Lesson : Procurement

Procurement Process Overview
Procurement is mySAP ERP covers not only traditional processes such as requistioning , purchase order management, and invoice verification , but also catalog-based self-service requistioning for maintenance. Repair, and operations (MRO) materials and services.
This catalog integration is expanded to maintenance operations and project management.
Procurement in mySAP ERP improves procurement processes by facilitating plan-driven and ad hoc purchasing, complete inventory management, and intelligent reporting on all procurement activities.
Source determination
mySAP ERP 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 EDI, if desired

Vendor selection and comparison of quotation
The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations.
Purchase order creation
The purchase order adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate purchase orders yourself or have the system generate them automatically . Vendor scheduling agreements and contracts (in the SAP system, types of long-term purchase agreement) are also supported.
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. The system also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders
Good receiving and inventory management
Goods receiving personnel can confirm the receipt of goods simply by entering the purchase order 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. The accounts payable clerk is notified of quantity and price variances because the system has access to purchase order and goods receipt data.
Purchase Orders (PO)
A purchase order is a formal request to a vendor to supply certain goods or services under the stated conditions. You can create purchase orders without reference, or with reference to a purchase requisition, a request for quotation, or another purchase order.
When you enter the purchase order data, the system suggests default values. For example, the system suggests the ordering address, as well as the terms of payment and freight (incoterms) from the vendor master record. If you have maintained a material master for a given material in the SAP system, the system suggests the material short text or the material group, for example. If a purchasing info record already exists in the system, the system copies a price proposal to the purchase order.
self service procurement
Self-Service Procurement allows employees to create and manage their own requisitions.
self service requisitioning
Self-Service Requisitioning means purchasing non-strategic goods, that is, goods not directly linked to the value chain (often called MRO: maintenance, repair, and operations items).
inventory Management
posting a goods receips to stock with reference to a purchase order has a number of advantages for you . including :
- The goods receiving point can check whether the delivery is the same as the purchase orders data , that is , whether the goods that were ordered have been delivered .
- The system suggests data from the purchase order when you enter the goods receips (for example , items and quantities)
- The purchase order history is automatically updated as a result of the deliveries.
- When you post a goods receipt to the warehouse , the system creates a material document containing information such as the material delivered and the quantitiy delivered .
- When you post a goods receipt to the warehouse , the system creates a material document containing information such as the material delivered and the quantity delivered.
- In transactions relevant for material valuation,the system creates at least one accounting document that record the effect of the goods movement on the value of the stock.
invoice verification
The procurement process is concluded by the invoice verification process, during which invoices and credit memos are entered and the contents and prices are checked for accuracy. However, payment and evaluation of invoices is not part of invoice verification; the appropriate information for these tasks passes on to other departments.Invoice verification, therefore, creates a link between Procurement and Accounting.Invoice verification, therefore, creates a link between Procurement and Accounting.
When you enter an invoice with reference to a purchase order, the system suggests data from the purchase order and the goods receipts for the purchase order (for example, vendor, material, quantity still to be invoiced, terms of payment, and so on).
Massages
You can issue all purchasing documents as messages. Each time you create an RFQ, purchase order , contract, or schedulling agreement , the system can create a message from the document affected . To issue the message (by printing, e-mail, fax, or EDI) from the message queue, you have the following options:
Issue immediately:
– The system issues the message directly from the queue, in other words, as soon as you save the document.
Issue later:
– Either you schedule a background job that processes the message queue in determined intervals, or you start the issue directly from the purchasing menu.
– As a rule, you issue the messages using the background job and start the issue manually only as an exception (such as for rush orders).