The first thing to understand is that Purchase Order is a legal document. It can trigger a transaction immediately which means that some product or service is sold and bought. There is a procurement aspect and then, there an accounting aspect. Hence, in MM, Purchase Order is a very important piece, just like Sales Order is in SD.

Given the dependency, it is important to control the flow of a PO. Example. Austin Inc. wants to buy a hazardous substance for its Nuclear Power Plant, however, the sellers may or may not be approved by the government. To avoid business with shady companies, Austin Inc. will reserve the names of all approved sellers in the system and might choose a manual approval. When a PO is created for that substance, the PO will put a release strategy and status will depend on whether the seller is approved or not. If the first check is passed, then another release strategy to hold it for manual validation can be invoked. If the Approver signs off, the PO can be passed on to Seller.

In configuring the Release Strategy for a PO, following elements need to be configured – Release Group, Release Codes, Release Indicator, Release Strategies, and Workflow.

Release strategy can be employed for many reasons and following are some examples –
1. Restriction on Material type or material volume
2. Net Price of the PO exceeds decided limits
3. Business with certain vendor