MM Process Flow
The typical procurement cycle for a service or material consists of the
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.
Also check out MM Tables Link