SAP MM : Procurement Process

Determination of Requirements
  • The user department responsible is manually passing a requirement for materials to the purchasing department via Purchase Requisition. 
  • Purchase requests are generated when business runs the MRP and Request are also generated based in Consumption based planning (CBP) for Production and Engg.Stores. 

Determination of Source of Supply
  • The purchasing component helps the buyer determine the sources of supply.
  •  User use the determination of the source of supply to create Requests for quotation (RFQs) and then to enter quotations.
  •  User is accessing the existing Purchase Orders and Conditions in the System. 

Vendor Selection and Comparison of Quotations
  • The System is capable of simulating pricing scenarios and simplifies the selection of vendors by making price comparisons between the various quotations. 

Purchase Order Processing
  • The purchasing system adopts information from purchase requisition and the quotation to help to create Purchase Orders. 
  • They are also creating manual purchase order directly for stock, non-stock items, services etc.   

Goods Receipt and Inventory Management
  • The Goods receiving requester confirms the receipt of the materials by simply entering the Purchase Order Number. 
  • The system compares the goods receipt quantity with the purchase order quantity. 
  • By specifying permissible tolerances, buyers can limit over deliveries and under deliveries of ordered materials.

Invoice Verification
  • after Goods Receipt done , Based on PO and GR , Invoice verification is done
  • Once the  Invoice Verification done , Transaction is ready to make the payment 

  • As per agreed Terms with vendor Payment is made

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