What is form of procurement in SAP SCM-APO-PPS - Production Planning and Detailed Scheduling?

SAP Term: form of procurement

• Component: SCM-APO-PPS

• Component Name: Production Planning and Detailed Scheduling

• Description: Form of product procurement. In SAP APO there are forms of procurement for external procurement and for in-house production. SAP APO provides the following forms of procurement for external procurement: Standard You order a product from an internal supplier or an external supplier vendor and the supplier makes it available to you on the delivery date for direct consumption/usage or for stock. Consignment The supplier keeps a stock of materials available at his cost on your premises. The supplier remains the owner of the materials until they are withdrawn from the supplier's consignment stores. The withdrawals are notified to the supplier at regular intervals and settled accordingly. Subcontracting The supplier processes material made available by you in order to manufactur a product you have ordered or perform an ordered service. SAP APO provides the following forms of procurement for in-house production: In-house production You procure the product t

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• Key Concepts: 
  Form of procurement is a term used in SAP's Production Planning and Detailed Scheduling (PPS) component of the Supply Chain Management (SCM) application. It is a way of specifying the type of procurement that will be used to acquire the necessary materials for production. This can include purchasing from external vendors, using internal resources, or a combination of both. 
  
  How to use it: 
  In SAP PPS, form of procurement is specified in the material master record. This is done by selecting the appropriate option from the drop-down menu in the “Form of Procurement” field. Depending on the selection, different fields may be required to be filled out in order to complete the material master record. 
  
  Tips & Tricks: 
  When selecting a form of procurement, it is important to consider the cost and availability of materials. For example, if an item is available from an external vendor at a lower cost than using internal resources, then it may be more cost-effective to purchase from the vendor. 
  
  Related Information: 
  Form of procurement is closely related to other concepts such as sourcing strategy and procurement type. Sourcing strategy determines which vendors will be used for purchasing materials, while procurement type specifies how materials will be acquired (e.g., purchase order, direct delivery). Understanding these concepts can help ensure that the most cost-effective and efficient form of procurement is selected for each material.