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SAP MM WM – Procure to Pay ProcessEvery organization acquires material or services to complete its business needs from vendors or dealers is called procurement. Procurement should be happen with materials are ordered in correct quantity, with a proper value at the proper time.SAP Standard Procurement Scenarios: * Domestic Procurement Process * Import Procurement Process * Service Procurement Process * Stock Transfer order * Sub Contract Procurement * Consignment Procurement Process * Pipeline Procurement Process * Asset Procurement Process * Vendor Return Process * Direct Shipments/Third Party Procurement Process * Vendor Down payment Process * Materials Planning Procedures in SAP MM (MRP & CBP)
2. Import Procurement ProcessGenerally, we pay the Customs Duties to the Government when we procure Materials from outside the country. For this, we create the Import Purchase Order against the Foreign Vendor with the foreign currency. We create the Commercial Invoice against the Custom Vendor and also create Foreign Vendor Invoice for the Material cost.
3. Service Procurement ProcessService is an instangible goods, which we can procured from Vendor with an agreed-upon scope and deliverables.
4. Stock Transfer order ProcessThis is one of the special stock procurement process. Its Stock transfer from one premises to another place. Like Company Company or Plant Plant or any Branches.
5. Sub Contract Procurement Process Its kind of special stock procurement process. Where the company Materials orders from vendor and Provide components to the Subcontract/External vendor for Production/Assemble purposed due to lack of manpower or Machinery problem. So, in this case we can approach with Subcontract vendor.
6. Consignment Procurement ProcessIn this Process Vendor keep his material stock at our company/plant premises as advanced stock.So, no need to pay immediately to the vendor because of whenever we can withdraw Materials from Vendor consignment stock to our own stock, that time only we need to liabilities to Vendor as per the business terms.
7. Pipeline Procurement ProcessIn this Process we can procured the materials for production process directly from a pipeline (for example, oil, mains water, electricity via a cable. So, there is no need to create PO, No Goods Receipt, No stock for these materials. We can only record the consumption stock material and pay accordingly to the vendor. All the prices and tax information will be determined from info records.
8. Asset Procurement ProcessIn this scenario we can procure normally include items such as land, buildings, equipment, machinery, vehicles, leasehold improvements etc.
9. Vendor return ProcessIn this Process we can return the goods to vendor against a return Purchase Order due to the reason is Material Stock damaged/Poor and payments was posted at initially.
10. Direct Shipments/Third Party Procurement ProcessIn this process customer order goods to a Business X, and Business X give the Purchase order to Vendor with customer delivery address. Vendor directly delivery goods to the customer. Business X pay to the Vendor Invoice then Business X collect the payments from Customer.
11. Vendor Advance payment processA down payment is basically an Advance given to Vendor before the physical exchange of goods and services. Once the delivery of goods and services occurs, the down payment is cleared against the final invoice.
12. Materials Planning Procedures in SAP MM (MRP & CBP):Basically, there are two types of standard materials planning procedures in SAP, which are:1. Material Requirements Planning (MRP):MRP is especially useful for the planning of finished products and important assemblies and components.2. Consumption Based Planning (CBP)Consumption-based planning (CBP) is a material planning procedure based on past consumption values that determine future requirements by using forecast or other statistical procedures.Consumption Based Planning (CBP) is done for the consumables in manufacturing industry for items like e.g. Cotton Rags, screws, grease etc.Consumption-based planning net requirements calculation is triggered when stock levels fall below a reorder point or by forecast requirements calculated from past consumption data.There are three procedures in Consumption Based Planning (CBP) * Reorder Point Planning* Forecast-Based Planning* Time-phased planning
A. Reorder point planningIn reorder point planning, SAP checks whether the available stocks are below the reorder point that has been set for the material. If they are, SAP will create procurement proposal.B. Forecast-based planningThe forecast, which calculates future requirements using historical data, is carried out at regular intervals. This offers advantage that requirements, which are automatically determined, are continually adapted to suit current consumption needs.
13. Warehouse Management ProcessA warehouse is a physical location in which all the warehouse operations take place. SAP Warehouse Management Process flow is as follows:1. Define and manage complex warehousing structures.2. Optimize material flow using advanced Putaway and picking techniques.3. Process goods receipts, goods issues, and stock transfers quickly and easily.
14. Standard Inbound Process in WMThe SAP system determines in the background which inbound delivery is assigned to which handling unit. The inbound delivery is updated via the transfer order for Putaway. Confirm the Putaway transfer order before posting the goods receipt. The storage unit is in the destination storage bin of the transfer order.
15. Standard Outbound Process in WMOutbound processing comprises of the preparation of the goods to be delivered from a warehouse to receiving/Destination location.
16. Warehouse Activity Monitor ObjectsFor each warehouse number, you have the following warehouse monitor objects available: 1. Unconfirmed transfer orders 2. Open transfer requirements 3. Open posting change notices 4. Critical deliveries 5. Negative stocks 6. Interim storage stocks without movement 7. Critical stocks for production supply
