Explaining the Requisitioning Process

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Recall the basic sourcing process steps

Scope Item Overview

Please have a look at the Scope Item Overview that Penelope has prepared for you.

Select the business process steps, to see the selected scope items:

We will now focus on the first business process step in source-to-pay: manage purchase requisitions.

As part of the integration test, you have a look at the required master data in procurement. The first documents will be created manually in Procurement to initiate the source-to-pay process.

Penelope messaged you, select the message to see what she has to say.

Supplier Master Data Record

In the same way that you used an FI supplier in the record-to-report process, it is now necessary to extend that Business Partner so they can be used in the source-to-pay process.

Select the supplier role, to learn more about role-related data. Do not forget to check the general business partner data by selecting the corresponding area.

Please note that the general data has to be provided for each Business Partner role. Further roles will be unlocked in the course of the training.

How to Create Business Partner from the Perspective of Purchasing

To use the FI vendor in purchasing, you must extend the existing business partner with the supplier role. While entering the necessary Purchasing Organization you are able to create the relevant purchasing dataComplete the fields as required.

Product or Material Master

Before our Bike Company can procure the materials needed to produce a new e-bike, we must first create a product master record (sometimes referred to as a material master record). The product master data record is the most centralized object in the ERP environment. Because it is used by all departments, each department must create the necessary data.

Because we need to buy the new material in advance for the development and the prototyping, the Procurement department starts creating a new product master record.

The product master is organized by departments. Views are allocated to each department (data tabs – grouping of fields) that contain the information necessary for the department. Because the development of a new product starts in the Engineering department, they are responsible for maintaining the basic data.

The Purchasing department is then the first one involved in the process of sourcing and they need to maintain data as well. As the new material will be managed in stock, besides the storage data, accounting data is necessary as the materials will be managed in valuated stock.

From this perspective the following departments need to maintain data:

  • Engineering / Construction
  • Purchasing
  • Storage
  • Finance

Because there are different types of products, it is possible to differentiate the usage (which departments can maintain a product) of the product.

The following are examples for the material type:

  • FERT for a finished product
  • RAW for a raw material
  • SEMI for a semi-finished product

You must also specify an industry sector, which determines the fields necessary.

A product master record is created (or maintained) for every enterprise structure needed by the department. Depending on the departments (and therefore the views), the product master needs to be maintained with a reference to the client – engineering data, with reference for plant – purchasing data, with reference for plant / storage location from the storage views.

Because the Bike Company produces products and uses production planning, the valuation level plant has been set up. Therefore, the financial views are created at the level of the plant.

Penelope has prepared some information for you. Please have a look at the interaction below, to learn more about the material master.

How to Create a Product Master Record

Create a Product Master Record, based on the information presented earlier.

Manage Purchase Requisition Business Process

Start with the Interaction below, to learn more about the business process step purchase requisition.

Let’s summarize:

As you just learned the item Category is used to define the business process used in purchasing.

The following item categories are available:

  • Normal
  • Consignment
  • Stock Transfer
  • Subcontracting
  • Service

The account assignment category is used when ordering products directly for an accounting object. Possible accounting object are:

  • Cost Center
  • Asset
  • WBS element
  • Order (enterprise asset management, production order and others…)

How to Create Purchase Requisition

Follow-On Process Steps of the Purchase Requisition

Now that we have manually created a purchase requisition to procure the materials needed to produce the new e-bike, we will have a look at the possible following on processes:

  1. Convert the purchase requisition into a purchase order. For this, you need to know where to buy the product and you need to enter the price manually.
  2. Use the purchase requisition to create several requests for quotation to be sent to several suppliers. You will receive some quotations, including the conditions for the delivery. This could be processed directly in the S/4HANA system. Based on the quotes, you have the option to create purchasing info records or a contract with a preferred supplier. You can then create a follow-on purchase order.
  3. Transfer the purchase requisition to SAP Ariba and process the request for quotation (RFQ) and quote in SAP Ariba.

How to Process Request for Quotation

Purchasing Info Record

A purchasing info record is a master data record that is used for the sourcing process. It combines the product and the supplier and is created with a reference to a purchasing organization. Optionally, it can also be maintained at the level of the plant. In addition to the purchasing info record we can maintain conditions. Conditions are possible pricing elements that could be valid for the purchasing process. For example, the price of the product, rebates or fright costs that apply.

The conditions are stored in separate master data records.

SAP Ariba Alternative

As an alternative, you can use the SAP Ariba solution to process some procurement steps or the entire procurement process.

As already seen in the process flow in lesson 2, we can create purchase requisitions in SAP Ariba. For this, we use catalogs from the SAP Guided Buying for SAP S/4HANA buying and create shopping carts. The created request would be forwarded to an approver (if necessary) and then be used as input to create a purchase order.

Please have a look at the illustration that Penelope has prepared for you.

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