Definition

The scenario covers the processes of purchasing goods that are not normally used in manufacturing as materials or in sales as trading goods but stored to use them later for general and supporting activities. Numerous consumable goods are purchased and not immediately transferred to the consuming unit but put away into a warehouse and consumed over a period of time.

The cost of goods may include purchasing costs as well as procurement costs, such as custom fees, transportation, storage services, and other.

The goods are normally consumed as an indirect expense, charged to the expense item and dimension: a business unit, a cost center, a line of business, and other.

This scenario can be applied for purchases of office supplies, IT equipment (if not an asset), or for maintenance materials and spare parts.

Legend

- a process group the process belongs to

- a typical business process

- a typical E2E business process scenario

- a typical E2E business process cluster

Purchase indirect materials stored in warehouses flowchart

Business processes list

• Maintain inventory replenishment parameters
• Generate demand-driven purchase orders for replenishment 
• Define delivery terms
• Specify terms for purchase orders and submit for approval
• Confirm purchase order and send to vendor
• Follow-up purchase order progress
• Process incoming delivery notification of purchase order
• P2M Inbound logistics
• Process vendor invoices by purchase orders
• R2R Vendor invoice offset (Based on purchase order)