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Business Blueprint

For Quality Polymer


SAP Rollout

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and

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Final

This document marks the completion of the Business Blueprint phase of the SAP R/3
implementation for Quality Polymer. With this acceptance, the following document is confirmed and
becomes the basis for the next phase (Realization) to proceed.

Name

Title

Team for Quality Polymer Sdn. Bhd. :


Kuraish Hatim

Team Leader, Sales and Distribution

Veno Gober

Team Leader, Material Management

Chow Kwang Chai

Team Leader, Purchasing

Janet Ling

Co-Team Leader, Production Planning

Ng Hong Chee

Co-Team Leader, Production Planning

Cheam Heng Lai

Team Leader, Financial & Controlling

Yaw Seng Heng

Project Advisor

Choo Kim Soon

Project Manager
Team Leader, Technical

Ea Consulting Asia Pacific Sdn. Bhd. :


Wong Wei Ling

Team Leader, Sales and Distribution,


Financial & Controlling

Adeline Lee

Project Manger
Team Leader, Purchasing and Invoice
Verification

Ramesh
Sunkarapalli

Team Leader, Production Planning

Signature

Date

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Table of Contents
1
2

Executive Summary.......................................................................................................... 1
Quality Polymer Rollout Project Overview.....................................................................2
2.1 Project Organization...................................................................................................2
2.2 Project Scope............................................................................................................. 3
2.3 Project Timeline.........................................................................................................3
Organization Structure.....................................................................................................5
3.1 Financials................................................................................................................... 5
3.1.1 Financials Organization Structure...................................................................5
3.1.1.1 Credit Control Area..........................................................................5
3.1.1.2 Cost Center Hierarchy.....................................................................6
3.1.1.3 Profit Center Hierarchy....................................................................7
3.2 Logistics..................................................................................................................... 8
3.2.1 Sales Organization Structure..........................................................................8
3.2.1.1 Sales Area.......................................................................................8
3.2.1.2 Shipping Point..................................................................................9
3.2.2 Purchasing Organization Structure.................................................................10
3.2.3 Inventory Management Organization Structure..............................................11
3.2.3.1 Storage Locations for Quality Polymer.............................................11
Master Data....................................................................................................................... 13
4.1 Financials................................................................................................................... 13
4.1.1 Order Type.....................................................................................................13
4.2 Logistics..................................................................................................................... 13
4.2.1 Customers and Vendors.................................................................................13
4.2.2 Material Types................................................................................................13
4.2.3 Material Types, Material Groups and Number Ranges...................................14
4.2.4 Material Valuation and Account Determination...............................................14
4.2.5 Product Hierarchy...........................................................................................14
4.2.6 Batch Management........................................................................................14
4.2.7 Shelf Life Expiration Date (SLED) and Classification for Batch Specification. 15
4.2.8 Bill of Materials (BOM)...................................................................................15
4.2.8.1 Material BOM...................................................................................15
4.2.8.2 Alternate BOM.................................................................................16
4.2.9 Master Recipe................................................................................................16
4.2.10 Recipe Group.................................................................................................16
4.2.11 Resources (Work Centers).............................................................................16
4.2.11.1 Processing Unit:.............................................................................16
4.2.11.2 Labor:............................................................................................16
4.2.12 Production Versions........................................................................................17
To-Be Business Scenarios...............................................................................................18
5.1 Sales and Distribution................................................................................................18
3

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5.1.1 BS130 Sales from Stock (Tanker)...................................................................18


5.1.2 BS130 Sales from Stock (Tote Tank)..............................................................19
5.2 Purchasing and Invoice Verification............................................................................20
5.2.1 BS215 Procurement for Stock Raw Material...............................................20
5.2.2 BS233 Vendor Consignment of IBC tote........................................................21
5.3 Inventory Management..............................................................................................21
5.3.1 BS273 Creation of Material Master for Quality Polymer.................................22
5.3.2 BS297 Stock Adjustment during Tanker Exit...................................................22
5.3.3 BS298 Blocking of Tote tanks used for temporary storage.............................23
5.4 Production Planning...................................................................................................23
5.4.1 BS329 Planning by Production.......................................................................23
5.4.2 BS331 Production Planning - Make to Stock..................................................23
5.4.3 BS352 Production Planning Pilot Production for New Materials..................24
5.4.4 BS 353 Production Planning - Canning Balance............................................25
5.4.5 BS347 Production Planning - Reprocess Formula.........................................25
5.4.6 BS348 Production Planning Assorted Materials..........................................26
5.4.7 BS351 Production Planning Common Semi Finished Material....................26
5.5 Financial Accounting..................................................................................................27
5.6 Controlling.................................................................................................................. 28
6 Interfaces and Enhancements.........................................................................................29
6.1.1 Interfaces.......................................................................................................29
6.1.2 User Exits.......................................................................................................29
7 Conversion Approach......................................................................................................29
7.1 Conversion strategy...................................................................................................29
7.2 Conversion Data Preparation.....................................................................................29
7.3 Actual Conversion......................................................................................................29
8 Authorizations.................................................................................................................. 30
9 System Landscape........................................................................................................... 30
9.1 System Environment..................................................................................................30
9.2 Transport Strategies...................................................................................................31
10 Training.............................................................................................................................. 31
11 Testing Approach.............................................................................................................. 32
11.1 Test data.................................................................................................................... 32
11.2 Testers (Users) for UAT..............................................................................................32
Appendices.............................................................................................................................. 33
A. Functional Requirements.................................................................................................33
B. To-Be Business Scenario Master List.............................................................................33
C. List of Reports..................................................................................................................33
D. List of Forms..................................................................................................................... 33
E. List of Conversion Objects..............................................................................................33

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Table of Exhibits
Figure 2.1.1: Rollout Project Organization........................................................................................2
Figure 2.2.1: Scope of Quality Polymer Rollout................................................................................3
Figure 2.3.1: ASAP Implementation Methodology............................................................................3
Figure 2.3.2: Timeline for Quality Polymer Rollout............................................................................4
Figure 3.1.1: Mapping of Credit Control Area...................................................................................5
Figure 3.1.2: Mapping of Cost Center Hierarchy..............................................................................6
Figure 3.1.3: Mapping of Profit Center Hierarchy.............................................................................7
Figure 3.2.1: Mapping of Sales Area................................................................................................8
Figure 3.2.2: Mapping of Shipping Point...........................................................................................9
Figure 3.2.3: Mapping of Purchasing Organization Structure.........................................................10
Figure 3.2.4: Mapping of Inventory Management Organization Structure.......................................11
Figure 3.2.5: Storage Locations for Quality Polymer......................................................................12
Figure 4.1.1: Order Types............................................................................................................... 13
Figure 4.2.1: Material Types........................................................................................................... 13
Figure 4.2.2: Material Types, Material Groups and Number Ranges..............................................14
Figure 4.2.3: Additional Product Hierarchy for Quality Polymer......................................................14
Figure 4.2.4: Batch Number Assignment........................................................................................14
Figure 4.2.5: Sample of a BOM......................................................................................................15
Figure 9.1.1: NPM System Landscape & Additional Server for Quality Polymer Rollout.................31

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1 Executive Summary
This report contains the conceptual design of the SAP R/3 system for Quality Polymer. The
Business Blueprint document maps and translates the To-be business requirements of Quality
Polymer, which were gathered during the business workshops, into design decisions in the SAP
R/3 system. As this is a rollout implementation from Nippon Paint SAP R/3 system, Quality
Polymer will adopt most of the relevant business scenarios and business processes from Nippon
Paint Malaysia (hereafter also referred to as NPM).
The main purpose of this report is to describe and freeze the scope of implementation, in order to
ensure a timely, effective and successful implementation. The report will highlight all the adopted
business scenarios from Nippon Paint Malaysia and focus on the additional business scenarios
and business processes.
Quality Polymer will fall under the NPM umbrella of controlling area, thus, fully using the company
code that has already been setup during Project Cheetah Implementation. Company code for
Desa Baiduri, a subsidiary of Quality Polymer, will also be introduced for this rollout
implementation. Costs incurred by departments and sub-departments can be viewed in a cost
center hierarchy. These can be matched against the revenue generated by Profit centers, which
will also be structured to the companies.
As with all SAP R/3 company codes in NPM, Quality Polymer will share the same credit control
area, continuing the trend to consolidate credit limit per customer buying from more than one
company. Quality Polymer will have one Sales Organization and Distribution Channel to handle
its sales processing. A single Purchasing Organization is also identified to handle the
procurement for the whole company.
For the logistics structure under the company code, one plant with multiple storage locations is
used to monitor the inventory of the company. This plant will also be the production plant for all of
Quality Polymer productions.
Four different storage locations are used to house the four raw materials tanks and another
twelve storage locations are used to map to the twelve storage tanks for the finished goods.
There will be other storage locations identified for other logical mapping.
Finally, it is important to note that the conceptual design detailed in this document is to streamline
expectations and clarify the scope, which will act as a base for the remaining phases.

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2 Quality Polymer Rollout Project Overview


2.1

Project Organization

The Rollout Project is under the responsibility of the Steering Committee, which is headed by the
MD of Quality Polymer, Lee Buck Siang. Daily project activities were undertaken by the project
team members from the combination of core Project Cheetah Team Leaders from each module,
identified key users from Quality Polymer and ea Consultants under the supervision of the
internal project managers, Choo Kim Soon and the external project manager Adeline Lee. In
addition, ea Consulting Manager, Alfred Chong provides quality review and overall project
direction with Mr. Yaw Seng Heng as the Project Advisor on the best business processes to adopt
from NPM.

Project Team Organisation


Structure

Steering
Steering Committee
Committee

Project
Project Sponsor
Sponsor
Mr
Mr Lee
Lee Buck
Buck Siang
Siang
Quality
Quality Review
Review
Alfred
Alfred Chong
Chong

Project
Project Advisor
Advisor
Yaw
Yaw Seng
Seng Heng
Heng
Project
Project Manager
Manager
Adeline
Adeline Lee
Lee (ea)
(ea)

Mr
Mr Lee
Lee Buck
Buck Siang
Siang (MD)
(MD)
Mr
Mr Yaw
Yaw Seng
Seng Heng
Heng (GM)
(GM)
Mr
Mr Leong
Leong Wai
Wai Khoon
Khoon
Ms
Ms Wong
Wong Siew
Siew Ying
Ying
Adeline
Adeline Lee
Lee (ea)
(ea)
Alfred
Alfred Chong
Chong (ea)
(ea)
Choo
Choo Kim
Kim Soon
Soon

CoCo- Project
Project Manager
Manager
Choo
Choo Kim
Kim Soon
Soon

BASIS/ABAP
BASIS/ABAP
Choo Kim Soon
(TL)
Lee Kian Ann
Damodaran

FICO
FICO

MM/PUR
MM/PUR

Cheam Heng Lai


(TL)
- Jesmine (PU)
Charlotte Chong
(QP)
Wong Wei Ling
(ea)

SD
SD

Veno Gober (TL-MM) Kuraish Hatim (TL)


- Mdm Song (PU)
- Zawiah (PU)
- Ms Lin (PU)
Chow KC (TL-PUR)
Azreen (QP)
Norhafizah (QP)
Wong Wei Ling (ea)
Adeline Lee (ea)

PP
PP
Ng Hong Chee (TLProcess)
- Zawiah (PU)
Janet Ling (TL-Master
Data)
Lum (QP)
Ramesh SV(ea)

Figure 2.1.1: Rollout Project Organization

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Project Scope

As this is a rollout system from NPM, with the exception of Warehouse Management, all modules
will be rolled out to Quality Polymer. Desa Baiduri, being a subsidiary of Quality Polymer will only
be implemented with the Financial and Management Accounting Module. The table below
denotes the modules that will be implemented for the two companies.
Existing NPM SAP Module

Quality
Polymer
Financial Accounting (FI)
Yes
Management Accounting (CO)
Yes
Sales and Distribution (SD)
Yes
Purchasing (MM-PUR)
Yes
Invoice Verification (MM-IV)
Yes
Inventory Management (MM-IM)
Yes
Warehouse Management (MM-WM)
Production Planning (PP)
Yes
Figure 2.2.2: Scope of Quality Polymer Rollout

2.3

Desa
Baiduri
Yes
Yes
-

Project Timeline

The implementation approach for the rollout project is based on the Accelerated SAP (ASAP)
implementation methodology. ASAP is broken into five stages as shown in the diagram below:

ASAP Methodologies

A results-based roadmap to support the core


components of an SAP implementation

Figure 2.3.3: ASAP Implementation Methodology

Stage 1 - Project Preparation


The purpose of this stage is to perform initial project planning and preparation activities for the
follow-up phases. Major activities include preparing the project infrastructure, identifying the
project team members and developing a detailed project plan.
Stage 2 Business Blueprint

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The purpose of this stage is to document the Business Blueprint, which maps the business
requirements into SAP and defines the approaches to be used in activities like conversion,
training and testing under the Realization phase. It is the result of requirement gathering
workshops and prototyping efforts. The Business Blueprint is an important component of ASAP
as it specifies the conceptual design on which the rest of the implementation is based.
Stage 3 Realization
The purpose of this stage is to configure all of the business requirements based on the Business
Blueprint conceptual design. The objectives are to configure the system, develop and test
interfaces, conversion programs, enhancements and reports as well as conduct overall
integration test. System authorizations are also created, user acceptance tests are conducted,
and preparation for end user training is established.
Stage 4 - Final Preparation
The purpose of this stage is to prepare for going live. Activities in this phase include end-user
training, system management, and actual conversion of live data, cut-over activities and
formation of an internal help desk to support the organization after going live.
Stage 5 Go-Live and Support
The purpose of this stage is move from a pre-production environment to a live production
operation environment. A support team for power users must be formed for the initial critical days
of going live as well as to support end users for a long-term period.
The Rollout Project commenced on 8th October 2003 and is a three-month project
implementation. The integration of the logistics modules and the financial modules demand an
aggressive timeline as depicted in the diagram below.

Project Timeline
Project Management

ASAP Phase

Oct

Nov

Dec

Jan

Weeks

Project Preparation

Business Blueprint

Realization

Final Preparation
Go Live & Support
Note: 15 weeks project with
certain weeks overlapping

3
Go
Live

Total

2
15

5th January 2003


Figure 2.3.4: Timeline for Quality Polymer Rollout

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3 Organization Structure
3.1

Financials

3.1.1 Financials Organization Structure


3.1.1.1 Credit Control Area
A credit control area is an organizational unit for specifying and controlling customer credit limits.
The credit limit assigned to a customer is valid across all company codes in the credit control
area. Quality Polymer belongs to the same credit control area as NPM. Therefore Quality
Polymer will adopt the criteria for credit check from NPM. The credit limit will be checked during
the creation of sales order and delivery order. The system will block any sales order or delivery
order that fails the credit check. Approval by the Credit Representative is required before the
sales document can be further processed.

Financial Organization Structure

300
Production

Client

Credit Control Area

1000
Nippon Paint

Company Code

7000
Quality Polymer

Sales Organisation

7000
Quality Polymer

7100
Desa Baiduri

Figure 3.1.5: Mapping of Credit Control Area

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3.1.1.2 Cost Center Hierarchy


The standard hierarchy and coding structure of the cost centers for Quality Polymer and Desa
Baiduri are as follows:

Cost Center Hierarchy


NPGROUP
Nippon Paint Group

70101000
Production

70103000
Technical

70102000
QC

70000000
Quality Polymer

71000000
Desa Baiduri

70100000
Pasir Gudang

71100000
Pasir Gudang

70106000
FG W/hse

70104000
Sales &
Marketing

70109000
Safety &
Health

70108000
Management

70111000
Purchasing

70110000
Finance &
Audit

70113000
IT

70199000
Dummy

70112000
HR & Gen
Admin

70101300
Emulsion

70112100
Human Resources

70101500
Raw Materials

70112200
General Admin

71101000
Gen Admin
71102000
Sales

70101600
Maint & Water
Treatment

1000
Controlling Area

70101700
Factory Office

Figure 3.1.6: Mapping of Cost Center Hierarchy

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3.1.1.3 Profit Center Hierarchy


The standard hierarchy and coding structure of the profit centers for Quality Polymer and Desa
Baiduri are as follows:

Profit Center Hierarchy

NPGROUP
Nippon Paint Group

70000000
Quality Polymer

71000000
Desa Baiduri

70100000
Pasir Gudang

71100000
Pasir Gudang

1000 Controlling Area

Figure 3.1.7: Mapping of Profit Center Hierarchy

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Logistics

3.2.1 Sales Organization Structure


3.2.1.1 Sales Area
The sales area and assignment of the sales organization to the company code for Quality
Polymer is as shown below.
Sales Organization Structure Sales Area

Company Code

7000
Quality Polymer

Sales Organisation

7000
Quality Polymer

Distribution Channel

Division

7A
Pasir Gudang

01
General
Sales Area

Sales Office

7001
Pasir Gudang

Figure 3.2.8: Mapping of Sales Area

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3.2.1.2 Shipping Point


The shipping point is required for delivery processing. The figure below shows the assignment of
the shipping point to the plant.

Sales Organization Structure Plant & Shipping Point

Company Code

7000
Quality Polymer

Sales Organization

7000
Quality Polymer

Distribution Channel

7A
Pasir Gudang

Plant

7001
Pasir Gudang

Shipping Point

7001
Pasir Gudang

Figure 3.2.9: Mapping of Shipping Point

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3.2.2 Purchasing Organization Structure


The Purchasing Organization Structure for Quality Polymer is as follows:

Purchasing Organization Structure

Company Code

7000
Quality Polymer

Purchasing
Organisation

7000
Quality Polymer

Purchasing Group

Plant

100
Raw material
purchases

300
Non-stock and
services items
purchases

400
Trading items

301
Other item
purchases

7001
Quality Polymer

Figure 3.2.10: Mapping of Purchasing Organization Structure

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3.2.3 Inventory Management Organization Structure


The Inventory Management Organization Structure for Quality Polymer is as follows:

Inventory Management Organization Structure

Company code

7000
Quality Polymer

Plant

7001
Quality Polymer

3000
Finished
goods

3701
FG
tank 1

Storage
Locations

3702
FG
tank 2

1000
Raw
material

WH

3703
FG
tank 3

3704
FG
tank 4

1101

1102

Monomer
tank 1

Monomer
tank 2

3705
FG
tank 5

1103
monomer
tank 3

3706
FG
tank 6

1104
Monomer
tank 4

3707
FG
tank 7

2200
EM Plant

3708
FG
tank 8

2400
Maintenance
Misc

3709
FG
tank 9

4000
Waste

3710

3711

3712

FG
tank 10

FG
tank 11

FG
tank 12

5000

5100

Technical
Dept

Marketing
Misc

Figure 3.2.11: Mapping of Inventory Management Organization Structure

3.2.3.1 Storage Locations for Quality Polymer


The details of Storage Locations for Quality Polymer are as follows:
Storage Location
1000

Location Description
Raw Material Warehouse

1101
1102
1103
1104
2200

Monomer tank 1
Monomer tank 2
Monomer tank 3
Monomer tank 4
EM Plant

2400

Maintenance Misc

Type of Storage
It stores raw materials such as additives, catalyst and
Surfactant
Stores monomer
Stores monomer
Stores monomer
Stores monomer
Represents Quality Polymer Production area that stores raw
materials before it goes into production.
Stores filter bags, parts, boiler materials, water treatment
materials and indirect materials

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Storage Location
3000

Location Description
Finished Goods

Type of Storage
Serves as a temporary storage location and stores finished
goods.

3701
3702
3703
3704
3705
3706
3707
3708
3709
3710
3711
3712
4000
5000
5100

FG tank 1
Represents Storage Tank 1
FG tank 2
Represents Storage Tank 2
FG tank 3
Represents Storage Tank 3
FG tank 4
Represents Storage Tank 4
FG tank 5
Represents Storage Tank 5
FG tank 6
Represents Storage Tank 6
FG tank 7
Represents Storage Tank 7
FG tank 8
Represents Storage Tank 8
FG tank 9
Represents Storage Tank 9
FG tank 10
Represents Storage Tank 10
FG tank 11
Represents Storage Tank 11
GF tank 12
Represents Storage Tank 12
Waste
Stores disposed product ie. Sludge etc.
Technical Dept
Stores materials from QC Lab
Marketing Misc
Stores T-shirts, uniforms, calendars etc.
Figure 3.2.12: Storage Locations for Quality Polymer

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4 Master Data
4.1

Financials

Quality Polymer will adopt the chart of accounts and account groups from NPM.
4.1.1 Order Type
Internal orders are used to collect, monitor and settle costs. The order types to be used by Quality
Polymer are as follows:
Order Type
7EMP
7VEC
7FOK
7MKT
7RPC
7QP1
7DIS

4.2

Name
Staff Expenses
Motor Vehicle Expenses
Forklift Maintenance
Marketing & Promotion/Project Expenses
Repacking Order
Quality Polymer Ad-Hoc Order
Quality Polymer Discount
Figure 4.1.13: Order Types

Range
From
710000
720000
730000
740000
760000
770000
External

To
719999
729999
739999
749999
769999
779999
External

Logistics

4.2.1 Customers and Vendors


Quality Polymer will adopt both the customer and vendor account groups and partner functions
from NPM.
4.2.2 Material Types
For Quality Polymer Rollout, the following material types will be adopted from NPM:
Material Type
ROH

Material Description
Raw Material

HALB

Semi-Finished Product

FERT
HAWA
ZIND

Finished Goods
Trading Goods
Indirect Material

LEIH
VERP
PIPE

Returnable Packaging
Packaging Material
Pipeline Material

ZDM

Development Materials

ZWTM

Waste Materials

Types of Material
Raw material used to produce finished goods. The loose finished
goods will also be identified by this material type, due to the NPM
design that has been up.
Semi-finished goods produced in-house or through subcontractor,
and it is used to produce finished goods.
Final product from production and pack in various packaging sizes.
Materials purchased externally and sell to customer.
Materials that are not part of trade, and mainly classified as
consumable material for used in production such as Boiler
materials, Water treatment chemicals, consumables and cooling
towers.
Packaging materials such as tote tanks.
Packaging materials such as tote tanks, drums and pails.
Materials such as water that flow into the production process
directly.
Material record is created for costing simulation purpose. This
material type will not allow quantity or value updates.
Materials used to track waste generated. This material is managed
at quantity basis only.
Figure 4.2.14: Material Types

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4.2.3 Material Types, Material Groups and Number Ranges


Materials with the same attributes can be assigned to a material group for analysis and search
purposes. Each material is assigned a material number to represent a material master record
created in SAP system.
For Quality Polymer Rollout, the following material groups and number ranges have been
identified:
Material Type
Raw Material (ROH)
Packaging Material
(VERP)
Indirect Materials
(ZIND)

Material Group
Material Description
Number Range
ROH008
Monomer
M001 M999
VERP005
Tote
PT0000000 PT9999999
VERP006
IBC
PI0000000 PI9999999
ZIND009
Boiler Materials
IM521 IM530
ZIND010
Consumables
IM531 IM540
ZIND011
Cooling Towers
IM541 IM550
Figure 4.2.15: Material Types, Material Groups and Number Ranges

4.2.4 Material Valuation and Account Determination


Quality Polymer will adopt Material Valuation and Account Determination from NPM.
4.2.5 Product Hierarchy
Product Hierarchy is used to group materials by combining different features. It is mainly used for
analysis and pricing. Below is the new product hierarchy relevant for Quality Polymer Rollout:
Material
Type
ROH
ROH
ROH
ROH

Product Hierarchy

First Level

Second Level

Third Level

200021010200000005

20002
2000210102
Vinyl Acetate Copolymer
Latex
Copolymer
200021010400000006
20002
2000210104
Homo Polymer
Latex
Others Latex
200041030000000012
20004
2000410300
Catalyst
Additive
Water Based Additive
2000810700
20008
Monomer
Monomer
Figure 4.2.16: Additional Product Hierarchy for Quality Polymer

4.2.6 Batch Management


Similar to NPM, batch management will be used to differentiate material with heterogeneous
yield, result qualities or varying constituents. In order to monitor a batch, a number is assigned to
uniquely identify it. The following number ranges will be assigned for Quality Polymer:
Types of Material
Batch Number Assignment
Assorted Material
yymmddQA01 QA99
Semi-Finished Product (HALB) & Finished
yymmddQ100 Q999
Goods (FERT)
Trading Goods (HAWA)
Free format(10 Digits)
Raw Material (ROH)
000Q100000 000Q999999 (10 Digits)
Internal Number(10 digits)
Packaging Material (VERP)
Figure 4.2.17: Batch Number Assignment

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All batches will have internally assigned numbering. Batch records will be created upon goods
receipt as per purchase order and upon release of process orders for materials produced inhouse
4.2.7 Shelf Life Expiration Date (SLED) and Classification for Batch Specification
SLED and Classification is also adopted in Quality Polymer Rollout. Together with the production
date, SLED will provide Quality Polymer with the material expiration date while the classification
will store all the Quality Inspection Specification for any particular batch.
4.2.8

Bill of Materials (BOM)

The Bill of material (BOM) can de defined as a formally structured list of components that make
up a finished product or semi finished product. For Quality Polymer, the following types of BOM
will be created:
4.2.8.1 Material BOM
The components of a material BOM are defined as components that are used during the
production process. A BOM specifies the proportion or the actual quantities of the lower level
components to be used in the final product. The highest level of the BOM is defined as level
zero. Generally for Quality Polymer, up to three (Level 0-2) levels of BOM will be identified
(Currently only one material has 4 Levels of BOM).
Example of a BOM to manufacture product L012BC1 (current material naming convention):
L012BC1

Level 0

L012

M001

BC1

SR7000

M002

Level 1

Level 2

M003

Level 3

Figure 4.2.18: Sample of a BOM

Level 0 will be for the finished product with a specific packing size. Level 1 will consist of the
loose semi-finished material and packaging material. Level 2 and below will consist of semifinished and raw materials to manufacture the semi-finished product of the next higher level.

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4.2.8.2 Alternate BOM


A finished or semi-finished material can be produced from alternative combinations of materials
depending on the quantity to be produced (lot size). The product is represented by a number of
alternative BOMs. Differences between alternative BOMs are very minimal.
4.2.9 Master Recipe
A master recipe is used for the manufacturing of a semi-finished product or finished product. A
master recipe consists of a header and several operations. Each operation is carried out at a
primary resource. An operation is subdivided into phases. Each phase has one or more process
instructions. For example, the operation Premixing can have the following phases:

Prepare raw materials

Mix raw material homogenously.

4.2.10 Recipe Group


A Recipe Group is a 6-character field, which can be assigned internally or externally. The Recipe
Group can combine several masters with following criteria:

Different production processes for the same material. For example, the production
process can be different if a similar material is produced for two different lot sizes.

Similar production processes for different materials. Like two different materials
may have the same production process

For Quality Polymer, the numbering for the Recipe Group will be internally assigned as follows :
Type of Group
Recipe Group

Internal Number Range


50000 - 599999
Figure4.2.5.2: Mapping of Recipe Group

4.2.11 Resources (Work Centers)


Resources are production facilities and persons involved in a production process that have
different capacities. They are subdivided into categories to specify their suitability for certain
purposes or their use in certain processes. Resources can be categorized as either processing
units or labor.
4.2.11.1 Processing Unit:
Processing units are resources used in production. For Quality Polymer, Monomer Mixing
Tank(MMT) and Reactor are examples of processing units. Processing units are linked to cost
centers and activity types. For Quality Polymer, one cost center will be defined for each and
every work center. The rate will be pre-defined for labor and machine activities. Production cost
will then be calculated by multiplying actual processing time with the rate. The resulting data is
used for process order settlement.
4.2.11.2 Labor:
Labor resources are people in the production process who have different levels of capacity
assigned to them. Labor resources contain data that can be used by production planning
(capacities) and by personnel administration (employee). Process worker and drumming hands
are examples of labor resource used in Quality Polymers environment.
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4.2.12 Production Versions


Production versions are used in situations where one material can be produced by several
production processes. A production version determines which alternative BOM is used together
with a chosen master recipe to produce a semi-finished product or a finished product.
For one semi-finished product or finished product, there can be several production versions with
various validity periods and lot-size ranges. Production versions are used together with
alternative BOMs. The different ways of production are defined as production versions.
The Numbering of Production Versions is Q1,Q2..,Q9.

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5 To-Be Business Scenarios


5.1

Sales and Distribution

In addition to new business scenarios that are specific only to Quality Polymer, Quality Polymer
will also adopt the following Sales and Distribution business scenarios from NPM:

BS103 Maintenance of Customer Master

BS104 Maintenance of Customer Partner Function

BS105 Maintenance of Customer Info Record

BS106 Maintenance of Pricing Structure

BS122 Sales from Stock

BS125 Trading Sales

BS126 Cash Sales

BS128 Credit Note Processing

BS129 Debit Note Processing

BS141 Goods Return from Customer

BS142 Replacement of Goods / Exchange of Goods

BS143 Development Material Sample Processing

BS147 Handling of Returnable Packaging

BS149 Charge Back to Transporter

5.1.1 BS130 Sales from Stock (Tanker)


When a customer confirms a sale with Quality Polymer, the Sales Administrator needs to create
the sales order in SAP. The Sales Administrator will create a sales order based on the customer
purchase order.
SAP will perform an availability check for the loose FERT. The availability check will allow the
Sales Administrator to verify if the requested delivery date can be met or a new delivery date is to
be proposed.
When the sales order is saved, SAP performs a check on the customers credit limit. Depending
on the customers credit status, different criteria can be set for credit limit check. If the customer
does not pass the credit limit, a block will be imposed on the sales order. No further processing
of the sales order is possible until the approval is executed.
Once the sales order is free from the credit limit block or the credit limit block has been released
by the Credit Representative, the Sales Administrator informs the Production Department to
create a process order for filling up the tanker with the loose FERT. After the process order has
been released, goods movement is allowed for the process order.

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Before the tanker is filled up with the loose FERT from the storage tank, the tanker must be
weighed to obtain the Berat Tanpa Muatan (BTM). After the tanker has been filled up, the tanker
will be weighed again to obtain the Berat Dengan Muatan (BDM). Goods are issued as per the
quantity difference between the BTM and BDM.
After the process order has been confirmed, a goods receipt is done for the process order and
the Production Department will inform the Sales Administrator the confirmed quantity. The Sales
Administrator creates the delivery order based on the confirmed quantity.
Another round of credit limit check is done for each delivery order. This is to safeguard the
change of customers credit limit status from the time of sales order to the delivery order.
However, depending on additional credit limit settings, sales orders that have been approved
might not be subject to checking during delivery order.
As in sales order processing, if the customer does not pass the credit limit, a block will be
imposed on the delivery order. No further processing of the delivery order is possible until the
Credit Representative has released the credit limit block. The delivery order is printed after the
Sales Administrator post goods issue for the delivery order. The Gate Pass will also be created. A
printout of the Gate Pass is given to the transporter for security clearance before leaving the
premises of Quality Polymer.
The Sales Administrator will only generate billing documents to the customer once the transporter
has returned a copy of the delivery order to Quality Polymer. When the billing document is
generated in SAP, an accounting document is also recorded immediately in the customer
accounts receivable. With this posting, the Finance Department will clear the invoice against
incoming payment received.
5.1.2 BS130 Sales from Stock (Tote Tank)
When a customer confirms a sale with Quality Polymer, the Sales Administrator needs to create
the sales order in SAP. The Sales Administrator will create a sales order based on the customer
purchase order. In addition to the material requested, the Sales Administrator will also have to
enter an additional line item for returnable packaging
If the purchase order is from NPM, the Sales Administrator cannot use the material number from
the purchase order but have to select the appropriate material number based on the unit of
measure in the purchase order.
SAP will perform availability check for all items in the sales order. The availability check will allow
the Sales Administrator to verify if the requested delivery date can be met or a new delivery date
is to be proposed.
When the sales order is saved, SAP performs a check on the customers credit limit. Depending
on the customers credit status, different criteria can be set for credit limit check. If the customer
does not pass the credit limit, a block will be imposed on the sales order. No further processing
of the sales order is possible until the approval is executed.
When the sales order is free from the credit limit block or the credit limit block has been released
by the Credit Representative, it is possible to create the delivery order immediately for urgent
delivery. Alternatively, the Sales Administrator runs the delivery due list and creates delivery
orders for all the sales orders that are due for delivery.

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Another round of credit limit check is done for each delivery order. This is to safeguard the
change of customers credit limit status from the time of sales order to the delivery order.
However, depending on additional credit limit settings, sales orders that have been approved
might not be subject to checking during delivery order. As in sales order processing, if the
customer does not pass the credit limit, a block will be imposed on the delivery order. No further
processing of the delivery order is possible until the Credit Representative has released the credit
limit block.
The Warehouse Personnel generates a list of delivery orders that are due for picking and prints
the picking list. After picking is done, the Warehouse Personnel will update the delivery order
with the confirmed quantity and post goods issue. The Gate Pass will also be created. A printout
of the Gate Pass is given to the transporter for security clearance before leaving the premises of
Quality Polymer.
The Sales Administrator will only generate billing documents to the customer once the transporter
has returned a copy of the delivery order to Quality Polymer. When the billing document is
generated in SAP, an accounting document is also recorded immediately in the customer
accounts receivable. With this posting, the Finance Department will clear the invoice against
incoming payment received.
Please refer to BS147 Handling of Returnable Packaging for the return of the tote tank from the
customer to Quality Polymer.

5.2

Purchasing and Invoice Verification

In addition to new business scenarios that are specific only to Quality Polymer, the following
Purchasing and Invoice Verification business scenarios will also be adopted from NPM:

BS201 Maintenance of Consumption-Based Planning (CBP)

BS203 Creation of Purchasing Info Record

BS204 Changing of existing Purchasing Info Record

BS209 Creating of new Vendor Master for Quality Polymer

BS206 Changing of existing Vendor Master

BS211 Procurement for Stock Trading

BS212 Procurement for Stock - Indirect Material

BS213 Procurement for Direct Consumption - non stock items

BS230 One-time Purchase Order

BS250 Expedite Purchase Order/Late Delivery

BS260 Vendor Evaluation

5.2.1 BS215 Procurement for Stock Raw Material


When Quality Polymer determines a requirement to purchase items ie. raw materials, a Purchase
Order will be created in the SAP system. This Purchase Order will be subjected to three levels of
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approval, also known as the Release Strategy in the SAP system. The levels of approval is
dependent on the Purchase Order amount as below:
1. Level 1

< RM5,000

2. Level 2

> RM5,000 RM500,000

3. Level 3

> RM500, 000

Upon approval of the Purchase Order, a hardcopy will be printed out and sent / faxed to the
vendor.
When the vendor finally delivers the goods to Quality Polymers warehouse, a Goods Receipt
transaction will be performed in the system to denote the acceptance of goods into warehouse.
With this, an accounting document will also be recorded in the system. For good that are batch
managed, SAP generates an internal batch number. Therefore it is important to record the
vendors batch number during Goods Receipt as this will provide a cross reference between SAP
batch number and the Vendors batch number.
Vendors will usually delivers the goods with a copy of Delivery Order and Invoice attached. The
invoice will be entered into a system, whereby 3-way-matching of the quantity an amount will be
done in the system by comparing the Purchase Order, Goods Receipt and the Vendors Invoice.
If everything is found to be consistent, payment will be arranged by the Quality Polymers Finance
Department to the Vendor. Otherwise, Variance Verification will need to be performed among the
Quality Polymers Purchasing, Finance and the Warehouse.
5.2.2 BS233 Vendor Consignment of IBC tote
This scenario refers to the management of IBC totes, which is one of the packaging materials
used in Quality Polymer.
As and when there is a requirement from Production Department and there is a shortage of IBC
totes, the Purchaser will communicate with the IBC vendor to order for an estimated quantity of
IBC totes. A Consignment Purchase Order will be created in the system. The IBC vendor will
deliver to the Store in Quality Polymer and Goods Receipt can be performed in the system as
non-valuated stock.
When these IBC totes are being used up to pack Finished Goods, a Transfer of Consignment
Stock needs to be done by performing a Goods Issue transaction in the system valuated at the
price charged by the IBC vendor.
Upon shipping out the Finished Goods, Quality Polymer will fax a copy of the BL (Bill of Lading) to
the IBC vendor. From the BL, the IBC vendor will be able to determine the quantity of IBC totes
that they will be invoicing Quality Polymer for. Quality Polymer will then make payment to the IBC
vendor.

5.3

Inventory Management

In addition to new business scenarios that are specific only to Quality Polymer, the following
Inventory Management business scenarios will also be adopted from NPM:

BS271 Deletion of existing Material Master


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BS272 Development Material Master Maintenance

BS275 Inventory Management of Storage Location

BS276 Inventory Consumed for General Usage

BS277 Vendor Return

BS278 Inventory Disposal

BS280 Waste Treatment Processing

BS282 Physical Stock Take

BS290 Warehouse Housekeeping - SLED Stock

BS295 Write Off Stock Processing

BS296 Inventory Disposal due to Operation Spillage During Loading

5.3.1 BS273 Creation of Material Master for Quality Polymer


When Quality Polymer has a requirement to create a new Material Master in the system, they will
need to fill up a Material Master Creation form, which will be sent via email or fax to the NPMs
Technical Department.
The Basic and Classification views of a Material Master will then be created by the NPM
Technical. Upon successful creation of the Material Master, the Quality Polymer user will be
informed of the Material Master number and other details via email or fax.
Now, the Quality Polymer user can proceed by extending the Material Master Productions views
(MRP 1, 2, 3, 4, Forecasting and Work Schedule). With this, the Quality Polymer user is able to
set up the BOM and Recipe (applicable to Finished and Semi-finished goods only).
Next, information on that Material will be sent back again to NPM so that the Material Master
creation can be completed by having the Accounting, Purchasing and Sales view centrally
created in NPM. Finally, for the Finished goods (FERT) and Semi-finished goods (HALB) only,
the Standard Costing will be run in the system to obtain the value of the FERT and HALB
concerned.
5.3.2 BS297 Stock Adjustment during Tanker Exit
This scenario takes place when the weight of a tanker that is about to leave Quality Polymer is
found to be different from what was available in the storage tank as indicated in SAP. Therefore,
adjustment has to be made by performing as follows:
1. If more stock has been detected, the difference will be adjusted by performing a Goods
Movement 701 for Goods Receipt into the warehouse in the system, whereby the StockFinished Goods Accounts will be debited and the Stock Adjustment-Finished Goods
Accounts will be credited accordingly.
2. Likewise, if less stock has been detected upon tanker exit, the difference will be adjusted
by performing a Goods Movement 702 for Goods Issue out of the warehouse in the
system, whereby the Stock Adjustment-Finished Accounts will be debited and the StockFinished Goods Accounts will be credited for the difference in amount accordingly.
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5.3.3 BS298 Blocking of Tote tanks used for temporary storage


This scenario will take care of Tote tanks that are sometimes used for temporary storage. In
order to reflect that these tote tanks are unavailable for usage, the Quality Polymer user will have
to perform a Goods Movement in the system to mark them as blocked.
Therefore, the user will be able to see that these tote tanks are blocked for usage upon executing
a Stock Overview in the system.

5.4

Production Planning

5.4.1 BS329 Planning by Production


This Business Scenario caters for planning to be performed by the sales Production
departmentDepartment. sales Market survey and past sales information will be used to forecast
demand for each material for the purpose of planning the companys future sales targets for the
next 12 months. This forecast period can be flexible based on management decision. The
Production Department is responsible for forecasting all the finished materials with specific
details.
The requirements will trigger planning of Production production for the next 12 months.
Production Department will check the feasibility of the production plan based on available
capacity. If there are any issues in capacity or demand, there may be further fine-tuning of the
plan. the The approved demand forecast will result in the production plan.Production department
and the sales and marketing department will discuss and agree on a common demand or forecast
for each material.
Flow 1:
The sales and marketing department does the market survey to ascertain the forecast for the next
12 month. They also use the past sales report, forecast and trend to calculate future demand.

After the Production production plan is finalized, the data is transferred to demand Demand
management Management by the sales Production Department manually, for each material to
SAP. A monthly Production production plan is created for every material for the next 12 months.
5.4.2 BS331 Production Planning - Make to Stock
This business scenario caters for the make to stock (MTS) production planning for all the
Finished goods/Semi-finished goods of Quality Polymer.
For Make To Stock Production Planning, the figures transferred to demand management will form
the basis for production.
In Demand Management, the requirement for each material is created for each finished material
as Planned Independent Requirements. A planned independent requirement contains one
planned quantity and one date, or a number of planned independent requirements schedule lines,
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that is, one planned quantity split over time according to dates. The Production Department can
split this requirement into weekly or daily time buckets.
MRP plans for all the materials in the plant.
During the MRP run, planned orders are created for both external procurement and internal
production, based on the selections in material master. The system calculates the net
requirement for all the materials based on the available quantity. Subsequently a monthly/weekly
schedule is prepared. The raw material shortages from planned orders are found in the Raw
Material Shortage Report. The Raw Material Shortage Report has to be reviewed by the
Purchasing Department for follow up with the vendor. The Buyer converts the planned order to a
purchase requisition that can be converted to a purchase order at a later date.
The Buyer issues the purchase order to the vendor and follows up with the vendor for delivery
dates. If the vendor cannot meet the delivery date, the Buyer has to reschedule the delivery date
and inform the Production Planner. If the new delivery date of the raw material affects the
customer promised date, the Production Planner has to inform the Order Processing Department
for necessary actions.
The Production Department creates the process orders or converts the planned orders based on
the production plan. The following fields are specified on the initial screen during the process
order creation:

Material no. - The semi finished or finished material, for which the process order is to
be created.

Production plant - The plant in which the process orders needs to be executed or
produced.

Process order type - The process order type distinguishes usage in Production. For
Quality Polymer, different process order types are defined for the Normal Order, Reprocessing, Pilot Production and Development Item.

The user specifies the scheduled date of production for the semi finished and finished products,
and whether the scheduling type is backward or forward scheduling. In forward scheduling, the
user has to specify the basic start date of production. For backward scheduling, the user has to
specify the basic finish date of production. The system chooses the first alternative BOM and
default master recipe for the process order. If the user wants to use a different BOM, the BOM
has to be selected manually. The user also checks the availability of raw materials. If the raw
materials are available, the process order can be released.
The Production Planner saves the process order and a process order number is generated.
After the process order has been saved and released, goods movement is allowed for the
process order. If materials are required from the warehouse, the Production Planner furnishes
the material shifting requirement to warehouse to transfer materials to the Production Storage
Location on the production floor.

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Goods are issued as per the planned raw material quantity from the Production Storage Location
to the process order.
After all the materials are issued to the process order, the Production Department initiates
production. Capacity is checked at each work center. If sufficient capacity is not available, the
Production Department reschedules the process order. The process instructions for each phase
and operation are used to carry out each process step of the production. After the goods are
produced, the actual usage of the resources for the process order is confirmed using the standard
values and activity types defined in the master recipe of the product. The standard values used
are machine hours and labor hours.
The Production Planner needs to update the goods issue to the process order before confirming
the process order. This information will be used to calculate the actual production cost and
variance during process order settlement in product costing.
After production is completed, a goods receipt is done for the process order and goods are
transferred to the warehouse.
5.4.3 BS352 Production Planning Pilot Production for New Materials
This business scenario caters to production planning of pilot production for new materials by
Production Department. The quantity for this production type is generally less than 400 kg. Pilot
production is generally for new materials that has been tested in the lab, and now needs to be
produced in an up scale quantity to verify the accuracy of the BOM and master recipe.
Production Department of Quality Polymer receives requirement for small lot production,
generally less than 400kg. Technical Department of NPM creates the material code for the
material to be produced by Production Department of Quality Polymer in the system.
Production Department creates the BOM and master recipe. Once the master data has been
setup, process order is created using a different process order type. After the process order has
been saved and released, goods movement is allowed for the process order.
The Production Department initiates production after all the materials have been issued to the
pilot reactor. After the goods are produced, the actual usage of the materials for the process
order is confirmed
5.4.4 BS 353 Production Planning - Canning Balance
This business scenario caters for the consumption of canning balance in production. The
canning balance is defined as the leftover loose material less than the standard packing size.
Production Department receives the requirement for new demand in the form of sales forecast or
sales order and checks if canning balance is available for this demand.
If the canning balance is available, Production Department uses this canning balance as a
component in Process Order for the new demand.
Production Department runs desktop MRP for this material desktop. The system nets off the
demand by the canning balance quantity.
The Production Department creates the process orders based on the production plan.

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The user specifies the scheduled date of production for the semi finished and finished products,
and whether the scheduling type is backward or forward scheduling. In the process order
material list screen, an additional line is included for the canning balance as a component. The
user also checks the availability of raw materials. If the raw materials are available, the process
order can be released.
After the process order has been saved and released, goods movement is allowed for the
process order. The Production Department furnishes materials requirement list for the Process
Order to Warehouse. Warehouse will transfer all the materials, based on the list, to the
designated Production Storage Location.
When all the materials are issued to the process order, the Production Department initiates
production.
After the goods are produced, the actual usage of the resources for the process order is
confirmed.
Upon completion, a goods receipt is performed for the process order and goods are transferred to
the warehouse.
5.4.5 BS347 Production Planning - Reprocess fFormula
This business scenario caters for the following situations where the Technical Department
evaluates the possibility of creating a reprocess formula to consume old stock:

Re-use of slow moving stock

Re-use of multiple batches of the same material returned by customer.

The Technical department evaluates the possibility of creating a reprocess formula for this stock.
If the reprocess formula can be created, then the old stock will be consumed.
Flow 1:
Production departmentDepartment reviews the stock report to identify slow moving materials,
expired materials and the customer returned materials in the warehouse . This triggers the
requirement for Production departmentDepartment to create Process Order with a different Order
Type.
Flow 2:
The Production departmentDepartment creates alternative BOM for the reprocess material. The
alternative BOM contains the returned material and other raw materials. The alternative BOM is
created together with a Production production Version version for reprocessing. The alternative
BOM may be used for all returned batches of the same material because there is not much
difference in the components and quantity of the various batches. The technicalProduction
departmentDepartment needs to create only one alternative BOM for all the batches.
Flow 3:
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The Production departmentDepartment creates the process order based on the reprocess
formula (alternate BOM). The following fields are specified on the initial screen during process
order creation:
Material No.
The semi finished or finished materials for which the process order is to be created.
Production plant
The plant in which the process orders needs to be executed or produced.

Process order type


The user needs to specify the process order type for reprocessing.
The user specifies the scheduled date of Production for the semi finished and finished products,
and whether the scheduling type is backward or forward scheduling. In forward scheduling, the
user has to specify the basic start date of Production. For backward scheduling, the user has to
specify the basic finish date of Production.
The system proposes the first BOM by default. The user needs to manually select the
Reprocessreprocess Production production version to trigger the selection of the alternative
BOM for reprocessing. The user can manually change the components of the process order
based on the requirement. The finish date in the process order are put far ahead in the future so
that purchasing department should not procure the material for this process order. The user
saves the process order without releasing it.
Flow 4:
Production departmentDepartment checks for new demand and also process orders with the
process order type reprocess. If there is a requirement that can use the reprocess process
order, Production departmentDepartment will use the reprocess process order to meet the new
demand.
Flow 5:
The Production Planner releases the process order. This triggers the requirement for components
of the process order.
Flow 6
After the process order has been saved and released, goods movement is allowed for the
process order. If materials are required from the warehouse, the Production Planner furnishes
the material staging requirement for warehouse to transfer materials to the Production Storage
Location on the production floor.
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Warehouse checks the process order and identifies the old or returned stock to be used based
on the process order type. The old or returned stock is to be used before placing any new
requirements.
Warehouse transfers goods to the Production Storage Location. Goods are issued from the
Production Storage Location to the process order.
Flow 7:
The transfer requirement generates a transfer order to the warehouse for transferring goods.
Warehouse transfers goods to the production supply area based on the transfer order.
Flow 8:
Goods are issued per the planned raw material quantity from the production supply area to the
process order.
Flow 9:
After all the materials are issued to the process order, the pProduction departmentDepartment
initiates production. Capacity is checked at each work center. If sufficient capacity is not
available, the Production department reschedules the process order. The process instructions for
each phase and operation are used to carry out each process step of the production. Upon
completion, the actual usage of the resources for the process order is confirmed using the
standard values and activity types defined in the master recipe of the product. The standard
values used are machine hours and labor hours.
If the actual usage of the material is different from the planned, the Production Planner needs to
update the process order before confirming the process order. This information will be used to
calculate the actual production cost and variance during process order settlement in product
costing.
Flow 10: Goods receipt is also done for the process order and goods are transferred to the
warehouse.

5.4.6 BS348 Production Planning Assorted Materials


Assorted materials are materials produced during production where the quality is not as per the
required specification. Flow 1:
Production Department will confirm the process order till the operation where production was
abandoned. The process order must be Technically Completed. Goods receipt is performed for
the product and the stock is blocked. Flow 2:
The The following fields are specified on the initial screen during process order creation:
Material No.
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The semi finished or finished materials for which the process order is to be created.
Production plant
The plant in which the process orders needs to be executed or produced.
Process order type
The process order type distinguishes type of usage in production.
The user specifies the scheduled date of production for the semi finished and finished products,
and whether the scheduling type is backward or forward scheduling. In forward scheduling, the
user has to specify the basic start date of production. For backward scheduling, the user has to
specify the basic finish date of production.
Flow 3:
Flow 4:
The transfer requirement generates a transfer order to the warehouse for transferring goods.
Warehouse transfers goods to the production supply area based on the transfer order.
Flow 5:
Goods are issued per the planned raw material quantity from the production supply area to the
process order.
Flow 6:

5.4.7 BS351 Production Planning Common Semi Finished Material


A number of common semi finished materials are used in the production of finished materials.
Production departmentDepartment needs to produce additional amount of common semi finished
materials to facilitate production in terms of capacity utilization and meeting customer delivery
dates. This additional amount is known as postponement.
Initially, Flow 1:
Production departmentDepartment reviews the stock report for semi-finished materials in the
warehouse. After that, Flow 2:
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The Production departmentDepartment identifies common semi finished materials with low stock
level by comparing available stock with the stock level predefined in the material master.
Flow 3:
The Production departmentDepartment then creates the process orders based on the production
plan. The following fields are specified on the initial screen during process order creation:
Material No.
The semi finished or finished materials for which the process order is to be created.
Production plant
The plant in which the process orders needs to be executed or produced.
Process order type
The process order type distinguishes type of usage in production.
The user specifies the scheduled date of production for the semi finished and finished products,
and whether the scheduling type is backward or forward scheduling. In forward scheduling, the
user has to specify the basic start date of production. For backward scheduling, the user has to
specify the basic finish date of production.
The Production Planner saves the process order and a process order number is generated.
Flow 4:
Once the process order has been saved and released, goods movement is allowed for the
process order. If materials are required from the warehouse, the Production Planner processes
the material staging requirement to create the requirement for warehouse to transfer materials to
the production supply area on the production floor.
Flow 5:
The transfer requirement generates a transfer order to the warehouse for transferring goods.
Warehouse transfers goods to the production supply area based on the transfer order.
Flow 6:
Goods are issued per the planned raw material After all the materials are issued to the process
order, Production departmentDepartment initiates production. Capacity is checked at each work
center. If sufficient capacity is not available, the Production department reschedules the process
order. The process instructions for each phase and operation are used to carry out each process
step of the production. Upon completion, the actual usage of the resources for the process order
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is confirmed using the standard values and activity types defined in the master recipe of the
product. The standard values used are machine hours and labor hours.
If the actual usage of the material is different from the planned, the Production Planner needs to
update the process order before confirming the process order. This information will be used to
calculate the actual production cost and variance during process order settlement in product
costing.
Flow 8:
After production is completed, a goods receipt is done for the process order and goods are
transferred to the warehouse.

5.4.8
5.4.9
5.4.10

5.5

Financial Accounting

Quality Polymer will adopt the following Financial Accounting business scenarios from NPM:

BS400 G/L Account Master Record

BS401 Account Assignment Template

BS403 Bank Master Data

BS404 Treasury

BS405 Petty Cash Processing

BS406 Vendor Master for Creditors without PO

BS407 Vendor Invoice with Credit Term (Non-Trade Related)

BS408 Vendor Invoice with Cash Term (Non-Trade Related)

BS409 Credit Note/Debit Note from Creditor (Non-Trade Related)

BS410 Credit Note/Debit Note to Creditor (Non-Trade Related)

BS411 Creation Of Customer Master for Staff

BS421 Creation & Revision Of Customer Credit Account

BS413 Credit Note/Debit Note from Debtor (Non-Trade Related)

BS414 Credit Note/Debit Note to Debtor (Non-Trade Related)

BS419 Advance Payment From Customer

BS420 Advance Payment To Vendor


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BS415 Staff Loan

BS416 Staff Advances

BS417 Month-End Processing

BS418 Year-End Processing

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Controlling

Quality Polymer will adopt the following Controlling business scenarios from NPM:

BS470 Cost Element Master Data

BS471 Cost Center Master Data

BS472 Cost Center Planning

BS474 Cost Center Distribution

BS485 Cost Center Planning - 2nd Half Year Revise Budget

BS475 Profit Center Master Data

BS476 Profit Center Planning

BS477 Internal Order for Vehicle Maintenance

BS478 Internal Order for Marketing & Promotion

BS480 Internal Order for Staff Expenses

BS481 Standard Cost Estimate for Existing Product

BS482 Standard Cost Simulation for New Product

BS483 Settlement of Process Order

BS484 Eventual Cost Calculation For Manufactured Material

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6 At month end, the Accounts Executive will prepares all journal


entries for the Assistant Finance Manager approval. Upon approval,
these entries will be posted. Once all the journal are pass, the
Assistant Finance Manager will proceed to close the posting period to
prevent further posting into the current period. With all this processes
completed, the Accounts Executive will print out all the required final
reports for the management to review.Interfaces and Enhancements
6.1.1 Interfaces
Two interfaces created for Project Cheetah will be introduced to Quality Polymer:
1. Sales Document Approval Transaction
2. Gate Pass Enhancements
6.1.2 User Exits
Numerous user exits were created during Project Cheetah. All these user exits will be reviewed
to cater for the rollout of Quality Polymer.

7 Conversion Approach
Conversion will be carried out to ensure that Quality Polymer will have all the relevant information
when the system goes live. Preparation for conversion is required during the implementation
because it is important to start the new system with clean and relevant data that is not obsolete.
The approach used in data conversion will be as follows:

7.1

Define conversion strategy

Identify and clean data for conversion

Perform the actual conversion

Conversion strategy

Due to the low volume master data in Quality Polymer, with the exception of GL accounts and its
open items, the user will manually enter all conversion objects into the Production System. Prior
to the manual entry to the Production System, the users input the data into the Quality System to
verify the data integrity and accuracy. This exercise also serves as a training and confidence
building for the users to familiarize themselves with SAP R/3.

7.2

Conversion Data Preparation

Data to be converted is identified with object description and the total number of records is
estimated. These data will be classified as master or transaction files depending on the type of
data converted. (A summary of these conversion data objects is found in the Appendix).

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The sources of data must be cleaned to ensure that the correct information is later entered to
SAP. This entails removal of duplicate records (like customer or vendor master records), data
consolidation, providing new pieces of information required in the new system and ensuring that
existing information is up-to-date. This responsibility rests solely on NPM team leaders and
Quality Polymer end-users.

7.3

Actual Conversion

Conversion of live data to SAP will occur during the Final Preparation phase. In general, master
data will be converted before transaction data. The latter is performed immediately after the
period closing of the legacy system and for the new SAP system to run live at the start of the
period (month). One way of minimizing transaction data to be converted is to ensure that all open
items are settled before the conversion process.
Prior to go-live date, all entered data must be verified in the production system to ensure
completeness and consistency.

8 Authorizations
New Authorization Profiles will be setup for all Quality Polymer users. This authorization profiles
will enable the users to have a control environment on their access level in terms of the different
transaction codes and organization structure that each user can have access to.
The Team Leaders will work closely with Quality Polymer management to determine the different
level of access that each user can have. Quality Polymer will adopt the Authorization Policy that
is in placed for NPM.

9 System Landscape
9.1

System Environment

Current NPM system landscape consists of three physical servers, each housing a single client
as illustrated below

Development Server Client 140

Quality System Server Client 300

Production Server Client 300

For Quality Polymer rollout, all configurations will be set in the Development Server. An additional
server has been setup for the role of testing by consultants and team leaders. This server will be
a copy of the Production Server Client 300. Prototype will take place in the Additional Server
while training and user acceptance test will be conducted in Quality System Server Client 300.
The diagram below depicts the system landscape of existing NPM servers and the additional
server for Quality Polymer rollout implementation.

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Current NPM
System Landscape

Development Server
(Client 140)
Additional Server
For QP Rollout Playground
Quality System Server
(Client 300)

Production Server
(Client 300)
Transport Route

Figure 9.1.19: NPM System Landscape & Additional Server for Quality Polymer Rollout

9.2

Transport Strategies

The transport strategy for Quality Polymer Rollout has to be monitored manually. As depict in
Figure 9.1.1., all configurations settings will still be done in Development Server Client 140. The
consultants will manually transport it to the Quality Polymer Playground Server. At the end of
every week, a consolidated list of change request from each module will be submitted to the
Basis consultant to move the configuration to the Quality System Server Client 300.
Prior to system go-live for Quality Polymer, all the modules weekly change request will be
transported to the Production Server Client 300.

10 Training
Team Leader will conduct training for Quality Polymer Key Users throughout the life cycle of the
Rollout Implementation. The key users will be exposed to NPM live environment on their
respective module. A training plan will be draft out to ensure that different key users will have
allocated slot to sit with NPM users for some SAP hands-on transaction. This approach aims to
empower key users to take
NPM team leader will review the training materials prepared during Project Cheetah. Team
leaders will train end-users during the Realization Phase using training material that has been
fine-tuned.

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11 Testing Approach
Testing covers the activities related to both scenarios and transactional testing on the system to
ensure that the configuration settings are right. The testing approach will include test planning,
conducting tests and documentation of the testing performed.
User acceptance tests (UAT) will be conducted in Realization stage. Upon successful testing of
the system, users are to sign-off that they are willing to accept the new set of configuration.
Quality Polymer key users will be responsible to perform the entire testing with the guidance of ea
consultants and NPM team leaders. Together with NPM team leaders, ea consultants will also
plan for the UAT. During the UAT, all test results will be recorded and verified by the testers and
team leaders.
Testing will cover identification of the following:

11.1

Test data

Users for UAT

Test data

Normally there are two sets of important data to be tested, namely;

Core Business Scenarios data - A number of Nippon Paint core scenarios per
company will be identified for testing

Core Business Process data The core business processes not included in the
business scenarios item 1 above will be tested.

In testing, a big consideration will be given to the integration between SAP modules. The detailed
plan for UAT will be prepared during the Realization phase.

11.2

Testers (Users) for UAT

Users to perform the User Acceptance Test will be identified during the early part of the
Realization phase. The selected users have the responsibility of testing the system, recording the
results of these tests, confirming that the testing works and note the exceptions and finally signoff the system indicating acceptance of the system. Therefore the testing must be completed and
signed off by the testers.

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Appendices
A.

Functional Requirements

A.1

Sales and Distribution

A.2

Purchasing and Invoice Verification

A.3

Inventory and Warehouse Management

A.4

Production Planning

A.5

Financial and Controlling Accounting

B.

To-Be Business Scenario Master List

B.1

Sales and Distribution

B.2

Purchasing and Invoice Verification

B.3

Inventory and Warehouse Management

B.4

Production Planning

B.5

Financial and Controlling Accounting

C.

List of Reports

C.1

Sales and Distribution

C.2

Purchasing and Invoice Verification

C.3

Inventory and Warehouse Management

C.4

Production Planning

C.5

Financial and Controlling Accounting

D.

List of Forms

D.1

Sales and Distribution

D.2

Purchasing and Invoice Verification

D.3

Inventory and Warehouse Management

D.4

Production Planning

D.5

Financial and Controlling Accounting

E.

List of Conversion Objects

E.1

Sales and Distribution

E.2

Purchasing and Invoice Verification

E.3

Inventory and Warehouse Management

E.4

Production Planning

E.5

Financial and Controlling Accounting

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