Effective Management of Project-Based Procurement Using ProMan
- by Vineet Pandey, Lead Consultant, SAP Practice, Infosys, Ltd.
- September 23, 2014
Learn about the key elements of the Project-Oriented Procurement (ProMan) application component available in Project System. Discover how it can help you manage project-based procurement in a single, centralized area rather than having to complete multiple transactions in an SAP ERP system.
By reading this article, you will learn how to:
- Manage project-based procurement in a very easy manner
- Execute multiple procurement functions from one single transaction
Project System is an SAP ERP module that helps manage the entire life cycle of a project. Project System has very tight integration with the finance and logistics modules of SAP ERP. Within Project System SAP provides an application component called Project-Oriented Procurement (ProMan) that conducts all procurement-related activities in one centralized place. It provides consolidated procurement information assigned to work breakdown structure (WBS) elements and network activities.
In an everyday business scenario across industries, anything can be viewed as a project. Typical examples of projects are assembly processing, direct sales, customer service, or fracking.
SAP ERP provides Project System (PS), one of the most integrated modules for managing all kinds of projects. PS can be used for defining, planning, budgeting, executing, evaluating, and settling a project.
Almost all the projects in SAP ERP systems deal with materials and have a requirement for them. The material requirement for the project is fulfilled by a project-related procurement cycle.
I explain how to manage the project-related procurement cycle and related document flows in an easier and more efficient way than using a string of transaction codes. For example, in a typical procurement process, we use multiple transactions to convert a purchase requisition, do material movement, perform goods issue, create project delivery, and see stock overview. However, with the standard functionality explained in this document, all the above transactions can be done from one single place. To explain the benefits of using Project-Oriented Procurement (ProMan), I use a real-life business example of an oil field services company using SAP PS. The company received a contract to perform well fracking services at a job site. The company uses PS to manage the following elements of the fracking project:
- A project is created in the SAP system based on the order received by the customer.
- Materials (proppants and chemicals) are assigned to the project against the network activities. Proppants are materials, typically sand, used during fracking to keep the fracture open.
- Other activities include managing crew, equipment, equipment setup, job execution, and job closeout.
In my example, I focus on the materials required for the project — proppants (e.g., sand) and chemicals. Depending on whether the material required for the project is a stock item or a non-stock item, reservations are created for stock items, and purchase requisitions are created for non-stock items.
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