Internal Orders

[Former Member]

Hi experts,

What is the process of Internal Orders and how the procurement process works . What is the difference between the Sub-contracting process and Internal orders?.Can any one explain the process of internal Orders?

Regards,

abi

[Former Member]

Hi,

Internal order,

During MRP RUN, SAP calculates the requirement for each materials then,

1-If the material is set as In-house production, "Indicator E" in the MRP2 View of the material master record, the system generates INTERNAL ORDER to meet the requirement. Internal Order is transferred to Production department to start the production at the requested date

2- If the material is set as External Procurement "Indicator F" in the MRP2 View of the material master record, the system generates a Purchase requisition "PR"/ Purchase Order "PO", the PO will be transferred to the supplier through the purchasing department.

In Sub-contractor Process:

You send the Raw material to the sub-contractor, who will treat goods "he has an added Value" and resent back the goods "semi-finished product" to you.

[Former Member]

Hi ABI

As a logistics person with little FI/CO knowledge , i wish to reply the following for your query.

Internal Orders are basically Budgetary provisions created for a particulr financial period for procurement of Assets/material/others in order to have a check over the total procurement/expenses values.

There might be multiple internal orders to suit different types of activities inside an organization.

For example If i want to procure an Asset and if it is so required that I have to refer an Internal order for that at PO stage than this order ensures that i do not exceed the amount whichhas been set as a limit inside the Internal order.

Internal order can be used against procurement/goods issue activities. For your information I have been doing the ASSET(CWIP)procurement process by assigning the internal order to the Asset which is to be procured at PR level itself. If you assign A as account assignment category then it will automatically ask for the asste no. and if you hace made the Order field mandatory then also it will ask for the same at PR level. You can proceed accordingly. If you wish to do a direct PO for Asset procurement the sam antries are also applicabe.

Subcontracting process is entirely different and has nothing to do with Internal order as such as it is process and internal order is something which may or may not be refered to a process.

Samuel