JK_BBP_PM_BP_0400

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Project Name

Title

JK Cement

Maintenance Services procurement

Version

Document ID

1.0s

JK_BBP_PM_BP_0400_V1.0

Author Akhilesh Kumar Singh

Reviewed By XXXXXXX XXXXX

Date 01.11.2012

T r a n s f o r m i n g E n t e r p r i s e s

Consulting

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Business Blue Print- Business Process- PlantMaintenance

File Name: Release: ECC 6.0

Responsibility: PM Status: Closed

Copyright © 2011 JKT Page 2 of 10

IMPLEMENTATION_BLUE PRINT

Business Process Details

ModulePlant Maintenance

Process Maintenance Services procurement

Sub Process /No

Maintenance Services procurementJK_BBP_PM_BP_040

0

Description Maintenance Services procurement processing

Sr No Business Process Explanation

1.1 As Is Process General Explanation

1.2 Explanation of Proposed Process

Purchase requisition (PR):

It is a SAP document which is created for request or instruction to Purchasingdepartment to procure a quantity of a material or service so that it is available at acertain point in time.

Purchase requisitions are also created automatically by order proposals e.g. aservice planning in maintenance order.

Purchase order (PO):

It is a SAP document for a request or instruction from a purchasing organization toa vendor (external supplier) to deliver a quantity of material or to perform servicesat a certain point in time.

PO is created directly or with reference to a PR.

Service Entry sheet:

After the services have been performed by a vendor (subcontractor) against apurchase order, they are entered by means of service entry sheets showing theexact quantities and values.

The service entry sheet can be processed further in Invoice Verification afteracceptance. Accepted entry sheets constitute the basis for the invoice verificationprocess with respect to externally performed services.

Operation control key:

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Control keys are assigned to each operation of a task list or maintenance order.

Control key determines that an operation will be executed in which way and whatfunctions would be allowed. It determines that whether an operation:

o will be processed internally or externallyo Capacity requirements will be determined foro will be scheduled according to the capacity availabilityo confirmation is required/possible/not possibleo will be costedo pertains to ‘service’ or in other words, services will be planned for it

Maintenance related external services from vendor can be purchased in twoways in SAP:

1. External Services procurement from Maintenance order:

In this method a maintenance order is created for the technical object

(Functional location or Equipment) requiring external service, in the same waylike a normal order. The external service required will be mapped as orderoperation with some extra purchase related parameters and Purchaserequisition for external service is triggered automatically from order at the timeof order saving or release based on the system configuration.

A PO will be raised to vendor against that PR from order. After performing theservices by vendor, service entry sheet will be f illed up and accepted. Basedon the service entry sheet, payment will be done to the vendor by accountsdepartment in FI module.

The cost of external service is debited to order since account assignment ofthe PR and PO will be the order.

So in this method equipment and maintenance order wise maintenance costcan be tracked for the external services.

2. Direct purchasing of external services:

In this method, the PR from concerned department is raised for externalservices. With reference to that PR, PO for external services is created directly

in MM module with reference to cost center (in case of maintenance services)

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or Asset (in case of asset erection or modification services).

After performing the services by vendor, service entry sheet will be filled upand services will be accepted by the department which received the services.Based on the service entry sheet, payment will be done to the vendor byaccounts department in FI module.

So in this method maintenance cost for the external services can be trackedby cost center or Asset wise and not the equipment or maintenance orderwise.

Purchase related settings for Maintenance department in JK CEMENT DIVISION:Following settings will be done in MM module for the maintenance department

Purchase organization:

Purchasing groups:

PR document types : PM (automatic PR from maintenance orders)

PR (manual PR )

PO document types for services : WO (work order)

GS (general services)

External Services procurement from Maintenance order:

External services will be required for all types of maintenance jobs whetherregular, breakdown, preventive, shutdown, spare equipment maintenance orcalibration inspection. So external services can be planned in all the order typesdefined in JK CEMENT DIVISION

This method of External Services procurement from Maintenance order, willinvolve following steps:-

1. A maintenance order will be created for a technical object requiring externalservice in the same way as any normal order with internal operations. All themaintenance operations and materials will be planned in the order as usual.The external service required, will also be mapped as operation(s).

Usually all the order operations are assigned to a control key PM01 for“internal operations” as default by the system. But here the control key ofoperation(s) requiring external service will be changed to the control key PM03

for “external services” from the default PM01 in the order. This will trigger

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automatic Purchase requisition for external service from order and w.r.t. theorder at the time of order release.

Following purchase related additional field will have to be entered in the‘services’ view of all the exter nal operations with control key PM03 :

Service master number or Service text (in absence of service masterrecords)

Service quantity and unit

Gross price (negotiated or expected) with currency

Material group (defined for services in the system for JK CEMENTDIVISION)

Cost element (for external services, is entered automatically fromcustomization settings or can be entered manually)

Purchase group & purchase organization (are entered automatically fromcustomization settings)

Planned delivery time (in days)

Vendor (optional)

Requisitioner

An order can have both internally processed operations as well as externally

processed operations and also materials to be issued, planned in it.

On the other hand it can have only externally processed operations with orwithout internal materials, planned in it.

3. The order is released and purchase requisition for the services enteredthrough external operation will be created in the system automatically.

The account assignment in PR will be the maintenance order and the GLaccount mentioned in the order.

PR will be released by appropriate authority in JK CEMENT DIVISION ifrequired so by the conditions in the PR.

4. Request for quotation will be initiated if required.5. PO for services to the desired vendor will be created by authorized person with

respect to the PR. The service details and account assignment are copiedfrom the PR to PO.

6. PO will be released by appropriate authority in JK CEMENT DIVISION ifrequired so by the conditions in the PO.

7. Only in case material has to be sent out to vendor premises ,Post transfer-posting document with movement type 541 to transfer the material from stockto Vendors premises. For In-setu repair this step is not required.

8. Services will be performed by the vendor.

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9. Receive the material inside plant.10. Service entry sheet will be entered with correct amount of services performed

by the vendor. Service entry sheet will be accepted by an authorized personfrom maintenance department.

The actual cost of external services will be updated in the maintenance orderby the accepted quantity of service.

11. Payment to the vendor will be done by accounts department in FI modulebased on the accepted quantity of services in the service entry sheet.

12. Other internal operations in the order, if mentioned, will be performed as usual.Material assigned to these operations will be issued from store and theoperations will be confirmed after completion of job.

13. Order will be technically completed.14. Order will be settled and business closed on a monthly basis.

Please note that business closing of order should not be performed if paymentof external services is still pending. System will also give warning in that case.

If an order is closed without payment to the vendor then the system will notallow the payment later. The business completion of the order will have to bereversed first and then only system will allow vendor payment for services.

Direct purchasing of external services:

This method of External Services procurement will involve following steps:-

1. PR from the concerned department will be raised for external services withproper service descriptions, quantity and account assignment.

Following parameters will be used in PR:

o PR type: PRo Item category: D (service)o Account assignment category : K (for cost center), or A (Asset)

o Purchase groupo Cost centero GL account for external services

PR will be released by appropriate authority in JK CEMENT DIVISION, ifrequired so by the conditions in the PR.

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2. Request for quotation will be initiated if required.3. PO for services to the desired vendor will be created by authorized person with

respect to the PR. The service details and account assignment are copiedfrom the PR to PO.

4. PO will be released by appropriate authority in JK CEMENT DIVISION, ifrequired so by the conditions in the PO.

5. Services will be performed by the vendor.6. Service entry sheet will be entered with correct amount of services performed

by the vendor. Service entry sheet will be accepted by an authorized person

from maintenance department.7. Payment to the vendor will be done by accounts department in FI module

based on the accepted service sheet.

Service Condition is defined for each service in which Pricing condition foreach service is defined on basis of unit of measure for a defined valid period.

For Annual Maintenance Contract we can define a service or Contract (MMmodule) for which rate condition will be defined on basis of activity or no ofvisit of the vendor. For every service provided by the vendor against the POService Entry sheet will be created to enter amount of service provided

against which payment can be done at the end of year or partly also.

Also for Manpower / Labor supply service has to be defined & servicecondition on basis of Labor hour/job has to be defined.

Validity period for the service can also be defined in Service Master.

Sr.No.

Activity Description T Code

01 Creation of ServiceMaster

Service Master Data is created for all theservices that are required from outsideagency.

AC03

02 Creation ofMaintenanceOrder

Maintenance order is created havingcontrol key PM03. Services are selectedwhich are required to complete the job.

IW31

03 Creating PurchaseRequisition

Based on the services required apurchase requisition is raised.

ME51N

04 Creating PurchaseOrder

Purchase order is created based on thepurchase requisition

ME21N

05 Job execution Based on the purchase order the job isexecuted by the maintenancedepartment.

06 Service

Acceptance

Create Service Entry Sheet against the

PO & accept the services

Ml81n

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06 TechnicalCompletion ofMaintenanceOrder

After the verification of jobs done by theparty maintenance order is technicallycompleted.

IW32

07 Order completion After the bill is paid to the party,maintenance order is completed in allrespects

IW32

1.3 Special Organizational Considerations

None

Sr No Topics

3.1 Changes Management Issues

Service Master to be maintained

3.2 Description of Improvements

Transparent process of procurement as everybody will be able to see thestatus of any purchase requisition in the system that whether PO is raisedagainst the PR or not, PO is awarded to which vendor and at what price and so

on. The PR will be created in the system directly hence no wastage of time in

forwarding it as in the manual system.

Similarly PR and PO will be released in the system on-line so no wastage oftime in forwarding and follow-up with the releasing authority.

This will lead to speedy purchase process and timely receipt of services ormaterials to the requesting party.

Before payment to the vendor for his services by the accounts person, the jobdone can be verified in the system by the accepted service quantity in serviceentry sheet by the service requesting person/ department.

PR can be listed easily by following search criterion in the system:

Sr No Gap Analysis

2.1 Gap Identified in proposed solution against Requirements & Expectations

Not applicable

2.2 Impact of RequirementNot applicable

2.3 Solution Proposed

Not applicable

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Document type (PM: automatic PR from maint. or PR: manual)

Purchasing group

Item category (D: service)

Account assignment category (F: order, K: cost center, A: asset)

Delivery date

Requisitioner

Similarly PO can be listed easily by following search criterion in the system:

Document type (WO: work order or GS: general service)

Purchasing group

Item category (D: service)

Account assignment category (F: order, K: cost center, A: asset)

Vendor

Delivery date

Document date

Requisitioner Services related expenses can be tracked by standard reports.

Sr No Topics

4.1 Interface / Enhancements considerations

Not Applicable4.2 Reporting considerations

SNo

Reports T Code

1 Reporting on Services MSRV6

2 Planned / Actual Services comparison. ME2S

1 Order operations report IW49

2 Maintenance cost report MCI8

3 Maintenance report logbook IW67

4.3 Authorization considerations

As per organizational needs, not finalized yet. Authorization matrix is being preparedseparately.

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Business Process Signoff

ModulePlant Maintenance

Process Maintenance Services procurement

Sub Process /No

Maintenance Services procurementJK_BBP_PM_BP_040

0 Description Maintenance Services procurement processing

JK_BBP_PM_BP_0400

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