http://www50.sap.com/businessmaps/3E2D2915149F48889859F93E3E46C7A8.htm

Business Scenario

Key Performance Indicators

Raw Material & WIP Inventory Turnover (Quantity)

Source Cycle Time

Supplier Quality Engineering Costs as a % of Material Acquisition Costs

Partner Opportunities

Partner Opportunities in Pharmaceuticals

See also

SAP NetWeaver Benefits

SRM

Procure to Pay is the process of obtaining and managing all raw materials needed for manufacturing. This cycle starts with the source selection, auditing followed by procurement of goods and services. The contracts with the suppliers are managed and can also include supplier managed inventories or direct inventory visibility. It also comprises direct procurement requirements through conversion from demands to purchase orders and confirmation of goods receipt. The incoming materials are then inspected and posted into inventory as part of managing the warehouse. The last activity in this cycle is payment of the suppliers which consists of receiving, entering and checking vendor's invoice for correctness.

Business Goals & Objectives

Lowering Working Capital

Lower work-in-process inventory

Reducing Operating Costs & Increasing Efficiency

Improve procurement processes
Integrate processes across divisions and functions

Processes

Sourcing & Planning	Improving the product quality and lower the costs for material acquisition by qualifying a supplier is mandatory for companies in a regulated environment. A supplier qualification that is compliant to regulatory requirements (e.g. 21CFR Part211) includes the inspection of incoming goods, an audit of the vendor and contractual agreements about product quality and financial conditions. These preconditions enable a pharmaceutical manufacturer to plan the procurement of the demands that results out of an MRP run or manually created purchase requisitions. Supplier Qualification Procurement Planning
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Supplier Collaboration	Supplier collaboration provides a cost-effective way for companies to improve replenishment cycles and quality of materials delivered by a trusted supplier. Order collaboration capabilities provide suppliers and buyers with a streamlined order management system, a user friendly interface and comprehensive search options. The collaboration with suppliers can be extended to a vendor managed inventory, where the manufacturer grants authorization to manage his inventory. Design Collaboration Inventory Collaboration
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Procurement	Improving procurement processes and integrate them across divisions will lower the costs of procured good and the work-in-process inventory. The procurement process consists of the administrative functions, such as contract management and the creation of purchase requisitions. Requisitions have to be converted to purchase orders or delivery schedules for a scheduling agreement and the fulfillment of the documents after electronic transfer to business partners has be to monitored.. After successful delivery of the purchased goods, the follow-up operational tasks such as supplier payment, warranty issues have to be performed. Contract Management Purchase Requisitions Purchase Orders Accounts Payable Supplier Payment
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Receiving and Inspection	Deliveries to the Pharmaceutical companies are subjected to stringent quality procedures to improve the product quality. Warehouse personnel receive the goods, followed by incoming inspection by quality control. The inspection costs can be reduced by use of quality certificates send by qualified suppliers. The stock is moved to quarantine inventory and after the lot disposition they are moved to the appropriate warehouse location. The integration of warehousing and quality control will the operating costs. Receive Materials Material Inspection
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Inventory Management	The inventory management comprises control of the stock transfers within the warehouse or intercompany distribution centers, display correct quality status and the accuracy of the physical inventory. Stock status has an impact on production scheduling i.e. a not released material lot must not be used or reserved for production. Automated warehousing and reduction in inventory carrying cost are key strategic goals pursued by the Pharmaceutical companies. Inventory Control Stock Transfers Physical Inventory
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
Reporting	The reporting provides accurate real time visibility into the inventory and status of the purchasing documents during various stages of procurement. Proactive monitoring enables a correct supplier scorecard by accessing historical data about the reliance on the delivery schedule and the quality of the delivered materials. The reporting enable pharmaceutical companies to focus on suppliers with a reliable product quality and low supplier lead time. Inventory Visibility Supplier Scorecard Proactive Monitoring
	To fully utilize this functionality, the following products should be evaluated SAP ERP SAP Extended Procurement for Life Sciences SAP Extended Sourcing for Life Sciences
SAP Product Available Partner Product Available SAP Product Available with Future Releases Partner Product Available with Future Releases Future Focus

Order to Cash

http://help.sap.com/bp_bblibrary/500/html/W40_EN_DE.htm

Order to Cash

Purpose

 

The SAP Best Practices scenario for Order to Cash supports the entire process chain for a typical sales process with a customer. The business process encompasses all steps from creating an order, and optionally, based on a quotation, creation of a delivery, to the billing procedure. During the sales order generation a credit check for the customer is executed and subsequent handling of blocked sales documents is demonstrated. An availability check is done followed by product allocation. Product allocations represent an ordered allocation of production for certain periods, so that a partial quantity can be delivered if not enough stock is available for further orders. Additionally, Service Charges are entered manually in the sales order, depending on the quantity of goods ordered. In delivery processing the delivery is created, the goods are picked, kitted, packed, shipped and the goods issue is posted. In the billing process that follows, an invoice is created and released to financial accounting. To complete the process, the customer payment is posted to clear the accounts receivable.
This scenario also includes additional presales support activities in addition to sales order processing, delivery, billing and payment. The process begins with a sales inquiry captured in a sales activity document in sales support. The inquiry results in a sale and the process shows how the initial sales activity can be linked to a sales document that is created in the subsequent order processing. At the time of order creation, dynamic product proposals, material substitutions, free goods and material exclusions are demonstrated. At delivery processing the delivery is created, then picked, and goods issue is posted. In the billing process that follows, an invoice is created and released to financial accounting. Incoming payments are documented in payment processing and then posted in financials.

Process Flow

• Sales Quotation
• Standard Order
• Shipping
• Delivery
• Picking
• Posting Goods Issue
• Warehouse Picking Execution
• Packing
• Posting Goods Issue
• Billing
• Payment of Customer

Evaluation of ERP Installation

Source: APICS Guidelines for ERP

ERP Complete Structure

Source: APICS Guidelines for ERP

Typical MRP process in APO

Bucher&Meissner: Automatic parameter configuration in SAP ERP/APO

BOM splitting example

Source: Bucher&Meissner: Automatic parameter configuration in SAP ERP/APO

Tutorial on ABAP custom macro functions in APO macro building

source:http://apolemia.blogspot.com/2008/02/tutorial-on-abap-functions-for-dp.html

It seems that there is no standard function to calculate the statistical mode. So I thought it would make a good example for a short tutorial on creation of ABAP functions to be used in planning macros.

The macro functions are standard functions created with SE37 that must have a specific call signature (input and output parameters and tables). The base parameters are the ones shown in the following figure (later other options are presented).



The VALUE_TAB structure has two fields, one for numbers and one for strings. All input parameters set in the macro are added to this table in the same order as defined in the macro, in the number or string field depending on the data type.

For our exemple the function will receive a list of numbers. The goal is to calculate the mode of the integer part of the numbers. Since the mode can be a list of several numbers, we intend to return the largest integer number of the list.

Bellow is the code for such a function. It just counts the frequency of the numbers (after convertion to integers). The final list is sorted and the mode (or maximum of modes) is returned on the output parameter field F_ARGUMENT. The other parameter F_CALC_ERROR is a flag that should be set in case of errors that cannot be handled (the equivalent of raising an exception).

FUNCTION z_macro_maxmode .
*"----------------------------------------------------------------------
*"*"Local interface:
*"  TABLES
*"      VALUE_TAB STRUCTURE  /SAPAPO/VALUE_TAB
*"  CHANGING
*"     REFERENCE(F_CALC_ERROR) TYPE  C
*"     REFERENCE(F_ARGUMENT) TYPE  /SAPAPO/MXSOP-V
*"----------------------------------------------------------------------

 TYPES:
   BEGIN OF t_histogram,
     value   TYPE i,
     counter TYPE i,
   END OF t_histogram.

 DATA:
   lv_value TYPE i,
   ls_hist  TYPE t_histogram,
   lt_hist  TYPE TABLE OF t_histogram WITH KEY value.

 LOOP AT value_tab.
   IF value_tab-string IS INITIAL.
     CLEAR ls_hist.
*     just truncated integers to make it simpler
     lv_value = trunc( value_tab-value ).
     READ TABLE lt_hist WITH TABLE KEY value = lv_value INTO ls_hist.
     IF sy-subrc = 0.
*     already in the table, increase the counter
       ls_hist-counter = ls_hist-counter + 1.
       MODIFY TABLE lt_hist FROM ls_hist TRANSPORTING counter.
     ELSE.
*     insert value for the first time in the table
       ls_hist-value = lv_value.
       ls_hist-counter = 1.
       INSERT ls_hist INTO TABLE lt_hist.
     ENDIF.
   ENDIF.
 ENDLOOP.

* return the integer with largest counter (if more than one return the
* largest integer)
 SORT lt_hist BY counter DESCENDING value DESCENDING.
 READ TABLE lt_hist INDEX 1 INTO ls_hist.

 f_argument = ls_hist-value.

ENDFUNCTION.

Now this function can be added to the macro builder (/sapapo/advm). First one registers the function using the following menu option.





A list of parameters is shown. The previous macro only uses the base parameters so no other checkbox is flagged, but here is the place to choose the parameter options.



Then the macro is created with the new function being called like the standard ones.



I've found that moving logic to ABAP functions can be a good way to simplify complex macros.