MRO: MAINTENANCE SERVICES - · PDF fileVESTA SERVICE OFFERINGS. ... • In SAP Plant...

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MRO: MAINTENANCE SERVICES2016 ASUG Annual Conference – Orlando FL

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AGENDA


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… successfully completed1000+ projects of all sizes…

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MANAGEMENT

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VESTA SERVICE OFFERINGS

Vesta Partners was founded on the belief that the best run companies have something in common; solid business processes enabled by the best available technology solutions

WE OFFER:

Enterprise Asset Management Solutions

Technical Services

Software Products

Industry Solutions


MAINTENANCE SERVICES

• The overall cost to perform maintenance work includes internal resources, external resources, stock materials/tools, and externally procured materials. This represents the total cost of maintaining assets. External resources or services represents a large percentage of maintenance cost.

• In SAP Plant Maintenance, there are several different options in how to configure and procure Maintenance Services. Today we will discuss the options available.


• Steps in the Service Requisitioning Process• Standard options for External Services Procurement on the work order• External Services Management vs. Standard Procurement• Planned vs. Unplanned Services• Use of Service Masters• Use of Contracts• Service Entry Sheets• Use of Material Masters – Material Type for Services (DIEN)• Services in the Task List/Maintenance Plan Process• Emergency Processing Options

DISCUSSION OVERVIEW


SERVICE STEPS - PM WORK ORDER

Determination of Requirements

Creation of requisition/service

specifications via PM WO

Bidding/RFQ

Award/Contract

PO ProcessingPerform Service

Service Entry Sheet Creation

Service Acceptance

Invoicing/Payment


• The work order control key is a default value which defines how an operation should be processed.• Services PM Work Order Options

• PM02 External Processing – Controls whether an operation or sub-operation is processed externally• PM03 Service – Controls whether you can plan services for an operation

CONTROL KEYS – PM WORK ORDER


EXTERNAL SERVICES MANAGEMENT (MM-SRV)


COST DETAILS – PM02 & PM03

PO Line 0020

PO Line 0010


COST DETAILS – PM02 & PM03

Actual Costs detail on the Work Order

Denise


CONTROL KEY PM03 &EXTERNAL SERVICES MANAGEMENT


• Performing a receipt of services is one of the differences in the service processing vs. a material goods receipt

• A Service Entry Sheet takes the place of the MIGO 101 goods receipt for a material goods receipt

• Processing of the Service Entry Sheet creates a goods receipt document for the PO with associated financial entries

• A Service Entry Sheet is necessary in order to process an invoice for payment

EXTERNAL SERVICES MANAGEMENT (MM-SRV)


With External Services Management functionality, you have a wide range of options when working with Services. You can decide to create with detailed planning or give the service provider considerable discretion in performing the required services and concentrate primarily on budgetary control.

Various mixed approaches are possible. Which one you actually use can be decided from case to case. Below are the two options in Plant Maintenance:

• Planned Services

• Unplanned Services

PLANNED VS. UNPLANNED SERVICES


• Planned Services are services whose nature and scope is known to you at the start of a procurement project or transaction.

• At the time the services are requested, the individual specifications are entered either with the aid of a service master record or directly as short and long texts. Price and quantity are specified in both cases.

• You identify only planned services in the purchase document –(no specification of limits for unplanned services)

• At the time the performance of the services is recorded, only the precise services, quantities and prices set out in the service specifications may be entered.

• You can combine the functionality of planned services and additionally set a value limit to cover unforeseen circumstances. This allows other services to be performed in addition to those specified in detail.

PLANNED SERVICES


• Service Master records are suitable for certain combinations of services that are likely to be referenced again and again

• The service master record counts as part of the master data within External Services Management and serves as a source of data for you to draw upon when creating service specifications. This enables you to save time and reduces the frequency of errors, since you need only enter the complete service descriptions in the service master record once.

StructureA service master record contains the following principal information for the unique description of a service:• Service number• Service category• Descriptive texts (short and long text)• Base unit of measure• Material group• Valuation class

PLANNED SERVICES - SERVICE MASTERS


Use of Service Masters• Service Master is similar to a Material Master in that it defines a unit of

service. (Example 1 Hour of Contracted Engineering time)• Value of service is defined as a Quantity of the Service Master Unit• Considered “Planned Services”• Unit of measure of Service Master is used.• Service details captured Service Master long text• Service Entry Sheets are used to verify receipt of the service.

PLANNED SERVICES - SERVICE MASTERS


• Unplanned Services utilize the setting of a value limit only• Unplanned services are services that cannot be specified in detail because

their precise nature and scope are not initially known, or services which, for various reasons, you do not wish to plan. Unplanned services therefore have no formatted descriptions, they are entered in the form of monetary limits.

• Services may be performed up to a value not exceeding these value limits. This allows you to exercise a degree of cost control in such situations.

• With Unplanned Services, you enter no specifications, quantities, or prices. Instead, you merely set a value limit for unplanned services. This allows any services to be performed up to that limit. The services are not actually specified until late in the procurement process - at the time their actual performance is recorded.

• Unplanned Services can reference contracts. In this case, you do not enter any specifications, quantities, or prices in the PO, but set only value limits relating to certain contract items. This ensures that the provider is not able to enter any services at any prices, but only those agreed in the contract.

UNPLANNED SERVICES


• You enter services that have actually been performed by means of Service Entry Sheets that reference the Service PO. This procedure accelerates the entry of planned services in particular. Each individual service is recorded together with quantities and values.

• If a value limit for unplanned services has been set in the purchase order, you can maintain specifications for such services at the time you record their actual performance. The services are recorded with their precise value, and the system checks that the limit has not been exceeded.

SERVICE ENTRY SHEETS


• After services have been performed, this is recorded in the Service Entry Sheet.

• One or more responsible persons can check that the work is satisfactory and formally accept the services.

• You can separate the process of service acceptance from that of Service Entry Creation in order to maintain the dual control principle. However, it is also possible to have entry and acceptance carried out by the same individual.

ACCEPTANCE OF SERVICE


• At the conclusion of the procurement process, the service provider’s invoices are checked for correctness. This involves comparing the value from the accepted entry sheet with that shown in the invoice and checking that the tax amounts are correct. If the value in the entry sheet is exceeded, the system issues a warning message. Invoices that have been verified and released to Financial Accounting are then paid automatically.

• Instead of the conventional method of invoice verification, you can use the Evaluated Receipt Settlement (ERS) procedure. In this case, you do not wait for the service provider to submit an invoice, but create one in the SAP System on the basis of the data in the PO. The service provider receives a credit memo and a log enabling him to check the correctness of the former.

VERIFICATION OF INVOICES


MAINTENANCE SERVICES AND THE USE OF CONTRACTS


• If contracts that either contain the material group or the service in the purchase requisition exist in the system, the system suggests these contracts as sources of supply.

• If a purchase requisition has been assigned to a contract, the system can generate release orders against the contract

• In configuration, you can define the requirements that the sources for services are to be determined. For example, you can specify that a contract is to be suggested as a source if it contains at least one service from the requisition. Alternatively, you can specify that a contract is only to be suggested if it covers all the requested services. This means that you decide yourself, on the basis of the data situation in your system, whether the system is to suggest as many sources as possible (which may be more or less suitable), from which you then make your choice, or whether the system is to suggest the ideal source only.

• You can also enter the source for a purchase requisition manually. This function enables you to assign the requisition to a provider from whom you have not previously procured services

SERVICES & CONTRACTS


MAINTENANCE SERVICES UTILIZING MATERIAL MASTERS


• Another option for the usage of maintenance services is the use of Material Masters for identification of service categories

• Material Type DIEN is designated for Service (DIEN material type not required) But using a different material type than ERSA allows control of the material type settings and different number range

DIEN SERVICE MATERIAL TYPE


Services Material (DIEN Material Type)• Services can be performed internally or procured externally (outsourced). They cannot be stored or transported. Example:

• Construction work• Janitorial/cleaning services• Legal services

Service Master Record: - Contains the description of a service• Purpose: The service master record counts as part of the master data within External Services Management and serves as a

source of data for you to draw upon when creating service specifications. This enables you to save time and reduces the frequency of errors, since you need only enter the complete service descriptions in the service master record once.

• Structure: • A service master record contains the following principal information for the unique description of a service:

• Service number• Service category• Descriptive texts (short and long text)• Base unit of measurement• Material/service group• Valuation class

MATERIAL MASTER VS. SERVICE MASTER


There are many fundamental differences between the use of Material Masters (DIEN material type) and Service Masters such as:

• GR vs service entry sheet posting • "Blank" Item Category vs "D" Item Category• Planned and Unplanned Services functionality vs normal material item• Flexibility to change the service short text description of the Service being performed during maintenance of purchasing

documents and service entry • Flexibility to change the price during service entry maintenance • Flexibility to change the tax code (at the service line item) during service entry maintenance • Flexibility to call off the planned service from contract during purchasing documents and service entry maintenance • Flexibility to hierarchically structure your services • Flexibility to define the model specification as the template when maintaining the purchasing documents • Flexibility to change and split the account assignment during service entry maintenance • Flexibility to define the pricing condition at the service ID level in addition to contract • No purchasing info record is maintained for Service Master • Ability to control the material group for the Service Material

MATERIAL MASTER VS. SERVICE MASTER


ADDITIONAL PM FUNCTIONALITY TO ENHANCE MAINTENANCE SERVICE PROCUREMENT


• For services that have to be performed on a periodic basis such as regular gardening and grass-cutting work, daily or weekly cleaning of offices, etc., you can record the service specifications in a maintenance order via a task list/maintenance plan

SERVICES IN PM TASK LISTS &MAINTENANCE PLANS (PM’S)


In the standard service procurement process, external services will be entered in a purchase requisition. The source determination process then takes place for the requisition, after which it is converted into a standard PO or a contract release order. The recording of the services actually performed is based upon the PO or release order.

If your business process allows, you can shorten this basic process as follows:• You identify the service specifications directly in the task list/maintenance plan,

purchase requisition is not required• To accelerate the procurement process, you create a purchase order with an

extended validity period for the desired vendor, which you can repeatedly reference when periodically recording the services performed by the vendor.

• If a secure, long-term supply relationship/contract exists with a certain service provider, you can have the system generate service entry sheets on the basis of the information from the maintenance plan.



• Maintenance Services that occur on an emergency basis can utilize standard SAP functionality to create Service Entry Sheets directly from the Maintenance Service Requisition in the work order

• This eliminates the need to involve Purchasing in the assignment of sources and processing. Instead, the system can convert them directly into service entry sheets, the step involving conversion into a purchase order being omitted

• This is makes particular sense in connection with maintenance and repair work. In the case of production stoppages due to mechanical breakdowns, for example, repairs often have to be carried out extremely quickly - with no time to involve Purchasing

• You can create a Framework Order (PO Type “FO”) in the system in advance to cover anticipated requisitions originating from Plant Maintenance. You can use this framework order as the source for the relevant requisition at the time a specific need arises. This means that you can use just one purchase order to cover a large number of procurement transactions

EMERGENCY MAINTENANCE SERVICES


EMERGENCY MAINTENANCE SERVICES

• A Framework Order must exist in the system and this framework order must be entered in the PM work order operation as a source • A Framework Order is a purchase order with the document type “FO” in the standard system. It has an extended validity period

instead of a specific delivery date


3 KEY LEARNING POINTS

Key Decisions in Maintenance Service Process

1. Process for Planned vs. Unplanned Services

2. Functionality differences for work order control key PM02 vs. PM03 -Regular external processing vs. use of External Service Management. Process control!

3. Use of Material Masters for Services (Material Type “DIEN”)


CLOSING

• In conclusion, we have highlighted for you today a few of the standard options available in SAP Plant Maintenance on how to establish and procure Maintenance Services.

• The business/business process will influence the appropriate direction and design of Maintenance Services

• Focus should be on:1. Ease of use for the end users2. Reporting – best way to track the cost and history of maintenance service

spend


QUESTIONS


THANK YOU

Bob Pennington - Senior Analyst & Non-Hydrocarbon Logistics SAP Systems LeadCITGO Petroleum Corporation – Email: [email protected]

Denise Powell - Global Business Development, Supply Chain & ProcurementVesta Partners – Email: [email protected]

MRO: MAINTENANCE SERVICES - · PDF fileVESTA SERVICE OFFERINGS. ... • In SAP Plant...

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