MM - Purchasing

Target Group

 Purchase department
Course Objectives

On conclusion of this course you should be

able to

• Understand the concepts in SAP - Purchasing component

• Create, change PR

• Create, change, compare RFQ

• Create, change Purchase Order

• Create, change outline agreements

Introduction

Contents
• Purchasing overview

• Purchase Requisitions

• Request for Quotations

• Purchase Order

• Outline Agreements
 Purchasing Overview

• The Purchasing component has the following tasks:

• external procurement of materials and services
• determination of possible sources of supply for a requirement identified by
the materials planning and control system
• determination of possible sources of supply for a requirement arising
directly within a user department
• monitoring of deliveries and payments to vendors
 Purchasing - Integration with other
modules

• Integration
• Controlling (CO)
• Purchase orders for materials intended for direct consumption
• They can be directly assigned to a cost center or a production order.

• Financial Accounting (FI)

• Vendor master is maintained by both accounting and purchasing departments.
• Through PO account assignment, Purchasing can also specify which G/L
accounts are to be charged in the financial accounting system.
 Purchasing - Integration with other
modules

• Sales and Distribution (SD)

• Within the framework of materials planning and control, a requirement
that has arisen in the Sales area can be passed on to Purchasing.
• When a requisition is created, it can be directly assigned to a sales order.
 Process flow in purchasing

• Determination of Requirements
• Materials requirements are identified either in the user departments or via
materials planning and control.
• It includes both MRP proper and the demand-based approach to inventory
control.
• The regular checking of stock levels of materials defined by master records,
use of the order-point method, and forecasting on the basis of past usage
are important aspects of the demand management.
• You can enter purchase requisitions yourself, or they can be generated
automatically by the materials planning and control system.
Process flow in purchasing

• Source Determination

– The Purchasing component helps in identifying potential sources of

supply based on past orders and existing longer-term purchase
agreements.

– This speeds the process of creating requests for quotation (RFQ)

• Vendor Selection and Comparison of Quotations

– The system is capable of simulating pricing scenarios, allowing you to

compare a number of different quotations.

– Rejection letters can be sent automatically.

Process flow in purchasing

• Purchase Order Processing

– The Purchasing system adopts information from the requisition and the
quotation to help you create a purchase order.

– You can generate Pos yourself or have the system generate them
automatically.

– Vendor scheduling agreements and contracts are also supported.

• Purchase Order Follow-Up

– The system checks the reminder periods you have specified

– System automatically prints reminders or expediters at the predefined

intervals.

– It provides you with an up-to-date status of all purchase requisitions,

quotations, and purchase orders.
Process flow in purchasing

• Goods Receiving and Inventory Management

– Goods Receiving personnel can confirm the receipt of goods simply by

entering the Po number.

– By specifying permissible tolerances, buyers can limit over- and under

deliveries of ordered goods.

• Invoice Verification

• The system supports the checking and matching of invoices.

• Invoice verification can be based on purchase orders or GR

documents or directly to a vendor without any document
reference.
Std. Menu options in Purchasing

• Create

– Use this option to create a purchasing document .

– Enter the required information and save the document .

– The document is then stored under a unique number.

• Change

– Use this option to change a purchasing document .

– You need the document number in order to access the document.

Std. Menu options in Purchasing

• Display

– Use this option to display a purchasing document .

– You cannot change or add any information to the document that is

displayed .

– You need the document number in order to access the document.

• List displays/reporting

– You can use these options to generate reports analyzing purchasing

documents

– Example
• List of all purchase orders for Vendor ABC
Std. Menu options in Purchasing

• Follow-on functions

– This option allows you to perform tasks related to (following on from)

but not included in the purchasing functionality.

– Example

• Entering a goods receipt or an invoice in the system.

• Messages

– This option enables you to print or transmit documents in message

form

– Example

• Transmission via fax, Printouts etc

Std. Menu options in Purchasing
Std. Menu options in Purchasing
Purchasing Documents

• Definition

– A purchasing document is an instrument used by Purchasing to procure

materials or services.

– Purchasing documents are two types

o Internal (Purchase requisitions)

o External (Request for quotations, Purchase orders & outline

agreements)

• Purchase Requisition (PR)

– The requisition will contain the materials or services to be procured, a
required date of delivery and quantity.

– It is a document that is internal to the company, therefore it is treated

separately with in purchasing.
Purchasing Documents

• Types of External purchasing documents

• Request for quotation (RFQ) / Quotation

– RFQ is an invitation extended to a vendor by a purchasing department to

submit a quotation or bid for the supply of materials or performance of
services.

– Quotation is the vendor’s response against RFQ to purchasing department.

It is an offer given by a vendor regarding supply of materials or
performance of services, subject to specified conditions.

– Quotation contains a vendor's prices and conditions.

– It is the basis for vendor selection.

• Note : In SAP, RFQ & Quotations are a single document.

Purchasing Documents

• Purchase order (PO)

– The buying entity’s request or instruction to a vendor (external supplier) to

supply certain materials or perform certain services with duly agreed terms
and conditions for a confirmed delivery date.

– It formalizes a purchase transaction.

Purchasing Documents

• Outline Agreements

– Outline agreement is a long term agreement between a purchasing

department and a vendor regarding supply of materials / performance of

services within a certain period according to predefined terms & conditions.

– In SAP, outline agreements are subdivided into two types.

o Purchasing contract - It is a type of outline agreement against which

release orders (purchase orders) can be issued for agreed materials /
services as and when required during that period.

o Scheduling agreement - It is a type of outline agreement against which

materials / services are procured on predetermined delivery schedules
(specifying purchasing quantities, delivery dates) over a predefined
period.
Purchasing documents

• Structure

– Each purchasing document is subdivided into two main areas:

• The header

– The header contains information relevant to the whole document .

– Example, information about the vendor and the document number

is contained in the document header

• The individual items .

– The items specify the materials or services to be procured .

– Example, The material description and the order quantity are

specified in each item.
Header
data

Item Item
Account
Category
overview Assignment
data Category
Purchasing documents

– The additional data

• It provides extra information about the item, and has no direct

connection with the item procurement data.

• Example,

– account assignment data

– PO history for an item, which contains information on already

recorded goods and invoice receipts relating to the item.
Additional
details
Purchasing documents
• Classification of Purchasing Documents

– Purchasing documents are differentiated in the SAP system via the

document type .

– Example, relevant number range depends on document types

– Document types are defined for RFQs, purchase orders, and contracts

• Numbering of purchasing documents

– Each document is assigned a unique number .

– This number can be assigned internally or externally , depending on

the policy .

– Internal number assignment means that the system assigns the

number.

– External number assignment means that the person creating the

document must supply it.

– Alphanumeric assignment is only possible in the latter case.

Purchase Requisition
Purchase requisition

• Purchase requisition can be created in the following path:

SAP MENU LOGISTICS MATERIALS MANAGEMENT

PURCHASING  PURCHASE REQUISITION  CREATE
Purchase requisitions

• Definition

– A purchase requisition is a request or instruction to Purchasing to

procure a certain quantity of a material so that it is available at a
certain point in time.

– It is an internal document.

• Requisitions can be created in the following ways:

– Directly: Someone from the requesting department enters a purchase

requisition manually.

– Indirectly: The purchase requisition is created via MRP, production

orders, networks, sales order etc.

• Purchase requisitions can be subjected to a release procedure.

Purchase requisitions - integration

• Requisitions can be created indirectly in the following ways:

– via materials planning and control

• The component Consumption-Based Planning suggests materials

that need to be ordered on the basis of past consumption or usage
figures and existing stock levels.

• The order quantity and the delivery date are determined

automatically.

• Materials planning and control can stipulate that a purchase

requisition is to be resubmitted to the purchasing department if it
has not been processed after a predefined period of time.
Purchase requisitions - integration

• Requisitions are generated automatically from production orders if

– They contain an external processing operation (e.g. subcontracting

work)

– A precondition is that the control key for the operation allows or

prescribes external processing.

– they contain non-stock components

Purchase requisitions
• Item category: It’s a Key which determines how the procurement of a
material or service item is controlled. Depending upon the item category
chosen in the document the procurement type will be different.

• Procurement types

– Standard

– Subcontracting

• Components to be provided can be entered.

– Consignment

– Third party

– Stock transfer

– External service

• Service specifications can be entered

Different types of item category
Manual creation of PR

• Things to remember

– Item category

– Account assignment category

– Purchasing organization

– Purchasing group

– Requirement tracking number

– Delivery date

– Item with or with out material master record

– Required quantity
Manual creation of PR
Request For Quotations
• Path for creation of request for quotation:
• SAP MENU  LOGISTICS  MATERIALS MANAGEMENT
PURCHASING  RFQ/QUOTATION  REQUEST FOR
QUOTATION  CREATE
Creating Request For Quotation

• Automatically from PR

• Manually

– With reference to PR

– With out reference to PR

• Delivery address

– Address of the company asking for quotation, by default it is the

address of E+L. But it can be changed.

• vendor address

– Just enter the codes of the vendor, System will take other details
from vendor master.

• Quotation dead line

• Delivery date
RFQ (contd…)

• Printing RFQ

• Send the Printed RFQ to the vendors

• Receive the quotation from the vendor

• Maintain the quotation

– Enter the net price quoted by the vendor

– Enter the pricing conditions

– Terms of payment

– Update the info record if required

Create request for quotation
Create RFQ w.r.t purchase requisition

Enter the PR .
The relevant
data’s will get
copied from PR
to RFQ.
Enter
collective
number
Create Request for quotation:

• Collective number: If the RFQs of a particular procurement process

have been assigned to a collective number, it is then possible to list
and process all the individual RFQs/inquiries that are grouped under
this number.
• You have created 20 RFQs/inquiries for the procurement of a material
and have filed them under the collective number “COL001".

So collective number helps in following ways:

• In respect of which RFQs have quotations been received?
• What is the net price of each quotation?
You can obtain this information by listing all individual RFQs entered
under the collective number “COL001”
Select the PR and
click on Adopt + details
Enter the vendor code
( system will take the
vendor address from
vendor master)
Maintain quotation

• Path to maintain quotation

• SAP MENU LOGISTICS MATERIALS MANAGEMENT
PURCHASING RFQ/QUOTATION QUOTATIONMAINTAIN
Maintain quotation

Enter RFQ No
Enter the
vendor
quoted price
Maintain quotation

• Discounts, freight cost & any other additional planned costs can be
entered in the quotation which gives an opportunity to compare the
actual landed cost of material considering all pricing factors

• Besides entering the different kind of prices, the validity period of

these price can also be entered.
Maintaining different condition types in a quotation

To enter Conditions, Select the

line item & go to Menu bar →
Item → Conditions
 Maintaining different condition types in a quotation

Maintain the
condition
types
Quotation price comparison

• The path for price comparison of quotations

• SAP MENU  LOGISTICS  MATERIALS MANAGEMENT

PURCHASING  RFQ/QUOTATION QUOTATION  PRICE
COMPARISON
Quotation price comparison
Quotations – Price Comparison

• Compare the quotations

– Maintain the collective number in the RFQs

– Quotations can be compared based on price

– Discounts and delivery costs can be included

– Comparison can be based on effective price also

– System compares and gives the ranking list

• Percentage basis for comparing quotations

– Mean value equals 100%

– Maximum value equals 100%

– Minimum value equals 100%

Quotations – Price Comparison
Quotations – Price Comparison
Outline agreement
Outline agreements with the vendor

• To set-up longer-term purchasing arrangements with vendors regarding

the supply of materials or the performance of services.

• Outline agreements can be subjected to a release (approval or clearance)

procedure.

• Outline agreement types

– contract

– Scheduling agreement
Contract
• Contract: A contract is a type of outline purchase agreement against
which release orders (releases) can be issued for agreed materials or
services as and when required during a certain overall time-frame.

Contracts can take the following forms:

• Quantity contracts:
Use this type of contract if the total quantity to be ordered during the
validity period of the contract is known in advance. The contract is
regarded as fulfilled when release orders totaling a given quantity
have been issued.
• Value contracts:
Use this type of contract if the total value of all release orders issued
against the contract is not to exceed a certain predefined value. The
contract is regarded as fulfilled when release orders totaling a given
value have been issued.
Contract: Header details
• Header Details: It contains information relating to the entire agreement.
For example, the vendor information and header conditions are in the
document header

Other important header details are:

• Vendor
• Vendor address
• Document type :
It determines if the contract will be a quantity contract or value
contract
• Purchase organization
• Purchasing group
• Validity period
• Payment terms
• Header conditions:
suppose any discount or any surcharge is applicable to the whole
contract, then those conditions can be maintained in header conditions.
Create Contract: Initial screen
Contract: header details
Contract: item details
• Item Details: It contains the information specific to the relevant material
or service. For example, the material/service information and item
conditions.

Other important item details are:

• Material / service
• Quantity
• Net price
• Item conditions such as discount & delivery costs
• Tax codes
• Plant
• Reminder details
• Delivery address

Item details also provides information on the statistics of goods delivery of

the contract.
Contract: item details
Contract: item details
Item condition details:

Enter value
of different
conditions
Texts in contract
• Texts in contract
• Header texts
The texts entered in header details holds for the whole document.
• Item texts
The texts entered in item details holds only for the respective material or
service.
These texts can be entered under different text types as per the relevance
of the information.
• You can create your own text types
Header texts:

Enter text under

different text
types depending
upon its
relevance
Item text:

Enter text under

different text
types depending
upon its
relevance
Purchase order creation:
Course Objectives

On conclusion of this course, you should be able

to
• Create a new PO

• Make changes to existing PO

• Print PO

• Navigate through purchasing information system

Introduction

• Contents
• Creating POs

• Printing of POs

• Printing Remainders

• Changing or cancelling POs

• Purchasing information
Purchase order

• Path for creation of purchase order:

• SAP MENU  LOGISTICS MATERIALS MANAGEMENT 

PURCHASING PURCHASE ORDER  CREATE  VENDOR /
SUPPLYING PLANT KNOWN
Create purchase order:

Create purchase
order
Purchase order

• Definition

– Formal request or instruction from a purchasing organization to a

vendor or a plant to supply or provide a certain quantity of goods or
services at or by a certain point in time.

• Structure

– Header

– items

– Additional data
 Purchase order

Header
details

Item
details
Create PO - Manually

• Manually creating a PO

– With reference to PR

• Select the PR

• Select the items from PR

• Copy the items in to PO

• Enter the vendor

• Enter the prices and pricing conditions

• Requirement tracking number

• Update the info record if required

The Purchase order created.

Create PO w.r.t purchase requisition

Enter purchase
requisition no
& item no
Create PO w.r.t request for quotation

– With reference to RFQ

• Select RFQ

• Select the items

• Copy the selected items in to PO

• Enter the Price and pricing conditions

• Update the info record if required.

• Acknowledgement and confirmations

Save the document & Purchase order created.

Create PO w.r.t request for quotation

Enter the
RFQ no &
the item no
Create PO w.r.t a contract

– With reference to contract

• Select contract

• Select the items

• Copy the selected items in to PO

• The price & relevant conditions will get copied to the purchase
order from the contract.

• Enter the quantity to be ordered.

• Enter the delivery date.

Save the document & Purchase order created

Create PO w.r.t contract

Enter the
contract no
& the item
no
Creating a Purchase order automatically

• Automatically from PR

– Set automatic PO indicator for material and vendor

– Maintain Purchasing info record

– Maintain source list with fixed vendor & set ‘MRP relevance field’ as 1.

– Maintain info record

– PR from MRP or Manually created PR

– Assign manually or automatically

– Process the assigned PR to create PO

Setting automatic PO in material master:

Flag auto
PO
 Set automatic PO in vendor master:

Set automatic
PO
Maintain Purchase Info record (ME11) :
Maintain Purchase Info record (ME11) :

Flag Regular Vendor

Order Unit
Maintain Purchase Info record (ME11) :

Tax code

Net Price
Maintain source list (ME01) :

Material

Plant
Maintain source list (ME01) :

Material
Flag fixed
vendor

vendor
Display Purchase requisition (source assigned)
Automatically creating purchase order:

• Path for automatically converting purchase requisition to purchase

order:

• SAP MENU LOGISTICS MATERIALS

MANAGEMENTPURCHASING PURCHASE
ORDERCREATEAUTOMATICALLY VIA PURCHASE REQUISITION
Automatically create purchase order.
Automatic purchase order
Display purchase requisition
• After the purchase order is create against the purchase
requisition then the status of the purchase requisition gives the
details of the follow on documents
Creating a PO (contd…)

• Important terms in PO

– Vendor

• For creating a PO you need to enter vendor code

• Vendor master should exist for this purpose

• if you don’t want to maintain all the details for a vendor you can
create a one time vendor

– Item category

• Standard

• Subcontracting

• Service

• Third party

• consignment
Item categories in purchase order:
Create PO (Contd…)

– Account assignment category

• Specification of the account assignment objects that are charged in

the case of a purchase order for a material that is intended for
direct usage or consumption.

• Examples

– Asset

– Sales order

– Production order

– Cost center

• Types of account assignment

– Single account assignment

– Multiple account assignment

Account assignment in purchase order:
Create PO (contd…)

– Delivery date

• Date format

– Day format

– Week format

– Month format

• Delivery date entered here is only expected delivery date

• You can also specify a statistical delivery date

Delivery date in purchase order:
Create PO (contd…)

– Units of measure in PO

– The order unit

» This is the unit you specify in connection with the order

quantity.

– The order price unit

» This is the unit that applies in connection with the net price
and which is taken as the basis for invoice verification.

» If the order price unit does not correspond to the order unit,
and if no conversion factor is specified in the system, you
must enter a conversion factor on the item detail screen.
Create PO (Contd…)

• Example for units of measure in PO

– Order quantity 10

– Order unit Box

– Gross price per unit 10 EURO

– Order price unit (number) 1

– Order price unit (of measure) kg

– Conversion factor 1 Box = 5 kg

10 Boxes = 50 kg
Order unit in purchase order:
Create PO (Contd…)

– Conditions

• This component enables you to store pricing stipulations agreed

with the vendor

• Examples are applicable discounts or surcharges, or stipulations

regarding the payment of freight costs in the system.

• There are three kinds of price in Purchasing:

– Gross price

» Price without taking any possible discounts and surcharges

into account
Create PO (Contd…)

– Net price

» Price taking any applicable discounts and surcharges into

account

– Effective price

» Net price after deduction of cash discount, with allowance for

any miscellaneous provisions, delivery costs, and non-
deductible taxes.
Conditions:

• Suppose the price of one material is as follows:

• GROSS PRICE = 100 EUR

• DISCOUNT 10% = - 10 EUR
• NET PRICE = (100-10=) 90 EUR
• DELIVERY COST = 8 EUR
• EFFECTIVE PRICE = (100-10+8 ) = 98 EUR
Calculation of net price & effective price:
Create PO (Contd…)

– Terms of Payment: it’s a Key for defining payment terms composed of

cash discount percentages and payment periods.

• Example

– Within 14 days 3% discount

– Within 30 days 2% discount

– With in 45 days Due net

Payment terms
Calculation of payment terms
INCO terms:

• INCO terms
• INCO terms are internationally-recognized terms of delivery reflecting the
standards set by the International Chamber of Commerce (ICC).
• Example
• FOB - Free On Board. This means that the buyer has to bear all costs
and risks of loss of or damage to the goods from that point.
• You can specify Incoterms for an order item that differ from those in
the PO header.
INCO terms
Purchase order texts:

• Purchase order text can be of two types

Header text
• Header text holds true for whole document

Item text
• Item text holds only for the respective material item.
Header text types in purchase order:

• Header texts

• Header note

• Pricing types

• Dead lines

• Terms of delivery

• Shipping instructions

• Terms of payments

• warranties

• Penalties for breach of contract

Item text types in PO

• Item text
• Info record PO text
• Material PO text
• Delivery text
• Info record note
Texts in purchase order
Confirmations

• Purpose

– This component can be used, if you wish to have your vendor provide
you with various kinds of confirmation regarding delivery dates and
quantities

– It enables you to base your materials planning and control activities on

more up-to-date data than that contained in purchase orders.

• Confirmation control key

• Shipping notification

• Order acknowledgement
Confirmation control key
 Vendor confirmation update

Vendor
confirms
the delivery
date &
quantity
Shipping notification

• Shipping Notification

• Definition

– A vendor’s confirmation to a purchasing organization of the delivery

date for a certain quantity of ordered materials

– It can be for the date of performance of ordered services also.

• Structure

– Against the shipping notification of vendor you create an inbound

delivery where the shipping doc no ,date of delivery & confirmed
quantity entered besides other shipping details
Create an inbound delivery

• Path for creation of inbound delivery:

• SAP MENU  LOGISTICS  MATERIALS MANAGEMENT

PURCHASING PURCHASE ORDER INBOUND DELIVEY
CREATE
Create inbound delivery

Enter PO no,
delivery date
& shipping doc no
Create inbound delivery

Put the quantity

To be delivered
Against the
Shipping no
Shipping notification

Vendor
Shipping
notification
details gets
updated in
the PO.
Goods receipt updates PO history

• When you do the goods receipt against a purchase order it updates the
status of purchase order in the PO history.

• When you do goods receipt against a inbound delivery ,it will update the
status of inbound delivery besides updating PO history. So this gives the
updated status of an inbound delivery
 PO history

goods receipt
updates the
status of PO.
Status of inbound delivery in PO

Goods receipt updates

the status of each
inbound delivery
Printing the remainders

• Types of expediting letters

– Remainders

• A negative number of days means that a reminder is to be issued to

the vendor n days prior to the delivery date

– Urging letters

• A positive number of days means that a letter or message urging

delivery is to be issued n days after the due date.
Reminders in a PO

Reminders
can be set in
purchase order
Changing and blocking POs

– If you change a PO after it has been sent to the vendor, a change

document is generated that can be sent to the vendor.

• This tells the vendor what you have changed.

– If the goods have already been delivered, then the changes you can
make to the PO are limited.

• For example, you cannot change the quantity to one that is less
than the quantity delivered.

– If the invoice has been received or the goods have been paid for, and
your intended change affects the price, the change will be ineffective.

• You can display the PO history for an item to determine whether

deliveries have been received or the item has been invoiced.
Printing a PO

• Menu path

– Purchase order -> Header -> Messages

• Data required

– Output type

– Medium

– Communication method

• Select the printer

– Further Data

• Repeat output

• Change output
Message in PO:

The message
types can be
Entered here.
Budget checks in Purchasing documents

Budget checks in purchasing documents :

It is only applicable for the documents which are account assigned (F) to Internal orders.

Prerequisite : Create
internal order and assign
budget value to that order.
(take FI/CO consultants
help to get internal orders)

In this example Budget

value 1000 EUR has
been assigned to
internal order 501860
Budget check in Purchase Requisition
If we enter requisition value more
than available budget, then system
will throw error message.

i.e., we can only request/procure

goods, those value is less than
available budget value
Budget check in Purchase Order
If we enter order value more than
available budget, then system will
throw error message.

i.e., we can only request/procure

goods, those value is less than
available budget value
A scheduling agreement is a longer-term arrangement with the vendor covering the supply of materials
Scheduling Agreement
subject to predetermined conditions. The conditions are valid for a predefined period and predefined total
purchase quantity.

Scheduling agreement have several advantages:

• Using scheduling agreement enables user to reduce processing times and the amount of paperwork within the
enterprise. A delivery schedule issued against a scheduling agreement can replace a large number of standard purchase
orders or contract release orders.
Scheduling agreement delivery schedule lines do not constitute an independent document but are part of the scheduling
agreement. Procurement via scheduling agreement thus enables to reduce the volume of document used.
• Volumes of stock on hand can be reduced to a minimum through application of the Just-in-Time (JIT) principle, involving
the specification of exact delivery time-spots.
• The vendors’ lead times are reduced. It is not necessary to deliver the entire quantity covered by the scheduling
agreement at once; instead, a series of smaller quantities can be delivered in accordance with the delivery schedule lines.
In this case, the vendors can receive due notification of such required quantities and delivery dates and times well in
advance.
Creation of Scheduling Agreement without Release Documentation

“Create Scheduling Agreement :

Initial Screen” screen,
Creation of Scheduling Agreement without Release Documentation cont..

“Create Scheduling Agreement : Header Data”

screen

“Create Scheduling Agreement :

Item Overview” screen
Creation of Scheduling Agreement without Release Documentation cont..

On “Create Scheduling Agreement : Item XXXXX”

screen
“Create Scheduling Agreement :
Item XXXXX Additional Data” screen
Creation of Schedule Line
cont..

Transaction ME38
Subcontracting Process – Overview

– Subcontracting

• Is a Process in which part of the manufacturing activities such as

assembling, machining etc., are assigned to the subcontractor, by
providing components

• Item category 'L' should be used for all purchasing documents. (RFQ,
Contract, PR and PO).

• Subcontract orders are created with item category 'L', and component
details. The price mentioned in PO is only subcontracting charges.
Subcontracting Process – Purchase Order

Create PO with item

category 'L' and enter
component details in
item detail 'Material
Data' tab

If BOM (Bill of
material) is available
for Finished goods, by
exploding BOM in PO,
component details
can be adopted

Enter subcontract
charge in the price
field
Subcontracting Process – Purchase Order

Component to
be provided to
the vendor
details in
Purchase order
Purchasing information

• List displays

– List of POs for a vendor or for a range of vendors

• This gives the details of the purchase order like still to be delivered,
still to be invoiced etc.

– List of POs for a material or for a range of materials

– List of POs for a account assignment

– List of POs for a requirement tracking number

• Reporting

– General analyses

– Order value analyses

– Subcontracting stocks per vendor

Purchasing information

List of purchase order

can be searched
depending upon
different search
criteria
Logistics info system

• Material

– Purchasing values

– Purchasing quantities

– On time delivery

– Qty reliability

– Frequencies

• Vendor

• Material group

• Purchasing group
Logistics info system

Several reports
available to give a
good analysis of
different purchasing
values & quantities.
SIM Files For Reference

• Creating a Purchase Requisition

• Creating a Contract

• Creating a Purchase Order

• Doing Price Comparison

• Creating Source List

• Creating Service Entry Sheet

- 153 -
Next Session

• Inventory Management

- 154 -