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    Procurement Cycle in Sap MM

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    tanusreeghosh
    The procurement cycle in SAP MM involves 8 steps: 1) determining requirements, 2) sourcing, 3) vendor selection, 4) purchase order processing, 5) purchase order monitoring, 6) goods receipt and inventory management, 7) invoice verification, and 8) payment processing. A purchasing document is used to purchase materials and services and includes header, schedule, and item information. There are internal documents like purchase requisitions and external documents like requests for quotation, quotations, purchase orders, contracts, and schedule agreements. A purchase requisition is an internal request to procure materials and can be created manually or through MRP, and does not include vendor details.

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    Procurement Cycle in Sap MM

    Uploaded by

    tanusreeghosh
    115 views4 pages
    The procurement cycle in SAP MM involves 8 steps: 1) determining requirements, 2) sourcing, 3) vendor selection, 4) purchase order processing, 5) purchase order monitoring, 6) goods receipt and inventory management, 7) invoice verification, and 8) payment processing. A purchasing document is used to purchase materials and services and includes header, schedule, and item information. There are internal documents like purchase requisitions and external documents like requests for quotation, quotations, purchase orders, contracts, and schedule agreements. A purchase requisition is an internal request to procure materials and can be created manually or through MRP, and does not include vendor details.

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    Procurement Cycle in Sap Mm

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    The procurement cycle in SAP MM involves 8 steps: 1) determining requirements, 2) sourcing, 3) vendor selection, 4) purchase order processing, 5) purchase order monitoring, 6) goods receipt and inventory management, 7) invoice verification, and 8) payment processing. A purchasing document is used to purchase materials and services and includes header, schedule, and item information. There are internal documents like purchase requisitions and external documents like requests for quotation, quotations, purchase orders, contracts, and schedule agreements. A purchase requisition is an internal request to procure materials and can be created manually or through MRP, and does not include vendor details.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    115 views4 pages

    Procurement Cycle in Sap MM

    Uploaded by

    tanusreeghosh
    The procurement cycle in SAP MM involves 8 steps: 1) determining requirements, 2) sourcing, 3) vendor selection, 4) purchase order processing, 5) purchase order monitoring, 6) goods receipt and inventory management, 7) invoice verification, and 8) payment processing. A purchasing document is used to purchase materials and services and includes header, schedule, and item information. There are internal documents like purchase requisitions and external documents like requests for quotation, quotations, purchase orders, contracts, and schedule agreements. A purchase requisition is an internal request to procure materials and can be created manually or through MRP, and does not include vendor details.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 4

    PROCUREMENT CYCLE in SAP MM

    1. Determination of Requirements
    • The material requirements are identified by the user departments or material planning &
    control
    • The requirement passed manually to the purchasing department [In case if you set MRP
    procedure for a material in the material master R/3 system will automatically generates a
    purchasing requisition]
    2. Source Determination
    • Identifies the potential source of supply
    • This is based on a) Past Order b) existing long term purchasing requirement
    3. Vendor Selection
    • The selection of vendors by comparing the prices of various quotations
    • Sending the rejection letters for the non-selected Vendors.
    4. Purchase Order processing
    • Creating the Purchase orders by including the Vendor schedule agreements and contracts
    5. PO Monitoring
    • Sending the reminders to Vendors in a pre-defined intervals
    6. Goods Receipt & Inventory Management
    • Confirming the receipts of the Goods
    • Compare the Goods receipts quantities with the PO quantities.
    • Inform the limit over or under deliveries of order goods.
    7. Invoice Verification
    • Invoices are checked for accuracy of prices and contents
    • Noting of quantity and price variances based on purchase order & goods receipt data
    8. Payment processing
    • Find accounting for vendor payments

    Purchasing Document

    A purchasing document is used for purchasing for materials and services Structure of the
    Purchasing Document
    • It is common for all Purchasing documents. In earlier versions (i.e. before 4.6c) below three
    segments are as three screens.
    • In latest versions all three screen information is in single screen information with tabular form
    called Enjoy Transaction (It ends with ‘n’ in Transaction code)

    • All documents are subject to the release of electronic approval


    • Confirmation settings for all documents are same.
    Types of Purchasing Documents:
    1. Internal Purchasing Documents
    i) Purchase Requisition (PR) is an internal purchasing document
    2. External Purchasing Documents
    i) Request for Quotation (RFQ)
    ii) Quotation
    iii) Purchase Order (PO)
    iv) Contract
    v) Schedule Agreement (SA)

    Purchase Requisition (PR)


    It is a request to procure certain quantity of material at certain point of time/date.
    • It is an Internal Document and not used at outside of the Enterprise.
    • Purchase Requisitions can be created
    -Manually – fill the data manually
    -By MRP — If you set up a MRP procedure for a material master the system automatically
    generates a PR.
    • Purchase Requisition does not have Header and Schedule lines.
    • There is no vendor detail to be filled-in in PR.
    • In PR you can indent more than one Item or more than one plant
    • It does not influence the financial updating.
    • When the system creates a purchase requisition automatically, a user program (MRP or order
    management) determines the material, PO quantity and delivery date. If required the Purchase
    Requisition is automatically assigned to an account.
    • Purchasing converts the PR in to a Request for Quotation, Purchase Order or Out-line
    Agreement.
    • The tables related to PR are: EBAN (PR), EBKN (PR a/c assignment)
    • Some of the fields in these tables are:
    EBAN EBKN
    BANFN – PR Number BANFN – PR Number
    BNFPO – Item number of PR BNFPO – Item number of PR
    BSART – PR doc type ZEBKN – Prog. A/c assignment.
    EKORG – Purchase Organization
    MENG — PR Quantity
    MATNR — Material Number
    WERKS – Plant
    IMG setting for Purchasing Requisition
    Define Number Ranges (OMH7)
    SPRO -> Material Management -> Purchasing Requisition ->Define Number Ranges
    Define Document Types (SPRO)
    SPRO -> Material Management -> Purchasing Requisition ->Define Document Types
    Assign number range to document type
    Release Procedure
    SPRO -> Material Management -> Purchasing Requisition ->Release Procedure
    – Procedure with Classification
    – Edit Characteristics (CT04)
    – Edit Classes (CL02)
    – Set up Procedure with Classification (SPRO)
    – Check Release Strategies (OMGQCK)

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