The service master record provides a description of a service.

The service master record counts as part of the master data and
serves as a source of data while creating service specifications. Using service master records can help you avoid errors and
reduce the amount of time spent on this activity, because you only needto enter the complete set of service specifications once.
A service master record contains the following principal information for the unique description of an external service:
Service number
Service category
Descriptive texts (short and long text)
Base unit of measurement
Material group
Valuation class
Service master records can be used by various applications. Besides Purchasing (MM-PUR), service master records are also
used in the Project System (PS), Plant Maintenance (PM), and Customer Service (CS).
The service master record transaction (AC03) is a single-screen transaction that helps you to create, change, and display
services. When you invoke the function, you are initially in display mode. You can choose a specific service with the Other
Service pushbutton or search for one in the overview. The overview is used in the same way as the document overview in the
purchase order (selection, layout, and breakdown), and can be displayed or hidden in this transaction by choosing the
Show/Hide Overview pushbutton.

To expand and collapse the data areas in the right-hand area of the screen, choose (Open) and (Close). The first time you call
this screen, the data areas Basic Data and Long Text are open. Each time you call the screen after this, the screen settings
and the data you selected or maintained before exiting the function are displayed.

Prices for valid external services that extend over a longer period can be recorded in the system in the form of service
conditions. The system applies these conditions while determining the price in the purchasing document. You can enter further
conditions in the purchasing document itself.
You can define service master conditions at several levels in the system as follows:

At the level of service (market price or own estimate)

At the level of service, vendor, and purchasing organization

At the level of service, vendor, purchasing organization, and plant

Note: For moreinformationon service conditions, refer to the SAP Library, application component External Services (MM-SRV).

The figure shows a simple procurement process for services consisting of a purchase order, service entry and acceptance, and
invoice entry. The process begins with the purchase order, in which the individual services are summarized in a service
specification and forwarded to the service provider.
When you procure the material, you are aware of necessary information, such as the material to be procured and the quantity.
When you procure the service, however, neither the exact service description nor the order quantity is clearly specified. For
example, when a machine is undergoing maintenance work, you do not know whether the settings simply have to be adjusted
or whether the parts have to be replaced.
You may only be able to estimate the amount of working hours, because you do not know exactly how long a maintenance task
will take. By specifying a limit for unplanned services, you can control the costs of unexpected services and services that
cannot be planned.
The work to be performed cannot be mapped in a single service master record. During machine maintenance, parts that may
be wearing out need to be identified, examined, and replaced. The total work includes shutting down, removing and examining
these parts, cleaning or replacing the worn-out parts, installation, and performing a function test. These individual services are
consolidated in sets of SS.
You must always assign a service item to an account assignment object. Procurement for the warehouse, which is possible for
materials, does not exist in service procurement. However, you can use account assignment category U (unknown) in
connection with Item category D (service) because in some cases the account assignment has not been determined at the time
of ordering.
When you procure the material, enter material type and the relevant data for each item. When you procure the service, the item
contains only a short text to describe the general procurement project. To list the individual services with a description, quantity
specification, prices, and other details, use the SS in the Item Details area. You can summarize both the services with master
records and the services without master records in the SS.
Item category D (service) activates the service function, and enables you to create a service specification, and sets the value
limits for unplanned services.
A set of service specifications can consist of any number of service lines. To maintain a clear overview of more extensive
specifications, use the outline function to structure the services hierarchically. The outline is comparable to the table of contents
in a book. A maximum of four hierarchy levels is possible. You can change the numbers of the outline levels and their short and
long texts at any time. You can assign any number of service lines to each outline level.
The system records the services that you perform in service entry sheets. When entering services, reference the purchase
order. You can copy planned services directly from the purchase order to the service entry sheet. The system records the
services actually performed but does not describe the unplanned services in detail. It neither specifies the quantity nor the
prices until the completed work is recorded. The system verifies that the unplanned services do not exceed the limit set in the
purchase order.
Saving a service entry sheet does not automatically post it in Financial Accounting. The relevant postings are not made in
Financial Accounting and cost accounting until the system accepts the service entry sheets. Service entry sheets can be
entered and accepted in one step or two, depending on user authorization.
You can set up release procedures for service entry sheets.

In service entry transaction ML81N, all header and service data is maintained on one screen (this is called a single-screen
transaction).
When you call the function, you are initially in display mode. Enter the purchase order for which the service entry sheet is to be
created by choosing the Other Purchase Order pushbutton.
If the purchase order is already displayed in the overview, double-click on the document number to copy the data.
Choose  (Create Entry Sheet) to start the entry process. You can enter the services manually in the service entry sheet, or
choose the Service Sel. pushbutton from either the purchase order or a set of model service specifications. If you have defined
a limit in the purchase order, you can also manually enter unplanned services up to that limit. You can print out service entry
sheets if necessary.
You can also accept the services actually performed when you are creating an entry sheet, provided that separate acceptance
is not required as part of a release strategy. To do so, choose  (Accept) before saving the service entry sheet. Service entry
sheets can also be accepted collectively (transaction ML85).
Click the Tree On/Off pushbutton to call the list of completed purchase orders for the list of completed services that have
recently been entered in the left-hand side of the screen. You can also call the associated service entry sheets. Double-click a
service entry sheet in this list to display, modify, or copy it.

You can enter invoice verification for services for a purchase order only after the service entry sheet has been accepted.
When entering the invoice, you can reference the purchase order or the service entry sheets. If you specify the purchase order
as the reference, the system proposes all of the accepted service entry sheets and accepted services for this purchase order.
The system compares the prices in the invoice with the prices from the service entry sheets. If there are no discrepancies, you
can enter and post the invoice. If the system finds any discrepancies, it blocks the invoice for payment.
In the purchase order history, all follow-on activities relating to a purchase order item are listed. The activities listed are all of
the services performed and entered on the service entry sheet, all of the accepted services entered on a material document,
and all entered invoices.
The purchase order history is updated in the same way as the updates that are applied when the procurement of stock material
takes place.

Simplify the procurement cycle at different points by automating the individual steps. This process starts with the determination
of requirements. Then, create purchase requisitions with MRP so that you do not have to manually enter them in the system.
Define the relevant data in the material master record of the material to be planned.
The main function of MRP is to ensure material availability. MRP ensures the timely procurement of the necessary requirement
quantities for in-house production and sales. MRP helps to monitor stocks and automatically creates procurement proposals for
purchasing and production.
The automatic planning run for requirements planning determines shortages and creates the corresponding procurement
elements. The possible procurement elements of requirements planning include the planned order, the purchase requisition,
and the scheduling agreement schedule lines.
For in-house production the system creates planned orders that are needed to plan production quantities. If planning is
complete, the planned orders are converted into production orders for in-house production.
If you have fulfilled these prerequisites, the system automatically includes the planning file entries in MRP-relevant
transactions, such as, goods issues and reservations, which change the MRP data of a material, and the executing of a
forecast, and so on. Alternatively, manually add planning file entries to the planning file.
To determine any shortages of individual materials, start a planning run. There are two different ways to execute planning runs:
total planning or single-item planning.

Carry out the total planning run either online or as a background job, then schedule a total planning run in the background once
or periodically. If you select Schedule once, the system executes the total planning run once on the date you specified with the
control parameters that you define in the variant screen. If you have selected Schedule periodically, the system repeats the
total planning run at regular intervals.

Also, execute the requirements planning run with single-item planning for an individual material. You can execute the planning
run at single level or multi-level. The single-level, single-item planning plans only the BOM level of the selected material. The
multilevel, single-item planning plans the BOM level of the selected material and all BOM levels beneath it.

Consumption-based planning is divided into the following MRP procedures:

Reorder point planning: The system calculates the net requirement by checking whether the stock available at plant level (sum
of plant stock and fixed receipts) falls short of the reorder point. The reorder point is determined for the material in the master
record. If the available stock falls short of the reorder point, procurement must be initiated. In reorder point planning, there are
two MRP types to be considered, the manual reorder point procedure and automatic reorder point. The MRP controller
determines the manual reorder point whereas the system uses the forecast for the automatic reorder point procedure to
calculate the reorder point.
Forecast-based planning: The system calculates the future requirement using the forecasting program based on the
consumption values. The forecast requirements have a direct effect in MRP. Execute the forecast calculation at regular
intervals.

Time-phased materials planning: The system calculates the future requirement through estimation, using the forecasting
program that is based on the consumption values. However, MRP is executed in this procedure only at determined points in
time, in a particular planning cycle (rhythmic planning). If a vendor always delivers a material on a particular weekday, plan
MRP in the same cycle, adjusted according to the delivery time.

The manual reorder point procedure uses the value VB in the MRP Type field. The basis of the reorder point planning is the
comparison of the available warehouse stock with the reorder point. If the quantity of available warehouse stock is less than the
reorder point, the system triggers procurement.
The reorder point is composed of the estimated average material requirement during the replenishment lead time and the
safety stock.
The following values must be considered when specifying the reorder point:
Safety stock
Present consumption or future requirement
Replenishment lead time
Use safety stock to cover variability of consumption (consumption higher than planned or higher than average consumption) as
well as variability of lead time (delivery later than planned).
The system executes the net requirement calculation during the planning run.
During reorder point planning, the system calculates the warehouse (plant) stock available for MRP using the following formula:
Warehouse stock + On-order stock (purchase orders, firm planned orders, and fixed purchase requisitions)
If the available warehouse stock for MRP is less than the reorder point, there is a shortage. The shortage quantity is the
difference between the reorder point and the available warehouse stock.

The lot size is calculated based on the following criteria:

If you specify that the exact lot-size (lot-for-lot order quantity) is to be used, the system uses the exact shortage quantity as the
order quantity if there is a material shortfall. If, on one day, there are several goods issues that cause a material shortfall, the
system groups the shortage quantity from the same day in one order proposal, rather than creating an order proposal for each
shortage.

If you specify that the fixed lot-size is to be used, the system uses the fixed order quantity recorded in the material master
record as the order quantity in case of a material shortfall. If this order quantity is not sufficient to cover the shortage, the
system generates several order proposals for the same date until the shortage is covered.

If you specify that the replenishment up to maximum stock level is to be used, the system creates an order proposal for the
quantity that is calculated by finding the difference between the available plant stock and the maximum stock level defined in
the material master record.
After calculating the net requirements and lot-size, the system will schedule the procurement proposal during the planning run.
The system calculates the date to send the purchase order and the date that the vendor must deliver the corresponding
quantity.

Evaluate the planning situation using the current stock list or requirements list. This list shows the present stock and
requirements situation of a material. Each time the list is set up, the system re-imports and displays the various MRP elements.
You can, therefore, always see the current availability of the material. This is a dynamic list. To set up the list again, either
restart the list or use (Refresh).
The stock or requirements list is divided into the following screen areas:
Header: In the header, find the material data, such as, the material number, plant, and MRP parameters. Use the variable
header to display additional information.
Items: Items include the individual MRP elements, such as, planned order, purchase orders, and reservations with date and
quantity specifications.
Material tree: The material tree is a structure tree consisting of the worklist of the materials. The MRP controller can choose to
show or hide the work list.
The MRP list is another function used for evaluation in MRP. The list shows the result of the most-recent planning run and is,
therefore, static. It does not show changes made after the planning run. During the planning run, you can decide whether you
need to create an MRP list.
Automate various steps in the procurement process and determine material requirements through materials planning. This
relieves the burden on user departments because you do not need to create purchase requisitions for required items manually.
You can use the automatic conversion of requisitions into purchase orders to simplify the procurement process.
To convert an item of a purchase requisition into a purchase order item automatically, the system must know from which vendor
and at what price the material is to be procured.
Explain the various options for assigning a source of supply to a requisition item.

You can also carry out the source determination process automatically, for instance, during the requirements planning run. In
such cases, the results of the planning run will include thosepurchase requisitions covering relevant material requirements, and
then the system assigns sources of supply to the requisition items listed.
The system can only assign a source automatically if the source can be determined uniquely. For this purpose, youmustdefine
a source as one that is valid for a certain period. To do so, you use the source list for the material.
A source of supply can be both a vendor (external supplier) and one of the plants in your enterprise. The system identifies
external supplier sources through purchasing info records and outline agreement items. For external sources of supply, the
system can retrieve the vendor and price of the material from the respective info record or the outline agreement item.
A purchasing info record is a repository of information for Purchasing. It contains data on a certain material supplied by a
certain vendor. The information may include the current vendor price, the vendor’s planned delivery time, and the name by
which the vendor refers to the material.
An outline agreement is a longer-term arrangement with a vendor for the supply of materials or provision of services based on
predefined terms and conditions. This arrangement is valid for a certain period and for a predetermined total purchase quantity
or value.
The following types of outline purchase agreement exist:
Contract
Scheduling agreement
An outline agreement does not contain specific delivery dates or quantities of individual deliveries. These are specified
subsequently, in either a contract release order or a scheduling agreement delivery schedule, depending on the type of
agreement.
Either create a contract item manually without referencing another document, or by referencing a quotation or purchase
requisition item. You can also reference an existing contract.
The structure of a contract (or of an outline agreement generally) consists of items defining the individual materials, material
groups, or services with prices. A contract consists of two elements, namely the document header and document items.
A distinction is made between the document header and the document items as follows:
The document header contains information relating to the entire agreement, such as, vendor data, agreement validity period,
agreement type, and header conditions.
The document item contains data specific to the goods or services to be procured, such as, material, agreed total purchase
quantity, price, and texts. However, there is no specification of an exact quantity or delivery date.
Contract items can relate to an individual plant or to all the plants of a purchasing organization. A contract without plant
information at item level is called an Enterprise Resource Planning (ERP) central contract.
The two contract types are described as follows:

Quantity contract: Choose this contract type if you have already agreed on the total quantity you want to order over the duration
of the agreement. When you fulfill the contract by placing orders, and if the agreed quantity has been reached, the contract
release orders are issued. In a quantity contract, define the target quantity and conditions of ordering for each item (among
other things).

Value contract: Choose this contract type if the total value of all contract release orders is not to exceed a certain amount.
When the agreed value has been reached, the contract is counted as fulfilled through the issue of contract release orders.

To inform the vendor about the quantities needed on specific dates, enter purchase orders that reference the contract. Such
purchase orders are known as contract release orders or contract releases. These contract release orders are recorded in the
release documentation for the relevant contract item.
The release (order) documentation comprises the details of the ordering activities of an item listed in the contract. The system
automatically updates the release documentation when a release order is created. The release documentation contains
information including the number of the release order, the purchase order date, the order quantity, and the order value for all
release orders issued against the contract. It is the basis for monitoring the contract.
The release documentation specifies the statistical data on a contract item. To display the release documentation, select the
required contract item and choose Item → Statistics → Release Documentation.
Hint: You can enter a contract item as a source of supply in a purchase requisition item. This ensures that the system
references the outline agreement when it converts the purchase requisition into a purchase order item. The resulting purchase
order is a contract release order.

The source list aids in the administration of sources of a material at plant level. Specify which sources of a material are allowed
and disallowed for a plant and the periods that these two statuses are valid. Take the source list entries into account for
automatic source determination in purchasing and requirements planning.
You can decide that a source is preferable over a certain period (Fixed checkbox). If no procurement is to be allowed from a
source of supply (or vendor) during a certain period, set the Blocked checkbox for the relevant source list entry.
You can choose from the following procedures to maintain the source list:

Maintain the source list manually for each material and plant.

Adopt an outline agreement item in the source list for the material when you create or change an outline agreement. To do so,
select the item and choose Item → Maintain Source List.This is also possible when you create or change a purchasing info
record.

Create a source list automatically. The system provides the option of quickly entering or updating all the sources of a material in
a source list.

With the automatic procedure, a source list record is created for each info record or outline agreement item. You can create a
source list for several materials (collective procedure) or for an individual material (individual procedure). There is a preview
function for the automatic generation of source lists. This allows you to simulate the results of the source list generation run.

The figure shows the procurement process described in this lesson. The system runs three of the four steps automatically.
The automatic procurement of material requirements is determined by the results of material requirements planning (MRP). If
all prerequisites are fulfilled, the planning run determines not only the requirements but also the source of supply of the
material. The MRP data must exist in the material master record as a prerequisite for this automation step.
For the material in the system there must be a valid source of supply present, such as, an outline agreement item or a
purchasing info record. Enter the source of supply in the source list of the material and mark it as Use in Materials Planning
(MRP), so that the system can determine this source of supply during the planning run.
If the planning run can determine the source of supply, you will find it in the Source of Supply tab page, located in the Item
Details screen area of the purchase requisition.

Using automatic generation of purchase orders, you can convert a purchase requisition item that is assigned to a source of
supply into a purchase order. An assigned purchase requisition item contains all the information (such as vendor and price) that
the system requires to convert it to the purchase order. The process of creating the purchase requisition and assigning the
source of supply are not important for conversion to a purchase order.
For the automatic conversion of purchase requisitions into purchase orders, the following prerequisites must be
fulfilled:
In the material master record (purchasing view), select the Automatic PO checkbox.
In the vendor master record (purchasing organization view), select the Automatic PO checkbox.
The planning run should have assigned a source of supply to the item. If not, manually assign the source of supply.
Select the purchase requisition items for conversion according to several criteria, such as the purchasing group, the purchasing
organization, the MRP controller, and the vendor. You can also decide that the system creates release orders for contracts.
During selection, allow for the purchase requisition items with assigned contracts.
Decide how the system groups the purchase requisition items into purchase orders. You can specify, for example, the creation
of a new purchase order for each purchasing group, plant, or delivery date.
If, for example, the system has to group together ten purchase requisition items into one purchase order and one of these items
has an error, the purchase order cannot be created. None of the ten items is then ordered. This is useful if the contents of the
purchase requisition items should also be in the purchase order.

To use the ERS procedure, you must initially form an agreement specifying that the vendor does not create an invoice for an
ordering transaction. Instead, you, as the goods recipient, let the SAP system automatically create the corresponding invoice
for the goods receipt(s). In ERS, this invoice represents a credit memo for the vendor. The system informs the vendor with a
message (credit memo) about the settlement of the deliveries.
The system indicates ERS as a credit memo procedure.
The ERS procedure has the following advantages:
Completes purchase-to-pay processes more quickly
Avoids entry errors
Prevents quantity and price variances in invoice verification
The basis for creating the invoice is the data from the purchase order and the relevant goods receipts.
To enable you to settle goods receipts for a vendor automatically, the following prerequisites must be met:

In the vendor master record, the checkbox for the automatic settlement of goods received (AutoEvalGRSetmt Del. checkbox)
must be selected.

The Terms of payment key must be entered in the header data for the purchase order (Delivery/Invoice tab). Use a terms of
payment key for which a default for the baseline date is set in Customizing. Define a default value for the terms of payment in
the vendor master record in the purchasing organization data.

The checkbox for automatic evaluated receipt settlement must be selected. The system proposes this checkbox in the
purchase order item if it has been set in the vendor master record.

The checkbox for goods-receipt-based invoice verification must be selected. The system proposes this checkbox from the
purchasing organization data of the vendor master record or from the info record for the vendor, material, or purchasing
organization combination.

The Tax code checkbox must be selected in the purchase order item. The system proposes this checkbox from the info record
for vendor, or material, or purchasing organization or it can be transferred from the contract item during contract releases.

The price in the purchase order item must not be an estimated price. (The Estimated price checkbox is located in the purchase
order item details on the Condition control tab.)

The goods receipt must be entered with reference to the purchase order.

The No ERS checkbox must not be set in the purchasing info record for the vendor and material. If you select this checkbox in
the info record, you will prevent ERS for the material at this vendor.
You must also specify the selection that the system uses to create the following invoice documents:

Document selection per vendor

Document selection per purchase order

Document selection per (purchase) order item

Document selection per delivery document or service entry sheet

If you want to settle materials and planned delivery costs in one step, document selection per delivery document is not
possible. The system does not support invoice verification for planned delivery costs.
Carry out a test run before you carry out an actual settlement. The system stores the results of the settlement in a log file that
contains information about the successful and the unsuccessful transactions.
If you are settling only the delivery costs, use program RMMR1MRS or program RMMR1MDC  to run the ERS in the
background.
In a production operation, you generate the following documents:

Purchasing documents

Material documents

Invoice documents

Accounting documents

The documents are posted and stored in database tables. Standard reports enable you to furnish reports based on this
document information.
In addition to running analyses of documents, you can also run analyses of master data. For example, you can output a list of
all purchasing information records for a material or vendor, or obtain an overview of the material master records for a certain
material type.

The SAP List Viewer and the Advanced List Viewer (ALV) grid control standardize and simplify the handling of lists in SAP
systems. There is a uniform user interface and a list format, which prevents the use of redundant functions. You use the ALV
grid control in list displays (for example, the list of material documents) and in other transactions (for example, a purchase
requisition).
Notice that not all lists use the full range of SAP List Viewer functions. Some lists offer special functions that are beyond the
scope of the SAP List Viewer. You can change the appearance and content of the lists using the layout (formerly known as
display variant).

SAP List Viewer and the ALV grid control provide the following functions:
Choose detail: The choose detail function provides additional information about a selected line, including information that is not
shown in the list.
Set filter: Using the filter function, you can only display those lines that satisfy certain criteria in one or more columns. To set a
filter, select one or more columns by clicking on the column header, and choose (Set filter). In the dialog box, enter the desired
restrictions for the chosen columns. To delete the filter criteria, choose Edit → Delete filter.
Sort: You can sort lists in ascending or descending order. Select the column with the desired sort criterion and choose one of
the sort functions Sort (Ascending) or Sort (Descending).
Display total: Within a list, you can create totals from the data in one or more selected columns. You can total both value and
quantity columns.
Display subtotals: If you have created a total for at least one column within a list, you can create additional subtotals. You can
generate subtotals in a list for one or more selected columns without value or quantity columns.
Layout: You can change the appearance of your list with layouts (or display variants).
Note: The individual list determines whether you can work with a layout or display variant in the list.

You can perform the following actions with the layout:

Change the appearance of many lists, using layout or change variants

Display additional fields from the column set or hide unwanted fields from the column selection

Arrange the fields in any order and generate totals

Adjust the size of the columns

You have the option of saving these changes as your own layout. You can create your own variants on a multi-user or user-
specific basis. SAP supplies standard layouts for some lists.
Note: The figure shows the Change Layout dialog box for the detailed version of the list of material documents (MB51).

If you are required to run reports or analyses with the same selection values at regular intervals, you use variants. Using
variants saves time and enables you to avoid input errors. You can define your own variants and also makeuseof existing ones.
To run reports and analyses for a document category, perform the following activities:

Open the Purchasing menu.

Choose the submenu of the purchasing document that contains the data you must evaluate.

There are various reports and analyses to choose from (for example, by vendors, materials, material groups, and so on). The
system adjusts the selection options to suit the relevant purchasing document. Therefore, the lists for each document category
can vary.

When you run a report or analysis, decide which information you need. Use the selection criteria to narrow the focus of your
report so that the result is clear and informative. In Purchasing, the selection parameter determines which purchasing
documents are analyzed by the report. For example, you can generate reports that select only open purchase orders, or
purchase orders for which no invoice has yet been received, or those with expired scheduling agreements.
 The
scope-of-list parameter influences how your result list is displayed. The scope-of-list parameter determines which data is
displayed for a selected document (for example, which lines appear in your report). You can decide to generate a list in short
form or to generate a list that contains more information, for example, lines for the open purchase order quantity and value, or
the validity period of outline agreements.
You can also display the purchase order history in additional lines in the list. As of SAP Enterprise, the scope-of-list parameter
determines whether the list is output using the ALV grid control.

The document lists of the reports and analyses includes the following:

Material Documents (MB51)

Accounting Document for Material (MR51)

Cancelled Material Documents (MBSM)

Reason for Movement (MBGR)

The following documents contain the Stock lists:

Stock Overview (MMBE)
Stock/Requirements List  (MD04)
Plant Stock Availability (MB53)
Warehouse Stock (MB52)
Stock for Posting Date (MB5B).
In Logistics Invoice Verification, there is a general analysis of invoice documents called the Invoice Overview (MIR6). You can
use this function to generate a list of invoices, for example, to check which documents have been entered manually by a certain
user or for a certain invoicing party over a specific period. Apart from invoices posted online, you can select invoices generated
by a Business Application Programming Interface (BAPI) or by the process of Evaluated Receipt Settlement (ERS). The report
also serves to select parked, held, or cancelled documents. From the list, you can branch to the documents and, if possible,
process them further.

Beginning with SAP ERP 5.0, there is another report that you can use to display a list of invoice documents called Display List
of Invoice Documents (MIR5). In addition to Invoice Overview, the system provides extended selection criteria and display
options.

However, you cannot perform changes to invoice documents in the list. A third analysis in invoice verification facilitates the
selection and release of invoices that have been blocked for payment.

In the Logistics Information System, you can distinguish between the following information systems:

Sales Information System (SIS)

Purchasing Information System (PURCHIS)

Inventory Controlling (INVCO)

Warehouse Management Information System (WMIS)

Shop Floor Information System (SFIS)

Quality Management Information System (QMIS)

Plant Maintenance Information System (PMIS)

Retail Information System (RIS)

Production Planning Information System (PPIS)

Logistics Data Warehouse comprises the following levels:

Online Transaction Processing (OLTP): The operative applications such as Sales and Distribution, Purchasing, Production, and
Plant Maintenance continuously supply the information systems of the LIS with data. This level information is also known as
OLTP. The data is derived from documents from the SAP ERP system or external or non-SAP systems.

Logistics Data Warehouse: The Logistics Data Warehouse is present above the OLTP level. For each business transaction
within the operative application, separate databases of the Logistics Data Warehouse, which is parallel to the OLTP level, store
important information in aggregated form. In the process, the system quantitatively reduces the data volume because of the
period-wise updating. The system then qualitatively reduces the information to the statistically relevant portions. The databases
of the Logistics Data Warehouse are known as information structures. Information structures constitute the data basis of the
LIS.

Online Analytical Processing level (OLAP): Data is evaluated at OLAP level. Various reporting and analysis tools are available
at this level.
The individual physical tables of the Logistics Data Warehouse are termed information structures.
Information (info) structures have a typical form containing the following types of information:
Characteristics: Characteristics describe information that is suitable for aggregation. The analysis objects of the real business
world are therefore included in info structures as classification keys in the form of characteristics. The system updates statistical
information on characteristics such as vendor, customer, or material in aggregated form. Organizational elements, such as
purchasing group, material group, valuation area, plant, or storage location, are also used as characteristics in info structures.
The time base gives another option for aggregation.
Periodicity (time base): The system also cumulates the data per period. Possible periods are day, week, month, and posting
period.
Key figures: The system updates key figures for each characteristic combination and periodicity. Key figures are quantitative
values providing information on measurable facts. You can derive key figures for each classification key by cumulation (for
example, purchase or production order quantity). However, key figures can also be simple counters, such as the number of
deliveries or the number of purchase orders. The standard SAP ERP system contains various information structures for
different application areas. Using available tools, you can group characteristics and key figures into individual info structures to
meet your own, specific requirements. You can also use separate update programs to supply these info structures with data.

When you post a document, the system updates key figures of the info structures for the relevant characteristic combinations.
When no data record exists in the information structure for the characteristic combination in the document, the system
generates a new data record and the characteristics and key figures are entered. In the figure shown, the generation of a new
data record is applied to the purchase order item for material M-01.
In the figure, the concept of the system generating a new data record in the information structure is explained by the
following information:
Characteristics combination: Vendor 1000, material M-01
Period: Month 05.2010
Key figure: Purchase order value 11000
When the characteristic combination already exists in the info structure, the system increases or reduces the key figures in the
data line by the relevant values. In the example shown in the figure, the increase or reduction of key figures is applied to the
purchase order item for material M-02.

The following reporting tools and their individual functions are available at the OLAP level of the LIS:

Standard analyses: The standard analyses in the LIS provide comprehensive data evaluation options based on the data in the
standard info structures. Standard analyses provide a multitude of functions to facilitate a detailed and targeted evaluation of
the data. In each standard analysis, you can use various selection options to define the scope of the data to be evaluated. The
selection of key figures to be evaluated can be preset or made interactively during the analysis.

Flexible analyses: The flexible analyses enable you to compile and aggregate key figures on an individual basis, which
facilitates the structuring of your report layout. For reports, you can also define key figures whose content is derived from
existing key figures by calculation formulae. For example, you can multiply key figures or calculate the quotient of two key
figures. The data in the list can be depicted in the form of a figure.

Early Warning System (EWS): The EWS enables you to search for unusual patterns. You can then react to previously defined
exception situations in time and correct them. The Logistics Data Warehouse is open and, therefore, allows you to run analyses
using external programs, such as a spreadsheet application.
The data basis for a standard analysis is established by specifying the object you want to analyze, for example, purchasing
group, vendor, or material group, and by selection. You can then display this dataset structured in different ways. You can also
store the selected data of a standard analysis for later analyses.

For all list levels, you can perform  the following additional functions:

Cumulative frequency curve

Correlation

ABC analysis

Classification

Segmentation

Ranking lists

All results can be presented in the form of figures. You can also display the complete master record and document information
using the standard transactions of the application from within the various breakdown levels.
SAP delivers the portal role, Buyer, along with Business Package for Buyers. This business package is for specialists. The
Buyer role can be run by the SAP Enterprise Portal or the SAP NetWeaver Business Client (NWBC).

The Service Map provides an overview of all services that can be called up by users through the Buyer role along with brief
explanations of the functions of all worksets included in the role. The links enable users to jump directly to the individual
services. The Service Map form of access is aimed at users who are new to or who infrequently work in the procurement
environment.

The Buyer role includes multiple worksets on the personal object worklists and access to a wide range of services and reports
to simplify and accelerate the steps of the procurement process.
The following worksets are included in the Buyer role on the Service Map:
Work Overview
Purchasing Documents
Goods Receipt
Service Entry Sheet
Invoice
Master Data for Suppliers
Master Data for Materials
Master Data for Services
Reports
Each workset offers a centralized point of access for the tasks linked to a specific area of operations. The workset includes a
summary of the information that is relevant to the user in the particular work environment, and it can be customized to meet
personal requirements in order to effectively carry out the tasks.
Each workset includes a worklist. There are a number of customization options that enable users to adjust worklists. For
example, you can create queries and change the display options. Furthermore, the applications and functions can be accessed
in the work center.
SAP ERP has links to several function packages. Function packages include functions that support the logistics process and
belong to the SAP ERP Operations package. End-user services are another group of functions. End-user services include
employee self-services (ESS). Employee self-services (ESS) provides employees with easy access to information and
functions such as the purchasing function. The purchasing function is called self-service procurement.
The figure shows the self-service procurement process. The employee creates a shopping cart in SAP SRM Server for goods
or services procured for direct consumption or stock. You use self-service procurement frequently to procure everyday
consumables; this type of procurement is indirect procurement. You can also procure stock materials, such as components for
production, using self-service; this type of procurement is direct procurement.
The process of procurement through self-service consists of the following steps:
Create a shopping cart by choosing the required articles or services from catalogs, by entering product IDs, or by describing the
articles or services using free text. The SAP SRM, MDM catalog is provided in conjunction with both the SAP SRM license and
the SAP ERP license. You can also connect to a large number of catalogs from other providers.
Depending on system configuration, employees need authorization from a manager or higher-level user to fulfill their requests.
If a shopping cart requires approval, the system uses a workflow to inform the employee responsible for releasing. Approvals
are based on the value of the shopping cart and the account assignment. The approval process may be a single stage or a
multi-stage process, based on the organizational processes.
The system processes the shopping cart after it has been approved. If the shopping cart is complete, the system converts it into
a purchase order. Conversion to a purchase order depends on the data available in the system. If the shopping cart is
incomplete, the system converts it into a purchase requisition and transmits it to the backend SAP system for completion.
The entry of a confirmation in SAP SRM Server corresponds to the entry of a goods receipt (GR) for materials or the creation of
a service entry sheet for externally provided services. The requester or another user, such as a vendor or a goods recipient,
can enter confirmations directly in SAP SRM Server. It is also possible to enter data about goods receipt or services rendered
in the backend (SAP ERP) system. Depending on the purchase order data and the person entering the confirmation, you may
need approval for the purchasing document.
You enter invoice data in the same way as the confirmation process either in SAP SRM Server or in the backend (SAP ERP)
system. You require an approval for the invoice as part of the workflow.
In SAP SRM, the system provides separate roles for individual user groups according to the process outlined. The roles
incorporate the functions and authorizations that employees or other users need to perform their tasks.
The typical roles in a self-service scenario are as follows:
Employees: The employee creates shopping carts, enters confirmations, and if the vendor requests, approves confirmations.
Managers: In addition to employee functions, the manager must approve the shopping carts created by the employees.
Vendors: The vendor can enter confirmations and invoices relating to goods and services.
The integration scenarios describe the document flow between SAP SRM Server and the SAP system using integration
scenarios. Procurement by self-service is completed using the classic scenario.
In the classic scenario, one or more documents in the SAP system (known as backend documents) originate from a shopping
cart in SAP SRM Server. These may be reservations, purchase requisitions, or purchase orders. The system outputs all
messages in the backend system.
In SAP SRM Server or in the backend (SAP ERP) system, the system can enter and process follow-on documents like goods
receipt, service entry, and invoice receipt. These follow-on documents are updated both in the shopping cart and the backend
purchase order.
Regardless of whether the confirmations and invoices are entered in SAP SRM or SAP system, the purchase order history is
consistent because the system updates it in both SAP SRM and SAP systems.
The system requires the Materials Management (MM) application in the backend (SAP ERP) system for the classic scenario.
As a result, stock material procurement (direct procurement) is possible with the classic scenario.
Hint: The documents in the backend (SAP ERP) system update the data for external and internal accounting. SAP SRM Server
supports the procurement process only. You need a backend (SAP ERP) system for inventory management and accounting.
The procurement process consists of creating a shopping cart and confirming the goods delivery.
As of SAP SRM 7.0, you access the SRM system using SAP Enterprise Portal. A special role assigns one or more employee
self-service(s) to a user. If the role contains the self-service procurement function, you see the Shop function when you log on.
When creating a shopping cart, the shopping cart wizard guides you through the necessary steps. This wizard is the standard
navigation interface for the user in the self-service scenario. The wizard walks you through the process of finding goods and
services quickly and simply, then placing them in your shopping cart.
The process of creating a shopping cart is as follows:

1. Select Goods/Services
2. View Item details
3. Complete and Order
4. Confirm order
You add a goods item or service to the shopping cart by choosing Select Goods/Service in the shopping cart wizard. Repeat
this step to add another item to the shopping cart. When you enter the goods or services for ordering, different options are
available. You can select from the following options when you create an item

If you choose an item from a catalog, the catalog provides the description and, if available, the product number. In addition, the
system adopts the vendor and price information from the catalog.

You can select a product directly for which a product master record exists in SAP SRM Server by using the corresponding entry
screen. The entry screen offers you the option of entering the product number directly or carrying out a search for the product
number using the product description. A product can be either a material or a service.

If no product master record or catalog entry is available for the required material or service, you can also create a free-text item.
In such cases, you enter a description, quantity, unit of quantity, and any other information manually.

Use a previously created shopping cart or a saved template of a shopping cart to select goods or services used frequently.

The shopping cart is displayed in the overview. You can view further information using item details. The detailed view of an
item contains the following additional information:

Basic data (for example, product number, purchasing group, quantity to be ordered, price, and goods recipient)

Cost assignment, for example, cost distribution, account assignment object, and General Ledger (G/L) account

Documents and assets, for example, purchase order text and internal memo

Delivery address or performance location

Sources of supply or service provider (If the system cannot determine a source of supply, you can enter a preferred vendor.)

Availability (If the required product is a material that you keep in the warehouse, an availability check can take place in the
backend system.)

You can continue in two different ways after the shopping cart is displayed in the overview. If you require more goods, return to
Step 1: Select goods and services. Otherwise, continue with Step 3: Complete and Order.
You complete the shopping cart by calling the approval preview and entering an approval memo. To complete, click on
the Order button.
In SAP SRM Server, the system implements various approval scenarios for shopping carts and other documents using
standard workflows.
The system creates the shopping cart successfully and confirms this in the fourth step. You have the option of printing the
document from your shopping cart.

The shopping cart is not in itself a purchase order. Depending on how much data is available (vendor, price) and the system
configuration, a shopping cart item may result in a purchase requisition, a purchase order, or a reservation in the backend
system.

Either the requester or the vendor can enter the confirmation in SAP SRM Server.
After you have chosen an item, enter the item details (for example, the delivery note number) and then confirm the goods
receipt or the service entry.
The closing invoice entry usually occurs in SAP ERP.

This figure shows a procurement cycle on the Ariba network:

The following steps describe the procurement cycle:
1. The buyer creates a profile and identifies suppliers they would like to enable on the Network.
2. The buyer sends an e-mail to invite the supplier.
3. The supplier receives this invitation via e-mail to join and register on the Ariba Network.
4. The supplier can create buyer-specific catalogs and post them to the Ariba Network so the buyer can create accurate
POs.
5. The buyer generates a PO and routes it electronically through the Ariba Network to the supplier.
6. The supplier generates an invoice and routes it to their customer electronically for approval.
7. The buyer makes the payment. The supplier has visibility into when the invoice is approved and knows that payment
is on its way.