Sap P2p End To End Processes 594p30
This document was ed by and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this report form. Report 3i3n4
Overview 26281t
& View Sap P2p End To End Processes as PDF for free.
More details 6y5l6z
- Words: 8,406
- Pages: 87
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
3. End-to-End Processes
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Definition of an End-to-End Process An End-to-End process is a sequence of activities that: is a logically connected series of tasks that serve a specific business need covers process areas that have dependencies on other process areas ensures consistency between process areas reflects the key activities across different process areas identifies business critical touch points and aligns Master Data elements serves as a template for validation and integration of process areas
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A process is an organized activity that adds value. It is not a single activity but a connected series of activities which logically fit together. End-to-End processes group the related processes from different functional areas, such as Procure-to-Pay , into extended 'value chains' which start at one end of the business and finish at another end. Process 1 (eg. Create Contract)
Process 2 (eg. Send Call-off)
Output from one process
= Input for another process
Process 3 (eg. Enter Goods Receipt)
Process 4 (eg. Perform Payment of Vendor Invoice)
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This presentation will cover following End-to-End processes:
Purchasing of S&IM Subcontracting Vendor Managed Inventory (VMI) P-Card Management Vendor Life Cycle
Overview of the Solution Set
Purchasing S&IM Detailed Route map & Best Practices
P
R
O C
E
S
S
O U T P U T S
Introduction Definition Benefits Triggers Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Process Variants Links to other End-to-End Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Benefits
4.
Triggers
5.
Business Rules
6.
Assumptions
7.
Key Decisions
8.
Change Impacts
9.
High Level Process Flow
10.
Key Roles
11.
Process Variants
12.
Links to other End-to-End
Purchasing S&IM 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
One of the challenges for Purchasing is to provide leadership and control in areas where it has not traditionally been involved. The area of Services and Indirect Materials (S&IM) will need clear directions in order to bring savings to the business. Globe is providing standardization in these non-traditional areas, which will allow Purchasing to aggregate where appropriate and deliver further benefits.
Purchasing S&IM 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This End-to-End process ensures that all Nestlé procurement of non-production related goods or services is performed accurately in a speedy, simple and standard way. This end-to-end process has two distinct but related parts: Strategic / Tactical Process which determines the appropriate procurement strategy for a spend category and the selection of an appropriate vendor(s). Operational Process which covers the steps from "need to procure" through to "payment for received non-production related goods and services". (e.g. MRO, office supplies, promotional items, media).
Purchasing S&IM 3. Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A standardized process ensures that purchasing is done in a professional way throughout the company. Proper co-ordination of purchasing activities (including rationalization of vendors, specifications & materials) will effectively leverage the purchasing power of Nestlé. Clearly defined roles and responsibilities for cross-functional teams will result in optimized decision making. Purchasing information will be more visible and transparent as a result of a standard common process and system. Specifically, spends across organizations will be visible for predefined categories for both materials and services.
Purchasing S&IM 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The need to procure an item that is not directly production related. Typically, this will be to meet a business requirement such as:
Supply replenishment Breakage replacement Transportation of goods Maintenance New Capex Marketing and sales campaign Training need Outsourced service
Purchasing S&IM
5. Business rules 1/2
Overview of the Solution Set
Implementation Approach
The Key Business Rule is: Use of a Nestlé procurement process to acquire Services & Indirect Materials is mandatory and all spending is categorized via use of the Generic Materials in the MDR or by characteristics applied to materials created in the material master.
Relevant KPIs - Purchasing Organization scorecard - Vendor scorecard
Heritage Systems There are no interfaces to legacy systems in this End-to-End process.
Detailed Route map & Best Practices
Purchasing S&IM
5. Business rules 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Custom Developments There is a custom development in Enterprise Buyer Professional (EBP) to permit use of PCards.
High level business control Control is provided within the procurement processes. All processes must be auditable.
Vendor Master Data The creation of new vendors and the use of one-time vendors, together with the amendment of existing vendors, must be done according to guidelines developed by Data Management.
Separation of Duties This End-to-End process is designed to ensure clear separation of duties via different roles e.g. order raiser, order approver, goods receiver, s payable clerk.
Purchasing S&IM 6. Assumptions 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
That all Services & Indirect Materials expenditures will be made via this Globe E2E business model. (This expenditure will therefore include such items as MRO items, temporary labor, office supplies, media, promotional items and training). That approval levels are pre-determined and embedded within the system. SAP EBP (Enterprise Buyer Professional) approvals will be consistent with those in SAP R/3. That the relevant purchasing process will be carried out by those who have been assigned and trained in the relevant procurement role. (This does not imply that all purchasing will be done by the Purchasing department; rather that the relevant functional area will have staff trained in the appropriate procurement role.)
Purchasing S&IM 6. Assumptions 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
That a business procedure and workflow will be developed by Data Management and will apply to all requests for: - the creation of new vendors. - the use of one-time vendors. - the amendment of existing vendor details.
The owning process area is Purchasing. That segregation of duties will be as extensive as is practicable, whilst recognizing employee trust and the relative importance of the spend category. Requirements coming out of Plant Maintenance will be either directly via a Purchase Requisition for non-stock items or a Purchase Requisition created by an MRP run. The process entry point will be at the “Process PO/Release Order” point in the process.
Purchasing S&IM 7. Key decisions
Overview of the Solution Set
Implementation Approach
Use of the procurement process to acquire Services and Indirect Materials is mandatory. All spending is categorized via the use of the Generic Materials in the MDR or Local Material Masters. Purchase Orders and contracts will have either value or quantity/value limits. All Purchase Orders and contracts will be required to have valid beginning and ending dates. Where appropriate, full inventory management is now available for Indirect materials in V1.5. Framework orders can be used for Services and Indirect materials for which a goods receipt is not required, such as utilities and taxes.
Detailed Route map & Best Practices
Purchasing S&IM 8. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Responsibilities / abilities and Decision Making The Head of Purchasing is the owner of the entire Purchasing process. This End-to-End procurement process (strategic, tactical & operational framework) is applicable for purchases of all Services and Indirect Materials. This process is to be followed wherever there is a purchasing activity. The Document Creator is responsible for accurate data entry and handling all transaction exceptions. Vendor Relationship Management is the responsibility of the Strategic Buyer.
Communication and Workload Shifts Communication of overall purchasing concept requires buy-in at a high level, executive sponsorship and active change management in the markets.
Purchasing S&IM
8. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working This End-to-End follows a defined and structured process. All employees assigned are trained in their respective procurement role. Entry of purchasing transaction information and goods receipt into the system requires discipline, and must be timely and accurate to minimize follow-up istration. Correction of transaction errors is performed by the Document Creator / . If Vendor issues arise, the Strategic Buyer is involved in the resolution. A 'Service Receipt' is used to accept services and approve payments. empowerment within a predefined framework.
Purchasing S&IM
9. High Level Process Flow 1/2 (Strategic)
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
2. Agree on Spend Category
3. Collect & Analyze History Purchase Data
4. Collect & Analyze Future Operational Requirements
8. Develop Procurement Strategy
7. Consolidate Spend & Market Analysis Data
6. Conduct Supply Market Research
5. Create Total Cost of Ownership Model
9. Communicate & Manage Procurement Policy
10. Process Request for Information
11. Process Request for Proposal
12. Process Request for Quotation
13. Negotiate with Selected Vendor
14. Maintain Schedule Agreements
15. Maintain Contracts
1. Rationalize Materials
Procure to Pay
Purchasing S&IM
9. High Level Process Flow 2/2 (Operational)
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
4. Create Requisition 1. Create Contract
Procure 5. Requisition released
to Pay
Vendor
Materials Handling / Finance & Control
2.Contract authorised through workflow
3.Contract transmitted to Vendor
6. Requisition assigned onto a PO
7.PO authorised through workflow
11. Invoice queries directed through invoice workflow
8. PO transmitted to Vendor
9. Post Goods Receipt
10. Invoice received and posted
Purchasing S&IM
Overview of the Solution Set
10. Key Roles
P2P Strategic Buyer
P2P Operational Buyer
Implementation Approach
P2P Purchase Requester
P2P Purchase Approver
MH Stock Goods Issue & Receipts
Detailed Route map & Best Practices
F&C s Payable Clerk
Purchasing S&IM 11. Process variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
MRO Items Procurement spare parts and services (stocked and nonstocked)
Temporary Labor Procurement of services (fixed price, estimated quantity)
Media Procurement of services (variable price, variable quantity)
Telephone Procurement of telephone services (variable price, variable quantity)
Capex Procurement of assets
Promotional Items Procurement of expensed items
Purchasing S&IM
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The Purchasing (Services & Indirect Materials) end-to-end process is, itself, part of four other End-to-End processes. These are shown as variants below:
Event Planning & Management - Consumer Marketing Event Planning & Management - Advertising Planning to Pay (HR) Asset Maintenance Management
Overview of the Solution Set
Subcontracting Detailed Route map & Best Practices
P R O C E S S
Introduction Definition Business Obj. & Benefits Triggers Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Process Variants KPIs Links to other End-to-End
Understand business O objectives U T Understand business benefits P Understand Key U decision T S
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Business Objectives & Benefits
4.
Triggers
5.
Assumptions
6.
Key Decisions
7.
Change Impacts
8.
High Level Process Flow
9.
Key Roles
10.
Process Variants
11.
KPIs
12.
Links to other End-to-End
Subcontracting 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A key strategy in sourcing products and services is subcontracting. Purchasing will need to work in a crossfunctional environment to determine whether to manufacture or outsource materials in order to maximise the business benefits for Nestlé.
Subcontracting 2. Definition 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The contracting out, to a third party, of all or part of the production or packing process for the processing of raw materials, semi-finished or finished products, when Nestlé is involved in the provision and/or management of one or more components supplied to the Subcontractor. Typical examples of subcontracting can be: Finished products. Semi-finished products, which will be further processed before being sold. Seasonal packed products i.e. Easter Eggs. Promotional packs. (free products, gifts, samples, etc.) Etc.
Subcontracting 2. Definition 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Subcontracting includes Co-manufacturing: i.e. the production of a base product by a vendor, which may also complete the process of packing the finished product. Co-packing: i.e. the packing of a semi-finished product by a vendor or re-packing of an existing product into a different packaging format.
It will not include: Purchase of temporary personnel services for the production of a product at a Nestlé site. This will be managed by creating a service purchase order. Purchase of a finished product for which all materials (raw, packaging, semi-finished) are procured by the Vendor itself. This is managed by placing a purchase order for a finished product as for any other material.
Subcontracting
3. Business Objectives & Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The objective is to provide a cost effective alternative source of supply to: solve internal capacity issues. reduce assets. avoid or defer major capital investments. increase operational cost efficiency due to inadequate internal capacity or unsatisfactory in-house cost structure. manufacture products requiring a technology not available at Nestlé or not owned by Nestlé. secure short term capacity from subcontractors for seasonal or promotional products, whilst respecting Nestlé quality, safety and traceability standards.
Subcontracting 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
At a strategic level, the process will be triggered by the sourcing strategy definition agreed on by the cross-functional team. The sourcing strategy relies on : Insourcing/outsourcing analysis. Cost-effective manufacturing alternative. Capacity evaluation. Technology and Quality requirements. Mitigation of investment risk for new products. Reduction of manufacturing assets.
Subcontracting 5. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Strategic decision to outsource the manufacture and/or packaging of our products to a third party subcontractor. Subcontractors are selected and approved, fullfilling Nestlé requirements i.e. Nestlé Quality System. Subcontractors comply with Nestlé Subcontracting Agreement (Contract and Conditions).
Subcontracting 6. Key Decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Contracts are created using the standard subcontracting system functionalities. Purchase Orders are created with reference to contracts above. A Subcontracting Agreement (SCA) will be created defining service levels and operational requirements.
Subcontracting
7. Change impacts
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Subcontracting is a complete End-to-End process which is managed by procurement. Cross-functional team approves the strategical decision of subcontracting, selects and monitors the Subcontractor. A Subcontracting Agreement is issued. The control of co-manufacturing/subcontracting contracts, purchase orders and stocks are ed by a Globe template functionality. Best practice is to create an accurate Bill of Material (BOM) for each subcontracted product. All master data records (e.g. subcontractor as a vendor, assignments, material numbers etc.) must be accurate and established before transactions with subcontractors are executed. The Subcontractor's performance is monitored regularly against the subcontracting agreement, using tools such as the Material Variance Report and the Vendor Evaluation.
Subcontracting
8. High Level Process Flow Strategic Planning
Procure to Pay
Materials Handling / Quality Management
Implementation Approach
1. Calculate Requirements for Subcontracted finished product
2. Run MRP on Components / Explode BOMs
3. Purchase Requisitions for Subcontracting product
4. Convert Purchase Requisition to Subcontract PO
5. Release Subcontract Purchase Order
6. Purchase Requisitions for components
7. Convert Purchase Requisition to PO / STO
8. Release Purchase Order / Stock Transport Order
10. Goods Issue of Components
Detailed Route map & Best Practices
QM Audit of Subcontractor & Approval by all parties
Supply Strategy
Demand and Supply Planning
Overview of the Solution Set
1111. Receipt of components in Subcontractor premises
12. Receipt of 12 Subcontracting Goods Consumption of Components
14. Invoice handling
9. Create Outbound delivery
13. Quality Inspection
Subcontracting
Overview of the Solution Set
9. Key Roles
Implementation Approach
Strategic Sourcing Cross Functional Teams
DSP •Demand Planner •MRP Planner
Technical & Production
P2P Strategic Buyer
P2P Operational Buyer
Quality Mgt. & Material Handling
QM QM Material Batch Maintenance
MH Stock Goods Issue & Receipts
Finance & Control
F&C s Payable Clerk
CS Order Processing Clerk
Detailed Route map & Best Practices
Many roles are involved in Cross Functional Teams in Subcontracting
To DC or Customer Sales
Subcontracting
10. Process variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The Subcontractor can be modelled as a Vendor or a Plant, depending on the level of tracability required at the subcontractor: Vendor - The subcontractor is set up as a vendor when: the subcontractor's finished product is to be received back to the main Nestlé plant. It is not required to manage the finished products independently. Plant - The subcontractor is set up as a plant when: full transparency of finshed good stocks at the subcontractor's site is required. planning is to take place at the subcontractor's plant. finished goods are to be sold directly from the subcontractor's plant to the customer. Note: In each case the standard SAP subcontracting solution is used.
Subcontracting 11. KPIs
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
On Time & In Full delivery (OTIF) Automatic scores generated within the system based on the purchase order quantity and delivery date.
Quality scores When a usage decision is taken for an inspection lot created for goods receipt, the quality score must also be determined for the lot. A quality score is a statistical value that describes the quality of an inspection lot.
Vendor confidence Based on the Vendor's track record, a confidence level is assigned to the Vendor. The three confidence levels used are: high, medium and low.
Service Manual scores can be added to reflect the Vendor's performance. These are also aggregated by plant within a BW report.
Subcontracting
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Planning to Produce Collaborative Replenishment Planning Order to Cash Concept to Consumption Business Planning Costing Integration Scenario
Detailed Route map & Best Practices
Overview of the Solution Set
Vendor Managed Inventory Detailed Route map & Best Practices
P
R
O
C
E
S
S
O U T P U T S
Introduction Definition Benefits Business Requirements & Constraints Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Marketplace Messages MP Message Rules Key Roles Process Variant Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Benefits
4.
Business Requirements & Constraints
5.
Business Rules
6.
Assumptions
7.
Key Decisions
8.
Change Impacts
9.
High Level Process Flow
10. Marketplace Messages 11.
MP Message Rules
12. Key Roles 13. Process Variant
Vendor Managed Inventory 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
In a stable vendor environment Nestlé may want to consider the introduction of Vendor Managed Inventory (VMI) with key vendors, moving from a traditional order methodology to VMI and streamline the process which will bring business benefits to both Nestlé and the Vendor.
Vendor
Nestlé
Vendor Managed Inventory 2. Definition 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
In a Vendor Managed Inventory scenario (VMI): The Vendor monitors the stock levels of Nestlé and initiates stock replenishment when necessary, without the need to receive any purchase orders from Nestlé. Purchase Orders will be generated directly in the Nestlé system by the Vendor through a portal or Marketplace.
This process enables the Vendor to: monitor requirements. monitor stock levels and planned consumption. generate Purchase Orders, Advanced Shipping Notification (Marketplace only) and Invoices in the Nestlé system. receive Goods Receipts Confirmation, Selfbill Invoices and Remittance Advices (Marketplace only).
Vendor Managed Inventory scenario includes only: Raw and Packaging materials.
Vendor Managed Inventory 2. Definition 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Opportunity for a greater number of vendors of different sizes and capabilities to enter a VMI agreement is provided through 2 access methods: Option 1: Marketplace (MP) A Marketplace allows an automatic exchange of information between Nestlé system and Vendor system. The MP solution is best suited to large capacity and technology advanced vendors.
Option 2: Supplier Workplace (SWP) Supplier Workplace (SWP) is a web-based tool accessed by vendors via the Internet where: vendors have only access to their own data. vendors need to be authorised by Nestlé to use SWP.
The SWP solution is best suited to medium capacity or less technology advanced vendors.
Vendor Managed Inventory 3. Benefits 1/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The VMI process is a common initiative with vendors for processes optimization aiming to gaining mutual benefits, such as: Total cost reduction of materials. The single sourcing allows cost reduction since the Vendor shares benefits resulting from optimized production capacity and operational processes.
Working capital reduction. Raw/Pack materials and Finished Goods inventories reduction.
Improved Payment compliance. Introduces collaborative planning concepts and thereby minimizes potential material shortages. Avoid stops in Manufacturing due to materials shortage. Increase product availability and customer service level.
Vendor Managed Inventory 3. Benefits 2/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Reduction of operating costs (/Headcount) Systems integration between Nestlé and vendors ensuring best information quality (material availability, delivery dates, etc.) i.e. Vendors ability to view information without having to Nestlé. Improved data accuracy implying lower failure cost. Increased use of automatic creation of purchase orders with reduction in cycle time, errors and the Total Cost of Ownership.
Reduction of istrational workload. Reduced number of manual invoices and time spent on resolving queries and issues. Lower number of rejections of deliveries due to all sort of discrepancies (i.e. quantities, commercial conditions, etc.)
Inbound Freight costs reduction. Volume and regularity of single sourcing allows transport optimization.
Minimum stock counts and warehousing complexity.
Vendor Managed Inventory 3. Benefits 3/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Benefits for Vendors (Marketplace): Vendor is allowed to monitor Nestlé requirements coming from Material Requirement Planning (MRP). Nestlé stock levels.
Vendor is allowed to generate Purchase Orders. Advance Shipping Notification documents Invoices. Vendor planning and capacity management is improved. Pro-active involvement in anticipating and responding. Partnership is strengthened.
Vendor Managed Inventory 3. Benefits 4/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Benefits for Vendors (Supplier Workplace): Access to real-time data is provided. Vendor is allowed to monitor Nestlé's requirements coming from Stock and Requirements List.
Vendor is allowed to generate Purchase Orders. Invoices.
Vendor planning and capacity management is improved. Pro-active involvement in anticipating and responding is allowed. Partnership is strengthened.
Vendor Managed Inventory 4. Business Requirements & Constraints 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Since starting VMI, Nestlé is moving to a long term strategic partnership with a single source implying following requirements: A strong Vendor selection process (high business maturity level). Wilingness to share strategic Nestlé information. Communication and openness amongst all stakeholders involved. Definition of clear responsibilities at organizational level. Speed on internal and external information transfer. Vendor more connected to our plants for a better understanding of our requirements. N. B. Attention is drawn to the fact that this long term partnership will give limited opportunities to participate in spot markets.
Vendor Managed Inventory 4. Business Requirements & Constraints 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Constraints for VMI implementation from Nestlé's side are poor sales forecasting and production planning. high seasonality businesses. Only one vendor can be responsible for a material/plant combination.
Scalability: Not all messages/transactions need to be implemented from the beginning of the VMI relationship.
Vendor Managed Inventory 5. Business rules 1/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
VMI Agreement: is a document created for VMI operating rules. This will be referenced in the SAP generated contract.
VMI Agreement contains Business Rules e.g. : Methods of invoicing. Target stock levels. Messages/transactions used within the VMI relationship.
Contract: is a system generated contract which covers price, contract validity, volume, specification number and & conditions.
Contract Business Rules: Vendors can only display their own contracts and purchase orders (SWP only).
Vendor Managed Inventory 5. Business rules 2/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Stock Data exchange: A of exceptions compared with the target stock levels must be communicated to the Strategic Buyer and the Vendor. The method of monitoring VMI compliance by Nestlé must be part of the process.
Purchase Orders : Every purchase order generated by a vendor is linked to an existing contract. In order to create a purchase order, the Vendor is only allowed to specify the quantity and delivery date for each purchase order item. All other information are defaulted from the contract.
Vendor Managed Inventory 5. Business rules 3/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Invoices:
Operational controls must be established to ensure that the invoice data input of the Vendor is correct and references both the PO and goods receipt confirmations.
Vendor-generated Purchase Orders must always be configured to ensure that no invoicing can be done for this Purchase Order without a Goods Receipt. Vendor-generated Invoices with price variances are blocked for payment.
Vendor Managed Inventory 6. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A VMI agreement is in place. A method of transmitting messages is developed between Nestlé and our vendors (MP only). Vendors are granted access to the Nestlé Business Extranet (SWP only). Providing two methods of accessing Nestlé's transaction will help to maximize the benefits from the VMI process, by offering a greater number of vendors the opportunity to enter a VMI agreement.
Vendor Managed Inventory 7. Key decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A decision to operate VMI must be part of the Spend Category Strategy. Clear working parameters must be included in the VMI agreement. Vendors will be authorized to perform selected Nestlé transactions via Supplier Workplace (SWP) or to send messages via Marketplace (MP). Purchase Orders created by vendors must be linked to a contract: price, payment , currency and conditions will automatically default from the contract.
Vendors will be responsible for the accuracy of the Purchase Order quantity based on Nestlé demand and stock targets.
Vendor performance level must be monitored.
Vendor Managed Inventory 8. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Decision Making VMI purchasing is a strategic decision based on strategic/operational needs of a Nestlé market to perform an enhanced relationship scope which goes beyond the basic service level expectations with a vendor.
Workload Shifts The Vendor monitors the stock levels and initiates stock replenishment when necessary. The Vendor may have authority to perform the following: Create purchase orders. Review purchase documents, i.e. POs and contracts (SWP only). Monitor and check stock levels and planning schedules. Create Advance Shipping Notifications (ASN) and final delivery documents (MP only). Generate invoices.
Vendor Managed Inventory 8. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Communication Structure of communication and to and from vendors is defined in the VMI agreement. Vendor's compliance to the VMI agreement is monitored closely and regular on performance data is given to vendors so that action plans can be developed.
New Ways of Working Vendors perform transactions via the SWP functionality. Access will be provided to the Vendor (SWP only) for all relevant documents (contracts and POs), material requirement data, stock level of materials, planning schedule and stock consumption. On time data availability and accuracy are critical. Operating controls will be managed by VMI agreement that specifies pricing details, inventory parameters, detailed material description & specification and other vital conditions. Vendor’s performance is captured, stored, monitored and shared to ensure consistency with agreed evaluation parameters. Continuous improvement of all VMI activities is an on-going process.
Vendor Managed Inventory 9. High Level Process Flow Demand and Supply Planning Procure to Pay
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. Calculate Time Phased Material Requirements 2. Maintain Contracts
16. Monitor VMI compliance
13 Exchange Self-billing Data (MP)
15. s Payable
12. Goods Receipt Confirmation (MP)
14. Generate Invoice
10. Post Goods Receipt
11. Quality Inspection
5. Exchange Planning Schedule
Vendor 4. Exchange Stock Level
7. Generate Purchase Order
8. Generate ASN Document (MP)
Materials Handling / Quality Management
3. Periodic Stock Analysis
9. Goods Arrive
Vendor Managed Inventory 10. Marketplace Messages
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Agreement Planning Schedule* * Synchronized messages
Vendor Vendor
Inventory Levels* Sales Order / Purchase Order / Purchase Order Change
Nestlé
Advance Shipping Notification
Goods Receipt Confirmation Self-Billing Invoice Self-Billing Invoice for Consignment
Remittance Advice
Marketplace
Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor
Vendor Managed Inventory 11. MP Message Rules
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Vendor Sales Order (SO) / Nestlé Purchase Orders (PO) Vendor Sales Order (SO) / Nestlé Purchase Orders (PO) chang e Planning Schedule and Inventory Advance Shipping Notification (ASN) Goods Receipt Advise (GRA) Self-Billing Invoice (SBI) Self-Billing Invoice for Consignment (SBIC) Remittance Advice (RA) (click on message rule for more details)
Vendor Managed Inventory 12. Key Roles DSP MRP Planner
P2P Strategic Buyer
Overview of the Solution Set
Implementation Approach
P2P Operational Buyer
P2P Vendor/VMI Vendor (SWP only)
MH Materials Handling Display
MH Stock Goods Issue & Receipts
QM QM Material Batch Maintenance
Detailed Route map & Best Practices
F&C s Payable Clerk
Vendor Managed Inventory 13. Process variant
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Consignment stock : The major difference with Consignment Stock is that the ownership of the stock es to Nestlé only at the point of consumption and not on receipt into the warehouse. Self-billing Invoices must be used with Consignment Stock.
Overview of the Solution Set
P-Card Management Detailed Route map & Best Practices
Introduction Definition Business Objectives Benefits Assumptions Key Decisions Change Impacts High Level Process Flow Working Process Key Roles Process Variants Links to other End-to-End Understand business objectives Understand business benefits Understand Key decisions
P R O C E S S
O U T P U T S
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Business Objectives
4.
Benefits
5.
Assumptions
6.
Key Decisions
7.
Change Impacts
8.
High Level Process Flow
9.
Working Process
10.
Key Roles
11.
Process Variants
12.
Links to other End-to-End
P-Card management 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
One of the key deliverables in Procure-to-Pay is to reduce transactional costs. A number of solutions have been identified and developed to reduce the costs of purchasing. Markets should evaluate these solutions to determine which tool is most appropriate for each spend category, P-Card being one of them. P-Card is ideal for high volume low value spend categories. As this is not template dependent, markets can benefit immediately by introducing this solution.
P-Card management 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
P-Card Management is an End-to-End process whereby Corporate Purchasing Cards (C or PCards) are issued to companies and used by employees as charge cards simplifying streamlines for purchases of high volume, low value goods and services for company use. The company carries the liability and is responsible for making one monthly payment for all purchases on a consolidated invoice statement to the Corporate Purchasing Card company e.g. American Express.
P-Card management 3. Business Objectives
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The objective is to provide an effective solution to significantly reduce the cost of the istration required to process the large quantity of low value orders and invoices Nestlé receives. The main deliverables are: A simplification of the purchasing and payment process for goods and services. The reductions of invoice process cost by reducing the number of paper invoices processed.
P-Card management 4. Benefits 1/2
Overview of the Solution Set
Implementation Approach
Introduce a simple, convenient and easy to use ordering process against agreed vendors, contracts and conditions which devolves the buying activity to the end s.
Increased speed and reduction of costs and istrative complexity in the procurement process.
Substantial reduction in workload in the s Payable and Purchasing Organizations.
Reduction in invoice processing costs through the direct integration with Nestlé's s Payable systems.
Improved overall visibility, across the organization, of S&IM spends.
Detailed Route map & Best Practices
P-Card management 4. Benefits 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Improved cash flow for vendors. Predictable vendor payment. Eventual contribution in stock reduction. Increased control and compliance of the use of preferred vendors i.e. reduction in maverick buying. No need for vendors to create customer invoices and statements. Transactions are posted in the month in which they occur. Allow many types of orders i.e. telephone, e-mail, e-catalogue, planned maintenance etc. Empowerment of employees to purchase goods and services necessary to continue operations.
P-Card management 5. Assumptions 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Selection of a Spend Category to be bought with P-Cards is done through the ''Define Procurement Strategy for a Spend Category '' process.
The current Globe solution is based upon ing Link (a software tool from American Express to reconcile P-Card statements) being used to generate reports.
On a monthly basis, all current data required to generate up-to-date reports are received from American Express and are ed in ing Link.
The Department/Cost Center Head will proactively inform the P-Card in case a specific P-Card's validity date is not to be renewed.
P-Card management 5. Assumptions 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Screening of P-Card vendors has been done through the ''Study Supply Market'' and "Screen & Select Vendors'' processes. The Corporate P-Card (C) Vendor List is posted on the Purchasing Intranet for easier accessibility.
Human resources will inform the P-Card about P-card Holders changing departments or leaving the company.
The P-Card Holder orders S&IM only from a vendor/s listed on the C Vendor List, from which he/she is authorized to buy.
P-Card management 6. Key decisions
Overview of the Solution Set
Implementation Approach
Following Key Decisions have to be applied: (please click on according key decision for details)
6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8.
P-Card Providers Use of P-Cards C Vendors P-Card Holders P-Card Limits Service & Goods Receipt Statement Reconciliation Tax Reporting and Documentation
Detailed Route map & Best Practices
P-Card management 7. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working
Employee awareness, understanding and acceptance of new purchasing roles is vital. High level of empowerment is given to employees in this process. Requirements for S&IM (high volume, low value) are purchased using P-Cards via phone, fax, e-mail, vendor's website, Enterprise Buyer Professional (EBP) application or in person. No Purchase Orders are required to be created (except in the case of EBP and Asset and Maintenance Management (AMM)). ''Buyerless" procurement where internal s, who are P-card Holders, across the company will execute the operational buying activities. The P-Card can only be used for the payment of S&IM ordered from vendors listed on the Corporate Purchasing Card (C) Vendor List.
P-Card management 7. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Checks and controls in the process, policies and guidelines for P-Card purchases should be in place to meet business needs while preventing abuse. P-Card usage and efficiency will be monitored and measured. Simplified purchasing and payment process with - one payment per billing cycle and charged to ing information provided by the Cardholder or that, which is embedded in the P-Card itself. - monthly statements provided to the Cardholder and to the Corporate Program .
P-Card management
Overview of the Solution Set
8. High Level Process Flow
No
3. Manage P-Card Revisions / Renewal
6. Order Goods & Services with P-Card
AMEX AMEX Transaction Transaction Approval Approval
No
4. Manage P-Card Transfers & Terminations
8. Handle Returns, Credits & Disputed Items
7. Receive Goods & Services
OK OK
9. Reconcile P-Card Statements Yes
5. Monitor P-Card Usage
14. Transfer Payment File
Yes
Yes
2. Manage P-Card Holder Enrolment
Finance & Control
Detailed Route map & Best Practices
End
1. Manage P-Card Vendor Enrolment
Procure To Pay
Implementation Approach
13. Execute Payment Run & Create Payment File
No
Reconciled Reconciled
11. Create Payment Proposal
10. 3rd Party/Intercompany Commitments
12. Approve Payment Proposal
15. Comply with PCard Sales & Use Tax
Yes
P-Card management 9. Working Process
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This process consists of following steps: An employee issued with a corporate purchasing card (P-Card) can use his/her P-Card for the payment of high volume, low value services and indirect materials from approved vendors listed on the C (Corporate Purchasing Card) Vendor List on the Purchasing Intranet. The approved Vendor processes the order and sends the details to the P-Card Provider (American Express). American Express (AMEX) accumulates the transactions from the vendors, pays those vendors, and sends Nestlé a consolidated P-Card transaction file each month. The P-Card Holder's manager must approve the transactions listed. Each month, each P-Card Holder will receive a copy of the transactions that have been charged to their card. The P-Card Holder will then be required to check each transaction and validate it both in of price charged and that the goods or services were received as shown on the transaction. The P-Card transaction file received from AMEX is ed into the SAP Finance system, which results in a payment to AMEX.
P-Card management 10. Key Roles P2P P-Card
Implementation Approach
Detailed Route map & Best Practices
P2P P-Card Approver
F&C Controller
HR HR
F&C Treasury Back Office
P2P P-Card Holder
F&C s Payable Supervisor
P2P P-Card Reconciliation
F&C s Payable Clerk
P2P Strategic Buyer
P2P Purchasing Manager
Overview of the Solution Set
P-Card management 11. Process Variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. Stock or Non-Stock Services & Indirect Materials online Card Type E (E-Card).
2.
Amex "Financial Event" A "Financial Event" can occur, if Amex places additional charges on Nestlé, within the contract, but not initiated by Nestlé P-Card.
3. Misused Card 4. Offline Procurement Card Type P (Product Card) Card Type B (Buyer Card)
5. Offline Procurement with Card Type G (General Requisitioner Card) Card Type I (Internal Order Card) Card Type D (Department Card)
P-Card management
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Purchasing of Services & Indirect Materials Asset Maintenance Management
Detailed Route map & Best Practices
Overview of the Solution Set
Vendor Life Cycle Detailed Route map & Best Practices
P
R
O
C E
S
S
O U T P U T S
Introduction Definition Benefits Triggers Business Requirements & Constraints Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents 1.
Introduction
2.
Definition
3.
Benefits
4.
Triggers
5.
Business Requirements & Constraints
6.
Business Rules
7.
Assumptions
8.
Key Decisions
9.
Change Impacts
10. High Level Process Flow 11. Key Roles
Vendor Life Cycle 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A Vendor is a business partner providing direct, indirect materials and services. The purpose of this process is to have formal and cross-team procedures with clearly defined and segregated roles and responsibilities to manage the Vendor master records across the company.
Vendor Life Cycle 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This process is the sequence of activities necessary to effectively and efficiently introduce a business partner as a unique Vendor master record (one code in SAP) into the system. This End-to-End process is applicable whenever a vendor is
introduced changed blocked unblocked
Vendor Life Cycle 3. Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Manage Vendor master data as a company asset. A standardized process ensures that purchasing is done in a professional way throughout the company. When processing procurement documents, there is less likelyhood of errors because of high quality Master Data management and one point of entry. Easy access and transparency of available Vendor data information will accelerate the procurement process.
Vendor Life Cycle 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A new Vendor can be introduced after a supply market analysis following a new material/service requirement, the development of a new product, etc. A Vendor can be changed based on communication received from the Vendor, as a result of a negotiation, etc. A Vendor can be blocked for quality reasons, financial reasons, business reasons, etc.
Vendor Life Cycle
5. Business Requirements & Constraints
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Scalability: This process covers the Vendor life cycle, either locally or globally, managed by Procurement. Sharing the information through other tools (e-mail, fax, intranet) will enhance the process, because it will reduce the workload of other organizations.
Usability: The speed at which requests may arise and approval decisions are taken in local or global organizations, is a key element of this process. Every role and stream involved in the process must be efficient and effective.
Vendor Life Cycle 6. Business rules
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The company can be supplied and can receive invoices only if Vendors are identified by a Vendor master record. Procurement is responsible for the approval process of a Vendor as a business partner. Each Vendor is identified by one Vendor master record. A new Vendor can be set up only if it does not already exist in the Master Data Repository (MDR). A Vendor with the same name/address/search term must exist only once on the MDR. The creation request form can be raised in other departments by a local person, but the decision to accept a Vendor is only taken by Procurement through business approval. The 'Vendor master data initiator' is a Data Management role that only proposes the creation of a new Vendor master record. The 'Strategic Buyer' is a procurement role authorized to deal with a Vendor. For more details, please your local GC.
Vendor Life Cycle 7. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A procurement function triggers the introduction of a new Vendor within the company and this determines the creation of a new Vendor master record in the system. The request form for creation, maintenance and change can be raised by non-procurement roles. A daily report ensures critical field checking. A procurement business approval for change in the MDR is not required. Data quality, consistency and validity are a co-responsibility of the Initiator, Procurement, Local Data Organizations and Globe Centers. Rationalization of the Vendor database and a higher degree of uniformity across the markets is recommended.
Vendor Life Cycle 8. Key decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
No Key decisions exist for the Vendor Life Cycle process. However, clearly defined rules must be applied for One Time Vendor (OTV), please see attached Key Decision Document.
Micros oft Word Document
Vendor Life Cycle
9. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Responsibilities / abilities and Decision Making The Procurement Unit is responsible for the approval of a Vendor as a long term business partner. This Vendor Life Cycle process is applicable for three scenarios, i.e. create, change and block/unblock Vendor. Local data management checks correctness, completeness and compliance with the Data Standards and then uniqueness in the Supplementary Data Repository (SDR) and the Global Master Data Repository (MDR). GLOBE Centers (data management) are responsible for the quality of the 'global data' of the Vendor which are recorded in the Global Master Data Repository (MDR). Communication and Workload Shifts Electronic workflow is used in the process of creating and changing a Vendor record.
Vendor Life Cycle
9. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working The Vendor Life Cycle follows a defined and structured process, all involved must adhere to workflow steps in their respective roles. Entry of Vendor information requires discipline and must be timely and accurate. Workflow s should exercise discipline and timeliness in updating all who have a role in the workflow. Master data records adhere to Nestlé data standards. Requests for new Vendors go through three approval stages, i.e. Procurement, Local data organization and the GLOBE Center. Requests to change Vendors on MDR go through two approval stages, i.e. Local data organization and GLOBE Center. Requests to change Vendors on SDR go through one approval stage, i.e. Local data organization. The creation of a new released Vendor will depend on the timings involved in data creation and approval from more than one department (i.e. Initiator, GC Data management, Local Data Organization, Purchasing and s Payable).
Vendor Life Cycle
10. High Level Process Flow Vendor Creation Any Department
1. Request Form for Vendor Creation
Procure to Pay
2. Business Authorization Create Vendor
Finance and Control Local Data Organization
Implementation Approach
3. Completeness Correctness and Uniqueness Check exists
Yes
Reject and Send Back to Requester
7. Complete Purchasing ing Views 9. Complete Bank Details Views
10. Approve Vendor and Inform Interested Parties
End
No 4. Create Vendor in Master Data Repository (MDR)
MDR
Detailed Route map & Best Practices
6. Start Local Workflow
8. Complete ing Views
already?
Globe Center
Overview of the Solution Set
5. Replicate MDR to Secondary Data Repository (SDR) and local SAP system
SDR
Vendor Life Cycle
10. High Level Process Flow Vendor Modification Any Department
1. Request Form for Vendor Change
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. MANUAL Request Form for Vendor Change
Procure to Pay Finance and Control Local Data Organization Globe Center
2. Completeness Correctness and Uniqueness Check
2. Completeness Correctness and Uniqueness Check
3. Change Vendor in Secondary Data Repository (SDR)
INFORM MARKET S
4. Replicate Changes in Local SAP System
3. Change Vendor in Master Data Repository (MDR)
MDR Changes on Global View
5. Replicate MDR to Secondary Data Repository (SDR) and local SAP system
SDR Changes on Local View
Vendor Life Cycle
Overview of the Solution Set
11. Key Roles
Initiator
Implementation Approach
Detailed Route map & Best Practices
P2P Vendor Master Business Authorizer
P2P Master Data Entry Purchasing
LDO Vendor Master Local Data Approver
F&C Master Data Entry Banking
GC Vendor Master MDR Data Approver F&C Master Data Entry ing
Implementation Approach
Detailed Route map & Best Practices
3. End-to-End Processes
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Definition of an End-to-End Process An End-to-End process is a sequence of activities that: is a logically connected series of tasks that serve a specific business need covers process areas that have dependencies on other process areas ensures consistency between process areas reflects the key activities across different process areas identifies business critical touch points and aligns Master Data elements serves as a template for validation and integration of process areas
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A process is an organized activity that adds value. It is not a single activity but a connected series of activities which logically fit together. End-to-End processes group the related processes from different functional areas, such as Procure-to-Pay , into extended 'value chains' which start at one end of the business and finish at another end. Process 1 (eg. Create Contract)
Process 2 (eg. Send Call-off)
Output from one process
= Input for another process
Process 3 (eg. Enter Goods Receipt)
Process 4 (eg. Perform Payment of Vendor Invoice)
3. End-to-End Processes
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This presentation will cover following End-to-End processes:
Purchasing of S&IM Subcontracting Vendor Managed Inventory (VMI) P-Card Management Vendor Life Cycle
Overview of the Solution Set
Purchasing S&IM Detailed Route map & Best Practices
P
R
O C
E
S
S
O U T P U T S
Introduction Definition Benefits Triggers Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Process Variants Links to other End-to-End Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Benefits
4.
Triggers
5.
Business Rules
6.
Assumptions
7.
Key Decisions
8.
Change Impacts
9.
High Level Process Flow
10.
Key Roles
11.
Process Variants
12.
Links to other End-to-End
Purchasing S&IM 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
One of the challenges for Purchasing is to provide leadership and control in areas where it has not traditionally been involved. The area of Services and Indirect Materials (S&IM) will need clear directions in order to bring savings to the business. Globe is providing standardization in these non-traditional areas, which will allow Purchasing to aggregate where appropriate and deliver further benefits.
Purchasing S&IM 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This End-to-End process ensures that all Nestlé procurement of non-production related goods or services is performed accurately in a speedy, simple and standard way. This end-to-end process has two distinct but related parts: Strategic / Tactical Process which determines the appropriate procurement strategy for a spend category and the selection of an appropriate vendor(s). Operational Process which covers the steps from "need to procure" through to "payment for received non-production related goods and services". (e.g. MRO, office supplies, promotional items, media).
Purchasing S&IM 3. Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A standardized process ensures that purchasing is done in a professional way throughout the company. Proper co-ordination of purchasing activities (including rationalization of vendors, specifications & materials) will effectively leverage the purchasing power of Nestlé. Clearly defined roles and responsibilities for cross-functional teams will result in optimized decision making. Purchasing information will be more visible and transparent as a result of a standard common process and system. Specifically, spends across organizations will be visible for predefined categories for both materials and services.
Purchasing S&IM 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The need to procure an item that is not directly production related. Typically, this will be to meet a business requirement such as:
Supply replenishment Breakage replacement Transportation of goods Maintenance New Capex Marketing and sales campaign Training need Outsourced service
Purchasing S&IM
5. Business rules 1/2
Overview of the Solution Set
Implementation Approach
The Key Business Rule is: Use of a Nestlé procurement process to acquire Services & Indirect Materials is mandatory and all spending is categorized via use of the Generic Materials in the MDR or by characteristics applied to materials created in the material master.
Relevant KPIs - Purchasing Organization scorecard - Vendor scorecard
Heritage Systems There are no interfaces to legacy systems in this End-to-End process.
Detailed Route map & Best Practices
Purchasing S&IM
5. Business rules 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Custom Developments There is a custom development in Enterprise Buyer Professional (EBP) to permit use of PCards.
High level business control Control is provided within the procurement processes. All processes must be auditable.
Vendor Master Data The creation of new vendors and the use of one-time vendors, together with the amendment of existing vendors, must be done according to guidelines developed by Data Management.
Separation of Duties This End-to-End process is designed to ensure clear separation of duties via different roles e.g. order raiser, order approver, goods receiver, s payable clerk.
Purchasing S&IM 6. Assumptions 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
That all Services & Indirect Materials expenditures will be made via this Globe E2E business model. (This expenditure will therefore include such items as MRO items, temporary labor, office supplies, media, promotional items and training). That approval levels are pre-determined and embedded within the system. SAP EBP (Enterprise Buyer Professional) approvals will be consistent with those in SAP R/3. That the relevant purchasing process will be carried out by those who have been assigned and trained in the relevant procurement role. (This does not imply that all purchasing will be done by the Purchasing department; rather that the relevant functional area will have staff trained in the appropriate procurement role.)
Purchasing S&IM 6. Assumptions 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
That a business procedure and workflow will be developed by Data Management and will apply to all requests for: - the creation of new vendors. - the use of one-time vendors. - the amendment of existing vendor details.
The owning process area is Purchasing. That segregation of duties will be as extensive as is practicable, whilst recognizing employee trust and the relative importance of the spend category. Requirements coming out of Plant Maintenance will be either directly via a Purchase Requisition for non-stock items or a Purchase Requisition created by an MRP run. The process entry point will be at the “Process PO/Release Order” point in the process.
Purchasing S&IM 7. Key decisions
Overview of the Solution Set
Implementation Approach
Use of the procurement process to acquire Services and Indirect Materials is mandatory. All spending is categorized via the use of the Generic Materials in the MDR or Local Material Masters. Purchase Orders and contracts will have either value or quantity/value limits. All Purchase Orders and contracts will be required to have valid beginning and ending dates. Where appropriate, full inventory management is now available for Indirect materials in V1.5. Framework orders can be used for Services and Indirect materials for which a goods receipt is not required, such as utilities and taxes.
Detailed Route map & Best Practices
Purchasing S&IM 8. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Responsibilities / abilities and Decision Making The Head of Purchasing is the owner of the entire Purchasing process. This End-to-End procurement process (strategic, tactical & operational framework) is applicable for purchases of all Services and Indirect Materials. This process is to be followed wherever there is a purchasing activity. The Document Creator is responsible for accurate data entry and handling all transaction exceptions. Vendor Relationship Management is the responsibility of the Strategic Buyer.
Communication and Workload Shifts Communication of overall purchasing concept requires buy-in at a high level, executive sponsorship and active change management in the markets.
Purchasing S&IM
8. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working This End-to-End follows a defined and structured process. All employees assigned are trained in their respective procurement role. Entry of purchasing transaction information and goods receipt into the system requires discipline, and must be timely and accurate to minimize follow-up istration. Correction of transaction errors is performed by the Document Creator / . If Vendor issues arise, the Strategic Buyer is involved in the resolution. A 'Service Receipt' is used to accept services and approve payments. empowerment within a predefined framework.
Purchasing S&IM
9. High Level Process Flow 1/2 (Strategic)
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
2. Agree on Spend Category
3. Collect & Analyze History Purchase Data
4. Collect & Analyze Future Operational Requirements
8. Develop Procurement Strategy
7. Consolidate Spend & Market Analysis Data
6. Conduct Supply Market Research
5. Create Total Cost of Ownership Model
9. Communicate & Manage Procurement Policy
10. Process Request for Information
11. Process Request for Proposal
12. Process Request for Quotation
13. Negotiate with Selected Vendor
14. Maintain Schedule Agreements
15. Maintain Contracts
1. Rationalize Materials
Procure to Pay
Purchasing S&IM
9. High Level Process Flow 2/2 (Operational)
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
4. Create Requisition 1. Create Contract
Procure 5. Requisition released
to Pay
Vendor
Materials Handling / Finance & Control
2.Contract authorised through workflow
3.Contract transmitted to Vendor
6. Requisition assigned onto a PO
7.PO authorised through workflow
11. Invoice queries directed through invoice workflow
8. PO transmitted to Vendor
9. Post Goods Receipt
10. Invoice received and posted
Purchasing S&IM
Overview of the Solution Set
10. Key Roles
P2P Strategic Buyer
P2P Operational Buyer
Implementation Approach
P2P Purchase Requester
P2P Purchase Approver
MH Stock Goods Issue & Receipts
Detailed Route map & Best Practices
F&C s Payable Clerk
Purchasing S&IM 11. Process variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
MRO Items Procurement spare parts and services (stocked and nonstocked)
Temporary Labor Procurement of services (fixed price, estimated quantity)
Media Procurement of services (variable price, variable quantity)
Telephone Procurement of telephone services (variable price, variable quantity)
Capex Procurement of assets
Promotional Items Procurement of expensed items
Purchasing S&IM
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The Purchasing (Services & Indirect Materials) end-to-end process is, itself, part of four other End-to-End processes. These are shown as variants below:
Event Planning & Management - Consumer Marketing Event Planning & Management - Advertising Planning to Pay (HR) Asset Maintenance Management
Overview of the Solution Set
Subcontracting Detailed Route map & Best Practices
P R O C E S S
Introduction Definition Business Obj. & Benefits Triggers Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Process Variants KPIs Links to other End-to-End
Understand business O objectives U T Understand business benefits P Understand Key U decision T S
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Business Objectives & Benefits
4.
Triggers
5.
Assumptions
6.
Key Decisions
7.
Change Impacts
8.
High Level Process Flow
9.
Key Roles
10.
Process Variants
11.
KPIs
12.
Links to other End-to-End
Subcontracting 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A key strategy in sourcing products and services is subcontracting. Purchasing will need to work in a crossfunctional environment to determine whether to manufacture or outsource materials in order to maximise the business benefits for Nestlé.
Subcontracting 2. Definition 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The contracting out, to a third party, of all or part of the production or packing process for the processing of raw materials, semi-finished or finished products, when Nestlé is involved in the provision and/or management of one or more components supplied to the Subcontractor. Typical examples of subcontracting can be: Finished products. Semi-finished products, which will be further processed before being sold. Seasonal packed products i.e. Easter Eggs. Promotional packs. (free products, gifts, samples, etc.) Etc.
Subcontracting 2. Definition 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Subcontracting includes Co-manufacturing: i.e. the production of a base product by a vendor, which may also complete the process of packing the finished product. Co-packing: i.e. the packing of a semi-finished product by a vendor or re-packing of an existing product into a different packaging format.
It will not include: Purchase of temporary personnel services for the production of a product at a Nestlé site. This will be managed by creating a service purchase order. Purchase of a finished product for which all materials (raw, packaging, semi-finished) are procured by the Vendor itself. This is managed by placing a purchase order for a finished product as for any other material.
Subcontracting
3. Business Objectives & Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The objective is to provide a cost effective alternative source of supply to: solve internal capacity issues. reduce assets. avoid or defer major capital investments. increase operational cost efficiency due to inadequate internal capacity or unsatisfactory in-house cost structure. manufacture products requiring a technology not available at Nestlé or not owned by Nestlé. secure short term capacity from subcontractors for seasonal or promotional products, whilst respecting Nestlé quality, safety and traceability standards.
Subcontracting 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
At a strategic level, the process will be triggered by the sourcing strategy definition agreed on by the cross-functional team. The sourcing strategy relies on : Insourcing/outsourcing analysis. Cost-effective manufacturing alternative. Capacity evaluation. Technology and Quality requirements. Mitigation of investment risk for new products. Reduction of manufacturing assets.
Subcontracting 5. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Strategic decision to outsource the manufacture and/or packaging of our products to a third party subcontractor. Subcontractors are selected and approved, fullfilling Nestlé requirements i.e. Nestlé Quality System. Subcontractors comply with Nestlé Subcontracting Agreement (Contract and Conditions).
Subcontracting 6. Key Decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Contracts are created using the standard subcontracting system functionalities. Purchase Orders are created with reference to contracts above. A Subcontracting Agreement (SCA) will be created defining service levels and operational requirements.
Subcontracting
7. Change impacts
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Subcontracting is a complete End-to-End process which is managed by procurement. Cross-functional team approves the strategical decision of subcontracting, selects and monitors the Subcontractor. A Subcontracting Agreement is issued. The control of co-manufacturing/subcontracting contracts, purchase orders and stocks are ed by a Globe template functionality. Best practice is to create an accurate Bill of Material (BOM) for each subcontracted product. All master data records (e.g. subcontractor as a vendor, assignments, material numbers etc.) must be accurate and established before transactions with subcontractors are executed. The Subcontractor's performance is monitored regularly against the subcontracting agreement, using tools such as the Material Variance Report and the Vendor Evaluation.
Subcontracting
8. High Level Process Flow Strategic Planning
Procure to Pay
Materials Handling / Quality Management
Implementation Approach
1. Calculate Requirements for Subcontracted finished product
2. Run MRP on Components / Explode BOMs
3. Purchase Requisitions for Subcontracting product
4. Convert Purchase Requisition to Subcontract PO
5. Release Subcontract Purchase Order
6. Purchase Requisitions for components
7. Convert Purchase Requisition to PO / STO
8. Release Purchase Order / Stock Transport Order
10. Goods Issue of Components
Detailed Route map & Best Practices
QM Audit of Subcontractor & Approval by all parties
Supply Strategy
Demand and Supply Planning
Overview of the Solution Set
1111. Receipt of components in Subcontractor premises
12. Receipt of 12 Subcontracting Goods Consumption of Components
14. Invoice handling
9. Create Outbound delivery
13. Quality Inspection
Subcontracting
Overview of the Solution Set
9. Key Roles
Implementation Approach
Strategic Sourcing Cross Functional Teams
DSP •Demand Planner •MRP Planner
Technical & Production
P2P Strategic Buyer
P2P Operational Buyer
Quality Mgt. & Material Handling
QM QM Material Batch Maintenance
MH Stock Goods Issue & Receipts
Finance & Control
F&C s Payable Clerk
CS Order Processing Clerk
Detailed Route map & Best Practices
Many roles are involved in Cross Functional Teams in Subcontracting
To DC or Customer Sales
Subcontracting
10. Process variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The Subcontractor can be modelled as a Vendor or a Plant, depending on the level of tracability required at the subcontractor: Vendor - The subcontractor is set up as a vendor when: the subcontractor's finished product is to be received back to the main Nestlé plant. It is not required to manage the finished products independently. Plant - The subcontractor is set up as a plant when: full transparency of finshed good stocks at the subcontractor's site is required. planning is to take place at the subcontractor's plant. finished goods are to be sold directly from the subcontractor's plant to the customer. Note: In each case the standard SAP subcontracting solution is used.
Subcontracting 11. KPIs
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
On Time & In Full delivery (OTIF) Automatic scores generated within the system based on the purchase order quantity and delivery date.
Quality scores When a usage decision is taken for an inspection lot created for goods receipt, the quality score must also be determined for the lot. A quality score is a statistical value that describes the quality of an inspection lot.
Vendor confidence Based on the Vendor's track record, a confidence level is assigned to the Vendor. The three confidence levels used are: high, medium and low.
Service Manual scores can be added to reflect the Vendor's performance. These are also aggregated by plant within a BW report.
Subcontracting
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Planning to Produce Collaborative Replenishment Planning Order to Cash Concept to Consumption Business Planning Costing Integration Scenario
Detailed Route map & Best Practices
Overview of the Solution Set
Vendor Managed Inventory Detailed Route map & Best Practices
P
R
O
C
E
S
S
O U T P U T S
Introduction Definition Benefits Business Requirements & Constraints Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Marketplace Messages MP Message Rules Key Roles Process Variant Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Benefits
4.
Business Requirements & Constraints
5.
Business Rules
6.
Assumptions
7.
Key Decisions
8.
Change Impacts
9.
High Level Process Flow
10. Marketplace Messages 11.
MP Message Rules
12. Key Roles 13. Process Variant
Vendor Managed Inventory 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
In a stable vendor environment Nestlé may want to consider the introduction of Vendor Managed Inventory (VMI) with key vendors, moving from a traditional order methodology to VMI and streamline the process which will bring business benefits to both Nestlé and the Vendor.
Vendor
Nestlé
Vendor Managed Inventory 2. Definition 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
In a Vendor Managed Inventory scenario (VMI): The Vendor monitors the stock levels of Nestlé and initiates stock replenishment when necessary, without the need to receive any purchase orders from Nestlé. Purchase Orders will be generated directly in the Nestlé system by the Vendor through a portal or Marketplace.
This process enables the Vendor to: monitor requirements. monitor stock levels and planned consumption. generate Purchase Orders, Advanced Shipping Notification (Marketplace only) and Invoices in the Nestlé system. receive Goods Receipts Confirmation, Selfbill Invoices and Remittance Advices (Marketplace only).
Vendor Managed Inventory scenario includes only: Raw and Packaging materials.
Vendor Managed Inventory 2. Definition 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Opportunity for a greater number of vendors of different sizes and capabilities to enter a VMI agreement is provided through 2 access methods: Option 1: Marketplace (MP) A Marketplace allows an automatic exchange of information between Nestlé system and Vendor system. The MP solution is best suited to large capacity and technology advanced vendors.
Option 2: Supplier Workplace (SWP) Supplier Workplace (SWP) is a web-based tool accessed by vendors via the Internet where: vendors have only access to their own data. vendors need to be authorised by Nestlé to use SWP.
The SWP solution is best suited to medium capacity or less technology advanced vendors.
Vendor Managed Inventory 3. Benefits 1/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The VMI process is a common initiative with vendors for processes optimization aiming to gaining mutual benefits, such as: Total cost reduction of materials. The single sourcing allows cost reduction since the Vendor shares benefits resulting from optimized production capacity and operational processes.
Working capital reduction. Raw/Pack materials and Finished Goods inventories reduction.
Improved Payment compliance. Introduces collaborative planning concepts and thereby minimizes potential material shortages. Avoid stops in Manufacturing due to materials shortage. Increase product availability and customer service level.
Vendor Managed Inventory 3. Benefits 2/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Reduction of operating costs (/Headcount) Systems integration between Nestlé and vendors ensuring best information quality (material availability, delivery dates, etc.) i.e. Vendors ability to view information without having to Nestlé. Improved data accuracy implying lower failure cost. Increased use of automatic creation of purchase orders with reduction in cycle time, errors and the Total Cost of Ownership.
Reduction of istrational workload. Reduced number of manual invoices and time spent on resolving queries and issues. Lower number of rejections of deliveries due to all sort of discrepancies (i.e. quantities, commercial conditions, etc.)
Inbound Freight costs reduction. Volume and regularity of single sourcing allows transport optimization.
Minimum stock counts and warehousing complexity.
Vendor Managed Inventory 3. Benefits 3/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Benefits for Vendors (Marketplace): Vendor is allowed to monitor Nestlé requirements coming from Material Requirement Planning (MRP). Nestlé stock levels.
Vendor is allowed to generate Purchase Orders. Advance Shipping Notification documents Invoices. Vendor planning and capacity management is improved. Pro-active involvement in anticipating and responding. Partnership is strengthened.
Vendor Managed Inventory 3. Benefits 4/4
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Benefits for Vendors (Supplier Workplace): Access to real-time data is provided. Vendor is allowed to monitor Nestlé's requirements coming from Stock and Requirements List.
Vendor is allowed to generate Purchase Orders. Invoices.
Vendor planning and capacity management is improved. Pro-active involvement in anticipating and responding is allowed. Partnership is strengthened.
Vendor Managed Inventory 4. Business Requirements & Constraints 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Since starting VMI, Nestlé is moving to a long term strategic partnership with a single source implying following requirements: A strong Vendor selection process (high business maturity level). Wilingness to share strategic Nestlé information. Communication and openness amongst all stakeholders involved. Definition of clear responsibilities at organizational level. Speed on internal and external information transfer. Vendor more connected to our plants for a better understanding of our requirements. N. B. Attention is drawn to the fact that this long term partnership will give limited opportunities to participate in spot markets.
Vendor Managed Inventory 4. Business Requirements & Constraints 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Constraints for VMI implementation from Nestlé's side are poor sales forecasting and production planning. high seasonality businesses. Only one vendor can be responsible for a material/plant combination.
Scalability: Not all messages/transactions need to be implemented from the beginning of the VMI relationship.
Vendor Managed Inventory 5. Business rules 1/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
VMI Agreement: is a document created for VMI operating rules. This will be referenced in the SAP generated contract.
VMI Agreement contains Business Rules e.g. : Methods of invoicing. Target stock levels. Messages/transactions used within the VMI relationship.
Contract: is a system generated contract which covers price, contract validity, volume, specification number and & conditions.
Contract Business Rules: Vendors can only display their own contracts and purchase orders (SWP only).
Vendor Managed Inventory 5. Business rules 2/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Stock Data exchange: A of exceptions compared with the target stock levels must be communicated to the Strategic Buyer and the Vendor. The method of monitoring VMI compliance by Nestlé must be part of the process.
Purchase Orders : Every purchase order generated by a vendor is linked to an existing contract. In order to create a purchase order, the Vendor is only allowed to specify the quantity and delivery date for each purchase order item. All other information are defaulted from the contract.
Vendor Managed Inventory 5. Business rules 3/3
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Invoices:
Operational controls must be established to ensure that the invoice data input of the Vendor is correct and references both the PO and goods receipt confirmations.
Vendor-generated Purchase Orders must always be configured to ensure that no invoicing can be done for this Purchase Order without a Goods Receipt. Vendor-generated Invoices with price variances are blocked for payment.
Vendor Managed Inventory 6. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A VMI agreement is in place. A method of transmitting messages is developed between Nestlé and our vendors (MP only). Vendors are granted access to the Nestlé Business Extranet (SWP only). Providing two methods of accessing Nestlé's transaction will help to maximize the benefits from the VMI process, by offering a greater number of vendors the opportunity to enter a VMI agreement.
Vendor Managed Inventory 7. Key decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A decision to operate VMI must be part of the Spend Category Strategy. Clear working parameters must be included in the VMI agreement. Vendors will be authorized to perform selected Nestlé transactions via Supplier Workplace (SWP) or to send messages via Marketplace (MP). Purchase Orders created by vendors must be linked to a contract: price, payment , currency and conditions will automatically default from the contract.
Vendors will be responsible for the accuracy of the Purchase Order quantity based on Nestlé demand and stock targets.
Vendor performance level must be monitored.
Vendor Managed Inventory 8. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Decision Making VMI purchasing is a strategic decision based on strategic/operational needs of a Nestlé market to perform an enhanced relationship scope which goes beyond the basic service level expectations with a vendor.
Workload Shifts The Vendor monitors the stock levels and initiates stock replenishment when necessary. The Vendor may have authority to perform the following: Create purchase orders. Review purchase documents, i.e. POs and contracts (SWP only). Monitor and check stock levels and planning schedules. Create Advance Shipping Notifications (ASN) and final delivery documents (MP only). Generate invoices.
Vendor Managed Inventory 8. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Communication Structure of communication and to and from vendors is defined in the VMI agreement. Vendor's compliance to the VMI agreement is monitored closely and regular on performance data is given to vendors so that action plans can be developed.
New Ways of Working Vendors perform transactions via the SWP functionality. Access will be provided to the Vendor (SWP only) for all relevant documents (contracts and POs), material requirement data, stock level of materials, planning schedule and stock consumption. On time data availability and accuracy are critical. Operating controls will be managed by VMI agreement that specifies pricing details, inventory parameters, detailed material description & specification and other vital conditions. Vendor’s performance is captured, stored, monitored and shared to ensure consistency with agreed evaluation parameters. Continuous improvement of all VMI activities is an on-going process.
Vendor Managed Inventory 9. High Level Process Flow Demand and Supply Planning Procure to Pay
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. Calculate Time Phased Material Requirements 2. Maintain Contracts
16. Monitor VMI compliance
13 Exchange Self-billing Data (MP)
15. s Payable
12. Goods Receipt Confirmation (MP)
14. Generate Invoice
10. Post Goods Receipt
11. Quality Inspection
5. Exchange Planning Schedule
Vendor 4. Exchange Stock Level
7. Generate Purchase Order
8. Generate ASN Document (MP)
Materials Handling / Quality Management
3. Periodic Stock Analysis
9. Goods Arrive
Vendor Managed Inventory 10. Marketplace Messages
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Agreement Planning Schedule* * Synchronized messages
Vendor Vendor
Inventory Levels* Sales Order / Purchase Order / Purchase Order Change
Nestlé
Advance Shipping Notification
Goods Receipt Confirmation Self-Billing Invoice Self-Billing Invoice for Consignment
Remittance Advice
Marketplace
Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor Vendor
Vendor Managed Inventory 11. MP Message Rules
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Vendor Sales Order (SO) / Nestlé Purchase Orders (PO) Vendor Sales Order (SO) / Nestlé Purchase Orders (PO) chang e Planning Schedule and Inventory Advance Shipping Notification (ASN) Goods Receipt Advise (GRA) Self-Billing Invoice (SBI) Self-Billing Invoice for Consignment (SBIC) Remittance Advice (RA) (click on message rule for more details)
Vendor Managed Inventory 12. Key Roles DSP MRP Planner
P2P Strategic Buyer
Overview of the Solution Set
Implementation Approach
P2P Operational Buyer
P2P Vendor/VMI Vendor (SWP only)
MH Materials Handling Display
MH Stock Goods Issue & Receipts
QM QM Material Batch Maintenance
Detailed Route map & Best Practices
F&C s Payable Clerk
Vendor Managed Inventory 13. Process variant
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Consignment stock : The major difference with Consignment Stock is that the ownership of the stock es to Nestlé only at the point of consumption and not on receipt into the warehouse. Self-billing Invoices must be used with Consignment Stock.
Overview of the Solution Set
P-Card Management Detailed Route map & Best Practices
Introduction Definition Business Objectives Benefits Assumptions Key Decisions Change Impacts High Level Process Flow Working Process Key Roles Process Variants Links to other End-to-End Understand business objectives Understand business benefits Understand Key decisions
P R O C E S S
O U T P U T S
Implementation Approach
Detailed Route map & Best Practices
Table of Contents
1.
Introduction
2.
Definition
3.
Business Objectives
4.
Benefits
5.
Assumptions
6.
Key Decisions
7.
Change Impacts
8.
High Level Process Flow
9.
Working Process
10.
Key Roles
11.
Process Variants
12.
Links to other End-to-End
P-Card management 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
One of the key deliverables in Procure-to-Pay is to reduce transactional costs. A number of solutions have been identified and developed to reduce the costs of purchasing. Markets should evaluate these solutions to determine which tool is most appropriate for each spend category, P-Card being one of them. P-Card is ideal for high volume low value spend categories. As this is not template dependent, markets can benefit immediately by introducing this solution.
P-Card management 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
P-Card Management is an End-to-End process whereby Corporate Purchasing Cards (C or PCards) are issued to companies and used by employees as charge cards simplifying streamlines for purchases of high volume, low value goods and services for company use. The company carries the liability and is responsible for making one monthly payment for all purchases on a consolidated invoice statement to the Corporate Purchasing Card company e.g. American Express.
P-Card management 3. Business Objectives
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The objective is to provide an effective solution to significantly reduce the cost of the istration required to process the large quantity of low value orders and invoices Nestlé receives. The main deliverables are: A simplification of the purchasing and payment process for goods and services. The reductions of invoice process cost by reducing the number of paper invoices processed.
P-Card management 4. Benefits 1/2
Overview of the Solution Set
Implementation Approach
Introduce a simple, convenient and easy to use ordering process against agreed vendors, contracts and conditions which devolves the buying activity to the end s.
Increased speed and reduction of costs and istrative complexity in the procurement process.
Substantial reduction in workload in the s Payable and Purchasing Organizations.
Reduction in invoice processing costs through the direct integration with Nestlé's s Payable systems.
Improved overall visibility, across the organization, of S&IM spends.
Detailed Route map & Best Practices
P-Card management 4. Benefits 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Improved cash flow for vendors. Predictable vendor payment. Eventual contribution in stock reduction. Increased control and compliance of the use of preferred vendors i.e. reduction in maverick buying. No need for vendors to create customer invoices and statements. Transactions are posted in the month in which they occur. Allow many types of orders i.e. telephone, e-mail, e-catalogue, planned maintenance etc. Empowerment of employees to purchase goods and services necessary to continue operations.
P-Card management 5. Assumptions 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Selection of a Spend Category to be bought with P-Cards is done through the ''Define Procurement Strategy for a Spend Category '' process.
The current Globe solution is based upon ing Link (a software tool from American Express to reconcile P-Card statements) being used to generate reports.
On a monthly basis, all current data required to generate up-to-date reports are received from American Express and are ed in ing Link.
The Department/Cost Center Head will proactively inform the P-Card in case a specific P-Card's validity date is not to be renewed.
P-Card management 5. Assumptions 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Screening of P-Card vendors has been done through the ''Study Supply Market'' and "Screen & Select Vendors'' processes. The Corporate P-Card (C) Vendor List is posted on the Purchasing Intranet for easier accessibility.
Human resources will inform the P-Card about P-card Holders changing departments or leaving the company.
The P-Card Holder orders S&IM only from a vendor/s listed on the C Vendor List, from which he/she is authorized to buy.
P-Card management 6. Key decisions
Overview of the Solution Set
Implementation Approach
Following Key Decisions have to be applied: (please click on according key decision for details)
6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8.
P-Card Providers Use of P-Cards C Vendors P-Card Holders P-Card Limits Service & Goods Receipt Statement Reconciliation Tax Reporting and Documentation
Detailed Route map & Best Practices
P-Card management 7. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working
Employee awareness, understanding and acceptance of new purchasing roles is vital. High level of empowerment is given to employees in this process. Requirements for S&IM (high volume, low value) are purchased using P-Cards via phone, fax, e-mail, vendor's website, Enterprise Buyer Professional (EBP) application or in person. No Purchase Orders are required to be created (except in the case of EBP and Asset and Maintenance Management (AMM)). ''Buyerless" procurement where internal s, who are P-card Holders, across the company will execute the operational buying activities. The P-Card can only be used for the payment of S&IM ordered from vendors listed on the Corporate Purchasing Card (C) Vendor List.
P-Card management 7. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Checks and controls in the process, policies and guidelines for P-Card purchases should be in place to meet business needs while preventing abuse. P-Card usage and efficiency will be monitored and measured. Simplified purchasing and payment process with - one payment per billing cycle and charged to ing information provided by the Cardholder or that, which is embedded in the P-Card itself. - monthly statements provided to the Cardholder and to the Corporate Program .
P-Card management
Overview of the Solution Set
8. High Level Process Flow
No
3. Manage P-Card Revisions / Renewal
6. Order Goods & Services with P-Card
AMEX AMEX Transaction Transaction Approval Approval
No
4. Manage P-Card Transfers & Terminations
8. Handle Returns, Credits & Disputed Items
7. Receive Goods & Services
OK OK
9. Reconcile P-Card Statements Yes
5. Monitor P-Card Usage
14. Transfer Payment File
Yes
Yes
2. Manage P-Card Holder Enrolment
Finance & Control
Detailed Route map & Best Practices
End
1. Manage P-Card Vendor Enrolment
Procure To Pay
Implementation Approach
13. Execute Payment Run & Create Payment File
No
Reconciled Reconciled
11. Create Payment Proposal
10. 3rd Party/Intercompany Commitments
12. Approve Payment Proposal
15. Comply with PCard Sales & Use Tax
Yes
P-Card management 9. Working Process
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This process consists of following steps: An employee issued with a corporate purchasing card (P-Card) can use his/her P-Card for the payment of high volume, low value services and indirect materials from approved vendors listed on the C (Corporate Purchasing Card) Vendor List on the Purchasing Intranet. The approved Vendor processes the order and sends the details to the P-Card Provider (American Express). American Express (AMEX) accumulates the transactions from the vendors, pays those vendors, and sends Nestlé a consolidated P-Card transaction file each month. The P-Card Holder's manager must approve the transactions listed. Each month, each P-Card Holder will receive a copy of the transactions that have been charged to their card. The P-Card Holder will then be required to check each transaction and validate it both in of price charged and that the goods or services were received as shown on the transaction. The P-Card transaction file received from AMEX is ed into the SAP Finance system, which results in a payment to AMEX.
P-Card management 10. Key Roles P2P P-Card
Implementation Approach
Detailed Route map & Best Practices
P2P P-Card Approver
F&C Controller
HR HR
F&C Treasury Back Office
P2P P-Card Holder
F&C s Payable Supervisor
P2P P-Card Reconciliation
F&C s Payable Clerk
P2P Strategic Buyer
P2P Purchasing Manager
Overview of the Solution Set
P-Card management 11. Process Variants
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. Stock or Non-Stock Services & Indirect Materials online Card Type E (E-Card).
2.
Amex "Financial Event" A "Financial Event" can occur, if Amex places additional charges on Nestlé, within the contract, but not initiated by Nestlé P-Card.
3. Misused Card 4. Offline Procurement Card Type P (Product Card) Card Type B (Buyer Card)
5. Offline Procurement with Card Type G (General Requisitioner Card) Card Type I (Internal Order Card) Card Type D (Department Card)
P-Card management
12. Links to other End-to-End
Overview of the Solution Set
Implementation Approach
Purchasing of Services & Indirect Materials Asset Maintenance Management
Detailed Route map & Best Practices
Overview of the Solution Set
Vendor Life Cycle Detailed Route map & Best Practices
P
R
O
C E
S
S
O U T P U T S
Introduction Definition Benefits Triggers Business Requirements & Constraints Business Rules Assumptions Key Decisions Change Impacts High Level Process Flow Key Roles Understand Business Benefits Understand Business Rules Understand Key Decisions
Implementation Approach
Detailed Route map & Best Practices
Table of Contents 1.
Introduction
2.
Definition
3.
Benefits
4.
Triggers
5.
Business Requirements & Constraints
6.
Business Rules
7.
Assumptions
8.
Key Decisions
9.
Change Impacts
10. High Level Process Flow 11. Key Roles
Vendor Life Cycle 1. Introduction
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A Vendor is a business partner providing direct, indirect materials and services. The purpose of this process is to have formal and cross-team procedures with clearly defined and segregated roles and responsibilities to manage the Vendor master records across the company.
Vendor Life Cycle 2. Definition
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
This process is the sequence of activities necessary to effectively and efficiently introduce a business partner as a unique Vendor master record (one code in SAP) into the system. This End-to-End process is applicable whenever a vendor is
introduced changed blocked unblocked
Vendor Life Cycle 3. Benefits
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Manage Vendor master data as a company asset. A standardized process ensures that purchasing is done in a professional way throughout the company. When processing procurement documents, there is less likelyhood of errors because of high quality Master Data management and one point of entry. Easy access and transparency of available Vendor data information will accelerate the procurement process.
Vendor Life Cycle 4. Triggers
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A new Vendor can be introduced after a supply market analysis following a new material/service requirement, the development of a new product, etc. A Vendor can be changed based on communication received from the Vendor, as a result of a negotiation, etc. A Vendor can be blocked for quality reasons, financial reasons, business reasons, etc.
Vendor Life Cycle
5. Business Requirements & Constraints
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Scalability: This process covers the Vendor life cycle, either locally or globally, managed by Procurement. Sharing the information through other tools (e-mail, fax, intranet) will enhance the process, because it will reduce the workload of other organizations.
Usability: The speed at which requests may arise and approval decisions are taken in local or global organizations, is a key element of this process. Every role and stream involved in the process must be efficient and effective.
Vendor Life Cycle 6. Business rules
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
The company can be supplied and can receive invoices only if Vendors are identified by a Vendor master record. Procurement is responsible for the approval process of a Vendor as a business partner. Each Vendor is identified by one Vendor master record. A new Vendor can be set up only if it does not already exist in the Master Data Repository (MDR). A Vendor with the same name/address/search term must exist only once on the MDR. The creation request form can be raised in other departments by a local person, but the decision to accept a Vendor is only taken by Procurement through business approval. The 'Vendor master data initiator' is a Data Management role that only proposes the creation of a new Vendor master record. The 'Strategic Buyer' is a procurement role authorized to deal with a Vendor. For more details, please your local GC.
Vendor Life Cycle 7. Assumptions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
A procurement function triggers the introduction of a new Vendor within the company and this determines the creation of a new Vendor master record in the system. The request form for creation, maintenance and change can be raised by non-procurement roles. A daily report ensures critical field checking. A procurement business approval for change in the MDR is not required. Data quality, consistency and validity are a co-responsibility of the Initiator, Procurement, Local Data Organizations and Globe Centers. Rationalization of the Vendor database and a higher degree of uniformity across the markets is recommended.
Vendor Life Cycle 8. Key decisions
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
No Key decisions exist for the Vendor Life Cycle process. However, clearly defined rules must be applied for One Time Vendor (OTV), please see attached Key Decision Document.
Micros oft Word Document
Vendor Life Cycle
9. Change impacts 1/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
Responsibilities / abilities and Decision Making The Procurement Unit is responsible for the approval of a Vendor as a long term business partner. This Vendor Life Cycle process is applicable for three scenarios, i.e. create, change and block/unblock Vendor. Local data management checks correctness, completeness and compliance with the Data Standards and then uniqueness in the Supplementary Data Repository (SDR) and the Global Master Data Repository (MDR). GLOBE Centers (data management) are responsible for the quality of the 'global data' of the Vendor which are recorded in the Global Master Data Repository (MDR). Communication and Workload Shifts Electronic workflow is used in the process of creating and changing a Vendor record.
Vendor Life Cycle
9. Change impacts 2/2
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
New Ways of Working The Vendor Life Cycle follows a defined and structured process, all involved must adhere to workflow steps in their respective roles. Entry of Vendor information requires discipline and must be timely and accurate. Workflow s should exercise discipline and timeliness in updating all who have a role in the workflow. Master data records adhere to Nestlé data standards. Requests for new Vendors go through three approval stages, i.e. Procurement, Local data organization and the GLOBE Center. Requests to change Vendors on MDR go through two approval stages, i.e. Local data organization and GLOBE Center. Requests to change Vendors on SDR go through one approval stage, i.e. Local data organization. The creation of a new released Vendor will depend on the timings involved in data creation and approval from more than one department (i.e. Initiator, GC Data management, Local Data Organization, Purchasing and s Payable).
Vendor Life Cycle
10. High Level Process Flow Vendor Creation Any Department
1. Request Form for Vendor Creation
Procure to Pay
2. Business Authorization Create Vendor
Finance and Control Local Data Organization
Implementation Approach
3. Completeness Correctness and Uniqueness Check exists
Yes
Reject and Send Back to Requester
7. Complete Purchasing ing Views 9. Complete Bank Details Views
10. Approve Vendor and Inform Interested Parties
End
No 4. Create Vendor in Master Data Repository (MDR)
MDR
Detailed Route map & Best Practices
6. Start Local Workflow
8. Complete ing Views
already?
Globe Center
Overview of the Solution Set
5. Replicate MDR to Secondary Data Repository (SDR) and local SAP system
SDR
Vendor Life Cycle
10. High Level Process Flow Vendor Modification Any Department
1. Request Form for Vendor Change
Overview of the Solution Set
Implementation Approach
Detailed Route map & Best Practices
1. MANUAL Request Form for Vendor Change
Procure to Pay Finance and Control Local Data Organization Globe Center
2. Completeness Correctness and Uniqueness Check
2. Completeness Correctness and Uniqueness Check
3. Change Vendor in Secondary Data Repository (SDR)
INFORM MARKET S
4. Replicate Changes in Local SAP System
3. Change Vendor in Master Data Repository (MDR)
MDR Changes on Global View
5. Replicate MDR to Secondary Data Repository (SDR) and local SAP system
SDR Changes on Local View
Vendor Life Cycle
Overview of the Solution Set
11. Key Roles
Initiator
Implementation Approach
Detailed Route map & Best Practices
P2P Vendor Master Business Authorizer
P2P Master Data Entry Purchasing
LDO Vendor Master Local Data Approver
F&C Master Data Entry Banking
GC Vendor Master MDR Data Approver F&C Master Data Entry ing
Related Documents 3h463d
Sap P2p End To End Processes 594p30
August 2021 0
End To End Recruitment Process 4s5567
October 2019 61
End To End Implementation Of Erp j1t5c
November 2019 44
End To End Odata Service Sapui5 Application 436fb
November 2019 57
3 Strand End To End Long Splice 612151
November 2019 35
Fi-sd Integration End To End Process.docx 114f6f
December 2019 45More Documents from "Sarosh" 2m5822
Sap P2p End To End Processes 594p30
August 2021 0
Petroleum Exploration Methods 5t731x
November 2019 29
Case Studies Pms 1n2f2z
April 2022 0