Presentation on theme: "State Farm Insurance Presents: PeopleSoft Contracts."— Presentation transcript:
State Farm Insurance Presents: PeopleSoft Contracts
Overview of State Farm Purchasing State Farm Purchasing has the authority and responsibility for purchasing or renting all items and services required by the Companies with the exceptions of real estate, advertising, agency publications and awards, computer hardware and software, and legal council. The Replacement Service is a unit in Property & Casualty Claims. The State Farm Replacement Service buys consumer products in support of Fire Claims’ claim settlement activities. Administrative Services’ purchasing authority is highly centralized, with most being done at corporate.
Users and Roles: Replacement Service, Claims - approximately 180 users in U.S. Purchasing – approximately 300 General Purchasing employees Avg. Monthly Numbers (based on data from 7/1/ /31/05) Replacement Service/Purchasing Total: Almost 6,000 Purchase Orders requesting over $85.5M of goods each month Number of Items: Purchasing is responsible for a variety of items: computer products and services, office supplies, furniture and equipment. 428,000 items 39,738 active for Purchasing 47,633 active for Replacement Service 83,146 Description only items (one time use, built in the transaction, not present on the item master table in PS)
Contract Use A contract is an agreement between two parties which, to be enforceable, should be in writing. Vendor contracts for all areas of Purchasing are maintained by Contract Administration in a Contracts Library. Setting up PeopleSoft contracts The contract process allows purchasing to create a PeopleSoft contract that mirrors an external supplier agreement. The PeopleSoft contract can be referenced on all purchase orders that are generated within the application, and discounts and other contract terms can be applied to those orders.
Types of contract Purchase Order Contracts: Use the Purchase Order Contracts to create order contracts that establish pricing terms and conditions that may offset or supplement regular pricing agreement with suppliers. Release to Single PO Only Contracts: Use the Release to Single PO Only contracts process option to indicate that the contract is a Release to Single PO Only contract. General Contracts: Use the General Contract to indicate that a contract is general in nature. If the contract does not fall under the above two options, then general should be selected. State Farm does not use general contracts at the time.
Types of contracts (continued) Fixed item Contracts: Use fixed item only for purchases that specifically reference the items identified on the contract. Open item contracts: Use Open Item contracts for agreements that apply to any item (adhoc or defined items) purchased from the supplier while the contract is in effect.
For State Farm’s purposes the contract process is to: Suppress the printing of purchase order terms and conditions while referencing the contract number on the purchase order. Apply price adjustments to Open Item procurements by using a discount % Apply price adjustments to Specific Item procurements by using a discount % or dollar amount Schedule releases of specific items over a specified time period. Allow for the tracking of: Price adjustments Minimum and maximum order quantities Purchases made to date Cumulative quantity price adjustments Advance notification to the buyer of contract expiration
Open Item Contract Adding a contract
PO Open Item Pricing
Specific Item Contract Contract Header
Sourcing information: Finds a contract If no contract is specified on the transaction and the transaction source is a requisition the PO Calculations process attempts to find the most recent effective contract for the already determined vendor. If the contract does not meet minimum or maximum requirements, the PO Calculations process goes to the next most recent effective contract. The contract maximums are checked at the line level. If you have multiple lines on a PO with the same item ID, the sum of those line quantities and amounts is checked against the contract line maximums. The contracts that the PO Calculations process reviews are restricted to the specified business unit when the contracts are set up in the system by business unit. If a contract is specified through online requisition or a contract release, the PO Calculations process ensures that the contract is still effective, and that the maximum amounts and quantities have not been exceeded. If the contract is not still effective or the maximum amount or quantity is exceeded, the PO Calculations process rejects the transaction.
Calculates the price The PO Calculations process updates the contract release amounts.. If you select the calculate price option, the PO Calculations process recalculates the price. The process begins with the price from the item. If it finds a contract or if a contract is specified, and the contract indicates to use the contract base price, the PO Calculations process uses the contract base price as the starting price instead of the item price. If there is no contract, or if the contract does not indicate to use the contract base price, and PO Calculations process finds an item vendor price, it uses the item vendor price as the starting price instead of the item price. Once the PO Calculations process has the starting price, it then applies contract and vendor price adjustments as indicated by the pricing rules. The process also creates value adjustments to show the starting price and each price adjustment. If Calculate Price is not checked then the process will not even look for a contract.
Questions? Contact Information: Jennifer Dalrymple Administrative Services – Administration Phone (309) Shawna Theison Administrative Services – Purchasing and Distribution Phone: (309)