Procurement of Materials and External Services Management (SAP Library

Procurement of Materials and External Services Management

Purpose

This scenario describes the procurement of materials and services from an external supplier (vendor).

" Procurement of Materials and External Services" describes the integrated use of the following R/3 components:

SAP Component	Functions
Purchasing	Create purchase requisitions, Create, transmit, and release purchase orders/contract release orders/SA delivery schedules
External Services Management	Enter and accept services performed
Warehouse Management/Inventory Management	Place materials into storage; manage, and valuate stocks
Quality Management	Inspect quality of goods received against a purchase order
Invoice Verification	Post invoice and arrange payment

Prerequisites

The relevant Quality Management process flows in this scenario are described in detail in QM in Materials Management.

Process Flow

Purchase Requisition

The scenario 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 for a material or service arises in other areas of the enterprise, the relevant purchase requisition has to be created manually.

Purchasing

Once they have been created, you can assign requisitions to a source of supply, taking previous purchase orders or contracts into account in the process. If no suitable source of supply exists, you must:

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

If required, the vendor must have been approved by Quality Management.

Purchase requisitions to which a release strategy has been assigned must be released (approved) before they can be converted to purchase orders, contract release orders or scheduling agreement (SA) delivery schedules.

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

– Scheduling agreement delivery schedule

– Purchase order/contract release order

Purchase orders subject to release strategies must be released before they can be sent to the vendor.

You monitor the order. The system is able to automatically print urging letters for you to send to the vendor, as required.
You can maintain vendor confirmations (e.g. acknowledgments and shipping notifications) relating to purchase orders or scheduling agreement delivery schedules. These enable precise planning, as you always have reliable information on expected deliveries in the period between ordering goods and the requested delivery date. Shipping notifications can be referenced at the time of goods receipt, allowing you to identify and investigate any quantity differences in good time.

Goods Receipt

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)
Settlement with regard to the goods received

Acceptance of Services Performed

You record the services actually performed by the service provider (actual services) in a service entry sheet. In doing so, you can reference the purchase order. This is the procedure if the services being recorded were pre-planned in detail. At the time the services actually performed are entered into the system, each individual item of the entry sheet is recorded with its actual value. The next step is to accept the services listed in the service entry sheet.

Invoice Verification

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.

Storage

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.