Optimize the Procurement Process by Automatically Generating Vendor Delivery Schedule Lines

  • by Jawad Akhtar, Head of SAP Delivery, AbacusConsulting
  • November 1, 2011
The ability to take advantage of automatic generation of delivery schedule lines for vendors adds value to the procurement process by eliminating the need to create and maintain them manually. Find out how you can easily put this into action with a practical example.
Key Concept
The procurement process can be enhanced by taking advantage of material requirements planning (MRP) functionality, which automatically creates delivery schedule lines for a vendor’s scheduling agreement where applicable. However, to optimize this procurement process, you have to set up the relevant master data appropriately. The MRP runs on the finished product level and reads the bill of materials (BOM) of the finished product. It focuses on materials to be procured externally from vendors whose scheduling agreements are already available in SAP ERP Central Component.

By taking advantage of existing functionality in SAP ERP Central Component (SAP ECC), you can optimize your company’s procurement process. It is easy to automate existing scheduling agreements with vendors that you now manage manually. You just need to set up or update the master data for materials procured externally via scheduling agreements in the materials management (MM) module.

I’ll show the step-by-step procedure for setting up the master data in SAP ECC for MM. In addition, I describe how SAP ECC makes use of the bill of materials (BOM) of the production planning (PP) module. SAP ECC uses the BOM to calculate the delivery quantities and to generate delivery schedule lines for the scheduling agreement previously created during the material requirements planning (MRP) run. A schedule line includes the date of delivery and also the quantity of the material that needs to be delivered on that specific date.

Master Data

Setting up master data in the MM module entails two steps. The first is to activate the source list option for the materials to be procured. A source list is a list of various sources for supply of a given material — that is, the vendors that are allowed to supply a particular material during a specific period. For those vendors, outline agreements in the form of quantity/value contracts or scheduling agreements exist in SAP ECC. An outline agreement is a long-term supply agreement with vendors. I focus on scheduling agreements that are already set up in SAP ECC for a vendor. They are the basis for maintaining a source list for procuring materials from various sources. The second step is to maintain the source lists. 

Jawad Akhtar

Jawad Akhtar earned his chemical engineering degree from Missouri University of Science and Technology. He has 17 years of professional experience, of which nine years are in SAP. He has completed eight end-to-end SAP project implementation lifecycles in the areas of PP, QM, MM, PM, and DMS in the steel, automobile, chemical, fertilizer, FMCG, and building products industries. He also has worked as an SAP integration manager and an SAP project manager. He has been proactively involved in a business development and solution architect role for seven years. He is the author of Production Planning and Control with SAP ERP, it's filled with in-depth infomation on discrete, process, and repetitive manufacturing types. His profile on LinkedIn is at http://pk.linkedin.com/in/jawadakhtar. You may follow Jawad on Twitter @jawadahl. Currently, he is associated with AbacusConsulting as Head of SAP Delivery.

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