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Purchasing: Automatic Generation of Purchase Orders from Purchase Requisitions

Description

As of Release 3.0, you can create purchase orders automatically from purchase requisitions to which a source of supply has been assigned.
You can perform this function online or - for large amounts of data - in the background.

For automatic PO generation, the system selects only those requisitions in respect of which the indicator "Automatic purchase order" has been set for both the material and the vendor.

Requirements

As a precondition for using the new function, this section discusses potential error situations and the corresponding reactions of the system.

Possible error situations

A requisition item cannot be converted into a purchase order in the following cases:

• if the master data is faulty or incomplete
  (for example, the vendor is blocked or there is no current order price)

• if Customizing is faulty or incomplete

• if input data is missing (for example, no account assignment)

Reaction of the system to errors

As a rule, the system attempts to group as many requisition items as possible together to form one purchase order. Generally speaking, one purchase order is created per purchasing organization, vendor and contract. The contents of this purchase order belong together.
For example, a PC, a printer and some software are requested in several different requisition items. Purchasing organization A is responsible for this and procures all the items against contract 10, which has been set up with vendor ACME.

Case 1. Omit incorrect items
Assume you have specified that incorrect items are to be omitted. From ten items, one of which is incorrect, the system will create a purchase order with nine items. The PO can be transmitted to the vendor (possibly automatically). The log documents the error and the incorrect item must then be reprocessed.

• Advantage:
  Low reprocessing effort. (You only need to reprocess one item.)

• Disadvantage:
  There is no guarantee that requisition items which belong together are kept together in one PO (PO 1: 1 PC; PO 2: software); greater exchange of communications with vendor.

Case 2. Do not omit incorrect items
If you specify that incorrect items should not be omitted, the system does not create a purchase order at all.

• Advantage:
  Requisition items that belong together remain together in the purchase order (PO 1 has two items: item 1 for a PC, item 2 for software); minimum order values per purchase order are better taken into account; exchange of communications with vendor reduced.

• Disadvantage:
  Higher reprocessing costs. (You have to check/reprocess all ten items.)