The product is ordered by your company through a purchase order. In subcontracting, the vendor (the subcontractor) receives components from the ordering party with the help of which it produces a product.
The type of procurement can be maintained in a field that is known as item category as shown below.įor different procurement types, there are four types of purchase orders, which are as follows − Accordingly, purchase orders can be created for different types of procurement. Procurement starts with creating a purchase order, i.e., a formal document given to vendors and it includes a list of goods and materials that are to be procured. Procurement can be done for various types of goods and services. SAP ERP was introduced so that procurement can be done efficiently in terms of time and cost.
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