SAP MM Configuration Guidance

SAP Career Guidance 2021
Knowledge Sharing
SAP Material Management
PREPARED BY
AKASH L. HIWALE
Under the guidance of SAP GURU
www.sapguruindia.com Contact: +916360959192 Page 1

INDEX
SR.NO TOPIC Page.no.
1. Enterprise structure: 4
Define
a. Plant
b. Purchase Org
c. Storage Location
d. Purchase group
Assignment 7
a. Plant to company code
b. Plant to Purchase organization
c. Purchase org to company code
2. Master Data 8
Material Master (MM01/02/03) 9
Vendor Master (XK01/02/03) 19
Info Record (ME11/12/13) 25
Source List (ME01/02/03) 29
3. (P2P) Procure to pay cycle 31
Purchase requisition (ME51N/52N/53N)
Request for Quotation (create-maintain-compare) (ME41-ME47-ME49)
Purchase Order (ME21N/22N/23N)
Goods Receipt (MIGO)
Invoice Receipt (MIRO)
4. Automatic Purchase Order (ME59N) 43
5. External service Procurement 48
Service master (AC01/02/03)
Service Purchase order (ME21N)(K)(D)
Service Entry Sheet (ML81L)
Invoice verification (MIRO)
6. Quota Arrangement (MEQ1/Q2/Q3) 51
7. Outline Agreement (ME31K/32K/33K) 55

Quantity Contract (MK)
Value Contract (WK)
Scheduling Agreement (ME31L/32L/33L)
64
Without Release(LP)
With Release(LPA) (Maintain/Release)(ME38/ME84)
8. Release Procedure for PO 68
Characteristics
Class
Define Release Procedure
81
9. Vendor Evaluation
Weighting key
Main criteria
Sub criteria
Weightage factor
Maintain vendor evaluation (ME61)
Display Vendor Evaluation (ME62)
Evaluation List (ME65)
Print Vendor Evaluation (ME6F)
10. Pricing Procedure 92
Condition Technique
Access Sequence

Price Determination Process

Schema Determination
11. Automatic Account Determination (MM-FI) 107
Material type
Define Account Category reference
Assigning ACR to Material type
Configuration Accounting maintain: automatic post (OBYC)
12. Special Procurement Process 124
12. A) Subcontracting 124
13. B) Vendor Consignment 136
14. C) Stock Transport Order 144
15. Split valuation 155

Global Types
Global Categories
Local Definition
16. Physical Inventory 168

Create PI document (MI01)
Enter count (MI04)
Post differences (MI07)
17. Material Requirement Planning (MRP) 176
18. Batch Management 184
Characteristics (CT04)
Class (CL01)
Condition Technique
Access Sequence
Search Procedure
19. Message Determination 204
20. Configuration of PO Doc. Type and Item Category 217
21. (LSMW) Legacy System Migration Workbench 225

1. ENTERPRISE STRUCTURE
Every organization has some framework or structure according to which the whole business
runs. An enterprise in the structure that represents an enterprise in SAP ERP system. It is subdi-
vided into various organizational units which, for legal reasons or business-related reasons, are
grouped together.
An enterprise structure defines various levels in an organization. These levels are placed accord-
ingly to some hierarchy shown below in flow diagram, each levels has some specific functionality
associated with it, which in a combined way describes the working of an organization.
CLIENT: 800
CO. CODE: 1000

Co. code assign to plant
Co. code assign to p. org
P.ORG: T010
P. Org assign to Plants
PLANT: T010 PLANT: T020
A01 T01
A02 T02
A03 T03

DEFINE ORGANIZATIONAL UNITS: In material management we have scope to define

following entities for organizational structure.
1) Plant 2) Purchase Organization 3) Storage Location 4) Purchase group
DEFINING ORGANIZATION-
AL UNITS
DEFINE OF NEW PLANT T020:
 Plant is an organizational unit within a company where activities take place. A plant will
produce goods and make goods available for the company.
 It is a unit having manufacturing facility, warehouse distribution center, or a regional sales
office within logistic. It subdivides enterprise in different aspects.

DEFINE OF NEW PURCHASE ORGNIZATION T010:
 A purchasing organization is an organization unit under a company or a plant that is respon-

sible for the procurement activities according to requirements.
 A purchasing organization can be at the client level, which is known as a centralized pur-
chasing organization.
P. ORG assign to plant
DEFINE STORAGE LOCATION WITHIN PLANT T020

ASSIGNMENT OF ORGANIZATION UNITS

 To establish a relationship between these levels, we have to assign them to one or other in
such a way that they still lie in the same hierarchy.
PATH TO ASSIGN ORG UNITS

WITH EACH OTHER
ASSIGNING PURCHASE ORGANIZATION TO PLANT:

2. Master Data
 In Every organization is very essential to have master data of each and every activity to be orga-
nized centrally for all modules and departments too.
 Also we can say it’s a data with its all specifications it stored in our system, and it can be used by
the system to gather information while creating PO and service, contract, scheduling agreement
etc.
 From point of view of material management it includes material master and vendor master files
at the core of procurement, inventory management, and invoice verification.
Master Data
Material master Vendor master Info record
1. Basic view (client level) 1. General data 1. General data
BUM, order unit, mat grp. Address, control, vendor data
2. Purchase view (plant level) communication data purchase order UOM
Quota usage key, reminder, 2. Company code data 2. Purchase org data
Source list, auto PO. Pur. Grp. Accounting info control-pln delivery,
3. MRP (Plant) payment transaction tolerances
Reorder point, 3. Purchasing Data 3.Conditions
Plant delivery time, purchasing data price related data
4. Accounting (Valuation area) order currency,
Val. class, val. Cat payment terms

Material Master Data Configuration

This is the enterprise main source of material-specific data. This data will include infor-
mation on the material a company can produce, store or sell.
Since there are different departments in an enterprise and each department works on some
specific material, they will enter different information regarding their material. So, each user
department has its own view of material maser record. The data screen that is used to cre-
ate material master can be divided into two categories.
Define Industry
Type
Define Material Type- QTY & Value Update for

1) RAW 2)Semi 3) Finished Valuation Area
Assigning Num-
ber range
Create Material
Define Material Type-
(MM01): Check Con-
1)RAW 2)Semi 3) Finished
figurations
Main Data
Additional Data:
Basic data
Material description
Purchasing data
Currency
Accounting data

Define Industry Sector
PATH: Logistic generalfield selectiondefine industry sector and industry sector field
Material types
Materials with some common attributes we have to put together for that we have to create material
types we have some common material types within system those are below
Path: Logistic-General => Material Master=>Basic settings=>Material Types=> Define

attributes of material types
Material Types Material type Description
ROH Raw Material
FERT Finished goods
HALB Semi-finished material
UNBW Non valuated material
NLAG Not Stock material
 Material type is very important in material master in every aspect; it has control over Below
points :
 Material views selection
 Field selection
 Price control
 Procurement types
 Valuation class etc.

Creation of material type

I have created material types as per my requirement where I have maintained views; pro-
curement types account category reference. So each department will have its own view of
the material master record.
Quantity and Value Update

For updating of quantity of material and current market value we need to update that into the system
for our plant, I have maintained it for my plant T020

Detail Overview of Material Type Configuration
1) Field Control
2) Procurement Control
3) Views Control
4) Valuation Control

1) Field Selection
In this section we define whether the material field is hidden, display, mandatory or optional in
maintainance, we can customize this according to clients requirment.
PATH:SPRO Logistc General Material Master Field Selection

T-Code for Create and maintain field references (OMS9).
For material master we can define field selection with refrence to T-CODE, Material type
assigned to Field refrence and Industry sector
In this particular example

Field refrence = FERT for Material Type TFIN
T-Code=MM01/02/03
Industry Sector=M
To define whether a field is hidden or displayed, or whether an entry is mandatory or optional

in material master maintenance, you must assign the field to a field selection group. You may
assign a field to one field selection group only.
We can see here for selection group 175 there are no. of fields is assigned.
So for this field refrence according to field selection group Purchasing group, currency key
fields are optional without entering to that field we can save material without any error.

In this example we can see with refrence to T-CODE MM01/02 we should have to maintain
Price control indicator whther it is standard or moving average price but for MM03 that entry
is only for display.

As per our configuration price

control is mandatory showing
here without this field we
could not precede further
2) Procurment Control: In this field we can see that we can control for TFIN- Finished for TESLA
material type we can by only external purchase order, there is no inhouse production is available for
this particular material type.
This is simple use of this Procurnment control Field

3) Material Views control: Every Material has different attributes and uses for specific of
particular department,Basic view, Purchasing view, accounting view with these three views we
can run entire purchase order cycle but for manufactring company point of we have to take
MRP view likewise from the point of view of sales we can sales view For my finished material I
need only these views because my material is not manufactured within my plant to take MRP
view for planning the material.
4) Valuation Control: In this field we have to maintain price control whether it is standard or
moving average price and with help of account assignment category we can define valuation
class to particular material type. I have selcted standard price for this material type, hence that
will automatically trigger while creating material as well as respect to AAC valuation class took
automatically by the system.

Number ranges
 When we create a material master record, every material is recognized by a unique
number that is known as the material number. We can assign a number to a material
through two ways
 External number assignment − While creating a material, you have to enter your own
number (containing alphabets or digits), and that should be unique.
 Internal number assignment − While creating a material, you need not enter any
number. The system automatically generates a unique number to that material.
Define Number Range −
Internal number range can be defined by following the STEPs given below −
PATH: IMG ⇒ Logistic General ⇒ Material Master ⇒ Basic Settings ⇒ Material Types ⇒
Define Number Range for Each material Type
T-Code: MMNR
Assigned Number ranges

to Material types

Created Material Group
Material group is a wider range of material type. Materials with some common attributes
are taken together and they are assigned to a material group. For example: We have some
materials that are to be packaged, so the material type can be electrical or food products,
but we can group these material types and put them in the packaged material group. Follow
the STEPs given below to create a Material Group.
Path IMG ⇒ Logistic General ⇒ Material Master ⇒ Settings for Key Fields ⇒ Define Mate-
rial Groups
T-Code: OMSF
Below shown I have made different materials with respect to my industry type, material
type and configured field selection for my plant T020.
T-CODE: MM60 for list of materials

Vendor Mater Data

Vendor master data is the company’s main source of vendor-specific data. It includes infor-
mation on vendor from which a company can produce, or sell.
Vendor master data contains vendor’s name, address, bank account no. etc.
Define Vendor Define Number Create Vendor

Account group ranges
Account group
XK01: MK01: FK01:

Centrally Purchasing Accounting
Implementation of Vendor master
Define vendor account

group

Vendor Account group

Vendors are categorized according to their requirement. Some of vendors having similar
characteristics are groped together and placed in one category. For example all local ven-
dors can be place under one account group.
PATH: Logistic general  Business Partner VendorControlDefine Account group

and fields selections (Vendor)
After filling all necessary details such as name of account group, general data, and field
Status. Click on save button. Vendor account group will created.

Number Range
PATH: Logistic generalBusiness PartnervendorConrolDefine Number ranges for
vendor master record

Creation of vendor
T-CODE: XK01-create,
General Data: General data is maintained at client level and it is valid for all
Organizational levels.

Accounting Data Accounting data is maintained at company level and it is valid

for all parts belonging to that company.
Purchasing Data Purchasing data is maintained at purchasing organization level.

List of Vendors Created In purchasing Organization (T010)
T-VODE: MKVZ

Purchasing Info record

The separate data of material and vendor master we combined altogether in one record is called
purchase info record, purchasing info record maintain material and vendor supplying that material
Ex. current price, standard quantity, planed delivery time, Tax code, tolerances.
Purchasing info
record
1) General Data
-vendor data
-order unit of
measure
2) Purchase org Da-
ta
-Control planned
-Delivery
-Tolerance
-Net price
3) Conditions
Price related data
Why do we need purchasing info record?

We cannot maintain price, delivery time or tolerance for particular vendor in to material and vendor
master record, due to that we have to maintain material and vendor combination data into the one
file which is centrally available for each department is called purchase info record.
T-CODE: ME11
P.org level- For Each plant assigned to p.org
For Plant specific
Info record for Special procurement types

1) General Data: it contains vendor data and purchase order unit of measure.
2) Purchase org Data: Planned delivery, tolerance limit we can maintain in this

3) Conditions
Here we can maintain conditions like gross price, discount, surcharge and freight etc. for particular
material and vendor for specific period of time
What is importance of info record?

1) Material with different prices regard to different vendors can maintain in info record.
VENDOR-9114
MAT- 748
VENDOR-101046
From above figure we can see for one particular material I have two source of supply (vendor)
And I have different price, delivery time, tolerances as per data provided by both the vendor

2) It helps in assigning source of supply automatically in purchase requisition
3) It helps to automatic trigger of data in Purchase order.
From below figure we can see that how info record data like Net price, Planned Delivery date, Condi-
tion can be trigger automatically once we put vendor and material combination.

Source list
The combined information of material and vendor is maintained in record is called purchase
info record. But a particular material can be ordered from different vendor time intervals,
this information stored in source list.
Importance of source list
Source list includes a list of possible source of supply for material at particular time period.
Specifies time period of ordering material from a given vendor.
Source list can be copied from one plant to another.
T-CODE: ME01
If the requirement of particular material is large and our single ven-

dor cannot fulfill that requirement at that time we can assign an-
other vendor for same period of time.
Fix vendor: Above we can see I have maintained three vendors for my material 748 at plant
level and fixed 101046 vendors now, then while creating purchase requisition system will
automatically give me this vendor for this particular period of time
If I tried to give put different vendor, system

is showing me this warning massage

Block vendor: Now I again went to source list and block the 101048 vendor
This time system showing me error massage that vendor is blocked by source list
As I blocked vendor no system is showing me

error massage.

3. PROCURE TO PAY (P2P) CYCLE
REQUIRNMENT SEND TO P. ORG
MAT: A1 MAT: A2
PLANT T020
PURCHASE ORGANIZATION (T010)
P.Org try to find material in the stock if not

available then P.Org start searching for ven-
dors for that material.
REQUEST FOR QUOTATION (ME41) VEND: A VEND: B VEND: C
Vendor Evaluation: Here as per client requirements we

configure vendor on the basis of price, quality, delivery
time etc. to select vendor.
MAINTAIN QUOTATION (ME47)

VEND: A VEND: B VEND: C
100 RS. 110 RS. 120 RS.
PRICE COMPARISON (ME49) Selected Rejected Rejected
Creation of PO for Plant T020, Material A1 & A2 and send

PURCHASE ORDER (ME21N)
to Vendor: A
Material is received in T020 premises and vendor sends us

GOODS RECEIPT (MIGO) the Invoice.
INVOICE VERIFICATION (MIRO) In this STEP accounting department verifies the invoice in
coordination with plant and purchase department
PAYMENT TO VENDOR After verifying the invoice Accounting department do the

payment to the vendor

Purchase Requisition
Procurement in every organization starts with gathering requirements. Once requirements

are gathered, we need to inform the purchasing organization. A purchase requirement is a
document that contains a list of requirements.
A Purchase requisition is a request that is made to the purchasing organization to procure a
certain list of materials.
It is an internal document and remains within the organization.
Purchase requisition needs approval from the purchase organization.
Purchase requisition can be created for the following procurement types-
 Standard- Getting finished material from vendor.
 Subcontracting-provide raw material to vendor and getting finished material.
 Consignment-procuring material that is kept in company’s premises and paying to
vendor for that.
 Stock transfer- getting material from within the organization.
 External service-Getting services lay maintenance from third party vendor.
For this Particular document I have created using only standard purchase order to learn
about how the simple procure to pay cycle runs within the system and for that I have made
7 materials and different vendors from which I wanted to buy from them, which shown be-
low in details
T-code: ME51N
Path: Logistic  Material ManagementPurchasing Requisitioncreate
Sr. No. Material Source of supply

9114
1 Rear view mirror (Finished) 748 101046
101048
9114
2 Window frame (Finished) 749
101046
9114
3 Seat (Finished) 750
101046
101047
4 Battery (Raw) 719
101048
5 Distributor (Raw) 733 101049
6 Radiator (Raw) 735 101048
7 Alternator (Raw) 736 101047
To understand different scenarios I have created Purchase requisition for all 7 material and to
some material I have assign source of supply in PR and I took some material to generate RFQ by
not assigning source of supply in PR and with combination I have created Purchase order.

Below we can see that I have assigned source of supply to item no: 10 i.e. (material 748 will be
taken from vendor 101046 only.)
As we can see for item no 20, 30, 40 I have not assigned any source, hence I can decide it after
Quotation from vendors.

For other materials i.e. item no: 50, 60, 70 there is only single source so that is automatically
will be assigned once I enter on assign source of supply.
Item no Material Source of supply
10 748 Assigned
20 749 Not
30 750 Not
40 719 Not
50 733 Assigned
60 735 Assigned
70 736 Assigned

Request for Quotation

Vendor selection is an important process in the procurement cycle. Once requirements are
gathered, we start looking for possible suppliers who can fulfill the requirements at the best
possible price. So a request is made to the vendors to submit their quotations indicating the
price of material along with their terms and conditions. This request is known as the request
for quotation (RFQ).
Request for quotation is a form of invitation that is sent to the vendors to submit a quota-
tion indicating their pricing and terms and conditions.
It contains details about goods and services, quantity, date of delivery, and date bid on
which it is to be submitted.
Quotation is reply by vendor response to request for quotation.
RFQ Creation Manually T-code: ME41

PATH: Logistic  Material ManagementRequest for quotationcreate
RFQ Creation Automatically from purchase requisition or outline agreement
With reference to PR I have these materials now and I will select which I have not assigned
source of supply and adopt those materials.

For selected material now I have to send Request to vendor for those three materials, as
shown below
For material 749 & 750 with vendor 9114
For material 749 & 750 with vendor 101046
For Material 719 with vendor 101048
For Material 719 with Vendor 101047

RFQ Maintain
Now I am going to maintain Quotation (Price) I have gathered from vendor.
T-code: ME47

RFQ Comparison
We can compare Quotation of different vendors in this STEP
T-code: ME49
Below source of supply which I have selected from my PR and RFQ

Now I will create Purchase order (PO) for these
Item no Material Fixed Source of supply
10 748 101046
20 749 101046
30 750 101046
40 719 101048
101049
50 733
101049
60 735
101048
70 736

PURCHASE ORDER
Purchase order is the formal and final confirmation of the requirement that is sent to ven-
dor to supply material or services.
A purchase order includes important information such as name of material its correspond-
ing plant, details of purchasing organization with its company code, name of vendor, and
delivery date
A purchase order can be created by following STEPs
Path: Logistic Material- ManagementPurchasingCreatevendor/supplying Plan
Known
T-CODE: ME21N-create, ME22N-Change, ME23N- Display
I have created Purchase orders with reference to PR as well as RFQ as shown in snapshot
below we have added the numbers of PR and RFQ with their item number.
Note: Item no. is also important in case of creat-

ing with reference to any document.
Here we can see that after entering the PR and RFQ Number the material and price is auto-
matically get generated
Note: It will apply only if there is same vendor, otherwise it will give you an error.

Similarly for other material and selected vendor with reference to PR and RFQ I have creat-
ed
Purchase Order for material 719 & 736 to vendor 101048
Similarly for other material and selected vendor with reference to PR and RFQ I have creat-
ed
Purchase Order for material 733 &735 to vendor 101049


After processing the Purchase order, the vendor delivers the material to the ordering party
this process is called goods receipt. It is the phase where the material is received by the or-
dering party and its condition and quality are verified. Once the material is verified against
the predefined quality, a goods receipt is posted goods receipt can be posted by following
STEPs below:
PATH: LogisticMaterial managementinventory managementGoods movement

T-CODE: MIGO
Similarly I have done goods receipt for Material 719 & 736
Similarly I have done goods receipt for Material 733 & 735

Invoice Verification (MIRO)

Invoice is received from the vendor after goods receipt, and then the invoice is verified by
the ordering party. This is the phase where the vendor (seller) is paid from the company and
reconciliation of invoice can be posted by following the STEPs below
PATH: LogisticMaterial managementLogistic Invoice verificationDocument en-

tryEnter Invoice.
Vendor Payment: And after verifying the invoice production, Purchase, Quality and other
departments, the accounting department pay to the vendor as per the term and conditions
had decided.

4. Automatic Purchase order

Automatic purchase order creation is functionality in SAP MM. By which, the purchasing
team saves their time from the manual creation of purchase order.
If I have number of purchase requisition of material from fix vendor then it takes a long time
to convert every PR into PO. So to overcome this problem SAP introduced the Automatic PO
creation Functionality.
STEP 1: In material master data, check box for Auto PO in the Purchasing View Should be checked
T-CODE: MM01

STEP-2:
In vendor master data, the Auto PO checkbox in the Purchasing View should be checked.
T-CODE: XK01

STEP-3:
A source list should exist for material with the same fix vendor.
T-CODE: ME01
Vendor should be fixing in the source

list
STEP-4:
A valid Purchase info record (PIR) of material with the vendor must in the system.
T-CODE: ME11

System will pull the

price from here
Likewise I have maintained PIR for the Combination of Material 464920 and vendor 101048.
STEP-5 Create Purchase requisition
T-CODE: (ME51N)
Likewise I have created another two Purchase requisitions. For different vendors

Auto creation of Purchase order from Purchase requisition
T-CODE: ME59N
Here I entered purchase requisition which

I have created.
Here we get our Purchase order number

5. External Service Procurement

Besides procurement of goods, an organization may occasionally require some kind of ser-
vices. Such services include small maintenance tasks such as changing the lights, painting,
and housekeeping. These services are carried out by external contractors and hence the
whole process of procurement of services is known as service management. The key points
to note about service management are as follows −
Service description along with its unit of measure is stored as master data in a record that
is known as the service master record.
The system stores the services that have been procured as a record in a sheet that is called
as the service entry sheet.
Service procurement can be of the following two types−
Planned Services − in planned services at the time of procurement specifications like quanti-
ty and price are known in advance. It means nature and scope of service is clear before pro-
curement.
Unplanned Services − in unplanned services at the time of procurement specifications like

quantity and price are not known in advance. It means nature and scope of service is not
clear before procurement. These services can be extended as per the requirement.
STEP 1
PATH: LogisticMaterial ManagementService MasterServiceService master
AC01/AC02/AC03

STEP 2: Service Purchase Order, In SAP MM services are accomplished with the help of ser-
vice purchase order. The requirement of service with its description along with quantity is
given to third party in form of service purchase order. In service purchase order important
field is item category. For service, item category will be D. So, service purchase order can be
created by following the below STEPs.
We can add limits in purchase order because of that we can specify unplanned services as
well.
Example- At our Home I have an issue with my electric wiring and I have ordered Electrician
to come and check what is an issue but after investigation we found that we need some wir-
ing, sockets and all other Labors required, so I have to fix the price within limit how much
should be the service charge within limits also so that other charges comes under un-
planned services.
Service type Type of work Cost
Machine Maintenance
Planned service 100000 EUR
New parts installation 10000 EUR

Unplanned Cable repair 500 EUR
Labor 500 EUR
We need to maintain Limits in PO to

get unplanned services, while creating
Service Entry sheet

STEP 3: Maintain in Service Entry sheet

T-CODE: ML81N
Here I have maintained planned and unplanned services.
STEP 4: MIRO
Now, I have to pay to the vendors against the services which the vendor has provided to us by In-
voice verification.

6. Quota Arrangement
A particular material can be procured from different vendors depending upon the require-
ment. In this way, the total requirements of material are distributed to different vendors,
i.e., the quota is assigned to each source of supply this is known as quota arrangement.
Quota rating is used to determine the amount of material that is to be assigned to particular
source or vendor. The source with lowest quota rating is called valid source.
Quota rating = (Quota allocated quantity + Quota Base Quantity)/Quota
STEP1: Change material by selecting quota arrangement and source list in purchasing view.
Quota Arrangement Usage: It determines whether a material in a quota arrangement and

which operation lead to a quota arrangement. For example, you can define quota arrange-
ment to only purchase order.
STEP 2: Create Purchasing info record for material 1 and vendor 100708 and 100709
STEP 3: Create Source list

1ST SCENARIO
STEP 4: Create quota arrangement (MEQ1)

I have maintained quota arrangement and maintained quota to different vendors as shown
below percentage wise as per quota rating here.
STEP 5: Create PO
Quota rating for vendor 100708

= (Quota allocated quantity + Quota Base Quantity)/Quota
= (1000+0)/6 =166.67
Quota rating for vendor 100709

= (Quota allocated quantity + Quota Base Quantity)/Quota
= (1500+0)/5 =300
Hence, PO & PR placed to the vendor with LOWEST Quota rating, which are 100708 vendors
in this case.

2nd SCENARIO
STEP 4: Create quota arrangement (MEQ1)
For vendor 100709 we have maintained maximum quantity 1000 it means when I use quan-
tity 1000 or less then1000 than the system will take vendor 100709 for it.
STEP 5: Create PR
I have created PR for less than 1000 quantity, it automatically pick the 100709 Vendor but
when I changed quantity to more than 1000 as per quota arrangement it shows me warning
error that specifies vendor 100708 for more than 1000 quantity.
Understand relationship between,

these three factors on the basis of
quota arrangement
Same like above now we have created PR for more than 1000 quantity, it automatically pick
the 100708 Vendor but when I changed quantity less than 1000 as per quota arrangement it
shows me warning error that specifies vendor 100709 for less than 1000 quantity.

Same error message we are getting while creating PO

7. Outline Agreement
These are short term and long term and long term agreements with the vendor to supply
goods and services under certain conditions.
Vendor selection is an important process in the procurement cycle; vendor can be selected
by quotation process. After getting shortlisted a vendor, an organization enters into an
agreement with that particular vendor to supply certain items with conditions. Typically
when the agreement reached with that particular vendor, a formal contract is signed with
the vendor. So the outline agreement is a long-term purchasing with vendor
The key points to taken care about outline agreement here
An outline agreement is a one-term purchasing agreement with a vendor containing terms

and conditions regarding the material that is to be supplied by the vendor.
The terms of outline agreement are valid up to certain period of time and cover a certain
predefined quantity or value.
Outline Agree-
ment
Scheduling
Contract
agreement
Value Quantity Without re- With release

(WK) (MK) lease (LP) (LPA)

Business scenario
Before  I had one plant Z005 with one purchasing organization i.e. (Z005) and I had a re-
quirement of materials (464802, 464804) on weekly basis with certain price from vendor
(101046) is supplying me that material from one year.
Now  I have been expanded my business and I have total three plant now i.e. (Z005, Z006,
Z007), with one Purchasing organization (Z005) means I have centralized purchasing organi-
zation,
I want material (464802, 464804) for all three plants and so in this case I am going to nego-
tiating with vendor, because I have increased volume so I could negotiate with vendor to
reduce the price by saying that I am going to procure material with a quantity 4 times more
than before.
Then the vendor could offer me to make an agreement for a year or six month with better
terms, with better shipment service, better packaging, better price etc. that will be benefi-
cial for vendor and I too.
So I will create I contract with the vendor for 1 year.
Before VENDOR 101046
Plant Z005 Total

sr.no. Material Monthly Requirement Price Qty Total Value
1 464802 1200 196 14400 2592000
2 464804 1200 200 14400 2880000
Purchasing Org-T010
Now
Validity Period 27/06/2021-27/06/2022
Z005
Plant Z006
Z007 Total
Qty Total Value
sr.no. Material Monthly Requirement Price
1 464802(MK) 1200/Plant 150 43200 6480000
2 464804(WK) 1200/Plant 180 72000 12960000

Quantity Contract:
As per business Requirement I am going to create now a quantity based contract with de-
cided vendor.
T-CODE: ME31K/32K/33K (Create/Change/Display)
Quantity type contract
I have entered here my centralized

purchase organization where my all
three plants are assigned.
I am not going to put plant here

because it will be than only
plant specific and I want this
contract for my three plants. I’ll
going to decide it in PO.
Header data: It includes all contract related data like company code, validity period, we can
also mention approximate value under the contract also we can decide terms of payment
agreed with vendor.
As I decided contract
for one year I enter
validity period here
In case quantity
contract it is not
mandatory to put
value

Quantity all three plants
If Purchase order (ME21N) for that material without reference to contract
2) In this case system is showing me the price

from info record which is not the negotiated
price, which could be loss to company.
1) If I try to make a PO without reference to con-

tract system will show me this type error. mes-
sage

Purchase order (ME21N) with reference to contract
I’ve create PO with reference to out-

line agreement tab than all the data
automatically gather by system in
PO.
I’ve entered my three

plants here for same ma-
terial.

How many PO are

released under this
contract.
Here we can see how much qty is

release under this contract

Value contract (WK)

As per business Requirement I am going to create now a Value based contract with decided
vendor.
T-CODE: ME31K/32K/33K (Create/Change/Display)
In this case I’ve create contact with reference to the purchase requisition.
But in this case we need to specify the plant oth-

erwise we can’t proceed further. Then the con-
tract will be plant specific only.
Here I have created contract with reference to purchase requisition

Header data: It includes all contract related data like company code, validity period, we can
also mention approximate value under the contract also we can decide terms of payment
agreed with vendor.
In value type contract this

field is mandatory
Target quantity and net price must be specifying here.

Purchase order with reference to Value and Quantity contract both in the same PO
Now I want to create purchase order with reference to

value and quantity contract for a different plant, I can
do that but vendor and p. org must be same.
My plant and contract are different

but vendor and purchase organiza-
tion is same.
Material of different contract

Scheduling Agreement
An agreement between vendor and ordering company to deliver the predefined material
at predefined dates within a timeframe is known as scheduling agreement.
In case of contract we tell the vendor specify the vendor target quantity OR A target value,
but what is I have requirement of material on weekly at particular date of a week in that
case with replacement of contract we can do scheduling agreement with the vendor by
specifying the actual date and quantity.
In this case want material (464810) and I required this material on weekly basis at particular
date.
To avoid any delay in order and save my time from creating PO on weekly basis I will create
scheduling agreement.
STEP 1
Create scheduling Agreement
We have without release (LP) and with release (LPA)
T-CODE: ME31L/32L/33L (create/change/display)
With release
NOTE: For this document I am showing you only with release (LPA) only the difference in
without release we no need to release the document it releases automatically with date.

In case of scheduling agreement enter

plant is must, because plant required
that material at particular schedule.

STEP 2: Maintain Scheduling agreement we need to maintain it as per date of delivery and
quantity.
T-CODE: ME38
Here I have maintain date of delivery

with quantity
Verify Purchase order ME21N from document overview.
It fetches all the details as per

scheduling agreement
Our Scheduling
Agreement but we
can’t generate here
it’s just for verify

STEP 3
Now I have to release it as per requirement.
T-CODE: ME84

8. Release Procedure for Purchase Order

Release strategy is an approval process to control the procurement process in
a company.
We can define a release strategy on the following basis; some of them are given below:
 Purchasing organization
 Purchasing group
 Purchasing Document
 Purchasing Document’s Total Value
 Plant
 Company
TABLE
CEKKO
T020_PLANT
FIELD: WERKS
Chara. Are assigning to class CLASS

Characteristics T020_ORDERTYPE T020_CLASS
FIELD: EKORG 032
T020_PURCHORG
FIELD: BSART Release
procedure
T020_NETVALUE Release
FIELD: GNETW group
ZP
Release
Code
Release Strategies
T1-T4
Release indi-
Release prerequisites
cator
Release Statuses B- Block
R-Release
Release Simulation
Classification

Path to perform Release procedure for Purchase order
STEP 1: CREATE CHARACTERISTIC
CHARECTERISTICS TABLE FIELD
Plant T020 CEKKO WERKS
Purchase. Org T010 CEKKO EKORG
Purchase. Order Type CNC CEKKO BSART
Purchase. Order Value Multiple CEKKO GNETW
Note: In This document I have explained characteristic for plant and for order
value for other characteristic process is same

CHARACTERISTICS FOR PLANT

T-CODE: CT04
For plant I selected multiple values

here so while creating strategy I will
be able to put multiple plants there.
This data should be consider from table from ABAP Dictionary from SE11
From SE11: ABAP Dictionary

For release strategy we have class type 032
CHARACTERISTIC for Order Value
Format and no. of decimal place should

be like this while putting the values

This data should be consider from table from ABAP Dictionary from SE11
Likewise I have done it for Purchase organization and for purchase order doc-
ument type other Characteristics value

STEP 2
CLASS: Is a group of characteristics we can store at one place
I have assigned my three characteristics with the class: T020_CLASS
Here we can see how I assigned all my characteristics at one place
i.e. T020_CLASS Assigned to (T020_PLANT, T020_ORDERTYPE, T020_PURCHORG,

T020_ORDER VALUE)

REALEASE PROCEDURE:
Release Group: A two-digit code assign to the class and group of release codes that can re-
lease a purchase document
I have created it as a ZP
Release Code: Specific two-character ID for the designed users to allow him to approve
/hold/reject the document
I have created T1, T2, T3, T4 and assigned it with release group ZP
These 4 codes I have used for ap-

proval process and I can select
maximum of 8 here.
Release Indicator: Specification of purchasing document for blocked or released.

Release Strategy:
While creating release strategy I have to enter
Approver Intervals
T1 0-500 EUR
T2 501-1000 EUR
T3 1001-2000 EUR
T4 2001-3000 EUR
Note: For this I am explaining only the last one others are same just change in the values
For 4tt approval

Till 3rd person there is block

But once 4th person approve then
there will be release of PO

We have to mention classification for at each level separately

FOR 1st Approval: T1
FOR 2nd Approval: T2
FOR 3rd Approval: T3

FOR 4th Approval: T4

Cerate PO ME21N:
As I configured till 500-1000 EUR only two approvals should be there.
As I configured till 2000-3000 EUR only all (Four) approvals are should be there.

Now I will release the PO with

T-CODE: ME29N
Last Approval (T4)
After Release we got the PO number: 45000247

9. Vendor Evaluation
 Vendor Evaluation is process which helps you to optimize your procurement process and
services on basis of factor decided by us.
 In SAP Vendor evaluation is integrated with Material management due to fact that while we
purchase material, data i.e. Delivery date, Quality & quantities of material, Packaging are
taken from purchasing
 Vendor Evaluation also utilizes basic Materials Management data, Inventory Management
data (such as goods receipts).
 Vendor evaluation helps us to select identical source of supply by continue monitoring of
existing supply relationships, it also provide us accurate information on price, payment
terms, delivery date variances, etc. on the basis of this detailed information we can collabo-
ration with relevant vendor we can quickly solve procurement problems in an organization.
 We can also check services we buy from vendor and monitoring them whether vendor
delivering services within timeframe and appraise quantity.
Vendor-A Score
(76)
Sub criteria W.F Main criteria W.K. Overall score Selected
.
Price Equal Weightage

SC-1 Price Level 60% = (SC1*60+SC2*40)
1
Price
SC-2Price history
40% 50%
+
SC-1 GR Lots 40% Quality
= (SC1*40+SC2*60) Quality
1
SC-2 Complaint
60%
50% Vendor-B Score
(65)
Rejected
Flow Diagram for Vendor Evaluation

Manual For this method we need to define MAIN CRITERIA
Vendor Evaluation Semi-Auto For this method we need to define SUB CRITERIA
Methods
Full- Auto In this method system automatically generate values
For this Particular document I am generating with SEMI-AUTOMATIC method
PATH to create Vendor evaluation

WEIGHTING KEY: We define weighting key for main criteria here if suppose we have main
criteria of price with weighting key 01 i.e. equal and for Quality with weighting key 02 i.e.
unequal
Details to be Consider for Evaluation of vendor
In vendor evaluation we have two types of criteria’s main criteria under which we have sub
criteria, both criteria we can define as per organizational requirements here below i have
shown both main criteria in which as per basic practices in an organization we have criteria’s
like price, quality, service, etc., henceforth we can define it as per organizational require-
ments
Main Criteria Sub Criteria

Price Level
Price Price History
Market Behavior
GR Lots
Quality Shop floor Complaint
Purchase Org.(T010)
Audits
On-time Delivery
Delivery Quality Reliability
Shipping Instructions
Service Reliability

STEP 1:
Main criteria: I can define multiple main criteria to evaluate the vendor as per previous his-
tory with company and we can give score on the basis of that.
Here in this example I am considering four main criteria’s.
Main criteria’s
Sub Criteria: In the main criteria we can define sub criteria related to main criteria in below image
we can see the sub criteria’s
Main criteria
Sub criteria
NOTE: Likewise within all main criteria’s there are sub criteria’s. I have shown only for price
here.

STEP 2: Maintain Purchase organization data

In this STEP I am adding main and sub criteria and providing them weighting for total score
of 100 and I am dividing them w.r.t requirements of client. For Purchase organization T010.
Max Score given to vendor
Past 200 days of data will

consider for evaluation
These are the main criteria I required for my purchase organization as per requirement of
client
I have selected four for this particular example

For a plant T010 within main criteria I have given weighing to sub criteria
shown below.
Main Criteria Sub Criteria Weighing
Price Level 70
Price Price History 20
Market Behavior 10
GR Lots 40
Quality Shop floor Complaint 40
Purchase Org.(T010)
Audits 20
On-time Delivery 60
Delivery Quality Reliability 30
Shipping Instructions 10
Service Reliability 100
For Price
For Quality

For Delivery
For Service
Now I have to give the score to the particular vendor out of 100
T-CODE: ME61

As I have to generate by semi-automatic method I have not entered value in the main crite-
ria. I will do it in sub criteria.
I have to enter here to

enter sub criteria
NOTE: We have to do this for each vendor to evaluate on the basis of these
criteria but for this particular example I am showing only for one vendor, for
other all is same just we need to change values
I have done that for three vendors
(9114, 101046, 101046)
For Price
Average score automatically

generated by system with
Equal Weighting
Weightage came as,

I have provided

For Quality
For Delivery

For Service
To see the evaluation for our vendors

Evaluation Comparison for particular material with that Vendor
T-CODE: ME64

T-CODE: ME65
For Print the Evaluation Document for particular vendor

T-CODE: ME6F

10. PRICING PROCEDURE
Pricing procedure is a way to determine prices in purchasing documents.

Each vendor providing us material or services has different terms and conditions with re-
spect to their price, location, etc. so for fulfilling the gap, SAP gives us provision to define
pricing procedure.
CONDITION TABLE CONDITION TYPE

(917)
Co. code Freight (T021)
Plant ASSIGN ACCESS SEQUENCE ASSIGN

(T020) Gross (T022)
P.org
Discount (T023)
Vendor
ASSIGN
Schema Group
Purchase CALCULATION
ASSIGN P.Org (T020) ASSIGN
Org (T010) SCHEMA
Vendor (T2)
ASSIGN
Vendor
master
XK01

PATH to define Pricing Procedure

STEP1
Creation of condition Table (M/03)
In Condition table we can add combination of field for making a condition records, with the
respect of which we need to perform pricing process.
For this particular example I have selected four fields.
T-CODE: (M/03)
These are the fields on which

I want to perform pricing
procedure.
A log to inform that my condition table (917) has been created successfully

STEP 2
Creation of an ACCESS SEQUENCE
As From flow chart we can see that access sequence is bridge of condition table and condi-
tion type, We can define it as access sequence to find condition records for condition types
from condition table we have created.
PATH: Material managementPurchasing Conditions Define Price determination
 Define access sequence
With new entries I have created T020 as TESLA access sequence.
STEP 3
Assign Condition table to Access Sequence
In this STEP we can see that which fields we have selected from condition table is now acti-
vated for table 917 and access T020.

Till STEP 3 I have done these
STEP 1 STEP 2
STEP3
Condition Record
Company code
Condition Access
plant
Table (917) Sequence (T020)
P.org
Vendor

STEP 4
Creation of condition types
Simply it’s just a defining term i.e. gross, freight, discount, surcharge, etc. we can define
here with our clients requirement.
I have taken here Gross, Freight, Discount
 Define condition type
Below these are the standard conditions types are given by SAP I have copy them to make
new as per clients requirement’s.
STEP 5 Assigning access sequence to condition types

Condition type 1: Freight %T021
In this STEP I am assigning condition

type with access sequence

Condition Type 2: Gross Price T022
Condition Type 2: Discount % T023
Till STEP 5 I have done this
DEFINE STEP 1 STEP 2 STEP 4

ASSIGN STEP3 STEP5
Condition Record Condition types
Company code Gross
Condition Access
Table (917) plant Sequence (T020) Freight (%)
P.org
Discount (%)
Vendor

Here we can see condition type I

have created included in the list
STEP 6: Creation of pricing procedure

In this STEP I will maintain the sequence for the pricing calculation
 Define calculation Schema
Here I ‘m defining the sequence for condition type
I have put 20 here because on

the basis of gross price I want to
get freight and Discount.
Here I maintained from STEP= 10

to STEP=30 total to be considered
Manually means we have to enter
Freight in PO manually and re-
quired for Gross means PO will
took it automatic.

STEP 7: Assigning pricing procedure to condition type
Likewise I have done it for T022 Freight and T023 Discount
Till STEP 7 I have done this.
STEP 1 STEP 2 STEP 4 STEP 6

STEP3 STEP5 STEP7
Company code Gross
Condition Access Pricing
plant Freight (%)
Table (917) Sequence (T020) Procedure (T020)
P.org
Discount (%)
Vendor

STEP 8
Creation of vendor Schema in Calculation schema
 Define Schema Group
For Schema Group for Vendor

STEP 9
Creation of vendor Schema in Calculation schema

STEP 10
Assignment of purchase schema to purchase organization
Purchase org is T010
STEP 11
Assignment of vendor schema to vendor
I have Assign vendor schema

T2 with vendor 101046

STEP 12
Assignment of pricing procedure to calculation schema
 Define Schema Determination
DEFINE STEP 1 STEP 2 STEP 4 STEP 6

ASSIGNMENT STEP3 STEP5 STEP7
Company code Gross (T022) Pricing
Condition Access
plant Freight % (T021) Procedure (T020)
Table (917) Sequence (T020)
P.org
Discount % (T023)
Vendor
STEP 8 STEP 9
STEP 12
Schema Group Schema Group

for Vendor (T2) for P.Org (T020)
ASSIGNMENT
STEP 11 STEP 10
Vendor XK01
P.Org (T010)
(101046)

DEFINING CONDITION RECORD

T-CODE: MEK1
NOTE: We have to maintain condition type with each vendor, for this example I am show-
ing only for T022 i.e. Freight in this case, for others it will be same.
For T022 gross price I have maintained three vendors.
As per our configuration

condition records have
been maintained.
Creation of Purchase Order (ME21N) to verify
In configuration I have entered manual

tick for T021 due to that T021 is not show-
ing here but I can enter it manually

I have entered T021 here manually
Analysis Pricing In PO
As per the configuration condition record has been maintained.

11. Automatic Account Determination (MM-FI)

With this account determination configuration setting, system will determine a suitable
G/L account while posting GR or GI etc.
Procurement process involves the cost of goods and services that needs to be paid to the vendor by
an organization. The cost being paid must be posted in an organization necessarily in a correct gen-
eral ledger (G/L) account. It is quite impossible to recollect and feed the correct GL account every
time during procurement. To avoid this inconvenience, the SAP system can be configured so that the
system will automatically determine the correct G/L account that needs to be posted. G/L account is
posted when goods receipt is dene as well as during clearing the invoices verification.
ACR
1010 VALUATION
AREA/PLANT
T010
MATERIAL TYPE VALUATION CLASS VG CODE
TRAW TRAW 0001
T020
MATERIAL T030
(601)
OBYC CO.CODE:1000
G/L CHART: INT

MvT
(101)
300000
TRASACTION KEY Account 300020

BSX/WRX/GBB Modifier
400020

PATH for Automatic Account Determination
STEP 1
Valuation grouping code must be active
Valuation areas can be grouped together and can be assigned to one grouping code. For ex-
ample Different plants under one company code can be and vice-versa.
Before this valuation grouping code must be activated and this can be done by following.
PATH: IMGMaterial ManagementValuation and account assignmentaccount de-

termination account determination without wizard Define Valuation Control
T-CODE: OMWM

Few terminologies need to look at before proceed further.

1) Chart of accounts: Index of all G/L accounts of the company. Every plant is assigned to a
company code & company code is assigned to a chart of account.
2) General Ledger Account: General Ledger (G/L) account is unique record for each type of
asset, liability, equity, revenue and expense under plant/company
3) Valuation grouping code/Valuation Modifier: A four-character id which is group together

with the different valuation area/plant for account determination in same general ledger
(G/L) account within a company code.
4) Transaction /Event Key: A three-character if which is assigned with the movement types
to make a relationship between movement types & general ledger (G/L) account. We can-
not change/add new event keys because those are standard
5) Valuation class: Is a group of materials with same account determination. It helps to seg-
regate G/L account on material type basis. We assign valuation class in material master rec-
ords
STEP 2 Grouping together Valuation Area

In valuation grouping, valuation area and valuation grouping code are assigned to the com-
pany code.
termination account determination without wizard Grouping together valuation are-
as
T-CODE: OMWM
For multiple plants only 1

valuation grouping code

VALUATION
AREA/PLANT
T010
VG CODE
T020 CO.CODE:1000 CHART: INT
0001
T030
STEP 3
(PART 1) Define Account Reference
termination account determination without wizard Define valuation classes
T-CODE: OMWM
In this STEP we can define which valuation class is allowed for a material type
The Account category reference (ACR) is an artificial four digit code which allows us to link
material type with valuation class.
I have created three ACR for my

each material type

(PART 2) Define Valuation Class
We have standard valuation classes with respect to the material type, I have copied them
and created valuation classes for material type and I assigned them to account category ref-
erence which I had created.
Standard Valuation Classes
1) Raw Material – 3000 2) SEMI-FINISHED – 3900 3) FINISHED -3920
I have created three valuation

class for my three material type
and assigned them to ACR

(PART 3) Define Account category reference assign with material type.
There is no direct configuration between material type and valuation class account assign-
ment elaborates which material types related materials can be choose the which valuation
class.
In this STEP I have assigned my material type with the account reference category, so that
valuation class will get automatically assign to valuation class.
ACR
1010
MATERIAL TYPE VALUATION CLASS

TRAW TRAW

Creation of material master MM01

As the account assignment category assigned to material type while creating material
(MM01)
Valuation class automatically assigned to material.
As per assignment valu-

ation class automatically
trigger here
Likewise I have done this for material type: TSEM and TFIN

Scenario 2:
Now client has a requirment that, they want multiple valuation class for one material type,
So in that case I need to assign account catergory reference to another valuation class.
ACR VALUATION CLASS

1010 TRAW
VALUATION CLASS
TSEM
MATERIAL TYPE
TRAW
I have assign here T011 valuation

class with 1010 ACR
During material creation with MM01 system now asking me the particular valuation class
Now as per requirements sys-

tem proving me two valuation
classes
Scenario 3:
Now client has a requirment that they want multiple Material types for multipe valuation
class, So in that case I need to assign account catergory reference to another valuation class

MATERIAL TYPE VALUATION CLASS

TRAW TRAW
ACR VALUATION CLASS

MATERIAL TYPE TSEM
TSEM 1010
VALUATION CLASS
MATERIAL TYPE
TFIN
TFIN
As per requirement here I

have assign only one ACR to
all three material types
In this case I also need to assign material type with the account category reference

During material creation with MM01 system now asking me to choose from these four
valuation classes.
Now we can see here as per the busi-

ness requirement’s, for both the mate-
rial types system is asking me same
valuation classes as I can select here
from multiples.

STEP 4
Define Account Grouping for Movement Types

termination account determination without wizard Define Account Groupings for
movement types.
T-CODE: OMWN
Based on movement type system is triggering a valuation string and this string is again trig-
gers different transaction keys. But few transaction keys also triggers account modifiers or
account grouping code also.
NOTE: This is STEP to create movement type, but we do not make any changes or create any
movement type, because SAP has provided all the necessary movments types for the business as
per the requirments.
STEP 5
Automatic account posting
termination account determination without wizard Configure automatic postings
T-CODE: OBYC
G/L
Material
600 300000
TRASACTION KEY 300020 CHART: INT

MvT -101 BSX
303000

These are some of the Standard transaction keys
BSX (Inventory posting)
WRX (GR/IR clearing acct)
GBB (Offsetting entry inventory posting)
KON Consignment payables
UPF Unplanned delivery costs
I have maintained G/L account 300000 for Transaction key BSX (Inventory post-
ing)
Same I have to maintain with

WRX /EIN/EKG etc.

Creation of Purchase Order (ME21N) with new material
If I have not get this maintained than

this type of error i could face while
goods receipt.

Now I have done Goods Receipt (MIGO), and will see how the accounting en-
tries are generated.
This kind of accounting entries I can see after doing goods receipt in account-
ing documents.

Account assignment without Material Master

Till now we have seen general scenario
But what if I don’t have any material and I want to do it without material mas-
ter.
And if we use account assignment category K- cost center or other, then we
need to maintained G/L account for transaction key WRX and maintain manu-
ally a G/L account
Create material group
T-CODE: OMSF
Assign valuation class to material group

PATH: SPROIMG Material managementpurchasingMaterial mas-
terentry aids for item without material master
I have maintained here material

group (T010) with valuation
class (TRAW)

Assign general modification to account assignment

PATH: SPROIMGMaterial managementPurchasing account assignment –maintain
account assignment categories
T-CODE: OME9
Below are transaction event keys relevant keys account modifiers
GBB---BSA, INV, VBO, VBR, VNG, ZOB
PRD---PRA, PRE, PRU
KON---PIP
Here I maintain the general modification for account assignment category

K (cost center)
Maintain G/L against account for TRAW valuation class
T-CODE: OBYC

As we maintain G/L account for T010

and for AAC here in PO G/L account
triggers automatically

12. Subcontracting Process

Subcontracting process is mainly used in most of industries. In subcontracting process, raw
material is providing to subcontracting vendor. It’s being processed by subcontracting ven-
dor, convert it into semi-finished material and deliver back.
BOM (CS01)
GR MvT=101
Component consume MvT=543
Finished Material
(1300016)
Raw Material (464822)
Plant/SLoc Plant/SLoc
(Z005) Raw Material (464823) (Z005)
Raw Material (464824)

Transfer posting
MvT:541

Business Scenario:
Raw material: Rotor (Disc) Semi Finished: Disc Brack
Raw Material: Wheel Hub
Raw Material: Brack Pad
My company is manufacturer of disc brake of two wheeler and four wheeler, within the my
premises I produce raw material of rotor (disc), wheel material, and brake pad and I want
this material to performed of drilling, boring and assembling activity from my vendor so in
that case I need to generate subcontracting process in my system.
Subcontractor
Raw Material Quantity Price Semi-Finished Material Quantity
Price
Rotor Disc (464822) 100 2000
Disc Brake Assembled
Wheel Hub (464823) 50 5000 50 5000
(1300016)
Brake Pad (464824) 50 3000

STEP 1: Create Bill of Material (BOM)
“A bill of Material (BOM) describes the different components that together create a prod-
uct.” It contains list of Raw material with quantity against which we can get a semi- finished
material
I will enter semi-

finished material here.
This semi-finished product I required

after doing all operation by vendor.
These raw material I need to send to

the vendor against which vendor will This quantity will multiply in PO as per
provide me semi-finished material. semi-finished ordered Qty.

STEP 2: Creating subcontracting PO with item category “L”
Item category must be

“L” for subcontracting
Semi-finished material
PO Order
quantity
As per the BOM, Raw material

Quantity is multiplied automatically
with semi-finished quantity.

T-CODE: MMBE
Let’s first check the stock overview for our raw material it is necessary that stock should be
available physically as well as in system, otherwise while transfer posting I could get error of
deficit stock quantity.
Raw material is available to

transfer to the vendor
STEP 3: Transfer posting
In this STEP I use special MvT 541 to trans-

fer company stock to vendor stock.

In this STEP I enter storage location

where my raw stock is available
Here we can see our raw material is

transfer to stock provided to the vendor

No accounting documents are generated after transfer posting because I am responsible

provide the stock to the
No Accounting documents are

generated after transfer posting
STEP 4: Goods Receipt of semi-finished material
While posting goods receipt here

system shows me how semi-
finished material sends to vendor


T-CODE: MMBE Stock Overview for Raw material
Raw material stock
Semi finished stock

Accounting Document


Invoice Verification (MIRO): Verifying invoice of vendor and payment to the

vendor against services
Payment to the vendor

against services for 50 pc.

13. Vendor Consignment

Vendor consignment is a special type of procurement process where the vendor stores his
material in the company/buyers premises with his own ownership of that material.
Material remains in the liability of the vendor until it withdrew from consignment stock. This
stock remains on the vendor’s hand until it gets transferred by transfer posting. The vendor
raises the invoice only after stock transferred into company stock.
Organization
Premises
Vendor Consignment
(101046) Stock
MvT: 101 K
Stock update
No value Update
MvT: 411 K
Stocks update
Value update
Plant
(Z007)
MAT: 464855
Settlement MAT: 464856

(MRKO)

Ball Bearing Radial Ball Bearing
In an automobile company I required two types of bearings first is ball bearing

and second is radial ball bearing for my axel and steering wheel and I have a
subcontractor/vendor which provides me this both types of bearings but I have
a deal with the vendor that I am storing this bearings in a consignment stock
and at every Six months the pieces of quantity of bearing I consume for that
much amount will pay to the vendor.
Daily 10 car Requirments of bearing in (PC)

Per car Daily Monthly Yearly
2 20 600 72000
1 10 300 36000
Plant Z007
Material Number Quantity Price Vendor
Ball bearing 464855 72000 200 101046
Radial ball bearing 464856 36000 300 101046

STEP 1
Create consignment info record
T-CODE: ME11
This is prerequisites to maintain

consignment info record with net
price and Tax code.

STEP 2
Create consignment Purchase Order
T-CODE: ME21N
For item cat K system is no ask me to put price and there is no condition tab is
maintained because we are asking for stock only not payment for now. I’ve
maintained net price in PIR, while settlement system will take that automati-
cally.
STEP 3
Post Good Receipt of consignment Purchase order
T-CODE: MIGO
For both the materials while I posting a goods

receipt special MvT 101 (K) is generated.

There are no accounting

document are generated
Stock Overview
After receiving material into consignment stock

T-CODE: MMBE
Here we can see that expect con-

signment stock no stock is available at
any level it shows we are not liable
for consignment stock.
For consignment stock we

always received goods at
storage location level

STEP 4
Transfer Posting
Now I wanted my stock into my own stock to use it for my production.
T-CODE: MB1B
The special MvT 411 (K) is

use for transfer posting from
consignment to own stock.
Here in need to put the Quantity which I want to

consume and consignment storage location.

Stock Overview
After transfer from consignment stock to own stock
T-CODE: MMBE
Once I received stock to own

stock it shows me at all lev-
els means now we are liable
to pay for it.
Here I have remaining

consignment stock

STEP 5
Consignment Settelment
In this STEP I’ve settled the consignment to pay to the vandor
Here I have settle my

document

14. Stock Transport Order (STO)

Goods are procured and supplied within a company. One plant orders the goods internally
from another plant (receiving plant/issuing plant). The goods are procured with a special
type of purchase order- the stock transport order. You’ll be able to request and monitor the
transfer of goods with a stock transport order.
Business Scenario:
Co. Code
1000
FA PUNE PLANT FA MUMBAI

(Z006) PLANT (Z005)
6) 2 STEP transfer
posting.
5) GR/STO
(101)(+)
1) STO PR (U)
STO PO (UB)
4) GI/STO
(351)(-)
3) MIGO
FA BANGALORE VENDOR
PLANT (Z007) (101046)
2) STD PO

Co. Code Plant Name Material Required Quantity
Z005 FA Mumbai (HQ) 2000

Square Diffuser
1000 Z006 FA Pune (Sales) 3000
(8700452)
Z007 FA Bangalore (Prod) 1000
If suppose I have three plants which are located as above my Mumbai plant is a
Headquarter but has a less storage facility and my Pune plant having large
storage facility and nearby to Mumbai plant so less transportation is required
and my Bangalore plant is a production house and having huge storage as well
which can fulfill the storage requirements of all three plants and my all three
plant has a weekly requirement for a particular material, as shown above, my
Bangalore plant is the one who is dealing with the vendor which is located at
Chennai and, so Bangalore plant is has a requirement from both Pune and
Mumbai plant including all Bangalore plant has now high volume requirement
of material, which could help me to negotiate with the vendor in terms of
price, facilities, taxes, delivery, etc. and as I will also get a benefit for paying ex-
tra delivery charges in case of the vendor to plant because its plant to plant
stock transfer.
So for all the above processes I got a purchase requisition (STO) from my
Mumbai plant for a quantity of 1000 and Pune plant quantity of 2000 and my
Bangalore plant also has a requirement of 3000 so combined of three plants I
need to create a purchase order for the total quantity of 6000 and create
standard PO for my vendor after receiving the goods in the Bangalore plant,
whenever required I need to transfer it to the Pune location as Pune has stor-
age facility I will store it for Mumbai plant as well and whenever Mumbai plant
required that material I need to send it from Pune Plant to Mumbai plant by
Transfer posting.

FIRST PART: Send Purchase order to Vendor from the requirement of three plants.
Plant Name Material Quantity

Z007 FA Bangalore (Prod) 8700452 6000
PURCHASE ORDER: ME21N

Stock Overview (MMBE): I have received my material of all three plants.
I have received my material

of all three plants
Difference between transfer posting and STO
Before proceeding further we need to understand difference between transfer posting and
stock transport order
Transfer Posting Stock transfer order
In this receiving plant placing

Pure inventory management transaction.
order to sending plant.
Its 1-STEP , 2-STEP It’s only 2- STEP
We can do transfer posting for Nearby Mostly STO carried out only if the
as well as for far-away. distance is far away.
Plant to plant/SLoc to SLoc Plant to plant
We do not plan receipt delivery schedule. We can plan delivery schedule.
Not possible Traceability Traceability

SECOND PART
STEP-1 Create Purchase Requisition (ME51N)
Plant Name Material Quantity

(combined Mum+Pune)
Z006 FA Pune (Sales) 8700452 5000
Now I have created Purchase Requisition for my both the plants with item category “U” for
stock transfer
When I put the item category “U” i.e. for stock

transfer System ask me to put Supply plant.

STEP-2 Create PO (ME21N)
Now I’m creating PO

with reference to PR
System took all the information

from PR; I just need to enter PO
document type
In case of STO we can define delivery

schedule over which we can’t do in
case of transfer posting

STEP-3:
This Goods Issue from supplying plant Z006 (MIGO) 7981984962
As the STO is also a 2-

Here I have used 351(-) STEP process this one is
MvT for issue goods 1st STEP to issue goods
from supplying plant.
Stock Overview
Here we can see from plant

Z007 stock is removed but it is
not in Z006 plant.

STEP-4
(MIRO) Goods receipt in plant Z006
No accounting documents are generated.
Here we can see for STO i.e. It’s an

plant to plant transfer no accounting
documents are generated.

Stock Overview (MMBE)
Here we can see after I done my GR

the stock is now in my plantZ006.
PART-3 TRASFER POSTING

1st STEP
T-CODE: Transfer Posting (MIGO) -MvT (303)
st
303 MvT For 1 STEP
after this STEP the stock
will go into transit.

Here we can see

stock is showing in
transit after first
STEP
2nd STEP (MvT305)
Here we use MvT

305 from transit to
receiving plant

STOCK OVERVIEW (MMBE)
Here we can see we

received our stock in
plant Z005

15. Split Valuation

Split valuation is the process to evaluate the material in same plant/valuation area with
different values
Procurement activities in every organization one of the important part is material valuation.
While creating purchase orders, material price is a mandatory field and it is automatically
determined. It happens because material valuation is maintained in the SAP system in mate-
rial master.
Material valuation represents integration between MM and FI modules, material valuation
is responsible for the updating of G/L accounts in financial accounting.
Use For certain materials, it is necessary to valuate the various stocks in a particular valua-
tion area separately. Reasons for this include:
1) Different origins of the material
2) Different grades of quality for the material
3) Different statuses for the material
4) Differentiation between in-house and external procurement
5) Differentiation between different deliveries
Account category
reference (0001)
Valuation (3)Plant Material

Type (Z005) Type (XK01)
Bangalore Material
(180 EUR) (464912)
Hyderabad (1)Valuation
(200 EUR) Category (Y)
Valuation
New Delhi class (3000)
(220 EUR)

Plant Z005
Material 464912 (Aluminum)
Banglore Venodor Hydrabad Vendor New Delhi

180 200 220
For my Mumbai client, Who has a Production facility for HVAC Ducting material they pro-
cure some Raw materials like Aluminum from three different Vendors one is in Bangalore,
and second is at Hyderabad and the third is at New Delhi there is a difference in the quality,
delivery charges, state taxes, due to this reasons price of all three vendors are different and
because of that my client requires to have a different stock account as well as different val-
uation of stock for that material this requirement I can fulfill by using split valuation.
PATH FOR Split valuation

STEP-1
Activate Valuation
PATH: SPROMaterials ManagementValuation and account assignmentSplit valua-
tion Activate Split valuation
Here we have to activate split

valuation for material
STEP-2
Create Global Valuation Category
Valuation Category is the criteria on which material is split valuated.
PATH: SPROMaterials ManagementValuation and account assignmentSplit valua-

tion Activate Split valuation

Here we can set whether under this

valuation category in-house production
or external procurement mandatory.

STEP-3
Creation of Valuation types
Valuation Type specifies the feature of a category.
Here I need to assign my account category reference,

which will trigger this valuation type for material type.

For Other two valuation Types I have done the same.

STEP-4
Activate Valuation types for Valuation Category
Here I need to activate my

valuation type under valuation
category

Likewise I have activated this with other valuation types.
STEP-5
Activate valuation category for Plant Z005
In this STEP I have

activated valuation
category under my
plant Z005.

Here we can see that by activating valuation category

automatically valuation types are activated for plant.
STEP-6
Creation of material
T-CODE: MM01
Here I need to assign

valuation category
For Split valuation price

control moving average
price is mandatory.

Extend material to Valuation category T-CODE: MM01

For Valuation category: Banglore-1
For Valuation category: Hydrabad
For valuation category: New Delhi

STEP-7
Creation of Purchase order (ME21N) for Vendor 101046
PO For vendor 101046

price is 180 EUR.
As I have maintained valuation type

for this material, system ask me to
enter the same, but I can decide it
while doing goods receipt.
Posting Goods Receipt (MIGO)
Here while posting Goods

receipt I have enter valua-
tion type

PO For vendor 101046
Stock Overview: MMBE
Here we can see same material is main-

tained at different valuation type.

Check Valuation in Material Master (MM03)
The same material value is split be-

cause of valuation type according to
which stock will be calculated.

16. Physical Inventory

“A process that determine that material stock is exact or if there are any difference in
quantity than updated it as per physical calculation.”
Some of Important Points why we need Physical inventory
1) There legal reasons due to which it is mandatory most of the time to conduct physical in-
ventory at least once in a year.
2) It is helpful for organization to have correct stock in system to match physical stock.
3) If correct stock is not maintained in a system that means there is wrong picture on the
financial aspects of the stock in possession.
4) Production planning required accurate MRP data of quantity of stock available for pro-
duction planning.
Create Enter Count Results Post Differences of

Physical inventory Physical inventory Physical inventory
document (MI01) document (MI04) document (MI07)
There are four types on which organizations do physical inventory
1) Periodic Inventory- This type is mostly use by organization, in this type physical inventory
of a material carried out once in a year.
2) Cycle Counting –This type carried out by organizations at regular intervals for particular
material, if organization has material which sell is frequently or has high value then organi-
zation could count it four times a year while material which organizations not use frequently
or has low value then for that material physical inventory carried out once in a year.
3) Continuous inventory – In this type a physical inventory is done for particular material at
specific date in a year so we can count some material on January and some on March so on.
4) Inventory Sampling- In this type organization may choose random material and do physi-
cal inventory count on them if there are small difference in quantity then others also con-
sidered as correct.

Path for Physical Inventory
Material System Stock On-order Physical stock
464802 300 0 240
464804 450 10 500
464822 50 0 52

STEP-1
Create Physical Inventory Document
T-CODE: MI01/MI02/MI03 (Create/Change/Display)
Posting block is use if there is a possibility that someone

will do a posting while physical inventory is in progress.
These are material on which I want

physical inventory to be carried out.

Display Physical inventory T-CODE: MI03
We can see here for this material

has not yet been counted.
For this material I had an open PO however if someone try

to post document then this kind of error will face because
we have maintained posting block.

STEP-2
Enter Inventory Count
T-CODE: MI04
10 % of variance is allowed
between our material’s actual
stock and system stock.

As I enter physical quantity and actual quantity there is

a difference more than 10% variance, system is show-
ing me negative difference warning massage.
As it shows this message we can cross check or if we not made any mistake then we can by-
pass warning message.
Here system showing

positive difference

Now as I have done with my counting system showing me counted and difference on item
level.
T-CODE: MI03
STEP-3
Post differences

Negative difference
Positive difference Here we need to give

reason for difference
702 (-) =GI from Unrestricted
701 (+) =GR to Unrestricted

17. MRP Process by considering Quota, Source list, Batches, Auto PO

MRP (Material Requirement Planning) is used to procure or produce the required material
quantities on time for in-house purpose or for fulfilling customer demands. In manufactur-
ing, the function of MRP is to guarantee material availability on time. The main objective is
to plan the supply based on requirements and considering the current stock in hand and
meet the shortages.
Creation of Material (MM01)

Classification view
I have maintained
class of batch here.
Purchasing View
Here we can see I have checked batch man-

agement, source list, and Quota arrangement
usage, and batch management

MRP Type
1) PD- If material requirement is like a routine in day of every week then this MRP type is selected.
2) ND-No Planning.
3) VB- Manual Reorder Point Planning. Both the reorder level and the safety stock level are defined
manually in the appropriate material master.
4) VM- Automatic Reorder Point Planning. The integrated forecasting program determine the both
the reorder level and safety stock level. Historical or past consumptions data are used by the system
to predefine future requirement. The forecast values are used by the system to work out reorder
level and safety stock level.
MRP with manual reorder point plan-

ning so I have enter reorder point as 100
below this order will be created

MRP 2
MRP 2 views maintain Procurement type, Special Procurement, Scheduling, Net require-
ment calculation safety stock.
1) Procurement
E-In-house Production
F-External Procurement
X-Both Production
I have created this for

external procurement
If we have maintained safety stock then

MRP creates planned order when system
stock fall below safety stock level.
Maintain Source List
Here I have maintained source

of supply fixed this vendor.

Maintain quota arrangement for material 200170

T-CODE: MEQ1
Here I have maintained two

vendor and allocated different
quota in ratios of 60:40
Here we can see no stock is

available for this material so
once we done MRP run order
will create automatically.

MRP run
T-CODE: MD03
Here I have we can select whether

purchase requisition create manu-
ally or after planned order.
Display Stock Requirement

T-CODE: MD04
Here we can see as per we have set reorder

point as 100 and we have zero stock sys-
tem automatically created planned order
for 100 quantity.

Here we can see that once I try to

convert planned order to PR on this
screen system automatically took
vendor 101046 however we I have
fixed vendor 101048 in source list
from this we can conclude that
Quota has highest priority.
MD04

AUTO PO from Purchase Requisition
T-CODE: ME59N
As I have maintained
batch management for
this material system cre-
ated batch here.

18. Batch Management

Batch management is used to identify a material by unique number that possesses some
specified information
Material Master (8019)

Classification
Batch management
CLASS_Z005
Accesses Sequence CONDITION TABLE

CHARACTERISTICS
(Z005) (911)
DIFFUSER_SIZE
SLOC
DIFFUSER_COLOUR PLANT
VENDOR
DIFFUSER_CFM
MATERIAL
Sort Sequence Strategy

(Z005) (Z005)
Procedure
(Z005)

Business Scenario:
Plant Z005
Material Diffuser(8019)
Characteristics CLASS
Diffuser Size
1) 225*225mm
2) 300*300mm
3) 450*450mm
Diffuser_colour
312 1/m3
1) White Class_Z005
2) Black
3) BLUE
Diffuser_CFM 300mm
1) 200 1/M3
2) 312 1/M3
3) 450 1/M3
300mm
Client’s business requirement is to procure material (Diffuser) which has to be identify sepa-
rately with different specifications (Size, Shape, Colour) for that as a consultant we would
suggest to client to use batch management to separate material with its specification.

STEP-1
Create Characteristics
T-CODE: CT04
1) For Diffuser Size
I have selected numeric

format so I can able to
enter numeric values
Here I have entered Size of

my material in value tab.

2) For Diffuser Colour
Here I maintained character format

so I can define it by colour.
For Size I’ve selected multiple values

here so while classification I will be able
to put multiple sizes there.
Here I have entered colour

of my material in value tab.

3) For CFM air flow
Format and no. of decimal place should

be like this while entering the values.

STEP-2
CLASS: Is a group of characteristics we can store at one place
I have assigned my three characteristics with the class: Z005_CLASS
T-CODE: CL01
For Batch Management we

have class type 032

Path to configure Batch management

STEP-3
Creation of condition Table for batch determination
These are the fields on which

I want to perform Batch
management.
STEP-4
Creation of an ACCESS SEQUENCE
With new entries I have created Z005 as access sequence.

STEP-5
Create Sort Sequence
T-CODE: CU70
I’ve created new Sort sequence
Within this sort sequence I have

maintained characteristics which I
had created and I can able to pro-
vide sequence to characteristics.

STEP-5
Create Strategy types
Here I have assigned class, sort se-

quence and access sequence to
strategy.

STEP-6
Define Search procedure
Here we need to assign Pro-

cedure to strategy.

STEP-7
Allocate MvT to Batch determination
In this STEP we allocate batch search procedures to

those Inventory Management movement types for
which batch determination is to be carried out.
STEP-8
Prerequisites for including batches for material it is necessary to all stocks must be clear and
no open documents for that material.
T-CODE: MM01/MM02

For assigning class and character-

istics it is necessary to extend
material with classification view
Classification view
I’ve selected all the values

of the character as per re-
quirement.

Likewise done this with all

other characteristic values.
Purchasing view
It’s mandatory to click checkbox

on batch management to add
this material for batches.

STEP-9
Manual Batch Creation
T-CODE: MSC1N
I have created batch manual-

ly for material with these
three particular specifica-
tions.
STEP-10
Create Purchase Order (PO)
T-CODE: ME21N
In the PO I maintained batch which I’ve created, from

which vendor will understand which particular specifica-
tion of this material we are ordering for.

Goods Receipt
T-CODE: MIGO
Stock Overview
T-CODE: MMBE
Here we can see our

batch is shown in stock

Automatic creation of batches
Now I’ve not maintained batch
As I’ve not maintain batch in PO while goods receipt

system will automatically generate batch number for
particular specification of that material.

While receiving the goods, store in charge

should maintain the particular specification in
classification tab of batches otherwise while
receiving other goods with same specification,
system will generated unnecessary batch for
same specification.

Internal and External Number Ranges Path for batch management from where system is
picking up internal number range and allows making external number range.
The number ranges are maintained at

client level in T-CODE: OMAD

Stock Overview
T-CODE: MMBE
Here we can see I have stock

all three batches one which I
have created and other two
are system generated.

19. Message Determination

Messages are an important part of communicating with vendors in relation to purchase
transaction.
There are two types of communication with the vendor via postal services and electronical-
ly. For output message, it dependence on different criteria that enables you to process and
send these message.
Condition table
(507)
Plant (Z005)
Vendor (101046) Assign

Access Sequence
(0507)
Material (464802)
Assign
Purch. Org (Z005)

Output Type
(Z507)
Message Sche- Condition rec-

mas (Z0507) ord (MN04)
Assign
Purchase Order
(EF) (ME21N)

Path to Generate Output Message for Purchase Order (PO)

STEP-1:
Create Condition Table
Here select non existing

number for condition table.
I have selected 4 Fields combination

for which I want output message.

STEP-2
Create access sequence and Assign Access Sequence to condition table.
Here I have created new access

sequence as per requirement.
New Access sequence created as 0507

and assigned to condition table (507)
By selecting condition table one by one and click on fields and enter. I had entered into the structure
KOMP for item overview details and KOMK for Header field. Save and enter

STEP-3
Create Message Type
NEU output type is standard

provided by SAP, I have copied it.
I have changed output type name to Z507 and assign it to access sequence.

I have assigned my
access sequence
here.
Copy all Data from standard NEU into Z507


Select Fine Tune Control: Purchase order
Here I select print operation

indicator and condition type

STEP-4
Create Message Determination Schemas
We can copy Schema or we can directly include

control data into standard schema
I have created new schema

(Z0507) as per my requirement.

Here I assign new message Schema Z507 to Purchase order.
Here I assign new message

Schema Z507 to Purchase order.

STEP-5
Create Condition Record
T-code: MN04 for message type Z507
Here I have maintained combination which I had selected

in condition table and I can assign in condition records.
Configuration done here now we need to check in Purchase Order.

Create PO
T-CODE: ME21N
ENTER here to check out-

put message generated.
Here we can see for combination of condition

type which I had decided I entered in PO.
As per configuration message

output triggered here.
Here I have entered

my local printer.

To see print preview Enter Here

20. Configuration of Document Type, Item category
Document type: It controls over how the business process runs for a whole
document because of that it’s at the item level and it also controls over num-
ber ranges. Some of the standard document types are:-
NB Standard PO
UB Stock Transport order
FO Framework order
Item category: It specified how the line item behaves for a business process for
a particular material at that line item.
Standard
L Subcontracting
K Consignment
U Stock Transfer
D Service
Account assignment category: This indicates for which particular department

the line item is procured.
K Cost Center
U Unknown
This three are used by the functional consultant to model the business process.

Path to Configure Document Type and Item Category
Creation of Document types
I have to Copy the standard

to create new for as per
business requirement.

I have copied (NB) and Created

new as (ZNBB) as per Clients
requirements
AS I’ve Copied Doc-

ument type all the
Item Categories are
also copied.

I’ve deleted Item category

which not required for clients
business requirements.
Number ranges for Document types

PATH: SPRO Material Management Purchase OrderDefine Number
range
Here I’ve created new

number ranges.

Assigned Number range to Document Type
Here I’ve set

Item interval Here I have as-
start from 1 signed number
range to Doc Type.
Testing: Create PO With new Document Type
Here we can see as per Con-

figuration for Doc. Type I’ve
created Item Categories.

Field Selection for Document Type

Path: SPROMaterial ManagementPurchase OrderDefine screen layout
at document level
Here also we have to

copy standard (NBF).
Here I’ve copied and

created (Z005)
Here I have make Storage

Location as Required, So
while creating PO that will
be mandatory.

Assign field Selection to new Doc. Type
As I’ve set item interval

as 1 it shown here
Here we can see system

asking for SLoc without
which we can’t save PO

Number Range
Here we can see as per

new number ranges.

21. LSMW-(Legacy System Migration Workbench)
LSMW is a tool that supports the transfer of data from non-SAP systems ("Legacy Systems")
to SAP R/3 systems. This can be a one-time transfer as well as a periodic one.
LSMW also supports conversion of data of the legacy system in a numerous way. The data
can then be imported into the SAP R/3 system via batch input, direct input, BAPIs or IDoc.
In simple Words: In big organizations we have to create more than 1000 of materials or
vendors in sap it’s too much time taking process to do this in within system to do this STEP
by STEP for each material or vendor, so SAP gives us provision to gather data which is in our
spreadsheets or word documents and direct get it into the SAP system.
START STEP: 1 STEP: 2 STEP: 3

TARGET
DATA
Preparatory Field map- SAP
in Leg- STEPs ping & rules
DATA import
acy sys- System
tem
Checklist LSMW

T-CODE: LSMW
First we need to cre-

ate Project Name in
the initial screen
STEPs of LSMW

STEP 1:- Here, we are Maintaining the Object Attribute and Selecting Batch Input Recording
Method. In this method we can create a recording of our own and use it to upload/change
data. According to method we are create recording of Project.

Based on that, we are doing recording for Vendor master Data so Enter Vendor Master Data
T code- XK01.as well as put all the required information for Data Migration.


I have copied this data

and paste on MS Excel

STEP 3
In this screen, the Fields which is maintained in the Object Overview this fields I have main-
tained here. Source Filed is used to identify whether a certain record should go to the speci-
fied structure.
FROM SE11

STEP 4:- The structure which need for processing of data so will need to be assign here.in
the object contains lots of source structure.
STEP 5
In this STEP, we assign source fields to target fields and define how the field contents will be
converted.
As show in image, we can assign each field to target field and once all assignment done sys-
tem showing MAPING COMPLITED massage


STEP 07
Here as show in EXCEL sheet, we are Upload Our File.

Here as show in EX-

CEL sheet, we are
Upload Our File

STEP 08
Here we define which file we are going to use for current upload i.e. whether the file is on
Presentation server or application server.

STEP 09
In this, system read the File which we have uploaded. So system asks for permission so after
giving permission system will read Data.

STEP 10
In this STEP, system Showing all data which we had uploaded.
STEP-11
In this STEP, System will convert all the Non SAP System Data into SAP DATA.

STEP 12
STEP 13
Once we Execute Batch input, all the converted Data indicated as a Batch Input.

STEP 14
Here we can run batch input

Here we can see as per data migration vendor has been created

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SAP MM Configuration Guidance

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SAP MM Configuration Guidance

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SAP Career Guidance 2021

SAP Material Management

Under the guidance of SAP GURU

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7. Outline Agreement (ME31K/32K/33K) 55

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Price Determination Process

12. A) Subcontracting 124

13. B) Vendor Consignment 136

14. C) Stock Transport Order 144

15. Split valuation 155

16. Physical Inventory 168

20. Configuration of PO Doc. Type and Item Category 217

21. (LSMW) Legacy System Migration Workbench 225

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CO. CODE: 1000

Co. code assign to p. org

P. Org assign to Plants

PLANT: T010 PLANT: T020

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DEFINE ORGANIZATIONAL UNITS: In material management we have scope to define

1) Plant 2) Purchase Organization 3) Storage Location 4) Purchase group

DEFINE OF NEW PLANT T020:

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DEFINE OF NEW PURCHASE ORGNIZATION T010:

 A purchasing organization is an organization unit under a company or a plant that is respon-

P. ORG assign to plant

DEFINE STORAGE LOCATION WITHIN PLANT T020

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ASSIGNMENT OF ORGANIZATION UNITS

PATH TO ASSIGN ORG UNITS

ASSIGNING PURCHASE ORGANIZATION TO PLANT:

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Material master Vendor master Info record

1. Basic view (client level) 1. General data 1. General data

BUM, order unit, mat grp. Address, control, vendor data

2. Purchase view (plant level) communication data purchase order UOM

3. MRP (Plant) payment transaction tolerances

Reorder point, 3. Purchasing Data 3.Conditions

Plant delivery time, purchasing data price related data

4. Accounting (Valuation area) order currency,

Val. class, val. Cat payment terms

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Material Master Data Configuration

Define Material Type- QTY & Value Update for

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Define Industry Sector

Path: Logistic-General => Material Master=>Basic settings=>Material Types=> Define

Material Types Material type Description

ROH Raw Material

FERT Finished goods

HALB Semi-finished material

UNBW Non valuated material

NLAG Not Stock material

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Creation of material type

Quantity and Value Update

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Detail Overview of Material Type Configuration

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PATH:SPRO Logistc General Material Master Field Selection

In this particular example

To define whether a field is hidden or displayed, or whether an entry is mandatory or optional

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