purchasing flow

7/27/2019 Purchasing Flow

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Purchasing

Purchasing starts with requisition creation & approval. Any person/department canrequest for material. Then Request for Quotations (RFQ) from suppliers. Suppliers then

send Quotes to the buyer. Buyer verifies & approves quotes. After that buyer generates

purchase order for procuring item/material.

Purchasing Flow has been defined as below;

Step 1: Define Purchased item

Step 2: Create Purchase Requisition

Step 3: Approve Purchase Requisition

Step 4: Create RFQ from Requisition

Step 5: Create Quotations

Step 6: Approve Quotations

Step 7: Create Purchase Order from requisition

Step 8: Approve Purchase Order

Step 9: Control of PO Documents

PaymentPurchase order

SupplierRequest for

quote (RFQ)

Receipts

Purchase

requisition

Demand Source

Order Pay

Quotation

Receive


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Step 1: Define Purchased itemResponsibility: Inventory> select organization > AGO Global Master


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Enter the Item code & Description.


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Apply the Purchasing Item template:

Special > Copy from


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> Apply > Done


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Change the Item status from Issued to Production.


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Save:

Action > Save


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Assign Organization to item:Special > Organization Assignment


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Assign Item to organizations; ARC, AUS, CMP & IBS.


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Save:

Action > Save.


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Step 2: Create Purchase Requisition


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Responsibility: AMAT Purchasing Manager

Navigation: Purchase requisition > Requisition


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Enter the line details like, Item, quantity, need by date.

Enter Organization & Location.


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Enter the Distribution details by clicking on Distributions button.

Enter Deliver-To Organizations.


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Enter the charge account (or) it will be defaulted from the Organization parameters while

saving the requisition.

Accrual Account & Variance account will get populated as per operating unit parameters.


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Save:

Action > Save


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After saving Requisition number (1019720) gets populated. Approve button is enabled

now.


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Step 3: Approve Purchase Requisition

Responsibility: AMAT Purchasing ManagerNavigation: Purchase Requisitions > Requisition Summary > Enter Requisition

Number > Find

Summary window will show requisition status as Incomplete.


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Click Approve button for approving / submitting requisition for approval.

> click OK to submit requisition for approval.


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Note window will get populated as Document has been submitted for Approval.

Re-query Requisition for checking Approval Status.


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Summary window will show the approval status as Approved


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You can see the Approval/ Action History from Special > View Action History

Action History window shows, Action, date & performed by name.


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Step 4: Create RFQ from Requisition


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Requisition for any item can be converted into Request for Quotation (RFQ). RFQ is

send to Suppliers for requesting Quotations from them.

Responsibility: AMAT Purchasing ManagerNavigation > Purchase Orders > AutoCreate > Enter Requisition Number > Find

AutoCreate Document window will get open. You can create standard PO/ RFQ fromrequisition.

Select Action & Document Type to be created.


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Select the Row by CTRL+ click, otherwise Note window will prompt as No records

have been selected. Please select at least one record.

Click Ok and select line.


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After CTRL+ click line gets selected and this will show different colour.

Click Automatic, so that Default settings will get defaulted in RFQ.


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New Document window will get open. Click on create to create RFQ from requisition

Note window will populate as showing RFQ number Autocreate completed successfully.

Auto-created 1 requisition lines onto document 24034.

RFQ window will get populated with all Header & line details as Requisition.


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Enter the other header details as Due Date, Reply via & Description of RFQ.

Enter the Supplier Information in Supplier window.


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Enter price breaks (Quantity, Price, discount %).


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Save the RFQ;Action > Save


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Check for Currency details by clicking on Currency Button.


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Change the status of RFQ from In Process to Active and save

Re-query RFQand check the status.


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Step 5: Receive Quotations from SuppliersSupplier sends response on RFQ to Buyer through Quotations.

Buyer Enter the Quotation information in Quotations window.Navigation : RFQs and Quotes > Quotations.


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Enter the Quotation for Supplier 1 with all Header and Line details.

Check Quotation terms.


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Check currency information. You can change currency, rate type & rate date.


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Enter the price break information for quotation from Supplier 1. Enter Quantity, Discount

& Effectively Dates.


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Save the Quotation price break information.


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Change the status of Quote from In Process to Active.


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Save: Action > Save


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Similar Enter Quotation details for Supplier 2.Enter Header details

Check Quotation terms;


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Enter Items details

Enter price break information (Quantity, Discount, Effectivity dates)


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Save: Actions> Save


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Change the status of quotation from In Process to Active.


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Step 6: Analyze and Approve QuotationsQuotations from supplier analyzed from Quote Analysis menu. Query for the RFQ

number in Quote analysis menu.Responsibility: AMAT Purchasing ManagerNavigation: RFQs and Quotes > Quote Analysis


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Analyze Quotations window will show all available Quotations for particular RFQ.

You can approve entire quotation or line within Quotation.


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Approve one of line with Quotation by giving reason & effectivity dates.

Save the approved/analyzed quotation.


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Step 7: Create Purchase Order from requisition

Standard Purchase order can be prepared from approved requisition by using autocreatefunctionality.

Note: We can create Purchase Order f rom Approved Quotation also

Responsibility:AMAT Purchasing Manager

Navigation: Purchase Orders > AutoCreate

AutoCreate Document window will show approved requisition line details


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Select the line by CTRL+click

Select Action & Document Type. Click on Automatic Button, the default parameters willget populate before creating PO.


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Click Create to create the PO. It will show Note message as with Document number.


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Purchase Order will get created with Incomplete status.

Enter the supplier and ship to location details in auto-created purchase order.


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Save: Action > Save


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Step 8: Approve Purchase Order


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Responsibility: AMAT purchasing managerNavigation: Purchase Orders > Purchase Order Summary > Enter Purchase Order

number > Find


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Click Approve button for approving the purchase order.

Another Approve Document window will get open. Click ok to submit document for

approval.

Note window populates as Document has been submitted for approval.


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Re-query the purchase order to see the Approval Status.

Check from Special > View Action History


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Action window will show the details of Action, Date & Performed by.

Below window shows, Thangam has forwarded the Document (PO) for approval to

Govindraj. And the Standard Purchase Order16008024 is pending for action fromGovindraj.


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Use / AskGovindrajs login(X047292) to approve this PO through notifications summary,

from which the PO sought next level approval.

Responsibility: AMAT purchasing manager

> Check the Notification Summary.

Notification Summary window shows the Open notifications which are pending foraction. Open notification of Standard Purchase order 16008024 is visible in notificationsummary.


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You can Delegate or Respond to the Document.

For Respond: click on respond button. Put Approval action like Approve, forward , reject,approve and forward by selecting it from LOV.


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After responding the notification gets closed. You can only view the response ofdocument. You cannot respond/delegate against this document


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Re-query the Purchase order # 16008024, to check the Approval status. Below document

summary window is showing, document has been approved.


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Step: 9 Document ControlBy Using Document control functionality purchasing Manager/Superuser can HOLD,Freeze, Cancel, and Hold for Invoice the document.

Below example shows, document control when Po is in Incomplete status & Approved

status

1. Document Controls when PO which is in Incomplete Status (before approval):Below example shows the Control of PO document when it is in Incomplete status.

Responsibility: AMAT Purchasing Manager.Navigation: Purchase Orders > Purchase Order summary> Query for existing open

purchase order (which is not approved)


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PO # 16073723 is in Incomplete status.


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You can control this document from; Special > Control

Control Document window will appear showing Actions for Control.


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Below example we kept PO on Hold ;

Action > On Hold > ok


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Re-query the Purchase order. It will show the status as Incomplete, On Hold.

Try to approve the document: It will submit for approval.


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But if you Query action history, it will through error as document is in Incomplete

status or unavailable to you.


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In such case, go and check the Control window;

Navigation: Special > Control


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Control window will show the Action details.

Click on action > Ok

Note window will populate showing Control Action is completed successfully.


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Status of PO will change to Incomplete

The PO can be approved by submitting for approval.


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The status of PO gets change to Approved.


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2. Control of Approved PO Document.

The Approved PO shows many controls

Navigation: Special >Control


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The Control Document window shows Actions as Cancel PO, Close, Finally Close,

Freeze, On Hold & Open for Invoice.

The below example shows PO # 16073723 is under Freeze control.

Navigation: Special > Control > Freeze > ok


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Note window will appear showing ControlAction is completed successfully.

Freeze PO , you cannot Open & cant take any action.


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Check control & remove/change control of Po Document.

Unfreeze the PO document


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Note window will appear as ControlAction is completed successfully.

You can Open PO Document # 16073723, as now it is not in freeze condition.


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Below example we will try to receive the Approved PO which is on Hold:

Query for the approved PO.

Navigation: Purchase Order Summary > Purchase Orders > Special > Control >

Select the Action for control > ok

After completion of Oh hold action, note window populates as Control Action

completed successfully.


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At any stage when we put approved PO Document on hold, the status will get

change to Requires Reapproval


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You cant receive this PO as it requires re-approval.

Release the Hold from Special > Control for the Po Document.

After completion of Control Action note window gets populated as Control Action

is completed successfully.


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Approve the PO & receive.


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After the material receipt, the status of PO will be changed toApproved Closed.

For Approved, Closed Document, below controls are available.

You can Finally Close, Freeze, On Hold, Open, Open for Invoice & open for Receiving.