SAP MM : Procurement Process

Determination of Requirements

• The user department responsible is manually passing a requirement for materials to the purchasing department via Purchase Requisition. 
• Purchase requests are generated when business runs the MRP and Request are also generated based in Consumption based planning (CBP) for Production and Engg.Stores. 

Determination of Source of Supply

• The purchasing component helps the buyer determine the sources of supply.
•  User use the determination of the source of supply to create Requests for quotation (RFQs) and then to enter quotations.
•  User is accessing the existing Purchase Orders and Conditions in the System. 

Vendor Selection and Comparison of Quotations

• The System is capable of simulating pricing scenarios and simplifies the selection of vendors by making price comparisons between the various quotations. 

Purchase Order Processing

• The purchasing system adopts information from purchase requisition and the quotation to help to create Purchase Orders. 
• They are also creating manual purchase order directly for stock, non-stock items, services etc.   

Goods Receipt and Inventory Management

• The Goods receiving requester confirms the receipt of the materials by simply entering the Purchase Order Number. 
• The system compares the goods receipt quantity with the purchase order quantity. 
• By specifying permissible tolerances, buyers can limit over deliveries and under deliveries of ordered materials.

Invoice Verification

• after Goods Receipt done , Based on PO and GR , Invoice verification is done
• Once the  Invoice Verification done , Transaction is ready to make the payment 

Payment

• As per agreed Terms with vendor Payment is made

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