Supply Chain Management in SAP Environment: Materials Management- Procurement Process

For planning purpose, some master data and transaction data from Materials Management- Purchase module is required to be transferred from ECC system to APO system.

First let’s see how the data flows in Procure-to-Pay (PTP) cycle in SAP Materials Management and what all master data and transaction data is created in Purchase process:

Purchase process flow:

1. Determination of requirement
• Stock requirement (External purpose / as a result of MRP)
• Consumption requirement (Internal Requirement)

2. Source Determination
3. Vendor selection and comparison of price
4. Create Purchase Requisition
5. Create Purchase Order
6. Purchase order follow-up
7. Goods Receipt and Inventory Management
8. Invoice verification

1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control. (This can cover both MRP proper and the demand-based approach to inventory control. The regular checking of stock levels of materials defined by master records, use of the order-point method, and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system.

2. Source Determination

The Purchasing component helps you identify potential sources of supply based on past orders and existing longer-term purchase agreements. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if desired.

3. Vendor Selection and Comparison of Quotations

The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically.

4. Purchase Order Processing

The Purchasing system adopts information from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase agreement) are also supported.

5. Purchase Order Follow-Up

The system checks the reminder periods you have specified and - if necessary - automatically prints reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all purchase requisitions, quotations, and purchase orders.

6. Goods Receiving and Inventory Management

Goods receiving personnel can confirm the receipt of goods simply by entering the PO number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods.

7. Invoice Verification

The system supports the checking and matching of invoices. The accounts payable clerk is notified of quantity and price variances because the system has access to PO and goods receipt data. This speeds the process of auditing and clearing invoices for payment.

The video below explains a step by step process of SP MM Procure-to-Pay cycle:

Also below is a list of important SAP MM transaction codes which are used most frequently by SAP MM users:

 

Transaction	Tcode
Create Material	MM01
Change material type	MMAM
List of materials	MM60
Create Vendor	XK01
List of vendors	MKVZ
Create vendor material inforecord	ME11
Extend material to multiple storage locations	MMSC
Maintain Material Source List	ME01
Analyse Source List	ME06
Create RFQ	ME41
RFQ by Vendor	ME42
RFQ By Material	ME4M
Maintain Quotation	ME47
Quotation Comparison Price List	ME49
comparison evaluation with weighting keys	ME64
Maintain Quota	MEQ1
Create Purchase requisition	ME51N
PR Release	ME54
Create Purchase Order	ME21N
Release PO (Collective/Individual)	ME28
Assign Source List to PO	ME56
Auto Convert PR to PO	ME 59
Goods Movemnent	MIGO
Create Reservation	MB21
Maintain Scheduling Agreement Schedule	ME38
Maintain Scheduling Agreement	ME31L
Release Scheduling Agreement	ME84
Create Contract	ME31K
Release Contract	ME35K
Change Price in Contract	MEKR
Create Stock	MB1C
View Stock	MMBE
Stock availability	CO09
Material Debit/Credit	MR22
Physical Inventory Sync	MI01
Physical Inventory Analysis	MI07
Print physical inventory doc	MI21
Stock requirement	MD04
Material Docs display list	MB51
Cycle Count (ABC Analysis)	MIBC
Subcontractor Stock	MBLB
Stock in transit	MB5T
Consignment Stock	MB54
Post zero stock  balance (BI session)	MI35
Transfer Posting	MB1B
Create Condition	MEK1
Condition Overview	MEKA
Invoice Verification	MIRO
Release Blocked Invoices	MRBR
GR/IR List of Balances	MB5S
Parking the invoice	MIR7
Display Invoice docs	MIR4
MRP Run	MD01
MRP List	MD05
Reason for requirement	MD09
List of PRs	ME5A

You may also want to download a complete SAP MM end user manual with step by step process and screen shots from this download link.