Example: Working with Reference Purchasing Organizations

The reference purchasing organization RORG, which belongs to head office in Atlanta, has negotiated a comprehensive contract for the material Steel bolt 01 with favorable conditions with vendor Smith Corp.

The purchasing organization EORG , responsible for procurement in the Houston and Austin plants, wants to issue release orders for the material Steel bolt 01 against this contract. Purchasing organization EORG procures other consumable materials from regional suppliers.

Prerequisites:

Before the purchasing organization EORG can issue release orders against the above contract, the following settings and data must have been maintained:

Maintaining Customizing Settings

Both purchasing organizations are maintained in Customizing for the Enterprise Structure under Definition Materials Management Maintain Purchasing Organization.

The reference purchasing organization RORG can be maintained with or without a company code and plant(s).
The purchasing organization EORG is assigned to company code 1000 and the two plants.

Purchasing organization RORG is maintained as the reference purchasing organization for the purchasing organization EORG in Customizing for the Enterprise Structure ( Assignment Materials Management Assign Purch. Organization to Reference Purch. Organization) .

Entering Application and Master Data

The vendor Smith Corp. is maintained for both purchasing organizations.
The material Steel bolt 01 is maintained for the plants Houston and Austin.
A centrally agreed contract has been created without a plant by the reference purchasing organization RORG .

The following graphic illustrates which data you have to maintain:

Process Flow

An employee belonging to the purchasing organization EORG creates a purchase requisition for the plant in Houston.
The purchasing department processes the requisition and carries out a source determination procedure.
The contract of the reference purchasing organization is determined as a valid source.