SAP Purchasing Process

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Contents
MM Process Flow

Procurement Process

Purchase Requisition

RFQ - Source Determination

Quotation Comparision

Master Data

Purchase Order

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MM Process flow - Procurement

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Procurement Process

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 Purchase Requisition

A Purchase requisition is a request for procuring a certain

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

Internal document.

 CBP (Consumption Based Planning): Planning of the material for

future
requirements based on the past historical consumption data. In CBP,
MRP procedures are three types:
 Re-order point
 Forecast based planning
 Time phased based planning

Transaction Code:
ME51 / ME51N - Create PR
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 Requirements Determination

The requirements/demand is identified from various sources:

 Production Demand - For consumption (or) create products

 Concerned departments / end users
 MRP – Generates a PR automatically

PR Creation

Manual Auto generation

End Users / Departments MRP

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 Purchase Requisition – Key fields

Item Category:

The category defines how the procurement of material can be controlled, defined
by the below categories in the standard R/3 system:

Standard - No item category

Consignment – K
Sub-contracting – L
Third-party – S
Stock Transfer – U
Service – D

Account Assignment Category:

This category specifies the consumption accounting data where that material has
to be posted.
 
This category to be blank - For procuring material for stock purpose
This category to be given a value - For consumption purpose

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 RFQ & Quotation

RFQ: It is an invitation extended to a vendor by a purchasing organization to submit a

quotation for the supply of materials.

Quotation: It is an offer by a vendor to a purchasing organization regarding the supply

of materials.

RFQ Types
AP (Request for GP bid)
AN (Default)

Create RFQ - T Code - ME41

Maintain Quotation - T Code - ME47

Outline Agreement:
 Contracts (T Code – ME31K)
Quantity contract - MK
Value contract – WK
Distribute contract - DC
 Schedule Agreements (T Code – ME31L)
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Source Determination

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 Request For Quotation/ Quotation

RFQ 1 RFQ 2
Known Requirements T Code –ME41

Vendor 1 Vendor 2

Quotation 1 Quotation 2
T Code –ME47

Price Comparison List –T Code ME49

Purchase Rejection
order

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 Comparing Quotations

Quotation: A Quotation contains information about the price and delivery conditions,
terms of payment, etc that the vendor formally agree in case it is appointed to provide
the material/service to the company.

Purpose: To determine the most favorable quotation submitted and

automatically generate letters of rejection to the unsuccessful bidders.

Prerequisites: If possible, each quotation should have pricing data for the
same item. Only then is the correct interpretation of the mean and total values
possible.

Outcome: A purchase order can be created on the basis of either the lowest
overall quotation or the lowest quote for individual items.

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 Transaction Codes

ME47 Create Quotation 

ME48 Display Quotation
ME49 Price Comparison List

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ME49 Price Comparison List

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 Material master record
General data

Material number
Description
Units of measure
Technical data

Plant-specific data Warehouse Sales-specific data

Valuation Management
system data
MRP/type Unit of measure Delivering plant
Planned delivery time Valuation price Palletting instruction
Valuation procedure Sales texts
Purchasing group

Storage location- Forecast data

specific data
Storage time Consumption data
Stock fields
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 Material Type

•Material types group materials with the same

basic attributes.

•Material type information determines:

•Which departmental views are
maintained.
•Whether changes in material
quantities are updated.
•Whether internal or external
procurement is allowed.
•Which general ledger accounts are
updated (e.g., inventory account).

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 Vendor Master Data

Data groupings Validity

General data

Address Valid
Communication for all organizations

Purchasing organization
data
Valid
Order currency for one purchasing
Plant level data organization

Accounting data
Valid
Bank data
for one company code
Payment transactions
Account management

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 Purchasing info record

General data Texts

Vendor data
Origin data
Order unit
Control data Prices and
conditions
Delivery time Gross price
Minimum quantity Discounts
Tolerances Freight

Price history
Purchasing statistics
Changes
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 Types of Purchase Orders

Contract will be awarded to the Vendor after thorough evaluation of

RFQ/Quotations received from identified Vendor

SAP provides 4 Standard PO doc type as

NB – Standard PO & Subcontracting
FO - Framework Order-Accelerated procurement processes in connection with
preventive maintenance(servicing) plans, Blanket Purchase Orders
DB - Dummy PO
UB - Stock Transfer Order

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Thank you

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