SAP MM

PIPELINE
PROCUREMENT
-GANESH PADALA
www.ganeshsapscm.com
Pipeline Procurement:

A pipeline material is a material that enters the production process directly from a pipeline
(for example, oil), from a pipe (for example, mains water), or via a cable (for example,
electricity), and can be consumed. Pipeline materials are represented by the material type
PIPE. These materials have the following business characteristics:

 They are not obtained or planned. The required quantity can be removed from the
pipeline at any time.
 They are not stored and they are not managed in inventory management. No physical
inventory is performed.
 You can only post withdrawals for this material using account assignment.
 Posting withdrawals creates liabilities to the vendor from whom the pipeline material
is obtained. These liabilities are settled periodically.

Prerequisites:

1. Create Material with Material Type by selecting mainly Basic

Data, Purchasing and Accounting views – PIPE - Mandatory
2. Create Pipeline Info Record with proper price and Tax Code –
Mandatory
3. Maintain Source List – T Code ME01 – Optional
4. Maintain OBYC settings for Transaction Key KON –
Consignment Accounts Payable

 Consignment liabilities (KON)

Consignment liabilities arise in the case of withdrawals from consignment stock or

from a pipeline or when consignment stock is transferred to own stock.
Depending on the settings for the posting rules for the transaction/event key KON, it
is possible to work with or without account modification. If you work with account
modification, the following modifications are available in the standard system:

o None for consignment liabilities

o PIP for pipeline liabilities

5. Maintain Output Condition Records for Output type KONS

with Transaction Code MRM1
Process Steps:

1. Posting Goods Issue for Pipeline Material with Movement Type 201
P – T Code - MIGO
2. Settling Pipeline Liabilities with Transaction Code- MRKO
3. Outgoing Payment to the Vendor – F-53/F110
1. Goods Issue for Pipeline Material - MIGO

Accounting Entries:

Consignment Payable – KON-PIP – Credit

Consumption Account –GBB- VBR - Debit

2. Invoice Settlement – MRKO

Accounting Entries:

Consignment Payable –KON-PIP– Debit

Vendor Account -KBS- Credit
Input Tax - Debit

3. Payment F-53 or any other payment process

Accounting Entries:

Bank Account - Credit

Vendor Account - Debit