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BASICS OF PROCUREMENT PROCESS IN SAP

Materials can be procured in any company from external vendors or from other branches of the company itself.

Purchasing, warehousing and invoice verification departments are involved in procurement process.

Vedula Rameswara Sharma


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SAP
Procurement process Determination of requirement (purchase requisition PR or Materials requirement planning MRP) Determination of source of supply (Request for quotation RFQ) Vendor selection ( Quotations compare, accept or reject) Purchase order - Manual or automatic

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SAP
Procurement process

Data in purchase order either from PR or RFQ Monitor and send reminder to suppliers Goods Receipt Invoice verification Payment process

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SAP Special Procurement process


Stock transfer with stock transfer orders within a company between plants Sub contracting Material provided to vendor by company for assembly or for minor finishing works only charges for conversion is paid Consignment stock Vendors stock provided in the plant store, Money need to be paid after withdrawal of material for usage. A credit memo will be automatically prepared by the system upon withdrawal.

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SAP
Organizational level Client highest hierarchical level in SAP system Company Code Smallest organizational unit for external reporting Plant Organizational unit within logistics for production, procurement and MRP Storage locations Plant dependent, inventory management and physical inventory places Purchase organization Centralized at company level or decentralized at plant level Purchase Group Not defined in customizing, directly deal with vendors.
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SAP
If purchasing organization is to be made responsible for all the plants of a company code you must assign company code to all the plants, in addition to assigning purchase organization to the company code. If you want to make the purchase organization be responsible for many company codes, then you must not assign it to any company code. You must assign it to all the required plants.

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SAP
Procurement process

Personal setting in a purchase order (PO) takes priority over user parameters
When you post a Goods Receipt (GR) to warehouse stock, a material document is created If GR is valuated, an accounting document is also generated by the system

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SAP

A movement type (MvT) is a three character key used to differentiate the goods movements
Various types of movements are GR, GI (Goods issue) and Transfer postings Invoice verification create a link between MM and accounting (int/ext)

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SAP

ME21N Create purchase order


ME23N Display purchase order ME9F Message output

MIGO - Goods receipt


MIRO Invoice Entry

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