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MM Process Flow: Purchasing and Inventory

The document outlines a 7 step process for materials procurement in SAP. Step 1 involves identifying materials requirements either from user departments or through materials planning. Step 2 helps identify potential suppliers based on past orders. Step 3 allows comparing quotes from vendors. Step 4 uses requisition and quote info to generate purchase orders. Step 5 provides purchase order follow up and status updates. Step 6 covers goods receipt and inventory management. Step 7 supports invoice verification by checking for variances against PO and goods receipt data.

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182 views1 page

MM Process Flow: Purchasing and Inventory

The document outlines a 7 step process for materials procurement in SAP. Step 1 involves identifying materials requirements either from user departments or through materials planning. Step 2 helps identify potential suppliers based on past orders. Step 3 allows comparing quotes from vendors. Step 4 uses requisition and quote info to generate purchase orders. Step 5 provides purchase order follow up and status updates. Step 6 covers goods receipt and inventory management. Step 7 supports invoice verification by checking for variances against PO and goods receipt data.

Uploaded by

ram9199
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

MM- Process Flow

1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials
planning and control. (This can cover 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 latter.) You can enter purchase
requisitions yourself, or they can be generated automatically by the materials
planning and control system.

2. Source Determination

The Purchasing component helps you identify potential sources of supply based on
past orders and existing longer-term purchase agreements. This speeds the process
of creating requests for quotation (RFQs), which can be sent to vendors electronically
via SAP EDI, if desired.

3. 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.

4. Purchase Order Processing

The Purchasing system adopts information from the requisition and the quotation to
help you create a purchase order. As with purchase requisitions, you can generate
Pos yourself or have the system generate them automatically. Vendor scheduling
agreements and contracts (in the SAP System, types of longer-term purchase
agreement) are also supported.

5. Purchase Order Follow-Up

The system checks the reminder periods you have specified and - if necessary -
automatically prints reminders or expediters at the predefined intervals. It also
provides you with an up-to-date status of all purchase requisitions, quotations, and
purchase orders.

6. 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.

7. Invoice Verification

The system supports the checking and matching of invoices. The accounts payable
clerk is notified of quantity and price variances because the system has access to PO
and goods receipt data. This speeds the process of auditing and clearing invoices for
payment.

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