Procurement Cycle In SAP MM

22 September, 2020


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procurement cycle

1. Determination of Requirements

The material requirements are identified by the user departments or material planning & control

The requirement passed manually to the purchasing department [In case if you set MRP procedure for material in the material master  R/3 system will automatically generate a purchasing requisition]

2. Source Determination

Identifies the potential source of supply

This is based on:

a) Past Order

b) existing long term purchasing requirement

3. Vendor Selection

The selection of vendors by comparing the prices of various quotations

 Sending the rejection letters for the non-selected Vendors.

4. Purchase Order processing

Creating Purchase orders by including the Vendor schedule agreements and contracts

5. PO Monitoring

Sending the reminders to Vendors in pre-defined intervals

6. Goods Receipt & Inventory Management

Confirming the receipts of the Goods

Compare the Goods receipts quantities with the PO quantities.

Inform the limit over or under deliveries of order goods.

7. Invoice Verification

Invoices are checked for the accuracy of prices and contents

Noting of quantity and price variances based on purchase order & goods receipt data

8. Payment processing

Find accounting for vendor payments

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Purchasing Document

A purchasing document is used for purchasing for materials and services Structure of the Purchasing Document

It is common for all Purchasing documents. In earlier versions (i.e. before 4.6c) below three segments are as three screens.

In the latest versions, all three screen information is in single screen information with a tabular form called Enjoy Transaction (It ends with ‘n’ in Transaction code)


All documents are subject to the release of electronic approval

Confirmation settings for all documents are the same.


SAP MM Tutorial

Types of Purchasing Documents

1. Internal Purchasing Documents

Purchase Requisition (PR) is an internal purchasing document

2. External Purchasing Documents

i) Request for Quotation (RFQ)

ii) Quotation

iii) Purchase Order (PO)

iv) Contract

v) Schedule Agreement (SA)

Purchase Requisition (PR)


It is a request to procure a certain quantity of material at a certain point of time/date.

It is an Internal Document and not used outside of the Enterprise.

Purchase Requisitions can be created:

  • Manually
  • fill the data manually
  • By MRP

If you set up an MRP procedure for a material master the system automatically generates a PR.

Purchase Requisition does not have Header and Schedule lines.

There is no vendor detail to be filled-in in PR.

In PR you can indent more than one item or more than one plant

It does not influence financial updating.

When the system creates a purchase requisition automatically, a user program (MRP or order management) determines the material, PO quantity, and delivery date. If required the Purchase Requisition is automatically assigned to an account.

Purchasing converts the PR into a Request for Quotation, Purchase Order, or Out-line Agreement.

The tables related to PR are: EBAN (PR), EBKN (PR a/c assignment)

Some of the fields in these tables are:

EBAN                                                          EBKN

BANFN – PR Number                                 BANFN – PR Number

BNFPO – Item number of PR                     BNFPO – Item number of PR

BSART – PR doc type                                 ZEBKN – Prog. A/c assignment.

EKORG – Purchase Organization

MENG -- PR Quantity

MATNR -- Material Number

WERKS – Plant

IMG setting for Purchasing Requisition

Define Number Ranges (OMH7)

SPRO -> Material Management -> Purchasing Requisition ->Define Number Ranges

Define Document Types (SPRO)

SPRO -> Material Management -> Purchasing Requisition ->Define Document Types Assign number range to document type

Release Procedure

SPRO -> Material Management -> Purchasing Requisition ->Release Procedure

  • The procedure with Classification - Edit Characteristics (CT04)
  • Edit Classes (CL02)
  • Set up Procedure with Classification (SPRO)
  • Check Release Strategies (OMGQCK)

Related Articles of SAP MM Procurement

Special Procurements in SAP MM

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