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CIL SAP MM TRAINING V 4 0
CIL SAP MM TRAINING V 4 0
CIL SAP MM TRAINING V 4 0
Sachin Haibatti
o Bachelor Of Engineering from University Of Mysore
o Overall 16 + years of experience in Procurement and
Inventory Management which includes 10+ years of
experience in SAP Materials Management (MM)
o Worked on BIG implementation, upgrade, and
support projects for,
SAIL (Steel Authority Of India), India
General Motors Corp, China
Nissan Motors Corp, Japan
Coach, USA
Ashok Leyland, India
Client Trucks India Ltd, India
Copyright © 2017 Tech Mahindra. All rights reserved. 1
SAP MM Overview
Presented By,
Sachin Haibatti
3 Procurement Cycle
5
Special Procurement Process
6
Inventory Management / Valuation
7
Logistics Invoice Verification
8
Reporting & Analytics
Ans: SAP the company was founded in Germany in 1972 by five ex-IBM engineers,
SAP stands for Systeme, Andwendungen, Produkte in der Datenverarbeitung which
- translated to English - means Systems, Applications, Products in Data
Processing.
Q) What are key portion of SAP system
Ans: On broad level , it is divided into 1) Functional Side ( various modules for
business functions 2) Technical side (Developer , system administrator )
Copyright © 2017 Tech Mahindra. All rights reserved. 5
Fundamental of ERP (2/2)
Finance (FI)
Controlling (CO)
Materials Management (MM)
Production Planning (PP)
Plant Maintenance (PM)
Quality Management (QM)
Sales & Distribution (SD)
Product Lifecycle Management
(PLM)
Project System (PS)
Human Capital Management
(OM /PA / Payroll )
Copyright © 2017 Tech Mahindra. All rights reserved. 7
SAP Client –Server Architecture
Company code
This level represents an independent accounting unit
within a client. Each company code has its own balance
sheet and its own profit and loss statement.
Example: a subsidiary company, member of a
corporate group.
Purchasing Organization
Storage location
Purchase Order
Purchase
Purchase Order
Order
Purchase Order
8. Payment
1. Requirements
determination
2. Source
determination
7. Invoice verification
Purchase Order
Purchase
Purchase Order
Order
Purchase Order
6. Goods receipt and 3. Requisition assigned
inventory management to a Vendor
Company Code
Procurement Environment
Requisition
Vendor Purchase
invoice order
? 10
20
7 30
Invoice Verification 2 Source determination
Procurement
6 Goods receipt
3 Vendor selection
Purchase
order
10
10
20
20
30
30
SAP AG
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SAP Data
Material Master
Vendor Masters
Pricing Conditions
Source Lists
Quota Arrangements
Service Master
The Material Master contains all data required to define and manage
material. It integrates data from engineering, manufacturing, sales and
distribution, purchasing, accounting, and other departments.
The material master is used as a source of data for purchase order
processing throughout the procurement cycle.
General Data
Sales Data
Purchasing
Data
Accounting
Material Master
Data Manufacturing
Data
o Internal Number
Range
o External Number
Range
o Maximum of 18
digits
Initial Screen
Material
Industry Sector
Material Type
Material Type
Operating
Raw materials
supplies
Semi-finished
Spare parts
products
SAP AG
The Vendor Master includes all data necessary for processing business
transactions and corresponding with vendors.
Information is shared between the accounting and purchasing departments.
Data is grouped into three categories:
General data
Accounting data
Purchasing data
General data
Purchasing
data Accounting data
R
SAP AG
Copyright © 2017 Tech Mahindra. All rights reserved. 38
Vendor Master Data
Data includes:
Material number
Vendor number
Vendor-specific data on deliveries, delivery tolerances, and pricing and text
During purchase order entry, data can be proposed from the purchasing
information record to the order.
This component enables you to store pricing stipulations agreed with the
vendor (such as applicable discounts or surcharges, or stipulations regarding
the payment of freight costs) in the system. You can enter these conditions in
quotations, outline purchase agreements, and info records. The system then
applies the conditions in determining the price in purchase orders (POs).
A source list specifies the possible sources of supply for a material over a given
period of time. It shows the time period in which a material may be ordered from a
given vendor or under a certain long-term purchase agreement.
1.1.95 - 30.6.95
Source list
Vendor 1 allowed 1.7.95 - 31.12.95
Material M1 Vendor 2 allowed Vendor 1 fixed
Plant 0001
Vendor 3 allowed
1.7.95 - 31.12.95
Vendor 1 fixed
Note - Services are meant for direct consumption instead of keeping them
in inventory.
Planned Services -
In planned services at the time of procurement specifications like quantity and
price are known in advance. It means nature and scope of service is clear before
procurement.
Unplanned Services -
In unplanned services at the time of procurement specifications like quantity and
price are not known in advance. It means nature and scope of service is not clear
before procurement. These services can be extended as per the requirement.
Purchase Order
Purchase
Purchase Order
Order
Purchase Order
8. Payment
1. Requirements
determination
2. Source
determination
7. Invoice verification
Purchase Order
Purchase
Purchase Order
Order
Purchase Order
6. Goods receipt and 3. Requisition assigned
inventory management to a Vendor
Purchase RFQ
requisition
RFQ
Purchase requisition ?
Quotation Quotation
Purch.order
31. 1.
Contract
Scheduling
Contract agreement
10 10
20 20
30 30
Purchase Requisitions:
MRP
Direct Entry
Purchase
Order
Source List
Vendor 1 Vendor 2
Quotation 1 Quotation 2
Quotations entering
10 10
20 20
30 30
Purchase orders:
Represent the formal approval of a purchasing transaction with a vendor.
Identify the following items such as:
Vendor
Material and quantity ordered
Price and terms
Delivery date and location
Copyright © 2017 Tech Mahindra. All rights reserved. 71
Purchase Order Processing
Purchase
Order Statistics Order
• Standard
History
Direct Entry
or Purchase
Requisition
Purchase
Requisition
Stock Material
Consumable Material Account Assignment
Service (cost center, asset,
internal order)
Goods Receipts
Stock Transfers
Goods Issue
Transfer Posting
10 10
20 20
30 30
Purchasing
Documents
Items Goods
1.
2.
Receipt
3.
RUHR
RUHR
TRUCKING
TRUCKING
Vendor Warehouse/Stores
Entering the goods receipt increases the inventory
level of a material that is procured for stock
Goods receipt
Goods receipt blocked
blocked stock
stock
Unrestricted-use
Unrestricted-use stock
Unrestricted use Stock stock
Warehouse
Stock
Stock inQuality
in
Stock in
quality
quality inspection
inspection
Inspection
Vendor
Vendor Blocked
Blocked stock
Blockedstock
Stock
Account assignment
Account assignment object
object
Cost
Cost center
Cost center
Order
Order
Order
…...
......
......
Copyright © 2017 Tech Mahindra. All rights reserved. 79
Result Of Good Movements
Movement types differentiate among the following stock transactions:
Goods receipt
Goods issue
Stock transfer
Transfer Posting
Movement type determines which:
Quantity is updated
Stock types are updated
General ledger stock or consumption accounts are updated
A three-digit code identifies the particular movement to be performed (e.g.,
101 = purchase order receipt).
Warehouse
Goods movement
Receipts Issues
Material Accounting
document document
Plant
Vendor
Unrestricted GR Blocked
Stock Stock
Cost Center
Inspection
Blocked Stock
Stock
Warehouse/Storage Location
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Return Delivery
Purchase Order
Purchase Requisition Goods Receipt
Qty. -100; Vendor - X
Qty. -100 Qty. -100; Vendor - X
Material – X;
Material - X Material – X
Price – 100 PC
Subsequent Delivery
Qty. -100; Vendor -
Plant X
Material – X
Unrestricted
Stock
Inspection
Blocked Stock
Stock Vendor
Warehouse/Storage Location
Copyright © 2017 Tech Mahindra. All rights reserved. 84
Goods Issues Goods Issues
From Warehouse
From Consignment Stores
Consumption Issue
Asset
Sales Sampling
Order Scrapping
Cost center Quality
Material/Goods Transfer
oLogical transfer of
material from one stock
type to another stock type
oFrom material to material
oFrom special stock to our
own stock
From Warehouse
From Consignment Stores
Consumption Issue
Asset
Sales
Order
Cost center
2
Quality inspection
3
Blocked stock
Create physical
inventory document
List of
differences
Post differences
Mat – X; Vendor – X
Qty. 10000PC
Rs. 100/PC
PR for Purchasing
Mat –X Goods Receipt
Contract Release Order
100PC Mat – X
w.r.t PR (PO)
Qty. 100PC
Mat – X
Vendor – X
Qty. 100PC
Invoice Receipt
Mat – X
Qty. 100PC
Payment to Vendor
Copyright © 2017 Tech Mahindra. All rights reserved. 97
Value Contract
Delivery Schedules :
Delivery of the total quantity of material specified in a scheduling agreement
item is spread over a certain period in a delivery schedule, consisting of lines
indicating the individual quantities with their corresponding planned delivery
dates.
Scheduling Delivery
agreement schedule
PO +
Plant Letter of Plant
Credit to
Overseas Bill Of
Lading
Goods Receipt
Vendor
Airport/Shi
pyard
Customer
Bill Of
Country
Entry or
Boarder
Customs
Shipyard/
Duty
Airport
Invoice from
Vendor
Payment to
Vendor
Copyright © 2017 Tech Mahindra. All rights reserved. 104
Asset Procurement Process
What is Asset/Capital Goods?
They are purchased and used to help your company produce finished goods or
provide services to the customer. They are reported as assets on a company's
balance sheet and often can be depreciated over time.
Examples of capital goods include,
1. Buildings
2. Machines
3. Equipment
4. Furniture
5. Fixtures
6. Computer
Vendor
Selection
Invoice Goods
Verification Receipt
Payment Run
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Asset Procurement Process
Vendor
Selection
User
Invoice
Department
Verification
Payment Run
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Non Stock Material Procurement Process
Vendor
Selection
Invoice
Verification
Goods
Receipt
Payment Run
Copyright © 2017 Tech Mahindra. All rights reserved. 110
RTP Material Handling (Returnable Transport)
Some ordered material will be delivered by the vendor by packing
with non ordered material and whenever ordered material is totally
consumed, the empty packaged items will be returned to the vendor
and these returning empty packaging items are called as RTP
materials
Invoice Vendor
Verification Selection
Goods
Receipt
Barrel
Payment Run
Copyright © 2017 Tech Mahindra. All rights reserved. 112
Non Stock Material Procurement Process
Non Ordered
Items
Pipeline Process
Consignments Process
Sub contracting Process
Stock Transport Order Process
Third-party processing
Blanket Purchase Order
External Services Process
Payment
Payment to vendor
Copyright © 2017 Tech Mahindra. All rights reserved. 117
Consignment Processes
What is Consignment stock ?
In consignment processing, the vendor provides materials and stores them
on your premises. The vendor remains the legal owner of the material until
you withdraw materials from the consignment stores.
The invoice is due at set periods of time, for example, monthly. In addition,
you can also arrange with the vendor that you take over ownership of the
remaining consignment material after a certain period of time.
Process:
The vendor performs its service and delivers the ordered material
(the end product). The consumption of the components is posted.
The vendor charges for his or her service. The invoice is posted in
Invoice Verification
Plant
Plant
Purchase Order No:
*Vendor : ***
Activate MRP
Set PC
10 L Product A 100 up planning file
Products C 200 PC
Material
Prerequisites for MRP
R
SAP AG
Plant
Plant
Activate MRP
Material
SAP AG
Goods
Receipt
Payment Run
Third-Party Processing
Own Company
Order PO
Delivery
Vendor
Customer
Copyright © 2017 Tech Mahindra. All rights reserved. 124
Stock Transport Process
STO Process
Stock transport Order can transfer the stock from one plant to
another plant within the company code and one plant to another
plant across the company code.
Can process the STO with delivery and without delivery. If process
with delivery we can obtain delivery cost for the particular
transportation.
With delivery material cost will increase due to adding the delivery
cost.
Stock
Transport
Order Plant 2
Plant 1
Goods Receipt
Goods Issue Stock In Transit
for Purchase Order
Unrestricted for Purchase
Order
Use Stock
COMPANY
Plant A Plant B
Supplying Plant Receiving Plant
PR Received
Purchase Request
Transfer Posting
Goods Received
Plant A Plant B
Supplying Plant Receiving Plant
PO Received
Purchase Order
Goods Issue
Goods Received
Payment Received
Payment Run
Copyright © 2017 Tech Mahindra. All rights reserved. 128
External Services Process
Service – X; Vendor – X
Qty. 1000 AU
Rs. 1000/AU
Purchase
Requisition Purchase Quotation
Order Comparison
Release
Strategy
Invoice Vendor
Verification Selection
Goods
Receipt
Payment Run
Copyright © 2017 Tech Mahindra. All rights reserved. 136
Release Procedure
Purchase Requisition
Before Release
After Release
After Release
Internal
Vendor Non SAP R/3
SAP
10 10
20 20
30 30
Invoice verification:
Matches the vendor’s invoice to the purchase order
and the goods received
Matches price, and quantity.
Updates the purchase order and its history.
Updates accounting information.
Vendor Bank
Financial 1000 Payment
Payment 1000
Accounting program
program
_______________ _________________
Invoice
Invoice Verification
Quality Inspection Payment Run Qty. – 100
Accepted Qty. – 80 Qty. – 100 Vendor – X
Rejected Qty. - 20 Vendor – X Material - X
Material -X
Return Delivery
Qty. 20 Credit Memo Payment
Vendor – X Qty. 20; Amount-2000 Amount 2000
Material - X Vendor – X
Material - X
Payment
Amount 1000
Payment
Amount 1000
Forecast Based
Reorder Point Planning Time Phased Planning
Planning
Convert
Capacity
Planning
Production Order Purchase Schedule lines
Requisition
Purchasing
Sales Order functions
Processing
Invoice verification
Purchase Order
Final costing
Warehouse