SAP MM Scenarios

Material Management
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MM BUSINESS PROCESSES
PROCUREMENT - GENERAL
1. MRP
2. Purchase Requisition
3.Vendor Selection
4. Purchase Order
5. Purchase order follow-up
6. Goods Receipt
Accounting entry:
Inventory Stock A/c Dr

GR/IR Clearing A/c Cr
7. Invoice Verification
Accounting entry:
GR/IR Clearing A/c Dr

Vendor A/c Cr
8. Invoice Payment
Accounting entry:
Vendor A/c Dr
Bank Clearing A/c Cr
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PROCUREMENT - PROCESS
1.Purchase Requisition (ME51N)

No accounting entry
2,Purchase Order (ME21N)

No accounting entry
3.Purchase Order Release (ME29N)

No accounting entry
4.Goods receipt (MIGO)

Inventory Dr
GR/IR Cr
5.Invoice receipt (MIRO)

GR/IR Dr
Vendor Cr
MM Steps-
Vendor Creation - MK01

Material master creation - MM01
Maintaining the purchase info record for the material against the vendor for a
material with a type of info record in - ME11
Creating a PR - ME51
PR Release Me54
Request for quotation from vendor if its new matrl-ME41
RFQ Output ME9A
Maintaining the quotation-ME47
Price comparison -ME49
Raising a PO for vendor against the PR in ME21n
PO Release ME29n
Receiving the goods against the PO - MIGO
Clearing the invoice for the vendor- MIRO
MM Cycle:
Determination of Requirements:
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In this step, there is a requirement of material or service, which must be procured
externally, from the user for its own process. The requirement must be recorded as
Purchase Requisition (PR) document in SAP MM.
Determination of the source of supply: After the PR has been created, the responsible
department (usually purchasing/procurement department of the company) must process it.
The buyer of the procurement department must determine the possible sources of supply
of the material/service specified in the PR.If there is no valid info record at that time, the
buyer can create Request For Quotation (RFQ) documents to one or some prospective
vendors.
The buyer can access the procurement history of the material/service specified in the PR,
so he can see which vendors that have provided it to the company before.
He can also create the RFQ to the new prospective vendor that might have never
provided the material/service to the company before*In the RFQ, the buyer must include
the information about the material/service needed from the vendors (can be copied from
the PR), the latest submission date of the quotation, the preferred term of delivery, term
of payment, currency, etc.
Vendor Selection: Purchase Order is sent to the selected vendor. After purchase order
processing, buyer will monitor the purchase order for delivery with vendor and also for
confirmations.
Goods Receipt: When the vendor delivers the material or performs the service, the
responsible person of the company must perform the goods receipt (GR) or service
acceptance (SA) transaction. When we perform the GR for the PO item for the first time,
SAP will propose the quantity to be GR as the PO order quantity. Depends on the
delivery terms agreed with the vendor, the vendor might deliver the material partially. We
can post the GR partially too, so when the next material delivery is received, SAP will
propose the quantity to be GR as the remaining quantity that has not been GR yet.
Invoice Verification: After

the vendor delivered the material/service, it will send the
invoice to the person responsible in the company. Invoice is a formal document issued by
a vendor to the company to request the payment for the material or service that the
vendor has already provided to the company according to the terms of payment agreed in
the PO.
Payment Processing: After the IR transaction has been posted, the vendors account
payable will increase and the company must process the payment to that vendor as stated
in the terms of payment of the PO. The payment transaction will be performed in FI
module. After the payment has been posted, the vendors account payable will be debited
and the cash or bank account will be credited.
RETURN DELIVERY TO VENDOR
1. Return Delivery can be done by using movement Types 122 and 161
(a) Return Delivery with 122 mov
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Movement type 122: Return delivery to vendor
Using movement type 122, you can distinguish real return deliveries for a purchase order
or order from cancellations (102).
In the standard version, you must enter a reason for the return delivery if you are using
movement type 122. In this way, evaluations of return deliveries are possible.
Steps
create Purchase Order ME21N
Goods receipts against Purchase Order MIGO
Return Delivery against Material Document MIGO
When we post the document the movement type 122 will be selected by the system.
122 - Movement type used for return delivery of goods referencing a Goods receipt
material document
You can return partial amount of goods to the vendor stating the reason for movement.
The account postings are

Debit - GR/IR account
Credit - Inventory account
(b) Return Delivery with 161 mov
Movement type 161: Return for PO
If a purchase order item is marked as a returns item, the returns to vendor are posted
using movement type 161 when the goods receipt for purchase order is posted.
Steps
Create Purchase Order with different Document Type (RNB)
Goods receipts against Purchase order
when we post the document the movement type 161 will be selected by the system.
Both Movement type 161 has the same effects as movement type 122.
161 - movement type used for returning the material to the vendor referencing a returns
PO.
The account postings are
Debit - GR/IR account
Credit - Inventory account
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The basic difference between these two movement types is,
MOV-122: you can return material to the vendor when you know the PO number or GR
number. The major advantage here for us is material get returned with same value when
GR taken.
MOV-161: Returns PO, here we will return the material by creating the PO with Returns
flag. As soon as you take GR system returns the material with price given in the PO. Here
system takes the price given in the Returns PO.
The business functionality of the both are, If you taken the 100 qty GR from the vendor
and 80 got accepted and 20 rejected. Then it is advisable to go for 122.
But you have procured material from various vendors and 100 Gr qty only 1 pc got
rejected and like that in case of other vendors. In cumulative you got some 30 pcs that are
not usable. In that case you negotiate with any vendor to take that material at agreed
price. In this case we go for Returns PO. Stocks get returned with the agreed price.
RETURN DELIVERY TO VENDOR-WITH DELIVERY
2.Return Delivery can be done bu using movement Types 122 and 161
(a) Return Delivery with 122 mov

steps
1. Create Purchase Order ME21N
2. Goods receipts against Purchase Order MIGO
3. Return Delivery against Material Document MIGO
also select via Delivery check box
When we post the document the movement type 122 will be selected by the system.
Delivery document will be created.
4. VL02n enter the delivery document no.
Enter the pick qty and batch and go for PGI
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Subcontract PO: You cannot use subcontracting PO in intra-company process (plants
under same company code)
You need to have the material maintained that can be procured externally and you need
have the BOM maintained with components.
2. You also need to maintain the "Subcontracting" info record.
3. After completing steps 1 & 2, you can create a subcontracting PO with item category
"L"
4. After creating this PO, you need to make transfer posting and issue the components.
This is done by MB1B transaction using movement type 541.
5. You can receive the finished product by MIGO transaction with Mvt. Type 101.
Sub Contracting Cycle
(1) You have a material that can be procured externally, and you have maintained BOM
with components. Any waste generated and received during subcontracting process can
be maintained as component with negative quantity.
(2) You create a subcontracting PO (PO with Item Category L). You can also maintain
Purchase Info Record for Subcontract category for material and subcontractor.
(3) You make a transfer posting to issue components for SC PO. Material is sent to
subcontractor. As material remains under your ownership, system does not make any
value entry. But quantity is shown as "Material Provided to Vendor"
(4) You receive finished material against SC-PO. You also specify components consumed
in manufacturing of finished goods. Additionally, if you have negative components in
BOM, now you'll also receive subcontracting by-products. There are three events, so
three accounting entries are generated:
DR FG Stock/ SC By-Product Stock

CR Change in Stock (FG/ SC By-Product )
(for finished goods received)
DR Subcontracting Charges
CR GR/IR Clg
(for moneys payable to Subcontractor)
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DR Consumption (Components)
CR Change in Stock (FG/ SC By-Product )
(material provided to Vendor is now charged to expense)
(5) You do the IV for SC Invoice, and the process is complete.
Process of Subcontract in MM
Sub-contract business process:

You want to buy material from the supplier (processed material/ assembled item) , but for
some reason (quality of certain item / price ) you will give some component to vendor .
Vendor shall process the item / use the item provided & supplies the final item.
SAP process:
1.Create the finished goods material code.
2. Maintain the BOM for the material.
3. Create PO with item category as "L.
4. Issue material to vendor with movement type 541
5.Receive the material against the PO with movement type 101.
6. MIRO to account for vendor's invoice for the service charge& material used by him.
Can anybody tell me how a process has to be given to subcontracting?

Suppose, I have 3 operations 1)weaving 2)dyeing 3)cutting & packing
if no 2 process (i.e Dyeing) has to be given to subcontracting, what process should i
follow ?
The following process to be followed for subcontracting.

1. Item code(material master) to be created at the stage of before dyeing.
2. Item code(material master) to be created after Dyeing as subcontracted item.(F30)
3. Bill of material to be created for the material (2) calling for material (1)
4. Info record and source list to be created for material (2) with the corresponding vendor
5. PO to be released for material (2)

6.Along with PO the material(1) to be issued to vendor
7.On receipt of material when GR is made the stock with vendor will get updated.
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Service procurement,
Services configuration can be at spro--mm--procurement of external services.
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1. AC01 - Create Service master and assign the Valuation Class and give uom, service
category and do Account Determination in OBYC for transaction Key GBB and
Valuation Modifier VBR and for transaction Key WRX, assign GR/IR Clearing A/c
2. ME21N - In PO (ME21N), use Item category as "D" (Services) along with Account
Assignment Category "K" (Cost Center) or "P" (Project) or "U" (Unknown) and In
"Services" tab, specify the Service Master Number(Activity Number), Quantity and
Gross price.
3. ML81N - Create Service Entry Sheet w.r.t. Service PO and press release flag for
acceptance. You will get service entry sheet number and a material document number.
Service Expense A/c - Dr (GBB)

GR/IR Clearing A/c - Cr (WRX)
4. MIRO - LIV for Service Entry Sheet or Service PO
Consignment Process steps
Consignment stock is special kind of stock .The stock is lying at your storage location but
the responsibility vendor .Consignment stocks are not valuated. When the material is
withdrawn it is valuated at the price of the respective vendor.
Vendor liability will arise at the moment when you are withdrawing the stock or transfer
the stock to your own stock.
Info records with info category Consignment are created before creating the PO (you
must maintain the consignment price for the vendor in an info record).The price is
required for material valuation and accounting purposes.
Steps:
1. Assign Standard purchase org.to plant in Enterprise assignments (IMG)

2. Consignment Info record Activate in IMG material's management..
2. Create Info record for the material & vendor with info category consignment and
maintain the price which will be used for the valuation and accounting entries.
2. You enter purchase requisitions for consignment materials in exactly the same way as
for other materials.( item category K).
3. Creat Purchase Orders / Outline Agreements for Consignment Materials in the similar
way (item category K).
4. Goods receipt with 101 as its item Cat K it will not create the AC doc.
5. You can transfer stock to your storage location or goods issue for the consumption
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whatever may the case with movement 411
6.Consignment materials are settled through MRKO... and payment will run in FI.
OR
The followings are the typical vendor consignment process steps:
1. Maintain consignment process through consignment info record (ME11)

2. Create PO with item category K (consignment)
3. Perform goods receipt against PO (movement 101 through MIGO or MB01) from step
2. This will place the material into consignment inventory. No account posting at this
time since the material still belongs to the vendor.
4. Perform transfer posting (movement 411 special stock K through MB1B) on the
material when the stock is ready to be transferred to company's own inventory.
Alternatively, consignment stock can also be consumed by production order through
movement 261 with special stock K.
5. Run transaction MRKO to settle consignment liability and pay the vendor. Think of
this transaction as a self service invoice. The consignment settlement is based on the
quantity of stock that was consumed (or transferred to company stock) in step 4.
The account entries in GR,GI and IR are as follow;
A. Goods Receipt:
No Accounting Documents
B.Goods Issues:
Consumption A/C: DR,

Consignment(Liability Account ) Payable: CR,
C.Consignment Settlement: - Transaction Code - MRKO
Consignment (Liability Account )Payable: DR,

Vendor Account A/C: CR
Step for STN

ME21N - Create Stock Transfer order (STO)
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VL10B - Create Delivery
VL02N - Post goods issue & Batch / qty. picking
VF01 - Create Billing Documents (STN)
VF02 - Display STN
VF03 - Printout for STN
Step for STN Cancellation:
VL09 - Reverse post goods issue
VL02N - Reverse delivery / pick qty.
ME22N Cancel / delete STO
Introduction
Most of the times we need to transfer stock of material from one plant to another plant or
plants. In SAP R/3 the following type of procedures are available.
1. Stock Transfer between Plants in:

1. One Step
2. Two Steps
2. Stock Transport Order:
1. Without Delivery
2. With Delivery via Shipping
3. With Delivery and Billing Document/Invoice
Advantages of the Stock Transport Order
It has the following advantages over the transfer of stock without a stock transport order:
1. A goods receipt can be planned in the receiving plant.

2. A vendor can be entered in the stock transport order.
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3. Delivery costs can be entered in the stock transport order.
4. The stock transfer order is part of MRP
5. The goods issue is possible via a delivery or via Shipping.
6. The goods receipt can be posted directly to consumption.
7. The entire process can be monitored via the purchase order history.
Stock Transport Order with Delivery and Billing Document/Invoice
As per Indian Law, if the material is subject to Excise Duty, even moving between plants
needs to be accompanied with Excise Invoice. The following process describes the full
cycle of from stock transport order, goods issue, excise invoice and goods receipt
processes.
Create Stock Transport Order
In case of requirement of materials, A Stock Transport Order stating specific quantity of

material will be raised by receiving plant to the supplying plant. For creating Stock
transport we can use the following path:
Logistics> Materials Management> Purchasing> Purchase Order>

Create>Vendor/Supplying Plant Known
T. Code: ME21N or ME27
Creating Outbound Delivery
If the stock of material is available in Supplying Plant then Supplying Plant will create a
delivery against the above Stock Transport Order.
SAP menu> Logistics> Sales and Distribution> Shipping and Transportation> Outbound
Delivery> Create> Collective Processing of Documents Due for Delivery>Purchase
Orders
T. Code: VL10B
Changing Outbound Delivery
To Pick the Material and to do the Post Goods Issue supplying plant will change the
above outbound delivery document.
SAP menu> Logistics> Sales and Distribution> Shipping and Transportation> Outbound
Delivery> Change> Single Document
T. Code: VL02N
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Creating Billing Document
After PGI, A billing Document known Commercial Invoice is created to update the
corresponding GL Accounts and same is send to receiving plant (Customer).
Logistics> Sales and distribution> Billing>Billing document> Create
T. Code: VF01
Creating Excise Invoice
To meet the legal requirement and to submit it to Excise Authorities the supplying plant
will create an Excise Invoice. It is a legal document and it must accompany the goods
when these are being sent to the Receiving Plant (Customer).
SAP User menu> Indirect Taxes> Sales / Outbound Movements> Excise Invoice> for
Sales Order> Outgoing Excise Invoice Create
T. Code: J1IIN
Goods Receipt for Stock Transport Order
With reference to Stock Transport Order as created above goods are received at the
receiving plant. During entering this goods movement at receiving plant we can capture
and post the Part I and Part II of excise duty. To get Excise Invoice tab at Header Data
choose Check icon at third row at the top of the screen.
Logistics> Materials Management> Inventory Management> Goods Movement> Goods

Receipt for Purchase Order
T. Code: MIGO
Stock Transport Order with Delivery via Shipping
For stock transport orders with delivery via shipping, note the prerequisites described
below.
Master Data: Material master
-Supplying plant
In the material master for the supplying plant, you must record the following data:
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Basic data
Shipping data
Accounting data
-Receiving plant
In the material master for the receiving plant, you must record the following data:
Basic data
Purchasing data
Accounting data
Customer Master Record

The goods recipient of the delivery is the receiving plant.
Stock Transport Order with Delivery via Shipping
For stock transport orders with delivery via shipping, note the prerequisites described
below.
Master Data: Material master
-Supplying plant
In the material master for the supplying plant, you must record the following data:
Basic data
shipping data
Accounting data
-Receiving plant
In the material master for the receiving plant, you must record the following data:
Basic data
Purchasing data
Accounting data
Customer Master Record

The goods recipient of the delivery is the receiving plant.
You must create a customer master record for the receiving plant. From this, both the
address and other data that is relevant for shipping, such as transportation zone and
shipping condition, are taken.
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The customer master record must be created for the organizational units. From the menu,
choose Logistics > Sales and Distribution >Master Data >Business Partner
>Customer> Create (account group Sold-To Party).
Customizing
Sales and distribution
-Schedule line categories
You assign schedule line categories and movement types in Customizing for Sales and
Distribution, under Sales > Sales Documents > Schedule Lines > Assign Schedule
Line Categories.
Possible schedule line categories and movement types are:
Schedule line category NN intra-company-code stock transfer
Schedule line category NC cross-company-code stock transfer
Movement type 647 one-step procedure
Movement type 641 two-step procedure
-Shipping point
Shipping point determination depends on the supplying plant, the shipping condition of
the customer master record belonging to the receiving plant, and the loading group of the
material.
You assign the shipping point to the supplying plant in Customizing for Logistics
Execution under Shipping> Basic Shipping Functions > Shipping Point and Goods
Receiving Point Determination >Assign Shipping Points.
(See also Enterprise Structure >Assignment > Logistics Execution >Assign shipping
point to plant.)
Purchasing
-Delivery type
Assign delivery type NL to the combination of order type UB and supplying plant
(replenishment delivery for intra-company-code stock transfers).
If you do not assign a delivery type, you can only post the goods issue in inventory
management.
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You define the delivery type in Customizing for Purchasing under Purchase Order > Set
up Stock Transport Order >Assign Delivery Type and Checking Rule.
If the document type contains a delivery type but another requirement is missing (for
example, shipping data), you receive either a warning message or an error message
(depending on the system configuration) when you try to enter the stock transport order.
If you receive a warning message, you can create the stock transport order, but you can
post the goods issue for this item only in Inventory Management.
-Organizational units
Assign the organizational units (sales organization, distribution channel, and division) to
the supplying plant and receiving plant (Purchasing >Purchase Order > Set up Stock
Transport Order > Define Shipping Data for Plants).
Plant customer number
Assign the customer number to the receiving plant (Purchasing > Purchase Order > Set
up Stock Transport Order>Define Shipping Data for Plants).
To better depict the customizing, Jimmy Zhang collected those settings into one picture.
Maybe it will help you to understand the settings and see the relationships more clearly.
Configuring the Stock Transport Order
- Configure using transaction OMGN

- Depending upon the sending and receiving plants, maintain sales organization and
customer data in customizing.
- Maintain the supplying plant as a vendor and attach the plant to the vendor in the
Vendor Master.
- Material type has to be HALB or HAWA.
- Ensure that the company with sales Organization has a plant to take care of stocking.
- The PO used is NB and not Stock Transfer PO.
Configure SD for inter-company billing to enable picking up the pricing procedure for
billing.
- Carry Out delivery through process delivery due list and billing through process billing
due list.
Otherwise, You need to configure your Stock Transport Order settings for your Cross-
Company:
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Business Transaction to work.
1. Customer No. for the Goods Receiving Plant - OMGN
2. Availability Check- Checking Rule (if necessary) - OMGN
3. Assign a Delivery Type for the Delivering Plant - OMGN (for Stock Transport Orders,
NLCC)
4. PO type (which i belive you have done) - OMGN
5. Assign Vendor No. to the Supplying Plant (done) - VK02
6. Assign Customer No. to the Purchasing Plant for the Inter-Compnay Invoice (but you
need to assign this to the Sales Organization pre-assigned to the Purchasing Plant),
IMG-SD-Billing-InterCompany Billing-Define Internal Customer No. by Sales Org
***and by the way for the Invoice to work between Cross-Compnay Plants, you need
also to have a Sales Org for the Supplying Plant and a Pricing Determination Procedure
Configure Intercompany Stock Transport Order
Explain STO.
STO is Stock Transport order. It is used for inter company transfer of goods. Plant to
plant transfer and even transferring raw material to Third party contractors (Job Work).
The Process is you create a STO do delivery against the STO and create a Billing
Document against the STO.
How to configure the inter-company Stock Transport Order? Prassee
Material should exist in both the plants (Delivering & Ordering),
Internal customer should be assigned to the ordering plant ( MM -> Purchasing ->
Purchase Order -> Setup stock transport order -> assign the internal customer to the
ordering plant and assign the Sales area of the internal customer.
Tcode : OMGN
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Assign its Sales area to the delivering plant
Assign the document type and Delivery type NB and NLCC
Assign the Supplying plant > Receiving Plant > NB
Take the delivering plant and assign the sales area.
Vendor master has to be created and assign the supply source ( Delivering Plant).
Create a purchase order ME21N > Save
Delivery VL10 G > Calculation rule (appropriate) > Assaign the purchase order
number here and execute.
Select the Delivery creation line and do the back ground process.
Start the log display and see the delivery document number by the documents button
Goto VL02N > do picking and PGI > Then do the MIGO with respect to the delivery
document.
Billing (Intercompany pricing conditions should be set
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Configure Intercompany Stock Transport Order
Material should exist in both the plants (Delivering & Ordering),
Internal customer should be assigned to the ordering plant ( MM -> Purchasing ->
Purchase Order -> Setup stock transport order -> assign the internal customer to the
ordering plant and assign the Sales area of the internal customer.
Assign its Sales area to the delivering plant
Assign the document type and Delivery type NB and NLCC
Assign the Supplying plant --> Receiving Plant --> NB
Take the delivering plant and assign the sales area.
Vendor master has to be created and assign the supply source ( Delivering Plant).
Create a purchase order ME21N ---> Save
Delivery VL10 G ---> Calculation rule (appropriate) --> Assign the purchase order
number here and execute.
Select the Delivery creation line and do the back ground process.
Start the log display and see the delivery document number by the documents button
Goto VL02N --> do picking and PGI --> Then do the MIGO with respect to the delivery
document.
Billing (Intercompany pricing conditions should be set).
SAP Split Valuation for Materials
The SAP R/3 System allows you to valuate stocks of a material either together or
separately, that is, according to different valuation criteria. Split valuation is necessary
if, for example:
1. Stock from in-house production has a different valuation price than externally procured
stock.
2. Stock obtained from one manufacturer is valuated at a different price than stock
obtained from another manufacturer.
3. Different batch stocks of a material have different valuation prices.
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4. Value damaged and repair part differently from a new part.
To used split valuation, you have to activate it using 'OMW0'.
To change split material valuation once it has been set, you must
1. First post out all stocks (for example, to a cost center or with movement type 562)
2. Then change the control parameters
3. If necessary, change the automatic account determination
4. Finally post the stocks back in again
In split valuation, you can distinguish between partial stocks of a material according
to certain criteria and valuate them separately.
The material stock is divided according to valuation category and valuation type.
The valuation category determines how the partial stocks are divided, that is, according to
which criteria.
The valuation type describes the characteristics of the individual stocks.
With the function "Setting" you can determine:
Which valuation categories exist in your company (global categories)

which valuation types exist in your company (global types)
which valuation types belong to which valuation category
which valuation categories exist in a valuation area (local categories)
Your entries are only relevant if you set split valuation as active in the function "Global
settings".
In the standard SAP R/3 System, the following valuation categories are default settings :
B procurement type
With the valuation types:
"EIGEN" for in-house production

"FREMD" for external procurement
H Origin
X automatic valuation (only for batch)
To select split valuation ('OMWC'), proceed as follows:
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1. Determine the valuation categories and valuation types that are allowed for all
valuation areas:
global valuation categories via menu "Goto --> Global Categories"
global valuation types via menu "Goto --> Global Types"
2. Allocate the valuation types to the valuation categories.

a) Select "Goto --> Global Categories".
b) Position the cursor on a valuation category and select
"Goto --> Global Categories --> Assignments --> 'Types->Category'".
c) Activate the valuation types you want.
3. Determine the local valuation categories for each valuation area.

a) Select "Goto --> Local definitions".
b) Position the cursor on a valuation area and select
"Goto --> Local Definitions --> Allocate Categoires->Org.units (button Cats-
>(OU)".
You obtain a list of the global valuation categories.
c) Activate the categories to be used in this valuation area.
The system creates the local valuation types based on the allocations under point 2.
Only now can you create a master record with split valuation.
Specifying Split Valuation by creating Material Subject to Split Valuation
1. Create a material master record, selecting the Accounting View 1.

2. Enter your data as required on the Accounting data screen, specifying a valuation
category.
(If you can't find the valuation category field, it might be hidden, use OMSR to define
the Field Groups.
Look for the field MBEW-BWTTY for Valuation category).
3. Be sure that the price control indicator is V for moving average price and enter a
moving average price.
4. In the case of split valuation, you can create only one valuation header record with
price control V because the
individual stock values are cumulated, and this total value is written to the valuation
header record. This is where the
individual stocks of a material are managed cumulatively. To do this, fill in the
Valuation category field on the accounting
screen when you create the material master record and leave the Valuation type field
blank.
5. Save your data and the system creates the valuation header record.
6. The initial screen appears.
7. Extend the material by creating new material master records from the Accounting
view 1. For the first material, specify a
valuation type in the Organizational Levels dialog box and enter the respective
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accounting data on the data screen.
Proceed likewise for the other materials, distinguishing between them by valuation
type. To do this, call up the material in
creation mode again. Due to the fact that a valuation header record exists, the system
requires you to enter a valuation
type for the valuation category.
8. Repeat step seven for every valuation type planned.
You want to valuate the stock of material XYZ that you obtain from manufacturer A in
Los Angeles at a different price than the stock you obtain from manufacturer B in Detroit.
In this case, the valuation category is H for origin. Your valuation types can be LOS
ANGELES and DETROIT.
If a material is subject to split valuation, every quantity (sub-stock) of this material must
be assigned to a valuation type (for example, country of origin).
For every valuation type, there are two types of data in the system, as follows:
Valuation data (for example, valuation price, total stock quantity, total stock value),
which is defined for every valuation type at valuation-area level and applies to all
dependent storage locations.
Stock data, which, like batch data, is managed separately for each storage location. If a
material that is subject to split valuation is also subject to management in batches, its
stock data is not managed by valuation type, but rather by batch. Every batch is assigned
to a valuation type.
The stock quantity, stock value, and valuation price for all valuation types are managed
cumulatively at valuation-area level.
Must the Valuation Type Exist Before the First Goods Receipt?
You can post the goods receipt of material of a certain valuation type only if the valuation
data for this valuation type already exists, because the system valuates the goods receipt
at the price defined in the valuation data. On the other hand, the stock data for the
valuation type is created automatically during the first goods receipt into the storage
location, if this is defined in Customizing for Inventory Management.
Goods Movements with Materials Subject to Split Valuation
If you want to enter goods movements for materials subject to split valuation, you must
enter the valuation type in addition to the material number.
Enter the valuation type in the Batch field for MB01.
In MIGO, there is a valuation type field in Detail data -> Material.
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SAP Batch Handling
What is a batch no. of a materail? and where can we mention batch no for material?
Can we maintain batch no in mm01 Tcode while creating material?
In simple terms SAP Batch Handling means an additional keys fields for users to identify
the same materials.
For e.g. Normal Control : Plant + Material + Storage Location

Batch Hanlding : Plant + Material + Storage Location + Batch Number
The structure of the material master record allows you to manage stocks of a material by
value at plant level or company-code level and by quantity down to storage-location
level. Under certain conditions, you may need to make further subdivisions for a material
and manage batches.
Certain materials' features cannot always be guaranteed to be exactly alike in production.

For example, you cannot guarantee that a certain color will always have the same shade.
Minor differences between production lots cannot be avoided. You need to be able to
uniquely identify the individual production lots of the same material and manage them
separately in inventory.
Materials that require such precise identification, for example pharmaceutical products,
are identified and managed in stock not only according to material number, but also
according to batch number.
With batch handling, you can manage not only production lots from in-house production,
but also production lots from vendors as separate entities.
It is possible to supplement standard batch management with batch status management.
What Is a Material Handled in Batches?

Before you can manage batches of a material in stock, you must first specify in the
material master record that the material is to be managed in batches for the specified
plant. To do this, you must set the batch management requirement indicator in the
material master record (for example, in the Purchasing view field MARA-XCHPF or
Storage Location view field MARC-XCHPF).
Whether the material is managed in batches:

This indicator can be set while creating material.
MM01 -- General Plant data/storage 1 View -- Batch Management (check box)
(Check also Purchasing or Warehouse Mgmt 1 view).
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Level of Batch Number Assignment
If a material is subject to management in batches, every quantity of that material must be
assigned to a batch. Each batch of a material is identified by a unique batch number,
under which it is managed. This number is either entered by the user (external number
assignment) or assigned automatically by the system.
You can define number assignment for batches at various levels:
- Uniquely at client level for a material

- Uniquely at material level
- Uniquely at plant level
In the standard R/3 System, numbers are assigned to the individual materials at plant
level.
For every batch, there are two types of data:
- General data on the batch (for example, shelf life expiry date, date of the last goods
receipt), which is defined in the master batch. The master batch applies to all storage
locations in which the batch is located. No stocks are managed at this level.
- Stock data, which is managed separately for every storage location in which the batch is
located.
For example, if the batch C1 of a material is spread across two different storage locations,
the stock quantity is tracked for each storage location.
Must the Batch Exist Before the First Goods Receipt?

Both the master batch and the stock data for the batch are created automatically during
the first goods receipt. Thus, you do not need to create this data manually. However, if
you want to define specific data for a batch, such as the shelf life expiration date, you
have to manually maintain the batch data.
What Sorts of Batch Stocks Are There?

The following stocks are managed separately at batch level:
- Unrestricted-use stock
- Restricted-use stock
- Quality inspection stock
- Blocked stock
- Stock in transfer
- Blocked stock returns
Working with Materials Handled in Batches

When you enter goods movements for materials handled in batches, you must enter the
batch number in addition to the material number. If you do not know the batch number,
you can search for the batch using the required characteristics
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Config Setting In Batch Management
This will help you for config setting:
Logistics general - Batch Management
1.1. Specify Batch Level

Menu Path Enterprise Structure--> Logistics General--> Batch Management --> Specify
batch level and activate batch status management Transaction OMCT
1.2. Batch Number - Activate Internal Number Assignment

Menu Path Enterprise Structure--> Logistics General--> Batch Management --> Batch
Number Assignment --> Activate internal batch number assignment Transaction OMCZ
1.3. Batch Creation - for Goods Movements

Menu Path Enterprise Structure--> Logistics General--> Batch Management --> Creation
of new batches --> Define batch creation for goods movements Transaction
1.4. Characteristic Value Assignment -- Update Standard Characteristics

Menu Path Enterprise Structure--> Logistics General--> Batch Management -->
Characteristic Value Assignment --> Update Standard Characteristics Transaction
1.5. Activate Batch Classification for Goods Movements in Inventory Management

Menu Path Enterprise Structure--> Logistics General--> Batch Management -->
Characteristic Value Assignment --> Valuation for goods movements --> Activate Batch
Classification for goods movements in Inventory Management Transaction OMCV
1.6. Batch Determination Condition Table(Cross Client)

Determination & Batch Check --> Condition Tables --> Define production order
condition tables Transaction OPLB
1.7. Batch Determination Condition Table(Cross Client)

Determination & Batch Check --> Condition Tables --> Define SD condition Tables
Transaction V/C7
1.8. Batch Determination Access Sequence(Cross Client)

Determination & Batch Check --> Access Sequences --> Define Production Order Access
Sequences Transaction OPLF
1.9. Batch Determination Access Sequence(Cross Client)

Determination & Batch Check --> Access Sequences --> Define SD Access Sequences
Transaction V/C2
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1.10. Batch Determination Strategy Types
Determination & Batch Check --> Define Production Order Strategy Types Transaction
OPLE
1.11. Batch Determination Strategy Types

Determination & Batch Check --> Define SD Strategy Types Transaction V/C1
1.12. Batch Determination Batch Search Procedure

Determination & Batch Check --> Define IM Search Procedure Transaction OMCY

Determination & Batch Check --> Define Production order Search Procedure
Transaction OPLG

Determination & Batch Check --> Define SD Search Procedure Transaction V/C3
1.15. Batch Determination Batch Search Procedure Allocation

Determination & Batch Check --> Allocate IM search procedure/activate check
Transaction OMCG
1.16. Batch Determination Batch Search Procedure Allocation

Determination & Batch Check --> Assign Search procedure to production order
Transaction OPL8
1.17. Batch Determination Batch Search Procedure Allocation(SD)

Determination & Batch Check --> Allocate SD Search procedure Transaction V/C5
1.18. Batch Determination Activate Automatic Batch Determination(SD)

Determination & Batch Check --> Activate Automatic Batch Determination in SD -->For
delivery item categories Transaction V/CL
1.19. Batch Determination Batch Selection Class

Determination & Batch Check --> Define Selection Classes Transaction CL01
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1.20. Batch Determination Sort Rule
Determination & Batch Check --> Define Sort Rules Transaction CU70
1.21. Batch Determination Make Settings for Batch Where-used list

Menu Path Enterprise Structure--> Logistics General--> Batch Management --> Make
Settings for Batch Where-used list Transaction OMBB *-- Vijay Mundke
Batch Shelf Life Questions and Answers

Is there any report for the shelf life expiry of materials?
There is standard report RM07MMHD and the transaction is MB5M
Use MB5M trxn and choose radio Button for " Rem.shelf life whse"
What is shelf life, and remaining self life expiration date? What is the significance in
Batch?
Shelf life is that length of time that food, drink, medicine and other perishable items are
given before they are considered unsuitable for sale or consumption. In some regions, a
best before, use by or freshness date is required on packaged perishable foods.
Shelf life is the time that products can be stored, during which the defined quality of a
specified proportion of the goods remains acceptable under expected conditions of
distribution, storage and display.
Shelf life is different from expiration date; the former relates to food quality, the latter to
food safety. Pharmaceuticals are similar. Regulations can restrict the sale and use of
pharmaceuticals which have exceeded their expiration date.
In SAP R/3 the expiration date is based on the production date and the total shelf life.
This refers for purchased materials (the date of production is entered at goods receipt), as
well as internal production of materials (date of production from a process order). The
shelf life of a material is a fixed time span in the material master and cannot be defined
on the batch level. In SAP R/3, the production date is defined as the date of goods receipt
from a production order.
In simple terms SAP Batch Handling means an additional keys fields for users to identify
the same materials.
For e.g. Normal Control : Plant + Material + Storage Location

Batch Hanlding : Plant + Material + Storage Location + Batch Number
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The structure of the material master record allows you to manage stocks of a material by
value at plant level or company-code level and by quantity down to storage-location
level. Under certain conditions, you may need to make further subdivisions for a material
and manage batches.
What is the field for " Batch Code Date " and "Shelf Life days"? And in which table
are they present.
Check the table:

- MCHA Batches
- Field VFDAT Shelf Life Expiration or Best-Before Date
LIFO and FIFO In Batch Management

Actually I have done the batch management (batch determination) but I am not
aware how to do the batch determination by FIFO and LIFO logic. Do we have to
create the characteristics like this and then we have to give this characteristics to
class and then assign this class to material in material master and give the search
procedure in order type, which contains the strategy types and strategy type which
contains the access sequence, sort rule and class, class type. What is the actual
process for this?
To achieve Batch Determination with LIFO & FIFO rule you have to complete following
steps:
1) Define Batch Search Strategy: - Here you can find five different areas for which you
can define the Batch search Strategy.
Transaction Code: SPRO (Logistic General --- Batch Management ---- Batch
Determination and Batch Check Batch Search Procedure).
2) Define Batch Search Procedure: - Here you have to assign your Batch Search Strategy
to this Batch Search Procedure.
Transaction Code: SPRO (Logistic General --- Batch Management ---- Batch
Determination and Batch Check Batch Search Procedure).
3) Batch Search Procedure and Allocation Check:-
Transaction Code OMCG (For Inventory purpose Transactions)
You have to assign batch Search Procedure to the different Movement types.
In case of Production / Process orders you have to assign your batch search Procedures to
Production scheduling profile.
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Transaction codes are OPL8 or CORC or COR4.
4) Now create Sort rule:-
Transaction Code is CU70
As per your requirement of FIFO or LIFO rule you have to assign related Characteristic
(LOBM_HSDT , LOBM_VFDT etc.)
For FIFO purpose you have to assign characteristic with Ascending Rule and for LIFO
assign in Descending.
5) Now Create Batch search Strategy:-
Transaction Code MBC1 (For inventory)
Transaction Code COB1 (For Production/Process order)
Here you have to assign your earlier created Sort rule with reference to material / material
types / Movement types / Production material type /Plant and Batch class which you have
maintain in the material Master.
I have done batch determination successfully in LIFO & FIFO criteria in the
following way. It worked. Try it if you like.
If you want to select the batch in FIFO criteria that is first in first out i.e. the batches that
are received first will be selected, then
- You have to create a characteristic for last Goods receipt date with table name MCH1 &
field LWEDT
- Assign this to class
- Create sort sequence with ascending order CU70
- Then create batch search strategy in MBC1 transaction if you want batch determination
in production order
- Give the sort rule there
- Give the no. of batch splits as much as you want or just keep 999, give the batch
selection criteria if u want or just give the indicator for no selection criteria
- Then try doing the batch determination & check if you are getting what you want
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Similarly If you want to select the batch in LIFO criteria that is last in first out i.e. the
batches that are received last will be selected, then
- You have to again create a characteristic for last Goods receipt date with table name
MCH1 & field LWEDT
- Assign this to class.
- Create sort sequence with descending order CU70
- Then create batch search strategy in MBC1 transaction if you want batch determination
in production order.
- Give the sort rule there.
- Give the no. of batch splits as much as you want or just keep 999 , give the batch
selection criteria if u want or just give the indicator for no selection criteria.
- Then try doing the batch determination & check if you are getting what you want.
Important Accounts for Invoice Verification

When you post an invoice, the system selects the accounts to be posted. Account
assignment is based partly on your entries when you create an invoice and partly on
information stored in the system.
Your entries provide the following information:

- Is the invoice posted as a net or as a gross amount?
- Which vendor account must be posted?
- Which G/L accounts must be posted?
- Which amounts must be posted?
The material master record provides the following information:

- Which valuation class does the material belong to?
- What type of price control is the material subject to?
- Which account must be posted for the material?
- Is the stock available smaller than the quantity invoiced?
Posted documents provide the following information:

- What is the purchase order price?
- Has there been a goods receipt for the purchase order?
- To post invoices correctly, your system administrator must define the accounts in the
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chart of accounts and the actions to be taken for the different postings when the SAP
system is being installed in your company.
The SAP accounts are defined in a chart of accounts. The following accounts are
particularly important for Invoice Verification:
Vendor Accounts
There is a separate account in the sub-ledger for each vendor that all amounts concerning
this vendor are posted to . Making a posting to the vendor account is not the same as
making a payment; payment is only made when the Financial Accounting department
posts the vendor's payment to a bank account.
Stock Accounts
In the R/3 System, you do not set up a separate account for each material. Instead,
different materials with similar features are grouped together in a common account (for
example, raw materials: acids). The account relevant for a material is defined in the
material master record when a material is created. The system only posts to the stock
account when a price difference occurs for an invoice.
GR/IR Clearing Accounts

The GR/IR clearing account is an "intermediate" account between the stock account and
the vendor account. At goods receipt, the net invoice amount expected is posted to the
stock account. The offsetting entry is posted to the GR/IR clearing account. This posting
is then cleared by an offsetting entry on the vendor account at invoice receipt.
Tax Accounts
The system makes postings to special tax accounts when invoices include tax.
Price Differences Accounts

Price differences have to be posted to a price difference s account if price differences
have occurred in an invoice and when invoices are posted net and no posting can be made
to the stock account.
Cash Discount Clearing Account

When you post an invoice net, the cash discount amount is taken into account in the
invoice, it reduces the value of the items; the offsetting posting is made to the cash
discount clearing account, which is then cleared when payment is made.
Freight Clearing Account

The stock account is debited with the planned delivery costs at goods receipt and the
system makes the offsetting posting to a freight clearing account. This posting is then
cleared by an offsetting entry to the vendor account at invoice receipt
Procedure for Setting Partner Functions

The procedure for setting partner functions:
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Step 1
Vendor Account Group
IMG->LOGISTICS GENERAL->BUSINESS PARTNER->VENDOR->CONTROL
->DEFINE
ACCOUNT GROUPS AND FIELD SELECTION
Step 2
Defining Partner Schemas
IMG->MATERIALS MANAGEMENT->PURCHASING->PARTNER ->
DETERMINATION -
>PARNER SETTINGS IN VENDOR MASTER RECORD
->DEFINE PARTNER SCHEMAS
Step 3
Assign Partner Schema
IMG->MATERIAL MANAGEMENT->PURCHASING->PARTNER
DETERMINATION->PARTNER
SETTINGS IN VENDOR MASTER RECORD->DEFINE PARTNER SCHEMA
THEN ASSIGN PARTNER SCHEMA
Step 4
Define Permissible Partner Role Per Account Group
DETERMINATION -
>PARTNER ROLES ->DEFINE PERMISSION PARTNER ROLES
If you want a partner schema for your own document type then define your partner
schema and assign to document type using the below mentioned path.
->DETERMINATION -
>PARTNER SETTINGS IN PURCHASING DOCUMENTS ->DEFINE PERMISSION
PARTNER SCHEMAS
And then
ASSIGN PARTNER SCHEMAS TO DOCUMENT TYPE
Once you have this configuration then you change your vendor in easy access menu
(XK02-select partner function) define the partner roles.
What Is Outline and Scheduling Agreement

Please give the difference between Purchase Order, Outline Agreement and
Scheduling Agreement.
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PO is normal where you issue the PO to a vendor and expect the delivery. The PO is
termed completed when the vendor has delivered the PO quantity or when you have
preclosed the PO when the vendor has delivered partial quantity and he has agreed not to
send anymore with ref to the PO.
Outline Agreement can be of 2 types:- Contract and SA.
Contract is where you have a contract with the vendor,may be a for a predetermined
quantity or predefined value. So everytime you need the matl, you need to make PO ref
the contract asking for the delivery of the matl. In such instance when PO is ref with
contract its called contract release orders or call off orders.
Scheduling agreement is a long term purchase agreement, where you will keep issuing
the delivery schedules whenever there is a change in requirement or at predetermined
time intervals. The delivery schedule can be on hour/daily/weekly/monthly basis. But it
will contain different zones viz. firm/tradeoff/Forecast. Firm zone schedules are
confirmed requirement and need to be taken by ordered party. Tradeoff zone requirement
is to purchase the raw materails and ordering party is liable to pay raw material cost, in
case of requirement cancellation. Forecast zone requirement is to help the vendor to plan
his requirements.
SA is also an agreement with the vendor for the supply of matl, may be a quanity or
value. The delivery dates will be maintained in ME38 ref the SA which are called
delivery schedules.So you can maintain the delivery schedule and communicate the
vendor on Forecase basis or JIT basis. And when you need some more matl then will only
create SA deliveries using ME38. SA could be of 2 types:- without release
documentation-system will transmit the delivery info to the vendor once you save the
document.
With release documentation- after creating the delivery schedules you need to create SA
release using ME84.
The main difference between contract and SA is volume of docs generated would be
higher in contract since everytime you need to make a PO ref the contract and its time
consuming, whereas SA can be integrated with MRP such that it automatically creates
delivery schedules during MRP run provided if there is a requirement to the matl.
What is Vendor Consignment?

Consignment is a functionality in MM-PUR wherein you purchase materials from the
vendor on a consignment-basis. When the delivery comes, the materials, though will be
stored in your warehouse, are still legally owned by the vendor until they are consumed,
i.e. GI posting (this is the only time you will be liable to the vendor).
You just have to make sure, you set up the following to run this function perfectly:
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1. Maintain account determination
KNO G/L acct: GR/IR Clearing

AKO G/L acct: Inventory account
2. Check field status compatibility at G/L account, posting keys in the IMG or run
SE38/RM07CUFA to display fields compatibilities.
3. Set up output condition type KONS.
4. On the material master record, set special procurement indicator to 10 (consignment)

at MRP2 view.
5. Create Info record for the consigned material and vendor-consignor. Be sure the info
category is Consignment
A Step by Step Guide to the SAP MM Inventory Management

Configurations
SAP Inventory Management system allows you to manage stocks on a quantity
and value basis in order to plan, enter, check goods movements and carry out
physical inventories.
This paper will provide you with a step by step guide to the configuration of the
Inventory Management under the MM modules.
Table of Contents
Objective
IMG Menu The Starting Point
Start of the SAP MM Inventory Management Configurations
The Basic Material Master Configuration : Units of measurement
Where does the user maintain the UOM?
Industry Type for Material Master
Delete or Add in Storage Location for the new Plant
General Plant Settings in Inventory Management
Define the Attributes of System Messages
Start of the Number Range Configurations
Define Number Assignment for Accounting Documents
Define Number Assignment for Material and Phys. Inv. Docs
Define Number Assignment for Reservations
Start of the Individual Fields IMG Settings
Field Selection for Goods Movements Initial/Header Screens
Field Selection for MIGO
Field Selection per Mvt Type
Define Screen Layout for Movement Type
Settings for Transactions and Reference Documents
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Create Storage Location Automatically
Set Manual Account Assignment for Movement Type
Maintain Copy Rules for Reference Documents
Set Up Dynamic Availability Check
Generate Physical Inventory Documents for Goods Movements
Allow Negative Stocks
Set Missing Part Check
Default the Delivery Completed Indicator
For GR-Based IV, Reversal of GR Despite Invoice
Record Reason for Goods Movement
How to Define, Copy or Change a Movement Types?
Default Print Control for Material Document
Define Stock List Display for MMBE
Define Valuation Class
Configure Automatic Postings to G/L Accounts
Storage Location Indicator to allowed/disallowed Physical Inventory Freezing
Configuration for Vendor Consignment
Business Process Flow for Vendor Consignment
The Initial Inventory during Implementation
Static versus dynamic data conversion
A Sample note on Inventory Balance Conversion
Appendix A: The Inventory Goods Movement Configuration Links Explain
Appendix B: Restrict the Storage Location from any Goods Movement
Appendix C: Allows/Disallowed Goods Movement Posting to Previous Period
Appendix D: How to Archive the Materials Documents?
Appendix E: Configure the Cycle Count in SAP
Automatic Conversion of PR to PO
You created purchase requisition for various material. During creation of purchase order
you used the following path:
Purchase Requisition
.......Follow on function
.........Create Purchase Order
............automatic via purReq.
When you mentioned required purchase requisition number and execute, system give
error that purchase requisition does not contain any suitable item.
Is there any setting in customization where you can monitor and use that function.
In an effort for you to successfully use the Transaction Code ME59 to automatically
convert the current PR into PO, then the following criteria should be met:
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1) In the Purchasing View of the material master data, the "Autom. PO" field must be
clicked;
2) In the Purchasing View of the Vendor Master Data, the "Automatic Purchase Order"
field must be clicked;
3) The Outline Agreement or Purchasing Info Record shall be maintained which will
allow the automatic copying of unit price and other conditions into PO;
4) The Source List shall be maintained for the nominated vendor which was shown in
either the Outline Agreement or Purchasing Info Record.
or
it might be PR subject to release strategy and not yet released
or
If you're not using a source list or automatic creation of PO, you may need to assign the
requisition to a purchase information record using transaction ME56. Then it should
appear in ME58.
Fast links:
Release Procedure for Purchase Requisitions

By: Kisan
How can I create the release procedure for PR?
SAP version used for this post: SAP ECC (ERP Central Component) 5.0
Setting up simple Release Procedure for Purchase Requisitions :
Release Procedures (approval) can be used for Purchase Requisitions (PR), Purchase
Orders (PO), RFQ's, Outline Agreements and Service Entry Sheets. The principle is
exactly the same for all. If you can master one, you will know them all.
Lets set up release procedures for PR for the following example:
Our company have got 2 plants: Plant 3100 (London) and plant 3600 (New York).
- For New York (plant 3100), if PR item value is between 0 - 1000 dollars, then PR needs
to be released by one person (person B)
- For New York (plant 3100), if PR item value is bigger than 1000 dollars, then PR needs
to be released by two people (first by person B, then person C)
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- For London (plant 3600), if PR item value is bigger than 1000 dollars, then PR needs to
be released by two people (first by person A, then person C).
Key terminology:
- Release Codes - The different levels that the approval will go through.
- Release Groups - Grouping of strategies.
- Release Strategy - Unique, set of condition, sequence and levels of releases. Every line
in diagram is a Strategy (so we have 3).
- Release Indicator / Status - The status of PR as it moves through the strategy. Example
'Block' (can't create PO yet) or 'Final Release' (can create PO from PR) Here is a
summary of the steps to follow to set up our example:
- Create Characteristics & link to comm. structure (CEBAN for PR)
- Create Class & link to characteristic
- Create Release Groups & link to class
- Create Release Codes
- Release Indicator
- Set up strategies
- Strategies & Codes

- Pre requirements
- Status
- Assign values for strategies
Set overall / item for doc type (PR only)
Create and allocate authorization profiles
--------------- DETAILS OF SETTING IT UP ---------------

Create Characteristics & link to communication structure (CEBAN for PR)
Here we define which fields are used to determine the strategy that will kick in. In our
case we used 'Plant' and 'Item value'. Not all fields in the PR can be used. For a full list of
fields that can be used to determine the release strategy, see tcode se12 table CEBAN.
So the two fields that will be used is:
Field CEBAN-WERKS for Plant

Field CEBAN-GSWRT for Item Value
We need to create a characteristic for every field. Tcode CT04 Any characteristic name
can be used. Keep something descriptive to avoid confusion.
For Item Value -- lets create characteristic Z_GSWRT
First go to Additional Data tab and enter the table/field (and Enter)
Enter currency to be used in the Basic data tab.

Also select multiple values and Intervals allowed
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The Intervals allowed will allow us to assign a range of values, example: If PR value is 0
- 1000 USD .....
Save the characteristic
For Plant -- characteristic Z_WERKS

Again, the table/field name in Additional Data to enter table/field
Again set multiple values and save the characteristic

The multiple values is to assign more than one plant to strategy,
example: If PR for plant 3100 and plant 3600 is ...
Create Class & link to characteristic
Create a class (simply to group the characteristics). Again any name can be used. Tcode
CL01 -- Create Class. The Class Type must be 032.
Configure Release Procedures
Above actions was all master data. We now need to do some configuration. Menu: IMG >
Materials Management > Purchasing > Purchase Requisition > Release Procedure >
Procedure with classification > Set up procedure -- (tcode OMGQ in older SAP versions)
Create Release Groups & link to class
We have two groups to create AA and AB. We need to indicate the class we are working
with, in out case Z_PR.
Create Release Codes
Create all the release code / group combinations. This is all the dots in diagram above. So
we have 4.
Later on, authorization profiles will be linked to these code / group combinations.
Release Indicator
First we create the different statuses that the PR can be in throughout it lifecycle. Later on
(below), we will be linking using these statuses. Here are the standard SAP indicators; we
probably wouldn't need to add any.
We will be using two of these -- X (Block) and 2 (Released)
Under the Details section, you can indicate which documents can be created from this
PR. For Indicator 2, one can create PO's and RFQ's.
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With Field Selection you can define which fields can be changed. This is the same
indicator that gets used with document type configuration to make some fields read only,
mandatory, hidden.
Set up strategies - Strategy & Codes
Every line in our diagram above is a strategy. So We have three Lets call them: Group AA
/ Strategy S1 -- Code L1 (for plant 0001) Group AA / Strategy S2 -- Code L1 & L2 (for
plant 0001) Group AA / Strategy S2 -- Code L1 & L2 (for plant 0002)
Here are the settings for AA / S2
Set up strategies - Prerequisites
Fir every strategy, we need to define a release prerequisites. This indicates if one code
needs to take place before the other. In this case, level 2 (L2) can only take place if level
1 (L1) has been released.
Set up strategies - Status
this is also done for every strategy. The screen is dependant on what groups were linked
to the strategy as well as prerequisites that was set up. In this example:
- if nobody releases it then PR is block.

- if L1 release the PR, the PR is still blocked
- if L1 and L2 release the PR, the PR can be converted to RFQ/PO
Out of interest, the reason why there is not a L2 only option is because of the setting in
the prerequisites.
Set up strategies - Values for strategies
The values linked to strategies are master data (not configuration) and can be set in two
places. Either within the configuration itself -- selecting the classification button
Or, in classification, example CL24N
Both methods work, the advantage of CL24N is that all the strategies can be viewed
easier.
Set overall / item for doc type (PR only)
For Purchase Requisitions, there is an option to release either on item level or on

document level. For PO / RFQ / Contracts, one can only release on header level. Back to
the PR, it is highly recommended to use item release. This can be done in two places.
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Firstly where the groups were created
On the document type configuration for PR

Config menu: Materials Management > Purchasing > PR > Define document types
Create and allocate authorization profiles
In our example we will have three people releasing, so three profiles will need to be
created. Authorization profiles can be created using tcode PFCG.
Usages of PFCG are not being discussed here, but see below for relevant screen where
the profile was created.
--------------- USING RELEASE PROCEDURES ---------------

Create a Purchase Requisition
Lets create a PR, and see if the release procedure kicks in. In our case we will create it for
plant 3600 and any value. So we will expect Strategy AB / S2 to kick in.
Create PR -- me51n
If no 'Release strategy' tab, then it didn't work. In this case all is fine. The user can see the
Release Group (AB), Strategy (S2) and release indicator (X).
(SAVE)
Release a Purchase Requisition
Releasing can be done per PR or collective. Lets' use the collective release. SAP Menu:
Logistics > Material Management > Purchasing > Purchasing Requisition > Release >
Collective Release -- ME55
Select all the items to be released and then hit Save. You will see the status of the item
change to the next Release Indicator.
This is the absolute basics of setting up Release Procedures for Purchase Requisitions.
What are the Types of Inforecords?

You can create purchasing info records for different procurement types as follows:
Standard, Subcontracting, Pipeline, Consignment You use this component if you wish to
store information on a vendor and a material as master data at purchasing organization or
plant level.
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Standard
-------------
A standard info record contains information for standard purchase orders.
The info records can be created for materials and services with and without master
records.
Subcontracting
-------------------
A subcontractor info record contains ordering information for subcontract orders.
For example, if you subcontract the assembly of a component, the subcontractor info
record would include the vendor's
(subcontractor's) price for assembling the component.
Pipeline
-------------
A pipeline info record contains information on a vendor's commodity that is supplied
through a pipeline or pipes
(oil or water) or by similar means (electricity through the mains).
The info record contains the vendor's price for the consumption of such commodities by
the buyer
("pipeline withdrawals"). You can store withdrawal/usage prices for different validity
periods.
Consignment
-----------------
A consignment info record contains information on a material that vendors keep available
at their own cost on the orderer's premises.
The info record contains the vendor's price for withdrawals by the orderer from
consignment stock.
As in the case of the pipeline info record, you can store prices for different validity
periods.
About the Source List Determination

When we create info & Maintain Quotation, by quota we are determining the
source. Also in Vendor Evaluation, we are evaluationg vendor. When we are
creating PO, from where the vendor will come from? Is it from Quota or Vendor
Evaluation?
You define source list requirements at plant level. If a source list requirement exists, you
must maintain the source list for each material before you can order it.
The source list serves:
41
To define a source of supply as "fixed". Such sources count as preferred sources over a
certain period of time. For example, the fixed vendor XXXX for material 100XX is ASA
Company for the first quarter and BSB Co. for the second quarter of the year.
Select the plants for which you wish to specify a source list requirement
You use the source list to determine the valid source of supply at a certain point in time.
The source list contains all the sources of supply defined for a material and the periods
during which procurement from these sources is possible
Following T/Code activities in Material Management module.
Maintain source list - ME01

Display source list - ME03
Display changes to source list - ME04
Analyze source list - ME06
Reorganize source list - ME07
Generate source list - ME05
Display source list for material- ME0M
you make the system settings that are necessary for purchasing operations carried out
using source lists.
Source list requirement for materials, It may be necessary to include possible vendors of
a material in the source list before the material can be ordered.
The Source list requirement field in the purchasing data of the material master record
indicates whether a source list requirement exists for a material.
You can define the Source list requirement at plant level in IMG. Logistics -->Materials
management --> Purchasing --> Source list.
Here you can see the plants for which a source list requirement exists.
PRICE DETERMINATION PROCESS or PRICING PROCEDURE
CONDITIONS OR PRICING PROCEDURE or PRICE DETERMINATION PROCESS

We deal with the Pricing Procedure for vendors.
PB00 Gross Price (info record, contract, scheduled Agreement)
PBXX Gross Price (PO)
FRA1 Freight
RA00 Discount on net
RA01 Discount on Gross
ZA00 Surcharge on net
42
SKT0 Surcharge / discount
ZPB0 Rebates
MWVS Input Tax
MWAS Output Tax
BASB Base Amount
RM0000 Calculation Schema or Pricing Procedure
(PB00 & PBXX)
RM0002 Calculation Schema or Pricing Procedure
(PB00)
PB00 --> AB00
Copy the Standard one and create new one (ours)
RM0000 contains all the condition types
Pricing Procedure (PP)
We define the pricing procedure to define condition supplement for the material price.
The condition supplement specifies the discount, surcharge, freight etc that we want a
system every time to access material price condition records.
The total value of the material is calculated or based on all addition and subtraction i.e.
discounts, surcharge, tax freight etc
Condition Table
It is a table, which defines the structure of condition record key.
Condition Record
It is a data record used to store conditions or condition supplements, i.e. condition like,
discount, freight, and surcharge, Tax etc.
Condition Type
It is used for different functions. In Pricing the condition types leads you to differentiate
different types of discounts, in output determination, batch determination, difference
between two output types, such as delivery note or order confirmation, between different
strategy types
Access Sequence
It specifies the order in which system searches or access the condition records from
condition table
Difference between PB00 & PBXX
1. Condition maintained in PB00 is time dependent whereas PBXX is time

independent.
2. Condition type PB00 used for IR, RFQ, Contract, Schedule Agreement
Condition type PBXX used for PO.
Calculation Schema
43
The main function of calculation schema is to provide framework of steps for the price
determination process to specify the discounts, surcharge, freight rebate etc.
It also determines the sequence of conditions that are to be followed and in which
sequence.
Schema Group Vendor

The main function of it is to identify or to pick the right process and conditions for a
particular vendor.
Schema Group Purchasing Organization

Key that determines which calculation schema (pricing procedure) is to be used in
purchasing documents assigned to the relevant purchasing organization.
Schema Group
It allows to group together the purchasing organizations, which uses the same calculation
schema.
Steps: -
1. Create Access sequence
2. Create condition types
3. Create pricing procedure or calculation schema
4. Link pricing procedure & access sequence to condition type
5. Create schema group for vendor
6. Create schema group for purchase organization
7. Assign schema group vendor-to-vendor master record in purchasing data view
8. Assign schema group purchase organization to our purchase organization
9. In info record purchase organization data enter condition types and pricing or
calculation procedure
CUSTOMIZE SETTINGS: -
SPRO --> IMG-->MM-->PUR-->Conditions -->Define price determination Process
1. Define access sequence
2. Define Condition type
3. Define cal. Schema
4. Define schema group
o Schema group vendor
o Schema group purchasing group
5. Assignment of schema group to PUR org
6. Define schema determination determine cal schema for standard PO.
You can start with the following sequence.
a) Definition of Condition tables ( in case standard condition tables does not suffice the
requirement ) - M/03
b) Creation of Access sequence to include the condition types created in step a - M/07
c) Creation of condition types with Access sequence created in step b - M/06
d) Setting up of calculation schema with the sequence of condition types created in step c - M/08
e) Creation of Vendor schema - OMFN
44
f) Assignment of Vendor schema to your vendors XK02
g) Creation of Purchasing organization schema - OMFM
h) Assignment of Purchasing organization schema to your own purchasing organization OMFP
i ) Linking Vendor schema, Purchasing organization schema and Calculation schema. OMFO
MM Tables
EINA Purchasing Info Record- General Data
EINE Purchasing Info Record- Purchasing Organization Data
MAKT Material Descriptions
MARA General Material Data
MARC Plant Data for Material
MARD Storage Location Data for Material
MAST Material to BOM Link
MBEW Material Valuation
MKPF Header- Material Document
MSEG Document Segment- Material
45
MVER Material Consumption
MVKE Sales Data for materials
RKPF Document Header- Reservation
T023 Mat. groups
T024 Purchasing Groups
T156 Movement Type
T157H Help Texts for Movement Types

OY01- Country
OY04 Decimal settings
SU01 - SU01
SCC4 SCC4 display clients
SE11 Tables Display
SE71 - Form Change
SE17 Tables Content
SE18, 19- Tables Content
SE38 - Program Execution
SA38 Program Execution
SE09 - Transport Request
SE10 - Transport Request
NACE - Condition for output Control
SE16 - Data Browser
OMWD valuation grouping code
OMSY - periods
OMS2 - categories define attributes of mat
OBYC AADet.
OBBG Tax Assignment
FTXP - Tax code Creation
OB40 - A/C assignment
OBCN A/C keys
Se91 - msg maintenance
Omrf stochastic block
sm21 log analysis
46
se80 object navagator
se30 ABAP run time analysis
su01 user maintenance
SCC1 client copy transport
Physical Inventory
1. Create physical inventory doc MI01
2. Set Posting Block for Physical Inventory in the above doc
3. Enter the Physical Inventory MI04
4. Post the differences-MI07
What are Tickets in SAP?
What are Tickets in SAP
Tickets in SD can be considered as the problems which the end user or the employee in the company face
while working on R/3. Tickets usually occur during the implementation or after theimplementation of the
project. There can be numerous problem which can occur in the production support and a person who is
working in the support has to resolve those tickets in the limited duration, every ticket has the particular
deadline alert so your responsibility is to finish it before that deadline.
To begin with , we should give TICKET to you for not knowing it.
Here is an eg of a ticket raise:

End user is not able to
1. Create Sales order for a customer from a New plant , since shipping point determination is not happened .
( Without Shipping point the document becomes INCOMPLETE and he will not be able to proceed further
like DELIVERY, BILLING).
He raises a ticket and the priority is set in one of the below:

1. Low 2. Medium 3. High.
Now you need to solve this ticket. You would analyze the problem and identify that the SP configuration has
to be done for the new plant.
You would request a transport for DEV CLIENT to BASIS. You do the change and Request one more
Transport to BASIS for QA client. The End user will test the same by creating a sales order for the new plant
and approve it.
Finally, you request a transport to move the changes to PRODUCTION. Once the change is deployed in
production the TICKET is closed. What I have given is a small example. You would get some real issues with
severity HIGH in your day-day support.
Handling tickets is called Issue Tracking system. The errors or bugs forwarded by the end user to the
support team are prioritized under three seviority High, Medium and Low. Each and every seviority as got its
time limits before that we have to fix the error.
47
The main job of the supporting consultant is to provide assistance on line to the customer or the organisation
where SAP is already implemented for which the person should be very strong in the subject and the
process which are implemented in SAP at the client side to understand,to analyse,to actuate and to give the
right solution in right time.This is the job of the support consultant.
The issues or the tickets(problems) which are arised is taken care of on priority basis by the support team
consultants.
The work process in support projects are given below for your reference.
1. The customer or the end user logs a call through any tool or by mail (RADIX).
2. Each one of the support team is a part of support group.
3. Whenever a customer logs a call he /she has to mention to which work group (by name).
4. Once the calls came to the work group the support consultant or the team need to send an IR (Initial
Response) to the user depending upon the priority of the calls. (Top,High,Med,Low,None)
5. Then the error is fixed, debugged by the support consultant or the team. Then after testing properly by
generating TR(Transport Request through the basis admin)
6. Then it is informed to the end user/customer/super user about the changes which have moved to the
production server by CTS process.
These are the process. In summary, what I understand is that if any configuration or customization is
required to solve the issue, then the consultant have to work on DEV Client, then the end user will test it in
the QA client and after approval the BASIS consultant has to transport it to the PRODUCTION
For Import PO
- You should have different Pricing Procedure ,with all the Duties conditions defined.
- Import Vendor , with import currency
- Different Document type for import PO, in the PO for the Customs conditions give the Customs
Vendor code.
- In PO tax code to be Zero or Nil %
- Do MIRO for Customs Vendor before doing MIGO
- Aftre doing MIRO do GR for the Item ( in MIGO you will get popup for the MIRO document done,
excise details from this is populated in to the PO )
TOTAL IMPORT CONFIGURATION AND CYCLE

in ur pricing u have to create following
JCDB IN: Basic Custom Duty
JCV1 IN : CVD
JECV IN : Ed Cess on CVD
J1CV IN : H&SECess on CVD
JEDB IN : Ed Cess on BCD
JSDB IN : H&SECess on BCD
JADC Additional Duty of Custom
JCV1, JECV, J1CV and JADC will go to Excise MODVAT Accounts and JCDB, JEDB and JSDB
will get loaded on inventory.
48
In M/06, for all above conditions, keep following controls;
Cond. class A (Discount or surcharge) Plus/minus A (Positive)

Calculat.type A (Percentage)
Cond.category B (Delivery costs)
Activate "Currency Conversion" and "Accrual"

Now for setoff
maintain the following conditions in excise default settings.
JCV1, JECV, JADC
path: spro>logistic general >tax on goods movements>India >basic settings>determination of
excise duty >maintain excise defaults >
along with ur tax procedure maintain these conditions in the specified fields
JCV1 in CVD condition field.
JECV in ECS condition field.
JADC in ACD condition field.
in case of SECess on CVD, no need to maintain.
it is hardcode in the standard
Vendor in GR 2 (Entry always possible)
Import scenario
1.Create material master of import goods.

2. Create vendor master record of import vendor and Customs clearing vendor.
3. Maintain CIN settings.
4. Maintain J1id.
5. Maintain Pricing procedure SAP standard JIMPOR.., maintain required conditions..JCDB,
JCV1...
6.Assign the schema to respective import vendor in purchasing view of VMR.
7. Create import PO, ZERO tax code ,check in conditions of JCDB, JCV1 the customs clearing
vendor(Indian vendor) and percentage is assigned. This can be done by In condition tab select
condtion then click on display, then enter.
Save the PO.
8. MIRO --Capture Bill Of Entry.(Commercial Invoice No.,).Customs clearing first .Here CVD will b
converted to BED.
9. Capture Excises invoice--j1iex.
10.MIGO. here system will ask u for the commertial invoice no ,give no gen in step8
12.Post Excise Invoice.
13.MIRO...Payment to vendor(import vendor)
In case of Normal Import Purchase, you will be aware of maintaining the Vendor Code of
Customs Office against the following condition types;
JCDB IN:Basic Custom Duty

JCV1 IN : CVD
JADC Addnl Duty of Custom
Use above conditions and Customs Office Vendor when you have to pay duty to Customs Office.
49
In case of Advance License,
Here in this case, create following condition types in addition to above conditions and assign in
the Import Pricing;
ZCV1 IN : CVD (Adv Lic)

ZEC1 IN : Ed Cess on CVD
Z1CV IN : H&SECess on CVD
ZADC Addl Duty of Custom
And create Vendor Code for each Advance License No and assign this Vendor Code against the
following condition types in Import PO;

ZCV1 IN : CVD (Adv Lic)
ZEC1 IN : Ed Cess on CVD
Z1CV IN : H&SECess on CVD
ZEBC ED Cess on BCD
ZSDB H&SECess on BCD
ZADC Addl Duty of Custom
And do the rest of process similar as you do in case of Import Purchase
In case of Import Purchase;
1. First you create Import PO and input all the Import duties in PO.
2.Then you do LIV for Customs Office (Here you enter all the Import duties as per Bill of Entry)
and following A/c entry get generated;
Customs Office A/c - Cr (Vendor Recon A/c)

Customs Duty Clearing A/c - Dr (OBYC - ZCC)
CVD Clearing A/c - Dr (OBYC - ZCV)
3. Then Capture Bill of Entry in J1IEX.
4. Then you do GR w.r.t. Import PO (MIGO), Accounting Entry will come as following;
Stock A/c - Dr (OBYC - BSX)

GR/IR Clearing A/c - Cr (OBYC - WRX)
Customs Clearing A/c - Cr (OBYC - ZCC)
5. Post Bill of Entry in J1IEX, and Accounting Entry will come as following;
CENVAT Receivable A/c (BED, ECS, SECess and ADC) - Dr (From Account Detmn of GRPO with
Sub Trans Type - IP)
CVD Clearing A/c - Cr (From Compnay Code Settings of Excise)
6. MIRO - For Import Vendor
Import Vendor - Cr (Recon A/c)

GR/IR Clearing A/c - Dr (WRX)
7. MIRO - For Clearing Agent
Out of following conditions;
50
JCV1 IN : CVD
JADC Addnl Duty of Custom
JCDB, JEDB, JSDB will get loaded to Stock and JCV1, JECV, J1CV and JADC will get posted to
CENVAT Receivable A/c
In M/08, assign A/c Key ZCC to JCDB, JEDB, JSDB conditions and Customs Clearing A/c in
OBYC and A/c Key ZCV to JCV1, JECV, J1CV and JADC conditions and CVD Clearing in OBYC.
Note: - Here you don't have to use Tax Procedure Accounting (OB40) in case of Imports. Only
maintain a Zero % Tax Code in Import PO.
Also check following;
SPRO > Logistics - General > Tax on Goods Movements > India > Basic Settings > Determination
of Excise Duty > Maintain Excise Defaults > Here assign following for Tax Procedure;
CVD cond. - CV1

ECS cond. - JECV
ADC cond. - JADC
And J1CV need not be assigned since it is hard-coded in SAP Standard program.
Also do account determination in OBYC as your have already done for MIRO of Customs Invoice.
Also check in SPRO > Logistics - General > Tax on Goods Movements > India > Basic Settings >
Maintain Company Code Settings > Here Assign CVD Clearing A/c in your Company Cod
51

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Material Management

5. Purchase order follow-up

Inventory Stock A/c Dr

GR/IR Clearing A/c Dr

Bank Clearing A/c Cr

1.Purchase Requisition (ME51N)

2,Purchase Order (ME21N)

3.Purchase Order Release (ME29N)

4.Goods receipt (MIGO)

5.Invoice receipt (MIRO)

Vendor Creation - MK01

Invoice Verification: After

RETURN DELIVERY TO VENDOR

(a) Return Delivery with 122 mov

create Purchase Order ME21N

Goods receipts against Purchase Order MIGO

Return Delivery against Material Document MIGO

The account postings are

(b) Return Delivery with 161 mov

Movement type 161: Return for PO

Create Purchase Order with different Document Type (RNB)

Goods receipts against Purchase order

RETURN DELIVERY TO VENDOR-WITH DELIVERY

(a) Return Delivery with 122 mov

1. Create Purchase Order ME21N

2. Goods receipts against Purchase Order MIGO

3. Return Delivery against Material Document MIGO

also select via Delivery check box

4. VL02n enter the delivery document no.

Enter the pick qty and batch and go for PGI

2. You also need to maintain the "Subcontracting" info record.

Sub Contracting Cycle

DR FG Stock/ SC By-Product Stock

(5) You do the IV for SC Invoice, and the process is complete.

Sub-contract business process:

Can anybody tell me how a process has to be given to subcontracting?

The following process to be followed for subcontracting.

5. PO to be released for material (2)

Services configuration can be at spro--mm--procurement of external services.

Service Expense A/c - Dr (GBB)

4. MIRO - LIV for Service Entry Sheet or Service PO

Consignment Process steps

1. Assign Standard purchase org.to plant in Enterprise assignments (IMG)

The followings are the typical vendor consignment process steps:

1. Maintain consignment process through consignment info record (ME11)

The account entries in GR,GI and IR are as follow;

Consumption A/C: DR,

C.Consignment Settlement: - Transaction Code - MRKO

Consignment (Liability Account )Payable: DR,

Step for STN

VL02N - Post goods issue & Batch / qty. picking

VF01 - Create Billing Documents (STN)

VF02 - Display STN

VF03 - Printout for STN

Step for STN Cancellation:

VL09 - Reverse post goods issue

VL02N - Reverse delivery / pick qty.

ME22N Cancel / delete STO

1. Stock Transfer between Plants in:

Advantages of the Stock Transport Order

1. A goods receipt can be planned in the receiving plant.

Stock Transport Order with Delivery and Billing Document/Invoice

Create Stock Transport Order