SAP MM/WM
Configuration Pack
INDEX
1. Over-view:- ---------------------------------------------------------------------------------- 4
2. Getting into the Configuration area of SAP ------------------------------------ 11
3. Enterprise structure -------------------------------------------------------------------- 14
3.1 Define valuation level ------------------------------------------------------------- 16
3.2 Define Plant -------------------------------------------------------------------------- 18
3.3 Maintain plant details and Factory calendar in Plant --------------- 21
3.4 Define Location --------------------------------------------------------------------- 23
3.5 Maintain Storage Location ----------------------------------------------------- 25
3.6 Maintain Purchase organization --------------------------------------------- 29
3.7 Assign Plant to company -------------------------------------------------------- 31
3.8 Assign purchase organization to the company code ----------------- 32
3.9 Assign purchase organization to plant ------------------------------------ 33
4. Material Master --------------------------------------------------------------------------- 34
4.1 Assign field to field selection groups --------------------------------------- 35
4.2 Define plant specific field and screen selection ------------------------ 39
4.3 Define material type -------------------------------------------------------------- 40
4.4 Define Number range for each material type ---------------------------- 44
4.5 Define industry sector------------------------------------------------------------ 46
4.6 Maintain user specific settings ----------------------------------------------- 47
4.7 Set material block for goods movement ----------------------------------- 50
4.8 Define storage location MRP per plant------------------------------------- 52
1. Over-view:-
MM Module is the one of the most important logistics modules
in SAP. MM module covers the following basic functions
• Planning
• Procurement
• Inventory Management
Planning: -
The following are the two types of planning in MM module.
• Consumption Based Planning
• Material Requirement Planning
Consumption Based Planning is based on past consumption
pattern. In this type of planning requirement is triggered by
the stock level and NOT by any planned independent
requirement or dependant requirements.
Material Requirement Planning is the detailed planning based
on requirements and stock levels.
Procurement: -
Procurement activities involves everything from the stage of
identifying vendors up to making payments to the respective
vendor.
The following are the important procurement functions: -
• Identify the vendor
• Negotiate the terms and conditions
• Release the purchase order
• Follow up for supplies
• Ensure right quantity and quality materials are received
at right time
• Ensure payment to the vendor at right time as per the
agreement terms.
Procurement Proposals: -
As a result of planning, procurement proposals are created for
the net requirement quantities either in terms of planned
order or as purchase requisitions.
If it is a planned order, it has to be converted to the purchase
requisition. This is an important function between planner
and the procurement person.
If purchase requisitions are directly generated, it has to be
converted to purchase order.
Purchasing: -
Purchasing is the process of releasing the document to the
identified vendor authorizing him to supply the materials at a
negotiated price.
Three important purchasing methods are
a. Purchase Order
b. Contracts
c. Scheduling Agreement
a. Purchase Order: - It is the process of issuing PO to the
vendor requesting him to supply according to the
requirements as a one time or as per the delivery schedule.
b. Contracts: - Contracts of quantity based or rate based can
be issued to the vendor authorizing him to supply till reaching
certain quantities or certain value of supply is reached. Every
contract will have a release order.
c. Scheduling Agreement: -
Scheduling agreement is similar to PO. It will specify the
quantity, rate but the schedule of delivery will be informed
through the delivery schedule to the vendor.
Each scheduling agreement will have a delivery schedule. If
scheduling agreement is available with a vendor, MRP can
automatically create the delivery schedule instead of PR or
Planned order during MRP run.
Inventory Management: -
Entire stocks and material movements are dealt in inventory
management. Each material movement is associated with a
movement type number. Movement type is responsible to
determine the right GL account for FI postings.
When performing the inventory management transactions
system performs the following actions instantly
• Material document is generated
• FI document is generated
• Controlling document is generated
• Inventory is adjusted
Inventory Management is tightly integrated with MRP and MRP
data.
Master Data in MM: -
As in every module, Master data plays a major role in MM
module as well. Following are the important master data in
MM module.
• Material Master (across all modules)
• Vendor Master
• Purchase Info record
• Quota arrangement (MM and PP modules)
• Source List
Integration of MM with other Modules: -
Materials Management and its component inventory
management is directly linked with MRP, purchasing and
invoicing for vendor supplies.
MRP takes the inventory into account and also the expected
receipt and issues during MRP run which is the vital data for
successful MRP.
MM with PP
• Staging of components for production order
• Receipt of finished products into the warehouse
MM with QM
• A movement type determines whether the material is
subject to QM or not.
• Goods posted to QM stock if it is subjected to QM
MM with SD
• Availability check can be carried out on creating sales
order
• As soon as the delivery against the sales order is created,
that quantity is marked for delivery and deducted from
stock when performing post goods issue (PGI) for
delivery.
• Special sales order stocks can be maintained.
MM with PM
Goods movements are performed with respect to
• Equipment BOM
• Maintenance order
• With serial number management, serial number can be
entered with every serial number
MM with FI
• When posting the material movements, GL accounts are
determined through movement type and valuation class
information.
• Entire accounting entries are posted instantaneously
OK friends, having understood the over view of MM module; let
us try to look at what is there in store with this MM pack for
you.
For ease of learning and better understanding of MM module,
it is divided in to five topics as mentioned below.
• Enterprise structure
• Planning
• Master Data and PR
• Purchasing
• Inventory Management
To the each one of the above topic, complete configuration,
user manual and power point presentation is provided.
Configuration - Enterprise Structure: -
Define Plant
Define Storage Location
Assign Plant to a company
Define Purchase Organization
Purchase organization assignment
Defining material master field selection
Material Master Plant specific field selection
Define Material Type
Define number range for material type
Define Industry sector for material master.
Configuration - Planning:-
Complete configuration of Material Requirement Planning
Consumption based planning
Configuration - Master Data and PR: -
Define system message attributes
Defining purchase value key
Define payment terms
Define Inco terms
Define Account Group (Field selection for vendor master)
Define number range for account group
Define purchasing groups
Define copying rules
Define Document types
Configure Release strategy for PR
Configuration – Purchasing: -
Define Document type
Define Number Range
Define tolerance limit for price variance
Release procedure for Purchase orders
Configure stock transport orders
Define Access Sequence
Define Condition Type
Define calculation schema
Define Schema determination
Account Determination
Configuration – Inventory Management: -
Define Plant Parameters
Define Field selection for goods movements
Movement type setting
Configure automatic storage location creation
Define screen layout
Define availability check for movement types
Configure negative stock
Define output determination
Configure stock determination
Configure split valuation
2. Getting into the Configuration area of SAP
BACKGROUND
There are two types of access to the user in SAP.
1. Easy access - used to access daily transactions
2. Project view or IMG – used to access for configuration.
SAP Easy access is to perform the master data maintenance
and perform transaction. SAP configuration is to maintain the
backend settings according to the business requirements.
Access to each transaction is controlled by authorization.
Follow the steps explained here to get into the configuration
area in SAP.
INSTRUCTIONS
1. Type SPRO in the SAP main screen dialog box,
2. Click
3. Click on
4. Click appropriate node to look at more details.
When the menu path is mentioned as “IMG”, follow the
above steps.
3. Enterprise structure
Enter price structure describes the entire organization
details. Organizational details are broadly divided into the
two areas like financial area and logistics area.
Financial area deals with
▪ company code
▪ controlling area
▪ Currency and more.
Logistics area deals with
▪ Plant
▪ Storage location
▪ Sales organization
▪ Sales Distribution channel
▪ Sales Division etc.
Organisational Units: Materials Management
Company
Company
Company
Company Controlling
Controlling
code
code Area
Area
Purchasing
Purchasing
Organization
Organization Plant
Plant
Storage
Storage
location
location
3.1 Define valuation level
BACKGROUND
This configuration setting enables to define at which level the
stock are to be valuated in SAP.
Stocks can be valuated at following two levels in SAP.
▪ Plant level
▪ Company code level
It is recommended to keep at plant level. This is a client level
setting.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Logistics - General → Define valuation level
1. Click
2. Select the radio button
3. Click Save
3.2 Define Plant
BACKGROUND
This configuration setting enables to define the plant. Each
manufacturing facility or branch of a company is defined as a
plant in SAP.
Plant is assigned to the company code.
Storage locations are created under each plant.
If the valuation level is the plant, the stocks are valuated at
plant level.
Note: - It is common practice to copy plan from the existing
defined plant. It will be defined by the FI.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Logistics - General → Define copy, delete, check
plant
1. Click
2. Click
3. Click
4. Click
5. Enter from plant as 0001 to copy from SAP defined plant
6. Enter To Plant – E.g. IND6
7. Click
8. Click to return to main menu.
Note: - Definition of plant and assignment of plant to the
company codes along with relevant GL accounts is done by
the FI team. However the creation of plant is demonstrated.
3.3 Maintain plant details and Factory calendar
in Plant
BACKGROUND
When copying the plant, the entire details will be copied
from the source plant. Address of the plant and other
details attached to the plant can be changed.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Logistics - General → Define copy, delete, check
plant
1. Double click
2. Select plant IND6 by clicking the grey box in the left side
3. Click
4. Click
5. Maintain the entire address, contact details of the plant.
6. Factory calendar must be attached to the plant
Below screen shows the details of plant settings.
3.4 Define Location
BACKGROUND
This configuration setting enables to define the location.
Location indicates where the materials are stored inside the
plant.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Logistics - General → Define Location
1. Click
2. Click
3. Update required and optional fields:
Field Name Description Value
Plant Name of the plant e.g. IND6
Location Location E.g. PROD
identification
Name Description of the Production location
location
4. Click
Note: - Maintain the address of the location in the subsequent
screen.
5. Enter title as Company
6. Enter country
7. Click
8. Click .
3.5 Maintain Storage Location
BACKGROUND
This configuration setting enables to define the physical
storage location. This will indicate where the stocks are stored
physically inside the plant.
Each item must have storage location. One material can be
stored in many storage locations.
Storage locations can be assigned to the warehouse through
warehouse management.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Materials Management → Maintain storage
location
Click
Enter the plant where the storage location is to be created.
E.g. IND6
Click
Click
Enter Storage location
Enter description of the storage location
Click
Select the storage location
Double Click
Enter the sequential number 1
Click
Select the sequence number
Click
Maintain the address.
Click
Click
Repeat the above to maintain the address for all storage
locations.
3.6 Maintain Purchase organization
BACKGROUND
This configuration setting enables to define the purchase
organization.
Purchase organization is the part of the enterprise structure
from MM point of view. It represents the responsibilities to
▪ Procure materials and services
▪ Negotiation with vendor
Purchase organization is assigned to the company codes and
plants. Following are the possibilities of assignments.
▪ One purchase organization to many company codes
▪ One purchase organization to one company code
▪ One purchase organization to one plant
Note: - It must be assigned to plant.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Materials Management → Maintain purchase
organization
1. Click
2. click
3. Update the following fields
Field Name Description
Purch.organization Key identifying the purchase
organization. E.g. IND6
Purch.org.descr. Description of the purchase
organization. E.g. For plant
IND6
4. Click .
3.7 Assign Plant to company
BACKGROUND
This configuration setting enables to assign plant to the
company code.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Assignment → Logistics – General → Assign plant to company
code
1. Click
2. Select the desired company code by clicking the cursor
on it.
3. Click
4. Select the plant from the display
5. Click
6. Click .
3.8 Assign purchase organization to the
company code
BACKGROUND
This configuration setting enables to assign the purchase
organization to a company code.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Assignment → Materials Management → Assign purchase
organization to company code
1. Click
2. Select the desired company code by clicking the cursor
on it.
3. Click
4. Select the purchase organization
5. Click
6. Click
3.9 Assign purchase organization to plant
BACKGROUND
This configuration setting enables to assign the purchase
organization to a plant.
INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Assignment → Materials Management → Assign purchase
organization to plant
1. Click
2. Select the desired plant by clicking the cursor on it.
3. Click
4. Select the purchase organization
5. Click
6. Click
All right guys, not much about MM organization structure.
Now we shall look into material master related to
configurations.
4. Material Master
Material master contains all information about a material. All
the information have to be maintained by the different end
users.
Example:
▪ Physical, sales and storage related details of a material is
maintained by the logistics team
▪ Finance related information is maintained by the finance
team
▪ Quality related information is maintained by the QM
team
Views on a Material Master
Basic Data Purchasing
St
t MRP Sales
Material
master Work
scheduling
Accounting
Quality
management
Storage Forecasting
Warehouse
Classification
management
Ok, now let’s go to the configuration details of material master.
4.1 Assign field to field selection groups
BACKGROUND
This configuration setting enables to define the field in the
material master as mandatory or optional or to hide.
Let’s try to make the purchasing value key as mandatory entry
for plant IND6.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → Field Selection → Assign fields to field selection
groups
1. Click
2. Click in purchasing value key row
3. Create new field ref by copying from the standard SAP
entry. E.g. IND6 as field reference.
4. Click
5. Select the field selection as required entry
6. Click
4.2 Define plant specific field and screen
selection
BACKGROUND
When there are more than one Bill Of Material, system will
select the first alternate by default.
It can be configured in such a way that system takes the right
alternate for a given period.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → Field Selection → Define plant specific field selection
and plant specific screen selection
1. Click
2. Maintain field reference as IND6 for plant IND6.
3. Click Save .
4.3 Define material type
BACKGROUND
Similar to the above alternate defining in production area, for
other areas like Inventory, MRP, Costing, Sales and
Distribution and Plant Maintenance can be maintained.
Only the menu path is given here and the rest of the settings
are similar to above 1.1.8.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → Basic settings → Material types → Define Attributes
of Material Types
1. Click
2. Select ROH by clicking the grey box in the left
3. Click to copy from ROH to the new material type
4. Type the new material type as YROH
5. Maintain the field reference as FERT
6. Select sales view
Note: - Standard settings are sufficient.
Field name Description
Field reference Field references are taken
from this material type.
X plant material status Cross plant material status to
restrict the usage of material
in all the plants.
Item category group Default item category group to
determine the item category
for the material type.
Tick in this check box will
make the initial status of the
batch as restricted.
Tick in this check box will not
check with the external
number range when creating
the material master.
Price control which will
appear in the material master.
However it can be changed in
the material master.
Indicates that the Quantity
update in specific valuation
area.
Indicates that the value
update in specific valuation
area.
Double click
Select the check box only in the relevant valuation area. E.g.
IND6, IND7 and IND9
7. Click
8. Click
9. Click Save
Effect of this configuration setting with initial status
check box ticked.
When the new batch is created, the initial status of that batch
will be restricted.
Note: -
Considering the restricted batch for MRP will be controlled by
the IMG setting for MRP.
The batch status can be changed to unrestricted-use only
through manually or through the QI Usage decision.
4.4 Define Number range for each material type
BACKGROUND
This configuration setting enables to define the number range
for material type.
Each material type must have a number range so as to enable
to create the material of that type.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → Basic settings → Material types → Define Number
Range for Each Material Type
1. Click
2. Click
3. Click F6 or from the top, follow the menu path.
Group→Insert to insert the new group
4. Maintain the Text for the new group and maintain the
interval for internal and external number range
5. Click .
6. Click to assign to the material type
7. click on the material type from the Not assigned list
8. Click
9. Tick the group check box to which number range is to be
assigned to this material type
10. Click
11. Click .
4.5 Define industry sector
BACKGROUND
This configuration setting enables to define the industry sector
and field selection specific to the industry sector.
Industry sector definition is the one through which any screen
sequence can be changed. Industry sector is the mandatory
entry when creating the material master.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → Field Selection → Define industry sector and
Industry-sector-specific field selection
1. Click
2. Select the Mechanical engineering by clicking the grey
box in the left
3. Click
4. Maintain industry sector. E.g. Z
5. Maintain industry description. E.g. Mechanical
engineering-sp
6. Maintain field reference. E.g. IND6
7. Click
8. Click
4.6 Maintain user specific settings
BACKGROUND
This configuration setting enables to maintain the setting for
material master creation specific to the user.
By this way, users can be restricted from accessing certain
data.
INSTRUCTIONS
Follow the Menu Path: IMG → Logistics – General → Material
master → configure the material master → Maintain User
settings
1. Click
2. Click
Maintain the entries as shown below.
3. Click
4. Click
Maintain the entries as shown below
5. Click
Effect of this configuration
When user sapuser6 try to create material master, industry
sector will not appear to him.
4.7 Set material block for goods movement
BACKGROUND
This configuration setting enables to define the block for
material. This is essential to prevent usage of same material
by different user at a given instance.
INSTRUCTIONS
Follow the Menu Path: IMG → Materials Management →
General settings for Materials Management
1. Click
2. Select the appropriate material block
Lock exclusively – when the material master is read during
the goods movement, plant data and accounting data are
locked till the material is posted.
Another user can not use this material at this time.
Late lock – data will be blocked only at the time of saving.
3. Click
4.8 Define storage location MRP per plant
BACKGROUND
This configuration setting enables to define the usage of
storage location stock during MRP run.
INSTRUCTIONS
Follow the Menu Path: IMG → Materials Management →
Consumption Based Planning → Planning → Define Storage
Location MRP per plant
1. Click
2. Enter Plant. E.g. IND6
3. Click
4. Select 1 to exclude storage location from MRP
5. Click
6. Click to reach main IMG menu
