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Topic 4 - The Procurement Process

The document discusses the procurement process in SAP ERP. It covers organizational levels like plant and purchasing organization. It also covers master data like material master and vendor master which are key to procurement. Finally, it explains concepts like item categories, account determination, and goods movements that are important in procurement.

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Thái Bình Phan
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45 views34 pages

Topic 4 - The Procurement Process

The document discusses the procurement process in SAP ERP. It covers organizational levels like plant and purchasing organization. It also covers master data like material master and vendor master which are key to procurement. Finally, it explains concepts like item categories, account determination, and goods movements that are important in procurement.

Uploaded by

Thái Bình Phan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The procurement

process
Objectives

 After completing this chapter, you will be able to:


 1. Describe the major organizational levels associated with the procurement
process.
 2. Discuss the four basic categories of master data that are utilized during the
procurement process.
 3. Explain the key concepts associated with the procurement process.
 4. Identify the key steps in the procurement process and the data,
documents, and information associated with these steps.
 5. Effectively use SAP® ERP to execute the key steps in the procurement
process.
 6. Utilize SAP ERP to extract meaningful information about the procurement
process.
Basic procurement process
ORGANIZATIONAL DATA

 Client
 Company code (CC)
 Plant
 Storage location (S Loc)
 Purchasing organization (P org)
 Purchasing group
Plant

 Many definitions or use. A location


 That holds valuated stock
 Where production planning is carried out
 Where products and services are created
 That contains service or maintenance facilities
 Factory, warehouse, distribution center
 Can be assigned to one CC only
 A CC can have many plants
Storage location

 A place, within a plant, where materials are stored


 Areas designated for different types of material (raw materials, work – in –process,
finished goods)
 More sophisticated divisions including storage bins, cabin trays
 A plant must have at least one storage location
 A storage location can belong to only one plant
Purchasing Organization

 Identify and select vendors


 Negotiate general conditions of purchase and contracts one or more plants or
companies
 Determine pricing conditions
 Typically, three models for purchasing organization
 Enterprise-Level
 Company-Level
 Plant-Level
Enterprise-Level purchasing organization

 Also know as cross-company code model


 One purchasing organization assigned to all CC in a client
 Purchasing for all plants across all CC
 Highly centralized – Corporate purchasing org
Company – Level Purchasing organization

 Also known as cross-plant model


 Different purchasing organizations are assigned to each CC
 Purchasing for all plants in one or more CC
Plant-Level purchasing organization

 Also known as plant-specific model


 Each plant has its own purchasing organization
 Highly decentralized
Reference purchasing organization

 One centralized purchase organization for high-level decisions across


enterprise
 Multiple CC-specific and plant-specific purchase org
Purchasing group

 A buyer or group of buyers responsible for certain material or groups of


materials
 Can be internal to the company or external
 Decide to purchase land, but use a realtor (external purchase group) to execute
the purchase
 Not assigned to our related to purchasing org
Master data

 Material master
 Vendor master
 Purchasing info record
 Conditions
Material master

 Data needed to execute transactions related to material


 Data are grouped by different user areas(views)
 Data are specific to (defined for) for different organizational levels
Material master - view

 Basic data
 Purchasing
 Accounting
 Forecasting
 Sales
 Plant/storage
 Work scheduling
 MRP
 Classification
 Warehouse management
Material master - views

 Basic data
 Description, unit of measure, weight, material group
 Purchasing
 Purchasing group, GR processing time, delivery (under/over) tolerances
 Accounting
 Currentcy, valuation class, price control
 Plant/ storage
 storage requirements
 Shelf life
 Weight, voulume
Vendor master

 Data needed to do business with vendors


 Data needed to execute transactions related to vendors
 Data are specific to different organizational levels. The three segments are:
 Client level data
 Company code level data
 Purchasing organizational level data
Data in the vendor master
Vendor – general data

 Client – level data


 Valid across all cc in a client
 Examples:
 Name,
 Address
 Communication
 Search term
Vendor – accounting data

 Company code specific data


 Valid for the entire company code across purchasing area
 Example:
 Account information
 Bank information
 Reconciliation account
 Payment terms and methods
 communication
Vendor – Purchasing data

 Separate for each purchasing organization


 Applies to the specified purchase org
 Examples:
 Partner functions
 InCoTerms: defines responsibilities and costs of shipments
 Freight, insurance, customers clearance, locations.
Purchasing info record

 Relates vendors and materials


 One info record per combination of vendor and material ( or material group)
 General data
 Conditions: Pricing, discounts, free goods
 Vendor data
 texts
Key concepts

 Item categories
 Account determination
 Stock type/ status
 Goods movement
Item categories

 Defines the process used to procure the item


 Categories:
 Standard
 Subcontracting
 Components provided; finished product received
 Consignment
 Liability only when withdrawn from stock
 Service
 Stock transfer
 Third party order
 Ship to third party; bill to us
Account determination

 Which GL account to assign to PO


 Defined in material master
 Account assignment categories
 Used when purchasing material without material master
 Assets, production order, cost center, sales, order, procurement
 Automatic GL account determination based on category
Stock types/ status

 Based on usability of material


 Unrestricted use
 In quality inspection
 Blocked stock (damaged, unusable, wrong delivery)
 Stock in transit
Goods movement

 A transaction that causes a change in stock


 Categories of goods movement
 Specific movement type
Goods movements

 Goods receipt
 From vendor or production process
 Increase in quantity and value of stock
 Goods issue
 To sales order or internal consumption
 Decrease in warehouse stock
 Stock transfer
 Physical movement of material between storage locations
 Sloc to sloc
 Plant to plant
 Cc to cc
Goods movements

 Transfer posting
 Results in a change in material status
 In –quality inspection/blocked/unrestricted use
 One material type to another

 May or may not include a change in location

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