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.
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)
–Stock Transport Orders
–Kitted Material Process
–Kan Ban Process
–3rd Party Ship Drop Process
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|
|ME52K||Purchase Requisition changed|
|3||Material Requirements Planning (MRP) Process||See P2P Process||
MRP-generated Purchase Requisitions
|4||Display Purchase Requisition||ME53K||Purchase Requisition displayed|
|5||Convert Planned Orders to Purchase Requisition||
|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.
|Description||Account Assignment Category||Description||Item
|Stock||NB or Custom||System-Generated or
|Subcontracting||NB or Custom||System-Generated or
|Third-party (Sales Order)||NB or Custom||System-Generated or
|X||All Account Assgts.||S||Third-party|
|Sales Order (Ship Loose)||NB or Custom||System-Generated or
|M||Procure to order|
|Consignment||NB or Custom||System-Generated or
|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.