Business Cycle between a Customer/Buyer and Vendor/Seller

Question

Hello everybody,
Can anybody send me a link which explains the entire business process involved between a customer and the vendor, right from creation of PR to delivering the products?
Cheers,
Deepak.

Answer 1

Hi Deepak,
In procurement scenario, assume that you have a company and you want to purchase some raw materials for manufacturing the end product.
The stores manager in your store room realises that a particular raw material is going out of of stock (based on the inventory mngt rules) and hence he creates a request for purchase. This is called Purchase requisition creation in SAP.
This PR will be now reviewed by the guy in procurement section. He will try to ask the production dept, whether this material is needed now. Based on the approval (PR release by release procedures), the procurement guy creates a Purchase Order on a Vendor. Once the PO is created, the softcopy of the same will be send to the vendor through email/fax/printout etc.
Now the vendor will deliver the goods which will be received by the stores guy (Goods Receipt). Simultaneously the invoice from the vendor will be received by the Finance Dept(Invoice Receipt)
Now the Invoice receipt will be compared with the PO, and if values and quantities are tallying , the amount will be paid based on the payment terms.So it is like
PR-PO-GR-IR-Payment is the process cycle in procurement. Here the vendor, various depts in ur organisation plays the role.
On the sales side, assume that you are owing a company, and you sell things. One of your customers want some materials from you.
For this, he creates an Inquiry asking for some details about that material(price, delivery date etc)
You will respond to that Inquiry by giving him a Quote(Quotation)
Now the customer accepts your quotation for price, quantity, delivery date, other discounts etc and he finally creates an order for the material.
Once you receive the order, you make the materials available, and you then deliver the materials to him (Delivery and Goods Issue)
Subsequently you also send him an invoice.
So the typical sales process will be like
Inquiry-Quotation-Sales order--Delivery-Goods Issue---Invoice
Though these are the basic processes in procurement and sales, there are lot of variations in these processes based on the business requirements.
There are also functionalities in SAP that you can make one of your customers as a vendor of a service. For example you give consumable goods to a shop, but you buy some advertisement space in his shop.
Hope the answer satisifies you.Pls lemme know if you need more info.