CONSIGNMENT PROCUREMENT

MM – GENERAL SETTINGS FOR MM – ACTIVATE CONSIGNMENT PRICES VIA INFO RECORDS

Activate consignment prices via info record:- activate consignment info record.
MM – VALUATION/ ASSIGNMENT – ACCOUNT DET W/O WIZARD - CONFIGURE AUTOMATIC POSTING
OBYC Configure automatic posting:-Assign G/L account for the combination of chart of accounts, transaction/ event
key (BSX, GBB,KON, KBS), valuation grouping code, valuation class and account grouping code (VBR).

EXPECTED QUESTIONS
1. What are configuration settings required for consignment process:-
 Go to configuration activate consignment prices via info records,here we will define whether the consignment
prices are picked from PIR (new procedure) or consignment price segments (old procedure). If we are using
latest version then activate consignment info record and for old version i.e 4.0, we have to convert
consignment price segment into consignment info record.
 Go to configure automatic posting and Assign G/L accounts for the combination of chart of accounts,
transaction/ event key (KON), valuation grouping code, valuation class and account grouping code (VBR).
2. Cvendor place his material in buyer premises, but the owner of the material is vendor himself until buyer use it & S
3.
 CreatePIR price, tax code. automatic settlement prices will pick from this info record.
 Created PO “K”, account assignment category is in display mode because this material is not valuated during
GR, invoice tab suppress (No invoice), No conditions tab (Prices will pick from info record).
 GR w.r.t PO with MT 101K.Only material document but no accounting document, because the material is still
not valuated.MMBE under vendor consignment stock.
 own stock, post withMT411K. Mat & acc doc2 are created. the value of material is Db – BSX and Cr – KON
(Consignment liability). After MRKO, KON debit and KBS credit (vendor payable account).
 consignment material to cost center (201K), Project (221K), sales order(231K), Asset(241K), sales(251K),
production order(261K), and network order (281K).
 Post GI MT 201K, Material & account documents are created. The vendor consignment stock decreases in stock
overview, but no updates in material master as this material is send to cost center but not to inventory. The value
of the material is Db – GBBVBR(consumption for internal goods issue G/L accounts) and Cr - KON. After
MRKO, Db - KON and Cr – KBS (vendor payable account).
 Process MRKO. Output message type for automatic settlement is KONS.
4. Important points
 For the same consignment stock we can have different prices based on the vendor/ P Org / Plant combination.
 While creating material master, if we select “10” in special procurement field of MRP2 view, then system
defaults item category as “K” in PR generated through MRP. But it will not default if PR created manually.
 Movement type for GR without reference to PO for consignment stock is “501 K”.

PIPELINE PROCUREMENT
MM – VALUATION/ ASSIGNMENT – ACCOUNT DET W/O WIZARD - CONFIGURE AUTOMATIC POSTING
OBYC Configure automatic posting:-Assign G/L account for the combination of chart of accounts, transaction/ event
key (GBB,KON, KBS), valuation grouping code, valuation class and account grouping code (VBR).

EXPECTED QUESTIONS
1. Configuration setting for pipeline procurement:- go to transaction OBYC and assign G/L account for the
combination of chart of account, transaction/ event key (KON), valuation grouping code, valuation class and account
grouping code (VBR)
2. Pipeline process:-
  In pipeline procurement,the material will directly flow from vendor premises to buyer premises through pipe/
wire/ cable etc. In this process, there will not be any PR, PO, and GR, whenever buyer require material he
consumes it and settle the liability on periodic basis.
 Create material master with material type as PIPE.
 CreatePIR with category as pipeline; maintain price, tax code and other relevant information. This is mandatory
step, because at the time of settlement system will pick from this info record.
 Buyer can issue pipeline material to cost center (201P), production order (261P), and network order (281P).
 Process GI with MT 201P, then a material & account documents created. No updates in material master as
pipeline material is not maintained in inventory. The value of the material is Db - GBB VBR&Cr - KON. After
MRKO, KON debit and KBS credit.
 Process MRKO. Output message type for automatic settlement is KONS.

SUBCONTRACTING PROCUREMENT
MM – PURCHASING – PO – SET UP SUBCONTRACT ORDER
Set up subcontract order:- Assign delivery type (LB – Delivery type for sub-contracting) to supplying plant.
MM – VALUATION/ ASSIGNMENT – ACCOUNT DET W/O WIZARD - CONFIGURE AUTOMATIC POSTING
OBYC Configure automatic posting:-Assign G/L accounts for the combination of chart of accounts, transaction/
event key(BSX, WRX, FRL, BSV, GBB),valuation grouping code, valuation class & account grouping code VBO.

EXPECTED QUESTIONS
1. Info record for subcontracting:-subcontracting info record is different from standard info record because it
contains a production version to pick the BOM which is maintained for finished product.
2. Subcontracting process via providing component to subcontractor through TP:-
 In this process buyer will provide input material to subcontractor and he will do some value added services to it
and return back finished product, scrap, co-product or by-product and also informs any over or under
consumption of input material and accordingly settlement will be done.
 Create PIR with category as subcontractingfor finished product.
 Maintain BOM (CS01), in that mention positive quantityfor material provided to vendor and negative
quantityfor material which is generated during production.
 Create PO with item category “L”, due to this in material tab two icons will be triggered “explode BOM”
&components”. Details maintained in BOM will trigger in explode BOM icon, If BOM is not maintained, then
we can manually maintained details in components icon.
 To provide input material to subcontractor, process TP in MB1B with MT 541. Only material document &No
accounting document, because material still belongs to buyer. Theinput material decreases in material master&
we can monitor this stock in ME2O (Sc stock provided to vendor).
 Process GR w.r.t PO with MT 101, automatically system determines the input material and triggers MT 543O
for input material, 545O for co-product, 545 for scrap.In this case a material & account documentsare created,
the stock increases in material master for finished product and the value of the finished productis Db – BSX and
Cr – BSV (COGS - Change in stock account), the value for service is Db – FRL (External services account)
andCr - WRX, and the value of input material provided to vendor is Db–GBBVBO(consumption for stock of
material provided to vendor) and Cr - BSX.
 If there is over or under consumption of input material then process Subsequent adjustment, for over
consumption enter quantity and TP input material to subcontractor with MT541.For under consumption, enter
quantity & check under consumption indicator then system automatically triggers MT544Ofor input material
and TP input material with MT “542” and for finished product MT121.
 Perform IV w.r.t PO, invoice&accounting document will be created, BSV debit and KBS credit.
3. Subcontracting process via other vendor:-If we want to send input material to subcontractor through other vendor,
then do not enter input material while creating subcontracting PO. Create anther PO to vendor and mention delivery
address as subcontractor and perform GR w.r.t PO with MT “101 O”, in this case material & accounting document is
created, we can check the stock in ME2O and the value is Db – BSX&Cr –WRX.
4. Subcontracting process via SD delivery:-
 Define shipping points and assign it to supplying plantin enterprise structures configuration.
 Assign shipping points to combination of shipping conditions, loading group, and supplying plantin logistics
execution configuration.
 Assign delivery type LB to supplying plantin set up subcontracting order configuration.
 Material master should have sales1, sales2 & sales/plant view extended with necessary data like loading group,
transportation group etc.
 To create a delivery, go to ME2O, here select plant and vendor and execute and select desire line and click on
create delivery and process PGI using transaction (VL02N) with MT541.
5. What is co-product and by-product:- when two finished products are produced with same input material, then
main product is called as finished product and other product is called as co-product. The extract of all these is called
as by-product which is not finished product and it is raw material to some other process.
6. Scenario - For process finished product we require four input components, I have three components and
subcontractor have one component, how do you do this in subcontracting:-We have to maintain BOM for three
components and while creating PO for subcontractor we have mention fourth component in different line item and
for this in delivery tab we have to check SC vendor indicator. Then process GR only for second item and then system
automatically pick MT101 O and we can monitor this in MMBE. Then provide other three components with MB1B
with MT541. Go for second GR for finish product, here fourth component shown as component provided to vendor.
7. Reversal of subcontracting process:-
 Maintain BOM for the finished material and create sale order for finished material.
 W.r.t sale order inward raw material into your stock with MT 501E (stock will inward as sale order stock) so it
will not creating the accounting documents it will update it to some cost center.
 Based on the received material do the MRP run, planed order will create and convert it into production order and
issue the material to the production order with by 201E.
 After the confirmation production order, process GR w.r.tproductionorder 101 E, so stock of the finished
material will update as sale order stock.
 Do the delivery for the sale order in VL01N, and VL02N.
 Do the Billing in VF01.

STOCK TRANSPORT ORDERS (STO)

MM – PURCHASING – PR - SET UP STOCK TRANSFER ORDER
Create checking rules:- Deine checking rules
Define checking rules:- Define availability check and assign it to checking rule.
Assign checking rules:- Assign checking rules to supplying plant &document type
MM – PURCHASING – PO - SET UP STOCK TRANSFER ORDER
Define shipping data for plants:-select receiving plant and enter customer number as receiving plant and then select
supplying plant assign sales organization, distribution channel, and division.
Create checking rules:- Define checking rules
Define checking rules:- Define availability check and assign it to checking rule.
Assign delivery type & checking rules:- Assign delivery type & checking rules for the combination of document type
and supplying plant. (Delivery type NL is for w/o billing & with shipping&NLCC is for with billing & shipping).
Assign document type, one step procedure, and under delivery tolerances:- Assign document type for the
combination of supplying plant and receiving plant and also check one step procedure and under deliver tolerances.
 Set up stock transfer order between storage locations
 Activate stock transfer between storage locations:- check issuing storage location active
 Assign delivery type an checking rules according to storage location:- For purchase document category “F”
assign document type UB, supplying plant, issuing storage location, and delivery type (create new).
 Define shipping data for stock transfer between storage locations:- Assign sales organization, distribution
channel, division, and shipping points of receiving storage location to plant and select plant and click on storage
location and assign customer number.
Logistics execution – shipping – shipping functions – shipping points & goods receipt points determination - set up
storage location based shipping point determination
 Define rules for determination of shipping points:- For delivery type select storage location specific shipping
point determination.
 Assign shipping points according to storage location:- assign shipping condition, loading group, and supplying
plant to storage location

EXPECTED QUESTIONS
1. Define shipping data for plants:-Select the receiving plant and enter customer no. as receiving plant which is
created as customer master record in supplying plant, then system treats receiving plant as customer to supplying
plant. Select supplying plant and assign sales org, distribution channel and division, then system will know which
sales team is responsible to supply the material to receiving plant.
2. Checking rule:-It is used to find out whether requested quantity is available in the supplying plant.
3. Availability check:-A check that runs automatically after each goods movement and which is intended to prevent
the book inventory balances from becoming negative.
4. Assign delivery types and checking rule:- This configuration is for STO process with or without Billing.
 Delivery type fieldis blank for supplying plant and document type UB - STOw/o shipping & w/o billing.
 Delivery type NL for supplying plant and document type UB - STO with shipping &withoutbilling.
 Delivery type NLCC for supplying plant and document type NB –STO with shipping &with billing.
5. Assign document type, one step procedure, under delivery tolerance:- This configuration is used to define
whether STO is INTRA or INTER company process.
 Document type UB is assigned to supplying plant and receiving plant – Intra company STO
 Document type NB is assigned to supplying plant and receiving plant – Inter company STO
 One step is checked, upon PGI in supplying plant then automatically GR processed in receiving plant and if it is
not checked then it is two step procedure and we have to do PGI in supplying plant and GR in receiving plant.
 Movement types
Intra Company STO – MT 647 (one step)& MT641 (Two step)
Inter Company STO – MT 645 (one step) & MT`643 (Two step)
6. STO:-It is a kind of purchasing takes place between plants belongs to same CC (Intra) or different CC (Inter) and
also between storage location belongs to same plant. In Intra Company stock transfer can be processwith and without
shipping and in both cases billing is not possible andin inter company stock transfer takes place with shipping
&billing.
7. STO w/o shipping and w/o billing or Intra company stock transfer without SD Delivery?
 In this process purchasing and inventory in receiving plant and inventory in supplying plant.
 In assign delivery type & checking rules configuration, if we maintain delivery type field as blank for supplying
plant and document type UB then scenario becomes STO without shipping and withoutbilling.
 In assign document type, once step process, and under delivery tolerance configuration, if we assign document
type UB for the combination of supplying plant and receiving plant then scenario becomes Intra company STO.
  Create STO in receiving plant with document type UB and item category “U”, due to this vendor details will
replace with supplying plant details and invoice tab will suppressed.
 In issuing plant, TP or GI w.r.t STO with MT351 (TP to stock in transit from unrestricted stock). Material
&accounting document will be created and stock removes from inventory and the material will be in stock in
transit (MB5T). The value of material is Cr –BSXof supplying plant and Db – BSXin receiving plant. The price
difference is posted in AUM (Expense/ revenue from stock transfer account) in receiving plant.
 Process GR w.r.t STO in receiving plant with MT101. Only material document is created but no accounting
document, because both plants belong to same CC& No invoice in this process.
8. STO with shipping and w/o billing or Intra company stock transfer with SD Delivery?
 In this process purchasing and inventory in receiving plant and shipping in supplying plant and we have to
consider receiving plant as customer & supplying plant as vendor.
 Define shipping points and assign it to supplying plantin enterprise structures configuration.
 Assign shipping points to combination of shipping conditions, loading group, and supplying plantin logistics
execution configuration.
 Create the customer master to represent receiving plant as customer to supplying plant.
 In define shipping data for plant configuration, select receiving plant and enter customer no. as receiving plant
which is created as customer master in supplying plant and then select supplying plant and enter sales
organization, distribution channel and division.
 Define checking rules and assign it to availability check.
 In assign delivery type and checking rules configuration, maintain delivery type as NL for the combination of
supplying plant & document type UB then scenario becomes STO withshipping and without billing.
 In assign document type, one step procedure, under delivery tolerance configuration, maintain document type
UB for combination of supplying plant & receiving plant then scenario becomes Intra CompanySTO.
 In receiving plant extend sales views in material master and maintain loading points and transportation etc.
 Create STO in receiving plant with document type UB and item category “U”, due to this vendor details will
replace with supplying plant details and invoice tab suppressed. In item details shipping tab trigger and data
maintained in configuration reflect here like shipping point, loading group, customer details, & delivery type etc.
 In supplying plant create delivery (VL10B) w.r.t STO and process PGI w.r.t outbound delivery (VL02N) with
MT 647 (one) or 641 (two), Material & accounting document will be created and stock removes from inventory
and the material will be in stock in transit (MB5T). The value of material is Cr – BSX of supplying plant and
Db – BSX in receiving plant. The price difference is posted in AUM (Expense/ revenue from stock transfer
account) in receiving plant.
 Process GR w.r.t STO in receiving plant with MT101. Only material document is created but no accounting
document, because both plants belong to same CC& No invoice in this process.
9. STO with shipping and billing or Inter company stock transfer with SD Delivery?
 In this process purchasing &inventory in receiving plant and shipping & billing in supplying plant and we have
to consider receiving plant as customer & supplying plant as vendor.
 Define shipping points and assign it to supplying plantin enterprise structures configuration.
 Assign shipping points to combination of shipping conditions, loading group, and supplying plantin logistics
execution configuration.
 Create the customer master in supplying plant to represent receiving plant as customer to supplying plant.
 In define shipping data for plant configuration, select receiving plant and enter customer no. as receiving plant
which is created as customer master in supplying plant and then select supplying plant and enter sales
organization, distribution channel and division.
 Define checking rules and assign it to availability check.
  In assign delivery type and checking rules configuration, maintain delivery type as NLCC for the combination of
supplying plant & document type NB then scenario becomes STO with shipping and with billing.
 In assign document type, one step procedure, under delivery tolerance configuration, maintain document type
NB for combination of supplying plant & receiving plant then scenario becomes Inter Company STO.
 In receiving plant extend sales views in material master and maintain loading points and transportation etc.
 Create vendor master in receiving plant and enter supplying plant in additional data of EXTRA tab to represent
supplying plant as vendor to receiving plant.
 Create STO in receiving plant with document type NB and enter vendor no. as supplying plant created as vendor
master in receiving plant. Then shipping tab will trigger in item details and copies all data maintained in
configuration settings like loading group, shipping points, delivery type, and customer details etc.
 In supplying plant create delivery (VL10B) w.r.t PO& process PGI(VL02N)with MT 645(one step) and MT
643(two step). Material & accounting document will be created and stock removes from inventory and the
material will be in stock in transit (MB5T). The value of material is Cr - BSX and Db – GBB VAX
(consumption for stock transfer G/L accounts).
 Create billing (VF01) w.r.t outbound delivery.Cr - GBB VAX and Db – CC clearance account
 Process MIGO in receiving plant with MT 101, material & accounting document is created, stock increases in
inventory and the value of material is Db – BSXand Cr - WRX.
 Process MIRO.Db - WRX & Cr - CC clearance account.
Note:- the condition types triggered is P101
10. STO return PO (intra company):-
 One step:-Create STO in receiving plant & check return indicator, process TP with MT 677, material &
accounting document is created stock decreases in receiving plant and increases in supplying plant. The value of
material debited in receiving plant and credited in receiving plant.
 Two step:-Create STO in receiving plant & check return indicator, process TP with MT 671, process GR in
supplying plant w.r.t STO then automatically triggers asMT 161.
 INTER:- ONE STEP 675 AND TWO STEP 673
11. STO process between storage locations belongs to same plants?
 Define shipping points and assign it to supplying plantin enterprise structures configuration.
 Assign shipping points for the combination of shipping conditions, loading group, supplying plant, storage
location in logistics execution configuration.
 In define shipping data for storage locationconfiguration;we have to assign sales organization, distribution
channel, division, and shipping points to plant.
 Define checking rules and assign it to availability check.
 In configuration check issuing storage location active.
 In assign delivery type & checking rules for storage location configuration, for document category F we have
assign delivery type for the combination of document type UB, supplying plant, and issuing storage location.
Note:- When we create PO, enter issuing storage location, system will determine shipping data based on
configuration and rest of the process is same.

12. Important points:-

 SD flow:- create enquiry – quotation – sales order – outbound delivery – PGI – billing – A/c receivable.
 For INTER STO, maintain material master record with sales views and in sales org view 1 maintain delivery
plant and tax details (MWST), if we do not maintain tax details here then it is not possible to create outbound
delivery against STO &in sales org 2 view maintain item category group as NORM. In sales general data
maintain availability check, transportation group & loading group etc.
THIRD PARTY PROCUREMENT
1. Third party procurement with SD module:-
 In this process, buyer receivers order from customer and buyer place order to vendor & mention delivery address
as customer, then vendor directly delivery material to customer & invoices to buyer which in turn buyer bill to
customer.
 If a material always subject to third party procurement, then create material master with material type HAWA
and maintain item category group as BANS in sales org 2 view.If material is produced internally, then create
material master with material type as FERT and maintain item category group as NORM.
 Due to item category BANS, automatically system triggers item category as “TAS”in sales order and creates PR
in background with account assignment category as “1” and item category as “S”.
 Create PO w.r.t PR generated from sales order, then automatically all the data maintained in sales order will be
pulled to PO.
 GR is not possible with account assignment category “1” and possible with account assignment category as “X”.
 For account assignment category “X”, Process GR with MT101, material and accounting documents are created.
Stock quantity will not update in master record and the value of material is Db – GBB VAX (consumption for
third party G/L accounts) & Cr – WRX.
 In PO, If GR based IV indicator is off then invoice is based on PO quantity and if GR based IV indicator is on
then invoice is based on GR quantity. Process MIRO,invoice& accounting documents are crated and Db - WRX
&Cr – KBS.
 Process billing to customer using T code VF01.

RTP (RETURNABLE TRANSPORT PACKAGING)

1. What is RTP and what are the process steps?
 Few ordered material comes to plant along with unordered material as packages. After consumption of ordered
material, the unordered material will be return to vendor and this returning item is called as RTP.
 Material type for RTP is LEIH, in this only quantity update and there is no value update.
 Create PO for main material but do not enter RTP material in it.
 Enter GR w.r.t PO for main material with MT 101 and we can create GR for RTP materialin same screen by
clickingnon ordered item button, then process GR forRTP material with MT 501M. Material document is
common for both main material and RTP material. Accounting document is created for main material but not for
RTP material, because in material type configuration we have maintained only quantity update.
 Once main material is consumed then return RTP material with reversal MT 502M.

OTHERS

1. What is inbound delivery

2. What is outbound delivery