{"id":135,"date":"2017-02-16T00:48:11","date_gmt":"2017-02-16T00:48:11","guid":{"rendered":"https:\/\/uplatz.com\/blog\/?p=135"},"modified":"2023-03-26T13:36:06","modified_gmt":"2023-03-26T13:36:06","slug":"sap-mm-material-management-purchasing","status":"publish","type":"post","link":"https:\/\/uplatz.com\/blog\/sap-mm-material-management-purchasing\/","title":{"rendered":"SAP MM &#8211; Purchasing"},"content":{"rendered":"<h2 style=\"text-align: center;\"><span style=\"color: #333399;\"><strong>Purchasing &#8211;\u00a0SAP MM (Material Management)<\/strong><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-734\" src=\"https:\/\/uplatz.com\/blog\/wp-content\/uploads\/2017\/02\/Sap-mm.png\" alt=\"SAP MM, SAP Material Management, Purchase \" width=\"690\" height=\"350\" srcset=\"https:\/\/uplatz.com\/blog\/wp-content\/uploads\/2017\/02\/Sap-mm.png 690w, https:\/\/uplatz.com\/blog\/wp-content\/uploads\/2017\/02\/Sap-mm-300x152.png 300w\" sizes=\"auto, (max-width: 690px) 100vw, 690px\" \/><\/p>\n<p>Purchasing can be defined as the activity of acquiring <strong>goods or services<\/strong> to accomplish the goals of an organization.<\/p>\n<p><span style=\"color: #333399;\">The major objectives of purchasing are to:<\/span><\/p>\n<ol>\n<li>Maintain the quality and value of a company&#8217;s <strong>products<\/strong><\/li>\n<li>Minimize cash tied-up in <strong>inventory<\/strong><\/li>\n<li>Maintain the flow of inputs to maintain the flow of outputs<\/li>\n<li>Strengthen the organization&#8217;s competitive position<\/li>\n<\/ol>\n<p><span style=\"color: #333399;\">Purchasing may also involve:<\/span><\/p>\n<ul>\n<li>Development and review of the product specifications<\/li>\n<li>Receipt and processing of requisitions<\/li>\n<li>Advertising for bids\/request for quotations<\/li>\n<li>Getting the price lists and maintaining the quotations<\/li>\n<li>Bid\/Quotation evaluation<\/li>\n<li>Award of purchase order \/ supply contracts<\/li>\n<\/ul>\n<p>Sometimes, evaluation of goods received and their proper storage\/disposal is also part of the purchase process.<\/p>\n<p>Based on the consumption purposes of the acquired goods and services, purchasing activities are often split into three categories or types.<\/p>\n<ol>\n<li>The first category being direct purchasing or purchase-for-stock.<\/li>\n<li>The second being indirect purchasing or purchase-for-consumption or purchase-to-order.<\/li>\n<li>The third being purchasing of services.<\/li>\n<\/ol>\n<h2><span style=\"color: #333399;\"><em>Direct Purchasing<\/em><\/span><\/h2>\n<p>It\u00a0encompasses all items that are part of <strong>finished products<\/strong>, such as raw material, components and parts. It takes care of all the material requirements that are in constant need\/demand. It will ensure that there are no delays in production activities due to lack of sufficient stock.<\/p>\n<h2><span style=\"color: #333399;\"><em>Indirect Purchasing<\/em><\/span><\/h2>\n<p>The activities here concern \u201c<strong>operating resources<\/strong>\u201d that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardized low value items like office supplies and machine lubricants to complex and costly products; like heavy equipment and assets.<\/p>\n<h2><span style=\"color: #333399;\"><em>Purchasing of Services<\/em><\/span><\/h2>\n<p>This relates to purchasing of services needed to carry on the operations of the enterprise. This might include house-keeping services, maintenance, consulting services, etc.<\/p>\n<p>Purchasing managers\/directors guide the organization\u2019s purchasing procedures and standards. Most organizations use a three-way check as the foundation of their purchase programs. This involves three departments in the organization completing separate parts of the process. The three departments do not all report to the same senior manager, to prevent unethical practices and lend credibility to the process.<\/p>\n<p>These departments can be purchasing, receiving and accounts payable; or engineering, purchasing and accounts payable; or plant manager, purchasing and accounts payable. Combinations can vary significantly, but a purchasing department and accounts payable are usually two of the three departments involved.<\/p>\n<p><span style=\"color: #333399;\">Topics covered under Purchasing:<\/span><br \/>\nI.\u00a0 \u00a0Basics<br \/>\n\u2022\u00a0 \u00a0Concept explained<br \/>\n\u2022\u00a0 \u00a0Difference Between Purchasing and Procurement<br \/>\nII.\u00a0 Purchasing Cycle<br \/>\nIII.\u00a0 Purchasing Documents<br \/>\n\u2022\u00a0\u00a0 \u00a0Different types of documents used<br \/>\n\u2022\u00a0\u00a0 \u00a0Division of Purchasing Documents in the SAP system<br \/>\n\u2022\u00a0\u00a0 \u00a0Type of data maintained in each division of the purchase document<br \/>\nIV.\u00a0 Purchase Requisition<br \/>\n\u2022\u00a0\u00a0 \u00a0Basics of Purchase Requisition<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of Purchase Requisition<br \/>\n\u2022\u00a0\u00a0 \u00a0Other End User activities of Purchase Requisition<br \/>\nV.\u00a0\u00a0 \u00a0Request for Quotation (RFQ)<br \/>\n\u2022\u00a0\u00a0 \u00a0Basics of RFQ<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of RFQ<br \/>\n\u2022\u00a0\u00a0 \u00a0Other End User activities of RFQ<br \/>\nVI.\u00a0\u00a0 \u00a0Quotation<br \/>\n\u2022\u00a0\u00a0 \u00a0Basics of Quotation<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of Quotation<br \/>\n\u2022\u00a0\u00a0 \u00a0Other End User activities of Quotation<br \/>\nVII.\u00a0\u00a0 \u00a0Comparison<br \/>\n\u2022\u00a0\u00a0 \u00a0What is comparison<br \/>\n\u2022\u00a0\u00a0 \u00a0Criteria for comparison in the real time and in the SAP system<br \/>\n\u2022\u00a0\u00a0 \u00a0The comparison process<br \/>\nVIII. Purchase Order<br \/>\n\u2022\u00a0\u00a0 \u00a0What is a Purchase Order<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of Purchase Order with reference<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of Purchase Order without reference<\/p>\n<p>IX.\u00a0 Release Procedure<br \/>\n\u2022\u00a0\u00a0 \u00a0Basics of Release Procedure<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Procedure and Approval process<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Characteristics<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Classes<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Groups<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Codes<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Indicators<br \/>\n\u2022\u00a0\u00a0 \u00a0Release Strategies<br \/>\n\u2022\u00a0\u00a0 \u00a0Releasing the Purchase Order through Release Procedure<br \/>\nX.\u00a0\u00a0 \u00a0Optimization<br \/>\n\u2022\u00a0\u00a0 \u00a0Concepts of Purchase Optimization<br \/>\n\u2022\u00a0\u00a0 \u00a0Prerequisites for creating a Purchase Order automatically<br \/>\n\u2022\u00a0\u00a0 \u00a0Creation of Purchase Order automatically<br \/>\nXI.\u00a0\u00a0 \u00a0Outline Agreements<br \/>\n\u2022\u00a0\u00a0 \u00a0Basics<br \/>\n\u2022\u00a0\u00a0 \u00a0Contracts<br \/>\nConcepts<br \/>\nQuantity Contract<br \/>\nValue Contract<br \/>\nCreation of a Contract<br \/>\nOther End User activities of Contract<br \/>\n\u2022 Scheduling Agreements<br \/>\nConcepts<br \/>\nCreation of Scheduling Agreement<br \/>\nOther End User activities of Scheduling Agreement<br \/>\nCreation of Delivery Schedule<\/p>\n<p>XII. Configuration<br \/>\n\u2022 Document Types configuration<br \/>\n\u2022 Assigning Number Ranges to Document Types<br \/>\n\u2022 Screen Selection for the Document Types<br \/>\n\u2022 Text Types and Copying Rules<br \/>\n\u2022 Tolerances for Archiving documents<\/p>\n<p><span style=\"color: #333399;\"><strong>About the Author:<\/strong><\/span><\/p>\n<p>This article has been written by one of our Elite tutors &#8211; Samba Siva. He has more than a decade of industry experience in the field of SAP. He has been teaching a lot of students worldwide at Uplatz.com<\/p>\n<p>If you are looking for SAP MM 1:1 instructor-led training with real time experience, please get in touch with us at info@uplatz.com or call us at +44 7836 212635<\/p>\n<p><span style=\"color: #333399;\"><strong>About Us:<\/strong><\/span><\/p>\n<p>Uplatz.com is UK based leading marketplace for online 1:1 training courses primarily focused on SAP, Oracle, Big Data, and Digital Marketing.<br \/>\n<span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/training.uplatz.com\/it-training.php\">Browse the our courses here <\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Purchasing &#8211;\u00a0SAP MM (Material Management) Purchasing can be defined as the activity of acquiring goods or services to accomplish the goals of an organization. The major objectives of purchasing are <span class=\"readmore\"><a href=\"https:\/\/uplatz.com\/blog\/sap-mm-material-management-purchasing\/\">Read More &#8230;<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83],"tags":[76,80,79,71,77,72],"class_list":["post-135","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sap","tag-master-data-management-in-sap-mm","tag-material-master","tag-purchasing","tag-sap","tag-sap-material-management","tag-sap-mm"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Purchasing - SAP MM | Concept and Application | Uplatz.com<\/title>\n<meta name=\"description\" content=\"This blog explains the concept of &quot;Purchasing&quot; as applied in organizations and industries. 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