Finished Goods and Raw Materials Sourcing

SAP Best Practices

Purpose, Benefits, and Key Process Steps

Purpose
• This scenario describes both the Finished Goods Sourcing and Raw Material Sourcing functions for the
apparel and footwear industry. It is applicable for companies that source their Finished Goods and also
for companies that manage their own production facilities or outsource production, and need to procure
raw materials. The following steps describe the typical procurement cycle to fulfill the scenario.

Benefits
• Whole process for material sourcing

Key process flows covered

• Create Purchase Requisition through MRP (based on demand derived through Sales Orders or Planned
Independent Requirements）
• Vendor Selection
• Create Purchase Order manually and with reference to Purchase Requisitions or automatically
• Maintain Confirmations
• Approval of Purchase Order
• Receive Delivery Note / Create Inbound Delivery
• Post Goods Receipt
• Logistics Invoice Verification

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Required SAP Applications and Company Roles

Required SAP Applications

 EHP6 for SAP ERP 6.0

Company Roles
 Production Planner
 Employee
 Purchaser
 Warehouse Clerk
 Sales Administrator
 Purchasing Manager
 Accounts Payable

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Detailed Process Description

Finished Goods and Raw Materials Sourcing

 A purchase requisition is either generated via the Material Requirements Planning (MRP)
process or manually by a requestor. A buyer validates the accuracy of the purchase
requisition and assign source to the purchase requisition. You can convert the purchase
requisition into a purchase order manually or automatically. The purchase order is subject
to approval based on a predefined amount prior to being issued to a vendor.
 Purchase order need to be confirmation. After that you receive the goods after the vendor
delivery it and do invoice verification after you receive the invoice from the vendor.

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Process Flow Diagram
Finished Goods and Raw Materials Sourcing

Send
Shipping Incoming
Vendor

Notification/ Vendor Invoice

Confirmation
Custom

Customer
er

Request for
Material
Administ
Sales

rator

Create Sales
Order
n Planner
Manager/ Employe Productio

Display Stock
Run MRP
Requirement list

Create Purchase
Requisition
e

manually
Purchase

Purchase

Convert
Create Purchase Assigned Enter PO Approval of
r

Requisition Requisitions to Confirmation Purchase Orders

Purchase Orders
Ware-
house
Clerk

Material Post Statistical

Document Goods Receipt
Accounts

AP–
Payable

Outgoing COGS Vendor Invoice Receipt

Payment
(158)

AP = Accounts Payable, COGS = Cost of Goods Sold, GR = Goods Receipt

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 Legend

Symbol Description Usage Comments Symbol Description Usage Comments

Band: Identifies a user role, such as Accounts Role band contains To next / From last Diagram: Leads Flow chart continues on the next /
Payable Clerk or Sales Representative. This band tasks common to that to the next / previous page of the previous page
<Function>

can also identify an organization unit or group, role. Diagram

rather than a specific role. Diagram
Connection
The other process flow symbols in this table go
into these rows. You have as many rows as
required to cover all of the roles in the scenario.
Hardcopy / Document: Identifies a Does not correspond to a task
printed document, report, or form step in a document; instead, it is
External Events: Contains events that start or end used to reflect a document
Hardcopy /
External
to SAP

the scenario, or influence the course of events in Document generated by a task step; this
the scenario. shape does not have any outgoing
flow lines

Flow line (solid): Line indicates the normal sequence Connects two tasks in
a scenario process or Financial Actuals: Indicates a Does not correspond to a task
of steps and direction of flow in the scenario. a non-step event financial posting document step in a document; instead, it is
Flow line (dashed): Line indicates flow to Financial used to reflect a document
infrequently-used or conditional tasks in a generated by a task step; this
Actuals shape does not have any outgoing
scenario. Line can also lead to documents involved flow lines
in the process flow.

Business Activity / Event: Identifies an action that Does not correspond Budget Planning: Indicates a Does not correspond to a task
either leads into or out of the scenario, or an to a task step in the budget planning document step in a document; instead, it is
Business outside Process that happens during the scenario document used to reflect a document
Activity / Event Budget generated by a task step; this
Planning shape does not have any outgoing
flow lines
Unit Process: Identifies a task that is covered in a Corresponds to a task
step-by-step manner in the scenario step in the document
Unit Process Manual Process: Covers a task Does not generally correspond to
that is manually done a task step in a document;
instead, it is used to reflect a task
Manual that is manually performed, such
Process Reference: If the scenario references Corresponds to a task Process as unloading a truck in the
another scenario in total, put the scenario number step in the document warehouse, which affects the
Process and name here. process flow.
Reference

Existing Version / Data: This block Does not generally correspond to

Sub-Process Reference: If the scenario references Corresponds to a task covers data that feeds in from an a task step in a document;
another scenario in part, put the scenario number, step in the document external process instead, this shape reflects data
Sub- name, and the step numbers from that scenario
Existing coming from an external source;
Process here Version / this step does not have any
Reference Data incoming flow lines

Process Decision: Identifies a decision / branching Does not usually

point, signifying a choice to be made by the end correspond to a task System Pass / Fail Decision: This Does not generally correspond to
user. Lines represent different choices emerging step in the document; block covers an automatic a task step in the document;
from different parts of the diamond. Reflects a choice to decision made by the software instead it is used to reflect an
Process System automatic decision by the system
Decision be made after step Pass/Fail
execution Decision that is made after a step has been
executed.

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