| Status | Approved |
| Owner | |
| Stakeholders |
Issue
Syensqo has multiple intercompany processes with different stock in transit valuation methods. This KDD is to assess the option to harmonise the intercompany processes and evaluate the Advanced Intercompany process in SAP.
Background & Context
Following are all the processes that are treated as intercompany processes Syensqo and the corresponding steps.
| Process | Description | Logistics Flow | Transport Management | Transfer Price | QM | Returns |
|---|---|---|---|---|---|---|
| Stock Replenishment | Standard Intercompany | Purchase Order: Standard purchase order Logistics: GI/GR Invoice: Posted with EDI | Separate service purchase order: Multiple shipment cost documents are raised | Cost+ Trading price | ||
| Direct Shipment (Drop Shipment / Intercompany Sales) | Sales done by the selling entity to customer with sending entity's plant, Goods are shipped from the sending entity | Sales Order: Standard sales order with sending entity plant Purchase Order: No Logistics: GI/GR Invoice: Automatic invoice is generated on the back of customer billing (EDI) | Separate service purchase order: Multiple shipment cost documents are raised Service purchase order raised in the delivering company code?? | Cost+ Trading price Transfer price is determined and stored in the Sales Order | ||
| Direct Trading (Third Party Sales) | Sales done by Syensqo and the sale is fulfilled using an external purchase order. The goods are shipped directly from the vendor | Sales Order: Standard sales order with a third-party item category Purchase order: Created from Sales Order Logistics: Customer inbound / GR(auto) Invoice/Billing: Generated on back of customer inbound. | Separate service purchase order: Multiple shipment cost documents are raised shipment cost is captured against inbound delivery Note : Multiple trading plants are created to cater to the transportation and taxes for this scenario | ?? | ||
| Indirect Trading (Buy - Sell) | Sales done by Syensqo and the sale is fulfilled using an external purchase order. The goods are shipped to the warehouse and then sent to the customer | Sales Order: Standard sales order with a third-party item category Purchase order: Created from Sales Order Logistics: GI / GR Invoice/Billing: Standard PO invoice and Sales order billing | Separate service purchase order for PO and SO: Multiple shipment cost documents are raised | Cost+ Trading price | ||
| Consignment | Goods are sent to the customer and stored in customer site. Customer is billed only when the goods are consumed | Sales Process: Consignment process Note: There are virtual plants created in the countries where Syensqo presence is not there. The movement of the stock to the virtual plant will follow the stock transfer process / Stock Replenishment process | Separate service purchase order: Multiple shipment cost documents are raised The shipment cost is captured against the SO inbound delivery | ?? | ||
| Stock Transfer | ||||||
| Sample / Free goods |
Assumptions
Constraints
Impacts
Business Rules
Options considered
Following are the options considered for the evaluation
Option A : Classic Intercompany Sales / Classic Intercompany Stock Transfer
Option A: Classic Intercompany Sales
Option B: Advanced Intercompany Sales
Option C: Classic Intercompany Stock Transfer
Option D: Advanced Intercompany Stock Transfer
Evaluation
| Criteria | Classic Intercompany Sales / Classic Intercompany Stock Transfer | Advanced Intercompany Sales / Advanced Intercompany Stock Transfer | ||
|---|---|---|---|---|
| Process Completeness | Low: Process has gaps and manual steps / customisations are required to patch the gaps |
| High: Seamless intercompany stock transfer between affiliated organizations |
|
| Document Flow | Simple Intercompany Sales: All the transactions are based on the Sales Order created Intercompany Stock Transfer: All the transactions are based on the Purchase Order created |
| Complex There are extra sales orders and purchase orders created to support the process. The logistics / finance documents are posted against the relevant Sales Order / Purchase Order |
|
| Usability | Multiple Fiori apps to support the process |
| Multiple Fiori apps to support the process |
|
| Valuated Stock in Transit (SIT) | There are gaps in the SIT process. Intercompany Sales: The valuated stock can be posted against the sending entity and not the selling entity. |
| SIT is supported |
|
| Transportation | Incoterms: Not all combinations of Incoterms can be used due to the issue with the SIT Issues with Freight settlements, cost accruals and distributions |
| All the incoterm combinations can be used Freight settlements, cost accruals and distributions will always be in the right company code |
|
| Margin Analysis | Intercompany Sales: Margin analysis is available only at the selling company |
| Intercompany Sales: Margin analysis is available at both selling and sending entity |
|
| Automation | No out of the box automation |
| Automation available via process value chains which can be configured as per the requirement |
|
| Legal / Regulatory | Doesn't fulfil all the legal compliance requirements ex: IFRS15 |
| Legal compliance with the IFRS 15 matching principle with EBRR Audit transparency |
|
| Reporting | Reports and KPI's are available only for the Sending / Receiving entities. Some additional reports required to be built for Margin analysis and SIT |
| Reporting and KPI's are available in Selling / Sending / Receiving entities Out of the box reports to support the operations and error management |
|
| Implementation Complexity | Medium Complex |
| Complex |
|
| Recommendation | Recommended |
Recommendation
Based on the above evaluation criteria, it is recommended to implement Advanced Intercompany Sales / Advanced Intercompany Stock Transfer processes for Syensqo. Follwoing are the different intercompany processes for Syensqo and the corresponding recommendation
| Process | Description | Recommendation |
|---|---|---|
| Stock Replenishment | Standard Intercompany | Advanced Stock Transfer |
| Direct Shipment (Drop Shipment / Intercompany Sales) | Sales done by the selling entity to customer with sending entity's plant, Goods are shipped from the sending entity | Advanced Intercompany Sales |
| Direct Trading (Third Party Sales) | Sales done by Syensqo and the sale is fulfilled using an external purchase order. The goods are shipped directly from the vendor | Advanced Intercompany Sales (To validate once) |
| Indirect Trading (Buy - Sell) | Sales done by Syensqo and the sale is fulfilled using an external purchase order. The goods are shipped to the warehouse and then sent to the customer | Advanced Intercompany Sales (To validate once) |
| Consignment | Goods are sent to the customer and stored in customer site. Customer is billed only when the goods are consumed | Consignment Sales Process |
| Stock Transfer | Stock is moved to different plants within the same entity | Intracompany Stock Transfer |
| Sample / Free goods | TBD ( Sales Process / R&I process / Returns process) |
See also
Change log
Workflow history
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