Skip to Content
Technical Articles
Author's profile photo Somesh uttarwar

S/4 HANA for central procurement – Central sourcing

Introduction:

Central procurement hub is relatively new in SAP world and thus there is a kind of curiousness among many SAP customers, vendors, and consultants on how it works and how everything looks like in the system. So, with explanation of central sourcing, this blog aims to show in detail how everything comes together in Central Procurement Hub in S/4HANA.

Create central RFQ:

To start with, central RFQ’s are created in hub system with the app “Manage purchase requisitions centrally”:

When we go in the app, select the PR (with no source of supply) for which we must create the central RFQ and then on the right-hand side click on “Create Document” – > “Create Central RFQ”. The new screen in app will look like this:

It’s also possible to add multiple bidders/suppliers in the central RFQ.

Once the central RFQ is saved here, its saved in draft version and can be processed further with the app “Manage central RFQs”:

All the central RFQ which are only saved will be in status “In preparation” and can be seen as list in app “Manage central RFQs”. In this app its also possible to edit the saved RFQ’s. Once the central RFQ is ready then it can be published by clicking “Publish” button at the top right corner.

At this stage, the approval workflow will be triggered if configured. Once the central RFQ is published and approved its then transmitted to the vendors.

Create supplier quotation:

Next steps in the process would be to create suppler quotations for the Central RFQ. This can be done via app “Manage central RFQs”:

We just have to go into the app, select the respective central RFQ for which we must create suppler quotations and then go to the Bidders area, select the desired vendor/supplier and click on the “Create Quotation” button on the right side.

Now enter the required details and save it. Once saved we can see the supplier quotation number generate on the top. Once basic details are saved, it can be again edited and processed accordingly in the app “Manage central supplier quotation”:

Quotation needs to be now submitted (till now we just saved the suppler quotation), and this can be done in this “Manage central supplier quotation” app. In this app list of suppler quotaion is displayed, select the desired quotation and click on the “Submit” button on the top right. Once its submitted, its ready to be awarded. In the similar way multiple suppler quotaions can be added for a perticular central RFQ.

Note: Currently , its not possible to compare central supplier quotations via any app and this is to be done manually. Also its not possible to send the rejections to suppler based on their quotations.

Once the suitable quote is found , it can be awareded by clicking the “Award” button. Once the suppler quotation is awareded, we can get inside the quotation by clicking on it and create the follow on document by clicking on the “Follow-on-document” button and this follow on document can be used as a source of supply.

Things to know:

There are few things to keep in mind while working with central purchasing:

  1. Which follow on documents should be created at the end can be defined in central RFQ while creating it i.e. Contract or PO.
  2. These documents i.e. central RFQ and central suppler quotations are only created in hub system and are not replicated in backend system.
  3. Also, these documents cannot be edited or accessed with normal GUI transactions.
  4. Integration with Ariba sourcing is also possible.
  5. As of now comparison of central supplier quotations is not possible and is to be done manually.

Sources:

Configuration documents can be found below:

  • SAP help: https://help.sap.com/viewer/af9ef57f504840d2b81be8667206d485/2020.000/en-US/ce84c311772c48aba48f4849a7579772.html
  • SAP best practices explorer: https://rapid.sap.com

Conclusion:

I hope this blog helps in basic understanding of working of central RFQs in the system and things we need to take care while using this solution.

Disclaimer:

Everything mentioned in this blog is from my personal experiences and is subject to change.

Assigned tags

      Be the first to leave a comment
      You must be Logged on to comment or reply to a post.