This scenario describes the procurement and management of a material that is obtained from an internal supplier.

Internal procurement using a purchase order has the following advantages over a stock transfer carried out without a PO:

• You can plan the receipt in the receiving plant
• You can enter a vendor (transport vendor) in the stock transport order
• You can enter delivery costs (incidental procurement costs) in the purchase order
• The stock transport order is included in materials planning: Purchase requisitions generated by materials planning can be converted into stock transport orders.
• Goods issues can be entered using an SD delivery
• Goods receipts can be posted directly to consumption
• The whole process can be monitored using the purchase order history

"Internal Procurement" using a stock transport order (type of purchase order) with billing document and invoice describes the integrated use of the following R/3 components:

Before you can use stock transport orders with a billing document and invoice, you need a vendor master record for the issuing plant.

Internal procurement begins with the generation of a purchase requisition:

• In the production or materials planning areas, the system is able to generate purchase requisitions automatically.
• If a need arises in other areas of the enterprise, the relevant purchase requisition has to be created manually.

1. Issue requests for quotation to potential vendors
2. Compare the quotations you receive in response
3. Assign the purchase requisition to one of the quotations received

2. Depending on the source of supply, you create and transmit one of the following documents:

3. You monitor the order. The system is able to automatically print urging letters for you to send to the vendor, as required.

4. You can maintain vendor confirmations (e.g. acknowledgments and shipping notifications) relating to purchase orders or scheduling agreement delivery schedules. Such confirmations enable you to plan more precisely, since in this way the vendor provides you with increasingly reliable information on expected deliveries during the period between the PO date and the desired delivery date. Shipping notifications can be referenced at the time of goods receipt, allowing you to identify and investigate any quantity variances in good time.

As soon as the ordered goods arrive, you post the goods receipt. The material is thus recorded in the inventory management system. If the material is subject to a certificate requirement, you must confirm the existence of such a certificate.

The goods receipt triggers the following activities:

• Quality Inspection
• Placement of the material into storage (stock putaway)

When the vendor’s invoice arrives, you match it with the purchase order or the goods receipt. After investigation and clarification of any discrepancies, you release the invoice for payment.

If the invoice verification process reveals any variances that the buyer needs to discuss with the vendor, you can park the invoice and continue processing it later.

Under certain circumstances, you can post an invoice as soon as you have posted the goods receipt (Evaluated Receipt Settlement). This allows you to settle up with regard to goods receipts without receiving an invoice from the vendor.

When the R/3 System releases the GR quantity after incoming inspection has given the all-clear, you place the goods into storage.

If the continuous inventory method is employed in your warehouse or stores, the system updates the necessary data at the time of stock putaway.