SAP MM

TOPICS :

• Enterprise Structure
• Master Records
• Purchase Requisition
• Purchase Order
• Inventory Management
• Special Procurement
• Stock Transfer Order
• Outline Agreements
• Account Determination
• Pricing Procedure
• Release Procedure
• Split Valuation
• Physical Inventory
• Non Stock and Non Valuated Procurement
• Material Requirement Planning (MRP)
 Enterprise Structure

MM Organizational Levels -

• Purchasing Organization (Top Level)

• Plants
• Storage Location (Least Level)

Customization of Enterprise Structure -

Company and Company code

• SPRO => IMG => Enterprise Structure =>

Definition => Financial Accounting => Define
Company

• Click New Entries button and fill all the information

as shown below
• Back to IMG and click Edit,copy,Delete,Check
Company Code
• Double click on copy delete check company code
• click copy org object button
• Enter from Company Code (Existing company
code) To Company Code (our new Company code
NIKE)
• Click Edit Company Code data
• Select our company code and click address button
 Plant

• SPRO => IMG => Enterprise Structure =>

Definition => Logistics general => Define
copy,delete,check plant

• Double click define plant and click new entries and

fill all the details
• Double click copy,delete check plant then click
copy org button
• From Plant (Existing Plant) to our Plant (NIKE)
 Storage Location

• SPRO => IMG => Enterprise Structure =>

Definition => Material Management =>
Maintain Storage Location

• click new entries and and add your storage

locations(NIKE and SLIM)
 Purchasing Organization

• SPRO => IMG => Enterprise Structure => Definition =>

Material Management => Maintain Purchasing
Organization

• click on new entries and add your purchasing organization

(NIKE)
 Assignment

• SPRO => IMG => Enterprise Structure => Assignment =>

Financial Accounting => Assign company code to company

• SPRO => IMG => Enterprise Structure => Assignment =>

Logistics general => Assign plant to company code

• SPRO => IMG => Enterprise Structure => Assignment =>

materials management => Assign purchasing organization
to company code

• SPRO => IMG => Enterprise Structure => Assignment =>

materials management => Assign purchasing organization
to plant

Master Records

• Material master record

• Vendor master record
• Purchasing info record
• source list record
• Quota arrangement record
 Material Master Record (3583)

It contains information on a material that a company procures

or sells a product.

Create MM01
Change MM02
Display MM03

Material Type : The materials having same attributes are

grouped together and assigned to a material type. It is nothing
but classification of all our materials into material types (Raw
material,semi finished,finished etc) based on their attributes.

NEW MATERIAL TYPE OMS2

NUMBER RANGE MMNR
Following are important existing material types :

ROH Raw Material

HALB Semi Finished
FERT Finished
DIEN Service
ERSA Spare parts
FRIP Perishables (less Life material)
HAWA Trading goods
HERS Manufacturer parts
LEIH Returnable Packaging
NLAG Non stock material
PIPE Pipeline material
UNBW Non Valuated material
VERP Packaging material
KMAT Configurable Material
FHMI Prod resource/Tools

Industry Sector : Industry sectors controls sequences of

screen and selection of fields in a material master data.
Industry sector has to be assigned to every material master
record that created in SAP

DEFINE INDUSTRY SECTOR OMS3

Create Material (MM01) :

Basic Data 1 :

Base Unit of Measure : With this unit of measure this material stocks
are maintained.

Material Group : Materials having same characteristics are grouped

together and assigned to a material group like material type . We can
classify all our materials into material groups.

SPRO => Logistics general => Material Master => settings for key fields
=> Define material groups => new entries => add a new material group
Old material No. : Enter which material no. was used for this material in
old ERP system or in existing legacy system. It is optional.

External material group : Enter material grup which was used for this
material in other external legacy system.

SPRO => Logistics general => Material Master => settings for key fields
=> Maintain external material groups.

Division : A division in SAP refers to the product division that exists in

your organization. When you create a material master record in SAP yo
create it for a particular division. A division is also one of the rules used
by SAP to determine the sales area.

Product allocation : Product Allocation is one of the availability check

methods. Product allocation gives businesses the flexibility to manage the
supply of scarce products so that you avoid allocating all the supply to
one customer or region.

X-plant material status : If material has to be blocked for purchasing

and inventory transactions etc for client level ie in all plants then select
option BP or 01.

Valid from : From this date material will be blocked for purchasing and
inventory transactions as per material statuses.

EAN/UPC :
EAN – International or European Article Number
UPC - Universal Product Code

The original manufacturer will provide this UPC No and later PO will be
given with our material No. as well as with EAN/UPC No also then it is
easy for vendor to identify the ordered material with EAN/UPC no. so
that quick business transaction and quick deliveries are possible from
Vendor.
Material group/Packaging Material : If created material is packaged
material then assign the packaged material group here ( it is the part of
SD, shipping)

Note: Material master Basic Data 1 and Basic Data 2 view details are
maintained at client level in MARA table.

Basic Data 2 :
Industry Standard Description : Description of the material in
accordance with the appropriate industry standard (such as ANSI or
ISO).

CAD Indicator : This indicator shows that the object (such as BOM or
document) was created or changed in a CAD system. Data transfer in the
SAP system via CAD interface.

Purchasing :
Purchasing Group : it is a group of buyers and it is responsible for
procurement of materials and service. Purchase group will not be
assigned to any organizational level that is plant or purchase
organization because it is a floating entity.

CREATE OWN PURCHASE GROUP OME4

Order Unit : Alternate Base unit of measurement.

Variable order unit : variable order unit will activate the order unit. If
you want to activate, activate by selecting 1.

Qualified for free goods discount : For this material if any free goods or
bonus goods are given by vendor then select option 1 0r 2.

Tax Indicator for material : It determines tax code automatically in PO

invoice tab.

Automatic PO : Generally in industries daily hundreds of PR are created

automatically via MRP and PO are also created automatically with
reference to PR. But following are the prerequisites to create automatic
PO

• Select automatic PO indicator in Material Master

• Maintain a fixed vendor for this material in quota
arrangement (1st priority) or source list or contract or info
record
• In vendor master, select automatic PO indicator
• For this material and a vendor, maintain an info record in
order to pick prices automatically in PO

AUTOMATIC PO ME59N
Batch Management : If material has to be managed in batches then
select batch management. Batch management is used to manage
homogeneity of the material to trace out the faulty material for recalling
product.

Purchasing Value Keys : It specifies reminders, under and over delivery

tolerance and shipping instructions etc.

GR processing time : After goods receipt number of working days

required to complete quality inspections and to place that material in
warehouse.

Post to inspection stock : If material needs quality inspection then select

this indicator so that in PO&GR the default stock type will be quality
inspection stock.

Source list : If you select this indicator then source list is mandatory for
this material and plant combination otherwise system will throw an
warning message in PO itself. Source list is set at 2 levels

• Material
• Plant

CREATE MEO1
CHANGE MEO2
DISPLAY MEO3

Quota arrangement usage : It specifies to which purchasing documents

should the quota arrangement data has to be copied.

Critical Part : it is for only info purpose that this material is critical.
Plant data storage 1 :

Temp. Conditions : Temperature conditions in which the material must

be stored.

Storage conditions : storage conditions required by material.

Container requirements : type, and conditions in the container in which

the material is shipped.
Max. storage period : maximum period of time for which a material can
be stored.

Min. remaining shelf life : minimum remaining time for the material to
be allowed to be stored ( in case the remaining time is shorter than
minimum – system will deny goods receipt).

Period indicator for SLED : used as a unit of time for minimum

remaining shell life. If this field contains D, then minimum remaining
shelf life is maintained in days. Indicator M is for months etc.

CC Phys. Inventory ind. : Indicates that the given material is subject to

the cycle counting method of inventory. The indicator also defines at
which time intervals a physical inventory is to be carried out for the
material.

CC Fixed : specifies that cycle counting indicator cannot be changed for

cycle counting by an ABC analysis. The only way to change this indicator
is through manual maintenance of the material master record.

Label type : Determines the way labels are created. The label type
specifies whether labels are pre printed by the vendor or created on a
central printer.

MRP 1 view :

MRP views are maintained mostly for production purposes. This

information is supplied by the appropriate MRP controller or someone
else from production planning team. The only mandatory field in MRP 1
view is planning type.
ABC indicator : This is an indicator showing the importance of the
material in terms of stock availability. Most of the companies use several
ABC values, but most common are -

• A - the most important materials, they need to be

available for sales in every moment customer
requests it.
• B - less important materials that are often
supposed to be available but the lack of this
material can happen and is allowed.
• C - Least important materials.
• N - New material that is not yet tested on the
market, so we don't know if it is A,B or C
• S – Material that are produced only on customer
 request.

MRP type : There are various types of MRP that can be utilized.

MRP Controller : MRP Controller responsible for production of this

material.

Lot size : Defines the procedure used by the system in order to calculate
the procurement or production quantity of the material.

MRP group : This setting is used to group materials with same MRP
control parameters. If this field is not maintained, the system will use
material group from basic data 1 when performing the MRP.

Reorder point : Indicates at which stock level MRP should create a new
order.

Planning cycle : cycle of planning, it is defined in customization and

assigned to a material, it can represent a day on which the planning is
performed.

MRP 2 view :
Procurement type : Here you can choose if your material has internal
production, external procurement or both types of procurement are
possible. It also might not have procurement at all.

Production storage location : Here you will maintain the storage location
that is copied throughout the production documents. If this is a
production component this marks the location from which the goods
issue is posted.

Schedule margin key : This represents a key used for determination of

floats required for scheduling an order. It is defined in customizing and
is supplied by your MRP controller or PP administrator.

Batch entry : Indicates when the batch determination should be executed

Default supply area : If you define it this will be a proposed supply area
for the material.

Backflush : Determines if backflush indicator is to be set in the

production order.

Storage location for external procurement : storage location to be

proposed in the PR.

Stock determination group : This indicator along with the stock

determination rule create a key for the stock determination strategy.

Co – product : If checked, indicates that this material can also be used as

a co product.

Bulk material : This identifies a bill of materials item as a bulk material.

This is important as requirements of bulk materials are not relevant for
the MRP.

MRP 3 view :
Period Indicator : Indicates if material is to be planned/forecast
monthly,weekly,yearly,daily etc.

Strategy group : Used for grouping the planning strategies, for example,
this can be set to make to order, make to stock etc. there are a number of
options and this must be defined by the production planning
management. In most cases, material types and/or material ABC
classification influences the decision which straergy group material
should be assigned.

Consumption mode : This controls how system will consume

requirements. In backward mode or forward mode.

Forward consumption mode : Number of days used as a consumption

threshold in forward consumption mode. Can be set from 1 to 999 days
but usually not longer than several days.

Backward consumption mode : Same as previous except it is used for

backward consumption mode.

Mixed MRP : Defines if material is available for sub assembly planning

and gross requirements planning.

MRP 4 view :
Selection method : If you are using BOM for your production, you could
govern with the selection of alternative BOM with this field. You can set
selection type by order quantity, production version, explosion date.

Discontinued indicator : you can select the indicator for discontinued

part as per requirements.

Effective out date : Date from which the stocks of the material are to be
used up. As soon as no more stock exists for this material, it is to be
replaced by follow up material.

Accounting 1 view :
Data entered in this view determines the way that accounting will be
processed for this material. Data is supplied by your FI/CO team.

Valuation class : Depending on your system settings, but valuation class

is in most times influenced by material type, so you will have a valuation
class for finished goods and another for trading goods.

Valuation class for sales order stock : You can assign a valuation class for
sales order stock to override the default valuation class defined in field 1
-valuation class.

Price control : This indicated which type of internal price will be used
for the material. It can be set to S (standard price) or V (moving average
price).

Moving price : you can populate this field if price control is set to V.

Standard price : you can populate this field if price control is set to S.
your controlling team can use transactions for generating these prices
based on the information contained in production orders, purchase
orders, so that these prices don't have to be entered manually for each
material.
Valuation category : Determines whether stock of the material is
valuated together or separately.

Purchase Info Record

Purchase info records are information about terms for purchasing a

specific material from a vendor. They are maintained at Vendor/material
combination and can contain data for pricing and conditions, over
delivery and under delivery limits planned delivery date, availability
period.

Procurement types in info record :

1) Standard
2) Subcontracting
3) Consignment
4) Pipeline

CREATE ME11
CHANGE ME12
DISPLAY ME13
Reminder 1,2,3 : These three fields indicate remainders to be issued to
vendor. Negative value indicates that the vendor should be prior to
quotation or delivery date.

Vendor material Number : Material number that is used by the vendor

for this material.

Vendor material group : Material group used by vendor for this material

Return agreement : This can indicate if goods return is available, and if

there are refunds available

Certificate category : Type of certificate issued by the vendor that

applies to this material.

Planned delivery time : Default time in days in which the material

delivery is planned.

Standard quantity : Standard purchase quantity for material

Minimum quantity : Do not allow procurement of a quantity less than
stated here

Maximum quantity : we do not want to purchase more than this quantity

at a time

Incoterms : Trading and delivery terms

Condition Type : You can enter a condition type in this field.

Amount per unit : In these fields you can enter an amount and amount
unit an quantity for which this amount is valid.
Valid from valid to : Represents a validity period for conditions. It means
that this condition is valid from so and so date.
Info memo : You can enter the info record note here.

PO text : same logic as previous except that this is a standard item text
that will be copied to purchase order item.

Purchase Requisition
This document initiates the procurement process and it is a request to
purchase material or service for same user department purpose. PR can
be created manually by user or automatically by system that is via MRP
or SD document

CREATE ME51N
CHANGE ME52N
DISPLAY ME53N

Number Range :

SPRO => IMG => MM => Purchasing => Purchase Requisition => Define
Number Ranges

*Number Range table NRIV*

Document Type : In Real time also existing document type will be there,
if different number ranges are required or different field selection is
required then define new document type as follows.
Select existing document type say NB click copy as and enter new
document and to that new document type assign new number ranges and
new field selection key.

• Click enter
• copy all select new document type and click allow item category
• click new entries and enter required item category and save
Source Determination : if we set this indicator, system will assign sources
or vendors for all items in PR itself from quota arrangement (first
priority) or source list or contract or info record and later PO will be
created to that vendor only.

Account Assignment : It specifies to which consumption G/L account the

line item value has to be posted. If line item is required for consumption
purpose , then only enter relevant account assignment category, if item is
required for stock purpose leave assignment category field as blank.

SPRO => MM => purchasing => Account Assignment => Maintain

account assignment categories

Material Data Tab : In this tab manufacturer part profile, manufacturer

part number and manufacturer details etc can be adopted from material
master purchasing view. In material master if all these fields are not
maintained then in PR material data tab that fields will not appear.

Quantities/Dates : In this tab Quantity order it specifies for how much

quantity order is given for this PR item. In this tab the planned delivery
time can be copied from material master and with this planned delivery
time + PR processing time the item delivery date calculates automatically
In this tab open quantity it specifies still how much quantity the PR is
open for pending.

In this tab closed if we set this indicator system will not expect further
PO even though PR item is having open quantity.

Valuation tab :
valuation price : It can be copied from material master Accounting 1
view and it is only for release strategy or approval purpose.

Goods receipt : This indicator comes in display or edit mode based on

account assignment category selected or not in line item.

Invoice receipt : If we select this indicator system will expect invoice and
payments for this PR item. Generally samples are given by vendor with
free of cost without invoice and payment.

Source of supply : Vendor can be assigned automatically for all line items
due to selection of source determination at header level, if at header level
it is not selected then for particular item click Assign source of supply
button in source of supply tab.

Purchase Order