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Global / Centralized Procurement

In a multi-org environment, many a times business demands centralize procurement across multiple operating units
as this provides following major benefits
1.Provides cost savings by consolidating purchases for volume discounts
2. Centralized control provides a single source of information for businesses
3. Better control on purchasing is possible under centralized purchasing. There is no chance of reckless purchase
since one unit is authorized to make purchase for the whole organization.
Business Flow Demonstrated in this White Paper:
Step1: Creation of Requisition from Operating X (ZZ Plant)
Step 2: Creation of Purchase order in Centralized Operating Unit Y (Vision Operations)
Step3: Receiving in Inventory Organization (ZA1) which belongs to Operating Unite X (ZZ Plant)
Step4: Request for Intercompany Invoice Generation

Mandatory setup:
Setup Following profile options
INV: Intercompany Invoice for Internal Orders = Yes
CST: Transfer Pricing Option = Yes, Price Not As Incoming Cost
Make sure your Security profiles setup provide access to all the Organizations involved in Purchasing Process.
Make Sure Centralized Operating Unit should also be defined as Logical Inventory organization.
Make Sure Purchasing Item access is been given to all inventory organizations involved in Global procurement
Process. (This includes the Logical inventory organization also)
Creation of Internal Customer

Creation of Intercompany Transactions Flow:
Setup> Organizations> Intercompany Transaction Flows
(Note: Start should be Procuring Organization. End should be operating Unit of Receiving Inventory

Transaction Flow:
Step1: Create Requisition
(Note: Operating unit will be the Requesting operating unit , Organization should be the Inventory organization
within a requesting OU where you would like to receive material)

Step2: Approve requisition

Step3: Create PO in Centralized OU which will be buying on behalf of other OUs
Responsibility: Purchasing Super User

Navigation: Autocreate> Find out the requisition that needs to be processed

Click on Automatic Button. Most Important: Select Centralized OU (In our case Vision
Operations) as a Purchasing Org.

Step4: Provide Ship-to and Bill-to Details at PO Header, Verify details , Check Shipment level
details, Initiate PO Approval.

Step5: Receive Material in requesting Inventory Organization