Unit 1 - The Procurement Process: Basics Flashcards
List the different steps of the procurement process (8 steps)
1- Determination of requirements 2- Determination of source of supply (RFQ) 3- vendor selection (price comparison) 4- order processing/ P.O handling 5- P.O monitoring 6- Goods Receipt 7- Invoice verification 8- Payment processing
At which level stock transfer with stock transfer orders happen?
Within one company - between two plants
What are the different steps of stock transfer orders? (3)
1- receiving plant create stock transfer order
2- goods issue entered in issuing plant with reference to STO. Stock “in transit”
3- Goods receipt in receiving plant
Transfer between plants can also be done without STO
List the different steps of the subcontracting process
1- order end product with a subcontract order
2- Components must be provided to the subcontractor (stock provided to vendor “O”)
3- Goods receipt for finished goods posted against subcontract order
4- Subcontractor writes invoice for service rendered
What is a requirement for the consignment process?
You need to agree on a price for the material. Info is stored in a consignment information record. (ME11 - info records category consignment)
What are the different organizational level in the Procurement Process? (5)
Client Company Plant Storage location Purchasing organization/ group
Define the “Client” organizational level
Legal and organizational self contained unit in terms of data with separate master records and set of tables.
Access authorization is assigned on a client-specific basis.
Define the “Company code” organization level
smallest organizational unit of external accounting.
represents an independent unit producing its own balance sheet/ profit loss statement. Own charts of account.
Define the “Plant” organization level
unit within logistics that subdivides an enterprise
from the viewpoints of production, procurement, and materials planning.
Define the “Storage location” organization level
unit that facilitates the differentiation of stocks of materials within a plant. Inventory management on a quantity basis is carried out in the plant at storage location level.
The physical inventory is also carried out at this level.
Can a plant belong to several company codes?
No. A plant can only belong to one company code.
Can storage location be assigned to different plants?
No. Storage locations are defined especially for a
plant. The key of a storage location need only
be unique within a plant. Within a client, the same key can be used for different
storage locations, since when you specify a storage location you always have to
specify the plant too.
Define “Purchasing group”
key for a buyer or a group of buyers who is/are
responsible for certain purchasing activities.
The purchasing group is NOT aligned to other units in the company structure. Can be used as selection criteria for report, link printer, … Contact info for vendors.
Define “Purchasing organization”
A purchasing organization procures materials or services, negotiates conditions of purchase with
vendors, and assumes responsibility for these transactions.
Define the different purchasing organization that can defined (cross-plant,…)
1- Plant-specific: purchasing organization is responsible for procuring materials for just one plant. Assign P.Org to company code + assign the one plant to P.Org.
2- Cross-plant: procure for several plants belonging to a company code. Assign P.Org to company code + assign the plants to P.Org.
3- Cross company code: you must not assign the
purchasing organization to any company code (prompted to enter when creating PO) . assign the plants to P.Org.
