Blueprint for Hospital Management by djn57824

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									Business Blueprint Review
 Materials Management
         Session 1

       Purchasing
     December 6, 2004
Welcome and Session Overview

   Housekeeping Items
     Turn Off Cell Phone
     No Side Conversation
     Ask Question During the Q & A Open Session
   Pre-session expectations
     Read Blueprint Documents
     Submitted Written Feedbacks
   Format for today’s session
     Introduction
     Summary of MM Team Blueprint
     Q & A Open Session
     Closing
Welcome and Session Overview

   Post-session expectations
    This session is intended to provide an executive summary of the Purchasing
      Section of blueprinting, to gain understanding of and to get feedback for the
      following:
     Purchasing Session
     Business Process Changes
     Benefits under New System
     Challenges with New System

   Submission of written feedback
    Send written feedback to Kevin R. Stevens – kstevens@uky.edu
    or submit the Feedback Form at
    www.uky.edu/IRIS/forms/blueprintfeedback.html
   Introduction – Purchasing Review Session


Background Information

 Replace the present financial system (FRS) which is antiquated, costly to maintain

 Address the lack of integration with human resources and student systems

 Improve business and service processes

 Ensure high levels of faculty, student, staff and customer satisfaction

 Enhance the university’s overall competitiveness

 Use a phased approach for implementation of functionality

 Implement core functionality in Phase 1 to replace FRS, MM, HRS and SIS
    Introduction – Purchasing Review Session


Project Scope – Materials Management

   Phase 1A
      Purchasing
      Accounts Payable
      Procurement Card

   Phase 1B
      Hospital Inventory Management

   Future Phases
      e-Commerce / e-Procurement
      Inventory Management in other areas (Physical Plant, Stores)
      EDI Transmission of Purchasing Documents (Campus)
      Expanded Use of Workflow
Introduction – Purchasing Review Session


                  Team Membership
  UK Members                   LSI Consulting
  Ronda Beck                   John-Marc Quilter
  Tony Day                     Andre Wakeford
  Joe Hines                    Hans-Peter Beiche
  Brian Hughes                 Suzanna Garfunkel
  Leon Roberts
  Kevin Stevens
Introduction – Purchasing Review Session

Project Methodology Phases




          We are Here
    Introduction – Purchasing Review Session


Project Timeline
   Project Preparation ended August 6, 2004.

   Business Blueprinting began August 9 and will end December 17,
    2004.
     Completed Blueprint for Review - November 30
     Blueprint Signoff - December 17

   Realization begins January 2005.

   Final Preparation and Go Live & Support dates for each functional area
    will be determined during the Business Blueprint phase.
    Introduction – Purchasing Review Session

Business Blueprint - Deliverables

   Baseline Scope: Project Scope for IRIS Phase I

   Timeline for Realization, Final Preparation, Go Live & Support

   SAP Organization Structure

   Business Process Requirements and Flow Charts

   GAP Analysis

   RICE List – Development Requirements for Custom Reports,
    Interfaces, Conversions, Enhancements

   Business Process Master List
  Introduction – Purchasing Review Session


Purchasing Scope for IRIS Phase 1
 Requisitions

 Purchase Orders
     Regular Purchase Orders
     Framework Orders

 Outline Agreements

 Goods Receipt

 Requests for Quotations (RFQ)
  Please Note: System deployment will be in phases and not all functionality will be
  in place during the initial phase. As an example, some paper forms (e.g., DAV
  forms) will continue to be used. In a later phase, these forms will be eliminated as
  electronic processes are introduced throughout the university.
    The Materials Management Blueprint


Key Decisions Made
   Support uniform or standard processes.

   Standard procurement approval process.

   No approval process will be required for hospital purchases of
    material master items.

   Procurement will be made using 5 basic SAP documents:
    Requisition, Purchase Order, Outline Agreements (Contracts),
    Request for Quotation, and Goods Receipt.

   Material Requirements Planning (Inventory Management System)
    will generate automatic Purchase Orders for the hospital.
    The Materials Management Blueprint –
    Key Decisions (Cont)

   On-line receiving will be done by department.

   “Three-way match” (Purchase Order, Goods Receipt, and Invoice)
    will be performed on-line in SAP for commodities and equipment.

   “Two-way match” (Purchase Order and Invoice) will be used for
    certain types of purchases (e.g. rentals and leases).

   Vendor File maintained by Accounts Payable, Hospital
    Accounting, and Purchasing.
    Materials Management – Purchasing
    Historic Challenges and Barriers

   CHANGE

   Developing processes that are user-friendly and balance the
    separation of duties while increasing efficiency

   Terminology
    Materials Management – Purchasing
    Business Process Changes

   Requisitions will commit funds.

   The paper invoice transmittal process will be eliminated.

   The Requisition and Purchase Order processes will be
    standardized.

   Purchase Order transmittal to vendors will be automated where
    appropriate.
    Materials Management – Purchasing
    New System Benefits

   Integrated System (FI, CO, FM, GM, CM, HR)

   All data in one system will reduce the effort required to maintain
    unnecessary interfaces and shadow systems.

   Improved efficiency for end-users
      Standardized requisition process
      Reduced reliance on paper processes

   Higher Data Quality

   Improved access to document flow (REQ/PO/GR/Invoice/Check)

   Authorized users will be able to view and monitor the status of
    their requisitions on-line.
    Materials Management – Purchasing
    New System Benefits

(Continued)

   Streamlined Reporting Process
      Real Time Reports – Drill Down Functionality
      Fewer Printed Reports

   Semi-automated/Automated Process
      Auto – PO for hospital MRP Orders
      Transmission of Purchasing Documents via EDI/FAX/Email
 Materials Management – Purchasing
 New System Benefits
                          Handhelds /
State of the Art       Bar     SD                          FI                      Comprehensive
 Technology IS-U/    CodingSales &                    Financial                     functionality
                           Distribution              Accounting
  3-tier Arch. UP/DownMM
                  JV Materials                                     CO
                             Mgmt.                              Controlling
             SCADA*
                        PP                                                 AM
                     Production
Integrated
 solutions
                      Planning
                                             R/3                      Fixed Assets
                                                                         Mgmt.
                                                                                          Designed
                                                                                         for all types
               EDI                                                                 Funds of business
                       QM
                    Quality
                                        Client / Server                       PS
                                                                          Project
 Open
                    Manage-
                     ment MSM              ABAP/4                 WF
                                                                          System

systems       Field    Maintenance &                            Workflow
             Service        Service                                                IS-RE
             Support         Mgmt HR                       IS
                                   Human              Industry
                     Work        Resources            Solutions          IS-U /
 Business           Clearance*                                           FERC
  process                    EH&S                                IS-U /                Over 9,000
                                           CAD   AM / FM                              installations
 solutions                   (Hazmat)
                                                  GIS             CCS*
                                                                                    around the world
Partner Solutions
    Materials Management – Process Review


    High Level Blueprint Review of:
   Master Data

   Business Process Key Points

   Business Process Flows
    Materials Management – Master Data

    Master Data records consist of information that is to be stored
    and maintained for a significant period of time and used
    repeatedly for one or more business processes.

   Vendor Master records will be uploaded from Master Data
    available in FRS.

   Material Master records will be uploaded from Master Data
    available in ESI.

   Hospital Accounting, Purchasing, and Accounts Payable will
    maintain their appropriate records.
    Materials Management – Master Data

   Material groups, used for grouping like materials and services,
    will be determined.
      These groupings will be used for search purposes as well as for some
       standard SAP procurement reporting.
      Material groups will also be used to route requisitions to buyers and for
       account determination.

   Purchasing groups will be configured for each buyer.
    Materials Management – Requisitions

   Any SAP user assigned the role of requisitioner will be able to
    manually enter requisitions to any Cost Center.

   Funds will be pre-encumbered when a requisition is created and
    saved.

   Requisitioners will enter all relevant information such as vendor,
    materials and/or services requested, and accounting data (cost
    center, fund and G/L account encumbered).
Approver
             Requisition Processing (Non-Material Master)



                                    Requisition
                   Not               Approval
                 Approved


                                                   Approved
Department




               Create/Change
                 Requisition
Purchasing




                                                                                        Process PO,
                                                                       Assign Vendor        RFQ,
                               No                 Validate Req   Yes        &/or         Framework
                                                                        Process Req    Order or Outline
                                                                                         Agreement
    Materials Management – Release Strategies

   Apply to all Campus Purchase Requisitions.

   Electronic document approvals will replace the current approvals.

   Based on the cost object, material group and dollar value or
    amount of the purchase requisition.
Materials Management – Release Strategies

                                                         No


                                                                                 Level 1 & 2
                                                                 Yes           Approval or Level
                                                                                 2 Approval

                                                                                                                                 Material Group
                                                                                                   Approved?
                                                                                                                                   Approval

                                                                                                                  Yes

                                                             Over 10K?    No   Level 1 Approval
 Release Strategy – Non Material Master




                                                                                                                                  Approved?

                                                                No
                                                                                                     Yes
                                                                                                                                      Yes


                                                                                                               Restricted
                                          Requisition    Requisitioner                                                            Requisition
                                                                                            No                  Material    No
                                          Processing      Cost Ctr?                                                               Processing
                                                                                                                Group


                                                                Yes

                                                                                                     Yes

                                                             Over 2.5K?



                                                                Yes



                                                             Over 10K?    No   Level 1 Approval



                                                                                                   Approved?


                                                                                 Level 1 & 2
                                                                  Yes          Approval or Level
                                                                                 2 Approval


                                                        No
    Materials Management – Non-Material Master
    Purchase Order Processing
   Purchasing Department or Purchasing designee with the
    appropriate authority will convert approved requisitions to
    purchase orders.

   Purchase Orders in excess of $100,000 will require approval from
    a Director/Associate Director/Assistant Director/Manager of
    Purchasing.

   Approved and processed purchase orders will be transmitted via
    EDI, facsimile, post, e-mail, etc., to the vendor by the Purchasing
    Department.
             Materials Management – Non Material Master
             Purchase Order Processing
Approver




                                              Purchasing
                                               Approve?



                                   NO                            Yes
Department




                                                 Yes                                                              GR Process
Purchasing




                                                                          Transmit PO
                Requisition   Create/Change                     Release    To Vendor
                                              Over 100K?   No
                Processing         PO                             PO
Vendor




                                                                                        Receive PO   Ship Goods
   Materials Management – Request for Quotations

 Any purchase requiring quotations will be processed as an
  Request for Quotation (RFQ) online.
     Quotes will be entered and evaluated in SAP.
     Quality and other “best value” criteria will be assessed outside of SAP.

 Vendor quotations/bids will reference a collective number
  (procurement solicitation ID).
     One reference number for the quotations/bids to the purchase
Purchasing
             Materials Management – Request for Quotations




                Requisition   Create   Transmit             Process     Select          PO
                Processing     RFQ       RFQ                Quotes      Vendor       Processing
Vendor




                                                  Prepare
                                                   RFQ                 Rejection
                                                   Quote              Notification
    Materials Management – Outline Agreements

   Established based on Purchase Requisitions, Requests for
    Quotations, Single Source, and Novation Contracts.

   Established for a fixed quantity or value for a specified period of
    time.

   Requisitioner can refer to these contracts for pricing terms and
    any other contractual terms that will be pulled from the outline
    agreement into the requisition.
Purchasing
             Materials Management – Outline Agreements




                              Create       Send       Create PO with
               Requisition                                                  PO
                              Outline     Outline      Reference to
               Processing                                                Processing
                             Agreement   Agreement   Outline Agreement
Vendor




                                          Receive
                                          Contract
    Materials Management – Framework Order

   Two-way match Purchase Order

   Defined validity period

   Quantity or Value limit

   Multiple Payments
Purchasing
             Framework Order Processing




                                Create
                Requisition                  PO
                              Framework
                Processing                Processing
                                 Order
    Materials Management – Goods Receipt

   Received on-line by departments

   Three-way match
             Materials Management – Goods Receipt




                                                                    Process GR with
                Receive Goods   Check Goods     Return?       No
                                                                    Reference to PO



                                                  Yes
Department




                                                                     Ship Back to
                                              Redelivery?     Yes
                                                                       Vendor


                                                   No


                                                Contact
                                              Purchasing to
                                               Cancel PO
Purchasing




                                               Cancel PO
    Materials Management - Training

   UK Community (Campus and Hospital)
      Create a Purchase Requisition
      Approvals
      Goods Receipt

   Purchasing Department personnel
      Convert a Purchase Requisition (PR) into a Purchase Order (PO).
      Understand the whole procurement process (i.e., requisition-to-check) to
       troubleshoot any purchasing problems.
      Purchasing approvers will have to be trained to release a Purchase Order.
      Vendor/Material Master maintenance.
  Questions and Answers


 Review of Ground Rules
    Questions asked one at a time
    No side conversations
    Parking lot

 Open Discussion
  Review Session Close


 Feedback Process
    All Feedback Must in Writing
    Send All Feedback to Kevin Stevens – kstevens@uky.edu

 Post-session Expectations
    Share comments
    Identify issues and potential problems
    Offer Suggestions
    Provide quick feedback in writing for consideration

    Blueprint documents to be signed on or before December 17, 2004

								
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