Purchase Cycle – PR>PO>GR>IR

Overview of SAP Best Practices for the SAP MM Purchasing Process – Purchase Cycle:

SAP MM Purchase Cycle Overview

The SAP Materials Management (MM) purchase cycle is a structured process that facilitates procurement activities within an organization. This cycle involves creating purchase requisitions (PR), converting them into purchase orders (PO), requesting quotations (RFQ), evaluating quotations (QT), goods receipt (GR), and invoice receipt (IR).

1. Definition and Purpose

The SAP MM purchase cycle ensures a systematic approach to procurement, enabling efficient sourcing, tracking, and payment for goods and services. It streamlines communication between departments, suppliers, and financial operations while maintaining compliance and cost control.

2. Business Scenarios

• Stock Procurement: Acquiring materials for inventory replenishment.
• Non-Stock Procurement: Procuring materials for specific projects or services.
• Service Procurement: Contracting external services.
• Subcontracting: Sending materials to a vendor for further processing.
• Consignment Procurement: Using materials owned by the vendor without immediate purchase.

3. Prerequisites

Master Data Requirements:

• Material Master (MM01): Contains information about materials.
• Vendor Master (XK01): Stores details about vendors.
• Purchase Info Record (ME11): Links material and vendor.
• Source List (ME01): Defines approved sources for procurement.
• Condition Records (MEK1): Maintains pricing conditions.

4. Process Flow with T-Codes

Step 1: Create Purchase Requisition (PR)

T-Code: ME51N – Initiates a request for material or service procurement. PR includes material, quantity, and delivery date.

Step 2: Convert PR to Purchase Order (PO)

T-Code: ME21N – Creates a formal order for the vendor. PR can be automatically or manually converted into a PO.

Step 3: Request for Quotation (RFQ)

T-Code: ME41 – Sends requests to vendors for pricing and terms.

Step 4: Quotation Evaluation (QT)

T-Code: ME47 – Compares vendor quotations to select the best option.

Step 5: Quotation Comparison

T-Code: ME49 – Compares and evaluates all received quotations based on price, delivery time, and other criteria to choose the optimal vendor.

Step 6: Goods Receipt (GR)

T-Code: MIGO – Records the receipt of goods from the vendor. Updates inventory and generates a material document.

Step 7: Invoice Receipt (IR)

T-Code: MIRO – Processes vendor invoices. Matches invoice details with PO and GR.

5. Configuration Steps

Path and T-Codes:

• Define Document Types for PR and PO: SPRO > Materials Management > Purchasing > Purchase Requisition > Define Document Types.
• Assign Number Ranges: SPRO > Materials Management > Purchasing > Define Number Ranges.
• Maintain Plant Parameters: SPRO > Materials Management > Purchasing > Define Plant-Specific Parameters.
• Set Tolerances for Invoice Verification: SPRO > Materials Management > Logistics Invoice Verification > Tolerances.
• Define Release Strategy: SPRO > Materials Management > Purchasing > Purchase Requisition > Release Procedure > Define Release Strategy.

6. Testing

Example Scenario:

• Requirement: Purchase 100 units of raw material.
• Process:
  1. Create PR using ME51N.
  2. Convert PR to PO using ME21N.
  3. Generate RFQ using ME41.
  4. Evaluate quotations using ME47.
  5. Compare quotations using ME49.
  6. Post GR using MIGO.
  7. Verify and post invoice using MIRO.

7. Reports

• Purchase Requisition List: ME5A
• Purchase Order List: ME2L
• Goods Receipt Report: MB51
• Invoice Report: MRBR
• Vendor Evaluation: ME61

8. Tables

• • EBAN: Purchase Requisition Details.
  • EKKO: Purchase Order Header.
  • EKPO: Purchase Order Item.
  • EKBE: PO History.
  • LFA1: Vendor Master General Data.
  • MSEG: Material Document Segment.
  • RBKP: Invoice Document Header.