MM Blprint

A.
Sign Off Form
1. Activity
Sign off – (Business Blue Print – Materials Management)
Signing this document records your agreement on the contents of the document, and
confirms the order of how to proceed with the remainder of the project
Name Signature
Bhrk Raju
Ravindra M.
Confidential – Not for circulation

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ASAP Business Blueprint
NACL
Created by: ravim
Date of creation: 3/11/2003

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Table of Contents
A. Organization.............................................................................................................................. 5
1. Cross-Application/Central Organizational Units..................................................................5
1.1. Material Valuation Area..................................................................................................... 5
1.2. Plant................................................................................................................................. 6
2. Procurement....................................................................................................................... 10
2.1. Purchasing Group............................................................................................................. 10
2.2. Purchasing Organization................................................................................................... 11
3. Inventory Management, Warehouse Management and Transportation..............................15
3.1. Storage location................................................................................................................ 15
B. General Settings........................................................................................................................ 19
1. Units of Measurement........................................................................................................ 19
C. Master Data............................................................................................................................... 20
1. General Master Records..................................................................................................... 20
1.1. Material Master................................................................................................................. 20
1.2. Vendor Master Record...................................................................................................... 32
1.3. Excise............................................................................................................................... 36
2. Procurement....................................................................................................................... 39
2.1. Purchasing Info Record.................................................................................................... 39
2.2. Conditions......................................................................................................................... 41
2.3. Message Conditions......................................................................................................... 44
2.4. Vendor Rebate Arrangements........................................................................................... 46
2.5. Settlement Accounting for Conditions Requiring Subsequent Settlement.........................48
2.6. Release Strategy with Classification.................................................................................53
D. Business Processes.................................................................................................................. 56
1. Procurement....................................................................................................................... 56
1.1. Procurement of Materials and External Services..............................................................56
1.1.1. Purchase Requisition.................................................................................................. 56
1.1.1.1. Purchase Requisition Processing.........................................................................56
1.1.1.2. Purchase Requisition Assignment........................................................................58
1.1.1.3. Release Purchase Requisition.............................................................................61
1.1.2. Purchasing................................................................................................................. 63
1.1.2.1. Purchase Order Processing.................................................................................63
1.1.2.2. Release of Purchase Orders................................................................................68
1.1.2.3. Transmission of Purchase Orders........................................................................70
1.1.2.4. Scheduling Agreement Delivery Schedule...........................................................73
1.1.2.5. Transmission of Scheduling Agreements.............................................................75
1.1.3. Goods Receipt............................................................................................................ 78
1.1.3.1. Goods Receipt Processing...................................................................................78
1.1.3.2. Goods Receipt Processing with Reference..........................................................80
1.1.4. Service Entry Sheet.................................................................................................... 83
1.1.4.1. Service Entry Sheet.............................................................................................83
1.1.5. Country Version India.................................................................................................85
1.1.5.1. Domestic Procurement Process...........................................................................85
1.1.5.2. Imports................................................................................................................. 88
1.2. Procurement via Subcontracting.......................................................................................91
1.2.1. Purchasing................................................................................................................. 91
1.2.1.1. Purchase Order Processing.................................................................................91
1.2.1.2. Release of Purchase Orders................................................................................95
1.2.1.3. Transmission of Purchase Orders........................................................................95
1.2.1.4. Scheduling Agreement Delivery Schedule...........................................................97

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1.2.2. Provision of Components...........................................................................................98
1.2.2.1. Goods Issue Processing......................................................................................98
1.2.3. Goods Receipt............................................................................................................ 101
1.2.3.1. Goods Receipt Processing with Reference..........................................................101
1.2.3.2. Subsequent Adjustment of Components..............................................................104
1.2.4. Country Version India.................................................................................................106
1.2.4.1. Subcontract Processing.......................................................................................106
1.3. Source Administration....................................................................................................... 109
1.3.1. RFQ/Quotation........................................................................................................... 109
1.3.1.1. Processing of Requests for Quotations................................................................109
1.3.1.2. Transmission of RFQs.......................................................................................... 111
1.3.1.3. Vendor Quotation Processing..............................................................................112
1.3.2. Outline Purchase Agreements....................................................................................114
1.3.2.1. Scheduling Agreement Processing......................................................................114
1.3.2.2. Release of Outline Agreements............................................................................114
2. Inventory Management, Warehouse Management and Transportation..............................116
2.1. Goods Movements............................................................................................................ 117
2.1.1. Goods Accepted......................................................................................................... 117
2.1.1.1. Return Delivery.................................................................................................... 117
2.1.1.2. Goods Receipt Processing...................................................................................119
2.1.2. Stck Transfers / Trans. Pstngs....................................................................................120
2.1.2.1. Two-Step Stock Transfer......................................................................................120
E. Stock transfer from Plant to Plant :............................................................................................ 120
F. Certain materials are transferred from one plant to another. This may be a Finished Good of a plant
being transferred to another plant, where it is used as a Raw Material. The material being transferred
reduces the stock from the................................................................................................................ 120
F. transferring plant and increase the stock in receiving plant. The stock value also gets transferred
similarly. The receiving plant has to acknowledge the receipt of the material being sent.................120
G. 120
H. There is an excise formality required for such a material transfer, but sales tax is not involved.
120
I. 120
J. Stock transfer to Depot:............................................................................................................. 120
1.1.1. Goods Issue............................................................................................................... 123
1.1.1.1. Goods Issue Processing......................................................................................123
1.2. Physical Inventory & Cycle Counting................................................................................127
1.2.1. Physical Inventory...................................................................................................... 127
1.2.1.1. Determination of Scope for Periodic and Continuous Inventory...........................129
1.2.1.2. Definition of Scope of Periodic Inventory.............................................................130
1.2.1.3. Printout of Physical Inventory Document.............................................................130
1.2.1.4. Inventory Count.................................................................................................... 130
1.2.1.5. Physical Inventory Analysis..................................................................................131
1.2.1.6. Post Inventory Differences...................................................................................131

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B. Organization
1. Cross-Application/Central Organizational Units
1.1. Material Valuation Area
Questions:
Q: 1) Is the value of a material the same throughout the company, or can the value of the
same material be different in different plants?
A: Value of the same Material can be different at different Plants.
Q: 2) Are you going to use Product Cost Planning and/or Production Planning in R/3? If so,
you need to set the valuation area to plant level.
A: Plants are defined as Valuation Area though MRP is not in scope.
CI template:
1. General Explanation
The Defination:
If the valuation level is the plant, the material stocks are valued at plant level. If the
valuation level is the plant, we can define the material prices for each plant. Each plant
can have its own account determination.
We can value stocks of a material either together or separately, that is, according to
different valuation criteria. Split valuation is necessary if, for example:
 Stock from in-house production has a different valuation price than externally
procured stock.
 Stock obtained from one manufacturer is valued at a different price than stock
obtained from another manufacturer.
 Different batch stocks of a material have different valuation prices.
Valuation Level:
We can define the valuation level by specifying the level at which material stocks are
valued. We can value material stocks at the following levels:
 Plant level
 Company code level
Choice of valuation level affects the following:

 Maintenance of material master records

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Depending on the valuation level chosen, accounting data (in particular the valuation
price) is maintained for each plant or for each company code in the material master
record.
 G/L accounts in which material stocks are managed
 If material stocks are valued at company code level, all plant stocks of a material
are managed in a joint stock account for each company code.
 If material stocks are valued at plant level, the material stocks for each plant can
be managed in different accounts. We can define a separate account determination for
each plant.
 G/L accounts to which transactions are posted in Materials Management .
2. Naming Convention
The naming convention of plant holds good for valuation as Material Valuation is defined at
Plant level.
3. Definition of Organizational Units
Organizational unit Plant is the Valuation level.
4. Assignment of Organizational Units
All plants will be assigned as Valuation level.
5. Changes to existing Organization
No change in current practice.
6. Special Considerations
Split Valuation will be activated for Imports procurement. The rate of Imported material will
be high vis-a-vis domestic procurement. Both the type of sources material will lie in stock
simultaneously. It is understood that still the value of the material will be derived at moving
average price at a particular time.
7. Project specific CI section
No specific requirements
1.2. Plant
Questions:
Q: 1) Are all plants in the same country? List the plants and countries.
A: Yes, all Plants are in same country.

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Q: 2) Will negative Stocks be allowed in any plants? If yes, specify the plants.
A: NO. None of the plants will have negative stocks.
Q: 3) Do you need special plants for your maintenance work apart from the common
logistics plants?
A: No. Not required.
Q: 4) Which enterprise entities carry out production and what do they produce?
A: Production Lines at Srikakulam, Etahkota and Nandigaon.
Q: 5) How does material move between plants (for example, using purchase orders or not)?
What are the requirements you have to fulfill concerning reporting, transport papers, etc.?
A: Yes; material will move between plants only on Stock Transport Orders. Delivery challan,
Excise gate pass will be needed with Invoice document. If material is not excisable then Exc.
Invoice will not be there.
Q: 6) Outline all facilities/locations that create, distribute, or store inventory.
A: All plants/Depots and storage locations hold or distribute certain inventory. Four Plants,
namely Srikakulam, Ethakota-1, Ethakota-2 & Nandigaon create inventories.
Q: 7) Does the manufacturing/distribution process for a product differ such that the
inventory value/cost structure is different at each facility/plant? If so, please explain how.
A: The production process though being same at various plants may use input materials that
are bought from different locations. Hence the transport cost for them will be different. Also
Taxation applicable may differ, having impact on cost structure of Products.
Q: 8) At which level should the balances be assigned to the organizational units?
Explanation: In the SAP system, warehouse stock is managed at the company code or plant
level. This means that within a plant, a material is always assigned to exactly one profit
center.
A:
Comments: Since Valuation level is defined at plants, the stock balances are
assigned at storage locations having value impact at plant level.
CI template:

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The plant is embedded in the organizational structure as follows:
 The plant is assigned to a single company code. A Company code can have
several plants.
 Several storage locations in which material stocks are managed can belong to a
plant.
A plant has the following attributes:

 A plant has an address.
 A plant has a language.
 A plant belongs to a country.
 A plant has its own material master data. We can maintain data at plant level for
the following views on a material master record in particular: MRP, Purchasing, Storage,
Work scheduling, Production resources/tools, Forecasting, Quality management, Sales,
Costing.
The plant plays an important role in the following areas:
 material valuation
If the valuation level is the plant, the material stocks are valued at plant level. If the
valuation level is the plant, you can define the material prices for each plant.
Each plant can have its own valuation area
 inventory management
The material stocks are managed within a plant.
The naming convention followed for Plant is
Srikakulam starts with 11

Ethakota starts with 12
Nandigaon starts with 13
Depots in AP Starts with 21
Depots in South Starts with 31
Depots in Central Starts with 41
Depots in North Starts with 51
Depots in East Starts with 61
With in each location the subsequent plant will have last digits as a step of 10.
For e.g. for Srikakulam 1110,1120 and so on.
1110 NACL-Srikakulam Plant

1120 NACL-Srikakulam Plant Bonded W
1210 NACL-Ethakota Plant-I
1220 NACL-Ethakota Plant-II
1230 NACL-Ethakota Plant Bonded War
1310 NACL-Nanadigaon Plant
2101 NACL-Bolaram Godown
2102 NACL-Ravalupalem Godown
3101 NACL-Trichy Godown
3102 NACL-Kanchipuram Godown

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3103 NACL-Pondichery Godown
3104 NACL-Bellary Godown
3105 NACL-Davangiri Godown
3106 NACL-Gulbarga Godown
3107 NACL-Banglore Godown
4101 NACL-Indore Godown
4102 NACL-Ahmedabad Godown
4103 NACL-Raipur Godown
4104 NACL-Nagpur Godown
4105 NACL-Pune Godown
4106 NACL-Akola Godown
5101 NACL-Ludhiana Godown
5102 NACL-Bathinda Godown
5103 NACL-Parwanoo Godown
5104 NACL-Delhi Godown
5105 NACL-Hissar Godown
5106 NACL-Sriganga Nagar Godown
5107 NACL-Jaipur Godown
5108 NACL-Rudrapur Godown
5109 NACL-Lucknow Godown
5110 NACL-Ghaziabad Godown
6101 NACL-Bhubaneshwar Godown
6102 NACL-Kolkata Godown
6103 NACL-Siliguri Godown
The plant is an operating area or branch within a company.

Each plant can have its own valuation area
The material stocks are managed within a plant.
All the plants are compulsorily assigned to a Company Code.

For e.g. Plant 1110 Srikakulam and Ethakota plant 1210 is assigned to one
Company code 1000 NACL.
NACL has taken on lease the plants of VIPL.

The leased plants are treated as one of the plants of NACL.
The Bonded warehouses where the Imported materials are valued at CIF value i.e.
without Taxes, they are configured as separate plants.
So also the Chennai & Mumbai port are treated as plants since sometimes material at
CIF value is bonded in these Government Warehouses.
All Depots are treated as plants.
The bonded warehouses at each plant and also the bonded warehouses at Chennai &

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Mumbai ports are treated as different plants for the purpose of having different valuations
at each location.
The warehouses at ports are to be defined as plants though they don't belong to NACL.
This location is used occasionally while importing the material. The transportation cost
will get added to the material value when the material moves to the plant bonded
warehouses or subsequently to manufacturing plants.
2. Procurement
2.1. Purchasing Group
Questions:
Q: 1) Shall purchasing groups represent individual buyers or groups of buyers? If Groups of

buyers, provide a list of groups.
A: As per existing org. structure, group of persons represents one Purchasing group.
Gr. 1: Shiva & Nidhi
Gr. 2: Shastry, Sharma & Prasad
Gr. 3: Varma
Gr. 4: Seshagiri Rao
Gr. 5: H Reddy & Nageshwara Rao
Gr. 6: Stock Transfer - Depots
Gr. 7: Stock Transfer - Plants
Q: 2) Provide a list of buyer names.
A: Shiva & Nidhi

Shastry, Sharma & Prasad
Varma
Seshagiri Rao
H Reddy, Nageshwara Rao & Srinivasa Rao
CI template:
A purchasing group is an individual buyer or a group of individual buyers, who are

responsible for the procurement activity of an individual or a group of items. All
Purchasing Groups are part of Purchasing Organization.
Purchasing Groups will be named according to the physical location of purchasing

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department. There after by serial number. For e.g. Srikakulam purchasing group will start
with S and serial 01.
C01: Shiva & Nidhi

C02: Shastry, Sharma & Prasad
E01: Varma
S01: Seshagiri Rao

S02: H Reddy, Nageshwara Rao & Srinivasa Rao
Definition:
 Internally responsible for the procurement of a material or a class of materials
 Usually the principal channel for a company's dealings with its vendors
A purchasing group can be an individual buyer or a group of individual buyers, who are
responsible for the procurement activity of an individual or a group of items.
All Purchasing Groups are assigned to respective purchasing organization.

For e.g.
The purchasing group S01 assigned to purchasing organization 1000 (NACL Central)
There are no changes w.r.t. Current Procurement Organization.
There are no special considerations.
Group of Persons is responsible for group of materials.
2.2. Purchasing Organization

Questions:
Q: 1) Which purchasing departments exist in your enterprise?
A: Central Purchasing Dept at head office, Ethakota Local Purchasing & Srikakulam Local
Purchasing.

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Q: 2) If there is more than one department which handles all purchasing, specify which
department(s) negotiate pricing terms and conditions with your suppliers.
A: All of these Depts. Negotiate Pricing terms & conditions with suppliers for specific items.
Q: 3) Do you have departments outside your purchasing department, which handle

purchasing? If so, list these departments and what they purchase.
A: No
Q: 4) How do the departments share the task of procuring the goods and services required
by the organization?
A: Central organization procures other than locally available Raw materials. Packing
Materials for SKLM plant are procured by Central Org. where as for ETK plant Pack Mat.
responsibility lies with Local ETK Purchasing Org. All Engineering & Consumable items are
ordered by Local Pur. Org. but are authorized by top Management based on value
restrictions.
Q: 5) Where do you procure materials/services in your enterprise?
A: Materials/services are procured at respective purchasing organizations as described

earlier.
Q: 6) Which material types/external services do you procure?
Explanation: Examples of material types: Raw material Semifinished product Trading goods
Empties Packaging
A: Material Types: Raw Material, Semifinished Matl, Trading Goods, Packing Matls, Spares
& Prod Utilities.
Services: Maintenance Service & others.
Q: 7) For which enterprise entities do you procure materials/services? List these

materials/services.
A: For plants: Raw Material, Semifinished Matl, Trading Goods, Packing Matls, Spares &
Prod Utilities.
Maintenance Service & others.
For Offices: Spares & Consumables, Maintenance Service & other services
Q: 8) Do you have corporate and localized purchasing functions?
A: Yes, there is Coporate & local purchasing.
Q: 9) Do you negotiate vendor pricing at a corporate or local level?

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A: Yes, Pricing is negotiated at Coporate as well as local P. Organizations.
Q: 10) Where do you procure materials/services in your enterprise centrally?
A: Central purchasing takes place at Head Office.
Q: 11) Which materials/services do you procure centrally?
A: Central organization procures other than locally available Raw materials. Central Org
procures packing Materials for SKLM plant.
Spares & Consumable Materials, Maintenance services & other services are procured
centrally for offices.
Q: 12) For which enterprise areas do you procure materials/external services centrally? List
these materials/services.
A: For all plants, Central organization procures other than locally available Raw materials.
Central Org procures packing Materials for SKLM plant.
Spares & Consumable Materials, Maintenance services & other services are procured
centrally for offices.
Q: 13) Where do you negotiate centrally agreed contracts for the purchase of
materials/services in your enterprise?
A: No such centrally agreed contract exists, but for Services there are locally agreed service
contracts.
Q: 14) For which materials/external services do you negotiate framework contracts?
A: For maintenance services & other services there are framework contracts. Also for Some
Raw Matls & Pack Matls there are framework contracts.
Q: 15) Which enterprise entities can release orders against these contracts?
A: Local Pur Org can release orders against the locally agreed framework contracts.
Q: 16) Do you want to have procurement in particular enterprise areas/business areas or

product groups separated?
A: Yes procurement needs to be separate for local & central organizations, to have better
control on Inventory.
CI template:

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The purchasing organization is integrated within the organizational structure as follows:
 A purchasing organization is assigned to a company code.
 Since each plant must be assigned to a company code, the latter can be
determined via the plant at the time of each procurement transaction even if the procuring
purchasing organization has not been assigned to a company code.
 A purchasing organization is assigned to more than one plant.
 A purchasing organization is divided into several purchasing groups that are
responsible for different operational areas.
 Each purchasing organization has its own info records and conditions for pricing.
 Each purchasing organization has its own vendor master data.
 Authorizations for processing purchasing transactions can be assigned to each
purchasing organization.
 All items of an external purchasing document, that is, request for quotation,
purchase order, contract, or scheduling agreement, belong to a purchasing organization.
 The purchasing organization is the highest level of aggregation (after the
organizational unit "client") for purchasing statistics.
 The purchasing organization serves as the selection criterion for lists of all
purchasing documents.
We have purchasing function in the following ways:

 Company-specific purchasing
 Plant-specific purchasing
We will be using only one purchasing organization i.e. Central Purchasing Organization
(1000)
Definition:
The purchasing organization is responsible for all purchasing activities (including the
processing of requests for quotations and purchase orders.
Organizational unit within Logistics, subdividing an enterprise according to the
requirements of Purchasing. A purchasing organization procures materials and services,
negotiates conditions of purchase with vendors, and bears responsibility for such
transactions.
A purchasing organization can purchase for several plants, or several purchasing
organizations can be responsible for purchasing in one plant.
The purchasing organization (1000) is assigned to the following plants, having

procurement activity.

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1110 NACL-Srikakulam Plant
1120 NACL-Srikakulam Plant Bonded Warehouse
1210 NACL-Ethakota Plant-I
1220 NACL-Ethakota Plant-II
1230 NACL-Ethakota Plant Bonded Warehouse
1310 NACL-Nandigaon Plant
2101 NACL-Bolaram Godown
Purchasing Organisation being a central organization is assigned to company code 1000

(NACL).
No Changes.
Though physically procurement activity is differed locally at plants and majority of central
activity at Head Office, the SAP definition will be only a Central Organisation catering to
all plants. There is no difference in procurement policy at all these procurement locations.
The pricing policy is same throughout NACL.
No specific input.
3. Inventory Management
3.1. Storage location
Questions:
Q: 1) List the storage locations that you will need for each Plant.
A: Srikakulam Plant:
Prod Shop, Fin. Goods Store, Engg.Str, Pack. Matl. Store, Tank Storage, R/M Store 1&2
Stores, Project Stores
Ethakota Plant - I:
Prod. Shop, R/M Godown, F/G Store, Pack. Matl. Store.
Ethakota Plant - II:

Prod. Shop, Pack.Matl.Str-1, Pack.Matl.Str-2, R/M Godown, F/G Godown, Tank Storage,
Project Stores

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For Bonded Ware Houses of Ethakota, Srikakulam, Warehouses at Mumbai & Chennai ports
as well as for all Depots, there is one Logical Storage Location.
Q: 2) Will negative Stocks be allowed in any storage locations? If yes, specify the storage
locations.
A: No, none of the Storage Location will be allowed to have negative stocks as per
management policy.
Q: 3) Are there any stocks in your company that you own, but that are not stored in your
company physically?
A: Sub-contracted material lie with vendor but belongs to company stock.

Mumbai & Chennai port warehouse stocks belong to us but are physically stored out of
company premises.
Q: 4) Explain your strategy(s) regarding material receiving and product picking.
A: FIFO is the strategy for material issue.
Q: 5) Do you need to check the capacity of your location?
A: NO
Q: 6) Does each part have a unique location or can they be stored anywhere?
A: Currently materials can be stored anywhere.
Q: 7) EH&S: Are your hazardous substances stored in separate storage locations (i.e. does
anything prevent you from storing them together)? How many hazardous substance
warehouses are there in each plant?
A: NO
Q: 8) EH&S: Do you assign the hazardous substance warehouses their own picking areas if
you distinguish between: - one hazardous substance warehouse, many storage locations,
one picking area - many hazardous substance warehouses, many picking areas - other?
A: NO
CI template:
A storage location has the following attributes:

 There may be one or more storage locations within a plant.

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 A storage location has a description and at least one address.
 It is possible to store material data specific to a storage location.
 Stocks are managed only on a quantity basis and not on a value basis at storage
location level.
 Physical inventories are carried out at storage location level.
 Storage locations are always created for a plant
 A plant must have at least one storage location.
The first three digits of the plants are used as first 3 digits of Storage Location code. The
last digit will be a serial number starting with 1 for different locations at a particular plant.
1110 1111 Prod Shop

1110 1112 R/M Str. 1&2
1110 1113 Fin. Goods Str.
1110 1114 Pack. Matl. Str.
1110 1115 Engg. Stores
1110 1116 Tank Storage
1110 1117 Project Store
1120 1121 CEPB WareHouse SKLM
1210 1211 Prod. shop
1210 1212 R/M Godown
1210 1213 F/G Str.
1210 1214 Pack. Matl. Str.
1220 1221 Prod. Shop
1220 1222 R/M Godown
1220 1223 F/G Godown
1220 1224 Pack. Matl. Str.-I
1220 1225 Pack. Matl. Str.-II
1220 1226 Tank Storage
1220 1227 Project Store
1230 1231 CEPB warehouse ETK
1310 1311 Prod. Shop
1310 1312 R/M Stores
1310 1313 F/G Stores
2110 2111 Storage Location 2111

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Definition:
A storage location is the place where stock is physically kept within a plant. An
organizational unit facilitating differentiation between the various stocks of a material
within a plant.
Each storage location in manufacturing plant resembles physical storage of material,
where as all the depots, which are defined as plants are having one logical storage
location.
All storage locations are defined for a particular plant.
No changes to the existing structure.
No Special considerations.
No specific CI sections.

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C. General Settings
1. Units of Measurement
CI template:
1. Requirements/Expectations
The base unit of measure will be according to the current norms in use. The procurement
& issuing unit may differ from base unit. The existing SAP standard UOM list caters to all
of our requirements.
2. General Explanations
Unit that enables you to determine the size of a quantity of material.

The international system of units is based on seven basic units of measurement. All other
units are derived from these basic units. Units of measurement that measure the same
quantity (and can therefore be converted into each other) are included in a dimensions.
Units of measurement are held centrally in the SAP System for all applications. The
conversion factors are stored in the system with a unique internal key.
3. System Configuration Considerations
No special considerations.
No specific Unit of Measurements

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D. Master Data
1. General Master Records
1.1. Material Master
Questions:
Q: 1) Which departments/organizational units are responsible for maintaining the material

data?
A: Fin., Semi-finish & Traded goods Master creation & maintenance will be looked after by
S&D. For Traded goods Materials related data will be updated by MM.
For all other Material Types Creation & maintenance is responsibility of MM.
Q: 2) Is master data common across all departments (common master data)?
A: Yes, Master data is common across departments.
Q: 3) What is the default sales unit in sales processing and what are alternative sales units?
A: The default Sales unit in Sales will be same as Base unit of measure in Material master.
The alternate Sales units used are:
1) Liter
2) KG
3) Box
Q: 4) Which types of materials do you distinguish between (examples, accruals, quantity

structures)?
A: Raw Materials, Packing Materials, Traded Goods, Semi finished items, Finished goods,
Spares & Consumables, Utilities.
Q: 5) How do these types differ regarding business processes (stock management,

procurement, sales, and so on), data maintained, and persons responsible?
A: Stock management, Procurement & material responsibility lies with different people in the
organization. Data is managed in different manner. In Fin Goods & Semi-finish goods the
Batch management is active.
Q: 6) Do you group similar products together (for example, in divisions or material groups)?
A: Yes, we do it in material groups
Q: 7) Do you maintain additional statuses for your materials (such as sales status)?

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A: No not in application currently.
Q: 8) If you have multiple plants, is your material normally supplied by a specific plant?
A: Multiple Plants can supply same material
Q: 9) Do you maintain additional types of grouping for other processes (for example, rebate
statistics, commission or pricing)?
A: We maintain groupings for report purpose.

Material Group-1 to Material Group-5.
Q: 10) Is the creation of a multi-level hierarchy necessary for materials (product hierarchy)?
A: No.
Q: 11) Do you record a minimum delivery quantity on your materials? If so, what happens
during sales order processing if a violation occurs?
A: No minimum delivery quantity maintained.
Q: 12) Are there materials that must be shipped in certain multiples (delivery units)?
A: Not necessary.
Q: 13) Do you record information on competitor products (sales support)?
A: No.
Q: 14) Can materials have different values in one plant? What are the criteria for the
different values?
A: Materials in a plant can have different value. This is possible in case of materials
procured domestically as well as imported.
Q: 15) According to which criteria, does your material master data let you select with regard
to planned QM processes (for example, goods receipt inspection only for raw materials etc)?
A: Their needs to be goods receipt inspection for all materials received & produced. Since
QM is not in scope the same will be taken care outside the system by manual control and
putting in GR Blocked stock.
Q: 16) Do you maintain material-specific technical terms of delivery?
A: Yes, while dispatching the Technicals, we maintain the technical specifications.

For input materials technical specs will be required.

Page 21 of 132
Q: 17) Are the technical delivery terms stored online, and will you print these terms with
each purchase order?
A: No such data exists. The data will be maintained in Material Master Text fields. This text
will be printed on Purchasing documents.
Q: 18) Do you require your vendors to provide quality certificates (certificates of

conformance or certificates of analysis) either prior to or with material shipments? Describe
the types of certificates you require.
A: Yes, specific raw materials must accompany with Certificate of Analysis either prior to
shipment or along with materials. With implementation of QM this can be taken care of.
Present scenario this will be controlled outside SAP.
Q: 19) Do you require your vendors to provide samples for approval prior to actual delivery?
Please describe.
A: Prior to approving a supply initially samples are requested. Once sample is approved;
there is no need of sample prior to each consignment.
Q: 20) Do you block a vendor invoice for payment until the quality inspection has been
successfully completed?
Explanation: Note: The block can be removed manually if required.
A: No Vendor Invoices are blocked for Quality reasons. The Goods receipt itself is not
prepared if Quality clearance is not there.
Q: 21) Will you process recurring inspections for materials? (Note: This is only possible for
batch-managed materials). Please provide an example.
A: No, QM not in scope
Q: 22) How many different materials do you procure on a regular basis?
A: We procure few materials on weekly basis and others are as and when required, which
may be Monthly or once in a quarter.
Q: 23) Do you want to maintain a source list for the material types you will procure?
A: There is no requirement of assign source automatically & no MRP hence no Source List
requirement.
Q: 24) Do you value your materials using a standard price, a moving average price, or
different valuation methods for different materials?

Page 22 of 132
A: The Finished goods are valued at Standard price and procured materials at M.A.P.
Q: 25) Each material must belong to exactly one material group. Which material groups do
you need to organize your materials?
A: RAW MATERIAL
RM01 CHEMICALS
RM04 DYES
RM07 FILLER MATERIAL
RM10 SOLVENT
RM13 STABILIZER
RM16 STICKING AGENT
RM19 SURFACTANT
RM22 GASES
RM25 TECHNICALS (EXT. PROCMNT.)
RM28 BULKS (EXT. PROCMNT)
FINISHED GOODS
FG01 TECHNICALS
FG11 FORMULATION BULK
FG21 FORMULATION RETAIL
FG31 NUTRIENTS
FG41 FINE CHEMICALS
FG51 CUSTOM SYNTHESISED PRODUCTS
PACKING MATERIAL
PM01 PET BOTTLES

PM04 CO-EX BOTTLES
PM07 ALUMINIUM TINS
PM10 HDPE TINS
PM13 METAL TINS
PM16 POUCHES
PM19 CARTONS
PM22 CORRUGATED BOXES
PM25 STICKERS
PM28 SHRINK SLEEVES
PM31 INNERS & CAPS
PM34 M.CUPS & POURERS
PM37 LEAFLETS
PM40 CORRUGATED BOX LABELS
PM43 BAGS
PM46 DRUMS
PM49 DRUM LABELS
PM52 PREFORMS
PM55 ROLLS
PM58 WADS
PM61 OTHERS
GENERAL STORES MATERIAL

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ES01 PUMPS
ES03 MECHANICAL SEALS
ES05 BOILER
ES07 AIR/ NITROGEN COMPRESSORS
ES09 CHILLING PLANT
ES11 COOLING TOWER
ES13 FANS & BLOWERS
ES15 CENTRIFUGES
ES17 GEAR BOXES
ES19 GLASS ITEMS
ES21 ETP/INCINERATOR
ES23 AGITATOR/FILTERS
ES25 FORKLIFT& MATERIALS HANDLING EQUIPMENT
ES27 FORMULATIONS/ PACKINGING EQUIPMENT
ES29 VALVES/ACCESSORIES
ES31 SS PIPEING & FITTINGS
ES33 MS PIPEING & FITTINGS
ES35 PLASTIC PIPEING & FITTINGS
ES37 BEARINGS
ES39 BELTS/PULLEYS
ES41 COUPLINGS/ ACCESSORIES
ES43 FASTENERS
ES45 WELDING MATERIALS
ES47 RINGS/ OIL SEALS
ES49 TOOLS
ES51 LUBRICANTS
ES53 MS/ SS STRUCTURAL MATERIALS
ES55 FIRE& SAFETY
ES57 CIVIL/ PLUMBLING MATERIALS
ES59 MISCELLANEOUS
ES61 CAPITAL EQUIPMENT
ES63 MOTORS
ES65 CABLES & ACCESSORIES
ES67 SWITCH GEAR
ES69 ILLUMINATION
ES71 DC EQUIPMENT& ACCESSORIES
ES73 ELECRICAL MICSCELLANEOUS ITEMS
ES75 DIESEL ENGINE

ES77 ALTERNATOR
ES79 PREEE/TEMP/FLOW/LEVEL INSTRUMENTS
ES81 SWITCHES
ES83 SENSORS& ACCESSORIES
ES85 DIGITAL INDICATORS & INDICATING CONTROLLERS
ES87 CONTROL VALVES/SOLENOID VALVES
ES89 TRASMITTERS & TRANSDUCERS
ES91 WEIGHING
ES93 INSTRUMENTS CABLING &BACCESSORIES
ES95 SPECIAL INSTRUMENTS/PLC/PCB
ES97 INSTRUMENT MISCELLANEOUS ITEMS
ES 98 POWER & FUEL (LIQUIDS)
ES 99 POWER & FUEL (SOLIDS)
GS01 OFFICE EQUIPMENT

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GS02 OFFICE STATIONERY
GS03 IS EQUIPMENT&STANRY
GS04 WELFARE ITEMS
GS05 TRAINING CENTRE
GS06 HARTICULTURE ITEMS
LB01 LAB CHEMICALS & RESINS

LB02 GLASS WARE (LAB)
LB03 LAB GASES
LB04 LAB EQPMNT &SPARES
LB05 LAB MISCELLANEOUS
SERVICE GROUPS
SG01 MECHANICAL
SG02 ELECRICAL
SG03 INSTRUMENTAION
SG04 CIVIL
SG05 GENERAL
Q: 26) Will you need to run MRP?
A: No
Q: 27) How many different G/L accounts do you need for inventory?
A: The number of GL accounts will be as per number of material categories.

eg.
IGL account valuation class Description

-------------------- ----------------------- ------------------
A12001 2001 Raw Materials- Domestic
A12002 2002 Raw Materials-Imported
A12003 2003 Packing Materials-Domestic
A12004 2004 Packing Materials - Imported
A12005 2005 Traded - Specialty fertilizers
A12006 2006 Traded - other Products - imported
A12007 2007 Traded - other Products - domestic
A12008 2008 Finished Goods - Formulation
A12009 2009 Finished Goods - Technical
A12010 2010 Finished Goods - Fine Chemical
A12011 2011 Raw materials - Bonded Warehouse
A12012 2012 Stores, Spares & consumables
A12013 2013 Fuel & Diesel
Q: 28) Will you maintain specification data for your hazardous substances?
A: NO

Page 25 of 132
Q: 29) Are separate material master records (perhaps with a separate material type or
numbering system) used in the development and engineering/design processes? How and
when are they converted to operational material number and type)?
A: NO, There is no development activity with different codes
Q: 30) Do you use other systems (such as service management or costing) that need
material master records from R/3 and therefore a permanent interface?
A: No parallel system to be interfaced.
Q: 31) Describe the structure and numbering system for material numbers
(internal/external, specific to material type, other criteria).
A: All FG, Semi-Finished and Traded Goods to have External numbering where as all other
materials will have internal numbering. Numbering will be specific to Material type.
Q: 32) Which material types do you use (please complete): FERT, HALB, ROH, KMAT,
HAWA, FMHI ?
A:
M Ty Desc Base Type
---------- ----------------------------- -----------------
FORM Formulations FERT
TECH Technical HALB
HAWA Trading goods HAWA
ROH Raw materials ROH
VERP Packaging VERP
ERSA Spare parts ERSA
HIBE Operating supplies HIBE
Q: 33) Do you maintain multilingual descriptions for materials? Which languages are
relevant? How and when are they translated?
A: NO
Q: 34) What types of texts do you maintain for your materials?
A: Material Specifications will be maintained in Material Texts of Material Master.
Q: 35) Please describe the process for creating and adding to material data. Include release
procedure/status, important sequences, automatic notifications (workflow), responsibilities,
authorizations, involved systems, and so on.
A: New Material Master Form to be designed by core team for filling-up data. The form will
be raised by user dept. It will be user responsibility to collect req. information from all relevant
depts. & submit the form to Materials Dept. Materials Dept will create & maintain Master on
SAP. There is no separate authorization than signing on physical form.

Page 26 of 132
With above process, Fin. , Semi-finish & Traded goods Master creation & maintenance will be
looked after by S&D. For Traded goods Materials related data will be updated by MM.
For all other Material Types Creation & maintenance is responsibility of MM.
Q: 36) Describe the change process for materials.
Explanation: Please note your requirements regarding release procedure/status, important

sequences, automatic notifications (workflow), responsibilities, authorizations, involved
systems, Engineering Change Management, revision levels, and so on.
A: Same Material form with data to be changed will be submitted by user dept to SD for Fin
Goods, Semi-Fin goods & Traded Goods. For all other Material types the form will be handed
over to MM.
There is no separate authorization than signing on physical form.
Q: 37) Which cross-plant and plant-specific material statuses are necessary?
A: Not necessary
Q: 38) Do you need to customize the appearance of or add data fields to the material
master record (additional fields, customized material master, field selection, customer-specific
field checks)?
A: No such requirement.
Q: 39) Do you use classification for your material masters? For what reasons (storing
addition information, search functionality, or variant configuration)?
A: We are using classification to determine the characteristics of a Batch.

In Material Master, the classification will be used for batches.
Q: 40) Do you classify standardized parts by loading DIN classes and characteristic data
records?
A: No such requirement.
Q: 41) Do you have different valuation techniques (for example, standard versus moving
average)? If so, please explain which.
A: We are using different valuation techniques as below:
1) Moving Average will be used for all procured materials.

2) Standard price will be used for all Factory produced goods.
Q: 42) Do you have inventories valued in different currencies at the same facility?
A: NO

Page 27 of 132
Q: 43) Are your materials taxable?
A: YES
Q: 44) For a material is there a main delivery location for a sales department?
A: The delivery of materials is distributed at various Depots, treated as Plants in SAP. Each
plant will have one shipping point.
Q: 45) PM/CS: Do you need a material master especially for plant maintenance / customer
service with reduced information (just basic data and classification data)?
A: No
Q: 46) PM/CS: Do your maintenance or service equipment include major components that
you want to deal with individually to compile separate histories? If so, describe these
components.
A: No
CI template:
Material Master should encompass all Material Varity of current business.

Material Specifications should be available in one master.
A Company manages the basic data on all its materials in the material master.
3. Naming/Numbering Conventions
The material codification used is as follows for procured materials. These will be
internally generated numbers.
ROH Raw materials 000001 100000

VERP Packaging 100001 200000
DIEN Services 200001 300000
ERSA Spare parts 300001 400000
HIBE Operating supplies 400001 500000
For manufactured and traded materials, the codification is decided as below.
These will be externally generated numbers.

Page 28 of 132
Materials Types used are as follows:
FORM Formulations
TECH Technical
HAWA Trading goods
ROH Raw materials
VERP Packaging
ERSA Spare parts
HIBE Operating supplies
The material groups naming convention used is as follows:
All Raw Material codification will start with "RM" followed with two digits specific code
All Finished Goods codification will start with "FG" followed with two digits specific code
All Packing Material codification will start with "PM" followed with two digits specific code
All General Stores Material codification will start with "GS" followed with two digits
specific code
RAW MATERIAL
RM01 CHEMICALS
RM04 DYES
RM07 FILLER MATERIAL
RM10 SOLVENT
RM13 STABILIZER
RM16 STICKING AGENT
RM19 SURFACTANT
RM22 GASES
RM25 TECHNICALS (EXT. PROCMNT.)
RM28 BULKS (EXT. PROCMNT)
FINISHED GOODS
FG01 TECHNICALS
FG11 FORMULATION BULK
FG21 FORMULATION RETAIL
FG31 NUTRIENTS
FG41 FINE CHEMICALS
FG51 CUSTOM SYNTHESISED PRODUCTS
PACKING MATERIAL
PM01 PET BOTTLES

PM04 CO-EX BOTTLES
PM07 ALUMINIUM TINS
PM10 HDPE TINS
PM13 METAL TINS
PM16 POUCHES
PM19 CARTONS
PM22 CORRUGATED BOXES
PM25 STICKERS
PM28 SHRINK SLEEVES
PM31 INNERS & CAPS
PM34 M.CUPS & POURERS

Page 29 of 132
PM37 LEAFLETS
PM40 CORRUGATED BOX LABELS
PM43 BAGS
PM46 DRUMS
PM49 DRUM LABELS
PM52 PREFORMS
PM55 ROLLS
PM58 WADS
PM61 OTHERS
GENERAL STORES MATERIAL
ES01 PUMPS
ES03 MECHANICAL SEALS
ES05 BOILER
ES07 AIR/ NITROGEN COMPRESSORS
ES09 CHILLING PLANT
ES11 COOLING TOWER
ES13 FANS & BLOWERS
ES15 CENTRIFUGES
ES17 GEAR BOXES
ES19 GLASS ITEMS
ES21 ETP/INCINERATOR
ES23 AGITATOR/FILTERS
ES25 FORKLIFT& MATERIALS HANDLING EQUIPMENT
ES27 FORMULATIONS/ PACKINGING EQUIPMENT
ES29 VALVES/ACCESSORIES
ES31 SS PIPEING & FITTINGS
ES33 MS PIPEING & FITTINGS
ES35 PLASTIC PIPEING & FITTINGS
ES37 BEARINGS
ES39 BELTS/PULLEYS
ES41 COUPLINGS/ ACCESSORIES
ES43 FASTENERS
ES45 WELDING MATERIALS
ES47 RINGS/ OIL SEALS
ES49 TOOLS
ES51 LUBRICANTS
ES53 MS/ SS STRUCTURAL MATERIALS
ES55 FIRE& SAFETY
ES57 CIVIL/ PLUMBLING MATERIALS
ES59 MISCELLANEOUS
ES61 CAPITAL EQUIPMENT
ES63 MOTORS
ES65 CABLES & ACCESSORIES
ES67 SWITCH GEAR
ES69 ILLUMINATION
ES71 DC EQUIPMENT& ACCESSORIES
ES73 ELECRICAL MICSCELLANEOUS ITEMS
ES75 DIESEL ENGINE

ES77 ALTERNATOR
ES79 PREEE/TEMP/FLOW/LEVEL INSTRUMENTS
ES81 SWITCHES

Page 30 of 132
ES83 SENSORS& ACCESSORIES
ES85 DIGITAL INDICATORS & INDICATING CONTROLLERS
ES87 CONTROL VALVES/SOLENOID VALVES
ES89 TRASMITTERS & TRANSDUCERS
ES91 WEIGHING
ES93 INSTRUMENTS CABLING &BACCESSORIES
ES95 SPECIAL INSTRUMENTS/PLC/PCB
ES97 INSTRUMENT MISCELLANEOUS ITEMS
ES 98 POWER & FUEL (LIQUIDS)
ES 99 POWER & FUEL (SOLIDS)
GS01 OFFICE EQUIPMENT

GS02 OFFICE STATIONERY
GS03 IS EQUIPMENT&STANRY
GS04 WELFARE ITEMS
GS05 TRAINING CENTRE
GS06 HARTICULTURE ITEMS
LB01 LAB CHEMICALS & RESINS

LB02 GLASS WARE (LAB)
LB03 LAB GASES
LB04 LAB EQPMNT &SPARES
LB05 LAB MISCELLANEOUS
SERVICE GROUPS
SG01 MECHANICAL
SG02 ELECRICAL
SG03 INSTRUMENTAION
SG04 CIVIL
SG05 GENERAL
4. Special Organizational Considerations
All Finished Goods and all Input Materials will be entered into Material Master. The
general stationary & consumable items will not be part of master.
Material Master will be maintained more detailed in S.A.P. than the existing system.
6. Description of Improvements
More classified information is available in Material Master. Better reporting functionality

based on such data is possible. Master Data will reduce data input efforts at various
transactions through all modules and processes.

Page 31 of 132
More online data regarding Material Valuation and precautionary messages & data
validity possible with the Master Data.
7. Description of Functional Deficits
No Functional Deficits
8. Approaches to covering Functional Deficits
Not Applicable.
9. Notes on further Improvements
With activation of QM module additional quality related data will be added in

future. If online costing is to be done in future, then additional cost data will
be maintained.
Separate internally generated number range will be required for different material types.
Material groups additional needs to be activated for SD classification.
11. Authorization and User Roles
For Finished Goods Master update authorization will be with S&D. For all other materials the
master update responsibility will be of Materials Dept.
Display authorization will be for all SAP users.
For S&D reporting, product classification additional Material Groups are

required.
Different No. Ranges for individual Material Types required.
1.2. Vendor Master Record

Questions:
Q: 1) What types of vendors do you have? (Domestic, foreign, payment address, etc.)
A: Domestic, Foreign & others
Q: 2) How many active vendors do you want to transfer to R/3?
A: More than 5000 approx.

Page 32 of 132
Q: 3) How do you want vendor numbers assigned in the R/3 System? Name your criteria for
manual and automatic number assignment. Describe the format of manually assigned vendor
numbers.
Explanation: Ways of assigning numbers: 1. Automatically by the R/3 System 2. Manually be

the user 3. Automatically and manually
A: [X] Always automatically from the SAP System

[ ] Always manually from the user
[ ] Automatic or manual
Q: 4) Do you have plants that supply materials or services to other plants in other company
codes?
A: No
Q: 5) Do stock transport orders take place between stores or between the DC and store? If
so, for which sites?
A: Stock transport orders are operated within Storage locations of 4 Manufacturing plants.
Finished Goods stock transfer takes place from Storage locations to various Depots, From
Depot to Depot and Depot back to plant Stores.
Q: 6) Do you want to reflect the organizational structure of your vendors in the R/3 System?
A: No
Q: 7) Is it necessary for you to maintain different purchasing vendor master data for different
plants?
A: Plants need to be maintained as Vendors since there will be a stock transport between
them.
It is not necessary to maintain a vendor master record for each plant.
Q: 8) When working with your suppliers, do you deal with people with different roles? If yes,
indicate the appropriate roles.
A: [ ] Order recipient
[ ] Goods supplier
[ ] Invoicing party
[ ] Payment recipient
[ ] Other, please specify
Comments: Very few cases per year may fall in this category. Hence no such
functionality required.
Q: 9) Do you employ different payment terms by facility?

Page 33 of 132
A: Yes,
We pay by
- Advance payment
- Immediate on receipt
- Part advance & part after receipt of material
- Credit payment
- Hundi
- LC
- Against Document through Bank
Q: 10) Are there any vendor-specific instructions or information that you want to include in
purchasing documents?
A: No
Q: 11) Do your vendors offer discounts for prompt payment (for example, 1% cash discount
within 10 days)? Provide a list of the payment terms you require.
A: Yes, but this can be well handled outside SAP with variable discount %.
Q: 12) Do you specify foreign-trade-specific information in your purchasing documents

(such as CIF or FOB)? hose needed.
A: Yes
Q: 13) Do you have vendors with several/different ordering addresses, payees, carriers, and
so on? If so, what do these depend on (assortment, supply region)?
A: No
Q: 14) Do you need to maintain default data for the article master (such as planned delivery
time, purchasing group) at vendor level?
A: No
Q: 16) How many vendors regularly supply you with goods?
A: Above 3500 approx.
Q: 17) Do you have vendors who are subject to withholding tax?
Explanation: Possible to group with different account groups; Maintenance of fields in master
record in master record.
A: Yes

Page 34 of 132
CI template:
Domestic, Foreign Vendors & others should have different number range. Current Data
available with us should be used appropriately to build the master. Latest communication
methods should be addressed to such as e-mail id, Mobile No. etc.
The vendor master contains the data of all vendors that a company conducts business
with.
The vendor master database contains information about the vendors that supply an
enterprise. This information is stored in individual vendor master records. A vendor
master record contains the vendor's name and address, as well as data such as:
 The currency used for ordering from the vendor
 Terms of payment & Inco Terms
 Names of important contact persons
Since, to the accounts department, vendors are generally creditors (accounts payable),
the vendor master record also contains accounting information, such as the relevant
control account (reconciliation account) in the general ledger.
Therefore, both Accounting and Purchasing Departments maintain the vendor master
record.
The naming conventions and number ranges used for four accounting groups in the
Vendor Master are as below:
Code Vendor Account Groups No Ranges
DOM DOMESTIC (int.number assignment) 20001 39999

IMP IMPORTS (int.number assignment) 40001 49999
TPT TRANSPORTER (int.number assignment) 50001 59999
OTH OTHERS (int.number assignment) 60001 69999
Domestic Vendors, Other suppliers like consultants, contractors etc. need to be

segregated from Imports Vendors.
No changes to existing organization.
 Partner Function, Alternate Payee functions are useful facilities,

Page 35 of 132
which will regularize the manual transactions and system will take care of
the same.
 Vendor Master Data can be defaulted in various purchasing

transactions. Also this will ensure uniformity of data throughout various
functions.
 For Vendors who are customers too, the Vendor Balance can be
linked with Customer balance to reconcile and arrive at final Dr/Cr. balance.
 Search Term is a useful facility to search the Vendor.
No deficits
Not Applicable.
Partner function will be used in future.
Three accounting groups are required to control Vendor Code series for three generic
vendor classifications.
Two different pricing calculation schemas are required. Viz. Domestic & Imports.
Materials Dept will create the Vendor Master. The Accounting related data would be given
by Accounts Dept on a standard Master addition format.
No project specific CI.
1.3. Excise
CI template:
The entire excise master data like chapter heading, vendor registrations etc.
need to be taken care-off by system.

Page 36 of 132
For transfers of Semi-Finished & Finished Goods from one plant to another
plant, Excise Duty has to be paid on 115% basis.
A quantity-based tax which must be paid when a dutiable material is moved from one
plant to another plant. Also known as excise tax. The excise duty is based on the quantity
and price of the material moved.
Normal Basic Excise Duty for all input & output materials is 16% only. But, the
percentage of duty may vary, based on the SSI status of the company. In case of SSI
Units, the excise duty is 9.6%.
Excise Registration IDs, Excise Groups & Excise Document Series are classified as
mentioned below:
Excise Registration IDs
Reg. ID ECC Number Regn. Range
100 AAACN6932H-XM001 1/94 SRIKAKULAM

200 AABCV0708J-XM001 2/94 RAMACHANDRAPURAM
300 AABCV0708J-XM002 1/95 RAMACHANDRAPURAM
400 AABCN0281G-XM001 9/98 KOTHUR-1
500 AABCN0281G-XM001 9/98 BELLARY
Excise Groups
Ex. Gp. Plant Description Reg. ID
01 1110 SRIKAKULAM 100

02 1210 ETHAKOTA-1 200
03 1220 ETHAKOTA-2 300
04 1310 SHADNAGAR 400
05 3104 BELLARY GODOWN/DEPOT 500
Excise Document Series
Series Gr. Description Reg. ID
101 EXCISE-SKLM 100

102 SUBCONTRACTING-SKLM 100
201 EXCISE-ETHK-1 200
202 SUBCONTRACTING-ETHK-1 200
301 EXCISE-ETHK-2 300
302 SUBCONTRACTING-ETHK-2 300
401 EXCISE-SHDN 400
402 SUBCONTRACTING-SHDN 400
501 DEPOT/GODOWN 500

Page 37 of 132
Cenvat on all Inward material except Capital Goods should be posted to RG23A Part-II
Register and the Cenvat on Capital Goods should be posted to RG23C Part-II Register.
Non-Modvatable items are not to be posted in any of the above registers.
Note: We are not eligible to avail the Cenvat credit on certain items. For e.g. Office
Furniture etc.
Presently, the excise registers are being maintained manually. With S.A.P., the same will
be maintained in the system itself.
With the maintenance of excise registers in S.A.P., the data will be maintained more
accurately in the system.
No Functional Deficits
Not applicable.
No further improvements are planned.
No specific configuration in master data.
The persons dealing with Central Excise activities are authorized to maintain the Central
Excise records in the system.
There is no specific C.I.

Page 38 of 132
2. Procurement
Questions:
2.1. Purchasing Info Record

CI template:
The Purchasing history needs to be maintained to improve procurement efficiency. This

will facilitate data input in recursive transactions.
Serves as a source of information for Purchasing. The purchasing info record (also
referred to in abbreviated form as the "info record") contains information on a specific
material and a vendor supplying the material. For example, the vendor's current pricing is
stored in the info record.
The info record allows buyers to quickly determine:
 Which materials have been previously offered or supplied by a specific vendor
 Which vendors have offered or supplied a specific material
The info record contains:
 Data such as prices and conditions that can be stored for the relevant purchasing
organization or plant
 The number of the last purchase order
 Tolerance limits for over-deliveries and under-deliveries
 The planned delivery time (lead time required by the vendor to deliver the
material)
 An indicator showing whether the vendor counts as the regular vendor for the
material
 The availability period during which the vendor can supply the material
The data in the info record (prices for example) is also used as default data for purchase
orders.
We can also maintain the vendor's conditions directly in the info record.
SAP standard numbering will be used as recommended.

Page 39 of 132
The Info Record will get created while saving PO.

The same needs to be changed imml'y to add the condition record.
Info Records are not part of current database of legacy system. This is an additional step
while creating a PO.
The Pricing history comes handy for procurement decisions. Also the terms and
conditions for previous procurement can form a basis for negotiations.
The Info record is useful tool for Source determination.
No Functional deficit.
Not applicable.
The Info Record functionality may be used to control pricing of procurement by

independent group in future.
No special consideration.
Info Update authorization to currently remain with the person creating PO.
Display authorization will be for all Purchase users.
The Info Record conditions will be updated manually latter when other data is recorded
by creating PO. The “Tick” provided in PO for INFO UPDATE makes this possible.

Page 40 of 132
2.2. Conditions
Questions:
Q: 1) Which price components do you use in purchasing documents (e.g. gross price,
surcharges, discounts, freight, duty, import)?
A: Basic Price, Discount, Freight, Insurance, Excise Duty, Sales Tax, Packing & Forwarding,
Customs Duty, CVD, SAD, Landing, Clearing Charge, Inland Freight, Inland Insurance,
Q: 2) Do prices depend on the quantity ordered (e.g. quantity discounts or price scales)? If
so, specify price components, quantity, and other factors.
A: No, but the Discount is expressed on UOM basis not on quantity basis. Also there is
some period end discounts, that is covered under Rebate settlement.
Q: 3) To which date does the price determination process relate? (E.g. delivery date, PO
date, other.)
A: PO Date
Q: 5) Do you manually change the price at header level for the entire purchasing
document?
A: No
Q: 6) Do you allow changes to the gross price that is automatically determined by the R/3
System?
A: Yes, The price taken from either Info record or previous PO will be revalidated.
Q: 7) Does the vendor's price includes value-added tax?
A: No
Q: 8) Is it possible to change pricing conditions after a PO has been created?
A: Yes, for corrections asked by approving authority.
CI template:
Complete pricing hierarchy is given in the attached document.

All existing pricing elements, their dependency should be taken care of.

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This component enables us to store pricing stipulations agreed with the vendor (such as
applicable discounts or surcharges, or stipulations regarding the payment of freight costs)
in the system. We can enter these conditions in quotations, outline purchase agreements,
and info records. We also have the option of entering general conditions at vendor level,
for example. The system then applies the conditions in determining the price in purchase
orders (POs). We can enter further conditions in the PO itself.
There are three kinds of price in Purchasing:
 Gross price
· Price without taking any possible discounts and surcharges into account.
 Net price
· Price taking any applicable discounts and surcharges into account.
 Effective price
· Net price after deduction of cash discount, with allowance for any miscellaneous
provisions, delivery costs, and non-deductible taxes.
We can enter conditions for items in respect of which you do not expect to receive an
invoice in purchase orders and outline agreements.
Condition remains valid for a specified period.
New Pricing conditions are created by name beginning with "Z".
There will be 4 different pricing schemas.
1. ZDOM Domestic Purchases

2. ZIMP Imports
3. ZSTKTR Stock Transport Plant to Plant or Depot
4. ZBWH Stock Transport Bonded W/H to Plant
Additional Condition Types
YINP I/L Insurance %

YINV I/L Insurance (Value)
ZINP Insurance %
ZINV Insurance (Value)
ZLAN Landing Charges
ZOA1 Customs %
ZOB1 Customs (Value)
ZOC1 Customs/Quantity
ZPFP P& F (%) Exc.
ZPFV P& F (Value) Exc.
No specific consideration.

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The orders created in legacy had no distinction of pricing records. Purchasing buyer has
to update condition record in Info Record whenever there is change.
There will be uniform structure for pricing.

This will provide for accurate information at Invoice verification.
Payment will be on a dependable calculation as per regulations and policies.
All
No functional deficit.
Not applicable
All current requirements are taken care of. Any new scenario needs to be catered to as
and when basis.
There will be 4 different pricing schemas.
1. ZDOM Domestic Purchases

2. ZIMP Imports
3. ZSTKTR Stock Transport Plant to Plant or Depot
4. ZBWH Stock Transport Bonded W/H to Plant
Additional Condition Types
YINP I/L Insurance %

YINV I/L Insurance (Value)
ZINP Insurance %
ZINV Insurance (Value)
ZLAN Landing Charges
ZOA1 Customs %
ZOB1 Customs (Value)
ZOC1 Customs/Quantity
ZPFP P& F (%) Exc.
ZPFV P& F (Value) Exc.

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The authorization to update conditions will be with the same person creating PO.
PO display will be for all purchasing users whereby they can see the condition records
too.
There will be four different Pricing Schemas to address Domestic & Imports Purchases
as well as Stock transport from Plant to plant and Bonded Warehouse to Plant.
2.3. Message Conditions

CI template:
This being an additional feature, there are no specific expectations.
Purchasing documents created in the SAP System can be transmitted to the vendor (e.g.
via the regular postal service as a normal printed document, as a fax, the system
generates a message for each document. (In this context, a message is a document in
output format for communication to vendors, and should not be confused with system
messages.
Each time you create an RFQ, a PO, a contract, a scheduling agreement, a scheduling
agreement release, or a standard delivery schedule issued under a scheduling
agreement, the system creates a message for the relevant document. This message is
placed in the message queue. The message queue contains all the messages that have
not yet been transmitted to the vendor.
The following options are available for outputting messages (e.g. as printout or fax) from
the message queue:
 Immediate output
 Later output
·
No special conventions.

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 The person generating output needs to have authorization to change

Purchase Order.
 In case printing fails the reoutput will have to be through new message
line.
 Simply new print of document can not be taken out.
 The output can be generated only after concerned authority releases the
document.
 The messages functionality gives control on
Not applicable.
New formats for message printing will be added in future as and when required.
 The person creating PO will have authorization to print the same.

 Similarly for Goods Receipt, and other store transaction documents the authority
for printing will be with the same person generating it.
No specific project CI.

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2.4. Vendor Rebate Arrangements
Questions:
Q: 1) Do you wish to send your business partners written confirmation of rebate

arrangements entered into with them?
A: Yes
Q: 2) Do you grant your vendors volume rebates based on the volume of business done
over a period of time?
A: Yes,
We enter into Rebate agreement, allowing discounts based on qty procured over period of
time.
CI template:
 We have certain purchasing contracts, where there is an initial agreement with

the vendor to allow commercial discount on the procurement price, by virtue of crossing
certain volume of business. The crossing limit is set on quantity terms only.
 The end of the period settlement is done only once for a contract, either after
crossing the volume criteria or after completion of the agreement period.
 The validity period of Rebate Agreements is restricted to maximum of a year.
·
Definition:
Understanding between business partners with regard to the granting of conditions
(concessions that are conditional upon certain events) relating to a certain time period.
This process allows us to create rebate arrangements by grouping together conditions
requiring end-of-period settlement agreed with a "condition granter" that are valid within
the same overall timeframe and which are due for settlement at the same points in time.
Vendors may agree to refund a certain portion of the purchase price to purchasers in the
wholesale/retail industry on condition that a certain quantity or value of goods is bought
(incentive rebates), that payment is effected promptly, or that promotional activities are
carried out, for example. End-of-period refunds of (retrospective discounts allowed on)
part of the total spends.
Conditions can be divided into two groups: those having immediate effect based on
individual invoice dates, and those requiring "subsequent" settlement (retrospective
settlement at the end of a certain period).
Conditions having subsequent effect have to be taken into account at a later date:
Some time after the submission of an invoice relating to an individual purchase
transaction, the settlement is based not on individual transactions but on the total volume
of purchases - expressed in money or quantity terms - over a period. This is "subsequent

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settlement."
No special naming conventions.
Present manual work of settling the rebates will be avoided and the same can be
captured in the system itself.
By incorporating Rebate arrangements for procurement, the manual activity and

dependency on accounting clerk is done away with.
System will track quantities delivered and discount to be availed.
No functional deficits.
Not Applicable.
The other variations if any, in future will be addressed subsequently.
No special configuration considerations.
The persons handling purchase orders will also be authorized for Rebate Agreements.
The subsequent settlement will be handled by Fin. authorized person.

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No specific CI.
2.5. Settlement Accounting for Conditions Requiring

Subsequent Settlement
Questions:
Q: 1) Is the data from the process of subsequent settlement to be included in the profitability
analysis?
A: [ ]Yes
[ ]No
Q: 2) Is the process of subsequent settlement to be carried out at plant level?
A:
Q: 3) At which levels is aggregation or sorting of data to be carried out?
A:
Q: 4) Must external business volume data (e.g. from sites with other systems) be taken into
account for subsequent (end-of-period rebate) settlement?
A: No
Q: 5) Are tolerance limits to be taken into account in subsequent (end-of-period rebate)

settlement? If so, which?
A: No
Q: 6) Are your business partners to be given written notification of rebate arrangements for
which settlement accounting has taken place?
A: Yes
Q: 7) How long do your agreements run?
Explanation: Listing of the various intervals used Listing of the various intervals used
A: Such agreements are valid for a year.

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Q: 8) What is the maximum period of an agreement with the settlement partner?
Explanation: For example, until cancelled or redefined annually. Note: You cannot map the
option "until cancellation" in the R/3 System by choosing "unending" rebate arrangement
(until 12.31.9999). See: Extending Rebate Arrangements
A: Such agreements are valid for a year.
Q: 9) How many agreements do you use that have a validity period of more than one year?
A: No such agreements. All agreements are valid only up to 1 year.
Q: 10) Which periods of time do you use that have a validity period of less than one year?
A: All agreements of validity less than a year can get over as & when the qty is surpassed.
Q: 11) Do you extend your agreements at regular intervals?
A: No
Q: 13) Do you use rebate arrangements that apply retrospectively?
Explanation: This can always only be done in exceptional cases!
A: Yes. This arrangement will be carried out outside by FI entry.
Q: 14) Do you carry out several settlements for each agreement?
A: No
Q: 16) At which time intervals will you carry out partial settlement with regard to a rebate
agreement?
Explanation: Maintenance of arrangement calendar.
A: At the end of period or as & when Qty is completed.
Q: 18) Do you settle up with regard to rebate arrangements only within a self-contained
accounting unit ("company code"), or are different volume rebates also settled for different
sub-enterprises in a single rebate arrangement and allocated proportionately?
Explanation: At this point, you should not underestimate the volume of documents.

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A: All volume rebates will be settled within a company code.
Q: 19) Do you settle rebate arrangements as credits or debits?
A: [ ] Credits
[X] Debits
Q: 20) Are settlements that are sent to customers (instead of vendors) also created based
on the business volume data from purchasing or agency business?
A: No
Q: 21) Before which settlements do you agree on your business volume with your
settlement partners?
Explanation: For example, only before final settlement for a rebate arrangement or also
before the settlements before that, for example, mid-year settlements
A: At the end of period or as & when Qty is completed.
Q: 22) Do you want to post the settlement documents immediately in Financial Accounting?
Explanation: You can set a posting block so that settlements must be released in a separate
step.
A: Yes
Q: 23) Do you receive promotional deals?
Explanation: Rebate based on business volume that is paid out at fixed intervals for defined
periods, for example.
A: Yes
Q: 24) Are subsequent settlement conditions to be taken into account for articles subject to
inventory management (valuation) on a value basis?
A: Yes
Q: 25) When is the business volume updated?
A: [ ] Purchase Order
[X] Goods receipt
[ ] Invoice Verification
Q: 26) Which business-volume-relevant document types do you use?

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A: [X] Scheduling agreements/purchase orders
[ ] Vendor billing documents
[ ] Settlement requests
Q: 27) Which schema do you want to use to calculate conditions that are subsequently
settled? Which discounts are included in the business volume basis for subsequent
settlement, if necessary?
A: Domestic procurement schema will have subsequent settlement. Discount on Qty or

Discount % will have subsequent settlement.
Q: 28) Which discounts are included in the business volume basis for subsequent
settlement, if necessary?
A: Discount on Qty or Discount % will have subsequent settlement.
Q: 29) On which value does the business volume of subsequent settlement depend?
Explanation: Net value in the invoice, gross value in the purchase order, and so on Net value
in the invoice, gross value in the purchase order, and so on
A: Net value of Invoice will be used for business volume determination for subsequent
settlement.
Q: 30) Are conditions calculated differently?
Explanation: Gross/net, different access sequence, and so on Gross/net, different access

sequence, and so on
A: No
Q: 31) Do you want to transfer business volume data from other systems to the R/3
System?
Explanation: Several tools are available for transferring legacy data: - Per File - Per pro-
forma vendor billing document
A: No
Q: 32) Do you want to import documents subject to volume-based rebates into the system
using a data carrier?
A: No

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Q: 33) Which evaluations and statistics do you need?
Explanation: For example, business volume and revenue at material group or article type
level type level
A: Business Volume expressed in Qty & Value.

Net discount from agreement.
CI template:
FI to give the requirements
Definition:
This component permits once-only or periodic settlement accounting with regard to
conditions governing cumulative, end-of-period rebates.
If, we agree upon certain conditions with vendor that provide for the payment of rebates
by the latter at the end of a certain period (possibly) subject to a certain minimum volume
of purchases) instead of immediate discounts allowed in or deductible from individual
invoices, we can store such conditions in the system in the form of a "rebate
arrangement". The system automatically updates the relevant business volumes.
Settlement with regard to such conditions takes place at predefined points in time
No special naming conventions.
Only once period end settlement is required.
Finance department need not tabulate the manual data. System will suggest the value to
be recovered as period end rebate.
 An accurate figure of period end rebate to be recovered will be tracked by

system.

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 Finance department need not tabulate the manual data.
 This will lead to accuracy and timely recoveries as regards end of period
rebates.
Not applicable.
The other variations if any, in future will be addressed subsequently.
The subsequent settlement will be handled by Fin. authorized person.
No specific project CI
2.6. Release Strategy with Classification

Questions:
Q: 1) Will any purchasing documents be subject to approval in SAP? If yes, describe the
criteria that will be needed to determine the appropriate approval policy for purchase
requisitions, RFQs, purchase orders, contracts, scheduling agreements.
A: Following two Purchasing documents will be subject to Release Procedure.

1) Purchase Requisition: All requisitions to be authorised by Plant Managers.
1) Purchase Order: All PO's to be authorised by GM in case of Ethakota Plant & by
EVP in case of Srikakulam Plant. Exception being Packing
Material PO to be authorised by Plant Manager for Ethakota. The
authorization control is based on Purchasing Group.

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CI template:
 Purchase Requisitions need to be authorised at operational level.

· ·
 Purchase Orders need to be authorised by top management.
· ·
 Packing Material and Engg. Items will be an exception.
· ·
 The Authority may differ according to plant of procurement.
Release Strategy is used to set up approval procedures for purchase requisitions or other
purchasing documents. Under such a procedure, if a purchase requisition or external
purchasing document fulfills certain conditions (e.g. the total order value exceeds Rs-
1,00,000), it has to be approved (by the cost center manager, for instance) before it can
be processed further. This process of approving (clearing) a proposed item of expenditure
is replicated in the SAP System by the "release procedure".
Each person involved in the release procedure effects release (signifies approval) via a
release transaction, using his or her release code. Once effected, a release can also be
cancelled with the same code (that is to say, the original status is reinstated).
Release procedures can be defined for the following documents:
 Purchase Requisition
 The external purchasing documents purchase order (PO), contract, scheduling
agreement, request for quotation (RFQ), and service entry sheet

The different strategies will have codes S1 & S2.

The grouping code will be G1 & G2.
The Plant wise single level Release strategy with 2 groups for exception handling will be
used.
The legacy system exercises control by signing on a physical document.

In SAP one additional step of document release will be there before a document can be
printed.
As per commercial transaction procedure the document will still be signed.

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The release procedure gives better control on procurement function. The PO is invalid till
it is released. The mere creation of a document in a system does not assume a
purchasing contract.
No functional deficits
Not Applicable
The authorization levels can be incremented in future for better control.
 It is single level authorization.
 There will be only two authorization group
 Authorization is Plant specific.
 The classification will be based on Purchasing Group.
Following two Purchasing documents will be subject to Release Procedure.
 Purchase Requisition: All requisitions to be authorised by Plant

Managers.
 Purchase Order:
1. All PO's to be authorised by GM in case of Ethakota Plant.

2. All PO's to be authorised by VP in case of Srikakulam Plant.
3. Packing Material PO to be authorised by Plant Manager for Ethakota.
4. The authorization control is based on Purchasing Group.
No specific CI.

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E. Business Processes
1. Procurement
Questions:
Q: 2) How does material move between plants?
A: The material will move on Stock Transport Order between plants. The Stock Transport
order will be with SD element. i.e. a delivery will be prepared for STO.
1.1. Procurement of Materials and External Services

1.1.1. Purchase Requisition
1.1.1.1. Purchase Requisition Processing
Questions:
Q: 1) How are purchase requisitions created in the case of stock material, material for direct
consumption, external services?
A: [X] Manually
[ ] MRP
[X] Sales order
[ ] Replenishment
[ ] Store order
[ ] Outside R/3
Q: 2) Will you use a purchase requisition to trigger creation of for a contract or scheduling
agreement (Outline Agreement Request)?
A: Purchase Requisitions will be used to convert into Scheduling agreements or Purchase

Order with exception of Imported Items. For Imported items the Purchase Orders will be
generated without PR.
Q: 3) How many days does it take, typically, before a purchase requisition becomes
demand in a purchasing document given to a supplier? Please indicate processing time per
plant.
Explanation: This would be used by the system to calculate replenishment lead times.
Example: In plant A, within two days the purchasing department will convert a requisition for

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widgets into a purchase order issued to a supplier. Please indicate processing times per
plant.
A: For Srikakulam Plant the PR to PO conversion time is: 2 Days

For Ethakota Plant the PR to PO conversion time is: 2 Days
For Specialty Fertilizers the PR to PO conversion time is: 2 Days
For Nanadigaon the PR to PO conversion time is: 2 Days
CI template:
Procurement indenting tracking User-wise / Project-wise should be possible.
Request or instruction to Purchasing Dept. to procure a certain quantity of a material or a

service so that it is available at a certain point in time.
A purchase requisition consists of a number of items, for each of which a procurement
type is defined. The following procurement types exist:
 Standard
 External service
An item of a requisition contains the quantity and delivery date of the material to be
supplied or the quantity of the service to be performed.
A purchase requisition can be fulfilled through purchase orders or longer-term purchase
agreements.
In the existing practice, no tracking number feature is used. With S.A.P., requisition-
tracking number will have to be controlled outside S.A.P. for uniqueness.
PR Tracking No. is a useful feature for comparison across Vendors for a particular Item/
Items.
Various reports / field selections can be made based on PR Tracking No.
No such functional deficits.

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Not applicable.
No further specific improvements planned as of now.
12. File Conversion Considerations
Purchase Requisitions outstanding, as of cut-off date for going live will not be considered
for loading into S.A.P.
Such Indents will be verified and re-approved for creation manually on to S.A.P.
All Purchase Requisitions are subject to approval procedure. The Plant incharge at
respective plants will be authorised to approve indents.
Purchase Requisition creation authorization will be with at least one user from each
department. Approval authorization with one authority in each plant.
14. Reporting Requirements
Purchase Requisitions not converted to either PO or RFQ to be listed

PR converted during the month.
PR for particular project (or) tracking number.
PR per user.
1.1.1.2. Purchase Requisition Assignment
Questions:
Q: 1) On the basis of which criteria are purchase requisitions assigned to a source of

supply?
A: Source of supply on Purchase Requisition will be decided based on

- Previous procurement record.
- Suggestion from end-user.
- Information gathered manually from sources directory.
- Buyers know-how.
The source assignment will be done manually.

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Q: 2) On the basis of which criteria are purchase requisitions grouped together?
A: Purchase Requisitions are grouped together based on Material & Discounts that will be
offered for volume of procurement. Project materials will be also be grouped together for one
project.
Q: 3) What support (e.g. price simulation) does the buyer need in order to assign the
purchase requisition?
A: Reliability of supplier from past history.

List of suppliers.
Price simulation
Terms of supply
Q: 4) Are purchase requisitions converted into requests for quotations?
A: Yes
Q: 5) Which sources of supply will you use for purchase requisitions? Are these sources of
supply internal and/or external to your company?
A: Any type of Source of Supply from Vendor Master can be used for Purchase Requisition.
The source can be internal as well as external.
CI template:
For assignment of source of supply, following data will be needed from the system.
 Reliability of supplier from past history (Info Record).

 List of suppliers.
 Price simulation
 Terms of supply
There are various methods of assigning requisitions to sources:

 Individually (online)
We assign an individual purchase requisition to a source.
We do this when creating or changing a purchase requisition.
 Collectively (online)
We assign the source(s) to all requisitions on a list.
We do this during the processing of requisitions
To permit a source to be determined for a certain material (or material group, if no
material master record exists), an outline purchase agreement or an info record must
have previously been created in the system.
Automatic assignment means that the system determines possible sources.

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We can also enter the source of supply for a requisition directly, i.e. manually. For e.g.,
you can use this function to assign the requisition to a vendor from whom we have not
previously ordered anything.
Source List will not be maintained to avoid data duplication, as the same is more useful
with M.R.P.
This feature was not available in current practice.
This is a new feature, which will reduce the Human dependency. Accurate suggestion for
source assignment will be available.
Not Applicable.
No future improvements planned.
Info records to be activated and source allocation sequence of standard S.A.P. to

continue.
No such conversion considerations.
The purchasing executives will be authorised to assign a source of supply and get the
same authenticated.

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No specific reporting requirements for PR assignment.
1.1.1.3. Release Purchase Requisition
Questions:
Q: 1) Should requisitions be subject to approval by someone (or possibly several people)

before the requisition can be processed into an RFQ and/or purchase order?
Explanation: Example: all requisitions for over $1000 must be approved by the purchasing
department manager, all requisitions for over $10000 must be approved by the department
manager and the chief financial officer. If yes, describe the approval process, and under what
circumstances the approval process applies - for stock material - for consumable material -
for external services
A: All Purchase Requisitions are subject to approval procedure. The Plant incharge at
respective plants will be authorised to approve indents.
Q: 2) Are the purchase requisitions subject to a release strategy? If so, which criteria apply?
A: Purchase Requisitions are subject to Release Procedure. Irrespective of other criterions

all PR's will authorised by respective Plant Incharges.
Q: 3) How is the person responsible for releasing the purchase requisition to be notified?
A: [ ] Via workflow
[ ] Other procedure
[X] Approver regularly checks R/3
[X] By telephone
[X] By e-mail
CI template:
The purchase requisitions after creation by respective user department needs to be

authorised by plant authority.
The aim of this procedure is to replace manual written authorization procedures using
signatures by an electronic one, while maintaining the dual control principal.
The person responsible processes the requisition or other purchasing document in the
system, thereby marking it.
Release Prerequisites
Specifies the sequence in which the processors (members of staff responsible for

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processing a certain document) must approve an internal or external-purchasing
document with their respective release codes.
Steps for Release of PR
 The characteristic values from a requisition or external-purchasing
document are passed on to the classification system.
 The system checks whether the values correspond with release
conditions. If so, it assigns a release strategy.
 The persons responsible for the release codes process the document in
the sequence defined in the release strategy
Single level release procedure applicable.
Approving authority has to intervene on system to release the document.
System based release functionality was not available in legacy. New S.A.P. functionality
will give better systematized control.
Not applicable.
Need best authorization levels may be incremented.
One level release approval scenario to be built.
No conversion considerations.

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Purchase Requisitions are subject to Release Procedure. Irrespective of other criterions
all PR's will authorised by respective Plant Incharges / Heads of the Departments
 In each plant at least one authorization will be available for releasing.
No Reporting Requirements for Release of PR.
1.1.2. Purchasing
1.1.2.1. Purchase Order Processing
Questions:
Q: 1) How will purchase orders be created in your system?
A: [X] Manually
[X] From purchase requisitions (manual or automatic)
[ ] From store order
[ ] From replenishment
[ ] From allocation table
[ ] From load-building run
[ ] From SAP Retail Store
[X] For stock material
[X] For consumable material
[X] For external services
Q: 2) 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?
A: Not required to check weather PO price is in tandem with MAP.
Q: 3) Describe how the source of supply is determined for manually created purchase
requisitions!
A: Source of supply is determined based on following information in same sequence of

appearance below.
- Previous procurement history
- Suggestion by user-department
- Source directory published by private agencies.
- Information available with the purchasing executive.
Q: 4) Specify the consumption categories for which you will procure external services and
material directly: Asset, cost center, production order, project, sales order, other (please
specify).
A: For Project & assets; procurement of Material & services will be direct for consumption.
Stationary & office consumables will be on account of respective Cost Centers.

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Q: 5) Which types of purchase order will you use?
A: [X] Standard
[ ] Consignment
[X] Subcontracting
[X] Stock transfer
Q: 6) How do you transmit purchase orders to your vendors?
A: [ ] via mail
[ ] via fax
[ ] By EDI
[X] Other
Q: 7) Do you order material in a unit of measure that differs from the one used for stock
keeping purposes?
A: Yes
Q: 8) Do you pay for material in a different unit of measure than the one that is shown in the
PO/and or used for stock putaway?
A: No
Q: 9) Is it necessary to track certificates of origin and/or customs reference numbers for

materials produced in foreign countries?
A: This will be done manually and not on SAP.
Q: 10) Will you be purchasing material imported from foreign vendors?
A: Yes
Q: 11) Are purchasing info records to be updated automatically with every purchase order?
Explanation: If updating is desired and you use rounding profiles in the case of stock
transport orders, after the first purchase order created the logistic data on the article is no
longer read for the rounding profile. Instead the newly created purchasing info records are
read! profile. Instead the newly created purchasing info records are read!
A: Yes
Q: 12) Do you wish to analyze/evaluate purchase transactions according to the reasons for
ordering?

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A: No
Q: 13) Do you plan and enter freight costs in the PO? If yes, describe the basis of the costs.
Also indicate if any types of costs can be determined automatically (for example, freight costs
per piece, per unit of weight, as a percentage of the value).
A: Planned freight cost will be entered in PO wherever possible. Freight Cost is on

consignment basis lumpsum. All other freight cost will be directly booked as FI expenses.
Q: 14) Do you want to prevent users from changing the account assignment of items in
purchasing documents for which they have no authorizations? If so, for which purchasing
documents?
A: [ ] Purchase requisitions
[ ] Purchase orders
[ ] Contracts
[ ] Scheduling agreements
Comments: No users than the person who generated the order will be allowed to
change account assignment.
Q: 15) Do you sometimes order stock material directly for a cost center or another
consumption category?
A: No
Q: 16) Do you have to declare your ordering activities to the authorities? If so, describe.
A: No such declaration required.
Q: 17) Do you allow overdeliveries? If so, specify the percentage variance for the individual
materials/material types.
A: There will be Overdelivery tolerance. It will be fixed for individual items based on nature
of shipment. Over-delivery tolerance can be given for any Material Type.
Q: 18) On the occasion that a vendor sent you less than the quantity ordered, would you
ever want this shortfall to be considered an under delivery, with no further deliveries
expected? Please list the values for each material/material group.
Explanation: In case of exceeding this value, it will be a partial delivery. In case the value
stayed below, it will be an under delivery
A: Such partial completions will be treated as Full completion instead of partial completion.

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Q: 19) Can the materials you purchase be subject to different tax types? (For example,
based upon the material purchased, based upon the plant for which the material is
purchased, etc)?
A: Material Purchased may have different Tax rates. Tax rates depend on state from which
we have procured the material. Also depends on SSI status of Vendor supplying the material.
Q: 20) Do your POs issued to vendors contain specific transport or packing instructions? Is
vendors' compliance with the transport and packing instructions to be recorded when the
goods are received?
Explanation: e.g., full compliance, ignored instructions, ...
A: Transport instructions will be mentioned in some cases to the vendor but the compliance
to the transport instructions will not be recorded.
Q: 21) Is it to be possible for purchase orders to be generated automatically following a

goods receipt? Specify the criteria for this.
Explanation: Define the movement types for which this should be allowed.
A: No Purchase Order will be generated based on GR. always PO will be available before
processing GR.
CI template:
All commercial obligations of procurement contracts must be addressed same as our

existing order process.
The data management must be more effective for better reporting and ease of
operations.
The integrated system should provide on-line, direct control on procurement activity.
Request or instruction from a purchasing organization to a vendor (external supplier) or a

plant to deliver a certain quantity of material or to perform certain services at a certain
point in time.
We require following 3 types of purchase orders.
1) Standard Purchase Order - for General Purchases & Sub-Contracting
2) Import Purchase Orders - for Imports

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3) Stock Transport Order - for Stock Transfers between Plants
4) Service orders - for all types of Services
Except releasing a purchase document, there is no change in the processing.
 Transparency of Purchasing documents.

·
 Precise Control on Procurement activity.
·
 Control on Output documents.
·
 Availability of Purchasing History.
·
 Help for Source Determination
·
 Compatibility with various communication mediums.
·
 Facilitates faster data input by copy and adopt methods
·
Not applicable.
Different procurement types can be further classified with the help of separate document
types, if need arises in future.
Different Purchase Order types to be configured for
 Imports Procurement

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 Domestic Components
 Domestic Services
 Stock Transport Orders
·
GR Message to the buyer to be configured
There won't be any data uploading for open purchase orders. The open POs will be
settled in legacy system and the new POs will be generated on SAP where required.
PO Creation authorization at least one for each purchasing group.
 Purchase Order output as per given format

 List of Purchase Orders
 Pending Purchase Orders for receipts for a given period
 Delivery completed Orders for a given period
 Purchase Orders by project-wise / user-wise
1.1.2.2. Release of Purchase Orders
Questions:
Q: 1) Are purchase documents to be approved by someone before being issued to

vendors? Describe the approval procedure....
Explanation: Example: all purchase orders for over $100,000 must be approved by the
purchasing department manager, all purchase orders over $1 million must be approved by
the President. Describe the approval process, and under what circumstances the approval
process applies. - For stock material - for consumable material - for external services
A: All Purchase orders are subject to approval procedure. Based on plant the release
procedure will differ. For SKLM plant all PO's will be released by EVP. For ETK Plant PO’s will
be released by Plant Incharge for Packing Material & Engg Items. All other item PO's will be
approved by G.M (Comm)
Q: 2) How is the person responsible for approval to be notified? - Approver checks R/3
regularly, by phone, by e-mail, by workflow, other.
Explanation: Background: Workflow for release procedure Background: Workflow for release
procedure

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A: The approver needs to be informed by either Email, telephone or he will be checking R/3
regularly.
Q: 3) Will you use an electronic signature to release purchasing documents?
A: No
CI template:
 Purchase Orders need to be authorised by top management.

·
 Packing Material and Engg. Items will be an exception.
·
 The Authority may differ according to plant of procurement.
·
Please Refer Node:
Master Data Procurement Release Strategy CIT-2
Please Refer Node:
Please Refer Node:
Please Refer Node:

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No Functional Deficit
Not Applicable
Please Refer Node:
Please Refer Node:
No Data will be loaded to SAP, but will be created by user where required.
The Purchase Orders are subject to Release Procedure as below.
 Purchase Order:
1. All PO's to be authorised by GM in case of Ethakota Plant.

2. All PO's to be authorised by VP in case of Srikakulam Plant.
3. Packing Material PO to be authorised by Plant Manager for Ethakota.
4. The authorization control is based on Purchasing Group.
No specific reporting requirements.
1.1.2.3. Transmission of Purchase Orders

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Questions:
Q: 1) How do your vendors transmit shipping notifications?
A: [X] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
Q: 2) What information does the shipping notification contain?
A: Shipping notification has following details

- Purchase Order reference.
- Material
- Quantity
- Date of dispatch
- Mode of transport
- Transporter name & Vehicle no
- Invoice no, value & LR no.
- Freight amount in some cases.
Q: 3) How are your RFQs and rejection letters to your vendors to be transmitted?
A: [ ] Internet
[X] Paper
[X] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
Q: 4) How long after ordering and before the time of delivery should a shipping notification
have been received?
A: The delivery may take varied time to reach receiving point depending on distance. The
Shipping Notification has to be received at our end imml'y on dispatch of goods from vendors
premises.
Q: 5) Are there differences per vendor and/or site? If so, which?
Explanation: Customizing and master data message determination customizing and master
data message determination
A: Some Local Vendors will not give shipping confirmations.
Q: 6) How will you transmit your purchasing documents to your vendors?

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Explanation: If you are using EDI, note also the EDI process in the reference structure.
A: [ ] Internet
[ ] Other, please describe
[ ] By telephone
[ ] By e-mail
[ ] By fax
[ ] By EDI
[X] By post (in written form)
Q: 7) Do you wish to adopt vendors' own nomenclature for characteristics (color codes, etc.)
on your order form?
A: Vendors nomenclature will not be used on our Purchase Order.
Q: 8) How are purchase orders to be transmitted?
A: [X] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
CI template:
Purchase Orders needs to be printed as per the given format.
The transmission of orders is controlled via SAP.

This facility track how many prints are sent & weather they are sent.
This functionality controls medium of transmission.
No special organizational considerations.
Document can not be printed without releasing.
 Various methods of communication can be used for transmitting

the
documents.

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 Output control is exercised.
Not Applicable
No further improvements planned.
No specific configuration considerations.
No File conversion considerations.
The person responsible for generating the Purchase Order will have authorization to print
and transmit the same.
1.1.2.4. Scheduling Agreement Delivery Schedule
Questions:
Q: 1) Are scheduling agreement delivery schedules/SA releases created in R/3 manually,

with reference to requisitions and/or automatically? (Further details in sourcing administration
scenario.)
A: Purchase Requisitions will be used to convert into scheduling agreements with exception
of Imported Items.
Some scheduling agreements will be generated directly without PR.
Q: 2) How do you wish to synchronize (monitor) the delivery schedules/SA releases with
respect to the quantities delivered?

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A: Each month’s requirement will be subdivided into different schedule lines. Whatever
schedule lines are not fulfilled will remain open & continue in next period. Some additional
schedule lines may be generated according to the next period requirements.
CI template:
There are certain purchasing transactions having a recursive nature. The terms and
conditions of such a contract generally hold good for a year or so.
Such transactions can be identified and only delivery dates with quantities need to be
informed to vendors, as these are the only criterions that change with period.
These documents need not be re-transmitted with each such instance.
Definition:
Outline agreement on the basis of which materials are procured at a series of predefined
points in time over a certain period.
A scheduling agreement consists of a number of items, for each of which a procurement
type is defined. The following procurement types exist:
 Standard
 Subcontracting
 Stock transfer
Delivery of the total quantity of material specified in a scheduling agreement item is
spread over a certain period in a delivery schedule, consisting of lines indicating the
individual quantities with their corresponding planned delivery dates.
For scheduling agreement items involving subcontracting, we can specify the materials or
components to be provided to the subcontractor with respect to each scheduled delivery
of the ordered item.
Conditions can apply to the entire scheduling agreement. Conditions at item level apply
specifically to the material to be supplied in each case.
Scheduling agreement releases (comprising a header and the actual delivery schedule)
are issued to the vendor, instructing the latter to effect deliveries of the relevant material
on the dates shown.
The delivery dates need not exactly match the actual delivery date. The material receipt
objective should be valid throughout planning period of generally one month.
In the present scenario, scheduling agreements are not being used. The same can be
used in SAP to save on procurement efforts.
Recursive purchasing transactions need to be identified and the order document has to

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be separate than the one-time procurement.
 Saving on manual efforts for procurement activity.

 Reduced number of documents with vendor there by reducing
probability
of incorrect referencing.
 Probabilities of manual errors in documents reduced as such
instances are
reduced.
 Ease of procurement.
This being an additional functionality there are no functional deficits
Not Applicable
The scheduling agreement can be extended to most of the procurement transactions.
The receipt date need not be the scheduled date specified in agreement.
All outstanding purchasing documents will be loaded as one-time purchases only.
The scheduling agreements will be created in future as and when current POs are
completed and the same falls under category of SA.
The person responsible for generating the Purchase Order will have authorization to
generate SA.
No specific Reporting Requirements.

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1.1.2.5. Transmission of Scheduling Agreements
Questions:
Q: 1) How do you wish to transmit scheduling agreements?
A: [ ] Internet
[X] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
A: The schedule agreement dispatch vendor will not differ based on Vendor.
CI template:
Please Refer Node:
Business Processes Procurement Purchasing Transmission of Purchase

Orders CIT1
Please Refer Node:

Orders CIT2
Please Refer Node:

Orders CIT5
Please Refer Node:

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Orders CIT6
Please Refer Node:

Orders CIT7
Please Refer Node:

Orders CIT8
Please Refer Node:

Orders CIT9
Please Refer Node:

Orders CIT10
Please Refer Node:

Orders CIT11
Please Refer Node:

Orders CIT12
Please Refer Node:

Page 77 of 132
Orders CIT13
Please Refer Node:

Orders CIT14
1.1.3. Goods Receipt

1.1.3.1. Goods Receipt Processing
Questions:
Q: 1) The material stock balances shown in your legacy system are to be transferred to the
R/3 System. Will the stocks be valued at the prices specified in the R/3 total value of the
former system be taken over?
A: All material Stocks balances from legacy are to be carried over to SAP R/3. The material
valuation will depend on the price existing in the legacy system on the date of transfer / some
cases may require computing the MAP outside the legacy. This calculation will be based on
Average procurement price during last six months.
Q: 2) If you do not use the R/3 Purchasing functionality, describe the process of receiving
goods from a vendor.
A: All transactions will be routed through SAP purchase functionality only. Exception being
cash purchase up to value- 10000 Rs.
Q: 4) Should the person who posts goods receipt be able to use a different account
assignment than the one specified via the automatic account determination process?
A: Person who posts goods receipt will not be able to use a different account assignment
than the one specified via the automatic account determination process.
CI template:
Goods receipt should follow our standard process and cater to all commercial
requirements of receiving goods.
Excise postings with external material goods receipt should be taken care by system.
Provision to enter the transporter name, L.R.No, Date, and Truck No. is required in
addition.

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Term from the field of inventory management denoting a physical inward movement of
goods or materials.
The SAP System has the following kinds of goods receipt:
 Goods receipt with reference to a purchase order
 Goods receipt with reference to a production order
 Other goods receipts (without reference)
Company is using the MM Purchasing component, deliveries from vendors are most
likely for purchase orders initiated by the purchasing department.
The purchase order is not only the document with which the purchasing department
orders goods from the vendor; it is also an important planning and tracking tool for the
following departments: Purchasing, Material Requirements Planning (MRP), Inventory
Management, and Invoice Verification.
It is important for all of the departments involved that the goods receipt entry in the
system references the purchase order, for the following reasons:
 Goods receiving can check whether the delivery actually corresponds to the
order.
 The system can propose data from the purchase order during entry of the goods
receipt (for example, the material ordered, its quantity, and so on). This simplifies
both data entry and checking (overdeliveries and underdeliveries).
 The delivery is marked in the purchase order history. This allows the Purchasing
department to monitor the purchase order history and initiate reminder procedures in
the event of a late delivery.
 The vendor invoice is checked against the ordered quantity and the delivered
quantity.
 The goods receipt is valued on the basis of the purchase order price or the invoice
price.
 The Goods receipt needs to be for Order only.

 Every goods receipt needs to be validated by Quality Dept.
 GR information should be given to purchasing buyer after posting.
 The two step process of Goods Inward Note and Goods Receipt Note will be
reduced to one step of Goods Receipt. But, a manual Goods Hand over Note as per the
given format will be handed over to Q.C. for their clearance.
 The Quality check needs to be manually confirmed before the actual goods
receipt is posted, since QM module is not in scope.
 The number of steps will be more at goods receipt point since, the Excise
transaction will also be posted simultaneously.
 The Goods Receipt will always check availability of Purchase Order.

 The GR data will be referred for Vendor Invoice verification.

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 The material document generated by system has simultaneous
entry in
finance providing for the Vendor payment.
 No document to control quality activity before Goods Receipt is made.

 There is no provision to enter Transporter Name, L.R.No. & Truck No.
while making the GR.
 To avoid laborious repetitive steps at GR processing, it has been simplified with a

single step, hence the quality procedure is kept under manual control. This may be
enhanced with QM implementation.
 Text field in Goods Receipt will be used to enter the details of Transporter Name,
L.R.No. & Truck No. This whole field will be used for printing wherever any of this
information is required.
With Quality Management activation, GR processing can be enhanced to 103, 105.

The quality control can be monitored through system.
No Goods Receipt data will be loaded in to SAP.

The stock closing balances in legacy system as of cut-off date will be loaded in to SAP as
opening balances.
At least one authorization at each storage location is required to the authorised person
receiving the goods physically and to generate Goods Receipt in the system.
Goods Receipt vouchers to be printed as per the format given by us.

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Transactions List of Goods Receipts & Goods returns as per given format.
List for Transit Insurance requirement.
1.1.3.2. Goods Receipt Processing with Reference
Questions:
Q: 1) Describe the process for receiving goods with reference to a purchase order.
Explanation: General introduction to the subject General introduction to the subject
A: Assumption: Material consignment is received at plant gate with all completed

documents.
Step 1: Security will enter consignment details in the "Inward Register"

Date / Time / Vendor / Material / Qty / Transporter / Truck No
Step 2: The material will be handed over to QC people with original documents.
Step 3: After QC clearance on physical document Store receipt clerk will enter 101
movement in SAP with reference to PO
Step 4: Then Excise officer will capture Excise Invoice details in SAP.
Step 5: The Excise Cenvat credit will be posted.
Step 6: The Goods receipt will be printed.
Step 8: The material with GR will move into warehousing location.
Q: 2) Name the storage locations to which vendors deliver the goods.
A: Raw Material will be delivered at Raw materials storage.

Solvent R/M will be delivered at Tank storage.
Packing Material will be delivered at Packing Storage location.
Engineering Spares will be unloaded at Engineering stores.
Based on space availability the RM & PM will be shifted to accommodate.
Q: 3) How do you inform the Purchasing Department that goods have been received?
A: Through GR message facility in PO a information will go to concerned Purchasing Group.
Q: 4) Do you receive quantities less than the ordered quantity? If yes, is the purchase order
considered complete then or do you receive the missing quantities later?
A: We receive quantities less than the ordered quantity. The purchase order is considered
as completed if Qty remaining is less to the extent of Shipping restrictions. For other
consignments where shipping restriction is not there the partial Qty may be received later.
The PO is kept open till then.
Q: 5) Do you physically store the goods you have received into "stock in quality inspection"
at a different location than those posted to normal stock?
A: No

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Q: 6) Do you allow every material to be stored at all storage locations? Please describe!
A: Solvents & Engineering Materials are to be stored in specific Storage Location. Where as
RM/PM can be stored interchangeably. Some times the solvents received in Barrels are
stored in RM/PM Godown.
Q: 7) Do you use a unit of measure for the pricing of the goods other than the unit you order
in? If yes, you can define the variances in customizing.
A: The Order unit itself is pricing unit.
Q: 8) Do the materials you receive have to be stored for a certain time before they can be
used or do they have an expiration date that you want to keep in the system?
A: The input materials expiration date has no significance in current scenario.
Q: 10) Which documents are generated with the goods receipt?
Explanation: Note on design of SAPScript documents, message determination Note on

design of SAPScript documents, message determination
A: [X] Goods receipt slip

[ ] Bar code sticker
[ ] Other
[ ] None
Q: 11) Which documents are generated in connection with a goods receipt?

A: Goods Receipt Note.
Q: 12) If a goods receipt quantity is assigned to a goods issue, do you want the person who
enters the goods receipt to receive a corresponding message?
A: No indication is required for person making goods receipt entry.
Q: 13) Will you inspect the material/article at the time of goods receipt? If so, do you enter
the goods receipt and the inspection result or do you only enter the goods receipt after the
inspection has been carried out?
Explanation: QM module
A: Yes

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Comments: Inspection results will not be recorded in SAP. The GR will be made after
inspection has been carried out. The goods will move to Stores with GR.
Q: 14) If you are using batch management, how is the batch number determined at the time
of goods receipt?
Explanation: Batch management Batch management
A: for Inward material there is no batch management.
Q: 15) Do you classify the batches at the time of goods receipt? Please specify the criteria.
A: Since input material has no batch classification, batches are not used for GR, Exception
being Semi-finish & Finished goods received through Stock Transport. For stock transported
Finish / Semi-finish goods batches will be maintained.
Q: 16) Is the automatic account determination process defined by Financial Accounting? If

not, who is responsible within Logistics?
A: Materials Management with FI are responsible for dealing with automatic account
determination process.
Q: 17) Do you wish to print out the material document as evidence of a goods movement?
Which information should be included in the printout?
A: For some goods movements the document associated with it needs to be printed. The
movements are listed below.
- 101 Goods Receipt

- 122 Material return to Vendor
- 351 Stock transfer between plants
- 311 Transfer posting
- 551 For scrapping
The print out must include following details:

- Document no & Date
- Material & Description
- UOM
- Qty
- Person receiving
- Issue Location
CI template:
Please Refer Node:

Page 83 of 132
Business Processes Procurement Goods Receipt Goods Receipt
Processing All CI templates at this node for all CI templates here.
1.1.4. Service Entry Sheet

1.1.4.1. Service Entry Sheet
Questions:
Q: 1) Do you wish to process or document completion of the services performed by the

service provider?
A: Service completion will be recorded on Service entry Sheet. The Invoice will be cleared
on the basis of Service entry Sheet.
CI template:
The adherence to the service specifications needs to be recognized on system against

the service contract.
Definition of Service:
Intangible good that is the subject of business activity and that can be performed
internally or procured externally (outsourced).
Services are regarded as being consumed at the time of their performance. They cannot
be stored or transported.
Examples of services include construction work, janitorial/cleaning services, and legal
services.
Service Entry Sheet:

List of services performed by a vendor on the basis of a purchase order, containing
service descriptions and details of quantities and values.
The descriptions of planned services deriving from the purchase order appear as default
values in the entry sheet. Unplanned services, which were originally entered in the
purchase order without descriptions and only with the aid of value limits, are precisely
defined in the service entry sheet.
Basic process will be used and there are no special considerations
Current practice does not include confirmation of services in the system.

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With SAP process, service contract has to be entered in the system and the same has to
be confirmed when the compliance is done.
This will be an additional processing for the procurement executive as well as for user
department.
 This process will establish control on service activity.

 The management will have transparent view on the services
performed.
 Performance monitoring of service contractors possible.
No functional deficits
Not Applicable
The services functional can be extended to number of such contracts.

The standard specifications can be used to streamline services procurement activity.
No service orders can be loaded into SAP from legacy system, since this functionality did
not exist.
The authorised person from user department authorizing Purchase Requisitions will also
confirm the services performed.
List of Service purchase orders

List of Services completed / pending with values.

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1.1.5. Country Version India
1.1.5.1. Domestic Procurement Process
CI template:
Domestic Procurement Process:
There will be basically 3 types of procurements in domestic scenario.
1) Procurement for Stocking / Consumption

2) Procurement from sub-contract
3) Procurement of External Services
For sub-contract & external services, there are no excise formalities involved in the
transaction as such. But, in sub-contract transaction, when the components are directly
delivered at sub-contracting vendor’s premises, the Cenvat availment is done only after
receiving the processed goods in our premises.
When a goods receipt is made against procurement for stocking / consumption, the
excise formalities as below
Step 1 : After posting of Goods Receipt, the GR copy and duplicate for transporter copy
of excise invoice will be sent to Excise.
Step 2 : Excise dept. will post the same in RG 23A Part-I & Part-II registers and hence
the Cenvat will be availed and also posted in 57AE Report.
Step 3 : After Invoice verification, the vendor will be paid.
The requisite Central Excise Registers to be printed as per the Central Excise Act.
The country version is useful for businesses with operations in India. It comprises
functions designed specifically for India, a localization Implementation Guide (IMG), and
a country template.
Most of the country-specific functions for India relate to Financials and Logistics, and
center around taxes, including:
 Excise duty and the central value-added tax system (CENVAT)
 Tax deducted at source (TDS)
 Sales tax
The purchasing process has been enhanced to take into account all procedures relating
to excise duty and excise invoices.
Master Data
The material master has been enhanced so that we can assign each material master
record to the appropriate chapter ID (which controls the excise duty rates).
Similarly, the vendor master records and plant master records have also been enhanced.

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The system is therefore able to calculate the correct excise duty for each combination of
vendor, plant, and material.
We have to maintain all of this master data before we start working with the system.
The Cenvat to be availed on components delivered at sub-contractors place need to be

addressed.
Since tracking of excise and sales tax will be on system, the data entry for the same has
to be simultaneous to the logistics transactions.
This will mean an additional data entry at the Goods Receipt / Selling stages.
 The manual maintenance of central excise registers can be done

away with
and the same will be printed through system.
In domestic excise scenario, sub-contract procurement has following deficit:
Process of taking a Cenvat credit on components directly delivered at sub-contracting

vendor’s place is not addressed.
Jobwork Challan is not provided in SAP.
The alternative process of processing a deemed receipt in our premises of components

directly delivered to sub-contract vendor's place will facilitate Cenvat credit immediately
after the receipt.
This has to be approved and agreed as a policy decision by the client.
Jobwork Challan will be manual out of the system.

Page 87 of 132
 The VAT functionality to be addressed as and when introduced.
The master data for Vendors, Items, Chapter Headings and combinations has to be
loaded in to SAP.
A separate person nominated for excise transaction will carry out the CIN entries after the
goods receiving clerk do GR processing.
SAP authorization will be required for the excise person.
All registers as per Central Excise Rule, 1964 and amendments there after are required
as below.
 RG 23A Part-I & II Registers

 RG 23C Part-I & II Registers
 57 AE Report
 RG 1 Register
 ER 1 (RT12) Report
 Differential excise duty (paid or payable) between Mfg. Unit & Registered
Depot.
 Monthly duty payment particulars. (Only at Manufacturing Point)
Central Excise Revenue particulars (Monthly)
1.1.5.2. Imports
CI template:
When a goods receipt is made against procurement for stocking / consumption, the
excise formalities as below
Step 1 : After posting of Goods Receipt, the GR copy and duplicate for transporter copy

Page 88 of 132
of excise invoice will be sent to Excise.
Step 2 : Excise dept. will post the same in RG 23A Part-I & Part-II registers and hence
the Cenvat will be availed.
Step 3 : After Invoice verification, the vendor will be paid.
The country version is useful for businesses with operations in India. It comprises
functions designed specifically for India, a localization Implementation Guide (IMG), and
a country template.
Most of the country-specific functions for India relate to Financials and Logistics, and
center around taxes, including:
 Excise duty and the central value-added tax system (CENVAT)
 Tax deducted at source (TDS)
 Sales tax

The purchasing process has been enhanced to take into account all procedures relating
to excise duty and excise invoices.
Master Data
The material master has been enhanced so that we can assign each material master
record to the appropriate chapter ID (which controls the excise duty rates).
Similarly, the vendor master records and plant master records have also been enhanced.
The system is therefore able to calculate the correct excise duty for each combination of
vendor, plant, and material.
We have to maintain all of this master data before we start working with the system.
The import process up to the bonded warehouses i.e. procurement without taxes need to
be configured.
Stock transfer from bonded warehouse to regular plant needs to be configured.
Since tracking of excise and sales tax will be on system, the data entry for the same has
to be simultaneous to the logistics transactions.
This will mean an additional data entry at the Goods Receipt / Selling stages.
The bonded warehouses at the ports viz. Mumbai & Chennai as well as the private
warehouses at the factory premises at Srikakulam & Ethakota are treated as plants of
NACL.
The goods receipt at all these four plants need to be generated.

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A stock transport order has to be in place for transferring the stock from Bonded
Warehouse to mfg. plant stores.
Separate Purchase order will be required, if a consignment is to be received at different

warehouses and plant. Even if, the whole consignment is received either of these plants,
but the PO specifies a different plant. In such case, the purchase order needs to be
changed.
 The manual maintenance of central excise registers can be stopped

and
the same will be printed through system.
There is no provision to clear the material without taxes and subsequently clear the
material as required by paying appropriate tax.
The valuation of material before paying taxes and after paying taxes will differ. In a same
plant, if we do both the processes, there is no transaction to add the taxation value on the
receipt.
We have defined the bonded warehouses as separate plants, where the material can be
inward without paying tax, and thereafter the material can be moved from bonded
warehouse plant as stock transfer with taxes to manufacturing plant.
The import process up to the bonded warehouses i.e. procurement without taxes need to
be configured.
Stock transfer from bonded warehouse to regular plant needs to be configured with
Taxes.
The master data for Vendors, Items, Chapter Headings and combinations has to be

Page 90 of 132
loaded in to SAP.
A separate person nominated for excise transaction will carry out the CIN entries after the
goods receiving clerk do GR processing.
SAP authorization will be required for the excise person.
All registers as per Central Excise Rule, 1964 and amendments there after are required
as below.
 RG 23A Part-I & II Registers

 RG 23C Part-I & II Registers
 57 AE Report
 RG 1 Register
 ER 1 (RT12) Report
 Differential excise duty (paid or payable) between Mfg. Unit & Registered
Depot.
 Monthly duty payment particulars. (Only at Manufacturing Point)
Central Excise Revenue particulars (Monthly)
1.2. Procurement via Subcontracting

1.2.1. Purchasing
1.2.1.1. Purchase Order Processing
Questions:
Q: 1) How will purchase orders be created in your system?
A: [X] Manually
[X] From purchase requisitions (manual or automatic)
[ ] From store order
[ ] From replenishment
[ ] From allocation table
[ ] From load-building run
[ ] From SAP Retail Store
[X] For stock material
[X] For consumable material
[ ] For external services

Page 91 of 132
Q: 2) 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?
A: Not required to check the whether PO price is in tandem with MAP.
Q: 3) Describe how the source of supply is determined for manually created purchase
requisitions!
A: Source of supply is determined based on following information in same sequence of

appearance below.
- Previous procurement history
- Suggestion by user-department
- Source directory published by private agencies.
- Information available with the purchasing executive.
Q: 5) Which types of purchase order will you use?
A: [ ] Standard
[ ] Consignment
[X] Subcontracting
[ ] Stock transfer
Q: 6) How do you transmit purchase orders to your vendors?
A: [ ] via mail
[ ] via fax
[ ] By EDI
[X] Other
Q: 7) Do you order material in a unit of measure that differs from the one used for stock
keeping purposes?
A: Yes
Q: 8) Do you pay for material in a different unit of measure than the one that is shown in the
PO/and or used for stock putaway?
A: No
Q: 9) Is it necessary to track certificates of origin and/or customs reference numbers for

materials produced in foreign countries?
A: This will be done manually and not on SAP.
Q: 11) Are purchasing info records to be updated automatically with every purchase order?

Page 92 of 132
Explanation: If updating is desired and you use rounding profiles in the case of stock
transport orders, after the first purchase order created the logistic data on the article is no
longer read for the rounding profile. Instead the newly created purchasing info records are
read! profile. Instead the newly created purchasing info records are read!
A: Yes
Q: 12) Do you wish to analyze/evaluate purchase transactions according to the reasons for
ordering?
A: No
Q: 13) Do you plan and enter freight costs in the PO? If yes, describe the basis of the costs.
Also indicate if any types of costs can be determined automatically (for example, freight costs
per piece, per unit of weight, as a percentage of the value).
A: Planned freight cost will be entered in PO wherever possible. Freight Cost is on

consignment basis lumpsum. All other freight cost will be directly booked as FI expenses.
Q: 16) Do you have to declare your ordering activities to the authorities? If so, describe.
A: No such declaration required.
Q: 17) Do you allow overdeliveries? If so, specify the percentage variance for the individual
materials/material types.
A: Overdelivery is not possible in Sub-contracting Process.
Q: 18) On the occasion that a vendor sent you less than the quantity ordered, would you
ever want this shortfall to be considered an under delivery, with no further deliveries
expected? Please list the values for each material/material group.
Explanation: In case of exceeding this value, it will be a partial delivery. In case the value
stayed below, it will be an under delivery
A: Quantity supplied less than ordered qty. will be treated as partial completion. This has to
be considered as "Under Delivery".
Q: 19) Can the materials you purchase be subject to different tax types? (For example,
based upon the material purchased, based upon the plant for which the material is
purchased, etc)?
A: For Sub-contracting processed material, there is no Sales Tax applicability.
Q: 20) Do your POs issued to vendors contain specific transport or packing instructions? Is
vendors' compliance with the transport and packing instructions to be recorded when the
goods are received?

Page 93 of 132
Explanation: e.g., full compliance, ignored instructions...
A: Transport instructions will be mentioned in some cases to the vendor but the compliance
to the transport instructions will not be recorded.
CI template:
Please Refer Node:
Business Processes Procurement Purchasing Purchase Order processing

CIT1
Please Refer Node:

CIT2
Please Refer Node:

CIT6
Please Refer Node:

CIT7
Not applicable.

Page 94 of 132
No specific improvements planned.
GR message to buyer to be configured.
No Sub-contract orders will be loaded on to SAP.

They will be created only when requirement arises after going live on SAP
Please Refer Node:

CIT13
Please Refer Node:

CIT14
1.2.1.2. Release of Purchase Orders
Questions:

A: All Purchase orders are subject to approval procedure. Based on plant the release
procedure will differ. For SKLM plant all PO's will be released by EVP. For ETK plant PO's will
be approved by G.M (Comm)

Page 95 of 132
procedure
regularly.
A: No
CI template:
Please Refer Node:
Business Processes Procurement Purchasing Release of Purchase Order

ALL CI templates of the node for all CIT here.
1.2.1.3. Transmission of Purchase Orders
Questions:
Q: 1) How do your vendors transmit shipping notifications?
A: [X] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
Q: 2) What information does the shipping notification contain?
A: Shipping notification has following details

- Purchase Order reference.
- Material
- Quantity
- Date of dispatch
- Mode of transport
- Transporter name & Vehicle no
- Invoice no, value & LR no.
- Freight amount in some cases.
Q: 4) How long after ordering and before the time of delivery should a shipping notification
have been received?
A: The delivery may take varied time to reach receiving point depending on distance. The
Shipping Notification has to be received at our end imml'y on dispatch of goods from vendors
premises.

Page 96 of 132
A: This procedure is uniformly applicable to all vendors.
A: [ ] Internet
[ ] By telephone
[ ] By e-mail
[ ] By fax
[ ] By EDI
Q: 7) Do you wish to adopt vendors' own nomenclature for characteristics (color codes, etc.)
on your order form?
A: Vendors nomenclature will not be used on our Purchase Order.
Q: 8) How are purchase orders to be transmitted?
A: [X] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
CI template:
Please Refer Node:

Order All CIT at this node for CIT's here.
1.2.1.4. Scheduling Agreement Delivery Schedule
Questions:

Page 97 of 132
Q: 1) Are scheduling agreement delivery schedules/SA releases created in R/3 manually,
with reference to requisitions and/or automatically? (Further details in sourcing administration
scenario.)
A: Scheduling agreements will be generated directly without PR.
Q: 2) How do you wish to synchronize (monitor) the delivery schedules/SA releases with
respect to the quantities delivered?
A: Each month’s requirement will be subdivided into different schedule lines. Whatever
schedule lines are not fulfilled will remain open & continue in next period. Some additional
schedule lines may be generated according to the next period requirements.
CI template:
Please Refer Node:
Business Processes Procurement Purchasing Scheduling agreement

Delivery schedule All CIT at this node for CIT's here.
Questions:
A: [ ] Internet
[X] Paper
[ ] Telephone
[X] Fax
[ ] E-mail
[ ] EDI
CI template:
Please Refer Node:
Business Processes Procurement Purchasing Transmission of Scheduling

Page 98 of 132
Agreement All CIT at this node for CIT's here.
1.2.2. Provision of Components

1.2.2.1. Goods Issue Processing
Questions:
Q: 1) How do you record materials ordered for specific work orders?
A: No such tracking exist.
Q: 2) How will the consumption of these parts be entered and who will post the return in the
system?
A: The goods receiving clerk will process GR for processed material & system will trigger
automatic consumption of input components based on BOM available with PO.
Q: 3) How do you record which materials were received specifically for a work order?
A: No such tracking exist.
Q: 4) How much time elapses between the actual goods issue and its posting in the
system?
Explanation: Info on process steps.
A: Issue of Input component will take place with transfer posting. Material will be shown
issued & consumed only after receiving the processed material. This time lag may vary
depending on production process involved.
Q: 5) Is the posting made online or in batch mode?
Explanation: Steps in system
A: On-line posting is made.
Q: 6) Are deliveries posted individually or for each group of goods issues?
A: Deliveries will be posted for group of goods issued as per PO BOM.
Q: 7) Which documents are generated in conjunction with this posting and what information
do they contain?

Page 99 of 132
Explanation: 1-step goods issue in which the GR at the receiving site is posted
simultaneously to the GI at the DC. Simultaneously to the GI at the DC.
A: With the processed material delivery the Goods receipt will be printed & contains all
details required at Goods receipt similar to regular non-subcontract GR.
CI template:
For the material to be dispatched to sub-contracting vendor, the quantities should be

calculated proportionately in line with the expected Finished Goods from the sub-
contractor.
Some of the materials are directly delivered to the sub-contractor vendor's location. In
such case, the Cenvat is availed after receiving the Finished Goods from sub-contractor
with relevant document.
 Provision of components
The components that are provided to the subcontractor are managed as stock provided
to vendor. In Inventory Management, the provision represents a transfer posting from
unrestricted-use stock to the stock of material provided to vendor. Components in a
subcontract order that are consumed can only be debited from the stock of the material
provided to the particular vendor.
No changes to existing organization.
 The accounting of material provided to a vendor will be more accurate.

 This will also be available on-line.
No deficits

Page 100 of 132
Not Applicable.
New Jobwork challan has to be configured.
No file conversion considerations.
The storekeeper issuing the material will be authorised for this transaction.
List of materials provided to sub-contracting vendor.
1.2.3. Goods Receipt

1.2.3.1. Goods Receipt Processing with Reference
Questions:
Q: 1) Describe the process for receiving goods with reference to a purchase order.
Explanation: General introduction to the subject General introduction to the subject
A: Assumption: Material consignment is received at plant gate with all completed

documents.
Step 1: Security will enter consignment details in the "Inward Register"

Date / Time / Vendor / Material / Qty / Transporter / Truck No
Step 2: The material will be handed over to QC people with original documents.
Step 3: After QC clearance on physical document Store receipt clerk will enter 101
movement in SAP with reference to PO
Step 4: Then Excise officer will capture Excise Invoice details in SAP.
Step 5: The Excise Cenvat credit will be posted.
Step 6: The Goods receipt will be printed.

Page 101 of 132
Step 8: The material with GR will move into warehousing location.
Q: 2) Name the storage locations to which vendors deliver the goods.
A: Raw Material will be delivered at Raw materials storage.

Based on space availability the RM will be shifted to accommodate in RM/PM Godowns.
If the processed material happens to be a finished good then it can be delivered to FG
Godown or to our Depots for sale.
Q: 3) How do you inform the Purchasing Department that goods have been received?
A: Through GR message facility in PO a information will go to concerned Purchasing Group.
Q: 4) Do you receive quantities less than the ordered quantity? If yes, is the purchase order
considered complete then or do you receive the missing quantities later?
A: Yes, The partial Qty may be received later. The PO is kept open till then.
Q: 5) Do you physically store the goods you have received into "stock in quality inspection"
at a different location than those posted to normal stock?
A: No
Q: 6) Do you allow every material to be stored at all storage locations? Please describe!
A: Processed material can be stored in RM/FG/PM Godown based on nature of material &
availability of space.
Q: 7) Do you use a unit of measure for the pricing of the goods other than the unit you order
in? If yes, you can define the variances in customizing.
A: The Order unit itself is pricing unit.
Q: 8) Do the materials you receive have to be stored for a certain time before they can be
used or do they have an expiration date that you want to keep in the system?
A: The input materials expiration date has no significance in current scenario.
Q: 9) Do you refuse to accept deliveries if the vendor has not complied with the shipping
instructions? (Can be used to evaluate vendors.)
A: No
Q: 10) Which documents are generated with the goods receipt?

Page 102 of 132
A: [X] Goods receipt slip

[ ] Bar code sticker
[ ] Other
[ ] None
Q: 11) Which documents are generated in connection with a goods receipt?

A: Goods Receipt Note.
Q: 12) If a goods receipt quantity is assigned to a goods issue, do you want the person who
enters the goods receipt to receive a corresponding message?
A: No indication is required for person making goods receipt entry.
Q: 13) Will you inspect the material/article at the time of goods receipt? If so, do you enter
the goods receipt and the inspection result or do you only enter the goods receipt after the
inspection has been carried out?
Explanation: QM module
A: Yes
Comments: Inspection results will not be recorded in SAP. The GR will be made after
inspection has been carried out. The goods will move to Stores with GR.
Q: 14) If you are using batch management, how is the batch number determined at the time
of goods receipt?
Explanation: Batch management Batch management
A: for Inward material there is no batch management. For Processed goods being finished
goods the batch no will be assigned manually.
Q: 15) Do you classify the batches at the time of goods receipt? Please specify the criteria.
A: The batches are classified according to predefined classes & related characteristics.


Page 103 of 132
Q: 17) Do you wish to print out the material document as evidence of a goods movement?
Which information should be included in the printout?
- 101 Goods Receipt

- 551 For scrapping

- Document No & Date
- UOM
- Qty
- Person receiving
- Issue Location
CI template:
Please Refer Node:

Processing All CI templates at this node for all CI templates here except CI template
2 & 7.
 Goods receipt of the end product (with consumption of the components)
The goods receipt to be posted for the end product with reference to the subcontract
order item. At goods receipt, consumption posting for the components is also made from
the stock of material provided to vendor. For each goods receipt item, the system copies
the components with their quantities as goods issue items. If the vendor (subcontractor)
consumed a greater or smaller quantity than was planned in the purchase order, you can
adjust the component quantity at goods receipt.
The goods receipt of Finished Goods only will reduce the quntities of Raw
Material required for that sub-contracted finished product.
1.2.3.2. Subsequent Adjustment of Components

Page 104 of 132
Questions:
Q: 1) How do you make adjustments for over-/underconsumption of components by the

subcontractor (vendor)?
A: The components required for over consumption are sent to the vendor. If it's under
consumption the raw material is got back from vendor.
If this process amounts to usage from vendor side then subsequent FI DR/CR is used to
settle the account.
CI template:
 After completion of Sub-contract agreement, Finished goods and left

over Raw
Materials with scrap material should be brought back to parent company.
 If in case any of these materials are not found physically or there is a
discrepancy then, a FI Dr/Cr. notes will be passed to settle the accounts.
 If the documents of Cenvat applicable on materials directly delivered by
component vendor to sub-contract vendor are not traceable, in such a
case, the entire Cenvat amount is debited to Sub-contract Vendor.
 Subsequent adjustment for over/under consumption

· If the vendor only tells you after the goods receipt has been posted that a greater
or smaller quantity of the components was consumed than had been planned in the
purchase order, the difference must be posted as a subsequent adjustment.
If the documents of Cenvat applicable on materials directly delivered by component

vendor to sub-contract vendor are not traceable, in such a case, the entire Cenvat
amount is debited to Sub-contract Vendor.
No changes.
 The reconciliation of component to Finish Goods can be done

accurately
with usage of Bills of Materials.

Page 105 of 132
 There will be proper accounting of materials and follow up can be
better.
Not applicable.
No data uploading required for this.
The Stores person sending the components will be authorised for receiving back the
finished goods as well as Raw Material returns. The FI entry for settlement if any, has to
be by authorised Finance person.
 List of Materials sent.

 Goods receipt list.
1.2.4. Country Version India
CI template:
Please Refer Node :
Business Processes Procurement Procurement of Material & External services

Country Version India All CI templates at this node for all CI templates here.

Page 106 of 132
1.2.4.1. Subcontract Processing
CI template:
There are 2 scenarios in Sub-contracting activity at NACL.
Scenario 1:
Product: Z Qty: 50000 kgs.
Input -A, Input - B, Input - C, Input- D
 A, B inputs are sent to subcontractor premises directly from our supplier.

We will raise the purchase order to deliver the goods in the premises of the
subcontractor. In this regard we can not take the Cenvat credit on such goods until we
receive the processed goods. Other wise we have to take the proportionate credit based
on the receipt of the processed goods from the subcontractor. We have to keep track to
ensure that consignment of each component should not exceed the 180 days to return to
the parent factory. For each and every directly delivered goods we have to prepare the
job work challan for inputs delivered at the processor’s premises. This will be prepared
based on the endorsement given on the duplicate for transporter copy. In this case we
require, the monthly consumption statement for the consumption taken place and the
balance.
C, D inputs are sent from the parent factory, so we need not reverse duty. Based
on the job work challan only we can send the inputs to the job worker premises to get the
goods processed. Here also we should ensure that the processed goods should reach
back to the parent factory with in 180 days from the date of Main Challan. Other wise we
have to reverse the equal duty amount until the goods returned back to the parent factory.
Whenever the goods come in to parent factory, we can claim the reversal of duty.
Scenario 2:
Product: Z Qty 50000 kgs
1. Input - A
2. Input - B
3. Input - C
4. Input - D
 A, B, C & D inputs are sent from the parent factory only we need not reverse
any duty amount. Based on the job work challan only we can send the inputs to the job worker
premises to get the goods processed. Here also we should ensure that the processed goods should
reach back to the parent factory with in 180 days from the date of Main Challan. Other wise we
have to reverse the duty amount equal to receipt, until the goods returned back to the parent
factory. Whenever the goods come back to parent factory, we can take the reversal of duty amount.
The processing, by an external supplier, of materials provided by a customer. The result

of this processing is the manufacture by the supplier (subcontractor) of an ordered
material or product, or the performance by the supplier of an ordered service.

Page 107 of 132
The material to be produced by the vendor can be ordered as a subcontract item in a
purchase requisition, purchase order, or scheduling agreement. Each subcontract item
has one or more sub-items that contain the individual components the vendor needs to
perform the subcontract work or value-added service.
The individual component items can either be
 Entered or changed manually
 Copied from an existing bill of material (this is known as a BOM explosion)
Purchase Requisition
If we enter a subcontract item with components in a purchase requisition or copy it from a
bill of material, the system automatically creates dependent requirements for each
component. These are only relevant for MRP.
Purchase Order
Each subcontract item in the purchase order has component items. They are copied from
the purchase requisition, entered manually, or copied from a bill of material.
The purchase order price is the subcontract price for manufacturing the ordered material
Scheduling Agreements and Schedule Lines
In a scheduling agreement we enter the material that is to be produced in a subcontract
item. In each schedule line we enter the components that are to be provided to the
vendor or copy them from the bill of material. This means that the components and their
reservation items and arranged below the schedule lines. This also applies to scheduling
agreement schedule lines and schedule lines in purchase requisitions and purchase
orders
Changes to the Purchasing Document
When we process subcontract orders in Purchasing, we have to note the following:
 If we change the order quantity or scheduled quantity, the quantities of the
components to be provided are changed proportionally, providing the indicator Fixed
quantity is not set.
 If we change the delivery date, the system only recalculates the date required,
the components are not automatically redetermined in the bill of material. In this case, we
must request a new BOM explosion.
Purchasing Master Data
The conditions for the material to be produced are stored in a subcontract info record.
We enter the special procurement type L (subcontracting) when making quota
arrangements.
Monitoring Materials to be provided to Vendor
By monitoring the material stocks to be provided to a vendor, we can determine whether
the components required for subcontract work at the vendor’s site is actually available in
the warehouse
The Material being sent to sub-contractor directly from our vendor, The Cenvat has to be
availed only after receipt of processed goods from sub-contractor.
No changes in organization.

Page 108 of 132
 Complete Excise formalities will be routed through system, hence, all
accounting issues will be addressed in an integrated manner.
 Linking to the previous original documents will be easier and faster with
system help.
Process of taking a Cenvat credit on components directly delivered at sub-contracting

vendor’s place is not addressed.
Jobwork Challan is not provided in SAP.
The alternative process of processing a deemed receipt in our premises of components

directly delivered to sub-contract vendor's place will facilitate Cenvat credit immediately
after the receipt.
This has to be approved and agreed as a policy decision by the client.
Jobwork Challan will be manual out of the system.
Alternative process on system can be explored for direct delivery of materials to sub-
contractor vendor’s place.
No file conversion required.
Excise Executive will handle excise Formalities.

Page 109 of 132
1.3. Source Administration
1.3.1. RFQ/Quotation
1.3.1.1. Processing of Requests for Quotations
Questions:
Q: 1) Do you generally request several vendors to submit prices, terms and conditions in
the form of a tender/bid/quotation?
A: Yes
Q: 2) Do you want to assign a collective number to the different quotations submitted by

several vendors?
Explanation: Use of collective number. Use of collective number.
A: Yes
Q: 3) Can an article be procured from several vendors? If so, is this the rule or an
exception? (Or specify percentage.)
A: Procurement can take place from several vendors as a rule. Exceptional cases may have
unique vendor.
Q: 4) Do you carry out requirements planning for structured articles (e.g. prepack, display)?
A: No
CI template:
Our current manual process of RFQ to be taken over by system.
Definition
A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing

organisation to submit a quotation (bid) for the supply of materials or performance of
services.

Page 110 of 132
No special organizational considerations.
No changes
 Transparency of the process, since manual element is eliminated

and all
the data is available on the system.
 The RFQ data can be referred for further processing and
referencing in PO.
 Based on RFQ, price comparison can be done in the system.
 Purchase Requisition data can be adopted in RFQ for reducing data
entry.
Not Applicable.
Standard SAP features are enough for current process, hence no special considerations.
No RFQs will be loaded into SAP from the legacy system.

Page 111 of 132
The purchasing executive creating Purchase Orders will be authorised to generate RFQ.
List of Open / Closed RFQs.

Quotation Comparisons
1.3.1.2. Transmission of RFQs
Questions:
A: [ ] Internet
[ ] By telephone
[ ] By e-mail
[ ] By fax
[ ] By EDI
CI template:
Please Refer Node:

Order All CIT at this node for CIT's here.
1.3.1.3. Vendor Quotation Processing
Questions:
Q: 1) Do you wish to have the system automatically analyze/evaluate quotations submitted

by vendors?
A: Analysis & evaluation of quotations from various bidders is required through system.
Q: 2) How do you receive the quotations?

Page 112 of 132
A: [ ] Other, please describe
[ ] By telephone
[X] By e-mail
[X] By fax
[ ] By EDI
Q: 3) Are the quotations submitted by vendors to be automatically compared by the

system?
Explanation: Use of price comparison list! Use of price comparison list!
A: Yes
CI template:
An accurate comparative data on various enquiry’s should be available for a particular

transaction.
A statement of price and terms of sale and a description of goods and/or services offered
by a vendor (external supplier), usually submitted in response to a prospective
purchaser's request for quotation (RFQ), or inquiry.
The vendor quotation relates to one or more items.
No changes.
 The quotation can be updated in system and compared for multiple

vendor’s
simultaneously.
 The Quotation can be accepted to build Info Record and create PO by
referencing Info Record there by saving data entry.

Page 113 of 132
Not applicable.
No file conversion to SAP required.
Each Purchasing Group will have one authorization to update Quotation.
 Quotation comparison statement.

 Approved Quotation.
·
1.3.2. Outline Purchase Agreements

1.3.2.1. Scheduling Agreement Processing
Questions:
Q: 1) Will you use scheduling agreements to procure materials from external suppliers or
supplying plants? If so, which types of scheduling agreement will you use? Should these
scheduling agreements be maintained centrally?
Explanation: Will you maintain scheduling agreements in SAP with either an external vendor
or a plant supplying the materials? If yes, - what type of scheduling agreements are you
maintaining? (For example, standard, subcontracting, consignment, stock transfer. - will any
of these scheduling agreements reference a centrally maintained contract?
A: We will use Scheduling agreements to procure materials from external suppliers & also
for Stock Transport from Plant to Plant. Standard type, Sub-contract & Stock Transfer
scheduling agreement will be used. These will be maintained locally at respective plants.

Page 114 of 132
Q: 2) Do you want to reconcile the quantity requested and the quantity actually delivered
with your vendor (monitoring function)? If so, how are the lines of the scheduling agreement
delivery schedule generated: manually or via materials planning (MRP)? M
A: Reconciliation of Quantity delivered against qty requested is required for procurement

monitoring. Schedule lines will be given manually as the MRP is not in scope.
Q: 3) Do you need release documents (e.g., call-off) and master conditions to manage your
scheduling lines? If yes, are any of these JIT delivery schedules?
A: no separate release is required.
Q: 5) Do you sometimes assign a consumption category to scheduling agreements for stock

materials?
A: For Stock materials no consumption category will be assigned.
CI template:
Please Refer Node:
Business Processes Procurement Procurement of Material and External

Services Purchasing Schedule Agreement Delivery Schedule All CIT at this
node for CIT's here.
1.3.2.2. Release of Outline Agreements
Questions:

A: All SA are subject to approval procedure. Based on plant the release procedure will differ.
For SKLM plant all SA's will be released by EVP. For ETK Plant SA's will be released by Plant
Incharge for Packing Material & Engg Items. All other items SA's will be approved by G.M
(Comm)

Page 115 of 132
procedure
regularly.
A: No
CI template:
Please Refer Node:

Services Purchasing Release of Purchase Orders All CIT at this node for
CIT's here.
Questions:
A: [ ] Internet
[X] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
CI template:
Please Refer Node:

Page 116 of 132
Services Purchasing Transmission of Schedule Agreements All CIT at this
node for CIT's here.
2. Inventory Management,
Questions:
Q: 1) Who owns the inventory? To whom are the costs of managing the inventory allocated?
A: Plants own The Inventories. Cost of managing is allocated to manufacturing plant.
Q: 2) At which level do you value material (for example, company level, plant level)?
A: Stocks are valued at Plant level.
Q: 3) Where do you want to be able to analyze the inventory balance sheet?
A: Inventory balance sheet needs to be analyzed at Plant level.
Q: 4) How does material move between plants?
A: Material moves on Stock Transport Order between plants. The STO has SD delivery
element.
Q: 5) Do you use pallet identification for production supply?
A: No pallet identification for production supplies is done.
Q: 6) Do you use picking and packaging functions with scanners (radio frequency)?
A: No
Q: 7) Do you prepare raw materials for a production order on a scale and do you have to
ensure that exactly this material combination is used in the order?
A: There is no scaling of Raw Materials and also the combination identified need not go for
a particular production lot.
2.1. Goods Movements

2.1.1. Goods Accepted
2.1.1.1. Return Delivery
Questions:

Page 117 of 132
Q: 1) Will you be required to retain costs for material that is inspected as a result of a stock
purge?
A: No
Q: 3) Do you enter data (for example, defects, characteristic results, specific findings) on
the defective material found in the stockroom or on the shop floor?
A: No
Comments: The data is captured on manual registers but not entered in system. Also
QM is not in scope.
Q: 4) Do you have to inspect/re-inspect defective material found in your stockroom or on the

production floor?
A: Yes
Comments: For the material if period of time is going to detoriate certain

characteristics then inspection/re-inspection is carried out. Otherwise inspection will not be
carried out & the material will be put to use.
Q: 5) Which documentation should accompany the goods that are returned to the vendor?
A: Goods return to vendor must accompany our Delivery challan/ Excise invoice depending
on excisability of material & Rejection letter. Commercial Invoice will follow by post.
Q: 6) Describe the handling of inspection lots where the usage decision has determined that
they are to be rejected and returned to the vendor.
A: A rejection letter stating reason of rejection is sent to vendor & asked to communicate
salvaging action, scrapping or return at his cost. As per his confirmation the action is taken.
CI template:
It should be possible to return the material to a Vendor in case of problems with either
material or documents. The same should be accounted for by reducing the credit to the
vendor. If the same happens to be a supply against a Purchase Order, the PO objective
should recouped to that extent.
Delivery returning goods that are part of your stock to an external supplier.
A return delivery references a purchase order or goods receipt.
If we want to return delivered goods to the vendor for some reason (for example, due to
poor quality or because they are damaged), we can use this function to return the goods,
even if the goods receipt has already been posted.

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If the vendor sends a substitute delivery after we have returned goods, we can reference
the return delivery when we post the goods receipt.
No changes.
 All the documentation will be complete and on-line information will be

available.
 The vendor accounts will be up to date showing real balances at any given
point of time.
Not Applicable
No open items are assumed at the cut-off date.
The person making the goods receipt will have the authorization to return the goods.
This assumes a manual clearance from quality department for the reason of rejection.

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List of Material Returns.
2.1.1.2. Goods Receipt Processing
Questions:
Q: 1) The material stock balances shown in your legacy system are to be transferred to the
R/3 System. Will the stocks be valued at the prices specified in the R/3 total value of the
former system be taken over?
A: All material Stocks balances from legacy are to be carried over to SAP R/3. The material
valuation will depend on the price existing in the legacy system on the date of transfer / some
cases may require computing the MAP outside the legacy. This calculation will be based on
Average procurement price during last six months.
Q: 2) If you do not use the R/3 Purchasing functionality, describe the process of receiving
goods from a vendor.
A: All transactions will be routed through SAP purchase functionality only. Exception being
cash purchase up to value- 10000 Rs.
Q: 4) Should the person who posts goods receipt be able to use a different account
assignment than the one specified via the automatic account determination process?
A: Person who posts goods receipt will not be able to use a different account assignment
than the one specified via the automatic account determination process.

CI template:
Please Refer Node:

Processing All CI templates at this node for all CI templates here.

Page 120 of 132
2.1.2. Stock Transfers / Trans. Postings
2.1.2.1. Two-Step Stock Transfer
Questions:
Q: 1) Do you want to transport goods receipts to more than one physical storage facility?
A: Goods will be moved physically from one storage Location to another.
CI template:
F. Stock transfer from Plant to Plant :
G. Certain materials are transferred from one plant to another. This may be a
Finished Good of a plant being transferred to another plant, where it is used as a
Raw Material. The material being transferred reduces the stock from the
transferring plant and increases the stock in receiving plant. The stock value also
gets transferred similarly. The receiving plant has to acknowledge the receipt of
the material being sent.
H. There is an excise formality required for such a material transfer, but sales
tax is not involved.
I. Stock transfer to Depot:
NACL will receive the indents from the Zonal managers, pack-wise and product wise
quantity. Basing on this requirement we will dispatch the stocks to the particular depots
respectively. We will transfer the goods by raising the stock transfer advise (prices for
stock transfer will be given by head office this is nothing but the approved prices by Head
office for sale of such goods at the depots.
Delivery Challan + Duplicate for Transporter copy (central excise invoice) + L.R copy +
Waybill will be sent to the depot along with the consignment. (At this point of time the
Central Excise records like RG-1 and duty payable registers will be up to dated.)
Recording of this data at Head Office:
Head office will up to date the Depot inventory, that the depot has received the stock.
Head office will prepare the goods received note in the depot.
Stock transfer from Depot to Depot
Generally the nearby Depots will verify the availability of stocks. If they can request the
nearby depot in-charge or the Zonal Manager to adjust the requested stocks instead of
getting from the factory to meet their sales.
In this connection One Stock Transfer advise will be prepared from the sending depot
and the same will accounted in the receiving depot by way of raising the goods received
note which will up to date the inventory.
This transaction requires only the Delivery Challan/Stock transfer advice containing the

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details of receiving depot particulars. If necessary the permits also will be prepared for
this type of transactions. No commercial entries will be taken place.
The removal of materials from storage at one location and their transfer to and placement
into storage at another.
Stock transfers can occur either within a single plant or between two different plants.
The removal of stock from storage at the first location and its placement into storage at
the other can be posted in the system either in one step or in two.
A stock transfer from plant to plant will take place within a company code.
Unlike a stock transfer from storage location to storage location, a stock transfer from
plant to plant affects both accounting and Materials Planning, as follows:
 Accounting
Accounting is affected if both plants are assigned to different valuation areas. This means
that a stock transfer leads not only to a quantity update but also to a value update (stock
value, G/L accounts). Thus, parallel to the material document for stock transfer, an
accounting document is created.
 Materials Planning
Materials Planning is affected because a change of plant stock is taken into account by
Materials Planning.
We can enter this stock transfer using either the one-step procedure or the two-step
procedure, whereby only the one-step procedure can be planned with a reservation.
If we post a stock transfer from plant to plant using the two-step procedure, we post the
removal from storage at the issuing plant first. After we post the removal from storage,
the quantity being transferred is managed as stock in transfer at the receiving plant. It is
not yet part of unrestricted-use stock, however.
When we post the placement into storage at the receiving plant in a second step, only
then is the event completed and the transferred quantity part of unrestricted-use stock.
The stock being transferred from bonded warehouse to manufacturing plant will be
transferred with taxes for imported materials.
If the material is transferred from Chennai / Mumbai bonded warehouse to manufacturing

plant, the freight cost should be loaded to the material value in addition to the above.
Due to distributed systems in legacy, though there were stock transfers between plants
existing, it was as good as fresh receipt in the receiving plant. With integrated system in
all plants, there will be a definite linkage of stocks being received with sender plant value
and quantity.

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The stock in transit within the plants will also be tracked. Issuing to a stock in transit will
be an additional step w.r.t. current process.
 The stock in Transit can be tracked.

 There is direct linkage with the price in sender plant.
 Over all stock balance within all organizational entities is
maintained.
Not applicable.
Separate pricing schema for stock transfer between Bonded W/H to Plant will be required
to take care of taxes on imported material.
Stock transport order should be possible between all plants of NACL.
No data to be uploaded for Stock Transport Orders.
Stores personnel will prepare the Stock Transport Order.

Stock Transport Orders will strictly be based on a mail approval taken from plant
authorities.
Report of Stock in Transit.

No. of Stock Transport Orders generated plant-wise.

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1.1.1. Goods Issue
1.1.1.1. Goods Issue Processing
Questions:
Q: 1) How much time elapses between the actual goods issue and its posting in the
system?
Explanation: Info on process steps.
A: Goods issue will be posted immediately in the system after physical issue.
Q: 2) Is the posting made online or in batch mode?
A: Issue postings will be made on-line.
Q: 3) Are deliveries posted individually or for each group of goods issues?
A: As per physical movement of materials, the issues will be posted in the system.
Q: 4) Which documents are generated in conjunction with this posting and what information
do they contain?
Explanation: 1-step goods issue in which the GR at the receiving site is posted
simultaneously to the GI at the DC. Simultaneously to the GI at the DC.
- 101 Goods Receipt

- 122 Material return to Vendor
- 351 Stock transfer between plants
- 551 For scrapping

- Document no & Date
- UOM
- Qty
- Person receiving
- Issue Location

Page 124 of 132
CI template:
Various types of Stock Issues / Transfers are described below
Issue for Production:

Issues will be against a reservation. The material will be transfer posted from stores to
production storage location. The material will get consumed for production from the
same location, once the Finished Goods are backflushed.
Issue for Maintenance / Cost Center / Project:

Issues will be made against a manual reservation created by user department. The
materials will be issued for consumption.
Issue for Scrap:

The issue against scrap will be from the regular stores location i.e. consumption against
scrap.
Return to Vendor:
Materials will be sent back to the vendor from un-restricted use stock for various reasons.
There will be a commercial invoice and an excise invoice will be sent to vendor.
Issues to Sub-contracting Vendor:

Components will be sent to Sub-contracting Vendor via material transfer from un-
restricted use stock to stock provided to sub-contract vendor (special stock type). The
material will get consumed when a GR is posted for Finished processed goods received
from sub-contracting vendor. A 543 movement will get posted simultaneous to 101 for
consuming components.
Stock Transfers between plants:

The material for Stock Transfer will be posted to Transit stock of receiving plant. The
receiving plant will make goods receipt to put the stock into unrestricted use after receipt.
Definition:
Term used in inventory management to describe a reduction in warehouse stock due, for
instance, to a withdrawal of stock or the delivery of goods to a customer.
Goods issues do not change the moving average price that is recorded for informational
purposes for materials with standard price control.
Stock Scheduled for Delivery
Withdrawal, picking, and shipping of goods to customers are carried out in the Sales &
Distribution (SD) component. They are not dealt with in this section.
Material Withdrawals for Production Orders
Inventory Management provides for the staging of components for production. You enter
withdrawals for production as goods issues with reference to the production orders for
which the components are required.
Other Types of Internal Staging of Material
Materials can be withdrawn not only for production but also for other purposes (for

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example, for cost center, CO order, maintenance order, or asset).
Return Deliveries to Vendors
Return deliveries to vendors are entered with the function Material document for Return
delivery or with the function Goods receipt for purchase order.
Scrapping/Sampling
If a material is no longer usable, it must be scrapped. Scrapping of a material is entered
in the R/3 System as a goods issue. The withdrawal of samples must also be entered as
a goods issue.
This section explains the following goods issues:
 Material withdrawals for production orders
 Other types of internal staging of material
 Scrapping/sampling
· · · · · · · ·
The material issued for production will be in 2 steps
Step 1 : The material will be moved from the stores location to virtual production
storage location.
Step 2 : The material will get consumed from the production storage location with
back flushing of finished goods according to the BOM.
Material Issued for sub-contracting.
In some cases, the material will be received at sub-contracting vendors place. The issue
of such material will be recorded when the Finished Goods from the sub-contractor are
received.
Material Issued for maintenance / cost centre
The manual reservation will be created by maintenance department. The reservation will
be printed and signed by Maintenance Manager and given to stores for issues. The
issues from stores will be to the cost center for consumption.
Issues to maintenance will take place only against the reservation created by
maintenance department in the system. In legacy the requisition was manual.
The production consumption after production declaration from production storage location
will involve two steps processing. This will be additional system input as compared to the
legacy single step material issue.
 Accurate material accounting will take place with financial

implications
simultaneously.

Page 126 of 132
 Materials consumed against cost center / projects / maintenance
can be
tracked.
 Material for scrap will be correctly accounted for.
 Material provided to sub-contracting vendor can be reconciled.
The reservation list, which can be printed, does not have associated value.
ABAP development will be done to add the value field with moving average price either in
ABAP List Viewer or through a separate report.
No data conversion required.
The store keeper who is organizing the physical material issues, will be authorised to
post the same.
 All different types of issues need to be listed with quantities.

 Material-wise and issue-wise consolidated list.
1.2. Physical Inventory & Cycle Counting

1.2.1. Physical Inventory
CI template:

Page 127 of 132
The physical inventory check will be done for the following types of materials.
1) Finished Goods
2) Raw Material
3) Packing Material
4) Engineering / General Materials..
All Finished Goods, Raw Material & Packing Material will be counted periodically.
All Engineering / General Items will be counted continuously once in a year.
In periodic inventory, "A" class packing materials, All Raw Materials & All Finished Goods
will be verified in every quarter. All other materials will be verified once in a year.
In continuous inventory, all the Engineering / General Materials will be counted once in a
year and few items at any given time.
A list of materials to be physically verified will be printed based on different criteria’s viz.
ABC Classification, Value of the Material, Quality Blocked Material and Material Group.
After physical verification of the material, we will arrive at some positive or negative
differences. If required, some materials will be recounted at the time of analyzing the
differences.
If there is a confirmed difference either positive or negative, will be approved by

competent authority and the same will be posted in the inventory as well as accounts.
Definition:
Physical inventory count of all the stocks of an organization on a certain dates (usually
the end of the fiscal year).
As a rule, the complete warehouse is blocked for all material movements.
Periodic Inventory
In a periodic inventory, all stocks of the company are physically counted on the balance
sheet key date. In this case, every article must be counted. During counting, the entire
warehouse must be blocked for goods movements.
Continuous Inventory
With the continuous inventory method, stocks are counted continuously during the entire
fiscal year. In this case, it is important to ensure that every article is physically counted at
least once during the year. Continuous inventory affords a high degree of flexibility, as
counting can be distributed over the full year.
Physical Inventory Document:
Document that serves as the basis for a physical inventory (stock taking process).
The physical inventory document is used to:
 Plan and carry out the physical inventory
 Record the actual count data
 Post any differences that the count may reveal
Inventory Count:
Determination of the quantity of stock physically on hand by counting, weighing,
measuring, or estimating, and the recording of the count results in the system. Any
necessary correction of the book inventory can then be made at a later point of time.

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During the inventory count, all the materials being inventoried are counted and entered
physically.
The stocks are counted for individually for the materials in a physical inventory document.
The count results are written on the printout of the physical inventory document.
The printout is then directed back to the person responsible, so that he or she can enter
the count into the system and analyze it.
During the physical inventory analysis, we enter the count results in the system,
determine whether a recount is necessary if there are any discrepancies, and post the
inventory differences.
A physical inventory history is maintained which enables us to track the progress of the
physical inventory and carry out subsequent reports.
Counting one or more items of a physical inventory document (that have already been
counted once) again. A recount may be initiated due to an inexplicable inventory
difference.
The relevant items are transferred to a new physical inventory document, which is
created, from the original document
Once the results of the count have been entered in the system, the differences are
determined by the system via a difference list. The system compares the book value at
the time of the count with the results of the count and calculates the differences.
The physical inventory has to be posted in the system and the differences will also be
posted after approval.
 All the documents related to physical inventory count are maintained on

system, hence, tracking and history is available for reference on-line.
 The analysis of inventory difference is available on system.
 The inventory difference after approval can be posted to stocks as well as

accounts simultaneously.
Not applicable.

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Further, different methods of counting may be applied as per the requirement.
No special considerations. Standard SAP scenario meets the client requirement.
No file conversions required.
The stores person will be authorised to generate physical inventory document and post
the inventory count in SAP.
The EVP for Srikakulam plant and GM, for Ethakota plant will be authorised to post
inventory differences.
Physical Inventory Document.

Inventory Count List.
Inventory Differences List with values.
Inventory to be verified at any given period.
Inventory difference History Item-wise.
1.2.1.1. Determination of Scope for Periodic and Continuous Inventory
Questions:
Q: 1) Do you block the relevant stock during the physical inventory count?
Explanation: Setting of flag when creating physical inventory Setting of flag when creating
physical inventory
A: Yes
Q: 2) Do you conduct a physical inventory for:
A: [ ] Other
[X] Unrestricted-use material
[ ] Stock in quality inspection
[X] Blocked stock
[ ] Consignment stock at customer
[ ] Vendor consignment stock
[ ] Vendors' returnable packaging

Page 130 of 132
[ ] Empties
Q: 3) Which types of physical inventory do you wish to use to count the materials in your
warehouses/stores?
Explanation: Linkage via ALE may be necessary Linkage via ALE may be necessary
A: [X] Annual (periodic) inventory

[X] Continuous inventory
[ ] Cycle counting inventory
[ ] Sample-based inventory
1.2.1.2. Definition of Scope of Periodic Inventory
Questions:
Q: 1) Which types of physical inventory do you wish to use to count the materials in your
warehouses/stores?
Explanation: Linkage via ALE may be necessary Linkage via ALE may be necessary
A: [X] Annual (periodic) inventory

[X] Continuous inventory
[ ] Cycle counting inventory
[ ] Sample-based inventory
1.2.1.3. Printout of Physical Inventory Document
Questions:
Q: 1) How are physical inventory documents to be printed out?
A: SAP standard physical Inventory document format to be generated as & when requested.
Request will depend on predefined periods of physical inventory counting.
1.2.1.4. Inventory Count
Questions:
Q: 1) How do you carry out the physical inventory count (e.g. manually, using bar code
scanners)?
A: Physical Inventory is manually counted.
1.2.1.5. Physical Inventory Analysis
Questions:
Q: 1) Are physical inventory differences aggregated at material group level?
A: Physical Inventory differences are analyzed at material level itself & not at Material Group
level.

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Q: 2) Do you allow physical inventory tolerances? Specify these tolerances.
A: There will not be any Physical Inventory tolerances except for materials that are stored in
tanks. For the materials stored in tanks, a tolerance limit of 1% is allowed.
1.2.1.6. Post Inventory Differences
Questions:
Q: 1) Who is responsible for posting physical inventory differences? Specify the persons
responsible and the maximum differences allowed.
A: Physical Inventory Differences are subject to approval. In case of Srikakulam plant, EVP
is authorised to post the physical inventory differences and in case of ETK General Manager
is authorised to post the differences.

Page 132 of 132

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A.

Sign Off Form

Confidential – Not for circulation

Date of creation: 3/11/2003

Confidential – Not for circulation

Confidential – Not for circulation

Confidential – Not for circulation

A: Value of the same Material can be different at different Plants.

A: Plants are defined as Valuation Area though MRP is not in scope.

Choice of valuation level affects the following:

Confidential – Not for circulation

3. Definition of Organizational Units

Organizational unit Plant is the Valuation level.

4. Assignment of Organizational Units

All plants will be assigned as Valuation level.

5. Changes to existing Organization

No change in current practice.

7. Project specific CI section

A: Yes, all Plants are in same country.

Confidential – Not for circulation

A: NO. None of the plants will have negative stocks.

A: No. Not required.

A: Production Lines at Srikakulam, Etahkota and Nandigaon.

Q: 6) Outline all facilities/locations that create, distribute, or store inventory.

Q: 8) At which level should the balances be assigned to the organizational units?

Confidential – Not for circulation

A plant has the following attributes:

The plant plays an important role in the following areas:

The naming convention followed for Plant is

Srikakulam starts with 11

1110 NACL-Srikakulam Plant

Confidential – Not for circulation

3. Definition of Organizational Units

The plant is an operating area or branch within a company.

4. Assignment of Organizational Units

All the plants are compulsorily assigned to a Company Code.

5. Changes to existing Organization

NACL has taken on lease the plants of VIPL.

Confidential – Not for circulation

7. Project specific CI section

Q: 1) Shall purchasing groups represent individual buyers or groups of buyers? If Groups of

Q: 2) Provide a list of buyer names.

A: Shiva & Nidhi

A purchasing group is an individual buyer or a group of individual buyers, who are

Purchasing Groups will be named according to the physical location of purchasing

Confidential – Not for circulation

C01: Shiva & Nidhi

S01: Seshagiri Rao

3. Definition of Organizational Units

4. Assignment of Organizational Units

All Purchasing Groups are assigned to respective purchasing organization.

5. Changes to existing Organization

There are no changes w.r.t. Current Procurement Organization.

There are no special considerations.

7. Project specific CI section

Group of Persons is responsible for group of materials.

2.2. Purchasing Organization

Q: 1) Which purchasing departments exist in your enterprise?

Confidential – Not for circulation

Q: 3) Do you have departments outside your purchasing department, which handle

Q: 5) Where do you procure materials/services in your enterprise?

A: Materials/services are procured at respective purchasing organizations as described

Q: 6) Which material types/external services do you procure?