Introduction
Direct procurement is the act of acquiring raw materials and goods for production.
Watch the following video to get more information about the procurement of direct materials and its key process steps:
These purchases are generally made in large quantities. This purchasing process uses purchase requisitions that are generated either using the Material Requirements Planning (MRP) process, or manually by a requester.
A purchaser validates the accuracy of the purchase requisition and converts the purchase requisition into a purchase order. The conversion from a purchase requisition to a purchase order can also be done automatically and is applicable for large volumes. Alternatively, the purchase orders can be generated manually.
The purchase order can be subject to approval based on predefined approval workflows before being issued to a supplier. Goods are shipped from the supplier and once they arrive the goods receipt is posted with reference to the purchase order. Upon receiving the invoice from the supplier, the supplier invoice is created with reference to a purchase order which then initiates the payment processing. It is possible to monitor the progress throughout the entire procurement process and can initiate reactive actions if needed.
The following image graphically shows the key process flow of procurement of direct materials:
You can find the complete Solution Process Flow on Process Navigator - SAP for Me:
Procurement of Direct Materials (J45) Solution Process