SAP MM Material

Management
 Contents

Preface

Chapter 1 Overview and Org. Structure Chapter 6 Invoice

Verification/Valuation
Chapter 2 Material Master

Chapter 3 Purchasing Master Data

Chapter 4 Procurement

Chapter 5 Inventory Management/

Valuation
Chapter 1 Organizational Structure & Overview
Organizational structures in R/3

Organizational units
Client

Company codes

Plants

Purchasing organizations

Storage locations/batches/special stocks

The Company code is the smallest organizational unit .
This includes the recording of all accounting-relevant events and
the production of all legally required final statements of accounts,
such as balance sheets and profit and loss (P&L) statements.

The Plant is an Organizational Unit within Logistics that subdivides

the enterprise for the purpose of Production, Procurement,
Maintenance, and Material Planning

A Purchasing Organisation is an Organizational unit

within logistics that subdivides an enterprise according to
the requirements of purchasing.
A Purchase Organization procures materials or services,
negotiates conditions of purchase with vendors, and
assumes responsibility for such business .
 The Storage location is the level at which the stocks of materials
of a plant are physically managed.
The physical inventory takes place at storage location level.
A storage location is always defined as belonging to a certain
plant.
 Overview of MM
Material requirements
planning

External procurement Internal procurement

Purchasing Production

Invoice Goods
verification receipt

Invoice Inventory
receipt management

Goods Transfer
? issue posting

Internal and external accounting Sales and

distribution
 Procurement Process
Order Invoice
MRP
?
7 Invoice verification 1 Requirement determination

MM
Materials
Goods receipt and management
6 Source
inventory management 2
determination

Order

5 Order follow-up 3 Vendor selection

4 Order processing
 Invent. mgmt on qty basis w/o
warehouse mgmt
Company Code

Plants 0001 0002 0003

Storage locations 0001 0001 0002

 Valuation

Client

Company codes 0001 0002

Plants 0001 0002 0003

 Organizational Entities in Purchasing

Purchasing group 1

Purchasing group 2
Purchasing organization 1
Purchasing organization 2

Purchasing
organization

Plant 1 Plant 2 Plant 2 Plant 10

Chapter 2 Material Master
 Material master record
General data

Material number
Description
Units of measure
Technical data

Plant-specific data Warehouse Manage- Sales-specific data

Valuation ment system data
MRP/type Unit of measure Delivering plant
Valuation
Planned delivery time price Palletting instruction Sales texts
Purchasing group Valuation procedure
Batch indicator Valuated quantity

Storage location-
specific data

Storage time
Stockfields
 Units of measure

Base unit: Piece

4 16 72

Box Crate Pallet

(unit of issue) (order unit) (sales unit)
 Material data maintenance:
accounting

Valuation class

MART Allowed values

ROH 3000
3010

...
..
HALB 7920
.
HIBE 3000
 Maintenance of material data

Price control

S V

Standard- Moving average

price control: price control:
Valuation of Final delivered price
standard price (such as purchase
from the material order price) influences
master record the valuation price
Chapter 3 Purchasing Master Data
Chapter 3.1 Purchasing Master Data
The Vendor
 The vendor

Purchasing

purchase Bank
order
DEUTSCHE
MARK
DEUTSCHE
MARK

Payment DEUTSCHE
MARK

Vendor Invoice
Material

order account

?
=

Goods receipt Invoice verification

Organizational levels of vendor master
record
General data

Purchasing Company code

organization data data
001

Company code
 Vendor master record
General data
Valid
Address for the whole group
Communication

Purchasing data
Valid
Order currency for one purchasing
Incoterms organization
Minimum order value

Accounting data
Valid
Bank data for the whole group or
Payment transactions for one company code
Account management
 Account group

One-time
account

Account group

Type of number Interval for number

Field selection
assignment assignment
Chapter 3.2 Purchasing Master Data
Info Record
 Purchasing info records
Piece
Piece
%
%
Conditions
Conditions
USD
USD Material

Info record

Vendor A Info record Stock material M1

Info record
Consumable
material M2
Info record

Vendor B Info record Service S1

Data in the purchasing info record

General data Texts

Vendor data
Origin data
Order unit

Control data Prices and

conditions
Delivery time
Gross price
Minimum quantity Discounts
Tolerances Freight

Price history
Purchasing statistics
Changes
Chapter 3.3 Purchasing Master Data
Source List
 Source list

1.1.95 - 30.6.95 1.7.95 - 31.12.95

Source list
Vendor 1 allowed Vendor 1 fixed
Vendor 2 allowed
Material M1
Plant 0001 Vendor 3 allowed
Chapter 4 Procurement
Chapter 4.1 Procurement
Procurement Environment
External procurement environment
Source list Requirements RFQs
determination

Purchase
requisition
Quotations

Source
determination Piece
Piece
Outline %%
agreement Vendor Conditions
Conditions
selection
USD
USD
Info record
Purchase order
history

Purchase
order
Invoice
receipt

Goods receipt
 Purchasing documents
Purchase
requisition
RFQ

Purchase requisition RFQ

?

Quotation Quotation
Purch.order

Quotation A ? B Purchase order

31. 1.
Contract
Scheduling
Release order agreement
 Structure of a purchasing document
Purchasing
document ocument
Document
ocumentheader

General
General data
data
statistics
statistics
Messages
Messages
Conditions
Conditions
Item 1 Additional
data for item 1
General data
Purchase
Conditions
order history
Texts

...
Schedule line

Item 2 Additional
... data for item 2

...
 Procurement for stock
Purchasing
document(s)

Item:
no account Warehouse
assignment
Goods
category
receipt

Goods
issue

Production
Material

Vendor
 Procurement for consumption
Purchasing
document(s)

Item:
with account
assignment
category

Goods
receipt Production

Vendor

Material
Chapter 4.3 Procurement
Processing Purchase Requisitions
 Purchase requisition

Department

MRP

Requisition Requisition

Purchasing
 Purchase requisition processing

MRP Direct entry

Purchase requisition

Determine source of Release

supply

Vendor
o.k.

Allocate and process

RFQ Purchase
order Release
Release
order
? order
 Issuing output
Purchasing
document

Output Fax
Printer

Reprint Reminder Rejection

Chapter 4.4 Procurement
Processing Purchase Orders
 Processing Purchase Orders
Purchase RFQ Reference Contract
requisition document

Pcs
Pcs
Vendor Order history

Purchase
%
%
order
Conditions
Conditions

One-time vendor $$
Info record
 Contract

Contract Reference Reference Purchase

request RFQ contract requisition

Contract Release order

11 22

Vendor
 Scheduling Agreements
Purchase RFQ Reference Purchase
scheduling
requisition agreement requisition

Scheduling Einstellungen
Einstellungen
agreement Schedule lines

22

11
Vendor
Chapter 5 Inventory Management/Valuation
Chapter 5.1 Inventory Management
Goods Movements
Documents for goods movements
Warehouse

A
Material

Goods movement

Material
document Accounting
document
 Material Valuation Levels

Material valuation levels

0001

Company code Plant

Valuation area
Chapter 5.2 Inventory Management
Processing Goods Receipts with Purchase
Order Reference
 Purchase Order Views in Inventory
Management
Purchase order
Header $ Conditions
Statistics Vendor Conditions
Texts Output
General
Items 01/01/95 Schedule
10/01/95 lines
Purchase order 30/03/95
history

Changes Account assignment

Texts
 Stock types for goods receipt
Goods receipt blocked stock

Unrestricted-use stock
Warehouse
Stock in quality inspection

Vendor Co
ns Blocked stock
um
pt
ion

Account assignment object

Cost center
Order
......
 Posting procedure for goods
receipt (example)

Stock account
Stock value GR/IR clearing

Price differences

( ) ( )

Update for goods receipt

Chapter 5.3 Inventory Management
Processing Goods Receipt w/o Reference
GR w/o Reference to a Purch. Order or Production Order

Preplanning
Goods receipt

Initial entry of stock balance

Without purchase order
without purchase order Without production order
Goods receipt of by-products
without production order Delivery free of charge
Returns from customer
Chapter 5.4 Inventory Management
Processing Transfer Postings
 Transfer posting

Transfer posting

Miscellaneous
Stock transfer
transfer postings

From storage From

From consignm.
From plant location to From QM to
material stores to
to plant storage unrestricted use
to material warehouse
location
Chapter 5.5 Inventory Management
Processing Goods Issues
 Goods issues

From warehouse

Goods issue
From consignment
stores

Consumption Issue

Cost center Sampling

Asset Scrap

Sales

Order
 Effects of goods issue
Material document Stock quantity
Consumption statistics
Accounting document ...

Point of consumption:
G/L account.
Cost center
Stock account
Order
Consumption account
...
...
Goods issue
Warehouse mgmt:
Reservation Transfer order

Order Quality management:

Inspection lot
 Posting method for goods issue

Stock account
Stock value Consumption account

Update on goods issue

Chapter 6 Invoice Verification / Valuation
 Types of invoice verification
or or
Purchase
order
Purchase Vendor
order invoice

Goods receipt

Invoice verification
?
 Postings at Standard Price
Stock account GR / IR clearing account
(2) 200.00
(3) 240.00 240.00 (2)

Exp. / revenue Price difference Vendor / general ledger

(2) 40.00 20.00 (3) 220.00 ( 3)

Event Stock Total value Standard Moving av.

price price

(1) Initial situation 100 200.00 2.00 2.00

(2) GR for PO: 100 @ 2.40 200 400.00 2.00 2.20
(3) IR for PO: 100 @ 2.20 200 400.00 2.00 2.10

Purchase order price 2.40 / pc

Invoice price 2.20 / pc
 Postings at Moving Average Price
Stock account GR / IR clearing account
(2) 240.00 20.00 ( 3 ) (3) 240.00 240.00 ( 2 )
(4) 240.00 550.00 ( 5 ) 240.00 ( 4 ) Raw material consumption
10.00 ( 6 ) ( 6) 240.00
(5) 550.00
Exp.. / revenue Price difference Vendor / general ledger
10.00 (6) 220.00 ( 3 )
220.00 ( 6 )

Event Stock Total value Moving av. price

( 1 ) Initial situation 100 200.00 2.00

( 2 ) GR for PO: 100 @ 2.40 200 440.00 2.20
( 3 ) IR for PO: 100 @ 2.20 200 420.00 2.10
( 4 ) GR for PO: 100 @ 2.40 300 660.00 2.20
( 5 ) Goods issue: 250 @ 2.20 50 110.00 2.20
( 6 ) IR for PO: 100 @ 2.20 50 100.00 2.00