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Direct procurement and Indirect Procurement in SAP AFS

Former Member
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Can you diffrentiate between Direct procurement and Indirect Procurement in SAP AFS.



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Answers (1)

Answers (1)

Former Member
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Hi Aki,

Direct Procurement

Raw Material and Production Goods

Order Qty: Large

Value: Industry specific (Like shirt in apparel industry)

Direct procurement supports the conversion of planned requirements to purchase orders.

Primary Processes-Direct Procurement

1. Determination of the materials and services required.

2. Create requisition.

3. Request for the quotation.

4. Quotation Management.

5. Vendor selection.

6. Create Purchase Order.

7. Goods Receipt and Invoice Receipt.

8. Invoice Verification/ Vendor Payment.

Indirect Procurement

Maintenance, Repair and Operating (MRO) Supplies

Order Qty: Low

Value: Generic (Machine Spare Parts in any industry)

Indirect procurement supports the purchasing of indirect materials and subcontracting.

This process can be dealt with using standard functions such as material requirements planning, purchase requisition, stock transport order, transportation planning and the handling of internal deliveries.

The cross-plant, internal procurement of materials can be carried out within one company code (intercompany) or by using several company codes (cross company).

Primary Processes-Indirect Procurement

1. Requisitioning

2. Purchase Order Management

3. Receiving

4. Financial Settlement

Hope it helps.


Anirban Roy