1. 1 MM – Configuration Purchasing Objective To understand Purchase Order Contracts Scheduling agreements Condition Partner Function

2. 2 PURCHASE ORDER

3. 3 Purchase Order PO is the legal document asking vendor to supply material or services with agreed conditions. PO can be controlled with header level release procedure. Item category and account assignment are important in PO like PR.

4. Create Purchase Requisition RFQ Reference PO Outline Agreement Vendor/ One-Time Vendor Purchasing Info Rec Price Conditions Purchase Order Processing Purchase Orders

5. PO Header PO Overview Texts Additional Data Delivery Schedules Account Assignment Pricing Conditions Contents in Purchase Order Changes Services Order History PURCHASE ORDER

6. 6 Account assignment in PO Every item in PO is assigned to an account. One item can be assigned with more than one accounts also. E.g. Procurement of certain project related items has to be accounted with two cost center.

7. Purchase Order DescQty Pur Req1 Chair2 Cost Centre2200 Pur Req3 Chair4 Cost Centre3200 Pur Req2 Chair6 Cost Centre2100 Pur Req4 Desk1 Cost Centre7211 1.Swivel Chair 12 2.Desk 01 Multiple Account Assignment

8. Item Category Normal Item Consignment Third Party Account Assignment = Mandatory when material Consumable = Optional when material Stocked = Not Allowed when Consignment Purchase Order Item Category in Purchase Order

9. 9 CONTRACTS

10. 10 Contracts Contracts are of two types Quantity contract Value contract It can be created with reference to requisition RFQ another contract Or directly

11. 11 Contracts cont.. Contracts does not contain Delivery date Release order created with reference to contract will have the delivery date. Contract has the validity period

12. Create Vendor/ One-Time Vendor Purchasing Info Rec Price Conditions Purchase Requisition RFQ Reference Contract Stocks Release Order 123456 78910111213 14151617181920 21222324252627 28293031 March 2000 Processing Contracts

13. Item Category Standard Item KConsignment MMaterial Unknown WMaterial Group Account Assignment = Mandatory when material Consumable = Optional when material Stocked = Not Allowed when Consignment Contract Item Category in Contract

14. 14 Contract item category Use M item category for unknown material If contracts specifies target value for all material, use material group W (only in value contract)

15. Release Order UnknownU XAll Auxiliary Account Assignment Account Assignment Category AAsset CSales Order KCost Centre Create Contract Asset Sales Order Cost Centre All Auxiliary Account Assignment ACKXACKX UUnknown Account Assignment Category

16. Contract Release Order Qty Date Purchasing Data Copied Open Target “Qty” Release Orders

17. Contract Purchase Org. COMN Plant PO Purch. Org. 2100 Plant : MIND6 PO Purch. Org. 2100 Plant : IND7 PO Purch. Org. 2300 Plant : 9100 Centrally Agreed Contract

18. 18 SCHEDULING AGREEMENT

19. 19 Scheduling agreement It specifies Order quantity Price specific period to supply There is a delivery schedule for each scheduling agreement Helps to reduce paper work

20. 20 Types of Scheduling agreement Scheduling agreement can be With release procedure Without release procedure

21. Delivery Schedule 2/24 3/24 5/26 Vendor Scheduling Agreement Processing Scheduling Agreements Purchase Request Reference RFQ Reference Scheduling Agreement Vendor -----------------------

22. 22 CONDITION

23. 23 Pricing Condition Pricing describes the price and cost Pricing is controlled with condition technique Let’s discuss about condition technique before we go to pricing.

24. 24 Condition Technique It is used across all modules in SAP output determination Work flow Batch determination Partner determination Condition technique is used to determine total cost of purchase in MM

25. 25 Condition Technique cont.. Following are the three important component Condition Table / condition type Access sequence Condition record

26. 26 Condition Table Condition table specifies the fields combination. System searches through predefined tables in a sequence. It is defined in the configuration.

27. 27 Condition Type Condition type is the four letter key controls Calculation type Type of changes allowed Scale basis Condition type contains access sequence

28. 28 Access Sequence There can be more than one table used to define different field combination It is required to search more than one table to fetch a record. Defining the sequence in which these tables are to be accessed is known as access sequence.

29. 29 Condition Record Condition records is the master data. Maintaining values for the condition table is known as condition record.

30. 30 PARTNER FUNCTION

31. 31 Partner Function Defines the responsibilities of people involved in the business. Example in MM are: a. Ordering address b. Supplier of goods c. Invoicing party d. Different payee

32. 32 Partner Function Contd.. Many business partners can be defined as partner in SAP. E.g. Vendors, Carriers Roles of each partner can be defined. E.g. Certain vendors are only for ordering and not for invoicing.

33. 33 Summary You must have understood Purchase Order Contracts Scheduling agreements Condition Partner Function