SAP MM Work

Shrini Damarla
SAP MM Chicago (2020)
SAP Material Management

Work Book - I
SAP Material Management Work Book - I
TABLE OF CONTENT
1. Enterprise Structure
1.1. Creation of Enterprise Structure…………………………………………………….
1.1.1.Defining the Org Units…………………………………………………….
1.1.1.1. Define Company…………………………………………………….
1.1.1.2. Define Company code…………………………………………………….
1.1.1.3. Maintain Controlling Area…………………………………………………
1.1.1.4. Define valuation level…………………………………………………….
1.1.1.5. Define Plant…………………………………………………….
1.1.1.6. Maintain storage location…………………………………………………
1.1.1.7. Maintain purchasing organization…………………………………………
1.1.2.Assigning Org. Units…………………………………………………….
1.1.2.1. Assign company code to company………………………………………
1.1.2.2. Assign company code to controlling area…………………………………
1.1.2.3. Assign plant to company code…………………………………………
1.1.2.4. Assign purchasing organization to company code …………………
1.1.2.5. Assign purchasing organization to plant……………………………
1.1.2.6. How to view your enterprise structure? …………………………………
2. Material Master Record…………………………………………………….
2.1. IMG settings: Material Master Record…………………………………………………….
2.1.1.Define Output Format of Material Numbers………………………………………
2.1.2.Maintain Company Codes for Materials Management……………………………
2.1.3.Define Attributes of Material Types……………………………………………
2.1.4.Define Number Ranges for Each Material Type…………………………………
2.1.4.1. Assign Mat type to Number Range group…………………………………
2.1.5.Define Material Groups……………………………………………………
2.1.6.Create Purchasing Groups…………………………………………………….
2.2. Tcodes for creation Material Master Record……………………………………………
2.3. How to create a Material Master Record ……………………
2.4. How to Change/Edit the material master record? ...................................................
2.5. How to copy the Material Master Record from Plant to Plant Problem observed……
2.6. How to copy the Material Master Record including material No from one plant to other plant?
3. Vendor Master…………………………………………………….
3.1. Vendor…………………………………………………….
3.2. Types Vendors…………………………………………………….
3.3. Vendor Master Record…………………………………………………….
3.4. IMG settings: Vendor Master…………………………………………………….
3.4.1.Define Vendor A/c Group…………………………………………………….
3.4.2.Create Number Ranges for Vendor Accounts…………………………………
3.4.3.Assign Number Ranges to Vendor Account Groups……………………………
3.4.4.Tcodes for creation Vendor master Record……………………………………
3.4.5.Creation of Vendor Master Record
4. Purchase Requisition…………………………………………………….
4.1. Tcodes for creation Purchasing Requisition……………………………………………
4.2. IMG settings: Purchase Requisition (PR) ………………………………………………
4.2.1.Define Number Ranges…………………………………………………….
4.2.2.Define Document Types…………………………………………………….
4.3. Creation of PR
Shrini Damarla - Chicago Page 1

5. Request for Quotation……………………………………………………

5.1. When RFQ required? …………………………………………………….
5.2. IMG settings: RFQs…………………………………………………….
5.2.1.Define Number Ranges…………………………………………………….
5.2.2.Define Document Types…………………………………………………….
5.3. Tcodes for creation Purchasing Requisition……………………………………………
5.4. Creation of RFQ – Manually……………………………………………………
6. Quotation…………………………………………………….
6.1. Quotation maintenance…………………………………………………….
6.2. IMG settings: quotation maintenance…………………………………………………….
6.3. Tcodes for Quotation Maintenance…………………………………………………….
6.4. How to maintain a Quotation in SAP? …………………………………………………….
6.5. How to compare the price of quotations? ………………………………………………
7. Purchasing Info Record (PIR) ………………………………………………………………
7.1. Example for PIR ………………………………………………………………
7.2. IMG settings: PIR ………………………………………………………………
7.2.1.Define Number Ranges ………………………………………………………………
7.3. Tcodes for PIR ………………………………………………………………
7.4. Creation of PIR ………………………………………………………………
8. Purchase order…………………………………………………………
8.1. IMG settings: Purchase order……………………………….
8.1.1.Define Number Ranges ……………………………………………………
8.1.2.Define Document Types …………………………………………………………
8.1.3.Set tolerance limits for price variance ……………………………….
8.2. Tcodes for Purchase Order ………………………………………………………………
8.3. Creation PO – Manually………………………………………………………………………….
9. Source List ………………………………………………………………
9.1. Why source List? ………………………………………………………………
9.2. How to set Source List @ Material Level (For one material) …………………………………
9.3. How to set Source List @ Plant Level (For all materials in Plant) …………………
9.4. Tcodes for Source List ………………………………………………………………
9.5. Creation of Source list - manually ………………………………………………………………
9.6. Creation of Source list - w.r.t PIR ………………………………………………………………
10. Out Line Agreements ………………………………………………………………
10.1. What is an Agreement? ………………………………………………………………
10.2. Why Agreement is needed? ………………………………………………………………
10.3. Is this agreement can be entered for all materials? ……………………………………
10.4. Types of Outline Agreements ………………………………………………………………
10.4.1. Contracts ………………………………………………………………
10.4.1.1. Types of contracts ………………………………………………………………
10.4.1.1.1. Qty. Contract ………………………………………………………………
10.4.1.1.2. Value contract ………………………………………………………………
10.4.1.2. IMG settings: Contracts ……………………………………………………………
10.4.1.2.1. Define Number Ranges ……………………………………………
10.4.1.2.2. Define Document Types ………………………………………
10.4.1.3. Tcodes for Contracts ………………………………………………………………
10.4.1.4. Creation of Qty. Contract ……………………………………………
10.4.1.5. Creation of Value Contract……………………………………………
10.4.2. Scheduling agreement ………………………………………………………………
10.4.2.1. Similarities of Contracts and Scheduling agreements … ……………………
10.4.2.2. Differences of contracts and Scheduling agreements ………………………

10.4.2.3. IMG settings: Scheduling Agreement …………………………………………

10.4.2.3.1. Define Number Ranges …………………………………………………
10.4.2.3.2. Define Document Types ………………………………………………
10.4.2.4. Creation of Scheduling Agreement ………………………………………………
10.4.2.5. How to maintain / enter delivery Schedules in Scheduling Agreement………
10.5. Creation of PO w.r.t Qty. Contract ………………………………………………………
10.6. Creation of a PO w.r.t Value contract ……………………………………………………
10.7. Automatic creation of PO w.r.t. PR …………………………………………………………

1. Enterprise Structure
Creation of Enterprise Structure
There are two steps to do this
A. Defining the Org Units

B. Assigning Org. Units
A. Defining the Org Units
1. Define Company (OX15)
SPRO → IMG → Enterprise Structure → Definition → Financial Accounting → Define

Company
Steps:
• Sys display list of companies in a Table

• Click 'New entries' button on application tool bar or F5
• Sys display an empty Format/Template
• enter the following Info
Company GM
Company name GM Group Companies
Street 10, Janapath.
Postal code 100001
City New Delhi
Country IN
Language Key EN
Currency INR
• Click save button on application tool bar
• Sys display/prompt a customizing request window
o Click 'create request' button (an empty paper symbol) or F8
o Enter Short description = GM Project
o Press enter
o Sys chooses your project
o Press enter
• Sys save the data of your company details in Data base layer
2. Define Company code (OX02)
SPRO →IMG→ Enterprise Structure → Definition → Financial Accounting → Edit, Copy,

Delete, Check Company Code
Steps:
• Click 'Copy, delete, check company code'

• Sys display an empty screen
• Click 'copy org object' button on application tool bar or F6
• enter
o From Company Code 1000
o To Company Code GMOT
• Press enter

• sys display a message as

'Do you want to copy the G/L account company code data?'
• Click 'Yes' button
• Sys display another message as
'Do you want to allocate a different local currency.to target company code?'
• Click 'Yes' button
• enter
Currency = INR
• press enter many times until you get the following message
o 'Company Code 1000 copied to GMOT'
• Click 'Back' button on application tool bar or F3
• Click 'Edit Company Code Data'
• Sys display list of Co_cds in a table
• click 'position' button
Enter Company Code = GMOT
• Select GMOT
• click 'Details' button on application tool bar
• Edit the following data
Company Name GM Motors Limited
Country IN
Language en
• Click 'address' button on application tool bar
• Edit the address fields
• Press enter
• Click save
3. Maintain Controlling Area (OX06)
SPRO →IMG →Enterprise Structure → Definition → Controlling → Maintain Controlling Area
Steps:
• Click 'Maintain Controlling Area'

• Sys display list of Co_ars
• Click New entries button on application tool bar or F5
• Sys display a empty Format/Template
• Click 'Co_ar = Co_cd' button
• Enter Company Code = GMOT
• Press enter
• Sys fill the relevant data from our co_cd to Co_ar format
• Edit the name as ' GM Motors Controlling area'
• Click save

4. Define valuation level (OX14)
SPRO →IMG → Enterprise Structure → Definition → Logistics - General → Define valuation

level
Steps:
• We cannot do anything here.

• SAP set the valuation area = Plant
5. Define Plant (OX10)
SPRO →IMG →Enterprise Structure → Definition → Logistics - General → Define, copy,

delete, check plant
Steps:
• Click 'Define Plant'

• sys display list of Plants in a table
• Click New entries button or F5
• Sys display an empty format/template
• Enter
o Plant GPL1
o Name 1 GM Plant 1
o Name 2 (Manufacturing Unit)
o Factory calendar 01 - Factory calendar Germany standard
• Press enter
• Click save
• sys display a address template of Plant
• Fill the relevant data of Plant address
• Press enter
• Repeat the above step for 2nd plant
o By copying existing plant
Or
o By clicking New entries
• Click save
6. Maintain storage location (OX09)
SPRO →IMG → Enterprise Structure → Definition → Materials Management → Maintain

storage location
• Enter Plant = GPL1

• Press enter
• Click 'New Entries' on appl. tool bar or F5
Str. Loc. Description
S11 Str. Loc. 11
S12 Str. Loc. 12
• Press enter
• Click save
• Repeat the above step for Plant 2

• Press enter
• Click 'New Entries' on appl. tool bar or F5
Str. Loc. Description
S21 Str. Loc. 21
S22 Str. Loc. 22
• Press enter
• Click save
7. Maintain purchasing organization (OX08)
SPRO →IMG → Enterprise Structure → Logistics - General → Materials Management →

Maintain purchasing organization (OX08)
Steps:
• sys display list of Purchase orgs in a table
• Click 'New entries' or F5
Purchase Org Description
GPO GM Purchasing Org
• Click save
B. Assigning Org. Units
1. Assign company code to company (OX16)
SPRO →IMG → Enterprise Structure → Assignment → Financial Accounting → Assign

Company code to company
Steps:
• Sys Display list of Co_cd and Company entries in a table
• Click Position
• Enter Company Code = GMOT
Co_cd Company
GMOT GM
• Click save
2. Assign company code to controlling area (OX19)
SPRO → IMG → Enterprise Structure → Assignment → Controlling → Assign company code

to controlling area
Steps:
• sys display list of Co_ars
• Click Position
• Enter Co_ar = GMOT
• Select Co_ar GMOT
• Click left side folder 'Assignment of company code(s)'
• Sys display empty co_cd table
• Click New entries
Co_cd Description
GMOT GM Motors Limited
• Click save

3. Assign plant to company code (OX18)
SPRO → IMG → Enterprise Structure → Assignment → Logistics - General → Assign plant to

company code
• Sys display co_cd and plant entries in a table

• Click new entries button
Co_cd Plant
GMOT GPL1
GMOT GPL2
• Click save
4. Assign purchasing organization to company code (OX01)
SPRO → IMG → Enterprise Structure → Assignment → Materials Management → Assign purchasing

organization to company code
• Sys display list of Purchasing org and co_cd entries

• Click Position
• Enter Purchasing Org = GPO
Purchasing Org Co_cd
GPO GMOT
• Click save
5. Assign purchasing organization to plant (OX17)
SPRO → IMG → Enterprise Structure → Assignment → Materials Management → Assign purchasing

organization to plant
• Sys display list of Purchasing Org and Plant entries

• Click New entries
Purchasing org Plant
GPO GPL1
GPO GPL2
• Click save
How to view your enterprise structure?
SPRO → IMG → Enterprise Structure → Definition → Financial Accounting → Edit, Copy, Delete,
Check Company Code
• Click 'Copy, delete, check company code'

• Sys display an empty screen or
• Use Tcode = EC01
• Click 'Org structure' button on application tool bar
• Click 'Navigation' button on application tool bar
o Press enter
o Sys display list of Co_cds
o Click 'Find' button on constant tool bar
o Enter GMOT
o Press enter
o Sys display your GMOT in a separate window
o Double Click GMOT


2. Material Master Record

What is a Material?
• It is the smallest unit in a industry which uses to make a product

• It is a tiny part of the product
• It cannot be further divided
o Ex. for materials are
▪ Tire, tube and rim
▪ Nut, Washer, Pin, Nail
▪ Screw driver, wrench
▪ Power drill gun
▪ Plastic Items
▪ Machinery
What is material master record?
• It is a record consists of completer information of

a specific material
• It may consists of
o Material Name
o Base Unit of Measure
o Alternate unit of measure
o Material Number
o Material type
o Material Group
o Gross Weight
o Net weight
o Purchase group
o Price Control indicator
o Valuation class
o Price of the material
• It is a data sheet for material
IMG settings: Material Master Record
1. Define Output Format of Material Numbers (OMSL)
SPRO →IMG → Logistics - General → Material Master → Basic Settings → Define Output Format of
Material Numbers
Steps:
• There is a provision for Mat No length

• Length can be changed (18 digits length is default)
• Template can be designed (special chars can be added like / - )
• Leading zeros can be set
• During Printing time
• During creation and saving in data base time
[Note: No need to do any setting during LAB Practice]

2. Maintain Company Codes for Materials Management (OMSY)
SPRO → IMG → Logistics - General → Material Master → Basic Settings → Maintain Company
Codes for Materials Management
Steps:
• Sys display list of Co_cds along with their starting year and period entries
• Click Position
• enter Company code = GMOT
• sys display your co_cd GMOT with the following year and period
Co_cd Year Period
GMOT 2006 12
• Change it to Current year and month
GMOT 2013 08
• Press enter
• Click save
3. Define Attributes of Material Types (OMS2)
SPRO → IMG → Logistics - General → Material Master → Basic Settings → Material Types → Define
Attributes of Material Types
[What is Mat. type?

• Material categorized based on its attributes (purpose) can be called Mat type
• In your company, there may be many materials will be used to make a final products (ex:
tyre, tube, rim, nut, washer etc. to make a CAR)
• There may be the materials like wrench, screw driver, Jokey, machinery are also used for
making your CAR
• All the above materials are classified/categorized as material types in SAP
• In SAP the following 37material types are available
1. ABF - Waste 11. FRIP - Perishable

2. COMP - Produ. Alloc Purchases 12. HALB - Semi-finished prod.
3. CONT - Kanban Container 13. HAWA - Trading goods.
4. COUP - Coupons 14. HERS - Manufacturing Parts.
5. DIEN - Services 15. HIBE - Operating supplies
6. ERSA - Spare parts 16. IBAU - Maintenance Assy.
7. FERT - Finished Product 17. INTR - Intra material.
8. FGTR - Drinks 18. KMAT - Configurable Mat.
9. FHMI - Produ. Resource/ tools 19. KWFO - Own material.
10. FOOD - Food (excl: perishable) 20. LEER - Empties.
21. LEIH - Returnable-Packaging 31. UNBW - Non Valuated material
22. LGUT - empties (retail) 32. VERP - Packing material
23. MODE - Apperal (seasonal) 33. VKHM - Additionals
24. NLAG - Non Stock material 34. VOLL - Full product
25. NOFI - Non-Foods 35. WERB - Product Catalog
26. PIPE - Pipeline material 36. WERT - Value Only material
27. PLAN - Trading goods (planned) 37. WETT - Competitive product.
28. PROC - Process material
29. PROD - Product Group
30 ROH - Raw material

• We are categorizing our materials in to different Mat types as under:
ROH Tyres, tubes, rims, washers, nuts

HALB Engine, Wheel
HAWA First Aid kit, Jockey, Fire Extinguisher
PIPE Water
ERSA Wrench, screw driver
• In this step instead of using SAP std. mat type we use our own mat type to assign our
number range
• we create our own mat. type by copying the existing SAP std. mat types
Steps:
• Sys display a list of Mat types in a table

• Click Position button
• Enter Mat type = ROH
• Select ROH
• Click copy as button on application tool bar or F6
o Enter Mat type = GROH - GM Raw Mat
• Press enter
• sys will copy the ROH as GROH
• Select GROH - GM Raw Mat
• Click left side folder 'Quantity/value updating'
• Click 'Position' button
o Enter Valuation Area = GPL1
• Press enter
Val area Mat type Qty. value
GPL1 GROH
GPL2 GROH
• Press enter
• Click save
4. Define Number Ranges for Each Material Type (MMNR)
SPRO → IMG → Logistics - General → Material Master → Basic Settings → Material Types → Define
Number Ranges for Each Material Type
-------------------------------------------- Steps for the ECC 6.0 EHP 6 ---------------------------------------------------
• Click 'Pencil' marked Groups button on application tool bar

• In Second screen
• Click ‘Create’ button or

On Menu bar → Group → Create or F9
• Sys display a template for group
• Enter
GRP TEXT as: 'GM Raw Mat NR group'
To find out the leftover number

- On Menu bar→Interval→existing
- Sys display from no, To no columns
- Put the cursor on ‘from no’ column

- Click ‘Sort ascending’ button

- Find out the last no used in ‘to no’ column
- Find out the next number from it
- Now enter that next number in From column of your group
- Enter ‘to number’ as per your blue print as under:
From To Current No Ext
xxxx xxxx 0
• Press enter
• Sys will create a Group with a Name 'GM Raw Mat NR group'
-------------------------------------------- Steps for the ECC 6.0 EHP 7 ---------------------------------------------------


• Enter
GRP TEXT as: 'GM Raw Mat NR group'
To find out Free number intervals

On Menu bar→Interval→ Free intervals
Sys display Free interval no range window
Select One Free No Range Slot
Press enter button
System insert select line
xxxx xxxx 0
Edit the ‘To no column’ number as per requirement

• Press enter
Assign your Mat type (GROH) to your Group (GM Raw Mat NR group)
1. Put the cursor on GROH

2. Click 'Element/Group' button on application tool bar or F5
3. Sys will display Group window
4. Put cursor on your number range group number
5. Press enter and go down
6. Sys display your number range group assigned to your Material Type
7. Click save
8. Go back to the number range initial screen
9. on Menu Bar → Ranges → Transport
5. Define Material Groups (OMSF)
SPRO → IMG → Logistics - General → Material Master →Settings for Key Fields → Define Material
Groups
[What is a Material Group: Materials categorized based on its characteristics (Properties) of the
material can be called as Mat. Group Ex: Rubber group, Metal group, Plastic group]
Steps:

• Sys display list of mat groups in a table

• Click 'New entries' button
Mat Group Description
G_RUBBER GM Rubber Group
G_METAL GM Metal Group
G_PLASTIC GM Plastic Group
G_GLASS GM Glass Group
G_LIQUIDS GM Liquids Group
G_WOOD GM Wood Group
• Click save
6. Create Purchasing Groups (OME4)
SPRO → IMG → Materials Management → Purchasing → Create Purchasing Groups
[What is a Purchasing group: An individual or a group of people working in/belongs to a Purchasing

org. can be called as Purchasing group or BUYER]
Steps:
• sys display list of Purchasing groups in a table
• Click 'New entries'
Purchase Group Description Tel No Fax No
GPG GM Pur. Grp. 98509858 45870985
• Click save
Tcodes for Material Master Record
Tcodes for Creation Change Display List of Materials

Material
Master MM01 MM02 MM03 MM60
Record
How to create a Material Master Record?
Tcode MM01
Path SAP Easy Access → Logistics→ Materials Management → Material Master → Material →
Create (General)→ MM01 - Immediately
Steps:
• Use Tcode = MM01

• In initial screen
Material Empty
Industry sector Mechanical Engineering
Material Type GROH - GM Raw Material
• Click 'Select Views' button on application tool bar or F5
o Sys. display list of Views
o Click 'deselect all' button
o Select Basic data1, Purchasing and Accounting Views
• Click 'Org. Levels' button or F6 button
o Enter Plant = GPL1

• In Basic data 1 view - Enter

o Mat Description : TYRE
o Base Unit of Measure EA
o Material Group G_RUBBER
o Press enter
• In Purchasing view
o Purchasing Group GPG
o Press enter
• In A/cing1 view
o Valuation Class 3000
o Price control V
[SAP is having Two price Control indicators
S - Standard Price
V - Moving Average Price (MAP)]
o Moving price 1000 (approx.)
o Press enter
• Click Yes to save
• sys will create a material master record
How to Change/Edit the Material Master Record?
Ex: Change the description 'Washer' as '3 inch Washer' of a material 300003106

• Enter Material = 300003106 (Which you wish to edit)
• Click 'Select Views'
• Click 'deselect all' button
• Select 'Basic data 1'
• Press enter
• In Basic data 1 view, Edit
Mat description as: '3 inch Washer'
• Click save
How to copy the material master record from Plant GPL1 to Plant GPL2

o Material Empty
o Material Type GROH - GM Raw Material
• Copy from
o Material xxxx (which you wish to copy)
• Click 'Select Views' button on application tool bar or F5
• Sys. display list of Views
• Click 'deselect all' button
• Select Basic data1, Purchasing and Accounting Views
• Click 'Org. Levels' button or F6 button
• Press enter

NOTE: sys assigns a different number and copies the relevant data from the existing material
master, which is not acceptable. We need the material master record has to be copied along with the
material number also
Then how to copy the material master record including material number from one plant to
other plant?

Material 300003102 (Which you wish to copy)
Material Type GROH - GM Raw Material
• Click 'Select Views' button on application tool bar
• Click 'Deselect all'
• Select Basic, Purchasing, accounting views
• Click 'Org Level' button
o Enter Plant = GPL2
• Sys will take us to Purchasing view
• In Purchasing view
• Enter Purchasing Group = GPG (you can enter any of your purchasing group name
(BUYER Names) then Press enter
• In accounting view
o Valuation Class 3000
• Moving price 1000 then Press enter
• Sys will create a material master record with same data and same no to plant to also

3. Vendor Master
Vendor:
A Person or a company who supplies the material to our company can be called a Vendor or supplier
• In general vendors will supply the material on credit basis

• Since they are supplying on credit basis they may be called as 'Creditors'
Types Vendors:
• Regular Vendors: Who supplies the material on regular basis.

• Fixed Vendors: For certain materials (high volume and low value items)
• One-time vendor: Some vendors supplies the material only once to the company
• Note: SAP will give least priority for the one time vendor during the 'Vendor Evaluation' time
Vendor Master Record
• Complete information regarding the vendor can be called

Vendor Master Record
• Vendor Master Record consists of
o Vendor’s Name and address information
o Vendor’s Tax Information
o Vendor’s Bank Information
o Vendor’s Accounting Information
o Vendor’s A/c correspondence information
o Vendor’s Pay terms Information
o Vendor’s Purchasing Information
▪ Order currency
▪ Sales Persons Name
▪ Telephone number
▪ Check box - GR based inv. Verification
o Vendor’s Partner function information
IMG settings: Vendor Master
1. Define Vendor A/c Group (OBD3)
[Vendor A/c group is the control parameter for Vendor master for number range and it is also
having screen lay out control]
Path: SPRO→IMG→Financial Accounting →Accounts Receivable and Accounts Payable

→Vendor Accounts →Master Data →Preparations for Creating Vendor Master Data →Define
Account Groups with Screen Layout (Vendors)
Steps:
• System displays the list of vendor A/c groups
• Click New Entries
o Account group VVGI
o Name Volvo Vendor A/c Group
• Click save

2. Create Number Ranges for Vendor Accounts (XKN1)
SPRO→IMG→Financial Accounting →Accounts Receivable and Accounts Payable →Vendor

Accounts →Master Data →Preparations for Creating Vendor Master Data →Create Number
Ranges for Vendor Accounts
In this step we will create number range
Steps:
• Click ‘Overview’ button on application tool bar

• Sys display number range table
• Put the cursor on From number column
• Click sort ascending order button
• Find out the last number in ‘to number column’
• Find out the next number for this
• Click back button or X button
• Come back to initial screen of number range
• Click Pencil marked interval button
• Click + interval button
• Enter
Group No From No To No
VI xxxxx xxxx
• Click save
3. 3. Assign Number Ranges to Vendor Account Groups (OBAS)
SPRO→IMG→>Financial Accounting →Accounts Receivable and Accounts Payable→Vendor

Accounts →Master Data →Preparations for Creating Vendor Master Data →Assign Number
Ranges to Vendor Account Groups
Steps:
• Click position and enter the vendor a/c and assign to the respective no.r range group
Vendor A/c group Group No range
VVGI VI
• click save
Tcodes for Vendor Master Record
Tcodes for Creation Change Display List of Vendors

Vendor Master Record XK01 XK02 XK03 MKVZ

Creation of Vendor Master Record
Tcode XK01
Path SAP Easy Access → Logistics→ Materials Management → Purchasing → Master
Data → Vendor → Central → XK01 - Create
Steps:
• Use Tcode = XK01
• In Initial screen
o Vendor Empty
o Company Code VMOT
o Purchasing Organization VPO
o Account group VVAG
• Press enter
• In address Info Screen
o Enter title, Name of the company and address
• Press enter
• In Control/tax info screen
o Skip this screen by pressing enter button
• In Payment transaction/Bank info screen
• In A/c info screen
o Recon. account 160000
o Cash management group A1
▪ [Reconciliation Account: It is a parallel a/c to the G/L A/c]
• press enter
• In Payment transaction Accounting screen
• In correspondence screen
• In Purchasing data screen
o Order currency INR
o Terms of payment 0002
o Check the check boxes of
▪ GR based Inv. verification
▪ Acknowledgement Required
• Press enter
• In Partner functions screen
• Click Yes to save this data
• system will create a vendor master record by allocating a number as per the number
range assigned to our vendor a/c group

4. Purchase Requisition
Purchase Requisition (PR):
• It is a request to procure certain quantity of material at

Certain point of time/date.
• It is an Internal Doc and not used at outside of the Enterprise.
• Purchase Requisitions can be created
o Manually – fill the data manually
o By MRP -- If you set up a MRP procedure
for a material master the system automatically
generates a PR.
• Transactional data
• It will be initiated by the other departments with a
Request to arrange materials on a specific schedule
Dates to a specified delivery place
• It can also be called in business terminology
o Indent, Indent Form
o Requisition slip
o Intra office Note/Memo (ION/IOM)
• Purchase Requisition does not have Header and Schedule lines.
• There is no vendor detail to be filled-in in PR. (In source of
Supply tab of Item details during automatic PO scenario vendor no. and PIR details will be filled)
• In PR you can indent more than one Item or more than one plant
• It does not influence the financial updating.
• When the system creates a purchase requisition automatically, a user program (MRP or order
management) determines the material, PO quantity and delivery date. If required the Purchase
Requisition is automatically assigned to an account.
• Purchasing converts the PR in to a Request for Quotation, Purchase Order or Out-line Agreement.
• The tables related to PR are: EBAN (PR), EBKN (PR a/c assignment)
• Some of the fields in these tables are:
EBAN EBKN
BANFN – PR Number BANFN – PR Number
BNFPO – Item number of PR BNFPO – Item number of PR
BSART – PR doc type ZEBKN – Prog. A/c assignment.
EKORG – Purchase Organization
MENG -- PR Quantity
MATNR -- Material Number
WERKS – Plant

IMG settings: Purchase Requisition (PR)
1. Define Number Ranges (OMH7)
SPRO→IMG→Materials Management →Purchasing→Purchase Requisition→Define Number

Ranges
In This step create no ranges
Steps:

o Click + interval button on application tool bar
o Enter group number and range
o Grp No From No To No Current No Ext
o V1 20000900 20000999 0
o Click save and transport it manually
2. Define Document Types (OMEB)
SPRO→IMG→Materials Management →Purchasing →Purchase Requisition→Define Document

Types
• SAP Doc types for PR are
▪ EC Purchase Requisition (for SRM applications)
▪ FO Framework requisition (for service material)
▪ IN Purchase requisition. I-Commerce (for Internet Commerce)
▪ NB Purchase requisition. Stand.
▪ RV Outline agreement requisition.
• Here SAP std. Doc type for PR is = NB
• Select NB and Click copy as
o VNB - Volvo PR
• Then assign No ranges (V1,VX) to the VNB - Doc type and Click save
Tcodes for Purchase Requisition
Tcodes for Creation Change Display List of Vendors

Purchase ME51N ME52N ME53N ME5A

Creation of PR
Tcode ME51N
Path SAP Easy access →Logistics → Materials Management→ Purchasing → Purchase
Requisition → ME51N - Create
Steps:
• Use Tcode = ME51N
• Select Doc type = VNB – Volvo PR
• In Header data
▪ Enter some text (not mandatory)
• In Item over view screen
▪ Mat No, Qty., Del date and Plant , Str. Loc. (optional)
• System displays the relevant information of the items by pulling from its master data
• You can enter as many line items you want
• Click ‘Check’ button on application tool bar
• System validates all the entries made by you and displays
• 'No messages issued during check' - message
• Now click save

5. Request For Quotation (RFQ)

Request for Quotation (RFQ)
Source of Supply
PO
Vendor A
PR
RFQ Vendor B Quotations
Manual
Vendor C
Rejection
letter
Material & vendor
Master data
• It is an outgoing document from company on our letter head

• It is a simple invitation to various vendors with a request to offer their quotation for our
requirement.
• It is not a legal document
• RFQ consists of
o Quotation dead line date for submission
o RFQs does not have ‘N’ joy transaction
When RFQ required?
• When you identify a New Vendor

• When first time you go for project
• When a gap between procurement is very long
• Upon expiry of contract
• For New Material / Services
• You cannot enter an account assignment in RFQ, only item category will be maintained.
RFQ Consists of:
• Header - General information on RFQ like Vendor’s address

• Item - Total Quantities and Delivery dates for Materials
• Schedule lines - An Item of Quotation may contain a deliver schedule with no of
Schedule lines in which total quantity is broken down in to smaller quantities
to be delivered on a specific dates over certain period.

IMG settings: RFQs
SPRO→IMG→Materials Management→Purchasing→RFQ/Quotation→Define Number

Ranges
Steps:

• Click + marked interval button
• Enter
o Group No From. To
o VQ xxx xxx.
• Click save
2. Define Document Types (OMEA)
SPRO→IMG→Materials Management →Purchasing→RFQ/Quotation→Define Document

Types
SAP Documents type for RFQs are:

AN - Std. RFQ
AB - Request for GP bid (Global Procurement)
Steps:
• SAP standard Doc type for RFQ is = AN

• Select AN and click copy as
o VAN - Volvo RFQ
• Then assign your number range group (VQ) to VAN doc type
• Click save
Tcodes for Request For Quotation
Tcodes for Creation Change Display List of RFQs

RFQ ME41 ME42 ME43 ME4L By Vendor Wise
ME4M By Mat. Wise

Creation of RFQ - Manually
Tcode ME41
Path SAP Easy access →Logistics → Materials Management→ Purchasing → RFQ/Quotation →
Request for Quotation → ME41 - Create
Steps:
• Use Tcode = ME41

o RFQ Type VAN
o Language Key EN
o RFQ Date 20.04.2013
o Quotation Deadline 22.04.2013
o RFQ Empty
o Purchase. Organization VPO
o Purchasing Group VPG
• Press enter
• In header data
o Coll. No. = VINV1
• In Item Over view
• Press enter ( as per PR)
o Enter
▪ Mat No,
▪ Qty.
▪ Del date
▪ Plant
▪ Str. loc.
• Press enter
o System will fill the relevant columns from master data
• Click Vendor address button or F7
o Enter vendor No: xxxxxx.
o press enter
o System will fill the vendor details
• Click save
• System create a RFQ by assigning a number
• enter another vendor number create one more RFQ
• Repeat the same for other vendors
• Press exit button on 'Tool bar' to exit from this program

6. Quotation
Quotation
• It is a response from the Vendor

• It is a commitment from the vendor
• In general Vendor will send the quotations through
o courier or post a hard copy
o fax machine a fax copy
o e-mail a scanned copy/ soft copy
Quotation maintenance
• Entering of the Vendor offer in SAP can be called Quotation maintenance
• All vendors prices will be compared

• Later one vendor by one vendor negotiation s will be started
• In case vendors agreed to change the price during the negotiation then Purchase org
• Will take the revised Quotation
• Revised prices will be again entered in SAP
• Again Price comparison will be done

IMG settings: - No IMG settings –
Tcodes for Quotation Maintenance
Tcodes Maintain
Display Price comparison
For Creation Change
Quotation ME47 ME47 ME48 ME49
Maintenance
How to maintain a Quotation in SAP?

Steps:
▪ RFQ NO = XXX
• Press enter
• System will display the line items of RFQ in Quotation
• Enter the Price = XXX.XX
• Press enter
• Click save
• Repeat the same for various vendor offers for our RFQs
How to compare the price of quotations?

Steps:
• In First screen
o Purchasing Organization VPO
o Quotation (you can enter RFQ nos)
or
o Collective RFQ Vinv1(Tracking No)
• Press execute button
• System will compare all the pricing elements offered by various vendors and rank them
with ascending order(lowest to highest)
• It is the time to start negotiation with each vendor for better Price

7. Purchasing Info Record (PIR)

• It is a master data
• It is a relation between a specific material supplying to a specific plant by a specific vendor
along with his Price, terms and conditions
• PIR is a One - to - One relation
• Once you maintain PIR, system will suggest the Price, when you create a PO
• Through PIR you can
o Maintain scales on different condition types
o Pricing conditions for different validity periods
o Free goods maintenance
• Example for PIR
IMG settings: PIR
1. Define Number Ranges (OMEO)
Path: SPRO →IMG →Materials Management → Purchasing → Purchasing Info Record → Define
Number Ranges
Steps:


• Enter
GRP TEXT as: 'GM PIR NR group'
To find out the leftover number

- On Menu bar→Interval→existing
- Sys display from no, To no columns
- Put the cursor on ‘from no’ column
- Click ‘Sort ascending’ button

- Find out the last no used in ‘to no’ column

- Find out the next number from it
- Now enter that next number in From column of your group
- Enter ‘to number’ as per your blue print as under:
xxxx xxxx 0
• Press enter
Assign your SAP Std. Doc type IL to your number range group
1. Put the cursor on IL

2. Click 'Element/Group' button on application tool bar or F5
3. Sys will display Group window
4. Put cursor on your number range group number
5. Press enter and go down
6. Sys display your number range group assigned to your Material Type
7. Click save
8. Go back to the number range initial screen
9. on Menu Bar → Ranges → Transport
Tcodes for Purchasing Info Record
Tcodes Creation Change Display List of PIR

for ME11 ME12 ME13 ME1L – By Vendor wise
PIR ME1M – By Mat. wise
PIR can be created
• Manually or W.r.t. Quotation.
Creation of PIR – manually

o Vendor 400900
o Material 300000800
o Purchasing Org. VPO
o Plant VPL1
o Info Record Empty Press enter
• In General Data Screen
• Press enter to skip this screen
• In Purchasing data 1 screen
o Pl. Deliv. Time 3 Days
o Standard Qty. 100
o Minimum Qty. 25
o Net Price 1.063,00 Press enter
• In Purchasing data 2 screen
o Press enter to skip this screen
• In Text Overview screen
o Press enter to skip this screen
• Click Yes to save the PIR
• System will create a PIR by assigning a No from its Number range

Creation of PIR - w.r.t, Quotation.
Pre-requisite
• You should have a Quotation
• Find out the Quotation / RFQ No XXX
Steps:
o Enter RFQ = 1605
▪ press enter
▪ system displays the line items
o Choose a line item for which, the price offered by the vendor is agreed by our
company
▪ click Item details or F2
▪ System will display the Item details screen
▪ Enter Info update as = A (with or without plant) Click save
Note: A PIR with the above vendor, Mat and Plant combination will be created

8. Purchase order
• It is legal document
• It is an outgoing document
• It will be printed on the company’s letter head and signed by concerned authority
• It is a commitment from company
• It can also be called an ultimate document because of its features
o Last minute changes of Price, quantities and delivery dates can be possible
o Scales can be maintained
o Free goods can be maintained
IMG settings: Purchase order
SPRO →IMG→Materials Management →Purchasing →Purchase Order→Define Number Ranges
Steps:

• Enter
o Group No From. To
o VP xxx xxx.
• Click save
2. Define Document Types (OMEC)
SPRO →IMG→Materials Management →Purchasing →Purchase Order→Define Document Types
• SAP doc type for PO are:

o FO - Framework Orders (for Service Material)
o EC - Electronic Commerce (For SRM application)
o IC - Internet Communication
o NB - Standard PO
o UB - Stock Transport Order
Steps:
• SAP standard Doc type for Po is = NB
• Select NB and copy as
o VNB - Volvo PO
• Then assign Number range group name (VP) to Doc type VNB

3. Set tolerance limits for price variance
SPRO →IMG→Materials Management →Purchasing →Purchase Order→Set tolerance limits for price
variance
[Tolerance Limits: Acceptable, allowable, permissible limits can be called as tolerance limits]
SAP defines the following two types of tolerance limits for every company code
• PE – Price variance (purchasing)
• SE – Max. Cash discount variance
Steps:
• System displays tolerance limits PE and SE for all company codes in a table
• Click position
• Enter your co_cd = VMOT
• Press enter
• In case if your company code (VMOT) have the PE and SE keys
o Select PE and click details
▪ You can set tolerance limits as Percentage or Absolute value
▪ Now define upper and lower limits as per your business process
o You can set for SE also
• In case if your Company code (VMOT) does not have the PE and SE keys
o You cannot create a PO
o So copy any standard co_cd PE and SE keys as your Company code
• Click save
Tcodes for Purchase order
Tcodes Creation Change Display List of POs

For ME21N ME22N ME23N ME2L – By vendor wise
Purchase Order ME2M- By Mat. wise
o Purchase Order can be created

▪ Manually
▪ W.r.t Value Contracts
▪ W.r.t Qty. Contracts
▪ Automatic creation of Purchase Order w.r.t PRs
Creation of PO – Manually
• Use Tcode = ME21N (N Joy transaction)

• Select Doc type = VNB - Volvo PO
• In Header data - Org data - TAB
o Purchase Org. VPO Volvo Purchase Org
o Purchase. Group VPG Volvo Purchase Group
o Company Code VMOT Volvo Motors Limited
▪ Enter Vendor No xxxxx
o Press enter
• In Item Over view
o Mat No XXXX

o Qty. XX
o Delivery date XXX
o Plant XXX
o Str. Loc. XXX (optional)
• Press enter
• System fill the other columns by relevant information from Master data files
• In case If you are having PIR,
o System pull the PIR price in to the PO
• In case if we don't have PIR,
o System suggests you to enter the Price.
• On application tool bar Click Check button
• system will validate all the entries
• click save
• system will create a PO
[Note: Creation PO in different methods will be covered after the Outline Agreement chapter]

9. Source List
Source List
• It is a master data
• It is a relation between a material vs. Vendors along with their validity periods
• It is one-to-many relation
• There is no number range or Document type for Source List
• Material no itself is a source list no.
• One you are maintaining the source list
o System will allow the list of vendors maintained in SL for creation of Purchasing
documents
o System will these vendors also on the specified period as per SL
o You can block a vendor for a specific material
o You can also fix a vendor for a specific vendor
• The structure of Source List is as under:
Why source List?
• To have an excellent control on Purchasing document creation SL will be Used

• You can block a vendor at material level

• You can fix a vendor for automatic PO
How to set Source List @ Material Level (For one material)
Steps:
• Go to change mode (MM02) of material master record of one material
• Select Purchasing view
• Check the check box of Source list
• Click save
Note: From now onwards system will allow you to create any PO or other documents for this material
unless you maintain Source List
How to set Source List @ Plant Level (For all materials in Plant) (OME5)
SPRO →IMG→Material management →Purchasing →Source List → Define Source list requirement
at plant level
Steps:
• System will display all plant entries

• Click Position and enter your plant = VP1
• Press enter
Plant Source List
VPL1
• Click save
Note: 1
• Now onwards system will allow you to create any PO or other purcha documents for this
material unless you maintain Source List
Notes: 2
• No IMG settings for Source List

• Except the SL maintenance at plant level
• No Number range for SL
• No document type
Tcodes for Source List
Tcodes Creation Change Display List of PIR

For ME01 ME02 ME03 ME0M – By Mat. wise
Source List
Note:
• There are No Tcodes like ME02, ME0M

Source List can be created
Manually
W.r.t PIR
Creation of Source list – manually
Steps:

• In Initial screen
o Material 300004102
o Plant VPL1
o Press enter
o In Over view screen enter the following and click save
From. To. Vendor No. Pur. Org Fix Block
Xx/xx/xx xx/xx/xx xxxx VPO
Xx/xx/xx xx/xx/xx xxxx VPO
Creation of Source list - w.r.t PIR
Pre-requisites
• You should have PIRs for a material

• To list out PIR use ME1L/ME1M
Steps:
• in initial screen
Enter the mat no xxxx.
Plant xxxx.
• In second screen
o Click ‘generate Records’ on application tool bar or Crtl+F7 button
o enter validity periods
▪ From xxxxx
▪ To xxxxx
o Press enter
• System will fill all the vendors’ info in Source list as per PIRs.
• click save

10. Out-Line Agreements

Out Line Agreement
• It is a long time Agreement
What is an Agreement?
• It is a common understanding between two parties to supply certain material on specific terms
and conditions
• Normally this agreements are entered between Vendors and company on mutual benefit base
Why Agreement is needed?

• In general to keep the vendor to supply the material for a long term for a specific price
companies will enter this type of Agreements
• In order to keep the vendor to bind for agreement companies will assure the vendor
Is this agreement can be entered for all materials?

• No.
• Generally out line agreements are for the high volume and Low value type materials like
NUTs, Washers etc.
Types of Outline Agreements

Based on the assurance of the company the agreements are two types
o Contracts
o Scheduling Agreements
Contracts
• It is a long term agreement

• It is a legal document
• Contract will between company and vendor
• In contract
o Company assures certain Quantity of the material or value of the material,
o Vendor will commit the price
• In Contract there is no delivery date column
• As and when company needs material from the vendor, It has to create a separate PO w.r.t.
to contract for that qty along with delivery date
• System will validate
o The vendor, Material, Plant and validity period and Targeted Qty or Values
o Once PO is created, the contract will also be updated accordingly
• Note: The PO which is created w.r.t Contract can also be called as Release order
Types of contracts
Based on the assurance of the company the contracts are two types
- Qty contract
- Value contract

Qty Contract
o In Qty contract, company assures the vendor certain Qty of the material
o Example : NUT with a Qty of 10,000
o You can enter a contract to a vendor for various materials
o The structure of the Qty Contract is as under
o As and when Company wants the material from this vendor, Company has to create a
separate PO w.r.t this contract
o Then system will validate the following parameter before creation of PO

▪ Vendor No,
▪ Required qty is below or equal to Target Qty
▪ Delivery date in Po is between the Contract Period (starting and ending
dates)

o After Validation only system will create a PO

o System will update the Contract target quantities also accordingly
Value contract
o In Value contract, company assures the vendor certain value of the material
o Example : WASHERS worth of Rs 25,000/-
o You can enter a value contract to a vendor for various materials
o The structure of the Value Contract is as under
o As and when Company wants the material from this vendor, Company has to create a
separate PO w.r.t this contract

IMG settings: Contracts
SPRO →IMG → Materials Management → Purchasing → Contract → Define Number Ranges

Steps:

• Insert two intervals
GRPNo From To Current No
G1 xxx xxx 0
G2 xxx xxx 0
• Click save
2. Define Document Types (OMEF)
SPRO → IMG→Materials Management →Purchasing →Contract →Define Document Types
Steps:
• SAP std. doc type for Qty. contract is = MK
• Select MK and click copy as
• GMK - GM Qty. Contract
• Then assign No range (G1) to this GMK doc type
• SAP std. doc type for Value contract is = WK
• Select WK and click copy as
• GWK - GM Value Contract
• Then assign No range (G2) to this GWK doc type
Tcodes for Contracts
Tcodes Creation Change Display List of Contracts

for ME31K ME32K ME33K ME3L – By Vendor wise
Contract ME3M – By Mat. wise
Creation of Qty. Contract
Steps:
• Use Tcode = ME31K
Vendor XXXX
Agreement Type GMK (Qty. contract doc type)
Agreement Date 30.08.2013

Agreement Empty
Purch. Organization GPO
Purchasing Group GPG
• Press enter
• In header data
• Validity Start 30.08.2013
• Validity End 31.12.2013
• Press enter
• In Item overview screen
• Mat No Target. Qty. Price Plant Str. loc.
PINS 10000 0,09 GPL1 S11
Washers 7777 0,08 GPL1 S11
• Press enter
• Click save
• Sys will create a qty. contract by assigning a no range from its internal no range group
Creation of Value Contract

Steps:
• Use Tcode = ME31K
Vendor XXXXX
Agreement Type GWK (Value contract doc type)
Agreement Date 30.08.2013
Agreement Empty
Purch.. Organization GPO
Purchasing Group GPG
• Press enter
• In Header data
Validity Start 30.08.2013
Validity End 31.03.2014
Target Val. 100000 INR
• Press enter
• In Item overview
Mat No Qty. Price Plant Str. Loc.
xxx --- xxx gpl1 s11
xxx --- xxx gpl1 s11
• Click save and Sys will create a value contract with internal no assignment

Scheduling agreement
• It is a long term agreement
• It is a legal document
• Scheduling agreement will between company and vendor
• In Scheduling agreement
o No assurance from company either on quantity of the material or value of the
material,
o Vendor will commit the price
o In Scheduling Agreement there is no delivery date column
o No Separate PO will be sent to the Vendor
• After creation of Scheduling agreement, by using a separate Tcode we enter the delivery
schedules with quantities
• System will treat the Sch. Agreement itself as PO

• As and when company does not want the material further, it can ask the vendor to stop
supplying
Similarities of Contracts and Scheduling agreements

• Both are long term agreements
• Both are out line agreements
• Both are legal documents
• Both documents does not have delivery date column

Differences of contracts and Scheduling agreements
Contract Scheduling Agreement

Company assures certain Quantity of the material No assurance from company either on quantity of
or value of the material, the material or value of the material
As and when company needs material from the No Separate PO will be sent to the Vendor
vendor,
It has to create a separate PO w.r.t. to contract Using a separate Tcode we enter the delivery
schedules with quantities
System will treat the Sch. Agreement itself as PO
IMG settings: Scheduling Agreement
Path: SPRO→IMG→Materials Management →Purchasing →Scheduling Agreement →Define Number

Ranges
2. Define Document Types (OMED)
Path: SPRO→IMG→Materials Management →Purchasing →Scheduling Agreement →Define

Document Types
Steps:
• SAP standard Doc type for Scheduling Agreement = LP
• Select LP and Copy as
o VLP – Volvo Scheduling Agreement
• Then assign Number range group (VS) to the VSLP doc type
Creation of Scheduling Agreement
Steps:
• Use Tcode = ME31L
o Vendor SIRI
o Agreement Type VLP
o Agreement Date 28.02.2013
o Agreement Empty
o Purchase Organization VPO
o Purchasing Group VSP
• Press enter
• In item Header data screen
o Validity Start 28.02.2013
o Validity End 31.12.2013
• Press enter
• In Item Overview screen
o Mat No
o Target Qty.
o Net price
o Plant

o Str. Loc. (optional)

• system will fill the other columns by relevant data from the master data
• click save
How to maintain / enter delivery Schedules in Scheduling Agreement

Steps:
o Enter Agreement 600
o Press enter
• In item overview
o Select line item,
o Then On menu bar-->Item-->Delivery schedules
or
o Click F2
or
o double click line item
• system will display the delivery schedule screen
• Enter Del dates Qty.
xxxx xxx
xxxx xxx
• click save
Creation of PO w.r.t Qty. Contract

Pre-requisite:
• You should have a Qty. Contract
• List out Qty. Contracts by
o using Tcode = ME3L
o Doc type = VMK (Volvo Qty. Contract)
• Then note down the contract No and its details
Steps:
• Select Doc type : VNB - Volvo PO
• In Item overview, Enter at respective column
o Contract No and Item No
• System automatically fills the relevant data in Header and Item overview Columns from
contract
• System request you to enter Order Qty. and delivery date
• System validates the Qty. and delivery dates w.r.t contract
o if it is below or equal to target qty. and date between contract period then only system
will create a PO
• Click Check button
• Click save
• System immediately updates the contract open target qty. accordingly
How to create a PO w.r.t Value contract

Pre-requisite:
• You should have a Value contract
• By using Tcode = ME3L and Doc type = VWK (Volvo Value Contract)
• List out all value contract and note down the details of these contracts

Steps:
• Select Doc type = VNB - Volvo PO
• In Item over view
- Rest of the steps are same as Qty. Contract
Automatic creation of PO w.r.t. PR
• In General, Automatic PO Process will be adopted only for specific materials which are
supplying by limited vendors.
• It is recommended to adopt this automatic PO only for the high volume and low value
materials.
Steps:
o Create/change the Mat. Master(MM01/MM02)
▪ Select Purchasing View
▪ Set check box Automatic PO

o Create/change the Vendor master(Xk01/Xk02)
▪ Select Purchasing Data Screen
▪ Set check box Automatic PO

o Create a Purchasing Info Record (PIR) (ME11) for the above material and above
Vendor
o Create a source List for the above material
o Create a Purchasing Requisition (PR) (ME51N) for the above material
o Set the check box source determination

o Execute the Tcode: ME59N
o Run it on Test mode first
o Then execute directly

11. Release Procedure

Release Procedure
• This is an Electronic way of Document Approval i.e. 'on-line approval rather than manual
signature.
• It is an approval process for Purchasing requisition and external Purchasing documents
• It Involves
o Checking the correctness of the data
o Giving authorization to purchase
• The approval may be based on doc. type, doc value, plant etc.
• There are two types of Release Procedures:
o With Classification (Item level release and only for PR)
o With Out Classification (Header/document level release for RFQ, PO, contract and
Scheduling. Agreement)
Note:
o Item level Approval is possible only in PR
o For other Purchase Documents only header level is possible
1. Release Strategy:
• It defines the sequence in which the purchase document is to be released

• It contains the release conditions, release codes, release pre requisites
• It defines the entire approval or release process
2. Release Condition:
• It determines/identifies which release strategy applies.
3. Release Group:
• Group of persons responsible for releasing the Purchasing documents with assigned strategy.
4. Release Code/Point:
• It is a two character alphanumeric id defined for each individual group (department) in the
release group.
5. Release Pre-requisite:
• It defines, who has to be release the document first.
6. Release Indicator:
• It is a one-character id, represents a release status.

• It is assigned to a document.
• When individual person of a group affects release with his release code, a release indicator is
assigned to a document]
E.g.: Blocked - ‘B’, Released - 'R"
• If a document is not released
o It cannot print a document
o You cannot send this to the concerned vendor
o You cannot do the goods receipt

Frequently used tables in Release procedure
Document Table Name Fields

PR CEBAN MATKL - Material Group.
BSART - Doc. Type.
RFQ,PO CEKKO BSART - Doc. Type
Contract GNETW - Net Order Value
Scheduling Agreement
Service Entry Sheet SESSR LWERT - Total Value Release
UWERT - Partial Value Release
Note: The effected Release can also be cancelled, but it is possible only before the higher
person in hierarchy has not approved
IMG settings: Release Procedure
1. Edit Characteristic (CT04)
Path: SPRO→IMG→Materials Management →Purchasing →Purchase Order →Release Procedure

for Purchase Orders →Edit Characteristic
[ In this step we will frame a rule for releasing the PO document]
Steps:
• Enter Characteristic = Volvo_CHR1

• Click 'Create' button
• click 'Additional data' – Tab, enter
Table Name CEKKO
Field Name GNETW
• Press enter Button
• System will take you to Basic data tab
• In Basic data - Tab , enter
Currency = INR
Check 'Multiple values'
Check interval values allowed
• Click Values – tab, enter
Char value >= 10000
Check the 'additional values'
Check 'Default values'
• Click Restriction tab
Class type = 032 - Release strategy
• Click save

2. Edit Class (CL02)
Path: SPRO→IMG→Materials Management →Purchasing →Purchase Order→Release Procedure for

Purchase Orders →Edit Class [Class: Class is a Group of Characteristics]
Steps: Enter Class Volvo_CLS

• Class type 032
• Click Create button
• In Basic data - Tab
Description = Volvo Class
• Click Char. Tab and enter
Your characteristics defined in step 1
• click save
3. Define Release Procedure for Purchase Orders
Path: SPRO→IMG→Materials Management →Purchasing →Purchase Order →Release Procedure

for Purchase Orders →Define Release Procedure for Purchase Orders
Steps:
• 3.1 Click 'Release Groups'
o [Release group: A group which is authorized to release the PO ]
▪ Make the screen empty before defining your rel group and click save
▪ Click New Entries
Rel. group Rel. obj. Class Description
AS 2 VOLVO_CLS Volvo Rel. Grp.
o Click save
• 3.2 Click 'Release Codes'
o [Release code: Authorized Designators in Release group to release the PO]
▪ Click New entries
Rel. Grp.. Rel. Code Description
AS 01 Purchase Assistant
AS 02 Manager Purchase
AS 03 DGM Purchase
o Click save
• 3.3 Click 'Release indicator'
o [Release indicator: It is an indicator which shows the status of the Release of PO]
Rel.ID Changeable % Value change Description
B 4 10,0 Blocked, change with value
R 1 Released, no changes
o Click save
• 3.4 Click ‘Release Strategies’
o [Release Strategies : The procedure adopted to release the PO]
o Click New entries
o In the first screen
Release Group AS Volvo Rel. Grp.
Release Strategy AS Volvo Strategy
Rel. Codes:
01 Purchase Assistant
02 Manager Purchases
03 DGM Purchase
o 3.4.1 ' Click Release Pre-requisites' button

o Enter/check the following Pattern
o Click continue
o 3.4.2 ' Click Release Statuses' button
o Click continue
o Click Save
o Click ‘Classification Button
o Check the following screen appearing with total net order value >= 100000
o Click ‘Release simulate’ button

o Click ‘Simulate release’ button
o Check the simulation
How to check that our purchase order is adopting the release Procedure and how to
release it?

Steps:
• Create a PO (ME21N)
• Enter relevant data and create a PO with value greater than 10,00 worth
• Click Check button on application tool bar
• In Header data in addition to the existing tabs a new tab will be created with a
name ‘Release strategy’
• Note: However during the creation of PO you cannot release a PO
• By Using a separate Tcode : ME29N you can release the PO
• Note: If you create a PO with ME21 (Instead of ME21N) you can release the
same by using a Tcode ME28 (but not ME29….surprisingly there is no Tcode
called ME29)

12. Pricing
Pricing Procedure
• Pricing
• Condition Technique
• Elements in price determination:
• IMG Settings in Pricing
Pricing
• This component is to store the pricing stipulations agreed with the Vendor (like discounts,
surcharges or payment of freight etc.) in the system.
• You can enter these conditions in
o Quotations
o Outline Agreements (Contracts and Schedule Agreements)
o Purchase Info Records
• The system applies the conditions in determining the price in Purchase Order
Note: You can enter further conditions in the PO itself.
• There are three kinds of prices in purchasing.

o Gross price:
▪ It is the basic price of the material w/o discounts, surcharges and taxes
Gross price = Basic Price of the Material
o Net Price:
▪ The Gross price after considering duties & taxes into account.
Net Price = Gross Price + Duties + Taxes
o Effective price:
▪ The net price after considering surcharge and discount
Effective price = Net price + surcharges + discounts
Condition Technique:
• The Condition Technique is used to determine the purchase price by systematic consideration
of all the relevant pricing elements
• This is the technique for formulation of rules and requirements.
• The system arrives at a suggested price by applying conditions defined by means of
Condition technique.
• The Condition Technique is how the price determined?
• The Condition Technique is used for
o Pricing for price determination
o Tax Determination
o For automatic account determination
Access Sequence access a Condition Record of a Condition Type in a Condition Table is a Condition
Technique.

This is a simple logic
• Here the Condition Type is very important like PB00, PBXX and RA01 etc.
In the background every Condition Type has its own definition means the purpose of the
Condition Type like, is it for Pricing or Percentage, Quantity base, Accrual Fields etc is to be
defined to work this functions.
• Normally we use the existing ones without any risk.
• But some cases, we have to create a New Condition Types as per the organization
requirement.
Elements in price determination:

o Condition Table
o Access Sequence
o Condition Record
o Condition Type
o Calculation Schema
1. Condition Table
• Here you create condition table based on the requirements on which you would like to
maintain the conditions for pricing.
• For Example: If you want your pricing to be determined based on the Purchasing
Organization, Plant combination then you can select the Purchasing Organization and Plant
fields in your condition table.
• For each combination, you need to create one table.
• You can select any number of combinations based on your client’s requirements.
• A Condition Table consists of one or more condition keys and data part.
• Data Part contains a number that references a record in another table (which contains the
condition records)
Note:
1. each condition type has same control data
2. Control data for condition type:
3. All condition types have the same screens. In that field values may be different.
2. Access Sequence
• An access sequence is a search strategy and it searches for a valid condition record in a
sequence
• An access sequence can be assigned to a condition type.

• The access sequence is used to define the sequence in which condition records for a
condition type are read.
• It checks where prices are stored and at what condition prices are to be picked up.
• If Contract or Schedule Agreement exists, what price has to be picked-up
• Here you configure access sequences to define the order how system can access the
condition tables based on the requirement.
• General rule is to define specific combination of fields first and then on to a more general
combination. (For example, if you are trying to set up more than one condition tables, say
combination of Purchasing Organization and plant and then purchasing organization alone:
Then your criterion here is first to maintain the Purchasing organization and plant combination
as your first access and Purchasing organization is your second access. This way system
tries to find the condition records that meet the purchasing organization and plant combination
first and if it doesn’t find, then it goes to the next access of condition records that meet only a
purchasing organization requirement).
3. Condition Record
• It represents that actual condition value and is stored in a condition key.
• Condition record contains the record which is maintained against condition table with regards
to condition type.
• It can be fetch via access sequence and condition type.
• Suppose we maintain a condition record against condition table (vendor) with regards to
condition type. Then whenever the vendor used this condition type, the condition record will
fetched.
• Ex. You can maintain the following in condition record.
Field Description Field name

Material No. MATNR
Vendor LIFNR
Purchase Org. EKORG
Plant WERKS
Purchase Info Record ESOKZ
4. Condition Types
• Condition types represent price/elements factors in the system
• The different “price factors” such as gross price, discounts, freight costs, customs and
taxes are represented with condition types.
• The condition type determines how the price factor is calculated. You can choose
between absolute, percentage, or quantity-dependent. The reference magnitude for price
scales is also defined by the condition type. The scale can refer to the quantity, the item
value, or the weight
• In this step you define conditions that are required in your pricing schema. If you want to
use the standard main condition types PB00 and PBXX and other supplemental
conditions for Discount, Tax and Freight etc... You can use them and do some
modifications based on the requirement. (In our example, we create a new condition type
similar to PB00 by copying into a new one ZZB0 and leave all others as it is...)
.
5. Calculation Schema
• The condition types are grouped together in a calculation schema.
• It is also called the calculations procedure of Condition Types.
• The calculation schema provides a framework for price determination.
• It determines the sequence in which the condition types are taken into account.
• You can define different calculation schemes, for example, for the individual purchasing
organizations and vendors.
• The standard Calculation schema provided by SAP for Purchasing is RM0000

• In this step you define calculation schema by maintaining all the condition types that are
relevant for your pricing procedure.
The calculation schema determines the following –
1. The subtotals (for time-dependent conditions, no subtotals are formed (net price, effective
price))
2. The extent to which manual processing of the price determination is possible
3. The basis on which (reference level) the system calculates surcharges and discounts in
percentages
4. The prerequisites that have to be filled so that a particular condition type is taken into
consideration
In General the Pricing structure or break up provided by vendors is under the following format
Rs. Condition Types
Gross Price 100.00 PB00
Discount on Gross Price (@5%): 5.00 RA01
------------
Gross Price after Discount 95.00
Excise duty @ 10% on GP after ED00
Discount 9.50
------------
Sub Total 104.50
Sales Tax @ 10% on sub-total 10.45 ST00
Freight 20% on GP 20.00 FRA1
Packing 2% on GP 2.00 PK00
-----------
Total Price 136.95
• A frame work of steps used to calculate or determine costs, prices, period end rebates and
taxes.
o Ex. RA01 - Discount % is calculated on PB00 - Gross Price.
o It means RA01 is based on PB00 like that we have to define in the Pricing Schema
o Here PB00 has the Access Sequence - 0002. But RA01 does not have the Access
Sequence. Why because it is a dependent on PB00. But both are Condition Types.
IMG settings:
1. Maintain Condition Table
2. Define Access Sequences
a. Assign field to each access
3. Define Condition Types
4. Define Calculation Schema
5. Assign Calculation Schema to the main Condition Type
6. Define Schema group:
a. Schema Groups: Vendor
b. Schema Groups for Purchasing Organizations
c. Assignment of Schema Group to Purchasing Organization
7. Define Schema Determination
8. Assign Schema group for vendor to the vendor master records
9. Maintain the condition records
The Pricing in MM is vast because each Condition has its own importance and each Access
Sequence has its own importance. So you need not bother about this. First you learn how to
define the Calculation Schema through the above.

1. Maintain Condition Table

SPRO→ IMG → Materials Management→ Purchasing→ Conditions→ Define Price
Determination Process→ Maintain Condition Table
Steps:
- Click ‘Create Condition Table’
- In Initial screen of ‘Table creation’
- Enter
Table: xxx (a number with which you wish to create a table)
- Standard SAP reserved the numbers from 0 to 500 for its internal use and allowed from
501 to 999 for the customers purpose. Let us select number (555)with in the range 501 to
999
- Example: If you want your pricing to be determined based on the Purchasing
Organization, Plant combination then you can select the Purchasing Organization and
Plant fields in your condition table.
2. Define Access Sequences.

SPRO → IMG → Materials Management → Purchasing → Conditions → Define Price
determination Process → Define Access Sequences.
Steps:
- Sys Displays a list of Access Sequences in a table
- Click New Entries button on application tool bar
- Enter
Access Sequence No Description
xxxxx Access Sequence
- Click Save
- Now select your Access Sequence xxxxx
- Click left side sub folder ‘Accesses’
- Sys Display overview of ‘Accesses’
o Enter
No Table
10 xxxx
Xx xxxy
- This step needs to be repeated if you are creating more than one access

Assign field to each access
o Assign the fields to the access by selecting the “Fields” folder on left hand side
after selecting the access as shown below.
o Field Catalog: Grouping of certain fields for determining prices
Material MATNR KOMP

Vendor LIFNR KOMK
Purchase Org EKORG KOMK
Plant WERKS KOMP
Purchase Info Rec ESOKZ KOMP
o Note
▪ P - item field in KOMP & KOMK
▪ K - Header field in KOMP & KOMK
o Click save
3. Define Condition Types

SPRO→ IMG → Materials Management→ Purchasing→ Conditions→ Define Price Determination
Process→ Define Condition Types.
Steps:
- Click Define condition type
- Sys Displays a list of condition types in a table
- Select ‘PB00’ i.e. SAP Standard Condition type for Gross price
- Click ‘Copy as’ XB00’ your own condition type for gross price
- Then assign your access sequence at step 2 in this condition type
- Repeat the same for other condition types which you wish to have in your schema

- [In this step we define standard main condition types PB00 and PBXX and other
supplemental conditions for Discount, Tax and Freight etc.]
-
Ex: PB00 - Standard Gross (Basic) Price (Automatic)
- PBXX - Standard Gross (Basic) Price (Manual)
- FRA1 - Delivery Costs
- NAVS - Non-Deduct able Input Tax
- SKTO - Cash Discount
4. Define Calculation Schema

SPRO → Materials Management → Purchasing→ Conditions→ Define Price Determination
Process → Define Calculation Schema.
Steps:
- In this step you define calculation schema by maintaining all the condition types that are
relevant for your pricing procedure.
- Select RM0000 (standard SAP’s calculation schema) and copy into new schema
XMM000
- Select schema XMM000 and hit “Control data” folder on the left hand side to maintain
your conditions in the pricing procedure.
- Click New entries
- Enter the following
- Clickk Save

5. Assign Calculation Schema to the main Condition Type:

Determination Process→Define Condition Types.
- Here you maintain the Calculation Schema that you have maintained in the Main
condition type (PB00/ZZB0) as shown below.
6. Define Schema group:
SPRO → Materials Management → Purchasing → Conditions → Define Price Determination

Process → Define Schema group.
- Here you define schema groups for vendor and purchasing organization and assign them
in the vendor master and configuration respectively in order for system to find out the
right pricing procedure for the combination.
- This is very important step in order for your system to find the right pricing procedure for
the combination of vendor and purchasing organization.
-
- 1. Define Schema group : vendor
o Click New entries

o Enter New schema group for vendor
o Click save

- 2. Define Schema group : Purchase organization
o Click New Entries

o Enter New Schema group for Purchasing Organization
o Click save
- 3. Assign schema group to purchasing organization
o Assign the Schema group for purchasing organization to the to purchasing

organization
o Click save
7. Define Schema Determination:

Determination Process → Define Schema Determination.
- Here you assign the Calculation Schema to the combination of Schema group for
purchasing organization and schema group for vendor appropriately.
Steps:
- Click ‘Determine Calculation schema for standard purchase order
- Click New entries
-
- Assign schema group for purchase organization, schema group for Vendor to the
calculation schema (pricing procedure)
- Click save
8. Assign Schema group for vendor to the vendor master records
- After assigning the Schema go to the relevant purchasing data of the vendor master
record and assign the “Schema group for vendor” to the appropriate vendors whom you
want this pricing procedure to be applied.

9. Maintain the condition records
- Now, you need to maintain the condition records in the Easy Access menu, in order for
this pricing procedure to take an effect.
Steps:
- Use T code = MEK1 (To create ‘condition record’)
- In initial screen
- Enter
o Condition Type : XB00 (Enter your condition types of your schema)
- Click ‘Key Combination’ button
- Select ‘Material, vendor, vendor and Purchase Organization’
- Press enter
o Material : xxxx
o Vendor : xxxx
o Plant : xxxx
- Purch. Org Amount Valid from Valid to

- Xxxxx xxx.xx xx/xx/xx xx/xx/xx
- Click save


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Shrini Damarla

SAP MM Chicago (2020)

SAP Material Management

Shrini Damarla - Chicago Page 1

5. Request for Quotation……………………………………………………

Shrini Damarla - Chicago Page 2

10.4.2.3. IMG settings: Scheduling Agreement …………………………………………

Shrini Damarla - Chicago Page 3

There are two steps to do this

A. Defining the Org Units

A. Defining the Org Units

1. Define Company (OX15)

SPRO → IMG → Enterprise Structure → Definition → Financial Accounting → Define

• Sys display list of companies in a Table

2. Define Company code (OX02)

SPRO →IMG→ Enterprise Structure → Definition → Financial Accounting → Edit, Copy,

• Click 'Copy, delete, check company code'

Shrini Damarla - Chicago Page 4

• sys display a message as

3. Maintain Controlling Area (OX06)

SPRO →IMG →Enterprise Structure → Definition → Controlling → Maintain Controlling Area

• Click 'Maintain Controlling Area'

Shrini Damarla - Chicago Page 5

4. Define valuation level (OX14)

SPRO →IMG → Enterprise Structure → Definition → Logistics - General → Define valuation

• We cannot do anything here.

5. Define Plant (OX10)

SPRO →IMG →Enterprise Structure → Definition → Logistics - General → Define, copy,

• Click 'Define Plant'

6. Maintain storage location (OX09)

SPRO →IMG → Enterprise Structure → Definition → Materials Management → Maintain

• Enter Plant = GPL1

Shrini Damarla - Chicago Page 6

7. Maintain purchasing organization (OX08)

SPRO →IMG → Enterprise Structure → Logistics - General → Materials Management →

B. Assigning Org. Units

1. Assign company code to company (OX16)

SPRO →IMG → Enterprise Structure → Assignment → Financial Accounting → Assign

2. Assign company code to controlling area (OX19)

SPRO → IMG → Enterprise Structure → Assignment → Controlling → Assign company code

Shrini Damarla - Chicago Page 7

3. Assign plant to company code (OX18)

SPRO → IMG → Enterprise Structure → Assignment → Logistics - General → Assign plant to

• Sys display co_cd and plant entries in a table

4. Assign purchasing organization to company code (OX01)

SPRO → IMG → Enterprise Structure → Assignment → Materials Management → Assign purchasing

• Sys display list of Purchasing org and co_cd entries

5. Assign purchasing organization to plant (OX17)

SPRO → IMG → Enterprise Structure → Assignment → Materials Management → Assign purchasing

• Sys display list of Purchasing Org and Plant entries

How to view your enterprise structure?

• Click 'Copy, delete, check company code'

Shrini Damarla - Chicago Page 8

Shrini Damarla - Chicago Page 9

2. Material Master Record

• It is the smallest unit in a industry which uses to make a product

What is material master record?

• It is a record consists of completer information of

IMG settings: Material Master Record

1. Define Output Format of Material Numbers (OMSL)

• There is a provision for Mat No length

Shrini Damarla - Chicago Page 10

2. Maintain Company Codes for Materials Management (OMSY)