Executing Purchase Order Management

Objective

After completing this lesson, you will be able to create a purchase order in SAP S/4HANA Materials Management

Purchase Order in SAP S/4HANA Materials Management

Meet Trent, a 30-year-old fitness enthusiast, seeking to incorporate cycling into his daily routine. To achieve this lifestyle change, he is keen on finding a durable and efficient bicycle that can cater to both his fitness goals and commuting needs. His mission is to blend health, sustainability, and convenience into his everyday routine. That's why Trent decided to configure a bike at a nearby store called Rapid Riders.

Join Trent’s conversation with Anton, who is the store owner.

While SAP software can manage a wide range of business processes, we'll be focusing on a subset that directly corresponds to Trent's journey of receiving his new bicycle.

This practical approach will give us a real-world understanding of how these processes work.

Procurement

The journey starts with a simple procurement process in SAP S/4HANA. Let’s have a look at the details of the process.

The image shows the steps of the procurement process and the apps you use: You create a purchase order in the Manage Purchase Orders app, post the goods receipt in the Post Goods Receipt for Purchasing Document app, and then the invoice receipt using the Create Supplier Invoice app.

Purchase Order Management

Nora, a Procurement Specialist at the Bike Companywith over a decade of experience in the Procure-to-Pay process, offers Trent some insights into her day-to-day business.

Purchase Order at a Glance

The SAP S/4HANA system offers various ways to create a purchase order: You can either create a purchase order from scratch, if, for example, you order material from a new supplier for the first time. Alternatively, you can reference other documents, for example, earlier purchase orders, if, for example, you already ordered the material from that supplier and the stock of the material is about to run low in the foreseeable future.

Irrespective of which way you choose to create a purchase order, the SAP S/4HANA system suggests default values from various related master data objects:

The ordering address and the terms of payment and freight (incoterms) are taken from the supplier's business partner.
The material short text, the purchase order unit of measure, and the material group are taken from the material master record.
The negotiated price is taken from a purchasing information record.

Structure of a Purchase Order

Like other transactional data records in the SAP S/4HANA system, the purchase order has a predefined structure and contains one document header and one or more items.

The image shows the structure of a sales order. For additional details, refer to the following text.

Document Header: The document header contains information that refers to the entire purchase order, for example the supplier from which you order the material, the purchasing organization that orders the material, the currency and payment terms in which the order will be settled, the purchase order date, and so on.
Item: An item in a purchase order corresponds to material ordered from the supplier. Necessary data for an item are the material number and text, the order quantity, the desired delivery date, the agreed price, and the plant for which the material is ordered.

To create, change, display, or monitor sales orders in the SAP S/4HANA system, the purchaser uses the Manage Purchase Orders app as a central tool. Once a purchase order has been created, the system automatically creates documents that you can either print out or directly send to your supplier via mail to inform them about your order.

Create a Purchase Order

Support Nora in creating a Purchase Order.

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