Global Procurement

In global procurement, a single purchasing affiliate negotiates with all suppliers on behalf of the entire corporation. This enables the company to negotiate lower prices for purchased goods. For example, a single global agreement is used to create purchase orders in multiple legal entities.

The legal owner of the purchase, that is the Sold-to Business Unit (BU) is determined when the purchase order is created from the defined financial orchestration flow. The Sold-to BU owns the supplier liability for the purchases. The Sold-to BU is different from the manufacturing plant or warehouse that actually consumes the goods or services procured. This purchase can also be routed through one or more financial intermediaries. For more information about global procurement and creating a global procurement flow, see the Implementing Manufacturing and Supply Chain Materials Management guide.