Title

Analysis of Order Values

Purpose
This program enables you to run the following analyses:

• Totals analysis


• ABC analysis


• Analysis using comparison periods


• Frequency analysis

You can choose one of the above options, combine several of them, orrun all four analyses in a single step.

Features

Running an analysis of order values
You invoke all four of the above analyses as follows:
Choose Purchase order -> Reporting -> Order value analysis.
Enter your selection criteria and press ENTER.
RESET N1
The screen is subdivided into five parts. The first two contain thefields for the sort and output sequence to which the other analysesrefer.
Note
To run voluminous analyses in the background, you must create avariant. In this variant, you must cancel the Interactive analysis
indicator. All results of the analysis are then printedsuccessively in a list.
In the left part of the screen you can specify the totaling (summary)levels:


• Purchasing organization


• Purchasing group


• Vendor


• Plant


• Material group


• Material

In the part of the screen to the right, you specify which values (e.g.net order value) you wish to have, and the sequence in which they areto be displayed in the list.

Totals analysis
Totals analysis affords you an overview of the value and number of POs.

Activities
To run a totals analysis, proceed as follows:
Choose Purchase order -> Reporting -> Order value analysis. Theinitial screen for order value analysis appears. Enter the necessarydata.
Choose Edit -> Selection options.
Specify the sort sequence. For example:
Purch. organization 1
Plant 2
Material 3
In the part of the screen on the right, enter the values you wish tohave for the specified criteria. For example:
Net order value 1
Av. value per PO 2
Run the analysis.
You get a list of all materials ordered for a plant, the net ordervalue, and the average value per PO. Below this, the following data isdisplayed for each plant and purchasing organization:
Total net order value
Total average value per PO

ABC analysis
The ABC analysis is used for classifying vendors or materials by ordervalue. The ABC indicator has the following instances:
A Percentage with a high order value.
B Percentage with a medium order value.
C Percentage with a low order value.
The ABC analysis allows you, for example, to determine the relativeimportance of the individual vendors in your vendor base. It providesyou with an overview of any changes that may occur in yourrelationships with vendors.

Activities
To run an ABC analysis, proceed as follows:
RESET N1
Choose Purchase order -> Analyses -> Order value analysis toaccess the initial screen of the order value analysis. Enter thenecessary data.
Choose Edit -> Selection options.
The ABC analysis pertains to the organizational level that you havemarked in the upper left part of the screen with 1.
For example, select the Vendor field by entering 1 in theuppermost left-hand part of the screen.
In the right-hand part of the screen for the ABC analysis, select thevalue according to which the analysis is to be carried out. You canselect one of the following values:
Net order value
Average value per purchase order
Number of purchase orders
On the right, select the Net order value field, for example.
Run the analysis. It will provide you with the totals list of thevendors.
Choose Goto -> ABC analysis to run the ABC analysis.
RESET N1
The default value distribution for ABC analyses is 70-20-10 percent.The system adds the net order values of the vendors in descending orderuntil 70 percent of the total order value is exceeded. This group ofvendors is classified in MM Purchasing as "A" vendors.
The addition is continued until a further 20% of the total order valuehas been exceeded. This group is classified as "B" vendors.
The vendors accounting for the remaining 10 percent of total ordervalue are the "C" vendors.
The % shr. column shows the vendors’ share of the total ordervalue. These shares are added together in the Cum. % shr.column.

Analysis using comparison periods
This analysis allows you to easily detect changes in purchasingactivities. For example, you can determine how much was ordered fromwhich vendor by which purchasing organization or purchasing group, andby how much the total order value of one period differs from that of acomparison period.
In this analysis, you can display all the data that you previouslydisplayed in the totals analysis.

Activities
To compare two periods, proceed as follows:
Choose Purchase order -> Reporting -> Order value analysis. todisplay the initial screen of the order value analysis. Enter thenecessary data.
Choose Edit -> Selection options.
Enter the two periods you wish to compare in the Order date 1 from- to and Order date 2 from - to fields.
Note
You can enter the dates for the following comparisons particularlyquickly (Fast entry option):
- Comparison of years
- Comparison of the first half of a year with the second half
If you enter one date in either the Order date 1 to or theOrder date 2 from field, the system sets the remaining dataautomatically on the basis of this single date specification.
Example
Enter the date 06.30.98 in the Order date 1 to field. The systemthen sets the data for a half-year comparison:
- 01.01.98 - 06.30.98
- 07.01.98 - 12.31.98
Choose Program -> Execute -> Goto -> Comparison of periods. Thesystem will generate an overview of the relevant purchase orders.
Note
You can also compare overlapping periods (for example, 01.01. - 03.31.compared with 03.01 - 05.31).

Frequency analysis
Use this analysis to determine which net order values most frequentlyoccur for which purchasing organizations.
The frequency analysis can be used as a basis for negotiations withvendors. For example, you may find that you have issued many individualpurchase orders with a value greater than $2000 to vendor X, and anindividual percentage quantity discount would be more favorable thanthe existing period-end rebate based on total business volume over aperiod.

Activities
To run a frequency analysis, proceed as follows:
RESET N1
Choose Purchase order -> Reporting -> Order value analysis todisplay the initial screen of the order value analysis. Enter thenecessary data.
Choose Edit -> Selection options.
Enter the following intervals in the Net value 1 to 4fields:
Net value 1 to 500
Net value 2 to 1000
Net value 3 to 2000
Net value 4 to 5000
Run the analysis. The totals list appears.
Choose Goto -> Frequencies to have the system calculate howoften order values occur.