Introduction
The next section covers the integration of Variant Configuration with materials management.
In detail, we look at purchase orders with configurable materials and configurable model service specifications.
This figure gives you an impression about the External Procurement Cycle.
The external procurement of materials is based on a cycle of general activities. The typical procurement process includes the following phases:
Determination of requirements: The responsible department can manually report a requirement for materials to Purchasing using a purchase requisition. If you've set an MRP procedure for a material in the material master record, the system can generate the purchase requisition automatically.
Determination of source of supply / supplier selection: As a purchaser, you're supported in determining possible sources of supply. Options include the creation of RFQs and the subsequent entry of quotations or the use of existing purchase orders, contracts, and conditions.
Purchase order processing: Like purchase requisitions, you can create purchase orders manually or have the system create them automatically. When you create purchase orders, you can enter data from other documents (for example, from purchase requisitions or quotations) and thus reduce the amount of data entry required.
Purchase order monitoring: Monitor the processing status of the purchase orders in the system. In this way, you can, for example, determine whether a delivery or an invoice has already been received for a purchase order item. You can also send reminders for outstanding deliveries to the vendor.
Goods receipt: Enter incoming deliveries in the system by referencing the corresponding purchase order to reduce the amount of data entry required. By referencing the related purchase order, you can also check whether the delivered goods and quantities match the purchase order. The system updates the purchase order history.
Invoice verification: Enter invoices in the system by referencing the previous purchase order or delivery to verify the calculations and the correctness of the invoice. The availability of the purchase order and goods receipt data enables you to be informed about quantity and price differences.
Payment processing: Execute the payment program to pay vendor payables. The regular execution of this program is the task of Financial Accounting.
In addition to the normal procurement process just described, various special procurement processes are also possible, including:
Stock Transfer with Stock Transport Order
Subcontracting
Vendor Consignment
You control which procurement process you want to use for a purchase order item using a special indicator known as the item category.
Material requirements planning is used to monitor stocks and, in particular, has the task of automatically generating procurement proposals for purchasing and production. This goal is achieved by using different MRP methods, which in turn involve different procedures. The automatic planning run in MRP determines shortage situations and generates the corresponding procurement elements. Possible procurement elements in MRP are planned order, purchase requisition, and scheduling agreement schedule lines.
In the case of in-house production, the system creates planned orders to plan the production quantities. When planning is complete, the planned orders are converted into production orders. The dependent requirements of the planned order are converted into reservations of the production order.
In the case of external procurement, the system generates either a planned order or a purchase requisition directly to plan the external procurement quantity. In the initial screen of the planning run, the creation indicator for purchase requisitions or the MRP groups in the material master record controls whether purchase requisitions or planned orders are generated directly. When planning is complete, the planned order must be converted into a purchase requisition and later the purchase requisition into a purchase order. The advantage of having a planned order created first is the additional control of the procurement proposals by the MRP controller.
If a scheduling agreement exists for a material and this is flagged as MRP-relevant in the source list, it's also possible to generate scheduling agreement delivery schedule lines directly during the requirements planning run. Unlike planned orders and purchase requisitions, scheduling agreement delivery schedule lines are fixed elements with a binding character.
You can convert the planned order into a purchase requisition and convert it into a purchase order (for example, in transaction MD04 of the stock/requirements list or in the corresponding app).
In the purchase order on the material data tab page, you can go directly to the configuration. The configuration from the sales order is automatically referenced or copied to the purchase order. it makes the configuration available to the supplier.
On the tab page for the conditions, you can see that pricing for variants takes place in the same way as in the sales order, also using the variant condition types VA00 and VA01.
You can also create a purchase requisition or purchase order for the configurable material directly, that is, without reference to a sales order. In this case, you have the option of configuring in the document.
Purchase Order
A purchase order is a formal request to a vendor to deliver goods or services to you under the conditions specified in the purchase order. In the purchase order, you also specify whether the material is to be used to replenish your warehouse or for consumption (for example: cost center, asset, or project). Usually, goods receipt, and invoice verification take place on the basis of the purchase order.
You can save time and effort when you create purchase order items with reference to an existing purchase order, purchase requisition, quotation, or contract.
You can also enter a purchase order in the system without reference to existing documents. The system supports you with default values when you enter purchase order data. For example, the system proposes the ordering address as well as the terms of payment and freight (Incoterms) from the supplier master record. If a material master record exists, the material short text, order unit, and material group are copied automatically. If a purchasing info record already exists in the system, a price can be proposed in the purchase order.
If the source of supply is a plant of your company, execute a stock transport order. If you order from an external vendor, you create a standard purchase order.
Structure of a Purchase Order
Like other purchasing documents in the SAP system, the purchase order consists of a document header and one or more items.
Document header:
In the document header, you can find information that refers to the entire purchase order, such as: document type, supplier, purchasing organization, purchasing group and company code, currency, document date, and payment terms.
Items:
The items in a purchase order describe the materials or services ordered. The required data for an item are material/service, order quantity and unit of measure, delivery date, price, and plant for which the material/service is ordered. For each item, you can maintain additional information (for example, tolerances for overdeliveries or item-related texts).
You also use the item category to determine the procurement process for the individual purchase order items. You use the item category to specify, for example, whether it's a special procurement process such as vendor consignment, subcontracting, or stock transfer.
In a purchase order, you can order materials or services for different plants. All plants mentioned in a purchase order must be assigned to the purchasing organization entered in the purchase order header.
Pricing and Prices in Purchasing
Pricing in Purchasing takes place in the same way as pricing in Sales and Distribution on the basis of the condition technique.
Conditions are agreements with suppliers about prices, surcharges, discounts, and so on. Conditions can be maintained when entering quotations, info records, outline agreements (contracts, scheduling agreements), and purchase orders. The net or effective price in a purchasing document is determined on the basis of these conditions. You can also store general conditions at vendor level, for example. The system then also uses these conditions for price determination.
There are different types of conditions in Purchasing:
Conditions in the contract apply to all release orders that are created with reference to this contract.
Conditions in the purchasing info record apply to all purchase order items that contain the material and the vendor of the purchasing info record.
You can also use general conditions to represent price agreements that are not only valid for individual quotations, outline agreements, purchase orders, or info records. You enter general conditions in Purchasing under → Master Data → Conditions.
The condition type determines how the price factor is calculated. You can choose between percentage, quantity-dependent, or absolute. The condition type is also used to define the scale base type for scales. An access sequence can be assigned to a condition type. The access sequence is a search strategy that determines the sequence in which condition records for a condition type are to be read. The condition types are grouped together in a pricing procedure. The pricing procedure is therefore the set of rules for pricing.
Variant Conditions in Purchasing Info Record and Conditions for Pricing
In Purchasing, you can use variant conditions to define surcharges and discounts for externally procured, configurable materials. The surcharges and discounts depend on the characteristic value assignment that's transferred from the sales order or material master (for material variants).
The characteristic value assignment can also take place in a purchase requisition item or purchase order item. You maintain the surcharges and discounts for the individual characteristic values in the purchasing info record with the condition types VA00 (quantity-dependent) and VA01 (percentage).
For material procurement, you specify a material and the corresponding data for each item.
In contrast, when services are procured, neither the exact service description nor the purchase order quantity is clearly defined. By defining a limit for unplanned services, you can control the costs for unplannable and unexpected services.
A service item must always be assigned to an account. This is possible for material in service procurement. However, you can use account assignment category U (Unknown) in conjunction with item category D (Service), since the account assignment is often not yet known at the time of ordering.
When procuring services, the item contains only a short text that describes the procurement project in general.
To list the individual services with description, quantity, price, and other detailed information, use the bill of services (BOS). This must be maintained at item detail level. Item category D activates the service functionality and allows you to create a service specification and specify value limits for unplanned services.
In the purchase order, you can also work with services, that is, independently of configurable materials. You can copy these services from a model service specification. The model service specifications are configurable. In this case, after selecting the configurable model service specification, a characteristic value assignment screen would appear in the same way as the configuration of the configurable material. The configuration of the model service specification is independent of the configuration of the material in the sales order.
Service Specification
Model Service Specifications
In model service specifications, you can store service specifications that are often used in your company. The model service specification serves as a template for service specifications in purchase requisitions and purchasing documents and is one of the master records for service procurement.
A model service specification contains individual service lines and, if necessary, an outline. This service specification can then be referenced in the various documents, whereby only individual service lines or the complete outline with all service lines can be transferred.
The following default values can already be maintained in the model service specification:
Purchasing Organization
Fixed Supplier
Contract Document Number
The user parameter MSP can be used to set a preferred model service specification as default (default).
Model Service Specification with Variant Configuration
A model service specification with Variant Configuration enables you to have the system automatically create a service specification on the basis of the specific data specified by the user. The SAP system selects and displays only those services in the purchase requisitions and purchasing documents that are relevant for the relevant procurement.
The buyer selects a model service specification using the Service Selection function.
When you start the configurator, all characteristics for the specification are displayed.
The purchaser selects the desired values.
The configurator collects the selected services.
The basis for the configuration is a model service specification with services that are mutually exclusive or independent of each other. These dependencies are controlled by the object dependencies in the knowledge base. In the knowledge base, the attributes of individual services are saved as characteristics that are assigned to model service specifications. The characteristics are part of the classification system and Variant Configuration in Logistics.
Configurable model service specifications represent maximum templates similar to the other configurable object types (material master, network, general maintenance task lists). According to a configuration, the elements to be transferred are selected from these templates (selection conditions) and possibly changed (procedure).
The procedures use reference characteristics with reference to the database table ESLL for these changes. In the example, only one service is selected and assigned a procedure. The procedure overwrites the short text according to the configuration. The model service specification can be configured by setting the corresponding indicator. Configuration profile and variant class are also required.
Quality Management
In procurement, the QM component has functions for managing, controlling, and processing the following objects, based on:
Material
Material and vendor
Vendor and manufacturer
Quality Management in Procurement
Processes the evaluation, release, and selection of vendors (for example, release of a vendor for specific quantities, for a specific period, or for a material)
Manages quality documents (for example, technical delivery terms)
Controls whether a source inspection or a goods receipt inspection is to take place
Processes complaints against a vendor
When goods are received, an inspection lot (with origin 01) is created for the goods based on the available information (such as quality info record procurement, inspection specifications, current quality level, and so on).
If QM in procurement is active for a material, the system checks whether the QM system entered for the vendor in the vendor master record or quality information record procurement is certified and whether this system complies with the QM system requirements that are defined in the material master. If this is the case, no inspection lot is created, and the goods are posted directly to the warehouse (skip for certified vendor). The procedure for goods receipts and the inspection skip for certified QM systems is allowed for the combinations:
Material + vendor or material + vendor + manufacturer
The goods are posted to inspection stock and are released for use or blocked, depending on the inspection results and the usage decision. The transfer posting of the stock occurs automatically when the usage decision is saved.
In addition to the basic inspection processing activities, there are various procedures for optimizing the scope and frequency (dynamic modification) of the goods receipt inspections.
You can use quality notifications to document any problems that you identify when recording defects or inspection results. You can forward these problems to the relevant departments for further processing.
Automatic payment of an invoice for a delivery can be prevented if the goods are currently being inspected or if the usage decision is a rejection.
In Customizing, you can define that automatic follow-up actions (such as sending of a mail) are to be triggered by the usage decision.