Unit 8: Automated Procurement Process

Lesson 1 · Running Materials Requirements Planning

Key concepts

MRP ensures material availability: it monitors stock, detects shortages and creates procurement proposals for purchasing and production in time. SAP S/4HANA offers the classic MRP run and the HANA-optimized MRP Live.

Planning level: MRP areas

MRP plans per MRP area, which always lies within one plant (never cross-plant).

Example structures: plant planned as a whole (default); one storage location planned separately (one storage location MRP area, rest stays in plant area); plant split into two storage-location areas plus a subcontractor area.

Other prerequisites: plant parameters in Customizing (number ranges, purchasing processing time, stocks to include …) and MRP data in the material master at plant level (plus MRP-area data where needed).

MRP procedures

The procedure is set per material per plant/MRP area, so the same material can be planned differently in different plants.

Reorder point planning

Reorder point = average requirement during the replenishment lead time + safety stock. The safety stock covers extra consumption and delivery delays. During the run the system calculates:

• Available stock = warehouse stock in the MRP area + fixed receipts (POs, firmed planned orders, firmed PRs).
• If available stock < reorder point → shortage = reorder point − available stock.

Static lot sizes

Static procedures ignore future shortages; periodic and optimizing lot-sizing procedures also exist but are not covered here.

Forward scheduling for external procurement

Planned delivery time can come from the material master, info record or contract; GR processing time from material master or contract.

MRP data in the material master

Plant-level data applies to the plant MRP area. MRP-area-specific data (for storage location or subcontractor areas) overrules plant data; if none exists, S/4HANA uses the plant parameters. A subcontracting MRP area should exist for each subcontractor, but area-specific material data is not mandatory for every component.

Source determination in MRP

After net requirements and lot sizes are calculated, MRP decides between in-house and external procurement and, for procurement type F, the source. Possible sources: info records, outline agreement items (contracts, scheduling agreements) and other plants (stock transfer; a plant can also be represented as a supplier by assigning it in the BP general data).

1. Scheduling agreement valid → MRP Live always creates schedule lines (classic MRP per creation indicator).
2. Contract valid → PR assigned to the contract.
3. Info record with automatic sourcing indicator → PR assigned to that info record.

This default can be overruled by source lists and quota arrangements; quota arrangements have the higher priority.

System steps

1. Maintain MRP 1/2 views (MM02), e.g. MRP type VB, reorder point, lot size FX.
2. Run MRP Live with MD01N (or Fiori Schedule MRP Runs); single material classic: MD03.
3. Check the result in the stock/requirements list MD04 (dynamic) or MRP list MD05; Fiori Monitor Material Coverage.
4. Check the generated PRs and assigned sources in ME53N / ME5A; maintain quota arrangements with MEQ1.

Lesson 2 · Generating Purchase Orders Automatically

Key concepts

When MRP has assigned a source to the PR item, the item carries all data needed for a PO – supplier, price, conditions. The automatic PO function then creates the PO without buyer intervention. Prerequisites:

System steps

1. Run ME59N with selection (purchasing group/organization, supplier, plant, MRP controller …) and grouping options; tick "exclude items with errors" if desired.
2. Schedule it as a periodic background job right after the MRP run so new PRs become POs automatically.
3. Check the log and the created POs (ME2N); output is sent according to message settings.

Lesson 3 · Creating Invoices Automatically Using Evaluated Receipt Settlement

Key concepts

With Evaluated Receipt Settlement (ERS) you agree with the supplier that it sends no invoices. Instead, the system creates the invoice from the goods receipts. From the supplier's view this is a credit memo (self-billing), and a settlement message can inform the supplier. The amount is derived from:

• GR quantities not yet settled (from the PO history),
• the PO item price,
• the tax code of the PO item,
• the payment terms in the PO header.

Prerequisites

How the PO was created (manually or automatically) does not matter.

Execution

1. Online: Fiori Create Evaluated Receipt Settlement or SAP GUI MRRL – select by company code, supplier, plant, posting date; the system groups GRs into invoices using predefined document splits (e.g. per PO, per PO item, per delivery).
2. Test run first, then real run; check the created invoice documents (MIR4).
3. Periodic: schedule with MRRL variants or the Fiori app Schedule Supplier Invoice Jobs – Advanced and monitor there.

Unit summary & exam focus

MRP (classic or Live) plans per MRP area, calculates shortages, lot sizes and dates, and assigns sources (scheduling agreement → contract → info record, overruled by quota arrangements and source lists). ME59N converts sourced PRs to POs, and ERS replaces supplier invoices with system-generated settlements.

T-codes in this unit

Self-check questions

1. What is compared with the reorder point in reorder point planning?
   Answer

   The available stock = warehouse stock in the MRP area plus fixed receipts.
2. Which field controls the planning procedure of a material?
   Answer

   The MRP type (MRP 1 view).
3. Which MRP area types exist?
   Answer

   Plant, storage location and subcontractor MRP areas – all within one plant.
4. In which order does MRP look for a source for an externally procured material?
   Answer

   Scheduling agreement → contract → info record with automatic sourcing indicator; can be overruled by quota arrangements (highest) and source lists.
5. Is a source list mandatory for MRP sourcing in S/4HANA?
   Answer

   No. That was the case in SAP ECC; in S/4HANA it is optional.
6. Which settings are needed for ME59N?
   Answer

   Automatic PO in material and supplier, valid source in the PR item, and no extra entries (e.g. tax code) needed.
7. Name the ERS prerequisites.
   Answer

   ERS in supplier and PO item, GR-based IV and tax code in PO item, payment terms in PO header, "No ERS" not set in info record.
8. Which lot-sizing key creates a proposal for exactly the shortage quantity?
   Answer

   EX (lot-for-lot).