Day in the life of a Material Buyer – 3- Purchasing

Purpose: The purpose of this blog post is to bring the real-life day-to-day scenarios of a material buyer based on my own domain experience as a material buyer.

This is the Third blog post of the series – Day in the  Life of a material buyer. Please go through the previous blog posts listed below.

Day in the life of a Material Buyer – 1- Overview of buyer functions

Day in the life of a Material Buyer – 2- Vendor acknowledgment and communication

Here I would explain the third activity with SAP tools.

  • Purchasing activities.
    • Activities related to Purchase requisitions.
    • Purchase order-related activities like
      • ME58 – Convert Assigned Purchase Requisitions to Purchase Orders
      • ME57 – Assign and Process Purchase Requisitions to Purchase Orders
      • MEAN – Delivery Address
      • PO Release Approval
      • Purchasing Document – Closing Procedures.
  • Other purchasing strategies (Are not covered in this blog post)

–Scheduling Agreements

–Stock Transport Orders

–Kitted Material Process

–Subcontracting Process

–Kan Ban Process

–Consignment.

–3rd Party Ship Drop Process

–Contract

Purchasing flow in SAP.

Purchase requisition transactions

Step Activity Tcode in SAP Remarks Fiori App (To update soon)
1 Create Purchase Requisition ME51K Purchase Requisition created
2

Change

Purchase Requisition

ME52K Purchase Requisition changed
3 Material Requirements Planning (MRP) Process See P2P Process

Process

MRP-generated Purchase Requisitions

4 Display Purchase Requisition ME53K Purchase Requisition displayed
5 Convert Planned Orders to Purchase Requisition

MD14

Individual

MD15

Collectively

Purchase Requisition(s) created from MRP planned order(s)

Key things to remember in purchase requisitions as a buyer.

  • Account Assignment Category

–A key indicating whether an item is to be assigned to an auxiliary account (such as a cost center). The account assignment category determines which account assignment details are required for the item (for example, cost center or account number).

  • Item Category

–An identifier indicating the characteristics of an item. The item category determines whether the following are mandatory or permitted for an item:

  • Material number
  • Additional account assignment
  • Inventory management in the SAP system
  • Goods receipt
  • Invoice receipt

Purchase Order Process

  • System-generated purchase order.
      • A purchase requisition is generated via the Material Requirements Planning (MRP) process. A buyer converts the purchase requisition into a purchase order. The purchase order is subject to approval based on the release strategy. The buyer then sends the purchase order to the vendor.
      • Goods are shipped from the vendor, and the receipt of the goods is done with reference to the purchase order.
      • The invoice is received from the vendor. Invoices are entered with reference to a purchase order. The vendor is paid by accounts payable.
  • Purchase order Process Flow
Step Activity Tcode in SAP Remarks Fiori Apps to be updated
1 Review MRP List (optional) MD06 Results of latest MRP run viewed.
2 Display and assign purchase requisitions ME57 Unassigned requisitions are displayed, and sources of supply assigned
3 Convert assigned requisitions to purchase orders ME58 The system generates a purchase order.
4 Approval of purchase orders ME28 / ME29N The purchase order is now released.
5 Transmit purchase order ME9F The purchase order is printed, faxed, e-mailed, as needed
6 Goods Receipt MIGO Material is received.
7 Invoice Receipt by Line Item MIRO The invoice is verified.
8 vendor Outgoing Payment See finance process The outgoing payment is processed.

As a buyer, you should also be aware what are the different types of purchase document types created by your consultant. For eg, you may have a separate document type (Usually NB standard sap, but could be different based on need).

  • NB – System generated
  • MAN- Manually created
  • RET- Returned to vendor PO
  • CON- Consumables.
  • AST -Asset purchase.

Each would ideally have its own number range,

Different Purchase order Scenarios you may face are as below.

Scenarios Document
Type
Description Account Assignment Category Description Item
Category
Description
Stock NB or Custom System-Generated or
Manual Created
Standard
Subcontracting NB or Custom System-Generated or
Manual Created
L Subcontracting
Third-party (Sales Order) NB or Custom System-Generated or
Manual Created
X All Account Assgts. S Third-party
Sales Order (Ship Loose) NB or Custom System-Generated or
Manual Created
M Procure to order
Consignment NB or Custom System-Generated or
Manual Created
K Consignment
Consumable Material usually Custom Assets/Consumables K Cost center
Consumable Service usually Custom Assets/Consumables K Cost center
Fixed Asset usually Custom Assets/Consumables V Purchase to BS acct
Return to Vendor usually Custom Return to Vendor Ord
Stock Transfer UB Stock Transport order U Stock transfer

This blog post is more focused on Material buyers (end users) and new consultants may find it useful to understand SAP MM functionality better.

Do give feedback to make this blog post better.