Posted by: ahmedashfaque | July 21, 2014

Internal procurement – needs and appropriate configuration variations – part 2


In the last post we discussed internal procurement in the form of stock transfers. Stock transfers are used in simpler business scenarios where goods are transferred from one location (plant) to another location (plant) in the same legal entity.

There are some limitations of stock transfers.

  • You can not use shipping for stock transfers. this means in transit movement of goods can not be tracked.
  • You can not do receiving planning in advance at the receiving plant.
  • You can not incorporate transportation cost in the movement of goods.
  • If a third party logistics provider is required for movement of goods then this scenario can not be captured in SAP system.

Stock transport orders (STO) provide a solution for all the limitations listed above. As mentioned in the previous post stock transport orders are very similar to external procurements. You create a PO, do goods receipt and finally pay for invoices. STOs even generate billing for the supplying plant which is sent to the receiving plant. The receiving plant then does payment via invoice processing.

To take care of various business scenarios, STOs are of 3 types.

  • STO without delivery: You create a PO then do goods receipt and invoice processing. The shipping component is not involved and so in transit goods movements can not be tracked.
  • STO with delivery: You create a PO and then a delivery. Good receipt planning takes place against the delivery (advance shipping note). You do goods receipt and invoice processing afterwards.
  • STO with delivery and with billing: This is the most complete type of STO where PO, shipping, and billing is incorporated. Here the STO takes care of tracking of in transit goods movements, billing generation at supplying plant, goods receipt, and invoice processing.

Based in the need of the company, STOs can be configured to represent almost any business scenarios.

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