▶ START · Vendor identified / requirement arises
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1
Vendor Onboarding & Master Governance
🔒 Vendor Gate
Invite vendor & share registration link
iProcurement shares a registration link with a shortlisted vendor (portal, email or WhatsApp). Trigger-based — vendors cannot self-enrol from a public page.BuyerTrigger-based; link sent to potential vendor via portal / email / WhatsApp.
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Vendor self-registration (KYC + documents)
iKYC = Know Your Customer. The vendor enters legal, bank and tax details and uploads statutory documents — PAN, GST, MSME, FSSAI, bank proof — on the portal.VendorPAN, GST, MSME, FSSAI, bank proof, statutory certs uploaded on the portal.
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Capture vendor material codes
iThe vendor also uploads their own material codes / part descriptions (any format). AI maps each to Naga's SAP material code so future receipts auto-match — see Smart Material-Code Mapping.VendorVendor part codes/descriptions uploaded & AI-mapped to SAP material master (mandatory).
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🤖 OCR extraction + duplicate & field validation
iOCR = Optical Character Recognition. AI reads the uploaded documents, pulls out the key fields, and checks for duplicate vendors using PAN, GSTIN, bank account and name.AI / OCRExtract & compare GST/PAN/bank/name; duplicate check on PAN, GSTIN, bank a/c.
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Data valid & non-duplicate?
iCheckpoint: if a field is wrong, missing, or a duplicate is found, the request is returned to the vendor to fix. Only clean records move forward.Decision
↻ No / mismatchReturned to vendor for correction — re-upload right document.
✓ YesProceed to external validation & review.
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🤖 External validation (GST active · IFSC / bank)
iAutomated checks against authoritative sources — e.g. is the GST number active, does the IFSC/bank account exist — via approved government and bank APIs.AI / APIAutomated status checks via approved government / bank APIs (where legally available).
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Multi-stage review & approval
iSequential human review by Purchase, Finance, Tax, Quality and Compliance. Phased: manual at first; once AI proves reliable, clean cases auto-approve and only flagged ones reach reviewers.ApproversPurchase → Finance → Tax → Quality → Compliance, risk rating & rework. Phased: manual first, then AI auto-approves clean cases.
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Approved?
iFinal onboarding decision. If rejected, the vendor is notified with a reason. If approved, the master record is created in SAP.Decision
✗ RejectedVendor notified with reason; onboarding closed / reworked.
✓ ApprovedCreate master in SAP.
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💾 Create Vendor / Business Partner (maker-checker)
iThe final maker-checker sits in VMS. Once approved there, the master posts to SAP — no separate SAP-side maker-checker is needed. No master is created outside this audited workflow.SAPMaker-checker is in VMS; on final approval the master posts to SAP (no second SAP-side check).
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🔒Control Gate · Vendor Gate
Only approved, valid, non-blocked vendors are selectable downstream. SAP vendor number returned to vendor.
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2
Demand → RFQ & Sourcing
🔒 Sourcing Gate
Purchase Requisition raised (budget check)
iPR = Purchase Requisition. MRP materials: PR is raised in SAP (auto from min/max) and pulled into VMS. Non-MRP materials: PR is raised directly in VMS — blocked/alerted if the material already has SAP MRP.User DeptMRP: PR raised in SAP → pulled to VMS. Non-MRP: PR raised in VMS (blocked if material has SAP MRP).
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🤖 Demand consolidation + eligible-vendor proposal
iAI groups similar requirements across divisions to buy in bulk (better price) and proposes eligible vendors by category, risk and past score.AIAggregate similar demand across divisions; propose vendors by category, risk & score.
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Buyer confirms invitees & RFQ rules
iRFQ = Request for Quotation. The buyer confirms which vendors to invite and the rules — minimum number of quotes, closing date, sealed-bid visibility.BuyerMin-quote count, bid-close date, sealed-bid visibility per policy.
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🔒Control Gate · Sourcing Gate
Required number of quotes + technical approval, or deviation approved.
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RFQ issued (portal + email / WhatsApp)
iThe RFQ goes out to vendors. The portal is the controlled channel for responses; WhatsApp/email are only alerts.SystemPortal is the controlled response channel; WhatsApp/email as alert.
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Vendors submit sealed quotations
iVendors submit quotes — price, freight, tax, lead time, warranty, payment terms, documents — before the closing date. Sealed = hidden from others until bid close.VendorPrice, freight, tax, lead time, warranty, payment terms, documents — before close.
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3
Comparison, Landed Cost & Negotiation → Award
🔒 Price Gate
🤖 Landed-cost normalisation & ranking (first)
iThis runs first, as soon as quotations are in: landed cost = basic + freight + packing + tax/duty + the rupee value of the credit period (cost-of-funds). AI normalises and ranks all vendors and suggests the best — before the human technical/commercial review.AIRuns first — basic + freight + packing + tax/duty + credit-period→₹; AI ranks & suggests best.
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⚟ Runs in parallel — after the AI suggestion
Technical evaluation
iQuality/User department checks specification, warranty and compliance. This team cannot see or change the commercial (price) bids, keeping evaluation fair.Quality / UserSpecification, warranty, compliance — cannot alter commercial bids.
Commercial evaluation
iA separate buyer team evaluates price and commercial terms — kept apart from technical evaluation so neither side can influence the other.BuyerPrice & commercial terms — separate team from technical.
⚞ Merge
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Negotiation rounds → revised quotes resubmitted
iNegotiation calls are placed and recorded inside VMS (transcribed; vendor phone numbers masked). AI shows cross-division rates, history and targets on screen. The revised quote is re-entered and re-ranked. Every round retained for audit.Buyer / VendorCalls placed & recorded in-VMS (transcribed, numbers masked); AI shows targets. Revised quote re-enters & re-ranked.
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Non-lowest selection or price increase?
iIf the buyer wants a vendor who isn't the cheapest, or a price has risen, the system forces a recorded reason and approval before continuing.Decision
✓ Lowest / within limitProceed to award.
⚠ YesMandatory reason + approval (Price Gate).
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🔒Control Gate · Price Gate
Price increase, high-value & non-lowest selection require reason + approval.
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Award decision — split / item-wise / non-lowest
iThe order can be awarded flexibly — split across vendors, item-by-item, or to a non-cheapest vendor (with approval). The agreed price is locked as the savings baseline.ApproversFlexible award with approval; baseline locked for savings measurement.
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Regret communication to unsuccessful vendors
iVendors who were not selected are automatically notified of the outcome, often with a note on where to improve next time.SystemAuto-notify non-selected bidders (outcome + improvement note).
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4
PO Creation & Release
🔒 PO Gate
💾 PO created from approved award
iPO = Purchase Order: the formal order, created in SAP from the approved award.SAPAward data handed to SAP purchasing document.
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🤖 PO validation vs quotation & approval
iAI checks the PO against the winning quotation and approvals — price, quantity, unit, tax, payment term, warranty, vendor/GSTIN and quotation validity.AIPrice, qty, UoM, tax, payment term, warranty, vendor/GSTIN, quotation validity.
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🔒Control Gate · PO Gate
Stock, open PO, consumption, budget, approved source & terms shown before release.
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PO release (value-based approval levels)
iThe PO is approved through value-based approval levels, then issued to the vendor via portal + WhatsApp/email.ApproversReleased & issued to vendor via portal + WhatsApp / email.
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5
ASN, Gate Entry & Goods Receipt
🔒 Receipt Gate
Vendor submits ASN + uploads invoice
iASN = Advance Shipping Notice: the vendor tells Naga what has been dispatched before it arrives — dispatch date, vehicle, packing list, expected delivery — and uploads the invoice.VendorDispatch date, vehicle/transport, packing list, expected delivery.
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Gate entry — vehicle/driver + invoice scan
iAt the factory gate, security captures the vehicle and driver details and scans the vendor invoice and supporting documents.Stores / GateCapture vehicle no., driver mobile; scan vendor invoice & supporting docs.
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🤖 OCR invoice vs SAP PO + gate seal
iAI reads the scanned invoice and matches it to the SAP PO — vendor, GSTIN, division, material, PO number, e-way bill, e-invoice, weighment slip and gate seal.AI / OCRVendor, GSTIN, division, material, PO no., e-way/e-invoice, weighment, seal colour/VA no.
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Physical verification — shortage / excess / damage
iStores physically counts and inspects the goods, recording any shortage, excess or damage against the invoice and PO.StoresReceived qty / condition compared with invoice & PO.
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Quality & quantity OK?
iIf quantity or quality fails, a debit note or rejection is raised with evidence. If OK, the goods proceed to receipt posting.Decision
✓ OKAccept & proceed to receipt posting.
⚠ OK with conditionAccept at reduced price + credit note.
✗ Not OKReturn + debit note / purchase return (e-invoice).
↻ Post-production return — defects found days after receipt trigger a separate return-to-vendor flow (debit note / purchase return).
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🔒Control Gate · Receipt Gate
ASN, gate entry, GRN, batch & quality status linked to PO.
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💾 GRN / MIGO (or ML81N service entry)
iGRN = Goods Receipt Note. In SAP this is the MIGO transaction (or ML81N for services) — the official record that goods were received.SAPGoods receipt auto-created on approval.
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6
Invoice Capture & 3-Way Match
🔒 Invoice Gate
Invoice submitted (PO or Non-PO Pro-screen)
iPO invoices flow here. Non-PO (expense) invoices follow a separate flow with three scenarios — pay the vendor directly, pay an employee-vendor, or reimbursement with ITC — to be finalised in Discovery.Stores / VendorPO invoices here; Non-PO = separate flow (vendor · employee-vendor · reimbursement/ITC), finalised in Discovery.
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🤖 OCR + duplicate check + 3-way match
i3-way match = checking the Invoice against the PO and the GRN (goods received) on quantity, rate, tax and tolerance. AI also blocks duplicate invoices (financial year + vendor + invoice number).AIFY + vendor + invoice no. dedup; PO ↔ GRN ↔ Invoice on qty / rate / tax / tolerance.
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Match within tolerance?
iIf the three documents disagree beyond tolerance, an exception is routed to the right team with an owner, reason and deadline (SLA). If they match, it posts.Decision
↻ MismatchException routed to Purchase / Stores / Tax / Finance with owner, reason & SLA.
✓ MatchProceed to posting.
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🔒Control Gate · Invoice Gate
Validated vs PO, GRN & tolerance rules; TDS / HSN / GST checked before posting.
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💾 MIR7 simulation → MIRO posting (FB60 / FB65 non-PO)
iSAP steps: MIR7 parks and simulates the invoice (an accounting pre-check); MIRO posts it. FB60/FB65 are used for Non-PO invoices and credit memos.SAPGL simulation retained before final posting.
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7
Payment Validation & Execution
🔒 Payment Gate
Due-date & ageing calc — Non-Due / Due / Over-Due
iThe system calculates each invoice's due date and sorts payments into Non-Due, Due and Over-Due, flagging early-payment cash-discount opportunities.SystemBaseline date + payment term; early-payment-discount opportunity flagged.
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🤖 Open-item review & invoice grouping
iAI reviews the vendor ledger — outstanding advances, debit/credit notes — and groups same-vendor invoices. Bank balance (fund position) is shown read-only.AIAdvances, debit/credit notes, same-vendor grouping; fund-position shown (read-only).
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Maker-checker — Payable Supervisor → Payable Head
iTwo-person control: a Payable Supervisor prepares and the Payable Head approves, both seeing the full comparison, advances and bank balance in one view.FinanceReview with comparison, advances & bank balance in one view.
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Approve / Hold / Reject?
iThe payment can be approved, held or rejected — a hold or reject needs a mandatory reason and routes back or notifies the vendor.Decision
↻ Hold / RejectMandatory reason captured; routed back / vendor notified.
✓ ApproveGenerate payment voucher.
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🔒Control Gate · Payment Gate
Due date, advance balance, debit/credit notes, discount & approval considered before payment.
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💾 Payment voucher (F-53) → bank → UTR update
iUTR = Unique Transaction Reference (the bank payment reference). SAP generates the payment voucher (F-53), the bank pays, and the UTR is captured back.SAPPayment executes in authorised SAP / bank process; UTR returned to VMS.
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UTR / payment status communicated to vendor
iThe payment confirmation and UTR are shared with the vendor via portal + WhatsApp/email.SystemVia portal + WhatsApp / email.
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8
Vendor Scorecard & Savings Capture
🔒 Performance Gate
Capture delivery / price / quality / compliance / service data
iDelivery, price, quality, compliance and service data from the whole cycle are collected to score the vendor.SystemTransaction data collected across the cycle for scoring.
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🤖 Weighted vendor scorecard + risk band
iA weighted vendor scorecard and risk band — price 25%, quality 25%, on-time delivery 20%, credit 10%, compliance 10%, service 5%, documentation 5%.AIPrice 25 · quality 25 · OTD 20 · credit 10 · compliance 10 · service 5 · docs 5.
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🔒Control Gate · Performance Gate
Score & risk feed vendor eligibility for the next sourcing cycle.
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🤖 Savings auto-attribution & finance validation
iEach saving is linked automatically to its baseline, formula, owner and evidence, then validated by Finance — preventing double-counting across modules.FinanceEach saving linked to baseline, formula, owner, evidence & approval; no duplicate claims.
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Executive 5% cost-benefit dashboard
iThe management view of the 5% savings target: identified -> approved -> realised -> finance-validated, with drill-down to the underlying SAP transaction.SystemIdentified → approved → realised → finance-validated, with drill-down to SAP.
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🏁 Benefit realised & reconciled to SAP
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↻ Continuous loop — vendor score & savings baseline feed the next sourcing cycle (back to Stage 2).