SAP PR Release Strategy Concept and Configuration Guide: A Case Study

SAP PR Release Strategy

Concept and Configuration Guide

- A Case Study -

By:

Ahmad Rizki

Smashwords Edition

©Ahmad Rizki, www.SAPstudyMaterials.com 2011. All rights reserved

All SAP product names at this article are trademarks of SAP AG.

I am not affiliated with nor endorsed by SAP AG.

Table of Contents

Chapter 1 - Purchase Requisition (PR) Release Strategy – Basic Concept

Chapter 2 – Step by step guide to configure SAP PR Release Strategy

2.1 Case study scenario

2.2 PR Release Strategies Matrix

2.3 Prerequisites

2.4 SAP PR Release Strategy configuration

2.4.1 – Edit characteristics

2.4.2 Step 2 – Edit Classes

2.4.3 - Set Up Procedure with Classification

2.4.3.1 Set Up Procedure with Classification – Define Release Group

2.4.3.2 - Set Up Procedure with Classification – Define Release Code

2.4.3.3 - Set Up Procedure with Classification – Define Release Indicator

2.4.3.4- Set Up Procedure with Classification – Define Release Strategy

Extra Contents

SAP MM Purchasing Process

Determination of Requirements

Determination of the source of supply

Vendor Selection

Purchase Order (PO) Processing

Purchase Order Monitoring

Chapter 1 - Purchase Requisition (PR) Release Strategy – Basic Concept

Purchase Requisition (PR) is an internal purchasing document in SAP ERP. A user creates a PR to notify the responsible department, usually the purchasing/procurement department, about his requirement of materials and/or external services. In SAP ERP system, the user can track the status of the PR whether it has been processed or not.

PR must contain information about quantity of a material or a service and the required date. It can be created directly (manually, through ME51N T-code) by a person or indirectly by another SAP component (such as material requirement planning/MRP, maintenance order of Plan Maintenance/PM module, production order of Production Planning/PP module).

PR can be processed to be an external purchasing document (such as Purchase Order/PO) or internal purchasing document (such as Stock Transport Order/STO).

In SAP ERP, PR can be processed directly to be PO/STO or must be approved /released before it can be processed to be PO/STO.

If we want that PR must be approved /released before it can be processed to be PO/STO, we must set up a release procedure for that PR.

The first thing to do in setting up a release procedure for a PR is to decide whether we will approve/release that PR for:

1. Overall PR

If we release a PR, all items in that PR will be released and then can be processed to be PO/STO. If we don’t release it, none of its item will be released nor can be processed to be PO/STO.

Or,

2. Item-wise

We must release item per item of a PR in order to make them ready to be processed to be PO/STO. If we don’t release some of PR items, the other items can be released and processed to be PO/STO.

In an SAP ERP client, all PRs with a particular PR Document Type can use just one of the above options. If we have more than one PR Document Type, we can set some of them use Overall PR release procedure and others use Item-wise release procedure, depends on our business process needs.

We can set the option in the process Define Document Type of Purchase Requisition that can be accessed by OMEB T-code or through menu paths of SPRO T-code: Materials Management – Purchasing – Purchase Requisition – Define Document Type, as per below image:

The above image is © SAP AG 2011. All rights reserved

If we want a PR Document Type uses Overall PR release procedure, we must tick the Overall release of purchase requisitions (OverReqRel) indicator. If we don’t tick that indicator, it means that PR Document Type will be released with Item-wise procedure.

The next thing to do is to determine the PR criteria/parameters that must be approved / released by specific person. For example:

PR of raw material that has value less than USD 50,000.00 can be released by operational manager. PR of that item that has value USD 50,000 or more must be approved by operational manager and operational director. PR for production equipment must be approved by Asset Manager and operational director, whatever its cost.

In SAP ERP there are two release procedures that we can choose:

1. Release Procedure without classification

This procedure can only be used for item-wise. It can’t be used for Overall PR. The criteria that can be used with this procedure to distinct the PR approval processes are limited to: PR item value, material group, account assignment, and plant. We can’t use this procedure if we want