Release Procedure for Purchase Order

In this blog, we share the set up the release (approval) procedures for Purchase Order

There are two Release procedure are available for Purchase Order
- Release Procedure without Classification
- Release Procedure with Classification

Release Procedure with Classification:

This release procedure for external purchasing documents RFQ, Purchase Order, Contract, Scheduling Agreement and Service Entry Sheet.

This release procedure can be configured for header.

For External Purchasing Documents – release is possible only at Header Level
Here we are defining steps of the Release Procedure for Purchase Order at Header Level.

Following steps to be configured for Release Strategy for Purchase Order:

Step 1 - Create Characteristics

In this step, we define the characteristics – specify the conditions to trigger the Release Strategy for Purchase Order. The inputs to be decide by the client, which condition to be defined
Characteristics: PO Doc. Type, Plant, Purch. Org and Value

Go to Transaction CT04
OR
Menu Path – SPRO -> SAP Ref. IMG. -> Materials Management -> Purchase Order -> Release Procedure for Purchase Oder -> Edit Characteristics

Characteristic 1- ZPO_VALUE
In Basic Data, Description – PO Value, Status – Released
Data Type – CURR (Currency) 13 Dec. - 2, Value Assignment – Multiple Values
In Addnl. Data, Table – CEKKO Field Name –GNETW
In Value Tab, maintain < 10,000.00 INR, 10,000.00 - 100,000.00 INR and < 10,000.00 INR

Characteristic 2 – ZPO_PLANT
In Basic Data, Description – PR Plant, Status – Released
Data Type – CHAR (Characters) 4, Value Assignment – Multiple Values
In Addnl. Data, Table – CEKKO Field Name – WERKS
In Value Tab, maintain 1000 and 1001

Characteristic 3 – ZPO_DOC TYPE
In Basic Data, Description – PR Doc. Type, Status – Released
Data Type – CHAR (Characters) 4, Value Assignment – Multiple Values
In Addnl. Data, Table – CEKKO Field Name – BSART
In Value Tab, maintain NB and FO

Characteristic 4 – ZPO_PURORG
In Basic Data, Description – Purch. Org., Status – Released
Data Type – CHAR (Characters) 4, Value Assignment – Multiple Values
In Addnl. Data, Table – CEKKO Field Name – EKORG
In Value Tab, maintain 1000 and 1001


Step 2 – Create Class

Here we define the Class for the Release Purchase Order and assign all the Characteristics defined above to the Class so that release strategy to be triggered when all the condition are met.
The default Class Type – “032” for Release Strategy

Go to Transaction CL02
OR
Menu Path – SPRO -> SAP Ref. IMG. -> Materials Management -> Purchase Order -> Release Procedure for Purchase Oder -> Edit Class

Provide the Class Name – ZPO_REL_STR
Class Type – 032 (Release Strategy)

In Basic Data, Description – PO Release Strategy
Status – Released
Valid From – 01.01.2018 Valid To – 31.12.2018
Same Classification – Do not check/ Warning Message
And then assign Characteristic in the Characteristic Tab – ZPO_VALUE, ZPO_PLANT, ZPO_DOC TYPE, ZPO_PURORG

Step 3 – Define Release Procedure for Purchase Orders

Menu Path – SPRO -> SAP Ref. IMG. -> Materials Management -> Purchase Order -> Release Procedure for Purchase Oder -> Define Release Procedure for Purchase Orders

i. Release Group
ii. Release Codes
iii. Release Indicator
iv. Release Strategies

Release Group:
Default Release Object 2 for Purchase Order
Define the Release Group and assign the created Class - ZPO_REL_STR
Rel . Grp. - P1
Rel.Obj. - 2
Class – ZPO_REL_STR
Description – PO Release Strategy

Release Codes:
In this step, we assign Release Codes to Release Group
Type for User Release Code
Creator R1
Checker         R2
Approver         R3

Rel. Grp Rel. Code Workflow Description
P1         R1                 Creator
P1        R2                 Checker
P1        R3                Approver

Release Indicators:
Release Indicator shows the status of a Purchase Order
Release ID Released Changeable %Value Chng Description
B 4/6 Blocked
R X 1 Released

1 Cannot be changed
2 Changeable, no new determination of strategy
3 Changeable, new release in case of new strategy
4 Changeable, new release in case of new strat. or val. change
5 Changeable, new release if new strategy/outputted
6 Changeable, new rel. if new strat. or value change/outputted
Changeable, new release in case of new strategy

Release Strategies:
It defines the approval process of Purchase Order. Here we define the order in which individuals or departments release the PR in sequence.

Rel. Grp. Rel. Str. Description
P1 A1 PR Release Strategy

Release Codes
R1 Creator
R2 Checker
R3 Approver

Now click on push button “Release Prerequisites” and tick the check box in ascending order and press Continue
Click on push button “Release Statuses” and check the release statuses and press Continue
Click on push button “Classification” and define the values in the characteristic or can define the values in the Transaction Code CL20N or CL24N
Click on push button “Release Simulation” and check whether release is getting affected for configured release codes or not.

Now create the Purchase Order with T. Code – ME21N with the above condition define in the Characteristic and click on Check button, this will activate the Release Strategy tab in the Header Level of the Purchase Order

For Individual Release – ME29N

For Collective Release – ME28

Release Procedure for Purchase Requisition

In this blog, we share the set up the release (approval) procedures for Purchase Requisition.

There are two Release procedure are available for Purchase Requisition
- Release Procedure without Classification
- Release Procedure with Classification

We have to elect to use either the procedure with or without Classification system.

Release Procedure without Classification:

This release procedure is only available for Purchase Requisition.
This Release Procedure is to check the data on the materials, quantities, and delivery dates for correctness and to ensure that the right account assignment and source of supply have been specified.
This procedure provides the approval of the individual line items of the Purchase Requisition.  Here, PR is release Item by Item only

Release Procedure with Classification:

This release procedure not only provides approval for Purchase Requisition but also for external purchasing documents RFQ, Purchase Order, Contract, Scheduling Agreement and Service Entry Sheet.
This release procedure can be configured for both header and item by item.

For PR – both header and item by item can be configured
For External Purchasing Documents – release is possible only at Header Level

For Header Level Release of Purchase Requisition:
SPRO Path -> SAP Ref. IMG -> Material Management -> Purchase Requisition -> Define Document Type and Tick the “Overall Release for PR” against the PR Document type for which you want to have the Header level release.

Following steps to be configured for Release Strategy for Purchase Requisition:

Step 1 - Create Characteristics

In this step, we define the characteristics – specify the conditions to trigger the Release Strategy for Purchase Requisition. The inputs to be decide by the client, which condition to be defined
Characteristics: PR Doc. Type, Plant and Value

Go to Transaction CT04 
OR
Menu Path: SPRO -> SAP Ref. IMG -> Material Management -> Purchase Requisition -> Release Procedure -> Procedure with Classification -> Edit Characteristics

Characteristic 1- ZPR_VALUE 
In Basic Data, Description – PR Value, Status – Released
Data Type – CURR (Currency) 13 Dec. - 2, Value Assignment – Multiple Values
In Addnl. Data, Table – CEBAN Field Name – GSWRT
In Value Tab, maintain < 10,000.00 INR, 10,000.00 - 100,000.00 INR and < 10,000.00 INR

Characteristic 2 – ZPR_PLANT
In Basic Data, Description – PR Plant, Status – Released
Data Type – CHAR (Characters) 4, Value Assignment – Multiple Values
In Addnl. Data, Table – CEBAN Field Name – WERKS
In Value Tab, maintain 1000 and 1001

Characteristic 3 – ZPR_DOC TYPE
In Basic Data, Description – PR Doc. Type, Status – Released
Data Type – CHAR (Characters) 4, Value Assignment – Multiple Values
In Addnl. Data, Table – CEBAN Field Name – BSART
In Value Tab, maintain NB and FO

Step 2 – Create Class

Here we define the Class for the Release Purchase Requisition and assign all the Characteristics defined above to the Class so that release strategy to be triggered when all the condition are met.
The default Class Type – “32” for Release Strategy

Go to Transaction CL02 
OR
Menu Path: SPRO -> SAP Ref. IMG -> Material Management -> Purchase Requisition -> Release Procedure -> Procedure with Classification -> Edit Class

Provide the Class Name – ZPR_REL_STR
Class Type – 032 (Release Strategy)
In Basic Data, Description – PR Release Strategy
Status – Released
Valid From – 01.01.2018 Valid To – 31.12.2018
Same Classification – Do not check/ Warning Message
And then assign Characteristic in the Characteristic Tab – ZPR_PLANT, ZPR_VALUE, ZPR_DOCTYPE

Step 3 – Set up Procedure with Classification

i. Release Group
ii. Release Codes
iii. Release Indicator
iv. Release Strategies

Release Group:

Default Release Object 1for Purchase Requisition and 2 for Purchase Order
Tick the “Overall Release” if you want to release the Purchase Requisition at Header Level or All items at one shot.
Define the Release Group and assign the created Class - ZPR_REL_STR
Rel . Grp. - P1
Rel.Obj. - 1
OvRelPReq. – “ “
Class – ZPR_REL_STR
Description – PR Release Strategy

Release Codes:

In this step, we assign Release Codes to Release Group
Type for User Release Code
Creator R1
Checker R2
Approver R3

Rel. Grp Rel. Code Workflow Description
P1 R1 Creator
P1 R2 Checker
P1 R3 Approver

Release Indicators:

Release Indicator shows the status of a Purchase Requisition
Default Indicator already defined in the Release Strategy for Purchase Requisition
1 Request for quotation
2 RFQ/purchase order
3 RFQ/PO no change of date
4 RFQ/PO no changes
A Fixed RFQ
B Fixed RFQ/purchase order
R REL PR
X Blocked

Release Strategies:

It defines the approval process of Purchase Requisition. Here we define the order in which individuals or departments release the PR in sequence.

Rel. Grp. Rel. Str. Description
P1 A1         PR Release Strategy

Release Codes
R1 Creator
R2 Checker
R3 Approver

Now click on push button “Release Prerequisites” and tick the check box in ascending order and press Continue

Click on push button “Release Statuses” and check the release statuses and press Continue

Click on push button “Classification” and define the values in the characteristic or can define the values in the Transaction Code CL20N or CL24N

Click on push button “Release Simulation” and check whether release is getting affected for configured release codes or not.


Now create the Purchase Requisition with T. Code – ME51N with the above condition define in the Characteristic and click on Check button, this will activate the Release Strategy tab in the Header Level of the Purchase Requisition

For Individual Release – ME54N

For Collective Release – ME55

Release Strategy in Purchasing

Release Strategy

This is the component in the Purchasing to set up the approval procedures for Purchasing Document like Purchase Requisition, Purchase Order and other purchasing documents. Under this procedure, if the PR and external purchasing document fulfills certain condition, then it has to be approved by concern person like Department Head or Purchasing Manager, before it can be processed further. This process of approving (clearing, or giving the “green light”) is called Release Strategy in the SAP system.

Which Documents can be Released (Approved)?

Release Procedure can be defined for the following documents:

-          Purchase Requisition

-          External Purchasing Documents Purchase Order, Contract, Scheduling Agreement, Request for Quotation and Service Entry Sheet

Release Procedure for Purchase Requisition:

Two different procedures are available for Purchase Requisitions:

-          With Classification

With this procedure, requisitions can be released both at Item level (i.e. item-by-item) and in total. The latter approach is also termed as “Overall Release”

-          Without Classification

With this procedure, requisitions can only be released at item level.

Only one of the procedure can be used in the SAP, both cannot be use.

Release Procedure for External Purchasing Documents

External Purchasing Documents (i.e. purchasing documents other than requisitions) are released at header level. Item-by-item release is not possible. These documents can only be released using release procedure with classification.

Release Conditions

The release conditions determine the release strategy in accordance with which a purchase requisition or an external purchasing documents to be released.

Procedure without Classification (Requisition items only)

The condition can be based on one of the following item characteristics or a combination of these:

-          Account Assignment Category

-          Material Group

-          Plant

-          Total Value

Procedure with Classification (Requisition and External Purchasing document)

The precondition for this is that the characteristic are first created and then assigned to the class. To enable the release strategy to be assigned to it, a requisition or an external purchasing document must have one of the possible values of each characteristic.

Steps of Release Procedure with Classification:

-          Define Characteristic with Transaction Code – CT04. Define the characteristic for example – Document Type, Purchase Org. etc. provide the Description, Data Type, single and multiple values assignment in Basic Data tab. In Addln. Data tab maintain the table and field. Table CEKKO for Purchase Order and CEBAN for Purchase Requisition

-          Define Class with Transaction Code - CL02 using Class Type 032 – Release Strategy and assign the Characteristic with Class

-          Define Release Procedure:

o   Release Group – It contains one or more release strategies.

Here we define the Release Group and assign the Class with it. Only one class can be used for whole release procedure

Release Object 01 for Purchase Requisitions and 02 for Purchase Order

o   Release Codes – The release code is a two character ID allowing a person to release the Purchase Requisition or External Purchasing Documents

Here we define Release code and assign with the Release Group

o   Release Indicator – When a requisition or external purchasing document has been processed via release code, a release indicator is assigned to it.

Here we define the Release Indicator, Released, and Changeability during or after release.

Note that the values 1 to 4 apply to internal purchasing documents (purchase requisitions) and the values 1 to 6 to external purchasing documents.

1	Cannot be changed
2	Changeable, no new determination of strategy
3	Changeable, new release in case of new strategy
4	Changeable, new release in case of new strat. or val. change
5	Changeable, new release if new strategy/outputted
6	Changeable, new rel. if new strat. or value change/outputted
	Changeable, new release in case of new strategy

o   Release Strategies – This release strategy defines the approval process of PR/PO. The strategy specifies the necessary release codes and the sequence in which releases have to be affected. You can define maximum of 8 release codes.

The assignment of the release strategy to Purchase Requisition or External Purchasing Documents is based on the release conditions. The authorization object is M_EINK_FRG

Here we define the Release Strategy and assign Release Group with it.

§  Release Prerequisites

§  Release Statuses

§  Classification

§  Release Simulation

ASAP Methodology

ASAP Methodology is an Accelerated System Application & Product in Data Processing. It is a standard methodology to implement the SAP from end to end in the most efficient & effective manner.

It is divided into 5 phases:
1. Project Preparation & Goal Settings
2. Business Blueprint
3. Realization
4. Final Preparation
5. Go-Live & Support

Project Preparation & Goal Setting: In this phase we plan for the project & lay down the foundation for successful implementation. In this, we define project goals and objectives, clarify the scope of implementation, schedule the project goals, and define the budget plan, we also establish the project organization, relevant committee & assign resources.

Business Blueprint: In this phase, we prepare blueprint document based on question & answer database. The purpose of this phase is to achieve a common understanding of how the company intends to run SAP to support their business.

The Scope Document consists of questionnaire of entire business process.
In AS-IS, we understand the business process from the core team & prepare the AS-IS document according to module wise.
In TO-BE, we map the business process in SAP based on AS-IS document and it is created differently for each module wise.
The GAP between AS-IS and TO-BE is called GAP analysis. Here we prepare the GAP document, where the business process is not mapped in the standard SAP system. Each process has to be taken sign off from the client.

Realization: In this phase, we configure the requirements contained in the Business Blueprints Baseline configuration (major scope) is followed by final configuration (remaining scope), which can consist of upto four cycles.

Final Preparation: In this phase you complete your preparations, including unit testing, integration testing, end user training, and cutover strategies. We also need to resolve all the open issues in this phase. At this phase we need to ensure that all the prerequisites for your system to Go-Live have been fulfilled.

Go-Live & Support: In this phase, we move from a pre-production environment to the live system. The most important elements includes product support, monitoring system, transaction and optimizing overall system performance and help desk & competency center.

SAP Different Projects

SAP has three types of Project (IRS)
1. Implementation Project
2. Rollout Project
3. Support Project

Implementation Project:  Implementation means implementing Business Processes. After purchasing the SAP, companies do study the Methodologies, various process and case studies.
In implementation, various functional modules has been implemented. Every module has its importance and is linked to other module in one or many ways.

1. Functional Modules: FICO, MM, SD, PP
2. Technical Modules: ABAP
3. Basis Security and Administration: BASIS
4. Others: BI/BW, CRM, MDM

Companies follows 5 phases of ASAP methodology to Implement a Project.
1. Project Preparation
2. Business Blueprint
3. Realization
4. Final Preparation
5. Go Live & Support

Rollout Project: means expanding the business after implementation. An organization which is started in one country, expanding their services to other countries, follows Rollout.
New Company Code rollout, Plant rollout.

Support Project: After implementation completed, Support is in action. In this we rectified the errors in support which is raised by user. We solve the bug, resolving the issues which is faced by user in their day to day activities.

SAP Upgrade Project: SAP upgrade means upgrading the SAP software with the latest version which has got more advantages. For example, ECC 6.0 EHP 6 to ECC 6.0 EHP 7.

SAP Overview

5 IBM employees founded SAP in 1972 in Weinhein, Germany, they call "SAP Systemanalyse und Programentwicklung" (System Analysis and Program Development) as a private partnership under the German CivilCode.

5 IBM Employees are:
- Deitmar Hopp
- Hasso Plattner
- Klaus Tschira
- Claus Wellenreuther
- Hans-Werner Hector

Their first client was the German branch of "Impherial Chemical Industries" in Ostringen.

SAP stands for "System, Application and Products in Data Processing."

As of 2016, SAP is the third world largest ERP softwarr.

In 1973, the first commercial product was launched. It was called SAP R/98 and offered a common system for multiple tasks, this permitted the use of centralized data storage, improving the maintenance of data. From the technical point of view, a database.

In 1976, the limited-liability company SAP GmbH Systeme, Andwedugn und Produkte in der DAtenverarbeitung (System, Applications and Products in data processing) is founded as a sales and support subsidiary.

In 1977, SAP moves it headquaters from Weinheim to nearby Walldrof, Germany

In 1979, SAP launched R/2, expanding the capabilities of the system to other areas, such as material management and production planning.

SAP released the new SAP R/3 in 1992. SAP developed and released several version of R/3 through 1995.

In 2004, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0.

In 2006, SAP ERP 6.0 released as latest version.
SAP ERP 6.0 has since then updated through SAP enhancement packs, the most recent SAP enhancement package 8 for SAP ERP 6.0 in 2016.

In 1988, SAP GmbH became SAP AG.
In 2014, SAP changed from an AG to a European Company SAP SE (Societas Europea or SE)

Since 2014, SAP focused on Cloud.

In 2014, IBM and SAP began a partnership to sell cloud-based services.

In 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform. Both HPE and IBM provide infrastructure services of SAP and SAP run its SAP HANA cloud solution on top.

SAP exceeded its revenue projections due to the expansion in its cloud business and the success of SAP HANA.

In 2015, the company launched SAP S/4 HANA,  the newest generation of the SAP Business Suite. It was written natively for the SAP HANA Platform. It offers cloud, on-premises and hybrid deployment options to customers, with its benefits including a smaller data footprint, higher throughput, faster analytics and faster access of data. It also allows existing SAP Business Suite customers to upgrade to this product from SAP Business Suite.

In 2016, SAP introduced SAP HANA, Express Edition which is meant to run an personal computers or an cloud computing platforms for students and other small-scale developers.

Bill McDermott, CEO of SAP, compared the release of SAP S/4 HANA to a "moonshot", describing it as the most important launch in the company history.

Special Procurement Type

In Standard Procurement, a company purchases a material from a vendor and the material is delivered to the company premises. Upon delivery, the ordered goods become the property of the company.

In case of Special Procurement, the goods do not necessarily flow from the vendor to the company. In third-party processing, for example, the ordered material is delivered directly by the vendor to a customer of the company. In stock transfer processing a material is procured internally and transported from a storage location to the place where it is needed.

The following Special Procurement types exist in the SAP system for Purchasing:

• Consignment
• Subcontracting
• Stock transfer using Stock Transport Order
• Third-Party Processing
• Returnable Transport Packaging
• Pipeline Handling

Consignment:

In Consignment Process, the vendor provides the material and stores them in your premises. The vendor remains the legal owner of the material until you withdraw from the consignment stores. Only then does the vendor require payment. The invoice is due at set periods of time, for example, monthly. In addition, you can also arrange with the vendor that you take over ownership of the remaining consignment material after a certain periods of time.

Subcontracting:

In Subcontracting Process, the company provides raw materials/ components to the subcontracting vendor. The vendor in turn process these materials and turn them into final products. These final products are then used by the company to carry out the rest of the operations.

Stock transfer using Stock Transport Order

In Stock Transfer processing, goods are procured and supplied within a company. One plant orders the goods internally from another plant (Receiving and Issuing Plant). The goods are procured using a special kind of purchase order: the stock transport order. With Stock Transport Order, you can request and monitor the transfer of goods. The delivery can be processed in Inventory Management or in the Shipping Component.

Third-Party processing:

In Third-Party processing, the company forwards the sales order to the external vendor, who sends the goods directly to the customer. The sales order is not processed by the Company but by the vendor. Third-party items can be entered in the Purchase requisitions, Purchase orders or Sales Order.

Third-party processing is linked with the Sales and Distribution component. If the sales order contains the third-party items, the system creates the Third Party Purchase Requisitions from the sales order.

Returnable Transport Packaging:

Returnable transport packaging (RTP) is a multi-trip packaging medium (for example, pallets or containers) in which goods can be transported more than once between vendors and customers.

Returnable transport packaging from a vendor, that is stored at a location in the company premises is managed as special stock and clearly assigned as belonging to the vendor. It is property of the vendor and is therefore not included in the Company valuated stock.

Pipeline Handling:

A Pipeline material is a material that flows directly into the production process from a pipeline (for example, oil), from a pipe (for example, tap tower), or from another similar source (for example, electricity)

A material from the pipeline is always available; i.e. it can be withdrawn from the pipeline at any time and in any quantity. 

Depending on the system configuration, a material can be withdrawn only from the pipeline or, in addition to the pipeline, normal stocks of the material can also be managed.