Optimized Purchasing

SAP AG

SAP AG

TAMM10 4.0B

19-1

Optimized Purchasing: Objectives (1)

At the end of this unit, you will:
Know and be able to differentiate between the various

kinds of master data relevant to source determination

Be able to maintain source list and quota arrangement

records
Understand the automatic source determination process
Know that the goal of optimized purchasing is to

automate and simplify the process of ordering needed

materials and services
Be aware of the prerequisites for optimized purchasing
Know and be able to differentiate between the various

functions for optimized purchasing

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SAP AG

SAP AG

TAMM10 4.0B

19-2

Optimized Purchasing : Objectives (2)

At the end of this unit, you will:
Be aware that you can simplify recurrent procurement

transactions and transactions involving phased

settlement by using invoicing plans
Be able to create purchase order items with invoicing

plans and have invoices generated automatically

SAP AG

SAP AG

TAMM10 4.0B

19-3

General Business Scenario

Optimized Purchasing

Materials
planning
User dept.

PReq.
Material
Quantity
Deliv. date
(Source)

Automatic
source
determination
Source list

Conversion

Pur. order
Vendor
Material
Quantity
Delivery date

Price

Source of supply
Info
Contract
record
item

Quota
arrangement

Scheduling
agmt. item
R

SAP AG

SAP AG

TAMM10 4.0B

19-4

Optimized Purchasing: Overview

1 Ordering: assigned requisitions
PReq
Source

Purchase
order

Contract
release
order

Purchase
order

Contract
release
order

Sch. agmt.
delivery
schedule

2 Automatic PO generation
PReq
Source

Assignment and processing of requisitions

PReq

Purchase
order

Sch. agmt.
delivery
schedule

Contract
release
order

Sch. agmt.
delivery
schedule

RFQ

Ordering with source determination

Purchase
order

Contract
release
order

PReq
R

SAP AG

Four functions are available for the purpose of optimized purchasing. These differ from each other in the
following respects:
Prerequisites
Manual effort
Result

SAP AG

TAMM10 4.0B

19-5

Ordering: Assigned Purchase Requisitions

Requisn.
Material
Quantity
Delivery date

List of assigned requisns.

Vendor A
4 PReqs.

Process
assignment

Source:
Vendor A
Requisn.
Material
Quantity
Delivery date
Source:
Contract 999
Vendor B

Vendor B
Contract 999
1 PReq.

Process
assignment

Release
order
Vendor B
Contract 999
10

Pur. order
Vendor C

Vendor C
3 PReqs.

Process
assignment

Item 10
20
30
R

Source:
Vendor C

Item 10
20
30
40

Item

Requisn.
Material
Quantity
Delivery date

Pur. order
Vendor A

SAP AG

A prerequisite for the function Ordering with respect to assigned requisitions is the existence of
requisitions that have been assigned to sources of supply. The system can assign sources automatically
if, for example, quota arrangements or source list records exist.

You get a list showing the number of assigned purchase requisitions per source.

You can convert all requisitions assigned to the same source into standard purchase orders, contract
release orders or lines of delivery schedules (issued under scheduling agreements) in a single step.

It is not possible to convert requisitions into RFQs using this function.

SAP AG

TAMM10 4.0B

19-6

Automatic Generation of POs

Prerequisites

Vendor master
Vendor
POrg
autom.
autom. PO

A
1000
X

Material master
Material
1
Plant
1000
autom.
autom. PO
X

PReq.
Material
Quantity
Delivery date
Source:
Vendor A
PReq.
Material
Quantity
Delivery date
Source:
Contract 999
Vendor B

PO
Vendor A

Vendor A
4 PReqs.
PO no.: 1234

Release
Autom.
order
PO
generation Vendor B
Contract 999
Item

10

Vendor B
Contract 999
1 PReq.
PO no.: 1235
...
1 PReq.
faulty

PO
Vendor C

PReq.
Material
Quantity
Delivery date

Item 10
20
30

Source:
Vendor C

Log

Item 10
20
30
40

SAP AG

As of Release 3.0, you can have purchase orders generated automatically from requisitions to which a
source has been assigned. You can perform the function either online or - in the case of large volumes of
data - in the background.

For the purposes of automatic PO generation, the system selects only those requisitions in respect of
which the Automatic PO indicator has been set for the material and vendor.

A log lists the purchase orders that were generated, indicates which ones are faulty, and provides
detailed information on the source of the error for each faulty requisition item.
The system cannot convert a requisition item if data is faulty or incomplete. Possible sources of errors
include the following:
Master data is faulty or incomplete
(For example, the vendor is blocked or the current order price is not available.)
Input data is missing
(For example, account assignment unknown.)
It is not possible to generate RFQs or scheduling agreement delivery schedules using this function.

SAP AG

TAMM10 4.0B

19-7

Assigning and Processing Requisitions

Purchase
requisition

1
List requisitions (for purchasing group)
2

W/o source

Assign source

Assign source
Outline agreement
Info record (vendor)

Flag for RFQ processing

3

Change
requisition

Assignment
overview

List of assigned requisitions

Purchase
requisition

Pur. order

Process
assignment

RFQ

?
R

With source

SAP AG

The Assign and process purchase requisitions function is a combination of the Assign purchase
requisitions and Ordering with respect to assigned requisitions functions.

From a list of open requisitions, you can initiate the automatic assignment of sources for all selected
requisition items. If more than one source exists for a requested material, you can choose your desired
source from a list displayed in a dialog box.

If requisitions have already been assigned, the previous source is overwritten.

You can flag for RFQ processing any requisitions for which no source is found.

After the assignment phase, you can save your requisitions with the assigned sources, or generate
standard purchase orders, contract release orders, scheduling agreement delivery schedules, or RFQs.

Assignment and processing can take place as separate processes and be carried out by different persons.

SAP AG

TAMM10 4.0B

19-8

Purchase Order with Source Determination

1

Enter item data:

material, quantity, delivery date

2
Assign source:
outl. agreement/info rec.
3

Outline
agmt.

Pc.
Pc.

%
%

Conditions
Conditions

$$
Info record

Generate POs or requisitions

Pur. order

Requisn.

Release (approve)
Process

With/without
source
RFQ

Pur. order

SAP AG

The Purchase order with source determination (= PO with unknown vendor) function is a combination
of the Create purchase requisition and Create purchase order functions.

With this function, you

first enter the materials to be ordered
then assign sources to the items
then generate the purchase orders for the assigned items

(or purchase requisitions for any items for which no sources can be determined or which must first be
released)
As in the case of requisitions, the system suggests possible sources of a material on the basis of existing
quota arrangements, source list records, outline agreements and/or info records.

SAP AG

TAMM10 4.0B

19-9

Purch. docs & Source of supply (Funktions)

Create PO - Vendor unknown
W/o. Source of s. / Source of supply / Source of supply /
Generate PO
Save as requisition Save as requisition

Create P. requisition
Without
Source of
Supply

Find or assign
Source of
Supply

P.req. W/o.
Source o. su.

Preq. with
Source o. su.
Assign

Process
(via. Assignment list)

Automatic

Purch. order

(via PReqs.)

Assign + Process

Create PO Vendor known

Anfrage

RFQ

Item with:
Source of supply
Flag for RFQ

SAP AG

SAP AG

TAMM10 4.0B

19-10

User Parameter EVO

Enter data on initial screen

Pur. order
acknowl.
reqt.: X
2

Default value:
Order acknowl.
requirement = X

Establish link

Establish
link to
PReq. no: 155 Select requisition items
3

X_ __ _ __ _
X_ __ _ __ _
Adopt requisition items

Default value:
Select all = X

Default value:
Single-line
overview = X

Default value:
Select all = X

4
Adopt

Purchase order
overview screen
5

10 _ _ __ ___
20 _ _ __ ___
30 _ _ __ ___
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SAP AG

The user parameter EVO allows you to specify default values for certain fields and functions for each
user. For example, it allows you to specify default values for
various indicators
the overview screen display
the fast entry functions

You define the default values via Customizing and assign them to a user by entering the key for the
default values in the user master record under the parameter ID EVO.

SAP AG

TAMM10 4.0B

19-11

Overview of Materials Requirements Planning

Planning file entry
Transaction
relevant to Materials
Planning

Planned order

MRP

Opening period

Materials Planning
Purchasing

Order

Tuesday, Tuesday,
Dec. 18 Dec. 18

Delivery
schedule

Purchase
requisition

SAP AG

If requirements for a material are planned automatically and MRP is active in the plant, the system
automatically carries out planning file entries upon transactions relevant to materials planning (goods
issues, reservations, change in a materials planning data, execution of a forecast for material ...).
You can also enter planning file entries manually.

You can carry out materials requirements planning online or in the background.

Planned orders are an order proposal used for requirements coverage. They are converted to purchase
requisitions in a single step. You can also create them manually.

You can also create purchase requisitions instead of planned orders.

SAP AG

TAMM10 4.0B

19-12

Calculation of Dates

Purchase order
date

Creation of
purchase
requisition

Processing time
Purchasing

Planned
delivery time

Delivery
date

Availability

GR processing
time

SAP AG

From the date of the purchase requisitions creation, the R/3 System calculates the materials availability
date by taking into account the three time components, purchasing processing time, planned delivery
time, and goods receipt processing time.
The processing time for Purchasing is the time required to convert a purchase requisition into a purchase
order and issue it. The time required is measured in working days according to the factory calendar. It is
plant-dependent and set in Customizing for Materials Planning.
The planned delivery time is the time from the issue of the purchase order issue to the receipt of the
goods at the vendor. This is entered in calendar days in the material master, info record, and /or contract.
The GR processing time is the time required from the goods receipt until the material is available. It is
entered in in the material master, and/or contract, in working days, according to the factory calendar.

SAP AG

TAMM10 4.0B

19-13

Structure of Stock/Requirements List

Stock/requirements
Stock/requirements list
Variable header
Material information
Consumption values

MRP elements

Contents
are
continually
imported

Planned orders
Purchase requisitions
Production orders
Purchase orders

...

Date
Exception message
Receipt/requirement quantity
Available quantity

Contents

Plant stock/
storage location stock
Forecast requirements
Sales orders
Reservations
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SAP AG

A stock/requirements list informs you of the available quantity, based on the stock situation,
requirements, and receipts.
The stock/requirements list is dynamic, i.e. every time you call up the function, the stock elements,
receipt elements, and issue elements (e.g., plant stock, purchase orders, and reservations) are
redetermined.
There is an individual display function and collective evaluation function for the stock/requirements list.
The MRP list is another function used for evaluation in MRP. This is a document that describes the
status of a material at the time of the planning run.

SAP AG

TAMM10 4.0B

19-14

Periodic Invoicing Plan

Pur. order
Item
10

Rental

Invoicing plan
Jan.
12.31
Feb.
01.31
Mar.
02.28
...

1000.00
1000.00
1000.00

Leasing
Automatic invoicing/
settlement
R

SAP AG

As of Release 4.0A, it is possible to create purchase order items with an invoicing plan. An invoicing
plan consists of a series of invoicing dates and values, and forms the basis for the largely automatic
creation and settlement of invoices.
PO items with an invoicing plan are suitable for recurrent procurement transactions (such as rental,
leasing, servicing agreements) or for transactions involving settlement in stages.
There are two kinds of invoicing plans: "periodic" and "partial".
The periodic invoicing plan should be used for recurrent procurement transactions. With this type of
invoicing plan, the total value of the PO item is invoiced on each due date. The due dates can be
suggested automatically by the system.
The invoicing plan type is defined in Customizing and is assigned in the PO item.

SAP AG

TAMM10 4.0B

19-15

Partial Invoicing Plan

Construction project

Pur. order
Item
10

Invoicing plan
Total invoice value

150,000.00

Signing
of contract
04.01

Completion of
main structure
08.01

Final
invoice
12.31

10%

30%

60%

Automatic invoicing/
settlement

SAP AG

There are two kinds of invoicing plans: "periodic" and "partial".

The partial invoicing plan should be used for transactions involving invoicing and payment in stages (for
example, in construction projects, where a down-payment is required). With this type of invoicing plan,
the total value of the item is spread among the individual due dates defined in the invoicing plan. Thus,
only a part of the total item value is payable on each due date.
In the case of the partial invoicing plan, the due dates can only be automatically suggested by the system
if date proposals are first defined in a model invoicing plan in Customizing for simplification purposes.
Otherwise the due dates have to be entered manually at the time the purchase order item is created.
The total value of the PO item can be split among the due dates on a percentage basis or in absolute
amounts.
Automatic invoicing is based on the dates and values specified in the invoicing plan assigned to the PO
item.
The invoicing plan type is defined in Customizing and assigned in the PO item.

SAP AG

TAMM10 4.0B

19-16

Maintaining an Invoicing Plan

Customizing

Purchase order
Item

AA
cat.

10

ERS GR
x

Invoicing plan type

10

Invoicing plan type:

10 Periodic
invoicing

Prerequisites
Account assignment
Eval. Receipt Settlement (ERS)
Non-valuated GR (or no GR)

Defaults:
- Date (type)
- Horizons
- Calendar

SAP AG

If you wish to create a purchase order with an invoicing plan, you should use the document type FO
(framework order). This document type enables you to enter a validity period in the purchase order
header.
You must specify account assignments for PO items with an invoicing plan.
The invoicing plan function is not possible in the case of valuated goods receipts. You must either cancel
the GR indicator in the PO item or set the Non-valuated goods receipt indicator.
The automatic generation of invoices on the dates set out in an invoicing plan is only possible if the ERS
indicator has been set in the Purchasing data of the vendor master record. If the indicator is set, you
must enter a tax code in the PO item.
You create a PO item with an invoicing plan by assigning the key for an invoicing plan type in the PO
item. The invoicing plan type is defined in Customizing and determines, for example, whether and
according to which rules invoicing dates are suggested.

SAP AG

TAMM10 4.0B

19-17

Invoicing Plans: Customizing

Types
Periodic invoicing plans

Start date
End date
Horizon
Dates from/to
Periodicity of
invoicing dates
Invoicing date
variance
No. of days/month
Date cat.

Partial invoicing plans

Rules for
determining
date
Maintenance
of date
proposals

Ref. invoicing plan no.

Date categories
Date
identifier

Calc.
rule

Date cat.
Invoice
block

Invoice in advance
Dialog in purchase order

Start date

Dialog in purchase order

Invoice block

SAP AG

The automatic creation of scheduled dates for an invoicing plan is controlled in Customizing for
Purchasing via the invoicing plan type.
The invoicing plan type defines the basic control data for the invoicing plan. Accordingly, the invoicing
plan type contains information such as rules for date determination. It also contains a rule for
determining the invoicing plan horizon. The latter indicates the last invoicing date in the plan by
specifying a certain time period starting from the current date.
The date category specifies data for each invoicing date that appears in the invoicing plan. A date
category can be assigned to each invoicing plan type.
To permit the automatic generation of invoices for invoicing plans, the indicator for Evaluated Receipt
Settlement (ERS) must be set in the vendor master record (Purchasing data).

SAP AG

TAMM10 4.0B

19-18

Optimized Purchasing: Summary (1)

Various functions are available for optimized

purchasing. Assigned purchase requisitions

are a prerequisite for some of them.
Assigned requisitions can automatically be

converted into purchase orders, contract

release orders, or lines of delivery schedules.
Non-assigned requisitions can first be

assigned to a source in a collective function.

Then they can be converted into purchase
orders, contract release orders, delivery
schedule lines, or RFQs.
R

SAP AG

SAP AG

TAMM10 4.0B

19-19

Optimized Purchasing: Summary (2)

Invoicing plans facilitate the largely automatic

creation and payment of invoices for both

recurrent procurement transactions and
transactions involving payment in stages.

SAP AG

SAP AG

TAMM10 4.0B

19-20