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MM Process Flow

The typical procurement cycle in SAP consists of 7 phases: 1. Determining material requirements through MRP or inventory control and creating purchase requisitions. 2. Identifying potential vendors based on past orders and contracts to speed creating requests for quotation. 3. Comparing quotations to simulate pricing and select a vendor. 4. Creating a purchase order which can be generated automatically. 5. Checking purchase order status and sending reminders at predefined intervals. 6. Confirming goods receipt by entering the purchase order number. 7. Verifying invoices by checking for quantity and price variances against purchase orders and goods receipts.

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Abhijit Prince
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147 views2 pages

MM Process Flow

The typical procurement cycle in SAP consists of 7 phases: 1. Determining material requirements through MRP or inventory control and creating purchase requisitions. 2. Identifying potential vendors based on past orders and contracts to speed creating requests for quotation. 3. Comparing quotations to simulate pricing and select a vendor. 4. Creating a purchase order which can be generated automatically. 5. Checking purchase order status and sending reminders at predefined intervals. 6. Confirming goods receipt by entering the purchase order number. 7. Verifying invoices by checking for quantity and price variances against purchase orders and goods receipts.

Uploaded by

Abhijit Prince
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 TXT, PDF, TXT or read online on Scribd

MM Process Flow The typical procurement cycle for a service or material consists of the followin g phases: 1.

Determination of Requirements Materials requirements are identified either in the user departments or via mate rials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of material s defined by master records, use of the order-point method, and forecasting on t he basis of past usage are important aspects of the latter.) You can enter purch ase requisitions yourself, or they can be generated automatically by the materia ls 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 proce ss of creating requests for quotation (RFQs), which can be sent to vendors elect ronically 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 gene rate Pos yourself or have the system generate them automatically. Vendor schedul ing agreements and contracts (in the SAP System, types of longer-term purchase a greement) are also supported. 5. Purchase Order Follow-Up The system checks the reminder periods you have specified and - if necessary - a utomatically 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 th e Po number. By specifying permissible tolerances, buyers can limit over- and un der 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 i nvoices for payment MM flow is processing between business organisation and Vendor: 1...Purchase Requisition --- T.code ---ME51 2...Source List -

________________________________________ T.code-----ME41 3...Request for Quation (RFQ)-T.codeME21N (To Vendor) 4...Purchase Order ________________________________________ T.code ________________________________________ ME21N (To Vendor) 5...Goods Receipt-------T.code....MIGO (Tables: MKPF, MSEG) 6...Invoice Verification----T.code...MIRO (Tables: BKPF , BSEG) 7...Vendor Payment----T.code...FB60 (FI - Account Payable)

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