Key User Training - MM

MM Overview
Recording Requirements Vendor Invoice Verification Placement of orders

Inventory Valuation

Materials Management
Stock Adjustments Material Issues Material Receipts

Follow up for orders

The Procurement Process

Source Determination Purchase Order Goods Receipt Invoice Processing

RFQ / Quotation

Pur. Order

Planning, Reporting & Analysis

Purchase Order
Purchasing
Purchase Requisition
10 20 30 40

Vendor
Purchase Order
10 20 30 40

Another Plant

Request for Quotation

10 20 30 40

Master Data

Goods Receipt

Purchase Order
10 20 30 40

Vendor Another Plant

Goods Receipt Area

Material Document

Accounting Document

Invoice Processing
Purchase Order
10 20 30 40

Invoice Document 132451 A/c Dr 1000 165234 A/c Cr 1000

Material Document

Invoice Verification

Vendor Invoice

Master Data

Payment Processing

Procurement Types
Procurem ent for Stocks Procurem ent for Consum pt on

Procurem ent for stocks c uses n ncre se n t e lues. ter l s rece e n stock qu nt t es n pl ce n stor e. Procurem ent for consum pt on oes not c use t e bo e. ter ls re rectly poste to consum pt on.

Consuma e Materia
Consumable materials are materials or services that are procured directly for an account assignment object. Inventory Management is not carried out. Examples of consumable materials are: office materials, computer systems, grease, welding rods. The system automatically updates consumption of materials with a material master record.

Account Assignment O jects

A: Asset
Purchasing Document

A/c Assignment Categories

K: Cost Centre F: Order

Account Assignment

P: Project

Account Assignment (contd )

Receipts directly posts consumption against department.

Receipts

Consuming Department
Issue is not required.

Issues

Consuming Department

Procurement or toc Materia s

Entry of material number required. No account assignment category. Posting to stock accounts. Quantity and value updated in the material master. Moving average price is updated.

Procurement or Consuma es
Entry of material number not required, but is possible. Account mandatory. assignment category

Posting to consumption accounts. Consumption update for materials with material master only.

Scope o Inventory Management

Stock Transfers Material Stocks Goods Receipts

Physical Inventory

Goods Issues

Integration o Inventory Management

Planning Goods Receipt / Issue updates the stocks and hence the planning situation. Controlling Goods Issue to Prodn or Cost Centre creates a costing document creation.

Inventory Management
Production Confirmations entered in the production order leads to goods issues and / or receipts. Financial Accounting Goods Receipt / Issue causes a stock / consumption posting in respective accounts.

Materia Movements in IM
Goods Receipts

Material Movements

Goods Issues

Transfer Postings

Types o Stoc s
Quality Inspection Stock Unrestricted Stock GR Blocked Stock Blocked Stock Consignment Stock Sales Order Stock Project Stock Vendor Stock

Normal Stocks

Special Stocks

Goods Receipt or Stoc Materia s

Purchase Order
10 20 30 40

Box 1 Box 2 Box 3

Vendor

Goods Receipt

Warehouse

Effects of Goods Receipt

Material Delivery
Material Master - Stock quantity, value and price (moving average) are updated Quality Management - Creation of an inspection lot to trigger a quality inspection. Inventory - Stock (may be quality inspection) is updated through a material document.
Goods Receipts

Accounting - Stock and consumption account are updated through accounting document. Purchasing - Purchase order history and PO are updated.

Goods Issue
Account assigned Purchase Order Production Order for BOM Materials Reservations for Non BOM Materials

Goods Receipt against PO

Goods Issue against Prodn Order

Goods Issue against Reservation

Consumption Posting (Same as Goods Issue)

Stock and Prodn Order updated with consumption

Update of Stock, Reservation & Cost Object

Effects of Goods Issue

Production Requirements Goods Issue Other Requirements
Material Master - Stock quantity, value are updated. Inventory - Unrestricted Stock quantity is updated through a material document. Accounting - Stock & Consumption accounts are updated through accounting document. Production - Relevant Production Order / Run Schedule Hdr updated with qty / value Controlling - Material Costs are posted into the cost object through Costing Document.

Stoc Transfers
Physical Storage Location 1 Storage Location 2 Logical Quality Inspection Unrestricted Use Unrestricted Use Blocked Stock

Plant 1

Plant 2

Plant 1

Vendor 001

Project Stock

Unrestricted Use

Effect of Transfer Postings

No accounting postings created normally (except in certain specific cases) Stock quantity reduced in one location / stock type and increased in the other. Material document is created for every transfer to record the stock movement.

Data in SAP
Material Data Vendor Data Bill of Material Routing

Transactions
Placing Orders, Material Receipts / Issues, Creating Production Orders, Booking Vendor Invoices

Purchase Order

Contract

Material Movements

Production Orders

Data in SAP (contd)

Master Data
Central Repository, used by various departments. Created once and changed if required. Transactions use these data repeatedly. Examples :Material Master, Vendor Master, BOM, Routings

Transaction Data
Created when a transaction is carried out. Record of the details of a transaction. Reports use the transaction data. Examples : Purchase Orders, Production Orders, Material Receipts.

Materia Master Structure

Production Stores Sales Planning Purchase
Various departments use the material master for their day to day activities. Various departments need different data for the same material.

Org Leve s in Materia Master

Stock transfer from Plant 1 to Plant 2 Material is In-house manufactured at Plant 1

Lead time for Plant 1 is for e.g 10 days

Lead time for Plant 2 is for e.g 8 days

Moving average price of say Rs 230.00

Moving average price of say Rs 234.50

For the same materia , different data is to e maintained, depending on organizationa eve s

Org Leve s (contd)

Materia master data is organized at various Organizationa eve s

Material Master

Client Level Data

Plant Level Data

Sales Org Level Data

Basic Data Purchase Text Sales Text

Purchasing Planning (MRP) Work Scheduling

Sales Gen. Data Sales Org Data

Materia Master : Views

Basic Data Costing Data Sales Data

Accounting Data

Material Master
Storage Data Scheduling Data Planning Data

Purchasing Data

Materia Type
Operating Raw Materials Supplies Semi-finished Products Finished Products Spare Parts Non-Valuated

Trading Goods Others

Contro using Materia Type

Contro s i aintaine for ea ie s ateria are ering

Material Type

Contro s t e ateria nu (Interna / Externa , ange)

p ate ontro for uantities an a ues in t e arious a uation areas Contro s t e externa pro ure ent / in ouse pro u tion for a ateria

Materia Types (contd)

Some typical examples of control functions:
a M at eria s are not so d

inis ed G oods are not p rc ased N on a at ed acco nt ed in t er ac a in at eria s are s of a e not

at eria s are not cost ed

Materia Groups
Groups the materials as per some common defined criteria. Some typical examples are Plastic Components, Rubber Components, Iron & Steel. Must be entered in purchasing documents if purchasing is done without any material master. Can be used for analysis / reporting in Purchasing / Inventory. Can be used to setup approval (release) procedures for Purchase Requisitions. May be changed in the material master, but distorts the analysis.

Materia Va uation Paramaters

Va uation Class - Classifies the materials from accounting perspective Va uation Category - Defines whether a materia is to e sp it va uated or not Price Control Indicator - Defines whether a material has Moving Average Price or Standard Price Price - MAP is calculated y the system during transactions Standard Price is entered