8/8/2014 A Document On Auto PO process | SCN

http://scn.sap.com/docs/DOC-42583 1/5
Getting Started Newsletters Store

Products Services & Support About SCN Downloads
Industries Training & Education Partnership Developer Center
Lines of Business University Alliances Events & Webinars Innovation
Log On Join Us Hi, Guest Search the Community
Activity Communications Actions
Browse
0 Tweet
created by raghavendra sai on Jun 11, 2013 4:43 PM, last modif ied by raghavendra sai on Jun 11, 2013 7:46 PM
1 A Brief Process Introduction:

This process will enable system to create the Purchase Orders automatically from the Purchase Requisitions created
in the system, without manual intervention, and at regular intervals of time with predetermined master data set up and
with a predefined job schedule to run at regular intervals of time.In this process system will convert the Requirements
created in the form of Purchase Requisitions created through MRP or created manually.Auto PO process once
introduced in the system will make an Optimized Purchasing in the system.Prior to Going into the Details of the AUTO
PO process a Brief overview of the Purchasing Process.

Purchasing Process in SAP an Illustration:


In Order to get fulfilled with the Auto PO process, there are certain prerequisites to get existed in the system.

2. Prerequisites:

In order to see that the POs to get created automatically, there are some prerequisites to be defined in the system.

2.1 Material Master Data :
a) Material Master (MM01). Proper material master needed to get created for the material with all the
relevant data for Purchasing and MRP to get filled.
b) A check Box for Auto PO in the Purchasing View to be checked.



2.2 Vendor Master Data:

a) Vendor Master (XK01) needed to be created for the company code of the plant by which the PO is to be
created and to be created for the Purchase Organization by which the PO is going to be created.
b) The Auto PO check Box in the Purchasing view needed to be checked.

A Document On Auto PO process
Share
0 Like
Version 1
8/8/2014 A Document On Auto PO process | SCN
http://scn.sap.com/docs/DOC-42583 2/5

2.3 Outline Agreement :

Outline Agreement ( ME31K) is an internal Purchasing document which will be created with
the vendor and the plant for the materials for which the vendor to supply for an agreed price
.This acts as a valid source for the Purchase Requisition to get created with a vendor assigned
. For a PO to get created automatically, it is a must to assign a vendor.

2.3 Source List :

A valid source list (ME01) which is fixed for a vendor need to get existed in the system
It is a List created in the system under a plant for a material which links to possible vendors for the
material supply. Furthermore the source list will have validity and a vendor can be fixed in the system for
supply.



2.5 Info Record:

A valid Info record must exist in the system. Info Record is a record created in the system for a vendor and material for
the purchase Organization and Plant through which the PO is going to be created. This can be created at the
Transaction code ME11.

2.6. Condition Records for Output type:

A Condition Record is a record which will be created for the Output Type which is to be used for assigning an
output type automatically to the PO, which in turn either prints, or Fax or Email the PO to the vendor. These can be
created at MN04.

3. Process Involved for the Auto PO creation:


1. 1 Purchase Requisition Creation through MRP / or through ME51N screen. If MRP run is made scheduled to run at
regular intervals of time Purchase Requisitions will get created automatically.

2. 2. Assign a source of Supply: During the creation of the PR, system needs to assign a valid source of supply to the
Purchase Requisitions. Means system is deciding about the vendor who has to supply the requirement at the
Requirement generation only. In Order to happen this master data which has been defined earlier will serve the
purpose in the order Outline Agreement or Info Record or Source list. With this step, system generates the Purchase
Requisitions with a vendor assigned..


1. Process the Assigned Requisitions :

a) a) Assigned Purchase Requisitions will need to get processed to convert into Purchase Orders. The run of the
Transaction ME59N for the required input criteria will convert the able Purchase Requisitions into Purchase Orders
automaticity without any manual intervention.In this step if the ME59N transaction is scheduled to run at regular
intervals of time for the pre-defined input criteria, without any Manual intervention, Purchase Orders will get created
automatically.

b) If there exists Proper condition record for the output type, system will pick the condition record assigned for the
combination of the Purchase Group and the mode of Transmission, and assigns to the POs created and send to
vendor automatically.

8/8/2014 A Document On Auto PO process | SCN
http://scn.sap.com/docs/DOC-42583 3/5


1. 4. Normal Process

1. Manually /Auto Run of the program RMMRP000 for the MRP either for the single material MD02 or for the plant

2. Create the PRs through MRP for those materials which are on Materials Requirements Planning.

3. Create the Purchase Requisitions manually for the requirements for those materials which are not on MRP or based
upon the independent requirements.

4. Assign the source / vendor to the Purchase Requisition .If the vendor still not known during the requirement
generation leaving the PR as such.

5. Enquire for the best source / vendor

6. Create PO using ME21N referring the Purchase Requisition by assigning a vendor or create the PO without referring
to the requirement (A PO need not always preferred to be referred with a requirement.

7. Repeat the process to create the POs manually for all the materials and for all the requirements

8/8/2014 A Document On Auto PO process | SCN
http://scn.sap.com/docs/DOC-42583 4/5
Average User Rating
(3 ratings)
0 Tweet



5. Obstacles in attaining the Optimality in Purchasing Cycle:

1. Buyers need always to find out the Purchase Requisitions which are needed to get executed for procurement.
Normally this is a time consuming process.

2. Buyers need always to find the correct vendor to supply the material. This also involves with additional time.

3. Buyers need to quantify the requirements from dependent and independent requirements and their expediting for
the actual execution. Especially when the Business activities for sales and for manufacturing are huge, this activity will
become time consuming leaving behind inefficiencies in coping up the requirements and supply of the raw materials.

4. Doing the cycle of Purchasing transactions in SAP like the PRs, Finding out the sources, Assigning the vendors to
the PRs, Processing the PRs to convert them into SAP PO and output them to the vendor for a high volume based
plant is lengthy and involve with additional resources and time .

Conclusion:
Normally any Auto process will reduce the cycle time involved in that particular process enabling reduced
user intervention. The Cycle Time reduction will save time taken for the Buyer to fall back on the transactions
in SAP in creating the documents rather he can spend upon the analysis for his purchases and for expending
the purchases and can save the cost involved in purchasing there by meeting the requirement flow in time
and can meet the Purchasing Budget . Also the sourcing team will get reduced in a course of time making the
purchasing cycle optimized.
1113 Views Products: sap_erp_logistics_materials_management Topics: enterprise_resource_planning
Share
4 Comments
Nilesh Kshatriya Jun 12, 2013 10:54 AM
Good explanation..
8/8/2014 A Document On Auto PO process | SCN
http://scn.sap.com/docs/DOC-42583 5/5
Follow SCN
Site Index Contact Us SAP Help Portal
Privacy Terms of Use Legal Disclosure Copyright
Like (1)
Keep it up.
Like (0)
Syam Kumar Dodda Jul 8, 2013 10:04 PM
Nice Document....
Like (1)
Ravindra Devarapalli Jul 9, 2013 4:13 AM
Great job. Very nice document........... keep it up.
Like (0)
Siva Prasad Vasireddy Mar 5, 2014 1:12 PM
Thank you for sharing