Example: Process of Procurement Using Vendor Confirmations in SAP MM

The following graphic provides an example of the procurement of goods using confirmations:

Meyer & Co.’s purchasing department orders 100 boxes of special steel bolts from vendor Miller Corp. The planned delivery date is August 30. On the basis of the delivery date set out in the PO, Meyer & Co.'s MRP system expects the material to be available to the production line on August 30.

Meyer & Co. expects its vendor to first send an order acknowledgment, and to follow this with a shipping notification indicating precise quantities and delivery dates when the goods are loaded for shipment. This will provide more up-to-date and reliable information for materials planning than the corresponding data in the purchase order.

On receipt of the purchase order, Miller Corp. sends Meyer & Co. an acknowledgment confirming delivery of 100 boxes of bolts on the desired date.

The data in Meyer & Co.'s materials planning system is then updated: now all the steel bolts are expected to be available on August 30.

After the materials have been loaded on board the cargo vessel, Miller Corp. sends Meyer & Co. a loading confirmation covering 100 boxes of steel bolts on August 30.

When the bolts have been loaded onto a truck for the last leg of their journey, Miller Corp. sends Meyer & Co. a shipping notification confirming delivery of the 100 bolts on August 8.

Meyer & Co. receives the shipping notification. Its materials planning system now expects the complete order quantity to be available on August 31.