Name: U5_L1_1.mp4
Uploaded: 2024-11-8
Duration: 210 s
Description: This video explains the different types of procurement proposals and how you can control which type the system creates during a planning run.

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Determining the Procurement Proposal

<div id="content"><p tabindex="0">Material requirements planning detects shortages and automatically generates procurement proposals for purchasing and production.</p><p tabindex="0">Let's listen to Julia, our virtual instructor, as she introduces you to the different types of procurement proposals and explains how you can control which type the system creates.</p><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_ktqy0w31"></div></div><p tabindex="0">In the previous video, Julia explained the different types of procurement proposals. She explained that the type of procurement proposal created during the planning run depends on whether a material is procured externally or produced in-house.</p></div>

Procurement Proposal Determination

Using Consumption-Based Planning in SAP S/4HANA

This video explains the different types of procurement proposals and how you can control which type the system creates during a planning run.

U5_L1_1.mp4

Hello again, let's continue walking through the planning process. We will now examine how the planning run determines the type of procurement proposal to be created. By type of procurement proposal, what exactly do we mean? Procurement proposals are used to procure the shortage quantity. Specifically, procurement proposals can be planned orders, purchase requisitions, or scheduling agreement schedule lines. You may be asking yourself, how does the planning run determine which type of procurement proposal to create? And how can we, the users, influence this? At the beginning of this course, when I introduced the steps of a planning run, I mentioned that to determine the type of procurement proposals to be created, the system checks in the the material master record whether the material is produced in-house or procured externally. If the material is produced in-house, the system creates planned orders. If the material is procured externally, the system generally creates purchase requisitions or scheduling agreement schedule lines. Let me show you where in the material or product master record you specify whether this material is procured externally or internally. The procurement type is a field in the material master record that determines whether a material is procured externally, produced internally, or whether both are allowed. The procurement type is maintained in the material master record at plant level in the MRP data. Here is a screenshot of the Manage Product Master Data app. You see the procurement type field. For this material, the procurement type is external procurement and cannot be changed. Why is this? The procurement type is defaulted from the material type. The material type also controls whether or not the default procurement type can be changed in the material master record. For example, it may make sense to always purchase raw materials externally, while semi-finish products are usually produced in-house, but can be purchased if necessary. Here is a screenshot of the Change Material app for another material. Just another way of looking at the material master data. For this material, the procurement type is E and it can be changed. A bit confusing for English speakers, but E stands for in-house production and F for external procurement. These keys are derived from the German language. You may be asking yourself the following question, what does the system do if a material has procurement type X, that is, if both external procurement and production are possible? In this case, the system creates planned orders. I hope you now know how the system determines which procurement proposals to trigger and and how you can influence this.