Procurement Cycle: 1. Requirement Determination (Purchase-Requisition)




In the previous post I have explained about SAP basic procurement process which consists of 8 steps of procurement cycle. In this post I will explain in details about the 1st step: The Determination of Requirement.

Introduction
The determination of requirement in SAP procurement process is about Purchase Requisition (PR) creation. Purchase Requisition (PR) is an internal purchasing document that is used to give notification to responsible department about the requirement of material/service. In SAP ERP, the creator of the PR can keep track of his requirement by monitoring the status of the PR, whether it has been processed to be an Purchase Order (PO) or not .

A PR must contain clear information about the description and quantity of the material/service, the required date, and other information. PR can be created directly in SAP MM module with ME51N t-code, or indirectly by another SAP component, such as: materials planning, maintenance order of PM module, production order of PP module, network activity of PS module, etc. We have explained this in the previous article about MM integration with other modules. 

SAP PR Document Type

In SAP ERP, there is a concept of document type for purchasing transaction. A group of purchasing documents (PR, RFQ, PO, etc) with same document type will have same behavior. So, with document type, we don’t have to configure the behavior for each PR document. We only need to configure the behavior for each PR document type.

In standard SAP ERP there are two default PR document types that can be used for different purpose, which are:

  • “NB” document type. PR with this default document type is used to procure a material/service externally, such as from 3rd party supplier/vendors, or from subsidiary or related company.
  • “TB” document type. PR with this default document type is used to procure a material internally, such as from other plant of the same company.
We can create or edit our own document type as our own requirement with “OMEB” t-code (only in SAP 4.6.C version or older) or “SPRO” t-code menu: Materials Management – Purchasing – Purchase Requisition – Define Document Type.

PR document type determines several things, such as:

  • Item number interval.

It defines the default interval size of one PR item number with the next one. For example, in the standard SAP ERP, the item number interval is 10. It means when we create a PR item without filling the “Item Number of PR” field (on ME51N screen), the first one’s “Item Number of PR” will be 10, the second one’s will be 20, the third one’s will be 30, and soon.

If you want to insert an additional item between the first and the second item, you can just create it on the last record/row, then fill the “Item Number of PR” field with the value that lies between 10 and 20, such as 15. When you hit “enter” the new item will be placed in the second row (between item 10 and 20).
  • Whether we can use internal number assignment, external number assignment, or both of them.
    Internal number assignment means that the PR number is determined by SAP, with sequential numbering. When a user creates a PR, he can’t fill the PR Number field.

    External number assignment means that the PR number is determined by the creator of the PR. When a user creates a PR, he must fill the PR Number field.
    The number of a PR must be unique. There can’t be more than one PR with the same number.
  • Number range: the allowed interval of PR number.
    For each internal and external number assignment we have to define the allowed interval of PR number.
    For example, a PR document type can have both assignments.
    In the case of internal number assignment, the number range interval is from 1000000000 to 1099999999. SAP will determine the PR number sequentially in that range, refers to the last PR number created.

    In the case of external number assignment, the number range interval is from 1100000000 to 1199999999. PR creator must fill the PR number field with the value in that range which has not been assigned to other PR.

  • The screen layout of PR document.
    Document type combined with other field selection keys (such as: transaction, activity type, item category/document category, function authorization/release status, and subitem/creation indicator) determines which fields are “required”, “optional”, “displayed only”, or “hidden” in a PR document.
  • The allowed item category.
    Item category is a key defining how the procurement of a material or service item is controlled.
    There are 7 standard item category in SAP ERP which are: blank (“standard”), K (“consignment”), L(“subcontracting”), B (“Limit”), S (“Third party”), U (“Stock transfer”), and D (“services”).
    Item category combined with other field selection keys determines the field selection and whether any additional data screens are shown such as component (L), limit (B), customer (S), services (D), etc. In addition, it determines whether a goods receipt or invoice receipt is to follow.
  • The allowed follow-on document types.
    A PR will be processed to be other purchasing document (follow-on document) such as Request for Quotation (RFQ) or Purchase Order (PO). We can set that specific PR document type can only be processed to specific follow-on document type (such as specific RFQ type or specific PO type).

    The follow-on document types are set for each item category allowed in document type configuration.

  • Whether the PR will be released with “overall release” or “item-wise release”.

We can set in SAP that the PR must be approved or released before it can be passed to the next step of purchasing processes. We have explained about the PR Release Strategy in the previous article.

PR document type can also be used as:
  • A characteristic in determining Release Strategy, so we can distinct the approval needs for each PR document type.
  • An authorization object of a role, so we can restrict that a user with specific role can only create/edit/display a PR that has a specific document type. The authorization object is M_BANF_BSA (Document Type in Purchase Requisition).

PR document in SAP ERP

T-code related to PR:

  • Create/Edit/Dsiplay PR: ME51N/ME52N/ME53N
  • Release PR (individually): ME54
  • Release PR (Collectively): ME55
  • List PR – general: ME5A
  • List PR per account assignment: ME5K
  • Follow on function: ME57
In SAP ERP, PR item data are stored at EBAN table. PR item account assignment data are stored at EBKN table.
Fields that are usually filled when we create PR are:
  • Purchase Requisition document type (stored as BSART field in EBAN table).
  • Purchase Requisition Number (stored as BANFN field in EBAN table)
    This field can be filled only if the PR document type allows the external number assignment.
  • Account Assignment Category (stored as KNTTP field in EBAN table).
    It specifies whether accounting for an item is to be effected via an auxiliary account (such as a cost center, asset, etc). You can read our post about K (cost center) account assignment category and A (Asset) account assignment category.
  • Item category (stored as PSTYP field in EBAN table)
    It determines the field selection and whether any additional data screens are shown. In addition, it determines whether a goods receipt or invoice receipt is to follow.
  • Material number (stored as MATNR field in EBAN table)
    The material number requested. If the PR item has a material number, SAP ERP will copy the material master data into the PR so we don’t have to fill it manually, such as Unit of Measurement, Purchasing Group, Short text (material description), Material Group, etc.
  • Short text (stored as TXZ01 field in EBAN table)
    The description of material/service requested.
  • Quantity (stored as MENGE field in EBAN table)
  • Unit of Measurement (stored as MEINS field in EBAN table)
  • Delivery date (stored as LFDAT field in EBAN table)
    Date on which the goods are to be delivered or the service is to be performed.
  • Plant (stored as WERKS field in EBAN table)
    It defines plant in which the material/service is requested.
  • Storage location (stored as LGORT field in EBAN table)
    It defines storage location in which the material/service is requested.
  • Purchasing Group (stored as EKGRP field in EBAN table)
    It is a key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities.
  • Requisitioner (stored as AFNAM field in EBAN table)
    It indicates for whom the material or external service shown in the purchase requisition is to be ordered.
  • Supplying plant (stored as RESWK field in EBAN table)
    It defines plant from which the ordered material is supplied in the case of stock transport order.
  • Valuation price (stored as PREIS field in EBAN table)
    It is the price of the requested material per price unit. This unit price will determine the PR item value (along with the quantity). The PR value can be used as a characteristic in PR Release Strategy, so we can set different approval need for PR with different value.
  • Source of supply (stored as BANFN field in EBAN table)
    It’s the proposed source of supply from the PR creator. It can be outline agreement or inforecord.
  • Other fields based on Item Category and Account Assignment.

In the next article I will explain about the 2nd step of procurement cycle, which is source of supply determination.

 


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