Understanding this concept is crucial for managing approval workflows in procurement processes.
What is the Release Procedure?
Imagine you're part of a company where purchases need to be approved before they're finalized—perhaps anything over $10,000 requires a manager's sign-off. In SAP, the Release Procedure replicates this approval process digitally, ensuring control and compliance in procurement.
Purpose of the Release Procedure
- Approval Workflow: It sets up a structured approval (release) process for purchasing documents like purchase requisitions and external documents (e.g., POs, contracts).
- Control Mechanism: Helps enforce company policies by requiring approvals based on specific criteria (like total order value or material groups).
- Customization: Allows different departments to have tailored release strategies, accommodating various needs across the organization.
- Release Codes: Unique identifiers assigned to individuals responsible for approving documents. Think of them as digital signatures.
- Release Strategies: Predefined pathways that dictate how a document moves through the approval process based on certain conditions.
- Purchase Requisitions: Internal documents requesting the procurement of materials or services.
- External Purchasing Documents:
- Purchase Orders (POs)
- Contracts
- Scheduling Agreements
- Requests for Quotation (RFQs)
- Service Entry Sheets
There are two mutually exclusive procedures:
1. Release Procedure Without Classification
- Level of Release: Item-level only.
- Usage: Simpler setups where approvals are needed per individual item in a requisition.
- Limitations:
- Cannot release the entire requisition at once.
- Less flexible in handling complex approval scenarios.
- Level of Release: Item-level and Overall (header-level).
- Usage: More versatile, suitable for complex approval processes.
- Advantages:
- Can approve entire requisitions in one go (Overall Release).
- Utilizes Classification System: Allows for more detailed conditions using Characteristics and Classes (e.g., total value, material group).
- They are mutually exclusive because they operate differently in terms of configuration and processing.
- Choosing one depends on your organization's needs for flexibility and complexity in the approval process.
- Applicable Documents: POs, contracts, scheduling agreements, RFQs, service entry sheets.
- Level of Release: Header-level only.
- Procedure Used: With Classification.
- Why? The complexity and significance of these documents often require comprehensive approval strategies that the classification system supports.
- Item-level Release: Not possible for these documents.
Step-by-Step Flow:
- Document Creation: A purchase requisition or external purchasing document is created.
- Triggering the Release Strategy:
- The system evaluates the document against predefined conditions.
- If conditions are met (e.g., order value exceeds a threshold), a release strategy is assigned.
- Release Codes Assignment:
- Specific individuals (approvers) are notified based on their release codes.
- Each code represents a required approval level.
- Approval Process:
- Approvers review the document.
- They can Release (Approve) or Reject (if using SAP Business Workflow).
- Release Tracking:
- The system records each release action.
- A document isn't fully approved until all required releases are effected.
- Further Processing:
- Once fully released, the document can proceed to the next stage (e.g., purchase orders can be sent to vendors).
Visualizing the Release Procedure
[Document Creation]
|
v
[Check Release Conditions]
|
+----+----+
|
|
Yes
No
|
|
v
v
[Assign Release Strategy] [Proceed
Without Release]
|
v
[Notify Approvers]
|
v
[Approver Action]
(Release Code)
|
+----+----+
|
|
[Release] [Reject]
|
|
v
v
[All Releases Completed?] [Document Returned
for Review]
|
+----+----+
|
|
Yes
No
|
|
v
v
[Proceed to Next Stage] [Await Further Approvals]
Metaphorical Understanding
Think of the release procedure like a security checkpoint:
- Document: A traveler needing clearance.
- Release Codes: Security stamps from officers at different checkpoints.
- Release Strategy: The traveler's required path through checkpoints based on their destination and credentials.
- Complete Release: Traveler has all necessary stamps and can proceed to the gate.
- Rejection: Traveler lacks proper documents and must go back for corrections.
Scenario: Your company requires managerial approval for any purchase requisition exceeding $10,000 and director approval for those over $50,000.
Configuration Steps:
- Define Release Codes:
- R1: Manager Approval.
- R2: Director Approval.
- Set Up Release Conditions:
- Characteristic: Total Purchase Requisition Value.
- Classes:
- Class 1: $10,000 - $50,000.
- Class 2: Above $50,000.
- Create Release Strategies:
- Strategy A (for Class 1):
- Requires R1.
- Strategy B (for Class 2):
- Requires R1 and R2.
- A requisition for $30,000 is created.
- Strategy A is applied.
- Manager (R1) approves.
- Requisition is released for processing.
- A requisition for $75,000 is created.
- Strategy B is applied.
- Manager (R1) approves.
- Director (R2) approves.
- Requisition is released for processing.
- Customization: Tailor release strategies to match organizational policies.
- Security: Ensure only authorized personnel have access to specific release codes.
- Workflow Integration:
- For purchase requisitions, you can integrate with SAP Business Workflow to enable rejection and automated notifications.
- Flexibility:
- With Classification: Offers greater flexibility with complex conditions using characteristics.
- Without Classification: Simpler setup but less adaptable to complex approval requirements.
- Enhanced Control: Enforces procurement policies systematically.
- Audit Trail: Keeps detailed records of approval actions.
- Efficiency: Streamlines the approval process with clear pathways.
- Risk Management: Mitigates unauthorized or unintended purchases.
Understanding and effectively implementing the Release Procedure in SAP MM is essential for robust procurement management. It ensures that purchasing activities align with company policies, providing control, transparency, and efficiency.
By configuring appropriate release strategies and codes,
you can replicate your organization's approval hierarchies within SAP,
safeguarding against unauthorized expenditures and fostering accountability.
