Procurement process with SAP MM

Starting from a specific need arising from a manual request from the specialist department or as part of scheduling, or from other modules such as maintenance (PM module), a purchase requisition (PR) is created. The purchase requisition asks the purchasing department to procure materials and/or services in a predetermined quantity by a predetermined date. A purchase requisition can be created manually, or it may be generated as part of the demand planning process in conjunction with other modules, such as maintenance (PM). Multi-stage approval processes can also be defined for purchase requisitions depending on the organizational structure. Approval of purchase requisitions is equivalent to approval of the department’s request to authorize procurement. Depending on value, merchandise group, account assignment category, and plant, it can be stipulated that a PR item can only be converted into a purchase order once a certain approval process has been completed. Then, approval would have been granted. Approval of a purchase requisition item is dependent on the following items:

• Release strategy: The release strategy determines which people must approve a purchase requisition in what order.
• Release conditions: The release conditions specify which release strategy should be assigned to a purchase requisition, for example, depending on the value and/or merchandise group.
• Release indicators: The release indicator shows whether a position can be ordered depending on whether it has been completely approved or whether further approvals are required.
• Release procedure: Purchase requisitions can be approved individually or with the help of the so-called collective release. This means that all purchase requisitions that meet a specific criterion are released simultaneously. In addition, a release procedure can be defined using SAP ERP’s class system. This makes it possible to specify the criteria for PRs that should be subject to approval more flexibly than with the conventional release procedure without classification.

A PR is either directly converted into a purchase order in procurement, or a request is first sent to potential suppliers. Requests are used to obtain offers for prices, delivery times, delivery, and payment terms. They are usually created in the system and directed to multiple bidders with the request to receive an offer by the specified deadline.
An inquiry can be created for bidders with supplier master records or for CpD creditors (Conto pro diverse). In the case of the latter, address data is only maintained when the inquiry is entered.
Inquiries can be created with the template of another inquiry, a purchase requisition, or a framework contract. The incoming bids are recorded by employees with SAP access. However, this does not meet the desired standard because the bids cannot be recorded in the SAP of the purchasing company by the suppliers.
An automated solution can provide a hybrid cloud solution where suppliers record their bids online, which are then automatically transferred to SAP after approval.See Simple Sourcing to determine the best offer using the system, a comparison of offers can be performed using the price overview.
Additional information can be obtained by comparing suppliers. If desired, the price and cost information of the most interesting offers can be saved in purchasing info records. Unsuccessful bidders can be rejected through the system. The inclusion in purchasing info records and the rejections are controlled by indicators in the request positions. After the offers for this request have been recorded, the order can be placed with the selected supplier.
The order is a contractual agreement with the supplier for the delivery or provision of goods and services. For services, SAP service entry sheets are used to confirm the service. A goods delivery is recorded in the form of a goods receipt with reference to the order. The cost center, order, or project specified in the order is either charged for direct consumption or booked to inventory.
When the supplier invoice is received, it can be recorded in the system with reference to the goods receipt or order. Possible discrepancies are displayed.