PR Release Procedure: PR Release Strategy Matrix

Scenario

 

A company has four plants (A000, B000, C000, and D000). Each plant has a stock controller and plant manager. Each plant produces specific sub-assembly and products, and they can be transferred from one plant to another. A000 also acts as the Head Office where Asset Manager and Operational Director perform their tasks.

All PRs created need to be released/approved by specific person according to the following conditions:

1. Because usually they create a Stock transfer request/STR (PR with item category “U: Stock Transfer”) that contains a lot of items, they decide that STR needs to be approved by its supplying-plant stock-controller with “overall PR” procedure (header level).
   To make this procedure runs well, the company has an internal policy that an STR can contain only items with same supplying plant. If someone needs STR from two supplying plant, he/she must create two different PR. They also have created a PR document type that specific for STR. That document type only allows “U: Stock Transfer” item category.
2. PR for external procurement (PR with item category other than “U: Stock Transfer”) needs to be approved with “item-wise” procedure (item level). The release strategy of the PR depends on the account assignment and the total item value.
   • Item with “standard (inventory)” account assignment that has total value less than USD 10,000 needs to be approved by its stock controller.
   • Item with “standard (inventory)” account assignment that has total value USD 10,000 or more needs to be approved by its stock controller and plant manager.
   • Item with “Asset” account assignment needs to be approved by Asset Manager whatever its total value and wherever it’s requested.
   • Item with “Cost Center” account assignment that has total value less than USD 5,000 needs to be approved by plant manager.
   • Item with “Cost Center” account assignment that has total value USD 5,000 or more needs to be approved by plant manager and operation director.

Based on the above scenario we are asked to configure the PR release procedure.

PR Release Strategies Matrix
From the above scenario we know that we have to use both “Overall PR” and “item-wise” procedures. We also know the criteria/parameters that determine the release strategy (who has the authorization to release/approve PR). To make it easier to understand, we can make a release strategy matrix like the following tables:

Each row in the above “Release Strategies” tables is a release condition, which if a PR meets the condition, then associated release strategy will be assigned to that PR. For instance, if a PR meets condition at the first row of “Release Strategies” table for “item-wise” release procedure, then that PR needs to be approved by Stock Controller A.

The one thing that must be carefully considered in PR release procedure configuration is to ensure that all possibilities of PR parameter’s value combinations (all release conditions) have been anticipated by PR release strategies. Once we determine the release conditions, if there are PRs which don’t meet any conditions, then that PRs will be considered that they don’t need any approval/release processes. So, they will be available to be processed to the next step (to become a PO or STO).If we don’t want that happen (if we want all PRs needs to be approved), we have to ensure that each PR created must meet one of the release conditions. In our scenario, we can ensure that, for example, by creating a PR document type for STR that only allows “U: Stock Transfer” item category; and another PR document type that only allows “Standard”, “A: Asset”, and “K: Cost center” item categories.After creating the PR Release Strategy matrix, then we start to configure it on SAP R/3.