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RHI Magnesita
MM User Training Session Day-1
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Purchasing Documents
The purchasing document is an instrument used by Purchasing to procure materials or
services.
In the standard SAP System for MM the following purchasing documents are commonly
used in all types of industries.
 Purchase Requisition (PR) – Internal Document
 Request for Quotation (RFQ)-External Document
 Purchase Order (PO) – External Document
 Contract-External Document
 Scheduling Agreement (SA)- External Document
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Purchase Order (PO)

 A purchase order (PO) is the official offer documenting the exact requirement of the buyer in terms of
quality, quantity, performance, pricing and payment terms for the products or services. It is issued by
buyers to their suppliers.
 A purchase order is the first official document created by the purchasing department to procure products. It
is made after the purchase requisition is approved by the procurement department.
 Each purchase order is given a unique number by the buyer. It includes details such as order date,
shipping information, discount conditions, names of suppliers, description of goods, price per unit, and
total quantity of items required.
 The purchase order is not a contract until the supplier signs it. When the supplier receives a purchase
order, they can accept or reject it. Once signed, the purchase order becomes an official contract which is
legally binding for both parties. The supplier agrees to supply the items detailed in the purchase order, and
the buyer agrees to pay the specified amount.
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Domestic P2P Cycle:

Procure To Pay (Domestic)
User Department

Procurement of Goods for all plants

Creation of
Purchase
Purchase Check and save Purchase Purchase
Budget Available Requisition
Sta rt Requisition Yes purchase Yes Requisition Yes Requisition
at fund center applicable for
through MRP requisition Approval Release
approva l
Run/Manual

No No

Changes in
Get budget
Purchase
allocation to fund
Requisition
center
No
Inventory DepartmentProcurement Department

Purchase order s ent to

Receive Creation of Check and save vendor and buyer
RFQ Budget Available PO approva l Purchase order
Purchase No Purchase Order Yes purchase Yes through automatically
required at fund center Acceptance released
Requisition against PR requisition triggered mail

Yes No
No
Purchase order
RFQ Process Get budget Print
allocation to fund Changes in
center purchase order

Changes
requested in
purchase order

Purchase order Purchase order

Changes in
saved with new de-release
purchase order
version number completely

Goods Goods Goods

Inward Ga te Weighing at Goods Receipt Receipt at
Weighing Yes Inspection No Transferred to
Entry of Goods weighbridge at store storage location
required required blocked s tock

Automa tic mail No

notifica tion sent to PR
creator for Goods Send Goods
receipt back to Vendor
Department

Yes
OK
AccountingQuality

Quality
Inspection
Department

Not O K

Invoice Invoice Payment to

Verification-Park Verification-Post Vendor aga inst End
Document Document Goods Invoice
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Purchase Order Creation Flow:

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Process Execution in SAP

S. No. Activity Activity Description T Code

Using this transaction purchase order can be created by procurement

01 Purchase Order creation ME21N
department with or without reference to PR

Using this transaction, changes can be made to existing purchase

02 Purchase Order Change orders. However, no changes are allowed in purchase order once it is ME22N
approved completely.

03 Purchase Order Display Using this transaction, existing purchase order can be displayed. ME23N

Once the PO is created, release procedure will be triggered (if

Purchase Order applicable) based on approval hierarchy defined in system and
04 ME29N/ME28
Approval approver must approve the Purchase order for further processing. Both
individual and collective release are possible for PO.

Purchase order can be printed using this transaction and PO will be

05 Purchase Order Print ME9F
mailed automatically to vendor once PO is released completely.

Using this transaction, list of all created purchase requisition can be

06 Purchase order Report ME2N
viewed
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PO approval Process:

 An approval procedure can be applied on purchase orders by maintaining required classifications data in SAP
system. RHIM ,RHIMIRL & RHIMSRL utilizing same setup and characteristics for PO release procedure and
approving Agent.

Characteristics Description

ZPO_VALUE Total net order value

ZPO_DOCTYPE Order Type (Purchasing)

ZPO_PURORG Purchasing organization

ZPO_PLANT Plant

ZPR_PURGRP Purchasing Group

7
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Purchase Order Doc and Message type:
Following document types will be utilized for domestic Procurement

PO Doc Type Description Number Range Type Number Range From Number Range To PR Doc Type

ZCOD Indirect Items- Dom Internal 4100000000 4199999999 ZREG

ZRMD RM Procurement - Dom Internal 4000000000 4099999999 ZNB

ZSER Service PO Internal ZRMD

4700000000 4799999999

 Provision of Purchase order print will be available.

 Output type for PO print will be fetched automatically based on condition record
maintained against PO document type.
 Purchase order will be sent to vendor and buyer automatically through mail once
purchase order approval is completed.
 Following output type used for Print out.

Output Type Description

ZNEU Domestic/import PO

ZSER Service PO
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System Validation Related to PO :

There is some system validation applied in the system for the Correct Creation of PO .

S. No. Process Step Validation Detail T-code

Material type and Purchase group combination will be as

1 Purchase order Creation ME21N/ME22N
custom table ZPG_MAT

Material type and PO Doc. type combination will be as

2 Purchase order Creation ME21N/ME22N
custom table ZPO_MAT

If Incoterm is EXW then freight will be mandatory condition

3 Purchase order Creation ME21N/ME22N
in purchase order

4 Purchase order Creation Local Freight will be in INR currency in import procurement ME21N/ME22N
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Good Receipt Note (GRN)

 The goods receipts process should guarantee that the necessary materials, components, and spares are provided in
accordance with the purchasing/production order and that the quantity of the materials is in line with the intended
requirements as stated in the published orders. Accounts and inventory will be updated to reflect the GR procedure.
A purchase order document will be used as the basis for the goods receiving process
 Good Receipt Against PO
• GRN against PO will be done by stores department.
•GR is done against the PO and material is posted to inventory in the storage location. Movement type 101
will be used while doing GR in SAP system.
•Gate entry will be mandatory during goods receipt against purchase order.
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Goods receipt Creation Flow:

Inventory Management (Goods Receipt against PO)
Vendor

Dispatch Goods to
Receive
Start business along with
Purchase order
Invoice
Inventory Department

Goods Goods
Inward Gate Weighing at Goods Receipt Quality Receipt at
Weighing Yes Inspection Yes Not OK
Entry of Goods weighbridge at store Inspection storage location
required required

No

No

Receipt at Send Goods

OK
storage location back to Vendor
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Service Procurement and SES

 External follows the same cycle as material procurement, with minor differences at the
document level, such as the creation of a service master and a service entry sheet. Prices,
discounts, surcharges, taxes, and freight, among other things, will be included in the PO
during its creation.
 A separate item category D is used to identify service items. Because services cannot be
stored in inventory, It will be consumed directly against a cost center. The consumption G/L
account must be identified when the Service entry sheet is created. The pricing procedure
will remain the same as that of the Purchase Order.

 Service entry sheet will be created by respective concerned user department against
approved Purchase order that records the work or service provided by external service
providers.
 Service entry sheet will be created with required input details such as
• Reference (Invoice detail)
• Quantity
• Value field (Display only)
• Service detail (adopted from purchase order)
 A unique service entry number will be generated once post document is posted.
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Service P2P cycle :

Service Procurement Process
Procurement of services for all plants
User Department

Creation of Purchase
Check and save Purchase Purchase
Purchase Budget Available Requisition
Start Yes purchase Yes Requisition Yes Requisition
Requisition with at fund center applicable for
requisition Approval Release
Item category ͚ D͛ approval

No No

Changes in
Get budget Purchase
allocation to fund Requisition
center
No
Procurement Department

Purchase order sent to

Receive Creation of vendor and buyer
RFQ Budget Available Check and Save PO approval Purchase order
Purchase No Purchase Order in Yes Yes through automatically
required at fund center Purchase order aaceptance released
Requisition reference to PR triggered mail

Yes No
No

Purchase order
RFQ Process Get budget Print
(Outside SAP) allocation to fund Changes in
center purchase order

Changes
requested in
purchase order

Purchase order Purchase order

Changes in
saved with new de-release
purchase order
version number completely
DepartmentDepartment
User

Creation of
Accept Service Service Entry
Sheet WRT to PO
Accounting

Invoice Invoice
Payment to
Verification-Park Verification-Post End
Vendor
Document Document
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Process step detailed requirement and Solution

Sr. No Process Steps T code/ Fiori APP Users Remarks/Controls
 Following fields will be mandatory for PR creation:
o Valuation Price
o Requisitioner
01 Create Purchase Requisition ME51N User Department/Plant
o Tracking ID (Department)
o Purchasing Group

 PR approval will be based on plant specific release strategies.

02 Approve Purchase Requisition ME54N User Department/Plant  PR release strategy will trigger based on DoA classification maintained
in system.
Request for quotation /Price
03 Email/ Manual Procurement Department  RFQ Will be processed outside of SAP.
negotiation
 Purchase Order cannot be back dated applicable, terms of delivery and
version details.
04 Create Purchase order ME21N Procurement Department
 Combination of purchase groups, document type & material type will
be checked through a custom validation.
 PO release strategy will trigger based on DoA classification maintained
05 Approve Purchase Order ME29N Procurement Department
in system.
06 Print Purchase Order ME9F Procurement Department
 Output Type for purchase order will be fetched automatically through
condition records.
07 Print Purchase Order Custom Program Procurement Department
 A mail with purchase order attachment will be sent to vendor and
buyer once PO is released.
08 Create Service Entry Sheet ML81N User Department  Reference field for invoice no input will be mandatory.

 Invoice will be verified against Purchase order and Service entry sheet
document.
09 Invoice Verification MIRO Accounts Department
 If a duplicate invoice no. is input with special character in reference
field, then system will not allow to post invoice verification document.
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Thank you
for
your Attenti
on
Important notice:
These materials do not constitute or form part, or all, of any offer of invitation to sell or issue, or any solicitation of any offer to purchase or subscribe
for, any securities in any jurisdiction in which such solicitation, offer or sale would be unlawful, nor shall part, or all, of these materials form the basis
of, or be relied on in connection with, any contract or investment decision in relation to any securities. These materials contain forward-looking
statements based on the currently held beliefs and assumptions of the management of RHI Magnesita N.V. or its affiliated companies, which are
expressed in good faith and, in their opinion, reasonable. Theses statements may be identified by words such as “expectation” or “target” and similar
expressions, or by their context. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the
actual results, financial condition, performance, or achievements of RHI Magnesita N.V. or its affiliated companies to differ materially from the results,
financial condition, performance or achievements express or implied by such forward-looking statements. Given these risks, uncertainties and other
factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. RHI Magnesita N.V. or its affiliated
companies disclaims any obligation to update these forward-looking statements to reflect future events or developments.