SAP Recommended Procedure – Procurement

SAP Recommended Procedure – Procurement Manual Reorder Point Planning The main function of manual reorder point planning is to... 7:50 AM

SAP Recommended Procedure – Procurement

Manual Reorder Point Planning

The main function of manual reorder point planning is to guarantee material availability on time that is to be procured or produced the required quantities, both for regular consumption and for plant maintenance functions. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.

In MyCompany's this process is specifically used for planning the availability of the material which is not a part of BOM.

MRP for material which are part of BOM please refer PP (Production Planning BP).

Some materials such as Machine and Spares and Chemicals would be used for this kind of planning while some will not be a part. This will be finalized during the realization phase with the co-ordination of materials manager.

Materials will be planned on the basis of re-order point where MRP will check the requirements for each material that is to be planned where stocks fall below the re-order point set for the material. A requirement is then generated automatically through the MRP run in the system in the form of plan orders and converted into a purchase requisition by the MRP Controller.

Reorder point will need to be defined in the material master record of the corresponding materials. MRP Controllers of relevant plants will run MRP on periodic basis (preferably on a fortnightly basis by MRP Controller). However, for urgent requirement of any material, MRP run can be performed immediately for that particular item. The purchase requisition created can then be picked up by the purchasing department upon daily monitoring of the records.

Purchase Requisition

The procurement process commences with the recognition of stock shortage. This determination of requirements is called a purchase requisition (PR). A Purchase Requisition is a request or instruction to Purchasing to procure a certain quantity of a material or a service so that it is available at a certain point it is also served as a notification of requirements of materials and/or external services and keep track of such requirements.

Requisitions can be created either directly or generated from the material requirement planning (MRP) in the system. "Directly" means that requester to enter a purchase requisition manually for the items he/she needed in the system

For raising purchase requisitions the following PR types will be used, with internal number ranges generated as defined.

Document type	Purchase Requisition Type	Number Range
NB	Production Relevant Items	10000000 – 19999999
EM	Engineering Materials	20000000 – 29999999
PI	Promotional Items	30000000 – 39999999
AS	CAPEX Items	40000000 – 49999999
NS	Miscellaneous Items	50000000 – 59999999