Definition

The purchasing of direct materials scenario covers the process of material purchase from vendors on a contractual basis for a fixed period of time or an amount of product. It can also be used for purchasing direct works. For repetitive manufacturing, materials are usually purchased under long-run contracts.

Purchasing direct materials is started by generating plan-based purchase orders and ends with receiving them in the warehouse for subsequent use in production or sales.

The received goods are tracked and stored in the warehouse.

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 direct materials flowchart

Business processes list

• Assess inventory requirements for procurement

• Generate demand-driven purchase orders

• Generate plan-based purchase orders
• Define delivery terms
• Specify terms for purchase orders and submit them 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)