SAP MM Presentstion-Final

MATERIAL MANAGEMENT

Contents

• Overview & Org Structure• Material Master• Vendor Master • Procurement cycle• Invoice Verification• Inventory Management• MM Transaction• MM Reports• MM Z Reports

2

3

Components of Materials Management

MaterialsManagement(MM)

LogisticsInvoiceVerification

MaterialMaster

PhysicalInventory

Valuation

MRP

ServiceEntrySheet

ServiceMaster

ProductCatalogPurchasing

InventoryMgmt.

ForeignTrade/Customs

4

Overview & Organizational Structure

Organization Structure

5

Purchasing Organization.

Valuation Area

Plant

Storage Location

Purchasing Groups

Organization Structure.

Lowest valuation area

Organizational level where Material

Requirement Planning (MRP) runs

Generally used to describe a production

site.

May be a physical or logical unit

Plant.

6

Valuation Area.

7

The valuation area determines at which

level a material to be valuated (inventory

value is established).

SAP R/3 allows valuation at the Company

Code level or Plant level, but recommends

valuation area to be set at the plant level

Storage Location .

8

Subdivision of a plant.

Materials are managed (inventory

management)

Raw Materials

Maintenance, Repair and Other

Finished Products

May be a Physical or Logical unit

Purchasing Organization .

9

Organizational unit responsible for the

procurement of materials and services.

SAP requires that purchasing organizations

to be assigned at the plant level.

A purchasing organization can be assigned

to

more than one plant.

A purchasing organization can be assigned

to

a company code.

Organization Structure .

10

Organizational units

Company

Controlling areas

Sales organizations Purchasing organizations

Company codes

Plants

Valuation areas

Storage locations/batches/special stocks

12

Company codes

ClientCMIFPE

3000 4000

Plants 4200

Inventory Valuation

41003400330032003100

13

Storage locations

Company Code3000

Plants 3100 3200 3300

310131023103

---

320132023203

---

330133023303

---

Inventory Management.

3300

340134023403

---

3400

14

Plants

Company (Group)

Company codes

Purchasingorganizations

CMIFPE

3000

3000

4000

4000

3400330032003100 4100 4200

Purchasing Organization

15

Plant 3100

Purchasing organization 13000

Purchasing organization 24000

Purchasing group 1

Purchasing group 2

Purchasingorganization

Plant 3200 Plant 3300 Plant 4200

Organization Entities in Purchasing

Plant 3400 Plant 4100

16

MATERIAL MASTER

Material Master

17

Material Master

• Material Master– Contains all the information a

company needs to manage about a material

– It is used by most components within the SAP system• Sales and Distribution• Materials Management• Production• Plant Maintenance• Accounting/Controlling• Quality Management

– Material master data is stored in functional segments called Views

18

Material Master

• An advantage of the SAP system is that it maintains one set of data in

real time. Material data is used by many functional areas. In the SAP

system, there is one set of related data for each material. With non-

integrated systems, each system may contain material data, and this

data is not always consistent. In the SAP system, the data is

consistently correct or incorrect.

• Material Master data is organized by Views. Depending on the type of

material, only certain views need to be used. As the system is

configured, additional views can be added as necessary.

• Many Material Master views are plant-specific

Material Master

1. Basic Data 12. Basic Data 23. Classification4. Purchasing5. Foreign Trade- Import6. Purchase order Text7. Sales: Sales Org Data 18. Sales: Sales Org Data 29. Sales: General /Plant Data10. Foreign Trade- Export Data11. Sales and Distribution Text12. MRP 113. MRP 214. MRP 3

19

15. MRP 416. Production Resource Tools17. Work Scheduling18. Forecast19. Quality Management20. General Plant Data/Storage 121. General Plant Data/Storage 222. Warehouse Management 123. Warehouse Management 224. Accounting 125. Accounting 226. Costing 127. Costing 2

Material Master Views

• Basic Data 1• Basic Data 2• Classification• Sales: Sales Org Data 1• Sales: Sales Org Data 2• Sales: General/Plant Data• Foreign Trade: Export Data• Sales Text• Purchasing• Purchase Order Text• Foreign Trade- Import Data• MRP 1• MRP 2• MRP 3• MRP 4• Forecasting• Work Scheduling• Production Resource Tool

• General Plant Data/Storage 1• General Plant Data/Storage 2• Warehouse Management 1• Warehouse Management 2• Quality Management• Accounting 1• Accounting 2• Costing 1• Costing 2

Basic Data, Classification arenot plant-specific (Client Level)Other views are plant-specific

Material Master

20

21

Material Types

Material Types Used

FERT Finished GoodsHALB Semi Finished GoodsROH Raw MaterialHIBE Operating SuppliesUNBW Non Valuated GoodsVERP Packaging MaterialERSA Spare Parts

22

Vendor Master Data

Vendor Master

Vendor Master .

23

Goods receipt

Bank

order account

?=

Invoice verification

purchase order

InvoiceMaterial

Purchasing

Payment

DEUTSCHEMARKDEUTSCHE

MARK

DEUTSCHEMARK

Vendor

The vendor

Organization Levels for Vendor Master .

23

General data

Purchasingorganization data

Company codedata

Company code

001

25

General data

AddressCommunication

Purchasing data

Order currencyInco termsMinimum order value

Accounting data

Bank dataPayment transactionsAccount management

Validfor the whole group

Validfor one purchasingorganization

Validfor the whole group orfor one company code

Vendor Master Record.

26

• General Data:– Client-level data: Applies to all company codes and

purchasing organizations– Name, address, phone numbers, language

• Company code data– Accounting data: Currency used, payment terms,

reconciliation account (a vendor is a creditor of the enterprise)

• Purchasing data– Data important for purchasing (contact persons,

delivery terms)– Maintained at purchasing organization level

Vendor Master .

27

Purchasing Master DataInfo Record

Purchasing Info Record .

28

Vendor A

Material

Piece % Conditions

USD

Piece % Conditions

USDInfo record

Vendor B

Stock material M1

Consumable material M2

Service S1

Info record

Info record

Info record

Info record


29

Data in the purchasing info record

General data

Vendor dataOrigin dataOrder unit

Texts

Control data

Delivery timeMinimum quantityTolerances

Prices andconditions

Gross priceDiscountsFreight

Price history Purchasing statisticsChanges

30

• Provides continuously updated information about the relationship of a specific material with a specific vendor

• Provides default information for purchase orders

Material Vendor

PurchasingInfo Record


31

• Purchasing info records can be created directly, as we will do in this class, or can be created automatically when a purchasing document (e.g. purchase order) is created or changed.

• The Purchasing Info Record can be created automatically from a purchase order if the Info Update indicator is set.

• Conditions is SAP’s term for pricing, which can include discounts, freight costs, surcharges, etc.


32

Procurement

Procurement .

33

External procurement environmentSource list

Quota arrangement

Piece % ConditionsUSD

Piece % ConditionsUSD

Info record

RFQs

Quotations

Invoice receipt

Purchase

requisition

Source determination

Vendor selection

Requirementsdetermination

Outlineagreement

Goods receipt

Purchaseorder

Purchase order history

Procurement .

34

Purchase Requisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt

GoodsReceipt

Purchase Order

VendorSelection

Procurement Process.

35

(Procure-to-Pay)


Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt Goods

Receipt

Purchase Order

3-WayMatch

Procurement Process

36

Purchase Requisition.

• Internal Document instructing the purchasing

department to request a specific good or

service for a specified time.

• Requisitions can be created in two ways:

– Directly - Manually

• person creating determines: what, how much, and when

– Indirectly - Automatically

• MRP, Production Orders, Maintenance Orders, Sales

Orders

37

Purchase requisition processing

RFQ

?Release

orderRelease

order

o.k.

MRP Direct entry

Purchase requisition

Determine source of supply

Vendor

Release

Allocate and process

Purchaseorder

38

• An RFQ is an invitation to a vendor by a

Purchasing Organization to submit a bid for the

supply of materials or services

– The accepted quotations will generate Purchasing Information Records

– Perform Quotation Price Comparisons– Finally Select a Quotation

PurReq.

generate RFQ

Vendor 1

Vendor 2

Vendor 3

Quote

Quote

Quote

P.O.45…12

RejectLetter

Eval.

Request For Quotation .

39

Request for Quotation

RFQ 1

Quotation 1 Quotation 2

Purchaseorder Rejection

RFQ 2

?

Price comparison list

Vendor 1 Vendor 2

Requirements known.Procure from whichsource?

40

Entering an RFQ

Inquiry 2

?

Vendor 1

Vendor 2

Inquiry 1

?

Item list

11 22

41

Processing Quotations: Example

Enter price and pricing conditions11

Vendor BQuotation forRFQ 2Item 10Gross price: 400/tSurcharge: 50%

Vendor C, B-Rejection-

Thank you for your offer. Unfortunately,we cannot place anorder at this time .....

Vendor AQuotation forRFQ 1Item 10Gross price: 400/tDiscount: Rs50

Vendor CQuotation forRFQ 3Item 10Gross price: 400/tFixed costs: $40

Vendor A- Order -

Mat. Qty Price

Steel 2t 350/t

Create info record or reject quotation33

Steel 2 t

Price

350/t 480/t 520/t 450/t

Quotation 1 Quotation 2 Quotation 3 Mean valuequotation

Compare quotations using price comparison list22

42

Purchase Order.

• A purchase order is a formal request to a

vendor for a specific material or service under

the stated conditions

• Purchase Orders can be created manually

– Reference a Purchase Order

– Reference a Purchase Requisition

– Reference a RFQ/Quotation

– Without Reference

• Purchase Orders can be create automatically

43

Processing Purchase Orders

Purchaserequisition

RFQ

??

Reference document

Contract

Pcs % Conditions

$

Pcs % Conditions

$Info record

Order history

Purchase order

Vendor

One-time vendor

44

Contract

Contractrequest

Reference RFQ

Reference contract

Contract


Vendor

Release order

11 22

45

Scheduling Agreements

EinstellungenEinstellungen

Purchaserequisition

RFQReference schedulingagreement


Vendor11 22

Schedule linesSchedulingagreement

46

Structure of a Purchasing document

Item 1

General dataConditionsTextsSchedule line

Additional data for item 1

Purchaseorder history

. .

.

Item 2.

. .

Additionaldata for item 2

. .

.

Purchasing document ocument

General datastatisticsMessagesConditions

ocument

General datastatisticsMessagesConditions

Document header

47

Account assignment type

Purchasingdocument

Itemcategory

Account assign.category

A B C

A AssetC Sale OrderF OrderK Cost CenterN NetworkP Project Q Project

48

Description Required account assignment data

Asset Main asset number and sub-number

Order Order and G/L account number

Production order Production order number

Cost center Cost center and G/L account number

Sales order Sales order and G/L account number

Individual customer requirement Sales order and G/L account number

Project Project /WBS Element

Unknown None

Account assignment type

49

Item category

Purchasingdocument

Itemcategory

Account assign.category

A B C

None StandardL Sub ContractingU Stock TransferS Third Party

50

PROCUREMENT OF EXTERNAL SERVICES

51

Processing External Services

52

Inventory ManagementProcessing Goods Receipts with Purchase Order Reference

Inventory Management

53

Goods Receipt Process

PurchaseOrder

45......01

Vendor

Notify Vendor

ShipmentGoods Receipt

54

• Goods movement in which we accept goods into

our system.

• If materials are delivered against a Purchase

Order we will reference that Order

– Determine if we got what we ordered

– System can purpose data for us from the PO

• Material, quantity

– Purchase Order History is update with the receipt

– Updates Physical Inventory

– Updates Inventory G/L Account

Goods Receipt

55

Stock Types for Goods Receipt

Account assignment object

Unrestricted-use stock

Stock in quality inspection

Blocked stock

Goods receipt blocked stock

Warehouse

Consumption

Cost center

Order

......

Vendor

56

Goods Receipt / Invoice ReceiptReconciliation Account


Purchase orderMaterials Management (MM) and Financial Accounting (FI)

via automatic account assignment

Goods receipt

No impact onFinancial Accounting (FI)

Dr Cr

Inventory

Rs100

Dr Cr

GR / IR

Rs100

57

GR w/o Reference to a Purchase Order or Production Order

Goods receiptPreplanning

without purchase order

without production order

Initial entry of stock balanceWithout purchase orderWithout production orderGoods receipt of by-productsDelivery free of chargeReturns from customer

58

• Incoming Invoices are reference against a

Purchase Order to verify their content, prices,

and arithmetic.

• If discrepancies arise between the purchase

order or goods receipt and the invoice the

system with generate a warning or an error

– Depending on system configuration the difference

could cause the system to Block the Invoice

Invoice Processing

59

• When an invoice is saved it applies the liability

from the Goods Receipt of our Purchase Order to a

Vendor

• Upon verification the:– Purchase Order is updated

– Material Master is Updated (MAP)

– Accounting Document is created

• Once the Invoice has been posted the verification

process is completed and the payment process is

initiated within Financial Accounting.

Invoice Processing

60

Types of invoice verification

Purchase order

Purchaseorder

?Invoice verification

Vendor invoice

Goods receipt

or or

61

----

Invoice Verification Environment

Purchase order

Goods receipt

Material master

Vendor master

Conditions

Invoice verification

Invoicedocument

G/L accounts

Assets

Cost centers

Purchase order

Material master

62

Posting an invoice

Purch. order history

Goods receipts Down payments Invoices

Material master

Moving average price Value

Invoicerelating to purchaseorder

Post

AXX

BXX

GR/R account

Vendor account

Doc. No. 51000123

Vendor 100-GR/R 100+

Goods Receipt / Invoice ReceiptReconciliation Account

Amount owed isassigned and transferred to

vendor account payableInvoice receipt

Dr Cr

Vendor A/P

Rs100

Dr Cr

GR / IR

Rs100

64

• When a goods movement takes place it is

represented by a Movement Type– Movement types are three-digit keys used to

represent a movement of goods• 101 – goods receipt into warehouse• 103 – goods receipt into GR blocked stock• 122 – return delivery to vendor• 231 – consumption for a sales order• 561 – initial entry of stock

• Destinations for Receipt of Goods– Warehouse – Unrestricted, Quality, Blocked– Quality– Goods Receipt Blocked Stock

Goods Movement

65

• When a Goods Movement for the receipt of

goods takes place a series of events occur

– Material Document is Created

– Accounting Document is Created

– Stock Quantities are Updated

– Stock Values are Updated

– Purchase Order is Updated

– Output can be generated (GR slip)

Effects of Goods Movement

66

Inventory ManagementProcessing Goods Issues

Inventory Management – Good Issue

67

Goods issues

From warehouse

From consignmentstores

Goods issue

Sampling

Scrap

Consumption

Cost center

Asset

Sales

Order

Issue

68

Effects of goods issue

Material document

Accounting document

G/L account.Stock accountConsumption account...

Reservation

Order

Stock quantityConsumption statistics...

Point of consumption:Cost centerOrder...

Warehouse mgmt:Transfer order

Quality management:Inspection lot

Goods issue

69

Posting method for goods issue

Stock accountStock value Consumption account

Update on goods issue

70

Special Stocks and Special Procurement Types

• Consignment• Subcontracting• Stock Transfer with Stock Transport Order• Third party processing• Sales order stock• Project Stock

71

Physical Inventory Procedures

• Periodic inventory• Continuous inventory• Cycle counting• Inventory sampling

72

Physical Inventory

• Can be carried out for Company’s own stock and Special Stock

• Inventory for Company’s own stock and Special stock must be taken separately in different physical documents

• Physical inventory can be taken for Unrestricted-use stock in the warehouse Quality inspection stock Blocked stock

73

Physical inventory procedure

Create physicalinventory document

1

Set blockingindicator

2

Physicalinventory document

4

Post differences

Batch-Input

Batch-Input

Arrangerecount

Change count

6

List of differences

5

Print physicalinventory document

3

5a

5b

74

MM Transaction

Material Master

MM01 Create MaterialMM02 Change MaterialMM03 Display MaterialMM06 Deletion FlagMM60 Material List

Vendor Master

XK01 Create VendorXK02 Change VendorXK03 Display VendorXK05 Block VendorXK06 Deletion Flag

75

Purchase Order

ME21N Create Purchase OrderME22N Change Purchase Order ME23N Display Purchase Order ME29N Release Purchase Order ME28 Collective Release


ME51N Create Purchase RequisitionME52N Change Purchase Requisition ME53N Display Purchase Requisition ME54N Release Purchase Requisition ME55 Collective Release

MM Transaction

76

MM Transaction


MIGO Good MovementsMB1B Transfer postingMB1A Good Issue

Physical Inventory Management

MI01 Create Physical Inventory DocumentMI02 Change Physical Inventory Document MI03 Display Physical Inventory DocumentMI04 Enter CountMI05 Change Count MI06 Display Count MI07 Post Difference

77

MM Reports


ME5A GeneralME5K Account Assignment wise - General ME5J Account Assignment – By Project

Purchase Order

ME2L By VendorME2M By Material ME2N By P.O Number ME2K Account Assignment – GeneralME2J Account Assignment – By Project

78

MM Reports


MB03 Display Material DocumentMB5B Stock on Posting Date MB52 Display Warehouse StockMB51 Material Document ListMB5T Stock in TransitMBBS Valuated Sale order/ Project StockMBLB Stock with Sub Contractor

79

MM Z -Reports

ZITL Internal Lead TimeZEXTL External Lead TimeZPOSHORT Material Shortage ReportZPODEPT Department wise commentsZMKVZ Vendor Details ZMM_PEND_INDENT1 Pending P.RZPOSC P.O Short CloseZPOSCLIST List of Short Closed P.OZPRSC List of P.R to be short closed

80

Thank You

SAP MM Presentstion-Final

Documents

Transcript of SAP MM Presentstion-Final