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Procurement 4 and Payment Process

Procurement process
Procurement process – the organization acquires the basic materials that it uses to produce goods and services.

MM Menu Options in the SAP System

Procurement Process

Magal and Word | Integrated Business Processes with ERP Systems | © 2011

Procurement Process - Steps
1. Determination of requirements (Requisitions) – By user - The user department responsible can pass a requirement for materials to the Purchasing department manually, via a purchase requisition.

– By MRP - If you have set a MRP procedure for a material in the material master, then MRP will automatically generate a purchase requisition.

2. Approve requisition – purchase requisition created has to be approved by the relevant authorities.

Create Purchase Requisition

Enter the valuation Price and click enter

Purchase Requisitions
Manual – users Automatic – MRP

Supply Chain Management

Supplier Relationship Management

Determination of requirements

Determination of source of supply

Procurement Process (cont..)
3. Determination of the source of supply – Source identification - ERP supports the buyer responsible in many different ways when determining sources of supply. Source can be from internal (eg. subsidiary, factory) or external (eg. vendor).

– RFQ – A pre-qualification and bid list may be prepared.
You can use determination of the source of supply to create requests for quotation (RFQs) to qualified list of vendors. Quotations received are then entered into the system.

RFQ Process

Create Request for Quotation

RFQ is created

Converting a Purchase Requisition to a Purchase Order

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

Magal and Word | Integrated Business Processes with ERP Systems | © 2011

Procurement Process (cont..)
4. Vendor selection - The system supports you during vendor selection by : –