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Business Case :

We have various business procurement scenarios where the deliveries are done by the supplier not till the plant but at intermediate locations or ex-works or till port, for eg., there are various Inco-terms where the material is not delivered till the plant, like – EXW, FCA, CPT, DAT etc.  and the delivery from Inco term location till the warehouse or Plant is managed by the Customer himself.

So the business requirement is to manage the lead time at the point of Inco term location i.e., Planned Vs actual delivery at the Intermediate location as illustrated below in the picture –

LT_Management.JPG

Current SAP Functionality:

Current SAP functionality only allows to manage the total lead time from supplier till the Plant for planning purpose in PDT (Planned Delivery time) field in Purchasing Info Record and Material master.

GAP in current SAP Functionality:

There is nowhere in the system that the Planned and actual delivery date at Inco term location can be recorded in the system, hence the vendor is not informed about the Delivery date at the intermediate location, instead the delivery date at the Plant is communicated to the vendor which is calculated based on the PDT in Info Record, where as vendor is supplying material only till the intermediate location, hence there is always a state of confusion till the Planner informs the supplier manually.

Looking into the business case, it looks pretty standard requirement; however while checking in standard SAP functionality, we do not find any standard solution available around this requirement. 

We even tried to explore Event Management, a new functionality from SAP if this could be an alternative to meet the objective of managing the Lead time at Inco term location, however  we were made to understand that this is also not the standard functionality available in EM and it cannot be used for this requirement.

Proposed solution :

Since there is no standard solution available, so we have proposed the following customized solution to manage the Lead time at Inco term location and hence evaluate the Vendor performance more accurately.

A) Proposed Master data changes –

1)   In the current SAP set up we are managing the total lead time from supplier till the Plant in Material Master and Info Record, as this time is being used for planning purpose.

2)   Instead of total lead time maintained in PDT in Purchasing Info Record, maintain only the Lead time from Vendor till the point of Inco term location (SLT – Supplier Lead time).

          PIR_Screen.JPG

B) Managing the Lead time from Inco term location till the Plant –

1)   We have an idea to maintain the lead time from Inco term location till the plant in the new customized field in Purchasing Info Record (PIR), however SAP has not provided any user exit to create a new field, so we had no choice but to build a Z-Table with respect to Plant/ Incoterms/ Location and manage Lead time from Inco term location till the Plant (CLT – Customer Lead Time)

C) How the Planning will be managed –

1)   During the Planning run the Purchase Requisition will be created with the delivery date calculated based on the PDT i.e, Supplier Lead time from Purchasing Info Record.

2)   During the conversion of this P.Req to Purchase order, the user exit need to be enabled to calculate the delivery date  = PO creation date + SLT (in PIR) + CLT (in Z-Table), so no impact on planning as MD04 continues to show the delivery date from PO.

3)   Even during manual creation of PO the above user exit shall be called to calculate the delivery date. The delivery date in PO shall be marked as greyed out since no change on this date is allowed.

4)   Create a new customized field in Purchase order at Item level to show the Planned delivery date at Inco term location = PO creation date + SLT.  In case there is a need to manually the change the delivery date in PO, planner is suppose to change only the SLT in PO and accordingly the delivery date shall be re-calculated.

5)   The planned delivery date at Inco term location shall be printed in the PO form which is send to supplier, so supplier is correctly informed of the delivery date at the required intermediate location so no confusion to the supplier.

6)   Successive Vendor confirmations can be entered in the PO manually by the Planner or may be automated via IDOC type – ORDRSP.

7)   Inbound delivery is created based on the final confirmed date of delivery from vendor and this date will be reflected in MD04, hence no impact on the planning.

D) Vendor Evaluation –

1)   Vendor evaluation shall be done comparing the planned delivery date in the PO (created as a new field in PO) with the actual GR date at Incoterm location in Inbound Delivery.

2)   This comparison of Planned Vs actual delivery date at Inco term location would give the accurate vendor evaluation having all the dates recorded in the system.

3)   In a further automated process, it can be attempted to create the Inbound delivery via IDOC type – DESADV to capture the actual delivery date based on the confirmation send by supplier.

Expectations from this document :

1)   This document is an intended approach to meet the specific business requirement which is not an available solution in standard SAP.  The proposed solution is still under development stage and the final solution is yet to be tested end to end.

2)   This document is also intended to help all other SAP community having the similar requirement can implement the similar solution.

3)   This document is also having an expected intention to SAP that they should look around developing the standard solution as this seems to be quite a standard requirement and the solution can be implemented as a more standard functionality rather than having a complex customized solution.

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6 Comments

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  1. Pankaj Agarwal Post author

    I think this document is useful for the SAP community who are looking to manage the Lead time at the Incoterm location which is not a standard solution so far from SAP.

    The document gives the total insight of the business requirement and the detailed set up which is required to be done in the system wrt the enhancements to be done to meet the required business scenario.

    Hope people may like this article and provide suggestions if any or they can revert back for any further clarifications.

    I think we can make this discussion more interesting by sharing other people views as well and try to make the solution more matured and lesser complex.

    I look forward for some healthy discussion on this thread.

    Regards,

    Pankaj

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    1. Hans Peter Hergott Hansen

      Hi Pankaj, Thanks for sharing your proposed solution on this trivial problem with delivery planning using EXW, FOB etc. Incotems. I wonder if you have implemented the solution and does it work as you expect?

      Regards,

      Hans Peter

      (0) 
      1. Pankaj Agarwal Post author

        Hello Hans Peter,

        Yes, we have implemented the solution in the system and it is working very well as expected.  I think this is quite a basic requirement and SAP should understand this and provide a standard solution around.

        Please feel free to revert back shall you have further question regarding this solution.

        Regards,

        Pankaj

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        1. Hans Peter Hergott Hansen

          Hi again,

          Good to hear your solution is working. We are considering something similar.

          Thanks once again for sharing your idea and I will come back to you in case of further questions.

          Regards,

          Hans Peter

          (0) 

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